Investor presentation 1H 2012/13

HEMAS HOLDINGS PLC

Investor Presentation

1H 2012/13

Macro Highlights

Sri Lanka: Macro Highlights

8.2% 8.4% 8.3%

7.9%

6.4%

Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012

7.31%

9.31%

11.32%

12.88% 13.02%12.48%

Sept 2011 Dec 2011 March 2012 June 2012 Sept 2012 Oct 2012

111.05114.88

129.57

135.46

131.17 131.6


6.4%

4.9%5.5%

9.3% 9.1% 8.9%


GDP Growth slows to 6.4% 12M T-Bill Rate peaks around 13%

Rupee recovers after a 20% slip Inflation hovers around 9%

Source - CBSL

FMCG Healthcare

Pharma

Hospitals

Leisure

Hotels

Destination Management

Transportation

GSAs

Travels

Maritime

Logistics

Power

Hydro

Thermal

Bio Mass

Hemas Group

1H Performance Review

Hemas Group: A Snapshot

Share Price (As at 21.11.2012) Rs. 27.90

Market Capitalization Rs. 14.4Bn

% of Total Market 0.70%

PER 10.2*

PBV 1.27

No of Shares 515,290,620

Public Shareholding 28.33%

* PER based on annualized earnings

PER

-

5.0

10.0

15.0

20.0

25.0

30.0

35.0

June 2011 Sept 2011 Dec 2011 Mar 2012 June 2012 Sept 2012

Sector & Market PER vs Hemas PER

Diversified Sector PER Market PER Hemas PER

Hemas Group: Performance Highlights

Figures are in Rs. Millions 1H 2012/13 1H 2011/12 % Change

Group Turnover 12,886 9,991 29%

PAT 771 527 46%

Group Earnings 705 486 45%

Cash From Operations 110 -45 346%

Total Assets 24,419 19,345 26%

Shareholders’ Funds 11,359 9,347 22%

Capital Employed 18,242 14,769 24%

1H 2012/13 1H 2011/12 % Change

EPS 2.74 1.89 45%

Net Assets per Share 22.04 18.14 22%

ROE 13.6% 11.1% 23%

ROCE 12.6% 9.8% 29%

All financials as per SLAS

Consumer Businesses Drive Revenue

Group turnover recorded a growth of 29%, YoY

Revenue growth was driven by Power, Healthcare and FMCG sectors

Revenue in Rs. Millions

Annual Revenue Growth

29%

35%

5%

4%

24%

4%

Revenue Contribution – 1H 2012/13

FMCG

Healthcare

Leisure

Transportation

Power

Other

Group Turnover

-5%

0%

5%

10%

15%

20%

25%

-

5,000

10,000

15,000

20,000

25,000

2007/08 2008/09 2009/10 2010/11 2011/12 1H 2012/13

1H Revenue YoY Growth

Group Earnings on an Upward Trend

Earnings in Rs. Millions

Annual Earnings Growth

Group Earnings

39%

29%

5%

17%

10%

Earnings Contribution – 1H 2012/13

FMCG

Healthcare

Leisure

Transportation

Power

-40.0%

-30.0%

-20.0%

-10.0%

0.0%

10.0%

20.0%

30.0%

40.0%

-

200

400

600

800

1,000

1,200

1,400

2007/08 2008/09 2009/10 2010/11 2011/12 1H 2012/13

1H Earnings YoY Growth

Group earnings recorded a growth of 45%, YoY

Earnings growth was driven by FMCG, Leisure, Healthcare and Transportation sectors

Earnings Growth Boosts ROE

* 2012/13 is based on annualized 1H earnings

1.51

1.76

2.36 2.33

2.74

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

0.00

0.50

1.00

1.50

2.00

2.50

3.00

2008/09 2009/10 2010/11 2011/12 2012/13 *

EPS and EPS Growth

EPS EPS Growth

EPSEPS Growth

Shareholders’ Funds in Rs. Millions ROE

11.5%12.3%

14.6%

12.3%

13.6%

0.0%

4.0%

8.0%

12.0%

16.0%

20.0%

-

2,000

4,000

6,000

8,000

10,000

12,000

2008/09 2009/10 2010/11 2011/12 2012/13 *

Shareholders’ Funds vs ROE

Shareholders' Funds ROE

Total FMCG market ~ Rs. 125Bn(Jan’12 to Sept’12)

76%

14% 10%

Food and Beverages Personal Care Household Care

Value Growth : Jan - Sept ’12 Vs. Jan - Sept ’11

Comprises of 18 Popular brands

No. 2 in Personal Care

Market leader in baby care, hair oil and men’s hair setting categories

Overview of FMCG Business

20%

54%

26%

Hemas FMCG revenue contribution for 1H 2012/13

Food and home care Personal care Personal wash

All Urban Rural

Total FMCG 13% 14% 12%

Food & Beverages 13% 15% 11%

Personal Care 12% 13% 12%

Household Care 14% 11% 15%

FMCG: Our Key Brands

A leading washing powder in the market delivering excellent value to the consumer

Baby Cheramy

Clogard

Kumarika

Diva

Velvet

Most preferred range of baby care products in Sri Lanka since 1962

Leading hair oil in the market with indigenous herbs

Unique oral care product containing clove oilNo. 2 in oral care market

No.1 in beauty soap market surpassing Lux

Won Bronze Award for Product Brand of the Year at the 11th SLIM Brand Excellence Awards

FMCG: Performance Highlights

Strong performance in Personal wash and Personal care categories contributed towards the growth in revenue

Steady increase in sales: September recorded the highest ever sales value crossing the Rs. 700Mn sales mark

Excellent overall performance in Bangladesh business; turnover up by 166%

Impressive market share gain in Personal wash category underpinned by Baby Cheramy and Velvet soap

Margins on track after price corrections to offset the exchange impact

Our sanitary napkin brand, Fems won the Silver Award for Best Turnaround Brand of the Year at the 11th SLIM Brand Excellence Awards

PAT in Rs. Millions


1H 12/13 1H 11/12 Change

Turnover (Rs. Mn) 3,679 3,139 17%

PAT (Rs. Mn) 358 257 40%

-

100

200

300

400

500

600

700

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2007/08 2008/09 2009/10 2010/11 2011/12 1H 2012/13

1H Revenue 1H PAT PAT full year

Big Heart Project

Baby Cheramy, celebrates 50 years of enriching lives of Sri Lankan mothers andchildren

The Big heart Project was launched together with the Department of Probation andChildcare Services of the Ministry of Child Development & Women Affairs, inSeptember 2012, to celebrate this milestone

The project will fund the educational needs of children that are 'at risk', or in dangerof being institutionalized due to the financial difficulties of their families

50 cents from every Baby Cheramy product sold will be donated to fund theeducational needs of children from grade 1-5

The Big Heart truck will travel across Sri Lanka and appeal to all Sri Lankans to opentheir hearts and donate towards this great cause

Healthcare

Size of the total Pharmaceutical market is ~ Rs 27Bn (MAT Q2 2012) (Source IMS)

Overall Pharmaceutical market has grown by 16.3% YoY (Source IMS)

Hemas Pharmaceutical remains the market leader with a share of 17.55% (Source IMS)

Pharmaceutical market composition (approx):

Overview of Pharmaceutical Distribution

66%

30%

4%

Distributors (Pharmacies)

Institutional Segment

Supermarkets

Hemas Pharmaceutical revenue contribution for 1H 12/13

66.5%0.4%

33.1%

Branded Generic Generic Branded

Overview of Hospitals

The number of registered private hospitalsstood at 186 at end 2011, with a bedcapacity of 4,784 (Source- CBSL)

Combined market size of the 4 leadinghospitals ~ Rs. 17Bn for FY 2011/12

Revenue split among leading Hospitals:

34%

21%21%

19%

6%

Asiri Nawaloka Lanka Hospitals

Durdans Hemas Hospitals

Outpatient and inpatient volumes atHemas Hospitals

Outpatient volume in ‘000s

Inpatient volume

3,000

4,000

5,000

6,000

60

80

100

120

Q1 2011/12

Q2 2011/12

Q3 2011/12

Q4 2011/12

Q1 2012/13

Q2 2012/13

Outpatient Inpatient

Revenue split is based on Q1, 2012/13 financials

0

40,000

80,000

Q1 11/12 Q2 11/12 Q3 11/12 Q4 11/12 Q1 12/13 Q2 12/13

Revenue in Rs. ‘000s Laboratory revenue at Hemas Hospitals

Pharmaceutical business was the main contributor to sector revenue growth

• Revenue growth of Pharma: 21.8%

• Revenue growth of Hospitals: 30.3%

Training and educational programs for doctors and community awareness projects along with high quality service standards contributed towards the revenue growth at hospitals

Hemas Wattala Hospital recorded the highest number of baby deliveries in September since inception

Health Care: Performance Highlights

PAT in Rs. Millions


1H 12/13 1H 11/12 Change

Turnover (Rs. Mn) 4,462 3,631 23%

PAT (Rs. Mn) 256 190 35%

-

50

100

150

200

250

300

350

400

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

2007/08 2008/09 2009/10 2010/11 2011/12 1H 2012/13


Leisure

Outbound travel forecast 2012: World 2%; Europe 1%; Asia 4% (IPK Survey)

Purpose of travel : 71% holidays of which 27% looks for sun and beach

Tighter budgets; looking for value for money

Tourists are becoming more demanding

Travelers are searching for meaningful experiences

Web and mobile technologies are emerging as powerful marketing tools

Travel Trends

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

-

20,000

40,000

60,000

80,000

100,000

Jan Feb Mar Apr May Jun Jul Aug Sep

Tourist arrivals & occupancy rates in 2012

Tourist Arrivals Occupancy Rates

Tourist arrivals during the year were 693,772 marking a growth of 16% and expect to top one million at the end of year

Overview of Tourism Industry

Sri Lanka

Tourist ArrivalsOccupancy Rates

Source - SLTDA

Leisure: Performance Highlights

PAT in Rs. Millions


1H 12/13 1H 11/12 Change

Turnover (Rs. Mn) 656 453 45%

PAT (Rs. Mn) 90 -23 491%

Sector performance was mainly driven by the Hotel sector and was enhanced by our inbound tour operation

Gross operating profit of the Hotel sector grew by an impressive 124% over LY

Occupancy rates of our hotels for 1H 2012/13:

Kani Lanka Resort & Spa rebranded as Avani Kalutara , was opened for guests in October 2012

Hotels under the Serendib Leisure umbrella are looking forward to a good winter season with favorable forward bookings

(60)

(40)

(20)

-

20

40

60

80

100

120

140

-

200

400

600

800

1,000

1,200

1,400

2007/08 2008/09 2009/10 2010/11 2011/12 1H 2012/13


Sigiriya 75%

Dolphin 85%

Avani Bentota 67%

Transportation

Port of Colombo – Transshipment volumes

Metric Tonnes

TEUs

Source – Port Statistics

Import volumes in Sri Lanka declined over LY on account of higher tariffs while exports slowed down due to unfavourable economic conditions in the EU and US markets

However, air export and transhipment volumes grew over LY which positively impacted the earnings growth of the sector

Main shipping lines re-aligned their capacities in and out of CMB which impacted freight rates and liner/feeder schedules

Infrastructure development throughout Sri Lanka created a significant demand for logistics facilities which is a focus area for growth in the sector

Source – Sri Lankan Cargo

YoY Growth

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Apr May Jun Jul Aug Sep Oct

2011/12 2012/13 Growth

Air cargo volumes

220,000

230,000

240,000

250,000

260,000

270,000

280,000

290,000

Apr May Jun Jul Aug Sep

2011/12 2012/13

Overview of Transportation Industry

Transportation: Performance Highlights

PAT in Rs. Millions


1H 12/13 1H 11/12 Change

Turnover (Rs. Mn) 465 359 29%

PAT (Rs. Mn) 155 102 52%

-

50

100

150

200

250

300

-

100

200

300

400

500

600

700

800

2007/08 2008/09 2009/10 2010/11 2011/12 1H 2012/13


GSA businesses maintained their leadership in the market with both passenger and cargo segments posting healthy earnings

The outbound travel business continued to strengthen its relationships with key corporate clients and increased its share during 1H

The maritime business benefitted from a higher throughput at the port. New business was generated by servicing casual callers and providing value added services to vessel owners

“MercMas” – JV with Mercantile Shipping to provide crew boat services for the transport of crew, sea marshals and spares in Galle was launched in October 2012

“Hemas Logistics” – strategic investment in a haulage company specializing in repositioning containers for shipping lines, expanded services to include car logistics and over dimensional cargo movement

Overview of Power Industry

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

2004 2005 2006 2007 2008 2009 2010 2011

Annual power generation - GWh

Hydro Thermal Other Renewbles

Combined installed capacity of power plants in 2011 was 3,141 MW, a growth of 11.5%

Gross generation for year 2011 was 11,528 GWh, a growth of 7.6%

Average electricity consumption per capita for 2011 was 480 KWh, a growth of 7%

GWh

Source – CEB Statistics 2011

0

10

20

30

40

50

60

70

-

1,000

2,000

3,000

4,000

5,000

6,000

2007/08 2008/09 2009/10 2010/11 2011/12

Power revenue Fuel prices *

Hemas Power revenue vsfurnace oil prices

*Average annual furnace oil priceSource – Ceypetco


Rs. per liter

Sector revenue was mainly driven by growth of our thermal power plant Heladhanavi due to increase in fuel prices

Our hydro power plants recorded a drop in performance due to low rain fall in catchment areas

Increase in rupee interest rates negatively impacted the bottom line of Heladhanavi

Rupee devaluation negatively impacted the net profit through exchange losses on foreign currency borrowings, most of which is unrealized

Power: Performance Highlights

PAT in Rs. Millions


1H 12/13 1H 11/12 Change

Turnover (Rs. Mn) 3,140 2,088 50%

PAT (Rs. Mn) 116 165 -30%

(10)

40

90

140

190

240

290

340

390

440

490

-

1,000

2,000

3,000

4,000

5,000

6,000

2007/08 2008/09 2009/10 2010/11 2011/12 1H 2012/13


Sustainability

Community Investment

Hemas’ primary CSR project ‘Piyawara’ celebrated its 10 year partnership with the Ministry of Child Development

At present Hemas has 35 state-of-the-art preschools island wide providing education for over 3,000 children

First ever community preschool in the resettled village of Ambalnagar (10km from Kilinochchi) was opened in July 2012 and the second was opened in Silawathei, Mulativue

Training has been provided for teachers in partnership with the Education Ministry of the Northern Province

Construction is in progress for another community pre-school in Mulativue and a model pre-school for 100 children in the Kilinochchi city

Strategic Focus

Strategic Focus

FMCG

• Greater focus to win in the personal care market

• Investment in identified high growth categories

• Improve sales growth and strengthen Hemas brand acceptance in Bangladesh market

Healthcare

Third hospital at Thalawathugoda

• Completion: May 2013

• Estimated cost: Rs. 1.3Bn

Leisure

Peace Haven project in Tangalle

• Luxury resort with 150 rooms

• Commencement of construction: FY 13/14

• Estimated cost: $30Mn

Strategic Focus contd.

Transportation

• Investments and growth plans for maritime, aviation and logistics businesses

Power

• Focus on renewable energy space; mainly in the small hydro segment in Sri Lanka and East Africa

Telephone: +94 11 4 731 731Email: [email protected]

Web: http://www.hemas.com

Hemas Holdings PLC Hemas House, 75, Braybrooke Place, Colombo 2, Sri Lanka

Hemas Investor Relations:

mailto:[email protected]

http://www.hemas.com/

Investor presentation 1H 2012/13

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