Quarterly Meeting 1/ Q18 & 2018 Performance & Outlook

Size: px

Start display at page:

Download "Quarterly Meeting 1/ Q18 & 2018 Performance & Outlook"

Buddy Ferguson
5 years ago
Views:

1 Quarterly Meeting 1/2019 4Q18 & 2018 Performance & Outlook 27 February 2019

2 The views expressed here contain some information derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness or reliability of the information. Any forward looking information in this presentation has been prepared on the basis of a number of assumptions which may prove to be incorrect. This presentation should not be relied upon as a recommendation or forecast by The Erawan Group PLC. Nothing in this release should be construed as either an offer to sell or a solicitation of an offer to buy or sell shares in any jurisdiction ERAWAN. All rights reserved.

3 4Q18 Executive Summary Tourism Industry Hotels Statistic* 9.7 million international tourist arrival 80% Occupancy with +3% ARR growth 5% Growth from 4Q17 *Total group ex. HOP INN 4Q Results Hotel Development +7% Total Revenue +11% EBITDA +12% Net Profit +4 Hotels +564 Rooms ERAWAN. All rights reserved.

6 International Tourist Arrivals 4.5 FY millions, +8% y-y Millions 2015 YTD 29.9 M 2016 YTD 32.6 M 2017 YTD 35.4 M 2018 YTD 38.3 M YoY Jan Feb Mar Apr May June July Aug Sep Oct Oct Nov Nov Dec Dec +11% +19% +16% +9% +6% +12% +3% +3% +4% - +5% +9% %YoY Source : Department of Tourism as of Dec ERAWAN. All rights reserved.

7 2018 Chinese, Russian and Indian Arrivals to Thailand % Growth 60% Chinese Russian India 50% 40% 30% 20% 10% 0% -10% -20% -30% %YoY Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Chinese +13% +52% +27% +32% +14% +18% -1% -12% -15% -20% -15% +3% Russian +28% +26% +26% +19% -13% -16% -11% -8% -2% -4% +2% +4% India +22% +15% +17% +13% +12% +9% +7% +11% +6% +4% +20% +21% Source : Department of Tourism as of Dec ERAWAN. All rights reserved.

8 International Tourist Arrivals by Source Markets Oceania The 2% Americas 4% South Asia 5% Europe 18% Middle East 2% Africa 1% 38.3 Million East Asia 68% Continent 4Q18 YoY 2018 YoY East Asia 6% 10% Europe 1% 4% South Asia 14% 12% The Americas 6% 4% Oceania 1% 2% Middle East 13% 7% Africa 7% 7% Total 5% 8% 2018 Contribution Source : Department of Tourism as of Dec ERAWAN. All rights reserved.

9 Thailand Tourist Arrivals 4Q17 Weight 4Q18 Weight YoY 2017 Weight 2018 Weight YoY 1. China 26% 22% 10% 28% 28% 7% 2. Malaysia 9% 13% 42% 9% 11% 22% 3. South Korea 5% 5% 7% 5% 5% 5% 4. Laos 5% 5% 7% 5% 5% 9% 5. Japan 4% 4% 9% 4% 4% 7% 6. India 4% 4% 16% 4% 4% 13% 7. Russia 5% 5% 1% 4% 4% 9% 8. United States 3% 3% 8% 3% 3% 9% 9. Singapore 3% 3% 6% 3% 3% 4% 10. Vietnam 2% 2% 14% 3% 3% 10% Other 34% 33% 3% 33% 32% 5% Grand Total 5% 8% Source : Department of Tourism as of Dec ERAWAN. All rights reserved.

12 Statistic Summary 4Q18 & 2018 by Segment Segment OCC 4Q18 (YoY) ARR +/- RevPAR +/- OCC 2018 (YoY) ARR +/- RevPAR +/- Thailand Luxury 78% 5% 5% 74% 3% 2% Midscale 81% 1% 5% 85% 4% 1% Economy 80% 9% 1% 81% 8% 3% Total Group (ex HOP INN) 80% 3% 1% 81% 5% - HOP INN 75% 5% 2% 75% 7% 8% Philippines HOP INN 77% 2% 8% 76% 5% 5% Remark : calculation in THB ERAWAN. All rights reserved.

F&B Luxury Resort still impacted from Chinese slowdown % to Total Revenue % to Total EBITDA RevPAR Total

13 Luxury Segment 4Q18 & 2018 Performance Growth 4Q18 Performance Highlight JW Marriott operated with 100% room inventoryafter 4Q18 5% 3% 5% 40% under renovation during 2Q-3Q18 Revenue growth witnessed from both room and F&B Luxury Resort still impacted from Chinese slowdown % to Total Revenue % to Total EBITDA RevPAR Total Revenue EBITDA 4Q18 46% 40% RevPAR Total Revenue EBITDA % 2% % 38% 9% ERAWAN. All rights reserved.

new hotel posted RevPAR growth at 3% 4Q18 Revenue growth witnessed from both room and F&B RevPAR Total

14 Midscale Segment 4Q18 & 2018 Performance Growth 4Q18 Performance Highlight Novotel Sukhumvit 24 opened in Oct-18 with OCC 5% 7% 8% >50% in the first quarter Midscale BKK ex. new hotel posted RevPAR growth at 3% 4Q18 Revenue growth witnessed from both room and F&B RevPAR Total Revenue EBITDA % to Total Revenue % to Total EBITDA 4Q18 24% 26% 4% 3% % % 28% RevPAR Total Revenue EBITDA ERAWAN. All rights reserved.

15 Economy Segment 4Q18 & 2018 Performance Growth 4Q18 Performance Highlight 4Q18 3% 1% in line RevPAR Total Revenue EBITDA ibis Styles Sukhumvit 24 opened in Oct-18 with OCC >60% in the first quarter Economy BKK ex. new hotel posted RevPAR growth at 6% Phuket and Samui hotels still impacted from slowdown of Chinese & Russian % to Total Revenue % to Total EBITDA 3% 2% 4% 4Q18 17% 17% 2018 RevPAR Total Revenue EBITDA % 17% ERAWAN. All rights reserved.

16 HOP INN Thailand 4Q18 & 2018 Performance Growth 4Q18 Performance Highlight 36 HOP INN in Thailand as of 4Q18. Most 25% 37% comprehensive budget hotel network in Thailand Room rate improvement at 5%. Organic hotels recorded revenue growth at 11% 4Q18 2% RevPAR Total Revenue EBITDA % to Total Revenue % to Total EBITDA 44% 69% 4Q18 7% 9% % RevPAR Total Revenue EBITDA % 9% ERAWAN. All rights reserved.

HOP INN Philippines 4Q18 & 2018 Performance Growth 4Q18 Performance Highlight 5 HOP INN in Philippines, all located in Manila city 160% 211% Average occupancy increase by 7%, despite 3 new hotels

17 HOP INN Philippines 4Q18 & 2018 Performance Growth 4Q18 Performance Highlight 5 HOP INN in Philippines, all located in Manila city 160% 211% Average occupancy increase by 7%, despite 3 new hotels opening Organic hotels posted revenue growth at 10% 4Q18 8% Expected positive net profit in 2019 RevPAR Total Revenue EBITDA % to Total Revenue % to Total EBITDA 164% 460% 4Q18 3% 3% % RevPAR Total Revenue EBITDA % 2% ERAWAN. All rights reserved.

Hotel Revenue by Room & F&B 11% 1% (Unit in MB) 4Q18 7% YoY Good momentum in Bangkok hotels 1,524

19 ERW Tourist Arrivals by Key Source Markets Key Source Markets 4Q17 Weight 4Q18 Weight YoY 2017 Weight 2018 Weight YoY 1. Thailand 18% 20% 18% 16% 19% 23% 2. China 12% 11% 1% 14% 13% 5% 3. United States 10% 10% 3% 10% 9% 1% 4. Singapore 6% 6% 14% 6% 6% 9% 5. India 5% 5% 9% 5% 5% 11% 6. Hong Kong 4% 4% 15% 4% 4% 6% 7. Russia 4% 4% 11% 4% 4% 7% 8. Australia 3% 3% 5% 3% 3% 4% 9. Germany 3% 3% - 3% 3% 3% 10. South Korea 3% 3% 4% 3% 3% 4% Other 31% 31% 4% 32% 30% 1% Remark : Exclude Philippines ERAWAN. All rights reserved.

20 Consolidate Profit & Loss Statement In Baht Millions 4Q17 4Q18 %YoY %YoY Hotel Operating Income 1,524 1,637 7% 5,773 6,022 4% Rental and Service Income % % Total Operating Income 1,582 1,701 7% 5,995 6,256 4% Other Income % % Total Income 1,596 1,717 8% 6,050 6,308 4% Operating Expenses (1,090) (1,156) 6% (4,207) (4,411) 5% EBITDA % 1,844 1,897 3% Depreciation & Amortization (188) (212) (738) (776) Finance Costs (88) (98) (344) (360) Taxes (52) (54) (172) (164) Minority Interest (20) (20) (60) (57) Normalized Net Profit / (Loss) % % Extraordinary Items Share of Profit/(Loss) from ERWPF % (24) (4) 85% Net Profit / (Loss) % % EBITDA Margin 31.7% 32.6% 0.9% 30.5% 30.1% 0.4% ERAWAN. All rights reserved.

21 Summary of Financial Position Total Assets Total Interest Bearing Debt (MB) & Interest-bearing Debt to Equity (x) 10, ,048 16,949 9, Total Liabilities 8,000 7,000 6, ,645 11,240 5, Total Equities 5,709 5,403 Average Cost of Debt (%) 6.00% 5.00% 4.00% 4.19% % ERAWAN. All rights reserved.

23 ERAWAN 5-year Strategic Direction ( ) Vision To be the Leading Hotel Investor in Thailand and ASEAN Mission To continue growing quality hotel portfolio in Thailand and ASEAN which optimize values to our shareholders as well as stakeholders Strategy Hotel Growth Strategy Continue expanding in high growth segments and destinations Return Enhancing Strategy Provide optimal return to our shareholders Sustainable Platform Strategy Ensure stability and sustainable growth of the organization ERAWAN. All rights reserved.

24 1. ERAWAN Hotel Growth Strategies Network Expansion Economy of Scale Diversified Portfolio F 2020F 41 Hotels 6,385 Rooms 52 Hotels 7,328 Rooms 61 Hotels 8,485 Rooms 70 Hotels 9,559 Rooms Hotels in Pipeline 7 HOP 1 HOP Opened 1 st Hotel in Philippines 10 HOP 1 HOP More than 30 HOP INN across all regions in Thailand Novotel & ibis Style Nana 5 HOP 3 HOP Opened 1 st Novotel in CBD of Bangkok, a 2 nd combo project o Mercure & ibis Sukhumvit 24 o 7 HOP To open 3 rd combo project, the biggest hotel in Bangkok with > 500 rooms 2 HOP INN enter Bangkok >10,000 Rooms Long-Term Objective Continue expanding in high growth markets & high growth segments ERAWAN. All rights reserved.

25 Erawan Portfolio in Thailand Non Bangkok (46 hotels) 2 Luxury 2 Midscale 6 Economy 36 Budget Bangkok (10 hotels) 2 Luxury 3 Midscale 5 Economy 56 Hotels in Thailand ERAWAN. All rights reserved. No. of hotel and room as of 31 December 2018

Rooms Midscale and Economy Thailand 501 Rooms >10,000 1,781 Rooms

28 More than10,000 Rooms in 2020 Erawan Room Growth in Thailand and Philippines Secured Pipeline HOP INN & Midscale Philippines 628 Rooms Midscale and Economy Thailand 501 Rooms >10,000 1,781 Rooms 8,485 HOP INN Thailand 652 Rooms ERAWAN. All rights reserved.

HOP INN Thailand Track Record %OCC & No. of HOP INN Hotels 80% 70% 60% 50% 40% 30% 20% 10% 0% 70% 53% 27% 22 15 10 75% 75% 36 30 2014 2015 2016 2017 2018 Revenue of HOP INN Hotels (MB.

29 HOP INN Thailand Track Record %OCC & No. of HOP INN Hotels 80% 70% 60% 50% 40% 30% 20% 10% 0% 70% 53% 27% % 75% Revenue of HOP INN Hotels (MB.) Successful Track Record 40 First mover to Budget segment with owned brand in Thailand Most comprehensive budget hotel network in Thailand as of 2018 Maintained occupancy while growing no. of hotel Strong revenue growth with positive EBITDA in 2 nd year of operation ERAWAN. All rights reserved.

Average occupancy >75% 4Q17 1Q18 2Q18 3Q18 4Q18 Opened HOP Aseana Very good rating from TripAdvisor

30 Ramp up continue for 5 HOP INN Philippines Performance Highlight Double digit RevPAR growth for 5 consecutive quarters and still continue 24% 20% 20% 19% RevPAR Growth yoy (Currency: Peso) 13% Average occupancy >75% 4Q17 1Q18 2Q18 3Q18 4Q18 Opened HOP Aseana Very good rating from TripAdvisor Expected positive net profit in 2019 Opened HOP Alabang Opened HOP Quezon ERAWAN. All rights reserved.

Our Strategies to Deliver Sustain Growth

Retention Improve Customer Experience and

31 Our Strategies to Deliver Sustain Growth to HOP INN A Network of Reliable Budget Hotels First Choice for Frequent Travelers To be top of mind Extensive Network and Expansion Initiative Target to have > 50 hotels in Thailand Customer Retention Improve Customer Experience and Engagement Most Cost Competitive Deliver quality product with competitive development and operating cost ERAWAN. All rights reserved.

32 HOP INN : The Success Brand Journey HOP INN will be key growth driver to ERAWAN HOP INN Total 788 Rooms 1% HOP INN 5 HOP INN Total 3,653 Rooms EBITDA from HOP INN has increased over the time % 2020F 50 HOP INN 7 HOP INN Total 5,525 Rooms 2020F 17% ERAWAN. All rights reserved. HOP INN Other Hotels

33 2. Return Enhancing Strategy Ongoing Initiatives to Improve Operating and Financial Capabilities Asset Improvement / Operation Excellence To continue assets enhancement and competitive edges to optimize return on investment Asset Monetization Program To optimize short-term return and long-term value for shareholder Capital Structure Optimization To optimize capital structure for financial flexibility, balancing cost and risk ERAWAN. All rights reserved.

2016 2018 JWM Guest Room Renovation 2020

34 Asset Improvement Program to Ensure the Hotels will remain Competitive JWM Guest Room Renovation 2020 Naka Add new 13 Deluxe Room JWM F&B Outlet renovation Naka Add new 10 Deluxe Rooms ibis soft renovation ERAWAN. All rights reserved.

ibis Soft Renovation Timeline Patong 2021

35 ibis Soft Renovation Timeline Patong years period Soft Renovation for 3 ibis hotels during low season 2Q-3Q 2019 Samui years anniversary for 3 ibis hotels Sathorn 2008 Opened Patong Samui Sathorn ERAWAN. All rights reserved.

Developer Operator Culture Commit to success Learning & Improvement

36 3. ERAWAN Sustainable Platform Corporate Governance Core Value System People Information Culture Environment Competencies Investor Developer Operator Culture Commit to success Learning & Improvement Integrity ENjoy to serve Team spirit ERAWAN. All rights reserved.

37 Competitive Advantages to Deliver Long Term Growth Core Competencies Experience and professional management team Asset /Operation Management Hotel Investment Invest in right product in right market at the right time Project Development Successful track record of execution project with efficiency time, quality and cost management ERAWAN. All rights reserved.

38 Erawan CSR Project : Happy Home Happy Stay Sustainable Tourism for Community First Project : Banlaem Homestay Nakorn Sri Thammarat Sharing knowledge and experience of managing accommodation to the community. Support skills and equipment to facilitate tourist services Support equipment, pillows, blankets, bed linen, life jackets etc ERAWAN. All rights reserved.

41 2019 Revenue Growth Contribution Outlook Growth drivers are equally from existing hotel and ramp up of new hotel opened in 2018 Growth Contribution Hotels opening in % Expected Growth 5-7% 47% Hotels opened in % Existing Hotels as of % Revenue Growth Expected Growth >200% ERAWAN. All rights reserved.

42 2019 Thailand Hotels Opening 46 Existing Hotels Non Bangkok +5 To be opened in 2019 Bangkok 11 Existing Hotels +4 To be opened in Hotels and Adding 1,074 rooms in Thailand ERAWAN. All rights reserved.

From 61 Hotels in 2018 to 70 Hotels in 2019, with

Kaen (3 rd Branches) 79 Rooms Potential opening 3Q19

opening 3Q19 Mercure Sukhumvit 24 201 Rooms

Potential opening 4Q19 Rayong(2 nd Branches) Hat Yai

Potential opening 3Q19 HOP INN Rangsit 79 Rooms

3Q19 79 Rooms Potential opening 4Q19 2 HOP INN

43 From 61 Hotels in 2018 to 70 Hotels in 2019, with Total 9,559 Rooms Bangkok Metropolitan Region Khon Kaen (3 rd Branches) 79 Rooms Potential opening 3Q19 Chiang Rai (2 nd Branched) 70 Rooms Potential opening 3Q19 Mercure Sukhumvit Rooms Potential opening 4Q19 ibis Sukhumvit Rooms Potential opening 4Q19 Rayong(2 nd Branches) Hat Yai (2 nd Branches) HOP INN Changwattana 108 Rooms Potential opening 3Q19 HOP INN Rangsit 79 Rooms Potential opening 4Q19 79 Rooms Potential opening 3Q19 79 Rooms Potential opening 4Q19 2 HOP INN entering BKK Nakorn Pathom 79 Rooms Potential opening 4Q ERAWAN. All rights reserved.

44 HOP INN Bangkok : Changwattana (108 Rooms) Central Changwattana Punyapiwat Changwattana Road soi 23 Sri Ratch Expressway MRT Pink Line Chaeng Watthana-Pak Kret 28 station Sukhothai University Potential opening 3Q19 Locate in soi Chanwattana 23 Close to pink line mass transit system (Khae Rai - Min Buri) : Chaeng Watthana-Pak Kret 28 station Nearby Attraction Central Changwattana Impact Arena Government complex Government Complex ERAWAN. All rights reserved.

45 HOP INN Bangkok : Rangsit (79 Rooms) Phaholyothin Road Rangsit-Nakhon Nayok roadad Major Cineplax Rangsit Future Park Rangsit Potential opening 3Q19 Located near Major Cineplex Rangsit Gateway from central, northern and northeastern to Bangkok Close to hub of public van Nearby Attraction Future Park Rangsit Major Ciniplex Rangsit Don Muang International Airport ERAWAN. All rights reserved.

46 Projected Hotel Revenue and EBITDA by Segment Hotel Revenue by Segment % 6% % 2019F 12% 2020F 13% Luxury Midscale 18% 25% 53% 18% 25% 51% 18% 25% 47% 18% 24% 46% 18% 26% 43% Economy HOP INN Hotel EBITDA by Segment Luxury 19% 5% 47% 7% 19% 45% 12% 18% 40% 17% 16% 41% 18% 18% 37% Midscale 29% 29% 30% 26% 27% Economy HOP INN ERAWAN. All rights reserved.

47 Projected Hotel Revenue and EBITDA by Destination F 2020F Hotel Revenue by Destination 37% 63% 1% 38% 61% 39% 2% 59% 4% 39% 57% 5% 37% 58% Bangkok Non Bangkok ASEAN Hotel EBITDA by Destination 36% Bangkok Non Bangkok ASEAN 64% 38% 61% 36% 3% 61% 42% 4% 54% 39% 6% 55% ERAWAN. All rights reserved.

48 Erawan : 2019 Recap 1 Thailand will maintain its competitive advantage in tourism. Tourist arrival to Thailand is expected to increase 7.5% to 41.1 million in Our hotel growth strategy create strong network and adding capacity to drive return 3 Return enhancement from asset improvement program and appropriate capital structure 4 Continue to maintain sustainable platform to deliver long term growth 5 Target revenue growth 10-15% in 2019, adding 1,074 rooms from 9 hotels ERAWAN. All rights reserved.

52 4Q18 & 2018 Hotel Statistic by Segment Hotel Properties Rooms Occupancy ARR (Bt/room/night) RevPAR (Bt/room/night) YoY 4Q17 4Q18 4Q17 4Q18 +/- LY 4Q17 4Q18 +/- LY 4Q17 4Q18 +/- LY Thailand Luxury % 78% +7% 6,094 5,789-5% 4,295 4,498 +5% Midscale 1,282 1,467 85% 81% -4% 2,980 2,964-1% 2,523 2,391-5% Economy 2,253 2,386 87% 80% -7% 1,267 1,380 +9% 1,096 1,104 +1% Total Group ex.hop INN 4,202 4,832 83% 80% -3% 2,657 2,737 +3% 2,193 2,182-1% HOP INN Thailand 2,502 2,810 78% 75% -2% % % Philippines HOP INN Philippines % 77% +7% 1,020 1,003-2% % Hotel Properties Rooms Occupancy ARR (Bt/room/night) RevPAR (Bt/room/night) YoY /- LY /- LY /- LY Thailand Luxury % 74% -3% 5,685 5,836 +3% 4,358 4,290-2% Midscale 1,282 1,467 88% 85% -3% 2,783 2,907 +4% 2,453 2,483 +1% Economy 2,253 2,386 85% 81% -4% 1,209 1,302 +8% 1,029 1,056 +3% Total Group ex.hop INN 4,202 4,832 84% 81% -3% 2,554 2,672 +5% 2,150 2,158 - HOP INN Thailand 2,502 2,810 75% 75% % % Philippines HOP INN Philippines % 76% % % ERAWAN. All rights reserved.