Cox and King

7/31/2019 Cox and King

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Cox & Kings Ltd.Investor Presentation

February 2011

360Travel. 100% Focus.


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Disclaimer

This presentation has been prepared by Cox & Kings Limited (the Company) solely for your information and for your useand may not be taken away, reproduced, redistributed or passed on, directly or indirectly, to any other person (whetherwithin or outside your organization or firm) or published in whole or in part, for any purpose. By attending this presentation,you are agreeing to be bound by the foregoing restrictions and to maintain absolute confidentiality regarding theinformation disclosed in these materials.The information contained in this presentation does not constitute or form any part of any offer, invitation orrecommendation to purchase or subscribe for any securities in any jurisdiction, and neither the issue of the information noranything contained herein shall form the basis of, or be relied upon in connection with, any contract or commitment on thepart of any person to proceed with any transaction. The information contained in these materials has not been

independently verified. No representation or warranty, express or implied, is made and no reliance should be placed on theaccuracy, fairness or completeness of the information presented or contained in these materials. Any forward-lookingstatements in this presentation are subject to risks and uncertainties that could cause actual results to differ materiallyfrom those that may be inferred to being expressed in, or implied by, such statements. Such forward-looking statementsare not indicative or guarantees of future performance. Any forward-looking statements, projections and industry datamade by third parties included in this presentation are not adopted by the Company and the Company is not responsiblefor such third party statements and projections. This presentation may not be all inclusive and may not contain all of theinformation that you may consider material. The information presented or contained in these materials is subject to changewithout notice and its accuracy is not guaranteed. Neither the Company nor any of its affiliates, advisers or representativesaccepts liability whatsoever for any loss howsoever arising from any information presented or contained in these materials.THIS PRESENTATION IS NOT AN OFFER OF SECURITIES FOR SALE IN THE UNITED STATES OR ELSEWHERE.


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Cox & Kings: Overview

Company Overview

One of Indias Largest Travel and Tour Companies Global Tours & Travel Operators: Geographical Diversification

Focus on Leisure with Diverse Product Offerings


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Company Overview

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Cox & Kings Ltd., C&K or Cox & Kings, is one of the oldest and well recognized travel and tour operators in the world

In December 2009, C&K successfully listed on the stock exchange in India

C&K has subsidiaries in UK, Australia, New Zealand, Japan, US, UAE, Germany, Hong Kong, Greece and Singapore

C&Ks business can be categorized into 4 service offerings, namely, leisure travel, corporate travel, visa processing and foreignexchange

Business Description

CMP on 31st December 2010

BSE : INR 523.8 NSE : INR 521.8

3- Month High /Low(Nov 2010 Jan 2011)

High INR 589.0Low INR 425.7

Market Cap. on 31st Dec. 2010

INR 3,575.32 crEquity Capital as on 31

st

December 2010

6,82,63,945

1758 201019th Cent.18th Cent. 19701923

Business was sold toLloyds Bank; The Shipping

agency became a separatecompany running toursaround the world

Cox & Kings agency wasbought by Grindlays Bank ina deal with the Indian Govt.to promote tourism in thecountry

Cox & Kings is a globaltour and travel company.The Company is a one stop

shop for travel solutions

Richard Cox servedas a regimentalagent to a unit of theMajestys Armed

Forces

Company establishedby Richard Cox grew toprovide services tomajority of the Britishregiments

Merged with Henry S. King &Co, a bank and shippingagency to form Coxs &

Kings; Henry S. King & Co

had strong links with India

1970-99

Largely operated as aticketing agent; nonleisure businessaccounted for over 50% ofthe revenues in 1999

1999-2006

Expanded productportfolio to become afull service Indiantour operator

2006-09

Acquires and consolidatesbusinesses across the worldwith a focus on leisure travel;90% of revenue is from leisuresegment in FY 07-09


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Shareholding Details

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Shareholding Pattern

Source: BSE

Promoter58.7%

Banks, MutualFunds & FI

6.1%

FII,NRIs andForeign

CorporateBodies27.1%

GDR3.5%

OtherCorporate

Bodies andPublic4.8%

Promoter58.7%

Banks, MutualFunds & FI

6.6%

FII,NRIs andForeign

CorporateBodies22.2%

GDR7.3%

OtherCorporate

Bodies and

Public5.3%

Quarter ended 31st December 2010 Quarter ended 30st September 2010

Shareholders No. of shares

% of

Holding

Promoters 40,040,880 58.7

Smal l Cap World Fund, Inc 3,995,500 5.9

Ci ti b ank N.A. New York , Nyad r D epartm en t 2,355,534 3.5

Carlson Fund - As ian Smal l Cap 1,700,000 2.5

Emergi ng Ma rke ts Growth Fund, Inc. 1,624,647 2.4

Goldman Sachs Investments (Maurit ius) I Ltd 1,428,000 2.1

Reliance Capital Trustee Co. Ltd A/c Reliance 1,302,700 1.2

Stichting Pens ioenfonds ABP -GDR 1,232,530 1.8

De uts che Se curi ti es Ma uri ti us Li mi te d 811,974 1.2

Capital International Emerging Markets Fund 772,764 1.1

Le hma n Brothe rs Opportuni ty Li mi te d 760,648 1.1

TOTAL 56,025,177 82.1

Top Shareholders as on 31st December 2010


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One of Indias Largest Travel And Tour Companies with a Strong Brand Name

9%

91%

% Sales

Retail Travel in India Market Share

Un-organized

Organized Brand has evolved over 250 years

# 1 Among Top Brands in India(1)

Source Euromonitor India June 2010

Leading Player in the Indian Market

Note: 1.Based on survey conducted in 2008 by TNS and co-funded by Media magazine across 10 countires in Asia Pacific region

Awards & Recognitions in 2010

India's Leading Destination Management Company awarded by the World Travel Awards 2010.

CNBC Awaaz Travel Award 2010 for Taking India Global.

Best Outbound Tour Operator awarded by Hospitality India and Explore the World Annual International Awards 2010.

First Runner Up in the Best Large Tour Operator category awarded by the Telegraph Ultra Travel luxury survey UK 2010.

First Runner Up in the Favourite Tour Operator category awarded by Cond Nast Traveller Readers Choice Awards (2010).

"Most admired tour operator 2010" awarded by SATTE (2010)
http://www.google.com/imgres?imgurl=http://www.atac.net.au/images/logos/pngs/tempoholidays.png&imgrefurl=http://www.atac.net.au/partners.html&usg=__k00ZTBp01ZvZ4QU1IaZjMqit1_Q=&h=175&w=175&sz=27&hl=en&start=1&um=1&itbs=1&tbnid=soZSThuHpaZf6M:&tbnh=100&tbnw=100&prev=/images?q=tempo+holidays&um=1&hl=en&sa=N&tbs=isch:1


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Global Tours & Travel Operator: Geographical Diversification

Cox & Kings Japan Ltd.

Outbound travel

Japan

Tempo Holidays Pty Ltd; MyPlanetAustralia Pty Ltd, Bentours

International Australia Pty. Ltd

Outbound travel

Australia and New Zealand

Cox & Kings Tours LLC

Outbound and Inbound travel

UAE

Cox & Kings Ltd, Quoprro Global

Services Pvt. Ltd.

Outbound, Inbound, Domestic,

Corporate travel

Special offerings such as Maharajas

Express, Kumbh Mela etc.

India

Cox & Kings (UK) Ltd. Outbound Travel

Clearmine Ltd. (ETN Services Ltd)Inbound Travel (Destination managementservices)

United Kingdom

Cox & Kings Singapore Pte Ltd.,Quoprro Global Services Pte Ltd.,

Quoprro Global Services Pvt Ltd.

Visa processing

South-East Asia

Note: 1. Cox & Kings Ltd. has a 100% commercial int erest in all its subsidiaries

East India Travel Company Inc

Up-market outbound tour andtravel packages

United States of America

Europe

Cox and Kings Gmbh, Quoprro

Global Hellas

Visa processing
http://www.google.com/imgres?imgurl=http://www.mapsofworld.com/images/world-countries-flags/greece-flag.gif&imgrefurl=http://www.mapsofworld.com/flags/greece-flag.html&usg=__-S7EsO6xTpbPeDwFgJlNUJdGxTc=&h=265&w=390&sz=8&hl=en&start=1&um=1&itbs=1&tbnid=TUdjP87y_AYdjM:&tbnh=84&tbnw=123&prev=/images?q=greece+flag&um=1&hl=en&sa=N&tbs=isch:1http://web.singnet.com.sg/~skkhoo/gif/singapore_flag.gif


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Key Global Subsidiaries

Note: 1. Cox & Kings Ltd. has a 100% commercial interest in all its subsidiaries

Premium long-haul outbound tour operator

Target segments Wealth retirees

Key destinations India, Latin America etc.

Cox & Kings (UK) Ltd., UK

Operational HighlightsSubsidiary

Provides destination management services in Europe

Mid market to premium positioning

Services to group companies as well as other tour operators

ETN Services Ltd., UK

Outbound wholesaler selling white label packages to other tour operators

Caters for business delegations and leisure travel

Provides destination management services for travellers from Japan


Outbound Mass market oriented travel packages

Synergies with ETN Services and C&K Dubai as key tourist destinations are Europe and Middle East

Uniquely positioned as one of the few large independent tour operators

Tempo Holidays Pty Ltd, Australia; Tempo

Holidays NZ Ltd, New Zealand

Inbound Service provider to a large number of tourists from Cox & Kings India

Outbound Initially tapped expat Indian population; subsequently tour operator for local populationCox & Kings Tours LLC, UAE

MyPlanet Australia Pty Ltd, Australia;

Bentours International Pty Ltd., Australia

Specialist outbound travel

Tourists from Australia and New Zealand

Leading outbound tour and travel operator to Scandinavia

Engaged in the business of providing visa processing servicesQuoprro Global Services Pte. Ltd., Singapore;

Quoprro Global Services Pvt. Ltd., Hongkong;

Cox and Kings Gmbh, Germany;

Cox and Kings Hellas, Greece

Premium outbound luxury packages for celebrity clientele

Outbound tours to Africa, Latin America, Asia and Middle EastEast India Travel Company Inc., USA


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Focus on Leisure with Diverse Product Offerings

Offerings

Markets

PortfolioSample

Corporate TravelLeisure Travel Innovative Products

Outbound Travel

Inbound Travel (Destinationmanagement)

Domestic Travel

Meeting, Incentives, Conferencesand Exhibitions (MICE)

Trade Fairs

Outsourced businesssolution provider todiplomatic missions

Licensed retail foreignexchange dealer in India

Customized businesstravel solutions

Retail clients in India, UK,

Australia, New Zealand, Japan,USA and UAE

Visa for India from

Germany, UAE, Hongkong, Greece andSingapore

Visas for Malaysia and

Singapore from Indiaand French Visa fromUK

Fx operations in India

200+ companies located

in India

Offerings thatdifferentiate Cox andKings from competitors

Create brand value forthe company

Strategic partnership

In all operational

markets

Visa Processing &

Foreign Exchange

Kumbh Mela, India


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Value Drivers

Selective Acquisitions Globally

Consolidated Sourcing Operations

Strong National & International Distribution

Technological Prowess

Experienced Board of Directors & Human Resources


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Selective Acquisitions Globally Aligned to Core Business Strategy

FY2008 FY2009 FY2010FY2006

Outbound travel operator catering tothe up-market leisure travel business

Cox & Kings (UK) Ltd.

Destination management services

Clearmine Ltd.-ETN Services Ltd.

Travel wholesaler

Revenues principally from package

consultancy and services for majorwholesalers and societies


Specialised outbound tours

Tempo Holidays PTY, Australia;Tempo Holidays NZ Ltd., New Zealand

Up-market outbound tour and travel

packages

East India Travel Company Inc

Specialized outbound tours

My Planet Australia, BenToursInternational Pty Ltd.

Visa processing services

Quoprro Global Services Pvt Ltd.

Rationale for Acquisitions:

Increase in scale of business through exponential growth in number of customers, markets and products

Synergies with existing operations with a scope for creating value for the combined entity

Risk mitigation through diversification of revenue streams; counters cyclical nature of industry

Strong management and prior success with integrating acquired businesses


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Improving Efficiency Through Consolidated Sourcing Operations

Significant increase in business and business volumesin recent years through acquisitions as well asorganically

Operating Income increased by 48 % (FY08-10)

Acquired 7 businesses in last 4 years

Since 2008, products sourced through globalconsolidated efforts

Growing size of operations provided buyingpower with suppliers

Increased ability to offer competitive packages tocustomers leading to higher revenue and bettermargins

(%)

40%42%

47%

25%

22%

34%

0%

10%

20%

30%

40%

50%

2008 2009 2010

Consolidated Buying Group Improving Margins

EBITDA Margin(1) PAT Margin

Expansion in Business Volumes

Inorganic GrowthOrganic Growth

Bargaining Power

Competitive Advantage

+

Note: EBITDA margin calculated after excluding other income


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Strong National & International Distribution Network

India Distribution Network

RADIUS: Consortium of leading travel

agents present across approximately 80countries

Tempo HolidaysCox & Kings India Portal

Online package design and selection

Cox & Kings UK Portal

Online booking

Global Distribution Network

Online Distribution Network

14 Sales Offices

115 Franchise Sales Shops

143 PAs

Source As of 31st December 2010 Subsidiaries Branch Office Representative Office

Russia

Australia

New Zealand

SingaporeSouth America

South Africa

US

UAE

UK

Japan

Hong Kong

Maldives

Tahiti

Spain

Italy

Germany

India


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Web enabled reservation engine

Centralized dynamic packagingsystem

Covers all travel related servicessuch as reservations, insurance, visaand package tours

Technological Prowess

Technology Platforms

B2B as well as a B2C solution,providing a backbone to the Global

Distribution Systems (GDS) Online payment gateways integrated toexisting technology platform

Fully integrated computer reservationsystems (CRS) with our mid and backoffice operations

Services

Latest data-management software,including ERP

Proprietary software for our VisaProcessing business with technicalsupport from a leading technologycompany globally

Top End Software

Servers are secured with firewalls

Robust security systems includingbiometrics identifiers, fingerprints andphotographs for visa application

Strong disaster management,including recovery solutions andscheduled backups

Security

Improve efficiencies and reduce TATs:Dynamic designing of packages; increasing business handled per employee

Seamless integration of operations of acquired entities

Ability to introduce white label/ co-branded offerings for clients such as MSN and Jet Escapes


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Promoter & Executive Director

Responsible for day-to-day

management at C&K India,marketing & design initiativesat the Group

Prior to her current role, shewas running a graphic designand production house

Promoter & ExecutiveChairman

In 1971 appointed on theBoard of Cox & Kings (UK) andin 1975 was appointedChairman of the Group

Previously acted as aconsultant to the parentcompany of British CaledonianAirways

Associated with C&K forseveral decades, he has beena constant guiding force to theCompany

Promoter & Executive Director

Joined Cox & Kings Travel Ltd.

in 1986 as a General Manager On the board of C&K since

1993

Responsible for overallleadership, strategy, globalcentralized buying andinternational growth

Founder member & director ofWorld Tourism Council for theIndian Subcontinent

Experienced Board of Directors & Human Resources

A.B.M Good Peter Kerkar Urrshila Kerkar

Management team includes experienced managers in the travel and leisure industry

Witnessed low attrition of key management personnel

As of December 31, 2010, total of 1,517 employees across the Asia Pacific region, Europe, the Middle East and North

America

S C Bhargava, Independent DirectorRetired from Life Insurance Corporation of India

as Executive Director (Investment)

M Narayanan, Independent DirectorEx-CMD of Tourism Finance Corporation of India Ltd;

Held senior management positions in IFCI and Bank of Baroda

Pesi Patel, Independent DirectorThree decades of experience in the industry; Key memberin determining future strategies for the Cox & Kings Group


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Business Strategy


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Business Strategy

Grow the

outbound leisureservices sub-segment in India

Expand

distributionnetwork globally

Leverage existingglobal platform toenhance product

and serviceofferings

Inorganic growthby selectivelyacquiring

businesses

Strategicinitiatives for our

product and

service offerings


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Financials


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Consolidated Audited Financials

Note: 1. EBITDA & PAT margin calculated after excluding other income2. INR/ USD exchange rate of INR 45.14/ USD as on 31 March 2010

EBITDA & PAT Margin(1)

(%)

40% 42%

47%

25%22%

34%

0%

10%

20%

30%

40%

50%

FY08 FY09 FY10

EBITDA Margin PAT Margin

Operating Income PAT

(INR MM)

1,821

2,869

3,992

0

1,000

2,000

3,000

4,000

5,000

FY08 FY09 FY10

(INR MM)

446634

1,348

0

300

600

900

1,200

1,500

FY08 FY09 FY10

US$ MM(2)40.3 63.6 88.4 9.9 14.0 29.9

Key Components of Operating Expenditure

as a Percentage of Operating Income

(%)28% 28%

25%

12% 12% 9%

0%

5%

10%15%

20%

25%

30%

FY08 FY09 FY10

Personnel Expenditure Advertising


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Consolidated Financials Q3FY11

Q3FY11 Operating Income for the Group stood at INR 1,083.1 Mn i.e. an increase of 37% over the same period last year

Cox & Kings Ltd. Consolidated Q3 2011 & Q3 YTD FY 2011 Results (INR Mn)

EBITDA increased to INR 385.6 Mn i.e. an increase of 27% over EBITDA for Q3 FY10

Particulars Q3 FY 11 Q3 FY 10Q-o-Q

Change

Q3 YTD FY

11

Q3 YTD FY

10% Change

Year Ended

FY 2010

Income from Operations 1,083.1 788.9 37% 3,386.9 2,622.4 29% 3,991.5

Employee Cost 353.2 248.7 962.3 705.6 994.1

Advertisement Cost 103.4 58.8 325.4 275.6 357.0

Depreciation 48.0 35.7 133.9 100.4 150.7

Other Expenditure 240.9 178.5 612.6 496.6 776.1

Total Expenditure745.5 521.7 43% 2,034.2 1,578.1 29% 2,277.9

Profit from operations before Other Income, Interest &

Exceptional Items 337.6 267.2 26% 1,352.6 1,044.2 30% 1,713.6

Other Income 81.6 22.7 172.7 70.2 137.3

Profit before Interest & Exceptional Items 419.2 289.8 45% 1,525.3 1,114.4 37% 1,851.0

Interest & Fi nance Charges (Net) 166.6 47.4 422.6 182.3 269.7

Profit before Exceptional Items 252.6 242.5 4% 1,102.7 932.1 18% 1,581.2

Exceptional Items Gain / (Loss) 86.9 33.6 102.1 257.6 283.8

Profit from Ordinary Activities before tax 339.5 276.1 23% 1,204.9 1,189.7 1% 1,865.1

Tax Expense 106.1 80.8 362.2 293.8 516.9

Net Profit from Ordinary Activities after tax 233.4 195.3 842.7 895.9 1,348.1

Share in the Profit/(Loss) of Assoicates (3.1) (2.5) (8.8) (7.3) (9.6)

Extra-ordinary items

Net profit for the period 230.2 192.8 19% 834.0 888.6 -6% 1,338.5

Note: There is a foreign exchange gain of Rs. 25.76 crores on account of foreign currency loan revaluation Q3 YTD - FY 2010 as

against Rs. 10.22 crores in Q3 YTD FY 2011. Hence, the PAT is marginally lower for the 9 months ended 2011 as compared to

corresponding period in the previous year.


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Net Debt & Cost

2222

Rs. 862 croresDebt

FY 11 Q3Particluars

Rs. 1052 croresCash & Cash Equivalents

(Rs. 190 crores)Net Debts

7.7%Average Finance Cost

4.7%Average Finance Cost (Net of

Return of Liquid Investments)


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Acquistions

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The Company is already engaged in discussion with identified acquisition targets.

Liquidity available to the company will be majorly used for these identifiedacquisitions.

There are certain jurisdictions where a serious discussion with the acquisition

target cannot be made unless the company has available funds. In such ascenario, the interest carry therefore becomes a necessary element of theacquisition. The company has continued with its cautionary approach ofjudiciously working on the acquisition.

The company is in a position to act in a very short time and conclude theacquisition the moment the opportunity is appropriate. We expect to conclude on

the transaction within the quarter ending June 2011.


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Strong Industry Fundamentals


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T & T Industry

Source WTTCs The Economic Impact of Travel & Tourism

Country rankings for Travel and Tourism Direct Industry GDP in 2020

Rank Country ($ in billions)

1 United States 916.5

2 China 500.7

3 Japan 215.8

4 United Kingdom 148.2

5 France 143

6 Spain 123.7

7 Italy 121.8

8 India 110.6

9 Germany 103.7

10 Australia 79.7

Forecast 10 Year Trend

Contribution of Travel & Tourism Industry 2010 2020

Economy GDP (USD in bn) 118 330

Economy GDP (INR in bn) 5,533 18,544

Growth rate 8.6% 9.0%

Real GDP growth rate 6.7% 8.5%

The Indian T & T industry expected to grow at an annual rate of7.8% over the next 10 years

India has been ranked 8th with 110.6 billion $ Direct Industry GDPin 2020.

India will rank 3rd in terms of annual growth in Travel & TourismDemand between 2010 and 2019, averaging 8.2% per annum

Travel & Tourism Demand (2009-2019)10- Year real growth (Annualized %)

6.9%

7.0%

7.1%

7.1%

7.1%

7.2%

8.2%

8.2%

9.2%

20.1%

0% 5% 10% 15% 20% 25%

Zimbabwe

Montenegro

Namibia

Cape Verde

Libya

Vietnam

Malawi

India

China

Sao Tome and Principe

China & India are amongst the Top 10 countries for T & T


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Indian T & T industry Domestic

Source Ministry of Tourism,

18% growth in the number of trips in 2010 from 550 mns Indians to 650 mns.

65% relates to leisure travel

25% growth in Domestic Air Travel

I di T & T i d I b d


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Indian T & T industry Inbound

Source Ministry of Tourism

Arrivals in India grew by 9.3% from 5.11 mns in 2009 to 5.58 mns in 2010

Visa on Arrival Scheme in India extended to 10 countries in 2010 from 5countries in 2009 namely :

Mayanmar & Indonesia

Japan

Singapore

Finland

Luxembourg

New Zealand

Cambodia

Loas

Vietnam

Philippines

I di T & T i d t O tb d


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Indian T & T industry Outbound

Source Euromonitor India June 2010,

Indians travelling abroad increased to 12.61 mns from 11.56 mns in 2009

Indians travelling to Hong Kong increased by 47% in 2010

Indians travelling to Switzerland increased by 25% in 2010

Indians travelling to South Korea increased by 25% in 2010

Indians travelling to Malysia increased by 25% in 2010

Indians travelling to Finland increased by 17% in 2010

St R & G th F t


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Strong Recovery & Growth Forecasts

Source UNWTO World Tourism Borometer, June 2010; UNWTO Presentation January 2010,

% 7%

2%

(2)%

(7)%

(10)%(12)

(8)

(4)

0

4

8

JanMar-09 AprJun-09 JulSep-09 OctDec-09 JanApr-10

YoY Growth in International Arrivals: World

%

Jan-10Apr-10 2010E

7.0

0.3

12.0

6.0

7.0

4.03.0

7.0

4.0

7.09.0

33.0

0

5

10

15

35

World Europe Asia and Pacific Americas Africa Middle East

YoY Growth in International Arrivals: By Region

Clear signs of recovery:T&T Economy GDP is expected to grow at acompounded rate of 4.4% between 2010-2020 (Source: WTTC)

Revival:Momentum in tourist demand on the growth in the worldeconomy

Broad based revival:Growth across all geographies

T&T: Travel and Tourism


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For further details, please contact:

Cox & Kings Ltd, Turner Morrison Building, 16 Bank Street, Fort, Mumbai - 400 001

Website: www.coxandkings.com

Email: [email protected]

Thank You

Documents

Cox and King