John Keells Holdings Plc · CSELK:JKH.N0000
John Keells — Q4 FY2022 Earnings Presentation
50 slides from John Keells's earnings presentation, 2022
Slide 1: Investor Presentation: Review of Q4 FY2022
Investor Presentation Review of Q4 FY2022 Version 2.0 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 658.4 million as at 31 March 2022 ▪ No controlling shareholder - 99% free float ▪ Net Debt : Equity ratio of 23.5%* ▪ The Board comprises of two Executive Directors and five Independent Non- Executive Directors ▪ Focus on sustainability related aspects, where the Group
Slide 3: Sri Lanka macroeconomic update; Q4 2021/22
Sri Lanka macroeconomic update; Q4 2021/22 • The Group continued to witness a strong recovery momentum during the fourth quarter with the recurring performance of most businesses reaching pre-COVID-19 levels. • The positive momentum of the Group’s performance during the quarter is largely on account
Slide 4: Recurring EBITDA for the quarter ended 31 March 2022
Recurring EBITDA: for the quarter ended 31 March 2022 Recurring EBITDA* Q4 FY2022 Q4 FY2021 Variance (Rs.Million) Transportation 2,521 1,356 1,165 Consumer Foods 1,563 1,272 290 Retail 2,384 1,952 432 Leisure 3,247 67 3,178 Property 5,356 10 5,346 Financial Services 1,161 1,156 5 Other, incl. IT and
Slide 5: Recurring EBITDA for the year ended 31 March 2022
Recurring EBITDA: for the year ended 31 March 2022 Recurring EBITDA* FY2022 FY2021 Variance (Rs.Million) Transportation 6,141 3,610 2,531 Consumer Foods 3,485 3,318 167 Retail 7,549 5,523 2,027 Leisure 3,785 (3,588) 7,373 Property 7,867 (17) 7,885 Financial Services 5,024 3,645 1,379 Other, incl. IT
Slide 6: Reconciliation of reported to recurring EBITDA and PBT
EBITDA and PBT: Reconciliation of reported to recurring EBITDA PBT FY2022 FY2021 FY2022 FY2021 (Rs.Million) (Rs.Million) Reported EBITDA 29,262 15,609 Reported PBT 27,324 5,445 Adjustments: Net exchange (gains)/losses (12,889) (1,910) - IP (gains)/losses (203) (38) Adjustments: - One-off impairments
Slide 7: Capacity building and investments now translating into profit growth
Capacity building and investments now translating into profit growth Recurring EBITDA 2021/22 2020/21 2019/20 2018/19* (Rs.Million) Transportation 6,141 3,610 4,375 4,598 Consumer Foods 3,485 3,318 3,366 2,864 Retail 7,549 5,523 5,108 2,988 Leisure 3,785 (3,588) 2,306 5,431 Property 7,867 (17) 641 3
Slide 8: Portfolio evaluation 2021/22; returns vs. effective capital deployed
Portfolio evaluation 2021/22; returns vs. effective capital deployed Revenue and profit recognition from the Industry group Effective capital employed (%) residential apartments and office towers Cinnamon Life Integrated Resort 40 of the “Cinnamon Life Integrated Resort” Leisure 16 project commenced
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: 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 10
Slide 11: 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 • WCT-1 – West Container Terminal -1 • The conditions precedent stipulated in the build, operate and tra
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) 4Q FY22 earnings update: Port capacity (TEUs) SAGT Transportation industry group SLPA Colombo 8 million 900 CICT 800 (Rs. mn) Q4 Q4 Hong Kong 21 million 2021/22 2020/21 700 Singapore 40 milli
Slide 14: Opportunities for growth in the Bunkering businesses
Opportunities for growth in the Bunkering businesses Bunkering Business (Lanka Marine Services) 2020/21 2021/22 LMS Q4 Q1 Q2 Q3 Q4 YoY volume growth (%) (10) 1 16 (6) 2 Port of Hambantota ▪ LMS was the first to enter into a short-term fuel contract with Sinopec Fuels of Lanka (SFOL) for the sale and
Slide 15: Consumer Foods - overview
Consumer Foods - overview ▪ Market leader in soft drinks, ice creams and processed meats 4Q FY22 earnings update: ▪ Custodians of the consumer brands “Elephant House”, “Keells - Krest”: Consumer Foods industry group high brand equity (Rs. mn) Q4 Q4 Key performance indicators (%) FY2018 FY2019 FY2020
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 8% 44% the Impulse category. 30% 70% 92% 56%
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 132 store 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 – ▪ Five new stores w
Slide 19: Supermarkets - overview
Supermarkets - overview Profitability margin FY FY FY FY FY 4Q FY22 earnings update: (%) 2018 2019 2020 2021 2022 Retail industry group Recurring EBITDA (Rs. mn) Q4 Q4 1,975 2,367 4,267 4,144 5,204 (Rs.milllion) 2021/22 2020/21 Recurring EBITDA Recurring 5.3 5.2 8.0 7.6 7.8 2,384 1,952 margin EBITDA
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
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 FY2022 FY2021 4Q FY22 earnings update: Sector Occupancy ARR Occupancy ARR Leisure industry group (%) (US $) (%) (US $) (Rs. mn) Q4 Q4 2021/22 2020/21 Colombo Hotels* 29 70 3 64 Recurring Sri Lankan Resorts 32 78 16 62 3,246 67 EBITDA Maldivian Resorts 75 333 27 349
Slide 23: Trend of tourist arrivals to Sri Lanka
Trend of tourist arrivals to Sri Lanka Annual tourist arrivals to Sri Lanka ('000) Tourist arrivals YoY Growth Year 2,500 (In 000’s) (%) 2010* 654 46 2,000 2015 1,798 18 1,500 2016 2,051 14 2017 2,116 3 1,000 2018 2,334 10 500 2019 1,913 (18) - 2020 508 (74) 1986 1991 1996 2001 2006 2011 2016 2021 2
Slide 24: Timeline: Encouraging recovery from pandemic
Timeline: Encouraging recovery from pandemic 24
Slide 25: 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 26: Significant growth in Asian arrivals to Sri Lanka
Significant 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 Sunday terror
Slide 27: 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 27
Slide 28: Room inventory in Colombo lags far behind regional capitals
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 28
Slide 29: 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 30: 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 31: 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 32: Prime land bank of over 36 acres in central Colombo
Prime land bank of over 36 acres in central Colombo ▪ Prime land bank of over 36 acres held in central Colombo ▪ One of the largest privately owned land banks ▪ Includes on-going projects – “Cinnamon Life” and “Tri-Zen” ▪ Opportunities for development at land banks held in Crescat City and Cinnamon
Slide 33: Developable freehold land of approximately 25 acres near Colombo
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 34: Robust development pipeline; on-going developments
Robust development pipeline; on-going developments Number of units sold as at 4Q FY22 earnings update: Cumulative sales (units) 31 March 2022 Property industry group Cinnamon Life: (Rs. mn) Q4 2021/22 Q4 2020/21 The Residence at Cinnamon Life 152 Suites at Cinnamon Life 115 Recurring 5,356 10 EBITDA
Slide 35: 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) ▪ 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 36: Cinnamon Life Integrated Resort
Cinnamon Life Integrated Resort 36
Slide 37: Integrated development in Colombo
Integrated development in Colombo 37
Slide 38: Integrated development in Colombo
Integrated development in Colombo 38
Slide 39: Integrated development in Colombo
Integrated development in Colombo 39
Slide 40: Aerial view of Cinnamon Life under construction
Aerial view of Cinnamon Life under construction 40
Slide 41: Aerial view of Cinnamon Life under construction
Aerial view of Cinnamon Life under construction 41
Slide 42: The Suites at Cinnamon Life
The Suites at Cinnamon Life 42
Slide 43: The Suites at Cinnamon Life
The Suites at Cinnamon Life 43
Slide 44: The Offices at Cinnamon Life
The Offices at Cinnamon Life 44
Slide 45: 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 46: 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 46
Slide 47: 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 extended its long-term partnership with
Slide 48: Financial Services – Insurance sector overview
Financial Services – Insurance sector overview Key performance indicators CY2017 CY2018 CY2019 CY2020 CY2021 4Q FY22 earnings update: Financial Services industry group Market share (%) 14 14 13 13 12 GWP growth (%) 22 11 4 13 18 (Rs. mn) Q4 Q4 2021/22 2020/21 Recurring net profit (Rs.Mn) 4,002* 3,24
Slide 49: 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 50: 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 FY2022 and does not constitute an issue prospectus or a financial analysis. This Investor Presentation sh
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