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HEMAS HOLDINGS PLC
Investor Presentation
1H 2012/13
Macro Highlights
Sri Lanka: Macro Highlights
8.2% 8.4% 8.3%
7.9%
6.4%
Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012
7.31%
9.31%
11.32%
12.88% 13.02%12.48%
Sept 2011 Dec 2011 March 2012 June 2012 Sept 2012 Oct 2012
111.05114.88
129.57
135.46
131.17 131.6
Sept 2011 Dec 2011 March 2012 June 2012 Sept 2012 Oct 2012
6.4%
4.9%5.5%
9.3% 9.1% 8.9%
Sept 2011 Dec 2011 March 2012 June 2012 Sept 2012 Oct 2012
GDP Growth slows to 6.4% 12M T-Bill Rate peaks around 13%
Rupee recovers after a 20% slip Inflation hovers around 9%
Source - CBSL
FMCG Healthcare
Pharma
Hospitals
Leisure
Hotels
Destination Management
Transportation
GSAs
Travels
Maritime
Logistics
Power
Hydro
Thermal
Bio Mass
Hemas Group
1H Performance Review
Hemas Group: A Snapshot
Share Price (As at 21.11.2012) Rs. 27.90
Market Capitalization Rs. 14.4Bn
% of Total Market 0.70%
PER 10.2*
PBV 1.27
No of Shares 515,290,620
Public Shareholding 28.33%
* PER based on annualized earnings
PER
-
5.0
10.0
15.0
20.0
25.0
30.0
35.0
June 2011 Sept 2011 Dec 2011 Mar 2012 June 2012 Sept 2012
Sector & Market PER vs Hemas PER
Diversified Sector PER Market PER Hemas PER
Hemas Group: Performance Highlights
Figures are in Rs. Millions 1H 2012/13 1H 2011/12 % Change
Group Turnover 12,886 9,991 29%
PAT 771 527 46%
Group Earnings 705 486 45%
Cash From Operations 110 -45 346%
Total Assets 24,419 19,345 26%
Shareholders’ Funds 11,359 9,347 22%
Capital Employed 18,242 14,769 24%
1H 2012/13 1H 2011/12 % Change
EPS 2.74 1.89 45%
Net Assets per Share 22.04 18.14 22%
ROE 13.6% 11.1% 23%
ROCE 12.6% 9.8% 29%
All financials as per SLAS
Consumer Businesses Drive Revenue
Group turnover recorded a growth of 29%, YoY
Revenue growth was driven by Power, Healthcare and FMCG sectors
Revenue in Rs. Millions
Annual Revenue Growth
29%
35%
5%
4%
24%
4%
Revenue Contribution – 1H 2012/13
FMCG
Healthcare
Leisure
Transportation
Power
Other
Group Turnover
-5%
0%
5%
10%
15%
20%
25%
-
5,000
10,000
15,000
20,000
25,000
2007/08 2008/09 2009/10 2010/11 2011/12 1H 2012/13
1H Revenue YoY Growth
Group Earnings on an Upward Trend
Earnings in Rs. Millions
Annual Earnings Growth
Group Earnings
39%
29%
5%
17%
10%
Earnings Contribution – 1H 2012/13
FMCG
Healthcare
Leisure
Transportation
Power
-40.0%
-30.0%
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
40.0%
-
200
400
600
800
1,000
1,200
1,400
2007/08 2008/09 2009/10 2010/11 2011/12 1H 2012/13
1H Earnings YoY Growth
Group earnings recorded a growth of 45%, YoY
Earnings growth was driven by FMCG, Leisure, Healthcare and Transportation sectors
Earnings Growth Boosts ROE
* 2012/13 is based on annualized 1H earnings
1.51
1.76
2.36 2.33
2.74
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
0.00
0.50
1.00
1.50
2.00
2.50
3.00
2008/09 2009/10 2010/11 2011/12 2012/13 *
EPS and EPS Growth
EPS EPS Growth
EPSEPS Growth
Shareholders’ Funds in Rs. Millions ROE
11.5%12.3%
14.6%
12.3%
13.6%
0.0%
4.0%
8.0%
12.0%
16.0%
20.0%
-
2,000
4,000
6,000
8,000
10,000
12,000
2008/09 2009/10 2010/11 2011/12 2012/13 *
Shareholders’ Funds vs ROE
Shareholders' Funds ROE
FMCG
Total FMCG market ~ Rs. 125Bn(Jan’12 to Sept’12)
76%
14% 10%
Food and Beverages Personal Care Household Care
Value Growth : Jan - Sept ’12 Vs. Jan - Sept ’11
Comprises of 18 Popular brands
No. 2 in Personal Care
Market leader in baby care, hair oil and men’s hair setting categories
Overview of FMCG Business
20%
54%
26%
Hemas FMCG revenue contribution for 1H 2012/13
Food and home care Personal care Personal wash
All Urban Rural
Total FMCG 13% 14% 12%
Food & Beverages 13% 15% 11%
Personal Care 12% 13% 12%
Household Care 14% 11% 15%
FMCG: Our Key Brands
A leading washing powder in the market delivering excellent value to the consumer
Baby Cheramy
Clogard
Kumarika
Diva
Velvet
Most preferred range of baby care products in Sri Lanka since 1962
Leading hair oil in the market with indigenous herbs
Unique oral care product containing clove oilNo. 2 in oral care market
No.1 in beauty soap market surpassing Lux
Won Bronze Award for Product Brand of the Year at the 11th SLIM Brand Excellence Awards
FMCG: Performance Highlights
Strong performance in Personal wash and Personal care categories contributed towards the growth in revenue
Steady increase in sales: September recorded the highest ever sales value crossing the Rs. 700Mn sales mark
Excellent overall performance in Bangladesh business; turnover up by 166%
Impressive market share gain in Personal wash category underpinned by Baby Cheramy and Velvet soap
Margins on track after price corrections to offset the exchange impact
Our sanitary napkin brand, Fems won the Silver Award for Best Turnaround Brand of the Year at the 11th SLIM Brand Excellence Awards
PAT in Rs. Millions
Revenue in Rs. Millions
1H 12/13 1H 11/12 Change
Turnover (Rs. Mn) 3,679 3,139 17%
PAT (Rs. Mn) 358 257 40%
-
100
200
300
400
500
600
700
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
2007/08 2008/09 2009/10 2010/11 2011/12 1H 2012/13
1H Revenue 1H PAT PAT full year
Big Heart Project
Baby Cheramy, celebrates 50 years of enriching lives of Sri Lankan mothers andchildren
The Big heart Project was launched together with the Department of Probation andChildcare Services of the Ministry of Child Development & Women Affairs, inSeptember 2012, to celebrate this milestone
The project will fund the educational needs of children that are 'at risk', or in dangerof being institutionalized due to the financial difficulties of their families
50 cents from every Baby Cheramy product sold will be donated to fund theeducational needs of children from grade 1-5
The Big Heart truck will travel across Sri Lanka and appeal to all Sri Lankans to opentheir hearts and donate towards this great cause
Healthcare
Size of the total Pharmaceutical market is ~ Rs 27Bn (MAT Q2 2012) (Source IMS)
Overall Pharmaceutical market has grown by 16.3% YoY (Source IMS)
Hemas Pharmaceutical remains the market leader with a share of 17.55% (Source IMS)
Pharmaceutical market composition (approx):
Overview of Pharmaceutical Distribution
66%
30%
4%
Distributors (Pharmacies)
Institutional Segment
Supermarkets
Hemas Pharmaceutical revenue contribution for 1H 12/13
66.5%0.4%
33.1%
Branded Generic Generic Branded
Overview of Hospitals
The number of registered private hospitalsstood at 186 at end 2011, with a bedcapacity of 4,784 (Source- CBSL)
Combined market size of the 4 leadinghospitals ~ Rs. 17Bn for FY 2011/12
Revenue split among leading Hospitals:
34%
21%21%
19%
6%
Asiri Nawaloka Lanka Hospitals
Durdans Hemas Hospitals
Outpatient and inpatient volumes atHemas Hospitals
Outpatient volume in ‘000s
Inpatient volume
3,000
4,000
5,000
6,000
60
80
100
120
Q1 2011/12
Q2 2011/12
Q3 2011/12
Q4 2011/12
Q1 2012/13
Q2 2012/13
Outpatient Inpatient
Revenue split is based on Q1, 2012/13 financials
0
40,000
80,000
Q1 11/12 Q2 11/12 Q3 11/12 Q4 11/12 Q1 12/13 Q2 12/13
Revenue in Rs. ‘000s Laboratory revenue at Hemas Hospitals
Pharmaceutical business was the main contributor to sector revenue growth
• Revenue growth of Pharma: 21.8%
• Revenue growth of Hospitals: 30.3%
Training and educational programs for doctors and community awareness projects along with high quality service standards contributed towards the revenue growth at hospitals
Hemas Wattala Hospital recorded the highest number of baby deliveries in September since inception
Health Care: Performance Highlights
PAT in Rs. Millions
Revenue in Rs. Millions
1H 12/13 1H 11/12 Change
Turnover (Rs. Mn) 4,462 3,631 23%
PAT (Rs. Mn) 256 190 35%
-
50
100
150
200
250
300
350
400
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
2007/08 2008/09 2009/10 2010/11 2011/12 1H 2012/13
1H Revenue 1H PAT PAT full year
Leisure
Outbound travel forecast 2012: World 2%; Europe 1%; Asia 4% (IPK Survey)
Purpose of travel : 71% holidays of which 27% looks for sun and beach
Tighter budgets; looking for value for money
Tourists are becoming more demanding
Travelers are searching for meaningful experiences
Web and mobile technologies are emerging as powerful marketing tools
Travel Trends
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
-
20,000
40,000
60,000
80,000
100,000
Jan Feb Mar Apr May Jun Jul Aug Sep
Tourist arrivals & occupancy rates in 2012
Tourist Arrivals Occupancy Rates
Tourist arrivals during the year were 693,772 marking a growth of 16% and expect to top one million at the end of year
Overview of Tourism Industry
Sri Lanka
Tourist ArrivalsOccupancy Rates
Source - SLTDA
Leisure: Performance Highlights
PAT in Rs. Millions
Revenue in Rs. Millions
1H 12/13 1H 11/12 Change
Turnover (Rs. Mn) 656 453 45%
PAT (Rs. Mn) 90 -23 491%
Sector performance was mainly driven by the Hotel sector and was enhanced by our inbound tour operation
Gross operating profit of the Hotel sector grew by an impressive 124% over LY
Occupancy rates of our hotels for 1H 2012/13:
Kani Lanka Resort & Spa rebranded as Avani Kalutara , was opened for guests in October 2012
Hotels under the Serendib Leisure umbrella are looking forward to a good winter season with favorable forward bookings
(60)
(40)
(20)
-
20
40
60
80
100
120
140
-
200
400
600
800
1,000
1,200
1,400
2007/08 2008/09 2009/10 2010/11 2011/12 1H 2012/13
1H Revenue 1H PAT PAT full year
Sigiriya 75%
Dolphin 85%
Avani Bentota 67%
Transportation
Port of Colombo – Transshipment volumes
Metric Tonnes
TEUs
Source – Port Statistics
Import volumes in Sri Lanka declined over LY on account of higher tariffs while exports slowed down due to unfavourable economic conditions in the EU and US markets
However, air export and transhipment volumes grew over LY which positively impacted the earnings growth of the sector
Main shipping lines re-aligned their capacities in and out of CMB which impacted freight rates and liner/feeder schedules
Infrastructure development throughout Sri Lanka created a significant demand for logistics facilities which is a focus area for growth in the sector
Source – Sri Lankan Cargo
YoY Growth
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
Apr May Jun Jul Aug Sep Oct
2011/12 2012/13 Growth
Air cargo volumes
220,000
230,000
240,000
250,000
260,000
270,000
280,000
290,000
Apr May Jun Jul Aug Sep
2011/12 2012/13
Overview of Transportation Industry
Transportation: Performance Highlights
PAT in Rs. Millions
Revenue in Rs. Millions
1H 12/13 1H 11/12 Change
Turnover (Rs. Mn) 465 359 29%
PAT (Rs. Mn) 155 102 52%
-
50
100
150
200
250
300
-
100
200
300
400
500
600
700
800
2007/08 2008/09 2009/10 2010/11 2011/12 1H 2012/13
1H Revenue 1H PAT PAT full year
GSA businesses maintained their leadership in the market with both passenger and cargo segments posting healthy earnings
The outbound travel business continued to strengthen its relationships with key corporate clients and increased its share during 1H
The maritime business benefitted from a higher throughput at the port. New business was generated by servicing casual callers and providing value added services to vessel owners
“MercMas” – JV with Mercantile Shipping to provide crew boat services for the transport of crew, sea marshals and spares in Galle was launched in October 2012
“Hemas Logistics” – strategic investment in a haulage company specializing in repositioning containers for shipping lines, expanded services to include car logistics and over dimensional cargo movement
Power
Overview of Power Industry
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2004 2005 2006 2007 2008 2009 2010 2011
Annual power generation - GWh
Hydro Thermal Other Renewbles
Combined installed capacity of power plants in 2011 was 3,141 MW, a growth of 11.5%
Gross generation for year 2011 was 11,528 GWh, a growth of 7.6%
Average electricity consumption per capita for 2011 was 480 KWh, a growth of 7%
GWh
Source – CEB Statistics 2011
0
10
20
30
40
50
60
70
-
1,000
2,000
3,000
4,000
5,000
6,000
2007/08 2008/09 2009/10 2010/11 2011/12
Power revenue Fuel prices *
Hemas Power revenue vsfurnace oil prices
*Average annual furnace oil priceSource – Ceypetco
Revenue in Rs. Millions
Rs. per liter
Sector revenue was mainly driven by growth of our thermal power plant Heladhanavi due to increase in fuel prices
Our hydro power plants recorded a drop in performance due to low rain fall in catchment areas
Increase in rupee interest rates negatively impacted the bottom line of Heladhanavi
Rupee devaluation negatively impacted the net profit through exchange losses on foreign currency borrowings, most of which is unrealized
Power: Performance Highlights
PAT in Rs. Millions
Revenue in Rs. Millions
1H 12/13 1H 11/12 Change
Turnover (Rs. Mn) 3,140 2,088 50%
PAT (Rs. Mn) 116 165 -30%
(10)
40
90
140
190
240
290
340
390
440
490
-
1,000
2,000
3,000
4,000
5,000
6,000
2007/08 2008/09 2009/10 2010/11 2011/12 1H 2012/13
1H Revenue 1H PAT PAT full year
Sustainability
Community Investment
Hemas’ primary CSR project ‘Piyawara’ celebrated its 10 year partnership with the Ministry of Child Development
At present Hemas has 35 state-of-the-art preschools island wide providing education for over 3,000 children
First ever community preschool in the resettled village of Ambalnagar (10km from Kilinochchi) was opened in July 2012 and the second was opened in Silawathei, Mulativue
Training has been provided for teachers in partnership with the Education Ministry of the Northern Province
Construction is in progress for another community pre-school in Mulativue and a model pre-school for 100 children in the Kilinochchi city
Strategic Focus
Strategic Focus
FMCG
• Greater focus to win in the personal care market
• Investment in identified high growth categories
• Improve sales growth and strengthen Hemas brand acceptance in Bangladesh market
Healthcare
Third hospital at Thalawathugoda
• Completion: May 2013
• Estimated cost: Rs. 1.3Bn
Leisure
Peace Haven project in Tangalle
• Luxury resort with 150 rooms
• Commencement of construction: FY 13/14
• Estimated cost: $30Mn
Strategic Focus contd.
Transportation
• Investments and growth plans for maritime, aviation and logistics businesses
Power
• Focus on renewable energy space; mainly in the small hydro segment in Sri Lanka and East Africa
Telephone: +94 11 4 731 731Email: ir@hemas.com
Web: http://www.hemas.com
Hemas Holdings PLC Hemas House, 75, Braybrooke Place, Colombo 2, Sri Lanka
Hemas Investor Relations:
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