John Keells Holdings PLC · CSELK:JKH.N0000
John Keells — Q1 FY2022 Earnings Presentation
46 slides from John Keells's earnings presentation, August 2021
Slide 1: Investor Presentation: Review of Q1 FY2022
Investor Presentation Review of Q1 FY2022 Version 1.0 This Investor Presentation should be read in conjunction with the JKH Annual Report 2020/21 to obtain a more comprehensive understanding of the drivers and strategies of our businesses
Slide 2: About JKH
About JKH ▪ Market cap of USD 878.2 million ▪ No controlling shareholder - 99% free float ▪ Net Debt : Equity ratio of 23.4%* ▪ The Board comprises of two Executive Directors and five Independent Non-Executive Directors *Net Debt excludes the Right-of-Use assets due to the accounting impacts of SLFR
Slide 3: COVID-19 impact on Sri Lanka and JKH; Q1 2021/22 update
COVID-19 impact on Sri Lanka and JKH; Q1 2021/22 update • The first quarter of 2021/22 was significantly impacted due to the rapid outbreak of a third wave of COVID-19 cases in the country from late April 2021 onwards resulting in the imposition of island-wide travel restrictions from mid-May to mid
Slide 4: Cumulative EBITDA for the year ended 31 March 2021
Cumulative EBITDA : for the year ended 31 March 2021 FY2021 FY2020 YoY Growth Industry Group (Rs. Million) (Rs. Million) (%) Transportation 3,610 4,375 (17) Consumer Foods 3,321 3,408 (3) Retail 5,523 5,108 8 Leisure (3,572) 2,327 (253) Property (17) 641 (103) Financial Services 3,645 2,988 22 Other
Slide 5: EBITDA for the quarter ended June 2021
EBITDA: for the quarter ended 30 June 2021 Q1 FY2022 Q1 FY2021 YoY Growth Industry Group (Rs. Million) (Rs. Million) (%) Transportation 1,023 395 159 Consumer Foods 318 487 (35) Retail 1,563 502 211 Leisure (649) (1,461) 56 Property 542 (29) 1,978 Financial Services 770 537 43 Total EBITDA 4,764 802
Slide 6: Portfolio evaluation 2020/21; returns vs. effective capital deployed
Portfolio evaluation 2020/21; returns vs. effective capital deployed The Group is now poised to reap the Industry group Effective capital employed (%) benefits from the 'Cinnamon Life' project, Cinnamon Life 34 given the revenue and profit recognition in Leisure 19 lieu of the handover of the reside
Slide 7: Transportation - overview
Transportation - overview ▪ 42% stake in SAGT ▪ SAGT capacity: ~2 million TEUs ▪ One of the largest cargo and logistics service provider in the country ▪ Leading bunkering services provider ▪ Joint Ventures with Deutsche Post for DHL air express and A P Moller for Maersk Lanka ▪ GSA for KLM Royal Du
Slide 8: The strategic location of the Port of Colombo
The strategic location of the Port of Colombo linking key shipping routes GWADAR BAHL KARACHI KOLKATA MUMBAI VISHAKHAPATNAM CHITTAGONG CHENNAI YANGON ADEN KOCHI LAMU MOMBASA DAR-ES-SALAM PORT LOUIS CAPE TOWN 8
Slide 9: Capacity enhancements in the Port of Colombo
Capacity enhancements in the Port of Colombo • CICT - Colombo International Container Terminal • ECT - East Container Terminal • SAGT - South Asia Gateway Terminal • JCT - Jaya Container Terminal • WCT – West Container Terminal A consortium consisting of Adani Ports and Special Economic Zone Limited
Slide 10: Sustained volume growth in the Port of Colombo
Sustained volume growth in the Port of Colombo 7.23 7.05 6.85 6.21 5.74 5.19 4.91 Million TEUs 4.31 2013 2014 2015 2016 2017 2018 2019 2020* *The impact from COVID-19 at the POC was more pronounced during the first quarter of 2020/21, when the pandemic escalated in Sri Lanka and the region. However,
Slide 11: Rapid absorption of capacity in the Port of Colombo
Rapid absorption of capacity in the Port of Colombo Container handling Port of Colombo - volumes ('000 TEUs) SAGT 1Q FY22 earnings update: Port Transportation industry group capacity (TEUs) JCT Colombo 8 million 900 CICT (Rs. mn) Q1 Q1 800 2021/22 2020/21 Hong Kong 21 million 700 600 EBITDA 1,023 39
Slide 12: Opportunities for growth in the Bunkering businesses
Opportunities for growth in the Bunkering businesses Bunkering Business (Lanka Marine Services) 2020/21 2021/22 LMS Q1 Q2 Q3 Q4 Q1 YoY volume growth (%) (30) (28) (18) (21) 5 Port of Hambantota ▪ LMS was the first to enter into a short-term fuel contract with Sinopec Fuels of Lanka (SFOL) for the sa
Slide 13: Consumer Foods - overview
Consumer Foods - overview ▪ Market leader in soft drinks, ice creams and processed meats 1Q FY22 earnings update: ▪ Custodians of the consumer brands “Elephant House”, “Keells - Krest”: Consumer Foods industry group high brand equity (Rs. mn) Q1 Q1 Key performance indicators (%) FY2017 FY2018 FY2019
Slide 14: Low consumption patterns and penetration reflects potential for sustained growth
Low consumption patterns and penetration reflects potential for sustained growth Bulk vs. Impulse Split - Regional ▪ The bulk-impulse mix of regional markets is highly skewed towards the impulse markets, 8% 44% demonstrating the significant growth potential 30% 70% 92% for the impulse category. 56%
Slide 15: Retail - overview
Retail - overview ▪ The Retail industry group consists of two business verticals; ▪ Supermarkets ▪ Office Automation ▪ “Keells” is a chain of ~10,000 square foot modern grocery retail outlets Modern Retail Penetration (%) 70 49 48 43 40 16 Singapore Malaysia Hong Kong Taiwan Thailand Sri Lanka Sourc
Slide 16: Rapid expansion to capitalise on low retail penetration levels
Rapid expansion to capitalise on low retail penetration levels Modern trade density – population (’000) per store Keells current coverage 132 47 30 21.0 7.3 4.7 4.5 3.7 3.6 3.4 3.0 1.9 2.5 0.9 Source: Retail and shopper trends in the Asia Pacific, AC Nielsen ▪ Comparatively higher modern trade densi
Slide 17: Supermarkets - overview
Supermarkets - overview Profitability margin 1Q FY22 earnings update: FY2017 FY2018 FY2019 FY2020 FY2021 (%) Retail industry group EBITDA (Rs.milllion) 2,010 1,975 2,465 4,267 4,144 (Rs. mn) Q1 2021/22 Q1 2020/21 EBITDA margin 6.7 5.3 5.4 7.8 7.6 EBITDA 1,563 502 EBIT margin 5.7 4.0 2.6 4.7 3.8 • Th
Slide 18: Leisure - overview
Leisure - overview ▪ Chain of Resort hotels in Sri Lanka ‾ 8 Resort hotels in strategic tourist destinations (1,022 rooms) ‾ 10% of the country’s 4-5 star class tourist accommodation ▪ 2 five-star city hotels in Colombo (847 rooms) ▪ 243 roomed lean luxury hotel managed by Cinnamon; “Cinnamon Red” ▪
Slide 19: Round trip offering in key tourist destinations; potential to expand Cinnamon footprint
Round trip offering in key tourist destinations; further potential to expand the ‘Cinnamon’ footprint ▪ Greater focus on asset light investment models as a part of the strategy to enhance the ‘Cinnamon’ footprint in Sri Lanka ▪ Land bank of 125 acres of freehold and 111 acres of leasehold land in ad
Slide 20: Timeline 2020/21: COVID-19 impact on Leisure
Timeline 2020/21: COVID-19 impact on Leisure Refer pages 99 and 101 of the JKH Annual Report 2020/21 for the detailed impact of COVID-19 on Group properties in Sri Lanka 20
Slide 21: Occupancies and average room rates
Occupancies and average room rates FY2021 FY2020 1Q FY22 Earnings update: Sector Leisure industry group Occupancy ARR Occupancy ARR (%) (US $) (%) (US $) (Rs. mn) Q1 2021/22 Q1 2020/21 Colombo Hotels* 3 104 34 100 EBITDA (649) (1,461) Sri Lankan Resorts 16 64 61 78 • The Maldivian Resorts segment co
Slide 22: Trend of tourist arrivals to Sri Lanka
Trend of tourist arrivals to Sri Lanka Annual tourist arrivals to Sri Lanka ('000) Year Tourist arrivals Growth (%) (In 000’s) 2,500 2010* 654 46 2,000 2015 1,798 18 2016 2,051 14 1,500 2017 2,116 3 1,000 2018 2,334 10 2019 1,913 (18) 500 2020 508 (74) - *2010 included due to being the first full po
Slide 23: Significant growth in Asian arrivals to Sri Lanka
Significant growth in Asian arrivals to Sri Lanka Tourist Arrivals 1,200,000 1,000,000 800,000 600,000 400,000 200,000 - 2019* 2010 2011 2012 2013 2014 2015 2016 2017 2018 2020** Source: Sri Lanka Tourism Development Authority *2019 and 2020 arrivals were impacted by Easter Sunday terror attacks and
Slide 24: Tourist arrivals to Sri Lanka lag well below regional peers
Tourist arrivals to Sri Lanka lag well below regional peers 45 40 35 30 Arrivals in millions 25 20 15 10 5 0 Malaysia Indonesia Thailand Vietnam Cambodia Sri Lanka 1990 2019 Source: Governmental tourism websites 24
Slide 25: Room inventory in Colombo lags far behind other regional capital cities
Room inventory in Colombo lags far behind other popular regional capital cities 60,000 31,790 30,114 26,113 9,100 7,600 5,019 Bangkok Manila Kuala Lampur Jakarta Ho Chi Minh Hanoi Colombo 25
Slide 26: Property - overview
Property - overview ▪ “John Keells Properties”; explore property development opportunities by leveraging on brand equity ▪ Focused strategies for expansion via developer/landowner tie ups “7th Sense” on Gregory’s Road ▪ Catering to different target market segments: ▪ Luxe Spaces ▪ Metropolitan Space
Slide 27: Industry potential
Industry potential ▪ Low levels of urbanisation within Sri Lanka in comparison to regional peers ▪ Annual condominium supply far below regional peers Annual condominium supply in regional cities 53,796 38,000 2,187 KL Ho Chi Minh City Colombo Sources: KL: CBRE property market outlook 1Q 2018 (foreca
Slide 28: Low penetration of apartment living in Colombo
Low penetration of apartment living in Colombo 5% 20% 30% 36% 40% 45% 50% 90% 95% 80% 70% 65% 60% 55% 50% 10% Greater Singapore Thailand Thailand Malaysia Malaysia India (Chennai) India Colombo (Central (Outskirts) (Central KL) (Greater KL) (Bangalore) Bangkok) Apartments Landed houses Source: Compa
Slide 29: Prime land bank of over 36 acres in central Colombo
Prime land bank of over 36 acres in central Colombo ▪ Prime land bank of over 36 acres held in central Colombo ▪ One of the largest privately owned land banks ▪ Includes on-going projects – Cinnamon Life and Tri-Zen ▪ Opportunities for development at land banks held in Crescat City and Cinnamon Lake
Slide 30: Developable freehold land of approximately 25 acres near Colombo city
Developable freehold land of approximately 25 acres in close proximity to Colombo city ▪ Greater connectivity and reduction in travel time to Colombo city post construction of the outer circular expressway. ▪ Direct connectivity to the Port City Colombo and a multi modal transportation hub to be dev
Slide 31: Robust development pipeline; on-going developments
Robust development pipeline; on-going developments Number of units sold as at 1Q FY22 earnings update: Cumulative sales (units) 30 June 2021 Property industry group Cinnamon Life: (Rs. mn) Q1 2021/22 Q1 2020/21 The Residence at Cinnamon Life 142 Suites at Cinnamon Life 110 EBITDA 542 (29) Cinnamon L
Slide 32: Scenic 500-acre land bank with an 18-hole golf course
Robust development pipeline: Scenic 500-acre land bank with an 18-hole golf course From 4Q FY2021 onwards, the Rajawella Holdings Limited (RHL) Group commenced the process ▪ Owners of a majority stake in RHL to complement the Group’s of monetising the land bank at leisure and property portfolios RHL
Slide 33: Cinnamon Life Integrated Resort
Cinnamon Life Integrated Resort 33
Slide 34: Integrated development in Colombo
Integrated development in Colombo 34
Slide 35: Integrated development in Colombo
Integrated development in Colombo 35
Slide 36: Integrated development in Colombo
Integrated development in Colombo 36
Slide 37: Aerial view of Cinnamon Life under construction
Aerial view of Cinnamon Life under construction 37
Slide 38: Aerial view of Cinnamon Life under construction
Aerial view of Cinnamon Life under construction 38
Slide 39: Suites at Cinnamon Life
Suites at Cinnamon Life 39
Slide 40: Offices at Cinnamon Life
Offices at Cinnamon Life fo} t+
Slide 41: Development programme
Development programme Conferencing ; capacity (4,837 pax) in three venues and car park facility (2,450 slots) 800 guest room hotel, including conferencing, banqueting, 7 specialty restaurants and entertainment facilities Rentable mall and entertainment space of 372,000 Sq. Ft (Gross – 518,000 Sq. Ft
Slide 42: The growth in Indian MICE travel to complement Cinnamon Life
The growth in Indian MICE travel to complement Cinnamon Life Indian Outbound MICE (Millions) 2.11 1.94 1.78 1.63 1.5 2017 2018 2019 2020 2021 Source: MasterCard 42
Slide 43: Financial Services – Insurance sector overview
Financial Services – Insurance sector overview ▪ Union Assurance (JKH Stake : 90%) ▪ Committed to a “digital first” business model with an investment of over Rs. 800Mn to become the largest digital insurer in Sri Lanka ▪ Developing Bancassurance channels - UA entered into exclusive bancassurance pa
Slide 44: Financial Services – Insurance sector overview
Financial Services – Insurance sector overview Key performance indicators CY2016 CY2017 CY2018 CY2019 CY2020 1Q FY22 earnings update: Market share (%) 13 14 14 13 13 Financial Services industry GWP growth (%) 19 22 11 4 13 group Recurring net profit (Rs.Mn) 1,313 4,002* 3,243 1,158 921 (Rs. mn) Q1 Q
Slide 45: Financial Services – Banking sector overview
Financial Services – Banking sector overview ▪ Nations Trust Bank (JKH effective economic interest : 32.16%) ▪ Focus on SME / retail strategy ▪ Franchise for American Express cards Key performance indicators CY2015 CY2016 CY2017 CY2018 CY2019 CY2020 Loans and advances growth (%) 22.4 23.7 25.0 19.0
Slide 46: Thank You
THANK YOU This document was produced by John Keells Holdings PLC for information purposes only. The information contained in this document are a review of the financial information pertaining to FY2022 and does not constitute an issue prospectus or a financial analysis. This Investor Presentation sh
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