MINT 2Q10 Investor and Analyst...
Transcript of MINT 2Q10 Investor and Analyst...
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Minor International
2Q10 Investor/ Analyst Presentation
The Stock Exchange of Thailand
19 August 2010
MINT’s long-term risk mitigation strategy
FinancialDisciplineFinancialDiscipline
New Initiatives
New Initiatives
High Return Assets
High Return Assets
DiversificationDiversification
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Forward Looking StatementStatements included or incorporated in these materials that use the words "believe", "anticipate", "estimate", "target", or"hope", or that otherwise relate to objectives, strategies, plans, intentions, beliefs or expectations or that have beenconstructed as statements as to future performance or events, are "forward-looking statements" within the meaning are notguarantees of future performance and involve risks and uncertainties that could cause actual results to differ materially fromguarantees of future performance and involve risks and uncertainties that could cause actual results to differ materially fromhistorical results or those anticipated at the time the forward-looking statements are made. Mint undertakes no obligation topublicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.Mint makes no representation whatsoever about the opinion or statements of any analyst or other third party. Mint does notmonitor or control the content of third party opinions or statements and does not endorse or accept any responsibility for thecontent or the use of any such opinion or statement.
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Today’s Agenda
� Recent Developments, 1H10 & 2Q10 Financial Performance
� MINT’s Strategies to Remain a Growth Company
� 2010 - 2011 Outlook
� Pipeline Expansion & Capex
� Q&A� Q&A
Appendix
� MINT’s hotel & restaurant portfolio
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Recent Developments, 1H10 & 2Q10 Financial Performance
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Recent Developments in 2Q10Restaurant:
� Food outlets reached 1,123; 686 are owned, while 437 are franchised
� First SW franchised outlets opened in Bangalore in India
Hotel & Residence
� Elewana Afrika, MINT’s 50% owned safari resort operator, acquired Kilindi Resort in Zanzibar. Kilindi is a 15 pavilion
beach resort with average ADR of US$1,000 , and re-opened for operation on 25 May after completing a program of
enhancements
� MINT recently announced the 80% acquisition of the Sri Lanka company Cyprea Lanka Ltd. in August 2010,
comprising of the Kani Lanka Resort & Spa on 8.25 acres and an adjacent plot of 10.25-acre land primed for
Anantara development in the future
Retail Trading:Retail Trading:
� Points of sales totaled 272 including 199 fashion outlets, 56 cosmetic outlets and 17 of others
� After the CTW burning incident, GAP opened a temporary 150 Sqm shop at Emporium until Sep 19 to alleviate the
impact of the CTW store closure and opened a second mega store at Siam Paragon on June 24. Plans are on track
to open a Gap store at Paradise Park on August 20, 2010 and reopening the Gap store at CTW in September 2010
Finance:
� Successfully launched a 5-year Bt 2.5 bn debenture with coupon rate of 3.98% in May
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Solid Revenue Growth in 1H10
Breakdown Revenue Growth Revenue Contribution
2,000
4,000
6,000
8,000
10,000
(Bt m)
143 68 -141,153
8,032 9,382
Increased17% y-y
0
2,000
1H09
Food
Hot
el&
Spa
Plaz
a& E
nter
tain
Ret
ail T
radi
ng
1H10
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2Q10 Financial Performance Snap Shot� Revenue was up 9% mainly from consolidation of Minor Corporation following the Jun-09 business
restructuring
� Net Profit was down 65% due to loss from Hotel & Spa business, MINT’s highest-margin business, � Net Profit was down 65% due to loss from Hotel & Spa business, MINT’s highest-margin business, which suffered from the political instability that caused tourist confidence to fall
(Bt Million) 2Q10 2Q09 %Change
Total Revenue 4,055 3,718 9%
EBITDA 617 788 -22%
21%
15%
20%
25%
EBITDA Net Profit
Profitability Margin
EBITDA 617 788 -22%
Net Profit 80 230 -65%
EPS (Bt) 0.0244 0.0718 -66%
15%
2%6%
0%
5%
10%
15%
2Q10 2Q09
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Retail Trading Compensating for the Shortfall from Hotel Business in 2Q10
Breakdown Revenue Growth Revenue Contribution
1,000
2,000
3,000
4,000
5,000
(Bt m)
27 -136-12
458
3,718 4,055Increased9% y-y
0
2Q09
Food
Hote
l& S
pa
Plaz
a& E
nter
tain
Reta
il Tra
ding
2Q10
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Remain Profitable from Restaurant and Mixed-Use Businesses
EBITDA (Bt m) 2Q10 2Q09 % chg
Restaurant 387 393 -2%
EBITDA Contribution
Restaurant 387 393 -2%
Hotel & Spa 123 266 -54%
Plaza & Entertainment 84 103 -18%
Retail Trading 23 26 -12%
EBITDA 617 788 -22%
NPAT (Bt m) 2Q10 2Q09 % chg
Restaurant 119 121 -2%Restaurant 119 121 -2%
Hotel & Spa -93 25 -472%
Plaza & Entertainment 53 67 -21%
Retail Trading 1 17 -94%
Net Profit 80 230 -65%
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2Q10 Consolidated Financial Performance
(Bt Million) 2Q09 % 2Q10 %%y-y
Change
Restaurant 2,424 65% 2,439 60% 1%
Hotel & Spa 1,025 28% 891 22% -13%
Mixed-Use 6 0% 5 0% -7%
Plaza & Entertainment 143 4% 131 3% -9%
Retail Trading 116 3% 574 14% 396%
Share of Profit - Restaurant 20 1% 32 1% 58%
Share of Profit - Hotel & Spa (16) 0% (16) 0% 2%
Total Revenue 3,718 100% 4,055 100% 9%
Operating Expenses 1,213 33% 1,479 36% 22%
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SG&A Expenses 1,717 46% 1,960 48% 14%
EBITDA 788 21% 617 15% -22%
DA 387 10% 388 10% 0%
EBIT 400 11% 229 6% -43%
Net Profit 230 6% 80 2% -65%
EPS (BT) 0.0718 0.0244 -66%
Weighted Number of Shares(m) 3,207 3,277 2%
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Restaurant Business
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Restaurant Business Sentiment Update
20%
Consumer confidence and dining
SSS turned positive by the growth in
domestic consumption and continued
5%
10%
15%
Consumer confidence and dining
behaviors hit by economic recession
& domestic political chaos
improvement from overseas business
%
5%
1Q09 2Q09 3Q09 4Q09 1Q10 2Q10
TSS
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Restaurant Business in 2Q10
BrandSSS (%) TSS (%)
2Q10 2Q09 2Q10 2Q09
The Pizza Company 2.6 -6.3 3.8 6.0
Swensen’s 3.4 -3.4 3.1 7.3
Sizzler 3.3 -0.8 14.1 11.4
Dairy Queen 5.6 0.4 10.3 4.3
Burger King 0.6 -14.3 2.0 10.6
The Coffee Club 1.4 1.9 14.0 17.8The Coffee Club 1.4 1.9 14.0 17.8
Thai Express -6.8 -15.7 -4.0 51.4
Average 1.3 -3.3 7.0 13.1
Average Thailand 2.8 -4.0 5.0 6.9
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Restaurant - 2Q10 Performance Snap ShotSame-Store-Sales Growth
Showed a continuous continuous
improvement
Effect from Political unrest
Total-System-Sales Growth
Closure of some outlets
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Strong July Sales Growth Driven by Domestic Consumption and Turnaround the Overseas Performance � Thai Express reported the first positive same-store-sales growth due to the effort to revive non-
performing stores and launch marketing campaign
SSS-2009 SSS-2010TSS-2009 TSS-2010
-10
-5
0
5
10
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
SSS-2009 SSS-2010
0
5
10
15
20
25
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
10 257M10 = 1.9%
7M10 = 4.0%7M09 = -2.3%
7M10 = 7.3%7M09 = 7.8%
7M10 = 8.6%
-10
-5
0
5
10
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
0
5
10
15
20
25
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
7M10 = 1.9%7M09 = -2.1%
7M10 = 8.6%7M09 = 14.0%
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Hotel & Residence Businesses
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Hotel Business Sentiment Update
Tourist arrivals hit record highProfitability grew 50% y-y in 1Q10
Impact from Pattaya riotRemain profitable at 44% OCR
and Bt 5,280 ADR Demonstration led to a
temporary closure of FS Bangkok
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Hotel Business in 2Q10Hotel
Occupancy Rate (%) ADR (Bt/night) RevPar (Bt/night)
2Q10 2Q09 2Q10 %Chg 2Q10 %ChgFour Seasons -BKK 11% 39% 5,524 -1% 581 -73%
Four Seasons -Ex-BKK 25% 28% 17,825 1% 4,542 -7%
Anantara 41% 38% 6,091 -10% 2,484 -3%
Marriott 53% 53% 3,155 -9% 1,680 -8%
Others 27% 29% 7,289 -5% 1,934 -14%
Average 41% 44% 5,002 -5% 2,038 -11%
Avg. Thailand 41% 44% 3,895 -12% 1,612 -16%
HotelOccupancy Rate (%) ADR (Bt/night) RevPar (Bt/night)
6M10 6M09 6M10 %Chg 6M10 %ChgFour Seasons -BKK 44% 37% 5,627 -2% 2,083 -17%
Four Seasons -Ex-BKK 36% 43% 18,438 -4% 7,943 13%
Anantara 44% 42% 7,650 -11% 3,394 -6%
Marriott 65% 61% 3,973 -5% 2,597 1%
Others 30% 31% 9,674 2% 2,905 -1%
Average 51% 50% 6,178 -2% 3,140 0%
Avg. Thailand 54% 51% 5,066 -3% 2,722 3%
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Hotel - 2Q10 Performance Snap Shot
Average Occupancy of 41% 3% y-y Average ADR of Bt 5,002 5% y-y
3,155
6,091
11,777
7,289
53%
41%
15%
27%
53%
38% 36%
29%
Q210 Q209
-10%
Others Others
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-9%
Include all 4 Four Seasons
hotels
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Stable Feeder Markets Movement� East Asia, especially Singapore, Hong Kong and Japan, was more sensitive to the political riots in
April – May.� Middle East increase is mainly attributed to the 2 new hotels in Abu Dhabi
MINT’s Customers Breakdown 2Q10 2Q09 %Chg
Thailand 14 16 -2
East Asia 19 23 -4
South Asia 4 3 1
� Middle East increase is mainly attributed to the 2 new hotels in Abu Dhabi� Despite a decline in UK tourists due to the impact of the Greece debt crisis, MINT is compensated
by a significant increase from German and Russian guests
Feeder Market Breakdown
South Asia 4 3 1
Middle East 7 5 2
Europe 38 34 4
The Americas 10 13 -3
Oceania 5 4 1
Africa & Others 2 2 0
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Tourist Arrivals to Thailand vs MINT� Tourists from Russia and China reported significant y-y growth of 102% and 47%, respectively.
Likewise, tourists from Korea and Middle East grew over 20%, each now representing 3%-5% of
total tourist arrivals to Thailand
300,000
400,000
500,000
6M10 6M09
total tourist arrivals to Thailand
� For MINT, a decline in UK guests was more than compensated by the sharp rise from the Germany,
UAE, Russia and Korea
MINT’s Top-Ten Feeder Markets Tourist Arrivals to Thailand
15,000
20,000
2Q10 2Q09#room night
+53%-13%
-19%
0
100,000
200,000
China Germany USA India Middle East
0
5,000
10,000
Ge
rma
ny
Th
ail
an
d
U.S
.A.
UK
Jap
an
U.A
.E.
Au
stra
lia
Ko
rea
Ho
ng
…
Ru
ssia
Ch
ina
Ind
ia
-19%
-9%
-15%+85% +40%
+215%-43%
+68%
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+21%-14%
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Retail Trading & Contract Manufacturing
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Improved Performance of Retail Trading & Contract Manufacturing Business� Despite the political demonstration and the curfew imposed during April – May, same store sales still
grew 7%. Contract manufacturing revenues declined 20% y-y since a major client underwent system migration and restructured their purchasing system. However, the shortfall is only temporary and the migration and restructured their purchasing system. However, the shortfall is only temporary and the orders are expected to resume in 3Q10.
2Q10 Revenue BreakdownBt 577m ( 12% y-y)
2Q10 Operating ProfitsBt m ( % y-y)Brand
SSS (%) TSS (%)
2Q10 2Q09 2Q10 2Q09
Fashion 14% -18% 3% -17%
Cosmetic -16% -19% -9% -14%
Household -8% -25% -22% -20%
Retail Trading 7% -18% 0% -16%
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Retail Trading 7% -18% 0% -16%
Change in Sales 2Q10 2Q09
Contract
Manufacturing-20% -7%
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MINT’s Strategies to Remain a Growing Company
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Achieving Target of 20% Earnings Growth Per Annum
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Recent Acquisition of Cyprea Lanka
� Investment size of USD 11,614,500 by MINT, equivalent
to 80.1% shareholding while Serendib holds the
remaining
� Cyprea Lanka assets include
� Kani Lanka Resort & Spa (Kani Lanka), a 4-star
resort with average occupancy of 90% and US$
100 ADR
� A beautiful plot of adjacent land, which can be
developed into Anantara hotel
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developed into Anantara hotel
� With the recovery from the global financial crisis
accompanied by an end to the civil war in Sri Lanka, we
anticipate the country to experience strong growth in
the tourism business
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Continued Penetration in High-Growth Regions
9.8% 2.9% Strong GDP
Middle East and North Africa
Sub Sahara
India
5.3%12.7%
4.7% 8.7%
8.4% 6.5%
China
South East Asia
5.9% 6.8%
Strong GDP Growth Expected in Focus Regions
Healthy Population
Growth
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Sub Sahara Africa
GDP Growth CAGR 2010-2015 Population Growth 2010-2015
Australia
3.2% 5.0%
Source: IMF World Economic Outlook 2010, World Bank, Health Nutrition Population Statistics
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Complementary Business Portfolios
Opening spa as Launch of hotels in
Mandara Spa, Sheraton Sanya Resort Anantara Sanya, 2011
3 Anantara Spas at Kempinski Hotels,
TanzaniaElewana Afrika, 2008
Opening spa as a spearhead
Launch of hotels in the location
Tanzania
Anantara Spa, The Emirates Palace, UAE
2 Managed Anantara Hotels in UAE, 2008
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2010 - 2011 Outlook
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Resiliency of MINT’s Hotel Group
Healthy traffic to MINT’s
80% Four Seasons Bangkok
Healthy traffic to MINT’s hotels in the East and
South of Thailand
30
0%
40%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
OCR-2009 OCR-2010
Occupancy rebounded strongly in July, showing
growth y-y
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Improving Consumer Confidence Index� Compared to 2009 when we experienced the airport closure and global economic
crisis, 2010 consumer confidence index has been less affected.
70
80
90
100
RajprasongRiot = 75.0
Pattaya Riot = 72.1
Politics,AirportClosure
London Bomb Bangkok Bomb,
CoupSub-prime
Crisis
Jul 10: 79.1 vs LY 73.4
50
60
Jan-
05
Apr
-05
Jul-0
5
Oct
-05
Jan-
06
Apr
-06
Jul-0
6
Oct
-06
Jan-
07
Apr
-07
Jul-0
7
Oct
-07
Jan-
08
Apr
-08
Jul-0
8
Oct
-08
Jan-
09
Apr
-09
Jul-0
9
Oct
-09
Jan-
10
Apr
-10
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Source : CEBC, Thai Chamber of Commerce University
Closure = 74.8
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Supportive Factors from Domestic Consumption & Tourism Recovery
Real GDP Growth Consumer Confidence Index
Tourist Arrivals to Thailand (m)Consumer Price Inflation
32Source: 1. World Economic Situation and Prospect 2010, United Nation 2. Global Economic Prospects Summer 2010, World Bank, The Thai Chamber of Commerce Center for Economic and Business Forecasting Consumer Confidence Index
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Downside Risk – Hotel Supply in SamuiNew Hotel Supply Rooms Opening Date
W Retreat Koh Samui 75 Nov 2010
Infinity Residences & Resort 65 Dec 2010
Conrad Koh Samui 65 1Q 2011
Vana Belle Samui (Starwood) 180 Aug 2011
MINT’s Samui hotels’ occupancies have been affected by political instability
and the increase in premium supply
MINT’s Samui hotels’ occupancies have been affected by political instability
and the increase in premium supply
0%
50%
100%
Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10
Four Seasons Anantara
33Source: C9 Hotelworks
and the increase in premium supplyand the increase in premium supply
Pattaya Riot & H1N1 Virus
Rajprasong Demonstration
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Downside Risk – Hotel Supply in PhuketHotel Name Rooms Opening Date
Pullman Phuket Arcadia 281 4Q 2011
Wyndam Resort 133 2Q 2010Wyndam Resort 133 2Q 2010
Centara Grand Beach 262 3Q 2010
Taj Exotica 79 2013
Regent Phuket Cape Panwa 106 1Q 2011
Westin Siray Bay 261 3Q 2010
Jumeirah Private Island 72 4Q 2011
JW Marriott Phuket continues to show steady recover y,
while Anantara Phuket, opened in October 2008, continues to establish its market position
JW Marriott Phuket continues to show steady recover y,
while Anantara Phuket, opened in October 2008, continues to establish its market position
34Source: C9 Hotelworks
0%
50%
100%
Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10
JW Marriott Anantara
Pattaya Riot & H1N1 Virus
Rajprasong Demonstration
while Anantara Phuket, opened in October 2008, continues to establish its market positionwhile Anantara Phuket, opened in October 2008, continues to establish its market position
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Progress on Projects Under Development
Anantara Kihavah,
Maldives
St. Regis Hotel,
Bangkok
St. Regis Residence,
Bangkok
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Maldives
82 over-water villas
Opening:
Dec 2010
Bangkok
220 rooms
Opening:
Jan 2011
Bangkok
53 units
Transferring:
Dec 2010
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Pipeline Expansion & Planned Capex
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Pipeline Expansion Breakdown
Unit Expansion Equity HMC/Franchise
Hotel 4 hotel/220 rooms TBC2010
Hotel 4 hotel/220 rooms TBC
Food 28 outlets 54 outlets
2011Hotel 5 hotels/275 rooms 3 hotels/375 rooms
Food -14 outlets 177 outlets
2012Hotel 1 hotel/125 rooms 5 hotels/453 rooms
Food 9 outlets 156 outlets
2013Hotel TBC 3 hotels/388 rooms
Food 21 outlets 179 outletsFood 21 outlets 179 outlets
2014Hotel TBC TBC
Food 46 outlets 188 outlets
Note: TBC = To be confirmed
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= Some of DQ equity outlets will be converted to franchise outlets
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Pipeline Expansion - HotelYear
OpeningInvestment Hotel Management Contract
- Kilindi Zanzibar, Elewana (15 rooms) *- Sri Lanka: Kani Lanka (105 rooms) **
2010- Sri Lanka: Kani Lanka (105 rooms) **- Anantara Kihavah, Maldives (80 rooms)- Extension: Anantara Koh Samui (20 pool villas)- St. Regis Residence, Bangkok (53 condo units)
2011
- St. Regis Hotel, Bangkok (227 rooms)- Masai Mara Camp (12 rooms)- Amboseli Camp(12 rooms)- Marula Manor (16 rooms)- Serengeti Migration Camp Explorer (8 rooms)
- Anantara Blue City, Oman (122 rooms)- Anantara Sanya, China (148 rooms)- Anantara Xishuangbanna, China (105 rooms)
2012 - Anantara Sri Lanka (125 rooms)
- Anantara Uluwatu, Bali (93 rooms)- Anantara Chennai, India (130 rooms)- Anantara La Cambuse, Maritius (170 rooms)- Anantara Flamingo Villas, UAE (30 rooms)- Anantara Flamingo Villas, UAE (30 rooms)- Anantara Savannah Villas, UAE (30 rooms)
2013- Anantara Wayanad, India (95 rooms)- Anantara Chongqing, China (130 rooms)- Anantara Chengdu, China (163 rooms)
Total 10 hotels (620 rooms )/1 residence (53 condo units) 11 hotels/ 1,216 rooms
Note: * Elewana Africa, MINT’s subsidiary, acquired of the five-star Kilindi Zanzibar and re-open on 25 May 2010** MINT acquired 80% of Cyprea Lanka Ltd., consisting of Kani Lanka Resort & Spa and an adjacent land, on Aug 2010
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Pipeline Expansion - Restaurant
Equity % of Openings Franchise % of Openings2010 28 34% 54 66%
Breakdown by Owning Interests
RESTAURANT (# OUTLETS)
2010 28 34% 54 66%2011 -14 -9% 177 109%2012 9 5% 156 95%2013 21 11% 179 90%2014 46 20% 188 80%Total 90 11% 754 89%
Thailand % of Openings Overseas % of OpeningsBreakdown by
Destinations
RESTAURANT (# OUTLETS)
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2010 29 35% 53 65%2011 81 50% 82 50%2012 48 29% 117 71%2013 58 29% 142 71%2014 84 36% 150 64%Total 300 36% 544 64%
Note: = Some of DQ equity outlets will be converted to franchise outlets
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Investment Capex� Capex includes all incurred expenses for both maintenance and new expansions� Capex for new opportunities including project initiatives as well as planned acquisition in both
restaurant and hotel businesses shall be provided additionally
3,000
4,000
5,000
6,000
7,000
Others Retail Trading Residencial Hotel Food
40
0
1,000
2,000
3,000
2010F 2011F 2012F 2013F 2014F
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Appendix: Hotel & Restaurant Portfolio
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Hotel Properties
- 12 hotels- 1,277 rooms- 4 countries
7 hotels in Thailand
2 hotels in Maldives
1 hotel in Bali
2 hotels in Abu Dhabi
- 4 hotels- 505 rooms- Thailand Bangkok
Chiang Rai
Chiang Mai
Samui
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Hotel Properties (Cont.)
- 4 hotels- 1,195 rooms- Thailand
Phuket
Pattaya
Hua Hin
Bangkok
6 hotels117 roomsTanzania &
Kenya
1 hotel19 roomsMaldives
3 hotels315 roomsSri Lanka
1 hotels122 roomsVietnam
Other BrandsOther Brands
- 12 hotels- 678 rooms- 5 countries
1 hotel105 roomsSri Lanka
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MINT’s QSR Portfolio
As of 2Q10 Outlets %
243
230250
73431,123
Equity 686 61%
Franchise 437 39%
Total 1,123 100%
As of 2Q10 Outlets %
24
22
238
Thailand 741 66%
International 382 34%
Total 1,123 100%
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Thank You
Kani Lanka Resort & Spa, Sri LankaKani Lanka Resort & Spa, Sri LankaKani Lanka Resort & Spa, Sri LankaKani Lanka Resort & Spa, Sri Lanka
Please visit www.minornet.com
Investor Relations Office +66 (2) 365 7636-37
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