Lemon Tree Hotels Ltd. · NSE:LEMONTREE
Lemon Tree Hotels — Q2 FY19 Earnings Presentation
27 slides from Lemon Tree Hotels's earnings presentation, Nov 13, 2018
Slide 1: Q2 FY19 Earnings Presentation
Lemon Tree Hotels Limited Q2 FY19 Earnings Presentation Nov 13, 2018
Slide 2: Disclaimer
Disclaimer Certain statements in this communication may be ‘forward looking statements’ within the meaning of applicable laws and regulations. These forward-looking statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those s
Slide 3: Table of Contents
Table of Contents 1 Company Overview 2 Chairman & Managing Director’s Message 3 Performance Highlights 4 Financial & Operational Metrics 5 Key Developments / Business Updates 6 Growth Outlook 7 Annexures Note: Slides 5, 15, 20-25 are either generic or have annual numbers. These will be updated on an
Slide 4: Lemon Tree – Snapshot
Lemon Tree – Snapshot Leadership in mid-priced hotel sector Key Statistics3 #1 mid-priced hotel sector chain by owned rooms 1 2,4 31 25 56 Cities for current New cities for under Cities by #3 overall hotel sector chain by owned rooms 2,4 operating hotels development hotels end of FY21 1,301 51 33 84
Slide 5: Strategically positioned in key geographies with Lemon Tree share of mid-priced sector
Strategically positioned in key geographies with Lemon Tree share of total mid- priced hotel sector Geographical spread across Delhi NCR: FY17 – 14% India and presence in key Jaipur: FY17 – 11% FY21E – 10% FY21E – 16% markets to cater effectively to corporate clients and business travelers Hotel
Slide 6: Chairman & Managing Director’s Message
Chairman & Managing Director’s Message Commenting on the performance for Q2 FY19, Mr. Patanjali Keswani, Chairman & Managing Director – Lemon Tree Hotels Limited said, “We have delivered another strong performance in Q2 FY19 with a top-line growth of 20% YoY in a seasonally weak quarter. Our strong
Slide 7: Performance Highlights – Operational Metrics
Performance Highlights – Operational Metrics Operational Inventory Average Daily Rate (Rs.) Owned/Leased rooms Managed rooms Total rooms 9% 3,939 12% 3,919 13% 3,896 4,871 4,999 4,434 3,698 3,626 3,278 3,278 2,855 3,171 3,504 3,449 1,593 1,721 1,263 843 Q2 FY18 Q2 FY19 H1 FY18 H1 FY19 FY17 FY18 FY17
Slide 8: Performance Highlights – Financial Metrics (Consolidated)
Performance Highlights – Financial Metrics (Consolidated) Total Income (Rs. million) EBITDA (Rs. million) 16% 1,440 17% 1,247 4,921 18% 4,203 37% 20% 44% 764 2,612 556 2,203 414 1,118 1,341 287 Q2 FY18 Q2 FY19 H1 FY18 H1 FY19 FY17 FY18 Q2 FY18 Q2 FY19 H1 FY18 H1 FY19 FY17 FY18 Cash profit (PAT + Dep
Slide 9: Discussion on Consolidated Financial & Operational Performance – Q2 FY19
Discussion on Consolidated Financial & Operational Performance – Q2 FY19 As of 30th September, 2018, operational portfolio comprised of 50 hotels and 4,999 rooms : 2,796 owned, 482 leased and 1,721 managed rooms; Pipeline includes of 1,525 owned/leased and 2,074 managed rooms. Operational Propos
Slide 10: Profit & Loss Statement (Consolidated)
Profit & Loss Statement (Consolidated) Change Change Rs. million Q2 FY19 Q2 FY18 H1 FY19 H1 FY18 Change (%) FY18 FY17 (%) (%) Revenue from operations 1,287 1,116 15% 2,552 2,198 16% 4,843 4,121 18% Other income 54 2 2700% 56 5 1099% 78 82 (5%) Total income 1,341 1,118 20% 2,612 2,203 18% 4,921 4,203
Slide 11: Quarterly contribution to full year performance: Seasonality in business
Quarterly contribution to full year performance (for same hotels) : Seasonality in business Quarterly revenue contribution to full Quarterly EBITDA contribution to full year revenue year EBITDA 28% 100% 31% 100% 27% 30% 23% 20% 22% 19% Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Note: The calculation for quarterl
Slide 12: Balance Sheet Snapshot (Consolidated)
Balance Sheet Snapshot (Consolidated) Rs. million H1 FY19 H1 FY18 FY18 FY17 Shareholder's Funds 8,271 7,946 8,148 8,086 Non-controlling interests 4,294 4,268 4,286 4,284 Total Shareholder’s equity 12,565 12,214 12,435 12,370 Total Debt 11,073 9,217 10,110 7,987 Other Non-current liabilities 385 325
Slide 13: Portfolio as on 30th September, 2018
Portfolio as on 30th September, 2018 Operational Portfolio Owned Leased Managed Total 30.09.2018 Hotels Rooms Hotels Rooms Hotels Rooms Hotels Rooms Lemon Tree Premier 4 796 2 161 4 344 10 1,301 Lemon Tree Hotels 13 1,241 4 321 14 954 31 2,515 Red Fox Hotels 5 759 - - 4 423 9 1,182 Total 22 2,796 6
Slide 14: Operational Performance by Brands – FY19 vs. FY18
Operational Performance by Brands – FY19 vs. FY18 Q2 Hotel level EBITDAR2/room Parameters Occupancy Rate (%) Average Daily Rate (Rs.) Hotel level EBITDAR2 Margin (Rs. million) Change Change Change By Brand Q2 FY19 Q2 FY18 (bps) Q2 FY19 Q2 FY18 (%) Q2 FY19 Q2 FY18 Change (%) Q2 FY19 Q2 FY18 (bps) Lem
Slide 15: Operational Performance by Ageing – FY18 vs. FY17
Operational Performance by Ageing – FY18 vs. FY17 Adult Hotels Toddler Hotels Infant Hotels Under-development Parameters Financial year (Stable - older than 3 (Stabilizing - between (New - less than 1 hotels years) 1-3 years old) year old) FY18 21 3 4 Hotels 7 FY17 21 3 - Operating Rooms FY18 2,727
Slide 16: Expansion Plans – Hotels under Development
Expansion Plans – Hotels under Development Expected Opening Under-development hotels Type Rooms Ownership (%) date Lemon Tree Premier, City Centre, Pune Owned 199 Dec-18 57.98% Lemon Tree Premier, Andheri (East), Mumbai Owned 298 Jan-19 100.00% Lemon Tree Premier, Kolkata Owned 142 Apr-19 57.98% Lem
Slide 17: Expansion Plans – Pipeline of Management Contracts
Expansion Plans – Pipeline of Management Contracts (as of November 5th , 2018) Management Contracts Pipeline Rooms Expected Opening date Tenure (years) Lemon Tree Hotel, Lucknow 51 Dec-18 11 Red Fox Hotel, Alwar 49 Dec-18 12 Lemon Tree Hotel, Amritsar 65 Feb-19 10 Red Fox Hotel, Neelkanth 80 Mar-19
Slide 18: Growth Strategies
Growth Strategies • Strong competitive position in mid-priced hotel sector to • Geographical diversification to reduce exposure to local, drive market share gains seasonal and cyclical fluctuations as well as provide greater choice to an expanding loyal (repeat) guest o Strong pipeline of owned, lea
Slide 19: Annexures
kena ANNEXURES
Slide 20: Strong operating performance
Strong operating performance Room additions CAGR Occupancy levels Owned Leased Hotels Managed Hotels FY15 FY16 FY17 FY18 20% 4,870 3,698 1593 79% 3,001 3,249 78% 2,708 77% 77% 77% 274 461 843 75% 171 481 75% 74% 1,920 283 283 317 73% 283 283 2,444 2,505 2,538 2,796 68% 68% 68% 2,254 1,637 FY13 FY14
Slide 21: Strong Growth and improving margins
Strong Growth and improving margins Revenue from operations (Rs. million) CAGR EBITDA & EBITDA margins EBITDA (Rs. million) EBITDA Margins (%) 22% 27.9% 29.7% 29.3% 4,843 4,121 3,680 2,904 17.8% 2,217 11.0% 246 519 1,033 1,247 1,440 FY14 FY15 FY16 FY17 FY18 FY14 FY15 FY16 FY17 FY18 Cash Profit (PAT
Slide 22: The hotel business cycle
The hotel business cycle Occupancy 70% Illustrative: 15 Room Hotel 65% with Investment = 300 60% Cycle Top (2) Middle (3) Bottom (2) Occupancy 70% or more 63-68% 60% or less Rooms Sold 12 10 8 Average Daily Rate 13 10 7 Revenue 156 100 56 Expenses 60 50 40 EBITDA 96 50 16 Hotel RoCE 32% 17% 5% 6:3:1
Slide 23: Indian hotel industry is at an inflection point
Indian hotel industry is at an inflection point Slowing supply and rising demand is expected to increase occupancy and ADR Occupancy (%) Rooms demand per day ('000) Rooms supply per day ('000) 200 Demand 10.8% Demand 15.1% Demand 13.7% Demand 12.5% Supply 14.9% Supply 15.1% Supply 8.4%
Slide 24: Increasing occupancy leading to increase in room rates
Increasing occupancy leading to increase in room rates Average Daily Rate (ADR) is increasing with increase in occupancy rates ADR (Rs.) Occupancy (RHS) ADR (INR) Occupancy 9000 80% 75% 8000 7543 70% 7000 65% 60% 6000 5745 55% 69% 68% 59% 59% 60% 58% 57% 58% 59% 63% 65% 5000 50% FY07 FY08 FY09 FY10
Slide 25: Mid-priced hotel sector expected to have higher demand supply gap
Mid-priced hotel sector expected to have higher demand supply gap resulting in higher growth in occupancy Mid-priced hotel sector expected to continue having higher demand-supply gap leading to… Demand Growth Supply Growth Demand Supply Gap FY12-17 FY17-21 19% 19% 16% 16% 15% 12% 12% 12% 13% 11% 8%
Slide 26: Conference Call Details
Conference Call Details Lemon Tree Hotels Limited (LTH) Q2 FY19 Earnings Conference Call Time • 2:00 pm IST on Thursday, November 15, 2018 Conference dial-in Primary number • Primary number: +91 22 6280 1141 / +91 22 7115 8042 Local access number • +91 70456 71221(Available all over India) Internati
Slide 27: About Us
About Us Lemon Tree Hotels (LTH) is the largest mid-priced hotel sector chain, and the third largest overall, on the basis of controlling interest in owned and leased rooms, as of June 30, 2017, according to the Horwath Report. LTH operates in the mid-priced hotel sector, consisting of the upper mid