Dusit it Thani Plc lc. . Analyst Meeting “Strengthening the Foundation” 11 April 2018
DTC at a gla lance Distinguished hospitality group with Thai heritage 2
Determined Vis ision Mis ission and Value Proud of our We empower Thai heritage , our people to Vision Mission uniquely delivering exceed expectations . gracious hospitality ALWAYS. to the world. Value Care, Commit, Can do! 3
DTC by numbers Focused on hospitality and hospitality education business 70 Years in hospitality business Brand Portfolio 8 Countries 27* Properties in operation 9 Owned hotels 18 Management contracts & franchise 64 Management contracts in pipeline Franchise contracts with Dossen 40 24 Years in hospitality education business * Dusit Thani Laguna Phuket, dusitD2 Chiang Mai and the leasehold of Dusit Thani Hua Hin are under Dusit Thani Freehold and Leasehold Real Estate Investment Trust (DREIT) of which DTC holds a 30.02% stake. As of 31 March 2018 4
Company structure Dusit Thani Plc. (DTC) 0.55% Mixed-Use Project Food Other Business Education Business Hotel Business 99.99% 99.99% 65.00% 99.7% Dusit Food Dusit Thani Managed Hotel Owned Hotel Dusit Excellence Vimarnsuriya Co., Ltd. Co., Ltd. Properties REIT Co., Co., Ltd. Ltd. 100% 99.99% 37.00% Dusit USA Management 25.977% 49.99% Dusit Thani 30.02% Inc. Suanlum Property Co., NR Instant Le Cordon Bleu Properties Ltd. Produce Co., Dusit Thani Freehold Dusit Co., Ltd. 99.99% Co., Ltd. and Leasehold Ltd Dusit Worldwide Co.,Ltd. Investment Trust 10.00% 84.05% (DREIT) 100% Pharam 4 Development Dusit Thai Dusit Overseas Co.,Ltd. 100% Co., Ltd. 2.75% Properties Plc. Dusit Thani 99.99% 51.00% College Devarana Spa Co., 14.00% 65.00% Dusit Saudi LLC Ltd. Saladaeng Property DMS Property 99.99% Management Investment Private Dusit China Capital Co., Co., Ltd. Limited Ltd. 9.24% Favstay 45.00% Pte. Ltd. Dusit Fudu Hotel 88.01% Philippine Hoteliers International Management (Shanghai) Philippine 40% Center for Co., Ltd. Hoteliers, Inc. Hospitality 49.00% Education, Inc. 99.99% Dusit Colours Co., Ltd. Dusit Management Co., Ltd. 99.70% ASAI Holdings Co., Ltd. As of 31 March 2018 5
Business structure DTC Hotel Education Mixed-use Food Others business business Project Owned Hotel Food OEM REIT Office Managed Residence Building Office favstay Building Retail As of 31 March 2018 6
Revenue contribution 2017 Total Revenue Others 10% Education 8% Hotel THB 5,570mn 82% Owned hotel revenue Remark: REIT data is included in hotel business Others = Realized income from deferred rental revenue, gain on sales of assets, interest income, dividend income, share of profit from investment by equity method, office rental income, and other incomes 7
Hotel key statistics 2017: 28 properties * 59% 62% 56% 41% 38% 44% in 8 countries Owned Hotel Statistic -3.5% -2.0% Remark: * Including Dusit Princess Korat (The hotel was divested at the end of December 2017) 8
Stagnant performance … +2.7% +19.6% +134.0% * * Remark: Including THB 325 mn gain on sales of assets (Dusit Princess Korat) 9
… but with financial flexibility for future growth Average finance cost ~ 4% p.a. +58.0% * Remark: Dividend per share in 2015 was revised retroactively to reflect the Company’s par value change from THB 10 to THB 1 since May 2015. Net interest beating debt (Net IBD) = Total interest bearing debt - Cash & Cash equivalents including short term investment 10 Maintaining BBB+ Company rating and stable outlook by TRIS Rating
DTC’s key challenges Challenging for Rely heavily raising ADR on domestic & Concentrated Aging market Need more Portfolio Properties renovation CAPEX Shift from full service to Customers F&B Industry boutique/ lifestyle look for local Shift Trend hotel and shared experience economy 11
DTC’s next chapter A new roadmap for sustainable growth and resilient to future crises 12
Strategic dir irection With strong background in the hotel management and education business over six decades, DTC is now entering into the new chapter with multi-year plan under “Balance, Diversify, and Expand” strategy … Long term target • BALANCE 50:50 domestic: overseas revenue with balancing of asset light vs capital investment DIVERSIFY • 10% contribution from new adjacent business • EXPAND Double number of rooms in operation from 7,000 to 14,000 keys in 2021 … by strengthening key 5 pillar foundations People Technology Financial Process Properties Capability 13
Moving towards strategic dir irection Objectives BALANCE Key challenges • Geographic Capital investment • Capital investment focusing UK, Japan, Australia markets DIVERSIFY • Resilient portfolio Hotel Non-hotel: portfolio • Financial driven Food, real estate, (Invest/ Lease/ wellness Managed) EXPAND • Brand awareness 14
Strategic roadmap 15
2018 Guidance • Core Revenue growth +5% driven by RevPar • Core EBITDA margin ~ 15% • New managed properties 10+ (1,800+ rooms) • CAPEX THB 925 mn* 355** Hotel renovation (Maldives, Pattaya and Srinakarin) Renovation of Dusit Thani College Investment in IT system and software & Head office relocation 270 Mixed-use project (Demolition & Design development) 300 New owned property (ASAI brand) * Excluding new investment ** Excluding hotel renovation under DREIT 16
Hotel busin iness Growing global presence 17
Hotel portfolio Thailand Overseas Owned Bangkok (Silom) Chiang Mai Pattya Manila Bangkok (Srinakarin) Hua Hin* Chiang Mai* Maldives Laguna Phuket* Conghua (Guangzhou, China) Constance Pasadena (USA) Managed Nairobi (Kenya) Dusit Thani Krabi Kenz Dubai (UAE) Guam (USA) Pathumwan Princess Dubai (UAE) Fudu Binhu (Changzhou, China) Royal Princess Larn Luang Lakeview Cairo (Egypt) Dusit Island Chiang Rai Abu Dhabi (UAE) dusitD2 Khao Yai Dongtai (Jiangsu, China) Panzhihua (Sichuan, China) Fudu Qingfeng (Changzhou, China) Dusit Residence Dubai Marina (UAE) 18 Remark: As of 31 March 2018
Hotel in in operation 27 properties with 7,154 rooms in 8 countries 19 Remark: As of 31 March 2018
2018 opening target Plan to add 10+ properties and 1,800+ rooms in 4 new countries via asset-light model. 2018F 12 countries China Bhutan 5 Bahrain 1 1 Vietnam 2 Philippines 1 38 properties 8,967 rooms 1 Singapore 20 Remark: As of 31 March 2018
More expansion in Asia pacific and Middle East … 2Q18: Phu Quoc, Vietnam (108 rooms) 3Q18: Thimphu, Bhutan (83 rooms) 4Q18: Vung Tau, Vietnam (100 rooms) 4Q18: Manila, Philippines (125 rooms) 4Q18: Singapore (208 rooms) 4Q18: Bahrain (174 rooms) dusitD2 The Fort, Manila, Philippines 21
… as well as in China 3Q18: Jiangsu, China (55 rooms) 3Q18: Tianjin, China (400 rooms) 3Q18: Guangdong, China (350 rooms) Dusit Thani Wetland Park Resort, Nanjing Jiangsu Dusit Thani Shuangyue Bay Resort Huizhou Guangdong dusitD2 Society Hill, Tianjin 3Q18: Jiangsu, China (33 rooms) 4Q18: Fujian, China (177 rooms) Heritage Villas Zhouzhuang, Jiangsu Dusit Princess Fuzhou, Fujian 22
Growing glo lobal presence Well established brand positioning in Asia, Middle East and Africa with balanced portfolio of city and resort properties. Coverage will increase from 8 countries to 20+ countries * * * and from 7,154 rooms to 20,000+ rooms * = In operation * * * * * * As of 31 March 2018 23
New brand la launch A distinctive new brand designed to link curious, millennial-minded travelers with authentic local experiences in vibrant cities and resort destinations worldwide. 24
DTC’s Hotel spectrum FULL SERVICE LIMITED SERVICE EXPERIENCE Bespoke/ Branded Lifestyle/ Shared Cruise/ Midscale Economy Budget Luxury Residence Boutique Economy Vacation Club = Future plan 25 Remark: Invested in favstay as Venture Capital
Developing a unique hotel concept that is missing in the market Leverage the strengths of Dusit International and resonate with a new target segment with high growth. Target the Millennials and those who share their mindset are thirsty for discovery, interaction and ways to make meaningful impact. 190 20% “Making over million trips per year, Millennials alone account for of international tourist arrivals and this figure is expected to rise to nearly 300 million by 2020” (Source: World Tourism Organization) 83% of business travelers are blending business and leisure, and seeking new types of experience from their hotels (Source: Sabre) 26
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OUR INGREDIENTS 29
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Expansion strategy • 6 projects under development with focus on asset-light expansion • Rooms count: 1,000 to date (April 2018) • Target to open in vibrant cities and resort destinations with emphasis on local neighbourhood • Potential markets: SEA, Japan and Europe • Plan to acquire 10 projects each year 31
Hospitality education business Rebranding and expansion 32
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