Investor Presentation Review of Q4 FY2020 Version 1.0 This - - PowerPoint PPT Presentation

Investor Presentation Review of Q4 FY2020

Version 1.0

This Investor Presentation should be read in conjunction with the JKH Annual Report 2019/20 to obtain a more comprehensive understanding of the drivers and strategies of our businesses

About JKH

• Market cap of USD 0.80 billion
• No controlling shareholder - 99% free float
• Debt : Equity ratio of 41.4%*
• The Board comprises of two Executive Directors and five Independent

Non-Executive Directors

2 *Debt includes the Right-of-Use assets due to the accounting impacts of SLFRS 16 – Leases. The debt to equity ratio excluding SLFRS 16 - Leases is 32.7%.

Portfolio profitability

Note: The above excludes the contribution from Other including Information Technology and Plantations Services

PAT attributable to equity holders 2017/18

• The Group is conscious of the composition of its earnings and targets a greater contribution from higher ROCE

earning industry groups such as Consumer Foods, Retail and Financial Services. Approximately 50 per cent of earnings are contributed from these businesses.

• 2017/18 excludes the one-off surplus transfer of Rs.3.38 billion at Union Assurance PLC
• Earnings of the Sri Lankan Leisure businesses in 2019/20 were significantly impacted by the Easter Sunday

attacks in April 2019 and resultant impact on tourist arrivals to the country. Performance was further impacted from the fourth quarter onwards with the global outbreak of the COVID-19 pandemic

3

2018/19

22% 11% 8% 20% 5% 33%

2019/20

36% 10% 4% 16% 1% 33% 54% 18% 13%

• 17%

4% 29%

Transportation Consumer Foods Retail Leisure Property Financial Services

COVID-19 – impact to Sri Lanka and JKH

Sri Lankan Context

• Following the diagnosis of COVID-19 patients in Sri Lanka, the Government declared an island-wide

curfew, imposed from 20 March 2020 onwards. Restrictions were waived only for services classified as 'essential’.

• Curfew has been gradually eased off in many parts of the country, except for two high risk districts,

including the Colombo district. The most recent release by the Government states that curfew in the two districts will remain, with restrictions being eased off during the day for the gradual commencement of economic activity by the public and private sectors.

• With the resumption of activity across the country post the easing of curfew restrictions, the Group

is seeing early signs of an encouraging recovery of consumer activity which should be positive for consumer-focused businesses such as Consumer Foods, Retail, Logistics and Insurance.

• It is encouraging that there is no indication of community spread in the country.

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COVID-19 – impact to Sri Lanka and JKH

Group response:

• In order to evaluate the financial position of each business, particularly over the next 12 months,

each of the businesses were stress-tested under multiple operating scenarios, and, subsequently at a Group consolidated level, to ascertain the impact on the ability to sustain its operations with its cash reserves and banking facilities in place.

• Whilst the assumptions vary across the businesses, the Group is satisfied of the ability of the

businesses to manage its operations even under an extreme stress-tested scenario.

• Whilst the short-term impact to the Group performance is expected to be significant, the Group has

undertaken various measures to ensure a sustainable and agile operating model, with a focused view on cash management and liquidity, in particular.

• The Group has evaluated all health and safety guidelines issued by the Government as well as

international best practice to ensure suitable working arrangements and safe conditions for employees, customers and other stakeholders.

• With the easing of restrictions, we have seen a smooth transition with the resumption of business

activity where we are already seeing a positive momentum.

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Cumulative EBITDA : for the year ended 31 March 2020

Total EBITDA 22,174 25,798 (14) Recurring EBITDA** 22,055 25,579 (14) Recurring EBITDA excluding Leisure*** 19,714 20,278 (3) **Refer page 38 of the JKH Annual Report 2019/20 for commentary on recurring adjustments

***Leisure is excluded due to the impacts of the Easter Sunday attacks 6

Industry Group FY2020 FY2019* YoY Growth (%) (Rs. Million) (Rs. Million) Transportation 4,417 4,563 (3) Consumer Foods 3,412 2,920 17 Retail 5,110 2,890 77 Leisure 2,363 5,354 (56) Property 568 323 76 Financial Services 2,988 3,359 (11) Other, incl. IT and Plantation Services 3,315 6,388 (48)

*Note that the FY2019 EBITDA is adjusted to reflect impact from SLFRS 16 - Leases, for comparison purposes

EBITDA : for the quarter ended 31 March 2020

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Industry Group Q4 FY2020 (Rs. Million) Q4 FY2019 * (Rs. Million) YoY Growth (%) Transportation 952 1,290 (26) Consumer Foods 1,111 1,105 1 Retail 1,421 1,060 34 Leisure 1,933 2,502 (23) Property 497 188 164 Financial Services 833 1,185 (30) Total EBITDA 8,104 7,541 7

*Note that the FY2019 EBITDA is adjusted to reflect impact from SLFRS 16 - Leases, for comparison purposes

 While the performance of the Group initially witnessed strong momentum in the fourth quarter of the financial year 2019/20, the outbreak of the COVID-19 pandemic had varying levels of impact on the performance of the businesses. This is discussed further in the ensuing slides.

Adjusted effective capital employed (Rs.bn)

Portfolio evaluation 2019/20; returns vs. effective capital deployed

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Adjusted ROCE (%)

Consumer Foods - 23% IT - 23% Transportation - 19% Retail - 16% Financial Services - 15% Property (Excl. Cinnamon Life) - 2% Cinnamon Life – (0.1%) Plantations – (0.2%) Leisure – (1%)

Industry group Effective capital employed (%) Cinnamon Life 32 Leisure 24 Property (Excluding Cinnamon Life) 8 Transportation 7 Financial Services 6 Retail 6 Consumer Foods 3 Plantations 1 Information Technology 1

• In addition, the Holding Company accounts for 12 per cent of effective

capital employed which consists primarily of cash Hurdle Rate - 15%

Transportation - overview

• 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 KLM Royal Dutch airlines and Gulf Air.
• Other operations include warehousing and supply chain management.

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KARACHI GWADAR BAHL MUMBAI CHENNAI VISHAKHAPATNAM KOLKATA CHITTAGONG YANGON MOMBASA LAMU DAR-ES-SALAM CAPE TOWN PORT LOUIS ADEN KOCHI

The strategic location of the Port of Colombo linking key shipping routes

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Capacity enhancements in the Port of Colombo

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• CICT - Colombo International Container Terminal
• ECT - East Container Terminal
• SAGT - South Asia Gateway Terminal
• JCT - Jaya Container Terminal

Sustained volume growth in the Port of Colombo

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4.31 4.91 5.19 5.74 6.21 7.05 7.23

• 1.00

2.00 3.00 4.00 5.00 6.00 7.00 8.00

2013 2014 2015 2016 2017 2018 2019 Million TEUs

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

Rapid absorption of capacity in the Port of Colombo

13 4Q FY20 earnings update: Transportation industry group

• LMS recorded a strong

growth in profits driven by improved margins.

• SAGT became liable for

corporate income tax from October 2019 onwards, thereby negatively impacting performance as the Group recognises its share of profit after tax of SAGT as an equity accounted investee.

(Rs. mn) Q4 2019/20 Q4 2018/19 EBITDA 952 1,290

Volumes (TEU) 2018/19 2019/20 % YoY Change Q4 Q1 Q2 Q3 Q4 SAGT 514,589 535,998 492,542 509,012 528,641 3% JCT 607,913 561,897 580,747 532,052 548,944

• 10%

CICT 668,230 702,745 763,123 759,448 726,303 9% Total 1,790,732 1,800,639 1,836,411 1,800,512 1,803,888 1% SAGT 2018/19 2019/20 Q4 Q1 Q2 Q3 Q4 Domestic: Transshipment volume mix 21:79 19:81 19:81 19:81 20:80

Opportunities for growth in the Bunkering businesses

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. 318,000 sq.ft. in the year 2019/20, at a

capacity utilisation of 96 per cent.

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LMS 2018/19 2019/20 Q4 Q1 Q2 Q3 Q4 Volume growth 9 (4) (16) (6) (8)

Consumer Foods - overview

• 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 (%) FY2017 FY2018 FY2019 FY2020 Growth of frozen confectionery volumes 11 (4) 10 3 Growth of beverage volumes 10 (16) (25) 7 Growth of convenience food volumes (4) 3 7 (0) EBITDA margin (%) 27 20 18 20

15 4Q FY20 earnings update: Consumer Foods industry group

*Adjusted for SLFRS 16 – Leases, for comparison purposes

• The Beverages and Frozen

Confectionery businesses recorded an improvement in performance driven by an expansion of margins due to a better sales mix.

• Both businesses recorded

encouraging volume growth in the months of January and February, where volumes grew approximately 20%-30%, on average.

• However, the imposition of island-

wide curfew due to the COVID-19 pandemic caused disruptions in sales in the last 2 weeks of March 2020, which is a peak sales month, resulting in a steep decline in volumes, thereby impacting overall volumes for the quarter.

(Rs. mn) Q4 2019/20 Q4 2018/19* EBITDA 1,111 1,105 Key performance indicators (%) FY2019 FY2020 Q4 Q1 Q2 Q3 Q4 Growth of frozen confectionery volumes 21 19 1 4 (12) Growth of beverage volumes (6) 22 2 4 1 Growth of convenience foods volumes 1 (2) 7 (9) EBITDA (Rs. million) 1,103 843 736 722 1,111 EBITDA margin (%) 24 19 17 18 26 Revenue mix (Bev:FC) 49:51 48:52 48:52 44:56 51:49

• Annual volume growth in the Consumer Foods businesses was impacted as a

result of the disruptions to sales in March 2020 due to the COVID-19 pandemic.

• The relative impact on volumes in March is more pronounced given the

seasonality associated with the Beverages and Frozen Confectionery businesses, where sales peak due to the traditional New Year in April.

Low consumption patterns and penetration reflects potential for sustained growth

• The bulk-impulse mix of regional markets is

highly skewed towards the impulse markets, demonstrating the significant growth potential for the impulse category.

• To leverage on the opportunity available in the

impulse category, CCS invested in a state-of-the art ice cream plant in Seethawaka which commenced operations in Q1 FY2018/19.

• 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 launched non-CSD products such as

plain milk, flavoured milk and water branded under Elephant House, and additional flavours

• f fruit juice branded under “Fit-O”)

Sri Lanka Thailand Malaysia 70% 30% 8% 92% 56% 44% Bulk vs. Impulse Split - Regional Impulse Bulk

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52.0 39.0 31.4 19.0 14.0 Philippines Thailand Singapore Malaysia Sri Lanka Carbonated Soft Drinks - Per Capita Consumption (Litres)

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 (%)

Retail - overview

Present share of modern retail

• No. of outlets

Keells * 109 Cargills 410 Arpico 47 Laugfs 37 * As at 31 March 2020

• 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

• Whilst approximately 200-225 outlets are expected by FY2022/23,

considering the significant disruption to operations in the current

• perating environment, the planned outlet roll-out has been temporarily

suspended and will be re-evaluated once operations settle.

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 current coverage

Rapid expansion to capitalise on low retail penetration levels

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Supermarkets - overview

19 Profitability margin (%) FY2017 FY2018 FY2019 FY2020 EBITDA (Rs.milllion) 2,010 1,975 1,623 4,267 EBITDA margin 6.7 5.3 3.6 7.8 EBIT margin 5.7 4.0 2.0 4.6 4Q FY20 earnings update: Retail industry group

*Adjusted for SLFRS 16 – Leases, for comparison purposes

• The Supermarket business recorded

a strong performance driven by growth in same store sales and a notable contribution from new

• utlets.

(Rs. mn) Q4 2019/20 Q4 2018/19* EBITDA 1,420 1,060

Key performance indicators (%) FY2020 Q4 Q1 Q2 Q3 Q4 Same store sales growth 4.5 3.6 5.1 5.4 1.7 Same store footfall growth 7.1 2 5.7 6.1 (6.2) Average basket value growth (2.4) 1.6 (0.6) (0.6) 8.4 EBITDA margin 5.0 7 .0 6.3 9.0 8.8

• Same store sales recorded an encouraging growth of 5.7 per cent in January and February 2020.
• However, a steep decline in same store sales was recorded in March due to the imposition of curfew which

resulted in outlets being closed during the latter half of March 2020, which is a peak sales month.

• ABV growth was flat throughout most of the year and was skewed primarily as a result of the effect of

customers stockpiling grocery items in the latter half of March 2020.

• While customers transitioned to online channels, this shift was inadequate to cater to the loss of footfall to
• utlets. With the easing of curfew restrictions, sales have rebounded.

Leisure - overview

• Chain of Resort hotels in Sri Lanka

‾ 8 Resort hotels in strategic tourist destinations (1,022 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”
• 4 Resort properties in the Maldives (454 rooms)
• Established hotel brand – “Cinnamon”
• Leading inbound tour operator in Sri Lanka
• Tour operator partners include global players such as 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
• f freehold land are in key tourist hotspots:
• 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

Round trip offering in key tourist destinations; further potential to expand the ‘Cinnamon’ footprint

21

*City Hotels occupancy and ARR excludes Cinnamon red

Occupancies and average room rates

22

Sector FY2020 FY2019 Occupancy (%) ARR (US $) EBITDA Margin (%) Occupancy (%) ARR (US $) EBITDA Margin (%) City Hotels* 34 100 10.8 48 128 22 Sri Lankan Resorts 61 78 11.4 80 90 28 Maldivian Resorts 56 364 26.7 84 320 23

*Sri Lanka Resorts EBITDA includes IP gains 4Q Earnings update: Leisure industry group

*Adjusted for SLFRS 16 – Leases, for comparison purposes

• The quarter was impacted by the

developments surrounding the global spread of COVID-19, derailing the momentum of recovery in arrivals from the Easter Sunday attacks.

• In addition, the quarter included the

start-up costs relating to the newly refurbished premium resort in Sri Lanka, Cinnamon Bentota Beach.

(Rs. mn) Q4 2019/20 Q4 2018/19* EBITDA 1,933 2,502

Key indicators City Hotels ** Sri Lankan Resorts Maldivian Resorts FY2020 FY2020 FY2020 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Occupancy (%) 14 35 43 42 46 65 76 58 55 47 56 63 ARR(US $) 123 106 93 93 72 67 70 99 325 297 357 419 EBITDA Margin (%) (34) 12 18 27 (15) 4 9 32 22 13 19 40

• The annual occupancy and ARRs in City Hotels and Sri Lanka Resorts

were impacted as a result of the decline in arrivals due to the Easter Sunday attacks in April 2019. Until the outbreak of the COVID-19 pandemic, forward bookings were showing positive momentum with arrivals in line with levels seen before the Easter Sunday attacks.

Year Tourist arrivals (In 000’s) Growth (%) 2010 654 46 2015 1,798 18 2016 2,051 14 2017 2,116 3 2018 2,334 10 2019 1,913 (18)

• Tourist arrivals from January – December 2019 was 1,913,702; a

decrease of 18%, as compared to the 2,333,796 recorded in the comparative period of the previous year.

• Arrivals for the first quarter (Jan - Mar) of 2020 was 435, 941

compared with 740, 600 in the previous year, impacted by travel restrictions on account of COVID-19 and the closure of the Bandaranaike International Airport from March 2020 onwards.

• The SLTDA has initiated a two-phased post COVID-19 action plan to

revive the tourism sector.

Source: Sri Lanka Tourism Development Authority

Trend of tourist arrivals to Sri Lanka

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Month Tourist Arrivals (In 000’s) Growth % August ‘19 144 (28) September ’19 109 (27) October ’19 119 (23) November ’19 177 (10) December ‘19 242 (5) January ‘20 228 (6) February ‘20 208 (18) March ‘20 71 (71)

• 500

1,000 1,500 2,000 2,500 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019

Annual tourist arrivals to Sri Lanka ('000)

*2010 included due to being the first full post-war year.

Source: Sri Lanka Tourism Development Authority

Significant growth in Asian arrivals to Sri Lanka

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*2019 arrivals impacted by Easter Sunday terror attacks

• 200,000

400,000 600,000 800,000 1,000,000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019* Tourist Arrivals

Source: Governmental tourism websites

Tourist arrivals to Sri Lanka lag well below regional peers

25 5 10 15 20 25 30 35 40 45 Malaysia Indonesia Thailand Vietnam Cambodia Sri Lanka Arrivals in millions 1990 2019

60,000 31,790 30,114 26,113 9,100 7,600 5,019 Bangkok Manila Kuala Lampur Jakarta Ho Chi Minh Hanoi Colombo

Room inventory in Colombo lags far behind other popular regional capital cities

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Property - overview

• “John Keells Properties”; explore property development
• pportunities by leveraging on brand equity
• 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 27

• 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)

Industry potential

28 53,796 38,000 2,187 KL Ho Chi Minh City Colombo

Annual condominium supply in regional cities

Low penetration of apartment living in Colombo

29

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

Developable land bank of over 36 acres in central Colombo

• Prime developable land bank of
• ver 36 acres held in central

Colombo

• One of the largest privately
• wned 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, Colombo Vauxhall Street Union Place Cinnamon Grand, Colombo Crescat Boulevard Cinnamon Life

Developable freehold land of approximately 25 acres in close proximity to Colombo city

• 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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Robust development pipeline; on-going developments

32

4Q FY20 earnings update:

Property industry group

*Adjusted for SLFRS 16 – Leases, for comparison purposes

• The EBITDA of the Property industry group

for the quarter includes fair value gains on investment property.

• Tri-Zen residential development project

continued its encouraging sales momentum, recording sales of 19 units during the months

• f January and February, although March was

impacted by the imposition of curfew.

• Whilst the construction sites of both Tri-Zen

and Cinnamon Life were closed from the time

• f curfew imposition, both sites are now

gradually commencing work as permitted under the relevant Government directives.

• Cinnamon Life is working closely with the

contractor to understand the impact on the

• verall project to manage resources and

deliverables. (Rs. mn) Q4 2019/20 Q4 2018/19 EBITDA 497 188

Cumulative sales (units) Number of units sold as at 31 March ‘20 Cinnamon Life: The Residence at Cinnamon Life 137 Suites at Cinnamon Life 110 Cinnamon Life commercial complex 4 floors Tri-Zen 262 Development Pipeline:

1. “Tri-Zen”- an 891 apartment residential development in central Colombo. 2. Revenue for Cinnamon Life will be recognized upon completion. 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. Future development of the land bank held at Rajawella Holdings Limited, as discussed in detail overleaf

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

33

Robust development pipeline: Scenic 500 acre land bank with an 18-hole golf course

Cinnamon Life Integrated Resort

34

Integrated development in Colombo

35

Integrated development in Colombo

36

37

38

As at March 2020

39

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

Development programme

Note: Areas are subject to change based on final drawings 40

The growth in Indian MICE travel to complement Cinnamon Life

Source: MasterCard 41

1.5 1.63 1.78 1.94 2.11 2017 2018 2019 2020 2021

Indian Outbound MICE (Millions)

• 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

Financial Services – Insurance sector overview

0% 1% 2% 3% 4% 5% 6%

Life Insurance Penetration as a % of GDP - 2016

Global average – 3.47%

42

45 54 64 71 80.3 88.8 2014 2015 2016 2017 2018 2019

Life Insurance Gross Written Premiums

• Rs. Bn

*Excludes a one-off surplus of Rs. 3.38 billion arising from the change in policy liability valuation

Financial Services – Insurance sector overview

43

4Q FY20 earnings update: Financial Services industry group

*Adjusted for SLFRS 16 – Leases, for

comparison purposes

• Nations Trust Bank recorded

a strong improvement in profits driven by the removal

• f the Debt Repayment Levy

and NBT on financial services.

• Profitability of Union

Assurance PLC was impacted by a notional tax credit reversal under investment income.

(Rs. mn) Q4 2019/20 Q4 2018/19 EBITDA 833 1,185

Key performance indicators CY2014 CY2015 CY2016 CY2017 CY2018 CY2019 Market share (%) 13 13 13 14 14 13 GWP growth (%) 8 17 19 22 11 4 Recurring net profit (Rs.Mn) 881 1,127 1,313 4,002* 1,640 1,200 Surplus from Life Fund (Rs.Mn) 750 800 1,100 3,642 1,100 1,000 Life Fund (Rs.Bn) 23.1 26.3 30.3 29.1 32.1 36.7 Capital Adequacy Ratio N/A N/A 411% 352% 262% 362% Key performance indicators Q4 FY2019 (Jan-Mar 2019) Q1 FY2020 (Apr-Jun 2019) Q2 FY2020 (Jul-Sep 2019) Q3 FY2020 (Oct – Dec 2019) Q4 FY2020 (Jan – Mar 2020) GWP growth (% YoY) (1) (1) 8 7 5 Net profit (Rs.Mn) 178 324 153 681 167 Net profit growth (% YoY) (41) (46) (91) (32) (6)

• Nations Trust Bank (JKH effective economic interest : 32.16%)
• Focus on SME / retail strategy
• Franchise for American Express cards

Financial Services – Banking sector overview

44

Key performance indicators CY2014 CY2015 CY2016 CY2017 CY2018 CY2019 Loans and advances growth (%) 19.5 22.4 23.7 25.0 19.0 2.0 Industry (LCB’s) (%) 12.3 23.5 17.8 15.8 20.3 4.9* Return on equity (%) 19.8 18.20 17.7 17.4 15.3 12.2 Industry (LCB’s) (%) 16.8 15.7 17.3 17.5 13.7 10.6* Net Interest Margin (%) 5.8 5.5 5.1 4.5 4.6 4.5 Industry (LCB’s) (%) 3.6 3.5 3.5 3.5 3.7 3.6* NPL ratio (%) 4.2 2.8 2.8 2.3 4.6 6.2 Deposit base (Rs. Bn) 111 129 152 194 231 227 Asset base (Rs. Bn) 159 176 211 268 325 325 Net Profit (Rs. Mn) 2,537 2,614 2,869 3,371 3,702 3,454 Key performance indicators Q4 FY2019 (Jan-Mar 2019) Q1 FY2020 (Apr-Jun 2019) Q2 FY2020 (Jul-Sep 2019) Q3 FY2020 (Oct – Dec 2019) Q4 FY2020 (Jan-March 2020) Net profit (Rs. Mn) 773 575 1,066 1,113 959 Net profit growth (% YoY) (18) (34) 9 54 27 Gross Loan growth (% YoY) 18 12 8 3 (1) Net Interest Margin (%) 4.9 4.8 4.8 4.9 4.6 NPL Ratio (%) 4.9 6.1 6.1 6.2 6.2

*CBSL provisional figures for 2019

THANK YOU

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 FY2020 and does not constitute an issue prospectus or a financial analysis. This Investor Presentation should be read in conjunction with the JKH Annual Report 2019/20 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

• n information contained herein. In making the investment decision, prospective investors must rely on their
• wn examination and assessments of the Company including the risks involved.

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