Investor Presentation March, 2017
Disclaimer This material has been prepared exclusively for informational and promotional purposes. Its intention is to inform about the business strategy of Tatry mountain resorts, a.s., with its registered office at Demänovská Dolina 72, Liptovský Mikuláš 031 01, Identifications Number: 31 560 636, registered in the Commercial Registry of District Court of Žilina, Section: Sa, Insertion No. 62/L (hereinafter referred to as TMR ). TMR s shares are listed on the parallel market of the Bratislava Stock Exchange and on the main markets of the Prague Stock Exchange and the Warsaw Stock Exchange. The company s share capital consists of 6 707 198 bearer shares booked on the bearer with a nominal value of 7 per share. TMR has been allocated ISIN SK11 20010287. Information contained in this material is based on historical data and may contain forecasts of future performance. Predictions are based on rational expectations supported by objective data. Predictions are not reliable indicators of future performance and they are not binding. TMR is not liable for any of the predictions contained in this material. Future figures of TMR can differ from predictions given in this presentation. This material is owned exclusively by TMR. Any distribution, duplication, publishing, copy or record of this information, or any part of it contained in this material is forbidden without prior approval oftmr. Any distribution of this presentation or any part of it beyond the territory of the Slovak Republic can be either restricted, or prohibited by law of the third state. 2
3 We are here to revolutionize tourism in Central Europe!
TMR at a Glance Leading and the only Alpine style mountain tourism services provider in the CEE region Natural monopoly no mountains comparable to the Tatras in the region Increasing quality with infrastructure investments of EUR 230 million during the last 10 years Significant (double digit) increases in revenues (cum. 103%) and EBITDA (cum. 124%) in the last 5 years as a result of investments, acquisitions, and strong pro-customer orientation 4
TMR s Strategy Who We Are and What We Do 5
Our Potential Long History of Tourism in the Tatras Cultural and Natural Heritage 6
Challenges Mountain Resorts in 2005 7
Who We Are Today 8
Business Model Overview I. MOUNTAIN & LEISURE Segment (M&L) Mountain Resorts 3 resorts in the High and Low Tatras (SK), and Poland (97%) Leisure Parks 25% Revenues by Segments* 1,0% Aquapark Tatralandia (SK) Silesian Amusement Park (75%, PL) Dining 27 dining facilities on and off the slopes Total chair capacity of 3,630 Sports Stores & Services Tatry Motion Ski schools, 1,577 m2 of total retail space, 1,259 rental skis & snowboards 74% M&L Segment Breakdown 18% 17% II. HOTELS Segment 11 owned and/or managed hotels 774 rooms, 2,000 beds Luxurious wellness spa facilities Ongoing hotel upgrades, additions III. REAL ESTATE Segment 4 hotels leased to third parties Sale of recreational real estate Holiday Village Tatralandia, Chalets Jasná de Luxe Center 8% 57% Mountain Resorts Leisure Parks Dining Sport Services & Stores 9 M&L Hotels Real Estate * FY 2015/16
Mountain Resorts Vysoké Tatry (The High Tatras, SK) Tatranská Lomnica Starý Smokovec Štrbské Pleso 24 km of ski trails 20 cableways and lifts Max. transportation capacity of more than 21,615 persons/hour 20 km of ski trails with snowmaking Summit elevation: 2,625 m a.s.l. Base elevation: 805 m a.s.l. Vertical drop: 1,820 m 8 dining facilities Tatry Motion stores & services Jasná Nízke Tatry (The Low Tatras, SK) Chopok North Chopok South 49 km of ski trails 28 cableways and lifts Max. transportation capacity of 32,684 persons/hour 33 km of ski trails with snowmaking Summit elevation: 2,004 m a.s.l. Base elevation: 880 m a.s.l. Vertical drop:1,124 m 13 dining facilities Tatry Motion stores & services Szczyrkowski ošrodek narciarski / SON (Beskids, PL) 97% interest EUR 60m of investments planned 25 km of ski trails 13 cableways and lifts Max. transportation capacity of 8,700 persons/hour. 11 km of ski trails with snowmaking Summit elevation: 1,211 m a.s.l. Base elevation: 620 m a.s.l. Vertical drop: 591 m 10
Leisure Parks Aquapark Tatralandia (Liptov, SK) 14 (10 year-around) swimming pools with thermal, sea, and clear water 21 steam, water and masage saunas, baths and procedures 26 toboggans and waterslides (6 year-round) and 300 other attractions Tropical Paradise, Wellness Paradise, Funpark Tatralandia Silesian Amusement Park/ Śląskie Wesołe Miasteczko (75%, PL) Location: Park Śląski (Silesian Park) at Chorzów, PL Area: 26 ha 42 attractions The largest and oldest park in Poland Planned investments EUR 30 mil. Hotel Holiday Village Tatralandia 5 dining facilities 11
Hotels Hotels - The High Tatras Grandhotel****, Starý Smokovec Grandhotel Praha****, Tatranská Lomnica Hotel FIS***, Štrbské pleso Mountain hotel Hrebienok Hotel Kukučka**** (managed) Hotels The Low Tatras Wellness Hotel Grand Jasná**** Chalets Jasná De Luxe**** Tri Studničky Hotel**** Holiday Village Tatralandia Hotel Srdiečko** Hotel Rotunda 12
Real Estate Lease of hotels and lodging facilities to third parties Hotel Liptov Hotel Ski & Fun Záhradky Sale of recreational real estate Holiday Village Tatralandia Chalets Jasná de Luxe Center construction, sale, operation Kosodrevina Lodge Otupné 13
Our Market Potential 14 Natural monopoly position (no other similar places in the region to provide the Alpine resorts feel except for the Tatras) No competition within 1000 km east of TMR resorts 7.5 million people living within 200 km Long tradition of visitors from CEE Easy access by plane More affordable than Alpine resorts Target Groups (through): Slovaks (massive marketing campaigns) Polish (massive marketing campaigns) Czech (still benefiting from the common past; no language barrier) Russian-speaking (driving distance unlike Alpine resorts) New markets (Baltic & UK via new airline connections) 4% Segmentation TMR Mountain Resorts Visitors in SK During Winter 2015/16 1% 2% 4% 9% 63% 17% Slovakia Poland Czech Rep. Hungary Russia U.K. Other Affluent clientele Luxury and prestige of the hotels in the High Tatras Mainstream Jasná, Nízke Tatry tailored to the young, families, and sports enthusiasts
Thousands Great Potential in Regional Mountain Tourism Skiers by Country 16 000 40% 14 000 35% 12 000 30% 10 000 25% 8 000 20% 6 000 15% 4 000 10% 2 000 5% 0 Slovakia Poland Czech Republic Ukraine Russia Austria Switzerland Germany 0% No. of National Skiers Skiers as % of Population 15 Source: Vanat, Laurent. 2016 International report on mountain tourism
Client Target Area in SK, Neighbors, and East 16
Our Strategy Based on 3 Pillars Increasing quality with investments Strategic acquisitions and expansion of operation in CEE Constant operations & services enhancement EUR 230 million over 10 years New modern cableways Renovating hotels Expanding resorts Capitalizing on completed investments Modernization of SON and Silesian Amusement Park Aquapark Tatralandia 2011 Špindlerův Mlýn ski resort (9.5%, CZ) Korona Ziemi (7%, PL) SON ski resort, PL 2014 Silesian Amusement Park (75%, PL) 2015 Enhancing customer experience through synergies Focus on affluent clientele Trendsetter in the region Quality management GOPASS loyalty program and e-shop Innovative technologies 17
thousands Our Assets Grow through Capital Investments Total of EUR 230 million invested into development of our resorts and hotels in the last 10 years 2013 ends Investment phase I The New Era of the Tatras EUR 190 mil. invested Transportation capacity increased by 17,000 to total 54,069 persons/ hour 10 newly built ski lifts, total 50 Additional 25 km of snowmaking, total 50 km 671 snow guns 25 dining facilities built on slopes Fixed Assets 350 000 300 000 250 000 200 000 150 000 100 000 50 000 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 CAPEX Breakdown Investment Phase I 1% 9% 0% 5% 4% 81% Mountain Resorts Aquapark Dining Sport Services & Stores Hotels Real Estate 18
EUR 230 million CAPEX in last 10 years Funitel Jasná Nízke Tatry Tropical Paradise Tatralandia 19 15-seat Kosodrevina, Chopok, Jasná Nízke Tatry Tropical Paradise Tatralandia
EUR 230 million CAPEX in last 10 years Surf Wave, Aquapark Tatralandia Chalets Jasná de Luxe**** Rotunda, Jasná 15-seat gondola, Vysoké Tatry 20
Quality in Business and Marketing - CRM Customer Card Ski Pass 21 Direct Marketing A customer card offering customized products: Accommodation - Ski Pass - Dining - Aquapark - Rental - Ski School A personalized online ski pass / aqua pass at more favorable rates without queuing at cash desks Registration takes just 2 minutes For purchase bonus points loyalty program A direct marketing tool An efficient sales channel www.gopass.sk 20% of all skier days sold in Jasná and VT in 2014/15 Mobile app GOPASS Sales Channel
Operational Overview What We Have Achieved and How 22
What Drives Our Revenues KPIs Revenue Growth 23
Occupancy (%), Price (EUR) Thousands Stable Growth in Annual KPIs, Increased Visit Rate 15/16 Despite Mild Winter 3 500 3 000 2 500 2 000 1 500 1 000 500 0 Visit Rate in Mountains and Leisure* 2011/12 2012/13 2013/14 2014/15 2015/16 16 14 12 10 8 6 4 2 0 Average Revenues per Visitor** 2011/12 2012/13 2013/14 2014/15 2015/16 Mountain Resorts Leisure Parks Leisure Parks Mountain Resorts Dining Sports Services & Stores KPIs of Hotel Portfolio 70 60 50 40 30 20 10 0 2011/12 2012/13 2013/14 2014/15 2015/16 Occupancy (%) ADR (EUR) 24 * Aquapark Tatralandia was acquired on 01/04/11, Silesian Amusement Park on 01/05/2015 ** per given period fiscal year
thousands Avg. ticket price in resorts Jasná and Vysoké Tatry thousands Avg. ticket price in resorts Jasná and Vysoké Tatry Impact of Ticket Pricing on TMR s Growth Annual increase of ticket prices is justified with extensive CAPEX invested into development of TMR resorts and hotels 5-year cumulative growth: Operating revenues* +103% EBITDA* +124% Average ticket price +34% 5-year CAGR: Operating revenues* +15% EBITDA* +17% Average ticket price +6% 90 000 80 000 70 000 60 000 50 000 40 000 30 000 20 000 10 000 0 30 000 25 000 20 000 15 000 10 000 5 000 Operating Revenues vs. Ticket Pricing 0 2011/12 2012/13 2013/14 2014/15 2015/16 40 35 30 25 20 15 10 5 0 M&L Hotels Real Estate 1-day ticket price EBITDA vs. Ticket Pricing 2011/12 2012/13 2013/14 2014/15 2015/16 40 35 30 25 20 15 10 5 0 M&L Hotels Real Estate 1-day ticket price 25 *Operating results are adjusted for one-off and non-operating items
1-day Ticket Price ( ) Strategic Product Position, Closing in on Alpine Resorts 60 Market Positioning in Europe in Winter 2015/16 55 Trails (km) Gastein; 86 50 Livigno; 115 Ischgl; 238 Val Gardena; 175 45 Stubaier Gletcher; 62 40 Jasná - TMR ; 49 35 PKL / Kasprowy Wierch; 16 Vysoké Tatry - TMR; 24 Špindleruv Mlýn; 25 Pec 30 pod Sněžkou ; 15 25 20 SON, Szczyrk; 25 Białka Tatrzańska ; 17 15 0,000 20,000 40,000 60,000 80,000 100,000 120,000 Capacity ('000 persons/hour) 26
Financial Overview How We Look Like in Numbers 27
thousands Growth Results Confirm Our Strategy Key Operating Results* 90 000 80 000 70 000 Plan 81 202 40% 35% 60 000 30,9% 30% 50 000 40 000 30 000 20 000 10 000 0 2011/12 2012/13 2013/14 2014/15 2015/16p 2015/16 Revenues EBITDA EBITDA Margin 25 111 25% 20% 15% 10% 28 * For better evaluation of the operating performance, the operating results are adjusted for one-off items and nonoperating items.
thousands thousands Operating Results by Segments Revenues EBITDA 90 000 80 000 CAGR +15% 30 000 25 000 CAGR +17% 70 000 60 000 20 000 50 000 15 000 40 000 30 000 10 000 20 000 5 000 10 000 0 2011/12 2012/13 2013/14 2014/15 2015/16 0 2011/12 2012/13 2013/14 2014/15 2015/16 Mountain Resorts Dining Hotels Leisure Parks Sports Services & Stores Real Estate Mountain Resorts Dining Hotels Leisure Parks Sports Services & Stores Real Estate 29
thousands Financial Position Liquidity Current liquid funds* EUR 7.5m Assets Total assets EUR 375.7m Fixed assets EUR 283.1m Level of Debt Total debt EUR 229.8m Total debt-to-capital (D/C) ratio 68.4% Bonds issued EUR 184.7m used to finance share capital decrease Bank debt EUR 45.1m Equity Total equity EUR 106.0m Share capital EUR 47.0m 400 000 350 000 300 000 250 000 200 000 150 000 100 000 50 000 0 Assets Breakdown as of 31/10/2016 Current Assets 17,9% Other Non- Current Assets 6,7% Financial Position Fixed Assets 75,4% Total Assets Fixed Assets Debt D/C 80% 70% 60% 50% 40% 30% 20% 10% 0% 30 * Current liquid funds include cash & cash equivalents
Overall Financial and Market Performance 25 TMR Stock Performance at BSSE Key Cons. Data in EUR FR 2015/ 16 FY 2014/ 15 FY 2013/ 14 FY 2012/ 13 FY 2011/ 12 25 24 24 23 23 Revenues 81.2m 70.9m 56.3m 54.3m 43.8m EBITDA 25.1m 24.4m 18.4m 18.6m 14.0m Net Profit 2.7m -0.8 0.7m 6.6m 10,2m EBITDA margin 30.9% 34.4% 32.7% 34.2% 31.9% EPS 0.46-0.10 0.11 0.98 1.52 22 Net Dividend 0 0 0 0 7.1m DPS 0 0 0 0 1.06 TMR Market Overview at BSSE*: One-year max.: EUR 24.60 One-year min.: EUR 22.90 One-year return: 3.4% Dividend yield: N/A D/E ratio 216.8% 215.3% 223.0% 210.0% 5.8% 31 * As of 31/10/2016
Outlook & Future Growth Where We Go from Here 32
Strategic Goals for Medium Term Investments in development of the Polish operations: Silesian Amusement Park EUR 30m Szczyrkowski ošrodek narciarski EUR 60m in 2 phases Increasing quality with investments Acquisitions and expansion of operations in the region Operation of mountain resorts and leisure parks in Czechia and Austria Awakening of real estate market in the Tatra region Chalets in Jasná Holiday Village Tatralandia Jasná Center Future potential in real estate projects Focus on quality improvement in our resorts Customer loyalty program GOPASS Client Relationship Management Add ancillary services Hotel upgrades Hotel capacity addition (Jasná)
Appendices Shareholder Structure Key Operating Results Consolidated Income Statement Financial Position 34
Shareholder Structure TMR is listed on 3 stock exchanges Bratislava, Prague, Warsaw 9,5% 8,8% 24,3% 9,9% 13,4% 15,4% 18,8% Retail investors <5% C.I. CAPITAL INDUSTRIES LIMITED FOREST HILL COMPANY, s.r.o Nikroc Investments Limited KEY DEE LIMITED TINSEL ENTERPISES LIMITED RMSM1 LIMITED * As of 13/03/2017
Key Annual Operating Results by Segments* Key Operating Results Revenues EBITDA in '000 2015/16 2014/15 Change yoy (%) 2015/16 2014/15 Change yoy (%) Mountains & Leisure 60 449 52 951 14,2% 19 593 19 669-0,4% Mountain Resorts 34 120 30 118 13,3% 12 510 12 566-0,4% Leisure Parks 10 527 9 207 14,3% 3 735 3 988-6,3% Dining 11 132 10 018 11,1% 2 402 2 379 1,0% Sports Services & Stores 4 670 3 608 29,4% 946 737 28,4% Hotels 19 910 16 751 18,9% 4 402 4 482-1,8% Real Estate 843 1 213-30,5% 1 116 259 330,9% Total 81 202 70 915 14,5% 25 111 24 410 2,9% 36 * Operating results 2013/14 are adjusted for one-off items and non-operating items.
Consolidated Income Statement Selected Audited Consolidated Results (IFRS) For the Year Ended October 31 in '000 2015/16 2014/15 Sales 80 577 69 991 Other Operating Revenues 625 924 Total Revenues 81 202 70 915 Cost of Sales -13 062-11 327 Personnel and Operating Costs -43 671-35 355 Other Gain/ Loss 642 177 EBITDA 25 111 24 410 EBITDA Margin 30,9% 34,4% Depreciation & Amortization -13 036-13 298 EBIT 12 075 11 112 Interest Income 1 336 1 403 Interest Expense -10 958-11 072 Income from Financial Instruments, net 1 605-1 566 Pre-tax Income 4 058-123 Income Tax -1 312-628 Net Profit 2 746-751 Foreign Currency Translation Reserve -75-505 Total Comprehensive Income 2 671-1 250 EPS ( ) 0,456-0,101 37
Financial Position October 31 Financial Position in '000 (audited) 2015/16 2014/15 Total Assets 375 701 360 921 Non-current Assets 308 365 313 766 Fixed Assets 283 133 272 831 Other Non-current 25 232 40 935 Current Assets 67 336 47 155 Liquid Assets 7 493 8 219 Equity 106 003 103 331 Liabilities 269 697 257 590 Non-current Liabillities 239 197 227 426 Current Liabilities 30 500 30 164 Total Debt 229 804 222 421 38