Indian Hotels Co. Ltd. · NSE:INDHOTEL
Indian Hotels — The Indian Hotels Company Limited (IHCL) — Investor Day (May 2022)
72 slides from Indian Hotels's investor day presentation, May 23, 2022
Slide 1: Capital Market Day
CAPITAL MARKET DAY 23rd May, 2022
Slide 2: IHCL has emerged stronger
IHCL HAS EMERGED STRONGER 2 TAJ SeLeQTIONS VIVANTA GINGER ama Qmin m@® INCL
Slide 3: Industry leading recovery
INDUSTRY LEADING RECOVERY Industry (India) RevPAR (₹) IHCL (India) RevPAR Recovery FY 22 v/s FY20 2nd 65% 76% 1st wave wave 3rd wave Industry IHCL Jun Jun Jan Feb Feb Feb Sep Sep Dec Jan Aug Oct Dec Jan Aug Oct Apr Nov Apr Nov Apr May Jul May Jul Mar Mar Mar 3
Slide 4: Industry leading growth in the last five years
INDUSTRY LEADING GROWTH IN THE LAST FIVE YEARS ~100 Shift in New Hotels Signed Portfolio Mix Growth in 25 50% Portfolio 35 Management Contract Mix improved from 40 32% → 46% 4
Slide 5: Industry leading growth despite the pandemic
INDUSTRY LEADING GROWTH DESPITE THE PANDEMIC 2020 2021 Indian hospitality industry hotel signings Indian hospitality industry hotel signings Source: HVS Anarock Indian Hospitality Overview Report 2020 & 2021 5
Slide 6: Industry leading pipeline today
INDUSTRY LEADING PIPELINE TODAY 60 HOTELS | 7,500+ ROOMS PIPELINE BY BRAND PIPELINE BY CONTRACT TYPE Ginger 92% 26% 32% Others 8% 40% 9% 74% 19% Taj SeleQtions Vivanta Ginger IHCL Mgmt. Contracts As on 31st March 2022 6
Slide 7: Industry leading venture into new destinations
INDUSTRY LEADING VENTURE INTO NEW DESTINATIONS JAMMU MANALI DHARAMSHALA HARIDWAR NAINITAL DEHRADUN JHANSI TAWANG 25+ ALWAR JAISALMER GORAKHPUR SHILLONG BHARUCH DWARKA BHOPAL KEVADIA LONAVALA PURI AMRAVATI TADOBA NAGPUR SHIRODA MIRAMAR MANIPAL NEW HAMPI DESTINATIONS ADDED *Including hotels in pipelin
Slide 8: Industry leading presence in India
INDUSTRY LEADING PRESENCE IN INDIA 100 LOCATIONS IN INDIA 215+ HOTELS IN INDIA *Including hotels in pipeline 8
Slide 9: Industry leading portfolio in India
INDUSTRY LEADING PORTFOLIO IN INDIA No. of Hotels 250 200 150 100 50 0 IHCL Marriott Sarovar/Louvre Radisson ITC Fern Lemon Tree Accor IHG Hyatt Existing Pipeline Source: Horwath HTL Notes: (a) Marriott excludes hotels under Luxury Collection Franchise; these are included under ITC; (b) Sarovar incl
Slide 10: Industry leading innovations: re-imagined & new brands
INDUSTRY LEADING INNOVATIONS: RE-IMAGINED & NEW BRANDS RE-IMAGINED NEW BRANDS 10
Slide 11: Industry leading F&B innovations
INDUSTRY LEADING F&B INNOVATIONS 11
Slide 12: Indian concept
INDUSTRY LEADING F&B INNOVATIONS INDIAN CONCEPT 12
Slide 13: Industry leading F&B innovations
INDUSTRY LEADING F&B INNOVATIONS 13
Slide 14: Industry leading F&B innovations
INDUSTRY LEADING F&B INNOVATIONS 14
Slide 15: Industry leading value creation
INDUSTRY LEADING VALUE CREATION SUPERIOR SHAREHOLDER RETURNS 21% 13% 12% 8% IHCL BSE Sensex BSE 200 BSE Midcap Annualized Return : 1st Jan 2018 To 30th April 2022 Note: XIRR of Total Shareholder Returns for IHCL (including Rights Issue & Dividend) vs XIRR of various indices values 15
Slide 16: A bright future for Indian hospitality
A BRIGHT FUTURE FOR INDIAN HOSPITALITY 16
Slide 17: The pandemic saw the industry focus on
THE PANDEMIC SAW THE INDUSTRY FOCUS ON RESILIENCE Recovery led by domestic Policy intervention & Business growth & tourism changes development Capitalizing on consumer Shift in focus on alternate INNOVATION Accelerated digitization trends revenue streams COMMUNITY Repatriation & stays for Quarantine
Slide 18: New travel trends shaping the future
NEW TRAVEL TRENDS WHICH ARE SHAPING THE FUTURE No compromise on wellness & Blending of Lesser number of trips well-being, trust is key business & leisure travel but longer stays Reduced long-haul travel for Tech savvy travelers seeking Demand for flexibility in bookings, low impact meetings digital
Slide 19: Demand supply
DEMAND SUPPLY ALL INDIA - ROOMS SUPPLY VS DEMAND – CURRENT AND FUTURE 250 Number of hotel rooms (‘000) Supply and Demand CAGR 200 CAGR FY16 - FY20 FY20 - FY26 150 Supply 6.5% 5.1% 100 CAGR 50 Demand 6.7% 6.5% CAGR 0 FY19 FY22-F FY23-F FY24-F FY25-F FY26-F Source: Horwath HTL Supply Demand Occ 19
Slide 20: Key considerations
KEY CONSIDERATIONS WHAT WE KNOW WHAT WE THINK WE KNOW WHAT WE DON’T KNOW Resilience key to recovery Business -> BLeisure Persistence of high inflation Trusted brands will prevail Global travel will recover Geopolitical situation (war) Domestic tourism leading the Virtual communication could have Pot
Slide 21: Unveiling our strategy
UNVEILING OUR STRATEGY a1 TAS SELEQTIONS VIVANTA GINGER ama Qmin m@ IHCL
Slide 22: A call to action
A call to action. An invitation to participate in a higher cause. 22
Slide 23: Standing in the future: FY 2025/26
STANDING IN THE FUTURE: FY 2025/26 33% 35% 50-50 ZERO PERFORMANCE EBITDA EBITDA from New Hotel Net Margin Brands and Mgmt. Fees Portfolio Debt 300+ Hotel Portfolio 500+ PORTFOLIO 100 75 125 * New Brands include Ginger, Qmin, amã & The Chambers 23
Slide 24: Roadmap to Ahvaan 2025
ROADMAP TO AHVAAN 2025 FY 2023/24 – FY 2025/26 FY 2022/23 Surge FY 2021/22 Pit-Stop › Most iconic portfolio › Exceed FY 2019/20 Performance › Most profitable Reset › Most valued brands › Focus on India › Market leadership › Established brand ecosystem › Healthy balance sheet › Capture hotel market s
Slide 25: Strategic initiatives
STRATEGIC INITIATIVES RE-ENGINEER RE-IMAGINE RE-STRUCTURE Margins Brandscape Portfolio 25
Slide 26: Re-engineer margins
RE-ENGINEER MARGINS Sustain Revenue Step Up Strengthen Service Growth Profitability Balance Sheet Excellence 26
Slide 27: New businesses
I NEW BUSINESSES NNO 038 he © Je AW qian Shiny {re } | ec. ied | f N 2 TAY SELEQTIONS VIVANTA GINGER am& Gin TAV INCL
Slide 28: Re-imagine brandscape
RE-IMAGINE BRANDSCAPE SCALE UP STRENGTHEN SYNERGIZE – SPEED & BRANDS ONE IHCL RESPONSIVENESS 28
Slide 29: Re-structure portfolio
RE-STRUCTURE PORTFOLIO STIMULATE STRATEGIC STREAMLINE SIMPLIFY GROWTH ACQUISITIONS PORTFOLIO MIX HOLDING STRUCTURE 29
Slide 30: Creating value in strategic projects
CREATING VALUE IN STRATEGIC PROJECTS Ginger Santacruz Kevadia, Gujarat Brand enhancing strategic assets – Eventual monetization to fuel further growth 30
Slide 31: Protecting and polishing our crown jewels
PROTECTING AND POLISHING OUR CROWN JEWELS St James Court, UK Taj Mahal, New Delhi Taj Lands End Continued endeavor to re-invest into our crown jewels to retain iconic positioning 31
Slide 32: Strategic initiatives
STRATEGIC INITIATIVES RE-ENGINEER RE-IMAGINE RE-STRUCTURE Margins Brandscape Portfolio › Sustain Revenue Growth › Scale Up › Stimulate Growth › Step Up Profitability › Strengthen Brands › Strategic Acquisitions › Strengthen Balance Sheet › Synergize – One IHCL › Streamline Portfolio Mix › Service Ex
Slide 33: Key enablers
=H= KEY ENABLERS a3 TA) SELEQTIONS VIVANTA GINGER ama Qmin m@ INCL
Slide 34: Operational & service excellence
OPERATIONAL & SERVICE EXCELLENCE BRAND CUSTOMER BEST-IN-CLASS STANDARDS & CENTRICITY PRODUCT CUSTODIANSHIP 34
Slide 35: Organizational culture
ORGANIZATIONAL CULTURE INTEGRITY UNITY EXCELLENCE RESPONSIBILITY PIONEERING TRUST AWARENESS JOY 35
Slide 36: One Tata
tos Wisse AUF are WITH YOU ALWAYS TA] SELEQTIONS VIVANTA GINGER amma lid TATA TATA CHEMICALS LIMITED Fly the new feeling W TITAN <p TATA ELXS! IHCL fir fsia NK TANISHQ TATA TRUSTS TATA CLIQ TATA PROJECTS Simplify.Create TATA ly croma TATA CAPITAL IHCL
Slide 37: Leveraging the Tata ecosystem
LEVERAGING THE TATA ECOSYSTEM Tata Neu has the Potential to 2 Mn -> 70 Mn Contribute 30% of IHCL’s Enterprise Revenues in 3 Years, While Elevating Customer Experience Through Digital Synergize with Tata group aviation companies for driving: • Base occupancies • Curated trips • Joint promotions • Air
Slide 38: Embracing digital
EMBRACING DIGITAL 1 2 All new website & app to Taking customer relationship be launched soon management to the next level 3 38
Slide 39: Organization to enable transformation
ORGANIZATION TO ENABLE TRANSFORMATION AS IHCL EMBARKS UPON A JOURNEY OF SCALE, SYNERGY AND SIMPLIFICATION AN OPTIMAL ORGANIZATION WILL BUILD A STRONG FOUNDATION FOR AGILE AND EFFICIENT EXECUTION OF KEY STRATEGIC INITIATIVES 39
Slide 40: Industry leading ESG+ framework
INDUSTRY LEADING ESG+ FRAMEWORK PRESERVE PROMOTE Heritage & Brand Environmental Stewardship PROGRESS PROMISE Sustainable Growth Social Responsibility PA R T N E R PRUDENT Transformation Corporate Governance 40
Slide 41: Paathya film
PAATHYA FILM Paathya 41
Slide 42: Industry leading ESG+ framework
INDUSTRY LEADING ESG+ FRAMEWORK 100% Adoption of 50 Intangible 100% Recycle 50% Culture Heritage and reuse Of Waste of all Energy Project With Water. Consumed to be from Renewable UNESCO Sources. Eliminate single- Empower the Use Plastic Beyond Livelihood of 100% Business Meetings & 10 the List of 1
Slide 43: Industry leading diversity
INDUSTRY LEADING DIVERSITY GUESTS EMPLOYEES PARTNERS & COMMUNITY 43
Slide 44: She Remains the Taj - film
SHE REMAINS THE TAJ - FILM She Remains the Taj 44
Slide 45: EBITDA margin
33% EBITDA MARGIN HOSPITALITY COMPANY RE-ENGINEER RE-IMAGINE BRANDSCAPE ea CULTURE ORGANIZATION TRUST, AWARENESS, JOY ICONIC AND PROFITABLE MARGINS ea & RESTRUCTURE ONE TATA DIGITAL PORTFOLIO EXCELLENCE Be PAATHYA Sd ee INTEGRITY, EXCELLENCE, UNITY, RESPONSIBILITY, PIONEERING 300+ HOTEL PORTFOLIO FI
Slide 46: Performance drivers
PERFORMANCE DRIVERS Giridhar Sanjeevi, EVP & CFO 46
Slide 47: IHCL: well placed to revive and surge ahead
IHCL: WELL PLACED TO REVIVE AND SURGE AHEAD 2015 / 16 2016 / 17 2017 / 18 2018 / 19 2019/20 2020/21 2021/22 INDUSTRY UPTICK ✓ ✓ ✓ BALANCE SHEET ✓ ✓ ✓ STRENGTH STRATEGIC CLARITY ✓ ✓ ✓ DELIVERY OF ✓ PERFORMANCE DEVELOPMENT ✓ MOMENTUM 47
Slide 48: Drivers of revenue growth
DRIVERS OF REVENUE GROWTH New F&B Concepts (Seven Like For Like (L-F-L) revenue Rivers, Paper Moon etc.) growth through RGI enhancement Growth in topline from new Robust hotel pipeline - growth in brands and businesses incremental management fees Select Hotels on Balance Sheet 48
Slide 49: L-F-L growth driven by strong industry recovery
L-F-L GROWTH DRIVEN BY STRONG INDUSTRY RECOVERY ₹ 8,000 75% ₹ 6,990 ₹ 7,000 ₹ 6,355 70% ₹ 6,000 ₹ 5,649 70% 68% ₹ 4,894 ₹ 5,000 65% OCCUPANCY & AVERAGE 66% ₹ 4,222 ₹ 4,000 ₹ 3,731 HOTELS ACT AS A ROOM RATE EXPECTED TO HEDGE TO INFLATION 60% ₹ 3,000 RETURN TO PRE- PANDEMIC GLOBALLY* ₹ 2,000 LEVELS BY
Slide 50: April 2022 same store RevPAR exceeded Apr. 2019
APRIL 2022 SAME STORE REVPAR: EXCEEDED APR. 2019 Same Store RevPAR - April (2022 Vs 2019) 156% 121% 124% 133% 140% 106% 125% 119% 125% 135% All India Goa Kerala Chennai Hyderabad Kolkata Rajasthan Mumbai Delhi & NCR Bengaluru RevPAR April 19 RevPAR April 22 * % indicate April 2022 growth over April
Slide 51: L-F-L growth driven by higher market share
L-F-L GROWTH DRIVEN BY HIGHER MARKET SHARE WIDENING REVPAR PREMIUM TAJNESS 2.00+ 1.94 BRAND 1.74 PORTFOLIO MIX 2019/20 2021/22 AHVAAN 2025 Potential SMART RENOVATIONS 51
Slide 52: Growth in new brands: unlocking the potential
GROWTH IN NEW BRANDS: UNLOCKING THE POTENTIAL 125+ 500 Hotels Properties Scale, Simplify, Grow Market Synergize Footprint 3,000+ 25+ members Cities High Flow Accelerate through GMV Growth 52
Slide 53: Strong growth in Chambers membership fees
STRONG GROWTH IN CHAMBERS MEMBERSHIP FEES ₹/ Crores 150 + Will continue launching new Chambers at select locations 85 63 49 39 36 39 High flow through 75% AHVAAN 2025 ‘16-17 ’17-18 ‘18-19 ‘19-20 ‘20-21 ‘21-22 Potential 53
Slide 54: Asset light model: higher management fees
ASSET LIGHT MODEL -> HIGHER MANAGEMENT FEES ₹/ Crores 400 + Continued focus on increased management fee 231 204 213 213 177 136 High flow through 70% AHVAAN 2025 ‘16-17 ’17-18 ‘18-19 ‘19-20 ‘20-21 ‘21-22 Potential 54
Slide 55: Drivers of margin expansion
DRIVERS OF MARGIN EXPANSION Focus on Enhancing Productivity Hotel expenditure Optimal manning Corporate overheads 55
Slide 56: Productivity: focus on hotel expenditure
PRODUCTIVITY: FOCUS ON HOTEL EXPENDITURE Consumables & Payroll Utilities Commissions Other Expenses Perishables Centralized Redeployments Increase in renewable Direct to Customer Continuous tracking Procurement energy Multiskilling Encourage Website/App Sharp focus Menu Engineering Water recycling R
Slide 57: Productivity: focus on optimal manning
PRODUCTIVITY: FOCUS ON OPTIMAL MANNING 3.39 3.3 2.93 2.89 2.17 2.2 2.14 1.62 1.95 1.7 1.37 1.33 1.48 0.92 1.01 March 2022 Staff to Room Ratio lower despite 0.4 0.38 0.39 business being back at pre-pandemic levels Taj Palace SeleQtions Vivanta Safari Ginger Apr-20 Apr-21 Mar-22 57
Slide 58: Productivity: focus on corporate overheads
PRODUCTIVITY: FOCUS ON CORPORATE OVERHEADS ₹ / crores Corporate Overhead 8% reduced by 28% (2021/22 vis-à-vis 2019/20) 5% Redeployments & re- structuring 347 Prudence in resource allocation Synergies - One IHCL 2019/20 AHVAAN 2025 Corporate overheads Corporate Overhead as % of Consolidated Revenue 5
Slide 59: Changing shape of the P&L
CHANGING SHAPE OF THE P&L PRE-COVID FY 2025/26 10% 25% REVENUE CONTRIBUTION 75% 90% 22% 35% 65% EBITDA 78% CONTRIBUTION Traditional Businesses New Brands, Initiatives & Management Fees* * New Brands & Initiatives include Ginger, Qmin, amã & Chambers 59
Slide 60: Changing shape of the P&L: margin expansion
CHANGING THE RESULT:SHAPE OF THE SUSTAINED P&L MARGIN EXPANSION EBITDA 33% 24% 17% -11% FY 2019/20 FY 2020/21 FY 2021/22 AHVAAN 2025 Potential 60
Slide 61: Summary: performance drivers
SUMMARY: PERFORMANCE DRIVERS PARTICULARS MARGIN IMPROVEMENT SOFT DRIVERS Revenue • Demand > supply Like-for-like Revenue Growth • Strong rebound in travel Growth in new brands and businesses 4 to 5 % • Pivot to domestic Higher growth in management fee income • Scalable & asset light Incremental Inco
Slide 62: Re-shaping the balance sheet
RE-SHAPING THE BALANCE SHEET RIGHTS ISSUE Consol. Net Debt (ÌNR Cr) 3,571 ~ ₹ 2,000 1.3x+ crores subscription QIP Net Cash -106 Positive ₹ 2,000 2.5x+ crores bids received September 30, 2021 March 31, 2022 62
Slide 63: Re-shaping the balance sheet
RE-SHAPING THE BALANCE SHEET Focus on Free Incremental Monetisation & Cash Flows Capital Allocation Simplification 63
Slide 64: Focus on free cash flows
FOCUS ON FREE CASH FLOWS IHCL CONSOLIDATED % of Revenue Total Revenue 100% EBITDA 30 - 35% Fixed Leases, Taxes, Working Capital & Dividends 10% Normal Capex & Renovations 5% Cash Flow before Expansion Capex 15% - 20% Capex for Expansion Projects/Inorganic Opportunities 10% Free Cash Flow Accruals Ta
Slide 65: Monetisation & simplification
MONETISATION & SIMPLIFICATION MONETISATION SIMPLIFICATION Target ₹ 1,000 Crores till FY 25/26 Ginger now a Wholly Owned Subsidiary Mix of Land Bank, Hotels & Investments To consolidate shareholding in St James Court, UK Continue flag in case of hotel divestment Pursue reduction of legal entities 65
Slide 66: Sea Rock
SEA ROCK Working with the Government to create a landmark hotel destination in Mumbai No further investment from IHCL - Target to bring in a development partner at an appropriate time Vision 1,200 rooms between Lands End & Sea Rock ₹ 1,000 Crore+ Revenue 66
Slide 67: Diversified shareholder base
DIVERSIFIED SHAREHOLDER BASE Shareholder Base (Lakhs) Shareholding Pattern 16% 38% 16% 3.42 1.35 30% Dec-17 Dec-21 Tata Group DII FII Retail Increased shareholding base – Shareholding diversified between Confidence in IHCL’s Strategy DIIs, FIIs & Retail 67
Slide 68: EBITDA margin
33% EBITDA MARGIN HOSPITALITY COMPANY RE-ENGINEER RE-IMAGINE BRANDSCAPE ea CULTURE ORGANIZATION TRUST, AWARENESS, JOY ICONIC AND PROFITABLE MARGINS ea & RESTRUCTURE ONE TATA DIGITAL PORTFOLIO EXCELLENCE Be PAATHYA Sd ee INTEGRITY, EXCELLENCE, UNITY, RESPONSIBILITY, PIONEERING 300+ HOTEL PORTFOLIO FI
Slide 69: Fueling IHCL's re-imagination
FUELING IHCL’s RE-IMAGINATION 69
Slide 70: Capital Market Day
CAPITAL MARKET DAY 23rd May, 2022
Slide 71: Industry leading value creation - calculation
INDUSTRY LEADING VALUE CREATION - CALCULATION IHCL Particulars Date Investment/Returns (₹) Price/Share (₹) No. of Shares Initial Investment 01-Jan-18 (1,00,000) 118 844 Dividend 01-Jul-18 338 Dividend 01-Jul-19 422 Dividend 01-Jul-20 422 Dividend 01-Jul-21 338 Rights Issue 15-Dec-21 (14,067) 150 94
Slide 72: Disclaimer
Disclaimer This presentation contains selected information about the activities of the Company and the Group as at the date of this presentation. The information in this document have been collected with the purpose to provide interested parties with information about the Group including but not lim
The Indian Hotels Company Limited (IHCL) — Investor Day (May 2022) on 6ix