Central Pattana Plc. Property Development and Investment
Corporate Presentation : 1Q15 Performance Review
CentralPlaza Rayong Disclaimer
. 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.
. This presentation may include information which is forward-looking in nature. Forward-looking information involve known and unknown risks, uncertainties and other factors which may impact on the actual outcomes, including economic conditions in the markets in which CPN operates and general achievement of CPN business forecasts, which will cause the actual results, performance or achievements of CPN to differ, perhaps materially, from the results, performance or achievements expressed or implied in this presentation.
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Note: All currency figures within this presentation are presented in Thai Baht unless otherwise stated. 2 Agenda
► Company Overview
► Operational Performance
► Future Developments
► Financial Performance
► Appendix
3 Company Overview
4 Business Overview Recent Achievements Selected as an index component of 2014 Dow Jones Sustainability Indices Emerging Markets amid the largest 800 companies by market capitalization
Listed on Top 50 Companies in ASEAN CG Scorecard 2013/14
“SET Awards of Honor 2014” Top Corporate Governance Report for the four consecutive years from 2011-2014
Certified Member of the Thailand’s Private Sector Collective Action Coalition Against Corruption Council (CAC)
“Thailand Energy Awards 2014” was presented to CentralPlaza Pinklao for the Best Regulating Structure and Outstanding Responsibility for Energy Efficiency
“Top 10 Developers Awards 2014” Recognized the top architectural firms and developers that had the greatest impact on the built environment in Southeast Asia
Note 1: SetSmart as of 31 March 2015; Bank of Thailand: USD1 = THB 32.7028 as of 31 March 2015. Note 2: Company data and company estimate as of 31 March 2015. 5 Strong Development & Acquisition Pipeline
1980s 1990s 2000s 2010-2015
25 existing projects (20 Greenfields, 5 Acquisitions <=> 11 in Bangkok, 14 in Provinces)
Bangkok (1) Bangkok (3) Bangkok (2) Bangkok (2) 2011 CentralPlaza Grand Rama 9 1980 Established under Central 1993 CentralPlaza Ramindra 2002 CentralPlaza Rama 2 Plaza Co., Ltd. 1995 CentralPlaza Pinklao 2008 CentralPlaza Chaengwattana 2014 CentralPlaza Salaya 1982 CentralPlaza Lardprao 1997 CentralPlaza Rama 3 Provinces (3) Provinces (8) Province (1) 2009 CentralFestival Pattaya Beach 2011 CentralPlaza Chiangrai 1995 Central Center Pattaya 2009 CentralPlaza Chonburi 2011 CentralPlaza Phitsanulok 2009 CentralPlaza Khonkaen 2012 CentralPlaza Suratthani
field Developmentfield 2012 CentralPlaza Lampang - 2013 CentralPlaza Ubonratchathani
CentralPlaza Lardprao 2013 CentralFestival Chiangmai Green 2013 CentralFestival Hatyai 2014 CentralFestival Samui
Province (1) Bangkok (3)
1996 CentralPlaza Chiangmai Airport 2001 CentralPlaza Bangna 2002 CentralWorld 2003 CentralPlaza Rattanathibet
Province (1) Acquisition 2009 CentralPlaza Udonthani
Province (1) Bangkok (2) Bangkok (1)
2000 CentralPlaza Chiangmai Airport 2004 The Offices at CentralWorld 2013 CentralPlaza Bangna Phase 2A 2006 CentralWorld 2015 CentralPlaza Pinklao
Province (1)
2003 CentralPlaza Chiangmai Airport Province (1) Phase 2B 2012 CentralPlaza Udonthani (Phase 2)
Enhancement Redevelopment &
Source: Company data and company estimate as of 31 March 2015. 6 Future Leasable Area & Occupancy Rate CPN’s 5 year Target: Revenue growth 15% per annum (CAGR) Retail NLA (sqm) 97% 98% 96% 96% 97% 96% 95% 95% 94% 2,000,000 95% 96% 100%
1,800,000 90% 1,600,000 80% 1,400,000 70% 1,200,000 60% 1,000,000
800,000 50%
600,000 40%
2011
2007 2010 2008 2009 2012 2013 2014
2017F
2015F 2016F Under study projects Under developing projects Exisitng projects % Occupancy (RHS) Assets under management 2007 2008 2009 2010 2011 2012 2013 2014 2015F 2016F 2017F No.of project 10 11 15 15 18 20 23 25 29 31 35 Retail space (NLA in sqm) 697,038 761,111 967,430 964,612 1,059,910 1,121,377 1,286,125 1,388,313 1,582,160 1,663,160 1,843,554 From 2015 to 2017, CPN will launch 10 new projects, of which 7 projects in domestic and 1 in overseas have been publicly announced.
2015 2016 2017 BKK & Greater BKK (2) CentralPlaza WestGate CentralFestival East Ville Provinces (5) CentralPlaza Rayong CentralPlaza Nakhonratchasima CentralFestival Phuket 2 CentralFestival Phuket 1 CentralPlaza Nakornsrithammarat Overseas (1) CentralPlaza i-City (Malaysia)
Source: Company estimate as at 31 March 2015. Retail space: Includes leasable area of CentralPlaza Rama 2, CentralPlaza Rama 3, CentralPlaza Pinklao, and CentralPlaza Chiangmai Airport, which were 7 partially transferred to CPNRF, but still under CPN’s management.
Competitive Landscape
CPN is the leading retail property developer and investor in Thailand with approximately 20% market share in Bangkok Metropolitan Area by mall leasable space.
20% The Mall Group Other 8% 46%
Seacon Square 5% Siam Future 4% Mega Bangna Fashion Island 3% 3% Siam Paragon TCC Land 4% Future Park 3% 4% New Proj. GFA Investment Year Strategy (#) (sqm) (MB) The Mall 5 2,000,000 65,000 2014-2017 City within the city for malls in Bangkok World iconic tourist destination for new malls in tourist destination SF 2 800,000 20,000 2014-2018 Expand 2-3 community malls per year JV with IKANO for super regional malls FUTUREPARK 1 160,000 4,000 2015 Expand mall adjoining Future Park Rangsit Use model of mall in CBD area for expanded mall TCC LAND 3 104 rai 7,000 2017-2018 Mixed-use projects in tourist destination and fine dining concept Siam Piwat & CP 1 40 rai 35,000 2017 Plan to be Bangkok's iconic landmark & Magnolia Mixed-use project (mall/residential/hotel/entertainment)
Source: Figures and strategy were collected from public media and had not been verified. This is made for information purposes only. 8 Strategic Shareholders
CPN is one of the flagship businesses of the Central Group (Chirathivat Family). As a strong and supportive shareholder, the Chirathivat family brings to CPN a wealth of retail-related expertise through the family’s long record and successful leadership in Thailand’s dynamic and competitive landscape of shopping mall developments and department store / specialty store operations.
Chirathivat Family 29% Local funds 19% Free float Foreign 55% 45% funds 69% Individuals Central 12% Group 26%
Source: Company estimate as of 31 March 2015. 9 Strategic Shareholder CPN’s strong synergy with the Central Group helps CPN to attract dynamic tenants, increase people traffic and command higher rents. Central Group
Central Pattana Public Company Limited Central Department Store Group
Central Hotel & Resort Group Central Food Retail Group
Central Restaurant Group Central Hardlines Group
Central Marketing Group Central Online
10 Central Group Holding Structure
Central Group & Chirathivat Family
55% 69% 100% 100% 100% 100% 63%
“CPN” “CENTEL” 60% “COL” Listed Company Listed Company Listed Company
“ROBINS” Listed Company
11 Property Development and Management
Property Developer & Property Manager Department Store & Shopping Mall Category killers
Other Other Other Other Tenants Tenants Tenants Tenants
CRG
Other Other Other Other Tenants Tenants Tenants Tenants
CMG
CRG & CMG Other tenants Joint developers • ~10% of total leasable areas • ~90% of total leasable areas and also in • Sharing cost of land and common and also in term of total term of total revenue area revenue • Owning its investment cost and assets • Pricing criteria as same as others
12 Integrated Business Platform
CPN is a retail developer with an integrated business platform that will allow it to expand on a sustainable basis and achieve operational enhancements and success with its synergies with the Central Group of companies.
CPN intends to use this integrated business platform to expand further throughout Thailand, maintaining market share in Bangkok while increasing market share in the provincial areas. CPN also intends to utilize this optimal business platform in its expansion into neighboring countries.
Central Group CPN Leading Property Fund/REIT (CPNRF and CPNCG)
Largest and most popular among Leading retail developer, property CPNRF and CPNCG are property the retail chains in Thailand manager and investor in Thailand with funds in Thailand . Guarantee space take-up with market share of 20% of Bangkok’s Provide optimal funding source: successful brands and store mall saleable area . Unlock CPN’s asset value concepts Integrated development, leasing and . Free up capital for business . Increase people traffic property management teams have expansion ensured continuous success for . Lower leverage and avoid Most successful and most over 30 years dilution experienced among the retail companies in Thailand . Strategic location Create fee base income . Attract tenants to locate in CPN . Optimal tenant mix Improve CPN’s financial position: shopping centers . World class standard . Tax benefit . Capital redeployment to . Allow CPN to achieve higher Branded malls to ensure innovative rental rates than others designs and functionality to suit projects with higher return customer needs
13 Key Success Factors
A Leading Player in the Retail Property Development Industry
Business alliances and joint developers, building confidence among prospects and attracting shoppers Central’s Group Synergy Over 30-years experience in Recurring income from High Revenue retail property development & monthly rent with proven Experienced & management sustainable rental growth Generating Capability at Hands-on Sustainable Management Site selection, merchandizing Growth Rate mix, and retail business know- how
Prudent Focus on Retail Financial Property Management Development in and Prime Locations Enhanced funding capability with Solid High quality shopping centers: high occupancy & traffic flow through REIT vehicle. Financial Operating and sustainable rental growth Business growing at a low Flexibility Performance gearing Dynamically Innovative & Step-up rental structure. Diversified Well diversified portfolio in 24 high traffic growth areas
14 Operational Performance
15 Property Locations Shopping Centers (11 BMA, 14 Provinces) Offices (7) Existing Projects (25) 1 (BMA) Hotels (2) 19 (10 BMA, 9 Provinces) Residences (2) 4 (Provinces) centralcenter 1 (Province)
Bangkok Metropolitan Area (BMA)
Note: As of March 2015. 16 Leasable Area and Occupancy As of 1Q15, CPN owns 25 premium shopping centers with average occupancy rate of 94%.
Land Net Leasable Area(1) (sq.m.) Occupancy Rate (2) No. of Retail Properties Freehold & Projects Freehold Leasehold Retail Department Store Total 1Q15 4Q14 1Q14 Leasehold
CPN in BMA 11 4 6 1 564,706 63,583 628,289 93% 97% 96%
CPN in Provinces 14 11 3 0 523,364 54,391 577,755 95% 96% 94%
Total Retail Properties(3) 25 15 9 1 1,088,071 117,974 1,206,045 94% 96% 95%
Breakdown by NLA Breakdown by Rental Income
Provinces Provinces 49% 48% BMA BMA 52% 51%
Net Leasable Area (sq.m.) (2) Provincial No. of Occupancy Rate Non-core Properties or 42% Projects No. of Units or Room(1) 1Q15 4Q14 1Q14 Office in BMA(3) 5 55,102 95% 96% 98% Residential in BMA 2 6,373 sq.m. or 61 units 51% 53% 70%
Hotel in provincial area(4) 2 561 rooms 78% 78% 77%
Note 1: Excludes rental agreements < 1 year, such as kiosk, carts, ATMs and coin machines. Note 2: Percentage based on leasable area. 17 Note 3: Excludes areas transferred to CPNRF. Note 4: Outsource the management, Pattaya (302 rooms) managed by Hilton and Udonthani (259 rooms) managed by Centara. Occupancy rate of Hotel Business was an average of 3 months
Rental Contract Type : By Area
Monthly basis collection (up to 3 years) Consignment • Tenants: Food centers, Cineplex, Fixed Rent 33% 48% International Food chains and Fashion Anchors such as “Uniqlo”, “H&M”. • Range of percentage: 10% - 30% Monthly basis collection of sales (up to 3 years) • With minimum guarantees • Increase rental rate approx 5% p.a. • Approx.1/3 of rental contract Long-term expired every year Lease 19%
Up-front collection (up to 30 years) • Up-front payment – realize throughout lease contract period on straight-line basis
Note: In addition to space rental fee, service & utility fees are collected on a monthly basis
Note: Percentage based on occupied area. Source: Company estimate as of 31 March 2015. 18 (1) Effective Rental Rate
(2) Overall effective rental rate declined in 2009 – 2011 from new Same Store Rental Rate of Bangkok Malls malls in provinces. 1Q15 same store rental grew by 3% YoY. (Bt/sq.m./mth) Same Store Rental 1,777 1,800 1,722 1,600 (Bt/sq.m./mth) 1,600 1,581 1,505 1,510 1,538 1,400 1,447 1,200 1,400 1,000 1,274 1,254 1,225 1,248 800 1,200 600 1Q14 1Q15 1,000 (2) Same Store Rental Rate of Provincial Malls
800 2008 2009 2010 2011 2012 2013 2014 1Q14 1Q15 (Bt/sq.m./mth) 1,369 1,400 1,338
Malls excluded: 1,200 All Projects • CentralFestival Samui • CentralPlaza Salaya 1,000 • Use normalized ARR of 800 CentralWorld (2Q14 – 4Q14) for 1Q14 base 600 1Q14 1Q15
Note 1: The figures are effective rental rates for retail tenants (occupied space < 1,000 sq.m.) and net of special rental discounts. Note 2: Excludes CentralFestival Samui, CentralPlaza Salaya, and use normalized ARR of CentralWorld (2Q14 – 4Q14) to represent 1Q14 rate. 19 Source: Company estimate as of 31 March 2015. (1) Expiration of Long-term Lease Contracts
Long term lease contract will be expired in each of the following years. This area will be converted to short term contracts at market rental rate which could increase the company’s revenues. (2) The expiration area and expiration period are shown below :
60%
50% 27%
40%
30% Anchor PKO 11% Retail
20% Others 2%
13% 10% 24% 10% 14%
PKO 2% 2% 2% 4% 0% 2015 2016 2017 2018 2019 2020 ≥ 2021
(1) Source: Company estimate as of 31 March 2015. (2) Total lease area is 186,621 sq.m. with less than 4% rental income contribution. 20 (3) In 2015, area excludes Big C at Central Center Pattaya. The upside from short-term contract renewal is subject to the renewal of the land lease of Central Center Pattaya .
Future Developments
21 Domestic Expansion PROVINCES 2015 Project under construction No. of Net Leasable Area Projects (sq.m.) New Retail Properties in BMA 2 116,500 New Retail Properties in Provinces 5 221,347 CentralPlaza Rayong (East of Thailand) Total Retail Properties(3) 7 337,847 NLA: 33,000 sq.m. Opening in 27 May 2015 Bangkok & Greater Bangkok CentralFestival Phuket 1 2015 (South of Thailand) NLA: 44,347 sq.m. Received approval from shareholders and will be acquired on 1 Jun 2015
2016 CentralPlaza WestGate (Bangyai) (West of BKK) NLA: 82,000 sq.m. Opening in July 2015 CentralPlaza Nakhonratchasima (Northeast of Thailand) NLA: 55,000 sq.m. Opening in 4Q16
CentralFestival East Ville (East of BKK) NLA: 34,500 sq.m. Opening in October 2015 CentralPlaza Nakhon Si Thammarat (South of Thailand) NLA: 26,000 sq.m. Opening in 2Q16 CentralFestival Phuket 2 2017 (South of Thailand) NLA: 63,000 sq.m. Opening in 2017
22 Source: Company estimate as of 31 March 2015. New Projects in Thailand (Open in 2015)
CentralPlaza Rayong CentralPlaza WestGate
Investment Cost (1) 2,400 Bt. mil 7,200 Bt. mil Net Leasable Area (2) 33,000 sq.m. 82,000 sq.m. Parking 1,500 cars 5,000 cars Joint Developer (3) Robinson Department Store Central Department Store Land Size (4) 60 rais 100 rais (Freehold) (Leasehold) Location Rayong Bangyai, Nonthaburi Opening 27 May 2015 Jul-15
Note 1: Includes land and construction cost of shopping center and parking building. Excludes those of Central Department Store or Robinson Department Store (CRC) Note 2: Excludes CRC’s area. 23 Note 3: Area will be developed and owned by the joint developer. However the store will serve as a magnet to draw traffic into CPN’s plaza area. Note 4: 1 rai = 1,600 sq.m. New Projects in Thailand (Open in 2015)
CentralFestival East Ville CentralFestival Phuket 1
Investment Cost (1) 3,200 Bt. mil 6,669 Bt. mil Net Leasable Area (2) 34,500 sq.m. 44,347 sq.m. Parking 1,900 cars N/A Joint Developer (3) Central Department Store Central Department Store Land Size (4) 51 rais 25 rais (Freehold & Leasehold) (Leasehold) Location Ekkamai-Ramintra Phuket Opening Oct-15 Jun-15
Note 1: Includes land and construction cost of shopping center and parking building. Excludes those of Central Department Store or Robinson Department Store (CRC) Note 2: Excludes CRC’s area. 24 Note 3: Area will be developed and owned by the joint developer. However the store will serve as a magnet to draw traffic into CPN’s plaza area. Note 4: 1 rai = 1,600 sq.m. New Projects in Thailand (Open in 2016)
CentralPlaza Nakhon Si Thammarat CentralPlaza Nakhonratchasima
Investment Cost (1) 1,900 Bt. mil 5,000 Bt. mil Net Leasable Area (2) 26,000 sq.m. 55,000 sq.m. Parking 1,500 cars 3,500 cars Joint Developer (3) Robinson Department Store Central Department Store Land Size (4) 51 rais 60 rais (Freehold) (Freehold) Location Nakornsithammarat Nakhonratchasima Opening (tentative) 2Q16 4Q16
Note 1: Includes land and construction cost of shopping center and parking building. Excludes those of Central Department Store or Robinson Department Store (CRC) Note 2: Excludes CRC’s area. 25 Note 3: Area will be developed and owned by the joint developer. However the store will serve as a magnet to draw traffic into CPN’s plaza area. Note 4: 1 rai = 1,600 sq.m. Assets Enhancement
CentralPlaza Pinklao CentralPlaza Bangna
CentralPlaza Pinklao CentralPlaza Bangna Phase I Phase II Investment Cost 1,900 TBA 57,601 sq.m. Net Leasable Area (Incremental NLA 8,000 sq.m.) TBA Type Renovation (Interior & Exterior) Rezoning & remerchandising mix Remerchandising mix phase by phase Opening (tentative) 4Q15 1Q16
26 Overseas Expansion Malaysia South East Asia in Focus • Realistic land price and freehold Investment Strategies: ownership ■ Joint venture with local partners focus on retail properties • Moderate competition and fragmented market ■ To be a property manager • High spending power with similar customer profile to Thailand Completed JV Agreement Vietnam
Potential Locations • Large population
Thailand • Low competition with few major players • Strong growth in disposable income but low spending power Indonesia Vietnam • Large population Malaysia • Rapidly growing middle class population with increasing spending power • Sophisticated market but strong competition from existing players • High cost of fund and unrealistic land Indonesia price with little infrastructure
27 New Project in Malaysia
CentralPlaza i-City
( 1 ) Investment Cost 7,400 Bt. mil Joint venture i-City Properties Sdn Bhd (“ICP”), an I-Berhad wholly-own subsidiary CPN holds 60% stake and ICP holds 40% stake CPN will lead in the development and management of the shopping mall Program:
Shopping Center 89,700 sq.m. (NLA includes department store)
Land Size 11.12 acres or 27.5 rais Location i-City, Shah Alam, Selangor Darul Ehsan, Malaysia Opening (Tentative) 2Q2017
Note 1: Includes land and construction cost of shopping center and parking building. 28 (Bt.mil)
Capital Expenditure (Bt.mil)
Major capital expenditure will be used to develop new projects. Financing plan for future expansion includes: cash flow from operation, bond issuance and/or project finance, and property fund vehicle.
(Bt. mil)
(Unit: MB) Actual Estimates CPN's Projects 2014 2015 2016 2017 2018 Under-construction Projects 8,090 15,812 6,510 4,195 1,282 Enhancement Projects 1,001 4,161 1,582 1,300 1,300 Potential Projects 2,127 3,513 6,450 10,226 13,302 Total CAPEX 11,218 23,486 14,542 15,720 15,884
Source: Company estimate as of 31 March 2015. 29 Financial Performance
30 Financial Summary
(Bt.mil) • Reopening of CentralWorld • Relaunch of CentralPlaza Udonthani 26,000 23,668 24,000 6-mth Closure of 22,000 21,234 CentralPlaza Lardprao 20,000 17,687 18,000 6-mth Closure of CentralWorld 16,000 14,000 12,766 11,755 12,000 11,388 8,447 10,000 9,271 8,000 7,345 7,307 6,189 6,293 6,136 6,087 6,000 4,952 5,634 4,000 2,991 3,112 2,442 2,620 5,590 2,109 1,929 2,367 2,186 2,058 1,710 1,820 2,147 2,000 1,125 4,413 1,710 2,158 2,292 1,871 5,991 1,767 2,013 0 1,552 7,231 2008 2009 2010 2011 2012 2013 2014 1Q14 4Q14 1Q15 Total revenues Operating profit Normalized Net profit Net profit
% YoY Growth 2008 2009 2010 2011 2012 2013 2014 1Q14 4Q14 1Q15 Total revenues /1,2 12% 27% (3%) 12% 39% 19% 13% /3 8% 6% 8% Operating profit /2 24% 4% (22%) 7% 113% 31% 15% 4% 8% 12% Regardless of Normalized Net profit 38% 6% (32%) 21% 136% 36% 21% 3% 22% 18% CTW, SS Revenue Net profit 23% 127% (77%) 83% 201% 2% 16% 3% 4% 26% would be +7% Same store revenue growth 11% 5% 0% 9% 29% 12% 4% /3, 4 (5%) 2% /5 4% /6
Gross Profit Margin (Exc. Other Income)(%) 47% 43% 34% 35% 44% 47% 48% 48% 48% 50% EBITDA Margin (%) 48% 44% 42% 44% 54% 52% 53% 55% 49% 57%
Note 1: Total revenue includes rental & service, hotel operation, food & beverage, and other incomes. Excl. interest income, share of profit from investment. Note 2: Excl. non-recurring items. 31 Note 3: Excl. backdated service income of 2012 recorded in revenue from rent and services in 1Q13 and discount given at CentralWorld in 1Q14. Note 4: Excl. CentralPlaza Ubonratchathani, CentralFestival Chiangmai, CentralFestival Hatyai, CentralFestival Samui, CentralPlaza Salaya, and CentralPlaza Chiangmai Airport. Note 5: Excl. CentralFestival Chiangmai, CentralFestival Hatyai, CentralFestival Samui, CentralPlaza Salaya, and CentralPlaza Chiangmai Airport. Note 6: Excl. CentralFestival Samui, CentralPlaza Salaya, CentralPlaza Chiangmai Airport and discount given at CentralWorld in 1Q14 Total revenues /1 +8% YoY or +452 Bt.mil YoY Revenue Breakdown mainly driven from rent and services. Rent and services +10% YoY +13% YoY • Full-quarter realization of 2 new projects (Bt.mil) launched in 2014 i.e. CentralFestival Samui, 23,668 CentralPlaza Salaya 24,000 20,967 • Improved revenue generated by existing malls, 20,000 especially at CentralWorld (CTW), and a 17,687 decrease in discounts at CTW. +8% YoY 16,000 • Same store revenue growth of 4% YoY. 12,765 -1% QoQ
12,000 Hotel +5% YoY 8,000 6,086 5,634 6,136 • Continuing growth in hotel business, led by the increase in RevPar at both hotels. 4,000
0 F&B sales -1% YoY 2011 2012 2013 2014 1Q14 4Q14 1Q15 • Despite contributions from new food courts at new projects opened in 2014, the marginal Retail Office F&B Hotel Management fee Other income drop stemmed from the decreased revenue at CentralFestival Pattaya Beach according to 1Q15 Revenue breakdown fewer number of international tourists.
Implementing strategic marketing activities: Office 2% - Rent from shops F&B 4% • Distinctive marketing activities for different - Promotion Area Retail 85% target groups in each catchment area. Hotel 4% (Events) • Particular promotion campaign targeting tourists - Service income Management at shopping centers located in tourist fee 2% - Convention Hall destinations. Other income - Onsite Media 3%
Excludes non-recurring income. Note 1: Includes revenues from residential projects and water & amusement park, and property management fees from CPNRF & CPNCG. 32
Costs Breakdown
+10% YoY Total Costs +5% YoY or +141 Bt.mil YoY. (Bt.mil) Rent and Services 6% YoY 12,000 11,616 10,542 • Additional operating costs and depreciation of the new projects launched in 2014. 10,000 9,434 Hotel Business +4% YoY 7,783 8,000 • The rise in costs at a slower pace than the 5% YoY growth in revenue. 6,000 -4% QoQ F&B +1% YoY 4,000 • The increased in costs in line with the growth 2,723 2,994 2,864 in revenue. 2,000
0 2011 2012 2013 2014 1Q14 4Q14 1Q15 Focusing on efficient cost management: Retail Office F&B Hotel Others • Energy and utility saving programs
1Q15 Cost breakdown • Energy and utilities are major components of business costs
Office 2% F&B Retail 6% 89% Hotel 3%
Note: Excludes non-recurring items. 33 SG&A Expenses Breakdown
(Bt.mil) SG&A expenses +7% YoY or +56 Bt.mil YoY 4,000 3,667 owing mainly to increased expenses of two malls 3,446 3,500 launched in 2014 including increased personnel and marketing expenses following the addition of 3,000 2,741 the CPN’s mall portfolio. 2,410 2,500 +7% YoY 2,000 -30% QoQ Executing efficient expense management: 1,500 1,230 1,000 807 863 • A pooled procurement mechanism with Central Group to achieve economies of scale 500 0 • Marketing campaign 2011 2012 2013 2014 1Q14 4Q14 1Q15 • Supply chain management Personnel Advertising & promotion Depreciation Others
1Q15 SG&A breakdown
Advertising & promotion 16%
Personnel 46% Depreciation 16%
Others 22%
Note: Excludes non-recurring items. 34 . Upgraded to “AA-” ratings with “Stable” outlook by Debt Analysis TRIS Rating in 12 May 2014
AA- Credit Rating . All borrowings are denominated in THB. Outstanding Borrowings 15,208.31 Bt.mil Fixed vs. Floating Interest Rate Mix
Long-term Short-term loan loan 19% 14% Floating 19%
Long-term Short-term Fixed bond bond 81% 49% 18%
Financing Cost (Bt.mil) 4.4% 1,200 6% 4.3% 4.0% 4.3% 1,057 3.9% 3.9% 3.9% 1,000 4.4% 5% 874 813 677 800 688 4% 600 3%
400 2%
200 179 1% 92 96 0 0% 2010 2011 2012 2013 2014 1Q14 4Q14 1Q15
Interest expenses Weighted average cost of debt (RHS)
Note: Weighted average interest rate was derived from interest expenses including interest capitalization for projects under development. 35 Capital Structure
CPN’s net D/E stood at 0.28 times, against its debt covenant of 1.75 times.
(Bt.mil) (Times) 43,951 45,000 1.40 41,748 40,000 36,824 1.20 35,000 1.00 30,000 25,900 25,245 25,568 25,000 0.80 20,448 19,008 19,842 20,000 19,085 18,918 1.19 0.82 16,669 0.60 0.92 16,019 15,208 15,000 0.74 0.40 10,000 0.49 0.20 5,000 4,207 3,773 0.29 2,828 0.28 2,541 1,869 1,632 945 0 0.00 2009 2010 2011 2012 2013 2014 1Q15
Cash & current investment Interest bearing debts Equity Net D/E
36 Key Trading Statistics and Dividend
Key Trading Statistics Dividend
Key Metrics THB Key Metrics 2014 2013 2012 2011 2010 2009 2008
(3) (3) Par Value 0.50 Par Value (THB) 0.50 0.50 1.00 1.00 1.00 1.00 1.00
Stock Price (1) 42.75 Dividend 0.65 0.55 0.475 0.37 0.25 0.58 0.33 (THB/Share) EPS (2) 0.45 Dividend Paid 2,917 2,468 2,070 806 545 1,264 719 (Bt. mil)
P/E (x)(1) 26.26 Dividend Payout 39.9% 39.2% 33%(2) 39% 48% 25%(1) 33% Ratio Market Capitalization (Bt. bn)(1) 192 Dividend policy is paid annually approximately 40% of net profit (unless there is Authorized Share Capital (mil. shares) 4,488 compelling reason against this).
Note 1: Dividend payout ratio of 25% in 2009 was derived from 40% of normal net profit and 14% of Note 1: SetSmart as of 31 March 2015. gain from transferring assets into CPNRF. Note 2: 1Q15 Performance. EPS excluding non-recurring items Note 2: Dividend payout ratio of 33% in 2012 was derived from 40% of normal net profit and 17% of
gain from transferring assets into CPNCG.
Note 3: Par spilt to THB 0.50 per share effective on 7 May 2013
37 Appendix
38 Statement of Financial Position
Financial position (MB) 4Q14 1Q15 % Change
Current assets Cash and current investments 3,773 2,828 (25%) Other current assets 3,245 2,704 (17%) Total current assets 7,018 5,532 (21%) Non-current assets Investment properties (1) 60,927 63,421 4% Leasehold rights 11,795 11,519 (2%) Property & equipment (PP&E) 2,140 2,074 (3%) Other non-current assets 7,154 7,171 0% Total Non current assets 82,017 84,186 3% Total assets 89,035 89,718 1% Current liabilities 14,126 13,632 (3%) Non-current liabilites 33,161 32,135 (3%) Total liabilities 47,287 45,767 (3%) Total equities 41,748 43,951 5%
(1) Investment Properties are booked at cost and depreciated with the straight-line basis over the life of the assets. The estimated fair value is 130,288 MB (127,663 MB in December 2014), stated in the disclosure notes to the main financial statement no. 10 under “Investment Properties”. 39 Statement of Comprehensive Income
Consolidated earnings (MB) 1Q14 4Q14 1Q15 % YoY % QoQ
Revenue from rent and services 4,793 5,239 5,271 10% 1% Retail 4,691 5,140 5,169 10% 1% Office 98 95 98 (1%) 3% Other supportive businesses 4 4 4 (18%) (8%) Revenue from hotel operation 255 269 268 5% (0.4%) Revenue from food and beverage 225 247 223 (1%) (10%) Other income 361 447 459 27% 3% Total revenues 5,634 6,202 6,221 10% 0.3% Total revenues excluding non-recurring items 5,634 6,136 6,086 8% (1%) Cost of rent and services 2,466 2,710 2,602 6% (4%) Retail 2,416 2,658 2,554 6% (4%) Office 46 48 45 (3%) (6%) Other supportive businesses 4 4 4 (3%) (8%) Cost of hotel operation 80 83 83 4% 0.03% Cost of food and beverage 177 201 178 1% (11%) Total costs 2,723 2,994 2,864 5% (4%) Operating profit 2,109 1,929 2,367 12% 23% Net profit 1,710 1,820 2,147 26% 18% Net profit excluding non-recurring items 1,710 1,767 2,013 18% 14% EPS (Bt) 0.38 0.41 0.48 26% 18% EPS (Bt) excluding non-recurring items 0.38 0.39 0.45 18% 14%
40 Operational Performance: CPNRF and CPNCG
In 1Q15, CPN Retail Growth Leasehold Property Fund (“CPNRF”) had four shopping centers and two office towers. In Sep12, CPN Commercial Growth Leasehold Property Fund (“CPNCG”) was launched and currently owns one office. CPNRF and CPNCG are managed by SCB Asset Management, Fund Manager. Their properties are managed by CPN, Property Manager.
Remaining Life Leasable Area(1) Occupancy Rate (2) CPNRF Properties (years) (sq.m.) 1Q15 4Q14 1Q14
1. Rama 2 (Retail) 10 Yr & 5 M 88,121 96% 97% 96%
2. Rama 3 (Retail) 80 Yr & 5 M 37,676 91% 94% 96%
3. Pinklao (Retail) 9 Yr & 9 M 21,674 77% 98% 99%
4. Pinklao Tower A & B (Office) 9 Yr & 9 M 33,760 97% 96% 97%
5. Chiangmai Airport (Retail) 29 Yr & 1 M 37,038 98% 99% N/A
Total 218,269 93% 97% 97%
Remaining Life Occupancy Rate (2) CPNCG Office Property Leasable Area(1) (sq.m.) (years) 1Q15 4Q14 1Q14
CentralWorld (Office) 17 Yr & 10 M 80,604 99% 99% 99%
Note 1: Includes rental agreements < 1 year such as kiosk, carts, ATMs and coin machines and CPN acts as the property manager. Note 2: Percentage based on leasable area. 41