3Q 12/13 earnings presentation - listed...

BTS Group Holdings PCL

prepared by Investor Relations department - BTS Group Holdings PCL -

3Q 12/13 earnings presentation 15 February 2013


Disclaimer

3Q 12/13 earnings presentation 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. Persons who attend this presentation or view this presentation are required to make themselves aware of and adhere to any and all restrictions applicable to them. In particular, this presentation may not be and will not be made in the United States and this presentation may not be and will not be distributed, directly or indirectly, into the United States or to any U.S. Person (as defined in Regulation S under the U.S. Securities Act of 1933 (“Regulation S”), other than as permitted by Regulation S or to Qualified Institutional Buyers (as defined in and) in accordance with Rule 144a under the U.S. Securities Act of 1933, and this presentation is not to be distributed, directly or indirectly, in Canada, Australia or Japan or to any citizen or resident of Canada, Australia or Japan. This presentation may only be attended by, and this presentation may only be viewed by, persons in member states of the European Economic Area who are qualified investors within the meaning of article 2(1)(e) of the prospectus directive (2003/7/ec) (“Qualified Investors”) and persons who (i) are outside the United Kingdom or (ii) are persons falling within articles 19(5) or 49(2)(a) to (d) of the financial services and markets act 2000 (financial promotion) order 2005 (all such persons (together with Qualified Investors) being referred to as “Relevant Persons”). This presentation must not be acted on or relied on by persons who are not Relevant Persons and any investment or investment activity to which this presentation relates is available only to Relevant Persons and will be engaged in only with Relevant Persons. 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


Section 1 Financial Performance

Section 2 Business Update

Appendices


1,333 2,516

3,321

4,666 (6,806)

Beginning cash (31/3/12)

CFO CFI CFF Ending cash (31/12/12)

9 Months Cash Flow Snapshot 3Q 12/13 Operating revenue breakdown

Operating revenue comparison (YoY)

3Q 12/13 Overview

4

P&L snapshot 3Q 12/13 (THB mn)

3Q 12/13 earnings presentation

*to equity holders of the parent

Total operating revenue grew 37% YoY Income Statement (THB mn) 3Q 12/13 3Q 11/12 % YoY

Operating Revenues 2,725 1,991 37%

Gross operating profits 1,264 917 38%

EBITDA 1,960 1,124 74%

Operating EBITDA 1,310 1,069 22%

EBT 1,272 385 230%

Net income(loss)* 1,088 329 231%

Gross Operating Profit Margin (%) 46% 46%

EBITDA margin (%) 56% 53%

Operating EBITDA margin (%) 48% 54%

Operating Net profit margin (%) 16% 13%

56%

Mass Transit

28%

Media

16%

Property

0%

Services

THB 5,428mn received from sale of investment (VGI, Kamala, and Nana)

THB (6,718)mn used in debt repayment and dividend payment

1,991

2,725

184 249

284 17

3Q 11/12 Mass transit Media Property Services 3Q 12/13

14% 50%

196%

(THB mn)

N/A


Operating revenue increased by THB 284mn YoY to THB 430mn due to the increased revenue from i) 55 transferred units of Abstract PHY, and ii) the opening of Eastin Grand Hotel Sathorn

Received THB 1,849mn for the divestment of Kampoo Property Company Limited (Nana)

Continued strong growth: revenue grew 50% YoY to THB 749mn High contribution from BTS-related business: revenue from BTS business increased

24% YoY to THB 369mn Strong increase in Modern Trade business: revenue from Modern Trade business

grew 83% YoY to THB 333mn Improved margins: operating EBITDA margin improved YoY to 53% compared to 51%

Revenue grew 14% YoY to THB 1,529mn

New quarterly ridership record: total quarterly ridership grew 16% YoY to 50mn passengers in 3Q 12/13

New average quarterly record: passengers of 608,564 per weekday, representing 15% YoY growth and 3% QoQ

3Q 12/13 Highlights

5

Major developments by business unit in 3Q 12/13

3Q 12/13 earnings presentation

Revenue increased by THB 9mn to THB 17mn QoQ driven by increased revenue from HHT construction services and rabbit card sales

MASS TRANSIT

MEDIA

PROPERTY

SERVICES


2%

O&M BRT

Revenue breakdown

Operating revenue breakdown

Historical operating revenue (THB mn) Key factors

Operating performance

Mass transit


YoY Growth Factor: 1) Ridership increased 16% to 50mn passengers (a new record in operational history) 2) Increase in revenue from i) SKV line extension (On Nut – Bearing), ii) organic growth, and iii) lower base effect in relation to flooding Cost increased 12% YoY or THB 92mn due to i) higher depreciation, and ii) employee cost EBITDA margin fell to 60% mainly due to an absence of non-recurring other income A new record of average weekday ridership of 608,564 passengers

82%

Core System

954 939

794

990 1,039 1,038 1,038

1,326 1,345

1,468 1,394

1,507 1,529

3Q 09/10

4Q 09/10

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

Mass transit (THB mn) 3Q 12/13 3Q 11/12 YoY 2Q 12/13 QoQ

Revenue 1,529 1,345 14% 1,507 1%

Costs of revenue 868 777 12% 752 16%

Gross Profit 661 569 16% 756 -13%

EBIT 534 468 14% 636 -16%

Operating EBITDA 923 866 7% 1,021 -10%

Gross margin (%) 43% 42% 50%

EBIT margin (%) 35% 35% 42%

Operating EBITDA margin (%) 60% 64% 68%

11%

O&M E14

5%

O&M S7&S8


Media


Operating revenue breakdown Operating performance


Media (THB mn) 3Q 12/13 3Q 11/12 YoY 2Q 12/13 QoQ

Revenue 749 501 50% 725 3%

Costs of revenue 297 203 46% 286 4%

Gross Profit 452 297 52% 439 3%

EBIT 353 225 57% 351 0%

Operating EBITDA 395 257 54% 381 4%

Gross margin (%) 60% 59% 61%

EBIT margin (%) 47% 45% 48%

Operating EBITDA margin (%) 53% 51% 53%

6%

Office Buildings & Others

49%

BTS - Related

293 289 300 345 370 355

467 523 501

465

637

725 749

3Q 09/10

4Q 09/10

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

45%

Modern Trade

BTS-related Media 1) Revenue increased 24% YoY (to THB 369mn) from i) increased capacity of train body and in-train media, ii) increase in occupancy in static and digital advertising areas, and iii) price and occupancy increase in merchandising areas Modern Trade Media 1) Revenue increased 83% YoY (to THB 333mn) from i) additional contracts signed with Tesco Lotus and Big C, and ii) a lower base in relation to the flooding Office Building and Other Media 1) Revenue increased 131% YoY (to THB 47mn), driven by i) additional rights in 4 office buildings, ii) new bundling packages


8%

Abstracts Projects

125 155 90

134 185 154 154 152

145

210 155

194

430

1,600

1,849

3Q 09/10

4Q 09/10

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

Property


Property Revenue

1) Revenue increased by THB 2,133mn YoY to THB 2,279mn mainly due to divestment of Nana Operating revenue

1) Operating revenue increased by THB 284mn YoY to THB 430mn from i) 55 transferred units of Abstracts PHY, and ii) increase in revenue from newly completed Eastin Grand Hotel Sathorn SG&A

1) SG&A rose 71% YoY by THB 63mn mainly from i) expenses related to Abstract PHY units transferred, and ii) depreciation expenses of Eastin Grand Hotel

Revenue breakdown Performance

Historical revenue (THB mn) Key factors

80%

Proceeds from sale of Nana

10%

Commercial Projects

THB 1,600

Proceeds from sale of Kamala

THB 1,849

Proceeds from sale of Nana

Thana City Projects

2% * Included sales of land at Nana

Property (THB mn) 3Q 12/13 3Q 11/12 YoY 2Q 12/13 QoQ

Revenue 2,279 145 1468% 1,837 24%

Costs of revenue 1,350 94 1335% 1,381 -2%

Gross Profit 929 51 1711% 456 104%

EBIT 727 (37) N/A 255 N/A

Operating EBITDA 59 (12) 605% (2) N/A

Gross margin (%) 41% 35% 25%

EBIT margin (%) 32% -26% 14%

Operating EBITDA margin (%) 3% -8% 0%


52%

BSS

Services


Revenue

1) Revenue increased by THB 9mn QoQ to THB 17mn from i) HHT construction services, and ii) the sale of rabbit cards (common ticketing cards for Bangkok’s mass transit network plus retail e-payment card) SG&A 1) SG&A rose to THB 27mn in 3Q 12/13 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


48%

HHT

1 1

9

25

31

35 33 33

36

1

6 8

17

3Q 09/10

4Q 09/10

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

Service (THB mn) 3Q 12/13 3Q 11/12 YoY 2Q 12/13 QoQ

Revenue 17 0 N/A 8 110%

Costs of revenue 27 1 3054% 21 30%

Gross Profit (10) - N/A (12) -22%

EBIT (36) (17) 115% (32) 13%

Operating EBITDA (20) (14) N/A (18) N/A

Gross margin (%) -57% N/A -153%

EBIT margin (%) -212% N/A -392%

Operating EBITDA margin (%) -118% N/A -227%


6,101 9,429

10,885

17,181

48,303 38,953

31-Dec-12 30-Sep-12

8,282 7,752

57,007 57,811

31-Dec-12 30-Sep-12

Liability and equity breakdown Assets breakdown

3Q 12/13 Balance sheet


Key ratios

Net Debt to Operating EBITDA1

3Q 12/13 : 2.07x 2Q 12/13 : 4.54x

Current assets

Non-current Assets

87%

13%

88%

12%

65,289 65,563

Current liabilities

Non-current liabilities

Equity 60%

14%

26%

65,289 65,563

74%

9%

17%

3Q 12/13: 0.21x 2Q 12/13: 0.55x

Net Debt to Equity

3Q 12/13 : 1.36x 2Q 12/13 : 1.00x

Current Ratio

3Q 12/13 : 5.70x 2Q 12/13 : 3.51x

Interest Coverage2

1 Annualised last 12 months operating EBITDA 2 Operating EBITDA divided by finance cost (period only)


0.21

0.20

0.19

0.35 0.35 0.33

0.26 0.26 0.25

Liability and equity breakdown Convertible Bonds

Improved Leverage Ratios


Net Debt to Operating EBITDA3 (X)

Net Debt to Equity (X)

Liabilities/Equity VS Liabilities/Assets (x)

1 Conversion period from 1 Jan to 7 Feb 2013 2 All the components in equity remain unchanged from 3Q 12/13 except for issue and fully paid capital

3 Annualised last four quarters of Operating EBITDA

Details (as of 7th February 2013)

Principal THB 10,000mn

Total CBs converted THB 9,581mn (1,871 mn shares)

Outstanding CBs THB 419mn

Conversion Price THB 5.00 per share (revised on 29 Jan 13)

2.07

1.97

1.91

3Q 12/13 Based on latest conversion 1 If CBs are all converted 2




Business Update



Mass Transit Update


Network Expansion: New lines expected to bid in 2013 (Total of 138.3km) Red Line (10.0km)

(Rangsit – Thammasat University)

Light Red Line (14.0km) (Salaya – Taling Chan)

Light Red Line (19.0km) (Bang Sue – Phaya Thai – Makkasan – Hua Mark)

Pink Line (36.0km) (Khae Rai – Pak Gred – Min Buri)

Green Line (7.0km) (Samut Prakan – Bang Pu)

Green Line (18.4km) (Mo Chit – Saphan Mai - Kukot)

Orange Line (20.0km) (Thailand Cultural Centre – Min Buri)

Airport Link Red Line (7.9km) (Phaya Thai – Bang Sue)

Sources: OTP & SRT

SRT Red Line (6.0km) (Taling Chan – Siriraj)


Mass Transit Update


New Stations and New Trains in Service

Sukhumvit Line: •13 new carriages already installed •All trains on SKV line to be 4-car trains by FY 12/13

Silom Line: •Pho Nimit: Trial Operation on 12 Jan 2013 •Talat Phlu: Trail Operation on 14 Feb 2013

Sources: OTP & SRT


Media Update


Expected Revenue Growth (13/14)

Development on Platform Screen Doors

• Installation started at Siam station in Feb 2013

• Expected completion (9 stations; 10 platforms) by Dec 2013

30% YoY Revenue Growth

20% Off.

Bldg & Others

40% Modern

Trade 20% BTS

49% 45%

6%

BTS Modern Trade Office Bldg

45% 49%

6%

BTS Modern Trade Office Bldg

FY 13/14 FY 12/13

Eastin Grand Hotel 2013/14 Revenue Contribution 2013/14 Expected Revenue Growth


71%

58%

62%

86%

78%

66%

77%

86%

90%

Apr May Jun Jul Aug Sep Oct Nov Dec

71%

44%

49%

72% 73%

59%

78%

91% 89%

Apr May Jun Jul Aug Sep Oct Nov Dec

May – Dec’12 Occupancy: 73%

Commercial Property Update


Eastin Grand Hotel

U – Chiangmai

U – Kanchanaburi

Awards

Eastin Grand

U - Kanchanaburi

U - Chiangmai

11th best hotel in Bangkok (out of 726 hotels) rated by Trip Advisor

World Travel Awards 2011 & 2012: Thailand’s Leading Romantic Resort

Historical Architectural Conservation Hotel 2009/11 Thailand Boutique Award 2010 – Outstanding in total experience category in Northern region

Apr – Dec’12 Occupancy: 75%

Apr – Dec’12 Occupancy: 70%

45%

64%

87% 84%

62% 60%

85% 81%

May Jun Jul Aug Sep Oct Nov Dec


Services Update


Result (as of Dec 12) Target (Dec 13)

>900,000 Rabbit Cardholders

>1.5 mn Rabbit Cardholders

>250,000 Carrot Program Member

>600,000 Carrot Program Member

Rabbit and Carrot Update

Rabbit SIM Card

3Q 12/13 New Partners

Upcoming Projects

Rabbit New Partners

>20 Carrot brand

partners (as of Dec 12)

Signed exclusive NFC contract with AIS in Dec 2012

3 Main Functions: 1) Card balance checking, 2) Card usage history, and 3) Over the air (OTA) top up

>30 Rabbit brand

partners (as of Dec 12)

Carrot New Partners

Project Partner Expected Date (Calendar Year)

1 NFC AIS 3Q 2013

2 Co-branded debit/credit card

BBL 1Q 2013

3 Rabbit at Express Stores & Supermarkets

Tesco Lotus 1Q 2013

Tops Supermarket 2Q 2013

Big C 4Q 2013


Appendices



Income Statement


Income Statement

Income Statement 3Q 12/13 3Q 11/12 % YoY 2Q 12/13 % QoQ

(THB mn)

Operating revenues 2,725 1,991 37% 2,434 12%

Other recurring incomes 50 86 -42% 36 39%

Total recurring revenues 2,775 2,078 34% 2,470 12%

Operating costs 1,461 1,075 36% 1,179 24%

Selling and Administrative expenses 459 314 46% 395 16%

Income (loss) from investment in associates 2 0 426% 1 119%

EBITDA 1,960 1,124 74% 1,635 20%

Operating EBITDA 1,310 1,069 22% 1,329 -1%

Finance cost 231 357 -35% 378 -39%

Non-operating gain (loss) 646 54 1107% 301 115%

EBT 1,272 385 230% 820 55%

Income tax 100 37 167% 88 14%

Minority interests 84 19 334% 41 104%

Net income(loss) to equity holders of the parent 1,088 329 231% 691 57%

EPS (THB per share) 0.10 0.04 189% 0.07 39%


Total assets a decrease in assets as BTS Group used cash proceeds from land sales to repay debt

Total liabilities a decrease in liabilities from the first tranche repayment of BTSC debenture, the continuing conversion of CB, and repayment of bank loans

Total shareholder equity an increase in shareholder equity from i) increase in paid up capital mainly from the additional shares from CBs conversion, ii) gain from sale of VGI

Balance Sheet


Balance Sheet

Balance Sheet 31-Dec-12 31-Mar-12 Change Change (%)

(THB mn)

Assets

Current assets 8,282 7,868 415 5%

Non-current assets 57,007 59,021 (2,014) -3%

Total assets 65,289 66,889 (1,599) -2%

Liabilities

Current liabilities 6,101 8,338 (2,237) -27%

Non-current liabilities 10,885 21,619 (10,734) -50%

Total liabilities 16,986 29,957 (12,970) -43%

Shareholder’s equity

Total shareholder’s equity 48,303 36,932 11,371 31%


Cash flow Statement


Cash Flow

Cash Flow Key items Net cash provided from operating activities

i) reduction in accrued income (receipt of payment from Treasury Department ii) reduction in O&M receivables iii) improved profit

Net cash provided from investing activities

i) sale of investment in subsidiaries (Kamala, Nana, and VGI)

Net cash used from financing activities i) debt repayment, ii) dividend payment

Cash Flow (for the 9 months) ended 31-Dec-12 31-Dec-11 Change Change (%)

(THB mn)

Beginning cash 1,333 1,825 (492) -27%

Net cash provided from operating activities 3,321 1,292 2,029 157%

Net cash provided from investing activities 4,666 (2,398) 2,267 -295%

Net cash used from financing activities (6,806) 654 (7,460) -1140%

Cash and cash equivalent 2,516 1,375 1,142 83%


BTS Stock Dashboard


BTS Data

Ranking in SET 50

SET Data

MARKET CAP

#33 AVG DAILY TURONVER1

#5

Pricing Jan-13 3Q 12/13

Price Change (%) 9.10 % 26.5 %

Liquidity

Daily Value (THB mn) 1,267.1 827.4 Daily Value (USD mn) 42.2 27.0

Market Cap (as of 31 Jan 13)

Market Cap (THB mn) 85,853.3

Market Cap (USD mn) 2,876.0

Pricing Jan-13 3Q 12/13 Index Change (%) 5.9 % 7.2 %

Liquidity Daily Value (THB mn) 48,806.8 31,035.6 Daily Value (USD mn) 1,626.0 1,011.8

Market Cap (as of 31 Jan 13) Market Cap (THB bn) 12,279.8 Market Cap (USD bn) 411.4

1 Average daily turnover of 1 month (1-31 Jan 2013)


Q&A


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