FY11 - Sterling Holidays

Sterling Holidays
Investor Presentation
April 2015
1
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
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
Vacation
Ownership
MICE
4
FIT / GIT
Confidential
Vacation Ownership : Flexible Points Product
•
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
7 Nights & 7
Days
Every Year
For 25 Years
Across
Across
Across
Seasons
Apartments
Destinations
Price Range : INR 1.95 Lacs- INR 13.39 Lacs
Average Annual Subscription Fee: INR.6,000
5
Confidential
4500 Resorts
Worldwide
24 Resorts
21 Destinations
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
•
6
Growing online presence
Confidential
Integrated Business Process Model
Customer Experience Management
Customer Experience Creation
(Resort Creation)
(Resort Operations)
- Scenic holiday spots
- Full service resorts
- Value creation
- Resort design & development
Shared Services
- Community building
[IT, Accounts, HR &
Customer Engagement
Legal]
(Customer Service)
(Sales & Marketing)
- Holiday planning & reservations
- Customer satisfaction benchmarking
7
Customer Acquisition
Confidential
- Lifestyle need-based segmentation
- Multi-channel sales initiatives
Revenue Streams
Vacation Ownership
8
FIT / GIT / MICE
Income
Income
Vacation Ownership sales
Room Income
ASF / AAC & Utility
F&B
Interest Income
Holiday & Health Club
Confidential
Unique Revenue Model Value created continuously
from a single resort unit
Interest on EMI
Annual Subscription Fee
Resort – FIT
Resort - Members
Entitlement Fee
Admission Fee
Income from
Financing
Recurring Revenue Streams*: ASF, Usage Fee, Resort Revenues
Value Realized
Value Creation Profile
Large Upfront Cash-flow
Upfront Cash:
Admission Fee
Residual Value
0
9
Built in Annuity Stream
Timeline (years)
Residual Value *:
Opportunity for 2nd
cycle - ZERO
Marginal Cost of
Inventory
*Inflation not considered
Confidential
25 26
Sterling
Holidays:
March 2011
Resurgence:
Strategy
&
Initiatives
Way Forward
Sterling Holidays : March 2011
11
Confidential
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
12
Confidential
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
Rooms (In nos.)
13
14
1202
Confidential
Resurgence : Strategy & Initiatives
14
Build
Credibility
Strategic Growth
Initiatives
Build
Increase
Customer
Cash Flow /
Confidence /
Revenues
Experience
15
Confidential
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
16
Confidential
Resort Network
River
front
Heritage
Jungle
Beach
Mountain
MANALI
DHARAMSHALA
MUSSOORIE
CORBETT
Dindi
Shridi
Corbett
Puri
Dharamshala
Sariska
Goa
Manali
Thekkady
Karwar
Mussoorie
Daman
Nainital
Gangtok
NAINITAL
GANGTOK
SARISKA
DARJEELING
DAMAN
PURI
SHIRDI
LONAVALA
Darjeeling
Lonavala
24 Resorts
21 Destinations
1767 Rooms
Ooty
GOA
KARWAR
Yercaud
OOTY
Kodai
Yelagiri
Munnar
17
DINDI
Confidential
MUNNAR
THEKKADY
YELAGIRI
YERCAUD
KODAI
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
Peermade
PROPOSED GREENFIELD PROJECT
LAND BANK
CORBETT
BHIMTAL
7
GANGTOK
28.28
Coorg - Meraca
30
Coorg - Virajpet
5.75
Goa Chapora
4.51
Goa Vagator
0.99
Alibaug
Proposed Greenfield Projects
3
Mahabaleshwar
5.13
Igatpuri
2.47
Bhimtal
6.6
Corbett
4.5
Gangtok
15.1
Wayanad
5.57
ALIBAUG
MAHABALESHWAR
16
Destinations
155 Acres
2000+ Rooms
GOA
COORG
YELAGIRI
OOTY
WAYANAD
MUNNAR
THEKKADY
PEERMADE
KODAI
RAMESHWARAM
Refurbish resorts
Then
Now
Munnar
Terrace Greens
19
Confidential
Refurbish resorts
Then
Now
Ooty
Fern Hill
20
Confidential
Refurbish resorts
Then
Now
Kodai
By The Lake
21
Confidential
Reposition resorts by creating
contemporary resort identities
22
Confidential
Multi-cuisine
Restaurant
Specialty
Restaurant
SPA
Gym
Multi-cuisine
Restaurant
Bar
Swimming
Pool
Holiday
Activities
Center
Multi-cuisine
Restaurant
Kids Club
SPA
Tea & Coffee
Lounge
Multi-cuisine
Restaurant
Tea & Coffee
Lounge
SPA
Holiday
Activities
Center
Improvement in ARR’s and occupancy post renovation
Average Room Rates, INR
Room nights in numbers & Occupancy
CAGR : 16%
2730
2194
CAGR : 13%
256620
2302
222281
201602
1942
158,728
1531
56%
177616
49%
41%
40%
37%
FY11
27
FY12
FY13
FY14
FY15
Confidential
FY 11
FY 12
FY 13
FY 14
FY 15
Increase in F&B revenue
• Introduced a wide spread of F&B options
• Increased prices of F&B
F&B Revenues, INR Mn
271
247
CAGR : 26%
197
163
109
FY11
28
Confidential
FY12
FY13
FY14
FY15
Increase ASF / AAC & Utility (Maintenance) revenue
• Increased maintenance charges by over 100%
ASF, AAC and Utility charges (INR Mn.)
255
272
CAGR : 50%
180
125
54
FY11
29
FY12
FY13
Confidential
FY14
FY15
Enhanced holiday experience by revamping holiday
activities and introducing spa
30
Confidential
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
Average Unit Realization, INR Mn
New Member Addition, Numbers
5481
CAGR : 48%
3409
CAGR : 22%
3650
0.21
0.22
FY13
FY14
0.24
0.17
2480
0.11
1135
FY11
31
FY12
FY13
FY14
FY15
Confidential
FY11
FY12
FY15
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
HSD Room Nights in Nos.
HSD Revenue in Mn.
CAGR : 20%
CAGR : 55%
92978
102620
79027
438
467
320
66313
212
50192
81
FY11
32
FY12
FY13
FY14
FY15
Confidential
FY11
FY12
FY13
FY14
FY15
Build Competent Human Capital
•
Established a professional leadership team with in-depth experience in
hospitality
•
Focused
recruitment of qualified
& industry experienced middle
management
•
33
Increased focus on training and development across the organisation
Confidential
Proactive customer engagement
34
•
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
Integrated IT landscape in sync with our business model
Customer Experience Creation
Build super fast –
Standalone
MS Navision - ERP
Customer Experience Management
IDS Fortune Next
COPS – Home
grown
PMS - Prologic First
Formula HR-HRMS
Support Services
Tally
COPS – Home grown
Cloud based CRM
– Salesforce.com
Customer Management
Before
35
Deployed
Confidential
MS Navision-ERP
Excel /Home grown
LMS : Salesforce.com
Customer Acquisition
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
•
36
Appointed an ORM agency
Confidential
Substantial growth in social media
2,15,971
Facebook Fan Count
Growth
867%
23,250
March '12
37
April '15
Confidential
Awards & Recognition
5 RCI crowned resorts
38
Confidential
The Sterling Advantage
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
39
Confidential
Financials : FY11 - FY15
40
Key indicators
INR Mn.
FY11
FY12
FY 13
FY14
FY 15
CAGR
1,135
2,490
3,409
3,650
5,481
48%
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%
158,728
177,616
201,602
242,959 256,620
13%
37%
40%
41%
49%
56%
11%
1,531
1,942
2,194
2,291
2,730
16%
New member additions (Numbers)
Cumulative (Numbers)
Total Room nights (Numbers)
Occupancy (%)
ARR in INR
Growth Indicators
New Member Addition, Numbers
Average Unit Realization, INR Mn
5481
CAGR : 48%
3409
CAGR : 22%
3650
0.21
0.22
FY13
FY14
0.24
0.17
2480
0.11
1135
FY11
FY12
FY13
FY14
FY15
Timeshare Revenue, INR Mn
FY11
FY12
FY15
Receivables, INR Mn
911
CAGR : 72%
2280
CAGR : 149%
634
1454
524
951
281
316
103
FY11
42
59
FY12
FY13
FY14
FY15
Confidential
FY11
FY12
FY13
FY14
FY15
Growth Indicators
Resort Income, INR Mn
Average Room Rates, INR
903
CAGR : 29%
813
2730
CAGR : 16%
1942
615
2194
2302
1531
479
331
FY11
FY12
FY13
FY14
FY15
Room Revenues, INR Mn
FY11
FY12
FY13
FY14
FY15
F&B Revenues, INR Mn
280
CAGR : 41%
CAGR : 41%
236
247
271
197
163
173
124
109
70
FY11
43
FY12
FY13
FY14
FY15
Confidential
FY11
FY12
FY13
FY14
FY15
Growth Indicators
ASF, AAC and Utility charges (INR Mn.)
255
272
CAGR : 50%
180
125
54
FY11
44
FY12
FY13
Confidential
FY14
FY15
Financials : Profit and Loss
INR Mn.
FY11
Timeshare
103
Resort Operations
331
Other income
Total Income
6
439
Expenditure
FY12
% Growth
FY13
% Growth
FY14
% Growth
FY15
% Growth
-
281
173%
524
87%
634
21%
911
44%
-
479
45%
615
28%
813
32%
903
11%
20
780
254%
78%
30
1169
50%
50%
58
1505
92%
29%
100
1914
73%
27%
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
45
Confidential
5
Financials : Balance Sheet
INR Mn
Share Capital
FY11
FY12
FY14
FY 15
511
597
677
889
901
-
181
-
-
0
-638
-345
-40
1,609
1673
309
41
295
1
0
Deferred Income
2,091
2,229
2,448
2,721
3171
Current Liabilities
394
230
451
345
419
2,666
2,932
3,831
5,565
6164
2,284
2,232
2,728
2,999
3542
Investments
21
10
0
1,210
483
Inventories
7
12
24
28
26
112
316
748
982
1796
79
30
16
91
58
163
331
315
255
259
2,666
2,932
3,831
5,565
6164
Share warrants
Reserves and Surplus
Borrowings
Total Equity & Liabilities
Net Block
Debtors
Cash & Bank Balances
Loans and Advances
Total Assets
46
FY13
Confidential
Financials : Cash Flow Statement
FY11
-328
FY12
-413
FY13
-213
FY14
-160
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
Net Income
INR Mn
Depreciation, Amortisation & Non-Cash items
47
Confidential
FY15
5
Way Forward
48
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
49
•
Build resorts with varying themes
•
Open resorts overseas
•
Make the company a fun place to work
Confidential
50
1986
Defined Holidays
2015
Redefining Holidays
Confidential
PAST Vacation Ownership Company
CURRENT Holiday Company
FUTURE Holiday Lifestyle Company
51
Confidential
Thank You!