Company Presentation - Feb 2018 - Minor International
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Company Presentation – Feb 2018
FORWARD LOOKING STATEMENT
Statements included or incorporated in these materials that use the words "believe", "anticipate", "estimate", "target", or "hope", or that
otherwise relate to objectives, strategies, plans, intentions, beliefs or expectations or that have been constructed as statements as to future
performance or events, are "forward-looking statements" within the meaning are not guarantees of future performance and involve risks and
uncertainties that could cause actual results to differ materially from historical results or those anticipated at the time the forward-looking
statements are made. MINT undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new
information, future events or otherwise. MINT makes no representation whatsoever about the opinion or statements of any analyst or other
third party. MINT does not monitor or control the content of third party opinions or statements and does not endorse or accept any
responsibility for the content or the use of any such opinion or statement.
Disclaimer 2
Agenda
2017 Performance Recap
& Recent Updates
Minor Hotels
Minor Food
Minor Lifestyle
Corporate Information
2018 Outlook & Beyond
Souq Waqif Boutique Hotels by Tivoli
2017 Performance Recap
& Recent Updates
MINT REMAINED RESILIENT DESPITE MACRO CHALLENGES
2017 net profit increased by 18% from 2016 core net profit, attributable to the strong performance of all three businesses. The
robust multi-brand portfolios, geographical diversification and business agility contributed to MINT’s growth.
REVENUE
THB million Excl special gains
+8% y-y Minor Lifestyle
60,000 7%
58,644
56,973 Minor Food
40%
55,000
54,285
50,000
45,000
Minor Hotels
40,000 53%
2016 Minor Hotels Minor Food Minor Lifestyle 2017
NET PROFIT
THB million Minor Lifestyle
Excl special gains
+18% y-y 3%
6,590
6,000 Minor Food
5,415 35%
4,000 4,576
2,000
0 Minor Hotels
2016 Minor Hotels Minor Food Minor Lifestyle 2017 62%
Non-recurring items as detailed on page 40
2017 Performance Recap 5
INTERNATIONAL PRESENCE
With solid diversification strategy, MINT’s presence was in 32 countries at the end of 2017 across its hospitality and restaurant
businesses.
REVENUE CONTRIBUTION
100% Minor Hotels
13%
75% 50% 49% 50% International Minor Food
50% Thailand
87% Combination
25% 50% 51% 50%
0%
2008 2016 2017 2022F
* Excludes non-recurring items in 2016
MINT’s Footprint 6
WHAT’S NEW IN 4Q17 TO DATE
MINOR HOTELS MINOR FOOD
Hotel Investment • Acquired 74% stake in the UK based Corbin & UK Operations • Completed the acquisition of 4 existing
King, comprising 6 brasserie-style restaurant Patara restaurants and franchised rights to
including the renowned Wolseley and the develop and operate restaurants under
management of The Beaumont, a five-star hotel in Patara and Suda brands in the UK
London
• Entered into a 50% strategic JV to strengthen the New International • Entered into Seychelles with the opening of
AVANI brand in Thailand with the launch of AVANI Market Burger King and The Coffee Club
Hua Hin in November 2017
• Launched Sunset Coast Samui, a property
managed by AVANI in February 2018
MINOR LIFESTYLE
Hotel Management • Debuted the Tivoli brand in the Middle East with
the opening of Souq Waqif Boutique Hotels by New Brand • Launched OVS Kids, the Italian fast-fashion
Tivoli in Doha, Qatar brand, at Don Mueang International Airport
• Took over the management of a hotel in Luang in Bangkok
Prabang, which will be rebranded to AVANI
Management • Introduced the AVANI Residences brand to CORPORATE
Letting Rights in Australasia with the launch of 2 properties:
Australia ‒ AVANI Metropolis Auckland Residences in Warrant • Final conversion of warrants in November
New Zealand Conversion 2017 resulting in an increase in equity of
‒ AVANI Broadbeach Gold Coast Residences in THB 7,364 million (THB 7,899 million received
Australia for the entire program)
Residential • Sold and transferred 1 unit of The Estates Samui
Development and 2 units of Anantara Chiang Mai Serviced Suites Dividend Payment • Announced dividend payment of THB 0.40
per share, or a payout ratio of 33%, to be
Anantara Vacation • Added 7 units in Phuket to the inventory pool of proposed to the AGM for approval on April 3,
Club Anantara Vacation Club 2018
Recent Development 7
Minor Hotels
Oaks Southbank Melbourne
FINANCIAL PERFORMANCE – MINOR HOTELS
2017 revenue of hotel & mixed-use business grew by 12%, as a result of growth of all major segments. 2017 EBITDA increased by
8%, slower than the growth rate of revenue, primarily because of the hotel renovations which impacted the profitability of
Portugal portfolio. Net profit increased by a higher magnitude of 20%, attributable to various tax benefits and deferred tax
adjustments.
KEY HIGHLIGHTS
THB million +12%
30,970
27,758 Owned hotels • Revenue grew by 10%, as a result of
23,547 improved overall operations, particularly in
19,243
56% Thailand, Brazil and Africa (partly from
17,977 of 2017 hospitality
Revenue consolidation of Zambia hotels since 3Q16)
revenue and consolidation of Corbin & King.
Management Letting
• Revenue increased by 3%, supported by
+8% Rights
RevPar growth of 4% in AUD term (3% in
7,146 7,685 20% THB term), together with the increase in
5,561 6,146 of 2017 hospitality room count of 1%.
EBITDA 5,206
revenue
EBITDA
Margin 29.0% 28.9% 26.1% 25.7% 24.8% Management contracts • Revenue increased by 6%, primarily
attributable to strong performance of hotels
4% in Thailand and the UAE, together with
+20%
of 2017 hospitality additional management fees from newly
3,375 revenue
NPAT 3,009
2,811 managed hotels.
2,449 2,600
Real estate • Revenue grew by 36%, from both strong
Net
Margin 13.6% 13.5% 12.8% 10.1% 10.9% 17% sales of residential development and
turnaround of Anantara Vacation Club
of 2017 hospitality
2013 2014 2015 2016 2017 following the adjustment of its sales model.
revenue
* The financials above reflect performance from operation, and therefore exclude non-recurring items in 2014-2016 as detailed on page 40
Minor Hotels 9
MINOR HOTELS - INTERNATIONAL PRESENCE
In recent years, MINT has implemented a solid diversification strategy. At the end of 2017, MINT operates hotels and spas under
a combination of investment, joint-venture and management business models in 25 countries, with another 6 countries in the
pipeline over the next three years.
REVENUE CONTRIBUTION
100% 6%
75% International
63% 63% 71%
50% Thailand
94%
25%
37% 37% 29%
0%
2008 2016 2017 2022F
* Excludes non-recurring items in 2016
Investment
Management
Combination
New Destinations in Pipeline
Hubs
Minor Hotels 10SYSTEM-WIDE HOTEL OPERATIONS
Excluding new hotels, organic RevPar of the entire portfolio increased by 3% in 2017, driven by owned hotels and Oaks. 2017
system-wide RevPar was flat compared to 2016, primarily from newly-added overseas hotels which are still in the ramping-up
stage.
NUMBER OF HOTEL ROOMS ADR
No of +2%
Rooms THB
20,209 Organic excl FX System-wide
19,797
20,000 +1% -1%
17,714
6,110 5,830 5,803 5,705
14,721 6,000 5,744
15,000 5,573
12,800 MLR
10,000 Managed
Joint-venture 4,000
5,000 Owned
- 2,000
2013 2014 2015 2016 2017 2013 2014 2015 2016 2017
OCCUPANCY REVPAR
80% THB Organic excl FX System-wide
+3% Flat
4,024 3,964 3,933 3,837
4,000 3,901 3,821
70% Organic
70% 68% 68% +1%
67%
66%
System-wide 3,000
67% Flat
60% 2,000
2013 2014 2015 2016 2017 2013 2014 2015 2016 2017
Minor Hotels 11OWNED-HOTELS OPERATIONS
2017 HOSPITALITY Owned hotels contribute 56% of hotel & mixed-use revenue in 2017. RevPar of owned hotels increased by 6%
REVENUE CONTRIBUTION
primarily because of the strong performance of hotels in Thailand, together with Tivoli branded portfolio in
56% Portugal and Brazil.
Owned-
hotels
NUMBER OF HOTEL ROOMS ADR
No of
Rooms -1% Organic excl FX System-wide
THB
+7% +7%
8,000
7,118 7,039 8,000 7,028
6,385 6,553
5,811 6,229 6,228
6,000 5,387 6,000
4,000 3,112 4,000
2,676
2,000 2,000
0 0
2013 2014 2015 2016 2017 2013 2014 2015 2016 2017
OCCUPANCY REVPAR
THB Organic excl FX System-wide
80% 5,000 +6% +6%
68% Organic 4,372
70% 66% 66% 4,168 4,293
-1%
63% 62% 4,000 3,866 3,865
59% System-wide 3,653
60% -1%
3,000
50%
40% 2,000
2012 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017
* No of rooms declined slightly in 2017 as renovations of some hotels such as Tivoli Carvoeiro and Anantara Golden Triangle resulted in the merge of rooms for bigger, higher category rooms.
**Change in 2016 stats because of retroactive classification of hotels in Zambia from JV hotels to owned hotels as a result of change in investment status effective 3Q16.
Minor Hotels 12OWNED-HOTELS OPERATIONS – THAILAND
2017 OWNED HOTEL REVENUE
BY GEOGRAPHY Thailand hotels continued to be the largest contributor to the owned hotels segment, with
Others, 6% revenue accounting for half of owned hotels revenue in 2017. Thailand will remain an attractive
Africa, 9%
Maldives, 7% destination for tourism with its diverse attractions, well-developed infrastructure and strategic
Thailand,
50% location.
Brazil, 9%
Portugal, 19%
BANGKOK KEY HIGHLIGHTS
RevPar Growth Organic
(y-y) +13% -25% +40% -4% +14% • International tourist arrivals into Thailand demonstrated
consistent growth of 9% in 2017.
THB
5,000 4,662 4,830 4,943 4,722 4,874 • Minor Hotels continued to grow with the industry, with
room nights growing at 8% in 2017, driven by East Asia
70% 71% 78% Thailand
4,000 70%
3,794
(China, Korea and Japan).
51% 3,473 3,337
3,278 • RevPar of Minor Hotels’ Thailand portfolio grew by 9% in
3,000 2017, despite the national mourning in the first 10
2,473
months of 2017.
2,000
2013 2014 2015 2016 2017
• Organic RevPar of owned hotels in Bangkok showed
THAILAND PROVINCES strong performance with an increase of 14% in 2017.
RevPar Growth Organic
(y-y) +17% -2% +10% +6% +6% Bangkok • The RevPar growth was driven by the double-digit growth
THB of Anantara Siam Bangkok and The St. Regis Bangkok,
together with the ramping up of AVANI Riverside
8,000 7,443 7,581
6,937 7,060 Bangkok, in its second year of operation.
6,686
65% 70% 71% 74%
6,000 69% 5,600
4,974 5,272
4,599 4,526
4,000 Thailand • RevPar of hotels in the provinces increased by 6% y-y in
Provinces 2017, attributable to hotels in Chiang Rai, Chiang Mai,
2,000 Phuket and Hua Hin.
2013 2014 2015 2016 2017
% Occupancy ADR RevPar
Minor Hotels 13OWNED-HOTELS OPERATIONS – OVERSEAS
2017 OWNED HOTEL REVENUE
BY GEOGRAPHY In 2017, RevPar of owned overseas hotels increased by 3%, driven by hotels in Brazil, Portugal
Others, 6% and Africa. Maldives showed signs of recovery in 2017 with RevPar growth of 2% in USD term
Africa, 9%
Maldives, 7% for the year 2017, but was down by 2% in THB term because of the strengthening of the Thai
Thailand,
50% Baht.
Brazil, 9%
Portugal, 19%
OVERSEAS KEY HIGHLIGHTS
RevPar Growth Organic
(y-y) -44% +8% -43% -24% +3% • Including the two rebranded properties, which are still
ramping up, RevPar of the Portugal portfolio increased by 4%.
THB
12,177 Portugal • The Tivoli-branded portfolio reported a much higher RevPar
12,000 11,151 growth of 9% in 2017, with double-digit RevPar growth in
2Q17-4Q17. The exceptional growth was due to the ability to
8,000 6,903 7,452 7,265 4,236 raise rates following the hotel renovations.
5,567 6,239 3,331
62% 61% 58% 58% 53%
4,000 3,220 • RevPar of hotels in Brazil showed double-digit growth
throughout the year, following the renovation and improved
0
Brazil political and macro climate.
2013 2014 2015 2016 2017
• RevPar growth was driven by both occupancy (Tivoli Mofarrej
2017 ORGANIC REVPAR GROWTH (THB) Sao Paulo) and ADR (Tivoli Ecoresort Praia do Forte Bahia).
21%
• Maldives is seeing signs of turnaround, with RevPar growth of
2% in 2017 in USD term, primarily from improved occupancy.
Maldives
4% • The recovery was especially eminent in 4Q17, with RevPar
2% growth of 11% y-y.
-2% • All hotels in Africa had positive RevPar growth, except only
Africa
Portugal Brazil Maldives Africa
Botswana which went through renovation in 2017.
* Change in 2016 stats because of retroactive classification of hotels in Zambia from JV hotels
% Occupancy ADR RevPar to owned hotels as a result of change in investment status effective 3Q16.
Minor Hotels 14MANAGEMENT LETTING RIGHTS
2017 HOSPITALITY
REVENUE CONTRIBUTION Management letting rights (MLR) business which manages serviced-suites, primarily under the Oaks brand,
is the second largest segment in the hotel and mixed-use business, with 20% revenue contribution in 2017.
MLR continued to provide the hotel & mixed-use business with stable performance throughout the year,
20% compared to hotel operations which are more seasonal. 2017 MLR’s revenue in THB increased by 3%, from
MLR
the increase in RevPar and the additional number of rooms.
NUMBER OF MANAGED ROOMS ADR
No of THB THB AUD
Rooms +1% +1%
6,000 200
7,000 4,788 4,795 4,588
4,271 4,557
6,223 6,232 6,339 6,418 190
5,897
6,000 4,000
180
5,000 177
174 170
2,000
4,000 AUD
166 +2% 160
162 164
3,000 0 150
2013 2014 2015 2016 2017 2013 2014 2015 2016 2017
OCCUPANCY REVPAR
90% THB AUD
THB
+1% 5,000 +3% 160
3,730 3,643
78% 78% 4,000 3,258 3,495 3,596 150
80% 76% 76% 77%
3,000 140
138
70% 2,000 133 130
AUD
1,000 126 127 +4% 120
124
60% 0 110
2013 2014 2015 2016 2017 2013 2014 2015 2016 2017
Minor Hotels 15MANAGED-HOTELS OPERATIONS
2017 HOSPITALITY In 2017, managed hotels contributed 4% of hotel & mixed-use revenue. Organic RevPar of managed hotels
REVENUE CONTRIBUTION
portfolio was down 2%, primarily from weak performance of hotels in Bali from the volcano eruption,
Qatar with its diplomatic crisis and the absence of the higher RevPar of PER AQUUM portfolio; i.e. Huvafen
4% Fushi and Desert Palm. With the increase in room counts, 2017 revenue from management service
Management
Contracts increased by 6%.
NUMBER OF HOTEL ROOMS ADR
No of
Rooms +4% THB Organic excl FX System-wide
-6% -9%
5,000 4,692
4,533 8,000
4,000 3,910
3,453 7,038
3,254 6,748 6,724
3,000 6,341 6,108
6,000
2,000 5,594
1,000
0 4,000
2013 2014 2015 2016 2017 2013 2014 2015 2016 2017
OCCUPANCY REVPAR
80% THB Organic excl FX System-wide
-2% -8%
70% Organic 5,000
65% 4,400
63% 63% +2% 4,241 4,138 3,917
58% System-wide 3,737
60% 64%
55% +1% 3,227
3,000
50%
40% 1,000
2013 2014 2015 2016 2017 2013 2014 2015 2016 2017
Minor Hotels 16HOTEL EXPANSION PIPELINE
Expansion inside and outside Thailand will contribute to revenue & profit in coming years.
HOTEL INVESTMENT MANAGEMENT CONTRACTS
Others
• Quy Nhon, • Koh Samui, • Barra Grande, Brazil (50 rms) • Victoria, Australia • Recife, Brazil • Doha, Qatar • Lewa,
2018F Vietnam (25 rms) Thailand (456 rms) (200 rms) (100 rms) Kenya
(58 rms) • Luang Prabang, Laos • Doha, Qatar • Beirut, Lebanon (5 rms)
(53 rms) (151 rms) (110 rms)
• Tunis, Tunisia • Al Wakrah, Qatar
(41 rms) (101 rms)
• Desaru, Malaysia • Warangi, • Shanghai, China (260 rms) • Victoria, Australia • Brasilia, Brazil • Queensland, • Laikipia,
2019F (103 rms) Serengeti • Qiandao Lake, China (120 rms) (170 rms) (395 rms) Australia (50 rms) Kenya
• Ubud, Bali, National Park, • Lijiang, China (607 rms) • Busan, Korea • South Australia, (7 rms)
Indonesia* Tanzania* • Yu Ping, China (173 rms) (400 rms) Australia
(70 rms) (12 rms) • Le Chaland, Mauritius (164 rms) • Bangkok, Thailand (278 rms)
• Al Houara Tangier, Morocco (150 rms) (385 rms) • Hangzhou, China
• Sifah, Oman (198 rms) • Jebel Dhanna, UAE (132 rms)
• Tozeur, Tunisia (93 rms) (228 rms) • Daegu, Korea
• Jebel Dhanna, UAE (60 rms) (144 rms)
• Fares Island, • Zhuhai, China (160 rms) • Zhuhai, China • Fortaleza, Brazil • Zhuhai,
2020F Maldives* • Jeddah, Saudi Arabia (328 rms) (300 rms) (130 rms) China
(200 rms) • Zanzibar, Tanzania (150 rms) • Savanne, Mauritius • Hangzhou, China (100 rms)
• Ras Al Khaimah, UAE (306 rms) (156 rms) (166 rms)
• Muscat, Oman • Busan, Korea
(150 rms) (150 rms)
• Ras Al Khaimah,
UAE (255 rms)
• Dubai, UAE
(372 rms & 528 rms)
• Khao Lak, • Sharjah, UAE (233 rms) • Gammart, Tunisia
2021F Thailand (232 rms)
(328 rms)
• Hangzhou,
2022F China
(54 rms)
Total 7 Hotels / 796 Rooms 46 Hotels / 9,051 Rooms
* Note: Joint-ventured properties
In addition to the current pipeline, MINT is evaluating opportunities to manage another 12 hotels and management letting rights in Australia, China, Japan, Malaysia,
Myanmar, New Zealand and North America.
Minor Hotels 17REAL ESTATE BUSINESS - RESIDENTIAL
2017 HOSPITALITY MINT’s residential projects are part of the real estate business, which is under Minor Hotels. The
REVENUE CONTRIBUTION
developments are next to MINT’s hotels and are usually branded MINT’s hotel brands. Below are the current
17% projects with inventories to be sold over the next several years.
Real Estates
LAYAN RESIDENCES BY ANANTARA, PHUKET ANANTARA CHIANG MAI SERVICED SUITES THE ESTATES SAMUI
The villas are on a cliff, above
powder-white sands and Inventory
14%
crystal-blue waters.
● 14 villas, with 2-5 Sold
bedrooms 86%
● 1 units sold in 2017;
12 units sold to date
The project is situated on Layan beach, one of the A 50% joint-venture with U City Pcl., the
most picturesque bays on west coast of Phuket. project is in the city center of Chiang Mai, TORRES RANI, MAPUTO
● 15 uniquely designed across from Anantara Chiang Mai Resort &
pool villas Spa.
● Up to 8 bedrooms, each ● 44 units in 7-storey 3 out of 6
penthouse units
with 21 meter private Inventory condominium sold to date
Sold Inventory
infinity pool 38% building 32%
62% Sold
● 1,313 to 2,317 sq.m. of ● 65 to 162 sq.m. (one 68% A 49% joint-venture with Rani Investment,
built-up area to three bedrooms) the project is 5 minutes from Maputo CBD.
● 3 units sold in 2017; Sold ● 8 units sold in 2017; ● 18-storey residential tower; 181 keys
42% 31 units sold to date
9 units sold to date for rent and 6 penthouse units for sale
● 20,926 sq.m., 21-storey office tower
Minor Hotels 18REAL ESTATE – PIPELINE OF RESIDENTIAL & OFFICE PROJECTS
In order to ensure the continuity of revenue stream from residential sales in the coming years, MINT has prepared additional
pipeline of residential and office projects. Other residential projects will be selectively considered in various hotel destinations in
order to increase returns of the overall project.
AVADINA HILLS BY ANANTARA, PHUKET ANANTARA DESARU RESIDENCES
Located next to Layan A 60% joint-venture project
Residences by Anantara, with Destination Resorts and
Phuket, the project is a 50% Hotels Sdn Bhd, the project is
joint-venture with Kajima situated on beachfront land in
Corporation. the heart of Desaru Coast,
Malaysia.
● 16 luxury pool villas ● 20 residential villas
● 6-8 bedrooms ● 3-4 bedrooms
● 2,158 to 3,251 sq.m. of ● 290 to 600 sq.m. of built-
built-up area
up area
● Expected launch in 2018 ● Expected launch in 2019
ANANTARA UBUD RESIDENCES SILOM OFFICE
A 50% joint-venture project The project is a 40% joint-
with PT. Wijaya Karya Realty, venture with NYE
the project is on the edge of Development. The property is
a cliff with easy access to located on Silom Road, in the
Ubud’s town center. heart Bangkok CBD and is
intended to be used as Minor
● 15 residential villas
Group’s head office.
● 1-2 bedrooms
● 9,668 sq.m. of retail space
● 165 to 252 sq.m. of built-
up area
Sold ● 56,699 sq.m. of office
55% space
● Expected launch in 2019
● Expected launch in 2023
Minor Hotels 19REAL ESTATE BUSINESS – ANANTARA VACATION CLUB
2017 HOSPITALITY Part of the real estate business, Anantara Vacation Club is another important contributor to Minor Hotels.
REVENUE CONTRIBUTION
Growth of members are driven by four main markets – China, Thailand, Hong Kong and Singapore. With the
17% change of sales model since 2015 which resulted in smaller package, accelerated cash flow, as well as lower
Real Estates bad debt and cancellation rate, AVC is seeing a turnaround of its performance since 4Q16. In 2017, AVC
revenues increased by 28%.
TOTAL NUMBER OF MEMBERS MEMBERS PRIMARILY IN ASIA
Growth (y-y) +67% +41% +28% +15% +27% Others, 10%
USA, 2%
No. of UAE, 2%
Members Philippines, 2%
12,000 Australia, 2%
10,193 China, 39%
Taiwan, 3%
9,000 8,000 Japan, 4%
6,928
6,000 5,431 Malaysia, 7%
3,857
3,000
Singapore, 9%
0
Hong Kong, 9% Thailand, 11%
2013 2014 2015 2016 2017 As at Dec 2017
INVENTORY TO ACCOMMODATE GROWING MEMBERS GROWTH DRIVEN BY FOUR MARKETS
No. of Units 7 Destinations: >12 Destinations China
No. of
Queenstown Members Hong Kong
Bali > 500 6,896
500
Sanya Thailand
400 Samui 6,000 Singapore 5,553
Phuket 4,896
Bangkok +28%
300 3,731
Chiang Mai 4,000 +17%
186 +48%
200 160 2,460 +111%
137 +12%
106 119 2,000 +300% +38% +11%
100 +35% +33%
+39% +5% +7%
+23% +19%
+36% +12% +10% +10% +15%
0 0
2013 2014 2015 2016 2017 2022F 2013 2014 2015 2016 2017
Minor Hotels 20Minor Food
FINANCIAL PERFORMANCE – MINOR FOOD
2017 revenue of Minor Food increased by 2%, primarily attributable to outlet expansion of 3%. With effective cost control,
especially of the supply chain management of China hub, streamlining of non-performing stores, together with higher
contribution from strategic investments, EBITDA and net profit increased by 12% and 14% respectively.
KEY HIGHLIGHTS
+2%
THB million
23,022 23,582 Total-system-sales • BreadTalk (Thailand), Burger King and The Pizza
growth of Company were the top three brands with
18,626
15,343 16,754 highest total-system-sales growth in 2017.
Revenue 5.1%
in 2017
• The number of outlets of The Pizza Company,
Outlet expansion Burger King and BreadTalk increased by over
of 10% in 2017.
+12%
3% • The growth was somewhat offset by the
4,285 in 2017 strategic closure of outlets in Singapore and
3,843
3,127 Australia.
2,759 2,817
EBITDA
• Positive same-store-sales growth in 2017 was
led by Swensen’s, Burger King and Riverside.
EBITDA 18.0% 16.8% 16.8% 16.7% 18.2%
Margin • However, soft macro conditions in countries
that the four hubs operate resulted in overall
+14% Same-store-sales moderation of the group’s same-store-sales
1,913 growth of growth.
1,550 1,572 1,684
NPAT 1,501
-0.8% • Despite challenges in Minor Food’s key
in 2017 operating markets, the strength of its multi-
brand portfolio, its diversification strategy and
Net operational excellence enabled Minor Food to
Margin 9.8% 9.3% 8.4% 7.3% 8.1%
focus on efficiency, which resulted in improved
2013 2014 2015 2016 2017 profitability.
* The financials above reflect performance from operation, and therefore exclude non-recurring items in 2014-2016 as detailed on page 40
Minor Food 22MINOR FOOD - INTERNATIONAL PRESENCE
MINT operates four restaurant hubs: Thailand, Singapore, Australia and China. MINT’s restaurant presence is now in 19 countries
across the region, operating owned, franchised and a combination of both business models. MINT continues to look for
opportunities to expand, especially in these existing markets.
REVENUE CONTRIBUTION
100%
19%
75% 41% 40% 34%
International
50%
81% Thailand
59% 60% 66%
25%
0%
2008 2016 2017 2022F
* Excludes non-recurring items in 2016
Owned
Franchised
Combination
Hub
Minor Food 23MINOR FOOD – OPERATIONAL PERFORMANCE
2017 total-system-sales of the restaurant business grew by 5.1%, driven by Thailand hub, China hub and smaller developing
countries like India and the Middle East. As most of the hubs faced some challenges of the economic slowdown, Minor Food
took the opportunity to streamline its outlet network by selectively closing down the non-performing stores. In 2017, China was
the only hub that reported positive same-store-sales growth for the year.
SSS & TSS GROWTH RESTAURANT OUTLETS BY GEOGRAPHY
International 3,458
20%
Thailand
+3%
45%
15% 13.8% 2,064
13.1% 1,996
11.2% 36% 35%
1,043
10% 9.1% 33% 55%
64% 65%
67%
5.1%
5% 2008 2016 2017 2022F
1.5% 1.3%
0.4% -0.2%
RESTAURANT OUTLETS BY OWNERSHIP
-0.8%
0%
Franchised 3,458
Owned
+3% 47%
-5%
2013 2014 2015 2016 2017 1,996 2,064
No. of
1,544 1,708 1,851 1,996 2,064 48%
Outlets 1,043 49%
38% 53%
59%
Same-Store-Sales Growth Total-System-Sales Growth 53%
51% 50%
52%
82%
62%
2008 2016 2017 2022F
Minor Food 24THAILAND HUB
2017 RESTAURANT
REVENUE CONTRIBUTION Revenue from domestic operations accounted for 60% of total restaurant revenue in 2017. Swensen’s,
Burger King and The Coffee Club maintained positive same-store-sales growth momentum for the year,
60%
which helped offset other brands that were impacted by the soft macro backdrop and national mourning
Thailand period.
THAILAND’S SSS & TSS GROWTH MARKET LEADER
Thailand hub’s same-store-sales growth was flat in 2017 amidst the Continued to drive product innovation with the launch of
economic slowdown and the national mourning period. However, Cheesy Lava Pizza, which, with the right marketing
same-store-sales growth started to see an improving trend with initiatives through social media and customer engagement
positive same-store-sales growth since mid-November 2017. activities, helped drive overall sales.
With consistent outlet expansion, Thailand hub saw total-system-
Launched Ice Cream Bingsu, Korean shaved ice dessert,
sales growth of 8.2% in 2017.
which successfully created excitement in the market, and
became 30% of sales mix since its nationwide launch.
20%
Implemented promotional campaign with tactical pricing
strategy for salad bar and best-selling menus, which
15% resulted in an increase of customer count by 17% y-y in
4Q17.
10%
Introduced the first local-relevant product, Durian
Blizzard, resulting in increase in customer count by 30% in
5%
4Q17.
0% Further strengthened the delivery channel with the launch
of Burger King online webpage, in addition to the 1112 call
-5% center and Food Panda service launched earlier.
2013 2014 2015 2016 2017
Successfully expanded to hotels and apartments in high-
traffic tourist areas, resulting in total-system-sales growth
Same-Store-Sales Growth Total-System-Sales Growth
of over 30% in 2017.
Minor Food 25CHINA HUB
2017 RESTAURANT
REVENUE CONTRIBUTION China hub remained one of MINT’s growth drivers as MINT is confident in the strong growth prospect of the
14% country, supported by growing middle class and increased urbanization trend. With the focus on cost
China efficiency and streamlining of outlets, in 2017, China hub’s net profit margin improved significantly in 2017.
CHINA’S SSS & TSS GROWTH DRIVING GROWTH & PROFITABILITY
China hub ended the year with same-store-sales growth of 1.3%, • Riverside, contributing over 80% of China hub’s
attributable to the solid performance of Riverside. revenues, reported positive same-store-sales growth
Total-system-sales growth in 2017 was 6.0%, relatively slower than every quarter in 2017.
the past three years, as China hub took the opportunity during the
year to streamline its outlets. • Total-system-sales grew moderately with the
strategic streamlining of number of outlets.
Acquisition of • Thai Express started to expand in China through
Riverside franchise business model.
300%
• The brand implemented menu adjustments to better
cater to local Chinese taste.
• Sizzler focused on improving customer experience
30%
with outlet renovations and new product
20% development.
10%
0%
-10%
-20%
2013 2014 2015 2016 2017
Same-Store-Sales Growth Total-System-Sales Growth
Minor Food 26AUSTRALIA HUB
2017 RESTAURANT
REVENUE CONTRIBUTION In 2017, Australia hub’s revenue contributed 14% of total restaurant business. Although 2017 revenue
declined from soft same-store-sales and minimal outlet expansion, the hub’s net profit increased by 12%,
primarily from the focus on efficiency and rationalization of non-performing outlets.
14%
Australia
AUSTRALIA’S SSS & TSS GROWTH IMPROVING EFFICIENCY AMIDST CHALLENGING MACRO
Same-store-sales of the Australia hub slightly declined with The Coffee Club in the Middle East and Thailand performed well
negative growth of 1.5%, as the country’s economy, especially in during 2017, with same-store-sales growth of 7.5% and 35.9%
Queensland, continued to be weak. respectively.
Total-system-sales declined by 0.9%, with the decline in net The hub continued to see robust sales growth of Veneziano
number of outlets at the end of 2017 as the Australian hub was Coffee Roaster, driven primarily by the retail distribution channel.
more cautious in opening of outlets amidst fragile macro
backdrop, together with the divestment of The Groove Train The hub’s profitability improved from the strong performance of
portfolio. international business and Veneziano, together with the closing
down of non-performing domestic outlets.
20%
Australia hub has taken the strategic decision to focus on coffee-
related business and divested all 26 of the Groove Train outlets at
15%
the end of 2017. The Groove Train was part of the acquisition of
VGC Group in 2014.
10%
5%
0%
-5%
2013 2014 2015 2016 2017
Same-Store-Sales Growth Total-System-Sales Growth
Minor Food 27SINGAPORE HUB
2017 RESTAURANT
REVENUE CONTRIBUTION Like many other F&B operators in the market, Singapore hub has been impacted by the economic slowdown
and increased competition over the past few years. While the closure of non-performing outlets resulted in
decline in revenue of 11%, Singapore hub’s profit improved with the focus on efficiency of the operations.
9%
Singapore
SINGAPORE’S SSS & TSS GROWTH ADAPTING TO THE MACRO ENVIRONMENT
Although same-store-sales growth continued to be negative at Singapore hub is adapting to current environment of continued
7.8% in 2017, the trend is improving, with a decline of only 3.6% in slowdown of the consumption and high competition by selectively
4Q17. closing down non-performing outlets. The initiative resulted in
the turnaround of the hub’s performance from loss-making earlier
With the selective closure of non-performing outlets, Singapore
in the year to profitability in 4Q17.
hub’s total-system-sales declined at a faster rate than same-store-
sales, at 11.0%. The closing down of non-performing outlets together with focus
on key marketing initiatives resulted in improving trend of key
20% brands, with Basil, Poulet and Riverside reporting positive same-
store-sales growth in 4Q17, while Thai Express and Xin Wang Hong
15% Kong Café saw improving trend of the negative same-store-sales
growth.
10%
5%
0%
-5%
-10%
-15%
2013 2014 2015 2016 2017
Same-Store-Sales Growth Total-System-Sales Growth
Minor Food 28Minor Lifestyle
FINANCIAL PERFORMANCE – MINOR LIFESTYLE
2017 revenue of Minor Lifestyle was up 17%, primarily from retail trading business. EBITDA grew at a slightly lower rate of 14%
due to margin pressure of the contract manufacturing business, together with the ramping up of the recently launched brands
earlier in the year. Net profit, however, increased at a faster rate of 57% because of higher operating leverage gained from the
stable level of depreciation.
+17%
KEY HIGHLIGHTS
THB million
4,091 Total-system-sales • Total-system-sales growth was primarily
3,616 3,703 3,505 3,505 attributable to Charles & Keith, Brooks
growth of
Revenue Brothers, together with the ramping up of
19.3% newly-added brands, including Etam,
in 2017 Radley and Anello.
Same-store-sales • Minor Lifestyle’s same-store-sales growth
+14% growth of was driven by Charles & Keith, Pedro,
2.3% Brooks Brothers and Radley.
384
338 300 304 in 2017
EBITDA 267
Retail trading • 2017 revenue from retail trading increased
EBITDA by 22%, mainly from Charles & Keith,
9.3% 10.4% 8.6% 7.6% 7.4% 76%
Margin Brooks Brothers, together with sales from
of 2017 Minor Lifestyle new brands added in 2016, in particular
+57% revenue Anello, Etam and Radley.
151 183
124 127
81
NPAT Contract manufacturing • 2017 revenue from contract manufacturing
increased by 3% as sales picked up towards
Net
Margin
4.2% 4.9% 3.5% 2.3% 3.1% 24% the end of the year, with successful
2013 2014 2015 2016 2017 of 2017 Minor Lifestyle product launches and marketing campaigns
revenue of major customers.
Minor Lifestyle 30MINOR LIFESTYLE – OPERATIONAL PERFORMANCE
Retail trading business showed strong operational recovery in 2017 with same-store-sales growth of 2.3%. With rapid expansion
of the newly-launched brands, total-system-sales grew by almost 20% for the year. Sales per sq.m. improved in 2017, signifying
the higher efficiency of the business.
SSS & TSS GROWTH SALES PER SQ. M.
30% THB
140,000
19.3%
20%
120,000
12.0%
8.4%
10% 105,248
100,000
3.8% 94,860 94,336
88,457
86,804
0% -3.3% 2.3% 80,000
0.3% -0.1%
-8.1% -6.3% 60,000
-10%
2013 2014 2015 2016 2017 2013 2014 2015 2016 2017
No. of No. of
276 297 307 327 398 276 297 307 327 398
Shops Shops
Same-Store-Sales Growth Total-System-Sales Growth Fashion & Cosmetic Sales per Sq. m.
* Note: sales per sq.m. was restated to exclude sales of contract manufacturing.
Minor Lifestyle 31Corporate Information
Anantara Guiyang, ChinaCAPEX & BALANCE SHEET STRENGTH
In addition to committed CAPEX, MINT also set aside additional CAPEX for future investments and new opportunities in the
pipeline. With the additional equity received from warrant conversion, leverage ratio declined to a level much lower than the
internal policy. With its solid balance sheet, MINT will be able to primarily use its internal cash flow and debt financing to fund
its CAPEX requirements going forward. In addition, MINT and its senior debenture have “A+” rating by TRIS.
CAPEX PLANS – COMMITTED & NEW OPPORTUNITIES LEVERAGE RATIOS
THB million X X
Internal
15,000 6.0 1.3 Policy
1.1
5.0 1.00x
12,000
0.9 0.90x
4.0
0.7
9,000
3.0 0.5
2013 2014 2015 2016 2017
6,000
2.0 Interest Bearing Debt Net Interest Bearing
to Equity Debt to Equity
3,000
1.0
BACK-UP FINANCING
- - Note: Cash on hand as at end of 2017
2017A 2018F 2019F 2020F 2021F 2022F THB million is THB 5,336 million
100,000
Minor Food Minor Hotels Minor Lifestyle Shareholders’
80,000 Equity
50,021
Additional CAPEX (non-committed average per annum) 60,000
for New Opportunity/Acquisition(s) 40,000
Debt
EBITDA coverage on committed CAPEX 20,000 50,163 Debt
28,624
0
* 2017 committed CAPEX includes increased shareholding in Riverside and Sun
Outstanding Borrowing & Equity Un-Utilized Facility
International portfolio in Africa, together with investments in Corbin & King, AVANI
Hua Hin, Avadina Hills by Anantara and renovations of Tivoli portfolio.
Corporate Information 332018 Outlook & Beyond
The Wolseley London, Corbin & King2018 OUTLOOK – MINOR HOTELS
Portugal, Thailand and Africa will be the drivers for owned hotels in 2018, while management contracts and real estates will also
support growth. In addition, Minor Hotels expects margin improvement in 2018.
OWNED HOTELS Thailand Australia Portugal Africa Maldives
RevPar
Thailand continues to Apart from portfolio Strong demand The renowned Victoria Improving tourism
be tourism playground expansion with continues with the Falls will attract from Europe and
Occupancy with healthy inbound additional properties, terrorism-free and tourists to Zambia, and MINT’s targeted
tourism growth Australia portfolio has value for money Botswana will benefit marketing will drive
always run at high and proposition from hotel renovation occupancy growth
stable occupancy rate
Minimal supply growth Competition means Rate increases are Potential rate increase Given excess supply
and healthy occupancy moderate ADR growth expected following the is expected after the and high competition,
ADR will prompt ADR for the serviced renovation renovation in Botswana minimal ADR increase
increases apartment segment is expected
MANAGEMENT CONTRACTS REAL ESTATES ACQUISITIONS
With the strong pipeline, MINT will continue The full benefit of the recently acquired
Over 45 management contracts signed and to execute sales of its luxury residential Tivoli portfolio will be better pronounced in
to be opened over the next 4 years (2018- development projects the upcoming high season of 2018
2022) under 5 brands AVC will continue to perform well following MINT will benefit from both strategic and
the turnaround of its performance since financial contribution of the Corbin & King
4Q16 group.
With the ramping up of the new hotels, the completion of the renovations of the hotels in Portugal, contributions from
MARGIN management contracts portfolio and real estates business, margin of Minor Hotels will improve
2018 Outlook 352018 OUTLOOK – MINOR FOOD
Minor Food’s operation in 2018 will be driven by Thailand and China hubs. Minor Food sees room for margin improvement
particularly from China and Singapore hubs.
THAILAND CHINA AUSTRALIA SINGAPORE
Total-System-
Sales
Consumption is expected to Consumption will remain The improving labor market While economic growth will
improve with strong export strong, with GDP growth and household income, be driven by manufacturing
Macro
and tourism, infrastructure forecast to be above 6% driven by non-mining sector, sector on the back of external
Environment
spending, agricultural will gradually result in demand, the spillover to the
Outlook
recovery and stronger healthier private rest of the economy is
household balance sheet consumption expected to be limited
With the strong portfolio of Riverside, the main brand, The Coffee Club will focus Thai Express will
brands, Minor Food will will continue to drive on building iconic brand differentiate products,
leverage on its product growth of the China hub experience with the displays and ambiance in
Same-Store-
innovation, marketing “coffee story”, and will each location and will
Sales Growth
capabilities, digital introduce lunch options promote premium menu
platform and operational that offer value, speed and items
excellence convenience
Thailand hub will continue With the streamlining of While outlet expansion in While selectively closing
to expand the number of Riverside outlets in 2017, Australia will be moderate, down non-performing
Outlet outlets across its brands China hub now has the the focus will be on outlets domestically,
Expansion platform to grow the brand international markets such Singapore hub will look for
more aggressively as Thailand and the UAE expansion opportunity
internationally
While Thailand and Australia hubs are expected to maintain their margins, China hub will see profitability improvement
MARGIN
from the increased scale, and Singapore hub will focus on efficiency enhancement
2018 Outlook 36FIVE-YEAR ASPIRATIONS
2022F
> 270 hotels
> 300 residences built
2017 > 500 timeshare units
> 3,400 restaurants
158 hotels > 600 retail shops & POS
2009 132 residences built to (> 44,000 Sqm)
date
186 timeshare units
30 hotels 2,064 restaurants
1,112 restaurants 398 retail shops & POS
292 retail shops & POS (30,532 Sqm)
(14,275 Sqm)
5.4bn 2022F
2017
NPAT
(THB)
1.4bn
2009
Corporate Information 37MINT’S FIVE-YEAR STRATEGY 2018-2022
Five-year strategy consists of the following three key pillars, with clear goals and measurements.
2022
NPAT growth of 15-20% CAGR ROIC of > 13%
Goals
Drive Growth of Multi-Brand Expand Through Strategic
Portfolio Maximize Asset Value
Investments, JV Partnerships &
Through Brand Value Enhancement and Productivity
& Distribution Optimization
Acquisitions
Growth
Asset-Right Mixed-use
Pillars Strategy Initiatives
Vertical Integration
Funding Source Optimization
Total-system-sales growth Revenue from overseas
of 15% of 50%
Measure- Improvement of margins
ments Revenue growth Net profit from overseas
of over 10% of over 50%
Corporate Information 38Thank You
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