Hongkong & Shanghai Hotels Ltd. · HKEX:45
Hongkong & Shanghai Hotels — The Hongkong and Shanghai Hotels — FY2023 Earnings Presentation
54 slides from Hongkong & Shanghai Hotels's earnings presentation, Mar 19, 2024
Slide 1: The Hongkong and Shanghai Hotels 2023 Annual Results
The Hongkong and Shanghai Hotels 2023 Annual Results 19 March 2024 1
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
Slide 3: Content
Content Key Messages 2023 Highlights and Financial Results Hotels Performance Commercial Properties Performance Clubs and Services Performance Sustainable Luxury Vision 2030 Outlook Q&A 3
Slide 4: Key messages
Key messages Milestone year with the opening of two new Peninsula Hotels in London (Sept) and Istanbul (Feb) These magnificent hotels give a strong foundation for the future of The Peninsula brand Strong rebound in business during 2023 compared to 2022 Excluding the results of The Peninsula
Slide 5: 2023 Highlights and Financial Results
2023 Highlights and Financial Results 5 5
Slide 6: 2023 Highlights
2023 Highlights Revenue Profitability Net op. cashflow3 Liquidity buffer New Hotels & Gearing Excl. residence sales proceeds1 EBITDA before pre-opening & Excl. residence sales proceeds project expense +38% +168% 9x The Peninsula 5,814m 744m HK$ 3.4bn HK$ HK$ 1,390m HK$ 2022 HK$82m Available Committe
Slide 7: Hotels
Revenue +39% Hotels Opening up of Greater China in early 2023 improved hotel performance in the region HK$'m Hotel Revenue Strong recovery from Rooms & F&B Rooms F&B Arcade & offices Others Record ARR at PTK and PMN 4,174 Results reflect an emerging recovery from the pandemic 4,000 +39% 367
Slide 8: Commercial Properties
Commercial Properties Rental income HK$0.8bn1 / HK$3.1bn2 Revenue HK$'m Residential Commercial and arcades Office Sales of resi apartments Improved performance from 3,110 commercial and arcades 3,000 +283% Revenue boosted by sales of 10 Peninsula Residences in London 2,000 2,298 +18% Sky Terra
Slide 9: Clubs & Services
Clubs & Services Revenue +60% Robust business from the very well-received new Peak Tram by local people and visitors Merchandising division expanded in China and Japan with new retail Boutique & Café shops and direct operation in various sales channels “The Quail, A Motorsports Gathering” in A
Slide 10: Profit or Loss Summary
Profit or Loss Summary (HK$ million) For the year ended 31 December 2023 2022 Changes Revenue - operations 5,814 4,198 38% - residential sales 2,298 - n/a Total revenue 8,112 4,198 93% Operating costs - operations (4,680) (3,680) -27% - residential sales (2,042) - n/a EBITDA before pre-opening and p
Slide 11: Cash Flow Summary
Cash Flow Summary (HK$ million) For the year ended 31 December 2023 2022 Operating EBITDA (before pre-opening and project expenses and residential 1,101 518 sales) Changes in working capital (excluding those relating to 267 18 The Peninsula London Residences) and tax payment Normal capital expenditu
Slide 12: Capital Structure and Financial Position Summary
Capital Structure and Financial Position Summary Credit Metrics Financial Position Summary Financing Arranged in 2023 (HK$ million) 2023 2022 HK$3.4bn Available liquidity As at 31 Dec HKD 6.6bn HK$2.3bn Total cash 881 585 Equivalent of refinancing executed in 2023 Total sale proceeds of 10 completed
Slide 13: Hotels Performance
Hotels Performance 13
Slide 14: The Peninsula Hong Kong
Revenue + 51% Strong recovery in terms of revenue, occupancy and average rates Occupancy + 21 pp Business performance picked up with the reopening of the borders with mainland China, ARR + 65% although long-haul markets from US and Europe are recovering more slowly than expected RevPAR + 226%
Slide 15: The Peninsula Hong Kong performance
Revenue + 61% Weak start to 2023, although the situation turned around following the lifting of COVID-19 Occupancy + 33 pp restrictions across the city ARR + 14% Strong YoY increase in occupancy, rates and RevPAR albeit mandatory lockdown in 2022 RevPAR + 154% The arcade was 83% occupied 15
Slide 16: The Peninsula Beijing performance
Revenue + 71% Swift recovery since March 2023 Occupancy + 42 pp Still very few international leisure travellers to Beijing partly due to geopolitical concerns and ARR + 11% lack of a full return to normal flight capacity in Beijing RevPAR + 287% Arcade 99% occupied, with some anchor tenants ha
Slide 17: The Peninsula Tokyo performance
GC TO CHANGE TO PIC WITH CHERRY BLOSSOMS Revenue + 78% Best performing year in the history of the hotel with rates, occupancy and RevPAR Occupancy + 11 pp exceeding expectations due to a return of international business ARR + 89% Strong domestic market as Japanese travellers chose to stay at hom
Slide 18: Hotel performance
Revenue + 44% Significant revenue growth although business has not rebounded to the extent expected Occupancy + 12 pp from certain key markets, partly caused by a lack of flight capacity. ARR + 28% European and US travellers not yet coming back due to regional geopolitical tensions RevPAR + 73%
Slide 19: Hotel performance
Revenue + 45% Achieved historically high average room rates and RevPAR compared to 2022 Occupancy + 9 pp Suite business remained strong and Club Lounge performed well ARR + 21% Strong diplomatic and corporate business RevPAR + 41% 19
Slide 20: Hotel performance
GC TO CHANGE TO PIC WITH CHERRY BLOSSOMS Revenue + 7% Experienced a reasonably strong year compared to 2022 Occupancy + 1 pp Achieved record high average daily rates ARR + 5% Satisfactory food and beverage revenue RevPAR + 7% 20 Started renovation in Jan 2024 with expected completion by end
Slide 21: Hotel performance
Revenue + 7% Recorded stable 2023 Occupancy + 4 pp Group business remained strong ARR - 4% RevPAR + 3% Results somewhat affected by increasing labour costs and high energy costs 21
Slide 22: Hotel performance
GC TO CHANGE TO PIC WITH CHERRY BLOSSOMS Revenue - 4% Softer than expected performance in 2023 Occupancy - 5 pp Business negatively impacted by prolonged inclement weather and the Writers’ Strike ARR + 2% High suite demand due to the Superbowl and the Milken Conference RevPAR - 6% Food and b
Slide 23: The Peninsula London
The Peninsula London picture Soft opening held on 12 September 2023 Rooms business gaining momentum and banquets and Spa performing well Brooklands was bestowed with two Michelin stars in Jan 2024 Strong outlook for the year given change in revenue strategy 10 luxury Residences sold and 8
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Slide 34: Hotel performance
Revenue + 23% Strong 2023, achieving the highest revenue and average room rates since hotel opening Occupancy + 2 pp Increasing numbers of local French visitors ARR + 20% Fully booked for the Olympics in summer 2024 RevPAR + 27% 34
Slide 35: The Peninsula Istanbul
Soft opening held on 14 February 2023 Good food and beverage performance, particularly in the Lobby and banqueting Lease extended from 30 years to 49 years Hyperinflation weighs heavily on the hotel’s operating results as well as regional geopolitical concerns 35
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Slide 44: Commercial Properties Performance
Commercial Properties Performance 44
Slide 45: Commercial properties: The Peninsula Arcade and residences
Strong banqueting revenue Revenue + 5% 90% occupancy Improved residential revenue and occupancy as demand is returning from both the local market and expatriates Positive long-term outlook and strategic review on the arcade being undertaken 45
Slide 46: Commercial properties: Sky Terrace 428
Satisfactory year after the borders reopened and visitors started returning to Hong Kong, as well as benefiting from the Revenue + 228% reopening of The Peak Tram Revenue and occupancy improved with fewer rental concessions Visitors to Sky Terrace 428 improved significantly in part due to succ
Slide 47: Clubs and Services Performance
Clubs and Services Performance 47 47
Slide 48: Peak Tram
Revenue The new sixth generation Peak Tram has been very well received by Hong Kong people and +669% visitors Robust business since the Chinese mainland borders reopened in February 2023 48
Slide 49: The Quail
Positive year with increased revenue and robust average rates although RevPAR declined Revenue + 12% slightly YoY Hosted The Quail: A Motorsports Gathering in May and celebrated the 20th anniversary of The Quail, A Motorsports Gathering in August, with the highest sponsorship revenue achieved si
Slide 50: Merchandising
New Peninsula Boutique & Café in Xintiandi, Shanghai and Ginza, Tokyo Revenue + 29% Continue progressing with expansion across the Chinese Mainland and Japan with new boutiques and seasonal pop ups To launch new categories of products including “lifestyle” and expand the range across core cate
Slide 51: Sustainable Luxury Vision 2030
Sustainable Luxury Vision 2030 Sustainable Luxury Vision 2030 51
Slide 52: Outlook
Outlook 52
Slide 53: Outlook
Outlook Generally favourable outlook for various businesses Long-haul market for leisure travellers to Hong Kong is still recovering and geopolitical tensions Cautiously optimistic in the hotels division Continue to invest in our existing assets and uplift our offering to visitors and reside
Slide 54: Q&A
Q&A 5454
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