KLCCP Stapled Group Financial Results 4th Quarter ended 31 December 2020 27 January 2021 DISCLAIMER
These materials contain historical information of KLCC Property Holdings Berhad and KLCC Real Estate Investment Trust (collectively known as KLCCP Stapled Group) which should not be regarded as an indication of future performance or results.
These materials also contain forward-looking statements that are, by their nature, subject to significant risks and uncertainties. These forward-looking statements reflect the KLCCP Stapled Group’s current views with respect to future events and are not a guarantee of future performance or results. Actual results, performance or achievements of KLCCP Stapled Group may differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding KLCCP Stapled Group’s present and future business strategies and the environment in which KLCCP Stapled Group will operate in the future, and must be read together with such assumptions.
No part of these materials shall form the basis of, or be relied upon in connection with, any investment decision whatsoever.
2 4Q FY2020 Results – Investor Presentation CONTENT
1 KLCCSS - AT A GLANCE
2 OUR RESPONSE TO COVID-19
3 FY 2020 KEY HIGHLIGHTS
4 4Q FY2020 FINANCIAL PERFORMANCE
5 SUSTAINABILITY
6 OUTLOOK & KLCCSS FOCUS
4Q FY2020 Results – Investor Presentation AT A GLANCE OUR PURPOSE WE CREATE PLACES PEOPLE LOOK FORWARD TO, PROGRESSING LIFESTYLE FOR A SUSTAINABLE FUTURE
WHO WE ARE
Malaysia’s largest REIT and only Stapled Security in the country, comprising KLCC Property Holdings Berhad (KLCCP) and KLCC Real Estate Investment Trust (KLCC REIT). KLCC REIT focuses on active asset management and acquisition growth strategies, whilst KLCCP is the development arm of the Stapled Group. At the forefront of Malaysia’s real estate industry, our unique structure allows us to maximise the value we create for all our stakeholders.
WHAT WE DO
We own, manage, develop and invest in a portfolio of premium assets comprising office, retail and hotel properties in the heart of Kuala Lumpur. This is complemented by our award winning asset management services provided by KLCC Urusharta Sdn Bhd and KLCC Parking Management Sdn Bhd. This synergy of property investment and asset management strengthens the earning potential of our stable of iconic properties.
PETRONAS TWIN TOWERS MENARA 3 PETRONAS MENARA EXXONMOBIL An iconic landmark, the world’s Premium office and retail Office tower currently tenanted 1 tallest twin towers 2 space seamlessly connected to 3 by major oil and gas HOW WE DO IT Suria KLCC corporation We are committed to creating a progressive SURIA KLCC MANDARIN ORIENTAL, MENARA MAXIS KOMPLEKS DAYABUMI lifestyle experience within the KLCC Precinct while enhancing the value of our property portfolio. We The premier shopping KUALA LUMPUR Home to one of the An integrated office and are focused on optimizing sustainable value 4 destination in the 5 A 5-star award winning 6 leading communications 7 retail development creation through a strategic approach that heart of Kuala Lumpur luxury hotel service provider in (located outside the capitalises on our unique Stapled Group structure Malaysia KLCC Precinct) and our competitive differentiators, well positioned for the future. CONTENT
1 KLCCSS - AT A GLANCE
2 OUR RESPONSE TO COVID-19
3 FY2020 KEY HIGHLIGHTS
4 4Q FY2020 FINANCIAL PERFORMANCE
5 SUSTAINABILITY
6 OUTLOOK & KLCCSS FOCUS
4Q FY2020 Results – Investor Presentation 11 Mac 18 Mac 4 May 9 Jun 20 Sep 14 Oct – 31 Dec WHO declares Movement Conditional Recovery 3rd wave CMCO 2.0 Together We CARE pandemic Control Order Movement Movement emerged (MCO) Control Order Control Order (CMCO) (RMCO)
Mar Apr May Jun Jul Aug Sep Oct Nov Dec Our primary focus has been on the health and safety of our people, continuing to Government-mandated lockdown * Gradual easing of restrictions serve our stakeholders as a progressive solutions partner and to uphold our Key Business People Technology Statement of Purpose especially in this themes Continuity period of crisis
For our Tenants & For Government, For our Employees For our Community Customers regulators and local authorities . Monetary donation to . Enabled technology - . Ensured facility readiness, . Proactively worked with University Malaya Medical Accelerated the roll-out of installed thermal imaging Government, Ministry of Centre (UMMC) to purchase PPE Microsoft 365 for a seamless cameras, social distancing Health and industry bodies to and medical equipment to treat transition to work from home labelling at all common areas implement effective Covid-19 patients . Provided mandatory COVID- of our properties containment strategy . 19 screening in Jun’20 for all . Prioritised tenant assistance Distributed food packages and initiatives and adhered employees prior to Return to – reinforcing strong tenant supplies to targeted frontliners strictly to the health & Work in Office relationship and business on duty and hotel colleagues hygiene protocols who were severely affected by sustainability . Provided information to . Reimbursed executive the pandemic employees for internet data . Implemented digital regulators pertaining to . plan during the MCO period solutions, touchless and Collaborated with Komuniti COVID-19 related financial varied communication Tukang Jahit (KTJ), a social impact and sustainability of channels (cashless, social enterprise working for the REITs media, QR code) benefit of the lower-income earners (B40)
6 * Essential activities such as healthcare, banking finance, food, water were allowed throughout MCO, CMCO and RMCO 4Q FY2020 Results – Investor Presentation MCO 2.0 here we go again.. PERMAI stimulus gives priority to the most vulnerable group 2021 Government announced the imposition of MCO 11 from 13 Jan to 26 Jan in 6 states - Penang, Jan Selangor, Malacca, Johor and Sabah, along with 3 federal territories including Kuala Lumpur, Putrajaya and Labuan 3 main Objectives & 22 initiatives CMCO : Pahang, Perak, Negeri Sembilan, Kedah, Terengganu & Kelantan 1 Combatting the COVID-19 outbreak RMCO : Perlis & Sarawak 2 Safeguard the welfare of the People 12 Malaysia's King declared State Of Emergency Jan measure to curb the spread of COVID-19. The 3 Supporting business continuity emergency is until Aug 1 or may end earlier depending on the country's COVID-19 situation Relevant applicable stimulus measures 18 Government launched MYR15bil economic Jan package (PERMAI)
19 Whole nation came under MCO except for Jan Sarawak as number of cases continued to increase 21 MCO 2.0 in 6 states & 3 federal territories has Jan been extended to 4 Feb 7 4Q FY2020 Results – Investor Presentation CONTENT
1 KLCCSS - AT A GLANCE
2 OUR RESPONSE TO COVID-19
3 FY2020 KEY HIGHLIGHTS
4 4Q FY2020 FINANCIAL PERFORMANCE
5 SUSTAINABILITY
6 OUTLOOK & KLCCSS FOCUS
4Q FY2020 Results – Investor Presentation A year of realisation, not without accomplishments Key highlights for the year A painful year as the 03 business operations of 01 02 the Group grappled Ramped up with the profound TNL extension for Completed the overall creativity with impact of the global PETRONAS Twin Towers anchor-to-specialty tailored pandemic, particularly and Menara 3 space configuration, staycation in our retail and hotel PETRONAS for a with total of 72 tenants, packages, segments. Suria KLCC further term of 15 many of which are first creative food was affected by lower years upon the expiry stand-alone stores in offerings and brought the 5-star footfall due to the of the current term of Malaysia and exclusive the leases to Suria KLCC hotel experience lockdowns and tenant to the door-steps assistance granted of its guests whilst MOKL Hotel 04 05 suffered from the Successfully transitioned mandatory closure the Suria KLCC car park to Launched the new Integrated and restricted travel fully cashless with total Building Command Center digital surveillance (IBCC) to manage our facilities in real time and leverage on the power of data to be more efficient 9 4Q FY2020 Results – Investor Presentation FY2020 Financial Highlights Weathering the pandemic together with our business partners to sustain operations Overall performance primarily impacted by the RM1,239.2 mil RM690.6 mil various lockdowns and restrictions imposed during the year which negatively affected the Revenue Profit before tax* retail and hotel segments
-12.9% vs FY19 -27.4% vs FY19 Retail – 19.2% revenue decline from various assistance packages provided to affected tenants RM547.1 mil 30.00 sen Hotel – mandatory closure and Profit attributable Dividend per restricted travel led to drastic decline in to equity holders* Stapled Security volume of business -25.3% vs FY19 -21.0% vs FY19 Impairment of investment property under construction (IPUC) of RM81.4 mil for the ongoing development of Kompleks RM7.21 18.0% Dayabumi Phase 3
Net asset value per Excluding the impairment charges Profit Gearing ratio Stapled Security attributable to equity holders is at RM628.5 mil, 17.8% in FY19 a 14.2% decrease compared to FY2019 -1.5% vs FY19
10 * Excluding fair value adjustments 4Q FY2020 Results – Investor Presentation A higher payout ratio of 98%, testament to our continued commitment to shareholders
98% 97% 98% 95% 95% 95% 96% 94%
38.00 37.00 35.65 36.15 34.65 33.64
30.00 28.94
FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020
Dividend per stapled security (sen) Dividend payout ratio
11 4Q FY2020 Results – Investor Presentation Segmental Results Retail and hotel segments materially impacted by the challenges from the pandemic
Segmental Revenue MANAGEMENT (RM mil) SERVICES Composition to total 1,423.0 KLCCP Stapled Group Higher revenue from the new revenue (%) business approach in facility 146.6 29.0% 1,239.2 management services 15 177.5 189.2 4 HOTEL 70.2% 52.9 Severely affected by the MCO and
503.2 travel restrictions 406.8 33 19.2% RETAIL Impacted by the various 0.9% assistance packages provided to 595.7 590.3 48 affected tenants
OFFICE
FY2019 FY2020 Stable and steady, underpinned by locked-in tenancies Office Retail Hotel Management Services 12 4Q FY2020 Results – Investor Presentation Office – Anchoring the Group, backed by its long-term, locked-in leases
. Revenue Marginal decrease in revenue as a result of the accounting adjustments to reflect the extension of Triple Net Lease (TNL) agreements for PETRONAS Twin Towers and 0.9% Menara 3 PETRONAS for a further 15 years RM590.3m YoY FY2019: RM595.7m . 15.6% YoY decline in PBT (excluding fair value adjustments) attributable to the
impairment for the ongoing development of Kompleks Dayabumi Phase 3, as a
result of anticipated increase in development cost from current economic conditions * Profit before tax and prolongation of the project 15.6% RM448.4m YoY . Excluding the fair value adjustments and impairment, PBT decreased marginally to FY2019: RM531.0m RM529.8 mil . Key Events: Occupancy Menara ExxonMobil lease renewal - ExxonMobil Exploration and Production 100% Malaysia Inc and PETRONAS renewed the lease for the next 3-year term of the 18-year lease tenure Extension of the Triple Net Lease (TNL) agreements for PETRONAS Twin Towers and Menara 3 PETRONAS to 2042 for a further 15 years, reinforcing the Group’s stability Completion of the new 10-metre pedestrian bridge across the Klang River connecting Dayabumi and Central Market
13 * Excluding fair value adjustments 4Q FY2020 Results – Investor Presentation Extended leases cement the stability of the office segment
Background
. Following the announcement made to Bursa dated 19 Nov 2020, PETRONAS has exercised Strengthens KLCC’s positioning by the option to extend the lease of PETRONAS securing long term lease commitment Twin Towers and Menara 3 PETRONAS for a beyond FY2026/2027 further term of fifteen (15) years upon the expiry date of the current term of the leases The extension is a commitment of our lessee to reflect requirement of their office . Expiry of the current term of the leases : spaces in the future . PETRONAS Twin Tower – 30 September 2027 Reinforces the quality of our office . Menara 3 PETRONAS – 14 December 2026 spaces and tenant offerings making it a preferred address in Kuala Lumpur . Rental amounts to be determined prior to the commencement of the Extended Lease, all Office segment will continue to remain as other terms and conditions of the Triple Net the main income generator for the Lease (TNL) Agreements shall remain Group, providing stability and visibility of unchanged and apply to the Extended Leases future cash flows
14 4Q FY2020 Results – Investor Presentation
Retail – Riding through the ongoing pandemic with our retail
partners and customers . 19.2% and 25.4% YoY decline in revenue and PBT respectively mainly due to Revenue 19.2% the assistance packages granted to tenants coupled with lower internal digital advertising income RM406.8m YoY FY2019: RM503.2m . We supported our retail partners to sustain their business operations and
survive the impact of pandemic with various tenant assistance from 2Q to
4Q 2020 amounting to approximately 23% of the mall’s revenue for the Profit before tax * year RM285.5m 25.4% . Performance Highlights for the year: YoY FY2019: RM382.8m 3Q 2020 - saw encouraging recovery in footfall and tenant sales by 50% and 25% respectively between Jun-mid Sept before the 3rd wave of Covid-19 Occupancy Despite the re-imposition of the CMCO (14 Oct - 31 Dec), December 97% recorded the highest tenant sales since February 2020, hitting 82% recovery to pre-Covid levels of December 2019 FY2019 – 99%* * excludes unleased area of anchor-to- December vs June 2020 specialty space reconfiguration Footfall and tenant sales recorded an increase of 26% and 60% respectively mainly contributed by Fashion, Jewellery and Beauty/Hair Salon tenants Tenants of newly reconfigured space saw significant recovery in sales: Fashion (>100%), F&B (72%) and Cosmetic (46%) 15 * Excluding fair value adjustments 4Q FY2020 Results – Investor Presentation Retail – Reimagining the mall and boosting footfall with elevated shopper experience
EXPERIENTIAL, REWARD ALWAYS SOMETHING DIGITAL MULTI-CHANNEL DRIVEN SHOPPER NEW EXPERIENCE ENGAGEMENTS Interactive, lifestyle curated Introduced 40 new Successful 45-day Golden- content and videos to tenants which are first Ticket campaign increased connect with customers -- stand-alone stores in sales by 24% during the 69% increase YouTube Malaysia and exclusive to RMCO period subscribers Suria KLCC “Unlock a Christmas Upgraded Suria’s website Full completion of the Surprise”, attracted over with “New” section to anchor-to-specialty 3,000 customers in highlight new brands, reconfiguration of December 2020 collections and products to 108,940 sq.ft. with 72 drive traffic tenants - international and local fashion, F&B and Influencer and celebrity cosmetic brands collaboration to create awareness and promote health tips
16 * Excluding fair value adjustments 4Q FY2020 Results – Investor Presentation New tenants at Suria KLCC in 4Q 2020
Sakana, casual Maria’s Signature, one of New Era, exclusive Japanese dining the best steakhouses in town sports headwear
Yomie’s Rice x Yogurt, filtered whey yogurt drink
Warung Prima, at the Eatomo, fusion of Japanese + Signature Foodcourt Californian menu
17 4Q FY2020 Results – Investor Presentation Hotel – Set back after set back in its road to recovery
. Sharp YoY decline in revenue and LBT as a result of the cancellation of room Revenue 70.2% bookings, suspension of events coupled with the closure of international RM52.9m YoY borders FY2019: RM177.5m . Performance Highlights for the year: 3Q 2020 - Good traction from domestic demand, increasing occupancy
Loss before tax (LBT) to a high of 21%, improved recovery in corporate & group demand – recorded highest sales since start of the pandemic RM63.6m >100% Significant growth from F&B – in September, banqueting had its Profit before tax (PBT) YoY
FY2019: RM0.7m strongest month since MCO with 3 weddings and Lai Po Heen trading
at full capacity December vs June 2020 Occupancy 45% Occupancy peaked to 26% with festive season and easing of 19% YoY interstate travel; Staycation campaigns led the recovery, accounting FY2019: 64% for 65% of total bookings Room revenue increased >100% from pent-up demand of the high- yielding rooms (club and suites); Suite's occupancy soared to 33% in December All F&B outlets showed substantial growth in revenue mainly from the very strong Christmas period coupled with improved hotel occupancy 18 4Q FY2020 Results – Investor Presentation Hotel – Capitalised on domestic business and strategic partnership collaborations OFFERED CAPITALISED TANTALISING DINING STRATEGIC PARTNERSHIPS DOMESTIC BUSINESS EXPERIENCE & COLLABORATIONS Promoted Staycations and Unique collaborations creating Innovated F&B service Suite Treat packages with the O&MO (Oberoi and Mandarin offerings – 1st to introduce Corporate Longer Weekend Oriental) Alliance which opened assisted buffet arrangement Staycation up opportunities to grow the to ensure guests’ health and brand value Targeted high net worth safety is prioritised individuals for Suites Launched strategic alliance with Mandarin Online Shop - room Kuala Lumpur Convention Centre signature dishes from its Business Events Alliance - “Fly, restaurants, specially curated Introduced “Working from Shop & Stay” in collaboration cakes and pastries MO” programme with Suria KLCC, Malaysian Promoting cash and/or Banqueting - Wedding Airlines and Aquaria to attract meals vouchers to promotions with early bird customers to the KLCC Precinct offers, wedding fairs and corporate organisers as Collaborated with dedicated marketing action giveaway to their clients influencers/KOLs to post on plan; hosted 9 weddings their “stay” experience at MOKL and 131 events throughout to attract guests the year
19 4Q FY2020 Results – Investor Presentation Management Services – Elevating quality of service and operational efficiency during crisis
Revenue . 29% YoY increase in revenue from new business approach in facilities 29.0% management services RM189.2m YoY . FY2019: RM146.6m PBT declined from lower carpark income resulting from lower transient parking during the various phases of MCO
* . Key Events: Profit before tax RM20.3m 45.5% Launched new Integrated Building Command Center (IBCC) by KLCC YoY Urusharta Sdn Bhd (KLCCUH) to manage facilities in real time and FY2019: RM37.3m leverage on the power of data to be more efficient
No of facilities KLCC Parking Management Sdn Bhd (KPM) successfully transitioned the managed Suria KLCC car park to fully cashless with total digital surveillance 20 KLCC Park named one of the Top World's Best Urban Park at the FY2019: 20 International Large Urban Parks Award 2020 held in Albania No of car parking KLCCUH and KPM awarded the prestigious Royal Society for Prevention of managed Accident (RoSPA) Award as a recognition for their practices and achievements in health and safety excellence 11,625 FY2019: 12,634
20 * Excluding fair value adjustments 4Q FY2020 Results – Investor Presentation CONTENT
1 KLCCSS - AT A GLANCE
2 OUR RESPONSE TO COVID-19
3 FY2020 KEY HIGHLIGHTS
4 4Q FY2020 FINANCIAL PERFORMANCE
5 SUSTAINABILITY
6 OUTLOOK & KLCCSS FOCUS
4Q FY2020 Results – Investor Presentation 4Q FY2020 Highlights Tough end to an unprecedented year
Reinstatement of the CMCO during the quarter in response to the resurgence of COVID-19 cases RM304.7 mil RM99.1 mil dampened the road to recovery, particularly for retail and hotel segments Revenue Profit before tax* Retail – Due to various assistance -16.5% vs 4Q FY19 -59.2% vs 4Q FY19 packages granted to tenants coupled with overall drop in other revenue streams Hotel – Occupancy and RevPar for the quarter slumped significantly to 15% and RM80 respectively (4Q 2019: 66%, RM436) RM73.1 mil 6.70 sen Secured TNL extension for PETRONAS Twin Profit attributable Dividend per Towers and Menara 3 PETRONAS for another 15 to equity holders* Stapled Security years from expiry of leases in 2027 & 2026 respectively -60.9% vs 4Q FY19 -42.2% vs 4Q FY19 Excluding impairment for the ongoing development of Kompleks Dayabumi Phase 3, the Group would have recorded a PBT of RM180.4 mil.
22 * Excluding fair value adjustments 4Q FY2020 Results – Investor Presentation Prudent balance sheet management to withstand the volatile markets
RM17,995.5 mil RM15,693.2 mil Total assets – affected by the decrease in Total Assets Investment fair values of investment properties, -1.2% vs FY19 Properties particularly for Suria KLCC vs FY19 -1.3% Increase in current assets – Suria KLCC’s trade receivables due to slower collection of rentals from tenants
RM2,349.4 mil RM13,014.1 mil
Total Borrowings Equity attributable 0.1% vs FY19 to equity holders -1.5% vs FY19
23 4Q FY2020 Results – Investor Presentation Robust capital structure safeguarding financial resilience to weather uncertainties
Total Borrowings . Well staggered debt maturity profile up to 2026 RM2,349 mil . Bank facilities in place for next refinancing of RM400 mil due in Apr 2021 [FY2019: RM2,347 mil] . Drawdown of term loan in 4Q 2020 by Asas Klasik Sdn Bhd (MOKL Hotel) to aid cashflow Gearing Ratio 18.0% [FY2019: 17.8%] Debt Maturity Profile As at 31 Dec 2020 (RM’mil) Borrowings on Fixed Cost 2,349.0 84% 9.7 371.1 [FY2019: 84%]
Average Maturity Period As at 30 Dec 2020 Dec 30 at As 10.0 3.59 years 1,968.7 2.0 [FY2019: 4.58 years] 9.7 10.0 1,055.0 1.9 400.0 10.0 10.0 327.2 500.0 13.7 Average Cost of Debt Total 2020 2021 2022 2023 2024 2025 2026 Borrowings 4.4% Islamic Medium Term Notes Term Loan Facilities Lease liabilities [FY2019: 4.6%] 24 4Q FY2020 Results – Investor Presentation CONTENT
1 KLCCSS - AT A GLANCE
2 OUR RESPONSE TO COVID-19
3 FY2020 KEY HIGHLIGHTS
4 4Q FY2020 FINANCIAL PERFORMANCE
5 SUSTAINABILITY
STRATEGIC OVERVIEW & 6 OUTLOOK
4Q FY2020 Results – Investor Presentation Elevating the role Progressing Our of ESG in the face Social Agenda of the pandemic Protecting Our Embodying Good RM2.3 mil was spent Environment in the roll out of Governance Microsoft 365 to all Attained Prudent use of employees in ISO37001:2016 electricity accelerating digital certification through throughout the adoption Best Workplace implementation of Practices at the pandemic resulted th Anti-Bribery 12 Global CSR in a reduction of Guest satisfaction of Summit & Management System 21% in energy 87% for providing Awards 2020 for KLCCP, KLCCRM, consumption bespoke hotel KPM & KLCCUH experiences Successfully Achieved 43% eliminated 68% of Contributed RM95.3 women on board single-use plastic mil social-relief deeds exceeding country’s in hotel operations which includes various aspirational target of assistance packages Best 30% MOKL Hotel - to retail tenants and Sustainability Stay Safe other charitable Leadership for Mark efforts Facility Standard Management Certificate
26 4Q FY2020 Results – Investor Presentation Creating a positive impact to the society
4Q FY2020 Results – Investor Presentation CONTENT
1 KLCCSS - AT A GLANCE
2 OUR RESPONSE TO COVID-19
3 FY2020 KEY HIGHLIGHTS
4 4Q FY2020 FINANCIAL PERFORMANCE
5 SUSTAINABILITY
6 OUTLOOK & KLCCSS FOCUS
4Q FY2020 Results – Investor Presentation External factors that will influence our business: The COVID-19 pandemic has Malaysian and global Change in consumer changed the economy behavior and shopping world, and its patterns effects will Government response Technological last to COVID-19 crisis advancements
Rise of remote Increased spotlight on working ESG
29 4Q FY2020 Results – Investor Presentation KLCCSS continues to strengthen its resilience and long-term sustainability, progressing lifestyle for a sustainable future
Building resilience & Technology and digital Heighten focus on stakeholder confidence transformation Sustainability
. Rebuild trust through our . Instill a culture of . Tenant collaboration and strong focus on health & innovation and learning support to drive footfall and wellbeing towards a digital native brand value mindset . Provide safe and frictionless . Retooling of human environment – tech-enabled real . Increase our operational capital relevant to Digital estate services, tenant centric agility with digital & data Ways of Working in our mindset, personalised experience capabilities– real time data, AI, quest towards a digitally . Ramp up our communication touchless, mobile device competent organisation functionality, social media trends cadence, staying close to our . Continuous investment in stakeholders, understanding . Increased focus on long-term energy- their challenges cybersecurity – to implement efficient solutions quick win security controls . Continued emphasis on cash throughout our GBI buildings preservation and cost optimisation efforts
4Q FY2020 Results – Investor Presentation THANK YOU
31 4Q FY2020 Results – Investor Presentation