SHR Opportunity Day 1H/2020 - 2 September 2020 - S Hotels & Resorts Public ...
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SHR Opportunity Day 1H/2020 2 September 2020
S Hotels & Resorts The premier hotel investment and resort management company, creating unique travel experiences for our guests and value for our stakeholders Agenda ▪ SHR Company Overview ▪ Strategic Recovery Path for COVID-19 ▪ Business Direction ▪ 1H/2020 Operating & Financial Performance
SHR Company Overview
P r o ven tr a c k r ec o r d to g r o w fo o tpr i n t
Number of keys Geographical coverage Target customers
Africa Others
2.8% 0.4%
+376 America
+878 8.5%
4,647
+274 +3 4,271
+2,889 39 Europe
3,390 3,393 Hotels 38.0% Asia-Pacific
3,116 50.3%
Contribution by
2019
Number of keys
Notes:
227 13% 9% 7% 4% 67% (1) Overall portfolio includes all assets including UK assets. Breakdown by keys.
(2) Core portfolio excludes UK assets, which are held through a 50% stake in our
equal joint venture with FICO UK. Breakdown by customer nights.
2014 2015 2016 2017 2018 2019 Thailand Maldives Fiji Mauritius United Kingdom (3) Haven’t include Crossroads island 3 yet
2014 2015 2016 2017 2018 2019 2020
Apr 2014 Apr 2015 Sep 2016 Jan 2017 Mar 2018 Sep 2019 Feb 2020
◼ Singha Estate acquired ◼ 6 grand deluxe pool ◼ Acquired 2 Holiday Inn ◼ Commenced land ◼SHR acquired Project ◼ Commencement of ◼ Disposal of 50% share
Santiburi Koh Samui villas added to Santiburi hotels and 1 Mercure reclamation, shoreline Crossroads Phase One operations for two investing in Island 3
Koh Samui hotel through second protection, landscaping from Singha Estate hotels in Maldives Crossroads project
Nov 2014 JV with FICO UK and construction of May/Jun 2018
Oct 2015 Nov 2019
◼Acquired Phi Phi Island Project Crossroads Phase Santiburi Koh Samui
◼ Entered into equal JV ◼ ◼SHR trading on SET
Village Beach Resort One (via Singha Estate) constructed 19 new
with FICO UK to acquire
UK portfolio of 26 hotels grand reserve pool villas
(new room category)
◼ Acquired 6 Outrigger
hotels
4
SH R’ s g l o b a l h o spi ta l i ty po r tfo l i o
Outrigger Laguna
Phuket Beach Resort
255 Outrigger Koh Samui
Beach Resort
52 Phi Phi Island Village
Beach Resort 201
Portfolio outreach/
Number of countries 5
2,964
UK
3,115
Hotel Brands
7
29 Hotels
151 Santiburi Koh Samui 96 Total Number of
Resorts/Hotels 39
SAii Lagoon Maldives,
198
TH
Total Number of
Keys 4,647
Curio Collection by Hilton
604 Outrigger Fiji
253 Castaway Island, Fiji 65
Beach Resort
4 Hotels
Contribution by Positioning
Maldives Fiji
178 Upscale 4%
Hard Rock Hotel Maldives
429 318 Luxury 2%
Mauritius 3 Hotels 2 Hotels
181 Upper
Upper
1 Hotel upscale
midscale
Outrigger Mauritius 181 27%
Beach Resort 67%
Outrigger Konotta
Maldives Resort 53
Outrigger Hotels Self-Managed Hotels(1) UK Hotels
Total # of keys Total # of Hotels
Note: Core portfolio excludes Holiday Inn and Mercure hotels in the UK which are held through a 50% stake in our equal joint venture with FICO UK.
(1) Includes Self-Managed Hotels under franchise agreement(s).
5
Our hospitality management platform
2. Third Party Hotel
Management Agreement
6 properties | 859 keys
“Affordable luxury
lifestyle resort”
SHR is able to tap on both
in-house, home-grown
management platforms
as well as access to strong
brands via collaboration
with reputable
international operators.
1. Self-Managed 3. Self-Managed with
2 properties | 297 keys
Franchise Agreement
2 properties | 376 keys
6
Our hospitality management platform
❖ Thai sensibilities, but
with a creative, 4. Hotel Management Platform
dynamic global view SHR manage hotel on 3rd Party asset
❖ Resort style in Pacific under the HMA (To be launched in 2020 – 2021)
and Indian ocean
❖ Upper upscale Recurring management fee income
❖ Refine luxury as
personal freedom
Accelerated growth capacity with
“ To set a regional hotel
Asset-light model
brand with the vision to
bring the world inclusivity
rather than separation” Penetrate domestic market
❖ Immersion travel culture
with local experience
❖ Residential areas Raise SHR brand awareness
and highly recognized sustainable
❖ Upper midscale
development approach
❖ 70 – 150 keys per hotel
7
Und er c o nstr ucti on pr o jects
Crossroads project Island 3 Phi Phi Island Village Beach Resort Outrigger Laguna Phuket Beach Resort
Construction 2020 - 2022 Renovation • Existing Hillside Villas (12 keys) Objective Multipurpose Hall for meeting and
Period Plans • Spa Pavilion and treatment rooms seminar activities (MICE)
Opening date 2022 • Fun Pool Restaurant
Project cost USD 56m-60m
No of keys 80 villas (120 sqm to 320 sqm per Objective To enhance ADR and spending per Size 1,900 sqm with maximum capacity
room) person of 350 persons
Positioning High-end lifestyle resort
Construction Jun – Nov 2020
Est. ADR USD 900 – 1,000 Period
Completed End of Q1/2020
Contribution to • 50% share of profit from JV Construction
SHR earning Project cost THB 30m
• Acted as Asset management
eligible for management fee to JV
8
Strategic Recovery Path for COVID-19
P o s t COV ID - 1 9 Outl o o k fo r H o s pi tal i ty In d u s tr y
COVID-19 Status Update Hospitality Industry Outlook Post COVID-19
Philippines
2K “Outdoors” and “Nature-related”
2nd wave facing in are more popular
Philippines, Australia
▪ Survey on Chinese travelers found outdoor,
and Japan
nature-related, food and family-themed
1K
destinations will be more popular
Australia
▪ Economy travel will recover more quickly
Japan
No. of daily new case
“Domestic” and “Leisure” are expected
to recover faster
Potential Vaccine Development Status ▪ Baes on World Tourism Organization (UNWTO) Panel of
Experts survey
Company Current Expectation
▪ International Tourism 2020 possible to declines up to -78%
Uni. of Oxford (UK) Phase 2/3 Deliver emergency vaccines by October
given travel restriction release in December
Pfizer (US) Phase 2/3 1.3 billion doses worldwide by end of 2021
Sinopharm (China) Phase 3 Ready for public use by the end of the year
Domestic demand boosted by TAT
Projected 2020 GDP Growth
▪ Expect international tourists at 8.2 million with the domestic
trips at 71 million, generating a total revenue of 0.81 trillion
Global 5% baht
US China
▪ Launch “We travel together” campaign to re-boosting domestic
6% 1% tourism by offering 40% discount on hotel room rates
Europe Thailand ▪ Introduce Amazing Thailand Safety & Health Administration
9% 8% (SHA) to increase tourist confidence.
10
10P o r tfo l i o key str ength s a r e r eta i n ed po s t COV ID - 1 9
Leisure segment &
Upper-upscale positioning Diversified Portfolio
Resort style hotel
• Affordable luxury position • Experiential traveller • Diversified prime location
• Maintain purchasing power after • Family and small group focus (1) • Located in dream leisure
COVID-19 • Easier to bounce back than business or destination
• High sanitation & hygiene standards MICE market (2) • Balance out high season earning
• Physical distancing, low density
• Outdoor and nature-related
destinations will be more popular (1)
(1) In-line with / according to McKinsey survey
(2) According to UNWTO
© S Hotels and Resorts Public Company Limited 11
11Upd ate o n c ur r ent si tuati o n
COVID-19 Status Recovery Plans
• Hotels in Phuket have resumed their operations on July 1, followed by the
• Positive signal & Controllable situation
reopening of hotel in Koh Samui on July 15
• Active case below hundred
• All properties have participated the government’s scheme “Rao Tiew Duay
• Single-digit daily new cases
Thailand Kan” (We Go Travel Together)
• Not yet reopened the international air traffic to large
• Self-manage hotels have inaugurated the special “Buy 1 Get 1 Free” deals,
scale for inbound tourists but only for a few selected
while two Outrigger branded resorts have also offered “special discounted”
groups
accommodation rates
• Controllable situation • Outrigger Fiji Beach Resort and Castaway Island Fiji have resumed their
• Active case = 7 operations on July 1 and 31, respectively
Fiji • Single digit new case in the last month • Both Outrigger properties have released local offers in support of the national
• Proposing “Bula Bubble” for AUZ and NZ, however tourism “Love our Locals campaign” to stimulate the struggling industry across
progress is depending on situation of those countries (1) the country
• Controllable situation • Regarding the oil spill situation in Mauritius, occurred near Pointe D'Esny
Mauritius • Active case = 2 which is 50km northeast of the Outrigger Mauritius Beach Resort, we are
• Single digit new case in the last month considering the necessary to re-schedule the opening plan
• SAii Lagoon Maldives and Hard Rock Hotel Maldives, under the project
• Border is re-opened for tourists without quarantine
CROSSROADS have also reopened their doors from July 15
Maldives requirements since mid-July
• The re-opening dates of the Outrigger Konotta Maldives resort and the Marina
• Consideration on travel bubble with India (2) are still tentative
• More controllable situation • 20 properties in UK have reopened their doors in response to the government
UK • Decreasing trend of # of new case stimulus scheme with 15% VAT reduction for hotel, restaurants, etc. from
• Self-isolate exemption for some countries (3) 15th Jul 20 – 12th Jan 21.
(1) https://www.stuff.co.nz/travel/destinations/pacific-islands/122364524/is-the-bula-bubble-dead-heres-fijis-big-problem-for-kiwis
(2) https://www.businesstraveller.com/business-travel/2020/08/14/india-maldives-partnership-strengthens-flights-under-air-bubble-to-operate-soon/
(3) https://www.gov.uk/guidance/coronavirus-covid-19-travel-corridors#countries-and-territories-with-no-self-isolation-requirement-on-arrival-in-england
12Res u m pti o n o f H o tel Oper a ti o n s
▪ The re-opening is subjected to
government order, travel restriction,
and demand.
▪ Diversified portfolio can capture inter -
regional demand all over the world
UK: Majority has
▪ Rolled out a series of innovative re-opened in July
commercial strategies to target Key Market: Local
Maldives: 2 properties have
domestic and inter-regional markets in re-opened in July Thailand: Fully has
Key Market: Europe, USA, re-opened in July
the short term Key Market: Local
Russia, Middle East
▪ The cost initiative will lower the
minimum breakeven occupancy on Fiji: Fully has
re-opened in July
EBITDA to approximately 30 – 40%. Key Market: Local,
Mauritius: Expected to
reopen in September AUS, NZ
13Business Direction
Str a teg i c gr o wth pl a n
Profitability optimization
• Enhance profitability of existing portfolio by
clustering service, implementing HOM (Hotel
Operating Model) International region
• 3rd party HMA with
performance guarantee
• Target on seasonal balancing
Acquisition and divestment
• High leisure driven properties in key tourism
destinations focusing on experiential or lifestyle
brownfield properties
Domestic & Inter-region
• Divestment for rebalance portfolio • Self-managed
Hotel Management • Homegrown HMA
• Divestment
Platform
• Properties with or without brand with
opportunity to convert to franchise or self
managed
• Aim to lunch the hotel management under
Management Inducement Program
15B a l a n cin g Gr o wth
wi th F i n a n c ia l Str en g th
Current (2020) 5-year Destination (2025)
39 hotels 80 hotels
Healthy Optimal
capital structure capital structure
▪ Positive liquidity status ✓ Access various sources of fund
▪ Financing flexibility ✓ Minimise cost of funding
▪ Available debt room to support ✓ ROE improvement
growth
UK Portfilio
3rd Party HMA 3rd Party HMA
Hotels
16% 14%
21%
UK Portfilio
Hotels 2019 Room
74% Targeted Self-Managed
contribution
portfolio by and Franchise
by management 17%
platform platform in
“ Gearing toward Self-Managed, Franchise and 2025
Homegrown brand platform with solid base Self-Managed
and Franchise Homegrown HMA
performance from third party operator guarantee” 10% 48%
161H/2020 Operating & Financial Performance
P o r tfo l i o per fo r m a n ce b y m a n a g em en t pl a tfo r m
Hotel performance across portfolio materially affected by the COVID -19, as well as, the hotels had to suspend
operations from April 1, 2020.
Self-Managed Hotels Outrigger Hotels
Unit: %, THB 1H/2019 USD/THB = 31.62
9,653 FJD/THB = 14.23 1H/2019
8,674 1H/2020 MUR/THB = 0.82 1H/2020
6,428 7,006
73% 6,347 74%
4,784
3,134
33% 30% 2,077
Occupancy ADR RevPAR Occupancy ADR RevPAR
Crossroads Hotels (1) UK Hotels
USD/THB = 31.62 1H/2019 GBP/THB = 39.85 1H/2019
10,841 1H/2020 1H/2020
65%
2,666
2,334
1,742
31% 27%
3,331
619
Occupancy ADR RevPAR Occupancy ADR RevPAR
(1) officially opened on 1 September 2019.
18Su m m a r y o f SH R c o n s o li d ated fi n a n c i al per fo r m a n ce
Revenue from services by management platform 1H/2020 Revenue from services by hotel location
Unit: million baht Unit: (%)
1,751.8 Mauritius
Self-Managed 9%
3rd-Party HMA 69% 34% YoY 1,151.6 Fiji Thailand
11% 38%
Self-Managed 31%
with Franchise
46%
31%
23% Maldives
42%
1H/2019 1H/2020
Gross profit and margins Nature by expense
Unit: million baht, (%) Unit: million baht, (%) 8% YoY
38% 39%
38%
Financial cost 196.8 34% YoY
37%
205.5
45% YoY 482.8
292.8
36%
35% Depreciation
664.3 32% 34%
512.0 103.3
33%
Admin expenses 756.3 265.9
32%
154.4
366.3
31%
Selling expenses 127.2 477.6
30%
795.1 - 1% 74.0 - 37%
29%
559.0 YoY 368.0 YoY
28%
Cost of services
1H/2019 1H/2020 1H/2019 1H/2020 1H/2020 ex.
Crossroads
• The operating cost (excluding depreciation and interest) was trimmed in 2Q2020
Gross profit decreased by 45% YoY due to the decrease in operating revenue of by 38% while 1H2020 was flat.
Self- Managed Hotels and Outrigger Hotels, impacted by COVID-19 pandemic • Excluding an expense of the project Crossroads, the operating cost in 1H2020
declined by 37%.
• The increase of admin expenses in 1H2020 was primarily attributable to the record
of expenses incurred during the suspension period as administrative expenses.
19Su m m a r y o f SH R c o n s o li d ated fi n a n c i al per fo r m a n ce
Adjusted EBITDA and margins (1) Adjusted net profit (loss) and margin (2)
Unit: million baht Unit: million baht
30%
21%
20%
(9%) 0%
1H/2019 1H/2020 -10%
373.6 10%
(148.9) Net profit
-20%
for the
EBITDA -30%
period
= 82.1
0%
= (575.7)
-40%
1H/2019 1H/2020 -50%
(945.7)
-10%
(296.8) -60%
-70%
-20%
-80%
(26%) -30% (82%) -90%
(1) Adjusted EBITDA is calculated from EBT plus (2) Adjusted net profit (loss) is calculated from
Finance cost, Depreciation and Amortization, Net profit (loss) of the period, 370 mb, and deduct
Interest income from Loan to JVs and deduct unrealized loss from exchange rates and
Interest income, unrealized loss from exchange non-recurring items
rates and non-recurring items
20DISCLAIMER The information contained in this material has been prepared by S Hotels and Resorts Public Company Limited (“SHR” or “S Hotels and Resorts”) solely for information purpose and does not constitute an offer or invitation to sell or the solicitation of an offer or invitation to purchase or subscribe for shares in S Hotels and Resorts . Some statements made in this material are forward‐looking statements. These statements typically contain words such as "expects" and "anticipates" and words of similar import. Any statement in these materials that is not a statement of historical fact is a forward-looking statement that involves various risks and uncertainties. These include statements with respect to our corporate plans, strategies, and beliefs. The statements are based on our management’s assumptions and beliefs in light of the information currently available to us. These assumptions involve risks and uncertainties which may cause the actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by such forward‐looking statements. None of the future projections, expectations, estimates or prospects in this presentation should be taken as forecasts or promises nor should they be taken as implying any indication, assurance or guarantee that the assumptions on which such future projections, expectations, estimates or prospects have been prepared are correct or exhaustive or, in the case of the assumptions, fully stated in the presentation. We assume no obligations to update the forward-looking statements contained herein to reflect actual results, changes in assumptions or changes in factors affecting these statements. Accordingly, no representation or warranty, express or implied, is made or given by or on behalf of S Hotels and Resorts or any of its shareholders, directors, officers or employees or any of the Banks (and their shareholders, directors, officers or employees) or any other person as to the accuracy, completeness or fairness of the information or opinions contained in this presentation. None of S Hotels and Resorts nor any of its shareholders, directors, officers or employees accepts any liability (in negligence or otherwise) whatsoever for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection therewith. Individual situations and local practices and standards may vary, so viewers and others utilizing information contained within a presentation are free to adopt differing standards and approaches as they see fit. Products and names mentioned in materials or presentations are the property of their respective owners and the mention of them does not constitute an endorsement by S Hotels and Resorts . The information contained in this presentation is only current as of the date its date. In giving this presentation, neither S Hotels and Resorts nor its respective advisers and/or agents undertake any obligation to provide the recipient with access to any additional information or to update this presentation or any additional information or to correct any inaccuracies in any such information which may become apparent. You must make your own assessment of the relevance, accuracy and adequacy of the information contained in this presentation and must make such independent investigation as you may consider necessary or appropriate for such purpose. The presentation should not be construed as legal, tax, investment or other advice.
Thank you https://investor.shotelsresorts.com ir@shotelsresorts.com
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