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Hemas Investor Presentation 2012/13

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Hemas records Profit Before Tax of Rs. 2.4Bn - growth of 58%

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Hemas Investor Presentation 2012/13

  1. 1. HEMAS HOLDINGS PLCINVESTOR PRESENTATION 2012/13
  2. 2. ECONOMIC OUTLOOK• Economic growth slowed down to 6.4% in 2012, after recording it’s highest of 8.2% in 2011• Inflation at single digits for the fourth consecutive year (7.6% in 2012)• Interest rates on a reducing trend• Exchange rate stabilizes around Rs.125/USD after heavy depreciation in 2012• Higher levels of FDI in 2011 and 2012
  3. 3. KEY ECONOMIC INDICATORS22.6%3.5%6.2% 6.7% 7.6%0.0%4.0%8.0%12.0%16.0%20.0%24.0%2008 2009 2010 2011 2012Inflation2,014 2,0572,4002,8362,9231,5002,0002,5003,0003,5002008 2009 2010 2011 2012USD Per Capita GDP6.0%3.5%8.0% 8.2%6.4%0.0%2.0%4.0%6.0%8.0%10.0%2008 2009 2010 2011 2012Economic Growth114.03 115.15112.02114.88128.821001051101151201251301352008 2009 2010 2011 2012Exchange Rate19.08%9.32%7.55%9.31%11.69%0%5%10%15%20%25%2008 2009 2010 2011 2012Interest Rates75240447895689802004006008001,0001,2002008 2009 2010 2011 2012USD Mn. Foreign Direct Investments
  4. 4. HEMAS: A DIVERSIFIED CONGLOMERATEFMCGPersonal CarePersonal WashHome CareLeisureHotelsDestinationManagementHealthcarePharmaceuticalDistributionHospitalPowerHydroThermalTransportationAviationMaritimeLogistics
  5. 5. HEMAS GROUP: A SNAPSHOTShare Price (as at 21.06.2013) : Rs. 35.20Market Capitalization : Rs. 18.14Bn% of Total Market : 0.76%PER : 10.93PBV : 1.49No of Shares : 515.29MnPublic Shareholding : 28.33%-5.010.015.020.025.030.0Sept 2011 Dec 2011 Mar 2012 June 2012 Sept 2012 Dec 2012 Mar 2013Sector & Market PER vs Hemas PERDiversified Sector PER Market PER Hemas PER
  6. 6. FINANCIAL PERFORMANCEFigures are in Rs. Mn 2012/13 2011/12 % ChangeGroup Turnover 26,098 21,533 21%PBT 2,406 1,521 58%PAT 1,934 1,261 53%Group Earnings 1,658 1,165 42%Performance Indicator 2012/13 2011/12 % ChangeEPS 3.22 2.27 42%Net Assets per Share 23.59 20.67 14%ROE 14.5% 12.0%ROCE 15.4% 13.4%Figures are in Rs. Mn 2012/13 2011/12 % ChangeCash From Operations 2,143 1,508 42%Total Assets 26,008 22,656 15%Shareholders’ Funds 12,153 10,650 14%Capital Employed 19,339 16,848 15%
  7. 7. GROUP TURNOVER AND EARNINGS-5%0%5%10%15%20%25%05,00010,00015,00020,00025,00030,0002008/09 2009/10 2010/11 2011/12 2012/13Group TurnoverTurnover Turnover Growth-40%-30%-20%-10%0%10%20%30%40%50%02004006008001,0001,2001,4001,6001,8002008/09 2009/10 2010/11 2011/12 2012/13Group EarningsEarnings Earnings GrowthRS. Mn RS. Mn
  8. 8. EPS AND ROE1.511.762.362.273.22-40%-30%-20%-10%0%10%20%30%40%50%0.000.501.001.502.002.503.003.502008/09 2009/10 2010/11 2011/12 2012/13EPS and EPS GrowthEPS EPS Growth11.5%12.3%14.6%12.0%14.5%0.0%4.0%8.0%12.0%16.0%20.0%-2,0004,0006,0008,00010,00012,00014,0002008/09 2009/10 2010/11 2011/12 2012/13Shareholders’ Funds vs ROEShareholders Funds ROERsRs. Mn
  9. 9. A JOURNEY OF 65 YEARS…194819621970’s199320032007Founded HemasDrugs Ltd.Entered theFMCGbusinessDiversifiedinto traveland tourismRestructuredthe Group intosubsidiariesHemas Holdingslisted on theColombo StockExchangeEntered thePower BusinessEntered theHospital businessby acquiringSouthern Hospitalin Galle
  10. 10. TODAY WE ARE…• No. 2 player in the personal care market, with market leadership in babycare• Market leader in pharmaceutical distribution• First internationally accredited hospital chain in Sri Lanka• Only Sri Lankan hotel chain that manages an international brand• Market leader in the Airline GSA business• Contributing ~ 6% to the national power grid
  11. 11. FMCG INDUSTRY OUTLOOKFood,63%HouseholdCare, 13%PersonalCare, 22%OTCProducts,2%Total FMCG Market FY 2012 ~Rs. 130BnSource: NielsenRetail Audit Data for 40 Categoriestracked in GeneralTrade.ExcludingSoft Drinks0.0%5.0%10.0%15.0%20.0%25.0%Personal Care and Personal Wash Market GrowthPersonal Care Personal WashSource: LMRBMarket growth rates for Personal Care andPersonal Wash categoriesValue Contribution
  12. 12. FMCG: PERFORMANCE HIGHLIGHTSKey Statistics 2012/13Turnover (Rs.Mn) : 7,691Profit After Tax (Rs.Mn) : 745Revenue Contribution to the Group : 29%PAT Contribution to the Group : 39%-100200300400500600700800-1,0002,0003,0004,0005,0006,0007,0008,0002008/09 2009/10 2010/11 2011/12 2012/13Revenue and Profit after TaxRevenue PAT• Sector posted a revenue growth of 14.5% and a profit growthof 28.8%• Revenue growth was mainly driven by exceptional performancein Baby Cheramy ,Velvet, Diva detergent, and Clogard• Notable market share growth in Personal Care segment led bybaby care, oral care and hair care categories• Bangladesh operations achieved a significant turnover growthof 142.8% over LY• Sector exited from food & confectionery category with the saleof Mr. Pop and Yummee brands• Winning in the personal care market remains the strategic focusof the sectorRs. MnRs. Mn
  13. 13. HEALTHCARE INDUSTRY OUTLOOK• Sri Lankan Healthcare industry was valued at ~ Rs. 278Bn(USD 2.34Bn) in 2012 (Source: BMI)• Sri Lanka’s total expenditure on health has increased by aCAGR of around 11% in the past 5 years• Private sector continues to play a significant role incatering to the increasing demand• An urgent need for effective private healthcare solutionsresulting from rising income levels and lifestyle changes05001,0001,5002,0002,5001980/81 1990/91 2005 2006/07 2009/10Rs.Household Expenditure onHealthcareHealthcare expenditure (Monthly Avg in Rs.)Sri Lankan community’s demand forhealthcare and related services are movingtowards an increasing trendSource: CBSL Statistics
  14. 14. HEALTHCARE: PERFORMANCE HIGHLIGHTS• Sector revenue and profit grew by 20.0% and 53.8%respectively• Revenue growth was driven by the pharmaceutical business whichposted a revenue growth of 19.4%• Hemas Pharmaceuticals remains the market leader with a marketshare of 17.95% (Source: IMS)• The Pharmaceutical business attracted a new agency, SunPharma Limited, the 3rd largest pharmaceutical company inIndia• Hospital sector generated a revenue of Rs. 1.3Bn posting agrowth of 22.7%• Our 3rd Hospital in Thalawathugoda was opened by thePresident Mahinda Rajapaksa on 18th June 2013-100200300400500600-2,0004,0006,0008,00010,0002008/09 2009/10 2010/11 2011/12 2012/13Revenue and Profit after TaxRevenue PATRs. MnRs. MnKey Statistics 2012/13Turnover (Rs. Mn) : 8,976Profit After Tax (Rs. Mn) : 493Revenue Contribution to the Group : 34%PAT Contribution to the Group : 25%
  15. 15. NEWEST MEMBER IN THE HOSPITAL CHAINHemas Hospital, Thalawathugoda
  16. 16. LEISURE INDUSTRY OUTLOOK• Sri Lanka becoming an increasingly popular tourist destinationwith post war developments• The Lonely Planet listed Sri Lanka as the No.1 country to visit in2013• Over 1Mn tourists arrived to Sri Lanka in 2013, a YoY growthof 17.5%• Inability to convert improved arrivals to guest nights resulted ina drop of average occupancy rates in 2012• Increased accessibility to drive demand, mainly in Far East andSouth
  17. 17. LEISURE: PERFORMANCE HIGHLIGHTS-50100150200250300350400450500-2004006008001,0001,2001,4001,6001,8002008/09 2009/10 2010/11 2011/12 2012/13Revenue and Profit after TaxRevenue PATKey Statistics 2012/13Turnover (Rs.Mn) : 1,643Profit After Tax (Rs.Mn) : 464Revenue Contribution to the Group : 6%PAT Contribution to the Group : 24%Rs. MnRs. Mn• Leisure sector revenue grew by 38.6% while profits recorded animpressive growth of 275.4%• Improved web sales and excellent relations with tour operatorscontributed to the excellent performance of Hotels• Annual average occupancy of Serendib Hotels:- Dolphin - 86%- Avani Bentota - 67%- Sigiriya - 71%• Guest profile at Serendib Leisure Hotels was mainly driven bythe traditional European markets led by Germany• Diethelm Travels, the destination management arm of the Groupenjoyed an exceptional year, posting a profit growth of 156.4%
  18. 18. TRANSPORTATION INDUSTRY OUTLOOK• Transportation industry achieved significant progress with theexpansion of the existing road network and related services• Mattala Rajapaksa International Airport: Phase 1 targets apassenger volume of 1Mn and a cargo throughput of 45,000MTp.a• 2nd terminal of BIA with a capacity to handle 9mn passengersp.a. to be constructed under the expansion project• Upgrading of the ports remain at the forefront of the country’sdevelopment strategy• Infrastructure development throughout Sri Lanka creates asignificant demand for logistics facilities 01,0002,0003,0004,0005,0002008 2009 2010 2011 2012TEUs ‘000Container handling Transshipments040,00080,000120,000160,000200,0002008 2009 2010 2011 2012In Tons Air Freight ThroughputSource: SL Freight Forwarders Associationstatistics 2013Source: CBSL StatisticsVolume of Container handlingand Transshipments
  19. 19. TRANSPORTATION: PERFORMANCE HIGHLIGHTS• Sector experienced a healthy year with its revenue and profitgrowing by 52.5% and 33.6% respectively• Revenue growth was mainly driven by the Logistics segment ledby the strategic investment made in ForwardAir• Overall market share in the travel agency space recorded adouble digit growth ahead of the market growth• Hemas was appointed as the GSA for China Southern Airlines,the largest airline of China• Maritime segment recorded a strong growth aided by thehigher throughput of our feeder agency ‘Far Shipping’-50100150200250300350-2004006008001,0001,2002008/09 2009/10 2010/11 2011/12 2012/13Revenue and Profit after TaxRevenue PATKey Statistics 2012/13Turnover (Rs.Mn) : 1,101Profit After Tax (Rs.Mn) : 328Revenue Contribution to the Group : 4%PAT Contribution to the Group : 17%Rs. MnRs. Mn
  20. 20. POWER INDUSTRY OUTLOOK• Growth in economy to accelerate the demand for power• Electricity generation in 2012 increased moderately by 2.4%to 11,800 GWh• Government of Sri Lanka focuses on increasing installedcapacity via thermal generation to meet the growing demand• Dependency on the IPPs is expected to grow in the short tomedium term• Private sector contribution has continued to rise, with thesector accounting for around 43% of the country’s powerrequirements01,0002,0003,0004,0005,0006,0007,0008,0002010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030Electricity Demand Forecast in MWsHydro42%Coal20%OtherThermal30%RE8%Current Capacity Mix - MW
  21. 21. POWER: PERFORMANCE HIGHLIGHTS• Power sector posted a revenue growth of 23.2% and aprofit growth of 12.8% despite the prolonged droughtwhich affected hydro power generation• Revenue growth was mainly driven by the pass-througheffect of escalating fuel prices of our thermal powerplant, Heladhanavi• High O&M charges and translation losses on foreigncurrency borrowings impacted the bottom line• Average plant factor of the mini hydro power plantsstood at 38% due to poor rainfall in catchment areas• Hemas power acquired a 29.3% stake of Panasian PowerPLC which owns 2 mini hydro plants -50100150200250300350400450-1,0002,0003,0004,0005,0006,0002008/09 2009/10 2010/11 2011/12 2012/13Revenue and Profit after TaxRevenue PATKey Statistics 2012/13Turnover (Rs.Mn) : 5,509Profit After Tax (Rs.Mn) : 286Revenue Contribution to the Group : 21%PAT Contribution to the Group : 15%Rs. MnRs. Mn
  22. 22. EXPANSION IN THE WELLNESS SPACE• Hemas acquired a 72% voting and 37% non-voting stake of J.L. Morison Sons & Jones (Ceylon) PLC• JLM commenced operations in 1939, was listed in 1964 and became a 100% Sri Lankan ownedcompany in 1998• The Group recorded revenues of Rs.3Bn and earnings of Rs.160Mn in 2012/13 and its current marketcapitalization is ~Rs.2.5Bn• The industry verticals of the company could be identified as follows: Own range of consumer products Distribution of imported FMCG products Importing and distribution of pharmaceuticals & diagnostics Manufacturing and distribution of generic pharmaceuticals Distribution of agro chemicals
  23. 23. JLM STRATEGIC FIT• Traded and manufactured consumer brands can benefit from our island wide distributionexpertise• Pharma manufacturing, an interesting new area for us where JLM has a well regardedreputation in the local market• OTC pharma brands create a best fit with our existing pharma business• Traded pharma will further strengthen the group’s core expertise• Asset base: Rs. 2Bn of NAV• Purchase consideration: Rs. 2.5Bn (100%)
  24. 24. 24WellnessPersonal care Pharmaceutical &OTC HospitalsLeisureHotels andTravelDestinationManagementInfrastructurePower TransportationOUR PORTFOLIO
  25. 25. CORPORATE SOCIAL RESPONSIBILITY• Hemas’ primary CSR project ‘Piyawara’ celebrated its 10 year partnership with the Ministry of ChildDevelopment during the year• Three state-of-the-art preschools were opened during the year in the areas of Mulativue andKilinochchi• First ever community preschool in the resettled village of Ambalnagar (10km from Kilinochchi) wasopened in July 2012 and the second was opened in Silawathei, Mulativue• Our 36th “Piyawara” preschool was opened in Theethakarie, Mulativue in February 2013; this is thesecond community pre-school opened in Mulativue
  26. 26. CORPORATE SOCIAL RESPONSIBILITY• The 37th“Piyawara” preschoolwas opened in Kilinochchi inMay 2013; this is first evermodel pre-school opened inKilinochchi• This school can accommodate80 children and will be used asa model training centre by theMinistry of Education of theNorthern Province
  27. 27. THE ‘BIG HEART’ PROJECT• Baby Cheramy, celebrates 50 years of enriching lives of Sri Lankanmothers and children• The Big heart Project was launched together with the Department ofProbation and Childcare Services of the Ministry of Child Development& Women Affairs, in September 2012, to celebrate this milestone• The project will fund the educational needs of children that are atrisk, or in danger of being institutionalized due to the financialdifficulties of their families• A 20-20 cricket match which re-united the 96 world cup championswas played in January 2013 to fund the project
  28. 28. Telephone: +94 11 4 731 731Email: ir@hemas.comWeb: http://www.hemas.comHemas Holdings PLCHemas House, 75, Braybrooke Place, Colombo 2, Sri LankaHemas Investor Relations:

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