investor presentation mhril qtr 3 fy11
TRANSCRIPT
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Mahindra Holidays & Resorts India Ltd.
Changing the Way India Holidays
(updated as at Dec 31, 2010)
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The MHRIL story
Company Overview1
Differentiated Approach: Customer Centric Design2
Integrated and Mixed Use Business Model3
Unique Revenue Model4
Proven Financial Performance5
Way Forward6
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Company Overview
Highlights & Milestones
Product Portfolio
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Highlights & Milestones
Among the Top 10 Vacation Ownership Companies in the World#
Indias No.1 Vacation Ownership Company
121,751 Vacation Ownership (VO) members as at Dec 31, 2010
72% of the total active VO members in India with RCI*
34 resorts, 1,555 apartments & cottages as at Dec 31,2010
Impressive Growth Rates 5 year CAGR for Income at 43%
5 year CAGR for PAT at 54%
Club Mahindra Holidays: Superbrand 2009**
10 RCI Gold Crown Resorts: Munnar and Goa for 10 consecutive years
Ranked 150 in Business Today BT Top 500 (2009)
One of Best performing Global IPO by Wall street Journal (lone Indian IPO)
4
#
Company Sources * Source: Group RCI as on May 31, 2009 **Source: Brand Council in India
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Product Portfolio
Flagship Brand : Indias No. 1 holiday brand
Offers Family Holidays 7 days every year for 25 years 27 resorts in India & Thailand. 5,087 resorts through RCI Age Segment 30 55 years
1997
Offers Short Breaks 6 days every year for 10 years
Across 5 resorts Target Segment young urban families
2006
Corporate Membership Offers Reward & Recognition solutions Points based platform to aid flexibility for Corporates
2006
1 stop shop for family holiday & travel related services Powered thru e-commerce website, dedicated call center
2008
Provides accommodation in private homes Has aggregated 205 homes across 14 states Launched in the UK, extended into India
2008
2010 Tented campsite specially designed for families Outdoor & Adventure activities to bring people closer to
nature
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Differentiated Approach
Customer Centric Design
Product Features
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Conventional Proposition: Essentiallydiscounted accommodation room nights.
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Understanding Vacation Ownership
Key features of the conventional model
Ownership at a fixed resort location for a fixed week
in the year every year in a fixed season and room type
Concept of Vacation Ownership
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Customer Centric Design
Fixed Week Fixed Resort
Variable Price Model
Limited Service Resort
Distinct Developer, Marketer and Service
Operator
Pure Timeshare Resorts
Floating Week Floating Resort
Gives customer flexibility: Time of holiday,
duration, destination of choice
Fixed Retail Price
Greater transparency
Full Service Resort Amenities, Facilities and Services
Complete Family Holiday Experience
Vertically Integrated Operations
Deliver on promised value
Mixed Use Resorts
Maintain Quality
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ONE WEEK EVERY YEAR FOR 25 YEARS, RIGHT-TO-USE MEMBERSHIPIN THE SEASON AND APARTMENT TYPE THE MEMBER CHOOSES
For conditions of usage please refer to the Membership Application Form
available at any of our offices, branches and outlets
Conventional Model Club Mahindra Model
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Integrated & Mixed Use Business Model
Integrated Value Chain
Multiple Sales Channels
Resort Network
Family Holiday Experience
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Delivery Through Integrated Value Chain
Resort Design &
DevelopmentLifestyle product
marketing approach
Pan India multi-
channel salesinitiatives
Holiday planning
& reservationservices
Active customer
feedback system
Full service
resorts
Additional valueopportunities
Identification &
acquisition of land
Club Mahindra
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Pan India multi-channel sales team11
Onsite
BranchOffices 19
36#
126**
3*
RetailOutlets
Franchisee
ServiceOffice
11
*Dubai ; **including Dubai & Kuwait; #29 Direct and 7 Franchise
Follow Permission Marketing Approach
Retails Outlets: Club Mahindra Holidayworlds
at Malls and shopping complexes
Direct to home: Meet target members at home
Onsite: Club Mahindra Holidayworlds at resorts
Reaching Customers throughInnovative Sales & Marketing Channels
Multiple Sales Channels
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Pan India presence
Coorg
Kodaikanal
Poovar
Ashtamudi
Dharamsala
Mussoorie
Manali
Binsar (2)
Corbett
Goa (2) Pondicherry
Ramnagar
Tungi
Kadapakkam
Theog
Thekkady
Ooty (2)
MasinagudiYercaudMunnar
Varwade
KasPanchgani
Shimla
Operational
Under Development
Green FieldsNaukuchiatal
Kumbalgarh
Hyderabad
Gangtok
Existing Resorts
Own 12 (1047 Apartments)Long Lease 16 (426 Apartments)
Short Lease 6(82 Apartments)
Total 34 (1555 Apartments)
96% Own & Long Lease
Expansions Planned
Ashtamudi, Coorg
Greenfield Development
Tungi (near Lonavala), Theog (near Shimla)
Landbanks for future
Maharashtra Kas, Varwade
Tamil Nadu Kadapakkam
Andhra Pradesh Near Hyderabad
Karnataka Coorg
**Besides resorts shown in map Club Mahindra members have access to a total of 5,087 RCI affiliated resorts across the world
*Also present in Thailand
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Gir
Ranthambore
Sariska
Nawalgarh
Osian
Swamimalai
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Holistic Family Holiday Experience
# Activities and amenities at certain locations are resort specific and may not be available at all locations throughout the year
10 RCI Gold Crownresorts
2 Resorts 5 Staraccredited by Dept. ofTourism GOI
MRD processes certifiedISO:9001-2000compliant
PCMM level 3 assessedat Goa Resort
BHC certified Hygienesystems
Accreditation forquality resort services
Fun dining Restaurants &
Gourmet takeaways
Svaastha Spas/AyurvedicSpas
Kids Club Champs
Bars
Swimming pool
Conferences & Outbound
Trainings
Activities & amenities
giving complete holidayexperience#
Designed to suit
topography of the
location
Non-conventional
accommodation such as
log huts, tents and
floating cottages Resort
Design
Adding innovative
activities
Strategy to enhanceholiday experience
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Unique Revenue Model
Multiple Revenue stream
Continuous Value creation from single unit
The Club Mahindra Advantage
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Revenue Streams From Members
Membership Fee: Admission Fee
Entitlement Fee
Annual Subscription Fee: (ASF)
Interest: On Instalments (EMIs)
Resort Revenue: Revenue generated at the resort during theholiday
Upfront Cash:
Admission Fee
Recurring Income:
Entitlement Fee
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Unique Revenue ModelValue created continuously from a single resort unit..
Timeline (years)*Inflation not considered
0 25
ValueRealized
Recurring Revenue Streams*: ASF, Usage Fee, ResortRevenues
UpfrontCash:
AdmissionFee
Residual Value *:Opportunity for2nd cycle - ZEROMarginal Cost of
Inventory
Income fromFinancing
Admission FeeEntitlement Fee
Resort - MembersResort FITInterest on EMI
Annual Subscription Fee
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Value Creation Profile
Large Upfront Cash-flow
Built in Annuity Stream
Residual Value
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The Club Mahindra Advantage
Club Mahindra Hotels
OccupancyHigher and Stable All Year round
occupancy
Lower occupancy subject to
uncertainty and fluctuations
Revenue
StreamsMultiple revenue streams. Yearly
and Annuity based.
Limited revenue streams. No
Annuity streams.
Debt Structure Almost debt free High levels of debt
Cash Flows Strong upfront cash flow model Low on cash flow
Receivables Receivables can be Securitized. No Securitization opportunity
Holiday
ExperienceHigh Quality Focus on every
member of the Family.
Generally less focus on Holiday
Experience and no focus on
individuals within the Family.
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Details of income
For FY 05 to FY 09 numbers are from the MHRIL Prospectus
All Figs in Rs crores
2010 2009 2008 2007 2006 2005
Income from sale of Vacation Ownership 348.6 297.21 283.54 181.11 113.49 73.95
Annual subscription fee 51.7 45.56 32.28 22.77 19.94 12.73
Income from travel services & homestays 2.7 1.21 0.08 0 0 0
Income from resorts
- Room rentals 22.3 17.53 14.12 10.52 6.37 5.06
- Food and beverages 30.8 23.12 16.22 13.52 9.32 7.31
- Others 12.7 7.57 5.34 3.98 3.21 2.31
Total Income from Resorts 65.8 49.08 36.83 28.43 19.29 15.03Total 468.7 393.06 352.73 232.31 152.72 101.71
2010 2009 2008 2007 2006 2005
Other Income 47.6 51.25 22.31 8.34 4.01 4.44
Net Profit before tax, restated 176.7 132.04 126.19 66.77 32.83 15.25
Percentage 27% 39% 18% 12% 12% 29%
Interest
On instalment sales 18.7 37.15 19.68 7.32 3.39 2.84
Income from securitization (refer note 5) 22.3 9.96 1.21 0.72 0.45 1.57
Gain on exchange fluctuation 0.0 2.50 - - - -
Miscellaneous income 6.6 0.16 0.55 0.26 0.16 0.03
Total 47.62 51.25 22.31 8.34 4.01 4.44
Details of Other Income
Details of Income from sale of Vacation Ownershipand other services
Year ended March 31st
Year ended March 31st
B lSummary Sta tement of Asse ts & Liabilities As at 31st March In Rs crore
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BalanceSheet
Summary Sta tement of Asse ts & Liabilities As a t 31st March In Rs. crore
2010 2009 2008 2007 2006 2005
Shareholders' funds:
Share capital 83.3 77.0 76.4 28.4 28.4 28.4Employee stock options outstanding - - 0.0
Reserves and surplus 356.0 118.8 66.6 47.3 14.9 0.0
Minority Interest - 0.0 0.0 0.0 - -
439.3 195.8 143.0 75.7 43.3 28.4
Deferred income
Advance towards members' facilities 805.0 641.0 482.5 324.2 226.3 164.0Loan funds:
Secured loans 10.0 24.7 20.1 6.0 26.8 22.0Unsecured loans - - - - - 1.3
Deferred tax liability (net) 33.3 29.5 23.6 20.2 9.2 -
TOTAL 1,287.7 891.0 669.2 426.0 305.6 215.7
APPLICATION OF FUNDS
Fixed assets
Gross block 489.2 429.3 273.4 225.7 191.7 149.3
Less : Depreciation 82.5 64.1 47.9 38.3 30.7 23.5Net block 406.7 365.2 225.5 187.4 161.0 125.7
Capital work in progress/advances 86.6 42.8 39.0 9.8 1.4 1.4
Expenditure during construction pending allocation11.3 8.5 6.0 2.9 0.8 0.3
504.6 416.5 270.5 200.1 163.2 127.5
Investments 227.2 0.0 0.0 5.9 0.0 4.5
Deferred tax asset (net) - - - - - 2.2
Current assets, Loans and advances
Inventories 3.0 5.3 3.5 1.8 0.9 0.6
Sundry debtors 631.5 482.6 403.4 218.7 145.7 78.2Cash and bank balances 24.4 32.8 7.6 9.4 7.8 3.9Loans and advances 81.2 66.5 62.0 41.9 26.2 18.8
740.1 587.1 476.5 271.8 180.6 101.6
Less: Current liabilities and provisions
Current liabilities 143.2 82.1 60.9 40.6 38.0 25.1
Provisions 41.0 30.6 17.0 11.2 0.3 0.2
184.2 112.6 77.9 51.8 38.2 25.3
Net current assets 555.9 474.5 398.6 220.0 142.3 76.3
Profit and loss account - - - - - 5.2
TOTAL 1,287.7 891.0 669.1 426.0 305.6 215.7
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Strong Financial Performance
Sustained Growth
Financials
Highlights: 9M FY11 and Q3
Consolidation Measures for the future
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Growth Rate
Please note, all figures are based on consolidated financial statement , Div for FY 10 is proposed .
FY 05 FY 06 FY 07 FY 08 FY 09 FY 105 Year
CAGR
Cumulative Member base (No) 28,491 38,691 53,113 73,533 92,825 109,884 31%
Income from sale of Vacation
Ownership & Other Services101.7 152.7 232.3 352.7 393.2 473.5 36%
PBDITA 27.3 44.6 79.3 144.0 152.1 199.5 49%PAT 8.3 20.0 42.5 84.0 79.8 117.1 70%
Share Capital 28.4 28.4 28.4 76.4 77.0 83.3 24%
Reserves 0.0 14.9 47.3 66.6 118.8 355.3 713%
EPS (Diluted) (in Rs) 1.69 4.05 5.50 10.77 10.19 14.18 53%
Dividends 0% 0% 30% 30% 30% 40%
(Rs. In Cr.)
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77.4
145.7
218.7
403.4484.1
631.5
733.7
FY05 FY06 FY07 FY08 FY09 FY10 9M FY11
106.1
156.7
240.6
375.0
444.3
516.4
364.4
FY05 FY06 FY07 FY08 FY09 FY10 9M FY11
500606
675779
1,177
1,4761,555
FY05 FY06 FY07 FY08 FY09 FY10 9M FY11
28,491
38,691
53,113
73,533
92,825
109,884
121,751
FY05 FY06 FY07 FY08 FY09 FY10 9M FY11
Sustained Growth
Cumulative VO Membership Inventory (Number of Units)
22
CAGR FY08 FY10: 31% CAGR FY08 FY10: 24%
Total Income (INR Cr) Receivables Available for securitization (INR Cr)
CAGR FY08 FY10: 37% CAGR FY08 FY10: 52%
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9.2
20.8
41.7
80.5 83.4
117.8
62.6
FY05 FY06 FY07 FY08 FY09 FY10 9M FY11
27.2
44.5
78.9
140.5155.6
200.4
108.1
FY05 FY06 FY07 FY08 FY09 FY10 9M FY11
Consistent Financial Growth
PBIDT and PAT Margins
Please note, all figures are based on standalone financial statement
EBITDA (INR Cr) PAT (INR Cr)
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CAGR FY08 FY10: 49% CAGR FY08 FY10: 67%
FY 05 FY 06 FY 07 FY 08 FY 09 FY 10 9M FY 11EBITDA Margin 26% 28% 33% 37% 35% 39% 30%
PAT Margin 9% 13% 17% 21% 19% 23% 17%
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Nine Month Ending Sept 30, 2010
9M F11 Highlights 9M Total income at INR 364.44 Cr
9M PAT at INR 62.59 Cr
11,867 members added
Cumulative member base as on 31st Dec 2010: 121,751
CMH 114,879 and Zest 6,872
Launched Terra a Tented campsite with adventure activities giving customers an
outdoorsy experience
MOU signed with the Government of Gujarat for setting up 7 resorts
MHRIL became the first vacation ownership company in the world to havereceived the prestigious COPC certification.
Won prestigious Bird Express TravelWorld Awards for Excellence in Operations
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Quarter Ending Dec 31, 2010
Q3 F11 Highlights Q3 Total income at INR 144.5 Cr (Growth of 14.1% )
Q3 PAT at INR 31.1 Cr (Growth of 30.6% )
Q3 EBITDA at INR 51.9 Cr (Growth of 25.0% )
3,758 members added
Occupancy was 81.4% against 74.1% in Q3 LY
3 New destinations added : Osian , Navalgarh and Swamimalai
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Consolidation Measures for the future
Measures taken at start of fiscal year
Move from Aggressive-Push to Assisted-Pull approach in Acquisition
Sales processes streamlined
Price increase 5%
DP increased to 15%
Limit Tenure to 48 EMI plans Strengthening memberbase health through re-alignments and cancellations
Upsides
More committed and actively holidaying member base
Improved Yield : from New Sales funnel and receivables
Released old inventory for resale at current prices
Downsides
Short term pains: dampener impact on Revenues and PAT
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MHRIL Growth Strategy
Strategy Formulation
Intensify, Integrate & Diversify
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Strategy Formulation
CompetitiveAdvantage
GrowthStrategy
Environment& Industry
+
Growth Strategy driven byAn enabling environment & our competitive advantage
CHANGEIdentified Business
Processes to suit thechanged times.
CONSOLIDATEIntensify existing VO
operations.Enter new segments.
BE FUTURE READYLeverage Competences &enter related businesses.
Test new initiatives.
+ +India Story:StrongFundamentals
Travel &
Tourism:
GrowthSector
VO Industry:
Nascentmarket
New Segments
ManagementCompetences
Leading Brand, Mahindra Group,Unique & Differentiated Biz Model,
Human Capital
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Growth Strategy
Intensification: Build on the VO
business
Geographic Expansion
Age Segments
Project GYPSY, Senior Citizens
Income Segments Fractionals, Mass-market VO
Integration: Strengthen the
Value Chain
Travel Services
Diversification: Expand into
Holiday Related Services
Homestays, Svaastha
Intensify Integrate Diversify
Existing
Club Mahindra+
Geographical/Channel Expansions,
Extensions for Sr. Citizens& Teens
India
International Expansions
New
Global
Geogra
phicalMarket
Product
Zest, Fundays, Fractionals,
Mass Market VO, Club M
Travel Services
Homestays, Svaastha,Campsites
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Thank You!