Ctf Services Limited · HKEX:659
Ctf Services — NWS Holdings — H1 FY2019 Earnings Presentation
39 slides from Ctf Services's earnings presentation, Feb 26, 2019
Slide 1: NWS Holdings Limited FY2019 Interim Results Announcement
Connecting Lives ‧ Building Futures NWS Holdings Limited FY2019 Interim Results Announcement Analyst Presentation 26 February 2019
Slide 2: Table of Contents
Table of Contents NWS Business Overview Section 1 Company Highlights Section 2 FY2019-1H Financial Summary Section 3 Business Segment Overview and Update Section 4 Appendices Acquisition of FTLife Appendix A Historical Net Gearing Ratio Appendix B 2
Slide 3: Section 1: NWS Business Overview
Section 1 NWS Business Overview Connecting Lives ‧ Building Futures
Slide 4: NWS Overview
NWS Overview 17.HK Market Cap: HK$134Bn(1) 100% 61% 75% 825.HK Market Cap: HK$3Bn(1) NWS Holdings Limited (“NWS”) 659.HK Market Cap: HK$80Bn(1) Note: 1.Market cap as at 25 Feb 2019 4
Slide 5: NWS at a Glance
NWS at a Glance Construction / Facilities Roads Environment Aviation Logistics Transport Management 15 toll roads in the 73 projects in 46 Leasing commercial ATL Logistics Centre Hip Hing Group Operation and PRC cities across the aircraft to worldwide in Hong Kong provides professional m
Slide 6: Section 2: Company Highlights
Section 2 Company Highlights Connecting Lives ‧ Building Futures
Slide 7: Company Highlights
Company Highlights Experienced Management Team with Diverse Background Resilient Portfolio with Highly Visible Recurring Income Revitalize the Business Portfolio while Generating Strong Cash Flow and Recurring Income Optimize Capital Structure with Prudent Financial Policy 7
Slide 8: Experienced Management Team with Diverse Background
Experienced Management Team with Diverse Background Senior Management Robust Corporate Governance • Chairman of New World • Chairman of Goshawk and Development Company director of SUEZ NWS Ltd (“NWD”), New World • Board member of NWS for Department Store, and over 10 years New World China • Experien
Slide 9: Resilient Portfolio with Highly Visible Recurring Income
Resilient Portfolio with Highly Visible Recurring Income Majority AOP with strong earnings visibility Key Highlights Key Operating Drivers Strategic locations targeting diverse users • Greater Bay Area 7 road projects in Greater Bay Area (1) • Traffic growth Roads Extended network to Hunan in
Slide 10: Revitalize the Business Portfolio while Generating Strong Cash Flow
Revitalize the Business Portfolio while Generating Strong Cash Flow and Recurring Income Recent Acquisitions Restructuring & Disposal • Hunan Sui-Yue Expressway • Hip Seng Group (湖南隨岳高速) • MOU of Guangxi Guiwu • Urban Parking (Beijing) Limited Expressway (廣西貴梧高速) • Sky Aviation Leasing Int’l Limited
Slide 11: Case Study – Growth of Goshawk to Global Top 10 Player
Case Study – Growth of Goshawk to Global Top 10 Player under NWS Ownership 4 Sep 2018 Strategic growth acceleration while 3 Acquired Sky maintaining a quality portfolio of Jun 2018 Aviation young and liquid fleet with long Owned fleet size remaining lease terms increased to 105 aircraft Order
Slide 12: Optimize Capital Structure with Prudent Financial Policy
Optimize Capital Structure with Prudent Financial Policy NWS Financial Policy Debt Maturity Profile HK$Bn • Ample cash on balance sheet with HK$7.3Bn as at 31 Dec 2018 7.3 • Prudent financial policy and well managed maturity profile allows NWS to maintain financial 71% flexibility for operations, po
Slide 13: Section 3: FY2019-1H Financial Summary
Section 3 FY2019-1H Financial Summary Connecting Lives ‧ Building Futures
Slide 14: Financial Summary
Financial Summary 2017 2018 YoY For the six months ended 31 December (HK$MM) (HK$MM) change % Revenue 18,076.9 14,188.0 (22) - Infrastructure 1,328.3 1,450.1 9 - Services 16,748.6 12,737.9 (24) • Disposal of Hip Seng Group Attributable Operating Profit (AOP)(1) 2,682.1 2,431.9 (9) Profit Attributabl
Slide 15: AOP by Segment and Geography
AOP by Segment and Geography AOP by Segment AOP by Geography Others 7% 39% Hong Kong 30% 26% 18% 14% Mainland 10% China 63% -6% Roads Environment Logistics Aviation Construction Facilities & Transport Management 15
Slide 16: Performance by Segment
Performance by Segment 2017 2018 YoY For the six months ended 31 December (HK$MM) (HK$MM) change% • Excluding exchange rate effect AOP up 6% Roads 1,027.8 948.5 (8) • Tate’s Cairn Tunnel concession expired in July 2018 • One-off gain from SUEZ NWS’ Environment 293.8 449.6 53 restructuring of a JV •
Slide 17: Financial Summary
Financial Summary Infrastructure AOP(1) Services AOP(1) HK$MM HK$MM YoY: -3% YoY: -29% 365 232 339 339 135 294 450 607 629 1,028 949 -84 -147 FY2018-1H FY2019-1H -19 FY2018-1H FY2019-1H Roads Environment Logistics Aviation Construction&Transport Facilities Mgt Strategic Investments Services AOP main
Slide 18: Section 4: Business Segment Overview and Update
Section 4 Business Segment Overview and Update Connecting Lives ‧ Building Futures
Slide 19: Infrastructure Business Overview – Roads
Infrastructure Business Overview Roads Portfolio of 15 roads in Segment AOP PRC approx. 700km HK$MM Guangdong Guangxi Zhejiang Hubei Tianjin Shanxi Hunan 1,028 949 # of Roads 7 1 1 1 1 3 1 Length 313.9 km 13.0 km 103.4 km 98.06 km 60.67 km 76.52 km 24.08 km Concession 2023–2035 2022 2029 2040 2039 2
Slide 20: Infrastructure Business Overview – Environment
Infrastructure Business Overview (Cont’d) Environment • Environment business spans 73 projects and 46 cities across the Greater China region mainly through two strategic platforms, SUEZ NWS Limited (“SUEZ NWS”) and Chongqing Derun Environment Co., Ltd. (“Derun Environment”) Segment AOP HK$MM SUEZ NW
Slide 21: Infrastructure Business Overview – Logistics
Infrastructure Business Overview (Cont’d) Logistics ATL Logistics Centre CUIRC Segment AOP • Logistics centre in Hong Kong • JV with China Railway Corporation HK$MM YoY • Largest logistics centre with ramp access in the • 10 Large-scale rail container 0% world: Total leasable area: 5.9m sqftHeilongj
Slide 22: Infrastructure Business Overview – Aviation
Infrastructure Business Overview (Cont’d) Aviation Goshawk Aviation Segment AOP • As at 31 Dec 2018, with the acquisition of Sky Aviation, completed in Sep 2018 and including direct order: HK$MM – Global top 10 aircraft lessor(1) – Total fleet increased to 216 aircraft (including owned, managed and
Slide 23: Services Business Overview – Construction and Transport
Services Business Overview Construction and Transport Construction Segment AOP • Contracts on Hand: HK$39.1Bn as at 31 Dec 2018, HK$MM Backlog of HK$22.1Bn • Recent key residential/commercial projects: 629 607 –SAVANNAH at Tseung Kwan O Xiqu Centre Kai Tak Sports Park –Home Ownership Scheme Developm
Slide 24: Services Business Overview – Facilities Management
Services Business Overview (Cont’d) Facilities Management HKCEC Healthcare Free Duty Shops Segment AOP HK$MM • Includes operation and management • Gleneagles Hong Kong Hospital • Retails of duty free tobacco, (84) (147) of HKCEC, Hong Kong’s largest (“GHK Hospital”) liquor, perfume, cosmetics, multi
Slide 25: 1. Optimize 2. Build 3. Fortify
1. OPTIMIZE 2. BUILD 3. FORTIFY Leverage the Group’s Develop and grow Explore new investment strong fundamentals portfolio of businesses opportunities to and continually optimize with long-term growth, strengthen our its diverse business recurring income- resilience, create portfolio generating syne
Slide 26: NWS Strategy in Greater Bay Area
NWS Strategy in Greater Bay Area Roads Aviation Environment 7 road projects in GBA: Goshawk Aviation SUEZ NWS key projects located in heart of • Guangzhou City Northern Ring Road • Already set up a platform in Tianjin to explore GBA: Hong Kong, Macau, Shenzhen, • Guangzhou City Nansha Port Expresswa
Slide 27: Appendices
& A 27 ar al NWS
Slide 28: Appendix A: Acquisition of FTLife
Appendix A Acquisition of FTLife Connecting Lives ‧ Building Futures
Slide 29: Transaction Overview
Transaction Overview • All cash agreement to acquire entire issued share capital of FTLife Insurance Company Limited (“FTLife”) from Tongchuangjiuding Investment Management Group Co., Ltd. (“Jiuding”) Price and • Acquisition price of HK$21.5Bn (subject to adjustments(1)) Considerations – Represents
Slide 30: Compelling Strategic Transaction
Compelling Strategic Transaction Robust Long-term Outlook for the Hong Kong Life Insurance Industry • Favorable industry trends e.g. high savings rate, growing high net worth and aging population • Demand from PRC and overseas visitors looking to access world-class financial products • Potential lau
Slide 31: Attractive Valuation Compared to Precedent Insurance Deals
Attractive Valuation Compared to Precedent Insurance Deals Price to Book Multiple (x) 6.9x 5.9x 3.2x Precedent Average: 3.5x 1.9x 1.9x 1.6x 1.4x Tahoe / Jeneration / RL360 / Yunfeng Pacific Century Jiuding / NWS / Dah Sing AXA Wealth Friends Provident Financial / Group / Ageas HK (6) FTLife (7) (5)
Slide 32: FTLife – High Quality HK Life Insurer
FTLife – High Quality HK Life Insurer Gross Written Premiums (“GWP”) Company Overview HK$MM • Premier HK life insurer with 30+ years of history CAGR: • Comprehensive product offerings including whole life, term life, 16% endowment, investment-linked, accident and health 4,808 3,576 Network of 2,500+
Slide 33: Robust Long-term Outlook for HK Life Insurance
Robust Long-term Outlook for HK Life Insurance Supported by Strong Growth Fundamentals & Structural Factors High Savings Rate Fast HNW Population Growth Robust Premium Growth Gross Savings Rate (% Gross National Income)(1) 2014-17 CAGR (%) HK Life Sector Total Premiums (HK$Bn) 47.1 PRC customers(3)
Slide 34: Greater Bay Area Insurance Connect Growth Upside
Greater Bay Area “Insurance Connect” Growth Upside Potential GBA(1) Insurance Connect Represents Substantial Market Demand from GBA Integration Significant Upside to HK-based Insurers Population of GBA and HK, 2017 (MM) 69 70 35 Zhaoqing Guangzhou Huizhou 7 Foshan Dongguan Zhongshan Shenzhen 0 Jiang
Slide 35: Complementing NWS' Diversified Business Portfolio
Complementing NWS’ Diversified Business Portfolio Roads Aviation Construction Transport Insurance …with added element of long- Stable, long-term yielding portfolio of assets… …complemented by value-added services… term growth and recurring income …expanding the New World Group’s dynamic Facilities a
Slide 36: Compelling Synergy Opportunities within the New World Group
Compelling Synergy Opportunities within the New World Group • Leverage the New World Group’s extensive and • Collaboration with expanding footprint the New World in the Greater Bay Group’s healthcare Area for greater • Connectivity and wellness regional integration, between FTLife’s portfolio, e.g.
Slide 37: Appendix B: Historical Net Gearing Ratio
Appendix B Historical Net Gearing Ratio Connecting Lives ‧ Building Futures
Slide 38: Net Gearing Ratio
Net Gearing Ratio 40% 35% 30% 25% 20% 15% 10% 5% 0% FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 1HFY2019 38
Slide 39: Disclaimer
Disclaimer NWS Holdings Limited (“NWS”) makes no representation or warranty of any kind, express, implied or statutory regarding the accuracy or completeness of the information contained. It is not the intention to provide, and you may not rely on this presentation as providing, all material informa