Pt Lippo Karawaci Tbk · IDX:LPKR
Pt Lippo Karawaci Tbk — Investor Presentation (February 2020)
27 slides from Pt Lippo Karawaci Tbk's investor presentation, February 2020
Slide 1: PT Lippo Karawaci Tbk Investor Presentation February 2020
PT Lippo Karawaci Tbk Investor Presentation February 2020 1
Slide 2: Indonesia's leading integrated real estate platform
Indonesia’s leading integrated real estate platform Disciplined financial management The largest real estate company The only fully integrated business model supported by Fitch & S&P recent upgrades Investments Real Estate & Fund Management Management #1 #1 #1 B- B- B3 by revenues by recurring by as
Slide 3: Why invest in PT Lippo Karawaci Tbk now?
Why invest in PT Lippo Karawaci Tbk (“LPKR”) now? 1 2 Indonesia property market’s Simplified organization and indicators signal a potential refocused strategy acceleration Operations are ideally Valuation is low positioned for growth and uncorrelated with fundamental value 3 4 3
Slide 4: Indonesia property market's indicators signal a potential acceleration
1 Indonesia property market’s indicators signal a potential acceleration Annualized property price growth in Q2 2019 is at 15 year low Marketing sales expected to grow at double digit rate in 2020 16% 20% 12% 16% 8% 15% 4% 1.5% 11% Average: 11% 10% 10% - 10% Mar-03 Jun-06 Sep-09 Dec-12 Mar-16 Jun-19
Slide 5: Indonesia property market's indicators signal a potential acceleration
1 Indonesia property market’s indicators signal a potential acceleration Supported by solid fundamental drivers and… Indonesia GDP growth projected at 5.0% - 5.5% Rapid urbanization driving residential demand Real GDP YoY growth (%) actual & projected Urbanization rate (%) actual & projected 5.4% 20
Slide 6: Catalysts for an acceleration in the near term
1 Indonesia property market’s indicators signal a potential acceleration …catalysts for an acceleration in the near term Cheaper mortgage loans bolster home affordability Government driving supportive regulatory regime Blended mortgage rates (%) ▪ Bank Indonesia relaxed mortgage policies : 11.0% o L
Slide 7: Simplified organization and refocused strategy pillars
2 Simplified organization and refocused strategy 3 pillars leveraging on LPKR’s unique strengths Pillar Land Banking & Development Real Estate Management & Services Investments and Fund Management ▪ Development of residential, commercial ▪ Management of real estate assets, as ▪ Management of third-p
Slide 8: Revised strategy focused on disciplined capital allocation
2 Simplified organization and refocused strategy Revised strategy focused on disciplined capital allocation approach across segments and supported by efficient asset rotation HoldCo ▪ No increase in head office personal expenses over the next 3 years ▪ No increase in consolidated leverage coupled wi
Slide 9: New leadership team focused on corporate governance and transparency
2 Simplified organization and refocused strategy New leadership team focused on corporate governance and transparency Board of Commissioners provides adequate representation to minority shareholders John A Prasetio Dr. Stephen Riady George Raymond Zage III Kin Chan Anangga W. Roosdiono Independent P
Slide 10: Strengthened balance sheet following USD 788mn rights issue
3 Successfully repositioned operations for growth Strengthened balance sheet following USD 788mn rights issue Gearing is at historically low levels No significant debt maturing until 2025(1) 0.80x Blended rateCoupon rate USD million IDR Loans Bonds 8.05% pa 6.75% pa 450 420 417 0.70x 0.70x 400 350 0
Slide 11: On-going projects on track to be fully completed by Q1 2021
3 Successfully repositioned operations for growth LPKR’s on-going projects are on track to be fully completed by Q1 2021 Occupancy Significant Trend construction progress since rights issue Malls UnderLPKR Aggregate Management projects under construction(1) Construction progress 99% 100% 100% 97% 88
Slide 12: LPKR's businesses have unique organic growth potential
3 Successfully repositioned operations for growth LPKR’s businesses have unique organic growth potential Land Banking & Development Real Estate Management & Services Significant GDV well-positioned to take advantage of demand pick-up High growth in recurring income businesses Gross development value
Slide 13: Historically low valuation uncorrelated with fundamental value
4 Historically low valuation uncorrelated with fundamental value LPKR is currently trading at undemanding valuation from historical and relative perspective LPKR Historical Share Price Price-to-Book Price per share close to its historical low LPKR is trading well below its peers’ average IDR 1,600 2
Slide 14: Share price implies an 81% discount on Land Banking & Development
4 Historically low valuation uncorrelated with fundamental value LPKR’s share price implies an 81% discount on its core Land Banking & Development segment Value Per share(1) (IDR): IDR billion 242 140 382 6 29 82 48 14 23 181 968 80,000 81% Discount 70,000 68,319 60,000 50,000 Pillar 3 Pillar 2 Pill
Slide 15: Key Updates
LIPPO KEY UPDATES
Slide 16: Pillar 1 – Marketing sales execution
Pillar 1 – Marketing sales execution Marketing Trend Occupancy sales have started to stabilize and pick up in 2019 Marketing sales are supported by a diversified portfolio drivenUnder Malls by projects construction progress Management Marketing sales breakdown by nature Marketing sales breakdown by
Slide 17: Pillar 2 – Summary financial performance
Pillar 2 – Summary financial performance Revenue Revenue Revenue Revenue Healthcare Retail Malls Hotels Others IDR bn IDR bn IDR bn CAGR: 9% CAGR: 42% CAGR: 7% CAGR: 4% 7,000 19% 700 500 (2%)900 820 5,965 23% 444 783 6,000 450 800 5,168 5,306 5,216 600 529 522 374 369 13% 486 400 700 5,000 4,396 500
Slide 18: Pillar 2 – Healthcare
Pillar 2 – Healthcare Siloam is driven by strong market fundamentals and significant operating improvement potential Occupancy Trend by hospital type Net GOR growth Indonesia healthcare spend expected to triple by 2027 Malls Under 9M2018 Management – 9M2019 Annual healthcare spending, 2017 – 2027E I
Slide 19: Pillar 2 – Retail Malls
Pillar 2 – Retail Malls Indonesian retail outlook is positive, supported by middle-income growth Occupancy Trend Rental rates grew 9% y-o-y in 9M2019 boosted by Specialty stores Growing middle class expected to boost consumer spending Malls Under Average Management rental rate of malls owned and lea
Slide 20: Pillar 2 – Hotels
Pillar 2 – Hotels Tourism industry is a key priority of the Government and benefits from favourable initiatives Average room rate(1) Key Drivers 2016 – 9M2019 IDR ‘000 per room per day 7% ▪ Growth in the Indonesian tourism industry has accelerated to 20% p.a. since 2016 from a c. 9% CAGR from 2010 t
Slide 21: Pillar 3 – Fund management
Pillar 3 – Fund management LMIRT’s AUM has grown at a high CAGR of 12% over last decade Real Estate to attract strong inflows of USD 190bn over 2020-25 LMIRT Portfolio Valuation (2008 – 2018) Breakdown of APAC fund management AUM by fund type IDR tn USD bn 25 CAGR: 12% 8,000 CAGR CAGR: 16% 19 20 202
Slide 22: Consolidated financial performance
Consolidated financial performance Revenue Gross profit & gross profit margins Consolidated Consolidated IDR bn IDR bn 48% 45% 50% 49% 42% 12,000 10,962 11,057 10,071 6,000 5,520 10,000 5,215 8,268 8,274 5,000 4,558 8,000 4,073 4,000 3,490 6,000 3,000 4,000 2,000 2,000 1,000 - - 2016 2017 2018 9M18
Slide 23: Key updates – Meikarta
Key updates – Meikarta Significant construction progress since rights issue Marketing sales have started to pick up 40.0% IDR bn Units 600.0 133 140 35% 35.0% 120 500.0 30.0% 28% 100 25.0% 400.0 80 20.0% 69 67 300.0 59 14% 60 15.0% 11% 200.0 40 10.0% 310 7% 5% 100.0 201 5.0% 162 20 123 - - - Aug-18
Slide 24: Key updates – Puri Mall
Key updates – Puri Mall LPKR and LMIRT have agreed to an extension of the long stop date of the transaction 1 to June 30, 2020 Puri Mall Strata process is currently pending the below: • Regulatory body approval 2 • Governor’s approval • Administrative process to obtain the legalization of segregatio
Slide 25: Key updates – Rental payment to REITs
Key updates – Rental payment to REITs Net rental payment from LPKR to REITs(1) 1,200 IDR bn 1,005 1,000 946 947 839 844 808 800 778 580 590 600 400 329 221 203 198 200 175 135 - 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 ▪ Expected reduction in net rental payments fro
Slide 26: Company Structure as of Dec 2019
Company Structure as of 31 Dec 2019 LEGEND Lippo Group Public <5% Subsidiaries 52.7% 47.3% PT Lippo Karawaci Tbk Operating Divisions (IDX : LPKR) Pillar 1 Pillar 2 Pillar 3 Land Banking & Development Real Estate Management & Services Investment & Fund Management PT Siloam International 51.1% First R
Slide 27: 2020 commitments summary
2020 commitments summary 1 Disposal of Puri Mall to LMIRT 2 Disposal of IDR 2tn of non-core assets 3 Finalize construction of LPKR projects 4 Achieve IDR 2.5tn of marketing sales 5 No increase in consolidated leverage 27
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