HEMAS HOLDINGS PLC

Investor Presentation
1H 2012/13
Macro Highlights
 Sri Lanka: Macro Highlights
GDP Growth slows to 6.4% 12M T-Bill Rate peaks around 13%
8.2% 8.4% 8.3% 12.88% 13.02%
7.9% 12.48%
11.32%

9.31%

6.4%

7.31%

Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Sept 2011 Dec 2011 March 2012 June 2012 Sept 2012 Oct 2012

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

9.3% 9.1% 8.9%
135.46
131.17 131.6
129.57 6.4%
5.5%
4.9%

114.88
111.05

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

Source - CBSL
 Hemas Group

FMCG Healthcare Leisure Transportation Power

Pharma Hotels GSAs Hydro

Destination
Hospitals Travels Thermal
Management

Maritime Bio Mass

Logistics
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 Sector & Market PER vs Hemas PER

35.0

30.0

25.0

20.0

15.0

10.0

5.0

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

* PER based on annualized earnings

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 Revenue Contribution – 1H 2012/13
Revenue in
Annual Revenue
Rs. Millions 4%
Growth
25,000 25%

29% FMCG
24%
Healthcare
20% Leisure
20,000
Transportation
Power
4%
15% Other
5%
15,000

35%
10%

10,000

5%
 Group turnover recorded a
5,000
growth of 29%, YoY
0%
 Revenue growth was driven
by Power, Healthcare and
- -5%
2007/08 2008/09 2009/10 2010/11 2011/12 1H 2012/13 FMCG sectors
1H Revenue YoY Growth
 Group Earnings on an Upward Trend
Group Earnings Earnings Contribution – 1H 2012/13
Earnings in Annual Earnings
Rs. Millions Growth 10%
1,400 40.0%

17% FMCG
30.0% 39% Healthcare
1,200
Leisure
20.0% Transportation
1,000
5% Power

10.0%
800

0.0% 29%

600
-10.0%

400  Group earnings recorded a

-20.0%
growth of 45%, YoY
200
-30.0%
 Earnings growth was driven
- -40.0%
by FMCG, Leisure, Healthcare
2007/08 2008/09 2009/10 2010/11 2011/12 1H 2012/13 and Transportation sectors
1H Earnings YoY Growth
 Earnings Growth Boosts ROE
EPS and EPS Growth Shareholders’ Funds vs ROE
EPS Shareholders’ Funds
EPS in Rs. Millions ROE
Growth

3.00 40% 12,000 20.0%

2.74

30%
2.50 10,000
2.36 2.33 16.0%
14.6%
20%
13.6%
2.00 8,000 12.3% 12.3%
1.76 10% 11.5% 12.0%
1.51
1.50 0% 6,000

8.0%
-10%
1.00 4,000

-20%
4.0%
0.50 2,000
-30%

0.00 -40%
- 0.0%
2008/09 2009/10 2010/11 2011/12 2012/13 *
2008/09 2009/10 2010/11 2011/12 2012/13 *

EPS EPS Growth Shareholders' Funds ROE

* 2012/13 is based on annualized 1H earnings

FMCG
 Overview of FMCG Business
Total FMCG market ~ Rs. 125Bn Hemas FMCG revenue contribution
(Jan’12 to Sept’12) for 1H 2012/13

26%
14% 10%
20%
76%
54%

Food and Beverages Personal Care Household Care Food and home care Personal care Personal wash

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

All Urban Rural  Comprises of 18 Popular brands
Total FMCG 13% 14% 12%
 No. 2 in Personal Care
Food & Beverages 13% 15% 11%
Personal Care 12% 13% 12%  Market leader in baby care, hair oil
and men’s hair setting categories
Household Care 14% 11% 15%
 FMCG: Our Key Brands
Most preferred range of baby care products
Baby Cheramy in Sri Lanka since 1962

Unique oral care product containing clove oil

Clogard No. 2 in oral care market

Kumarika Leading hair oil in the market with

indigenous herbs

A leading washing powder in the market

Diva
delivering excellent value to the consumer

No.1 in beauty soap market surpassing Lux

Velvet
Won Bronze Award for Product Brand of the
Year at the 11th SLIM Brand Excellence Awards
 FMCG: Performance Highlights
1H 12/13 1H 11/12 Change  Strong performance in Personal wash and
Turnover (Rs. Mn) 3,679 3,139 17% Personal care categories contributed
PAT (Rs. Mn) 358 257 40% towards the growth in revenue

 Steady increase in sales: September

Revenue in PAT in Rs. recorded the highest ever sales value
Rs. Millions Millions
crossing the Rs. 700Mn sales mark
7,000 700

6,000 600
 Excellent overall performance in Bangladesh
business; turnover up by 166%
5,000 500
 Impressive market share gain in Personal
4,000 400
wash category underpinned by Baby
3,000 300 Cheramy and Velvet soap

2,000 200  Margins on track after price corrections to

offset the exchange impact
1,000 100

- -
 Our sanitary napkin brand, Fems won the
2007/08 2008/09 2009/10 2010/11 2011/12 1H Silver Award for Best Turnaround Brand of
2012/13
the Year at the 11th SLIM Brand Excellence
1H Revenue 1H PAT PAT full year
Awards
 Big Heart Project

 Baby Cheramy, celebrates 50 years of enriching lives of Sri Lankan mothers and
children

 The Big heart Project was launched together with the Department of Probation and
Childcare Services of the Ministry of Child Development & Women Affairs, in
September 2012, to celebrate this milestone

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

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

 The Big Heart truck will travel across Sri Lanka and appeal to all Sri Lankans to open
their hearts and donate towards this great cause
Healthcare
 Overview of Pharmaceutical Distribution

 Size of the total Pharmaceutical market is Hemas Pharmaceutical revenue

~ Rs 27Bn (MAT Q2 2012) (Source IMS) contribution for 1H 12/13
 Overall Pharmaceutical market has grown
by 16.3% YoY (Source IMS) 4%

 Hemas Pharmaceutical remains the market 30%

leader with a share of 17.55% (Source IMS) 66%

 Pharmaceutical market composition (approx):

33.1%
Distributors (Pharmacies)

Institutional Segment
66.5%
0.4% Supermarkets

Branded Generic Generic Branded

 Overview of Hospitals
Outpatient and inpatient volumes at
 The number of registered private hospitals Hemas Hospitals
Outpatient
volume in Inpatient
stood at 186 at end 2011, with a bed ‘000s volume

capacity of 4,784 (Source- CBSL) 120 6,000

 Combined market size of the 4 leading 100 5,000

hospitals ~ Rs. 17Bn for FY 2011/12
 Revenue split among leading Hospitals: 80 4,000

60 3,000
6% Q1 Q2 Q3 Q4 Q1 Q2
19% 34% 2011/12 2011/12 2011/12 2011/12 2012/13 2012/13

Outpatient Inpatient
21%
21% Revenue in
Rs. ‘000s Laboratory revenue at Hemas Hospitals
80,000

40,000
Asiri Nawaloka Lanka Hospitals
Durdans Hemas Hospitals

0
Q1 11/12 Q2 11/12 Q3 11/12 Q4 11/12 Q1 12/13 Q2 12/13
Revenue split is based on Q1, 2012/13 financials
 Health Care: Performance Highlights
1H 12/13 1H 11/12 Change

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

PAT (Rs. Mn) 256 190 35%  Pharmaceutical business was the main
contributor to sector revenue growth
Revenue in
PAT in Rs.
• Revenue growth of Pharma: 21.8%
Rs. Millions
Millions
• Revenue growth of Hospitals: 30.3%
8,000 400

7,000 350  Training and educational programs for

doctors and community awareness
6,000 300
projects along with high quality service
5,000 250 standards contributed towards the
4,000 200 revenue growth at hospitals
3,000 150  Hemas Wattala Hospital recorded the
2,000 100 highest number of baby deliveries in
1,000 50
September since inception

- -
2007/08 2008/09 2009/10 2010/11 2011/12 1H
2012/13
1H Revenue 1H PAT PAT full year
Leisure
 Overview of Tourism Industry
Travel Trends Sri Lanka

 Outbound travel forecast 2012:  Tourist arrivals during the year were
World 2%; Europe 1%; Asia 4% 693,772 marking a growth of 16% and
(IPK Survey) expect to top one million at the end
of year
 Purpose of travel : 71% holidays of
which 27% looks for sun and beach
Tourist arrivals & occupancy rates
 Tighter budgets; looking for value for in 2012
money Tourist Arrivals
Occupancy Rates
100,000 100.0%

 Tourists are becoming more

80,000 80.0%
demanding
60,000 60.0%
 Travelers are searching for meaningful
experiences 40,000 40.0%

 Web and mobile technologies are 20,000 20.0%

emerging as powerful marketing tools

- 0.0%
Jan Feb Mar Apr May Jun Jul Aug Sep
Tourist Arrivals Occupancy Rates
Source - SLTDA
 Leisure: Performance Highlights
1H 12/13 1H 11/12 Change
 Sector performance was mainly driven by
the Hotel sector and was enhanced by our
Turnover (Rs. Mn) 656 453 45%
inbound tour operation
PAT (Rs. Mn) 90 -23 491%
 Gross operating profit of the Hotel sector
grew by an impressive 124% over LY
Revenue in PAT in Rs.
Rs. Millions Millions
1,400 140
 Occupancy rates of our hotels for 1H
120
2012/13:
1,200
100 Sigiriya 75%
1,000 80
Dolphin 85%
60
800
40
Avani Bentota 67%
600
20
 Kani Lanka Resort & Spa rebranded as
-
400
Avani Kalutara , was opened for guests in
(20)
200
October 2012
(40)

- (60)  Hotels under the Serendib Leisure

2007/08 2008/09 2009/10 2010/11 2011/12 1H
2012/13
umbrella are looking forward to a good
1H Revenue 1H PAT PAT full year
winter season with favorable forward
bookings
Transportation
 Overview of Transportation Industry
Metric
Tonnes
Air cargo volumes YoY Growth

7,000 25.0%  Import volumes in Sri Lanka declined

6,000
20.0%
over LY on account of higher tariffs
5,000 while exports slowed down due to
4,000 15.0%
unfavourable economic conditions in
3,000 10.0%
the EU and US markets
2,000
5.0%
1,000
 However, air export and transhipment
0 0.0%
Apr May Jun Jul Aug Sep Oct volumes grew over LY which positively
2011/12 2012/13 Growth impacted the earnings growth of the
Source – Sri Lankan Cargo
sector
TEUs Port of Colombo – Transshipment volumes  Main shipping lines re-aligned their
290,000 capacities in and out of CMB which
280,000
impacted freight rates and liner/feeder
270,000
schedules
260,000
250,000  Infrastructure development throughout
240,000
Sri Lanka created a significant demand
230,000
for logistics facilities which is a focus
220,000
Apr May Jun Jul Aug Sep
area for growth in the sector
2011/12 2012/13

Source – Port Statistics

 Transportation: Performance Highlights
1H 12/13 1H 11/12 Change  GSA businesses maintained their leadership in the
Turnover (Rs. Mn) 465 359 29% market with both passenger and cargo segments
PAT (Rs. Mn) 155 102 52%
posting healthy earnings
 The outbound travel business continued to
strengthen its relationships with key corporate
Revenue in PAT in Rs. clients and increased its share during 1H
Rs. Millions Millions
800 300
 The maritime business benefitted from a higher
700
250
throughput at the port. New business was
600
generated by servicing casual callers and
200 providing value added services to vessel owners
500
 “MercMas” – JV with Mercantile Shipping to
400 150
provide crew boat services for the transport of
300
100
crew, sea marshals and spares in Galle was
200
launched in October 2012
50
100  “Hemas Logistics” – strategic investment in a
haulage company specializing in repositioning
- -
2007/08 2008/09 2009/10 2010/11 2011/12 1H
containers for shipping lines, expanded services to
2012/13 include car logistics and over dimensional cargo
1H Revenue 1H PAT PAT full year movement
Power
 Overview of Power Industry
GWh
14,000
Annual power generation - GWh
12,000 Hemas Power revenue vs
10,000 furnace oil prices
8,000 Revenue in
Rs. per
Rs. Millions
liter
6,000
6,000 70
4,000
5,000 60
2,000
50
0 4,000
2004 2005 2006 2007 2008 2009 2010 2011 40
Hydro Thermal Other Renewbles 3,000
30
2,000
 Combined installed capacity of power 20

plants in 2011 was 3,141 MW, a growth of 1,000 10

11.5% - 0
2007/08 2008/09 2009/10 2010/11 2011/12
 Gross generation for year 2011 was 11,528
GWh, a growth of 7.6% Power revenue Fuel prices *

 Average electricity consumption per capita

for 2011 was 480 KWh, a growth of 7%
*Average annual furnace oil price
Source – CEB Statistics 2011
Source – Ceypetco
 Power: Performance Highlights
1H 12/13 1H 11/12 Change

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

PAT (Rs. Mn) 116 165 -30%  Sector revenue was mainly driven by
growth of our thermal power plant
Heladhanavi due to increase in fuel prices
Revenue in PAT in Rs.
Rs. Millions Millions  Our hydro power plants recorded a drop
6,000 490
in performance due to low rain fall in
440
5,000 catchment areas
390

4,000
340  Increase in rupee interest rates negatively
290 impacted the bottom line of Heladhanavi
3,000 240

190
 Rupee devaluation negatively impacted
2,000 the net profit through exchange losses on
140
foreign currency borrowings, most of
90
1,000 which is unrealized
40

- (10)
2007/08 2008/09 2009/10 2010/11 2011/12 1H
2012/13
1H Revenue 1H PAT PAT full year
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

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
Strategic Focus
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
 Hemas Investor Relations:

Telephone: +94 11 4 731 731

Email: ir@hemas.com
Web: http://www.hemas.com

Hemas Holdings PLC

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