Indian Hotels Co. Ltd. · NSE:INDHOTEL
Indian Hotels — The Indian Hotels Company — Investor Day (February 2019)
74 slides from Indian Hotels's investor day presentation, Feb 19, 2019
Slide 1: Capital Market Day
Capital Market Day February 19, 2019
Slide 2: South Asia's largest hospitality company with 115 years of legacy
We are South Asia’s largest hospitality company with a legacy of 115 years 100+ 4 12 locations continents countries 178 21,600+ $1 Billion+ Group revenue hotels keys 32,000+ associates 2
Slide 3: We asked ourselves – WHAT IF?
We asked ourselves – WHAT IF? 3
Slide 4: Embarked on a journey of transformational growth
And embarked on a journey of transformational growth ₹ / crores Where we were Inflection Point 4,123 4,076 3,013 2,601 Aspiration 1,875 2022 370 355 249 -231 -63 2005/06 2006/07 2007/08 2015/16 2016/17 2017/18 9m 2018/19 Revenue PAT 4
Slide 5: Fundamentals Intact
Fundamentals Intact Staying true to our vision and strategy 5
Slide 6: Aspiration 2022
Aspiration 2022 Unveiled one year back in February, 2018 6
Slide 7: Aspiration 2022: Focus on Margin Expansion
Aspiration 2022 Focus on Margin Expansion 2017/18 2022/23 Particulars Increase Forecast Aspiration Aspiration 2022/23 EBITDA Margin 17% 25% 8.0% Points 7
Slide 8: Strategic Initiatives
Strategic Initiatives Path to Execution Re-structure Re-imagine Re-engineer Scale up Inventory Manage Brandscape Expand Margins Sell Non Core Assets Multiply Portfolio Embrace Technology Simplify Holding Structure Manoeuvre Excellence Engage People 8
Slide 9: Opportune moment to reimagine
Opportune moment to reimagine Hospitality market is turning around 9
Slide 10: The Right Time and The Right Place
The Right Time and The Right Place Robust growth in consumption and exports Stronger corporate & banks’ balance sheets Increasing incomes and affordability Impact of headwinds settling down India to be a $6 Trillion Economy in 10 years | Travel & Tourism’s contribution to GDP to grow at 6.9% p.a. So
Slide 11: The hospitality market is turning around
The hospitality market is turning around Industry Same Store Occupancy 65.3% 67.0% (0.2 pp) (1.7 pp) ARR ₹ 5,846 ₹ 5,920 (1.8 %) RevPAR ₹ 3,819 ₹ 3,968 (2.0 %) Source : STR Horwath India Hotel Market Review 2018 report 11
Slide 12: Demand growth outpacing supply
Demand growth outpacing supply Luxury Supply growth 3.2% Demand growth 5.0% Industry* Upper Upscale Supply growth 3.6% Supply growth 2.8% Demand growth 4.3% Demand growth 4.3% Upscale Supply growth 4.3% Demand growth 3.5% Source : STR Global *All figures are for calendar year 2018 **Does not include
Slide 13: Unlocking Brandscape
Unlocking Brandscape Multi-segment brandscape strategy 13
Slide 14: Capitalizing on the opportunity across segments
Capitalizing on the opportunity across segments 14
Slide 15: Taj: Authentic, Iconic
LL) AUTHENTIC ICONIC Inspired by its INDIAN HERITAGE and TRADITIONS, Taj delivers worldclass hospitality that is distinctively NOBLE
Slide 16: Curated
CURATED ONE OF A KIND
Slide 17: Vivanta
hi vill Hy IVAN TA i, DASH OF UNIQUE Experience
Slide 18: Where the boundaries of work and play are blurred
Where the boundaries of WORK and PLAY are blurred. Where LOCAL merges with GLOBAL. WHERE CONTRASTS COME TOGETHER, SEAMLESSLY GET IN TOUCH WITH
Slide 19: Taj SeleQtions, Vivanta, Ginger brands
c) ° 7 19 TAJ SELEQTIONS VIVANTA GINGER EXPRESSUAS TAJSATS INCL
Slide 20: Launch of Ginger Goa – December, 2018
Launch of Ginger Goa – December, 2018 20
Slide 21: Air catering
42% #1 Undisputed market leader in Market Share in India Indian Air Catering Business Over 42 years of catering experience Positioning for Tomorrow 23 million meals prepared annually • Culinary Art in Motion • Inspiring Food Solutions Over 65,000 meals crafted daily • Leveraging Central Kitchen Over
Slide 22: Expressions: Food & Beverage
Expressions : Food & Beverage • 380+ restaurants and bars across the network • 2 Michelin Star restaurants – Quilon and Campton Place • 40%+ contribution to total revenue • Future Focus: Leveraging brands, Innovative concepts, Exploring partnerships 22
Slide 23: Expressions: Chambers
Expressions : Chambers • India’s leading business club with close to two thousand members • 6 locations in India + 1 in Dubai • Future Focus : Enhanced benefits and facilities, Expanded footprint 23
Slide 24: Expressions: Jiva
Expressions: Jiva • 66 Spas and 37 Salons • Signature treatments rooted in Indian traditions with a strong sense of place • Future Focus: New Spas, Wellness programs, New Salon designs and Wider retail offerings 24
Slide 25: Expressions: Khazana
Expressions: Khazana • 13 Khazana boutiques offering a wide range of products • Promoting Indian Art forms, Handicrafts and heritage • Future Focus: Store expansions, Exclusive curated product lines, Tata Group products 25
Slide 26: Expanding our brandscape
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Slide 27: Network Strength
Network Strength Strong presence in domestic market and select overseas destinations 27
Slide 28: Our Portfolio: 178 Hotels
Our Portfolio 22 3903 22% 178* Hotels 21,600+* Keys Brandscape 55% (Post migrations) 18% 17726 5% 156 Domestic International Domestic International Taj SeleQtions Vivanta Ginger 178 hotels with 148 operational and another 30 under development *including pipeline 28
Slide 29: Strong domestic presence
Strong domestic presence PIONEERING DESTINATIONS Maharashtra, 20 Kerala Goa Goa Andamans Rajasthan Kerala Others, 39 Delhi NCR, 16 Rest of UP, 7 Karnataka, 15 Rajasthan Andamans Goa, 9 Tamil Nadu, 13 Kerala, 11 Rajasthan, 13 Gujarat, 13 156 Hotels in India across 26 states / UTs 29
Slide 30: Management contract mix rising from 32% to 38%
Shift in business model with management contract mix rising from 32% to 38% Holding Holding company company 23% 21% Management contracts Management 32% contracts 38% Group Group companies companies 41% 45% Portfolio as on 31st March 2018 Portfolio as on 19th February 2019 *Portfolio includes operati
Slide 31: Development in focus
Development in focus Strong owner relations, enabling brandscape and positive sentiments driving development 31
Slide 32: Our approach to development
Our approach to development S M A R T • Margin • Asset • Strategic • Relationships • Tracking • Enhancing Management 32
Slide 33: New Signings
New Signings Pawna Dam, Lonavla (145) Connaught Hotel, New Delhi (85) Katra (80) Vizag (56) Makkah (340) Cidade de Goa (207) Vadodara Expansion (60) Jhansi, (76) Taj Bangalore Expansion (220) Heathrow Airport (108) Noida (119) Deira Water Front, Dubai (200) Jhamel, Kathmandu (111) Bharuch (55) Udaip
Slide 34: New Openings
TAJARAVALI TAJ THEOG RESORT RESORT&&SPA VIVANTA SPA New Openings SHIMLA KATHMANDU UDAIPUR Taj Aravali Resort & Spa, Udaipur Taj Theog Resort & Spa, Shimla 3 Hotels 301 Keys Vivanta Kathmandu 34
Slide 35: Always Iconic
Always Iconic Iconic assets, exceptional service and operational excellence 35
Slide 36: Securing and retaining our crown jewels
Securing and retaining our crown jewels 36
Slide 37: Operational Excellence
Operational Excellence Employee Focus Areas Guest Engagement Engagement 1. Safety and Security 2. Guest Experience Create a culture of 3. Revenue management Operational Excellence delivering high profit 4. Cost optimization margins 5. Exploring synergies Margin Process 6. Procurement Enhancement Exc
Slide 38: Exceptional service delivered by exceptional people
Exceptional service delivered by truly exceptional people 32,000+ employees 7th time Gallup Great Workplace winner 16.4% Gender Diversity 80% Retention Ratio 38
Slide 39: Tajness: values and culture
IHCL i IHCL (eprese is the soul of our culture. “ina free enterprise, the community is not just : Itis an implicit trust in people to forge invaluable relationships by creating erotheretkeneld ain buslness but iniiccy an emotional connect with our various stakeholders. it subtly guides all the very
Slide 40: Leveraging technology
Leveraging technology WEBSITES F&B ONLINE Corporate & B2C Websites | Integrated Booking Engine | Single Sign On Online F&B Channels | Integrated 3rd Party Channels MOBILE APP ANALYTICS, INSIGHTS & OTHERS Upgraded Native App | Live Folio | Keyless Entry Enterprise Analytics | 360 Degree View of the C
Slide 41: Leading to sustained performance
Leading to sustained performance Revenue (₹ Cr) – Up 10% EBITDA (₹ Cr) – Up 27% 1500 1338 400 350 1217 300 920 995 981 300 1000 864 200 126 116 500 99 100 67 0 0 Q1 Q2 Q3 Q1 Q2 Q3 PY CY PY CY PAT (₹ Cr) – Up 588% EBITDA Margin – Up 230 bps 200 30.0% 25% 26% 162 150 108 20.0% 100 13% 12% 11% 10.0% 8%
Slide 42: Turnaround to Profitability
Turnaround to Profitability Consistent performance with strong fundamentals 42
Slide 43: Consolidated Results
Consolidated Results – 9 months FY 2018 / 19 Revenue EBITDA EBITDA Margin PAT ₹ 3,314 cr ₹ 592 cr 17.85% ₹ 172 cr 230 10% 27% 588% bps ₹ 3,001 cr ₹ 467 cr 15.56% ₹ 25 cr 43
Slide 44: Standalone Results
Standalone Results – 9 months FY 2018 / 19 Revenue EBITDA EBITDA Margin PAT ₹ 1,996 cr ₹ 494 cr 24.73% ₹ 99 cr 235 9% 20% 21% bps ₹ 1,835 cr ₹ 411 cr 22.39% ₹ 82 cr 44
Slide 45: Journey so far
Journey so far 2015 / 16 2016 / 17 2017 / 18 Now Industry uptick Balance Sheet strength Strategic Clarity Delivery of Performance Development Momentum 45
Slide 46: Where we are in the journey of transformational growth
Where we are in the journey of transformational growth ₹ / crores Where we were Inflection Point Yr 1 of Aspiration 2022 4,123 4,076 4,165 3,314 3,013 2,601 1,875 *Has overtaken full year PAT in 370 355 9 months 249 172 101 -231 -63 2005/06 2006/07 2007/08 2015/16 2016/17 2017/18 9m 2018/19 Revenue
Slide 47: Aspiration 2022: Drivers of margin expansion
Aspiration 2022 Drivers of margin expansion Particulars Margin Improvement Revenue RevPAR Growth Other Operating Income 3 to 4 % Management Fee Income Incremental Income from New Inventory Costs Operational Payroll Procurements (Raw Materials, Stores & Supplies) Corporate Overheads 3 to 5% Admin and
Slide 48: Room Revenue and F&B Growth has strong momentum
Room Revenue and F&B Growth has strong momentum ₹ /crores Domestic International Particulars CY PY Growth over PY % CY PY Growth over PY % Room Revenue 1,570 1,476 6.4% 960 868 10.7% RevPAR 5,407 5,086 6.3% 13,331 12,013 11.0% F & B Revenue 1,534 1,406 9.1% 624 557 12.0% *All figures are for YTD Dec
Slide 49: Sustainable Cost Optimization and Re-Engineering
Sustainable Cost Optimization and Re-Engineering Solution wise contribution to Benefits Coverage SYNERGISE ₹ 1500 crores of cost at network Level across (PRICE) legal entities RE-ENGINEER Raw materials (CONSUMPTION) Power & Fuel Stores & Supplies RE-IMAGINE (DIGITAL SOLUTIONS) Part of Selling Cost S
Slide 50: Improving returns
Improving returns Driving higher returns through focused initiatives for margin expansion and asset management 50
Slide 51: Driving Return on Equity
Driving Return on Equity (Net Profit to Equity) (Net Profit / Income) (Income / Assets) (Assets / Equity) Profit Margin Asset Sweating Capital Mix Drive Top line Growth Drive new development pipeline Manage Leverage Asset Smart approach Drive Margins Simplify IHCL structure Focus on Co
Slide 52: An Ecosystem for Revenue and Margin Growth
An Ecosystem for Revenue and Margin Growth Jiva Khazana Topline Drivers Travel Chambers Desks Margin Hotels Drivers Air Market Share F&B Catering Concepts Drivers Shop Rentals 52
Slide 53: Asset Management – Portfolio Health
Asset Management – Portfolio Health Capital Allocation Contract Management Maintain market leadership with quality products Periodic review and study of contracts Prioritization of investments Exit hotels with sustained losses and low potential Return maximization Build Synergies Unlock Ca
Slide 54: Optimizing the Balance Sheet
Optimizing the Balance Sheet Focus on building a smarter balance sheet 54
Slide 55: Preserving Balance Sheet health
Preserving Balance Sheet health 8000 1.8 1.65 7000 1.6 6000 1.4 1.25 1889 1999 1.2 5000 4216 1 4000 3151 0.8 Improving D / E3000 0.45 0.47 0.6 2000 0.4 2580 1000 2518 4181 4273 0.2 0 0 2015-16 2016-17 2017-18 2018-19 YTD 31 Dec. 2018 Equity Net Debt Debt : Equity* Net Debt : Equity Net Debt: EBITDA
Slide 56: All levers used effectively
All levers – EBITDA, Monetization, Equity Infusions used effectively ₹ /Crores Particulars 2015/16 2016/17 2017/18 9 Months - 2018/19 EBITDA 652 665 732 592 Divestments* 151 1,163 - 120 Equity - 1,500 * Divestments include – Taj Boston; Holding in Belmond, Tata Projects & Titan Ltd • Generated cash
Slide 57: Monetization: Sale and Manage Back
Monetization ₹ 120 Cr Management Greenfield Contracts Projects Structured Transactions – Sale and Manage Back Low Investment High 57
Slide 58: Monetization: Unlocking Land Banks
Monetization Management Greenfield Contracts Projects Unlocking Value of Land Banks – Sale / New Build Low Investment High 58
Slide 59: Monetization: Sale & Lease Back
Monetization Management Greenfield Contracts Projects Exploring Sale & Lease Back Opportunities Low Investment High 59
Slide 60: Monetization: Sale of Non-Core Assets
Monetization Management Greenfield Contracts Projects Sale of Non-Core Assets Low Investment High 60
Slide 61: Strategic Partnerships
Strategic Partnerships Management Greenfield Contracts Projects Exploring alliances with funds and development partners Low Investment High 61
Slide 62: Approach to Funding
Approach to Funding Ginger Portfolio Special Situations Recapitalised Ginger with Rs. 75 crores High Sale & Lease Back to generate cash for Explored NCLT Bid with renovations without further capital from Cash Requirement IHCL Piem, OHL & other Associates Current IHCL Standalone Portfolio All
Slide 63: Strong institutional shareholding
Strong institutional shareholding Shareholding Pattern* Top institutional investors* Retail, 13% Investors % stake in IHCL Tata Group, Reliance Capital Trustee Company Ltd. 6.68 39% HDFC Trustee Company Ltd. 5.26 FII, 14% Life Insurance Corporation of India 3.66 Government Pension Fund Global 3.57 I
Slide 64: Nurturing a culture of responsibility and governance
Nurturing a culture of responsibility and governance Responsible corporate adhering to the highest standards of governance 64
Slide 65: Strengthening our Community Connect
Strengthening our Community Connect Vision: Give Back to Target Communities & Geographies through CSR & Volunteering Livelihoods Neighbourhoods Welfare • Taj Tata Strive, Golden • Heritage sites support • ₹ 1 Cr + contributed for Threshold and Career Kerala and Kodagu relief Awareness programs • Per
Slide 66: Upping the Sustainability Quotient
Upping the Sustainability Quotient 33% 22% Water reused Renewable and Recycled energy use 10% 81 Earth Check Reduction in certified Hotels specific GHG emissions since 67 2016-17 Gold Certified Hotels 66
Slide 67: Corporate Governance
Corporate Governance z SHAPING OUR IHCL COMMON FUTURE THE FUTURE THE INDIAN HOTELS COMPANY LIMITED CHECKS IN CORPORATE SUSTAINABILITY REPORT 2017 - 18 THE INDIAN HOTELS COMPANY LIMITED. [ATATA Enterprise 117" annual REPORT 2017-18 GINGER — EXPRESS|
Slide 68: Investor information website
IHC INVESTORS HOME COMPANY INFORMATION FINANCIALS REPORTS BOARD MEETINGS CORPORATE ANNOUNCEMENT AGMs/EGMs CORPORATE ACTIONS DISCLOSURES iy | — O0#8#00000 Company Information What's New NIFTY © Corporate Profile s e IHCL wins the Prestigious Best aoe © Board of Directors Hospitality Corporate Governa
Slide 69: Board of Directors
Board of Directors 5 a a N. CHANDRASEKARAN PUNEET CHHATWAL NADIR GODREJ DEEPAK PAREKH Chairman Managing Director & Non-executive Non-executive Chief Executive Officer Independent Director Independent Director r \ \e SAE IREENA VITTAL MEHERNOSH S. KAPADIA _ VIBHA PAUL RISHI GAUTAM BANERJEE VENU SRINI
Slide 70: Executive Leadership Team
Executive Leadership Team 70
Slide 71: A strong foundation for Aspiration 2022
1 F undamentals intact R 2 O pportune moment to reimagine 3 U nlocking brandscape E N etwork strength 4 “A strong FOUNDATION 5 D evelopment in focus C 6 A lways iconic for Aspiration 2022” A 7 T turnaround to profitability 8 I mproving returns P 9 O ptimizing balance sheet 10 N urturing a culture of
Slide 72: Disclaimer
Disclaimer These presentations may contain forward-looking statements within the meaning of applicable securities laws. Similarly, statements that describe our business strategy, outlook, objectives, plans, intentions or goals also are forward-looking statements. Forward-looking statements are not g
Slide 73: Our Operational Portfolio
Our Operational Portfolio Inventory by Geography Inventory by Contract Type International, Management Holding 2735 Contracts, Company, 4815 4357 Group Domestic, Companies, 15006 8569 Holding Company Group Companies Domestic International Management Contracts As of February 2019, IHCL has 148 hotels
Slide 74: A Recap of Network Performance for FY 2017/18
A Recap of Network Performance for FY 2017 / 18 (₹/Crores) The Indian Hotels Company Limited Domestic International Air Ginger Group Hotels Hotels Catering Particulars Owned Managed Owned Managed Owned Managed Owned Owned Managed Total Revenue 3,535 915 1,366 615 183 18 428 5,512 1,548 7,060 EBITDA
The Indian Hotels Company — Investor Day (February 2019) on 6ix