Investor Presentation Review of FY2019 Version 1.0 This Investor - - PowerPoint PPT Presentation
Investor Presentation Review of FY2019 Version 1.0 This Investor Presentation should be read in conjunction with the JKH Annual Report 2018/19 to obtain a more comprehensive understanding of the drivers and strategies of our businesses John
John Keells Group - Confidential
Investor Presentation Review of FY2019
Version 1.0
This Investor Presentation should be read in conjunction with the JKH Annual Report 2018/19 to obtain a more comprehensive understanding of the drivers and strategies of our businesses
John Keells Group - Confidential
▪ Market cap of USD 1.14 billion ▪ No controlling shareholder - 99% free float ▪ Debt : Equity ratio of 23.7% ▪ The Board comprises of two Executive Directors and six Independent Non- Executive Directors
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John Keells Group - Confidential
Note: The above excludes the contribution from Other including Information Technology and Plantations Services
2016/17 PAT attributable to equity holders 2017/18
▪ The Group has consciously focused on the shift in the composition of its earnings, targeting a greater contribution from higher ROCE earning industry groups such as Consumer Foods, Retail and Financial Services ▪ 2017/18 excludes the one-off surplus transfer of Rs.3.38 billion at Union Assurance PLC ▪ The decline in contribution from the Property industry group is due to revenue of residential apartments at Cinnamon Life not being recognised
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2018/19
36% 10% 4% 16% 1% 33%
Transportation Consumer foods Retail Leisure Property Financial Services
23% 17% 10% 32% 4% 15%
22% 11% 8% 20% 5% 33%
John Keells Group - Confidential
Total EBITDA 25,890 32,174 (20) Recurring EBITDA* 25,672 28,805 (11)
*Refer page 36 of the JKH Annual Report 2018/19 for commentary on recurring adjustments
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Industry Group FY2019 FY2018 YoY Growth (%) (Rs. Million) (Rs. Million) Transportation 4,555 3,438 32 Consumer Foods 2,913 3,132 (9) Retail 2,146 2,520 (15) Leisure 5,017 6,330 (21) Property 323 1,382 (77) Financial Services 4,548 8,873 (49) Other, incl. IT and Plantation Services 6,388 6,439 (1)
John Keells Group - Confidential
Total EBITDA 7,809 14,092 (45)
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Industry Group Q4 FY2019 (Rs. Million) Q4 FY2018 (Rs. Million) YoY Growth (%) Transportation 1,282 497 158 Consumer Foods 1,103 864 28 Retail 827 580 42 Leisure 2,375 2,540 (7) Property 195 1,158 (83) Financial Services 1,590 6,459 (75) Other, incl. IT and Plantation Services 437 1,995 (78)
Following are the reasons for the deviations in performance due to one-off/non-operational impacts:
tax charge at SAGT.
leasehold rights and lower fair value gains on investment in 2018/19.
John Keells Group - Confidential
Adjusted effective capital employed (Rs.bn)
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Adjusted ROCE (%)
IT - 54% Financial Services - 25% Transportation - 21% Consumer Foods - 21% Plantations - 15% Retail - 13% Leisure - 4% Property (Excl. Cinnamon Life) – 0.2% Cinnamon Life – (0.1%) Hurdle Rate - 15% Industry group Effective capital employed (%) Cinnamon Life 24 Leisure 21 Property (Excluding Cinnamon Life) 13 Transportation 8 Financial Services 6 Retail 4 Consumer Foods 3 Plantations 1 Information Technology 0.1 ▪ In addition, the Holding Company accounts for 18 per cent of effective capital employed which consists primarily of cash
John Keells Group - Confidential
▪ Investment pipeline comprises primarily of Cinnamon Life, where completion is staggered ▪ The realisation of benefits from these investments is expected to accrue from beyond the next 12-18 months, particularly with Cinnamon Life. ▪ These investments will be funded through available/internally generated cash. Some of the key projects include:
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Project Expected completion Cinnamon Life - Residential and Commercial towers 4Q FY2020
1Q FY2021 Reconstruction of Bentota Beach by Cinnamon End 2019 Reconstruction of Cinnamon Hakura Huraa Maldives End 2019 Cinnamon red Kandy FY2021 Roll out of 55-60 Retail outlets FY2020 & FY2021 Retail Centralised Distribution Centre 1H FY2021 JK Logistics - construction of a warehouse 1H FY2021
John Keells Group - Confidential
▪ 42% stake in SAGT ▪ SAGT capacity: ~2 million TEUs ▪ Largest cargo and logistics service provider in the country ▪ Leading bunkering services provider ▪ Joint Ventures with Deutsche Post for DHL air express and A P Moller for Maersk Lanka ▪ GSA for Jet Airways, KLM Royal Dutch airlines and Gulf Air. Other
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John Keells Group - Confidential KARACHI GWADAR BAHL MUMBAI CHENNAI VISHAKHAPATNAM KOLKATA CHITTAGONG YANGON MOMBASA LAMU DAR-ES-SALAM CAPE TOWN PORT LOUIS ADEN KOCHI
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4.31 4.91 5.19 5.74 6.21 7.05 2013 2014 2015 2016 2017 2018 Million TEUs
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Port Container handling capacity (TEUs) Colombo 8 million Hong Kong 21 million Singapore 40 million Shanghai 36 million
Sources: Government websites/ Sri Lanka Ports Authority
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Volumes (TEU) 2017/18 2018/19 % YoY Change Q4 Q1 Q2 Q3 Q4 SAGT 507,668 504,312 538,723 516,037 514,589 1 JCT 559,681 547,629 592,551 604,672 607,913 9 CICT 639,002 656,986 676,710 703,470 668,230 5 Total 1,706,350 1,708,927 1,807,984 1,824,179 1,790,732 5 SAGT 2017/18 2018/19 Q4 Q1 Q2 Q3 Q4 Domestic: Transshipment volume mix 20:80 17:83 17:82 20:80 21:79
4Q Earnings update: Transportation industry group
improvement in volumes and mix.
impairment provision for doubtful debt and a cumulative deferred tax charge at SAGT.
(Rs. mn) Q4 2018/19 Q4 2017/18 EBITDA 1,282 497
400 600 800 Q4 Q1 Q2 Q3 Q4
Port of Colombo - volumes ('000 TEUs)
CICT JCT SAGT
John Keells Group - Confidential Sources: Government websites/ Sri Lanka Ports Authority
Bunkering Business (Lanka Marine Services) Port of Hambantota ▪ Strong opportunities for private bunkering service providers with infrastructure in place for inland storage of petrochemicals and a pipeline to the Port ▪ The Port will occupy an area of 1,815 hectares and have a capacity to accommodate 33 vessels at a time ▪ Positioned within 10 nautical miles of the world’s busiest shipping lanes in which 200 to 300 ships sail through on a daily basis Logistics Business (John Keells Logistics) ▪ Total warehouse space under management grew to approx. 315,000 sq.ft. in the year 2018/19, at a capacity utilisation of 90 per cent.
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LMS 2017/18 2018/19 Q4 Q1 Q2 Q3 Q4 Volume growth 20 20 2 9 (4)
▪ LMS revenue recorded an increase although profitability was impacted by the appreciation of the Rupee
John Keells Group - Confidential
▪ Market leader in soft drinks, ice creams and processed meats ▪ Custodians of the consumer brands “Elephant House”, “Keells - Krest”: high brand equity
Key performance indicators (%) FY2016 FY2017 FY2018 FY2019 Growth of frozen confectionery volumes 15 11 (4) 10 Growth of beverage volumes 22 10 (16) (25) Growth of convenience food volumes 11 (4) 3 7 EBITDA margin (%) 26 27 20 18
▪ A sugar tax on carbonated beverages was implemented from 9 November 2017 onwards, resulting in an upward revision
for both CSD and fruit-based beverages in December 2018. ▪ Following the implementation of the threshold-based tax, selling prices of large PET packs of the CSD portfolio were reduced by ~20 per cent from February 2019, whilst selling prices of selected SKUs will be revised in 1Q of 2019/20 14
Key performance indicators (%) Q4 FY2018 FY2019 Q1 Q2 Q3 Q4 Growth of frozen confectionery volumes 2 3 8 7 21 Growth of beverage volumes (22) (37) (31) (23) (6) Growth of convenience foods volumes 11 12 12 3 1 EBITDA (Rs. million) 864 523 691 596 1,103 EBITDA margin (%) 21 14 16 16 24 Revenue mix (Bev:FC) 59:41 49:51 50:50 47:53 49:51
4Q Earnings update: Consumer Foods industry group Frozen confectionery:
Frozen Confectionery business driven by strong volume growth Beverages:
Beverage business as a result of higher margins.
the second half of 2018/19 has consistently witnessed an upward trend.
(Rs. mn) Q4 2018/19 Q4 2017/18 EBITDA 1,103 864
John Keells Group - Confidential
▪ The bulk-impulse mix of regional markets are highly skewed towards the impulse markets, demonstrating the significant growth potential for the impulse category.
Sri Lanka Thailand Malaysia 70% 30% 8% 92% 56% 44% Bulk vs. Impulse Split - Regional Impulse Bulk
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▪ CCS reformulated its flagship flavours and currently, approximately 70 per cent of the CSD portfolio’s calorific sugar content is reformulated and replaced with Stevia; a natural sweetener with zero calories. ▪ CCS also implemented the following initiatives;
branded “GO Sugar Free
(flavoured milk and water branded under Elephant House, and additional flavours of fruit juice branded under “Fit-O”)
52.0 39.0 31.4 19.0 10.0 Philippines Thailand Singapore Malaysia Sri Lanka Carbonated Soft Drinks - Per Capita Consumption (Litres)
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Sources: Central Bank of Sri Lanka, Nomura Research Institute, Unilever Corp, Web articles
70 49 48 43 40 16
Singapore Malaysia Hong Kong Taiwan Thailand Sri Lanka
Modern Retail Penetration (%)
Present share of modern retail
Keells * 96 Cargills 380 Arpico 50 Laugfs 37 * As at 31 March 2019
▪ The Retail industry group consists of two business verticals; ▪ Supermarkets ▪ Office Automation ▪ “Keells” is a chain of ~10,000 square foot modern grocery retail outlets
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▪ Comparatively higher modern trade density – population per store ratios as against regional peers ▪ High potential for expansion due to lower penetration of modern trade in Sri Lanka ▪ Approximately 225-250 outlets expected by FY2022/23. ▪ The sector will undertake planned capex of approximately USD 65 million over the next two years for 60 new stores and the construction
132 47 30 21.0 7.3 4.7 4.5 3.7 3.6 3.4 3.0 2.5 1.9 0.9
Modern trade density – population (’000) per store
Source: Retail and shopper trends in the Asia Pacific, AC Nielsen
Keells Super current coverage
FY2020 25-30 FY2021 30
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John Keells Group - Confidential
▪ The Q4 FY2019 same store sales were driven by the same store footfall growth for the quarter, although the average basket vales were impacted by the current economic conditions
▪ Profitability margins were impacted by the cost of expanding and
rebranding and refitting stores ▪ The blended margins in the ensuing year are expected to improve as a result of the benefit of a larger base of existing outlets showing an improvement in the performance. However, there may be a certain dilutive effect on margins due to the opening of new outlets
18 Profitability margin (%) FY2016 FY2017 FY2018 FY2019 EBITDA (Rs.milllion) 1,537 2,010 1,975 1,623 EBITDA margin 6.9 6.7 5.3 3.6 EBIT margin 5.8 5.7 4.0 2.0 Key performance indicators (%) Q4 FY2018 FY2019 Q1 Q2 Q3 Q4 Same store sales growth 3.5 1.4 0.8 2.4 4.5 Same store footfall growth 3.8 3.9 2.7 4.2 7.1 Average basket value growth (0.3) (2.4) (1.9) (1.7) (2.4) EBITDA margin 4.2 3.5 1.6 4.0 5.0 4Q Earnings update: Retail industry group
by strong revenue growth in the Supermarket business supported by new outlets and a pick up in same store sales to 4.5 per cent.
(Rs. mn) Q4 2018/19 Q4 2017/18 EBITDA 827 580
John Keells Group - Confidential
▪ Chain of Resort hotels in Sri Lanka ‾ 8 Resort hotels in strategic tourist destinations (1,000 rooms) ‾ 10% of the country’s 4-5 star class tourist accommodation ▪ 2 five star city hotels in Colombo (847 rooms) ▪ 240 roomed lean luxury hotel managed by Cinnamon; “Cinnamon red” ▪ 3 Resort properties in the Maldives (340 rooms) ▪ Established hotel brand – “Cinnamon” ▪ Leading inbound tour operator in Sri Lanka ▪ Tour operator partners include global players such as Thomas Cook, Kuoni, Hotel Plan and Virgin Holidays
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▪ Greater focus on asset light investment models as a part of the strategy to enhance the ‘Cinnamon’ footprint in Sri Lanka ▪ Land bank of 173 acres of freehold and 127 acres of leasehold land in addition to 517 acres of leasehold land in Digana ▪ Of the total freehold land acreage owned, a total of 96 acres
▪ Ahungalla (Southern Province) : 10.9 acres ▪ Trincomalee (Eastern Province) : 14.6 acres ▪ Nilaveli (Eastern Province) : 41.7 acres ▪ Wirawila (Southern Province) : 25.2 acres ▪ Nuwaraeliya (Central Province) : 3.4 acres
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▪ "Cinnamon Hakuraa Huraa Maldives“ and "Cinnamon Bentota Beach Bentota“ - reconstruction
▪ The industry group commenced the construction of "Cinnamon red Kandy" in the heart of the hill capital of Sri Lanka in January 2019, complementing its round trip offering of its hotel portfolio
investment is estimated to be Rs.1.00 billion
Gold green building certified hotel in Kandy. ▪ Entered into a MoU and in the process of finalising a sublease agreement for a new property in the Maldives with a partner under the "Cinnamon" umbrella.
extensions.
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John Keells Group - Confidential
*City Hotels occupancy and ARR excludes Cinnamon red
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Sector FY2019 FY2018 Occupancy (%) ARR (US $) EBITDA Margin (%) Occupancy (%) ARR (US $) EBITDA Margin (%) City Hotels* 48 128 22 64 127 27 Sri Lankan Resorts 80 90 28 81 91 28 Maldivian Resorts 84 320 23 82 263 24 Key indicators City Hotels * Sri Lankan Resorts Maldivian Resorts Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Occupancy (%) 43 52 65 48 74 81 70 87 73 79 92 95 ARR(US $) 128 127 128 126 69 85 85 109 298 257 300 393
EBITDA Margin (%) 13 25 23 25 101 22 21 493 (3)2 18 16 38
4Q Earnings update: Leisure industry group
by lower occupancies in the City Hotels sector due to the increase in room inventory within Colombo and the closure
Maldives" for the reconstruction
(Rs. mn) Q4 2018/19 Q4 2017/18 EBITDA 2,375 2,540
*City Hotels occupancy and ARR excludes Cinnamon red
John Keells Group - Confidential
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▪ Sri Lanka witnessed a series of coordinated attacks on Easter Sunday, 21 April 2019, which resulted in a death toll of over 250 people and injured over 500 individuals. ▪ The attacks targeted several religious establishments and three city hotels including “Cinnamon Grand Colombo”; the flagship city hotel property of the JKH Group. The damages sustained to the hotel were limited to the “Taprobane” restaurant and the surrounding vicinity. ▪ The hotel commenced accepting new bookings soon after the incident while its restaurants were opened to the public from 30 April 2019 onwards. ▪ The tourism industry witnessed cancellations particularly given adverse travel advisories from key source markets within a few days of the incident. ▪ However, the safety and security measures are currently confirmed to be in place by the Authorities. ▪ Subsequent to the the initial cancellations, forward bookings of the Group’s hotels are already witnessing a pick-up.
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▪ Studies of other travel destinations that were impacted by similar terrorism incidents indicate that destinations typically require 12 to 18 months to revert to pre-incident levels. ▪ Popular destinations which were affected by acts of terrorism such as Bali, Mumbai, Paris and Brussels have indicated a recovery in less than 18 months.
Crisis Category Average recovery time (months) Political Turmoil 26.7 Terrorism 13.0 Pandemic 21.3 Environmental Disaster 23.8
Trend in tourist arrivals post terror attacks:
(Source: World Economic Forum)
Estimates by the World Travel and Tourism council show the average recovery time in months by type of crisis:
8,000 12,000 16,000
Indonesia and Bali tourist arrivals
Indonesia Bali (Source: World Bank and Bali Hotel Association)
4,000 6,000 8,000 10,000
Belgium Tourist Arrivals
(Source: World Bank) (Source: Ministry of Tourism, Thailand)
10,000 15,000 20,000 25,000 30,000 35,000 40,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Thailand and Bangkok tourist arrivals
Thailand Bangkok
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▪ The GoSL has proactively initiated a range of measures and concessions to help the revival of the tourism industry.: ▪ Implement a public relations campaign to curtail the negative global media coverage whilst working towards the removal of adverse travel advisories for key tourist markets. ▪ A one-year moratorium on loans taken by the tourism related businesses. ▪ A proposed amendment to the Value Added Tax (VAT) for hotel and tour operators. ▪ The Group re-evaluated its short term plans for recovery of the Leisure businesses, particularly in the city hotels. Given the anticipated reduction in arrivals, particularly in the next 3 months, which is a relatively lower occupancy period. The mitigatory strategies for the immediate short term are as follows: ▪ Engage the domestic market to boost occupancy in the short term. ▪ Initiate marketing and outreach efforts once travel advisories on key tourist markets are removed. ▪ Develop agile cost structures within the hotel properties to remain flexible in managing short term operations costs. ▪ Critical evaluation of operating models to ensure optimum operating costs whilst maintaining the sustenance of the brand and service standards.
John Keells Group - Confidential
Year Tourist arrivals (In 000’s) Growth (%) 2010 654 46 2011 856 31 2012 1,006 18 2013 1,275 27 2014 1,527 20 2015 1,798 18 2016 2,051 14 2017 2,116 3 2018 2,334 10 2019-YTD 908 2
▪ Tourist arrivals from January – March 2019 was 740,600, an increase of 4.6%, as compared to the 707,924 recorded in the comparative period of the previous year. ▪ Arrivals for April 2019 declined by 7.5 per cent.
Source: Sri Lanka Tourism Development Authority
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1,000 1,500 2,000 2,500 1985 1996 2007 2018
Annual tourist arrivals to Sri Lanka ('000)
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Source: Sri Lanka Tourism Development Authority
27 245,753 334,274 383,748 527,656 640,045 822,272 938,697 962,395 966,731 2010 2011 2012 2013 2014 2015 2016 2017 2018 Tourist arrivals Calendar Year
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Source: Governmental tourism websites
28 5 10 15 20 25 30 35 40 Malaysia Indonesia Thailand Vietnam Cambodia Sri Lanka Arrivals in millions 1990 2018 Actual/ Target
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60,000 31,790 30,114 26,113 9,100 7,600 5,019 Bangkok Manila Kuala Lampur Jakarta Ho Chi Minh Hanoi Colombo
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▪ Colombo is increasingly becoming an attractive location for City Hotel developments ▪ Expected 5-star room supply:
Development
Year of completion Cinnamon Life 800 1Q 2021 ITC 350 2021 Ritz Carlton* 473 2022 Total rooms 1,623
▪ Operations at “Cinnamon Life” is expected to commence in March 2021 with the residential apartments and office complex ready for hand over and
30 * Note that the year of completion of the above is uncertain and is likely to be later than stipulated
John Keells Group - Confidential
▪ “John Keells Properties”; explore property development
▪ Focused strategies for expansion via developer/landowner tie ups ▪ Catering to different target market segments: ▪ Luxe Spaces ▪ Metropolitan Spaces ▪ Suburban Spaces ▪ High-rise apartment complexes completed ▪ “7th Sense” on Gregory’s Road ▪ OnThree20 ▪ The Emperor ▪ The Monarch
“7th Sense” on Gregory’s Road OnThree20 31
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▪ Low levels of urbanisation within Sri Lanka in comparison to regional peers ▪ Annual condominium supply far below regional peers
Source: KL: CBRE property market outlook 1Q 2018 (forecast for 2018) HCMC: CBRE Vietnam property overview Q1 2017 (forecast for 2018) CMB: Internal Estimates (forecast for 2018)
32 53,796 38,000 2,187 KL Ho Chi Minh City Colombo
Annual condominium supply in regional cities
John Keells Group - Confidential
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Source: Company analysis
10% 95% 80% 60% 70% 50% 55% 65% 90% 5% 20% 40% 30% 50% 45% 36% Greater Colombo Singapore Thailand (Central Bangkok) Thailand (Outskirts) Malaysia (Central KL) Malaysia (Greater KL) India (Chennai) India (Bangalore) Apartments Landed houses
John Keells Group - Confidential
▪ Prime developable land bank of over 36 acres held in central Colombo ▪ One of the largest privately owned land banks ▪ Opportunities for development at land banks held in Crescat City and Cinnamon Lakeside Vauxhall street land bank ▪ Prime freehold land extent of 9.38 acres, to be developed with Finlays Colombo Limited ▪ Located in close proximity to the Beira lake water front which is earmarked for development of recreational and residential projects by the UDA
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Cinnamon Lakeside 7.40 acres leasehold land Vauxhall Street 9.3 acres freehold land Union Place 1.5 acres Crescat 8.03 acres freehold land Cinnamon Life 7.1 acres freehold 3.03 acres leasehold
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▪ Greater connectivity and reduction in travel time to Colombo city post construction of the outer circular expressway ▪ Direct connectivity to the Port City Colombo and a multi modal transportation hub to be developed ▪ Opportunity to expand into residential apartment projects in proximity to the Colombo city Suburban Space development ▪ Master planning is currently underway for the 18-acre land in Thudella ▪ The site will be developed in phases, as a fully integrated community with approximately 2,000 units. ▪ The preliminary approvals for the development are in place, and the design work has been initiated.
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John Keells Group - Confidential
1. Revenue recognition of Cinnamon Life will be upon completion in CY2021. The completion dates of the project are as follows: ✓ Residential and office towers : March 2020 ✓ Hotel and retail mall : March 2021 2. “Tri-Zen”- an 891 apartment residential development in central Colombo, with expected completion in FY2022/23 3. Master planning has been initiated for the jointly held 9.38-acre property in Vauxhall Street and the 18-acre site in Thudella 4. Acquisition of approximately 100 perches of land located in Colombo for a niche residential development 5. Future development of the land bank held at Rajawella Holdings Limited, as discussed in detail overleaf
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4Q Earnings update: Property industry group
2017/18 including a one-off revenue recognition at Rajawella Holdings Limited on the sale of leasehold rights and lower fair value gains on investment property in 2018/19 in comparison to 2017/18. (Rs. mn) Q4 2018/19 Q4 2017/18 EBITDA 195 1,158
Cumulative sales (units) Number of units sold as at 31 March ‘19 Cinnamon Life: The Residence at Cinnamon Life 136 Suites at Cinnamon Life 110 Cinnamon Life commercial complex 4 floors Tri-Zen 200
John Keells Group - Confidential
Rajawella Holdings Limited (RHL) ▪ Owners of a majority stake in RHL to complement the Group’s leisure and property portfolios ▪ The 500 acre land in Digana includes an 18-hole, Donald Steel designed, Golf Course and developable land extent of approximately 80 acres ▪ Currently developing the master plan to maximise the development potential of the land plot ▪ Troon International has taken over the management of the course and the refurbishment of the course commenced in February 2018 ▪ Expected appreciation of land value with the completion of the central expressway ▪ Development and sale of properties such as villas, club house facilities, activity zones and possible operation of a hotel in the long term
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As at December 2018
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As at May 2019
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Conferencing ; capacity (4,837 pax) in three venues and car park facility (2,450 slots) 800 guest room hotel, including conferencing, banqueting, 7 specialty restaurants and entertainment facilities Rentable mall and entertainment space of 372,000 Sq. Ft (Gross – 518,000 Sq. Ft) First residential development of approximately – 358,000 Sq. Ft (231 units). Second residential development of approximately – 255,000 Sq. Ft (196 units). A standalone office development - 254,000 Sq. Ft rentable area
Note: Areas are subject to change based on final drawings 44
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Source: MasterCard 45
1.5 1.63 1.78 1.94 2.11 2017 2018 2019 2020 2021
Indian Outbound MICE (Millions)
John Keells Group - Confidential
▪ Union Assurance (JKH Stake : 90%) ▪ Committed to a “digital first” business model with an investment of over Rs. 800Mn to become the largest digital insurer in Sri Lanka ▪ Developing Bancassurance channels - UA entered into exclusive bancassurance partnerships with Nations Trust Bank PLC and Union Bank PLC
0% 1% 2% 3% 4% 5% 6%
Life Insurance Penetration as a % of GDP - 2016
Global average – 3.47%
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45.0 54.0 64.0 71.0 80.3
2014 2015 2016 2017 2018
Life Insurance Gross Written Premiums
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*Excludes a one-off surplus of Rs. 3.38 billion arising from the change in policy liability valuation
47 *The company recognised a deferred tax asset amounting to Rs.1.53 billion arising from brought forward tax losses as at 31 December 2017
Key performance indicators CY2013 CY2014 CY2015 CY2016 CY2017 CY2018 Market share (%) 14 13 13 13 14 14 GWP growth (%) 8 8 17 19 22 11 Recurring net profit (Rs.Mn) 791 881 1,127 1,313 4,002* 1,640 Surplus from Life Fund (Rs.Mn) 612 750 800 1,100 3,642 1,100 Life Fund (Rs.Bn) 19.3 23.1 26.3 30.3 29.1 32.1 Capital Adequacy Ratio N/A N/A N/A 411% 352% 262%
4Q Earnings update: Financial Services industry group
included a one-off surplus and optimal surplus transfer recorded in 2017/18 which cumulatively amounted to Rs.7.02 billion.
surplus recorded by UA amounted to Rs.1.10 billion in 2018/19.
by the downturn in economic conditions mark-to-market losses on its equity investment portfolio due to a decline in the stock market.
by introduction of the Debt Repayment Levy and higher impairment charges.
(Rs. mn) Q4 2018/19 Q4 2017/18 EBITDA 1,590 6,459
Key performance indicators Q4 FY2018 (Jan-Mar 2018) Q1 FY2019 (Apr-Jun 2018) Q2 FY 2019 (Jul- Sep 2018) Q3 FY 2019 (Oct- Dec 2018) Q4 FY2019 (Jan-Mar 2019) GWP growth (% YoY) 12 13 4 15 (1) Net profit (Rs.Mn) 304 300 1,638 1,002 178 Net profit growth (% YoY) 181 349 1,693 (86) (41)
John Keells Group - Confidential
▪ Nations Trust Bank (JKH effective economic interest : 32.16%) ▪ Focus on SME / retail strategy ▪ Franchise for American Express cards
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Key performance indicators CY2013 CY2014 CY2015 CY2016 CY2017 CY2018 Loans and advances growth (%) 12.10 19.50 22.4 23.70 25.00 19.00 Industry (LCB’s) (%) 8.50 12.30 23.50 17.84 15.77 17.87* Return on equity (%) 19.60 19.80 18.20 17.70 17.40 15.26 Industry (LCB’s) (%) 17.30 16.80 15.70 17.30 17.50 14.5* Net Interest Margin (%) 5.80 5.80 5.50 5.10 4.50 4.60 Industry (LCB’s) (%) 3.70 3.60 3.50 3.50 3.50 3.70* NPL ratio (%) 3.5 4.2 2.8 2.8 2.3 4.6 Deposit base (Rs. Bn) 96 111 129 152 194 231 Asset base (Rs. Bn) 142 159 176 211 268 325 Net Profit (Rs. Mn) 2,136 2,537 2,614 2,869 3,371 3,702
*As at September 2018
Key performance indicators Q4 FY2018 (Jan-Mar 2018) Q1 FY2019 (Apr-Jun 2018) Q2 FY2019 (Jul-Sep 2018) Q3 FY2019 (Oct- Dec 2018) Q4 FY2019 (Jan-Mar 2019) Net profit (Rs. Mn) 939 936 1,043 783 773 Net profit growth (% YoY) 30 33 3 (16) (18) Loan growth (% YoY) 28 24 25 20 18 Net Interest Margin (% 5.5 5.0 5.0 5.0 4.9 NPL Ratio (%) 2.62 3.06 3.71 4.58 4.88
John Keells Group - Confidential
This document was produced by John Keells Holdings PLC for information purposes only. The information contained in this document are a review of the financial information pertaining to FY2019, and does not constitute an issue prospectus or a financial analysis. This Investor Presentation should be read in conjunction with the JKH Annual Report 2018/19 to obtain a more comprehensive understanding of the drivers and strategies of our businesses. Whilst John Keells Holdings accepts responsibility for the accuracy of the information contained in this document, it does not assume any responsibility for investment decision made by the prospective investors based
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