Frasers Property Thailand Corporate Day 1/2020 1st Quarter Fiscal - - PowerPoint PPT Presentation

Frasers Property Thailand

1st Quarter Fiscal Year 2020 Earnings Three Months Ended December 31, 2019

Corporate Day 1/2020

2 Frasers Property Thailand – Corporate Day 1/2020 |

Statements in this presentation constitute “forward-looking statements”, including forward-looking financial information. Such forward- looking statements and financial information involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Frasers Property (Thailand) Public Company Limited (“FPT”) and its subsidiaries or industry results, to be materially different from any future results, or FPT performance or achievements expressed or implied by such forward-looking statements and financial information. Such forward-looking statements and financial information are based on numerous assumptions regarding the present and future business strategies and the environment in which the FPT and its subsidiaries will operate in the future. Because these statements and financial information reflect FPT’s current views concerning future events, these statements and financial information necessarily involve risks, uncertainties and assumptions. Actual future performance could differ materially from these forward- looking statements and financial information as a result of these risks, uncertainties and assumptions and you are cautioned not to place undue reliance on these statements and financial information. FPT expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement or financial information contained in this presentation to reflect any change in FPT’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement or information is based, subject to compliance with all applicable laws and regulations and/or the rules of the Stock Exchange of Thailand, the Securities and Exchange Commission and/or any other regulatory or supervisory body or agency. This presentation includes market and industry data and forecast that have been obtained from internal survey, reports and studies, where appropriate, as well as market research, publicly available information and industry publications. Industry publications, surveys and forecasts generally state that the information they contain has been obtained from sources believed to be reliable, but there can be no assurance as to the accuracy or completeness of such included information. FPT has not independently verified any of the data from third party sources or ascertained the underlying economic assumptions relied upon therein. The information contained in this document is strictly confidential and is made available to the recipient on the condition that it will be held in complete confidence. Any reproduction or distribution of this document in whole or in part, or the disclosure of any of its Presentations, without prior expressed or written consent of the Company is prohibited. The information contained in this document has been compiled from sources believed to be reliable. The accuracy and completeness of such information, however, is not guaranteed nor warranted. Nothing in this presentation should be construed as financial, investment, business, legal or tax advice and you should consult your independent advisors.

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• Quarterly highlights
• Business updates
• Portfolio operating metrics
• Financial performance
• 2020 Outlook
• Q&A
• Special gathering on FPT’s Supachalasai townhall

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Industrial property is s gaining momentum with so solid operating metrics

Strengthened factory AUM occupancy rate at 75 75% % in Dec-19 (from 72 72%in Dec-18), and warehouse AUM occupancy rate at 86 86% (from 81 81%in Dec-18). Healthy Built-to-Suit development pipeline with an 11-year 13K sq.m. BTS contract secured for Lyreco Thailand in Nov-19 and more than 50K BTS expected to sign within 2Q20. Rising demand in FMCG, e-commerce, logistics providers and consumer products sector, well- supported by relocation of Chinese manufacturing and demand for EEC.

Growth in recurring income provide for operational resilience

1Q20 revenue from rental and related services rose by +4.87% % Y-o-Y to THB 696 million, driven by an increase of +4.60% % from industrial property sector and +5.34% % from commercial property sector with FYI center recording full occupancy.

Softened residential sa sales from market sl slowdown

Revenue from sales of real estate dipped -5.59% % Y-o-Y to THB 3,546 million, but this remains above overall dip in residential property sector of 15-30 % for 2020*.

FTREIT’s ass sset acquisition will br bring higher management fee to to FPT

FTREIT successfully acquired 80K sq.m. of high-quality assets outside the Group Company in Nov-

• 19. The acquired asset is 100% occupied and located in EEC Laemchabang.

Robust growth in recurring incomes by +4.87% Y-o-Y 93% OCC rate for commercial property portfolio (AUM) 82% OCC rate for industrial portfolio (AUM)

*Source : Bangkok Post

Business updates

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✓ High enquiries of new and expansion leases from existing tenants & tenants relocating from China. ✓ Enhancing services and tech initiatives to drive portfolio performance. ✓ Strong Built-to-Suit pipelines YTD, on track to reach 150K sq.m. for FY2020 ✓ Development of BTS and new logistics park on track. ✓ TRA master planning in progress

Industrial Property & Related Businesses Residential Commercial & Hospitality

✓ Sales softened from cyclical industries tied to macro environment, with a moderate drop far less than the broader market. ✓ A total of 6 new projects launched over the quarter worth THB 7.9 billion ✓ Pre-sales value amounted to THB 7.1 billion from 58 active projects worth THB 72 billion ✓ Total backlog awaiting to be transferred at THB 3,654 million ✓ SYM outstanding performance with ramp-up occupancy for Mitrtown office tower at 73%, while retail space almost fully secured at 94%. ✓ 100% occupancy remains for GOLD’s high-quality commercial portfolio in CBD Bangkok including FYI Center, Park Venture Ecoplex, Sathorn Square

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Lyreco’s biggest distribution centre to support e-commerce business in Thailand with net leasable area of more than 13K sq m. and a storage capacity for more than 6,800 product SKUs under an 11-year leasehold agreement. Located in a prime logistics node of FPT’s Bangplee Cluster on Bangna-Trad Road km.19. The facility is expected to be handover in Q2-2020.

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8 Frasers Property Thailand – Corporate Day 1/2020 |

Exploring opportunities and energizing future with unique space solutions of exceptional quality. Engaging environment with a vibrant community amidst lush greeneries. Groundbreaking in February 2020 with target launch of ~40K sq.m. in 1st phase by Dec 2020.

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Well integrated the sleek warehouse building with office spaces, retail amenities design , and green sustainability concept at the central to facilitate the community with playground, exhibition area, outdoor sport activities and shared meeting room. The facility is expected to be handover in Q4-2020

Centralized Amenity

Outdoor Sport Activity Popup exhibition/ event Amphitheatre

Location

Site

Highway Entrance/Exit Point

• Approx. 3km from site by

local road

Located in Phra-Padaeng district,

• nly 25 min from CBD, 10 min to Thonburi

and 25 min to Bangna-Trat Road.

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10 Frasers Property Thailand – Corporate Day 1/2020 |

Pinthong 5 IE

Midea 130 rai

FPT ESB3 (WH)

Heating,Ventilatio, Air Conditioning Systems (HVAC) Consumer Appliances Robotics & Industrial Automation Smart Supply Chain & Other Business Product Segment JV/ Partnerships with Leading Global Brands Companie s and Brand Examples

Midea’s snapshot

Onboarding Midea Group being the anchor customer for the new manufacturing park in Chonburi province Midea facility will be developed into Midea Group’s largest home appliance manufacturing hub in Thailand & the largest intelligent technology manufacturing hub outside of China. FPT landbank of 300 rais located next to Midea facility will provide the perfect fit for facilities to Midea’s eco- system.

Laemchabang

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Accelerate growth of Data Centre business via new partner with TCC Technology CO., Ltd

JustCo ’s mega co-working space at Samyan Mitrtown

Newly-launched space occupying six floors across 12,000 sq.m. JustCo’s portfolio occupancy remains strong across all fully-operating centres.

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Bangkok’s First Hyperscale Data Centre Campus

Portfolio operating metrics

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Factory

452

properties under management

1.15

Dec-18 Dec-19 Portfolio Occ rate 72% 75% WALE 1.85 Years 1.99 Years 1Q Net add 18.6K sq.m. Dec-18 Dec-19 Portfolio Occ rate 81% 86% WALE 3.39 Years 3.30 Years 1Q Net add 148.3K sq.m.

mn sq.m.

AUM

Warehouse

properties under management

434 1.68

mn sq.m.

AUM

FPT

308

properties under management

1.07

Dec-18 Dec-19 Portfolio Occ rate 66% 76% 1Q Net add

• 34.6K sq.m.

Dec-18 Dec-19 Portfolio Occ rate 84% 85% 1Q Net add 200.6K sq.m.*

mn sq.m.

AUM

FTREIT

properties under management

578 1.76

mn sq.m.

AUM

*Inclusive of newly-acquired assets by FTREIT outside Frasers sponsorship totaling 80 K sq.m.

167K sq.m. YTD Net Add for total portfolio of asset under management

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Breakdown of industrial property tenants

Japan 32.9% Thailand 18.8% Germany 16.2% USA 5.6% China 4.4% Others 22.1%

COUNTRY/ REGION

Logistic/ Warehouse Operator 32.5% Auto 18.4% Electronics/Computer 13.7% Consumer Products 4.8% F&B 4.5% Others 26.0%

INDUSTRY Higher take-ups of Chinese customers Top 20 tenants span across 7 different industries

3.09%

Sep-18

3.95%

Sep-19

4.43%

Dec-19

70%

Of annualized rental revenue

7

Different industries

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15 Frasers Property Thailand – Corporate Day 1/2020 | 4,396 3,440 3,924 3,546

1,000 2,000 3,000 4,000 5,000 6,000

Jan-Mar Apr-Jun Jul-Sep Oct-Dec

CY2017 CY2018 CY2019

8,988 5,462 9,029 7,103

2,000 4,000 6,000 8,000 10,000 12,000

Jan-Mar Apr-Jun Jul-Sep Oct-Dec

CY2017 CY2018 CY2019

Residential Presale Residential Revenue Residential Project Launch Plan

7,307 9,029 7,103

Oct - Dec 18 Jul - Sep 19 Oct - Dec 19

(THB mn)

7,103 MB Presale in 3 months

3% Y-o-Y

(THB mn)

3,756 3,924 3,546

Oct - Dec 18 Jul - Sep 19 Oct - Dec 19

3,546 MB Revenue 3 months

(THB mn)

2 4 3 2 1 3 2 1 2 1 1

Oct-Dec 19 (A) Jan-Mar 20 (F) Apr-Jun 20 (F) Jul-Sep 20 (F)

TH TW SDH Upcountry

38% Y-o-Y 21% Q-o-Q

(THB mn)

6% Y-o-Y 10% Q-o-Q

10 9 4 6 2 3 4 4

FY2019 (A) FY2020 (F)

Presale as of Calendar Year Period Revenue as of Calendar Year Period

7,900 5,300 28,600

FY2020

6,300 9,100 20,700

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Occ rate :

99%

Asking rent :

THB 1,100/sq.m.

Occ rate :

100%

Asking rent :

THB 1,500/sq.m.

Occ rate :

91%

Asking rent :

THB 600/sq.m.

Occ rate :

99%

Asking rent :

THB 900/sq.m.

Occ rate :

73%

Asking rent :

THB 1,200/sq.m.

REIT Management Secure almost of Office Tenants

73%

Secure almost of Retail Tenants

(8% on negotiate)

94%

Triple Y Residence Presale & Transfer

71%

Financial performance

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1,253 1,798 610 1,710 10,282 15,515 714 960 415 566 532 996 9MFY18 FY19

Industrial property business Gain on sales of IP assets Residential property business Commercial property business Hospitality business Other income

423 442 889 3,756 3,546 288 306

144 144

171 171 1Q19 1Q20

1,135 308 2,144 3,484

1Q19 1Q20 9MFY18 FY19

Revenue Structure Net Profit EPS**

(THB mn) (THB mn) (THB)

**Calculated by dividing profit attributable to owners of the company over number of paid-up shares

0.37 0.14 0.36 0.96

1Q19 1Q20 9MFY18 FY19 7.5% 9.6% 9.1% 8.3% 15.7% 0.0% 4.4% 7.9% 66.2% 76.9% 74.5% 72.0% 5.1% 6.6% 5.2% 4.5% 2.5% 3.1% 3.0% 2.6% 3.0% 3.7% 3.9% 4.6% 1Q19 1Q20 9MFY18 FY19

• 72.9%

Y-o-Y

• 62.1%

Y-o-Y

• 18.7%

Y-o-Y

• 3.6%*

Y-o-Y

*Normalized revenue excluding gain from sales of properties to FTREIT in 1Q19

+56%

Y-o-Y

+62%

Y-o-Y

+166.3%

Y-o-Y

21,545 13,806 4,609 5,671

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7,475 4,504 3,332

30 Sep 18 30 Sep 19 31 Dec 19

(THB mn) (THB mn)

0.47 1.63 1.79

30 Sep 18 30 Sep 19 31 Dec 19 Net IBD/ E*

*Calculated by a ratio of total loans, borrowings and liability under financial lease, net of cash & cash equivalents & current investment, to total shareholders’ equity

Cash & Current Investments Gearing Ratio

27,115 50,024 53,477 14,138 14,492 13,948 41,397 27,870 28,024 82,650 92,386 95,449

30 Sep 19 30 Sep 19 31 Dec 19

IBD Non-IBD Shareholder's Equity Total assets

30 Sep 19 31 Dec 19

Enlarging asset from residential project under construction

Balance Sheet Composition

30 Sep 18

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Profit & Loss statement (THB mn) 1Q20 (Oct - Dec 19) 1Q19 (Oct -Dec 18) % Remark Total revenue 4,609 5,671 ▼ 19%

• Residential sales dropped far less than the broader sector that

is facing major headwinds. Revenue from sales of real estate 3,546 3,756 ▼ 6% Rental and related service revenue 696 663 ▲ 5%

• Healthy growth in recurring income driven by +4.60% increase

from industrial property and +5.34% from commercial property Revenue from hotel business 144 144

• Management fee income

175 131 ▲ 34%

• Growth in management fee from higher asset size of industrial

portfolio and income from management of SYM Gain on sales of properties

• 889

▼ 100%

• No gain on sales of properties as there is no asset recycling to

FTREIT in 1Q20. Share of profits of associates /JV, net of unrealized gains on sales of properties 5 (114) ▲ 104%

• No unrealized gain on sales as there is no asset recycling to

FTREIT in 1Q20. Finance cost 262 153 ▲ 72%

• Higher interest from new debenture issued.

Profit for the year 308 1,135 ▼ 73% Profit attributable to major shareholder 283 679 ▼ 58% Net profit margin* 6.13% 11.98% ▼ 5.5 pp Earnings per share (THB) 0.14 0.37 ▼ 0.23

*Calculated by profit attributable to owner of the company over total revenue

2020 Outlook

22 Frasers Property Thailand – Corporate Day 1/2020 | Note: *Exports and imports in terms of USD (BOP basis) Source: EIC analysis as of 4 February 2020 suggesting downward forecast figures from 2019-nCoV impact

Unit : %YOY

2019F 2020F

• GDP

2.5 2.1

• Private Consumption

4.2 2.5

• Private Investment

2.2 0.9

• Government

Consumption 1.8 2.2

• Government

Investment

• 0.5

3.9

• Export of goods*
• 3.3
• 1.0
• Tourist Arrivals

4.3

• 4.6
• Imports of goods*
• 5.3
• 2.7
• Headline Inflation

0.7 0.5

Breakdown of Total Export Value by Sector 2019 vs. 2018 9% 8% 14% 10% 14% 3% 42%

2019

9%7% 15% 10% 15% 3% 41%

2018

Agri F&B Electronics Electric Appliance Auto Machinery Others Source : Trade report, MOC

Foreign Investment from Major Countries (Foreign Equity >=10%) 353,790 466,510 314,130 374,340

2018 (Jan-Sep) 2019 (Jan-Sep) Net Application Application Approved

1,048 1,165 1,118 1,074 THB mn #Projects Manufacturing Production Index (MPI) Capacity Utilization Index Private Investment Index (PII) Business Confidence Index

Source : TRADINGECONOMIC.COM Source : TRADINGECONOMIC.COM Source : TRADINGECONOMIC.COM Source : TRADINGECONOMIC.COM

Apr-19 Jul-19 Oct-19 Jan-20 Jan-19 Apr-19 Jul-19 Oct-19 Dec-19 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 19 19 19 19 19 19 19 19 19 19 19 19

Source : BOI

Net Application Application Approved

Apr-19 Jul-19 Oct-19 Jan-20

23 Frasers Property Thailand – Corporate Day 1/2020 |

Export Export Export Export Export

Relocation of supply chain from trade war effect Infrastructure connectivity gives rise to robust demand for logistic, residential and commercial space Impact assessment from nCoV severity remains prematured Growing E-Commerce users creates opportunities for new related investments Ongoing mega-projects and incentive from EEC & BOI will boost domestic investment

2.0 2.2 2.6 2.8 3.2 3.8

9.6% 10.4% 14.0% 7.9% 14.0% 20.0%

Y2014 Y2015 Y2016 Y2017 Y2018 Y2019P

% growth rate Trillion baht

P= Predicted Source : ETDA Source : Bangkok Post

Dual Track Railway Lam Cha Bang Seaport (Phase III) High-speed Rail Express Way/ Motorway

Suvarnnabhumi & U-Tapao Airport

1Q-2020 Thai economy faced series

• f cuts in growth forecast from

shrinking tourists due to effect from nCov, in addition to delay of government projects.

Extension of the tax filing Tax deductions from expenses

• n local seminar

Source : Bangkok Post Tax deduction for renovation expense at 1.5x Reduction of jet fuelexcise taxon domestic flights

Thai government released 4 tax schemes to boost recovery

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40k sq.m. NLA

Mar-2020 60k sq.m. GFA

.

Deliverable timeline

75k sq.m.

Sep-2020

40k sq.m. (Phase 1)

Q2/2021

30k sq.m. (Phase1)

20k sq.m. (Phase 2)

.

13k sq.m.

Township Master planning

Q3/2021 Dec-2020

High value project line-ups to deliver returns from 2020

Jul-2020

Bangkok Logistic Park

25 Frasers Property Thailand – Corporate Day 1/2020 |

2020 Business Strategy

NEO HOME

สวย ครบ คุ้ม ใกล้

CITY HOME

ขยายตลาด เน้นท าเลในเมือง

Single Detached House

ขยายอาณาจักรแห่งใหม่ บ้านเดี่ยว (พระราม 2)

Townhome Market Expansion

โซนตะวันออก ตะวันออกเฉียงเหนือ

High potential UPC Projects

ขยายตลาดต่างจังหวัด ท าเลใหม่ที่มีศักยภาพ

Residential property market assessment

Low policy interest rate at 1.00% Government spending

• n mass transit

expansion Transfer and Mortgage Fee reduce to 0.01%* [<3MB housing value] “Baan Dee Mee Down” Offering up to THB 50,000 cash rebate for down payment Lower mortgage interest rates at 2.5% from GHB

BoT relaxes LTV rule for mortgages**

**Source : Bangkok Post

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Looking forward 2020

Investor appetite for prime industrial property remains strong

• Active asset enhancement initiative and smart solutions to maintain Industrial Property

AUM occupancy rate above 80%

• Strong IP pipeline driven by organic growth from existing tenants & new demand

following EEC and US-China trade war. Built-to-Suit target at 150,000 sq.m. Residential sales conservatively projected a mid-single-digit growth driven by unique value proposition to realign with economic and competitors. Leverage existing partnership to drive future growth International expansion to achieve better profitability in high growth markets Deleveraging initiatives to bring down gearing with proceeds from assets recycling and sales of land being the main funding source for new expansion.

Experience matters.