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© 1
Mahindra Holidays & Resorts India Ltd.
Changing the Way India Holidays
(updated as at Dec 31, 2010)
© 2
The MHRIL story
Company Overview1
Differentiated Approach: Customer Centric Design2
Integrated and Mixed Use Business Model3
Unique Revenue Model4
Proven Financial Performance5
Way Forward6
© 3
Company Overview
Highlights & Milestones
Product Portfolio
©
Highlights & Milestones
• Among the Top 10 Vacation Ownership Companies in the World#
• India‟s 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
©
Product Portfolio
Flagship Brand : India’s 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
5
© 6
Differentiated Approach
Customer Centric Design
Product Features
©
Conventional Proposition: Essentially
discounted accommodation room nights.
7
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’
©
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
8
ONE WEEK EVERY YEAR FOR 25 YEARS, RIGHT-TO-USE MEMBERSHIP
IN 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
© 9
Integrated & Mixed Use Business Model
Integrated Value Chain
Multiple Sales Channels
Resort Network
Family Holiday Experience
© 10
Delivery Through Integrated Value Chain
Resort Design &
DevelopmentLifestyle product
marketing approach
Pan India multi-
channel sales
initiatives
Holiday planning
& reservation
services
Active customer
feedback system
Full service
resorts
Additional value
opportunities
Identification &
acquisition of land
Club Mahindra
©
Pan India multi-channel sales team
11
Onsite
Branch
Offices19
36#
126**
3*
Retail
Outlets
Franchisee
Service
Office
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 through
Innovative Sales & Marketing Channels
Multiple Sales Channels
© 12
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
12
Gir
Ranthambore
Sariska
Nawalgarh
Osian
Swamimalai
©
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 Crown resorts
• 2 Resorts 5 Star accredited by Dept. of Tourism GOI
• MRD processes certified ISO:9001-2000 compliant
• PCMM level 3 assessed at Goa Resort
• BHC certified Hygiene systems
Accreditation for
quality resort services
• Fun dining Restaurants &
Gourmet takeaways
• Svaastha Spas/Ayurvedic
Spas
• Kids Club
• Champs
• Bars
• Swimming pool
• Conferences & Outbound
Trainings
Activities & amenities giving complete holiday
experience#
• 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 enhance holiday experience
13
© 14
Unique Revenue Model
Multiple Revenue stream
Continuous Value creation from single unit
The Club Mahindra Advantage
© 15
Revenue Streams From Members
• Membership Fee:
– Admission Fee
– Entitlement Fee
• Annual Subscription Fee: (ASF)
• Interest: On Instalments (EMI’s)
• Resort Revenue: Revenue generated at the resort during the
holiday
Upfront Cash:
Admission Fee
Recurring Income:
Entitlement Fee
©
Unique Revenue Model Value created continuously from a single resort unit..
Timeline (years)*Inflation not considered
0 25
Valu
e R
eali
zed
Recurring Revenue Streams*: ASF, Usage Fee, Resort
Revenues
Upfront
Cash:Admission
Fee
Residual Value *:Opportunity for
2nd cycle - ZERO
Marginal Cost of
Inventory
Income from
Financing
Admission FeeEntitlement Fee
Resort - MembersResort – FITInterest on EMI
Annual Subscription Fee
26
Value Creation Profile
Large Upfront Cash-flow
Built in Annuity Stream
Residual Value
16
© 17
The Club Mahindra Advantage
Club Mahindra Hotels
OccupancyHigher and Stable All Year round
occupancy
Lower occupancy subject to
uncertainty and fluctuations
Revenue
Streams
Multiple 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
Experience
High Quality – Focus on every
member of the Family.
Generally less focus on Holiday
Experience and no focus on
individuals within the Family.
© 18
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 15.03
Total 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 Ownership
and other services
Year ended March 31st
Year ended March 31st
© 19
Balance
Sheet
Summary Statement of Assets & Liabilities As at 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 28.4 Employee 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 805.0 641.0 482.5 324.2 226.3 164.0 Loan funds:
Secured loans 10.0 24.7 20.1 6.0 26.8 22.0 Unsecured 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 23.5
Net 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 78.2
Cash and bank balances 24.4 32.8 7.6 9.4 7.8 3.9 Loans 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
© 20
Strong Financial Performance
Sustained Growth
Financials
Highlights: 9M FY11 and Q3
Consolidation Measures for the future
© 21
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.)
©
77.4
145.7
218.7
403.4
484.1
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
500 606
675 779
1,177
1,476 1,555
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%
©
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
140.5 155.6
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)
23
CAGR FY08 – FY10: 49% CAGR FY08 – FY10: 67%
FY 05 FY 06 FY 07 FY 08 FY 09 FY 10 9M FY 11
EBITDA Margin 26% 28% 33% 37% 35% 39% 30%
PAT Margin 9% 13% 17% 21% 19% 23% 17%
©
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 have
received the prestigious COPC certification.
– Won prestigious Bird Express TravelWorld Awards for Excellence in Operations
24
©
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
25
©
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
26
© 27
MHRIL Growth Strategy
Strategy Formulation
Intensify, Integrate & Diversify
©
28
Strategy Formulation
Competitive
Advantage
Growth
Strategy
Environment
& Industry
+
Growth Strategy driven by
An enabling environment & our competitive advantage
CHANGE
Identified Business
Processes to suit the
changed times.
CONSOLIDATE
Intensify existing VO
operations.
Enter new segments.
BE FUTURE READY
Leverage Competences &
enter related businesses.
Test new initiatives.
+ +India Story:
Strong
Fundamentals
Travel &
Tourism:
Growth
Sector
VO Industry:
Nascent
market
New Segments
Management
Competences
Leading Brand, Mahindra Group,
Unique & Differentiated Biz Model,
Human Capital
28
© 29
29
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
Glo
bal
Geogra
phic
al M
ark
et
Product
Zest, Fundays, Fractionals,
Mass Market VO, Club M
Travel Services
Homestays, Svaastha,
Campsites
© 30
Thank You!