Minor International Sales Revenue (Btm) 3Q09 Investor/ Analyst - - PowerPoint PPT Presentation

9-Month Revenue Breakdown (%)

3Q09 Investor/ Analyst Presentation

The Stock Exchange of Thailand 17 November 2009

Pratana Mongkolkul, Group CFO Prapharat Tangkawattana, Senior Finance Director

Minor International

Food 61% Hotel 29%

Others 10%

5,000 10,000 15,000 20,000 2004 2005 2006 2007 2008 2009

Sales Revenue (Btm)

Today’s Agenda

I. Recent Developments II. Financial Results

• III. MINT’s Strategic Growth

IV. Pipeline Expansion & Financial Outlook

• I. Recent Developments

Key Business Developments in 3Q09

• Successful placement of Bt 2,000m debentures in July; 4-year term with coupon rate of 4.65%. It is

MINT’s first debenture issued to retail investors

• MINT’s total food outlets reached 1,097 with current international coverage in 14 countries
• Opened purely-managed hotels, Anantara Qasr Al Sarab - Abu Dhabi and Anantara Lawana - Koh

Samui , in late October 2009. MINT currently operates 30 hotels in 8 countries

• Completed an extension of 12 pool villas at Four Seasons Hotel in Chiang Mai & opened 2 new spa

under management contracts in Turkey and China

• Signed an agreement with GAP Inc. as the exclusive distributor in Thailand. First stores in Bangkok to be
• pened in 1Q10

4

MINT’s Revenue Breakdown by Business

Share of Profit 1% Retail Trading 14% Plaza & Entertain 3% Share of Profit 1% Retail Trading 6% Plaza & Entertain 3%

• Strategically, MINT’s revenue structure is balanced with 50% from food and 40% from hotel,

while the remaining comes from other complimentary businesses

Food 57% Hotel & Spa 24% Food 61% Hotel & Spa 29%

3rd Quarter 2009: Bt 4,152 m 9 Months 2009: Bt 12,184 m

5

Food Business in This Quarter

• Facing challenges from the outbreak of H1N1 flu since July
• Cautious consumer spending driving marketing strategies; variety and value

promotion

• Strengthening profitability from successful implementation of Supply Chain

Management Business

• SSS growth declined in-line with GDP and Consumer Confidence, however, TSS

grew due to shop expansion

• Strong improvement in Thai franchised outlets due to expansion in under-

penetrated markets especially in upcountry

• Business synergy with local bank to strengthen domestic franchising business

6

Improvement of Consumer Confidence

7

70 75 80 85 Jan 08 Mar 08 May 08 Jul 08 Sep 08 Nov 08 Jan 09 Mar 09 May 09 Jul 09 Sep 09

Pressure from Global Economic Downturn and Intensified Political Tension

• We have seen the gradual improvement in consumer sentiment in the past few months which we

believe has driven private consumption and manufacturing orders and we expected that this will strengthen our domestic QSR business

Thailand’s Modern Trade Growth in Late 2009

8

• Economic slowdown forced a slower

growth in hypermarkets in Thailand in the first half of 2009

• Pent-up demand expected to accelerate

domestic hypermarkets in the latter of the year

• Industry experts indicated 5% growth
• n average in 2010. This will be one of

key drivers for the new openings especially for those under-penetrated markets

Expected Growth of Hypermarkets

Existing Store New Store

30 60 90 Tesco Lotus Big C Carrefour

Source: Public News Based on Management Interview

+5 +3 +7

Promising Growth of Delivery Business & Upcountry Franchising

9

• Delivery dockets for local TPC franchised

stores grew 5% y-y, especially in under- penetrated markets

• Local SW franchised outlets reported the

docket growth of 21% y-y, thanks to value promotions

• Newly opened stores of TCC achieved

higher sales/ store compared to the existing ones

111 222 TPC SW TCC

3Q08 3Q09

Capturing Under-penetrated Market

Number of Franchised Outlets

Food Business: Key Performance - 3Q09

Brand SSS (%) TSS (%) 3Q09 3Q08 3Q09 3Q08 The Pizza Company

• 8.9

5.1 0.5 15.9 Swensen’s 3.4 3.6 8.8 18.9 Sizzler

• 3.3

15.3 10.9 14.6 Dairy Queen

• 9.7

13.0

• 6.3

25.3 Burger King

• 7.0
• 0.8

4.1 19.4 The Coffee Club 0.2 1.2 19.6 15.2 Thai Express

• 17.7

3.6 33.0 71.7 Average

• 4.2

4.2 9.9 19.5

10

Food Business: Key Performance -- 9M09

Brand SSS (%) TSS (%) 9M09 9M08 9M09 9M08 The Pizza Company

• 4.6

2.1 7.0 10.4 Swensen’s

• 1.5

0.9 8.1 12.8 Sizzler

• 0.3

18.9 11.3 17.4 Dairy Queen 0.1 5.7 3.8 15.8 Burger King

• 9.1

0.9 5.9 16.9 The Coffee Club 1.6 2.7 18.3 19.1 Thai Express

• 14.9

6.7 50.4 62.1 Average

• 2.5

4.1 12.9 17.7

11

Key Issues in Hospitality Business

• Despite H1N1 challenge at the beginning of 3Q, hotel business poor sentiment has

shown the occupancy rate bottom-out in June

• Overall room rate remained an issue giving a modest rebound of tourist arrivals

compared to strong growth last year

• International tourist arrivals to Thailand posted a significant y-y decline, however,

a strong improvement is seen in the South beach provinces and oversea markets. September was the first month to report number of tourist arrivals climbing back at the same level of normal years.

• Continuous introduction of premium properties; Anantara Kihavah, Maldives and
• St. Regis Hotel & Residence, Bangkok

12

Thai Tourism Sentiments in Past 18 Months

13

The industry was severely hit in late 2008 by political unrest and further in 2009 due to the slowdown of the global economy and the H1N1 virus

• utbreak

The government has launched several tourism recovery programs including massive budget and policy measures in

• rder to restore business and

consumer confidence

1.25 2.50 3.75 5.00 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 Number of Tourist

68 55 53 50 53 42 47

Occupancy (%) (Million Persons)

Foreign Tourists & Thai hotels Occupancy

Source: BOT

Regional Occupancy Rate

Market (YTD Jul 2009) Occupancy % Change in Occupancy % Change in ADR % Change in RevPar Hong Kong - 5 Star (HKD) 56% (24%) (16%) (36%) Hong Kong - 4 Star (HKD) 74% (10%) (20%) (28%) Bangkok - 5 Star (THB) 47% (32%) (11%) (40%) Bangkok - 4 Star (THB) 51% (29%) (12%) (37%) Singapore - 5 Star (SGD) 65% (12%) (21%) (30%) Singapore - 4 Star (SGD) 72% (12%) (23%) (32%) Manila - City (PHP) 68% (10%) (2%) (12%) Phuket - City (THB) 59% (16%) (13%) (27%) Maldives - City (USD) 60% (21%) 8% (15%) Bali - City (USD) 70% (9%) 3% (6%) Jakarta - City (USD) 61% (11%) (7%) (17%) Hanoi - City (USD) 54% (16%) (17%) (31%) Ho Chi Minh - City (USD) 53% (27%) (10%) (35%)

Source: The Brief (Oct 2009)STR Global 2009, Jones Lang LaSalle Hotels 14

Feeder Markets to Thailand vs. MINT’s

Thailand MINT Hotels - 9M09

Source: 9M09 Office of Tourism Development, MINT

Others 3% Oceania 5% South Asia 6% South East Asia 28% East Asia 22% The Americas 6% EU 28% Thailand 12% Others 7% Oceania 4% South East Asia 6% East Asia 21% The Americas 12% EU 38%

15

Change in % Share of Total Tourist Arrivals (y-y)

Europe 2% East Asia (5%) The Americas

• South East Asia

2% South Asia 1% Oceania and Others

(Million)

0.5 1.0 1.5 2.0

J a n

• 8

F e b

• 8

M a r

• 8

A p r

• 8

M a y

• 8

J u n

• 8

J u l

• 8

A u g

• 8

S e p

• 8

O c t

• 8

N

• v
• 8

D e c

• 8

J a n

• 9

F e b

• 9

M a r

• 9

A p r

• 9

M a y

• 9

J u n

• 9

J u l

• 9

A u g

• 9

S e p

• 9

O c t

• 9
• No. of Foreign Visitors (Pending info of Oct-09)

79% 85% 81% 66% 66% 60% 72% 75% 49% 61% 60% 43% 60% 67% 56% 50% 43% 39% 48% 56% 48% 63%

MINT’s Thai Hotels’ Average Occupancy (%)

Airport Closure

MINT’s Hotel Occupancy Hit Bottom in Jun 09

April Riot H1N1 Outbreak

First 8 months 2008 were outstanding period for MINT’s hotel business

16

17

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009F

1,401 1,806 1,740 1,997 2,175 2,158 2,151 2,555 3,023 3,339 3,951 4,156 3,200

(Baht/Night)

911 SARS Tsunami, Bird Flu London Bomb BKK Bomb, Coup Sub-prime Crisis Airport Closure Financial Crisis

5-Yr CAGR 14%

MINT’s RevPar from Past to Present

Global Economic crisis Political Turmoil H1N1 Outbreak

• In our opinion, the excess supply was not a major

concern compared to demand situation

• MINT’s hotel RevPar is about to show a decline for the

first time in 5 year mainly caused by global economic turmoil

• c. 3,200

Hotel Supply Situation

5,000 10,000 15,000 2008 2009E 2010F 2011F

Source: HVS Asia Pacific Hotel Watch 2009, MINT

18

Upscale Hotel Rooms in Bangkok Upscale Hotel Rooms in Phuket

1,750 3,500 5,250 7,000 2008 2009E 2010F 2011F

Upscale Hotel Rooms in Samui

500 1,000 1,500 2,000 2008 2009E 2010F 2011F 6,000 12,000 18,000 24,000 2008 2009E 2010F 2011F

Upscale Hotel Rooms in Maldives

Existing Supply Additional Supply

Hotel Business: Key Performance - 3Q09

Hotel Occupancy (%) ADR (Bt/night)

RevPar (Bt/night)

3Q09 3Q08 3Q09 %Chg

3Q09 %Chg

Four Seasons 45% 54% 7,157

• 22%

3,215

• 35%

Anantara 47% 64% 6,247

• 9%

2,915

• 34%

Marriott 60% 71% 2,948

• 21%

1,761

• 34%

Others 28% 37% 7,139 15%

1,985

• 14%

Average-Thai 51% 66% 3,906

• 19%

1,975

• 38

Average 51% 64% 4,765

• 13%

2,429

• 31%

19

Hotel Business: Key Performance - 9M09

Hotel Occupancy (%) ADR (Bt/night)

RevPar (Bt/night)

9M09 9M08 9M09 %Chg

9M09 %Chg

Four Seasons 43% 58% 8,399

• 11%

3,583

• 35%

Anantara 44% 67% 7,715 1%

3,372

• 34%

Marriott 61% 78% 3,778

• 14%

2,300

• 32%

Others 30% 46% 8,725 15%

2,623

• 24%

Average-Thai 51% 70% 4,768

• 12%

2,425

• 37%

Average 50% 69% 5,783

• 5%

2,907

• 31%

20

Performance Comparison of Core Business

Food: EBITDA vs Revenue Growth Hotel: EBITDA vs Revenue Growth

Revenue Growth 0% 5% 10% 15% 20% 2006 2007 2008 9M09 0% 10% 20% 30% 40% 2006 2007 2008 9M09

25% 6% 29% 16% 10% 22% 1%

• 27%
• MINT’s EBITDA margins demonstrated the pro-active response to changing environments.

Hotel & Spa profitability relatively held up despite significant drop in sales revenue in 9M09

21

Revenue Growth

• II. 3Q09 Financial Results

Key Issues on MINT’s Core Business Financials

• Food: Sustained sales growth and high profitability driven by
• perating efficiency & resilient demand
• Hotel & Spa: Room rate pressures, offset by an increased occupancy

rate

• Residential Properties: Absence of new residential sales and

revenues recognition

• Corporate: Earnings diversification and strategic fundings for future

growth & new opportunities

23

(Bt Million) 3Q09 % 3Q08 % % y-y Chg Food 2,373 57% 2,268 55% 5% Hotel & Spa 1,013 24% 1,389 34%

• 27%

Mixed-Use 5 0% 322 8%

• 99%

Plaza & Entertainment 116 3% 139 3%

• 17%

Retail Trading 600 14%

• 0%

n.a. Share of Profit 45 1%

• 4

0% n.a. Total Revenue 4,152 100% 4,114 100% 1% Operating Expenses 1,516 37% 1,414 34% 7% SG&A Expenses 1,917 46% 1,741 42% 10% EBITDA 720 17% 959 23%

• 25%

Net Profit 152 4% 376 9%

• 60%

Net Profit Before Extra-item 175 4% 376 9%

• 53%

EPS (Bt) Before Extra-item 0.0574 n.a. 0.1098 n.a.

• 48%

Third Quarter Performance

24

(Bt Million) 3Q09 % Food 2,373 57% Hotel & Spa 1,013 24% Mixed-Use 5 0% Plaza & Entertainment 116 3% Retail Trading 600 14% Share of Profit 45 1.1% Total Revenue 4,152 100% Operating Expenses 1,516 37% SG&A Expenses 1,917 46% EBITDA 720 17% Depreciation & Amortization 399 10% EBIT 321 8% Interest Expenses 115 3% Tax 44 1% Minority 11 0% Net Profit 152 4%

Share of Profit 6% Retail Trading 5% Plaza & Entertain 10% Hotel & Spa 32% Food 47%

Net Profit Contribution (Btm) 3Q09 % Food 121 80% Hotel & Spa & Mixed-Use

• 23
• 15%

Plaza & Entertainment 44 29% Retail Trading 10 7% Consolidated Net Profit 152 100% EBITDA Contribution

Third Quarter: Breakdown Performance

25

(Bt Million) 9M09 % 9M08 % % y-y Chg Food 7,429 61% 6,388 52% 16% Hotel & Spa 3,509 29% 4,803 39%

• 27%

Mixed-Use 20 0% 610 5%

• 97%

Plaza & Entertainment 402 3% 450 4%

• 11%

Retail Trading 716 6%

• 0%

n.a. Share of Profit 109 1% 75 0.6% 46% Total Revenue 12,184 100% 12,326 100%

• 1%

Operating Expenses 4,074 33% 4,070 33% 0% SG&A Expenses 5,556 46% 5,027 41% 11% EBITDA 2,554 21% 3,229 26%

• 21%

Net Profit 782 6% 1,477 12%

• 47%

Net Profit Before Extra-item 805 7% 1,477 12%

• 46%

EPS (Bt) Before Extra-item 0.2444 n.a. 0.4370 n.a.

• 44%

First Nine Months of 2009 Performance

26

(Bt Million) 9M09 % Food 7,429 61% Hotel & Spa 3,509 29% Mixed-Use 20 0% Plaza & Entertainment 402 3% Retail Trading 716 6% Share of Profit 109 1% Total Revenue 12,184 100% Operating Expenses 4,074 33% SG&A Expenses 5,556 46% EBITDA 2,554 21% Depreciation & Amortization 1,163 10% Net Profit 782 6%

Share of Profit 4% Retail Trading 2% Plaza & Entertainment 10% Hotel & Spa 40% Food 43%

Net Profit Contribution (Bt m) 9M09 % Food 353 45% Hotel & Spa & Mixed-Use 229 29% Plaza & Entertainment 173 22% Retail Trading 27 4% Consolidated Net Profit 782 100% EBITDA Contribution

First Nine Months of 2009: Breakdown Performance

27

• III. MINT’s Strategic Growth

28

MINT’s Asset-Light: Then and Now

29

353 Food Outlets 9 Hotels 1,097 Food Outlets 30 Hotels

Asset-Heavy..THEN

NOW..Expansion with Asset-Light

Prior to 2003, MINT’s business portfolio was 100% assets MINT initiated its food franchise business of The Pizza Company brand and the hotel management employing Anantara brand. Total revenues grew by 29% CAGR since 2003

Continuing the Transformation

The Future of MINT’s Intellectual Properties

2002 2006 YTD 09 2013E 703 425 100 4 853 672 531 350

Investment Franchised

2002 2006 YTD 09 2013E 2,270 664 3,184 2,862 2,279 2,055

Investment Purely Managed

(No of Outlets) (No of Rooms)

30

Contributions from The Asset-Light Business

31

100 200 300 2004 2005 2006 2007 2008

Food Franchise Fee Income (Btm)

150 300 450 600 2004 2005 2006 2007 2008

Management Fee Income (Btm)

Strong and steady growth of fee- based income from both hotel & food businesses Food franchising business can expand at a faster rate, given short lead times The growth rate of hotel management fee is attractive, it takes approximately 3 years for a management contract to take effect

21% CAGR 91% CAGR

Timeshare development and other one-off fees

Food QSR Business

Food Key Strategic Directions

Continued expansion of strong concepts in Thailand Aggressive franchising in strong retail consumption growth markets such as SE Asia & Middle East

Solid Organic Growth

Enhancing growth through the franchising platform

• esp. in high potential markets in China & India

Potential Markets Strategic Acquisition

Continued acquisition of successful food concepts

???

33

Food Outlets Expansion Plan

34

500 1,000 1,500 2009 2012

Number of Outlets, by Ownership Number of Outlets, by Brands

500 1,000 1,500 2009 2012

Number of Outlets, by Location

Equity Franchise Equity Franchise Thailand Overseas Thailand Overseas

12% CAGR 6% CAGR 16% CAGR 4% CAGR

Sep-09 2012E 244 362 229 272 40 52 226 274 24 31 77 115 237 290

MINT’s Food Asset-Light Portfolio Outlook

35

Own 100%

2000

Franchised 39% Own 61%

2Q09

Franchised 46% Own 54%

2014

Note: Based on number of outlets from internal budgets under pipeline expansion, MINT

Food Business 5-Year Pipeline Growth

26% 9M09

37%

2014

Overseas Revenues Contribution Aiming to be a global integrated

• perator of multiple food brands

Under the pipeline plan, MINT’s food total-system-sales target to grow 16.6% p.a. for the next five years The strategy is to increase franchising penetration in both existing and especially in emerging markets With further catalyst from strategic acquisition of new food concepts Minor Food Total-System-Sales

12.5 25.0 37.5 50.0 2009 2014 (Bt bn)

36 17% CAGR

MINT’s Hospitality Business

Hotel Key Strategic Directions

Leader in Thailand Strengthening Brand Recognition New Opportunities Amidst Crisis

4 Four Seasons Hotels 4 Marriott & JW Marriott Hotels 7 Anantara Hotels 12 existing Anantara hotels in Thailand, Maldives, Bali and Abu Dhabi Additional 11 Aanantara hotels under the pipeline; 1 owned and 10 purely-managed Stronger balance sheet Lower cost of borrowing Excess capital from food/ mixed-use projects

38

The Pipeline Expansion

Journey into

the spirit

• f Arabia

Enjoy life at a slower rhythm

• n unspoilt

Maldivian shores

Investment Hotel:

• 1. Anantara Kihavah, Maldives (82 rooms) 2Q10
• 2. ST. Regis Hotel & Residences (220 rooms/53 condo units for sale) 4Q10

Extension: Anantara Koh Samui (20 rooms) 2011

Hotel Management:

• 1. Anantara Lawana Resort & Spa, Samui (122 rooms & villas) November 2009*
• 2. Anantara Al Madina A’Zarqua, Oman (122 rooms) 2Q10
• 3. Anantara Sanya, China (148 rooms) 2010
• 4. Anantara Marrakech, Morocco (109 rooms) 2011
• 5. Anantara Magador, Morocco (75 rooms) 2011
• 6. Anantara Mahabaliburam, India (126 rooms) 2011
• 7. Anantara Uluwatu, Bali (93 rooms) 2011
• 8. Anantara Jumeirah Lake, Dubai (473 rooms) 2012
• 9. Anantara Estrella, Cape Verde (200 rooms) 2012
• 10. Anantara Santiago, Cape Verde (200 rooms) 2012
• 11. Aequalis Santiago, Cape Verde (60 rooms) 2012

Anantara Qasr Al Sarab, Abu Dhabi Anantara Baa Atoll, Maldives

39

MINT’s Hospitality Asset-Light Portfolio

40

Own 100%

2000

Managed 11% JV 22% Own 67%

2Q09

Managed 40% JV 13% Own 46%

2014

Note: Based on number of hotel rooms from internal budgets under pipeline expansion, MINT

MINT Hospitality 5-Year Intact Growth

Aiming to be a regional leader in Hospitality & leisure During 2009-12, at least 10 additional hotels will be managed by Anantara Drive growth in Anantara brand Continued expansion into other hospitality-related businesses

Acquisitions of properties and new

hotel brands accelerate growth of

profits faster than top-line revenues

8% 9M09

15%

2014

Overseas Revenues Contribution MINT’s Hospitality & Leisure Revenues

5 10 15 20 2009 2014 (Bt bn)

41 19% CAGR

MINT’s Owned Hotels Progress

42

Four Seasons Chiang Mai, Extension

Project: Hotel 12 pool villas Completion: 3Q 2009

Anantara Kihavah , Maldives

Project: 82 villas Completion: 2Q 2010

• St. Regis Hotel &

Residence, Bangkok

Project: 220 rooms, 53 Residence Completion: 4Q 2010

• IV. Pipeline Expansion &

Financial Outlook

Management’s Guidance for 2009-10

Food Hotel Residential MINT- Consolidated

2009E

(2-3%) SSS; 12-15% TSS 50-55% Occupancy; (5-10%) ADR 2-5 units of St. Regis Modest revenue growth; 20-25% decline in

• perating profits

2010F

+3-5% SSS; 15% TSS 65% Occupancy; +5% ADR 8-12 units sales of

• St. Regis;

1-2 villas of The Estate Samui Significant improvement on top & bottom-line from low base comparison

44

• We anticipated a near-term improvement with a tourism fully recovered by year-end 2010

How We Grow Business in the Next 5-Year?

45

Food Business 1,600 outlets Hospitality 40 hotels Retail & Trading

• Revenues > $700m
• Achieve 50:50 mix of

equity: franchise outlets

• Organic revenues > $500m
• With strategic acquisition,

total revenues should grow 31% per annum

• Revenues > $130m
• Exclusive agreement with

Gap Inc.

Note: Based on the internal budgets, MINT

50% 40% 10%

Annualized Topline Contributions

With Well-Diversified Sources of Income

46

Sales Revenues Net Profit

Others 15% Hotel & Mixed Use 40%

Food 45%

Others 5% Hotel & Mixed Use 65%

Food 30%

Note: Contributions estimated from internal budgets under pipeline expansion, MINT

• Food and hotel remain balanced key businesses offering reciprocal advantages

With Higher Contributions from Overseas

10,000 20,000 30,000 40,000 2009 2014

Sales Revenues Net Profit (2009 - 2014)

Thailand 64% Overseas 36% Thailand Overseas

19% 24%

Note: Total Sales revenues & net profit calculated from internal budget, MINT

47

• Gradually shifting away from single-country orientation

Thank You

For further information, please visit www.minornet.com Investor Relations Office: Ririnda Tangtatswas + 66(0) 2365 7637 Punnee Ruangwaewmanee + 66 (0) 23657636