Mandarin Oriental International Limited
Mandarin Oriental International — Mandarin Oriental Hotel Group — FY2020 Earnings Presentation
38 slides from Mandarin Oriental International's earnings presentation, 2021
Slide 1: 2020 Annual Results
2020 ANNUAL RESULTS Mandarin Oriental Hotel Group
Slide 2: Review of 2020
Review of 2020 • COVID-19 restrictions dramatically reduced global travel • Limited ability for hospitality businesses to generate revenues • Substantial underlying losses incurred • Extensive cost measures implemented • Robust liquidity and funding position • Development pipeline solid MANDARIN ORI
Slide 3: Results Overview
Results Overview US $ m 2020 2019 Combined Total Revenue* 593 1,325 Group Revenue# 184 567 Underlying EBITDA (74) 155 • In 2020, government subsidies of US$36m were recognised in EBITDA across subsidiaries, management business and associates and joint ventures * Includes revenue from the total portf
Slide 4: Results Overview
Results Overview US $ m 2020 2019 Underlying (loss)/profit attributable to shareholders Owned hotels (145) 22 Management business (30) 19 Less: Impairment of the Geneva hotel (31) - Total (206) 41 MANDARIN ORIENTAL
Slide 5: Results Overview
Results Overview 2020 2019 Net Non-Trading Losses (US $ m)# (475) (97) Loss Attributable to Shareholders (US $ m) (680) (56) Dividend per Share (US ¢) - 1.50 Adjusted Net Asset Value per Share (US $) 4.09 4.70 # Primarily comprises a 15% decrease in the valuation of the Causeway Bay site under devel
Slide 6: Cost Management Activities
Cost Management Activities • EBITDA losses were reduced as the year progressed • Payroll costs lowered by US$120m* • Headcount reduced from 13,920 to 10,770 • Non-payroll costs significantly lowered • Non-essential capital expenditure suspended • Cost management remains in place MANDARIN ORIENTAL
Slide 7: Cash Flow Overview
Cash Flow Overview • EBITDA cash outflow was US$61m* • Capital expenditures and investments of US$109m • Robust liquidity position, further enhanced in early 2021 • Balance sheet strong, gearing remains low • Group conservatively geared to sustain business downturns * EBITDA cash outflow includes lo
Slide 8: Operational Performance
OPERATIONAL PERFORMANCE
Slide 9: Market Performance
Market Performance • Trends we experienced pre-pandemic have accelerated • Expected decline in corporate travel has smaller impact, as reducing customer base • Pent-up demand for leisure travel, which is our main customer group, > 60% of room nights • Development strategy focused on leisure destinat
Slide 10: Global Portfolio
Global Portfolio Prague London Paris Munich Boston Geneva Beijing New York Madrid Lake Como Tokyo Barcelona Milan Bosphorus, Istanbul Washington DC Marrakech Shanghai Bodrum Doha Guangzhou Miami Dubai Hong Kong Sanya Riyadh Taipei Abu Dhabi Bangkok Macau Canouan Kuala Lumpur Singapore Jakarta Santia
Slide 11: 2020 Annual Occupancy Performance
2020 Annual Occupancy Performance 63% 63% 62% 63% 25% 22% 18% 17% Asia EMEA^ America Total 2019 2020 • Figures shown on a like-for-like basis for all hotels that were in the Group’s portfolio and operating for the entire year of both 2019 and 2020. As Mandarin Oriental Ritz, Madrid, remains closed f
Slide 12: 2020 Monthly Occupancy Performance
2020 Monthly Occupancy Performance Hotels with - - 11 13 13 13 9 8 3 3 3 2 closed status* 80% 60% 40% Asia 20% EMEA^ America 0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec • 2020 occupancy figures are shown including periods when hotels were closed due to COVID-19 restrictions and as a result, w
Slide 13: 2020 Annual Average Daily Rate
2020 Annual Average Daily Rate Average % change 2020 vs 2019 (US$ terms) 16% 4% 2% -10% -17% Asia Chinese Europe (excl. America Resorts (excl. Chinese Mainland Middle East) Mainland) • Figures shown on a like-for-like basis for all hotels that were in the Group’s portfolio and operating for the enti
Slide 14: 2020 Annual RevPAR Performance
2020 Annual RevPAR Performance -49% US$ 569 -55% -63% -67% 290 314 280 192 142 105 63 Asia EMEA^ America Total 2019 2020 • Figures shown in US$ on a like-for-like basis for all hotels that were in the Group’s portfolio and operating for the entire year of both 2019 and 2020. As Mandarin Oriental Rit
Slide 15: Owned Hotels Operating Performance in 2020
Owned Hotels Operating Performance in 2020 Asia • Hong Kong and Singapore positive EBITDA, though well below 2019 • Hong Kong occupancy 5% in second quarter, 29% in fourth quarter • Tokyo benefited from government “Go To Travel” campaign • EBITDA losses at all other owned hotels • Most hotels reopen
Slide 16: Management Business
Management Business • Total management fees 64% lower than 2019 • Branding fees received from a number of projects • Net loss from sales and marketing activities • US$12m annual payroll savings from headcount reduction • Profitability expected to recover quickly as demand returns MANDARIN ORIENTAL
Slide 17: Redevelopment of the Causeway Bay Site
Redevelopment of the Causeway Bay Site • Previously the site of The Excelsior hotel, Hong Kong • Being redeveloped into a mixed-use commercial building • Commenced on 1st May 2019, demolition work completed in 2020 • Total project costs of some US$650m, on track to complete in 2025 • 87% of construc
Slide 18: Financial Review
FINANCIAL REVIEW
Slide 19: Underlying EBITDA Performance
Underlying EBITDA Performance Key Highlights US $ m 1H 2020 2H 2020 2020 2019 Underlying EBITDA* Owned hotels (39) (23) (62) 125 Management business (11) (1) (12) 30 Total (50) (24) (74) 155 • Underlying EBITDA losses reduced by 50% in the second half of 2020 • Owned hotels represented c.85% of the
Slide 20: Cash Flow Statement – Operating Activities
Financial Review Cash Flow Statement – Operating Activities US $ m 2020 2019 Operating Activities EBITDA from subsidiaries and non-cash items (63) 132 Dividends and interest from associates and JVs - 6 Working capital movement 2 (3) Net interest and other financing charges paid (12) (16) Tax paid (1
Slide 21: Cash Flow Statement – Investing Activities
Financial Review Cash Flow Statement – Investing Activities US $ m 2020 2019 Investing activities Net capital expenditure on existing properties (39) (42) Redevelopment of the Causeway Bay site (22) (15) Restoration of the Madrid hotel (31) (15) Net (advance to)/repayment from associates and joint v
Slide 22: Summary Cash Flow Statement
Financial Review Summary Cash Flow Statement US $ m 2020 2019 Operating Activities (84) 113 Investing Activities (109) (80) Financing Activities Net drawdown of borrowings 88 34 Dividends paid - (38) Others (6) (7) Net (decrease) / increase in cash (110) 22 Opening cash balance 1st January 271 247 E
Slide 23: Net Debt
Financial Review Net Debt US $ m 2020 2019 Adjusted shareholders’ funds# 5,171 5,936 Adjusted net asset value per share (US $) 4.09 4.70 Net debt 506 300 Gearing 10% 5% Hedging ratio on gross debt 41% 47% Average tenor of debt 3.2 years 4.2 years Cash balance 165 271 Undrawn committed debt facilitie
Slide 24: Future Significant Capital Commitments
Financial Review Future Significant Capital Commitments US $ m Timing Munich expansion 139 2021-25 Redevelopment of the Causeway Bay site 569 2021-25 Total 708 MANDARIN ORIENTAL
Slide 25: Hotel Openings and Hotels Under Development
HOTEL OPENINGS AND HOTELS UNDER DEVELOPMENT
Slide 26: New Hotels Under Operation
New Hotels Under Operation Emirates Palace, Abu Dhabi Al Faisaliah Hotel, Riyadh (Management contract) (Management contract) • 394 rooms and suites • 321 rooms and suites • Takeover effective on 1st January 2020 • Takeover effective from March 2021 • To be rebranded as Mandarin Oriental • To be rebr
Slide 27: Development Portfolio
DEVELOPMENT PORTFOLIO Moscow London Vienna Zurich New York Istanbul Beijing Barcelona Luzern Tel Aviv Nanjing Boca Raton Dubai Shenzhen Honolulu Da Nang Grand Cayman Muscat Manila Phuket Saigon Expected to open within the next five years Hotels (20) Residences (13 of which 2 are standalone) MANDARIN
Slide 28: Development Update
Development Update • Development pipeline all managed properties, no equity investment required • Focus on city-centre and resort locations where brand is currently absent • Many projects at an advanced stage of completion • Construction delays expected due to pandemic • Since January 2020, four new
Slide 29: New Project
New Project Mandarin Oriental, Vienna (Management contract) • 151 rooms and 17 branded residences • A new hotel housed in a heritage building • Scheduled to open in 2023 MANDARIN ORIENTAL
Slide 30: New Project
New Project Mandarin Oriental Savoy, Zurich (Management contract) • 80 rooms and suites • Existing hotel: Savoy Baur en Ville • The Group will assume management in 2024 following a full renovation • To be rebranded as Mandarin Oriental Savoy, Zurich MANDARIN ORIENTAL
Slide 31: New Project
New Project Mandarin Oriental, Da Nang (Management contract) • 69 villas and 18 branded residences • Beach front resort • Scheduled to open in 2024 MANDARIN ORIENTAL
Slide 32: Scheduled Openings in 2021
Scheduled Openings in 2021 Mandarin Oriental Ritz, Madrid (50% ownership) • 153 rooms and suites • Historic and iconic property • Extensive three-year renovation • Scheduled to open in the second quarter of 2021 MANDARIN ORIENTAL
Slide 33: Scheduled Openings in 2021
Scheduled Openings in 2021 Mandarin Oriental Bosphorus, Istanbul (Management Contract) • 100 rooms and suites • First new hotel to open on The Bosphorus for some time MANDARIN ORIENTAL
Slide 34: Looking to the Future
LOOKING TO THE FUTURE
Slide 35: Strategic Priorities
Strategic Priorities • Brand: grow Fans of M.O., new hotel openings, expand brand into new areas • People: focus on colleague experience, launched alumni network: Forever Fans • Customer: personalised experiences • Digital: enhancing guest-facing technologies • New vision: A World of Fans MANDARIN O
Slide 36: Core Values
Core Values • Sustainability and innovation are the foundation of our culture • Goal to eliminate single-use plastic across hotels by March 2021 • 95% reduction in usage estimated by end of June 2021 • Broader sustainability objectives also developed • Removing barriers to creativity and thinking di
Slide 37: Outlook
Outlook • Trading conditions remain uncertain • Underlying loss expected in the first half of 2021 • Removal of barriers to travel and roll-out of vaccination programmes critical • Balance sheet conservatively geared • Strong long-term prospects for luxury hospitality MANDARIN ORIENTAL
Slide 38: Questions to investors@mohg.com
Questions to investors@mohg.com
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