the proposed joint ventures with the straits …...2013/07/02 · this presentation may contain...
TRANSCRIPT
The Proposed Joint Ventures with
The Straits Trading Company Limited
And
Toga Pty Ltd
2
DISCLAIMER
This Presentation should be read in conjunction with the Circular to Shareholders dated
24 June 2013 issued by Far East Orchard Limited (“FEOrchard” or the “Company”) in
relation to the Transactions (“Circular”). Shareholders are also advised to read all the
announcements and documents relating to the Transactions that have been or shall be
released by the Company; copies of which are available on www.sgx.com.
Capitalised terms not defined herein shall have the meanings given to them in the
Circular.
FORWARD LOOKING STATEMENTS
This Presentation may contain forward-looking statements. These statements reflect
current expectations, beliefs, hopes, intentions or strategies regarding the future and
assumptions in light of currently available information. Such forward-looking statements
are not guarantees of future performance or events and involve known and unknown
risks and uncertainties. Accordingly, actual results or outcomes may differ materially from
those described in such forward-looking statements. Shareholders should not place
undue reliance on such forward-looking statements, and neither FEOrchard nor any
member of the FEOrchard Group undertakes any obligation to update publicly or revise
any forward-looking statements, subject to compliance with all applicable laws and
regulations and/or rules of the SGX-ST.
Hospitality Segment:
Business Strategy & Update
SINGAPORE’S LEADING HOSPITALITY OPERATOR
4 4
Current Portfolio
17 hotels and serviced
residences in Singapore
1 serviced residence
in Malaysia
Strategy
Vertically integrated
hospitality operator
To grow a portfolio of 3rd
party hospitality management
agreements
To grow our footprint
regionally
The Quincy Hotel Oasia Hotel Singapore
Orchard Scott Residences
Orchard Parade Hotel
Orchard Parksuites Village Hotel Albert Court
UPCOMING HOTELS & SERVICED RESIDENCES
5 5
Amoy Hotel
2013
7 new and pipeline agreements in Singapore, Malaysia and Indonesia
Oasia Downtown Hotel Outpost Hotel Oasia West Residences
Oasia Residences KL Quincy Bali Quincy Bintan
EXPANSION BEYOND SINGAPORE
6 6
Australia
Expand Beyond
Singapore
to Achieve
Better Growth
Southeast Asia
WHY AUSTRALIA?
7 7
Different Economic Cycle from Southeast Asia
Developed economy with stable hospitality market trends
In contrast, Southeast Asia has higher growth and risks
Key Travel Destination in Asia Pacific
Approximately 6 million international visitors1
Approximately 74 million domestic overnight trips2
Source: (1) Australian Bureau of Statistics, Short-term visitor arrivals (last twelve months ended April 2013);
(2) Tourism Research Australia, Domestic overnight trips (year ended Dec 2012)
Top 5 Country for Visitor Arrivals into Singapore
Increases awareness of our hospitality brands
Provides cross-selling benefits
JOINT VENTURE OPPORTUNITIES
8 8
Like-Minded Partners
Highly Complementary Networks and Assets
Enhanced Platform for Growth
HOSPITALITY STRUCTURE POST-COMPLETION
9 9
FEOrchard
30%
STC1
50% 50%
Hospitality
HoldCo
Toga Investments
Trust SPV
STC Joint Venture Toga Joint Venture
70%
via a subsidiary, FEHIPL2
50%
Held directly or by wholly-owned subsidiaries:
FEOrchard Assets:
• 25 hotel and serviced management agreements.
• One property management agreement
STC Assets
• Three Hotels in Australia
• RHI, which manages/leases 13 hotels
Toga Hotels:
• Toga Group’s hospitality
management arm, which
operates >50 hotels and
serviced apartments
Five Hotels in Australia
• After option is exercised to
acquire TAF Assets
(1) Through its wholly-owned subsidiary, SPL
(2) Assuming that the Interest Transfer has taken place
FINANCIAL IMPACT FOR SHAREHOLDERS
10 10
Diversification Greater revenue and earnings diversification
New geographies and customer segments
Funded by existing cash and/or external debt facilities
No need to raise new equity from existing or new shareholders
Value
Creation
Revenue and cost synergies
Increase recurring income and earnings growth
Better access to future growth opportunities in hospitality-related
investments
The Joint Ventures Offer Benefits to FEOrchard and our Shareholders
Sufficient
Funds
The Proposed Joint Ventures
with Straits Trading and Toga :
Overview
RHI operates 13 hotels under the “Rendezvous” brand
and also owns the “Marque” brand
PROPOSED JOINT VENTURE WITH STRAITS TRADING
12 12
Melbourne, Australia
Rendezvous Grand Hotel Melbourne
Perth, Australia
Rendezvous Hotel Perth (1)
Hospitality Assets ― Three Hotels
Hospitality Management ― RHI
Perth Central, Australia
Rendezvous Studio Hotel Perth Central
(1) To be rebranded as Rendezvous Grand Hotel Perth
PROPOSED JOINT VENTURE WITH TOGA
13 13
Hospitality
Management
Leading accommodation provider in Australia
Operates >50 hotels and serviced apartments
Australia, New Zealand, Germany and Denmark
Hospitality
Assets1
(1) After option is exercised to acquire TAF Assets
Sydney
Vibe Hotel
Adelaide
Adina Apartment
Hotel
Sydney Harbourside
Adina Apartment
Hotel
Darwin
Travelodge
Mirambeena
Brisbane
Adina Apartment
Hotel
BUILDING A STRONGER PORTFOLIO
14
18 PROPERTIES
3,600 ROOMS
>80 PROPERTIES
>13,000 ROOMS
13 PROPERTIES
2,700 ROOMS
54 PROPERTIES
7,000 ROOMS
ENLARGED HOSPITALITY PLATFORM
15
Over 80 properties with more than 13,000 rooms
1 property
128 rooms
DENMARK
GERMANY
5 properties
>600 rooms
AUSTRALIA
NEW ZEALAND
55 properties
>7,500 rooms
4 properties
>800 rooms
17 properties
~ 3,450 rooms
1 property
150 rooms
SINGAPORE
MALAYSIA
1 property
341 rooms
CHINA
18 properties
>3,700 rooms
ENLARGED HOSPITALITY PLATFORM
16
Increases our brand portfolio from 3 to 9
HIGHLY COMPLEMENTARY OPPORTUNITIES
17 17
Strategic
Foothold
Manage 59 properties in Australia and New Zealand
Portfolio under the joint ventures located across key cities such as Sydney,
Brisbane, Gold Coast, Melbourne, Perth, Auckland and Christchurch
Cost
Savings
Both joint ventures create a strong presence in Australia and New Zealand
Improve operational efficiency
Greater economies of scale
Optimise shared resources and rationalise overheads
Revenue
Enhancement
Cross-sell across geographies and target segments
Improve sales and distribution especially in the domestic market
IN SUMMARY
18
Expands
Regional Footprint
Increases
Scale & Efficiency
Increases
Recurring Income
Increases
Future Opportunities
T H A N K Y O U