Slide 1: Q4 & FY18 Earnings Presentation
Lemon Tree Hotels Limited Q4 & FY18 Earnings Presentation May 25, 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 3
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 32 22 54 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 50 28 78
Slide 5: Strategically positioned in key geographies
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 – 16% markets to cater effectively FY21E – 10% to corporate clients and | Mussoorie | Neelkanth bus
Slide 6: Competitive Advantage: Differentiated Business Model
Competitive Advantage: Differentiated Business Model Lower than industry Focus on culture & service Presence across value Process chain average development cost differentiation with focus on per room* domestic travellers Occupancy (Utilization) RevPAR (Revenue per Customers Value for money pricing P
Slide 7: Leading Player in the Hotel Industry: Key Strengths (Contd.)
Leading Player in the Hotel Industry: Key Strengths (Contd.) End-to-end presence across the hotel value chain • Operations range from acquiring land to developing, owning, managing and marketing hotels • Acquired expertise and understanding in site selection, design, development, management and mark
Slide 8: Leading Player in the Hotel Industry: Key Strengths
Leading Player in the Hotel Industry: Key Strengths Efficient operations with lowest opex costs in industry • Lowest staff per room ratio in the industry and lower power costs drive higher gross operating margins • Energy efficient and economically designed maintenance-friendly rooms • Staff per roo
Slide 9: Chairman & Managing Director’s Message
Chairman & Managing Director’s Message Commenting on the performance for Q4FY18 and FY18, Mr. Patanjali Keswani, Chairman & Managing Director – Lemon Tree Hotels Limited said, “We are pleased to present our first financial results following our successful public listing. The public listing has enhan
Slide 10: Performance Highlights – Operational Metrics
Performance Highlights – Operational Metrics Operational Inventory Average Daily Rate (Rs.) Owned/Leased Managed rooms Total rooms rooms 16% 32% 4,235 13% 4,870 3,664 3,896 15% 3,449 3,698 3,277 2,855 89% 1,593 843 FY17 FY18 FY17 FY18 FY17 FY18 Q4 FY17 Q4 FY18 FY17 FY18 Note: Based on number of room
Slide 11: Performance Highlights – Financial Metrics (Consolidated)
Performance Highlights – Financial Metrics (Consolidated) Total Income (Rs. million) EBITDA (Rs. million) 1,440 17% 1,247 4,921 16% 4,203 24% 55% 454 1,118 1,392 293 Q4 FY17 Q4 FY18 FY17 FY18 Q4 FY17 Q4 FY18 FY17 FY18 Cash profit (PAT + Depreciation, Rs. million) PAT (Rs. million) 672 46% 145 117 46
Slide 12: Discussion on Consolidated Financial & Operational Performance
Discussion on Consolidated Financial & Operational Performance – Q4 and FY18 As of 31 March, 2018, operational portfolio comprised of 48 hotels and 4,870 rooms : 2,796 owned, 481 leased and 1,593 managed rooms Added 1,172 rooms in FY18 to operational portfolio as compared to 449 rooms added in F
Slide 13: Profit & Loss Statement (Consolidated)
Profit & Loss Statement (Consolidated) Rs. million Q4 FY17 Q4 FY18 Change (%) FY17 FY18 Change (%) Revenue from operations 1,113 1,320 19% 4,121 4,843 18% Other income 5 72 1,219% 82 78 (5%) Total income 1,118 1,392 24% 4,203 4,921 17% Cost of F&B consumed 89 115 29% 353 436 23% Employee benefit exp
Slide 14: Balance Sheet Snapshot (Consolidated)
Balance Sheet Snapshot (Consolidated) Rs. million FY17 FY18 Shareholder's Funds 8,086 8,148 Non-controlling interests 4,284 4,286 Total Shareholder’s equity 12,370 12,435 Total Debt 7,987 10,110 Other Non-current liabilities 294 344 Other Current liabilities 1,467 1,693 Total Equity & Liabilities 22
Slide 15: Portfolio as on 31st March, 2018
Portfolio as on 31st March, 2018 Operational Portfolio Owned Leased Managed Total 31.03.2018 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 4 320 13 937 30 2,498 Red Fox Hotels 5 759 - - 3 312 8 1,071 Total 22 2,796 6 481
Slide 16: Operational Performance by Brands – FY18 vs. FY17
Operational Performance by Brands – FY18 vs. FY17 Hotel level EBITDAR2/room Parameters Occupancy Rate (%) Average Daily Rate (Rs.) Hotel level EBITDAR2 Margin (Rs. million) Change Change By Brand FY17 FY18 (%) FY17 FY18 (%) FY17 FY18 Change (%) FY17 FY18 Change (%) Lemon Tree Premier 74.6% 77.2% 3.5
Slide 17: Operational Performance by Ageing – FY18 vs. FY17
Operational Performance by Ageing – FY18 vs. FY17 Toddler Hotels Infant Hotels Adult Hotels Parameters Financial year (Stabilizing - between 1-3 years (New - less than 1 year (Stable - older than 3 years) old) old) FY17 21 3 - Hotels FY18 21 3 4 Operating Rooms FY17 2,727 1061 - (year-end) FY18 2,72
Slide 18: Expansion Plans – Hotels under Development
Expansion Plans – Hotels under Development Expected Opening Under-development hotels Type Rooms Ownership (%) date Leased Red Fox Hotel, Dehradun 91 Jul-18 57.98% (40 years) Lemon Tree Premier, City Centre, Pune Owned 199 Dec-18 57.98% Lemon Tree Premier, Andheri (East), Mumbai Owned 298 Jan-19 100.
Slide 19: Expansion Plans – Pipeline of Management Contracts
Expansion Plans – Pipeline of Management Contracts (as of 15 May, 2018) Management Contracts Pipeline Rooms Expected Opening date Tenure Lemon Tree Hotel, Lucknow 51 Sep-18 11 Red Fox Hotel, Morjim, Goa 111 Oct-18 10 Lemon Tree Hotel, Shirdi 59 Jan-19 12 Lemon Tree Hotel, Rishikesh 102 Jan-19 12 Lem
Slide 20: 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 21: Annexures
kena ANNEXURES
Slide 22: 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 23: 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 24: 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 25: 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 26: 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 27: 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 28: Conference Call Details
Conference Call Details Lemon Tree Hotels Limited (LTH) Q4 & FY18 Earnings Conference Call Time • 2:00 pm IST on Tuesday, May 29, 2017 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) International
Slide 29: 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