John Keells Holdings PLC · CSELK:JKH.N0000
John Keells — Q3 FY2022 Earnings Presentation
48 slides from John Keells's earnings presentation, Jul 3, 2022
Slide 1: Investor Presentation: Review of Q3 FY2022
Investor Presentation Review of Q3 FY2022 Version 3.0 This Investor Presentation should be read in conjunction with the JKH Annual Report 2020/21 to obtain a more comprehensive understanding of the drivers and strategies of our businesses
Slide 2: About JKH
About JKH ▪ Market cap of USD 982.5 million ▪ No controlling shareholder - 99% free float ▪ Net Debt : Equity ratio of 26.0%* ▪ The Board comprises of two Executive Directors and five Independent Non- Executive Directors ▪ Focus on sustainability related aspects, where the Group has re-established i
Slide 3: COVID-19 impact on Sri Lanka and JKH; Q3 2021/22 update
COVID-19 impact on Sri Lanka and JKH; Q3 2021/22 update • The Group witnessed a strong recovery momentum during the quarter under review with the performance of businesses reaching close to pre COVID-19 levels with business activity and consumer trends being near “normal” since the onset of the pand
Slide 4: Cumulative EBITDA for the year ended 31 March 2021
Cumulative EBITDA : for the year ended 31 March 2021 FY2021 FY2020 YoY Growth Industry Group (Rs. Million) (Rs. Million) (%) Transportation 3,610 4,375 (17) Consumer Foods 3,321 3,408 (3) Retail 5,523 5,108 8 Leisure (3,572) 2,327 (253) Property (17) 641 (103) Financial Services 3,645 2,988 22 Other
Slide 5: EBITDA for the quarter ended 31 December 2021
EBITDA: for the quarter ended 31 December 2021 Q3 FY2022 Q3 FY2021 YoY Growth Industry Group (Rs. Million) (Rs. Million) (%) Transportation 1,396 930 50 Consumer Foods 1,004 605 66 Retail 2,275 1,696 34 Leisure 1,234 (1,008) 222 Property 707 14 5,037 Financial Services 2,111 1,229 72 Total EBITDA 9,
Slide 6: EBITDA for nine months ended 31 December 2021
EBITDA: for nine months ended 31 December 2021 YTD FY2022 YTD FY2021 YoY Growth Industry Group (Rs. Million) (Rs. Million) (%) Transportation 3,620 2,254 61 Consumer Foods 1,922 2,045 (6) Retail 5,166 3,571 45 Leisure 539 (3,656) 115 Property 2,511 (27) 9,235 Financial Services 3,862 2,418 60 Total
Slide 7: Portfolio evaluation 2020/21; returns vs. effective capital deployed
Portfolio evaluation 2020/21; returns vs. effective capital deployed The Group is now poised to reap the Industry group Effective capital employed (%) benefits from the “Cinnamon Life” project, Cinnamon Life 34 given the revenue and profit recognition in Leisure 19 lieu of the commencement of the ha
Slide 8: Transportation - overview
Transportation - overview ▪ Port of Colombo: ▪ 42% stake in SAGT (capacity: ~2 million TEUs) ▪ Development of the West Container Terminal-1 (capacity: ~3.2 million TEUs) ▪ One of the largest cargo and logistics service provider in the country ▪ Leading bunkering services provider ▪ Joint Ventures wi
Slide 9: The strategic location of the Port of Colombo
The strategic location of the Port of Colombo linking key shipping routes GWADAR BAHL KARACHI KOLKATA MUMBAI VISHAKHAPATNAM CHITTAGONG CHENNAI YANGON ADEN KOCHI LAMU MOMBASA DAR-ES-SALAM PORT LOUIS CAPE TOWN 9
Slide 10: Capacity enhancements in the Port of Colombo
Capacity enhancements in the Port of Colombo • The development of the West Container Terminal-1 (WCT-1) in the Port of Colombo, as the partner of Adani Ports and Special Economic Zone Limited (APSEZ), the Build, Own and Transfer (BOT) Agreement WCT -1 between the Sri Lanka Ports Authority (SLPA) and
Slide 11: Sustained volume growth in the Port of Colombo
Sustained volume growth in the Port of Colombo 7.23 7.25 7.05 6.85 6.21 5.74 5.19 4.91 Million TEUs 4.31 2013 2014 2015 2016 2017 2018 2019 2020* 2021 *The impact from COVID-19 at the PoC was more pronounced during the first quarter of 2020/21, when the pandemic escalated in Sri Lanka and the region
Slide 12: Rapid absorption of capacity in the Port of Colombo
Rapid absorption of capacity in the Port of Colombo Container handling Port of Colombo - volumes ('000 TEUs) 3Q FY22 earnings update: Port SAGT capacity (TEUs) SLPA Transportation industry group Colombo 8 million 900 CICT (Rs. mn) Q3 Q3 800 2021/22 2020/21 Hong Kong 21 million 700 600 EBITDA 1,396 9
Slide 13: Opportunities for growth in the Bunkering businesses
Opportunities for growth in the Bunkering businesses Bunkering Business (Lanka Marine Services) 2020/21 2021/22 LMS Q3 Q4 Q1 Q2 Q3 YoY volume growth (19) (10) 1 16 (6) (%) Port of Hambantota ▪ LMS was the first to enter into a short-term fuel contract with Sinopec Fuels of Lanka (SFOL) for the sale
Slide 14: Consumer Foods - overview
Consumer Foods - overview ▪ Market leader in soft drinks, ice creams and processed meats 3Q FY22 earnings update: ▪ Custodians of the consumer brands “Elephant House”, “Keells - Krest”: Consumer Foods industry group high brand equity (Rs. mn) Q3 Q3 Key performance indicators (%) FY2017 FY2018 FY2019
Slide 15: Low consumption patterns and penetration reflects potential for sustained growth
Low consumption patterns and penetration reflects potential for sustained growth Bulk vs. Impulse Split - Regional ▪ The bulk-impulse mix of regional markets is highly skewed towards the impulse markets, 8% 44% demonstrating the significant growth potential 30% 70% 92% for the impulse category. 56%
Slide 16: Retail - overview
Retail - overview ▪ The Retail industry group consists of two business verticals; ▪ Supermarkets ▪ Office Automation ▪ “Keells” is a chain of ~10,000 square foot modern grocery retail outlets Modern Retail Penetration (%) 70 49 48 43 40 16 Singapore Malaysia Hong Kong Taiwan Thailand Sri Lanka Sourc
Slide 17: Rapid expansion to capitalise on low retail penetration levels
Rapid expansion to capitalise on low retail penetration levels Modern trade density – population (’000) per store Keells current coverage 132 47 30 21.0 7.3 4.7 4.5 3.7 3.6 3.4 3.0 1.9 2.5 0.9 Source: Retail and shopper trends in the Asia Pacific, AC Nielsen ▪ Comparatively higher modern trade densi
Slide 18: Supermarkets - overview
Supermarkets - overview Profitability margin FY FY FY FY FY 3Q FY22 earnings update: (%) 2017 2018 2019 2020 2021 Retail industry group EBITDA (Rs.milllion) 2,010 1,975 2,465 4,267 4,144 (Rs. mn) Q3 Q3 2021/22 2020/21 EBITDA margin 6.7 5.3 5.4 7.8 7.6 EBITDA 2,275 1,696 EBIT margin 5.7 4.0 2.6 4.7 3
Slide 19: New concept Keells store, Lauries Road, Colombo
New concept “Keells” store – Lauries Road, Colombo A new concept “Keells” store was opened at Lauries Road, Colombo. This store brings innovative technology features such as “Scan & Go” self-checkouts and a food ordering kiosk in a very sleek and contemporary atmosphere. In keeping with our strategy
Slide 20: Leisure - overview
Leisure - overview ▪ Chain of Resort hotels in Sri Lanka ‾ 8 Resort hotels in strategic tourist destinations (1,022 rooms) ‾ 10% of the country’s 4-5 star class tourist accommodation ▪ 2 five-star city hotels in Colombo (847 rooms) ▪ 243 roomed lean luxury hotel managed by Cinnamon; “Cinnamon Red” ▪
Slide 21: Round trip offering in key tourist destinations
Round trip offering in key tourist destinations; further potential to expand the “Cinnamon” footprint ▪ Greater focus on asset light investment models as a part of the strategy to enhance the “Cinnamon” footprint in Sri Lanka ▪ Land bank of 125 acres of freehold and 111 acres of leasehold land in ad
Slide 22: Occupancies and average room rates
Occupancies and average room rates FY2021 FY2020 3Q FY22 earnings update: Sector Leisure industry group Occupancy ARR Occupancy ARR (%) (US $) (%) (US $) (Rs. mn) Q3 2021/22 Q3 2020/21 Colombo Hotels* 3 104 34 100 EBITDA 1,234 (1,008) Sri Lankan Resorts 16 64 61 78 Maldivian Resorts 27 349 56 364 •
Slide 23: Trend of tourist arrivals to Sri Lanka
Trend of tourist arrivals to Sri Lanka Annual tourist arrivals to Sri Lanka ('000) Tourist arrivals YoY Growth 2,500 Year (In 000’s) (%) 2010* 654 46 2,000 2015 1,798 18 1,500 2016 2,051 14 2017 2,116 3 1,000 2018 2,334 10 2019 1,913 (18) 500 2020 508 (74) 2021 194 (62) - 1986 1991 1996 2001 2006 20
Slide 24: Trend of monthly tourist arrivals and occupancies
Trend of monthly tourist arrivals and occupancies Monthly Tourist Arrivals - Sri Lanka Monthly Tourist Arrivals - Maldives Month 2019 2020 2021 Month 2019 2020 2021 January 244,239 228,434 1,682 January 151,552 173,347 92,103 February 252,033 207,507 3,366 February 168,583 149,785 96,882 March 244,3
Slide 25: Significant growth in Asian arrivals to Sri Lanka
Significant growth in Asian arrivals to Sri Lanka Tourist Arrivals 1,200,000 1,000,000 800,000 600,000 400,000 200,000 - 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019* 2020* 2021* Source: Sri Lanka Tourism Development Authority *2019, 2020 and 2021 arrivals were impacted by Easter Sunday terror
Slide 26: Tourist arrivals to Sri Lanka lag well below regional peers
Tourist arrivals to Sri Lanka lag well below regional peers 45 40 35 30 Arrivals in millions 25 20 15 10 5 0 Malaysia Indonesia Thailand Vietnam Cambodia Sri Lanka 1990 2019 Source: Governmental tourism websites 26
Slide 27: Room inventory in Colombo lags far behind regional capital cities
Room inventory in Colombo lags far behind other popular regional capital cities 60,000 31,790 30,114 26,113 9,100 7,600 5,019 Bangkok Manila Kuala Lampur Jakarta Ho Chi Minh Hanoi Colombo 27
Slide 28: Property - overview
Property - overview ▪ “John Keells Properties”; explore property development opportunities by leveraging on brand equity ▪ Focused strategies for expansion via developer/landowner tie ups “7th Sense” on Gregory’s Road ▪ Catering to different target market segments: ▪ Luxe Spaces ▪ Metropolitan Space
Slide 29: Industry potential
Industry potential ▪ Low levels of urbanisation within Sri Lanka in comparison to regional peers ▪ Annual condominium supply far below regional peers Annual condominium supply in regional cities 53,796 38,000 2,187 KL Ho Chi Minh City Colombo Sources: KL: CBRE property market outlook 1Q 2018 (foreca
Slide 30: Low penetration of apartment living in Colombo
Low penetration of apartment living in Colombo 5% 20% 30% 36% 40% 45% 50% 90% 95% 80% 70% 65% 60% 55% 50% 10% Greater Singapore Thailand Thailand Malaysia Malaysia India (Chennai) India Colombo (Central (Outskirts) (Central KL) (Greater KL) (Bangalore) Bangkok) Apartments Landed houses Source: Compa
Slide 31: Prime land bank of over 36 acres in central Colombo
Prime land bank of over 36 acres in central Colombo ▪ Prime land bank of over 36 acres held in central Colombo ▪ One of the largest privately owned land banks ▪ Includes on-going projects – “Cinnamon Life” and “Tri-Zen” ▪ Opportunities for development at land banks held in Crescat City and Cinnamon
Slide 32: Developable freehold land of approximately 25 acres near Colombo
Developable freehold land of approximately 25 acres in close proximity to Colombo city ▪ Greater connectivity and reduction in travel time to Colombo city post construction of the outer circular expressway. ▪ Direct connectivity to the Port City Colombo and a multi modal transportation hub to be dev
Slide 33: Robust development pipeline; on-going developments
Robust development pipeline; on-going developments Number of units sold as at 3Q FY22 earnings update: Cumulative sales (units) 31 December 2021 Property industry group Cinnamon Life: (Rs. mn) Q3 2021/22 Q3 2020/21 The Residence at Cinnamon Life 146 Suites at Cinnamon Life 114 EBITDA 707 14 Cinnamon
Slide 34: Scenic 500-acre land bank with an 18-hole golf course
Robust development pipeline: Scenic 500-acre land bank with an 18-hole golf course Rajawella Holdings Limited (RHL) ▪ Owners of a majority stake in RHL to complement the Group’s leisure and property portfolios ▪ The 500-acre land in Digana includes an 18-hole, Donald Steel designed, Golf Course and
Slide 35: Cinnamon Life Integrated Resort
Cinnamon Life Integrated Resort 35
Slide 36: Integrated development in Colombo
Integrated development in Colombo 36
Slide 37: Integrated development in Colombo
Integrated development in Colombo 37
Slide 38: Integrated development in Colombo
Integrated development in Colombo 38
Slide 39: Aerial view of Cinnamon Life under construction
Aerial view of Cinnamon Life under construction 39
Slide 40: The Suites at Cinnamon Life
The Suites at Cinnamon Life 40
Slide 41: The Suites at Cinnamon Life
The Suites at Cinnamon Life 41
Slide 42: The Offices at Cinnamon Life
The Offices at Cinnamon Life 42
Slide 43: Development programme
Development programme Conferencing ; capacity (4,837 pax) in three venues and car park facility (2,450 slots) 800 guest room hotel, including conferencing, banqueting, 7 specialty restaurants and entertainment facilities Rentable mall and entertainment space of 306,000 Sq. Ft (Gross – 535,000 Sq. Ft
Slide 44: The growth in Indian MICE travel to complement Cinnamon Life
The growth in Indian MICE travel to complement Cinnamon Life Indian Outbound MICE (Millions) 2.11 1.94 1.78 1.63 1.5 2017 2018 2019 2020 2021 Source: MasterCard 44
Slide 45: Financial Services – Insurance sector overview
Financial Services – Insurance sector overview ▪ Union Assurance (JKH Stake : 90%) ▪ Committed to a “digital first” business model with an investment of over Rs. 800Mn to become the largest digital insurer in Sri Lanka ▪ Developing Bancassurance channels - UA entered into exclusive bancassurance pa
Slide 46: Financial Services – Insurance sector overview
Financial Services – Insurance sector overview Key performance indicators CY2017 CY2018 CY2019 CY2020 CY2021 3Q FY22 earnings update: Market share (%) 14 14 13 13 12 Financial Services industry group GWP growth (%) 22 11 4 13 18 (Rs. mn) Q3 Q3 Recurring net profit (Rs.Mn) 4,002* 3,243 1,158 921 2,05
Slide 47: Financial Services – Banking sector overview
Financial Services – Banking sector overview ▪ Nations Trust Bank (JKH effective economic interest: 32.57%) ▪ Focus on SME / retail strategy ▪ Franchise for American Express cards Key performance indicators CY2016 CY2017 CY2018 CY2019 CY2020 CY2021 Loans and advances growth (%) 23.7 25.0 19.0 2.0 (7
Slide 48: Thank You
THANK YOU This document was produced by John Keells Holdings PLC for information purposes only. The information contained in this document are a review of the financial information pertaining to FY2022 and does not constitute an issue prospectus or a financial analysis. This Investor Presentation sh
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