SHR Opportunity Day Q1/2020 - 1 June 2020 - S Hotels & Resorts Public ...
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SHR Opportunity Day Q1/2020 1 June 2020
S Hotels & Resorts The premier hotel investment and resort management company, creating unique travel experiences for our guests and value for our stakeholders Agenda ▪ SHR Company Overview ▪ Business Update ▪ Strategic Recovery Path for COVID-19 ▪ Q1/2020 Portfolio Performance ▪ Q1/2020 Financial Performance
SHR Company Overview
P r o ven tr a c k r ec o r d to g r o w fo o tpr i n t
Apr 2015 Sep 2016 Mar 2018 Sep 2019 Feb 2020
Apr 2014 ◼ 6 grand deluxe pool villas ◼ Acquired 2 Holiday Inn ◼ SHR acquired Project ◼ Commencement of ◼ Disposal of 50% share
◼ Singha Estate added to Santiburi Koh hotels and 1 Mercure hotel Crossroads Phase One operations for two investing in Island 3
acquired Santiburi Samui through second JV with from Singha Estate hotels in Maldives Crossroads project
Koh Samui FICO UK
Oct 2015
Nov 2014 ◼ Entered into equal JV
◼ Acquired Phi Phi with FICO UK to
Island Village acquire UK portfolio
Beach Resort of 26 hotels Jan 2017 May/Jun 2018 Nov 2019
◼ Commenced land ◼ Santiburi Koh Samui ◼ SHR trading on SET
reclamation, shoreline constructed 19 new grand
protection, landscaping and reserve pool villas (new room
construction of Project category)
Crossroads Phase One (via ◼ Acquired 6 Outrigger hotels
Singha Estate)
2014 2015 2016 - 2017 2018 2019 2020
Number of keys 227 2,889 274 3 878 376 4,647
Geographical
coverage
Upscale 4% Others 0.4%
Luxury 2%
Africa 2.8% Americas 8.5%
Overall portfolio(1)
Upper upscale
Core assets(2)
27%
Europe
Asia-Pacific
38.0%
50.3%
Target
Upper Positioning customers
midscale
67% 2014
2019 2019
Notes: (1) Overall portfolio includes all assets including UK assets. Breakdown by keys.
(2) Core portfolio excludes UK assets, which are held through a 50% stake in our equal joint venture with FICO UK. Breakdown by customer nights.
4
SH R’ s g l o b a l h o spi ta l i ty po r tfo l i o
39 Total # of
Resorts / Hotels
5 Countries
7 Brands
4,647 Total #
of Keys
Phi Phi Island Village
Outrigger Laguna 255 Outrigger Koh Samui 52 Beach Resort 201
2,964 Phuket Beach Resort Beach Resort
151 Santiburi Koh Samui 96
SAii Lagoon Maldives, 198 Outrigger Fiji 253
Curio Collection by Hilton Beach Resort
178 65
Hard Rock Hotel Maldives Castaway Island, Fiji
Outrigger Hotels Self-Managed Hotels(1) UK Hotels
Outrigger Mauritius 181
Beach Resort Total # of keys Total # of Hotels Outrigger Konotta
Maldives Resort
53
Note: Core portfolio excludes Holiday Inn and Mercure hotels in the UK which are held through a 50% stake in our equal joint venture with FICO UK.
(1) Includes Self-Managed Hotels under franchise agreement(s).
5
Our hospitality management platform : “Affordable luxury lifestyle resort”
SHR is able to tap on both in-house, home-grown management platforms as well as access to strong brands via collaboration with reputable international operators.
Self-Managed 3rd Party Hotel Management Agreement
2 properties | 297 keys 6 properties | 859 keys
Self-Managed with Franchise Agreement Hotel Management Platform
2 properties | 376 keys (To be launched in 2020-2021)
6
Business Update
Q 1 / 2 020 K ey per fo r m a nce d r i v er : Cr o s s r oad s pr o j ec t
Crossroads : World-class integrated development and the first of its kind in the region
Destination highlights
▪ 1st integrated lifestyle destination in the Maldives
▪ Superb location : within 15 minutes by speed ferry from the Malé Velena International Airport
Crossroads Phase Two
▪ The project comprises:
Crossroads Phase One Island III ▪ SAii Lagoon Maldives, Curio Collection by Hilton
Hard Rock Hotel ▪ Hard Rock Hotel Maldives
Maldives
▪ The Marina @ Crossroads
▪ High-end lifestyle resort under development on Island III
The Marina @ Crossroads SAii Lagoon Maldives, Curio ▪ 50-year lease expiring in February 2066, with option to extend for 49 years
Collection by Hilton
▪ Right of purchase and right of first refusal to acquire Project Crossroads Phase Two from Boon
Rawd Brewery Group (BRBG)
SAii Lagoon Maldives, Curio Collection by Hilton Hard Rock Hotel Maldives The Marina @ Crossroads
▪ First hotel under SHR’s new “SAii” brand used alongside ▪ First upper upscale hotel in the Maldives under the ▪ First integrated leisure and entertainment island in
the established Hilton brand name Hard Rock Brand the Maldives that offers wide variety of leisure
▪ 198 upper upscale rooms (44 sqm to 240 sqm per room) ▪ 178 rooms (46 sqm to 445 sqm per room) components to visitors with global brands HRC and
CDM
8
Upd a te o n Cr o ssr oad s pr o j ec t Is l a n d 3
Disposal of shares and record of gain Project Overview
100%
USD 16.2 mil
Wai Eco World Developer S Hotels and Resorts (SC)
Pte. (“WEWD”)
50% of share
50% in PLM3 50%
Prime Locations
Management 3 Ltd
100%
Construction start 2020
Dream Islands Dream Islands
Sublease Island 3 Opening date 2022
Development 2 Private Development 3
Limited Private Limited
Project cost USD 56m-60m
No of keys 80 villas (120 sqm to 320 sqm per room)
On 17 February 2020, SHR(SC) transfers 50% of share in PLM3 to WEWD Positioning High-end lifestyle resort
Est. ADR USD 900 – 1,000
No. of share transferred : 4,000,000 ordinary shares
Consideration received : USD 16.2 m Contribution to SHR • 50% share of profit from JV earning
Gain on share disposal in Q1/20 : USD 10.4 m • Acted as Asset management eligible for
management fee to JV
9
Im pa c t fr o m COV ID - 1 9 pa n d em i c
• The temporary suspension on hotel operations from 1 April 2020 is reacting to the unfolding COVID-19
outbreak around the globe, following the lockdown measures implemented by many countries.
• Some properties in UK that are still in operation in accordance with the government’s request to facilitate the
government officers who are in duty to handle COVID-19 pandemic.
COVID-19 current situation by country
Country National COVID-19 Status COVID-19 Case (1)
• Active case below hundred
Thailand • Positive signal & Controllable situation
• Single-digit daily new cases
• Positive signal & Controllable situation
• Active case = 3
Fiji • Potentially included in Trans-Tasman bubble (travel
• No new case since 21 Apr 2020
arrangement between AUS and NZ) (2)
• Active case = 0
Mauritius • Positive signal & Controllable situation
• No new case since 27 Apr 2020
• Unlocking July expected
Maldives • June: Private jet and Charter flight • Cases isolated in Male only
• July: Commercial flight
UK • Still in challenging situation • Decreasing trend of # of new case
(1) Source: https://www.worldometers.info/coronavirus/ as of 25 May 2020
(2) TVNZ. (2020, May 21). Fiji could join trans-Tasman bubble with Australia, NZ
10Strategic Recovery Path for COVID-19
Rec o v er y si gn fo r h o s pi ta l i ty i n d u s tr y
Chinese confidence in travel grows
McKinsey survey on Chinese travelers (1)
▪ 56% of Chinese travelers planning the trip between September and October (National Day holiday).
▪ 25% are looking at international destination. 22% are choosing destination
▪ Outdoor, nature-related, food and family-themed destinations will be more popular
▪ Economy travel will recover more quickly
“Domestic” and “Leisure” are expected TAT plans to boost domestic demand
to recover faster ▪ The outlook for domestic trips was projected at 100 million, with total
revenue of 1.23 trillion baht. (3)
World Tourism Organization (UNWTO) Panel of Experts survey (2)
▪ Re-boosting domestic tourism by offering 40-50% discount on hotel
• Domestic demand is expected to recover faster than room rates. (4)
international demand. The majority expects to see signs of
recovery by the final quarter of 2020 but mostly in 2021. ▪ International demand is expected to recover in October 2020. (3)
• Leisure travel is expected to recover quicker, than business • Amazing Thailand Safety & Health Administration (SHA) certification
is introduced to increase confidence among international and domestic
travel tourists (5)
(1) McKinsey. (2020, May 14). Hitting the road again: How Chinese travelers are thinking about their first trip after COVID-19.
(2) UNWTO. (2020, May 8). International Tourist Numbers Could Fall 60-80% in 2020.
(3) Bangkokbiznews. (2020, May 19). TAT 'trusted' rebranding curates market.
(4) Bangkokpost. (2020, May 25). NESDC plan to re-boost domestic tourism.
(5) TAT. (2020, April 20). TAT introduces “Amazing Thailand Safety and Health Administration: SHA” certification
12SH R str a tegi c r ec o ver y path fo r COV ID - 19
Q4/2020 onward | New Normal
Continue Unlocking model with
Q3/2020 | Unlocking model international customer trends & demands
Commercial Strategic growth plan
Q2/2020 | Lockdown • Domestic & inter-regional focus • Acquisition with domestic & inter-regional
• Short-haul travelling focus focus
Cash management • Cash-generating pre-sales/bookings
• Intensive monitoring
Asset enhancement plan
• Centralised & cluster cash management Trust, Safety & Hygiene • Embracing New Normal trend –
• Getting support from banks and business • Guest & employee protection digitalization touchless technology
partners
• High hygiene standards from arrival to
• Liquidity back up departure Cash management
• Skeleton workforce, reduced payroll & • New Normal trend adoption • Seeking efficient source of fund for
workforce
strategic growth plan
• Cost control across OPEX and CAPEX
Cash management
• Operating cost-base direct & indirect
• Operational efficiency
• Cluster cash management
• Right-size costs to forecasted revenue
13SH R po r tfo l i o i s fo l l o wi n g th e tr en d
SHR key strengths are retained post COVID-19
Leisure segment Diversified &
dream destination
• Experiential traveller target
• Family and small group focus (1) • Diversified prime location
• Easier to bounce back than • Located in dream leisure
business or MICE market (2) destination
• Younger traveller trend
Upper-upscale positioning Resort style hotel
• Affordable luxury position • In line with New Normal trend
• Maintain purchasing power ▪ Physical distancing, low
after COVID-19 density
• High sanitation & hygiene ▪ Open-air and natural
standards ventilation
• Outdoor and nature-related
destinations will be more
popular (1)
(1) In-line with / according to McKinsey survey
(2) According to UNWTO
14SH R N ex t N o r m a l
The Art of Balancing between “New Normal” and “Guest Satisfaction”
Enhance Global Healthy Hotel Operational Efficiency Branding and Marketing
and Safety Standards Strategy
• Best standard practice adoption from • Implementing “Hotel Operating Model • Re-vitalise our sustainability &
global partners (HOM)” to optimise workforce level community programs
• Guest pre-arrival questionnaire based on occupancy and cost-base as • Re-encourage our guests to come back
well as cross functional cooperation
• Transportation procedure from arrival to • Re-launch tactical cash campaign with
departure • Cost and cash saving flexibility
• Room cleaning & maintenance standards • Vendors and partners selection • Social campaigns
• Restaurant operating standards • #StayhomeTraveltomorrow
• #GoingPlacesTogether
• #ExperienceEverywhere
#GoingPlaesTogether
15Q1/2020 Portfolio Performance
Q 1 / 2 020 Rev enue fr o m s er v i ces b r ea k d own
Revenue by management platform Revenue by hotel location
Mauritius
Self-Managed 3rd-Party HMA 9%
46% Thailand
23% 40%
Fiji
12%
Self-Managed Maldives
with Franchise 39%
31%
17P o r tfo l i o per fo r m a n ce b y m a n a g em en t pl a tfo r m
Unit: THB
Self-Managed Hotels
Q1/19 Q1/20
81% 10,174 9,760
65%
8,285
6,336
Occupancy ADR RevPAR
Outrigger Hotels
USD/THB = 31.29
Q1/19 Q1/20
FJD/THB = 14.14 7,288 7,071
MUR/THB = 0.84 72%
59%
5,272
4,192
Impact of COVID-19 pandemic
Hotel performance across portfolio
Occupancy ADR RevPAR
dropped due to COVID-19 pandemic,
Crossroads Hotels (1) (1) officially opened on 1 September 2019. specifically in March 2020
USD/THB = 31.29 10,893 Q1/19 Q1/20
61% 6,606
Occupancy ADR RevPAR
UK Hotels
GBP/THB = 40.06
Q1/19 Q1/20
2,462 2,343
57% 50%
1,405 1,167
Occupancy ADR RevPAR
18Q1/2020 Financial Performance
Su m m a r y o f SH R c o n s o li d ated fi n a n c i al per fo r m a n ce
Revenue from services Adjusted gross profit and margins
(MB) (MB)
YoY 17.6% YoY 5.1%
599
1,145
974
569
(MB)
58.5% 52.3%
Q1/19 Q1/20 Q1/19 Q1/20
Adjusted EBITDA and margins (1) Adjusted net profit (loss) (2)
(MB) (MB)
YoY 55.2% YoY 542.9%
312
37 235 Net reported profit
140
32.0% 12.2%
(163)
Q1/19 Q1/20
Q1/19 Q1/20
(1) Adjusted EBITDA is calculated from EBT plus Finance cost, Depreciation (2) Adjusted net profit (loss) is calculated from Net profit (loss) of the
and Amortization, Interest income from Loan to JVs and deduct Interest period, 235 mb, and deduct unrealized loss from exchange rates and
income, unrealized loss from exchange rates and non-recurring items non-recurring items
20A d o pti on o f new fi n a n c i al r epo r ti n g s ta n d a r d s
Unit: MB Unit: MB
The group has adopted following financial report standards retrospectively
from 1 January 2020 Consolidated P&L Statement TFRS 9 TFRS 16 Total
For 3-month period ended 31 March 2020 Impact (1) Impact (1) Impact (1)
▪ Financial Instruments (TAS 32, TFRS 7 and TFRS 9)
▪ Fair value change of short-term investment is recognised in P/L instead Rental expense 23.4 23.4
of OCI. There is no impact on the ending balance value.
Investment MTM loss (1.8) (1.8)
▪ Derivative is recognized in BS (previously off-book item). Fair value
change is recognised in OCI under cash flow hedge method. EBITDA (1.8) 23.4 21.6
▪ Leases (TFRS 16) Amortisation expense (9.6) (9.6)
▪ Right of use assets and lease liabilities are recognized in BS (previously
some are off-book item). Interest expense (16.7) (16.7)
▪ Amortisation and interest expenses are recognised in P/L instead of
Net profit (1.8) (2.9) (4.7)
rental expenses.
(1) The impact is based on comparison with previous standard application.
21Ro b u s t c a pi tal str u c tu r e
Positive liquidity status & Available debt room to support future growth
Liquidity status as at 31 March 2020 Available debt room to support future growth
1x-1.5x
(MB)
Cash balance
3,543 million Baht 10,000 –
20,000
Debt capacity
0.44x 0.42x
Available credit facility (1)
1,385 million Baht 7,848 8,078 8,078
(1) including project loan
YE19 Q1/20 Q1/20
Debt capacity based
on target IBD/E ratio
IBD/E = 0.42x IBD/E ratio Remaining interest-bearing debt
▪ With target capital structure 1-1.5 times, the Company has debt room to
support acquisition growth of 10,000-20,000 MB
22DISCLAIMER
The information contained in this material has been prepared by S Hotels and Resorts Public Company Limited (“SHR” or “S Hotels and Resorts”) solely for information
purpose and does not constitute an offer or invitation to sell or the solicitation of an offer or invitation to purchase or subscribe for shares in S Hotels and Resorts .
Some statements made in this material are forward‐looking statements. These statements typically contain words such as "expects" and "anticipates" and words of similar
import. Any statement in these materials that is not a statement of historical fact is a forward-looking statement that involves various risks and uncertainties. These
include statements with respect to our corporate plans, strategies, and beliefs. The statements are based on our management’s assumptions and beliefs in light of the
information currently available to us. These assumptions involve risks and uncertainties which may cause the actual results, performance, or achievements to be
materially different from any future results, performance, or achievements expressed or implied by such forward‐looking statements.
None of the future projections, expectations, estimates or prospects in this presentation should be taken as forecasts or promises nor should they be taken as implying any
indication, assurance or guarantee that the assumptions on which such future projections, expectations, estimates or prospects have been prepared are correct or
exhaustive or, in the case of the assumptions, fully stated in the presentation. We assume no obligations to update the forward-looking statements contained herein to
reflect actual results, changes in assumptions or changes in factors affecting these statements.
Accordingly, no representation or warranty, express or implied, is made or given by or on behalf of S Hotels and Resorts or any of its shareholders, directors, officers or
employees or any of the Banks (and their shareholders, directors, officers or employees) or any other person as to the accuracy, completeness or fairness of the information
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constitute an endorsement by S Hotels and Resorts . The information contained in this presentation is only current as of the date its date. In giving this presentation,
neither S Hotels and Resorts nor its respective advisers and/or agents undertake any obligation to provide the recipient with access to any additional information or to
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23Thank you https://investor.shotelsresorts.com ir@shotelsresorts.com
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