Lemon Tree Hotels Ltd. · NSE:LEMONTREE
Lemon Tree Hotels — Nirmal Bang Institutional Equities Investor Conference 2022
63 slides from Lemon Tree Hotels's conference presentation, Feb 12, 2022
Slide 1: Exchange intimation of analyst/investor meet
February 12, 2022 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 SEB
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- 15,052 51,170 Upper Upscale Upscale 4,661 30,490 Upper Midscale 4,458 30,100 Hotel Sector Mi
Slide 6: Our Journey So Far
Our Journey So Far lemortce 2002 2006 Sounded Warburg Pincus investment 2009 +» Red Fox by Lemon Tree Hotels brand launched + 10" hotel opened O Q 2012 + APG investment in in Lemon Tree Hotels Lemon Tree Hotels 2018 * Fleur Hotels founded. Lemon Tree Hotels goes ‘arnation Hotels public with a succes
Slide 7: Our Inventory Vis-à-vis The Industry
Our Inventory Vis-à-vis The Industry Consolidated inventory - 2021 6th largest hotel chain Source: Hotelivate Trends and Opportunity Report FY21 for India 6
Slide 8: Lemon Tree – Snapshot as on 31st December 2021
Lemon Tree – Snapshot as on 31st December 2021 Current (17% of Branded By CY23 (20% of Branded Pipeline Mid Market Hotels in Mid Market Hotels in India*) India*) 8,489 2,006 10,495 Group rooms; rooms; rooms; 87 hotels 20 hotels 107 hotels Brand Current Pipeline By FY23 Aurika Hotels & Resorts 194 Ro
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 Group Structure
Lemon Tree Group Structure Brand Owner + Asset Owner + Lemon Tree Hotels Ltd., incl 100% subsidiaries Manager 74.9% 58.91% Asset Manager Asset Owner Carnation Fleur, incl Hotels 100% subs Keys Management/ Franchise Contracts Keys Owned/Leased Assets Operating Operating Operating Operating Operating
Slide 11: Lemon Tree Brand Standards
Lemon Tree Brand Standards 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 Aurika/LTP/LTH/RFH Keys Brandin
Slide 12: Hotel Inventory by Segment and Lemon Tree Brand Positioning
Hotel Inventory by Segment and Lemon Tree Brand Positioning Segment Industry Inventory Our Inventory Lemon Tree Brand Positioning Luxury and Upper Upscale 51,170 Upscale 30,490 194 Upper Midscale 30,100 2554 Midscale and Economy 37,500 5741 250,000 (suitable for branding under LTP/LTH/RFH) Unbranded
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. 1,006 Cr Total capit
Slide 14: Expansion Plans – Pipeline of Management Contracts
Expansion Plans – Pipeline of Management Contracts (as on 31st Dec 2021) Expected Management Contracts Pipeline City Rooms Opening date Keys Lite by Lemon Tree Hotels, Tapovan, Rishikesh Rishikesh 39 Apr-22 Keys Select by Lemon Tree Hotels, Gandhi Ashram, Ahmedabad Ahmedabad 52 Apr-22 Lemon Tree Hot
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 the only hotel chain in the top 10
Focus on culture & service Presence across value Process differentiation with focus on chain domestic travellers 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
Slide 19: Recognition and awards through the years
Focus on culture & service Presence across value Process differentiation with focus on chain domestic travellers Recognition and awards through the years 68 out of 79 eligible hotels won the Tripadvisor Travellers’ Choice Awards 2021 Lemon Tree Premier, Corbett – a managed hotel – won the Best of th
Slide 20: Recognition and awards through the years
Focus on culture & service Presence across value Process differentiation with focus on chain domestic travellers Recognition and awards through the years 60 out of 72 eligible hotels won the Tripadvisor Travellers’ Choice Awards 2020 Lemon Tree Premier, Corbett – a managed hotel – won the Best of th
Slide 21: Value for money pricing, occupancy and RevPAR vs industry
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 22: Lower operating expense as % of revenue and staff per room
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 23: Strong Operating and Financial Performance
Strong Operating and Financial Performance 22
Slide 24: Operating Performance
Operating Performance Rooms are being added Occupancy Owned Leased Hotels Managed Hotels FY16 FY17 FY18 FY19 FY20 FY21 8,309 8,006 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 2,505 2,5
Slide 25: 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 26: 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 27: Individual Progression of 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 FY15 FY16 FY17 FY18 FY19 CAGR FY15 FY16 FY17 FY18 FY19 CAGR Opening Opening Lemon Tree Lemon Tree Premier, Dec-FY14 Infant Toddler Toddler Adult Adult Hotel, Jul-FY14 Infant Toddler Toddler Adult Adult De
Slide 28: Aggregate Progression of Adult Hotels
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 29: 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 60% 69% Third Seven hotels opened in FY10 & FY11 Fourth Five hotels opened during FY12 - FY15 70% 53% 68% Fifth Eight Hotels opened d
Slide 30: CoVID-19: Survive, Revive & Thrive
CoVID-19 : Survive, Revive & Thrive 29
Slide 31: Q3 FY22 Operating Performance Trends – Operational Inventory
Q3 FY22 Operating Performance Trends Increasing Operational Inventory Operational Pick-up 6,000 105.0% 99.5% 5,000 97.0% 96.8% 100.0% 96.4% 95.4% % Operational Invetory 94.5% 94.2% Operational Invetory 95.0% 4,000 90.0% 3,000 84.9% 81.9% 85.0% 2,000 80.0% 5,037 4,252 4,408 4,908 4,888 4,953 5,004 5,
Slide 32: Q3 FY22 Operating Performance Trends – Occupancy
Q3 FY22 Operating Performance Trends Rising Occupancy Levels Occupancy-ADR Trend 70.0% 4,263 4,500 3,981 60.0% 4,000 50.0% 3,415 3,500 Gross ADR (Rs) Occupancy (%) 3,230 40.0% 3,075 2,775 3,000 30.0% 2,369 2,429 2,500 20.0% 2,288 39.6% 40.8% 20.0% 24.5% 29.5% 34.8% 50.9% 53.8% 50.5% 53.6% 51.5% 54.0
Slide 33: Q3 FY22 Operating Performance Trends – Operating Efficiency
Q3 FY22 Operating Performance Trends Improving Operating Efficiency and Superior Recovery Revenue vs OPEX Trend Revenue Trend 60 55.2 80 48.1 70 50 74.5 68.2 55.2 38.8 60 40 34.0 48.1 32.9 50 29.7 Rs. Cr Rs Cr 38.8 30 40 32.4 32.9 34.0 32.2 29.6 29.7 18.6 30 20 26.1 14.2 23.7 31.0 18.6 10.2 21.4 20
Slide 34: CoVID-19: Survive & Revive
CoVID-19 : Survive & Revive Quarter on Quarter Performance 200.0 50.0% 44.9% 176.5 36.4% 40.0% 36.2% 146.0 150.0 31.6% 31.4% 112.2 26.7% 30.0% 97.0 98.8 100.0 80.4 70.6 20.0% 64.3 66.6 63.0 65.6 17.1% 53.6 44.3 48.3 50.0 43.8 42.2 36.3 39.3 35.8 30.4 10.0% 22.3 14.3 7.5 4.6% 2.0 0.0 0.0% Q4 FY20 Q1
Slide 35: CoVID-19: Thrive – By Building Operational Efficiencies
CoVID-19 : Thrive – By Building Operational Efficiencies Manpower Staff Per Room 1.20 • One of our biggest learnings has been that our 1.00 0.96 hotels can operate with lesser manpower without compromising on service quality 0.80 0.60 - 0.70 0.60 0.44 • During Covid-19 induced lockdowns and partial
Slide 36: CoVID-19: Thrive – By Building Operational Efficiencies
CoVID-19 : Thrive – By Building Operational Efficiencies Heat, Light and Power Cost Per Unit • We have been aggressively expanding the share 11.20 of electricity from renewable sources, which 11.03 comes at a lower cost as compared to thermal 11.00 power 10.80 • In FY20, 5% of our electricity was so
Slide 37: CoVID-19: Thrive – By Building Operational Efficiencies
CoVID-19 : Thrive – By Building Operational Efficiencies Raw Material Cost Raw Material Cost 40% 35% • With our continuously expanding geographical footprint we are strengthening our position to 30% 27% - 30% As % of FnB Revenue 26% negotiate contracts with our suppliers favorably 20% • Over the pas
Slide 38: Cost Rationalization
Cost Rationalization Commenting on the performance for Q3 FY20, Mr. Patanjali Keswani, Chairman & Managing Director – Lemon Tree Hotels Limited said, 37
Slide 39: Annexures
ANNEXURES kena
Slide 40: Under Development Hotels
lemortece HOTELS Under Development Hotels
Slide 41: Lemon Tree Mountain Resort – Shimla
Lemon Tree Mountain Resort – Shimla 40
Slide 42: Aurika, Mumbai Airport (MIAL) | Image Representation
Aurika, Mumbai Airport (MIAL) | Image Representation 41
Slide 43: Aurika, Mumbai Airport (MIAL) | Image Representation
Aurika, Mumbai Airport (MIAL) | Image Representation 42
Slide 44: Aurika, Mumbai Airport (MIAL) | Image Representation
Aurika, Mumbai Airport (MIAL) | Image Representation 43
Slide 45: Lemon Tree Mountain Resort – Shimla | Image Representation
Lemon Tree Mountain Resort – Shimla | Image Representation 44
Slide 46: Latest Performance – Q3 FY22
Latest Performance – Q3 FY22 45
Slide 47: Q3 FY22 Performance Highlights – Operational Metrics
Q3 FY22 Performance Highlights – Operational Metrics (Consolidated) Inventory Average Daily Rate (Rs.) Owned/Leased rooms Managed rooms Total rooms 54% 3,901 29% 3,901 8,294 2.4% 8,489 YoY QoQ 6.3% 5,192 5,192 3,028 3,102 3,297 2,528 End of Q3 FY21 Q3 FY22 Q3 FY21 Q3 FY22 Q3 FY21 Q3 FY22 Q3 FY21 Q3
Slide 48: Q3 FY22 Performance Highlights – Financial Metrics
Q3 FY22 Performance Highlights – Financial Metrics (Consolidated) Revenue from Operations (Rs. Cr) EBITDA (Rs. Cr) 110% 48% 65.6 65.6 YoY 143.7 QoQ 143.7 194% 83% 96.9 YoY QoQ 35.8 68.4 22.3 Q3 FY21 Q3 FY22 Q2 FY22 Q3 FY22 Q3 FY21 Q3 FY22 Q2 FY22 Q3 FY22 EBITDA Margin (%) Cash profit (Rs. Cr) 1,334
Slide 49: Consolidated Profit & Loss Statement – Q3 FY22
Consolidated Profit & Loss Statement – Q3 FY22 Rs. Cr Q3 FY22 Q2 FY22 Q3 FY21 QoQ Change (%) YoY Change (%) Revenue from operations 143.7 96.9 68.4 48.3% 110.1% Other income 2.4 1.9 2.2 22.5% 5.3% Total expenses 80.4 63.0 48.3 27.5% 66.4% EBITDA 65.6 35.8 22.3 83.3% 194.0% EBITDA margin (%) 44.9% 36
Slide 50: Consolidated Profit & Loss Statement Breakup – Q3 FY22 vs Q3 FY21
Consolidated Profit & Loss Statement Breakup – Q3 FY22 vs Q3 FY21 Total without Keys Hotels Keys Hotels Total Rs. Cr YoY Change YoY Change YoY Change Q3 FY22 Q3 FY21 Q3 FY22 Q3 FY21 Q3 FY22 Q3 FY21 (%) (%) (%) Inventory 4,256 4,256 0% 936 936 0% 5,192 5,192 0% ARR 4,115 2,627 57% 2,331 1,854 26% 3,9
Slide 51: 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) Q3 Q3 Change Q3 Q3 Change Q3 Q3 Change Q3 Q3 Change Q3 Q3 Change By Brand (#Rooms) FY22 FY21 (bps) F
Slide 52: Discussion on Consolidated Financial & Operational Performance – Q3 FY22
Discussion on Consolidated Financial & Operational Performance – Q3 FY22 Revenue from operations stood at Rs. 143.7 Cr in Q3 FY22, up 110% as compared to Rs. 68.4 Cr in Q3 FY21. On a sequential basis, revenue from operations increased 48.3% from Rs. 96.9 Cr in Q2 FY22 ADR increased by 54.3% to 3,9
Slide 53: 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 54: 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 55: 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 56: ESG Focus
ESG Focus lemortece HOTELS
Slide 57: 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 58: 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 59: 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 60: FY21 ESG Report – Vision FY26 goals
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 61: 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 62: 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 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 — Nirmal Bang Institutional Equities Investor Conference 2022 on 6ix