1q 13/14 earnings presentationbts-th.listedcompany.com/...quarterlyresult1q2014.pdf · 8/15/2013...

prepared by Investor Relations department BTS Group Holdings PCL

BTS Group Holdings PCL

1Q 13/14 earnings presentation 15 August 2013

1Q 13/14 earnings presentation


Disclaimer

2

Investment involves risk. Prospective should understand the characteristics of Securities and study information about BTS Group Holdings Public Company Limited (the “Company”) before making a decision to invest in Securities. This presentation is for information purposes only and is intended only for the initial direct attendee of the presentation. It may not be reproduced or redistributed to any other person. It shall not and does not constitute either an offer to purchase or buy or a solicitation to purchase or buy or an offer to sell or exchange or a solicitation to sell or exchange any securities of BTS Group Holding PCL (the "Company") or any of its subsidiaries in the United States of America or in any other jurisdiction or an inducement to enter into investment activity. No part of this presentation, nor the fact of its existence, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein. This presentation is not to be relied upon in any manner as legal, tax or any other advice and shall not be used in substitution for the exercise of independent judgment and each person made aware of the information set-forth hereof shall be responsible for conducting its own investigation and analysis of the information contained herein. Except where otherwise indicated, the information provided in this presentation is based on matters as they exist as of the date stated or, if no date is stated, as of the date of preparation and not as of any future date, and the information and opinions contained herein are subject to change without notice. None of the Company nor any of its subsidiaries accepts any obligation to update or otherwise revise any such information to reflect information that subsequently becomes available or circumstances existing or changes occurring after the date hereof. None of the Company or any of its subsidiaries or any of their respective directors, officers, employees or agents shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with the presentation and any and all such liability is expressly disclaimed. The information contained herein must be kept strictly confidential and may not be reproduced or redistributed in any format without the express written approval of the Company. Some statements made in this presentation are forward-looking statements, which are subject to various risks and uncertainties. These include statements with respect to the Company’s corporate plans, strategies and beliefs and other statement that are not historical facts. These statement can be identified by the use of forward-looking terminology such as “may”, “will”, “expect” , “intend”, “estimate”, “continue”, “plan” or other similar words. The statements are based on the assumptions and beliefs of the Company’s management in light of the information currently available to the Company. 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. Nothing in this Presentation is, or should be relied on as promise or representation of the Company as to the future.



Agenda

3

Section

1 BTSG 1Q 13/14 FINANCIAL PERFORMANCE

Section

2 Section

3

BUSINESS UPDATES

BTSGIF 1Q 13/14 FINANCIAL PERFORMANCE (separate presentation)

Appendices



1Q 13/14 Highlights

4

Net cash from operational activities increases 210.0% YoY to THB 767.8mn Net cash flows generates THB 31bn as a result of proceeds from sale to

BTSGIF net of new investments Dividend paid of THB 2.0bn

Transaction occurred on 17 April 2013

1Q 13/14 Financial Statements include 16 days of ‘Profit from discontinued

operations’ and 75 days of ‘Share of Income from investments in Associate’

De-recognition of assets, recognition of gain plus many more accounting entries

Strong excess liquidity of THB 35bn • Cash Balance of THB 6.36bn (81.0% increase QoQ) • Current Investments of THB 28.58bn

Leverage reduced: Net debt / equity reduced to 0.05x as of 30 June 2013

IMPACT FROM BTSGIF

IMPROVED PROFITABILITY

STRONG CASH FLOW GENERATION

BALANCE SHEET STRENGTH

Net Income of THB 10.8bn. Recurring net profit of THB 641.5mn, grew 189.4% Recurring profit improvement: Recurring net profit margin increased to 22.5%

from 9.9% in 1Q 12/13 due to i) the recognition of share of net profit in BTSGIF and ii) the increase in interest income from proceeds from BTSGIF

Media and Property business demonstrated excellent profit improvement



3 MONTHS CASH FLOW SNAPSHOT

3,513

6,358

768

6,158 (4,081)

Beginning cash (31/3/13)

CFO CFI CFF Ending cash (30/6/13)

(THB mn)

2,192

2,543

(722)

206

832 35

1Q 12/13 Mass transit Media Property Services 1Q 13/14

-52% 32% 536%

(THB mn)

595%

P&L SNAPSHOT

1Q 13/14 Overview

5

* excluding interest income ** to equity holders of the parent

Total operating revenue grew 16% YoY Income Statement (THB mn) 1Q 13/14 1Q 12/13 % YoY

Operating Revenues 2,542.7 2,192.0 16.0%

Gross operating profits 1,299.4 1,087.5 19.5%

EBITDA 14,717.5 1,155.1 1174.1%

Recurring profit 641.5 221.7 189.4%

Operating EBITDA* 976.2 1,124.8 (13.2%)

Net income (loss)** 10,823.8 194.5 5,463.4%

Gross Operating Profit Margin (%) 51.1% 49.6%

EBITDA margin (%) 90.6% 51.7%

Net recurring profit margin (%) 22.5% 9.9%

Operating EBITDA margin (%) 38.4% 51.3%

26%

Mass Transit

33%

Media

39%

Property

Excess cash from proceeds from sale of net fare-box revenue to BTSGIF

Debt repayment and dividend payment

OPERATING REVENUE COMPARISON (YoY)

1Q 13/14 OPERATING REVENUE BREAKDOWN


2%

Services


HISTORICAL AVG FARE AND RIDERSHIP

HISTORICAL OPERATING REVENUE (THB mn) KEY FACTORS

OPERATING PERFORMANCE

Mass Transit (as if no BTSGIF)*

6

Quarterly Ridership increased 8.4% YoY to 50.3mn trips Average Fare increased 3.5% YoY to THB 25.3 per trip Key growth factor: i) the commencement of trial operations in 2 stations of the Silom line (Bang Wa) extension and ii) new carriages into service (4-car trains in SKV line) O&M revenue rose by 31.3% YoY to THB 339.3mn mainly from additional service income from Silom line extension from Wongwian Yai (S8) to Pho Nimit (S9) and Talat Phlu (S10) Costs & SGA increased 28.1% YoY or THB 225.4mn due to i) higher depreciation and ii) employee bonus Operating EBITDA margin decreased to 62% (67% in 1Q 12/13) as costs and SG&A increased greater than the revenue growth

Mass transit (THB mn) 1Q 13/14 1Q 12/13 YoY 4Q 12/13 QoQ

Revenue 1,612 1,394 16% 1,585 2%

Fare-box revenue 1,273 1,136 12% 1,263 1%

Other revenue 339 258 31% 322 5%

Costs of revenue 881 695 27% 800 10%

Gross profit 731 699 5% 785 (7%)

Operating EBITDA 963 932 3% 1,038 (7%)

Gross margin (%) 45.4% 50.1% 49.5%

Operating EBITDA margin (%) 61.7% 66.9% 65.5%


77

80

79

79

82

238

270

291

258

270

271

322

339

717

910

960

959

956

1,088

1,076

1,17

7

1,135

1,238

1,259

1,263

1,273

1Q 10/11

2Q 10/11

3Q 10/11

4Q 10/11

1Q 11/12

2Q 11/12

3Q 11/12

4Q 11/12

1Q 12/13

2Q 12/13

3Q 12/13

4Q 12/13

1Q 12/13

O&M (THB mn) Farebox (THB mn)

48

.0

46

.4

49

.4

50

.3

51

.1

50

.3

24.5 24.5 25.1 25.0 24.7 25.3

10.8

11.6

12.4

13.2

14.0

14.8

15.6

16.4

17.2

18.0

18.8

19.6

20.4

21.2

22.0

22.8

23.6

24.4

25.2

26.0

4Q 11/12 1Q 12/13 2Q 12/13 3Q 12/13 4Q 12/13 1Q 13/14

Ridership (mn trips) Average fare (THB / trip), RHS

* Includes 100% of fare-box revenue and O&M

IR Quarterly Presentation 4Q 1213_Draft1.xlsx


30

0

34

5

37

0

35

5

46

7

52

3

50

3

46

5

63

7

72

5

74

9 68

3

84

3

1Q 10/11

2Q 10/11

3Q 10/11

4Q 10/11

1Q 11/12

2Q 11/12

3Q 11/12

4Q 11/12

1Q 12/13

2Q 12/13

3Q 12/13

4Q 12/13

1Q 13/14

Media

7

OPERATING REVENUE BREAKDOWN OPERATING PERFORMANCE


5%

Office Buildings & Others

49%

BTS - Related

46%

Modern Trade

BTS-related Media Revenue increased 39% YoY (to THB 410mn) from i) the increase

in train capacity from 35 C-cars, ii) the increase in advertising spaces on non-prime stations, and iii) the increase in rent for long-term contracts of merchandising space

Modern Trade Media Revenue increased 27% YoY (to THB 389mn) from the full year recognition of revenue from additional sales floor contracts acquired in 2012

Office Building and Other Media Revenue increased 25% YoY (to THB 44mn), driven by i) additional rights in 4 office buildings, ii) new bundling packages, and iii) obtaining rights to advertise in CU Bus

Media (THB mn) 1Q 13/14 1Q 12/13 YoY 4Q 12/13 QoQ

Revenue 843 637 32% 683 23%

Costs of revenue 339 271 25% 288 18%

Gross Profit 504 367 37% 396 27%

Operating EBITDA 423 301 41% 327 29%

Gross margin (%) 59.8% 57.5% 57.9%

Operating EBITDA margin (%) 50.2% 47.2% 47.8%



90

13

4

18

5 15

4

15

4

15

2 11

1

21

0 1

55

19

4

43

0

74

4

98

7 1

,64

3

1,8

49

1Q 10/11

2Q 10/11

3Q 10/11

4Q 10/11

1Q 11/12

2Q 11/12

3Q 11/12

4Q 11/12

1Q 12/13

2Q 12/13

3Q 12/13

4Q 12/13

1Q 13/14

Property

8

REVENUE BREAKDOWN OPERATING PERFORMANCE

HISTORICAL REVENUE (THB mn) KEY FACTORS

THB 1,643

Proceeds from sale of Kamala

THB 1,849

Proceeds from sale of Nana


Property (THB mn) 1Q 13/14 1Q 12/13 YoY 4Q 12/13 QoQ

Revenue 987 155 537% 744 33%

Costs of revenue 590 119 396% 455 30%

Gross Profit 397 36 1003% 289 37%

Operating EBITDA 235 (44) N/A 123 91%

Gross margin (%) 40.3% 23.4% 38.9%

Operating EBITDA margin (%) 23.8% N/A 16.5%

Operating Revenue Revenue increased by THB 832mn YoY to THB 987mn from i) 225 transferred units of Abstracts PHY ii) revenue from Eastin Grand Hotel Sathorn Cost Costs increased by THB 471mn YoY to THB 590mn from i) transferred units of Abstracts Phahonyothin Park ii) costs related to Eastin Grand Hotel SG&A

SG&A rose by THB 95mn to THB 200mn mainly from

i) expenses related to Abstracts PHY units transferred

ii) depreciation expenses of Eastin Grand Hotel Sathorn

Residential Projects 76.7%

Commercial 39.3%

Thanacity Golf 4.4%


Services

9

Revenue Revenue increased by THB 35mn YoY to THB 41mn from the sale of Rabbit cards (common ticketing cards for Bangkok’s mass transit network plus retail e-payment card) Cost & SG&A Cost increased to THB 26mn and SG&A rose to THB 22mn largely due to the establishment of the Rabbit card and Carrot Rewards programme

Reclassify Thana City Golf course from services to property in 4Q 11/12

OPERATING REVENUE BREAKDOWN OPERATING PERFORMANCE



Service (THB mn) 1Q 13/14 1Q 12/13 YoY 4Q 12/13 QoQ

Revenue 41 6 583% 12 242%

Costs of revenue 26 20 30% 31 (16%)

Gross Profit 15 (14) N/A (19) N/A

Operating EBITDA 7 (32) N/A (33) N/A

Gross margin (%) 36% N/A N/A Operating EBITDA margin (%) 18% N/A N/A

20%

CARROT

76%

RABBIT

4%

HHT

9

25

31

35

33

33

36

1

6

8

17

12

41

1Q 10/11

2Q 10/11

3Q 10/11

4Q 10/11

1Q 11/12

2Q 11/12

3Q 11/12

4Q 11/12

1Q 12/13

2Q 12/13

3Q 12/13

4Q 12/13

1Q 13/14


1Q 13/14 Balance Sheet

10

LIABILITIES AND EQUITY BREAKDOWN (THB MN) ASSET BREAKDOWN (THB MN)

KEY RATIOS

Net Debt to Operating EBITDA

1Q 13/14: 0.61x 1Q 12/13: 5.72x

Non- current assets

Current assets

22%

78%

51%

49%

67,031 79,624

Non-current liabilities

Current liabilities

Equity

9%

76%

15%

67,031 79,624

76%

13%

11%

1Q 13/14: 0.05x 1Q 12/13: 0.66x

Net Debt to Equity

1Q 13/14: 5.94x 1Q 12/13: 1.00x

Current Ratio

1Q 13/14: 5.07x 1Q 12/13 : 3.02x

Interest Coverage


14,812.7

39,022.9

52,218.4

40,601.0

4Q 12/13 1Q 13/14

7,507.5 11,824.8

9,021.9 6,837.5

50,501.7 60,961.6

4Q 12/13 1Q 13/14


61,399 (39,458)

(1,080) (614) (6,749)

13,498

Net cash received from sale to BTSGIF

De-recognition of Core mass transit net

assets*

Provision for Special Business Tax (SBT)

Deferred Management Fee

Income

Elimination of gain on sale to BTSGIF

Gain on sale of future net fare-box revenues

11

NET GAIN ON SALE OF NFR TO BTSGIF OF THB 13,498MN

Capital gain on sale of NFR to BTSGIF


(Unit : THB mn)

*Net of project costs allocated to Media business THB 2,371mn to be amortised over concession period. Expect amortisation of THB 95mn over next 3 years.

Sale of NFR to BTSGIF considered as true sale of intangible asset

TAS 18: Implicit Management Fee for Operation of Core Network. Amortise as gain over remaining concession period c.THB 36mn p/a

TAS 37: BTSG agrees to absorb any SBT on interest payable by BTSGIF, if not waived by Revenue Department. Full provision this quarter. Expect amortisation c.THB 25mn over 3 years

TAS 28: BTSG sold 2/3 of rights to NFR so can only recognise gain on 2/3 sold. THB 6.7bn amortised as gain over concession period


TAS 12 INCOME TAXES IMPACT

12


THB mn

Capital gain on BTSGIF 13,497.6

Corporate income tax (20%) (2,699.5)

Net capital gain on BTSGIF 10,798.1

NO TAX was paid on the capital gain on sale of Net Farebox Revenues (NFR) to BTSGIF.

HOWEVER, in accordance with THAI ACCOUNTING STANDARD 12 (TAS 12) INCOME TAXES, the Company has to recognise ‘DEFERRED TAX LIABILITIES’ of THB 2,699.5mn, which is the estimated present value of tax that BTSC is expected to pay on net fare-box revenue over the remaining concession period.

TAX SIDE FY 13/14 ACCOUNTING SIDE FY 13/14

THB mn

Capital gain on BTSGIF -

Corporate income tax (20%) -

Net capital gain on BTSGIF -

Temp differences

DTL in FS (gradually paid over 17 years)


1/3 investment in BTSGIF

(THB 224mn)

BTSGIF (THB 457mn)

13

Share of net profit from BTSGIF


NET INVESTMENT INCOME FROM BTSGIF OF THB 681MN

Transactions THB mn

1/3 investment in BTSGIF (from operation) 224

Amortisation of 1/3 of original project cost (over 17 years)

(100)

Share of net profit from BTSGIF 124

ESTIMATED 3-YEAR FUTURE PROJECT COST AMORTISATION

YEAR FY 13/14 FY 14/15 FY 15/16

THB mn (509.62) (548.54) (568.99)


Agenda

14

Section

1 BTSG 1Q 13/14 FINANCIAL PERFORMANCE

Section

2 Section

3

BUSINESS UPDATES

BTSGIF 1Q 13/14 FINANCIAL PERFORMANCE (separate presentation)

Appendices



15

FARE INCREASE AND IMPACT 35 C-CAR OPERATION

Fully in-service: May 2013 (all regular-service trains on the Sukhumvit line are 4-cars long)

Increased capacity in Sukhumvit line: 33%

Recent increase: 1 June 2013 (effective fare increased)

Impact: Despite the fare increase,

• Jun 13 ridership increased 8.7% YoY • 1Q 13/14 ridership grew 8.4% YoY

YTD RIDERSHIP VERSUS TARGET YOY RIDERSHIP GROWTH VERSUS TARGET

* PPHPD: Passengers per Peak Hour per Direction

15

.75

16

.54

17

.04

16

.09

17

.01

17

.17

Apr-13 May-13 Jun-13

Passengers - Target (million) Passengers - actual (million)

8.5% 7.8%

8.7%

6.2%

4.9%

7.9%

Apr-13 May-13 Jun-13

Passengers Actual Growth (% YoY) Targeted Passengers Growth (%YoY)

Mass Transit Update



Update on Green Line and Pink Extension

16

Light Rail Transport Bang Na – Suvarnabhumi 18.6km; completed by 2017

Dark Green Line Samut Prakarn – Bang Pu 7 km; completed by 2017

I. Dark Green Line Bearing – Samut Prakarn

12.8 km; completed by 2017

Light Green Line National Stadium – Yodse 1 km; completed by 2019

II. Dark Green Line Mo Chit – Saphan Mai

12.0 km; completed by 2016

III. Pink Line Khae Rai – Min Buri

34.5 km; completed by 2017 Dark Green Line Kukod – Lamlukka 6.5 km; completed by 2019

Expected Date for Tendering: end of 2013 Expected Operating Year: 2017 Expected Contract Type: PPP Expected Return: ≥ 12% Civil Works Awarded: THB 17.8bn Estimated Project Cost: THB 27.3bn

I. Dark Green Line Bearing – Samut Prakarn (12.8km)

Expected Date for Tendering: early 2014 Expected Operating Year: 2017 Expected Contract Type: PPP Expected Return: ≥ 12% Estimated Project Cost: THB 34.1bn

III. Pink Line Khae Rai – Min Buri (34.5km)

II. Dark Green Line Mo Chit – Saphan Mai (12.0km)

Expected Date for Tendering: early 2014 Expected Operating Year: 2017 Expected Contract Type: PPP Expected return: ≥ 12% Estimated Project Cost: THB 45.0bn



INSTALLATION: JUL & AUG 2013

TEST RUN: SEP 2013

START SELLING: OCT 2013

Media Update

17

BTS-RELATED MEDIA

• 76 screen installation under progress


E-POSTER

• 24 panels on 12 stations

START SELLING: FEB 2014

TURNOVER SIZE: THB 120MN

PLATFORM TRUSS LED

NO. OF BUILDINGS NO. OF SCREENS CAPACITY INCREASE

CURRENT 51 452

ADDITIONAL (START SELLING: OCT 2013) + 11 + 118 26.1%

RECRUITING + 9 + 80 17.6%

EXPECTED TOTAL 71 650 43.8%

OFFICE BUILDING


Abstracts Project Presold (as of 31 July): 88%

LOCATION: 250M FROM BTS UDOMSUK

SITE AREA: 3,160 SQM (1-3-90 RAI)

LAND TENURE: FREEHOLD

AVERAGE SALE PRICE: 75,000 PER SQM

Property Update

18

COMMERCIAL PROPERTY

RESIDENTIAL PROPERTY

LOCATION: SATHORN, BANGKOK

SITE AREA: 16-0-81 RAI

LAND TENURE: LEASEHOLD, 30 YEARS LEASE CONTRACT WITH TREASURY DEPARTMENT

SIZE: 3 FLR, 86 ROOMS

TYPE: Resort in the City

EXPECTED OPENING OCT 2014

LOCATION: SATHORN, BANGKOK, DIRECT ACCESS TO BTS SURASAK



SIZE: 33 FLR, 396 ROOMS

TYPE: Business/Leisure Grand Hotel

TOTAL NLA: 17,561 SQM

EASTIN GRAND SATHORN – 4 Stars U SATHORN – 4 Stars

LOCATION: 250M FROM NEW BTS STATION



AVERAGE SALE PRICE: THB 75,000 PER SQM

ABSTRACTS PHAHONYOTHIN PARK ABSTRACTS SUKHUMVIT 66/1

TDC: THB 296MN (USD 10MN)

TDC: THB 3,000MN (USD 96MN)

TDC: THB 690MN (USD 22MN) TDC: THB 3.1BN (USD 99MN)

Opened: Oct 12 1Q 13/14 average occupancy rate: 78%

Transferred (as of 31 July): 45%


http://www.abstractscitizen.com/p-lnsprtn.php


Services Update

19

NUMBER OF RABBIT CARDS NUMBER OF READERS AND SHOPS (as of 31 Jul 13)

MERCHANT PARTNERS (as of 31 Jul 13) RABBIT SPECIAL PROMOTIONS

>1,000,000

>1,200,000

> 1,500,000

>2,000,000 (Target)

DEC 12/13 MAY 13/14 JUL 13/14 MAR 14/15

>34 brand

partners


Number of shops: 620 Number of readers: 760


APPENDIX

20 1Q 13/14 earnings presentation


15.0

20.0

25.0

30.0

35.0

40.0

18.8

25.1

31.3

37.6

43.8

50.1

56.4

22.3

25.0

28.0

31.0

34.0

37.0

42.0

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

SJT Fare Structure

21

NO. OF STATIONS

AUTHORISED FARE

NEW EFFECTIVE FARE

PREVIOUS EFFECTIVE FARE

POTENTIAL FARE UPSIDE

FARE PRICE (THB)

Key change: Single Journey Ticket (THB 15 – 42) Monthly Trip: increase THB 2.0 per trip (adult) & THB 1.0 per trip (student) No increase on Stored Value Ticket prices until end of Dec 13 No increase on one-day pass 50% discount for senior citizens at all times (formerly

off-peak only)

FARE INCREASE EFFECTIVE FARE: Estimated FY13/14 average fare increase by 6.5%, from THB 24.8 to THB 26.4



CAPEX for Green & Pink Line Extension

9,680 9,720

19,400

14,520 14,580

29,100

Total, 24,200 Total, 24,300

Total, 48,500

Green Line Pink Line Total

(THB MN)

OPTION1: PPP GROSS COST (E&M ONLY)

D/E RATIO 1.5:1

11,675 11,250 22,925

35,025 33,750

68,775 Total, 46,700 Total, 45,000

Total, 91,700

Green Line Pink Line Total

(THB MN)

OPTION2: PPP GROSS COST (E&M + CIVIL)

D/E RATIO 3:1

22

EQUITY DEBT EQUITY DEBT



Prudent Treasury Management

1Q 13/14 earnings presentation 23

INVESTMENT OBJECTIVE INVESTMENT POLICY PROPOSED PORTFOLIO ASSET SELECTION

“Preserve Capital for future investment projects” • Match cash investment

with uses of fund plan • Absolute return target

(inflation rate)

• Preserve principal • No negative return • Investment grade • No FX risk exposure

• Asset classes • Asset universe • Asset allocation • Benchmark

• Propose • Approve • Execute • Monitor • Evaluate

BTSG INVESTMENT FRAMEWORK

PORTFOLIO RISK EXPOSURE PORTFOLIO EXPECTED RETURN

1YR 2YRS 3YRS

Risk Type Risk Management Risk Exposure

Interest rate risk Match maturity Low

Credit risk Investment grade only Low

Market risk Within risk budgeting Moderate

FX risk Fully hedged all exposure None

GOV’T BOND RETURN 2.60%

EXP PORT RETURN 3.20%





1q 13/14 earnings presentationbts-th.listedcompany.com/...quarterlyresult1q2014.pdf · 8/15/2013...

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