2Q 2016 BUSINESS PERFORMANCE Premium Lifestyle Leading Company
DISCLAIMER This material has been prepared for investors convenience, based on 2Q16 financial statements that have not yet been officially audited, which could alter final data. Actual results may differ from forecasts herein given the unpredictability of future performances; Hotel Shilla will therefore not revise or update this material.
CONTENTS 01 CORPORATE OVERVIEW 1 02 BUSINESS PERFORMANCE AND OUTLOOK 8 03 APPENDIX 13
01CORPORATE OVERVIEW INTRODUCTION VISION / HISTORY / AWARDS BUSINESS PORTFOLIO BUSINESS SITE OVERVIEW
INTRODUCTION THE SHILLA is an affiliated company of the Samsung Group, providing the premium customer service in the service business. Electronics Finance Service Heavy-Industry &Construction ELECTRONICS LIFE INSURANCE THE SHILLA C&T (Trading) HEAVY-INDUSTRIES DISPLAY FIRE&MARINE INSURANCE C&T (Fashion) C&T (Resort) ENGINEERING SDI CARD WORLDWIDE S-1 C&T (Construction) ELECTRO-MECHANICS SECURITIES SERI MEDICAL CENTER SDS ASSET MANAGEMENT BIOLOGICS BIOEPIS Major Shareholders of The Shilla: Samsung Life Insurance 8.0%, Samsung Electronics 5.1%, Samsung Securities 3.1%, Samsung Card 1.3%, Samsung SDI 0.1% 2
VISION Hotel Shilla aspires to become a Premium Lifestyle TRAVEL RETAIL Leading Company that offers clients the best options based on dignity and trust. The company will provide optimal services across its business range, including travel retail, hotel, leisure, F&B, and business travel management(btm) to improve LEISURE PREMIUM LIFESTYLE LEADING COMPANY HOTEL the lifestyles of clients. BTM F&B 3
HISTORY AWARDS 1979 Seoul Hotel open 2006 Presidential Award at Korea Retail Ceremony 1986 Seoul Duty Free open 2008 Gazette, The Best hotel in Seoul 1989 1990 1991 2006 Jeju Duty Free open Jeju Hotel open IPO(Korea Exchange) Jinji Lake Hotel(China) open 2009 Institutional Investor, The world s Top 100 Hotel(1st in Asia) LHW Leader s Club, Golden award JALPAK, The Best Hotel Zagat, The Best Hotel in service sector TTG Travel Award, The Best City Hotel in Seoul 2008 Incheon Int l Duty Free open Institutional Investor, The World s Top 100 Hotels 2010 Cheongju Int l Duty Free open 2010 Institutional Investor, The Best Hotel in Seoul 2011 2012 2013 Gimpo Int l Duty Free open L/V at Incheon airport open SweetMay in Macao open Changi Int l Duty Free(Singapore) open 2011 2012 2013 NCSI, No.1 Hotel in service sector Travel+Leisure, The World s Best Award Asia 16th KCSI, The Best Duty Free Store 2014 Shilla Stay Co., Ltd established 2014 NCSI, The Best Company Macao Int l Duty Free open 2015 Interbrand, The Best Korea Brands 2015 2015 HDC Shilla Co., Ltd. established NSCI, No.1 Hotel in hotel sector 2016 Shilla I Park Duty Free established 4
MILESTONE 5
BUSINESS PORTFOLIO TR (Travel Retail) Hotel & Leisure Seoul Downtown DF Jeju Downtown DF Shilla I Park Downtown DF Internet DF Incheon Int l Airport DF Gimpo Int l Airport DF Changi Int l Airport DF in Singapore Macao Int l DF Seoul Jeju Jinji Lake Shilla Hotel in China (Management) Geoje Samsung Hotel (Management) Shilla Stay (Management) BTM CFC Leports SweetMay in Macao, Hongkong 6
BUSINESS SITE OVERVIEW TR Business HOTEL & LEISURE Business Seoul DF Seoul BTM 375 Brands 7,177sqm Jeju DF 256 Brands 6,294sqm Incheon DF 384 Brands 3,263sqm Gimpo DF 84 Brands 400sqm 463 Rooms (43.3sqm per room) 7 Banquets 7 Restaurants Jeju 429 Rooms (44.6sqm per room) 6 Banquets 6 Restaurants Jinji Lake, China CFC demarq Leports VANTT Seocho Reports Center SINGAPORE Changi DF Incheon DF Seoul Hotel Seoul DF Gimpo DF Shilla I park DF Samsung Hotel Changi DF 205 Brands 5,808sqm Macao DF 210 Brands 1,098sqm Shilla I Park DF Samsung Hotel, Geoje Shilla Stay Dongtan, Yeoksam, Jeju, Seodaemun, Ulsan, Mapo, SweetMay Macau DF Hong Kong Jinji Lake Jeju Hotel Jeju DF 577 Brands 11,170sqm Gwanghwamun, Guro 7
PERFORMANCE AND OUTLOOK 02BUSINESS BUSINESS PERFORMANCE AND OUTLOOK BY BUSINESS SEGMENT
BUSINESS PERFORMANCE (2Q 2016) Non-consolidated Sales increased by 11.8% YoY, OP decreased by 29.5% YoY (KRWb) Sales OP 2Q15 2Q16 YoY 1Q16 QoQ Sales 734.9 821.3 11.8% 752.0 9.2% TR 662.3 736.4 11.2% 675.2 9.1% Hotel&Leisure 72.6 84.9 16.9% 76.8 10.5% OP 43.1 30.4-29.5% 27.2 11.8% 11.8% 734.9 821.3 9.2% 752.0-29.5% 43.1 TR 45.4 27.7-39.0% 35.0-20.9% Hotel&Leisure -2.3 2.7 Turnaround -7.8 Turnaround OP Margin 5.9% 3.7% - 3.6% - 30.4 11.8% 27.2 2Q15 2Q16 1Q16 2Q15 2Q16 1Q16 9
BUSINESS PERFORMANCE (2Q 2016) Consolidated Sales increased by 13.0% YoY, OP decreased by 36.4% YoY 2Q15 2Q16 YoY 1Q16 QoQ (KRWb) Sales OP Sales 844.7 954.1 13.0% 888.9 7.3% TR 766.6 857.7 11.9% 803.1 6.8% Hotel&Leisure 78.1 96.4 23.4% 85.8 12.4% 954.1 7.3% 13.0% 888.9-36.4% 844.7 29.4 OP 29.4 18.7-36.4% 19.3-3.1% TR 31.7 15.4-51.4% 27.8-44.6% 18.7-3.1% 19.3 Hotel&Leisure -2.3 3.3 Turnaround -8.5 Turnaround OP Margin 3.5% 2.0% - 2.2% - 2Q15 2Q16 1Q16 2Q15 2Q16 1Q16 10
TRAVEL RETAIL BUSINESS Consolidated Sales Increased by 6.7% YoY and OP decreased by 35.3% YoY Sales (KRWb) OP (KRWb) 2Q Review 2Q16 downtown sales recorded 538.2 KRWb (29.0% yoy) based on the in/outbound traffic growth. 766.6 349.6 857.7 319.5 803.1 316.1 31.7 27.8 2Q16 airport sales recorded 319.5 KRWb ( 8.6% yoy) due to the 3rd period started at the Incheon airport with the smaller space. 3Q Outlook 417.0 538.2 487.0 15.4 Profitability of the TR business will gradually improve based on an increase in travel demands as the vacation season and the Mid-Autumn Festival in China. 2Q15 2Q16 1Q16 2Q15 2Q16 1Q16 Downtown Airport 11
HOTEL & LEISURE BUSINESS Consolidated Sales increased by 23.4% YoY & OP turned into profit-making Sales (KRWb) OP 96.4 (KRWb) 2Q Review The turnaround of Hotel & Leisure business in 2Q16 resulted from a good all-round performance with the sales of 96.4 KRWb (23.4% yoy) Quartely Rate of Occupancy 17.5 858 78.1 20.2 16.7 21.5 9.6 20.6 19.0 16.0 14.7 35.8 38.4 30.3 2Q15 2Q16 1Q16 3.3-2.3-8.5 2Q15 2Q16 1Q16 2014 2015 2016 Seoul Jeju 3Q 63% 89% 4Q 66% 85% 1Q 50% 81% 2Q 61% 76% 3Q 60% 90% 4Q 67% 84% 1Q 52% 81% 2Q 75% 89% 3Q Outlook The omnidirectional improvement expected by continuation of the better performance by strengthening its products and efficiency at the Shilla Seoul, the betterment by vacation season at the Shilla Jeju, growth in sales by the grand open of Shilla Stay Cheoan. Seoul Jeju Others Leisure 12
03APPENDIX INVESTMENT PERFORMANCE AND MAJOR FINANCIAL RATIOS OWNERSHIP STRUCTURE
ANNUAL CAPEX Y2014 Y2015 (KRWb) 2Q2016 Capex 106.8 103.3 38.2 * Non-Consolidated, Accrued in period (KRWb) MAJOR FINANCIAL RATIOS Debt/Equity Ratio Liabilities Y2013 161% 1,177.5 Y2014 193% 1,432,8 1Q2016 235% 1,521.4 Debt Equity Current Assets 1,432.8 Current Liabilities 1,521.4 Equity Current Ratio 730.0 189% 743,9 176% 648.1 136% 1,177.5 1,023.6 1,032.0 Current Assets 823.0 1023,6 1,032.0 823.0 756.6 Current Liabilities EBITDA/Sales 435.2 7.0% 582,8 4.6% 756.6 3.9% 730.0 743.9 582.8 648.1 EBITDA 202.8 151,2 37.2 435.2 Sales 2.909.0 3,251,7 954.1 * Consolidated Y 2014 Y 2015 2Q 2016 14
OWNERSHIP STRUCTURE NPS 10.5% Affiliates 17.6% Foreign Investors 18.0% Others 53.9% As of June 30, 2016
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