Company Presentation - May 2018 - SET
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Company Presentation – May 2018
FORWARD LOOKING STATEMENT
Statements included or incorporated in these materials that use the words "believe", "anticipate", "estimate", "target", or "hope", or that
otherwise relate to objectives, strategies, plans, intentions, beliefs or expectations or that have been constructed as statements as to future
performance or events, are "forward-looking statements" within the meaning are not guarantees of future performance and involve risks and
uncertainties that could cause actual results to differ materially from historical results or those anticipated at the time the forward-looking
statements are made. MINT undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new
information, future events or otherwise. MINT makes no representation whatsoever about the opinion or statements of any analyst or other
third party. MINT does not monitor or control the content of third party opinions or statements and does not endorse or accept any
responsibility for the content or the use of any such opinion or statement.
Disclaimer 2
Agenda 1Q18 Performance Recap & Recent Updates Minor Hotels Minor Food Minor Lifestyle Corporate Information 2018 Outlook & Beyond
1Q18 Performance Recap & Recent Updates
MINT REMAINED CONFIDENT OF THE FULL YEAR RESULTS
While hotel operations and lifestyle business performed well, and the performance of the restaurant business was stable, the
decline in 1Q18 net profit of 11% was due to the increase in costs SG&A of hotel & mixed-use business, partly from the
consolidation of Corbin & King and preparation for future growth, the timing mismatch of mixed-use revenues compared to
1Q17 and the impact from the strengthening of the Thai Baht. Excluding the impact of foreign exchange, 1Q18 net profit is
estimated to have declined by a lower magnitude of only 3% compared to the same period last year.
REVENUE
THB million Minor Lifestyle
+5% y-y
7%
16,145 Minor Food
16,000 15,379 38%
14,000
12,000
Minor Hotels
10,000 55%
1Q17 Minor Hotels Minor Food Minor Lifestyle 1Q18
NET PROFIT
THB million Minor Lifestyle
2%
2,000 1,924 -11% y-y
Minor Food
1,800 1,719 32%
1,600
1,400
1,200
1,000 Minor Hotels
1Q17 Minor Hotels Minor Food Minor Lifestyle 1Q18 66%
1Q18 Performance Recap 5
INTERNATIONAL PRESENCE
With solid diversification strategy, MINT’s presence was in 40 countries at the end of April 2018 across its hospitality and
restaurant businesses.
Minor Hotels
Minor Food
Combination
REVENUE CONTRIBUTION
100%
13%
75% 49% 47% 50% International
50% Thailand
87%
25% 51% 53% 50%
0%
2008 2017 1Q18 2022F
MINT’s Footprint 6
WHAT’S NEW IN 1Q18 TO DATE
MINOR HOTELS MINOR FOOD
Hotel Investment • Launched Sunset Coast Samui, a property New Investment • Acquired 75% in Benihana Holdings, the world’s
managed by AVANI in February 2018 leading Japanese-inspired teppanyaki restaurant
chain
‒ MINT holds the global trademark and IP
rights for Benihana in Asia (excl the islands
Hotel Management • Launched AVANI+ Luang Prabang in March of Japan), Middle East, Europe, Australia,
• Added Kifaru House in Lewa Wildlife Africa, Canada and Mexico
Conservancy, Kenya to the Elewana ‒ The portfolio of 19 restaurants today
Collection portfolio includes 2 owned stores in London, and
another 17 franchised stores in the UK,
Poland, Romania, Slovakia, Canada, Jordan,
Kuwait, Lebanon, Saudi Arabia, the UAE,
Management Indonesia and Thailand
• Launched AVANI Central Melbourne
Letting Rights Residences in Australia
Increased • Increased shareholding in Riverside in China
Investment from 85.9% to 100%
Mixed-use
• Added 9 units in Phuket to the inventory pool
New International • Entered Pakistan with the franchise of
of Anantara Vacation Club
Market Swensen’s
MINOR LIFESTYLE CORPORATE
New Brand • Launched the full line of OVS, the Italian fast- Bond Issuance • Completed debentures issuance in the amount
fashion brand, with the first flagship store at of THB 1 billion in March 2018 (10-yr @ 3.43%)
Mega Bangna
Recent Development 7
Minor Hotels
Sunset Coast Samui, Managed by AVANI
FINANCIAL PERFORMANCE – MINOR HOTELS
1Q18 revenue of hotel & mixed-use business grew by 6%, primarily driven by owned and managed hotels. However, both
EBITDA and NPAT declined in 1Q18 because of the higher costs & SG&A, partly from the consolidation of Corbin & King and
preparation for future growth, mismatch in the timing of mixed-use activities during the quarter compared with 1Q17 and the
strengthening of the THB. Consequently, both EBITDA and net profit margins were temporarily under pressure during the
quarter. Nevertheless, margins of organic hotel operations (excluding Corbin & King) improved y-y.
KEY HIGHLIGHTS
THB million +6% y-y
Owned hotels • Revenue grew by 32% y-y, as a result of
8,388 8,352 8,929 improved overall operations, particularly in
7,571
6,659 61% Thailand, Portugal, Maldives and Sri Lanka,
of 1Q18 hospitality together with the consolidation of Corbin &
Revenue
revenue King.
Management letting • Revenue increased by 9% y-y in AUD term,
rights supported by RevPar growth of 4% in AUD
-13% y-y
and the increase in number of rooms.
17%
2,574 • However, with the strengthening of the THB,
1,836
2,201 2,245 of 1Q18 hospitality
EBITDA revenue in THB was flat in 1Q18 compared
1,073 revenue
to 1Q17.
EBITDA
30.7% 16.1% 24.2% 26.4% 25.1%
Margin Management contracts
• Revenue increased by 18%, primarily
-16% y-y
4% attributable to strong performance of hotels
of 1Q18 hospitality in Thailand and Oman.
NPAT 1,361 revenue
1,053 1,141
673
287 Mixed-use • Revenue declined by 37% y-y, from the
Net mismatch in the timing of mixed-use
Margin
16.2% 4.3% 8.9% 12.6% 12.8% 16% activities.
of 1Q18 hospitality
1Q17 2Q17 3Q17 4Q17 1Q18 revenue
Minor Hotels 9
MINOR HOTELS - INTERNATIONAL PRESENCE
In recent years, MINT has implemented a solid diversification strategy. At the end of 1Q18, MINT operates hotels and spas under
a combination of investment, joint-venture and management business models in 26 countries, with another 7 countries in the
pipeline over the next three years.
REVENUE CONTRIBUTION
100% 6%
75% International
63% 61% 71%
50% Thailand
94%
25%
37% 39% 29%
0%
2008 2017 1Q18 2022F
Investment
Management
Combination
New Destinations in Pipeline
Hubs
Minor Hotels 10SYSTEM-WIDE HOTEL OPERATIONS
Excluding new hotels and FX impact, organic RevPar of the entire portfolio increased by 6% in 1Q18, driven primarily by owned
hotels. 1Q18 system-wide RevPar declined by 2% because of the addition of new hotels which are still in the ramping-up stage,
together with the strengthening of the THB.
NUMBER OF HOTEL ROOMS ADR
No of THB
Rooms +3% y-y
Organic excl FX System-wide
19,794 19,896 19,860 20,209 20,379 8,000 +4% y-y -3% y-y
20,000
6,338 6,574
6,157
15,000 6,000 5,850
MLR / Oaks 5,207 5,444
10,000 Managed
Joint-venture 4,000
5,000 Owned
0 2,000
1Q17 2Q17 3Q17 4Q17 1Q18 1Q17 2Q17 3Q17 4Q17 1Q18
OCCUPANCY REVPAR
90% Organic excl FX System-wide
THB
+6% y-y -2% y-y
80% 5,000 4,545
4,270 4,204
70% Organic 3,800 3,903
67% 67% 69% 4,000
70% 65% +2% y-y 3,388
System-wide 3,000
68%
+1% y-y
60%
2,000
50% 1,000
1Q17 2Q17 3Q17 4Q17 1Q18 1Q17 2Q17 3Q17 4Q17 1Q18
Minor Hotels 11OWNED-HOTELS OPERATIONS
1Q18 HOSPITALITY Owned hotels contributed over 60% of hotel & mixed-use revenue in 1Q18. Organic RevPar excluding FX
REVENUE CONTRIBUTION
impact of owned hotels increased by 17% from the strong performance of hotels in both Thailand and
61% overseas. With the ramping up of the recently-added hotels, together with the consolidation of Corbin & King,
Owned-
hotels
revenue of owned hotels increased by 32% in 1Q18.
NUMBER OF HOTEL ROOMS ADR
No of Organic excl FX System-wide
Rooms -1% y-y THB +12% y-y +8% y-y
8,000 8,000 7,573 7,314
7,118 7,050 7,039 7,039 7,063
6,791 6,617
6,000 6,095
6,000 5,519
4,000
4,000
2,000
0 2,000
1Q17 2Q17 3Q17 4Q17 1Q18 1Q17 2Q17 3Q17 4Q17 1Q18
OCCUPANCY REVPAR
THB Organic excl FX System-wide
90% +17% y-y +13% y-y
6,000
80%
Organic 4,566 4,400
69% 4,206
+2% y-y 3,907 3,881
70% 4,000 3,445
62% 59% 60%
58%
60%
60% 2,000
50% System-wide
+2% y-y
40% 0
1Q17 2Q17 3Q17 4Q17 1Q18 1Q17 2Q17 3Q17 4Q17 1Q18
* No of rooms declined slightly y-y in 1Q18 as renovations of some hotels such as Tivoli Carvoeiro and Anantara Golden Triangle resulted in the merge of rooms for bigger, higher category rooms.
Minor Hotels 12OWNED-HOTELS OPERATIONS – THAILAND
1Q18 OWNED HOTEL REVENUE
BY GEOGRAPHY Thailand hotels continued to be the largest contributor to the owned hotels segment. With first
Others, 12% quarter being its high season, the Thailand portfolio accounted for over half of owned hotels
Africa, 6%
Thailand,
revenue in 1Q18. Thailand will remain an attractive destination for tourism with its diverse
Maldives, 8% 56% attractions, well-developed infrastructure and strategic location.
Brazil, 9%
Portugal, 9%
BANGKOK KEY HIGHLIGHTS
RevPar Growth Organic
(y-y) +2% +21% +19% +14% +16% • International tourist arrivals into Thailand grew by 15% in
THB 1Q18.
6,000 5,369 5,469
4,945
4,573 • Number of room nights of Minor Hotels’ Thailand
4,580 4,659
4,009 3,764 4,094 operation grew by 7% y-y in 1Q18, driven by US,
4,000 3,294 Thailand Germany, UK, Korea and Japan.
81% 82% 85%
72% 76%
2,000
• Organic RevPar of Minor Hotels’ owned Thailand
portfolio grew by 15% y-y in 1Q18, driven by both
Bangkok and the provinces.
0
1Q17 2Q17 3Q17 4Q17 1Q18
• Owned hotels in Bangkok continued to demonstrate
THAILAND PROVINCES strong organic performance with RevPar increase of 16%
RevPar Growth Organic in 1Q18.
(y-y) +1% +9% +5% +13% +14% Bangkok
THB • All key Bangkok hotels – Anantara Siam Bangkok,
10,000 9,257 9,903 Anantara Riverside Bangkok, The St. Regis Bangkok and
8,224
7,229 8,357 AVANI Riverside Bangkok – had double-digit RevPar
8,000 6,359 6,175 6,286 83%
78%
73% 75% growth.
6,000 69%
4,370 4,535
4,000 • RevPar of hotels in the provinces increased by 14% y-y in
2,000 Thailand 1Q18, attributable to hotels in Chiang Mai, Chiang Rai,
Provinces Phuket, Samui and Pattaya.
0
1Q17 2Q17 3Q17 4Q17 1Q18
% Occupancy ADR RevPar
Minor Hotels 13OWNED-HOTELS OPERATIONS – OVERSEAS
1Q18 OWNED HOTEL REVENUE
BY GEOGRAPHY In 1Q18, RevPar of owned overseas hotels increased by 14%, driven by hotels in all key markets:
Others, 12% Portugal, Brazil, Maldives and Africa, despite the strengthening of the THB. Excluding FX impact,
Africa, 6%
Thailand,
organic RevPar of owned overseas hotels increased by 23% in 1Q18. Improving global economy,
Maldives, 8% 56% favorable tourism environment in key markets, together with Minor Hotels’ ongoing sales &
Brazil, 9% marketing efforts, contributed to the strong performance.
Portugal, 9%
OVERSEAS KEY HIGHLIGHTS
RevPar Growth Organic
• Portugal portfolio saw RevPar increase of 45%, driven by the
(y-y) -7% +8% Flat +12% +14%
ability to increase rates after the extensive renovations.
THB 6,607 6,902
6,430 6,365 Portugal • While the RevPar trend is signaling a good momentum, first
6,000 5,560
quarter is Portugal’s low season, and the impact to the overall
3,200 4,229 portfolio will be more meaningful in the third quarter.
4,000 3,036
64% 3,098
2,713 58% 48% • Brazil’s RevPar increased by 22% in local currency but 7% in
45%
2,000 42% THB term with the strengthening of the THB.
Brazil • The RevPar increase was attributable to higher occupancy of
0
1Q17 2Q17 3Q17 4Q17 1Q18 Tivoli Mofarrej Sao Paulo and improving ADR of Tivoli
Ecoresort Praia do Forte Bahia.
1Q18 ORGANIC Y-Y REVPAR GROWTH (THB) • The performance of the Maldives portfolio was strong in the
high season, with RevPar growth of 15% in THB term (+28% in
45% USD term).
Maldives • The strong RevPar growth was primarily attributable to the
occupancy increase, both from the higher industry-wide
international tourist arrivals, and Minor Hotels’ continued
15%
targeted marketing efforts.
7% 6%
• RevPar of the African portfolio increased by 14% in local
currencies but 6% in THB term.
Portugal Brazil Maldives Africa Africa
• The RevPar growth has been driven by hotels in Zambia and
% Occupancy ADR RevPar Botswana.
Minor Hotels 14MANAGEMENT LETTING RIGHTS
1Q18 HOSPITALITY Management letting rights (MLR) business which manages serviced-suites, mainly under the Oaks brand, is
REVENUE CONTRIBUTION
the second largest segment in the hotel and mixed-use business. MLR provides Minor Hotels with stable
performance throughout the year, compared to hotel operations which are more seasonal. While 1Q18
17% MLR’s revenue increased by 9% in AUD term, from the increase in RevPar and the additional number of
MLR
rooms, the revenue in THB term was flat because of the strengthening of the THB.
NUMBER OF MANAGED ROOMS ADR
No of THB AUD
Rooms +3% y-y THB
6,000 -4% y-y 200
7,000 4,830
4,581 4,689 4,621
6,363 6,418 6,511 4,235
6,328 6,338 190
6,000 4,000 189
185 180
181 AUD
5,000 2,000 +4% y-y
174 170
4,000 164
0 160
1Q17 2Q17 3Q17 4Q17 1Q18 1Q17 2Q17 3Q17 4Q17 1Q18
OCCUPANCY REVPAR
THB AUD
90% THB
-1% y-y 5,000 -4% y-y 170
80% 80% 3,793 3,680 3,740 3,624
79% 4,000
80% 78% 3,170
75% 150
3,000
148 148
2,000 142
70% 140 AUD
130
+4% y-y
1,000
123
60% 0 110
1Q17 2Q17 3Q17 4Q17 1Q18 1Q17 2Q17 3Q17 4Q17 1Q18
Minor Hotels 15MANAGED-HOTELS OPERATIONS
1Q18 HOSPITALITY In 1Q18, managed hotels contributed 4% of hotel & mixed-use revenue. Organic RevPar of managed hotels
REVENUE CONTRIBUTION
portfolio was down 6%, primarily from weak performance of hotels in Qatar with its diplomatic crisis, the
UAE from high government contract business in 1Q17, and the absence of the higher RevPar of recently
4%
Management sold PER AQUUM portfolio; i.e. Huvafen Fushi and Desert Palm. With the increase in room counts and the
Contracts ramping up of new hotels, 1Q18 revenue from management service increased by 18%.
NUMBER OF HOTEL ROOMS ADR
+6% y-y Organic excl FX System-wide
No of +AVANI+ THB -7% y-y -13% y-y
+Anantara +The
Rooms Guiyang Beaumont Luang
Prabang 8,000 7,034
5,000 6,575
4,619 4,619 4,692 4,745 5,704 5,530 6,075 6,103
4,484 6,000
4,000
4,000
3,000 2,000
2,000 0
1Q17 2Q17 3Q17 4Q17 1Q18 1Q17 2Q17 3Q17 4Q17 1Q18
OCCUPANCY REVPAR
80% Organic Organic excl FX System-wide
+1% y-y THB
-6% y-y -16% y-y
70% 71% 6,000
70% 4,952
4,678
64% 3,876 4,170
63% 68% 3,460
4,000 3,417
60%
60% System-wide
-2% y-y 2,000
50% 0
1Q17 2Q17 3Q17 4Q17 1Q18 1Q17 2Q17 3Q17 4Q17 1Q18
Minor Hotels 16HOTEL EXPANSION PIPELINE
Expansion inside and outside Thailand will contribute to revenue & profit in coming years.
HOTEL INVESTMENT MANAGEMENT CONTRACTS
Others
• Quy Nhon, • Koh Samui, • Barra Grande, Brazil (50 rms) • Victoria, Australia • Recife, Brazil • Doha, Qatar • Lewa,
2018F Vietnam (25 rms) Thailand (456 rms) (200 rms) (100 rms) Kenya
(58 rms) • Luang Prabang, Laos • Doha, Qatar • Beirut, Lebanon (5 rms)
(53 rms) (151 rms) (110 rms)
• Tunis, Tunisia (41 rms) • Al Wakrah, Qatar
(101 rms)
• Desaru, Malaysia • Warangi, • Shanghai, China (260 rms) • Victoria, Australia • Brasilia, Brazil • Queensland, • Laikipia,
2019F (103 rms) Serengeti • Qiandao Lake, China (120 rms) (170 rms) (395 rms) Australia (50 rms) Kenya
• Ubud, Bali, National Park, • Lijiang, China (607 rms) • Busan, Korea (400 rms) • South Australia, (7 rms)
Indonesia* Tanzania* • Yu Ping, China (173 rms) • Bangkok, Thailand Australia
(70 rms) (12 rms) • Le Chaland, Mauritius (164 rms) (385 rms) (278 rms)
• Al Houara Tangier, Morocco (150 rms) • Jebel Dhanna, UAE • Hangzhou, China
• Sifah, Oman (198 rms) (228 rms) (132 rms)
• Tozeur, Tunisia (93 rms) • Daegu, Korea
• Jebel Dhanna, UAE (60 rms) (144 rms)
• Fares Island, • Zhuhai, China (160 rms) • Zhuhai, China (300 rms) • Fortaleza, Brazil • Zhuhai,
2020F Maldives* • Jeddah, Saudi Arabia (328 rms) • Savanne, Mauritius (130 rms) China
(200 rms) • Zanzibar, Tanzania (150 rms) (156 rms) • Hangzhou, China (100 rms)
• Ras Al Khaimah, UAE (306 rms) • Muscat, Oman (166 rms)
(150 rms) • Busan, Korea
• Ras Al Khaimah, UAE (150 rms)
(255 rms)
• Dubai, UAE (372 rms &
528 rms)
• Khao Lak, • Chengdu, China (150 rms) • Gammart, Tunisia
2021F Thailand • Accra, Ghana (155 rms) (232 rms)
(328 rms) • Sharjah, UAE (233 rms)
• Hangzhou,
2022F China
(54 rms)
Total 7 Hotels / 796 Rooms 48 Hotels / 9,356 Rooms
* Note: Joint-ventured properties
In addition to the current pipeline, MINT is evaluating opportunities to manage another 11 hotels and management letting rights in Australia, China, Japan, Malaysia, Oman,
Portugal and Vietnam.
Minor Hotels 17MIXED-USE BUSINESS – RESIDENTIAL
1Q18 HOSPITALITY MINT’s residential projects are part of the mixed-use business, which is under Minor Hotels. The
REVENUE CONTRIBUTION
developments are next to MINT’s hotels and are usually branded MINT’s hotel brands. Below are the current
16% projects.
Mixed-use
LAYAN RESIDENCES BY ANANTARA, PHUKET THE ESTATES SAMUI
The project is situated on The villas are on a cliff,
Layan beach, one of the above powder-white
most picturesque bays sands and crystal-blue
on west coast of Phuket. waters.
● 15 uniquely designed ● 14 villas, with
pool villas 2-5 bedrooms
● Up to 8 bedrooms,
each with 21 meter
private infinity pool
● 1,313 to 2,317 sq.m.
of built-up area
ANANTARA CHIANG MAI SERVICED SUITES TORRES RANI, MAPUTO
A 50% joint-venture with A 49% joint-venture with
U City Pcl., the project is Rani Investment, the
in the city center of project is 5 minutes from
Chiang Mai, across from Maputo CBD.
Anantara Chiang Mai ● 18-storey residential
Resort & Spa. tower; 181 keys for
● 44 units in 7-storey rent and 6 penthouse
Sold condominium building units for sale
42% ● 65 to 162 sq.m. (one ● 20,926 sq.m., 21-
to three bedrooms) storey office tower
Minor Hotels 18MIXED-USE BUSINESS – PIPELINE OF RESIDENTIAL & OFFICE PROJECTS
In order to ensure the continuity of revenue stream from residential sales in the coming years, MINT has prepared additional
pipeline of residential and office projects. Other residential projects will be selectively considered in various hotel destinations in
order to increase returns of the overall project.
AVADINA HILLS BY ANANTARA, PHUKET ANANTARA DESARU RESIDENCES
Located next to Layan A 60% joint-venture project
Residences by Anantara, with Destination Resorts and
Phuket, the project is a 50% Hotels Sdn Bhd, the project is
joint-venture with Kajima situated on beachfront land in
Corporation. the heart of Desaru Coast,
Malaysia.
● 16 luxury pool villas ● 20 residential villas
● 6-8 bedrooms ● 3-4 bedrooms
● 2,158 to 3,251 sq.m. of ● 290 to 600 sq.m. of built-
built-up area
up area
● Expected launch in 2018 ● Expected launch in 2019
ANANTARA UBUD RESIDENCES SILOM OFFICE
A 50% joint-venture project The project is a 40% joint-
with PT. Wijaya Karya Realty, venture with NYE
the project is on the edge of Development. The property is
a cliff with easy access to located on Silom Road, in the
Ubud’s town center. heart Bangkok CBD and is
intended to be used as Minor
● 15 residential villas
Group’s head office.
● 1-2 bedrooms
● 9,668 sq.m. of retail space
● 165 to 252 sq.m. of built-
up area
Sold ● 56,699 sq.m. of office
55% space
● Expected launch in 2019
● Expected launch in 2023
Minor Hotels 19MIXED-USE BUSINESS – ANANTARA VACATION CLUB
1Q18 HOSPITALITY Part of the mixed-use business, Anantara Vacation Club is another important contributor to Minor Hotels.
REVENUE CONTRIBUTION
Growth of members are driven by four main markets – China, Thailand, Hong Kong and Singapore. With the
16% change of sales model since 2015 which resulted in smaller package, accelerated cash flow, as well as lower
Mixed-use bad debt and cancellation rate, AVC is seeing a turnaround of its performance since 4Q16. In 1Q18, AVC sales
increased by 17% in USD term but revenue was up 3% in THB term because of the strengthening of the THB.
TOTAL NUMBER OF MEMBERS MEMBERS PRIMARILY IN ASIA
Growth (y-y) +41% +28% +15% +27% +28% Others, 10%
USA, 2%
No. of UAE, 2%
Members Philippines, 2%
12,000 10,842 Australia, 2%
10,193 China, 39%
Taiwan, 3%
9,000 8,000 Japan, 4%
6,928
6,000 5,431
Malaysia, 7%
3,000
Singapore, 9%
0
Hong Kong, 9% Thailand, 11%
2014 2015 2016 2017 1Q18 As at Mar 2018
INVENTORY TO ACCOMMODATE GROWING MEMBERS GROWTH DRIVEN BY FOUR MARKETS
No. of Units 7 Destinations: >12 Destinations China
Queenstown No. of
> 500 Members Hong Kong
500 Bali
Sanya 8,000 Thailand 7,321
Samui 6,896
400 Singapore
Phuket 6,000 5,553
Bangkok 4,896 +28%
300 +28%
Chiang Mai
4,000 3,731 +17%
200 186 195 +48%
160 +111%
119 137 +12% +11%
100 2,000 +35% +38% +11%
+5% +7% +33% +35%
+19%
+12% +10% +10% +15% +15%
0 0
2014 2015 2016 2017 1Q18 2022F 2014 2015 2016 2017 1Q18
Minor Hotels 20Minor Food
FINANCIAL PERFORMANCE – MINOR FOOD
1Q18 revenue of Minor Food increased by 1%, attributable to outlet expansion of 3%. With continuous effective cost control,
especially of the supply chain management of China hub and the streamlining of non-performing stores, Minor Food was able to
maintain its EBITDA and net profit margins for the quarter.
KEY HIGHLIGHTS
+1% y-y
THB million
• Burger King, Dairy Queen, The Pizza Company,
Total-system-sales Sizzler and BreadTalk reported positive total-
6,028 6,053 6,085 growth of
5,809 system-sales growth as a result of y-y outlet
5,693
Revenue expansion.
-1.7%
in 1Q18 • However, with outlet rationalization, overall
total-system-sales declined for the quarter.
• The number of outlets of The Pizza Company,
Outlet expansion Burger King and BreadTalk increased by over
-1% y-y of 10% y-y in 1Q18.
1,138 1,118 1,123 • The growth was offset by the strategic closure
1,012 1,018 3% of outlets in Singapore, China and Australia, in
in 1Q18 late 2017 and the strategic divestment of The
EBITDA
Groove Train portfolio.
EBITDA
18.9% 17.4% 17.9% 18.5% 18.5% • For 1Q18, Sizzler and Dairy Queen reported
Margin positive same-store-sales growth.
• However, soft macro conditions in countries
+2% y-y Same-store-sales that the four hubs operate resulted in overall
540 548 growth of moderation of the group’s same-store-sales
NPAT 500
431 442 growth.
-1.8% • Despite challenges in Minor Food’s key
in 1Q18 operating markets, the strength of its multi-
Net
Margin
9.0% 7.4% 7.8% 8.3% 9.0% brand portfolio, its diversification strategy and
operational excellence enabled Minor Food to
1Q17 2Q17 3Q17 4Q17 1Q18
maintain its profitability.
Minor Food 22MINOR FOOD - INTERNATIONAL PRESENCE
MINT operates four restaurant hubs: Thailand, Singapore, Australia and China. MINT’s restaurant presence is now in 27 countries
across the region, operating owned, franchised and a combination of both business models. MINT continues to look for
opportunities to expand, especially in these existing markets.
Owned
Franchised
Combination
Hub
REVENUE CONTRIBUTION
100%
19%
40% 35% 34%
75%
International
50%
81% Thailand
60% 65% 66%
25%
0%
2008 2017 1Q18 2022F
Minor Food 23MINOR FOOD – OPERATIONAL PERFORMANCE
1Q18 same-store-sales and total-system-sales of the restaurant business declined by 1.8% and 1.7% respectively. The positive
total-system-sales growth of Thailand hub was offset by other three main hubs’ rationalization of nonperforming outlets in late
2017 as an effort to protect profitability of the group amidst challenging domestic consumption environment.
SSS & TSS GROWTH RESTAURANT OUTLETS BY GEOGRAPHY
International 3,458
20%
Thailand
+3% y-y
45%
15% 2,064 2,085
35% 35%
1,043
10% 33% 55%
8.2% 65% 65%
67%
5.7%
2008 2017 1Q18 2022F
5% 3.2% 3.2%
1.3% RESTAURANT OUTLETS BY OWNERSHIP
-1.0% -1.1% -1.7%
0%
-2.5% Franchised 3,458
Owned
-1.8%
-5% +3% y-y 47%
1Q17 2Q17 3Q17 4Q17 1Q18 2,064 2,085
No. of
2,017 2,037 2,042 2,064 2,085 48% 48%
Outlets
1,043
38% 53%
59%
Same-Store-Sales Growth Total-System-Sales Growth 53%
52% 50%
52%
82%
62%
2008 2017 1Q18 2022F
Minor Food 24THAILAND HUB
1Q18 RESTAURANT
REVENUE CONTRIBUTION Revenue from domestic operations accounted for over 60% of total restaurant revenue in 1Q18. While
Sizzler, Dairy Queen and The Coffee Club Thailand maintained positive same-store-sales growth during the
65% quarter, other brands reported negative same-store-sales growth amidst the continued soft domestic
Thailand consumption, especially in the provincial areas of Thailand.
THAILAND’S SSS & TSS GROWTH MARKET LEADER
Thailand hub’s same-store-sales declined by 1.4% in 1Q18 as the Reinforced The Pizza Company’s market leadership
recovery of domestic consumption continued to be lackluster. position in nationwide coverage, product innovation and
Thailand hub continued to expand its number of outlets, resulting quality through increased communication across all
in total-system-sales growth of 5.4% in 1Q18. channels.
Focused on becoming a dessert destination for kids, not
only with the sundae premiums as collectables, but also
through the upgrade of kids’ total experience with
interactive in-store experience.
20%
Successfully launched new store concept, with easily
15% accessible salad bar, where customers do not have to wait
in line.
10%
Introduced New York Cheesecake Blizzard, which was
5%
especially successful in Bangkok.
Installed the first self-ordering kiosk at Burger King MBK,
0%
which helps improve speed of service and avoid the
communication barrier.
-5%
1Q17 2Q17 3Q17 4Q17 1Q18 Effectively drove new product development of the cold
drinks category – cold brews and frappes – which resulted
Same-Store-Sales Growth Total-System-Sales Growth in an increase in sales mix of the cold drinks by 4%.
Minor Food 25CHINA HUB
1Q18 RESTAURANT
REVENUE CONTRIBUTION China hub remained one of MINT’s growth drivers as MINT is confident in the strong growth prospect of the
country, supported by growing middle class and increased urbanization trend. With the focus on cost
13% China
efficiency and streamlining of outlets, China hub’s net profit margin continued to see improvement in 1Q18.
CHINA’S SSS & TSS GROWTH RIVERSIDE AS KEY GROWTH DRIVER
China hub reported a decline of over 5% in 1Q18 same-store-sales • MINT increased its shareholding in Riverside to
growth. However, monthly trend shows improvement in same- 100%.
store-sales growth, with only -2% in March. • Following the closing of nonperforming stores in
Total-system-sales growth was -2.7% for the quarter, but up 2.4% 2017, Riverside’s strategy this year is to focus on new
in March. The negative total-system-sales was a result of the outlet openings, especially in Beijing and Shanghai, in
continued rationalization of outlets, which was more than new order to strengthen its competitiveness and enhance
outlet openings earlier in the quarter. market share.
20% • The China hub will continue with Thai Express’ menu
adjustments to better cater to the taste of the local
15% Chinese.
10% • Instead of outlet expansion, Sizzler will focus on new
menu launches, with emphasis on Chinese local
5% products & flavors.
• The launches will be in stages in 2018.
0%
-5%
-10%
1Q17 2Q17 3Q17 4Q17 1Q18
Same-Store-Sales Growth Total-System-Sales Growth
Minor Food 26AUSTRALIA HUB
1Q18 RESTAURANT
REVENUE CONTRIBUTION In 1Q18, Australia hub’s revenue contributed 11% of total restaurant business. While overall revenue of the
Australia hub declined slightly in local currency, primarily because of the strategic divestment of The
Groove Train portfolio, the revenue declined by a larger magnitude in THB term, by 14% because of the
11%
Australia strengthening of the THB.
AUSTRALIA’S SSS & TSS GROWTH IMPROVING DOMESTIC EFFICIENCY & INTL EXPANSION
Same-store-sales of the Australia hub slightly declined with Australia hub continues to focus on quality improvement of the
negative growth of 1.5% in 1Q18 amidst the continued weakness domestic franchise portfolio. This means strengthening of the
of the economy, especially in Queensland. operations and product innovations while continuing the
rationalization of the nonperforming stores.
Total-system-sales declined at a faster rate of 13.6%, with the
decline in net number of outlets from the store rationalization The store expansion continues to be driven by The Coffee Club in
and the strategic divestment of The Groove Train portfolio since the international markets, where all markets (Thailand, New
end of 2017. Zealand, UAE and the Maldives) see healthy same-store-sales
growth.
10.0% In addition to existing international markets, Australia hub
continues to look for opportunities to expand The Coffee Club
5.0% brand to new territories.
0.0%
-5.0%
-10.0%
-15.0%
1Q17 2Q17 3Q17 4Q17 1Q18
Same-Store-Sales Growth Total-System-Sales Growth
Minor Food 27SINGAPORE HUB
1Q18 RESTAURANT
REVENUE CONTRIBUTION Like many other F&B operators in the market, Singapore hub has been impacted by the economic slowdown
and increased competition over the past few years. With the closure of nonperforming outlets throughout
2017, revenue of the Singapore hub declined by 14% y-y in 1Q18. Nevertheless, net profit turned around
7% from negative to positive profit as a result of the rationalization and the hub’s focus on efficiency of its
Singapore operations.
SINGAPORE’S SSS & TSS GROWTH ADAPTING TO THE MACRO ENVIRONMENT
Singapore hub reported same-store-sales decline of 4.6% in 1Q18. Singapore hub continued to streamline its domestic operations,
However, the monthly trend showed meaningful improvement adapting to the external challenges. At the end of 1Q18, the hub
with February & March growth becoming flattish. has 55 stores domestically, a decline of 14% y-y.
With the continued selective closure of nonperforming outlets, The four main brands, Thai Express, Basil, Xin Wang Hong Kong
Singapore hub’s total-system-sales declined at a faster rate than Café and Poulet saw visible signs of improvement with most of the
same-store-sales, at 30.6%. same-store-sales growth turning positive in the months of
February and March.
0%
Because of the operational improvement and outlet
rationalization, the operations became profitable for the quarter.
-10%
-20%
-30%
-40%
1Q17 2Q17 3Q17 4Q17 1Q18
Same-Store-Sales Growth Total-System-Sales Growth
Minor Food 28Minor Lifestyle
FINANCIAL PERFORMANCE – MINOR LIFESTYLE
1Q18 revenue of Minor Lifestyle was up 17% y-y, primarily from retail trading business. EBITDA grew at a lower rate of 10% y-y
due to margin pressure of the recently-launched brands which are still in their ramping up stage, preopening expenses of OVS and
increase in labor cost of contract manufacturing business. Net profit, however, increased at a faster rate of 25% because of higher
operating leverage gained from the stable level of depreciation.
KEY HIGHLIGHTS
THB million +17% y-y
Total-system-sales • Total-system-sales growth was primarily
1,037 1,173 1,130
963 919 growth of attributable to the recently-launched
Revenue fashion brands (Anello, Radley, Etam and
19.4% Brooks Brothers), as well as the household
in 1Q18 brands (Henckels and Joseph Joseph).
Same-store-sales • Minor Lifestyle’s same-store-sales growth
growth of was driven by both fashion brands (Charles
+10% y-y
3.1% & Keith, Pedro, Esprit and Radley) and
115 household products (Henckels and Joseph
EBITDA
in 1Q18
65 70 72 Joseph).
54
Retail trading • 1Q18 revenue from retail trading increased
EBITDA
6.7% 5.9% 6.8% 9.8% 6.3%
by 21% y-y, mainly from Charles & Keith,
Margin 77% Esprit, Henckels, together with sales from
of 1Q18 Minor Lifestyle recently-added brands, in particular Anello,
+25% y-y revenue Etam, Radley and OVS.
58
NPAT 24 27 30
18 Contract manufacturing • 1Q18 revenue from contract
Net manufacturing increased by 8% y-y, driven
Margin
2.5% 2.0% 2.6% 5.0% 2.7% 23% by increased orders from existing
of 1Q18 Minor Lifestyle customers and acquisition of new
1Q17 2Q17 3Q17 4Q17 1Q18 revenue customers.
Minor Lifestyle 30MINOR LIFESTYLE – OPERATIONAL PERFORMANCE
Retail trading business continued to demonstrate stable growth trend, where same-store-sales grew 3.1% in 1Q18. With rapid
outlet expansion, primarily because of the recently-launched brands, total-system-sales grew by almost 20% for the year. Sales
per sq.m. remained stable in 1Q18 compared to 1Q17.
SSS & TSS GROWTH SALES PER SQ. M.
THB
30% 27.5% 35,000
25.2%
19.4%
19.4% 30,000
20%
27,285
12.7% 26,014 25,238
25,000 25,238
24,141
10% 5.7%
4.3% 20,000
3.1%
1.1%
0%
15,000
-8.5%
-10% 10,000
1Q17 2Q17 3Q17 4Q17 1Q18 1Q17 2Q17 3Q17 4Q17 1Q18
No. of No. of
329 339 354 398 416 329 339 354 398 416
Shops Shops
Same-Store-Sales Growth Total-System-Sales Growth Fashion & Cosmetic Sales per Sq. m.
Minor Lifestyle 31Corporate Information
Elewana Kifaru House LiwaCAPEX & BALANCE SHEET STRENGTH
CAPEX include committed CAPEX of existing projects and potential CAPEX on new projects in the pipeline. With the additional
equity received from warrant conversion, leverage ratio declined to a level much lower than the internal policy. With its solid
balance sheet, MINT will be able to primarily use its internal cash flow and debt financing to fund its CAPEX requirements going
forward. In addition, MINT and its senior debenture have “A+” rating by TRIS.
CAPEX PLANS LEVERAGE RATIOS
THB million X X
15,000 6.0 1.4 Internal
Policy
1.2
5.0
12,000 1.0 0.95x
0.8 0.85x
4.0
9,000 0.6
3.0 0.4
6,000 1Q17 2Q17 3Q17 4Q17 1Q18
2.0 Interest Bearing Debt Net Interest Bearing
to Equity Debt to Equity
3,000
1.0
BACK-UP FINANCING
0 0.0 Note: Cash on hand as at end of 1Q18
2017A 2018F 2019F 2020F 2021F 2022F THB million is THB 4,847 million
100,000
Minor Food Minor Hotels Minor Lifestyle Shareholders’
80,000 Equity
60,000 50,701
Additional CAPEX (non-committed average per annum)
for new projects in the pipeline 40,000
Debt
EBITDA coverage on committed CAPEX 20,000 47,922 Debt
28,162
0
* 2017 committed CAPEX includes increased shareholding in Riverside and Sun
Outstanding Borrowing & Equity Un-Utilized Facility
International portfolio in Africa, together with investments in Corbin & King, AVANI
Hua Hin, Avadina Hills by Anantara and renovations of Tivoli portfolio.
Corporate Information 332018 Outlook & Beyond
2018 OUTLOOK – MINOR HOTELS
Portugal, Thailand and Africa will be the drivers for owned hotels in 2018, while management contracts and mixed-use business
will also support growth. In addition, Minor Hotels expects margin improvement in 2018.
OWNED HOTELS Thailand Australia Portugal Africa Maldives
RevPar
Thailand continues to Apart from portfolio Strong demand The renowned Victoria Improving tourism
be tourism playground expansion with continues with the Falls will attract from Europe and
Occupancy with healthy inbound additional properties, terrorism-free and tourists to Zambia, and MINT’s targeted
tourism growth Australia portfolio has value for money Botswana will benefit marketing will drive
always run at high and proposition from hotel renovation occupancy growth
stable occupancy rate
Minimal supply growth Competition means Rate increases are Potential rate increase Given excess supply
and healthy occupancy moderate ADR growth expected following the is expected after the and high competition,
ADR will prompt ADR for the serviced renovation renovation in Botswana minimal ADR increase
increases apartment segment is expected
MANAGEMENT CONTRACTS MIXED-USE BUSINESS ACQUISITIONS
With the strong pipeline, MINT will continue The full benefit of the recently acquired
Over 45 management contracts signed and to execute sales of its luxury residential Tivoli portfolio will be better pronounced in
to be opened over the next 4 years (2018- development projects the upcoming high season of 2018
2022) under 5 brands AVC will continue to perform well following MINT will benefit from both strategic and
the turnaround of its performance since financial contribution of the Corbin & King
4Q16 group.
With the ramping up of the new hotels, the completion of the renovations of the hotels in Portugal, contributions from
MARGIN management contracts portfolio and mixed-use business, margin of Minor Hotels will improve
2018 Outlook 352018 OUTLOOK – MINOR FOOD
Minor Food’s operation in 2018 will be driven by Thailand and China hubs, together with the growth prospects of Benihana, the
newly-acquired brand. Minor Food sees room for margin improvement particularly from China and Singapore hubs.
THAILAND CHINA AUSTRALIA SINGAPORE
Total-System-
Sales
Consumption is expected to Consumption will remain The improving labor market While economic growth will
improve with strong export strong, with GDP growth and household income, be driven by manufacturing
Macro
and tourism, infrastructure forecast to be above 6% driven by non-mining sector, sector on the back of external
Environment
spending, agricultural will gradually result in demand, the spillover to the
Outlook
recovery and stronger healthier private rest of the economy is
household balance sheet consumption expected to be limited
With the strong portfolio of Riverside, the main brand, The Coffee Club will focus Thai Express will
brands, Minor Food will will continue to drive on building iconic brand differentiate products,
leverage on its product growth of the China hub experience with the displays and ambiance in
Same-Store-
innovation, marketing “coffee story”, and will each location and will
Sales Growth
capabilities, digital introduce lunch options promote premium menu
platform and operational that offer value, speed and items
excellence convenience
Thailand hub will continue With the streamlining of While outlet expansion in While selectively closing
to expand the number of Riverside outlets in 2017, Australia will be moderate, down non-performing
Outlet outlets across its brands China hub now has the the focus will be on outlets domestically,
Expansion platform to grow the brand international markets such Singapore hub will look for
more aggressively as Thailand and the UAE expansion opportunity
internationally
While Thailand and Australia hubs are expected to maintain their margins, China hub will see profitability improvement
MARGIN
from the increased scale, and Singapore hub will focus on efficiency enhancement
2018 Outlook 36FIVE-YEAR ASPIRATIONS
2022F
> 270 hotels
> 300 residences built
1Q18 > 500 timeshare units
> 3,400 restaurants
160 hotels > 600 retail shops & POS
2009 132 residences built to (> 44,000 Sqm)
date
195 timeshare units
30 hotels 2,085 restaurants
1,112 restaurants 416 retail shops & POS
292 retail shops & POS (31,902 Sqm)
(14,275 Sqm)
5.4bn 2022F
2017
NPAT
(THB)
1.4bn
2009
2018 Outlook & Beyond 37MINT’S FIVE-YEAR STRATEGY 2018-2022
Five-year strategy consists of the following three key pillars, with clear goals and measurements.
2022
NPAT growth of 15-20% CAGR ROIC of > 13%
Goals
Drive Growth of Multi-Brand Expand Through Strategic
Portfolio Maximize Asset Value
Investments, JV Partnerships &
Through Brand Value Enhancement and Productivity
& Distribution Optimization
Acquisitions
Growth
Asset-Right Mixed-use
Pillars Strategy Initiatives
Vertical Integration
Funding Source Optimization
Total-system-sales growth Revenue from overseas
of 15% of 50%
Measure- Improvement of margins
ments Revenue growth Net profit from overseas
of over 10% of over 50%
2018 Outlook & Beyond 38Thank you
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