CentralCentral PattanaPattana PlcPlc.. Property Development & Investment
Analyst Briefing – 4Q06 and FY2006 13 March 2007 Important Notice
The information contained in this presentation is for information purposes only and does not constitute an offer or invitation to sell or the solicitation of an offer or invitation to purchase or subscribe for share in Central Pattana Public Company Limited (“CPN” and shares in CPN, “shares”) in any jurisdiction nor should it or any part of it form the basis of, or be relied upon in any connection with, any contract or commitment whatsoever.
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2 Content
Market Update
Business Highlights
Operations
Developments
Financial Highlights
3 Market Update Retail Overview
Retail in 2006 Expectation for 2007
Retail sales in 2006 experienced lackluster period Although there are still many negative economic & mainly due to decline in consumer purchasing power external factors weighing down the economic recovery, and lower consumer confidence instigated by the high including recent bombings on New Year’s Eve, CPN oil prices and political & economic uncertainties. believes that the recovery in the economy, retail sector
Retail sales growth in 2006 rose by 1-2% yoy, much lower and consumer confidence will be stronger in the 2H07. than the 7-9% growth in 2005. This assumption is made on the basis that:
Sales of retail operators retreated to single-digit growth Political situation remains steady. after staying double digits since the financial crisis. Oil price remains at current levels.
Ministry of Commerce is drafting the new Retail Inflationary and financial pressure has eased.
Business Law, limiting the expansion of large-scaled Interest rate continues downward trend. hypermarkets and supermarkets in populated areas. Consumer Confidence improves. Although it may take some time to be effective, the Tourism is anticipated to continually flourished. uncertainty of the policy may depress retail growth in 2007. Government expenditure proceeds in 1Q07. Amendment to Constitution is completed in 4Q07.
Election takes place in December 2007.
Source : Bank of Thailand and NESDB 5 Bangkok Retail Market Overview
Comments Retail Supply
Sqm (‘000) Vacancy % Total retail supply in Bangkok has increased by 5.8% 2,500 5.8% approximately 156,000sqm or 3.6% in 9M06 and all of 6.8% 8.4% 2,231 2,250 5.6% this new area came from malls and retail space in office 2,059 buildings. 2,000 1,928 1,927 5.4% 5.4% Mall saleable area increased by 8.4% in 9M06. 1,750 The average vacancy at 3Q06 was 5.8% a slight 5.2% 5.1% increase from 5.4% in 2Q06 due to the nearly completed 1,500 5.0% redevelopment of CentralWorld and also the completion 1,265 1,275 1,289 1,274 1,250
of Exchange tower. 4.8% 1,007 1,007 1,000 4.7% New supply in 2006 mainly came from CPN’s 815 779 4.6% CentralWorld redevelopment project and from Siam 750
Future’s Esplanade project.The only new prime retail 4.4% 500 centre to be completed will be The Crystal (15,000sqm),
anticipated to open in 2H07. 250 4.2%
Rental rates have generally been stable since 2H05 due 0 4.0% 2003 2004 2005 9M 2006 to the steady supply of new retail leasable area. It is also Superstores Dept. Stores Malls Vacancy expected to remain stead in the short-term and may again rise depending on how quickly the country’s economic New Supply (sqm) 45,000 338,000 156,000 condition improves. Total Supply (sqm) 3,972,000 4,017,000 4,355,000 4,511,000
Source : CBRE and Company’s estimate 6 Bangkok Office Market Overview
Comments Office Supply
Sqm (‘000) Vacancy % 5,340 Total office supply in the 9M06 increased significantly 5,500 5,243 28.0% 5,000 25.0% 4,740 4,714 by 3.3% or 240,000 sqm to 7.45 million sqm due to the 24.0% 4,500 opening of 8 office buildings: 4,000 20.9% 16.4% 20.0% 3,500 16.1% 3,000 13.5% 16.0% 2,376 2,471 3 offices in CBD (Q House Lumpini, Column Tower and 2,500 10.2% 1,967 2,110 12.0% Exchange Tower). 2,000 1,500 4.8% 8.1% 8.0% 1,000 5 offices in Non CBD (Fenix Tower, Supalai Grand Tower, I 4.0% 500 Tower, Central Place Pinkla, and Rasa Tower II). 0 0.0% 2003 2004 2005 9M 2006 The average vacancy for Grade A in 9M06 increased Grade A Grade B & C Vacancy - A Vacancy - B&C
slightly from the end of 2005 due to the new supply. New Supply (sqm) 70,000 25,000 240,000 Grade A increased from 4.8% to 8.1%, meanwhile Grade Total Supply (sqm) 7,115,000 7,185,000 7,210,000 7,450,000 B remained nearly unchanged from 16.4% to 16.1%. Office Rental Rate New supply of only 36,000 sqm (two office buildings) is
coming to the market by the end of 1H2007. The only new Bt/sqm + 17.6% + 10.9% Vacancy% + 17.7% 660 grade A building in CBD to be completed will be Athenee 700 + 9.1% 28.0% + 17.7% 595 + 17.3% 25.0% Tower on Wireless Rd., anticipated to open in 2H07. 600 506 24.0% 500 467 20.0% 431 20.9% 428 Rental rate growth for 2006 is expected to slow 400 365 16.1% 16.0% 311 16.4% somewhat due to the downturn of the economy. However 300 12.0% 13.5% 8.1% due to limited supply in the next 12 months we expect 200 10.2% 8.0% 100 4.0% rental to increase at a moderate pace. 4.8% 0 0.0% 2003 2004 2005 9M 2006 Grade A Grade B Vacancy - A Vacancy - B&C
Source : CBRE and Company’s estimate 7 Business Highlights FY2006 Business Highlights
Financial and Operation Highlights Leading Position in BMA Retail Space
FY2006 total revenue increased by 4.4% YoY CPN 28%28% Excluding non-recurring items in FY2005, operating profit Others and net profit increased by 8.0% and 16.6% YoY, 16% Financial respectively. The Mall Group Siam Piwat 14% Average effective retail rental rates increased 12% YoY. 1% Total leasable area increased 10% YoY mainly on the MBK completion of asset enhancement projects at CentralWorld, 3% Seri Center Future Park Rangsit Central Town Rattanathibet, and Pinklao Tower B. 4% 10% Fashion Island Siam Future Seacon Square Siam Paragon Occupancy of retail properties declined from 93% in 4Q05 7% Operation 5% 6% 6% to 92% in 4Q06 due to lower occupancy of the newly opened phase at Centralworld.
CentralWorld completed its expansion and renovation Shareholder’s Value Creation project and had an opening celebration of its expansion phase in August 2006 and a reopening of its renovation Bt mm 49,241 phase in December 2006. 50,000 Central Town Rattanathibet completed its asset 56.9% enhancement project in December 2006 with a new parking 40,000 building and an additional leasable area of over 11,200 sqm. 86.7% 31,375 30,000 Asset enhancement projects at Central Plaza Ramindra,
Development Central Plaza Rama 2 and Central Plaza Ratchada-Rama 3 20,000 16,802 have made much progress. Two green-field projects, Central Plaza Chaengwattana and 10,000 Central Pattaya Beach, have started construction and piling work has been completed. 0 31 Dec 2004 31 Dec 2005 29 Dec 2006
9 OD and HR Strategy
Organization Development & HR Management Highlights
Completed works in 2006:
Organization development:
BOD approved the “Strategic Manpower Planning & Sourcing” for business expansion in 2006 – 2010
Established Strategic Planning and Business Policy Office (SPBO)
Continued extensive work in BSC, JD and CG to ensure alignment of corporate strategies and business requirement.
Business process improvement:
Completed revised comprehensive shopping center management manual for GM’s to ensure world class operational standard for all centers.
Completed “Admired Quality Awards (AQA)” under the theme Service Excellence.
Human resource management:
Conducted salary survey and completed competitive salary adjustment.
Continued works in 2007:
Organization development: implement “Economic Value Added (EVA) ” program and continue extensive work in BSC and CG.
Business process improvement: Enhance Enterprise Resources Planning (EPR) System
Human resource management:
Knowledge Management Career Succession Planning
Career Path Management Talent Management Program
10 Operations Leaseable Area and Occupancy: Retail
Shopping Center Comments
Leaseable No.of Occupancy Rate (2) Shopping Format area (1) Tenants 4Q06 3Q06 4Q05 Center (sqm) 4Q06 (1)
1. Ladprao Plaza 55,553 376 100% 99% 100% Underwent major renovation. Construction 2. Ramindra Plaza 13,585 56 76% 65% 95% completed in December 2006
3. Pinklao Plaza 55,638 315 98% 96% 99%
4. Pattaya Festival 15,258 145 100% 100% 100%
5. Rama 3 (3) Plaza 52,767 335 96% 88% 97% Undergoing minor renovation. Completion date in 2Q 2007 (Please see CPNRF) 6. Chiangmai Plaza 73,770 527 99% 99% 97%
7. Bangna Plaza 57,721 303 99% 100% 98% Undergoing minor renovation. Completion date in 8. Rama 2 (3) Plaza 96,466 342 99% 99% 97% 3Q 2007 (Please see CPNRF) Underwent minor renovation. Construction 9. Rattanathibet Plaza 77,729 150 90% 99% 97% completed in December 2006 10. CentralWorld World 185,851 313 81% 51% 75% Major renovation. Phase 1 and 2 opened in August and December 2006, respectively Total 684,338 2,862 92% 84% 93%
% LT 30%
% ST (1) 70% (Fixed rent : % of Sales = 82% :18%)
Note 1: Excluding rental agreements < 1 year, such as kiosk, carts, ATMs and coin machines. Note 2: Percentage based on leaseable area. 12 Note 3: Rama II and Rama III are under CPNRF (CPN acts as the property manager). Leaseable Area and Occupancy: Office & Residential
Comments
Leaseable No.of Occupancy Rate (2) Office area (1) Tenants 4Q06 3Q06 4Q05 (sqm) 4Q06 (1)
1. Ladprao 18,134 47 100% 100% 98%
2. Pinklao A 22,560 56 92% 97% 99%
3. Pinklao B 11,335 26 60% 52% n/a Tower B only recently opened in 1Q 2006
4. Bangna 9,796 27 97% 98% 99% Adjusted leaseable area and occupancy rate to 5. CentralWorld 83,376 96 90% 90% 74% reflect retail (kiosk) space. Total 145,701 248 89% 90% 83%
% LT : ST (1) 1% : 99%
Leaseable area (1) Occupancy Rate (2) Residential (sqm) 4Q06 3Q06 4Q05
1. Bangna 1,907 57% 49% 69%
2. Lang suan 4,466 62% 68% 72%
Total 6,373 59% 62% 71%
% LT : ST (1) 0% : 100%
Note 1: Including retail space. Excluding storage. Note 2: Percentage based on leaseable area. 13 Value Enhancement of Existing Projects
(New Car Park Building – Front)
Central Plaza Rattanathibet Investment Cost : 652 MB Program : New car park building (5 floors with 1,262 car parks) and expansion of new retail space of 11,200 sq.m, of which anchors include Index Furniture, Fitness First and Office Depot Location : Suburb of Bangkok Construction Period : 1Q 2006 – 4Q 2006 Progress : Completed in December 2006 Impact : Increase saleable area and traffic flow
(New Car Park Building – Back)
14 Value Enhancement of Existing Projects
(Before renovation) (After renovation)
Central Plaza Ramindra Investment Cost : 230 MB Program : Renovation & Rezoning Create new facade and renovated common area space Added more F&B outlets and increased cinema area from 3 to 6 screens Location : Suburb of Bangkok Construction Period : 2Q 2006 – 4Q 2006 Progress : Completed in December 2006 Impact : Increase rental rate and traffic flow
Note1: As of 31 December 2006 15 Effective Rental Rate
Average Rental Rates (Retail Space Only)(1)
Average rental rates have steadily increased over the past years. 2006 increased 12% YoY primarily due to the opening of CentralWorld’s expansion and redevelopment phase I and II in August and December 2006, respectively
1,300
1,250 1,214 1,200 12% 1,164 1,171 1,150 1,144 1,126 1,100 10% 1,050 1,040
1,000
Bt per sqm per month 945 950
900
850
800 2004 2005 2006 1Q 2006 2Q 2006 3Q 2006 4Q 2006
% Growth 10% 12% 1.6% 4.0% 7.8%
Note 1 : Company Estimates. Average retail rental rates after discount. 16 People Traffic Flow
Traffic By Properties(1)
200,000 180,000 2004 2005 2006 160,000 140,000 120,000 100,000 80,000 60,000 40,000 person per day (average) day per person 20,000 0 Lardprao Pinklao Bangna Rama 3 Rama 2 CentralWorld(2) Ram Indra Pattaya ChiangMai Rattanathibet Change 2006 / 2005 (15%) (8%) 7% (11%) 24% (18%) (4%) 5% 5% 50%
Significant increase in traffic at Rattanathibet due to completion of renovation since 3Q 2005. Large increase at Rama 2 due to completion of pedestrian bridge and development of area Increase in Bangna traffic due to heightened property development in the area.
Decrease in CentralWorld traffic mainly due to closure of selected areas for major renovation. Traffic decreased at Rama 3 due to construction of flyover and competition from newly opened shopping centers nearby. Traffic decreased at Ladprao due to new overpass route.
Note 1 : Company Estimates. Note 2 : 150,000 Person/Day is expected in the 1st Year of CentralWorld after renovation is completed. 17 Developments CentralWorld Project Update
Net Leaseable Area Status Sales Progress Occupancy Area (sqm) - Zone B & C 49,619 Opened (Aug 18) 94% - Zone D, E and F 61,036 Opened (Aug 18) 94% Phase 1 - Isetan & Major Cineplex 35,139 Existing 100% Total 145,794 95% 88%
- Zone A 21,243 Opening (Dec 2006) 73% Phase 2 - Zen Dept. Store 18,814 Opening (Dec 2006) 100% Total 40,057 86% 54%
Total Project - 6 Zones & 2 Dept Stores 185,851 93% 81%
DD EE CC FF
AA BB
Note1: As of 31 December 2006. 19 CentralWorld Project Update (Cont’d)
Zen Dept Store Zone “A” Atrium Opened Stores
Central Food Hall which comprises of a 500 seat food center and Thailand’s largest supermarket opened in Nov 2006. Zone A and Zen Department Store reopened in Dec 2006. SF World Cinema launched its grand opening of 16 screen cinema in Dec 2006. Zone “B” Beacon Anchors opened in 2006 Super Sports TK Park B2S Asian Senses Zone “C” Central Court Toy ‘R’ Us Power Buy SB Design Square
Upcoming Events Zone “D” Dazzle
Jewelry Zone, 1st floor in Zone D, will be opened in 3Q07. More F&B outlets, 1st floor in Zone A, will begin opening stores around Feb to Apr in 2007. Zone “E” Eden Project occupancy should reach approximately 90% by Apr 2007. Zone “F” Forum CentralWorld will launch its grand opening in Aug 2007. Convention Center will be opened in 3Q07. International Fashion Brand, 1st floor in Zone A, will come in 3Q08.
20 CentralWorld Project Update (Cont’d)
Strategies
After New Year’s Eve bombings, traffic at CentralWorld dropped 30% from the average of 70,000 visitors per day (the peak was at 100,000 visitors per day) in Dec 06. However, the average traffic has resumed to approximately 60,000 - 70,000 visitors per day in Feb 07. Marketing activities to boost traffic flow including Advertising locally via – Billboards, BTS Plasma, Magazines, TV and Radio. Advertising internationally via – Airport Billboards, In-Flight TV and Magazines. Events and Promotion campaigns all year round. Tourist campaigns Tourist privilege VAT claimed Tourist tax refund Establish CentralWorld as one of the finest shopping destinations of the World.
21 Future Projects – Chaengwattana (PLAZA)
Project Highlights Investment Cost (1) 4,500 - 5,000 MB Program - Shopping Center (N.L.A) 64,000 sqm (Excl. Dept Store) - Office (G.A) 26,000 sqm - Parking (G.A) 102,000 sqm (3,218 cars) Location Suburb of Bangkok (Vicinity where 28 government agencies will be relocated to)
Development Process Status / Time line Construction Period Sep 2006 to Dec 2008 Progress - Master planning Completed - Conceptual design Completed - Schematic design Completed - Design development Completed - Interior design Completed - Piling work Completed Leasing Start March 2007 /2 Opening - Shopping Center December 2008 - Office Building January 2009
Note1: Including land and construction cost 22 Future Projects – Pattaya (FESTIVAL)
Project Highlights Investment Cost (1) 3,500 - 4,000 MB Program - Shopping Center (N.L.A) 55,000 (Excl. Dept store) - Hotel or Service Apt (G.A) (2) 40,000 sqm - Parking (G.A) 66,000 sqm (1,935 cars) Location - Pattaya, Chonburi Province - Approximately 1 1/2 hours drive east of Bangkok
Development Process Status / Time line Construction Period January 2007 to April 2009 Progress - Master planning Completed - Conceptual design Completed - Schematic design Completed - Design development 90% (Completion by 1Q07) - Interior design 70% (Completion by 1Q07) Leasing Start January 2007 /2 Opening April 2009
Note1: Including land and construction cost Note 2: Hotel and service apartment under consideration to sub-lease 23 Future Projects - Others
Khon Kaen Location : Northeastern Thailand Investment Cost : 1,500 to 2,000 MB Program(1) : Shopping center/Dept. Store - NLA – 66,000sqm : Parking – G.A – 92,716sqm (2,235 cars) Construction Period : 1Q 2007 – 3Q 2008 Progress : Construction permit approved : Designing phase / detailed feasibility study Chonburi Location : 1 hour drive south of Bangkok Investment Cost : 1,500 to 2,000 MB Program(1) : Shopping center/Dept. Store - NLA – 55,700sqm : Parking – G.A – 52,500sqm (1,500 cars) Construction Period : 2Q 2007 – 4Q 2008 Progress : Construction permit approved : Designing phase / detailed feasibility study
Rama 9 Location : Bangkok Investment Cost : 3,500 to 4,000 MB /2 Program : Shopping center/Dept. Store – Under study : Parking – Under study Construction Period : Tentative 3Q 2008 – 1Q 2010 Progress : Feasibility study
Note1: Including Central Group’s area (department store and CRC specialty stores) 24 Capital Expenditure Profile
Major capital expenditure will be used to develop 8 new projects (8 shopping centers and 1 office) and renovate 5 existing shopping centers. Financing plan for future expansion includes:
Cash flow from operation
Loan – project financing Property fund (Bt mil) Properties 2006 2007 2008 2009 2010 CentralWorld (Phase 1 & 2) 2,700 1,600 Chaengwattana 250 1,800 2,200 270 Pattaya Beach (New) 570 1,400 1,200 320 Khon Kaen 240 1,100 270 Chonburi 850 560 Rama 9 1,000 1,500
Enhancement Projects 800 500 500 500 500
3 New Projects (1) 600 1,500 2,000 3,500
Total 4,560 7,850 6,230 4,090 5,500
Company estimates Note1: Tentative development projects 25 Future Leaseable Area & Occupancy Rate
Retail Leaseable Area and Occupancy Rate (Shopping Center Only)
years % in 5 h of 50 growt le area easeab sqm L % Occupancy
(1) 97% 97% 100% Rama 9 1,200,000 96% 95% 95% 95% 95% 95% 94% 93% 95% 92% Pattaya Beach(1) 1,000,000 90% Khon Kaen(1) 85% 800,000 (1) 80% Chonburi
600,000 75% Chaengwattana 70% 400,000 Rattanathibet - 65% additional space 60% CentralWorld - 200,000 expansion phase 55% Existing area (2) 0 50% 22) Occupancy rate 2001 2002 2003 2004 2005 2006 2007 F 2008 F 2009 F 2010 F 2011 F (%)
Leaseable area (Sq.m.) 2001 2002 2003 2004 2005 2006 2007 F 2008 F 2009 F 2010 F 2011F Shopping Center 281,623 518,894 598,587 591,007 617,299 684,338 684,338 870,038 925,038 925,038 1,025,038 Office Building 49,833 49,833 49,833 134,099 134,038 145,700 145,700 145,700 171,700 171,700 171,700 Residential 16,825 16,825 16,336 16,336 6,373 6,373 6,373 6,373 6,373 6,373 6,373 Total 348,281 585,552 664,756 741,442 757,710 836,411 836,411 1,022,111 1,103,111 1,103,111 1,203,111
Note: Company estimates at 31 December 2006. Include leaseable area of Rama 2 & 3 which were partially transferred to CPNRF, but still under CPN’s management. Note1: Including Central Group’s areas (department store and CRC specialty stores). 26 Note 2: Including CentralWorld’s original space. Financial Highlight Consolidated Performance
Adjusted items in 2005 (unit : Bt mm) Adjusted items in Q42005 (unit : Bt mm) Net profit 3,295 Net profit 382 Adjusted 1.Gain from CPNRF (2,885) Adjusted 1.Gain from CPNRF (118) Bt m il 2.Impairment provision 407 2.Tax of 1. 35 12,000 3.Tax of 1.&2. 743 Net profit after adjusted 299 4.Minority interest of 2. (114) 9,729 Net profit after adjusted 1,446 10,000
7,292 8,000 6,844 6,158 6,298 6,000 4,877 3,413 3,677 3,106 3,295 4,000 2,399 2,590 2,187 1,952 1,446 1,685 1,687 1,348 1,059 2,000 656 560 527 299 365 0 2004 2005 2005 Adj.* 2006 4Q05** Adj. 4Q06
(1) Total revenue EBIT DA (2) Operating profit Net profit
Growth (% Y-o-Y) 2004 2005 2005 Adj.* 2006 4Q06 Y-o-Y Total revenue (1) 12% 58% 11% 7% 16% EBITDA 13% 103% 10% 8% 61% Operating profit 14% 123% 10% 8% 6% Net profit 13% 144% 7% 17% 22% (3) 9% 10% 10% 13% 16% Same store growth
Note: * Excluding gain from CPNRF of Bt 2,885 mil and impairment provision of Bt 406.6 mil in 2005 performance. (see box above graph) *Excluding gain from CPNRF of Bt 118 mil in 4Q05 performance. (see box above graph)
Note1: Total Revenue = Rental & Service Income + Food & Beverage Income + Other Income Note2: EBITDA is calculated by taking operating income and adding back depreciation and excluding interest income. It also includes long-term lease revenue which is a non-cash item Note3: Same store growth 2006 compare with 2005 excludes revenue from Rama2 & Rama3 28 Same store growth 2005 compare with 2004 excludes revenue from Rama2 & Rama3 in 4Q and The Offices at Centralworld Same store growth 2004 compare with 2003 excludes revenue from Rattanathibet Revenue Breakdown
Revenues Comments (FY06 vs. FY05)
Revenue increased by 1% y-o-y. Although Rama 2 and Rama 3 properties were leased Retail out to CPNRF in August 2005, retail revenue still experienced a marginal increase due to higher revenue from relaunching Rattanathibet in Sep 05, relaunching of 7% CentralWorld’s expansion and redevelopment phases and adjustments of co-service rate in Aug 06. Bt m il 7,292 Revenue increased 54% y-o-y. 8,000 6,844 7,000 Office Increase came from higher occupancy rate and higher 6,000 16% rental rates for new contracts signed at The Offices at 5,000 CentralWorld and new space at Pinklao Tower B. 4,000 3,000 1,952 1,687 Revenue decreased 6% y-o-y. 2,000 1,000 Food & Decrease came mainly from closure of food court at 0 Beverage Rama 3 in 3Q06 for renovation and ceasing of food court 4Q05 4Q06 2005 Adj 2006 operation at CentralWorld also in 3Q06 4Q05 4Q06 %yoy FY05 FY06 %yoy
Retail 1,247 1,501 20% 5,460 5,534 1% Revenue decreased 45% y-o-y. Other Office 152 199 31% 482 743 54% Decrease came from conversion of Pinklao Tower B from Rental residential apartments to office building. F&B 114 92 (19%) 420 397 (6%) Other rental 7 5 (29%) 60 33 (45%) Other income 167 155 (7%) 422 586 39% Revenue increased 39% y-o-y. Other Increase came mainly from full year book of property Income management fee from CPNRF and realized income of operating lease of land to CPRNF.
Note1: Other Rental = Includes revenue form Residential + Water & Amusement Park Note2: Other income in 2005 excludes gain from financial lease of Rama 2 and Rama 3 to CPNRF 29 Cost of Rental and Service Breakdown
Cost of Rental and Service Comments (FY06 vs. FY05)
Cost increased 8% y-o-y. 8% Increase came from additional depreciation of the Bt m il Retail 3,783 expansion phrase of CentralWorld (opened in Aug 4,000 3,501 06) and higher cost at Central Plaza Rattanathibet 3,500 (reopened in Sep 05)
3,000 Cost increased by 23% y-o-y. 2,500 Office Increase came from additional cost from Pinklao Tower B (opened in Mar 06) and higher occupancy 2,000 22% at The Offices at CentralWorld.
1,500 1,071 878 1,000 Cost decreased 6% y-o-y. Food & Decrease came from the closure of food court at 500 Beverage Rama 3 and CentralWorld and in line with decrease in revenue from F&B. 0 4Q05 4Q06 2005 Adj 2006
4Q05 4Q06 %yoy FY05 FY06 %yoy Retail 656 831 27% 2,667 2,882 8% Office 118 156 32% 454 560 23% F&B 90 71 (21%) 323 304 (6%) Others 13 13 1% 56 37 (34%)
Note1: Others in 2005 excludes impairment of land under development. 30 Selling and Administration Expenses Breakdown
Selling and Administration Expenses Comments (FY06 vs. FY05)
8% Expenses increased 20% y-o-y. Bt mil Increase came from organization restructuring, 1,200 People 1,078 salary base adjustment, and increase in personnel to support business expansion. 999 1,000
800 Expenses increased by 15% y-o-y. Ads & Increase came from marketing activities during 17% 600 Promo and after the opening of CentralWorld’s expansion phrase. 375 400 319 Expenses increased 3% y-o-y. 200 Depre- Increase came from depreciation of incremental ciation office equipment. 0 4Q05 4Q06 2005 Adj 2006
4Q05 4Q06 %yoy FY05 FY06 %yoy
People 124 139 12% 374 450 20%
Ads&Promo 93 153 64% 294 338 15% Depreciation 12 15 25% 56 58 3% (1) Others 90 69 (23%) 275 232 (16%)
Note1: Others in 2005 excludes impairment of land under development. 31 Key Ratios
Corporate Performance
Key ratios 2004 2005 2005 Adj. 2006 Y-o-Y Chg 4Q05 4Q06 Y-o-Y Chg Gross profit margin (%) 45.9% 45.5% 45.5% 43.6% (1.9%) 42.3% 40.4% (1.8%) Operating profit margin (%) 35.5% 68.8% 30.2% 33.8% 3.6% 37.2% 27.2% (10.1%) EBITDA margin (%) 50.4% 64.4% 49.5% 49.3% (0.1%) 42.0% 52.8% 10.8% Net profit margin (%) 21.9% 33.7% 21.0% 22.6% 1.7% 20.7% 18.2% (2.5%)
ROA 5.0% 10.1% 4.8% 5.0% 0.2% 4.7% 4.3% (0.4%) ROE 15.9% 33.5% 14.7% 14.3% (0.4%) 13.9% 12.4% (1.5%)
Business Line Performance
Gross Profit Margin (%) 2004 2005 2005 Adj. 2006 Y-o-Y Chg 4Q05 4Q06 Y-o-Y Chg Retail 49.2% 51.2% 51.2% 47.9% (3.3%) 47.4% 44.7% (2.7%) Office 16.9% 5.8% 5.8% 24.6% 18.8% 22.1% 21.6% (0.4%) F&B 24.0% 23.1% 23.1% 23.4% 0.3% 21.1% 22.8% 1.8% Other rental 8.9% (10.4%) (10.4%) (12.1%) (1.7%) (85.7%) (160.0%) (74.3%)
Note: Inclusion of gain from financial lease of Rama 2 and Rama 3 to CPNRF and impairment of land under development in 2005. 32 Capital Structure
Bt m il D/E (Tim e s ) 14,000 1.0 0.9 12,574 11,789 0.9 12,000 11,041 11,112 0.8 0.7 9,653 10,000 8,743 0.6 0.7 7,995 7,956 8,000 0.6 6,140 0.5 6,000 0.4 3,690 4,000 0.4 0.3 2,279 2,100 0.2 2,000 0.1 0 0.0 2003 2004 2005 2006
Cash De bt Eq u it y Ne t De bt to Equity
“ CPN’s Policy is to Maintain Net Debt to Equity at Lower Than 1.0 ”
Key ratios 2004 2005 2005 Adj. 2006 %Y-o-Y Chg 4Q05 4Q06 %Y-o-Y Chg
Net debt to equity (times) 0.9 0.4 0.4 0.6 22.8% 0.4 0.6 54.7% Total debt to equity (times) 2.1 1.8 1.8 1.7 (10.0%) 1.8 1.7 (5.5%) Interest coverage (times) 7.6 5.9 5.9 5.9 2.3% 3.7 9.7 158.9%
33 Debt Analysis
Outstanding Borrowings Bt 11,112 mil Financing Cost
Bt m il ST-Loan LT-Bond 700 621 11% Interest Expense 36% 600 544 ST-Bond 459 500 400 9% 400 300 158 200 126 100 0 LT-Loan 2003 2004 2005 2006 4Q05 4Q06 44% Weighted Avg. As of 31 December 2006. Interest Rate 4.9% 4.9% 5.3% 5.6% 4.9% 5.6%
Fixed vs Floating Mix
Bt mil Fixed Floating 11,041 11,112 12,000 10,000 7% 9,065 39% 8,043 8,000 44% 4,720 6,000 41% 4,000 93% 2,398 61% 48% 2,000 56% 59% 52% 71% 0 29% 2005 2006 2007 2008 2009 2010
Fixed Rate 4.8% 5.4% 5.6% 5.5% 5.6% 6.2% Floating rate MLR-0.5% MLR-1.35% MLR-1.32% MLR-1.37% MLR-1.36% MLR-1.46%
34 Share and Dividend Performance
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Close Price (Bt) Volume ('000 share) 25 30,000 7% th of 5 Share Price Movement l grow Annua 20 25,000
15 20,000 1M 3M 12M
10 15,000 CPN (3.8%) 17.7% 56.9%
5 10,000 SET Index (8.0%) (0.9%) (4.8%) Property Index (11.0%) 4.3% 1.8% 0 5,000 6 6 6 6 6 6 6 6 0 0 0 6 0 0 0 0 7 /0 0 0 0 /0 0 0 0 0 /0 3 2 2 2 4 2 2 2 2 9 /0 / / / /0 / / / / /0 1 /2 /3 /5 7 7 9 1 2 2 0 5 9 9 0 /1 /2 /1 /1 0 1 2 1 8 9 3 7 0 0 0 1 2 Volumes ('000 shares) Close Price (Bt)
Share Overview Dividend Summary
2004 2005 2006 Par Value (Bt) 1.00
Stock Price (Bt) 22.60 Par Value (BT) 1.00 1.00 1.00 EPS (Bt/share) – 12M 2006 0.77 Dividend (Bt/share) 0.25 0.40 000.31 (1) P/E (Bt) 29.35 Dividend Paid (Bt mil) 545 872 675 P/BV (Bt) 3.92 Dividend Payout Ratio 40% 26%* 40% Market Capitalization (Bt mil) 49,241 Notes: Dividend policy is paid annually not less than 40% of net profit. Share Capital (Shares) 2,178,816,000 : Dividend Yield ~ 2.0% - 2.5% in last 3 years. : 40% of profit excluded extra gain (Bt 530 mil) plus 18% of gain from set up CPNRF(Bt 362 mil).
Source: SETSmart as of 31 December 2006. Note1: Earning per share (EPS) based on 2006 EPS of Bt 0.77 per share. 35 Appendix Borrowings: 31 December 2006
TRIS Rating Co., Ltd. has rated the Company’s senior debentures as “A” in May 2006.
Loan Bt mil Terms
Bill of Exchange & Promissory Note 239 3-mth fixed deposit rate Unsecured Bond (Mar’04) 1,000 5 years, 4.2% Unsecured Bond (Mar’ 04) 1,500 6.8 years, 5.24% Unsecured Bond (Apr’ 05) 500 2 years, 3.9% Unsecured Bond (Apr’ 05) 500 2 years, 3.8% Unsecured Bond (Jun’ 06) 1,500 3 years, 6.39%, MLR – 1.55% Property Fund Pinklao (Dec’02) 759 10 years, MLR-1%, MLR–0.75%(amortising) Property Fund Pinklao (Dec’02) 253 10 years, 7% (amortising) Property Fund Centralworld (Jun’03) 1,974 10 years, MLR - 1.25% (amortising) Property Fund Centralworld (Jun’03) 1,316 10 years, 6.125% (amortising) Property Fund Bangna (Mar’03) 929 15 years, 4.75%, MLR-1.25% (amortising) Property Fund Bangna (Mar’03) 242 15 years, 6% (amortising) Project Finance - Chiangmai 2B(Dec’02) 400 7 years, 6.25% (amortising) Total(Long Term Borrowings & Current Portion) 11,112 Less Cash (3,690) Net 7,422
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