company presentationmint.listedcompany.com/misc/presentation/20200609-mint-company... · ytd 2020...
TRANSCRIPT
Forward Looking Statement
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.
AGENDA
1Q20 in Review
Minor Hotels
Minor Food
Minor Lifestyle
Corporate Information
Response to COVID-19: Immediate & Long-term Plans
YTD 2020 Recap – Impact from COVID-19
5
Since the outbreak of COVID-19, MINT’s business has been impacted globally. MINT continues to minimize costs and CAPEX in order to reduce negative flow-through, preserve cash and focus on liquidity, while preparing for the business re-opening. While April is the worst month, signs of recovery is seen in May onwards.
Jan 2020 Feb 2020 Mar 2020 Apr 2020 May 2020
• News of COVID-19 • Wuhan / China lockdown
• Italy lockdown, followed by other European countries
• Many countries under lockdown globally
• Many countries start to loosen lockdown measures
• Majority of food outlets in China closed
• Majority of food outlets in China reopened, performing better than “best case” expectation
• 2/3 of outlets in Thailand & Australia operational for delivery and takeaways
• Temporary closure of hotels in Europe, starting in Italy & Spain, and gradually extended to other European countries and Latin America
• Hotel closure in Thailand, Maldives and other countries. Those remained open are at minimal operation
• Over 90% of lifestyle outlets temporarily closed
• Gradual reopening of dine-in services in Thailand
• Selective reopening of hotels such as in China & Vietnam.
• Reopening of restaurants in hotels in Bangkok
Jun 2020
• Gradual border reopening of some countries
• Gradual reopening of dine-in services in Australia
• Gradual reopening of hotels in Europe, primarily in Benelux and Central Europe
• Selective reopening of hotels in Thailand and other countries.
• Over 90% of lifestyle outlets reopened
1Q20 Performance Recap
6
NET PROFIT
In 1Q20, MINT’s core revenue declined by 22% y-y, as all three business units have been impacted by the COVID-19 outbreak. Consequently, with the severe and sudden revenue decline while costs did not fall as fast, the compounding negative flow-through resulted in MINT’s net loss both pre-and post- TFRS 16 in the quarter.
* Non-core items are detailed on page 43.
* Excludes non-core items
1Q20 REVENUE CONTRIBUTION
-22% y-yMinor
Lifestyle 5% Minor
Food25%
Minor Hotels70%
REVENUE
THB 22,421 million
NM
10,000
20,000
30,000
1Q19Reported
Non-coreItems
1Q19Core
MinorHotels
excl NHH
NHH MinorFood
MinorLifestyle
1Q20Core
Pre-TFRS16
TFRS16Impact
excl NHH
TFRS16Impacton NHH
1Q20Core
Post-TFRS16
Non-coreItems
1Q20Reported
THB million
-4,000
-3,000
-2,000
-1,000
0
1,000
1Q19 Reported
Non-core Items
1Q19 Core
Minor Hotels
excl NHH
NHH Minor Food
Minor Lifestyle
1Q20 Core
Pre-TFRS16
TFRS16 Impact
excl NHH
TFRS16 Impact on NHH
1Q20 Core
Post-TFRS16
Non-core Items
1Q20 Reported
THB million
583
-1,272
+1,400
29,030
-703
--182
28,848
-2,433 22,421 22,533
+50 633
-557 -109-288
-265
+113
-2,834-3,173
-1,774
22,421--3,027
-51
-1,531
International Presence
7
With a solid diversification strategy implemented, MINT’s footprint was in 63 countries at the end of 1Q20 across its hospitality and restaurant businesses.
*Excludes non-core items
Minor Food
Combination
Minor Hotels
REVENUE CONTRIBUTION
57%
27% 33% 29%
43%
73% 67% 71%
0%
25%
50%
75%
100%
2014 2019* 1Q20* 2024F
International
Thailand
Minor Hotels – Financial Highlights
9
1Q20 revenue declined by 26% y-y, attributable to most businesses and geographies, from the impact of the COVID-19 pandemic. Both EBITDA and NPAT pre-TFRS 16 were negative in 1Q20, predominantly starting from February. The negative flow-through with declining revenues was further dampened by the seasonally soft quarter and lease structure in Europe. As such, almost 80% of Minor Hotels’ net loss was attributable to NHH. Post-TFRS 16, Minor Hotels reported core net loss of THB 3 billion.
* The financials above reflect performance from operation, and therefore exclude non-core items as detailed on page 43.
21,230 15,770 15,770
THB million
-26%
Revenue
3,085 2,070
-670 128 -2,998 -2,675
NM NM
EBITDA NPAT
% Margin
14.5% 13.1%
0.6%
MINOR HOTELS – FINANCIAL PERFORMANCE
1Q19 1Q20 Pre-TFRS 16 1Q20 Post-TFRS 16
PERFORMANCE SNAPSHOT – BY BUSINESS
Owned & Leased
Management Letting Rights
Managed Hotels
Mixed-Use Business
1Q20 Revenue Change Y-Y (THB)
26%
6%
34%
43%
BUSINESS PERFORMANCE SNAPSHOT – BY GEOGRAPHY
1Q20 Revenue Change Y-Y
(THB)
Thailand EuropeAustralia &
New ZealandMaldives &
The Middle EastThe Americas
6%38% 26% 26% 25%
Minor Hotels – International Presence
10
In recent years, MINT has implemented a solid diversification strategy. Today, MINT operates hotels and spas under a combination of owned, leased and management business models in 55 countries.
* Excludes non-core items
Management
Combination
Investment
New Destinations in Pipeline
Hubs
REVENUE CONTRIBUTION
67%
14% 14% 12%
33%
86% 86% 88%
0%
25%
50%
75%
100%
2014 2019* 1Q20* 2024F
International
Thailand
Owned & Leased Hotels
11
In terms of business model, owned and leased business contribute 85% of Minor Hotels’ revenue. In terms of geography, Europe is the major contributor with 59% of Minor Hotels’ revenue. Thailand is the second largest contributor, followed by Australia & New Zealand.
SYSTEM-WIDE ROOM CONTRIBUTIONBy Ownership
SYSTEM-WIDE ROOM CONTRIBUTIONBy Geography
1Q20 REVENUE CONTRIBUTIONBy Business
1Q20 REVENUE CONTRIBUTIONBy Geography
Owned26%
Leased46%
JV 2%
Managed17%
MLR9%
76,320 Rooms
THB 15,770 million
Owned & Leased
85%
Managed2%
MLR8%
Mixed-use5%
Thailand14%
Europe59%
Americas7%
Australia & New Zealand 8%
Maldives & Middle East 4%
Others8%
Asia11%
Europe62%
Americas11%
Oceania10%
Middle East & Africa 6%
76,320 Rooms
* As at end of Mar 2020 * As at end of Mar 2020
Owned & Leased Hotels
12
Number of rooms of owned & leased hotel portfolio increased by 3% y-y in 1Q20. Organic RevPar excluding FX impact declined by 25%, driven purely by occupancy as a result of the adverse impact of COVID-19. System-wide RevPar of owned & leased portfolio declined further by 28%, from the addition of new hotels and slightly stronger Thai Baht during the quarter. As a result, revenue of owned & leased hotels declined by 26% y-y in 1Q20. Going into 2Q20, Minor Hotels’ business was most significantly impacted by the COVID-19 pandemic in April, and a sales improvement began to be seen in the second half of May, following the re-opening of some of the hotels.
System-wide+2%
Organic excl FX+6%
52,97854,685
1Q19 1Q20
No of Rooms
65%
46% 46%
1Q19 1Q20
+3%
1Q19 1Q20
Occupancy
Organic-19%
System-wide-19%
3,748 3,970 3,810
1Q19 1Q201Q19 1Q20
ADR (THB)
OPERATIONAL STATS
System-wide-28%
Organic excl FX-25%
2,444 1,844 1,752
1Q19 1Q201Q19 1Q20
RevPar (THB)
1% -6% -70% -99% -98%
Monthly 2020 Organic RevPar Growth - THB (y-y)Jan Feb Mar Apr May
Owned Hotels – Thailand & Maldives
13
The two largest geographies for Minor Hotels outside of Europe are Thailand and the Maldives. With Chinese tourists contributing over 20%, Thailand hotels saw RevPar declining since February. The outstanding performance of hotels in the Maldives in January was offset by the declining RevPar in February and March. April was the lowest month for the two geographies, with the temporary closure of hotels in both Thailand and the Maldives. Signs of recovery is seen for May as selected hotels in Thailand started to gradually reopen.
OPERATIONAL STATS – THAILAND (ORGANIC)
82%
54%
7,301 7,325
1Q19 1Q20
5,951
3,948
-28% Flat -34%
2% -4%-47% -36%-77% -66%-99% -100%-98% -95%
Monthly 2020 Bangkok RevParGrowth - THB (y-y)
Monthly 2020 Provinces RevParGrowth - THB (y-y)
Jan Feb Jan FebMar Mar
Occupancy ADR (THB) RevPar (THB)
OPERATIONAL STATS – MALDIVES (ORGANIC)
73%60%
1,134 1,151
1Q19 1Q20
829 693
-13% +1% -16%
Occupancy ADR (USD) RevPar (USD)
18%-20% -53% -100% -100%
Monthly 2020 Maldives RevPar Growth -USD (y-y)
Jan Feb MarApr May Apr May Apr May
Owned & Leased Hotels – Europe & The Americas
14
Hotels in Europe & the Americas are the largest contributor to owned & leased hotel portfolio. 1Q20 RevPar of Europe & the Americas portfolio declined by 24% in Euro term, primarily from the drop in occupancy amidst COVID-19 situation, with Italy and Spain being the hardest hit. Since early April, over 90% of the hotels in Europe and about 75% of the hotels in Latin America have been temporarily closed. Hotels in Europe, in particular in Benelux and Central Europe started to reopen in late May. Hence, at the end of May, 81% and 90% of hotels in Europe and Latin America, respectively, remained closed.
-26%
-36%
-24%-21% -20%
Spain Italy Benelux Central Europe
Latin America
Spain • Activities declined since the State of Emergency on 14 March
Italy• The operation was negatively impacted since mid-February,
although lockdown started 9 March
Benelux • Demand dropped with cancellation of events
Central Europe
• Business was weak
• Frankfurt was also impacted by the high supply
Latin America • RevPar declined was from both occupancy and ADR
Spain 33%
Italy13%
Benelux 20%
Central Europe
23%
Americas11%
OPERATIONAL STATS – EUROPE & THE AMERICAS (ORGANIC)
65%
46%95
101
1Q19 1Q20
62 47
-19% +6% -24%
Occupancy ADR (EUR) RevPar (EUR)
1Q20 y-y Organic RevPar Decline1Q20 Revenue Contribution
Note: Europe & the Americas include hotels under NHH portfolio and hotels in Portugal and Brazil
KEY HIGHLIGHTS
9% 3% -70% -99% -98%
Monthly 2020 Europe & the Americas RevPar Growth -EUR (y-y)
Jan Feb Mar Apr May
Asset-Light Businesses
15
MINT’s asset light businesses include management letting rights (MLR) of serviced-suites primarily under the Oaks brand in Australia and New Zealand, together with the hotel management contracts under Minor Hotels’ brands. Even though management letting rights business remained operational, similar to others, both businesses were impacted by the COVID-19 outbreak. Similar to the rest of the hotels portfolio, Apr was the lowest month for both MLR & managed hotels, with improvement seen in May.
MANAGEMENT LETTING RIGHTS
148 124
1Q19 1Q20
3,188 2,558
+3% -16% -20%
No of Rooms RevPar (AUD) RevPar (THB)
7,000 7,180
MANAGED HOTELS
13,284 12,626
No of Rooms
-5%System-wide
-30%Organic excl FX
-20%
3,172 2,552 2,234
1Q19 1Q201Q19 1Q20
RevPar (THB)
4% -5% -37% -78% -70%
Monthly 2020 AUD RevPar Growth (y-y)
Jan Feb Mar
1Q19 1Q20
5% -11% -55% -92% -82%
Monthly 2020 THB excl FX RevPar Growth (y-y)
Jan Feb MarApr May Apr May
Hotel Expansion Pipeline – 72 Hotels; 13,707 Rooms
• Ubud, Bali, Indonesia* 71 rms• Rome, Italy 238 rms• Budapest, Hungary 185 rms• Nice, France 152 rms
• Khao Lak, Thailand 328 rms
• Venice, Italy 64 rms• Florence, Italy 86 rms• Budapest, Hungary 138 rms• Prague, Czech Republic 152 rms
• Hannover, Germany 89 rms• Venice, Italy 100 rms
• Warangi, Serengeti National Park, Tanzania* 12 rms
MA
NA
GED
/ M
LRS
• Frankfurt, Germany 428 rms• Monterrey, Mexico 120 rms• Cagliari, Italy 100 rms
• Frankfurt, Germany 375 rms
OW
NED
& L
EASE
D
49 Hotels / 10,060 Rooms
• Libo Country, China 173 rms• Nanjing, China 120 rms• Ras Al Khaimah, UAE 174 rms
• Busan, Korea 570 rms• Ras Al Khaimah, UAE 225 rms• Nha Trang, Vietnam 273 rms• Nairobi, Kenya 120 rms
• Fortaleza, Brazil 130 rms• Hangzhou, China 166 rms
• Phuket, Thailand 500 rms• Chengdu, China 202 rms
• Lima, Peru 164 rms• Iquique, Chile 135 rms
• Lima, Peru 265 rms• Santiago, Chile 146 rms
• Hangzhou, China 54 rms
• Phi Phi Island, Thailand 107 rms• Chengdu, China 150 rms• Sharjah, UAE 233 rms• Jeddah, Saudi Arabia 328 rms
• Savanne, Mauritius 156 rms• Sifah, Oman 300 rms• Kota Kinabalu, Malaysia 386 rms• Cam Ranh, Vietnam 595 rms• Ho Chi Minh City, Vietnam 217 rms
• Guadalajara, Mexico 120 rms• Aguascalientes, Mexico 105 rms• Mexico City, Mexico 144 rms• Panama, Panama 83 rms
• Zhuhai, China 100 rmsOthers
23 Hotels / 3,647 Rooms
• Bang Krachao, Thailand 62 rms
• Krabi, Thailand 83 rms• Dubai, UAE 527 rms• Muscat, Oman 162 rms
• Chengdu, China 201 rms• Bahia, Brazil 50 rms
• Toowoomba, Australia 50 rms• Cairns Esplanade, Australia 60 rms• Hangzhou, China 132 rms
• Murano, Italy 104+38 rms• Doha, Qatar 228 rms
• Feira de Santana, Brazil 207 rms
• Fares Island, Maldives* 200 rms
• Milan, Italy 185 rms• Santander, Spain 64 rms• Alicante, Spain 63 rms
• Milan, Italy 100 rms• Hamburg, Germany 261 rms
• Hamburg, Germany 136 rms
• Accra, Ghana 155 rms• Riyadh, Saudi Arabia 163 rms
• Yangon, Myanmar 250 rms• Phan Thiet, Vietnam 516 rms• Ho Tram, Vietnam 410 rms
• Yangon, Myanmar 221 rms
Others
* Note: Joint-ventured properties
2020F 2021F 2022F 2023F
12 Hotels / 1,615 Rooms 7 Hotels / 1,009 Rooms 4 Hotels / 1,023 Rooms
13 Hotels / 1,904 Rooms 16 Hotels / 3,417 Rooms 14 Hotels / 3,024 Rooms 6 Hotels / 1,715 Rooms
16** MINT is in the process of reevaluating the opening dates of the hotels in the pipeline.
Mixed-Use Business
Mixed-use business comprises residential development and Anantara Vacation Club. In addition to the current projects, MINT has a pipeline of branded residences for sale in order to ensure the continuity of revenue stream in the coming years. Anantara Vacation Club provides stable revenue growth driven by membership growth. In 1Q20, mixed-use revenue declined by 43%, from mismatched timing of residential sales, as well as declining sales activities of Anantara Vacation Club as a result of the COVID-19 outbreak, in particular with Chinese tourists as the major market. Anantara Vacation Club started to reopen its sales operations gradually in China and Taiwan.
17
INVENTORY TO ACCOMMODATE GROWING MEMBERS
229 241
1Q19 1Q20 2024F
No of Units
QueenstownBali
SanyaSamuiPhuket
BangkokChiang Mai
>350
GROWING MEMBERSHIP
PIPELINE
CURRENT PROJECTS
Layan Residences by Anantara, Phuket
Avadina Hills by Anantara, Phuket
Anantara Chiang Mai Serviced Suites
Torres Rani, Maputo
15 luxury pool villas
16 luxury pool villas
44 units in 7-storey condominium building
181 keys for rent & 6 penthouses for sale; 21-storey office tower
100%-owned
50% JV
50% JV
49% JV
Anantara DesaruResidences, Malaysia
Anantara UbudResidences, Indonesia
Silom Office
20 residential villas
15 residential villas
60% JV
50% JV
40% JVNA
Launched 2015
Launched 2018
Launched 2016
Launched 2015
To launch 2020
To launch 2023
To launch 2020
RESIDENTIAL DEVELOPMENT ANANTARA VACATION CLUB
12,79614,835
1Q19 1Q20
+16%
No of Members
China39%
Thailand11%
Singapore8%
Hong Kong8%
Malaysia7%
Others27%
+5%
No of Units
* MINT is in the process of reevaluating the launch dates of the residential projects in the pipeline.
Minor Food – Financial Highlights
19
1Q20 revenue of Minor Food declined by 11% amidst the impact from COVID-19. On a like-for-like basis, EBITDA pre-TFRS 16 declined at a faster rate of 46%, while its bottom line turned to net loss pre-TFRS 16 of THB 82 million, solely from China hub, which posted net loss of THB 234 million, with temporary closure of the majority of its outlets particularly in Feb. Including TFRS 16, Minor Food reported net loss of THB 97 million in 1Q20.
* The financials above reflect performance from operation, and therefore exclude non-core items as detailed on page 43.
6,367 5,664 5,664
THB million
-11%
Revenue
FINANCIAL PERFORMANCE
1,103 919
601 475
-97 -82
-46% NM
EBITDA NPAT
1Q19 % Margin1Q20 Pre-TFRS 16
17.3% 16.2% 5.7%
OPERATIONAL STATS
-4.0% -10.5%
5.3%
-5.8%
2,254 2,362
No of Outlets SSSG TSSG
1Q19 1Q20
+5%
3.5%
-8.0%
-25.0%
-25.6% -28.1%
11.9%
-0.9%
-24.5%
-47.4%-37.8%
Jan Feb Mar Apr May
TSSG
SSSG
• Same-Store-Sales: SSSG was positive in Jan, attributable to Thailand & Australia hubs. However, SSSG was impacted by the COVID-19 outbreak in Feb & Mar, resulting in negative SSSG in 1Q20. SSSG stabilized in April & May.
• Outlet expansion: 1Q20 network growth of 5% y-y was a result of expansion primarily in Thailand and China, together with the addition of Bonchon outlets.
• Total-System-Sales: TSS declined in 1Q20, following the decline in SSS amidst the COVID-19 outbreak, together with temporary outlet closures in China in Feb, followed by dine-in outlet closures in Thailand and Australia in late March. Apr was the worst month for TSS decline, with recovery trend in May as stores gradually started to reopen in the tail-end of the month.
1Q20 Post-TFRS 16
10.6%
Minor Food – International Presence
20
MINT operates three restaurant hubs: Thailand, China and Australia. MINT’s restaurant presence is now in 26 countries across the region, operating owned and franchised business models. MINT continues to look for opportunities to expand, especially in these existing markets.
Hubs
Franchised
Combination
Owned
* Excludes non-core items
67% 65% 75%64%
33% 35% 25%36%
0%
25%
50%
75%
100%
2014 2019* 1Q20* 2024F
International
Thailand
REVENUE CONTRIBUTION
Minor Food Portfolio
21
Minor Food operates outlets that are 50% owned and 50% franchised, while owned outlets is the majority revenue contributor. In terms of geography, Thailand continues to be the most important market, followed by China and Australia hubs.
SYSTEM-WIDE OUTLET CONTRIBUTIONBy Ownership
1Q20 REVENUE CONTRIBUTIONBy Business
SYSTEM-WIDE OUTLET CONTRIBUTIONBy Geography
1Q20 REVENUE CONTRIBUTIONBy Geography
Thailand 75%
Australia9%
China6%
Others10%
Thailand74%
Australia16%
China4%
Others6%
2,362 OutletsOwned
50%
Franchised50%
Owned93%
Franchised7%
2,362 Outlets
THB 5,664
million
* As at end of Mar 2020 * As at end of Mar 2020
Operational Stats by Hub
22
Same-store-sales and total-system-sales growth of all three hubs have been impacted by the COVID-19 outbreak. Timely boost of the delivery service, both in terms of platform and promotional campaigns, has significantly helped Thailand’s sales momentum, especially in April when all dine-in outlets have been temporarily closed. China started to gradually open its outlets in March and is recovering better than originally expected. Australia hub has been the most impacted by COVID-19 outbreak. In general, recovery is seen across the hubs in May.
THAILAND CHINA AUSTRALIA
-6.0% -6.9%
0.5%
5.5%
SSSG TSSG
1Q19 1Q20
-30%
-20%
-10%
0%
10%
20%
Jan-20 Feb-20 Mar-20 Apr-20 May-20
2.5%
-49.4%
21.6%
-59.1%
1Q19 1Q20
-100%
-80%
-60%
-40%
-20%
0%
Jan-20 Feb-20 Mar-20 Apr-20 May-20
-2.1%
-7.9%
-2.7%
-12.5%
1Q19 1Q20
SSSG
TSSG*
SSSGTSSG
-100%
-80%
-60%
-40%
-20%
0%
20%
Jan-20 Feb-20 Mar-20 Apr-20 May-20
SSSG TSSG SSSG TSSG
SSSGTSSG*
* Closure of dine-in restaurants in Apr * Closure of dine-in restaurants* Closure of restaurants in late Jan / Feb
1,251 986 986
Minor Lifestyle
24
1Q20 revenue of Minor Lifestyle declined by 21% y-y, primarily from the soft retail trading business, which was impacted by the COVID-19 outbreak, although contract manufacturing sales was resilient from the sales of sanitizer. Consequently, both EBITDA and bottom line pre-TFRS 16 declined to a net loss of 41 million and 78 million respectively. Situation in April deteriorated as over 95% of the outlets were temporarily closed. Visible recovery is seen in May.
THB million
Revenue
FINANCIAL PERFORMANCE
84
-7 -41 31
-78 -78
EBITDA NPAT
% Margin
6.7%2.4%
Retail Trading
70%
Contract Manufacturing
30%
• Retail trading: revenue declined by 27% y-y, attributable to all brands, from the falling foot traffic and store closures later in March amidst COVID-19.
• Contract manufacturing: revenue declined only slightly by 1% y-y, supported by strong sanitizer sales and high demand of cleaning products in March.
OPERATIONAL STATS
-1.3%
-32.0%
8.0%
-29.5%
486 473
No of Shops SSSG TSSG
1Q19 1Q20
TSSGSSSG
-100%
-75%
-50%
-25%
0%
Jan-20 Feb-20 Mar-20 Apr-20 May-20
THB 986
million
1Q19 1Q20 Pre-TFRS 16 1Q20 Post-TFRS 16
-21% NM NM
CAPEX & Balance Sheet Strength
26
CAPEX plans includes maintenance, renovations and signed pipeline. MINT has suspended its CAPEX plan in 2020, and only continuing those that are necessary. With the adverse impact on equity base from the adoption of TFRS 16, together with the net loss in 1Q20, interest bearing debt to equity ratio rose to 1.61x. MINT and its senior unsecured debentures have “A” rating by TRIS.
Interest Bearing Debt to Equity Net Interest Bearing Debt to Equity
Internal Policy
X
CAPEX PLANS LEVERAGE
BACK-UP FINANCING
THB million
0
50,000
100,000
150,000
200,000
Outstanding Borrowing* & Equity Un-Utilized Facility
Debt31,619
Debt129,512
Note: Cash on hand as at end of 1Q20 is THB 20,712 million
Equity**9,926
* Outstanding borrowings exclude lease liabilities as per covenant calculation definition** Assume 100% conversion of MINT-W6 (at exercise price of THB 43 per share)
Equity80,235
0
5,000
10,000
15,000
20,000
2019 2020F 2021F 2022F 2023F 2024F
THB million
Suspended / Delayed
Minor Food
Minor Hotels
Minor Lifestyle
1.36
1.61
0.75
1.00
1.25
1.50
1.75
1Q19 2Q19 3Q19 YE19 1Q20*
* Interest Bearing Debt excludes lease liabilities as per covenant calculation definition
* CAPEX plan for 2021F – 2024F is according to the original 5-year plan and has not been adjusted amidst the COVID-19 situation
Recovery Case Study – Minor Food’s China Hub
28
01-Feb-20 16-Feb-20 02-Mar-20 17-Mar-20 01-Apr-20 16-Apr-20 01-May-20 16-May-20 31-May-20 15-Jun-20
China is an example of quick recovery after the COVID-19 situation improves. Since the stores started to reopen again in March, sales continue to improve week on week, tracking ahead of best case scenario projected in February. Furthermore, China hub’s operation turned profitable at the store contribution level in April, two months ahead of the original projection. With the current momentum, China hub anticipates the trend to continue and will recover to pre-COVID level by June.
Ensure Business Continuity
Accelerate Business Recovery
30 Days 30 Days 30 Days
• Strict adherence & embed safety standards to epidemic prevention policy
• Reopen stores & grow delivery revenue
• Secure loan facility
• Cost reduction: payroll & rental
• Recover business volume
• Secure government subsidies
• Target for all employees on temporary redundancy to resume work
• Upgrade CRM & loyalty program
• Acquire new A+ locations in key markets
• Develop Panda delivery menu from all Riverside stores • Roll out of Riverside new menu
• Launch Panda delivery menu nationwide
• Complete store renovations
• Restart all digital initiatives
Average daily sales pre-COVID
Daily sales
No of outlets in operation
Priorities
Re-opening Strategy
29
Europe Spain Italy Benelux Germany Euro Area
Domestic Demand c60% c50% c50% c70% 50-55%
Euro Demand 75-80%
Corporate vs Leisure
B2B 30-40%
B2C 60-70%
Asia & Oceania Thailand Maldives Africa Middle East Australia
Domestic Demand 11% - na na 85%
Regional Demand 54% 36% 63% 44% 15%
Corporate 15% 2% 23% 14% 43%
Leisure 85% 98% 77% 86% 57%
As the lockdown is being relaxed in various cities and countries, MINT is ready to resume operations in all of its businesses across geographies. Although visibility is still limited in terms of speed and magnitude of recovery, MINT will ensure that demand will be sufficient to uplift its performance before progressively reopen its hotels, restaurants and lifestyle outlets.
MINOR HOTELS MINOR FOOD
Reopening plans:
• Extend the service to dine-in for outlets that are already opened for delivery and takeaways
• Reevaluate and reforecast the performance of each outlet that remain closed, to ensure that only outlets with positive cash flow will reopen.
• Adjust store operating hours according to the rules and regulations.
• Focus on hygiene and safety of customers and team members.
• Hotels in China and Vietnam have reopened and have successfully captured domestic demand.
• Selective restaurants in hotels in Bangkok have reopened in accordance with social-distancing guidelines.
• The recovery of demand will be different in each country and region.
• Selective and gradual reopening of hotels starting in June.
Recovery plans:
• Drive revenue through online channel
• Plan store opening hours to allow for cleaning and sterilization to protect customers and team members
MINOR LIFESTYLE
* Data as of 2019
Minimizing Cash Outflow
30
Cost Reduction Initiatives
CAPEX Suspension
Dividend Cancellation
o Suspension of staff travels, advisory and training initiatives
o Reduction of marketing and advertising costs especially in low-activity businesses
o Cut of any other unnecessary costs
o Conversations with suppliers for discounts or better payment terms
o Optimization of full time & part time manning and workforce productivity.
o Reduction of salaries and deferral of salary merit increase, both for at least 3 months, across levels and geographies.
o Implementation of “temporary redundancy” scheme in Europe, in order to put some of the payroll on the government subsidy program.
o Application for government subsidies across all geographies.
o Negotiation with landlords globally to reduce or suspend rent payments
Un-prioritized Costs
Suppliers
Payroll
Rentals & Leases
o Drastic reduction of CAPEX, with the exception of:‒ Prior commitments: including the investments in second phase of Bonchon and BreadTalk
Singapore, and NHH’s Boscolo portfolio‒ Maintenance & ongoing projects, such as Avani Khao Lak and Anantara Desaru
o Omission of dividend payment for the year ended 2019, subject to shareholders’ approval
MINT continues to focus on cash preservation and liquidity management, with initiatives from all business units and across geographies. This is an on-going process with the objective to minimize cash outflows throughout business recovery process.
CAPEX cancellation THB 7-10 billion
Cash saving THB 2.3 billion
Cost savings is still on-going. As of today, estimated at:
nearly 25% of 2019 costs & expenses*
nearly 30% of 2020 budget cost & expenses*
* Excl depreciation, interest and taxes
Payroll35%
Leases15%
Supply chain17%
Other Opex32%
Movement of Free Cash Flow – Cash Burn Should Ease After Lock-Down Peak
Due to national lock-downs during the pandemic, adjusted free cash flow turned negative from February to April, although the reversal narrowed in April as cost-cutting measures and CAPEX suspension began to take effect. The benefit of cost-cutting initiatives and CAPEX suspension, together with business re-opening should lead to further free cash flow recovery for the remainder of the year.
14.7
-3.8
11.0
2.10.0 -0.2
-1.2-1.3 -1.1 -0.9-0.5-1.0 -0.8
-3.2 -1.3
1.9
-3.3
-5.0
-6.4 -0.2 -1.9 -4.3 -3.0
2019 1Q20 Jan 20 Feb 20 Mar 20 Apr 20
Free CF (after Repayment of Lease Liabilities)
Operating CF
Net CAPEX
Net of Tivoli & Maldivian Asset
Sales CAPEX included
May – Dec 20
• Stress test & scenario analysis will be conducted on an on-going basis with assumptions adjusted according to the evolution of the situation;
• The benefits of cost-cutting initiatives are expected to show greater effect going forward;
• Business are re-opening with focus on hotels, restaurants & lifestyle outlets with cash positive potential;
• Most committed CAPEX has already been spent in the first 4M20 while full-year CAPEX is being cut by nearly half of original budget
Repayment of Lease Liabilities
2019Actual
CostSavings
2020Budget
2019Actual
CostSavings
2020Budget
24% 26%
19% 24%20% 26%
24% 30%
Cost Saving Initiatives
32
With the effort across business units and across geographies, MINT has been able to reduce costs of up to 25-30% in the four categories, both against actual 2019 and budget 2020 costs & expenses. The initiatives are ongoing as MINT continues to look for further potential cost reductions.
THB million
0
10,000
20,000
30,000
40,000
2019Actual
CostSavings
2020Budget
2019Actual
CostSavings
2020Budget
PAYROLL RENTAL & LEASESSUPPLIERS OTHER COSTS
20,000
40,000
60,000
80,000
Total before COVID Part-Time Reduction PermanentRedundancy
TemporaryRedundancy
Total after Reduction
-28%
-14%
-17%
• Headcount was reduced by approximately 60% during COVID
• In addition, executives at management level have taken up to 60% pay cuts and see other benefits reduced
Minor Hotels (Ex. NH)
9%
NH49%
Minor Food38%
Minor Lifestyle4%
Lease & Rental Saving
Before After
52% - 63%38% - 46%
Before After
43% - 53%32% - 39%
Cost Cutting Helps Reduce Indicative Breakeven Points
With effective cost cutting initiatives implemented on a firm-wide basis, the indicative pre-TFRS16 EBITDA breakeven points of all businesses have declined significantly, resulting in breakeven timelines accelerated to earlier than originally planned.
Before After
49% - 59%
34% - 42%
Minor Hotels – Breakeven Occupancy Breakeven Occupancy – NH Hotel Group
Before After
40% - 48%22% - 27%
Thailand, Asia, Middle East & Africa
Minor Food – Breakeven Sales Level
82%
69%
Before After
Europe & Americas Australia & New Zealand
10,826 keys / 15% of total system 46,164 keys / 65% of total system 7,201 keys / 10% of total system
Hotels breakeven occupancy ranges are indicative and calculated based on EBITDA post charging of rental expenses (with impact of TFRS16 neutralized) but before charging corporate overheads; ADR simulated 10-15% down to budget as a central case with occupancy ranges based on variations of +/-10% around the central case; breakeven after cost cutting is with reference to H2 2020 and applies latest forecast cost structure; breakeven before cost cutting is with reference to FY 2020 (Europe & Americas with reference to H2 2020) and is based on the cost of the 2020 budget; perimeter of breakeven analysis covers c.90% of system keys and is considered by management to be representative of the total system; the c.10% of system keys not covered in the analysis comprises hotels under third-party and JV brands in Thailand and Africa, the hotel management contract portfolio of NH, and certain Tivoli properties in Portugal.
Indicative % at Property Level Indicative % Pre-COVID Sales Level
Minor Food: Re-Opening Plan & Indicative Monthly Sales
Number of Operating
Outlets
Total System Sales
(THB mn)
Minor Food
Thailand Hub
Australia Hub
China Hub
Minor Food
Thailand Hub
Australia Hub
China Hub
Indicative EBITDA Pre-TFRS16 Breakeven before Cost Cutting
Indicative EBITDA Pre-TFRS16 Breakeven after Cost Cutting
Over 30% of total outlets were closed during the peak of the lock-down, while remaining outlets continued serving delivery and takeaway. Minor Food is gradually opening its dine-in outlets from May onwards, with social distancing practice implemented and gradually eased as per government directives. Total system sales are expected to recover to reach pre-crisis level at year-end.
Minor Food’s total system sales are indicative and should not be construed as forward guidance. Breakeven is calculated based on non-variable financial obligations and profitability margins, post-cost cutting with reference to latest forecast of cost structure applied for H2 2020. The impact of TFRS16 is neutralized in the calculation.
Indicative
Indicative
0
500
1,000
1,500
2,000
2,500
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Jan-19 Mar-19 May-19 Jul-19 Sep-19 Nov-19 Jan-20 Mar-20 May-20 Jul-20 Sep-20 Nov-20
Minor Food Capitalizes on Strong Delivery Platform
During the lock-down period, delivery sales more than doubled from the prior-year period. Strong delivery sales growth on the back of own solid delivery platform and careful planning of marketing initiatives and operations to accommodate the surge in demand have helped alleviate adverse impact of the pandemic on dine-in sales.
0
200
400
600
800
1,000
1,200
Delivery Sales
(THB mn)
Total Delivery
SalesGrowth
(%)
0%
100%
200%
Jan-19 Mar-19 May-19 Jul-19 Sep-19 Nov-19 Jan-20 Mar-20 May-20 Jul-20 Sep-20 Nov-20
Minor Food
Thailand Hub
Australia Hub
China Hub
Indicative
Indicative
Minor Food’s total system sales are indicative and should not be construed as forward guidance.
Minor Hotels: Indicative Occupancy Recovery & Breakeven
As the lock-down has been eased, Minor Hotels began to re-open its hotels at the end of May, with occupancy expected to gradually recover throughout the remainder of the year. With successful cost-cutting effort and with the re-opening plan focusing mainly around hotels with cash positive potentials, Minor Hotels sees EBITDA pre-TFRS16 breakeven point as requiring occupancies in the range of 34% to 42% in 2H20.
Minor Hotels
61%
69%71% 73% 72% 73% 71% 69%
74% 75% 75%
62%
34% - 42%
49% - 59%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Breakeven Range:
Before Cost Savings
After Cost Savings
Last Year
This Year
Thailand, Asia, ME &
Africa
63%
72%68% 69%
53%57%
51%
64%
53%59%
75%
62%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Projected occupancies to September are an indicative scenario due to highly fluid business on-the-books situation and should not be construed as forward guidance; breakeven occupancy ranges are indicative and calculated based on EBITDA post charging of rental expenses (with impact of TFRS16 neutralized) but before charging corporate overheads; ADR simulated 10-15% down to budget as a central case with occupancy ranges based on variations of +/-10% around the central case; breakeven after cost cutting is with reference to H2 2020 and applies latest forecast cost structure; breakeven before cost cutting is with reference to FY 2020 (Europe & Americas with reference to H2 2020) and is based on the cost of the 2020 budget; perimeter of breakeven analysis covers c.90% of system keys and is considered by management to be representative of the total system; the c.10% of system keys not covered in the analysis comprises hotels under third-party and JV brands in Thailand and Africa, the hotel management contract portfolio of NH, and certain Tivoli properties in Portugal.
Breakeven Range:
Before Cost Savings
After Cost Savings
Last Year
This Year
40% - 48%
22% - 27%
Minor Hotels: Indicative Occupancy Recovery & Breakeven
As the lock-down has been eased, Minor Hotels began to re-open its hotels at the end of May, with occupancy expected to gradually recover throughout the remainder of the year. With successful cost-cutting effort and with the re-opening plan focusing mainly around hotels with cash positive potentials, Minor Hotels sees EBITDA pre-TFRS16 breakeven point as requiring occupancies in the range of 34% to 42% in 2H20.
Europe & Americas 59%
66%71% 73%
76% 77% 74%68%
79% 78%75%
61%
38% - 46%
52% - 63%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Australia & New Zealand
74% 80% 79% 77%73% 71%
82% 81%78%
81% 81%
72%
32% - 39%
43% - 53%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Breakeven Range:
Before Cost Savings
After Cost Savings
Last Year
This Year
Breakeven Range:
Before Cost Savings
After Cost Savings
Last Year
This Year
Projected occupancies to September are an indicative scenario due to highly fluid business on-the-books situation and should not be construed as forward guidance; breakeven occupancy ranges are indicative and calculated based on EBITDA post charging of rental expenses (with impact of TFRS16 neutralized) but before charging corporate overheads; ADR simulated 10-15% down to budget as a central case with occupancy ranges based on variations of +/-10% around the central case; breakeven after cost cutting is with reference to H2 2020 and applies latest forecast cost structure; breakeven before cost cutting is with reference to FY 2020 (Europe & Americas with reference to H2 2020) and is based on the cost of the 2020 budget; perimeter of breakeven analysis covers c.90% of system keys and is considered by management to be representative of the total system; the c.10% of system keys not covered in the analysis comprises hotels under third-party and JV brands in Thailand and Africa, the hotel management contract portfolio of NH, and certain Tivoli properties in Portugal.
Covenant Waiver
Debt Maturing in
2020
Liquidity Management
Credit Rating
Liquidity & Debt Management
38
With the impact from COVID-19, MINT is proactively managing its cash position and debt funding, both outstanding facilities and credit lines to ensure liquidity in the coming quarters.
MINT is in discussion with creditors (both bondholders and banks) on:o Waiver of covenant testing (Gross IBD to equity < 1.75x) for the next
3 quarters (until YE20);o With additional negative covenants until end of 2020:
MINT’s Ratingo Rating reaffirmed at A by TRISo Outlook revised down to negative amidst the
COVID-19 situation.
USD Perpetual Bondo Rating downgraded to BBB by Fitch Ratingso This was a result of the downgrade of BBL’s (the
guarantor’s) Long Term Issuer Default Ratingo No impact on MINT’s rating
Due 2Q20o THB 2 billion Term Loan: repaid by short-term
loan, with target to refinance to long-term loan during June
o THB 4 billion Bonds: settled by on existing long-term EUR loan facility on 22 May 2020
Due 2H20o THB 3.6 billion Loans in various currencies: in
advanced discussion with banks to extend / refinance the loans
Cash on Hand + Working Cap Facilities
THB 22.2 billion + THB 27 billion
o In addition, NHH has already secured EUR 250 million 3-year syndicated loan in May
o MINT is in the process of acquiring additional facilities to ensure liquidity of the company
* As at end of Apr 2020
‒ No M&A cumulatively of over 3% of total assets (excluding lease obligations)
‒ Total debts of not more than THB 150 billion at end of any quarter
‒ No dividend payment* Note: these terms and conditions are being discussed and may
change as the conversation evolves
Strengthening of Equity Base
39
MINT has announced the comprehensive capital structure plan, taking a proactive approach to ensure its ability to service the obligations and to maintain its commitment on the quality of the balance sheet. The solid balance sheet will be the foundation for MINT to further build on its first-class quality assets and grow its business sustainably in the long term. The plan will result in the increase in shareholders’ equity over the one to three years period.
2Q20 3Q20 4Q20 2021 2022 2023
Perpetual Bonds• Onshore/offshore equity-accounted perpetual
bonds
Rights Offering (RO)1
• With oversubscription mechanism• RO ratio of not lower than 6.45 existing shares
to 1 new share1
• RO price at a discount of no more than 15% to the Market Price1,2,3
Warrants (W7)1
• Eligible for shareholders after RO• Warrant offering price: free• Warrant ratio of 17 ordinary shares (post-RO)
to 1 new warrant1
• Warrant exercise ratio of 1 warrant to 1 share• Exercise price at a premium of no more than
10% to the Market Price1,4
• Warrant term of 3 years
THB 10 billion
THB 10 billion
THB 5 billion
1 Capital increases are subject to shareholders’ approval at the AGM to be held on 19 June 2020; preliminary details of instruments can be found in SET disclosure dated 19 May 2020; final details of both RO and W7 to be determined by Board of Directorsor persons as assigned by the Board.
2 Market Price to determine rights offering price is the volume weighted average price of MINT for 7-15 consecutive trading days prior to the date where offer price and other details with regards to the RO are determined.3 The Company may adjust or modify, either by increasing or reducing, the announced offering price if it is deemed appropriate for the success of the RO, taking into account the relevant market conditions, provided that the offering price adjustment shall
be no more than 10% of the announced Offering Price. 4 Market Price to determine warrant exercise price is the volume weighted average price of MINT for 7-15 consecutive trading days prior to the date where the Exercise Price and details with regards to the W7 are determined.
Instrument Target
1
2
3
• To be issued within 3Q20
• 19 Jun: AGM to approve capital increase• Before record date: announcement of RO price & other details; announcement of rights
adjustment of MINT-W6• 29 Jun: record date to determine eligible shareholders• 17 – 23 Jul: RO subscription period1
• Early-Aug: new shares registration; trading of new shares
Indicative Timeline
• 19 Jun: AGM to approve capital increase
• 3Q: BOD meeting to determine and announce exercise price & other details, and set record date to determine eligible shareholdersNote that W7 exercise price is not indicative of MINT future share price, but was set on the basis as a reward for existing shareholders
• 3Q: W7 issuance and trading • 3Q23: Last day of W7 exercise
Other trends and business initiatives are being assessed in order to respond to the post-COVID lifestyle.
Medium to Long-term Roadmap - Business Beyond COVID
With the changing of the consumer behavior amidst the COVID-19 situation, MINT will have to adjust its businesses to better serve the customers in the medium to long term. MINT has launched the project Business Beyond COVID with all the business units to craft the recovery path amidst the “new normal” way of living.
40
MINOR HOTELS
Increased reliability of the brands
Hotel sanitary standards over Airbnb
Leisure travel opportunities with working remotely behavior
More cautious consumer spending over next 3-9 months
Increasingly remote-working/VDO conferencing
Business lunches into the office, hotel catering services
Real estate locations/properties undervalued
Real-time demand tracking & revenue optimization
Growing concern over labor costs
Emerging Trends Examples of Immediate Responses
Heightened cleaning & hygiene measures in collaboration with
industry experts
o Anantara: “Peace of Mind”
o NHH: “Feel Safe at NH”
o Avani: “AvaniSHIELD”
o Oaks: “SureStay”
Emphasis on wellness & medi-spa in
partnership with specialists
Anantara & Verita
o Anantara Siam: to focus on boosting immunity
o Anantara Riverside: to focus on longevity & diagnostics
St Regis & Clinique la Prairie Aesthetics & Medical Spa
Focus on keeping the brand on top of mind
of customers
#AnantaraEscapism campaign
o Sharing aspirational contents & tips for staying well and healthy at home
Other trends and business initiatives are being assessed in
order to respond to the post-COVID lifestyle.
Medium to Long-term Roadmap - Business Beyond COVID (Cont’d)
With the changing of the consumer behavior amidst the COVID-19 situation, MINT will have to adjust its businesses to better serve the customers in the medium to long term. MINT has launched the project Business Beyond COVID with all the business units to craft the recovery path amidst the “new normal” way of living.
41
MINOR FOOD
Emerging Trends Examples of Immediate Responses
o Thailand hub:
‒ focused on 1112 Delivery app, resulting in delivery sales almost tripling in Apr vs Jan 2020
‒ launched “Zero Touch Delivery” program
o China hub debuted Panda Delivery
o Australia hub launched “The Coffee Club Pantry” and “The Coffee Club @ Home”, delivering groceries and coffee bean
Rising Home occasion (cooking, digital screens)
Booming of Celebratory emotional needs
Heightened food safety and nutrition concerns
Higher sourcing standards
Expansion of Online grocery retailer
Growing delivery, drive-thru & pick-upbusinesses
MINOR LIFESTYLE
More cautious consumer spending over next 3-9 months
Emerging product demand – “Health is Wealth”, e.g. sanitizing and immune-boosting products
Accelerated shift to digital sales channels
New contingency considerations in lease agreement, e.g. hardship funds, rental adjustment, rate holidays
Emerging Trends Examples of Immediate Responses
Other trends and business initiatives are being assessed in
order to respond to the post-COVID lifestyle.
o Shifted to online channel to boost fashion and household sales
o Focus on the manufacturing of hand sanitizer and other cleaning products
Non-Core Items
43
Period Amount (THB million) Business Unit Non-recurring Items
1Q20
113 revenue
49 net profitMinor Hotels Non-recurring items of NH Hotel Group
755 Minor Hotels Foreign exchange gain on unmatched USD Cross-Currency Swap
568 pre-tax
585 post-taxMinor Hotels Change in fair value of interest rate derivative
10 Minor Food Reversal of provision related to Ribs & Rumps
1Q19
50 Minor Food Gain from the divestment of Bread Talk Thailand
132 pre-tax91 post-tax Minor Hotels Capital gain from asset rotation of NH Hotel Group
-191 Minor Hotels Foreign exchange loss on unmatched USD Cross-Currency Swap
IFRS 16 Impact on P&L
44
THB million 1Q20
Pre-IFRS16 1Q20
Post-IFRS16
Total EBITDA -111 2,982
EBITDA Margin (%) -0.5 13.3
Depreciation 2,319 4,874
Interest Expense 892 1,808
Corporate Income Tax -305 -344
Minority Interest -182 -182
Total Net Profit -2,834 -3,173
Net Profit Margin (%) -12.6 -14.2
* Excludes non-recurring items as detailed on page 43.