John Keells Holdings PLC · CSELK:JKH.N0000
John Keells — Q1 FY2021 Earnings Presentation
44 slides from John Keells's earnings presentation, August 2020
Slide 1: Investor Presentation: Review of Q1 FY2021
Investor Presentation Review of Q1 FY2021 Version 2.0 This Investor Presentation should be read in conjunction with the JKH Annual Report 2019/20 to obtain a more comprehensive understanding of the drivers and strategies of our businesses
Slide 2: About JKH
About JKH ▪ Market cap of USD 0.87 billion ▪ No controlling shareholder - 99% free float ▪ Debt : Equity ratio of 42.0% ▪ The Board comprises of two Executive Directors and five Independent Non-Executive Directors *Debt includes the Right-of-Use assets due to the accounting impacts of SLFRS 16 – Lea
Slide 3: Portfolio profitability
Portfolio profitability PAT attributable to equity holders 2017/18 2018/19 2019/20 22% 29% Transportation 33% 33% 36% Consumer Foods 54% 4% Retail Leisure 11% -17% Property 1% Financial Services 5% 8% 16% 10% 13% 20% 4% 18% Note: The above excludes the contribution from Other including Information T
Slide 4: COVID-19 impact to Sri Lanka and JKH; faster than anticipated recovery momentum
COVID-19 impact to Sri Lanka and JKH; faster than anticipated recovery momentum in business activity • Post the easing of the strict lockdown measures which were in place in the country till mid-May, business recovery is reverting to almost pre- COVID-19 levels, faster than anticipated, and this mom
Slide 5: Cumulative EBITDA for the year ended 31 March 2020
Cumulative EBITDA : for the year ended 31 March 2020 FY2020 FY2019* YoY Growth Industry Group (Rs. Million) (Rs. Million) (%) Transportation 4,417 4,563 (3) Consumer Foods 3,412 2,920 17 Retail 5,110 2,890 77 Leisure 2,363 5,354 (56) Property 568 323 76 Financial Services 2,988 3,359 (11) Other, inc
Slide 6: EBITDA for the quarter ended 30 June 2020
EBITDA: for the quarter ended 30 June 2020 Q1 FY2021 Q1 FY2020 YoY Growth Industry Group (Rs. Million) (Rs. Million) (%) Transportation 395 1,053 (63) Consumer Foods 487 841 (42) Retail 502 1,036 (52) Leisure (1,461) (336) (335) Property (29) 47 (162) Financial Services 537 436 23 Total EBITDA 802 3
Slide 7: Portfolio evaluation 2019/20; returns vs. effective capital deployed
Portfolio evaluation 2019/20; returns vs. effective capital deployed Industry group Effective capital employed (%) Cinnamon Life 32 Adjusted ROCE (%) Leisure 24 Property (Excluding Cinnamon Life) 8 Transportation 7 Consumer Foods - 23% Financial Services 6 Retail 6 IT - 23% Consumer Foods 3 Plantati
Slide 8: Transportation - overview
Transportation - overview ▪ 42% stake in SAGT ▪ SAGT capacity: ~2 million TEUs ▪ Largest cargo and logistics service provider in the country ▪ Leading bunkering services provider ▪ Joint Ventures with Deutsche Post for DHL air express and A P Moller for Maersk Lanka ▪ GSA for KLM Royal Dutch airline
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 • CICT - Colombo International Container Terminal • ECT - East Container Terminal • SAGT - South Asia Gateway Terminal • JCT - Jaya Container Terminal 10
Slide 11: Sustained volume growth in the Port of Colombo
Sustained volume growth in the Port of Colombo 8.00 7.23 7.05 7.00 6.21 6.00 5.74 5.19 5.00 4.91 Million TEUs 4.31 4.00 3.00 2.00 1.00 - 2013 2014 2015 2016 2017 2018 2019 11
Slide 12: Rapid absorption of capacity in the Port of Colombo
Rapid absorption of capacity in the Port of Colombo Port of Colombo - volumes ('000 TEUs) Port Container handling SAGT 1Q FY21 earnings update: capacity (TEUs) JCT Transportation industry Colombo 8 million 800 group CICT 700 (Rs. mn) Q1 Q1 Hong Kong 21 million 600 2020/21 2019/20 Singapore 40 millio
Slide 13: Opportunities for growth in the Bunkering businesses
Opportunities for growth in the Bunkering businesses Bunkering Business (Lanka Marine Services) 2019/20 2020/21 LMS Q1 Q2 Q3 Q4 Q1 YoY Volume growth (%) (4) (16) (6) (8) (30) Port of Hambantota ▪ Strong opportunities for private bunkering service providers with infrastructure in place for inland st
Slide 14: Consumer Foods - overview
Consumer Foods - overview ▪ Market leader in soft drinks, ice creams and processed meats 1Q FY21 earnings update: ▪ Custodians of the consumer brands “Elephant House”, “Keells - Krest”: high brand Consumer Foods industry group equity (Rs. mn) Q1 Q1 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, demonstrating the significant growth potential 8% 44% for the impulse category. 30% 70% 92% 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 Taiwan Thailand Sri Lanka Kong Prese
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 2.5 1.9 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 1Q FY21 earnings update: FY2017 FY2018 FY2019 FY2020 (%) Retail industry group EBITDA (Rs.milllion) 2,010 1,975 1,623 4,267 (Rs. mn) Q1 Q1 2020/21 2019/20 EBITDA margin 6.7 5.3 3.6 7.8 EBITDA 502 1,036 EBIT margin 5.7 4.0 2.0 4.6 • Revenue was negatively
Slide 19: 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) ▪ 240 roomed lean luxury hotel managed by Cinnamon; “Cinnamon red” ▪
Slide 20: 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 173 acres of freehold and 127 acres of leasehold land in ad
Slide 21: Occupancies and average room rates
Occupancies and average room rates FY2020 FY2019 1Q FY21 Earnings update: EBITDA EBITDA Leisure industry group Sector Occupancy ARR Occupancy ARR Margin Margin (Rs. mn) Q1 Q1 (%) (US $) (%) (US $) (%) (%) 2020/21 2019/20 City 34 100 10.8 48 128 22 EBITDA (1,461) (336) Hotels* Sri Lankan 61 78 11.4 8
Slide 22: Trend of tourist arrivals to Sri Lanka
Trend of tourist arrivals to Sri Lanka Annual tourist arrivals to Sri Lanka ('000) Tourist Year arrivals Growth (%) 2,500 (In 000’s) 2,000 2010 654 46 2015 1,798 18 1,500 2016 2,051 14 1,000 2017 2,116 3 2018 2,334 10 500 2019 1,913 (18) - *2010 included due to being the first full 1985 1987 1989 19
Slide 23: Significant growth in Asian arrivals to Sri Lanka
Significant growth in Asian arrivals to Sri Lanka Tourist Arrivals 1,000,000 800,000 600,000 400,000 200,000 - 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019* *2019 arrivals impacted by Easter Sunday terror attacks Source: Sri Lanka Tourism Development Authority 23
Slide 24: 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 24
Slide 25: 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 25
Slide 26: 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 27: 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 Source: KL: CBRE property market outlook 1Q 2018 (forecas
Slide 28: 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 29: Developable land bank of over 36 acres in central Colombo
Developable land bank of over 36 acres in central Colombo ▪ Prime developable land bank of over 36 acres held in central Colombo ▪ One of the largest privately owned land banks ▪ Opportunities for development at land banks held in Crescat City and Cinnamon Lakeside Vauxhall street land bank Cinnamon
Slide 30: 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 deve
Slide 31: Robust development pipeline; on-going developments
Robust development pipeline; on-going developments Number of units sold Cumulative sales (units) 1Q FY21 earnings update: as at 30 June‘20 Property industry group Cinnamon Life: (Rs. mn) Q1 2020/21 Q1 2019/20 The Residence at Cinnamon Life 137 EBITDA (29) 47 Suites at Cinnamon Life 111 Cinnamon Life
Slide 32: 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 33: Cinnamon Life Integrated Resort
Cinnamon Life Integrated Resort 33
Slide 34: Integrated development in Colombo
Integrated development in Colombo 34
Slide 35: Integrated development in Colombo
Integrated development in Colombo 35
Slide 36: Veet
Veet 36
Slide 37: As at March 2020
As at March 2020 37
Slide 38: As at March 2020
As at March 2020 38
Slide 39: 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 372,000 Sq. Ft (Gross – 518,000 Sq. Ft
Slide 40: 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 40
Slide 41: 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 42: Financial Services – Insurance sector overview
Financial Services – Insurance sector overview Key performance indicators CY2014 CY2015 CY2016 CY2017 CY2018 CY2019 1Q FY21 earnings update: Market share (%) 13 13 13 14 14 13 Financial Services industry GWP growth (%) 8 17 19 22 11 4 group Recurring net profit (Rs.Mn) 881 1,127 1,313 4,002* 1,640 1
Slide 43: Financial Services – Banking sector overview
Financial Services – Banking sector overview ▪ Nations Trust Bank (JKH effective economic interest : 32.16%) ▪ Focus on SME / retail strategy ▪ Franchise for American Express cards Key performance indicators CY2014 CY2015 CY2016 CY2017 CY2018 CY2019 Loans and advances growth (%) 19.5 22.4 23.7 25.0
Slide 44: 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 FY2021 and does not constitute an issue prospectus or a financial analysis. This Investor Presentation sh
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