John Keells Holdings Plc · CSELK:JKH.N0000
John Keells — Q2 FY2023 Earnings Presentation
48 slides from John Keells's earnings presentation, November 2022
Slide 1: Investor Presentation: Review of Q2 FY2023
Investor Presentation Review of Q2 FY2023 Version 1.0 This Investor Presentation should be read in conjunction with the JKH Annual Report 2021/22 to obtain a more comprehensive understanding of the drivers and strategies of our businesses
Slide 2: About JKH
About JKH ▪ Market cap of USD 517.9 million as at 30 September 2022 ▪ No controlling shareholder - 99% free float ▪ Net Debt : Equity ratio of 30.6%* ▪ The Board comprises of two Executive Directors and four Independent Non-Executive Directors *Net Debt excludes the Right-of-Use assets due to the ac
Slide 3: Overview of ESG initiatives
Overview of ESG initiatives ▪ Focus on sustainability related aspects, where the Group has re-established its second round of sustainability goals for 2024/25 to further reduce energy and water usage, amongst others ▪ The Group’s carbon footprint per million rupees of revenue decreased by 29 per cen
Slide 4: Sri Lanka macroeconomic update; Q2 2022/23
Sri Lanka macroeconomic update; Q2 2022/23 ▪ The quarter under review had operations with day-to-day consumer and business activity reverting to levels of normalcy from late July 2022 onwards, supported by political and social stability and less disruptions on account of the macro-economic challenge
Slide 5: EBITDA: for the quarter ended 30 September
EBITDA: for the quarter ended 30 September EBITDA* Q2 FY2023 Q2 FY2022 Variance Variance % (Rs. Million) Transportation 3,035 1,201 1,834 153 Consumer Foods 1,009 600 409 68 Retail 1,963 1,328 635 48 Leisure 1,005 (46) 1,051 2,278 Property (279) 1,261 (1,540) (122) Financial Services 1,104 982 122 1
Slide 6: EBITDA: for the six months ended 30 September
EBITDA: for the six months ended 30 September EBITDA* YTD FY2023 YTD FY2022 Variance Variance % (Rs. Million) Transportation 7,586 2,224 5,362 241 Consumer Foods 2,242 918 1,324 144 Retail 4,282 2,891 1,391 48 Leisure 2,874 (695) 3,569 514 Property (419) 1,803 (2,222) (123) Financial Services 1,981
Slide 7: Recurring EBITDA: for the year ended 31 March
Recurring EBITDA: for the year ended 31 March Recurring EBITDA* FY2022 FY2021 Variance Variance % (Rs. Million) Transportation 6,141 3,610 2,531 70 Consumer Foods 3,485 3,318 167 5 Retail 7,549 5,523 2,027 37 Leisure 3,785 (3,588) 7,373 205 Property 7,867 (17) 7,885 45,451 Financial Services 5,024 3
Slide 8: Portfolio evaluation 2021/22; returns vs. effective capital deployed
Portfolio evaluation 2021/22; returns vs. effective capital deployed Revenue recognition from the residential apartments and Industry group Effective capital employed (%) office floors sold to date at “Cinnamon Life Integrated Cinnamon Life Integrated Resort 40 Resort” has been completed. The projec
Slide 9: 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 10: The strategic location of the Port of Colombo linking key shipping routes
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 10
Slide 11: Capacity enhancements in the Port of Colombo
Capacity enhancements in the Port of Colombo 11
Slide 12: 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 13: 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) SAGT Port Q2 FY23 earnings update: capacity (TEUs) SLPA Transportation industry group Colombo 8 million 900 CICT 800 Q2 Q2 Hong Kong 21 million (Rs. mn) 700 2022/23 2021/22 Singapore 40 milli
Slide 14: Opportunities for growth in the Bunkering business
Opportunities for growth in the Bunkering business Bunkering Business (Lanka Marine Services) 2021/22 2022/23 LMS Q2 Q3 Q4 Q1 Q2 YoY volume growth (%) 16 (6) 2 54 (2) Port of Hambantota ▪ Strong opportunities for private bunkering service providers with infrastructure in place for inland storage of
Slide 15: Consumer Foods - overview
Consumer Foods - overview ▪ Market leader in soft drinks, ice creams and processed meats Q2 FY23 earnings update: ▪ Custodians of the consumer brands “Elephant House”, “Keells - Krest”: high brand equity Consumer Foods industry group Key performance indicators (%) FY2018 FY2019 FY2020 FY2021* FY2022
Slide 16: 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, demonstrating the significant growth potential for the Impulse category. 8% 44% 30% 70% 92% ▪ To
Slide 17: 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 18: 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 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 density – population per stor
Slide 19: Supermarkets - overview
Supermarkets - overview FY FY FY FY FY Q2 FY23 earnings update: Profitability margin (%) Retail industry group 2018 2019 2020 2021 2022 Recurring EBITDA (Rs.milllion) 1,975 2,367 4,267 4,144 5,204 Q2 Q2 (Rs. mn) 2022/23 2021/22 Recurring EBITDA margin 5.3 5.2 8.0 7.6 7.8 EBITDA 1,963 1,328 Recurring
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; potential to expand Cinnamon footprint
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 128 acres of freehold and 108 acres of leasehold land in ad
Slide 22: Occupancies and average room rates
Occupancies and average room rates Q2 FY23 earnings update: FY2022 FY2021 Leisure industry group Sector Occupancy Occupancy (Rs. mn) Q2 2022/23 Q2 2021/22 ARR (US $) ARR (US $) (%) (%) EBITDA 1,005 (46) Colombo Hotels* 29 70 3 64 • The strong performance was driven by the Maldivian Resorts Sri Lanka
Slide 23: Trend of tourist arrivals to Sri Lanka
Trend of tourist arrivals to Sri Lanka Year (000’s) Tourist arrivals YoY Growth (%) Annual tourist arrivals to Sri Lanka ('000) 2010* 654 46 2,500 2015 1,798 18 2,000 2016 2,051 14 1,500 2017 2,116 3 2018 2,334 10 1,000 2019 1,913 (18) 500 2020 508 (74) 2021 194 (62) - 1986 1991 1996 2001 2006 2011
Slide 24: Trend of monthly tourist arrivals and occupancies
Trend of monthly tourist arrivals and occupancies Monthly Tourist Arrivals Sri Lanka The Maldives Month 2019 2020 2021 2022 2019 2020 2021 2022 Jan 244,239 228,434 1,682 82,327 151,552 173,347 92,103 131,764 Feb 252,033 207,507 3,366 96,507 168,583 149,785 96,882 149,008 Mar 244,328 71,370 4,581 106
Slide 25: Significant pre-pandemic growth in Asian arrivals to Sri Lanka
Significant pre-pandemic 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 S
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 other 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 ▪ Catering to different target market segments: “7th Sense” on Gregory’s Road ▪ 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 Colombo Singapore Thailand (Central Thailand (Outskirts) Malaysia (Central Malaysia (Greater India (Chennai) India (Bangalore) Bangkok) KL) KL) Apartments Landed houses Source: Compa
Slide 31: Prime land bank of over 35 acres in central Colombo
Prime land bank of over 35 acres in central Colombo ▪ Prime land bank of over 35 acres held in central Colombo ▪ One of the largest privately owned land banks ▪ Includes the ongoing “Cinnamon Life Integrated Resort” project ▪ Opportunities for development at land banks held in “Crescat Boulevard” an
Slide 32: Developable freehold land of approximately 25 acres near Colombo city
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 30 Q2 FY23 earnings update: Cumulative sales (units) September 2022 Property industry group Cinnamon Life Integrated Resort: (Rs. mn) Q2 Q2 The Residence at Cinnamon Life 151 2022/23 2021/22 Suites at Cinnamon Life 115 EBI
Slide 34: Robust development pipeline: 500-acre land bank with 18-hole golf course
Robust development pipeline: Scenic 500-acre land bank with an 18-hole golf course Rajawella Holdings Limited (RHL) ▪ The 500-acre land in Digana includes an 18-hole, Donald Steel designed, Golf Course and developable land extent of approximately 80 acres ▪ Troon International has taken over the man
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: Aerial view of Cinnamon Life under construction
Aerial view of Cinnamon Life under construction 38
Slide 39: Aerial view of Cinnamon Life under construction
Aerial view of Cinnamon Life under construction 39
Slide 40: Aerial view of Cinnamon Life under construction
Aerial view of Cinnamon Life under construction 40
Slide 41: The Suites at Cinnamon Life
The Suites at Cinnamon Life 41
Slide 42: The Suites at Cinnamon Life
The Suites at Cinnamon Life 42
Slide 43: Development programme
Development programme Conferencing ; capacity (~5,000 pax) in five venues and car park facility (2,330 slots) 800 guest room hotel, including conferencing, banqueting, 15 specialty restaurants (~1,300 pax) and entertainment facilities Rentable mall ~149,000 Sq. Ft (Gross – ~345,000 Sq. Ft) and enter
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%) ▪ Developing Bancassurance channels - UA extended its long-term partnership with NTB and entered into a partnership with Standard Chartered Bank (%) Life Insurance Premium as a percentage of GDP (%) Life Insurance Gro
Slide 46: Financial Services – Insurance sector overview
Financial Services – Insurance sector overview Q2 FY23 earnings update: Key performance indicators CY2017 CY2018 CY2019 CY2020 CY2021 Financial Services industry group Market share (%) 14 14 13 13 12 Q2 Q2 GWP growth (%) 22 11 4 13 18 (Rs. mn) 2022/23 2021/22 Recurring net profit (Rs.Mn) 4,002* 3,24
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 FY2023 and does not constitute an issue prospectus or a financial analysis. This Investor Presentation sh
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