sterling holidays · price range : inr 1.95 lacs- inr ... jungle beach mountain ... resort network...
TRANSCRIPT
1
Sterling Holidays
Investor Presentation
April 2015
2
We are India’s first Vacation Ownership organization.
We are thought leaders and pioneers who defined
holidays for Indian families as early as 1986.
2
3
Our Mission
Sterling Holidays aims to be the No.1 Holiday company in India
Sterling Holidays aims to deliver experiential holidays to multiple customer
segments in themed full service resorts located in scenic leisure destinations
thereby creating memorable holiday experiences
Sterling Holidays and its employees are committed to service excellence, good
corporate governance and sustainable development to create wealth for all
stakeholders and be a responsible corporate citizen
3
Product Range
Confidential 4
Vacation
Ownership
FIT / GIT MICE
Vacation Ownership : Flexible Points Product
7 Nights & 7
Days
Every Year
For 25 Years Across
Seasons
Across
Apartments
Across
Destinations
5 Confidential
Price Range : INR 1.95 Lacs- INR 13.39 Lacs
Average Annual Subscription Fee: INR.6,000
• The 3rd generation and most contemporary product modeled on the international points
system.
• Offers ultimate flexibility of usage across seasons and apartment types.
• Access to full service resorts.
• Enables accumulation and advancing of points
• Allows transfer of membership
24 Resorts
21 Destinations
4500 Resorts Worldwide
Hotel Sales Division
• One Time Leisure holidays; potential to covert to membership
– FIT packages
– Group packages
– MICE [Meetings, Incentives, Conferences, and Exhibitions]
– Special seasonal offers
• Growing online presence
Confidential 6
Integrated Business Process Model
Confidential 7
Customer Experience Creation
(Resort Creation)
- Scenic holiday spots
- Resort design & development
Customer Experience Management
(Resort Operations)
- Full service resorts
- Value creation
- Community building
Customer Engagement
(Customer Service)
- Holiday planning & reservations
- Customer satisfaction benchmarking
Customer Acquisition
(Sales & Marketing)
- Lifestyle need-based segmentation
- Multi-channel sales initiatives
Shared Services
[IT, Accounts, HR &
Legal]
Revenue Streams
Vacation Ownership
Income
Vacation Ownership sales
ASF / AAC & Utility
Interest Income
FIT / GIT / MICE
Income
Room Income
F&B
Holiday & Health Club
Confidential 8
Unique Revenue Model Value created continuously
from a single resort unit
Confidential 9
Timeline (years) *Inflation not considered
0 25
Va
lue
Re
aliz
ed
Recurring Revenue Streams*: ASF, Usage Fee, Resort Revenues
Upfront Cash:
Admission Fee
Residual Value *:
Opportunity for 2nd
cycle - ZERO
Marginal Cost of
Inventory
Income from
Financing
Admission Fee Entitlement Fee
Resort - Members Resort – FIT Interest on EMI
Annual Subscription Fee
26
Value Creation Profile
Large Upfront Cash-flow
Built in Annuity Stream
Residual Value
Sterling
Holidays:
March 2011
Resurgence:
Strategy
&
Initiatives
Way Forward
Confidential 11
Sterling Holidays : March 2011
March 2011
• Low level of revenues
• Weak financial position with debts
• Poorly maintained resorts resulting in low occupancy and
negative customer feedback
• Lack of leadership and middle management team
• Inadequate processes and controls leading to inaccurate
reporting
• Outdated technology platforms
• Large numbers of litigation
• Highly demotivated team
Confidential 12
Key Parameters FY11
Financial Parameters:
Total Income (in INR, Mn.) 432
EBITDA (in INR, Mn.) -212
PAT (in INR, Mn.) -328
Non - Financial Parameters:
New Member additions (Numbers) 1135
Average Unit Realization (in INR, Mn) 0.107
Occupancy (%) 37%
ARR (in INR) 1531
Total number of resorts : 10 Owned & 4 Leased 14
Rooms (In nos.) 1202
Confidential 13
Resurgence : Strategy & Initiatives
14
Confidential 15
Strategic Growth
Initiatives
Build
Credibility
Increase
Cash Flow /
Revenues
Build
Customer
Confidence /
Experience
Resorts refurbishment
• Hard refurbishment : Not just paint & polish
• Complete renovation involving
– Rooms
– Back of the house
– Front of the house
– Electrical & Engineering
• An average spend of Rs. 22 – 24 lacs per room
Confidential 16
River front
Herit- age
Jungle Beach Mountain
Dindi Shridi Corbett Puri Dharamshala
Sariska Goa Manali
Thekkady Karwar Mussoorie
Daman Nainital
Gangtok
Darjeeling
Lonavala
Ooty
Yercaud
Kodai
Yelagiri
Munnar
Resort Network
Confidential 17
GOA
KARWAR
MUNNAR
THEKKADY
PURI
MANALI
MUSSOORIE
OOTY YERCAUD
DARJEELING
LONAVALA
DHARAMSHALA
CORBETT
GANGTOK
SARISKA
YELAGIRI
KODAI
NAINITAL
24 Resorts
21 Destinations
1767 Rooms
DINDI
DAMAN SHIRDI
Proposed Greenfield Projects Land Bank locations 155
Acres
Yelagiri 20
Ooty Fernhill 1
Kodai Villapatti 7.52
Kodai Lakeview 2.99
Rameshwaram 2.19
Thekkady 2.8
Munnar 7
Peermade 28.28
Coorg - Meraca 30
Coorg - Virajpet 5.75
Goa Chapora 4.51
Goa Vagator 0.99
Alibaug 3
Mahabaleshwar 5.13
Igatpuri 2.47
Bhimtal 6.6
Corbett 4.5
Gangtok 15.1
Wayanad 5.57
YELAGIRI
OOTY
KODAI
RAMESHWARAM MUNNAR
THEKKADY PEERMADE
COORG
GOA
ALIBAUG
MAHABALESHWAR
CORBETT
BHIMTAL GANGTOK
PROPOSED GREENFIELD PROJECT
LAND BANK
16 Destinations 155 Acres 2000+ Rooms
WAYANAD
Confidential 19
Refurbish resorts
Then
Now
Munnar
Terrace Greens
Confidential 20
Refurbish resorts
Then
Now
Ooty
Fern Hill
Confidential 21
Refurbish resorts
Then
Now
Kodai
By The Lake
Reposition resorts by creating
contemporary resort identities
Confidential 22
Multi-cuisine Restaurant
Specialty Restaurant
SPA
Gym
Multi-cuisine Restaurant
Holiday Activities Center
Bar
Swimming Pool
Multi-cuisine Restaurant
Kids Club
SPA
Tea & Coffee Lounge
Multi-cuisine Restaurant
SPA
Holiday
Activities Center
Tea & Coffee Lounge
Improvement in ARR’s and occupancy post renovation
Confidential 27
158,728 177616
201602
222281
256620
FY 11 FY 12 FY 13 FY 14 FY 15
Room nights in numbers & Occupancy
37%
40%
41%
49%
56%
CAGR : 13%
1531
1942
2194 2302
2730
FY11 FY12 FY13 FY14 FY15
Average Room Rates, INR
CAGR : 16%
Increase in F&B revenue
Confidential 28
109
163
197
247
271
FY11 FY12 FY13 FY14 FY15
F&B Revenues, INR Mn
• Introduced a wide spread of F&B options
• Increased prices of F&B
CAGR : 26%
54
125
180
255 272
FY11 FY12 FY13 FY14 FY15
Increase ASF / AAC & Utility (Maintenance) revenue
Confidential 29
ASF, AAC and Utility charges (INR Mn.)
• Increased maintenance charges by over 100%
CAGR : 50%
Enhanced holiday experience by revamping holiday
activities and introducing spa
Confidential 30
Increase in Vacation Ownership sales
• Exponential growth in new member additions and average unit realisation [AUR]
• Restart new member acquisition by setting up sales offices across India
• Appointed franchisee
• Increase in price
Confidential 31
1135
2480
3409 3650
5481
FY11 FY12 FY13 FY14 FY15
New Member Addition, Numbers
0.11
0.17
0.21 0.22 0.24
FY11 FY12 FY13 FY14 FY15
Average Unit Realization, INR Mn
CAGR : 22% CAGR : 48%
Increase in FIT / GIT / MICE business
• Set up a new HSD team
• Increased focus on FIT, GIT and MICE
• Formed alliances with leading OTA’s, tour operators & corporates
• Also set up a revenue optimisation function
Confidential 32
50192
66313
79027
92978 102620
FY11 FY12 FY13 FY14 FY15
HSD Room Nights in Nos.
81
212
320
438 467
FY11 FY12 FY13 FY14 FY15
HSD Revenue in Mn.
CAGR : 55% CAGR : 20%
Build Competent Human Capital
• Established a professional leadership team with in-depth experience in
hospitality
• Focused recruitment of qualified & industry experienced middle
management
• Increased focus on training and development across the organisation
Confidential 33
Proactive customer engagement
• Set up a state of the art call center
• Initiated and built the database of members
• Proactive holiday planning
• Resulting in increase in occupancy
Confidential 34
Integrated IT landscape in sync with our business model
Confidential 35
Customer Experience Creation Customer Experience Management
Customer Management Customer Acquisition
MS Navision - ERP Build super fast –
Standalone PMS - Prologic First IDS Fortune Next
Cloud based CRM
– Salesforce.com COPS – Home grown LMS : Salesforce.com Excel /Home grown
Support Services
Formula HR-HRMS
Tally MS Navision-ERP
Deployed Before
COPS – Home grown
Increase presence in social media
• Enhanced the website with modifications
• Established social media presence across
Facebook, Twitter, Google + and Pinterest
• Created a Sterling Blog
• Appointed a digital & social media
agency
• Appointed an ORM agency
Confidential 36
23,250
2,15,971
March '12 April '15
Substantial growth in social media
Confidential 37
Facebook Fan Count
Growth
867%
Awards & Recognition
Confidential 38
5 RCI crowned resorts
24 resorts, 1767 rooms, 21 destinations
Affiliated with RCI - A network over 4500
resorts across 101 countries
15 additional sites with a potential of
2000+ rooms
2300 strong work force
16 customer & sales offices
75,975 active customers and growing
The Sterling Advantage
Confidential 39
Financials : FY11 - FY15
40
Key indicators
INR Mn. FY11 FY12 FY 13 FY14 FY 15 CAGR
New member additions (Numbers) 1,135 2,490 3,409 3,650 5,481 48%
Cumulative (Numbers) NA 63,435 66,844 70,494 75,975 -
Average Unit Realization 0.11 0.19 0.21 0.22 0.24 22%
Timeshare revenue 103 281 524 634 911 72%
Resort revenue 331 479 615 813 903 29%
Other income 6 20 30 58 100 105%
Total revenue 439 780 1,169 1,505 1,914
EBITDA -158 -148 -143 67 174
EBITDA in % -36% -19% -12% 4% 9% -
PAT -328 -413 -213 -160 5 -
PAT in % -75% -53% -18% -11% 0% -
No. of rooms (Numbers) 1,202 1,362 1,477 1,512 1,767 10%
Member Room nights sold (Numbers) 108536 111303 122575 140068 153940 9%
Non Member Room nights sold (
Numbers) 50,192 66,313 79,027 92978 102,680 20%
Total Room nights (Numbers) 158,728 177,616 201,602 242,959 256,620 13%
Occupancy (%) 37% 40% 41% 49% 56% 11%
ARR in INR 1,531 1,942 2,194 2,291 2,730 16%
Confidential
Growth Indicators
42
1135
2480
3409 3650
5481
FY11 FY12 FY13 FY14 FY15
New Member Addition, Numbers
0.11
0.17
0.21 0.22 0.24
FY11 FY12 FY13 FY14 FY15
Average Unit Realization, INR Mn
103
281
524
634
911
FY11 FY12 FY13 FY14 FY15
Timeshare Revenue, INR Mn
59
316
951
1454
2280
FY11 FY12 FY13 FY14 FY15
Receivables, INR Mn
CAGR : 22% CAGR : 48%
CAGR : 149% CAGR : 72%
331
479
615
813
903
FY11 FY12 FY13 FY14 FY15
Confidential
Growth Indicators
43
Resort Income, INR Mn
1531
1942 2194
2302
2730
FY11 FY12 FY13 FY14 FY15
Average Room Rates, INR
70
124
173
236
280
FY11 FY12 FY13 FY14 FY15
Room Revenues, INR Mn
109
163
197
247 271
FY11 FY12 FY13 FY14 FY15
F&B Revenues, INR Mn
CAGR : 16% CAGR : 29%
CAGR : 41% CAGR : 41%
Confidential 44
Growth Indicators
54
125
180
255 272
FY11 FY12 FY13 FY14 FY15
ASF, AAC and Utility charges (INR Mn.)
CAGR : 50%
Financials : Profit and Loss
Confidential 45
INR Mn. FY11
FY12 % Growth FY13 % Growth FY14 % Growth FY15 % Growth
Timeshare 103 - 281 173% 524 87% 634 21% 911 44%
Resort Operations 331 - 479 45% 615 28% 813 32% 903 11%
Other income 6 20 254% 30 50% 58 92% 100 73%
Total Income 439 - 780 78% 1169 50% 1505 29% 1914 27%
Expenditure
Expense as a % of
Total Income
Expense as a % of Total
Income
Expense as a % of Total
Income
Expense as a % of Total
Income
Expense as a % of Total
Income
Salaries 200 46% 301 39% 579 50% 636 42%
679 36%
Timeshare expenses 152 35% 287 37% 295 25% 286 19%
489 26%
Resort expenses 226 51% 303 39% 365 31% 425 28%
458 24%
Lease rentals 21 5% 37 5% 72 6% 91 6%
114 6%
Total Expenditure 598
928
1,312
1,438
1,740
EBIDTA -158 -148 -143 67
174
Depreciation 45
48
63
88
105
Interest 22 34 13 58
31
PBT -225
-229
-218
-79
37
Exceptional Items (Net) 101 184 -5 81
32
Tax 2
-
-
-
PAT -328
-413
-213
-160
5
Financials : Balance Sheet
Confidential 46
INR Mn FY11 FY12 FY13 FY14 FY 15
Share Capital 511 597 677 889 901
Share warrants - 181 - - 0
Reserves and Surplus -638 -345 -40 1,609 1673
Borrowings 309 41 295 1 0
Deferred Income 2,091 2,229 2,448 2,721 3171
Current Liabilities 394 230 451 345 419
Total Equity & Liabilities 2,666 2,932 3,831 5,565 6164
Net Block 2,284 2,232 2,728 2,999 3542
Investments 21 10 0 1,210 483
Inventories 7 12 24 28 26
Debtors 112 316 748 982 1796
Cash & Bank Balances 79 30 16 91 58
Loans and Advances 163 331 315 255 259
Total Assets 2,666 2,932 3,831 5,565 6164
Financials : Cash Flow Statement
Confidential 47
INR Mn FY11 FY12 FY13 FY14 FY15 Net Income -328 -413 -213 -160 5
Depreciation, Amortisation & Non-Cash items 167 241 2 125 168
Changes In working capital -106 -114 -11 -66 -286
Cash flow from operations (A) -267 -286 -221 -101 -112
Capital Expenditure (net) 78 -252 -538 -228 685
Net cash from investments 5 5 57 -1,117 727
Cash from Investments (B) 83 -247 -482 -1,345 42
Issuance of Shares (incl. Premium) 94 855 408 1,878 72
Increase /(Decrease) in Debt, net of repayments 108 -371 281 -357 (34)
Cash from Financing ( C) 202 484 689 1,521 37
Net Increase / (Decrease) in Cash (A)+(B)+(C) 18 -49 -14 75 -33
Closing Cash Balance 79 30 16 91 58
48
Way Forward
Way forward
• Launch multiple products across VO, FIT, GIT & MICE
• Launch sales operations in the Middle East
• Revisit Brand Strategy and reposition brand
• Develop organization structure in line with Business process as against
function based
• Build resorts with varying themes
• Open resorts overseas
• Make the company a fun place to work
Confidential 49
1986 Defined Holidays
Redefining Holidays 2015
50 Confidential
PAST Vacation Ownership Company
CURRENT
Confidential 51
FUTURE
Holiday Company
Holiday Lifestyle Company
Thank You!