Hongkong & Shanghai Hotels Ltd. · HKEX:45

Hongkong & Shanghai Hotels — The Hongkong and Shanghai Hotels — FY2022 Earnings Presentation

58 slides from Hongkong & Shanghai Hotels's earnings presentation, Mar 15, 2023

  1. Slide 1: The Hongkong and Shanghai Hotels 2022 Annual Results

    The Hongkong and Shanghai Hotels 2022 Annual Results 15 March 2023 1

  2. Slide 2: Disclaimer

    Disclaimer This presentation (“Presentation”) is made available by The Hongkong and Shanghai Hotels, Limited (“HSH”) for general purposes only. Nothing contained in this Presentation is intended to constitute a public offer under any legislation or an invitation or inducement to engage in any invest

  3. Slide 3: Key messages

    Key messages  Navigated challenges well given unprecedented circumstances  Positive momentum towards end of 2022  Reported a positive EBITDA before pre-opening and project expenses of HK$518m vs HK$457m last year  Conservative liquidity cover and stable balance sheet  Strong brand maintained 

  4. Slide 4: 2022 Financial Results

    2022 Financial Results 4

  5. Slide 5: 2022 Highlights

    2022 Highlights EBITDA Revenue before pre-opening & Net op. cashflow¹ Liquidity buffer Projects project expense & Gearing The Peak Tram 3.6bn Re-opened in Aug 2022 HK$ +21% +13% +19% Available Committed The Peninsula HK$ 4,198m HK$ 518m HK$ 82m facilities Istanbul 2021 HK$3,461m Soft opening was in

  6. Slide 6: Hotels

    Revenue +32% Hotels  Positive recovery trend from Rooms & F&B  Fast rebound in the US and Europe  Good recovery in other Asian markets particularly for Tokyo Hotel revenue towards end of the year HK$'m 4,000 Rooms F&B Arcade & offices Others  Record ARR for majority of our hotels  Hong Kong and

  7. Slide 7: Commercial properties HK$1.2bn

    Commercial properties Rental income HK$1.2bn Rental income Incl. arcade Residential Commercial and Arcades Office HK$'m  Decrease of rental income from 1,400 flat Residential 1,217 1,218 1,200 153 147  Stronger performance from arcade 1,000 rental 800 642 669 600  The Peak Tower improved slightly

  8. Slide 8: Clubs & Services

    Clubs & Services Revenue +3%  Mooncake sales impacted by softer China/Hong Kong market  Merchandising division is expanding in China with new retail boutiques and online sales channels.  “The Quail, A Motorsports Gathering” in Aug 2022 continues to be a great success  The Peak Tram re-opened in

  9. Slide 9: Financial results

    Financial results (HK$ million) For the year ended 31 December 2022 2021 Changes Revenue 4,198 3,461 21% Operating costs (3,680) (3,004) -23% EBITDA before pre-opening and project expenses 518 457 13% Pre-opening and project expenses (119) (63) -89% EBITDA 399 394 1% Depreciation and amortization (4

  10. Slide 10: Cash flow summary

    Cash flow summary (HK$ million) For the year ended 31 December 2022 2021 Operating EBITDA (before pre-opening and project expenses) 518 457 Changes in working capital and tax payment 18 (76) Normal capital expenditure on existing assets (excluding projects) (200) (141) Net cash inflow/(outflow) afte

  11. Slide 11: Capital structure and balance sheet

    Capital structure and balance sheet Credit metrics Balance sheet Financing arranged in 2022 (HK$ million) 2022 2021 HK$3.6bn Available liquidity As at 31 Dec GBP 675m New 3-year green term loan to early refinance HK$5bn+ Total cash 585 479 GBP 650m club loan due in 2023 Peninsula London apartments c

  12. Slide 12: Hotels

    Hotels 12

  13. Slide 13:  Negatively impacted by stringent travel restrictions and social distancing measures  Double digit

    Revenue - 6%  Negatively impacted by stringent travel restrictions and social distancing measures Occupancy - 13 pp  Double digit increase in average room rates ARR +19% RevPAR - 25%  The Peninsula Arcade was 92% occupied 13

  14. Slide 14:  Challenging 2022 due to stringent COVID restrictions with full lockdown from Apr to

    Revenue - 36%  Challenging 2022 due to stringent COVID restrictions with full lockdown from Apr to Occupancy - 28 pp Jun 2022 ARR - 3%  Remained to be RevPAR leader despite weak environment RevPAR - 53%  The arcade was 94% occupied 14

  15. Slide 15: Revenue  Challenging year due to stringent COVID-19 restrictions and lockdowns Occupancy

    Revenue - 14%  Challenging year due to stringent COVID-19 restrictions and lockdowns Occupancy - 12 pp  The arcade business was 98% occupied and business in the retail outlets was robust ARR + 5%  Some of our anchor tenants are undergoing expansion of their space RevPAR - 38% 15

  16. Slide 16:  Gained momentum towards the end of the year  Achieved very high average

    GC TO CHANGE TO PIC WITH CHERRY BLOSSOMS Revenue + 62%  Gained momentum towards the end of the year Occupancy + 13pp  Achieved very high average room rates ARR + 42%  Banquets and large events increased significantly in second half of 2022 RevPAR + 99% 16

  17. Slide 17:  Experienced a strong second half after removal of COVID-19 related restrictions  All

    GC TO CHANGE TO PIC WITH CHERRY BLOSSOMS Revenue + 393%  Experienced a strong second half after removal of COVID-19 related restrictions Occupancy + 17 pp  All business areas picked up gradually throughout the year and December was ARR + 90% particularly strong RevPAR + 273% 17

  18. Slide 18:  Experienced a strong year after a relatively weak first two months  Diplomatic

    Revenue + 341%  Experienced a strong year after a relatively weak first two months Occupancy + 39 pp  Diplomatic and corporate business was strong ARR + 37%  Suite business was good and new Club Lounge brought in significant revenue RevPAR + 481% 18

  19. Slide 19:  Achieved a very high average rate  Food and beverage revenue was good

    GC TO CHANGE TO PIC WITH CHERRY BLOSSOMS Revenue + 89% Occupancy + 8 pp  Experienced fast recovery and strong rebound ARR + 16%  Achieved a very high average rate RevPAR + 32%  Food and beverage revenue was good 19

  20. Slide 20:  Very strong year in 2022  Achieved very high occupancy and average rates

    Revenue + 32%  Very strong year in 2022 Occupancy + 7 pp  Achieved very high occupancy and average rates ARR + 15% RevPAR + 30%  Maintained RevPAR leader position in the market 20

  21. Slide 21:  Successful 2022 with very high average rates  Food and beverage performed well

    GC TO CHANGE TO PIC WITH CHERRY BLOSSOMS Revenue + 18%  Successful 2022 with very high average rates Occupancy + 10 pp  Food and beverage performed well throughout the year ARR + 18%  Banqueting and catering demand was strong RevPAR + 39% 21

  22. Slide 22:  Business rebounded from Mar 2022 after uplift of all COVID-19 restrictions  High

    Revenue + 78%  Business rebounded from Mar 2022 after uplift of all COVID-19 restrictions Occupancy + 11 pp  High demand for suites and family travel ARR + 39%  Achieved very high occupancy and average rates RevPAR + 93% 22

  23. Slide 23: Commercial Properties

    Commercial Properties 23

  24. Slide 24:  Overall revenue declined by 2% due to lack of international arrivals affecting the

    Revenue - 2%  Overall revenue declined by 2% due to lack of international arrivals affecting the luxury residential leasing market  Food and beverage business impacted in the first half, although catering revenue picked up the second half when large events and banquets could be held again 24

  25. Slide 25:  Remains significantly impacted by the lack of foreign visitors to Hong Kong 

    Revenue + 6%  Remains significantly impacted by the lack of foreign visitors to Hong Kong  Revenue improved by 6% boosted by the re-opening of the Peak Tram in Aug 2022 2525

  26. Slide 26:  Occupancy remained stable  92% occupied

    Revenue - 7%  Occupancy remained stable  92% occupied 26

  27. Slide 27:  Business performance was positive in 2022  Revenue and occupancy improved compared to

    Revenue + 9%  Business performance was positive in 2022  Revenue and occupancy improved compared to the previous years 27

  28. Slide 28: 21 Avenue Kléber

    21 Avenue Kléber Revenue + 4%  Office space and both retail spaces fully leased  Occupancy remained stable 28

  29. Slide 29: Clubs and Services

    Clubs and Services 29 29

  30. Slide 30: Revenue

    Revenue +112% 30

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    1 34

  35. Slide 35:  Revenue decreased compared to last year  Expansion in several markets including the

     Revenue decreased compared to last year Revenue - 11%  Expansion in several markets including the Chinese mainland to direct operate retail boutiques and online sales channels 35

  36. Slide 36:  Revenue increasing 18% year on year due to significant increase in average rates

     Revenue increasing 18% year on year due to significant increase in average rates and Revenue + 18% Quail events  Delighted to host The Quail: A Motorsports Gathering which brought substantial sponsorship 36

  37. Slide 37: New hotel developments

    New hotel developments 37 37

  38. Slide 38: The Peninsula London project update

     The Peninsula London project has experienced delays and cost overruns  The soft opening date is targeted to be later in 2023  Revised budget of the project is GBP 1,020m 38 38

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  48. Slide 48: The Peninsula Istanbul soft opening

     Soft opening of the hotel was held on 14 February 2023  Two buildings and spa ready for guest stays and Lobby open for business  The rooftop restaurant Gallada will open in summer 2023 48

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    NSA S| |) | ee / ee / ee WENGER ee ee eae - SOS tL Pe” 7 ’ NSN SE ee ee) eee SSS 7 oe ey 7 ‘NSA ee / e/a THE PENINSULA

  50. Slide 50: The Peninsula

    THE PENINSULA ®&

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  52. Slide 52: The Peninsula

    THE PENINSULA

  53. Slide 53: The Peninsula

    THE PENINSULA = ~ -_ beer) \s . ; N Papen " ae T i!

  54. Slide 54: The Peninsula Istanbul

    THE PENINSULA ISTANBUL

  55. Slide 55: Sustainable Luxury Vision 2030

    Sustainable Luxury Vision 2030 55

  56. Slide 56: Outlook

    Outlook 56 56

  57. Slide 57: Outlook

     Recovery in Hong Kong important for our group  Opening up of China is a positive step Outlook  We are optimistic for our retail arcades and merchandising business  Immediate focus remains on delivering our new Peninsula hotel project in London  Geopolitical uncertainties  Strong balance sheet

  58. Slide 58: Q&A

    &> Q&A 58

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