quarterly meeting 3/2019 - the erawan group · hop inn revenue 6% •midscale bkk (ex. new hotel)...

2Q19 & 1H19 Performance & Outlook

15 August 2019

Quarterly Meeting

3/2019

2 © 2019 ERAWAN. All rights reserved.

The views expressed here contain some information derived from publicly available sources

that have not been independently verified. No representation or warranty is made as to the

accuracy, completeness or reliability of the information. Any forward looking information in

this presentation has been prepared on the basis of a number of assumptions which may

prove to be incorrect. This presentation should not be relied upon as a recommendation or

forecast by The Erawan Group PLC. Nothing in this release should be construed as either

an offer to sell or a solicitation of an offer to buy or sell shares in any jurisdiction.


2Q19 Executive Summary

9.0 million international

tourist arrival

+1% Growth from 2Q18

Tourism Industry Hotels Statistic*

75% Occupancy

-3% ARR growth

2Q19 Group Operating Results

+3% Total Revenue

+1% EBITDA

9 MB Norm. NPAT

Hotel Development

*Total group ex. HOP INN

JW Marriott Room & F&B Renovation

ibis Patong & SathornRoom Renovation


Industry Update


International Tourist Arrivals by Quarter

Source : Department of Tourism as of Jun-19

9.0

7.6

8.27.8

9.2

8.1

8.89.3

10.6

8.9 9.1

9.7

10.8

9.0

Q1 Q2 Q3 Q4

2016 2017 2018 2019

1%

1%


0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec

2016 YTD 16.6 M 2017 YTD 17.3 M

2018 YTD 19.5 M 2019 YTD 19.7 M

YoY 2019-2018

International Tourist Arrivals

YTD-Jun19 19.7 millions, +1% y-y

Millions

Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec

+5% - -1% +3% -1% +1% %YoY



Thailand Tourist Arrivals


2Q18

Weight

2Q19

WeightYoY

1H18

Weight

1H19

WeightYoY

1. China 31% 28% 8% 30% 29% 5%

2. Malaysia 11% 11% 5% 9% 10% 7%

3. India 5% 6% 23% 4% 5% 24%

4. South Korea 4% 4% 3% 5% 5% 3%

5. Laos 5% 5% 7% 4% 4% 5%

6. Japan 4% 4% 12% 4% 4% 11%

7. Russia 3% 2% 9% 4% 4% 3%

8. United States 3% 3% 5% 3% 3% 4%

9. Viet Nam 3% 3% 3% 3% 3% 3%

10. United Kingdom 2% 2% 5% 3% 3% 1%

Others 29% 30% 4% 31% 31% 1%

Grand Total 1% 1%


Performance Review 2Q19 & 1H19


2Q19 & 1H19 Core Performance Summary

Group Operating Income

EBITDA

325 330

984 942

27 9

326 240

1,349 1,396

3,126 3,154

2Q18 2Q19 1H18 1H19

1H191% YoY

2Q193% YoY

1H194% YoY

2Q191% YoY

Normalized Net Profit

1H1986 MB YoY

2Q1918 MB YoY


Statistic Summary 2Q19 & 1H19

Segment

2Q19 (YoY) 1H19 (YoY)

OCCARR

+/-

RevPAR

+/-OCC

ARR

+/-

RevPAR

+/-

Thailand

Luxury 65% 3% 3% 74% 5% 6%

Midscale 83% 5% 7% 85% 6% 8%

Economy 75% 3% 9% 81% 2% 8%

Total Group(ex HOP INN)

75% 3% 6% 81% 5% 8%

HOP INN 74% 4% - 73% 4% 1%

Philippines

HOP INN 80% 1% 1% 78% 1% 2%

Remark : calculation in THB


Hotel Revenue by Room & F&B

(Unit in MB)4% 4%

1,2931,340

2%

3,0243,042

2Q19

1,340 MB 4% YoY

1H19

3,042 MB 1% YoY

5%


2Q19 Performance Summary

• Luxury BKK OCC was increased 2% from

2Q18 but ARR was slightly dropped

• Luxury resort still recorded soft performance

due to slowdown of Chinese and European

Luxury Revenue 4% Midscale Revenue 10%

Economy Revenue 3%

• Economy RevPAR declined 9% from 2Q18 as a

result from BKK and Non-BKK OCC dropped

• The decline of Chinese and Russian still

impacted performance of Economy hotels

• India (ex. new hotel) grew by 6% from 2Q18

HOP INN Revenue 6%

• Midscale BKK (ex. new hotel) recorded

RevPAR in line with 2Q18, with Chinese

market recovery

• Midscale Non-BKK was still impacted from

slowdown of Chinese

• India (ex. new hotel) grew by 27% from 2Q18

• HOP INN room rate improvement at 4%. More

than 90% of HOP INN hotels can increase

room rate due to our pricing strategy

• EBITDA was recorded in line with 2Q18 due to

the increasing of operating expense to improve

HOP INN brand & product


RevPAR Total Revenue EBITDA

HOP INN Philippines

2Q19 Performance Growth

• OCC posted at 80%, grew 2% from same period last

year

• Organic hotels posted RevPAR growth at 16% from

both OCC and ARR

• Generated net profit in 2Q19 & 1H19

2Q19 Performance Highlight

1%

69%

116%


Consolidate Profit & Loss StatementIn Baht Millions 2Q18 2Q19 %YoY 1H18 1H19 %YoY

Hotel Operating Income 1,293 1,340 4% 3,012 3,042 1%

Rental and Service Income 56 56 - 114 112 2%

Total Operating Income 1,349 1,396 3% 3,126 3,154 1%

Other Income 13 18 37% 23 35 53%

Total Income 1,362 1,414 4% 3,149 3,189 1%

Operating Expenses (1,037) (1,084) 5% (2,165) (2,247) 4%

EBITDA 325 330 1% 984 942 4%

Depreciation & Amortization (188) (207) (371) (413)

Finance Costs (87) (100) (171) (195)

Taxes (17) (10) (89) (72)

Minority Interest (6) (4) (27) (22)

Normalized Net Profit / (Loss) 27 9 69% 326 240 27%

Extraordinary Items

Share of Profit/(Loss) from ERWPF 3 2 37% (11) 5 N/A

Provision for Employee Benefit - (18) N/A - (18) N/A

Net Profit / (Loss) 30 (7) N/A 315 227 28%

EBITDA Margin 23.9% 23.3% 0.6% 31.2% 29.5% 1.7%


16,949 17,248

2018 2Q19

Total Assets

Summary of Financial Position

11,240 11,561

2018 2Q19

Total Liabilities

5,708 5,686

2018 2Q19

Total Equities

1.7 1.7 1.7 1.71.8

1.0

1.2

1.4

1.6

1.8

2.0

5,000

6,000

7,000

8,000

9,000

10,000

2015 2016 2017 2018 2Q19

Total Interest Bearing Debt (MB) & Interest-bearing Debt to Equity (x)

3.00%

4.00%

5.00%

6.00%

2015 2016 2017 2018 2Q19

Average Cost of Debt (%)

4.12%


2Q19 Capital Structure

69%

31%

Floated

94%

6%

Loan by % of Fixed and Floated Interest Rate

Loan by Currency

1.77xIBD/E

Fixed

THB

Peso

4.12%

4.54

Yr.

Avg.

Cost

of Debt

Avg.

Loan

Tenor


Outlook


2019 Outlook

Update 2019 Outlook

Tourist Arrival

40.2 Million

(+4.5%)

Occupancy Rate 2019 Hotel

Opening

Revenue Growth

Revised Maintained Maintained Maintained


Hotels Growth Strategy

Return Enhancing Strategy

JW Marriott Room Renovation 3rd Phase 133 Rooms 2Q19-3Q19

JW Marriott F&B Outlet renovation Manho & Tsu 2Q19

Ibis Soft Renovation Patong, Samui, Sathorn 2Q19-3Q19

HOP INN Khon Kaen - Mittraphap Road (3rd Branch) 79 Rooms

Jul-19

HOP INN BKK - Changwattana 108 Rooms

HOP INN Rayong - Sukhumvit Road (2nd Branch) 79 Rooms

Aug-19

HOP INN Chiang Rai - Clock Tower (2nd Branch) 70 Rooms

HOP INN Hat Yai (2nd Branch) 79 Rooms

Oct-19

HOP INN BKK - Rangsit 79 Rooms

HOP INN Nakorn Pathom 79 Rooms

Dec-19Mercure Sukhumvit 24 201 Rooms

ibis Sukhumvit 24 300 Rooms

(As of 2Q19)


Existing 36 Hotels

Existing 5 Hotels, 3 Province

HOP INN Thailand Development

Northern


Southern


Western


Northeastern

Existing 5 Hotels, 5 Provinces

Eastern

Existing 2 Hotels, 2 Provinces

Central

BKK

To be opened 2H19

+1 Hotel

To be opened in 2H19 +7 Hotels

(No. of hotels as of 2Q19)

Under Development

+2 Hotels

To be opened 2H19

+1 Hotel

Under Development

+1 Hotels

To be opened 2H19

+1 Hotel

Under Development

+1 Hotel

To be opened 2H19

+2 Hotels

Under Development

+3 Hotels

To be opened 2H19

+1 Hotel

To be opened 2H19

+1 Hotel

Under Development +7 Hotels


HOP INN Philippines Development

Under Development

+2 Hotels

Ortigas(To be opened in 2021)

North EDSA(To be opened in 2022)

Existing Hotels

5 hotels

Manila

Under Development

+2 Hotels

(To be opened in 2021)

Cebu


Mercure & ibis Sukhumvit 24 Updates

Brief summary

• To be opened in December 2019

• 29 floors

• ibis 300 rooms (Floor 9-19)

• Mercure 201 rooms (Floor 20-28)

• Panorama roof top bar on floor 29th


Before

After

Renovation Updates – Tsu Restaurants


Renovation Updates – ibis Sathorn

Before After


Renovation Updates – ibis Patong

Before After


Our Strategies to Deliver Sustain Growth to HOP INN

First Choice for

Frequent Travelers

Most Cost

Competitive

Extensive Network

and

Expansion Initiative

Customer

Retention


Q & A


Success with Integrity


Appendix

2Q19 & 1H19 Review


Hotel Properties Rooms Occupancy ARR (Bt/room/night) RevPAR (Bt/room/night)

YoY 2Q18 2Q19 2Q18 2Q19 +/- LY 2Q18 2Q19 +/- LY 2Q18 2Q19 +/- LY

Thailand

Luxury 979 979 64% 65% - 5,439 5,259 -3% 3,503 3,394 -3%

Midscale 1,282 1,467 84% 83% -1% 2,724 2,580 -5% 2,288 2,135 -7%

Economy 2,253 2,386 80% 75% -5% 1,072 1,043 -3% 856 777 -9%

Total Group ex.HOP INN 4,514 4,832 78% 75% -3% 2,364 2,293 -3% 1,837 1,720 -6%

HOP INN Thailand 2,652 2,810 76% 74% -2% 581 601 +4% 441 442 -

Philippines

HOP INN Philippines 508 843 78% 80% +2% 946 932 -1% 739 750 +1%

Hotel Properties Rooms Occupancy ARR (Bt/room/night) RevPAR (Bt/room/night)

YoY 1H18 1H19 1H18 1H19 +/- LY 1H18 1H19 +/- LY 1H18 1H19 +/- LY

Thailand

Luxury 979 979 75% 74% -1% 5,940 5,662 -5% 4,427 4,175 -6%

Midscale 1,282 1,467 88% 85% -2% 2,943 2,767 -6% 2,583 2,364 -8%

Economy 2,253 2,386 85% 81% -5% 1,318 1,285 -2% 1,123 1,035 -8%

Total Group ex.HOP INN 4,514 4,832 84% 81% -3% 2,696 2,573 -5% 2,254 2,075 -8%

HOP INN Thailand 2,652 2,810 77% 73% -3% 577 601 +4% 444 441 -1%

Philippines

HOP INN Philippines 508 843 77% 78% +1% 951 963 +1% 731 747 +2%

2Q19 & 1H19 Hotel Statistic by Segment


Operating Income by Segment

2Q19 1H19

Contribution Y-Y Contribution Y-Y

Luxury 41% 4% 43% 6%

Midscale 27% 10% 25% 5%

Economy 16% 3% 18% 1%

HOP INN Thailand 8% 6% 7% 7%

HOP INN Philippines 4% 69% 4% 111%

Rental 4% - 4% 2%

Total Group 3% 1%


Operating Income by Destination

2Q19 1H19

Contribution Y-Y Contribution Y-Y

Bangkok 60% 5% 60% 3%

Pattaya 16% 2% 15% 7%

Phuket 6% 8% 8% 14%

Other 18% 8% 17% 8%

Total Group 3% 1%


ERW Room Revenue by Key Source Markets

Remark : Exclude Philippines

2Q18

Weight

2Q19

WeightYoY

1H18

Weight

1H19

WeightYoY

1. Thailand 23% 24% 7% 18% 20% 9%

2. China 13% 12% 5% 14% 14% 3%

3. United States 9% 8% 8% 9% 9% 3%

4. India 6% 7% 21% 5% 6% 6%

5. Singapore 6% 6% 3% 6% 5% 4%

6. Hong Kong 5% 4% - 4% 4% 2%

7. Russia 2% 2% 16% 5% 4% 21%

8. Germany 3% 3% 2% 3% 3% 8%

9. United Kingdom 3% 3% 3% 3% 3% 1%

10. South Korea 3% 3% 10% 3% 3% 8%

Other 28% 28% 1% 29% 29% 1%


Category Hotel City Rooms Year Operate Ownership

Luxury Hotel Grand Hyatt Erawan Bangkok 380 1991 74%(1)

2 hotels | 821 rooms JW Marriott Bangkok 441 1997 100%

Luxury Resort Renaissance Koh Samui Samui 78 2005 100%

2 hotels | 158 rooms The Naka Island a Luxury Collection Phuket 80 Dec-08/Nov-17 100%

Midscale Hotel Courtyard by Marriott Bangkok 316 Nov-07 100%

3 hotels | 690 rooms Mercure Siam Bangkok 189 Dec-12 100%

Novotel Sukhunvit 4 Bangkok 185 Oct-18 100%

Midscale Resort Holiday Inn Pattaya Pattaya 567 Oct-09 100%

2 hotels | 777 rooms Mercure Pattaya Ocean Resort Pattaya 210 Dec-14 100%

Economy Hotel Ibis Sathorn Bangkok 213 Sep-08 100%

5 hotels | 1,001 rooms Ibis Nana Bangkok 200 Mar-09 100%

Ibis Riverside Bangkok 266 Nov-10 100%

Ibis Siam Bangkok 189 Dec-12 100%

Ibis Style Sukhumvit 4 Bangkok 133 Oct-18 100%

Economy Resort Ibis Patong Phuket 258 May-08 20%(2)

6 hotels | 1,385 rooms Ibis Pattaya Pattaya 254 Jul-08 20%(2)

Ibis Samui Samui 209 Oct-08 100%

Ibis Kata Phuket 258 Dec-09 100%

Ibis Huahin Huahin 200 Jan-12 100%

Ibis Styles Krabi Ao Nang Krabi 206 Nov-14 100%

Erawan Hotel Portfolio as of 2Q19



HOP INN Hotel Thailand HOP INN Nongkhai Nongkhai 79 Apr-14 100%

36 hotels | 2,810 rooms HOP INN Mukdahan Mukdahan 79 Apr-14 100%

HOP INN Kanchanaburi (2branches) Kanchanaburi 158 Jun-14/Dec17 100%

HOP INN Udonthani Udonthani 79 Jun-14 100%

HOP INN Ubon Ratchathani Ubon Ratchathani 79 Sep-14 100%

HOP INN Nakhon Ratchasrima Nakhon Ratchasrima 79 Sep-14 100%

HOP INN Maesod (2 branches) Tak 156 Oct-14/Sep-17 100%

HOP INN Sakaeo Sakaeo 79 Oct-14 100%

HOP INN Lampang Lampang 79 Nov-14 100%

HOP INN Khonkaen (2 branches) Khonkaen 158 Dec-14/Oct-17 100%

HOP INN Phitsanuloke Phitsanuloke 79 Aug-15 100%

HOP INN Trang Trang 79 Nov-15 100%

HOP INN Nakhonsrithammarat Nakhonsrithammarat 79 Nov-15 100%

HOP INN Suratthani Suratthani 75 Dec-15 100%

HOP INN Krabi (2 branches) Krabi 146 Dec-15/Mar-18 100%

HOP INN Roiet Roiet 79 Jan-16 100%

HOP INN Chumphon Chumphon 79 Mar-16 100%

HOP INN Chanthaburi Chanthaburi 75 Apr-16 100%

HOP INN Sakon Nakhon Sakon Nakhon 75 Jun-16 100%

HOP INN Chiang Mai Chiang Mai 75 Aug-16 100%




HOP INN Thailand HOP INN Hat Yai Hat Yai 79 Oct-16 100%

36 hotels | 2,810 rooms HOP INN Phuket Phuket 79 Dec-16 100%

HOP INN Burirum Burirum 79 Mar-17 100%

HOP INN Rayong Rayong 75 Apr-17 100%

HOP INN Chiang Rai Chiang Rai 79 May-17 100%

HOP INN Lampang City Center Lampang 79 Jun-17 100%

HOP INN Huahin Prachuap Khiri Khan 79 Sep-17 100%

HOP INN Nakornsawan Nakorn Sawan 79 Dec-17 100%

HOP INN Lopburi Lopburi 79 Dec-17 100%

HOP INN Surin Surin 79 Apr-18 100%

HOP INN Chonburi Chonburi 79 Aug-18 100%

HOP INN Chiangmai Superhighway Chiang Mai 79 Oct-18 100%

HOP INN Philippines HOP INN Ermita Manila 168 Dec-16 100%

5 hotels | 843 rooms HOP INN Makati Manila 144 Aug-17 100%

HOP INN Aseana Manila 196 Apr-18 100%

HOP INN Alabang Manila 168 Jul-18 100%

HOP INN Quezon Manila 167 Dec-18 100%



For More information Please visit www.theerawan.com

or contact [email protected]

quarterly meeting 3/2019 - the erawan group · hop inn revenue 6% •midscale bkk (ex. new hotel)...

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