Review of Q1 FY2020 Version 1.3 This Investor Presentation should - - PowerPoint PPT Presentation
Investor Presentation Review of Q1 FY2020 Version 1.3 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
Investor Presentation Review of Q1 FY2020
Version 1.3
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
▪ Market cap of USD 1.10 billion ▪ No controlling shareholder - 99% free float ▪ Debt : Equity ratio of 25.7% ▪ The Board comprises of two Executive Directors and six Independent Non- Executive Directors
2
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
3
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
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
4
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)
5
Industry Group Q1 FY2020 (Rs. Million) Q1 FY2019 * (Rs. Million) YoY Growth (%) Transportation 1,055 929 14 Consumer Foods 843 522 61 Retail 1,087 573 90 Leisure** (332) 228 (246) Property (12) 18 (163) Financial Services 774 865 (11) Total EBITDA 4,041 4,512 (10) *Note that the Q1 FY2019 EBITDA is adjusted for SLFRS 16, the accounting standard on Leases. Under the adoption of SLFRS 16, the impact to the Income Statement is front-loaded due to the higher finance expense at the inception of the lease. Accordingly, the ensuing slides, where applicable, are based on an adjusted EBITDA, where the lease expense in EBITDA in 2018/19 is comparatively adjusted on a like-with-like basis against the EBITDA in 2019/20 (adjusted EBITDA). **The Group’s Sri Lankan leisure business was significantly impacted by the Easter Sunday terror attacks and the resultant adverse travel advisories imposed by key tourist markets.
Adjusted effective capital employed (Rs.bn)
6
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 Plantation Services 1 Information Technology 0.1 ▪ In addition, the Holding Company accounts for 18% of effective capital employed which consists primarily of cash
▪ 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:
7
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
▪ 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
8
KARACHI GWADAR BAHL MUMBAI CHENNAI VISHAKHAPATNAM KOLKATA CHITTAGONG YANGON MOMBASA LAMU DAR-ES-SALAM CAPE TOWN PORT LOUIS ADEN KOCHI
9
10
11
4.31 4.91 5.19 5.74 6.21 7.05 2013 2014 2015 2016 2017 2018 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
12 1Q FY20 earnings update: Transportation industry group
volumes and improved volumes mix YoY.
(Rs. mn) Q1 2018/19 Q1 2017/18 EBITDA 1,055 929
Volumes (TEU) FY2019 FY2020 YoY Change (%) Q1 Q2 Q3 Q4 Q1 SAGT 504,312 538,723 516,037 514,589 535,998 6 JCT 547,629 592,551 604,672 607,913 561,897 3 CICT 656,986 676,710 703,470 668,230 702,745 7 Total 1,708,927 1,807,984 1,824,179 1,790,732 1,800,639 5
200,000 400,000 600,000 800,000 Q1 Q2 Q3 Q4 Q1 2018/19 2019/20
Port of Colombo - volumes ('000 TEUs)
SAGT JCT CICT
SAGT FY2019 FY2020 Q1 Q2 Q3 Q4 Q1 Domestic: Transshipment volume mix 17:83 17:82 20:80 21:79 19:81
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
13
▪ LMS volumes were impacted by the continuous drop in base fuel prices during the months of May and June, which increased the selling price parity between Colombo and Singapore
LMS FY2019 FY2020 Q1 Q2 Q3 Q4 Q1 Volume growth 20 2 9 (4) (16)
▪ 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. 14 1Q FY20 earnings update: Consumer Foods industry group Frozen Confectionery:
Frozen Confectionery business driven by strong volume growth in the impulse segment Beverages:
strong growth in volumes and an improvement in margins on account of higher operating leverage
(Rs. mn) Q1 FY2020 Q1 FY2019 EBITDA 843 522 Key performance indicators (%) FY2019 Q1 FY2020 Q1 Q2 Q3 Q4 Growth of frozen confectionery volumes 3 8 7 21 19 Growth of beverage volumes (37) (31) (23) (6) 22 Growth of convenience foods volumes 12 12 3 1 (2) EBITDA (Rs. million) 523 691 596 1,103 843 EBITDA margin (%) 14 16 16 24 19 Revenue mix (Bev:FC) 49:51 50:50 47:53 49:51 48:52
▪ 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
15
▪ 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)
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 * 98 Cargills 389 Arpico 49 Laugfs 40 * As at 30 June 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
16
▪ 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 Supermarkets business will undertake planned capex of approximately USD 65 million over the next two years for 60 new stores and the construction of the centralised distribution centre
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
17
▪ The Q1 FY2020 same store sales were driven by the same store footfall growth for the quarter, and the growth in the average basket values. ▪ Same store sales were impacted, to an extent, due to the temporary accessibility limitations arising as a result of the Easter Sunday terror attacks in April 2019, particularly in the mall- based outlets. Excluding this impact, same store sales increased to ~4.8 per cent. ▪ 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. million) 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 1Q FY20 earnings update: Retail industry group
revenue growth in the Supermarkets business, supported by the re-branding initiative, expansion of outlets and a pick- up in average basket values.
*Note that the 2018/19 EBITDA is adjusted for SLFRS- 16, Leases (Rs. mn) Q1 FY2020 Q1 FY2019* EBITDA 1,087 573
Key performance indicators (%) FY2019 FY2020 Q1 Q2 Q3 Q4 Q1 Same store sales growth 1.4 0.8 2.4 4.5 3.6 Same store footfall growth 3.9 2.7 4.2 7.1 2.0 Average basket value growth (2.4) (1.9) (1.7) (2.4) 1.6 EBITDA margin 3.5 1.6 4.0 5.0 7.1
▪ 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
19
▪ 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
20
▪ "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
21
*City Hotels occupancy and ARR excludes Cinnamon red
22
Sector FY2019 FY2018 Occupancy (%) ARR (USD) EBITDA Margin (%) Occupancy (%) ARR (USD) 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
*Sri Lanka Resorts EBITDA includes IP gains 1Q Earnings update: Leisure industry group
impacted as a result of the Easter Sunday terror attacks in April 2019, and the resultant adverse travel advisories from key source markets.
*Note that the 2018/19 EBITDA is adjusted for SLFRS-16, Leases (Rs. mn) Q1 2019/20 Q1 2018/19* EBITDA (332) 228
**City Hotels occupancy and ARR excludes Cinnamon red
Key indicators City Hotels ** Sri Lankan Resorts Maldivian Resorts FY2019 FY2020 FY2019 FY2020 FY2019 FY2020 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Occupancy (%) 52 65 48 14 81 70 87 46 79 92 95 55 ARR (USD) 127 128 126 123 85 85 109 72 257 300 393 325 EBITDA Margin (%) 25 23 25 (34) 22 21 49* (15) 18 16 38 22
23
▪ Post the series of coordinated attacks on Easter Sunday, 21 April 2019, Cinnamon Grand commenced accepting new bookings soon after the incident while its restaurants were opened to the public from 30 April 2019 onwards. ▪ The adverse travel advisories from key source markets, which were imposed in the immediate aftermath of the attacks, have been relaxed during the quarter. The tourist arrivals to the country for the quarter under review decreased significantly by 41 per cent to 267,849, including a decrease of 71 per cent and 57 per cent, in May and June, respectively. ▪ Lonely Planet continues to list Sri Lanka as its top destination for travel in 2019 while the US based Travel and Leisure magazine voted Sri Lanka as the number one island to travel in 2019. ▪ Subsequent to the the initial cancellations, forward bookings of the Group’s hotels have witnessed a pick-up. The forward bookings for the Group’s Sri Lankan resort hotels are encouraging and have witnessed an upward trend in recent weeks, reaching levels of approximately 75 per cent compared to the bookings received at the same time last year, indicating signs of recovery. ▪ Aided by the gradual recovery of the country, Cinnamon Events have re-commenced planned branding and promotional activity.
Post-crisis recovery initiatives
by the tourism related businesses.
for hotel and tour operators from 15 per cent to 7 per cent.
provide relief for the tourism sector loans under Enterprise Sri Lanka loan schemes
Group initiatives
medium term.
and development of agile cost structures within the hotel properties to remain flexible in managing short term
24
▪ 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
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 1,124 (19)
▪ Tourist arrivals from January – June 2019 was 1,008,449 a decrease
period of the previous year. ▪ Arrivals for the quarter (April-June) declined by 41 per cent to 267,849 compared to 456,723 recorded in the comparative quarter, subsequent to the Easter Sunday terror attacks which took place in April 2019. Arrivals for July were recorded at 115,701 a 47 per cent decrease against the comparative period.
Source: Sri Lanka Tourism Development Authority
25
1,000 1,500 2,000 2,500 1985 1996 2007 2018
Annual tourist arrivals to Sri Lanka ('000)
Source: Sri Lanka Tourism Development Authority
26 245,753 334,274 383,748 527,656 640,045 822,272 938,697 962,395 966,731 2010 2011 2012 2013 2014 2015 2016 2017 2018 Tourist arrivals Calendar Year
Source: Governmental tourism websites
27 5 10 15 20 25 30 35 40 Malaysia Indonesia Thailand Vietnam Cambodia Sri Lanka Arrivals in millions 1990 2018 Actual/ Target
60,000 31,790 30,114 26,113 9,100 7,600 5,019 Bangkok Manila Kuala Lampur Jakarta Ho Chi Minh Hanoi Colombo
28
▪ 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
29 * Note that the year of completion of the above is uncertain and is likely to be later than stipulated
▪ “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 30
▪ 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)
31 53,796 38,000 2,187 KL Ho Chi Minh City Colombo
Annual condominium supply in regional cities
32
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
▪ Prime developable land bank of
Colombo ▪ One of the largest privately
▪ 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
33
Cinnamon Lakeside Colombo Vauxhall Street Union Place Cinnamon Grand Colombo Crescat Boulevard Cinnamon Life
▪ 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.
34
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
35
1Q FY20 earnings update: Property
industry group
was impacted by the Easter Sunday terror attacks in April 2019. (Rs. mn) Q1 2019/20 Q1 2018/19 EBITDA (12) 18
Cumulative sales (units) Number of units sold as at 30 June ‘19 Cinnamon Life: The Residence at Cinnamon Life 135 Suites at Cinnamon Life 109 Cinnamon Life commercial complex 4 floors Tri-Zen 207
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
36
37
38
39
40
41
As at end June 2019
42
As at September 2019
43
As at September 2019
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
Source: MasterCard 45
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
0% 1% 2% 3% 4% 5% 6%
Life Insurance Penetration as a % of GDP - 2016
Global average – 3.47%
46
45.0 54.0 64.0 71.0 80.3
2014 2015 2016 2017 2018
Life Insurance Gross Written Premiums
*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%
1Q FY20 earnings update: Financial Services
industry group
includes a one-off notional tax credit recognition in interest income.
by a decrease in the rate of loan growth and higher impairment charges due to the heightened credit risk from subdued macro- economic conditions.
*Note that the 2018/19 EBITDA is adjusted for SLFRS-16, Leases (Rs.mn) Q1 2019/20 Q1 2018/19 EBITDA 774 865
Key performance indicators Q1 FY2019 (Apr-Jun 2018) Q2 FY2019 (Jul- Sep 2018) Q3 FY2019 (Oct- Dec 2018) Q4 FY2019 (Jan-Mar 2019) Q1 FY2020 (Apr-Jun 2019) GWP growth (% YoY) 13 4 15 (1) (1) Net profit (Rs.mn) 300 1,638 1,002 178 146 Net profit growth (% YoY) 349 1,693 (86) (41) (52)
▪ Nations Trust Bank (JKH effective economic interest : 32.16%) ▪ Focus on SME / retail strategy ▪ Franchise for American Express cards
48
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 20.28 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 13.7 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 Key performance indicators Q1 FY2019 (Apr-Jun 2018) Q2 FY2019 (Jul-Sep 2018) Q3 FY2019 (Oct- Dec 2018) Q4 FY2019 (Jan-Mar 2019) Q1 FY2020 (Mar-Jun 2019) Net profit (Rs. Mn) 936 1,043 783 773 641 Net profit growth (% YoY) 33 3 (16) (18) (32) Loan growth (% YoY) 24 25 20 18 12 Net Interest Margin (% 5.0 5.0 5.0 4.9 4.9 NPL Ratio (%) 3.06 3.71 4.58 4.88 6.11
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 FY2019 to obtain a more comprehensive understanding of the drivers and strategies
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
49