SHR Analyst Meeting 9M/2020...2020/11/26  · Mauritius 8% 9M/2019 9M/2020 Self-Managed 3rd-Party HMA Self-Managed with Franchise SUMMARY OF SHR CONSOLIDATED FINANCIAL PERFORMANCE

SHR Analyst Meeting 9M/2020

November 26, 2020

S Hotels & Resorts The premier hotel investment and resort management company, creating unique travel experiences for our guests and value for our stakeholders

Agenda

▪ SHR Company Overview

▪ Strategic Recovery Path for COVID-19

▪ Business Direction

▪ 9M/2020 Operating & Financial Performance

SHRCompany Overview

2019

PROVEN TRACK RECORD TO GROW FOOTPRINT

4

227

3,116 3,390 3,393

4,271 4,647

2014 2015 2016 2017 2018 2019

+274+2,889

Number of keys

+3

+878

+376

Asia-Pacific50.3%

Europe 38.0%

America8.5%

Africa2.8%

Others0.4%

Notes:(1) Overall portfolio includes all assets including UK assets. Breakdown by keys.(2) Core portfolio excludes UK assets, which are held through a 50% stake in ourequal joint venture with FICO UK. Breakdown by customer nights.(3) Haven’t include Crossroads island 3 yet

Major customersGeographical coverage

Thailand Maldives Fiji Mauritius United Kingdom

13% 9% 7% 4% 67%

2014

◼ Singha Estate acquiredSantiburi Koh Samui

Apr 2014

◼ Acquired Phi Phi IslandVillage Beach Resort

Nov 2014

◼ Acquired 2 Holiday Inn hotels and 1 Mercure hotel through second JV with FICO UK

Sep 2016

◼ Commenced land reclamation, shoreline protection, landscaping and construction of Project Crossroads Phase One (via Singha Estate)

Jan 2017

◼ SHR acquired Project Crossroads Phase One from Singha Estate

Mar 2018

◼ Santiburi Koh Samui constructed 19 new grand reserve pool villas (new room category)

◼ Acquired 6 Outrigger hotels

May/Jun 2018

◼ Commencement of operations for two hotels in Maldives

Sep 2019

◼ SHR trading on SETNov 2019

◼ 6 grand deluxe poolvillas added to SantiburiKoh Samui

Apr 2015

◼ Entered into equal JV with FICO UK to acquire UK portfolio of 26 hotels

Oct 2015

◼ Disposal of 50% share investing in Island 3 Crossroads project

Feb 2020

2015 2016 2017 2018 2019 2020

39Hotels

Contribution by Number of keys

SHR’S GLOBAL HOSPITALITY PORTFOLIO

Note: Core portfolio excludes Holiday Inn and Mercure hotels in the UK which are held through a 50% stake in our equal joint venture with FICO UK.(1) Includes Self-Managed Hotels under franchise agreement(s).

Outrigger Hotels UK Hotels

Total # of keys Total # of Hotels

Self-Managed Hotels(1)

5

Hard Rock Hotel Maldives178

2,964

Outrigger Laguna Phuket Beach Resort

Outrigger Koh Samui Beach Resort

255 52 Phi Phi Island VillageBeach Resort 201

Outrigger Konotta Maldives Resort 53

SAii Lagoon Maldives,Curio Collection by Hilton

198

Outrigger Fiji Beach Resort 253 Castaway Island, Fiji 65

Outrigger Mauritius Beach Resort

181

151 Santiburi Koh Samui 96

TH

6044 Hotels

Mauritius

1811 Hotel

Maldives

4293 Hotels

UK3,115

29 Hotels

Fiji

3182 Hotels

Total Number of Resorts/Hotels 39

Total Number of Keys 4,647

Portfolio outreach/Number of countries 5

Hotel Brands 7

Upscale 4%Luxury 2%

Upper upscale

27%

Upper midscale

67%

Contribution by Positioning

OUR HOSPITALITY MANAGEMENT PLATFORM

SHR is able to tap on both in-house, home-grown

management platformsas well as access to strong

brands via collaboration with reputable

international operators.

6

“Affordable luxury lifestyle resort”

1. Self-Managed2 properties | 297 keys

3. Self-Managed with Franchise Agreement

2 properties | 376 keys

2. Third Party Hotel Management Agreement

6 properties | 859 keys

HOTEL MANAGEMENT AGREEMENT PLATFORM

“To set a regional hotel brand with the vision to

bring the world inclusivityrather than separation”

❖ Immersion travel culture

with local experience

❖ Thai Primary and

Secondary Cities &

Further SEA deployment

❖ Upper midscale

❖ Cultural Story / Hidden

neighborhood to be

explored ❖ Thai sensibilities, but

with a creative,

dynamic global view

❖ Resort style in Pacific

and Indian ocean

❖ Upper upscale

❖ Refine luxury as

personal freedom

▪ Expand accelerated growth capacitywith “Asset-Light” model

▪ Remunerate recurring management fee income

▪ Develop the image of a particular hotel according to the standard of the Company’s own brand

▪ Offer investment to revamp the image of the asset in various forms

7

KEY POINTS OF SHR’S HMA PLATFORM

The collectible fees comprise ofBase Management Fee, Incentive Management Fee and Marketing Contribution Fee for all managed

properties.

Management Fee

41 Properties

2025 Target

• Quality, Safety, Reliability• Standard operating

procedure

Standard Implementation

• Property Improvement Plan• Design & Construction• Talents Development • Systems Change

Developing

• Automatized, Centralized, Cutting-edge

• Modern, Responsive, Conversion-driven

• User-friendly

Commercial Platform

• Departmental Support• Human Resources Optimization• Strategy & Innovation Hub

Expertise

Enhance direct bookings Emphasize hotels’ highest margin

Apply dynamic pricing

Website Development

8

Business Direction

10

To introduce the brand to

in home market

▪ To reduce license and management fee

▪ To cluster operation of Outrigger with self-manage properties

would suggest the economy of scales and provide cost saving

Profitability optimization

Laguna Phuket Beach Resort

Flexibility in operations management

Koh Samui Beach Resort

To Launch example of new

SHR brand under HMA model

TERMINATE HOTEL MANAGEMENT AGREEMENT WITH OUTRIGGER

&ENTER INTO SELF-MANAGED PLATFORM

Able to adjust the strategies and policies to enhance potential and adaptability

23%

44%

33%

Self-Managed

Outrigger

Crossroads

28%

30%

42%

Targeted Revenue Contribution by Platform

9M2020 2021F

3rd Party HMA14%

Self-Managed and Franchise

25%

Homegrown HMA40%

UK Portfilio Hotels

21%

3rd Party HMA16%

Self-Managed and Franchise

10%

UK Portfilio Hotels

74%

11

Balanci ng Growth wi th Fi nanci al Strength

Gearing toward Self-Managed, Franchise and

Homegrown brand platform with solid base

performance from third party operator guarantee”

Current (2020) 5-year Destination (2025)

39 hotels 80 hotels

Healthy capital structure

Optimalcapital structure

✓ Access various sources of fund✓ Minimise cost of funding✓ ROE improvement

✓ Positive liquidity status✓ Financing flexibility✓ Available debt room to support growth

9M2020 Room contribution

by management platform

Targeted portfolio by platform in

2025“

Strategic Recovery Path for COVID-19

Q3/2020 HIGHLIGHTS

S t r a t e g i e s

▪ As of 30 Sep 2020, 35 properties out of 39 total hotel portfolio or 90% of number of keys are operational

Apr May Jun Jul Aug Sep Oct

90%90%

75%

▪ Outrigger Mauritius Beach Resort will resume its operation on Dec 1, 2020. While Konotta will be closed until Q3’2021

Resumption of Hotel OperationsSignif icant Development

(Rooms)

Clustering service & Workforce management

Decreasing the minimum breakeven occupancy

on EBITDA to approximately 30 – 40%.

Moving forward for rebalancing portfolio and

major customer to rapidly adapt to the changing

situation

▪ On October 15, 2020, the Company announced the establishment of “S Hotels and Resorts Management Company Limited” with the objective to support the Hotel Management Agreement business

▪ Aim to launch the hotel management by 2021

4,647

0

N u m b e r o f k e y s r e - o p e n e d d u r i n g Q 3 / 2 0 2 0

13

PROGRESSIVE IMPROVEMENT IN 2H2020

14

40%

0%

15%

30%

45%

Jul Aug Sep

United Kingdom

Occ. Rate

Fiji

Thailand(Self-manage hotels)

Oct

27%

0%

15%

30%

Jul Aug Sep

Occ. Rate

Oct

21%

0%

15%

30%

Jul Aug Sep

Occ. Rate

Oct

Maldives(Self-manage hotels)

11%

0%

15%

30%

Jul Aug Sep

Occ. Rate

Oct

Applied for Quarantine Accommodation

Outrigger Laguna Phuket Beach Resort and Outrigger

Koh Samui Beach Resort have been certified for ALSQ

Hotel Management Platform

Properties with or without brand with opportunity

to convert to self managed in order to enhance

profitability of existing portfolio

ADR Performance by Geographies in Q3/20

▪ Maldives and UK reported the drop in ADR ~ 20%

▪ Thailand faced with the intense price competition

especially Samui, recorded the contraction in ADR

around 60%. While Phuket declined only 17%

▪ Fiji marked the worst performance due to the

heavily reliant on local business at the moment

PICK UP DEMAND IN MALDIVES

▪ In Q3/2020, traffic mostly driven from UAE, followed by USA, UK, and Russia.

▪ Foreseen the strong recovery demand towards the end of 2020 and the beginning of 2021, driven by the rebound in India and Europe tourists.

70%(Forecasted)

21%

0% 20% 40% 60% 80% 100%

Oct

Nov

Dec

41%(Forecasted)

▪ Create the unforgettable memories for celebrating the festive season with fun events full of good vibe to enjoy the new start!

▪ The Marina is currently occupied by 63% of total capacity

Business on Books +Forecasted

15

16

FORWARD LOOKING INBOUND TOURIST ARRIVALS

United Kingdom

Thailand

Mauritius Fiji

▪ D i v e r s i f i e d p o r t f o l i o c a n c a p t u r e r e c o v e r y d e m a n d a l l o v e r t h e w o r l d

▪ D o m e s t i c a n d I n t e r - r e g i o n m a r k e t s r e m a i n k e y d r i v e r i n 1 H / 2 0 2 1

▪ A d a p t e d s t r a t e g i e s t o e n h a n c e o c c . r a t e i n w e e k d a y , a c c e n t u a t i n g c o r p o r a t e / g r o u p

a c t i v i t i e s a n d m o v i n g t o w a r d d i g i t a l d i s t r i b u t i o n c h a n n e l

▪ Only local business is forecasted for Q4/2020 and Q1/2021

▪ The government is pressing ahead with its quarantine-free travel with New Zealand and Australia, followed by Pacific Bubble

▪ Focus on local market with somespecial deals especially weekend for the domestic travelling

▪ Currently no update on border opening with no mandatory quarantine

▪ Still face with the rise of COVID-19 case, led to imposing the second lockdown measures during Nov 5 to Dec 2, 2020

▪ The Company is closely observing whether any partial suspension is required

▪ Extend “We go travel together” until Jan 2021▪ Open the border for premium long stay (Special tourist visa: STV),

implemented from Oct 1, 2020 until Sep 30, 2021▪ BOT estimates the international arrival in 2021 to stand at 9.0 million

Maldives

▪ Re-open for international tourists with hassle-free entry and no testing requirements or mandatory quarantine

▪ Tourist arrivals is expected to stand at 0.5 and 1.1 million in 2020 and 2021, respectively

9M/2020 Operating & FinancialPerformance

Self-Managed Hotels Outrigger Hotels

UK HotelsCrossroads Hotels (1)

H o t e l p e r f o r m a n c e a c r o s s p o r t f o l i o m a t e r i a l l y a f f e c t e d b y t h e C O V I D - 1 9 , a s w e l l a s , t h e h o t e l s h a d t o s u s p e n d

o p e r a t i o n s f r o m A p r i l 1 , t o J u l y 1 4 , 2 0 2 0 .

PORTFOLIO PERFORMANCE BY MANAGEMENT PLATFORM

USD/THB = 31.52FJD/THB = 14.39MUR/THB = 0.81

GBP/THB = 40.05USD/THB = 31.52

7,915

5,751

8,896

2,214

ADR RevPAR

9M/2019

9M/2020

73%

25%

Occupancy

6,046

4,659

6,540

1,467

ADR RevPAR

9M/2019

9M/2020

77%

22%

Occupancy

35%24%

Occupancy

9,750

3,378

10,477

2,515

ADR RevPAR

9M/2019

9M/2020 70%

29%

Occupancy

2,712

1,8872,307

664

ADR RevPAR

9M/2019

9M/2020

(1) officially opened on 1 September 2019.

Unit: %, THB

18

1,182.2 478.5

183.3

92.6

551.7

648.4

414.2

397.2

302.8

151.3

9M/2019 9M/2020

1,249.0 742.9

245.0

159.8

795.4969.0

437.4717.5

314.7 287.7

9M/2019 9M/2020

Financial cost

D&A

Admin expense

Selling expense

COGS

Thailand37%

Maldives43%

Fiji12%

Mauritius8%

9M/2019 9M/2020

Self-Managed

3rd-Party HMA

Self-Managedwith Franchise

SUMMARY OF SHR CONSOLIDATED FINANCIAL PERFORMANCE

52% YoY

19

29%

68%

33%

44%

23%

1,265.6

2,639.7

Revenue from services by management platform

Unit: million baht

9M/2020 Revenue from services by hotel locationUnit: (%)

Gross profit and margins

Unit: million baht, (%)

Nature by expense

957.3

98.3

36%

8%

0%

5%

10%

15%

20%

25%

30%

35%

40%

9M/2019 9M/2020

90% YoY

Gross profit decreased by 90% YoY due to the decrease in operating revenue of Self- Managed Hotels and Outrigger Hotels, impacted by COVID-19 pandemic

18% YoY

• The operating cost (excluding depreciation and interest) was trimmed in 3Q2020 by 48% YoY and 9% QoQ. While 9M2020 shown a 18% decease in operating cost, compared to same period last year.

• Excluded Crossroads Project operating cost for 9M2020 was down by 36% YoY.• The increase of admin expenses in 9M2020 was mainly from the recognition of

expenses incurred during the suspension period as administrative expenses.

Unit: million baht, (%)

3%

Excluded Crossroads Project

36% YoY

3

-1,542

9M/2019 9M/2020

Adjusted net profit (loss) (2)

SUMMARY OF SHR CONSOLIDATED FINANCIAL PERFORMANCE

Adjusted EBITDA (1)

Remark:(1) Adjusted EBITDA is calculated from EBT plus Finance cost, Depreciation and Amortization, Interest income from Loan to JVs and deduct Interest income, unrealized loss from exchange rates and non-recurring items(2) Adjusted net profit (loss) is calculated from Net profit (loss) of the period deduct unrealized loss from exchange rates and non-recurring items

20

Unit: million baht

Unit: million baht

794.6

(563.9)

9M/2019 9M/2020

Net profitfor the period

= (1,175.2)

EBITDA= (185.3)

261.3

(854.0)

(267.1)

Q3/2019 Q2/2020 Q3/2020

69% QoQ

(8.1)

(787.1)(596.3)

Q3/2019 Q2/2020 Q3/2020

24% QoQ

YoY: Decreased due to an absence of revenue during the suspension period together with a decrease in Share of profit (loss) from an associate and joint ventures.QoQ: Improved 69% on the back of a reinstatement of hotels operation, a rebound in share of gain form JV, along with a 9% drop in operating cost

YoY: Decreased due to a higher depreciation on ROU assets along with the opening of Crossroad Project in Sep 2019.QoQ: There was FX loss at 3 MTHB in Q3/20, decrease from 24 MTHB in Q2/20

35%

8%

57%

2021 2022 2023 Onwards

LOW GEARING & POSITIVE LIQUIDITY STATUS

Liquidity status as at 30 September 2020

Cash balance 2,408.9 MTHB

Available credit facility (1)

1,309.6 MTHB

IBD/E = 0.47x

(1) including project loan

Financial Position as at 30 September 2020

Total Interest-bearing debts of 8,129.6 million baht

THB, 46%

USD, 42%

EUR, 7%FJD, 5%

Interestbearing debtby Currency

Total Asset

29,161.6MTHB Liabilities,

39%

Equity,

61%

Dec 2019 Sep 2020

Total Asset

29,061.1MTHB Liabilities,

40%

Equity,

60%

Interestbearing debtby Maturity

Available debt room to support future growth

8,130

0.47x

1.50x

-0.50x

0.50x

1.50x

2.50x

3.50x

-4,300

15,700

35,700

IBD/E ratio (x)

Unit: million baht

Equity

Debt headroom

Interest-bearing debt (IBD)

Sep 2020 2025F

21

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The information contained in this material has been prepared by S Hotels and Resorts Public Company Limited (“SHR” or “S Hotels and Resorts”) solely for information purpose and does not constitute an offer or invitation to sell or the solicitation of an offer or invitation to purchase or subscribe for shares in S Hotels and Resorts .

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