39
Company Presentation – Feb 2018
Company Presentation – Feb 2018
2
Statements included or incorporated in these materials that use the words "believe", "anticipate", "estimate", "target", or "hope", or that
otherwise relate to objectives, strategies, plans, intentions, beliefs or expectations or that have been constructed as statements as to future
performance or events, are "forward-looking statements" within the meaning are not guarantees of future performance and involve risks and
uncertainties that could cause actual results to differ materially from historical results or those anticipated at the time the forward-looking
statements are made. MINT undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new
information, future events or otherwise. MINT makes no representation whatsoever about the opinion or statements of any analyst or other
third party. MINT does not monitor or control the content of third party opinions or statements and does not endorse or accept any
responsibility for the content or the use of any such opinion or statement.
FORWARD LOOKING STATEMENT
Disclaimer
2017 Performance Recap & Recent UpdatesMinor HotelsMinor FoodMinor LifestyleCorporate Information2018 Outlook & Beyond
Souq Waqif Boutique Hotels by Tivoli
Agenda
2017 Performance Recap& Recent Updates
5
MINT REMAINED RESILIENT DESPITE MACRO CHALLENGES
2017 net profit increased by 18% from 2016 core net profit, attributable to the strong performance of all three businesses. The robust multi-brand portfolios, geographical diversification and business agility contributed to MINT’s growth.
REVENUE
NET PROFIT
2017 Performance Recap
40,000
45,000
50,000
55,000
60,000
2016 Minor Hotels Minor Food Minor Lifestyle 2017
THB million Excl special gains+8% y-y
56,97358,644
54,285
0
2,000
4,000
6,000
2016 Minor Hotels Minor Food Minor Lifestyle 2017
THB million
6,590
5,415
Excl special gains+18% y-y
4,576
Minor Lifestyle 7%
Minor Food40%
Minor Hotels53%
Minor Lifestyle3%
Minor Food35%
Minor Hotels62%
Non-recurring items as detailed on page 40
6MINT’s Footprint
With solid diversification strategy, MINT’s presence was in 32 countries at the end of 2017 across its hospitality and restaurant businesses.
Minor Food
Combination
Minor Hotels
REVENUE CONTRIBUTION
87%
50% 51% 50%
13%
50% 49% 50%
0%
25%
50%
75%
100%
2008 2016 2017 2022F
International
Thailand
* Excludes non-recurring items in 2016
INTERNATIONAL PRESENCE
7
WHAT’S NEW IN 4Q17 TO DATE
Recent Development
MINOR HOTELS
• Launched OVS Kids, the Italian fast-fashionbrand, at Don Mueang International Airportin Bangkok
• Completed the acquisition of 4 existing Patara restaurants and franchised rights to develop and operate restaurants under Patara and Suda brands in the UK
MINOR LIFESTYLE
MINOR FOOD
• Sold and transferred 1 unit of The Estates Samuiand 2 units of Anantara Chiang Mai Serviced Suites
• Acquired 74% stake in the UK based Corbin & King, comprising 6 brasserie-style restaurant including the renowned Wolseley and the management of The Beaumont, a five-star hotel in London
• Entered into a 50% strategic JV to strengthen the AVANI brand in Thailand with the launch of AVANI Hua Hin in November 2017
• Launched Sunset Coast Samui, a property managed by AVANI in February 2018
• Debuted the Tivoli brand in the Middle East with the opening of Souq Waqif Boutique Hotels by Tivoli in Doha, Qatar
• Took over the management of a hotel in LuangPrabang, which will be rebranded to AVANI
• Added 7 units in Phuket to the inventory pool of Anantara Vacation Club
Hotel Investment
Hotel Management
Management Letting Rights in Australia
Residential Development
Anantara Vacation Club
• Introduced the AVANI Residences brand to Australasia with the launch of 2 properties:
‒ AVANI Metropolis Auckland Residences in New Zealand
‒ AVANI Broadbeach Gold Coast Residences in Australia
UK Operations
• Entered into Seychelles with the opening of Burger King and The Coffee Club
New International Market
New Brand
CORPORATE
Warrant Conversion
• Final conversion of warrants in November2017 resulting in an increase in equity ofTHB 7,364 million (THB 7,899 million receivedfor the entire program)
Dividend Payment • Announced dividend payment of THB 0.40per share, or a payout ratio of 33%, to beproposed to the AGM for approval on April 3,2018
Oaks Southbank Melbourne
Minor Hotels
9
FINANCIAL PERFORMANCE – MINOR HOTELS
2017 revenue of hotel & mixed-use business grew by 12%, as a result of growth of all major segments. 2017 EBITDA increased by 8%, slower than the growth rate of revenue, primarily because of the hotel renovations which impacted the profitability of Portugal portfolio. Net profit increased by a higher magnitude of 20%, attributable to various tax benefits and deferred tax adjustments.
Minor Hotels
Revenue
EBITDA
NPAT
THB million
+20%
17,977 19,243
23,547
27,758 30,970
5,206 5,561 6,146 7,146 7,685
2,449 2,600 3,009
2,811 3,375
+12%
+8%
EBITDA Margin 29.0% 26.1% 24.8%28.9%
NetMargin
20172013 2015
13.6% 12.8%
2014
10.9%
2016
13.5%
25.7%
10.1%
* The financials above reflect performance from operation, and therefore exclude non-recurring items in 2014-2016 as detailed on page 40
KEY HIGHLIGHTS
Owned hotels
56%of 2017 hospitality revenue
Management Letting Rights
20% of 2017 hospitality revenue
Management contracts
4%of 2017 hospitality revenue
Real estate
17% of 2017 hospitality revenue
• Revenue grew by 10%, as a result of improved overall operations, particularly in Thailand, Brazil and Africa (partly from consolidation of Zambia hotels since 3Q16) and consolidation of Corbin & King.
• Revenue increased by 3%, supported by RevPar growth of 4% in AUD term (3% in THB term), together with the increase in room count of 1%.
• Revenue increased by 6%, primarily attributable to strong performance of hotels in Thailand and the UAE, together with additional management fees from newly managed hotels.
• Revenue grew by 36%, from both strong sales of residential development and turnaround of Anantara Vacation Club following the adjustment of its sales model.
10
Hubs
In recent years, MINT has implemented a solid diversification strategy. At the end of 2017, MINT operates hotels and spas under a combination of investment, joint-venture and management business models in 25 countries, with another 6 countries in the pipeline over the next three years.
REVENUE CONTRIBUTION
94%
37% 37% 29%
6%
63% 63% 71%
0%
25%
50%
75%
100%
2008 2016 2017 2022F
International
Thailand
Management
Combination
Investment
New Destinations in Pipeline
* Excludes non-recurring items in 2016
Minor Hotels
MINOR HOTELS - INTERNATIONAL PRESENCE
11
70%
66%68%
67% 68%
67%
60%
70%
80%
2013 2014 2015 2016 2017
5,5736,110 5,830 5,744 5,803 5,705
2,000
4,000
6,000
3,9014,024 3,964
3,821 3,933 3,837
2,000
3,000
4,000
SYSTEM-WIDE HOTEL OPERATIONS
Excluding new hotels, organic RevPar of the entire portfolio increased by 3% in 2017, driven by owned hotels and Oaks. 2017 system-wide RevPar was flat compared to 2016, primarily from newly-added overseas hotels which are still in the ramping-up stage.
THB
NUMBER OF HOTEL ROOMS ADR
OCCUPANCY REVPAR
No of Rooms
System-wide-1%
Organic excl FX+1%
THB Organic excl FX+3%
System-wideFlat
+2%
Organic+1%
System-wideFlat
-
5,000
10,000
15,000
20,000
2013 2014 2015 2016 2017
MLR
Managed
Joint-venture
Owned
12,80014,721
20,209
17,714
Minor Hotels
19,797
2013 2014 2015 2016 2017
2013 2014 2015 2016 2017
12
56%
66%68%
59%
66%63% 62%
40%
50%
60%
70%
80%
2012 2013 2014 2015 2016 2017
4,3724,168 4,293
3,6533,866 3,865
2,000
3,000
4,000
5,000
OWNED-HOTELS OPERATIONS
Owned hotels contribute 56% of hotel & mixed-use revenue in 2017. RevPar of owned hotels increased by 6% primarily because of the strong performance of hotels in Thailand, together with Tivoli branded portfolio in Portugal and Brazil.
THB
THB
Owned-hotels
2017 HOSPITALITY REVENUE CONTRIBUTION
NUMBER OF HOTEL ROOMS ADR
OCCUPANCY REVPAR
-1%No of
Rooms
Organic excl FX+6%
System-wide +6%
System-wide +7%
Organic-1%
System-wide-1%
2,6763,112
5,387
7,118 7,039
0
2,000
4,000
6,000
8,000
2013 2014 2015 2016 2017
6,3857,028 6,553
5,811 6,229 6,228
0
2,000
4,000
6,000
8,000
Minor Hotels
* No of rooms declined slightly in 2017 as renovations of some hotels such as Tivoli Carvoeiro and Anantara Golden Triangle resulted in the merge of rooms for bigger, higher category rooms.**Change in 2016 stats because of retroactive classification of hotels in Zambia from JV hotels to owned hotels as a result of change in investment status effective 3Q16.
2013 2014 2015 2016 2017
2013 2014 2015 2016 2017
Organic excl FX+7%
13
RevPar Growth (y-y) +17% -2% +10% +6% +6%
4,662 4,830 4,943 4,722 4,874
3,278
2,473
3,473 3,3373,794
70%
51%
70% 71% 78%
2,000
3,000
4,000
5,000
2013 2014 2015 2016 2017
RevPar Growth (y-y) +13% -25% +40% -4% +14%
OWNED-HOTELS OPERATIONS – THAILAND
THB
THAILAND PROVINCES
BANGKOK
THB
RevParADR% Occupancy
Minor Hotels
6,6866,937 7,060
7,443 7,581
4,599 4,526 4,974 5,272 5,60069% 65% 70% 71% 74%
2,000
4,000
6,000
8,000
2013 2014 2015 2016 2017
Organic
Organic
Thailand, 50%
Portugal, 19%
Brazil, 9%
Maldives, 7%
Africa, 9%Others, 6%
2017 OWNED HOTEL REVENUE BY GEOGRAPHY
KEY HIGHLIGHTS
Thailand
Bangkok
ThailandProvinces
• International tourist arrivals into Thailand demonstratedconsistent growth of 9% in 2017.
• Minor Hotels continued to grow with the industry, withroom nights growing at 8% in 2017, driven by East Asia(China, Korea and Japan).
• RevPar of Minor Hotels’ Thailand portfolio grew by 9% in2017, despite the national mourning in the first 10months of 2017.
• Organic RevPar of owned hotels in Bangkok showedstrong performance with an increase of 14% in 2017.
• The RevPar growth was driven by the double-digit growthof Anantara Siam Bangkok and The St. Regis Bangkok,together with the ramping up of AVANI RiversideBangkok, in its second year of operation.
• RevPar of hotels in the provinces increased by 6% y-y in2017, attributable to hotels in Chiang Rai, Chiang Mai,Phuket and Hua Hin.
Thailand hotels continued to be the largest contributor to the owned hotels segment, with revenue accounting for half of owned hotels revenue in 2017. Thailand will remain an attractive destination for tourism with its diverse attractions, well-developed infrastructure and strategic location.
14
11,15112,177
7,2655,567 6,2396,903 7,452 4,236
3,220
3,33162% 61% 58% 58% 53%
0
4,000
8,000
12,000
2013 2014 2015 2016 2017
4%
21%
-2%
2%
Portugal Brazil Maldives Africa
OWNED-HOTELS OPERATIONS – OVERSEAS
Minor Hotels
KEY HIGHLIGHTSOVERSEAS
2017 ORGANIC REVPAR GROWTH (THB)
In 2017, RevPar of owned overseas hotels increased by 3%, driven by hotels in Brazil, Portugal and Africa. Maldives showed signs of recovery in 2017 with RevPar growth of 2% in USD term for the year 2017, but was down by 2% in THB term because of the strengthening of the Thai Baht.
* Change in 2016 stats because of retroactive classification of hotels in Zambia from JV hotels to owned hotels as a result of change in investment status effective 3Q16.
THB
RevPar Growth (y-y) -44% +8% -43% -24% +3%
Organic
Portugal
• Including the two rebranded properties, which are stillramping up, RevPar of the Portugal portfolio increased by 4%.
• The Tivoli-branded portfolio reported a much higher RevPargrowth of 9% in 2017, with double-digit RevPar growth in2Q17-4Q17. The exceptional growth was due to the ability toraise rates following the hotel renovations.
Brazil
• RevPar of hotels in Brazil showed double-digit growththroughout the year, following the renovation and improvedpolitical and macro climate.
• RevPar growth was driven by both occupancy (Tivoli MofarrejSao Paulo) and ADR (Tivoli Ecoresort Praia do Forte Bahia).
Maldives
• Maldives is seeing signs of turnaround, with RevPar growth of2% in 2017 in USD term, primarily from improved occupancy.
• The recovery was especially eminent in 4Q17, with RevPargrowth of 11% y-y.
Africa• All hotels in Africa had positive RevPar growth, except only
Botswana which went through renovation in 2017.
2017 OWNED HOTEL REVENUE BY GEOGRAPHY
Thailand, 50%
Portugal, 19%
Brazil, 9%
Maldives, 7%
Africa, 9%Others, 6%
RevParADR% Occupancy
15
3,730 3,6433,258 3,495 3,596
126124
127
133138
110
120
130
140
150
160
0
1,000
2,000
3,000
4,000
5,000
2013 2014 2015 2016 2017
78%76% 76% 77% 78%
60%
70%
80%
90%
2013 2014 2015 2016 2017
4,788 4,7954,271 4,557 4,588
162 164166
174 177
150
160
170
180
190
200
0
2,000
4,000
6,000
2013 2014 2015 2016 2017
MANAGEMENT LETTING RIGHTS
Management letting rights (MLR) business which manages serviced-suites, primarily under the Oaks brand, is the second largest segment in the hotel and mixed-use business, with 20% revenue contribution in 2017. MLR continued to provide the hotel & mixed-use business with stable performance throughout the year, compared to hotel operations which are more seasonal. 2017 MLR’s revenue in THB increased by 3%, from the increase in RevPar and the additional number of rooms.
THB
+1%No of
Rooms
NUMBER OF MANAGED ROOMS ADR
OCCUPANCY REVPAR
THB AUDTHB+1%
AUD+2%
+1%AUD
THB+3%
AUD+4%
5,8976,223 6,232 6,339 6,418
3,000
4,000
5,000
6,000
7,000
2013 2014 2015 2016 2017
Minor Hotels
2017 HOSPITALITY REVENUE CONTRIBUTION
20%MLR
16
3,227
3,737
4,4004,241 4,138 3,917
1,000
3,000
5,000
5,594
6,7487,038
6,7246,341 6,108
4,000
6,000
8,000
58%
55%
63% 63%65%
64%
40%
50%
60%
70%
80%
2013 2014 2015 2016 2017
MANAGED-HOTELS OPERATIONS
In 2017, managed hotels contributed 4% of hotel & mixed-use revenue. Organic RevPar of managed hotels portfolio was down 2%, primarily from weak performance of hotels in Bali from the volcano eruption, Qatar with its diplomatic crisis and the absence of the higher RevPar of PER AQUUM portfolio; i.e. HuvafenFushi and Desert Palm. With the increase in room counts, 2017 revenue from management service increased by 6%.
THB
NUMBER OF HOTEL ROOMS ADR
OCCUPANCY REVPAR
THBNo of
Rooms System-wide-9%
Organic excl FX-6%
Organic+2%
System-wide+1%
Organic excl FX-2%
System-wide-8%
+4%
3,254 3,4533,910
4,533 4,692
0
1,000
2,000
3,000
4,000
5,000
2013 2014 2015 2016 2017
Minor Hotels
2017 HOSPITALITY REVENUE CONTRIBUTION
2013 2014 2015 2016 2017
2013 2014 2015 2016 2017
4%Management Contracts
17
• Zhuhai, China (300 rms)
• Savanne, Mauritius (156 rms)
• Muscat, Oman (150 rms)
• Ras Al Khaimah, UAE (255 rms)
• Dubai, UAE (372 rms & 528 rms)
Expansion inside and outside Thailand will contribute to revenue & profit in coming years.
* Note: Joint-ventured properties
Total
2018F• Victoria, Australia
(456 rms)• Luang Prabang, Laos
(53 rms)• Tunis, Tunisia
(41 rms)
• Quy Nhon, Vietnam (25 rms)
2019F
• Barra Grande, Brazil (50 rms)
• Desaru, Malaysia (103 rms)
• Ubud, Bali, Indonesia* (70 rms)
2020F
MANAGEMENT CONTRACTS
• Khao Lak, Thailand (328 rms)
Minor Hotels
HOTEL INVESTMENT
• Victoria, Australia (170 rms)
• Busan, Korea (400 rms)
• Bangkok, Thailand (385 rms)
• Jebel Dhanna, UAE (228 rms)
46 Hotels / 9,051 Rooms
2021F
• Warangi, Serengeti National Park, Tanzania* (12 rms)
• Doha, Qatar (100 rms)
• Beirut, Lebanon (110 rms)
• Fortaleza, Brazil (130 rms)
• Hangzhou, China (166 rms)
• Busan, Korea (150 rms)
2022F
• Gammart, Tunisia (232 rms)
• Fares Island, Maldives* (200 rms)
• Recife, Brazil (200 rms)
• Doha, Qatar (151 rms)
• Al Wakrah, Qatar (101 rms)
• Brasilia, Brazil (395 rms)
• Zhuhai, China (100 rms)
• Koh Samui, Thailand (58 rms)
In addition to the current pipeline, MINT is evaluating opportunities to manage another 12 hotels and management letting rights in Australia, China, Japan, Malaysia,Myanmar, New Zealand and North America.
HOTEL EXPANSION PIPELINE
Others
• Lewa, Kenya (5 rms)
• Shanghai, China (260 rms)• Qiandao Lake, China (120 rms)• Lijiang, China (607 rms)• Yu Ping, China (173 rms)• Le Chaland, Mauritius (164 rms)• Al Houara Tangier, Morocco (150 rms)• Sifah, Oman (198 rms)• Tozeur, Tunisia (93 rms)• Jebel Dhanna, UAE (60 rms)
• Queensland, Australia (50 rms)
• South Australia, Australia (278 rms)
• Hangzhou, China (132 rms)
• Daegu, Korea (144 rms)
• Laikipia, Kenya (7 rms)
• Zhuhai, China (160 rms)• Jeddah, Saudi Arabia (328 rms)• Zanzibar, Tanzania (150 rms)• Ras Al Khaimah, UAE (306 rms)
• Sharjah, UAE (233 rms)
• Hangzhou, China (54 rms)
7 Hotels / 796 Rooms
18
REAL ESTATE BUSINESS - RESIDENTIAL
Sold 86%
Inventory 14%
LAYAN RESIDENCES BY ANANTARA, PHUKET
The project is situated on Layan beach, one of the most picturesque bays on west coast of Phuket.
THE ESTATES SAMUI
The villas are on a cliff, above powder-white sands and crystal-blue waters.
Sold 42%
Minor Hotels
2017 HOSPITALITY REVENUE CONTRIBUTION
ANANTARA CHIANG MAI SERVICED SUITES
A 50% joint-venture with U City Pcl., the project is in the city center of Chiang Mai, across from Anantara Chiang Mai Resort & Spa.
TORRES RANI, MAPUTO
A 49% joint-venture with Rani Investment, the project is 5 minutes from Maputo CBD.
● 18-storey residential tower; 181 keys for rent and 6 penthouse units for sale
● 20,926 sq.m., 21-storey office tower
3 out of 6 penthouse units
sold to dateSold 62%
Inventory 38%
● 15 uniquely designed pool villas
● Up to 8 bedrooms, each with 21 meter private infinity pool
● 1,313 to 2,317 sq.m. of built-up area
● 3 units sold in 2017; 9 units sold to date
● 44 units in 7-storey condominium building
● 65 to 162 sq.m. (one to three bedrooms)
● 8 units sold in 2017; 31 units sold to date
Inventory 32% Sold
68%
● 14 villas, with 2-5 bedrooms
● 1 units sold in 2017; 12 units sold to date
MINT’s residential projects are part of the real estate business, which is under Minor Hotels. The developments are next to MINT’s hotels and are usually branded MINT’s hotel brands. Below are the current projects with inventories to be sold over the next several years.17%
Real Estates
19
REAL ESTATE – PIPELINE OF RESIDENTIAL & OFFICE PROJECTS
Minor Hotels
In order to ensure the continuity of revenue stream from residential sales in the coming years, MINT has prepared additional pipeline of residential and office projects. Other residential projects will be selectively considered in various hotel destinations in order to increase returns of the overall project.
AVADINA HILLS BY ANANTARA, PHUKET
Located next to LayanResidences by Anantara, Phuket, the project is a 50% joint-venture with Kajima Corporation.
● 16 luxury pool villas
● 6-8 bedrooms
● 2,158 to 3,251 sq.m. of built-up area
● Expected launch in 2018
Sold 55%
ANANTARA UBUD RESIDENCES
A 50% joint-venture project with PT. Wijaya Karya Realty, the project is on the edge of a cliff with easy access to Ubud’s town center.
● 15 residential villas
● 1-2 bedrooms
● 165 to 252 sq.m. of built-up area
● Expected launch in 2019
ANANTARA DESARU RESIDENCES
A 60% joint-venture project with Destination Resorts and Hotels Sdn Bhd, the project is situated on beachfront land in the heart of Desaru Coast, Malaysia.
● 20 residential villas
● 3-4 bedrooms
● 290 to 600 sq.m. of built-up area
● Expected launch in 2019
SILOM OFFICE
The project is a 40% joint-venture with NYE Development. The property is located on Silom Road, in the heart Bangkok CBD and is intended to be used as Minor Group’s head office.
● 9,668 sq.m. of retail space
● 56,699 sq.m. of office space
● Expected launch in 2023
20
106 119137 160
186
500
0
100
200
300
400
500
2013 2014 2015 2016 2017 2022F
TOTAL NUMBER OF MEMBERS MEMBERS PRIMARILY IN ASIA
INVENTORY TO ACCOMMODATE GROWING MEMBERS GROWTH DRIVEN BY FOUR MARKETS
Part of the real estate business, Anantara Vacation Club is another important contributor to Minor Hotels. Growth of members are driven by four main markets – China, Thailand, Hong Kong and Singapore. With the change of sales model since 2015 which resulted in smaller package, accelerated cash flow, as well as lower bad debt and cancellation rate, AVC is seeing a turnaround of its performance since 4Q16. In 2017, AVC revenues increased by 28%.
REAL ESTATE BUSINESS – ANANTARA VACATION CLUB
As at Dec 2017
No. of Units >12 Destinations
3,8575,431
6,9288,000
10,193
0
3,000
6,000
9,000
12,000
2013 2014 2015 2016 2017
No. of Members
Growth (y-y) +67% +41% +28% +15% +27%
7 Destinations: Queenstown
BaliSanyaSamuiPhuket
BangkokChiang Mai
Minor Hotels
China, 39%
Thailand, 11%Hong Kong, 9%
Singapore, 9%
Malaysia, 7%
Japan, 4%
Taiwan, 3%
Australia, 2%
Philippines, 2%UAE, 2%
USA, 2%
Others, 10%
0
2,000
4,000
6,000
2013 2014 2015 2016 2017
No. of Members
5,553
2,460
3,731
+36% +12%+23% +19%
+300%+111%
China
Thailand
Singapore4,896
+10%
+5%
+48%
+39%+35% +38%
Hong Kong
+10%
+7%
+17%
+12%
> 6,896
+15%
+33%+11%
+28%
2017 HOSPITALITY REVENUE CONTRIBUTION
17%
Real Estates
Minor Food
22
FINANCIAL PERFORMANCE – MINOR FOOD
NetMargin
THB million
Minor Food
+2%
Revenue
EBITDA
NPAT
EBITDA Margin
+12%
+14%
2017 revenue of Minor Food increased by 2%, primarily attributable to outlet expansion of 3%. With effective cost control, especially of the supply chain management of China hub, streamlining of non-performing stores, together with higher contribution from strategic investments, EBITDA and net profit increased by 12% and 14% respectively.
15,343 16,754 18,626
23,022 23,582
2,759 2,817 3,127
3,843 4,285
1,501 1,550 1,572 1,684 1,913
18.0% 16.8%
9.8% 8.4%
18.2%
8.1%
16.8%
9.3%
20162013 2014 2015 2017
16.7%
7.3%
KEY HIGHLIGHTS
Total-system-salesgrowth of
5.1%in 2017
• BreadTalk (Thailand), Burger King and The Pizza Company were the top three brands with highest total-system-sales growth in 2017.
Outlet expansion of
3%in 2017
• The number of outlets of The Pizza Company, Burger King and BreadTalk increased by over 10% in 2017.
• The growth was somewhat offset by the strategic closure of outlets in Singapore and Australia.
Same-store-salesgrowth of
-0.8%in 2017
• Positive same-store-sales growth in 2017 was led by Swensen’s, Burger King and Riverside.
• However, soft macro conditions in countries that the four hubs operate resulted in overall moderation of the group’s same-store-sales growth.
• Despite challenges in Minor Food’s key operating markets, the strength of its multi-brand portfolio, its diversification strategy and operational excellence enabled Minor Food to focus on efficiency, which resulted in improved profitability.
* The financials above reflect performance from operation, and therefore exclude non-recurring items in 2014-2016 as detailed on page 40
23
Franchised
Combination
Owned
REVENUE CONTRIBUTION
Hub
81%59% 60% 66%
19%41% 40% 34%
0%
25%
50%
75%
100%
2008 2016 2017 2022F
International
Thailand
MINT operates four restaurant hubs: Thailand, Singapore, Australia and China. MINT’s restaurant presence is now in 19 countries across the region, operating owned, franchised and a combination of both business models. MINT continues to look for opportunities to expand, especially in these existing markets.
Minor Food
* Excludes non-recurring items in 2016
MINOR FOOD - INTERNATIONAL PRESENCE
24
MINOR FOOD – OPERATIONAL PERFORMANCE
Same-Store-Sales Growth Total-System-Sales Growth 53%82%
59%
Franchised
Owned
50%
International
Thailand
SSS & TSS GROWTH RESTAURANT OUTLETS BY GEOGRAPHY
RESTAURANT OUTLETS BY OWNERSHIP
2017 total-system-sales of the restaurant business grew by 5.1%, driven by Thailand hub, China hub and smaller developing countries like India and the Middle East. As most of the hubs faced some challenges of the economic slowdown, Minor Food took the opportunity to streamline its outlet network by selectively closing down the non-performing stores. In 2017, China wasthe only hub that reported positive same-store-sales growth for the year.
2008 2016 2017 2022F
36%
64%67%
33%
45%
55%
1,043
3,458
1,996 2,064
+3%
35%
65%
2008 2016 2017 2022F
38%
62%
47%
53%
3,458
48%
52%
+3%
1,043
1,996 2,064
49%
51%
1.5%0.4% -0.2%
1.3%
-0.8%
13.8%13.1%
11.2%
9.1%
5.1%
-5%
0%
5%
10%
15%
20%
2013 2014 2015 2016 2017
1,851 2,0641,544 1,708No. ofOutlets
Minor Food
1,996
25
THAILAND HUB
Same-Store-Sales Growth Total-System-Sales Growth
THAILAND’S SSS & TSS GROWTH MARKET LEADER
60%Thailand
2017 RESTAURANT REVENUE CONTRIBUTION Revenue from domestic operations accounted for 60% of total restaurant revenue in 2017. Swensen’s,
Burger King and The Coffee Club maintained positive same-store-sales growth momentum for the year, which helped offset other brands that were impacted by the soft macro backdrop and national mourning period.
Thailand hub’s same-store-sales growth was flat in 2017 amidst the economic slowdown and the national mourning period. However, same-store-sales growth started to see an improving trend with positive same-store-sales growth since mid-November 2017.
With consistent outlet expansion, Thailand hub saw total-system-sales growth of 8.2% in 2017.
Continued to drive product innovation with the launch of Cheesy Lava Pizza, which, with the right marketing initiatives through social media and customer engagement activities, helped drive overall sales.
Launched Ice Cream Bingsu, Korean shaved ice dessert, which successfully created excitement in the market, and became 30% of sales mix since its nationwide launch.
Implemented promotional campaign with tactical pricing strategy for salad bar and best-selling menus, which resulted in an increase of customer count by 17% y-y in 4Q17.
Introduced the first local-relevant product, Durian Blizzard, resulting in increase in customer count by 30% in 4Q17.
Further strengthened the delivery channel with the launch of Burger King online webpage, in addition to the 1112 call center and Food Panda service launched earlier.
Successfully expanded to hotels and apartments in high-traffic tourist areas, resulting in total-system-sales growth of over 30% in 2017.
-5%
0%
5%
10%
15%
20%
2013 2014 2015 2016 2017
Minor Food
26
-20%
-10%
0%
10%
20%
30%
2013 2014 2015 2016 2017
CHINA’S SSS & TSS GROWTH DRIVING GROWTH & PROFITABILITY
CHINA HUB
Same-Store-Sales Growth Total-System-Sales Growth
2017 RESTAURANT REVENUE CONTRIBUTION China hub remained one of MINT’s growth drivers as MINT is confident in the strong growth prospect of the
country, supported by growing middle class and increased urbanization trend. With the focus on cost efficiency and streamlining of outlets, in 2017, China hub’s net profit margin improved significantly in 2017.
China hub ended the year with same-store-sales growth of 1.3%, attributable to the solid performance of Riverside.
Total-system-sales growth in 2017 was 6.0%, relatively slower than the past three years, as China hub took the opportunity during the year to streamline its outlets.
Acquisition of Riverside
300%
• Riverside, contributing over 80% of China hub’s revenues, reported positive same-store-sales growth every quarter in 2017.
• Total-system-sales grew moderately with the strategic streamlining of number of outlets.
• Thai Express started to expand in China through franchise business model.
• The brand implemented menu adjustments to better cater to local Chinese taste.
• Sizzler focused on improving customer experience with outlet renovations and new product development.
Minor Food
14%China
27
AUSTRALIA’S SSS & TSS GROWTH IMPROVING EFFICIENCY AMIDST CHALLENGING MACRO
AUSTRALIA HUB
Total-System-Sales Growth
2017 RESTAURANT REVENUE CONTRIBUTION In 2017, Australia hub’s revenue contributed 14% of total restaurant business. Although 2017 revenue
declined from soft same-store-sales and minimal outlet expansion, the hub’s net profit increased by 12%, primarily from the focus on efficiency and rationalization of non-performing outlets.
Same-store-sales of the Australia hub slightly declined with negative growth of 1.5%, as the country’s economy, especially in Queensland, continued to be weak.
Total-system-sales declined by 0.9%, with the decline in net number of outlets at the end of 2017 as the Australian hub was more cautious in opening of outlets amidst fragile macro backdrop, together with the divestment of The Groove Train portfolio.
Same-Store-Sales Growth
-5%
0%
5%
10%
15%
20%
2013 2014 2015 2016 2017
The Coffee Club in the Middle East and Thailand performed well during 2017, with same-store-sales growth of 7.5% and 35.9% respectively.
The hub continued to see robust sales growth of VenezianoCoffee Roaster, driven primarily by the retail distribution channel.
The hub’s profitability improved from the strong performance of international business and Veneziano, together with the closing down of non-performing domestic outlets.
Australia hub has taken the strategic decision to focus on coffee-related business and divested all 26 of the Groove Train outlets at the end of 2017. The Groove Train was part of the acquisition of VGC Group in 2014.
Minor Food
14%Australia
28
SINGAPORE’S SSS & TSS GROWTH ADAPTING TO THE MACRO ENVIRONMENT
SINGAPORE HUB
Same-Store-Sales Growth Total-System-Sales Growth
2017 RESTAURANT REVENUE CONTRIBUTION
-15%
-10%
-5%
0%
5%
10%
15%
20%
2013 2014 2015 2016 2017
Like many other F&B operators in the market, Singapore hub has been impacted by the economic slowdown and increased competition over the past few years. While the closure of non-performing outlets resulted in decline in revenue of 11%, Singapore hub’s profit improved with the focus on efficiency of the operations.
Although same-store-sales growth continued to be negative at 7.8% in 2017, the trend is improving, with a decline of only 3.6% in 4Q17.
With the selective closure of non-performing outlets, Singapore hub’s total-system-sales declined at a faster rate than same-store-sales, at 11.0%.
Singapore hub is adapting to current environment of continued slowdown of the consumption and high competition by selectively closing down non-performing outlets. The initiative resulted in the turnaround of the hub’s performance from loss-making earlier in the year to profitability in 4Q17.
The closing down of non-performing outlets together with focus on key marketing initiatives resulted in improving trend of key brands, with Basil, Poulet and Riverside reporting positive same-store-sales growth in 4Q17, while Thai Express and Xin Wang Hong Kong Café saw improving trend of the negative same-store-sales growth.
Minor Food
9%Singapore
Minor Lifestyle
30
338 384
300 267 304
3,616 3,703 3,505 3,505
4,091
FINANCIAL PERFORMANCE – MINOR LIFESTYLE
Revenue
EBITDA
NPAT
NetMargin
THB million
Minor Lifestyle
+17%
+14%
+57%
2017 revenue of Minor Lifestyle was up 17%, primarily from retail trading business. EBITDA grew at a slightly lower rate of 14% due to margin pressure of the contract manufacturing business, together with the ramping up of the recently launched brands earlier in the year. Net profit, however, increased at a faster rate of 57% because of higher operating leverage gained from thestable level of depreciation.
151 183 124
81 127
2016 2017
4.9% 2.3%
2013
3.1%4.2%
2014
3.5%
2015
EBITDA Margin
10.4% 7.6% 7.4%9.3% 8.6%
KEY HIGHLIGHTS
Total-system-sales growth of
19.3%in 2017
Same-store-salesgrowth of
2.3%in 2017
Retail trading
76%of 2017 Minor Lifestyle revenue
Contract manufacturing
24% of 2017 Minor Lifestyle revenue
• Total-system-sales growth was primarily attributable to Charles & Keith, Brooks Brothers, together with the ramping up of newly-added brands, including Etam, Radley and Anello.
• Minor Lifestyle’s same-store-sales growth was driven by Charles & Keith, Pedro, Brooks Brothers and Radley.
• 2017 revenue from retail trading increased by 22%, mainly from Charles & Keith, Brooks Brothers, together with sales from new brands added in 2016, in particular Anello, Etam and Radley.
• 2017 revenue from contract manufacturing increased by 3% as sales picked up towards the end of the year, with successful product launches and marketing campaigns of major customers.
31
MINOR LIFESTYLE – OPERATIONAL PERFORMANCE
Same-Store-Sales Growth Total-System-Sales Growth Fashion & Cosmetic Sales per Sq. m.
SSS & TSS GROWTH SALES PER SQ. M.
THB
Retail trading business showed strong operational recovery in 2017 with same-store-sales growth of 2.3%. With rapid expansion of the newly-launched brands, total-system-sales grew by almost 20% for the year. Sales per sq.m. improved in 2017, signifying the higher efficiency of the business.
0.3%
-8.1% -6.3%
-0.1%2.3%
12.0%
3.8%
-3.3%
8.4%
19.3%
-10%
0%
10%
20%
30%
2013 2014 2015 2016 2017
No. ofShops
327 398276
94,860
105,248
88,45786,804
94,336
60,000
80,000
100,000
120,000
140,000
2013 2014 2015 2016 2017
No. ofShops
297 307
Minor Lifestyle
327276 297 307
* Note: sales per sq.m. was restated to exclude sales of contract manufacturing.
398
Corporate Information
Anantara Guiyang, China
33
0.5
0.7
0.9
1.1
1.3
2013 2014 2015 2016 2017
BACK-UP FINANCING
CAPEX & BALANCE SHEET STRENGTH
Interest Bearing Debt to Equity
Net Interest Bearing Debt to Equity
THB million
THB million
CAPEX PLANS – COMMITTED & NEW OPPORTUNITIES LEVERAGE RATIOS
Corporate Information
Additional CAPEX (non-committed average per annum) for New Opportunity/Acquisition(s)
EBITDA coverage on committed CAPEX
0
20,000
40,000
60,000
80,000
100,000
Outstanding Borrowing & Equity Un-Utilized Facility
Debt28,624
Debt50,163
Shareholders’ Equity50,021
In addition to committed CAPEX, MINT also set aside additional CAPEX for future investments and new opportunities in the pipeline. With the additional equity received from warrant conversion, leverage ratio declined to a level much lower than theinternal policy. With its solid balance sheet, MINT will be able to primarily use its internal cash flow and debt financing to fund its CAPEX requirements going forward. In addition, MINT and its senior debenture have “A+” rating by TRIS.
Note: Cash on hand as at end of 2017 is THB 5,336 million
X X
-
1.0
2.0
3.0
4.0
5.0
6.0
-
3,000
6,000
9,000
12,000
15,000
2017A 2018F 2019F 2020F 2021F 2022F
0.90x
1.00x
Internal Policy
Minor Food Minor Hotels Minor Lifestyle
* 2017 committed CAPEX includes increased shareholding in Riverside and Sun International portfolio in Africa, together with investments in Corbin & King, AVANI Hua Hin, Avadina Hills by Anantara and renovations of Tivoli portfolio.
2018 Outlook & Beyond
The Wolseley London, Corbin & King
35
2018 OUTLOOK – MINOR HOTELS
2018 Outlook
Thailand Australia Portugal Africa Maldives
Portugal, Thailand and Africa will be the drivers for owned hotels in 2018, while management contracts and real estates will also support growth. In addition, Minor Hotels expects margin improvement in 2018.
Occupancy
ADR
MARGIN
Thailand continues to be tourism playground with healthy inbound tourism growth
Minimal supply growth and healthy occupancy will prompt ADR increases
Apart from portfolio expansion with additional properties, Australia portfolio has always run at high and stable occupancy rate
Competition means moderate ADR growth for the serviced apartment segment
Strong demand continues with the terrorism-free and value for money proposition
Rate increases are expected following the renovation
The renowned Victoria Falls will attract tourists to Zambia, and Botswana will benefit from hotel renovation
Potential rate increase is expected after the renovation in Botswana
Improving tourism from Europe and MINT’s targeted marketing will drive occupancy growth
Given excess supply and high competition, minimal ADR increase is expected
With the ramping up of the new hotels, the completion of the renovations of the hotels in Portugal, contributions from management contracts portfolio and real estates business, margin of Minor Hotels will improve
RevPar
OWNED HOTELS
MANAGEMENT CONTRACTS REAL ESTATES
Over 45 management contracts signed and to be opened over the next 4 years (2018-2022) under 5 brands
With the strong pipeline, MINT will continue to execute sales of its luxury residential development projects
AVC will continue to perform well following the turnaround of its performance since 4Q16
ACQUISITIONS
The full benefit of the recently acquired Tivoli portfolio will be better pronounced in the upcoming high season of 2018
MINT will benefit from both strategic and financial contribution of the Corbin & King group.
36
2018 OUTLOOK – MINOR FOOD
2018 Outlook
Minor Food’s operation in 2018 will be driven by Thailand and China hubs. Minor Food sees room for margin improvement particularly from China and Singapore hubs.
THAILAND CHINA AUSTRALIA SINGAPORE
Macro Environment Outlook
Outlet Expansion
Total-System-Sales
Consumption is expected to improve with strong export and tourism, infrastructure spending, agricultural recovery and stronger household balance sheet
Consumption will remain strong, with GDP growth forecast to be above 6%
Same-Store-Sales Growth
The improving labor market and household income, driven by non-mining sector, will gradually result in healthier private consumption
While economic growth will be driven by manufacturing sector on the back of external demand, the spillover to the rest of the economy is expected to be limited
With the strong portfolio of brands, Minor Food will leverage on its product innovation, marketing capabilities, digital platform and operational excellence
Riverside, the main brand, will continue to drive growth of the China hub
The Coffee Club will focus on building iconic brand experience with the “coffee story”, and will introduce lunch options that offer value, speed and convenience
Thai Express will differentiate products, displays and ambiance in each location and will promote premium menu items
Thailand hub will continue to expand the number of outlets across its brands
With the streamlining of Riverside outlets in 2017, China hub now has the platform to grow the brand more aggressively
While selectively closing down non-performing outlets domestically, Singapore hub will look for expansion opportunity internationally
MARGINWhile Thailand and Australia hubs are expected to maintain their margins, China hub will see profitability improvement from the increased scale, and Singapore hub will focus on efficiency enhancement
While outlet expansion in Australia will be moderate, the focus will be on international markets such as Thailand and the UAE
37
FIVE-YEAR ASPIRATIONS
NPAT(THB)
1.4bn
2009
5.4bn 2022F
2017
2022F
2017
> 270 hotels
> 300 residences built
> 500 timeshare units
> 3,400 restaurants
> 600 retail shops & POS
(> 44,000 Sqm)
158 hotels
132 residences built to date
186 timeshare units
2,064 restaurants
398 retail shops & POS
(30,532 Sqm)
2009
30 hotels
1,112 restaurants
292 retail shops & POS
(14,275 Sqm)
Corporate Information
38
Five-year strategy consists of the following three key pillars, with clear goals and measurements.
MINT’S FIVE-YEAR STRATEGY 2018-2022
NPAT growth of 15-20% CAGR ROIC of > 13%
Growth Pillars
Measure-ments
Drive Growth of Multi-Brand Portfolio
Through Brand Value Enhancement & Distribution Optimization
Maximize Asset Value and Productivity
Expand Through Strategic Investments, JV Partnerships &
Acquisitions
Asset-Right Strategy
Mixed-use Initiatives
Total-system-sales growth of 15%
Revenue growth of over 10%
Improvement of margins
Revenue from overseas of 50%
Net profit from overseas of over 50%
2022 Goals
Corporate Information
Vertical Integration
Funding Source Optimization
Thank You
