Lemon Tree Hotels Ltd. · NSE:LEMONTREE
Lemon Tree Hotels — 24th Annual CITIC CLSA India Forum 2021
63 slides from Lemon Tree Hotels's conference presentation, Nov 15, 2021
Slide 1: Exchange intimation: Analysts/Investor Meet
November 15, 2021 National Stock Exchange of India Limited BSE Limited Exchange Plaza, C-1, Block G Phiroze Jeejeebhoy Towers Bandra Kurla Complex Dalal Street, Mumbai — 400 001 Bandra (E), Mumbai —- 400 051 NSE Scrip Symbol: LEMONTREE BSE Scrip Code: 541233 Ref: Disclosure under Regulation 30 of SE
Slide 2: Lemon Tree Hotels Limited Corporate Presentation
Lemon Tree Hotels Limited Corporate Presentation
Slide 3: 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 4: Company Overview and Growth Plans
Company Overview and Growth Plans 3
Slide 5: Supply of rooms in India's hotel industry was primarily at the top-end
Supply of rooms in India’s hotel industry was primarily at the top-end When Lemon Tree commenced business in 2002, India’s Hotel industry was an inverted pyramid 2002* 2019* No. of rooms No. of rooms Luxury and Upper Upscale refers to Luxury- 15,052 51,170 top tier hotels generally referred to as Up
Slide 6: Lemon Tree Brand Standards – Linked to Business Model
Lemon Tree Brand Standards – Linked to Business Model 2002 2004 2006 2009 2010 2012 2015 2018 2019 • Investment Opened the by APG in Further • IPO • Achieved • Acquired first “Lemon Company Investment Subscription Opened the Investment and Fleur 100x Keys Tree by APG – to equity first “Lemon by Open
Slide 7: Lemon Tree – Portfolio
Lemon Tree – Portfolio Key Statistics Q2 FY22 Q2 FY21 YoY Var (%) Cities 54 49 10% Hotels 87 81 7% Rooms 8,497 8,044 6% 6
Slide 8: Lemon Tree Group Structure
Lemon Tree Group Structure Brand Owner + Asset Owner + Lemon Tree Hotels Limited Manager incl. 100% Subs 74.9% 58.91% Third Party Asset’s Asset Owner Manager Carnation Fleur incl. 100% Hotels Subs Keys Management Keys Owned/Leased Contracts Assets Operating Operating Operating Operating Operating Ho
Slide 9: Strategically positioned in key geographies
Strategically positioned in key geographies with Lemon Tree’s share of total branded hotel sector Jaipur: FY20 – 5.1% Kolkata: FY20 – 2.9% FY26E – 4.0% FY26E – 2.6% Ahmedabad:FY20 – 4.2% Hyderabad: FY20 – 8.9% FY26E – 3.4% FY26E – 8.5% Mumbai: FY20 – 2.1% Chennai: FY20 – 2.5% FY26E – 6.0% FY26E – 2.
Slide 10: Lemon Tree – Snapshot as on 21st October 2021
Lemon Tree – Snapshot as on 21st October 2021 Current (17% of Branded By CY23 (20% of Branded Pipeline Mid Market Hotels in Mid Market Hotels in India*) India*) 8,497 1,965 10,462 rooms; rooms; rooms; 87 hotels 19 hotels 106 hotels Brand Current Pipeline By FY23 Aurika Hotels & Resorts 202 Rooms; 2
Slide 11: Lemon Tree Brand Standards – Linked to Business Model
Lemon Tree Brand Standards – Linked to Business Model LT Brand Standards Owned Leased Managed1 Most Unbranded2 (Built to suit) (Renovated) (Renovated) Mid-Market Hotels Product 10/10 8/10 6-8/10 2-4/10 Features Service 10/10 10/10 8/10 5/10 Features Planned Aurika/LTP/LTH/RFH Aurika/LTP/LTH/RFH Auri
Slide 12: Hotel Inventory by Segment and Lemon Tree Brand Positioning
Hotel Inventory by Segment and Lemon Tree Brand Positioning Segment Inventory Lemon Tree Brand Positioning Luxury and Upper Upscale 51,170 - Upscale 30,490 Aurika Upper Midscale 30,100 LTP Midscale and Economy 37,500 LTH/RFH 250,000 LTP/LTH/RFH Unbranded Standalone 1,750,000 Keys Prima/Select/Lite O
Slide 13: Expansion Plans – Hotels under Development
Expansion Plans – Hotels under Development Expected Under-development hotels Type Rooms Ownership (%) Opening date Lemon Tree Mountain Resort, Shimla Owned 69 TBD 100.00% Aurika, Mumbai International Airport# Owned 669 CY23 58.91% Total 738 Total estimated project cost is Rs. 10,060 Million Tota
Slide 14: Expansion Plans – Pipeline of Management Contracts
Expansion Plans – Pipeline of Management Contracts (as on 21st Oct, 2021) Management Contracts Pipeline Rooms Expected Opening date Lemon Tree Hotel Kalina/BKC, Mumbai 70 Dec-21 Lemon Tree Hotel, Sonamarg 40 Mar-22 Lemon Tree Hotel, Rishikesh 102 Mar-22 Keys Lite, Rishikesh 39 Mar-22 The Spectrum, G
Slide 15: Differentiated business model of Lemon Tree (LTH)
Differentiated business model of Lemon Tree (LTH) 14
Slide 16: The Business Model | Mid-cycle
The Business Model | Mid-cycle Lemon Tree’s ROCE is > 1.5x of a typical 5 star hotel in India Typical 5 star Cost Per Room (Normalised) 1000 400 ~40% of Five Star Rate (Normalised) 100 50 Occupancy x% 1.2x% Room Revenue (Normalised) 100 60 ~60% of Five Star Lower other income Total Revenue (Normalis
Slide 17: Land Development of Hotels
Focus on culture & service Presence across value Process differentiation with focus on chain domestic travellers Development Ownership Operations Sales & Land Marketing of Guest of Hotels of Hotels Of Hotels Hotels Development1 Ownership Management Brand • Identify strategically located land at • St
Slide 18: Ranked 4th in India and only Hotel chain in top 10 Best Companies
Focus on culture & service Presence across value Process differentiation with focus on chain domestic travellers • Ranked 4th in India and only Hotel chain in top 10 Best Companies to Work for by the Great Place to Work Institute, India in 2017 • Ranked 12th in Asia’s Best Large Workplaces in 2018 b
Slide 19: Value for money pricing, occupancy and RevPAR
Value for money Occupancy RevPAR (Revenue per Customers pricing (Utilization) Premium room) Premium Value for money (ADR in Rs.)^ Higher Average Occupancy*… … leads to Higher RevPAR# (INR) 1.1x 1.3x 1.2x 5,131 4,743 81.4% 4,176 3,203 67.5% Four Star Lemon Tree Industry 2018 Lemon Tree Industry 2018
Slide 20: Lower operating expense and staff per room ratio
Lower Average Operating Cost Higher GOP^ Expenses/ Room Lower Operating Expense as % of Revenue Lower Staff per room ratio 0.8x 0.7x Four Star 53.8% 66.7% 1.6 1.1 Lemon Tree Premier 2018 Industry 2018 Lemon Tree Premier 2018 Industry 2018 0.8x 0.7x Three Star 64.0% 75.1% 1.6 1.2 Lemon Tree Hotels 20
Slide 21: Strong Operating and Financial Performance
Strong Operating and Financial Performance 20
Slide 22: Operating Performance
Operating Performance Rooms are being added Occupancy Owned Leased Hotels Managed Hotels FY16 FY17 FY18 FY19 FY20 FY21 17% 8,006 8,309 CAGR 5,411 2814 3117 4,870 3,698 3,249 1841 675 978 1593 461 843 481 573 283 317 71% 53% 72% 37% 74% 36% 4,517 75% 78% 75% 77% 78% 73% 77% 74% 74% 79% 77% 78% 4,214
Slide 23: Operating Margins
Operating Margins Revenue from operations (Rs. Million) EBITDA (Rs. Million) & EBITDA margins 36.9% 6,694 29.7% 31.9% 27.9% 29.3% 28.1% 5,495 4,843 3,680 4,121 2,517 1,033 1,247 1,440 1,787 2,492 745 FY16 FY17 FY18 FY19 FY20 FY21 FY16 FY17 FY18 FY19 FY20 FY21 Cash profit Debt to Equity Ratio 1.02 1.
Slide 24: Operational Performance by Ageing – FY21 vs. FY20
Operational Performance by Ageing – FY21 vs. FY20 Adult Hotels Toddler Hotels Infant Hotels Under-development Parameters Financial year (Stable - older than 3 (Stabilizing - between 1- (New - less than 1 year hotels years) 3 years old) old) FY20 24 6 11 Hotels1 2 FY21 28 13 0 Operating Rooms FY20 2,
Slide 25: Individual Progression of latest Adult Hotels from Infant to Toddler to Adult
Individual Progression of 4 latest Adult Hotels from Infant to Toddler to Adult Date of Date of Opening FY15 FY16 FY17 FY18 FY19 CAGR Opening FY15 FY16 FY17 FY18 FY19 CAGR LTP Aerocity LTH Whitefield Delhi Dec-FY14 Infant Toddler Toddler Adult Adult Bangalore Jul-FY14 Infant Toddler Toddler Adult Ad
Slide 26: Aggregate Progression of latest Adult Hotels from Infant to Toddler to Adult
Aggregate Progression of 4 latest Adult Hotels from Infant to Toddler to Adult FY15 FY16 FY17 FY18 FY19 CAGR Aggregate Infant Toddler Toddler Adult Adult Inventory 472 807 807 807 807 Occupancy 69.6% 76.7% 77.8% 80.6% 85.3% ARR 2,622 2,945 3,130 3,627 4,545 14.7% RevPAR 1,826 2,260 2,436 2,922 3,877
Slide 27: Lemon Tree Hotels RoCE: Hotel Buckets by opening 2006-20
Lemon Tree Hotels RoCE : Hotel Buckets by opening 2006-20 Occupancy RoCE (%) (%) 70% 75% First Five hotels opened during FY05 - FY08 Second Five hotels opened in FY09 Third Seven hotels opened in FY10 & FY11 60% 69% Fourth Five hotels opened during FY12 - FY15 70% 68% Fifth Eight Hotels opened durin
Slide 28: Recognition and awards through the years
Recognition and awards through the years Ranked 4th in India and the only hotel chain in the top 10 Best Companies to Work for in India in 2017 by the Great Place to Work institute Ranked 12th in Asia’s Best Large Workplaces and the only Indian company in the top 15 in 2018 by the Great Place to
Slide 29: Extracts from first ESG Report of Lemon Tree Hotels for FY21
Extracts from first ESG Report of Lemon Tree Hotels for FY21 To read the full report please visit: https://www.lemontreehotels.com/factsheet/Policies/LTH_ESG_ Report_2021.pdf This report covers all 41 owned/leased hotels across 23 cities for the reporting period from 1st April 2020 to 31st March 202
Slide 30: FY21 ESG Report – Impact
FY21 ESG Report – Lemon Tree’s first | Impact Impact of our Environment, Social and Governance initiatives: Renewable energy in the Operations audited (internally) for Opportunity Deprived Indians electricity mix in FY21 cases of corruption and bribery (ODIs) employed in FY21 Reduction in normalized
Slide 31: FY21 ESG Report – Vision FY26
FY21 ESG Report – Lemon Tree’s first | Vision FY26 In the area of Environment, we are focused on becoming more energy At the center of our ESG approach is our commitment to efficient, adopting renewable creating sustained value. This is across all stakeholders - energy, mitigating and adapting to sh
Slide 32: FY21 ESG Report – Vision FY26
FY21 ESG Report – Lemon Tree’s first | Vision FY26 Our ambitions for FY26 are based on the following goals and aspirations: 15% 50% 40% 10% 100% 30% 15% Reduction in Renewable Reduction in Reduction in Certified Green ODIs in the Women across Energy energy (RE) GHG emissions water Buildings workforc
Slide 33: FY21 ESG Report – Policy Architecture
FY21 ESG Report – Lemon Tree’s first | Policy Architecture In a rapidly evolving business Embracing Redefining Providing environment addressing ESG issues Environmental Social Effective is crucial to ensure the longevity of Stewardship Engagement Governance an organization. Through our well- defined
Slide 34: FY21 ESG Report – Governance Structure
FY21 ESG Report – Lemon Tree’s first | Governance Structure Our efforts to integrate ESG across our business operations is effectively supported by a dynamic governance structure The Board ESG Taskforce Management Sets the vision for meeting Develops ESG strategy, Implements ESG related ESG requirem
Slide 35: CoVID-19: Survive, Revive & Thrive
CoVID-19 : Survive, Revive & Thrive 34
Slide 36: Q2 FY22 Operating Performance Trends – Operational Inventory
Q2 FY22 Operating Performance Trends Increasing Operational Inventory Operational Pick-up 5,200 97.0% 100.0% 95.4% 94.5% 94.2% 5,000 95.0% 5,037 % Operational Invetory Operational Invetory 4,953 4,800 4,908 4,888 90.0% 4,600 84.9% 85.0% 81.9% 4,400 4,408 80.0% 4,200 4,252 4,000 75.0% 3,800 70.0% Apr
Slide 37: Q2 FY22 Operating Performance Trends – Occupancy and ADR
Q2 FY22 Operating Performance Trends Rising Occupancy Levels Occupancy-ADR Trend 60.0% 3,600 53.8% 53.6% 54.0% 50.9% 50.5% 51.5% 3,400 50.0% 3,200 39.6% 40.8% 3,230 40.0% Gross ADR (Rs) Occupancy (%) 34.8% 3,000 3,075 29.5% 30.0% 2,800 24.5% 2,775 20.0% 2,600 20.0% 2,400 2,429 10.0% 2,369 2,288 2,20
Slide 38: Q2 FY22 Operating Performance Trends – Revenue vs OPEX
Q2 FY22 Operating Performance Trends Improving Operating Efficiency and ‘V-Shaped’ Recovery Revenue vs OPEX Trend Revenue Trend 40.00 80.00 74.49 32.86 33.98 68.15 35.00 70.00 29.71 30.00 60.00 25.00 50.00 18.64 Rs. Cr Rs Cr 20.00 40.00 33.98 32.19 32.86 14.15 19.10 19.55 29.71 28.74 15.00 17.37 30.
Slide 39: CoVID-19: Survive & Revive – Quarter on Quarter Performance
CoVID-19 : Survive & Revive Quarter on Quarter Performance 200.0 40.0% 36.4% 36.2% 176.5 31.6% 31.4% 150.0 30.0% 26.7% 112.2 97.0 98.8 100.0 20.0% 17.1% 70.6 66.6 64.3 63.0 53.6 44.3 48.3 50.0 43.8 42.2 10.0% 36.3 39.3 35.8 30.4 22.3 4.6% 14.3 7.5 2.0 0.0 0.0% Q4 FY20 Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21
Slide 40: CoVID-19: Survive & Revive
CoVID-19 : Survive & Revive Operational Performance Financial Commenting on the performance for Q3 FY20, Mr. Patanjali Performance Keswani, Chairman & Managing Director – Lemon Tree Hotels Limited said, Our operating inventory in Q2 FY22 Revenue from operations stood at Rs. 96.9 Cr in Q2 FY22, u
Slide 41: CoVID-19: Survive & Revive – Solved for Liquidity
CoVID-19 : Survive & Revive – Solved for Liquidity APG Strategic Real Estate Pool N.V. approved investment of upto Rs 300 Cr in two tranches by CCPS which will be convertible into equity in 30 months Planned Board of Directors gave approval to raise upto Rs 150 Cr as an abundant precaution to pr
Slide 42: CoVID-19: Thrive – Building Operational Efficiencies: Manpower
CoVID-19 : Thrive – By Building Operational Efficiencies Manpower Staff Per Room 1.20 • One of our biggest leanings has been that our hotels can operate with lesser manpower without 1.00 0.96 25.0% - 37.5% compromising on service quality 0.80 0.60 - 0.70 0.60 • During Covid-19 induced lockdowns and
Slide 43: CoVID-19: Thrive – Building Operational Efficiencies: Electricity Cost
CoVID-19 : Thrive – By Building Operational Efficiencies Electricity Cost Cost Per Unit • We have been aggressively expanding the share of 11.20 our electricity sourced from renewable sources, 11.03 which come at a lower cost as compared to thermal 11.00 3.0% - 5.0% power 10.80 • In FY20, only 5% of
Slide 44: CoVID-19: Thrive – Building Operational Efficiencies: Raw Material Cost
CoVID-19 : Thrive – By Building Operational Efficiencies Raw Material Cost Raw Material Cost 40% 35% 500 – 800 BPS • With our continuously expanding geographical 30% 27% - 30% footprint we are strengthening our position to As % of FnB Revenue 26% negotiate contracts with our suppliers favorably 20%
Slide 45: CoVID-19: Thrive – Building Operational Efficiencies
CoVID-19 : Thrive – By Building Operational Efficiencies These Commenting on the performance for Q3 FY20, Mr. stepsKeswani, Patanjali should lead to a permanent Chairman & Managing improvement Director – Lemonin our Tree Hotels Limited Net EBITDA by 500-700 bps as a percentage of revenue once we sai
Slide 46: Under Development Hotels
lemortece HOTELS Under Development Hotels
Slide 47: Aurika, Mumbai Airport (MIAL) | Image Representation
Aurika, Mumbai Airport (MIAL) | Image Representation 46
Slide 48: Aurika, Mumbai Airport (MIAL) | Image Representation
Aurika, Mumbai Airport (MIAL) | Image Representation 47
Slide 49: Aurika, Mumbai Airport (MIAL) | Image Representation
Aurika, Mumbai Airport (MIAL) | Image Representation 48
Slide 50: Lemon Tree Mountain Resort – Shimla | Image Representation
Lemon Tree Mountain Resort – Shimla | Image Representation 49
Slide 51: Lemon Tree Mountain Resort – Shimla
Lemon Tree Mountain Resort – Shimla 50
Slide 52: Annexures
ANNEXURES kena
Slide 53: Latest Performance – Q2 FY22
Latest Performance – Q2 FY22 52
Slide 54: Q2 FY22 Performance Highlights – Operational Metrics (Consolidated)
Q2 FY22 Performance Highlights – Operational Metrics (Consolidated) Inventory Average Daily Rate (Rs.) Owned/Leased rooms Managed rooms Total rooms 14.1% 28.2% 5.6% 8,497 YoY 3,028 QoQ 3,028 8,044 15.8% 5,192 5,192 2,654 2,852 3,305 2,362 End of Q2 FY21 Q2 FY22 Q2 FY21 Q2 FY22 Q2 FY21 Q2 FY22 Q2 FY2
Slide 55: Q2 FY22 Performance Highlights – Financial Metrics (Consolidated)
Q2 FY22 Performance Highlights – Financial Metrics (Consolidated) Revenue from Operations (Rs. Cr) EBITDA (Rs. Cr) 35.8 35.8 103.6% 129.9% YoY 96.9 QoQ 96.9 149.9% 1,647% YoY QoQ 47.6 42.2 14.3 2.0 Q2 FY21 Q2 FY22 Q1 FY22 Q2 FY22 Q2 FY21 Q2 FY22 Q1 FY22 Q2 FY22 EBITDA Margin (%) Cash profit (Rs. Cr)
Slide 56: Consolidated Profit & Loss Statement – Q2 FY22
Consolidated Profit & Loss Statement – Q2 FY22 Rs. Cr Q2 FY22 Q1 FY22 Q2 FY21 QoQ Change (%) YoY Change (%) Revenue from operations 96.9 42.2 47.6 129.9% 103.6% Other income 1.9 2.1 6.0 -9.6% -68.0% Total expenses 63.0 42.2 39.3 49.2% 60.4% EBITDA 35.8 2.0 14.3 1647.4% 149.9% EBITDA margin (%) 36.2%
Slide 57: Consolidated Profit & Loss Statement Breakup – Q2 FY22 vs Q2 FY21
Consolidated Profit & Loss Statement Breakup – Q2 FY22 vs Q2 FY21 Total without Keys Hotels Keys Hotels Total Rs. Cr YoY Change YoY Change YoY Change Q2 FY22 Q2 FY21 Q2 FY22 Q2 FY21 Q2 FY22 Q2 FY21 (%) (%) (%) Inventory 4,256 4,256 0% 936 936 0% 5,192 5,192 0% ARR 3,143 2,730 15% 2,053 2,122 -3% 3,0
Slide 58: Operational Performance by Brands & Region
Operational Performance by Brands & Region (On full inventory basis) Hotel level Average Daily Rate Hotel level EBITDAR Parameters RevPAR (Rs.) Occupancy Rate (%) EBITDAR/room (Rs.) Margin (Rs. Lacs) Q2 Q2 Change Q2 Q2 Change Q2 Q2 Change Q2 Q2 Change Q2 Q2 Change By Brand (#Rooms) FY22 FY21 (bps) F
Slide 59: Discussion on Consolidated Financial & Operational Performance – Q2 FY22
Discussion on Consolidated Financial & Operational Performance – Q2 FY22 Revenue from operations stood at Rs. 96.9 Cr in Q2 FY22, up 104% as compared to Rs. 47.6 Cr in Q2 FY21. On a sequential basis, revenue from operations increased 129.9% from Rs. 42.2 Cr in Q1 FY22 ADR increased by 14.1% from 2
Slide 60: Consolidated Profit & Loss Statement – FY21
Consolidated Profit & Loss Statement – FY21 Rs. Cr FY21 FY20 FY19 Revenue from operations 251.7 669.4 549.5 Other income 13.3 5.8 9.9 Total Income 265.0 675.2 559.4 Total expenses 190.5 426.0 380.7 EBITDA 74.5 249.2 178.7 EBITDA w/o Other Income 61.3 243.4 168.8 EBITDA margin (%) 28.1% 36.9% 31.9% F
Slide 61: Consolidated Balance Sheet Snapshot – FY21
Consolidated Balance Sheet Snapshot – FY21 Rs. Cr FY21 FY20 FY19 Shareholder's Funds 917.6 988.9 875.0 Non-controlling interests 617.4 555.9 432.2 Total Shareholder’s equity 1,535.0 1,544.8 1,307.2 Total Debt 1,685.0 1,577.5 1,204.2 Other Non-current liabilities 470.0 464.3 38.0 Other Current liabil
Slide 62: The hotel business cycle
The hotel business cycle Occupancy 70% Illustrative: 15 Room Hotel with 65% 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 3:2:1 Expenses 60 50 40 EBITDA 96 50 16 Hotel RoCE 32% 17% 5%
Slide 63: About Us
About Us Lemon Tree Hotels Limited is India’s largest hotel chain in the mid-priced hotel sector, 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. We operate in the upscale segment and in the mid-mark
Lemon Tree Hotels — 24th Annual CITIC CLSA India Forum 2021 on 6ix