COMPANY PRESENTATION Mar 2019
Forward Looking Statement Statements included or incorporated in these materials that use the words "believe", "anticipate", "estimate", "target", or "hope", or that otherwise relate to objectives, strategies, plans, intentions, beliefs or expectations or that have been constructed as statements as to future performance or events, are "forward-looking statements" within the meaning are not guarantees of future performance and involve risks and uncertainties that could cause actual results to differ materially from historical results or those anticipated at the time the forward-looking statements are made. MINT undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. MINT makes no representation whatsoever about the opinion or statements of any analyst or other third party. MINT does not monitor or control the content of third party opinions or statements and does not endorse or accept any responsibility for the content or the use of any such opinion or statement. 2
AGENDA 2018 Performance Recap Minor Hotels Minor Food Minor Lifestyle Corporate Information & Five-Year Strategy
NH Collectiion Grand Hotel Convento di Amalfi PERFORMANCE RECAP
2018 Performance Recap In 2018, MINT successfully completed the investment in NH Hotel Group (NHH), which was immediately accretive. As a result, MINT reported core net profit growth of 10% for the year, primarily attributable to the core organic hotel business and contribution from NHH, despite the headwinds of the weak macro backdrop, which resulted in soft performance of the restaurant business. REVENUE 2018 REVENUE CONTRIBUTION THB million 80,000 +34% +35% 78,499 79,328 Minor Lifestyle 6% Minor Food 30% 60,000 58,644 40,000 2017 Minor Hotels Minor Food Minor Lifestyle 2018 Core Non-core Items 2018 Reported Minor Hotels 64% * Excludes non-core items NET PROFIT 2018 NET PROFIT CONTRIBUTION THB million 6,000 5,415 +10% +1% 5,957 5,445 Minor Lifestyle 2% Minor Food 26% 4,000 2,000 2017 Minor Hotels Minor Food Minor Lifestyle 2018 Core Non-core Items 2018 Reported Minor Hotels 72% * Excludes non-core items * Non-core items are detailed on page 40. 5
International Presence With solid diversification strategy, MINT s footprint was in 62 countries at the end of 2018 across its hospitality and restaurant businesses. Minor Hotels Minor Food Combination REVENUE CONTRIBUTION 100% 13% 75% 49% 61% 72% 50% 87% 25% 51% 39% 28% 0% 2008 2017 2018* 2023F * Excludes non-core items International Thailand 6
Dividends and Warrants MINT Board of Directors announced the resolution for dividend payment and warrant issuance, both of which are subject to shareholders approval. The Annual General Meeting of Shareholders will be held on 22 April 2019. DIVIDEND PAYMENT Cash dividend of THB 0.40 per share Total cash not exceeding THB 1,848 million XD on 26 April 2019 Record date to determine the rights of shareholders on 29 April 2019 Dividend payment date on 15 May 2019 THB 0.40 35.6% 32.8% 33.7% 40% 32.8% 31.0% 0.30 0.10 30% 0.20 0.40 20% 0.40 0.35 0.35 0.10 0.25 10% - 0% 2014 2015 2016 2017 2018 Cash Stock Payout Ratio * EPS calculation based on core operations, excluding non-recurring items WARRANT ISSUANCE Issuance of warrants on ordinary shares (MINT-W6) Offering to existing shareholders at no cost, at the ratio of 20 ordinary shares to one unit of warrant, pro rata to existing shareholders Dilution of 4.76% Tenor: Approx 2 years 4 months Exercise ratio of 1 unit of warrant per 1 ordinary share Exercise price of THB 43 per share Record date on 29 April 2019 to determine the shareholders entitled to receive MINT-W6 Assuming all warrants are converted, total cash received will be approx. THB 9.9 billion MINT WARRNT HISTORY 1999 MINT-W2 5-years 10% Dilution 2006 MINT-W3 2-years 10% Dilution 2010 MINT-W4 3-years 10% Dilution 2014 MINT-W5 3-years 5% Dilution 7
Update on NHH Integration MINT has already started to work with NHH to identify, formulate and quantify the potential synergistic benefits. The process is expected to take 6 months. Task force from both Minor Hotels & NHH have already been assigned to collaborate across various functions and below are the key initial findings that have been identified and pursued. Dec 2018 Jan 2019 Feb 2019 Mar 2019 Apr 2019 May 2019 NHH Budget & Standalone 5-Year Plan Identification of Integration Initiatives Implementation of Integration Finalization & Market Release TIVOLI INTEGRATION Transfer of Portugal & Brazil Tivoli operations is in process. NHH is in the process of identifying synergies through efficiencies across sales & marketing, procurement & back office. BRAND STREAMLINE Joint brand positioning has been agreed. Over 5 hotels have been identified as potential accretive rebrand so far, of which 3 to Anantara. Strong interests for new expansion have been identified for both MINT and NHH brands across geographies. NEGOTIATION WITH TRADE PARTNERS Both Minor Hotels & NHH uniformly reached out to partners for improved and win-win pricing scheme based on enlarged portfolio. Partners include OTAs, travel agents and procurement suppliers. Proposals are being discussed with suppliers to include the combined portfolio. COMBINATION OF GLOBAL SALES NHH hotel portfolio has been incorporated in MINT websites. Vision has been defined for websites at both group and brand levels. Cross-selling has started; China office for Spanish hotels, Thailand office for German hotels, Madrid office for Oaks. Joint-salesforce roadmap has been agreed. LEVERAGE ON HUMAN CAPITAL Initial movements are planned: GM from Minor Hotels to NHH; Operations & revenue management from NHH to Minor Hotels. Further employee mobility policy is in process. * Note that transactions and agreements are conducted in arms-length manner under MINT and NHH approved protocols (Governance Framework signed 7 th February 2019) LOYALTY INTERFACE Respective database analysis has been completed. Both parties are analyzing terms and benefits. Global loyalty vision and roadmap to be defined by 3Q19, including assessment on merger, cross redemption and cross accumulation. 8
Anantara Quy Nhon Villas MINOR HOTELS
Minor Hotels Financial Highlights 2018 revenue of Minor Hotels grew by 63%, as a result of owned & leased and management hotels from both organic operations and consolidation of NHH. 2018 EBITDA increased by 60%, with robust NHH profitability partially offset by the higher personnel-related expenses of Australian operation and lower profitability of mixed-use business. Net profit grew by 28%, at a slower rate than revenue and EBITDA because of higher interest expenses to finance the acquisition of NHH, higher minority interest and tax rate of NHH. THB million Revenue 19,243 23,547 27,758 30,970 +63% 50,577 Owned & leased hotels 75% of 2018 Minor Hotels revenue KEY HIGHLIGHTS Revenue grew by 117%, as a result of: Organic growth of 24% from all key markets; i.e. Thailand, Brazil, Portugal and Africa, and Consolidation of NH Hotel Group EBITDA EBITDA Margin NPAT Net Margin 5,561 6,146 28.9% 2,600 13.5% 3,009 7,146 7,685 26.1% 25.7% 24.8% 12.8% 2,811 10.1% 2014 2015 2016 3,375 10.9% 2017 +60% 12,290 * The financials above reflect performance from operation, and therefore exclude non-core items in 2014-2016 and 2018 as detailed on page 40. 24.3% +28% 4,307 8.5% 2018 Management letting rights 12% of 2018 Minor Hotels revenue Management contracts 3% of 2018 Minor Hotels revenue Mixed-use business 10% of 2018 Minor Hotels revenue Revenue in THB term was flat. Although RevPar was up by 2% in AUD term, revenue in THB term was impacted by the weakening of the AUD. Revenue (excl NHH) increased by 19%, primarily attributable to higher income of managed hotels, especially in Thailand, together with contribution of newly added hotels and additional technical service and termination fees. Revenue declined by 13%, from: Mismatch of sales of residential development in 2018; and Adverse impact on Anantara Vacation Club s revenue from the strengthening of the THB against USD resulting in only 4% revenue growth. 10
Minor Hotels International Presence In recent years, MINT has implemented a solid diversification strategy. With the investment in NHH, MINT operates hotels and spas under a combination of investment, joint-venture and management business models in 53 countries. Investment Management Combination New Destinations in Pipeline Hubs REVENUE CONTRIBUTION 100% 75% 50% 25% 0% 6% 63% 94% 78% 89% 37% 22% 11% 2008 2017 2018* 2023F International Thailand * Excludes non-core items 11
System-wide Hotel Portfolio Excluding new hotels and FX impact, organic RevPar of the entire portfolio increased by 5% in 2018, driven primarily by owned and joint-venture hotels portfolio. 2018 system-wide RevPar declined by 15%, primarily from the change in room type mix with the consolidation of the NHH portfolio. No of Rooms 80,000 NUMBER OF HOTEL ROOMS +272% 75,241 THB ADR Organic excl FX +2% System-wide -16% 60,000 40,000 20,000 0 14,721 17,714 19,797 20,209 2014 2015 2016 2017 2018 MLR Managed Joint-venture Owned & Leased 6,000 4,000 2,000 6,110 5,830 5,744 5,705 5,816 2014 2014 2015 2015 2016 2016 2017 2017 2018 4,765 OCCUPANCY REVPAR 80% 70% 66% 68% 67% 67% 69% 69% System-wide +2% Organic +2% THB 4,000 3,000 4,024 3,964 3,821 3,837 Organic excl FX +5% 4,013 System-wide -15% 3,278 60% 2014 2015 2016 2017 2018 2,000 2014 2014 2015 2015 2016 2016 2017 2017 2018 12
Owned & Leased Hotels 2018 MINOR HOTELS REVENUE CONTRIBUTION No of Rooms 75% Owned & Leased With the acquisition of NHH, owned & leased hotels contributed three-fourths of hotel & mixed-use revenue in 2018. 2018 organic RevPar excluding FX impact of owned & leased hotels increased by 10%, from the strong performance of organic overseas hotels. System-wide RevPar of owned & leased portfolio declined by 19%, primarily from the dilution of ADR with the consolidation of different room type mix of NHH. Revenue of owned & leased hotels more than doubled in 2018, both from organic operations and the consolidation of NHH. NUMBER OF HOTEL ROOMS +653% 20,000 60,000 52,969 15,000 10,000 5,000 0 3,112 5,387 7,118 7,039 2014 2015 2016 2017 2018 THB 8,000 6,000 4,000 2,000 0 7,028 6,553 ADR Organic excl FX +5% 5,811 6,228 6,535 2014 2014 2015 2015 2016 2016 2017 2017 2018 System-wide -27% 4,575 OCCUPANCY REVPAR 80% 70% 60% 50% 59% 66% 63% 62% System-wide +6% 68% 65% Organic +3% THB 5,000 4,000 3,000 4,168 4,293 3,653 3,865 Organic excl FX +10% 4,269 System-wide -19% 3,117 40% 2014 2015 2016 2017 2018 2,000 2014 2014 2015 2015 2016 2016 2017 2017 2018 13
Owned Hotels Thailand 2018 OWNED HOTEL REVENUE BY GEOGRAPHY NHH, 42% MLR Thailand, 24% Overseas excl NHH, 34% While Thailand remained the largest single country contributor, its contribution is now smaller than all of NHH hotels combined. The momentum of RevPar growth of hotels in Thailand slowed in 2H18 primarily from the temporary slowdown of the Chinese tourists. Nevertheless, Thailand will remain an attractive destination for tourism with its diverse attractions, well-developed infrastructure and strategic location. BANGKOK RevPar Growth Organic (y-y) -25% +40% -4% +14% +8% THB 4,830 4,943 4,722 4,874 4,964 5,000 83% 70% 71% 78% 4,105 4,000 3,473 3,794 51% 3,337 3,000 2,473 2,000 2014 2015 2016 2017 2018 THAILAND PROVINCES RevPar Growth Organic (y-y) -2% +10% +6% +6% +3% THB 8,000 6,937 7,060 7,443 7,581 7,815 5,746 6,000 65% 70% 71% 74% 74% 4,526 4,974 5,272 5,600 4,000 2,000 2014 2015 2016 2017 2018 Thailand Bangkok Thailand Provinces KEY HIGHLIGHTS Despite the slowdown in Chinese tourists in 2H18, international tourist arrivals into Thailand grew by 7.5% in 2018. Number of room nights in Thailand sold by Minor Hotels grew by 4% in 2018. Organic RevPar of Minor Hotels owned Thailand portfolio grew by 5% in 2018, driven by 1H18 performance, and primarily by hotels in Bangkok. The 8% RevPar growth of owned hotels in Bangkok in 2018 was primarily from higher occupancy and a slight increase in ADR. The Riverside hotels, both Anantara Riverside Bangkok and AVANI Riverside Bangkok performed exceptionally well with double-digit RevPar growth throughout the year. RevPar of hotels in the provinces increased by 3% in 2018, from higher ADR. Both Anantara s in Phuket and hotels in Chiang Mai and Hua Hin performed well. % Occupancy ADR RevPar 14
Owned Hotels Overseas (Excl NHH) 2018 OWNED HOTEL REVENUE BY GEOGRAPHY NHH, 42% MLR Thailand, 24% Overseas excl NHH, 34% RevPar of owned overseas hotels (excl NHH) increased by 9% in 2018, driven by hotels in all key markets. Excluding FX impact, organic RevPar of owned overseas hotels increased by even higher rate of 16%. Favorable tourism environment in key markets, selective asset refreshments, together with Minor Hotels ongoing sales & marketing efforts, contributed to the strong performance. OVERSEAS EXCL NHH RevPar Growth Organic (y-y) +8% -43% -24% +3% +9% THB 12,000 8,000 4,000 12,177 7,452 7,265 5,567 6,239 6,297 4,236 3,220 3,331 3,621 61% 58% 58% 53% 58% Portugal KEY HIGHLIGHTS The Portugal portfolio s RevPar increased by 10% in THB (11% in EUR). With the completion of the renovations in 2Q18, the RevPar increase, in particular in 2H18, was from both occupancy and rate (vs previous RevPar increases mainly from rates), signifying the traction of the hotels operating performance. 0 2014 2015 2016 2017 2018 % Occupancy ADR RevPar Brazil Brazil s RevPar increased by 5% in THB (25% in BRL) with the weakening of the Brazilian real by 15%. RevPar of both hotels grew by over 20% in BRL. Others, 31% Africa, 13% Maldives, 10% 2018 ORGANIC REVPAR GROWTH (THB) Portugal, 33% Brazil, 13% 10% 5% 9% 7% Portugal Brazil Maldives Africa Maldives Africa The Maldives portfolio performed well throughout the year, with RevPar growth of 9% in THB (+16% in USD). The RevPar growth was driven by occupancy increase, from the continued targeted marketing efforts. RevPar of the African portfolio increased by 7% in THB (19% in local currencies). Hotels in Botswana and Zambia saw RevPar growth of over 20% in local currencies. 15
Owned & Leased Hotels NH Hotel Group 2018 OWNED HOTEL REVENUE BY GEOGRAPHY EUR 100 80 60 40 20 0 MLR RevPar +9% Y-Y 94 98 63 69 67% 70% 4Q17 NHH, 42% 4Q18 % Occupancy Thailand, 24% Overseas excl NHH, 34% NH HOTEL GROUP ADR 4Q18 ORGANIC REVPAR GROWTH (EUR) NHH was the largest contributor to the owned & leased hotel portfolio in 2018. 4Q18 RevPar of NHH increased by 9%, driven by all key markets. The RevPar increase in 4Q18 was both from occupancy (across all regions, with Latin America and Spain as highlights) and ADR (primarily from Spain and Central Europe). * Notes: (1) ADR & RevPar in THB terms are THB 3,675 and THB 2,580 respectively (2) For the time being, stats are given in EURs for performance comparisons. (3) The stats are different than NHH s public disclosure as MINT s version is organic (one-year in operation) whereas NHH s is LFL (24 months full cycle of operations) RevPar Spain Italy Benelux KEY HIGHLIGHTS Remarkable growth in Madrid from relevant congress in Oct 2018 Improving comps in Barcelona since 4Q18, recovering from slow leisure domestic market in 2Q18-3Q18 Good performance of Rome & secondary cities However, Milan reported flat RevPar growth, as the city was negatively affected by the trade fair calendar Outstanding performance in Brussels due to continued recovery since the terrorist attack in 4Q16 Dutch secondary cities also performed well America, 10% Central Europe, 24% Benelux, 22% Spain, 27% Italy, 17% 12% 5% 8% 7% Spain Italy Benelux Central Europe * Note that only 4Q stats are shown as consolidation of NHH is only in 4Q18. 12% Latin America Central Europe Latin America Munich & Berlin up strongly due to favorable trade fair calendar RevPar up even higher (+18%) in local currencies Buenos Aires & Bogota saw double-digit RevPar growth even with FX depreciation 16
NH Hotel Group Financial Highlights NH Hotel Group reported recurring EBITDA of EUR 263 million in 2018, above its announced target. EBITDA increase of 13% in 2018 was a result of sound revenue growth and constant focus on efficiency. 4Q18 recurring performance showed a stronger momentum compared to the full year. EUR million Revenue Recurring EBITDA EBITDA Margin Recurring NPAT Recurring NPAT Margin Reported NPAT NPAT Margin 397 63 +8% y-y +24% y-y 15.8% 18.1% 15.0% 8 1.9% 11 430 78 +250% y-y 28 1,553 233 35 2.8% 2.6% 2.3% +4% y-y 1,620 +13% y-y 263 16.3% +146% y-y 6.6% 2.2% 5.3% +1% y-y +228% y-y 118 11 36 86 7.3% 4Q17 4Q18 2017 2018 Revenues Recurring EBITDA Note: (1) As per NH Hotel Group s report, the numbers include hyperinflation accounting effect (IAS 29) (implemented since 1 Jan 2018), and (2) Recurring NPAT exclude capital gains and related taxes from asset rotation. Source: NH Hotel Group s 2018 Results Presentation & Sales and Results NPAT Leverage KEY HIGHLIGHTS 2018 revenue growth of 4% RevPar up 3.8% (Occupancy +1.5% & ADR +2.3%) Strong performance of Benelux and Italy Relative RevPar outperformed comp sets in top cities with focus on quality (measured through STR / MKG Competitive Set average growth) 2018 recurring EBITDA growth of 13%, with margin improvement of 1.3% 45% EBITDA conversion rate Effective cost control, both payroll and operating expenses 2018 NPAT up significantly Business improvement Lower financial costs, from both refinancing and full redemption of corporate bond and convertible bond Higher contribution of net capital gains from asset rotation Successful debt reduction Decline in net financial debt to EUR 171 million as of end of 2018 from EUR 655 million as of end of 2017 Early redemption of convertible bond (EUR 250 million) in June 2018 17
Management Letting Rights 2018 MINOR HOTELS REVENUE CONTRIBUTION No of Rooms 7,000 6,000 5,000 4,000 3,000 12% MLR Management letting rights (MLR) business which manages serviced-suites, mainly under the Oaks brand, is the second largest segment in the hotel and mixed-use business. MLR provides Minor Hotels with stable performance throughout the year, compared to hotel operations which are more seasonal. While 2018 MLR s revenue increased by 5% in AUD term, primarily from the increase in RevPar, revenue in THB term slightly declined by 1% because of the weakening of the AUD. NUMBER OF HOTEL ROOMS 6,223 6,232 6,339 6,418 +8% 6,935 2014 2015 2016 2017 2018 THB 6,000 4,000 2,000 0 4,795 164 ADR 4,271 4,557 4,588 4,297 166 THB -6% 174 177 179 AUD +1% 2014 2015 2016 2017 2018 AUD 200 190 180 170 160 150 90% 80% 70% 60% OCCUPANCY REVPAR 76% 76% 77% 78% 2014 2015 2016 2017 2018 THB +1% 5,000 THB -6% 79% 4,000 3,643 3,258 3,495 3,596 3,391 3,000 141 2,000 138 133 AUD +2% 1,000 124 127 0 2014 2015 2016 2017 2018 AUD 160 150 140 130 120 110 18
Managed Hotels 2018 MINOR HOTELS REVENUE CONTRIBUTION No of Rooms 15,000 12,000 9,000 6,000 3,000 0 3% Management Contracts In 2018, managed hotels contributed approximately 3% of hotel & mixed-use revenue. Organic RevPar excluding FX impact of managed hotels portfolio decreased by 1%. System-wide RevPar declined by 14%, with the addition of NHH portfolio. Because of higher income of managed hotels, especially in Thailand, together with contribution of newly added hotels and additional technical service and termination fees, revenue from management service (excluding NHH) increased by 19% in 2018. NUMBER OF HOTEL ROOMS 3,453 3,910 4,533 4,692 +184% 13,311 THB 6,748 7,038 ADR 6,724 6,108 6,048 5,309 4,000 2014 2015 2016 2017 2018 2014 2014 2015 2015 2016 2016 2017 2017 2018 8,000 6,000 Organic excl FX -1% System-wide -13% OCCUPANCY REVPAR 80% 70% 60% 50% 55% Organic Flat 63% 63% 64% 64% 64% System-wide Flat THB 5,000 3,000 3,737 4,400 4,241 Organic excl FX -1% 3,917 3,894 3,378 System-wide -14% 40% 2014 2015 2016 2017 2018 1,000 2014 2014 2015 2015 2016 2016 2017 2017 2018 19
HOTEL INVESTMENT MANAGEMENT CONTRACTS / MLRS Hotel Expansion Pipeline 2019F 2020F 2021F 2022F Desaru, Malaysia 103 rms Fares Island, Maldives* 200 rms Khao Lak, Thailand 328 rms Ubud, Bali, Indonesia* 71 rms Milan, Italy 185 rms Frankfurt, Germany 428 rms Antwerp, Belgium 180 rms Santander, Spain 64 rms Paseo de Montejo, Mexico 120 rms Monterey La Esfera, Mexico 120 rms Hamburg, Germany 261 rms Mannheim, Germany 225 rms Cancun, Mexico 140 rms Frankfurt, Germany 375 rms Leipzig, Germany 197 rms Milan, Italy 100 rms Warangi, Serengeti Hannover, Germany 89 rms National Park, Tanzania* 12 rms Amsterdam, Netherlands 650 rms 7 Hotels / 908 Rooms 8 Hotels / 1,548 Rooms 4 Hotels / 1,392 Rooms 19 Hotels / 3,848 Rooms * Note: Joint-ventured properties Bahia, Brazil 50 rms Libo Country, China 173 rms Chengdu, China 150 rms Sifah, Oman Le Chaland, Mauritius 164 rms Tozeur, Tunisia 93 rms Phi Phi Island, Thailand 107 rms Nanjing, China 120 rms Ras Al Khaimah, UAE 140 rms Zhuhai, China 160 rms Kota Kinabalu, Malaysia Victoria, Australia 170 rms Angkor, Cambodia 80 rms Accra, Ghana 155 rms Ho Chi Minh City, Vietnam Seminyak, Bali, Indonesia 37 rms Dubai, UAE 528 rms Sharjah, UAE 233 rms Busan, Korea 289 rms & 570 rms Ras Al Khaimah, UAE 225 rms Guadalajara, Mexico Bangkok, Thailand 382 rms Tunis, Tunisia 41 rms Zhuhai, China 300 rms Panama Dubai, UAE 372 rms Hangzhou, China 166 rms Savanne, Mauritius 156 rms Vũng Tàu, Vietnam 149 rms Muscat, Oman 150 rms Recife, Brazil 200 rms Queensland, Australia 50 rms Gammarth, Tunisia 232 rms Brasilia, Brazil 395 rms Daegu, Korea 144 rms Dubai, UAE 528 rms South Australia, Australia 278 rms Cam Ranh, Vietnam 595 rms Hangzhou, China 132 rms Venice, Italy 150 rms Busan, Korea 436 rms Beirut, Lebanon 110 rms Fortaleza, Brazil 130 rms Wellington, New Zealand 226 rms Iquique, Chile 135 rms Khon Kaen, Thailand 79 rms Mexico City, Mexico 144 rms Phuket, Thailand 500 rms Santiago, Chile 86 rms Lima, Peru 164 rms Valencia, Spain 47 rms Bahia, Brazil 207 rms Others Zhuhai, China 100 rms Santiago, Chile 146 rms Hangzhou, China 54 rms Porto, Portugal 79 rms Lima, Peru 265 rms London, UK 190 rms Laikipia, Kenya 7 rms 27 Hotels / 5,134 Rooms 13 Hotels / 2,272 Rooms 15 Hotels / 3,563 Rooms 5 Hotels / 1,004 Rooms 60 Hotels / 11,973 Rooms 198 rms 386 rms 217 rms 120 rms 83 rms 20
Mixed-use Business Residential 2018 MINOR HOTELS REVENUE CONTRIBUTION Layan Residences by Anantara, Phuket 10% Mixed-use Avadina Hills by Anantara, Phuket MINT s residential projects are part of Minor Hotels mixed-use business. The developments are within or adjacent to MINT s hotels and are usually branded MINT s hotel brands. In addition to the current projects, MINT has prepared a pipeline in order to ensure the continuity of revenue stream from residential sales in the coming years. Other residential projects will be selectively considered in various hotel destinations in order to increase returns of the overall project. CURRENT PROJECTS The Estates Samui Anantara Chiang Mai Serviced Suites Torres Rani, Maputo Anantara Desaru Residences, Malaysia PIPELINE PROJECTS Anantara Ubud Residences, Indonesia Silom Office 15 luxury pool villas 16 luxury pool villas 14 luxury pool villas 44 units in 7-storey condominium building 181 keys for rent & 6 penthouses for sale; 21-storey office tower 20 residential villas 15 residential villas Launched 2015 Launched 2018 Launched 2006 Launched 2016 Launched 2015 To launch 2019 To launch 2019 To launch 2023 NA 100%-owned 50% JV 100%-owned 50% JV 49% JV 60% JV 50% JV 40% JV 21
Mixed-Use Business Anantara Vacation Club 2018 MINOR HOTELS REVENUE CONTRIBUTION 10% Mixed-use Part of the mixed-use business, Anantara Vacation Club is another important contributor to Minor Hotels. Growth of members are driven by four main markets China, Thailand, Hong Kong and Singapore. In 2018, while AVC revenue increased by 9% in USD term, because of the strengthening of the THB, AVC revenue in THB term increased by 4%. No. of Members 12,000 9,000 6,000 3,000 0 5,431 TOTAL NUMBER OF MEMBERS Growth +41% +28% +15% +27% +21% 6,928 8,000 10,193 12,347 2014 2015 2016 2017 2018 MEMBERS PRIMARILY IN ASIA UAE, 1% Others, 12% USA, 2% Philippines, 2% Australia, 2% Taiwan, 4% Japan, 4% Malaysia, 7% Singapore, 8% Hong Kong, 8% China, 38% Thailand, 12% As at Dec 2018 No. of Units 500 400 300 200 100 0 INVENTORY TO ACCOMMODATE GROWING MEMBERS 119 137 160 186 7 Destinations: Queenstown, Bali, Sanya, Samui, Phuket, Bangkok Chiang Mai 229 >12 Destinations > 500 2014 2015 2016 2017 2018 2023F GROWTH DRIVEN BY FOUR MARKETS CAGR 2013-2018 2018 Growth Y-Y 41% 29% 26% 18% 21% 13% 12% 11% China Thailand Hong Kong Singapore 22
MINOR FOOD
Minor Food Financial Highlights 2018 revenue of Minor Food was flat, primarily because of the outlet expansion, which offset the slowdown of the same-store-sales from the weak macro backdrop. With spending on the product and promotional campaigns to drive traffic, the ramping up of the newly opened stores, and the contraction of same-store-sales, EBITDA and net profit declined by 15% and 21% respectively. THB million Revenue 16,754 2,817 18,626 3,127 23,022 3,843 4,285 Flat 23,582 23,484-15% 3,647 Total-system-sales growth of 0.2% in 2018 KEY HIGHLIGHTS The Pizza Company, Burger King, Dairy Queen and Riverside reported positive total-system-sales growth as the brands continued to open new outlets. Total-system-sales growth turned positive since Aug with the accelerated expansion in China and Thailand. However, full year 2018 growth was pulled down in 1H18 because of the outlet rationalization in Singapore and Australia and divestment of The Groove Train portfolio in late 2017. EBITDA EBITDA Margin NPAT Net Margin 16.8% 1,550 1,572 1,684 9.3% 16.8% 16.7% 8.4% 7.3% 18.2% 1,913 8.1% 2014 2015 2016 2017 15.5% -21% 1,521 6.5% 2018 Outlet expansion 10% in 2018 Same-store-sales growth of -3.3% in 2018 The drivers of outlet expansion during the year were The Pizza Company, Dairy Queen, The Coffee Club and Benihana through the acquisition in April 2018. Soft macro conditions in countries that the three hubs operate continued to put pressure on the group s samestore-sales growth. Minor Food will continue to strengthen its multi-brand portfolio through product innovations and operational excellence, together with focus on technology in order to maintain its competitiveness. * The financials above reflect performance from operation, and therefore exclude non-core items in 2014-2016 and 2018 as detailed on page 40. 24
Minor Food International Presence MINT operates three restaurant hubs: Thailand, China and Australia. MINT s restaurant presence is now in 27 countries across the region, operating owned, franchised and a combination of both business models. MINT continues to look for opportunities to expand, especially in these existing markets. Owned Franchised Combination Hubs REVENUE CONTRIBUTION 100% 75% 50% 25% 19% 81% 40% 35% 40% 60% 65% 60% International Thailand 0% 2008 2017 2018* 2023F * Excludes non-core items 25
Minor Food Operational Performance 2018 total-system-sales of the restaurant business grew by 0.2%, driven mainly by outlet increase of 10%, primarily from Thailand and China hubs. As all three hubs faced challenges of the economic slowdown and increased competition, same-store-sales declined by 3.3% in 2018. SSS & TSS GROWTH RESTAURANT OUTLETS BY GEOGRAPHY 20% 15% 13.1% Same-Store-Sales Growth 11.2% Total-System-Sales Growth International Thailand 1,043 33% 67% 2,064 35% 65% +10% 2,270 34% 66% 4,462 37% 63% 10% 9.1% 2008 2017 2018 2023F 5% 0% -5% No. of Outlets 5.1% 0.4% -0.2% 1.3% -0.8% 0.2% -3.3% 2014 2015 2016 2017 2018 1,708 1,851 1,996 2,064 2,270 Franchised Owned 1,043 38% 62% 82% RESTAURANT OUTLETS BY OWNERSHIP 2,064 48% 52% 53% +10% 2,270 49% 50% 51% 4,462 51% 59% 49% 2008 2017 2018 2023F 26
Minor Food Thailand Hub 2018 MINOR FOOD REVENUE CONTRIBUTION 65% Thailand Revenue from domestic operations accounted for over 60% of total restaurant revenue in 2018. The Pizza Company, Dairy Queen, Burger King and The Coffee Club expanded the number of outlets, which resulted in positive total-system-sales growth in 2018. THAILAND S SSS & TSS GROWTH KEY HIGHLIGHTS 20% Same-Store-Sales Growth Total-System-Sales Growth Same-store-sales: Thailand s SSS declined by 3.1% in 2018: Consumer confidence remained challenging throughout the year, especially in the rural areas, with weak commodity prices; 15% Bangkok has been impacted by high competition and delivery service disruption; and 10% The brands that have high exposure to tourists; i.e. Burger King and The Coffee Club, were impacted by the tourist slowdown in 2H18. 5% Total-system-sales: With outlet expansion of 12% during 2018, Thailand s TSSG was 5.4%. 0% -5% 2014 2015 2016 2017 2018 2019 Strategies: Focus on customer accessibility, both through physical and digital channels; Continue with product innovations, ensuring that the brands remain relevant for customers; and Leverage on digital technology, including areas of operations, customer service and ordering, loyalty and e-payment and big data analytics. 27
Minor Food 1112Delivery Anticipating the emerging dine-at-home trend and leveraging on one of the country s best delivery platform and driver fleet, Minor Food launched 1112Delivery Project to capture such growing trend in February 2019. Thailand Thailand Food Delivery Market 1112DELIVERY Food delivery market is expected to represent 20% of total food service market in Thailand by 2023. Customers are switching to online from offline ordering. By 2023, the delivery market size is expected to grow by over 6 times, with almost 60% of online food delivery continuing to be concentrated in Bangkok and metropolitan area, and another 20% in tier 2 cities. Repeat Customer feedback collected through all channels Accessibility Multiple channels, including: Website Mobile application 1112 call center Delivery Single delivery through professional 1112 delivery team All products delivered timely Selection All Minor Food brands available for delivery Multiple brands, single payment 28
Minor Food China Hub 2018 MINOR FOOD REVENUE CONTRIBUTION 13% China China hub is expected to remain one of MINT s growth drivers as MINT is confident in the strong growth prospect of the country, supported by growing middle class and increased urbanization trend. Riverside continues to be the main driver of China hub. CHINA S SSS & TSS GROWTH KEY HIGHLIGHTS Same-Store-Sales Growth Total-System-Sales Growth Same-store-sales: China s SSS declined by 5.9% in 2018, primarily from soft performance of outlets in Tier 3 cities and natural cannibalization from rapid expansion of outlets in Beijing and Shanghai. 30% 20% 10% 0% -10% -20% 2014 2015 2016 2017 2018 Total-system-sales: With rapid outlet expansion of 18%, the TSSG was 4.4% for the year 2018, with a monthly improving trend. 15% 10% 5% 0% -5% -10% -15% 2019 Strategies: Jan-18 Apr-18 Jul-18 Oct-18 Continue to expand Riverside outlets, with the aim to dominate the grilled fish segment in Beijing and Shanghai and surrounding areas (Tier 2); Improve customer experience for Riverside brand, both through store uplift and food traceability programs; and Grow the delivery business. TSSG SSSG 29
Minor Food Australia Hub 2018 MINOR FOOD REVENUE CONTRIBUTION 10% Australia In 2018, Australia hub s revenue contributed 10% of total restaurant business. Revenue in AUD declined by 11% as a result of negative same-store-sales growth, but declined at a higher rate in THB term because of the weakening of the AUD. 20% 15% 10% 5% 0% -5% -10% -15% AUSTRALIA S SSS & TSS GROWTH Same-Store-Sales Growth Total-System-Sales Growth 2014 2015 2016 2017 2018 KEY HIGHLIGHTS Same-store-sales: Australia s SSS declined by 2.6% in 2018, as the country s economy continued to be challenging. Total-system-sales: As part of its rationalization program, the hub divested The Groove Train portfolio at the end of 2017, resulting in Australia s TSSG to remain negative throughout 2018, and ending the year with TSS decline of 13.3%. 4Q18 New Market Expansion: The Coffee Club entered three new markets in late 2018: China, Qatar and Cambodia. JV has also been signed in Vietnam to operate The Coffee Club franchise. 2019 Strategies: Grow The Coffee Club business in Australia through brand relevance, such as convenience through delivery channel and differentiation through hero products and loyalty program; Drive international expansion of The Coffee Club brand in both existing and new markets; and Expand coffee roasting business through all channels: retail channel through The Coffee Club and white label business, and wholesale channel through supermarkets. 30
MINOR LIFESTYLE
Minor Lifestyle Financial Highlights 2018 revenue of Minor Lifestyle was up 9%, driven by the retail trading business. EBITDA and net profit increased at a much slower rate as discount campaigns were implemented to drive sales during the weak domestic consumption sentiment and intensified competition, which put pressure on margins. In 4Q18, Minor Lifestyle launched a new brand, Save My Bag, a handbag and accessories brand from Italy. THB million Revenue 3,703 3,505 3,505 4,091 +9% 4,439 Retail trading 78% of 2018 Minor Lifestyle revenue KEY HIGHLIGHTS 2018 revenue from retail trading increased by 9%, mainly from Charles & Keith, Anello, Etam, Radley, Henckels and Joseph Joseph, together with sales from recently-added brands, OVS, Bodum and Save My Bag. Contract manufacturing 384 300 +1% 267 304 307 22% of 2018 Minor Lifestyle revenue 2018 revenue from contract manufacturing increased by 1% as a result of weak consumption environment. EBITDA SSS & TSS GROWTH EBITDA Margin 10.4% 8.6% 7.6% 7.4% 6.9% 19.3% NPAT Net Margin 183 124 81 +2% 127 130 4.9% 3.5% 2.3% 3.1% 2.9% 8.4% 9.0% 3.8% -3.3% 2.3% -8.1% -0.1% -6.3% -3.9% 2014 2015 2016 2017 2018 TSSG SSSG 2014 2015 2016 2017 2018 No. of Shops 297 307 327 398 490 32
Minor Lifestyle Scomadi With the growing premium motorcycle and scooter segment, Minor Lifestyle is taking the opportunity to enter the market to operate the manufacturing and distribution of Scomadi. Thailand WHO IS SCOMADI? Scomadi is a British brand established in 2005 The founders are two partners with over 60 years of experience combined in the scooter industry Frank Sanderson of Scooter Innovation Ltd. Pal Melici of PM Tuning Ltd. Scomadi is a modern classic scooter brand WHY SCOMADI? Opportunity to grow a potential global lifestyle brand Diversification into another segment of Thai lifestyle market High growth of the modern classic scooters segment Brand with strong fan base and following with proven concept SCOMADI ROADMAP ORGANIZATION PRODUCTION MARKET EXPANSION BRAND AWARENESS NEW PRODUCT Placement of key positions Planning of business strategy, operations, systems and financials Ensuring production capabilities to meet current market demand Expansion of the brand, both domestically and internationally. Key international markets identified are UK, Europe, Australia, Malaysia and India Engagement activities with distributors in all key markets Target world-wide recognition through: motor sport events community-related events, such as road trips, digital spaces, scooter fashion shows celebrity endorsement New model development, such as electric models 33
Corporate Information & Five-Year Plan
CAPEX & Balance Sheet Strength CAPEX plans include committed CAPEX of projects in the pipeline. Following the acquisition of NHH, 2018 interest bearing debt to equity ratio rose to 1.53x, which is within its debt covenant of 1.75x. MINT and its senior unsecured debentures have A rating by TRIS. MINT plans to bring the debt to equity ratio down to its internal policy of 1.3x by the end of 2019. Going forward, source of fund for the committed CAPEX requirement will primarily be internal cash flow and debt financing. CAPEX PLANS LEVERAGE RATIOS THB million 100,000 30,000 25,000 X 6.0 5.0 X 1.6 1.4 1.2 1.0 1.53x 1.37x 1.30x Internal Policy 20,000 15,000 4.0 3.0 0.8 2014 2015 2016 2017 2018 2019 Target Interest Bearing Debt to Equity Net Interest Bearing Debt to Equity 10,000 2.0 5,000 1.0 0 0.0 2018 2019F 2020F 2021F 2022F 2023F Minor Food Minor Hotels Minor Lifestyle EBITDA coverage on committed CAPEX * 2018 CAPEX includes investments in Benihana, Riverside, Food Theory and NH Hotel Group THB million 200,000 150,000 100,000 50,000 0 Shareholders Equity 83,074 Debt 126,894 BACK-UP FINANCING Outstanding Borrowing & Equity Note: Cash on hand as at end of 2018 is THB 12,760 million Debt 42,367 Un-Utilized Facility 35
Refinance & Balance Sheet Management Plans MINT has a plan in place to refinance the current bridge loans to long-term bonds and/or loans within 2019. In addition, MINT targets to bring its debt-to-equity ratio back down to the internal policy of 1.3x by the end of 2019. Some of the initiatives, including asset rotation, is already being pursued. REFINANCING PLANS BALANCE SHEET MANAGEMENT THB 88 bn 94.1% stake THB 45 bn THB 15 bn THB 28 bn Acquisition 47.7% stake Oct 2018 16.6% stake Aug 2018 29.8% stake Jun 2018 THB 88 bn All funding swapped to EUR Target blended financing cost < 3% THB 55 bn THB 5 bn THB 3 bn THB 10 bn THB 15 bn Funding 18-mths bridge loans: To be refinanced to a combination of bonds and loans, or To be partially repaid with proceeds from asset rotation EUR 139 mn 5-yr loans EUR 80 mn 15-yr corporate bonds USD 300 mn 3-yr callable perpetual bonds THB 15 bn 5-yr callable perpetual bonds Completed in 2018 DE = 1.53x 2019 Plan DE >= 1.3x 2018 Performance 2018 net profit has been added to the equity base. Issuance of Perpetual Bonds Two tranches of perpetual bonds have been successfully issued, to help strengthen the equity base: THB 15 billion perpetual bonds; USD 300 million perpetual bonds. Revaluation of NHH Assets The revaluation exercise has been completed, which helped uplift the equity base by THB 708 million. 2019 Performance 2019 net profit will further add to the equity base. Asset Rotation Strategy Cash received can be used to repay debt, while asset sale may result in gain from sale of assets, which will improve the equity base. MINT is already exploring the sales-and-lease-back option for selected Tivoli assets. 36
MINT s Five-Year Strategy 2023 Goals Revenue Growth > 10% CAGR Employer of Choice NPAT Growth 15-20% Sustainable Business ROIC = 12% Winning Brand Portfolio Value Capture & Productivity Investments, Partnerships & Acquisitions Innovation & Digital Empowered People & Team Sustainable Framework Growth Pillars Brands & value chains monetization Margin enhancement through integration & shared operations Capital optimization with asset right strategy & mixed-use business 1 2 3 4 Ensure commitment Set clear targets Leverage ecosystem partners Promote digital culture Superior workforce Sustainable leadership Engaging work environment Good Corporate Governance People Customers Partners Environment Social Responsibility Mindset 37
Five-Year Aspiration 2018 513 hotels 132 residences built to date 229 vacation club units 2,270 restaurants 490 retail shops & POS (31,776 sq.m.) 2018 REVENUE THB 78.5 bn 2023 2023F > 630 hotels > 250 residences built > 500 vacation club units > 4,400 restaurants > 600 retail shops & POS (>46,000 sq.m.) 2013 REVENUE THB 36.9 bn 2009 30 hotels 1,112 restaurants 292 retail shops & POS (14,275 sq.m.) 38
APPENDIX
Non-Core Items PERIOD 4Q18 AMOUNT (THB million) 708-800 -96-280 pre-tax -232 post-tax -125-87 BUSINESS UNIT Minor Hotels Minor Hotels Minor Hotels Minor Hotels Minor Food Minor Hotels NON-CORE ITEMS Gain on fair value adjustment of investment in NH Hotel Group Loss from changing status of investment in NH Hotel Group Impairment charge of investment in Oaks Gladstone Impairment of investment in Rani (Mozambique) Impairment of investment in GrabThai in UK FX loss on unmatched USD cross-currency swap 2Q18-121 Minor Food Gain on fair value adjustment of investment in Benihana 4Q16 490 38-359 Minor Hotels Minor Hotels Minor Hotels Gain from bargain purchase of hotels in Zambia Gain from bargain purchase of Tivoli hotels in Portugal Anantara Vacation Club s (AVC) provision of doubtful account (recorded in SG&A), MINT s prudent measures to conservatively provide for potential bad debts of Phase I -223 Minor Hotels Oaks general administrative expenses and provision (recorded in SG&A) 3Q16 92-136 Minor Hotels Minor Hotels Gain from changing status of investment in some of the Oaks properties Impairment charges of certain Oaks properties (recorded in SG&A, pre-tax) 2Q16 1Q16 136 1,932 Minor Food Minor Hotels Gain from changing status of investment in BreadTalk Group in Singapore Gain from bargain purchase of the Tivoli Hotels & Resorts 4Q15 1,665-49 Minor Food Minor Hotels Gain on fair value adjustment of change in status of investments in Minor DKL Reduction of gain from bargain purchase of Oaks Elan Darwin recorded in 3Q15 3Q15 1Q15 70 650 Minor Hotels Minor Hotels Gain from bargain purchase of Oaks Elan Darwin Gain from bargain purchase of Sun International hotels in Africa 2Q14 87 pre-tax 69 post-tax Minor Hotels Gain from changing status of investments in Seredib Hotels PLC 40