Indian Hotels Co. Ltd. · NSE:INDHOTEL
Indian Hotels — The Indian Hotels Company — Institutional Investor Conference, 7 July 2021
71 slides from Indian Hotels's conference presentation, Jul 7, 2021
Slide 1: Analyst / Investor Presentation cover letter to exchanges
July 7, 2021 BSE Limited National Stock Exchange of India Limited Co rpo rate Rel ations hi p Departm ent Exchan ge Plaza 1 s t F lo or, New Trading Ring, Bandra K ur la Com plex Rotunda Building, P. J. Towers, Bandra (E) Dalal S tree t, Fort , Mumbai 4 00 051. Mumbai – 400 001. Scrip Co de: INDHOTE
Slide 2: Creating Value and Shaping the Future
CREATING VALUE AND SHAPING THE FUTURE INVESTORS MEET | 7th JULY 2021
Slide 3: 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 4: Agenda
AGENDA 1 Aspiration to Execution 2 COVID-19 Impact and R.E.S.E.T 2020 3 Creating Value & Shaping the Future 4 Investment Thesis 3
Slide 5: We started on the journey of re-imagination in 2018
WE STARTED ON THE JOURNEY OF RE-IMAGINATION IN 2018 4
Slide 6: Aspiration 2022
ASPIRATION 2022 15 NEW PROJECTS EVERY YEAR 8% EBITDA MARGIN EXPANSION 50-50 PORTFOLIO 5
Slide 7: We promised..
WE PROMISED.. ICONIC PROFITABLE GROWTH PORTFOLIO BRANDSCAPE Service, Excellence, 800 bps Margin 15 New Signings 50:50 Owned v/s Hospitality Stature Expansion p.a. Managed Ecosystem 6
Slide 8: We delivered: Iconic
I WE DELIVERED: ICONIC WORL fis: STRE aNGEST a HOTEL VX BRAND ot
Slide 9: We delivered: Profitable
WE DELIVERED: PROFITABLE ₹ / crores Where Where Where we we we were landed got to 4,595 4,596 4,123 4,076 4,165 3,013 2,601 1,875 249 370 355 287 354 101 -231 -63 2005/06 2006/07 2007/08 2015/16 2016/17 2017/18 2018/19 2019/20 Revenue PAT 8
Slide 10: We delivered: Growth
WE DELIVERED: GROWTH Close to 70 New Hotels Signed in Three Years 3,582 3,258 2,146 1,174 632 468 FY 2015/16 FY 2016/17 FY 2017/18 FY 2018/19 FY 2019/20 FY 2020/21 #Hotels 8 14 5 22 29 17 New Rooms Signed 9
Slide 11: We delivered: Portfolio
WE DELIVERED: PORTFOLIO FY 2017-18 FY 2020-21 18% 23% 32% 46% 36% 45% HoldCo Group Companies Mgmt Contracts HoldCo Group Companies Mgmt Contracts *Portfolio includes hotels under various stages of development 10
Slide 12: We delivered: Brandscape
I WE DELIVERED: BRANDSCAPE st Rs! S TA IHCL TAJ SELEQQTIONS EXPRESSIINS nlusnau \ VIVANTAL GINGER. OY, Z ama KHAZANA MACHU Tn : 7 ; ft A JIVAE=—= FSB had fy Yemwoen\ faves | (PAY © — TA} SELEQTIONS VIVANTA GINGER am& Qmin i INCL
Slide 13: COVID-19: An unprecedented challenge
COVID-19: AN UNPRECEDENTED CHALLENGE Source: World Travel & Tourism Council (WTTC) 12
Slide 14: Significant impact on the Indian hospitality sector
SIGNIFICANT IMPACT ON THE INDIAN HOSPITALITY SECTOR YoY Decline in RevPAR ↓71% ↓73% New Delhi Gurugram INDIA ESTIMATES ↓72% Jaipur ₹ 90,000 cr. revenue loss ↓70% 31 – 33 bps drop in occupancy ↓70% Kolkata Mumbai ↓76% ↓75% 18% – 20% drop in ADR Pune Hyderabad ↓66% 57% - 59% drop in RevPAR Goa ↓81% Be
Slide 15: The pandemic had a huge impact on our business
THE PANDEMIC HAD A HUGE IMPACT ON OUR BUSINESS *Data for All Domestic Hotels incl. Ginger Domestic Enterprise Revenue – IHCL (INR Cr) Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May 14
Slide 16: Hope is not a strategy
Hope is not a strategy – perseverance and resilience is 15
Slide 17: We embraced stragility and launched R.E.S.E.T 2020
WE EMBRACED STRAGILITY AND LAUNCHED R.E.S.E.T 2020 16
Slide 18: A short film on R.E.S.E.T 2020
A SHORT FILM ON R.E.S.E.T 2020 17
Slide 19: R.E.S.E.T 2020: Impact
R.E.S.E.T 2020: IMPACT ₹ 264 crores ₹ 420 crores ₹ 70 crores ₹ 135 crores 18
Slide 20: Agility and focus on execution helped us outperform
AGILITY AND FOCUS ON EXECUTION HELPED US OUTPERFORM *Data for Domestic Hotels Incl. Ginger Enterprise RevPAR – As a % of LY Industry IHCL 52% 43% 39% 37% 34% 33% 33% 33% 30% 30% 30% 30% 28% 29% 27% 24% 25% 19% Goa Rajasthan Kolkata Chennai Pune Hyderabad Mumbai Bengaluru Delhi & NCR Source for Indus
Slide 21: Creating value & shaping the future: key strategic imperatives
CREATING VALUE & SHAPING THE FUTURE: KEY STRATEGIC IMPERATIVES
Slide 22: Capitalize on business recovery
CAPITALIZE ON BUSINESS RECOVERY 21
Slide 23: COVID-19 forecast: cases taper down since mid-May
COVID-19 FORECAST: CASES TAPER DOWN SINCE MID-MAY The Current levels same Levels of Dec & Mar Sep 2020 Wave 1 Peak 90K+ Levels 3 Months 3 Months 3 Months Source : Institute for Health Metrics and Evaluation 22
Slide 24: Strong vaccination drive – hope of revival
STRONG VACCINATION DRIVE – HOPE OF REVIVAL Source: Our World in Data India Leads the Total Vaccination count Globally Over 20% of Total Population Partly / Fully Vaccinated 85% of IHCL’s Workforce has been at least partly vaccinated 23
Slide 25: How we see the sector recovering?
HOW WE SEE THE SECTOR RECOVERING? SHORT TERM SHORT LONG TERM MEDIUM MEDIUMTERM TERM TERM LONG TERM ↔ ↑ Rates, Lockdowns, RevPARs Domestic Restrictions travel rebound rebound ↔ Lockdowns, Restrictions ↑ Domestic travel rebound ↑ Rates, RevPARs rebound ↔ ↑ Improved CorporateProfitability demand
Slide 26: IHCL is well positioned to emerge faster and stronger
IHCL IS WELL POSITIONED TO EMERGE FASTER AND STRONGER FY 2023/24 Onwards FY 2022/23 FY 2021/22 Thrive Revive Surge Ahead To Pre-COVID Levels Survive Protect Profitability 25
Slide 27: Focus on new brands and businesses
FOCUS ON NEW BRANDS AND BUSINESSES 26
Slide 28: Unlock the potential in our re-imagined & new brands
UNLOCK THE POTENTIAL IN OUR RE-IMAGINED & NEW BRANDS R E - I M A G I N E D N E W 27
Slide 29: The re-imagined Ginger
THE RE-IMAGINED GINGER FY21 Revenue @ Doubling F&B +ve EBITDA 78 Hotels Now, Strong Potential – 63% of Pre-COVID Revenue in FY21 36% Lean Luxe 100 Hotels Soon 28
Slide 30: TajSATS re-imagined
TAJSATS RE-IMAGINED 50%+ Market New Airline # Flights: Focus on Non- Anuka Brand Share in Q4 FY21 Customers Added Mar ‘21 > Mar ‘20 Aviation Business Launched 29
Slide 31: The Chambers – new avatar
THE CHAMBERS – NEW AVATAR Revenue Potential to 7 Chambers, Over 2,200 Potential: Accretive become a 2 Upcoming Members Today 4,000+ Members 30 High Margin ₹ 150 Cr Business
Slide 32: Qmin – food delivery platform, food trucks, shops
QMIN – FOOD DELIVERY PLATFORM (APP), FOOD TRUCKS, SHOPS 3 Lakh+ 1 Lakh+ Orders Now in 15 cities, High APC, High GMV Potential – App Downloads Since Launch Target 25+ Cities Margin Business ₹ 500 Crores 31
Slide 33: amã Stays & Trails – India's 1st branded homestay business
amã STAYS & TRAILS – INDIA’S 1st BRANDED HOMESTAY BUSINESS 80% EBITDA Revenue Portfolio: 44 Now Hub-and-spoke Asset Light Flowthrough Potential: Potential: 500 model (synergize) Growth 32 (Mgmt. Fees) ₹ 500 Crores
Slide 34: Significant value creation possible from new brands
SIGNIFICANT VALUE CREATION POSSIBLE FROM NEW BRANDS 2017-18 TODAY TOMORROW • Ginger: 52 Hotel Portfolio • Ginger: 78 Hotel Portfolio • Ginger: 100-150 Hotels • The Chambers: 1.9K Members • The Chambers: 2.2K Members • The Chambers: 4K Members • Qmin: ₹ 50 Cr GMV • Qmin: ₹ 500 Cr GMV • amã: 44 Proper
Slide 35: Asset light growth
ASSET LIGHT GROWTH a4 TAY SELEQTIONS VIVANTA GINGER ama @
Slide 36: Industry leading pipeline, highest signings, highest openings
INDUSTRY LEADING PIPELINE, HIGHEST SIGNINGS, HIGHEST OPENINGS 2020 Brand Signings*: 2020 Brand Openings*: * Source: Indian Hospitality Industry Overview 2020, HVS Anarock 35
Slide 37: Asset light pipeline
ASSET LIGHT PIPELINE OPERATIONAL PIPELINE TOTAL 6% 18% 33% 23% 16% 46% 78% 36% 44% HoldCo Group Companies Mgmt Contracts HoldCo Group Companies Mgmt Contracts HoldCo Group Companies Mgmt Contracts *Portfolio figures are as of March 2021, includes hotels in various stages of development 36
Slide 38: Key milestone: 200 hotel portfolio in India
KEY MILESTONE: 200 HOTEL PORTFOLIO IN INDIA No. Of Hotels In India DOMESTIC PORTFOLIO OPERATIONAL 63 13 20 54 150* PIPELINE 12 3 11 24 50 TOTAL 75 16 31 78 200 The TOTAL PORTFOLIO including international hotels stands at 221 HOTELS *with the launch of Taj Wellington Mews expected to open soon 37
Slide 39: Enveloping India
IHCL 13 hotels 13 hotels 10 hotels lity Industry 2 1020 Re 3 hotels 14 hotels ——1 hotel verview 2020 | * Enveloping India #1 Hospitality Company in the Country 90+ locations in India 100+ locations hotel —4@ globally 17 International hotels
Slide 40: Significant growth envisaged in management fees
SIGNIFICANT GROWTH ENVISAGED IN MANAGEMENT FEES Management Fees (Rs Cr) 350 210 223 219 190 89 ‘16-17 ’17-18 ‘18-19 ‘19-20 ‘20-21 POTENTIAL 96 Managed Hotels (Portfolio) 46% Today 50% Tomorrow 70 – 80% EBITDA Flowthrough 39
Slide 41: Creating value through asset light growth
CREATING VALUE THROUGH ASSET LIGHT GROWTH 2017-18 TODAY TOMORROW • Hotel Portfolio: 158 • Hotel Portfolio: 221 • Hotel Portfolio: 300 • Managed Portfolio Mix: 32% • Managed Portfolio Mix: 46% • Managed Portfolio Mix: 50% • Management Fees: ₹ 210 Cr • Management Fees: ₹ 219 Cr* • Management Fees: ₹ 3
Slide 42: Continued spend optimization
CONTINUED SPEND OPTIMIZATION 41
Slide 43: Optimization of operating costs
OPTIMIZATION OF OPERATING COSTS Total Operating Cost 2019/20 2020/21 Decline in Total Operating Cost ↓ 45% in 2020/21 3,496 1,920 FY *All Numbers Include Fixed Lease Costs 42
Slide 44: Sustained optimization of fixed costs
SUSTAINED OPTIMIZATION OF FIXED COSTS Fixed Expenses per Month 2019/20 2020/21 Decline in Fixed Costs Per Month ↓ 28% in FY 2020/21 163 118 FY *All Numbers Include Fixed Lease Costs 43
Slide 45: Manpower optimization
MANPOWER OPTIMIZATION STAFF TO ROOM RATIO SUBSTANTIALLY REDUCED 2.9 2.3 2 1.9 1.5 1.3 1.4 1.5 1.5 1 0.4 0.32 Taj Palace SeleQtions Vivanta Safari Ginger FY 20 FY 21 Manpower Rationalization Through: Redeployments – 206 Associates Reimagine ways of working - Multiskilling, Cluster Approach, Share
Slide 46: Significant reduction in corporate overheads
SIGNIFICANT REDUCTION IN CORPORATE OVERHEADS Corporate Overheads – INR Crs 500 3.70 3.42 3.32 3.21 450 3.20 400 2.70 350 300 1.92 2.20 • Redeployments & re-structuring 250 1.70 • Prudence in resource allocation 200 39% 1.20 349 345 347 150 • Synergies - One IHCL 0.70 100 213 0.20 50 0 -0.30 2017/18
Slide 47: The Pierre cost rationalization
THE PIERRE COST RATIONALIZATION • Manpower Rationalization • Lease Renegotiation • Surrender of leased Ball Room Resultant Permanent Annual Savings ~ $ 5 Million 46
Slide 48: Strengthening the balance sheet with focus on ROCE
STRENGTHENING THE BALANCE SHEET WITH FOCUS ON ROCE 47
Slide 49: Committed to bring down debt to pre-pandemic level
COMMITTED TO BRING DOWN DEBT TO PRE- PANDEMIC LEVEL Target Debt Net Debt - ₹/Crores COVID Impact Pre Pandemic Levels 3 2.58 2.5 2.11 2 1.69 1.5 3110 1 1889 1925 1857 0.73 0.5 0.45 0.37 0.36 0 Mar 2018 Mar 2019 Mar 2020 Mar 2021 Target Net Debt Net Debt to EBITDA Net Debt to Equity *Trailing Twelve M
Slide 50: Selective capex focus
SELECTIVE CAPEX FOCUS › Flagship Ginger Hotel in Santa Cruz - ₹ 200 crs › Taj Mahal, New Delhi Renovation › Spent ₹ 105 crs Committed ₹ 70 crs St James Court London Chambers & New Coffee Shop - GBP 7 Mn The Pierre, NY – Ballroom Renovation (net) $ 6 Mn 49
Slide 51: Return on capital employed – IHCL standalone
RETURN ON CAPITAL EMPLOYED – IHCL STANDALONE ₹ 3,299 cr ROCE on ₹ 4,223 cr Hotel TOTAL CAPITAL OTHER HOTEL Assets EMPLOYED ASSETS ASSETS (₹ 7,522 CR) 20% *Figures as of FY 20. Detailed Workings in Annexure 50
Slide 52: Return on capital employed – consolidated
RETURN ON CAPITAL EMPLOYED – CONSOLIDATED ₹ 2,685 cr INTNL HOTEL ASSETS ROCE on ROCE on Domestic ₹ 4,765 cr Hotel TOTAL CAPITAL Assets Hotel DOMESTIC Assets EMPLOYED OTHER HOTEL (₹ 9,622 CR) ASSETS 9% 15% ASSETS ₹ 2,172 cr *Figures as of FY 20. Detailed workings in Annexure 51
Slide 53: Reshaping the financials
RESHAPING THE FINANCIALS TAS SELEQTIONS VIVANTA GINGER ama@ G@min
Slide 54: Revenue recovery: what is expected?
REVENUE RECOVERY| WHAT IS EXPECTED? Dec 21 Feb 20 Sustained Improvement supported by: • Domestic Leisure • Domestic Corporate 4-6 months of recovery due to domestic (Vaccinated) demand Demand Decline due to • International Demand Lock down and COVID Dec 20 Mar 21 fears June 21 2nd Wave Impact and Su
Slide 55: Q1 21-22 turnover expected to be in line with Q2 20-21
Q1 21-22 TURNOVER EXPECTED TO BE IN LINE WITH Q2 20-21 Consolidated Turnover - ₹/Crores 1200 1101 1000 800 615 626 600 400 324 175 200 0 Q4 19-20 Q1 20-21 Q2 20-21 Q3 20-21 Q4 20-21 Q1 21-22 54
Slide 56: Spend optimisation
SPEND OPTIMISATION Manpower Corporate Overheads Hotel Overheads Redeployment & Multitasking Prudent Resource Allocation Cluster Approach, Shared Services, Digitization 55
Slide 57: Reshaping the financials
RESHAPING THE FINANCIALS HIGH MARGIN & OPTIMISATION OF BALANCE SHEET ASSET LIGHT OPERATING PROFITABILITY SIZE GROWTH MODEL DEBT REVENUE COSTS MARGINS REDUCTION, MONETISATION 56
Slide 58: Leading possibilities, managing probabilities & delivering certainty
Leading Possibilities, Managing Probabilities & Delivering Certainty BALANCE SHEET MARKET FINANCIAL #MEALSTOSMILES ROCE LEADERSHIP TURNAROUND ~70 New Hotels Signed 57
Slide 59: Taking organizational culture to the next level
TAKING ORGANIZATIONAL CULTURE TO THE NEXT LEVEL 58
Slide 60: Culture
CULTURE “EATS STRATEGY FOR BREAKFAST, OPERATIONAL EXCELLENCE FOR LUNCH, AND EVERTHING ELSE FOR DINNER!” 59
Slide 61: Culture rooted in our core values
CULTURE ROOTED IN OUR CORE VALUES INTEGRITY UNITY EXCELLENCE RESPONSIBILITY PIONEERING TRUST AWARENESS JOY 60
Slide 62: Fostering a culture of service, growth and performance
FOSTERING A CULTURE OF SERVICE, GROWTH AND PERFORMANCE Rewarding Stimulating Encouraging Empowerment Retaining Performance Collaboration Innovation & Agility Tajness 61
Slide 63: Continued focus on our employees
CONTINUED FOCUS ON OUR EMPLOYEES Family Assistance Physical & Mental CARE 360o Support Taj For Family Plan Well-Being Multi-dimensional Options and Rewards & DEVELOPMENT Development Career Progression Opportunities Recognition 62
Slide 64: Building the organization of the future
BUILDING THE ORGANIZATION OF THE FUTURE 63
Slide 65: Focus on organizational optimization
FOCUS ON ORGANIZATIONAL OPTIMIZATION New Ways of Dual Roles & Shared One IHCL - Cross- Working e.g. Additional Services & Operational Functional A1, Digital Responsibilit- Clusters Synergies Projects ies 64
Slide 66: Focus on ESG: a key pillar of our journey forward
FOCUS ON ESG: A KEY PILLAR OF OUR JOURNEY FORWARD 65
Slide 67: Summary: Creating value and shaping the future
SUMMARY: CREATING VALUE AND SHAPING THE FUTURE Capitalize on Business Focus on New Brands & Pursue Recovery Businesses Asset Light Growth Sustain Spend Strengthen the Focus on Optimization Balance Sheet ROCE Take Org. Culture To Build Organization Of Re-shape The Financials The Next Level The Future
Slide 68: Investment thesis
INVESTMENT THESIS TA} SELEQTIONS VIVANTA GINGER amd @
Slide 69: Sustained value creation: onwards & upwards
SUSTAINED VALUE CREATION: ONWARDS & UPWARDS ICONIC OPERATIONAL PORTFOLIO FOCUS ON BRAND EXCELLENCE GROWTH ESG “Driven by cost optimization, increase in new hotel signings under management contracts, and new destinations enveloping India, IHCL aspires to continue to dominate market share in South Asi
Slide 70: Creating Value and Shaping the Future
CREATING VALUE AND SHAPING THE FUTURE INVESTORS MEET | 7th JULY 2021
Slide 71: Return on capital employed – calculation FY 2019-20
RETURN ON CAPITAL EMPLOYED – CALCULATION FY 2019-20 ₹/Crores Details Standalone Consolidated Reported Capital Employed 7,522 9,622 Less: Investments 3,743 1,692 Deployed Assets 3,779 7,930 Less: Corporate Assets 480 480 Hotel Assets 3,299 7,450 Less: International - 2,685 Domestic hotels 3,299 4,765
The Indian Hotels Company — Institutional Investor Conference, 7 July 2021 on 6ix