Hemas investor presentation june 2011
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Hemas investor presentation june 2011 Hemas investor presentation june 2011 Presentation Transcript

  • www.hemas.com
  • Contents• Country Overview : Key Statistics• Hemas Group: A Snap Shot• Our Businesses • FMCG • Healthcare • Transportation • Leisure • Power• CSR – Hemas Outreach Foundation 2
  • Sri Lanka: Key Statistics Nominal GDP USD 51Bn (2010) GDP per Capita USD 2,399 (2010) Real GDP Growth 8.0% (2010) Inflation 9.8% (April 11, CCPI Y-Y change) Interest Rate 7.3 % (12-month T-bill) Exchange Rate LKR 110/USD 3Source: CBSL, Country Report - Sri Lanka, Economist Intelligence Unit, Global Finance, Asian Tribune
  • Post War: A new era of opportunity • Political stability post elections • Economy expected to expand ~ 6.6% a year over the next 5 years • Improved investor confidence: stock market performance in 2010 ~104% (2009 ~ 125% ) • Tourism potential: 46% growth in arrivals for 2010 4Source: CBSL, Country Report - Sri Lanka, Economist Intelligence Unit, Global Finance, Asian Tribune
  • HEMAS GROUP 5
  • Hemas : Key Statistics Share Price Rs 47.50 Market Capitalization Rs 24.3Bn % of Total Market 0.94% PER 20.1 times PBV 2.7 times No of Shares 512Mn Public Shareholding 28.05%Rs Mn. 10/11 09/10 ChangeGroup Turnover 18,067 14,997 20.5%Group Earnings 1,210 902 34.2%Shareholders’ Funds 8,874 7,692 15.4%Capital Employed 14,666 12,367 18.5% 6
  • The Hemas Group Hemas Holdings PLC Hemas PowerFMCG Healthcare Leisure Transportation Other PLC (75%) Serendib Heladhanavi IT Network Pharma Hotels PLC GSAs (47%) Solutions (51%) Hospitals Diethelm Travels Hydro Power Property (70%) Travels (80%) Maritime BPO Freight & Logistics (49%) 7
  • Our Portfolio - FY10/11 Earnings Turnover 0% 4% 3% 16%19% 32% 38% 23%6% Capital Employed 4% 36% 19% 9% 18% 5% 30% 27% 10% FMCG HEALTHCARE LEISURE POWER TRANSPORTATION OTHER 8
  • Group Revenue: 5-Year CAGR ~ 13.1%Rs. Mn.20,000 25% 20% 20%18,000 20% 20%16,00014,000 15%12,00010,000 10% 7% 8,000 5% 6,000 4,000 0% 2,000 -1% - -5% 2007 2008 2009 2010 2011 Top line Growth 9
  • Growth in EPS Expected to ReboundRs.2.50 34% 40% 30%2.00 17% 20% 12%1.50 10% 4% 0%1.00 -10% -20%0.50 -32% -30% - -40% 2007 2008 2009 2010 2011 EPS Growth Comparative figures adjusted for sub division of ordinary shares in the proportion of 5:1 10
  • ROE: Showing signs of improvementRs. Mn.10,000 25% 9,000 21.0% 19.4% 8,000 20% 7,000 6,000 14.6% 15% 11.5% 5,000 12.3% 4,000 10% 3,000 2,000 5% 1,000 - 0% 2007 2008 2009 2010 2011 Shareholders funds ROE 11
  • Cash flows Vs EarningsRs. Mn.2,5002,0001,5001,000 500 - 2007 2008 2009 2010 2011 Operating Cashflow Earnings 12
  • Governance• Board of Directors: – Four independent non- executive directors (including Chairman), one non-executive director, three executive directors• Board sub committees: – Audit committee – Two independent non- executive directors – Remuneration committee - Two independent non- executive directors• Focus on Risk Management 13
  • FMCG: Overview FMCG Market ~ 141Bn• Hemas, No.2 in Personal Care 11% category Food & Beverages 15%• Portfolio includes 18 popular brands Personal Care Homecare• Market Leader in baby care, hair oil 74% and men’s grooming categories• Modern state-of-the-art production Hemas factory with R&D facilities 19%• Island wide distribution reach Personal Care ~ 80,000 outlets Food & Home Care 22% 59% Personal Wash 14
  • FMCG: Key Brands Baby Cheramy • Market leader in the baby care category DivaClogard • A leading washing powder in the market• Clear USP - Clove oil Kumarika • Market leader in the hair oil Velvet market • Toilet soap, re-launched in • 4thlargest revenue generator in December 09 the sector 15
  • FMCG: 10-11 update Turnover Key Statistics 2010/11 2009/10 Growth 32% Turnover (Rs. Mn) 5799 5247 11% Profit After Tax (Rs. Mn) 519 636 (18%) Sector Group• Baby care, Fragrances, Homecare and Personal wash contributed positively to growth in turnover• New taxes levied on imports and increasing raw material prices impacted profitability, year-on-year• Diva commenced local manufacturing at Dankotuwa• Re-launch of Fems, our sanitary napkin brand and the launch of new variants of Kumarika, our hair oil brand 16
  • FMCG: Accolades for our manufacturing facility• Gold award for the Extra Large Category at the CNCI ‘Achievers of Industrial Excellence’ Awards 2010 • GOLD Award at the ‘National Productivity Award 2009/10’ presented by the National Productivity Secretariat 17
  • FMCG: Strategic Focus• Consolidation of Personal care brands• Strengthen Household and Feminine Hygiene categories• Expand with selected categories in Bangladesh market• Explore opportunities to expand the Foods portfolio 18
  • Healthcare: Overview of the Pharmaceutical business Total Market• Core business: distribution of pharmaceutical products• Market leader with a share of 30% 16.4% (source: IMS)• Represents 25 multinational 60% pharmaceutical companies Market Total 10%• Widest and strongest distribution network 30% Private/Retail segment - pharmacies• Overall pharmaceutical market Institutional segment - Private hospitals & Osu Sala grew by ~ 20% , in 2010, driven by growth in volume (Source: IMS ) 60% Tender segment - govt. hospitals & SPC 10% 19
  • Healthcare: Overview of HospitalsInpatient split between Out Patient split between Govt. and Private Govt. and Private Hospitals • 100-bed hospital in Wattala and a 50-bed Hospitals hospital in Galle 13% 40% • Operations of Wattala commenced in 87% 60% December 2008 and Galle in March 2009 • Dedicated to provide patient centric Private Public Private Public medical care at affordable prices Western Province • Certification pending for ACHSI Private Sector Revenue Split accreditation 6% 22% 23% • ISO 15189 awarded for laboratory services 1% 24% • Tie-ups with institutions providing tertiary 12% education in nursing 12% Durdans Nawaloka Asiri Medical Asiri Surgical Asiri Central Lanka Hospitals • 3rd hospital at Battaramulla, to commence Hemas construction 20
  • Healthcare: Our Hospitals at Wattala & Galle Wattala • 100-bed state-of-the-art hospital with 10-bed ICU & NICU • Approximately 130 consultants practice on a visiting basis • Modern facilities including 20 consultation chambers and 5 operating theaters • Fixed priced health packages to ensure affordability & predictabilityGalle• 50-bed hospital with ICU• Focus on providing health services to the fast growing suburban community 21
  • Healthcare: 10-11 update Turnover Key Statistics 2010/11 2009/10 Growth 36% Turnover (Rs. Mn) 6514 5049 29% Profit After Tax (Rs. Mn) 232 68 239% Sector Group• Hospital sector showed a Turnover growth of 45% for the year• Wattala Hospital achieved cash break-even position in May 2010, 18 months after commencement• Growing consumer confidence in our Hospitals reflected by a 38% increase in surgeries• Pharmaceutical business continued to maintain its position as market leader, recording a turnover growth of 24% 22
  • Healthcare: Hospital laboratory expands to open in Ragama • The new lab is equipped with automated biochemistry and hematology analyzers, providing speedy and accurate laboratory test reports round the clock • Lab records 110 blood tests per day • The lab also provides ECG service, Channeling & information services and CT & MRI referral services for Hemas Hospital Wattala 23
  • Healthcare: Hospital Expansion Plan• Two 50 bed hospitals in Battaramulla and Ratmalana Battaramulla• Approximate date for commencement of construction - May 2011 (1st Hospital in Battaramulla) Colombo• Period of construction estimated at 12 South months• Commercial operations expected to start within 3 months following completion• Estimated project cost per new hospital – Rs 950 Mn 24
  • Healthcare: Strategic Focus• Expansion plans for OTC business• Looking to attract new agencies and consolidate market position in the Pharmaceutical market• Stabilize operations in existing hospitals and expand into identified key locations & sites 25
  • Transportation: Overview • Sector operates in the Aviation, Maritime and integrated logistics space • Market leader in aviation, representing two of the largest airlines, Emirates (EK) and Malaysia Airlines (MAS) • Maritime arm represents a Singaporean feeder agency, Far Shipping • Entered the asset ownership business space by acquiring a 17% stake in MSL • Sector entered into an agreement with NCGB India and Lanka IOC to provide Maritime Support Services • Retains interest in Courier and the Freight Forwarding industry 26
  • Transportation: 10-11 Update Turnover 4% Key Statistics 2010/11 2009/10 Growth Turnover (Rs. Mn) 734 664 11% Profit After Tax (Rs. Mn) 224 181 24% Sector Group• Growth in passenger sales drives sector performance during the year• GSA passenger and cargo sales have shown a growth of 38% and 21% respectively, year-on-year• Hemas was appointed as the GSA in Sri Lanka for Ukraine International Airlines during the year• Positive sentiment surrounding maritime industry contributes growth in Far Shipping sales• Far shipping operations expands to Chittagong , Bangladesh 27
  • Transportation: Strategic Focus• Consolidate the market leadership position in the Aviation business• Look out for opportunities in the local aviation industry• Opportunities to expand the Maritime and Ports related business 28
  • Leisure: Overview • Hemas owns 51% stake in Serendib Hotels, a public listed hotels group • Serendib Group consists 3 hotels located in Bentota, Negombo, Sigiriya, and manages and owns 19.9% of a fourth hotel in Kalutara with a room strength of 105 • Hemas owns 2 undeveloped properties in Kandy and Tangalle • Strategic alliance with Minor International, Thailand • Diethelm Travels, a strategic partnership with Diethelm Group, recently started operations in Maldives Kuchchaveli* Hotel Sigiriya, Sigiriya Hotel Mowbray, Dolphin, Kandy Waikkal Peace Haven, Serendib Tangalle Hotel, Bentota 29Source: SLTDA *To be acquired
  • Leisure: Market Statistics of Serendib Hotels Voting Non VotingShare Price Rs 30.80 Rs 18.70Market Capitalization Rs 1.9Bn Rs 0.5Bn% of Total Market 0.07% 0.02%PER 16.0times 4.6timesPBV 1.5times 0.5timesNo of Shares 60.4Mn 28.8MnPublic Shareholding 29.66% 26.64% 30
  • Leisure: 10-11 Update Turnover 6% Key Statistics 2010/11 2009/10 Growth Turnover (Rs. Mn) 1035 752 38% Profit After Tax (Rs. Mn) 122 33 263% Sector Group• Our hotels continued to benefit from the positive outlook of the country• Hotels recorded an average occupancy in excess 80%, for the year under review• Dolphin Hotel was refurbished at a cost of Rs. 530Mn and reopened in October 2010• Kani Lanka Resort and Spa was acquired by Hemas through Serendib Hotels PLC 31
  • Leisure: Dolphin Hotel upgraded to 4 star• Reopened in October 2010• Refurbishment cost - Rs. 530Mn 32
  • Leisure : Twin Experience of PLAY & PAUSE at Dolphin . . . 33
  • Leisure: Acquisition of Kani Lanka • A 150 key luxury hotel is being developed adjacent to the current hotel and will be the first – ever ‘Anantara‘ branded resort in Sri Lanka• Hemas acquired a 19.9% stake in Kani Lanka Resort and Spa, through its subsidiary Serendib Hotels PLC• Minor International PLC, our strategic partner, acquired the remaining 80.1%• The hotel is being managed by Serendib Leisure Management Limited 34
  • Leisure: Strategic Focus• Refurbishment and repositioning of Hotel Serendib - construction to begin in May 2011• Development of existing land banks, Peace Haven and Mowbray• Strategic investments with Minor to develop the Anantara brand 35
  • Power: Overview • 100MW thermal power plant: a joint venture with a 10 year PPA expiring in 2014 • Hydro power plants with operational capacities of 2.0MW and 2.6MW • 2.4MW hydro power plant under construction • Hemas Power was listed in Sep 09, andEnergy Demand Vs Generation Requirement raised Rs. 626Mn for new investments in Sri Lanka • Electricity demand to grow at a CAGR of 8.6% over the long-term in Sri Lanka • Long-Term Generation Plan of CEB estimates electricity demand to increase by 5,430MW by 2022 36
  • Power: Key Statistics Share Price Rs 35.80 Market Capitalization Rs 4.5Bn % of Total Market 0.17 % PER 10.9 times PBV 1.3 times No of Shares 125Mn Public Shareholding 24.93% 10/11 09/10 GrowthGroup Turnover Rs 3.4Bn Rs 2.9Bn 19%Group Earnings Rs 426Mn Rs 244Mn 75%Shareholders’ Funds Rs 2.9Bn Rs 2.5Bn 17%Capital Employed Rs 4.4Bn Rs 3.7Bn 17% 37
  • Power: 10-11 Update Turnover Key Statistics 2010/11 2009/10 Growth 19% Turnover (Rs. Mn) 3,412 2,867 19% Profit After Tax (Rs. Mn) 426 244 75% Sector Group• Heladhanavi continues to be the largest contributor to group profits• Hydro power contribution to sector profits grow to 45% in comparison to 25% in 09/10• Sector finance costs show significant reduction due to refinancing of working capital at Heladhanavi• Hemas contributed ~ 7% to the national grid this year• Magal Ganga set to complete in September 2011 38
  • Power: Strategic Focus• Development of on-going mini-hydro projects• Looking to enter non-conventional renewable energy space – Bio mass & wind energy• Explore overseas investments opportunities 39
  • CSR: Hemas Outreach Foundation 40
  • CSR: Our Objectives1. Focus on Early Childhood Care and Development (ECCD) of young children through pre- schools2. Training of pre-school teachers3. Empower community led social development through island wide parental awareness programs4. Improve children’s recreational facilities in disadvantaged communities5. Improve child protection legislation and provide publicity for children’s issues6. Sustaining the Menik Farm temporary preschools and play areas 41
  • CSR: Our activities this year . . .• 33 Piyawara model pre-schools are being monitored and sustained by Hemas Outreach Foundation• Opened first ever model pre-school in the Northern Region in Jaffna in January 2011• Set up pre-schools and play areas in post war relief villages in Vavuniya• Set up a special school for children with Down’s Syndrome in Hambantota area - 42 children are being rehabilitated• Conducted residential training programs for pre-school teachers• Weekly TV programme on Nugasevana to educate young mothers on early childhood development 42
  • In conclusion . . .• All sectors in the Group are well placed to benefit from expected economic growth• Growth of the middle class segment to drive growth in FMCG and Healthcare industries• Major investments in the medium term to be in Hospitals, Hotels and Power• Exploring opportunities to enter new categories in the FMCG market 43
  • Investor Relations Contact: Malinga Arsakularatne Chief Financial Officer +94 11 4731728 / +94 77 2233642 malinga@hemas.comCONFIDENTIALITY AGREEMENT:Any confidentiality information disclosed in this presentation shall be used by thereceiving party exclusively for the purposes of fulfilling the receiving party’sobligation and for no other purpose except with the consent of the disclosing party. 44