cimb invest malaysia conference 2014 venture –cimb mapletree & al-salam bank of bahrain •...

CIMB INVEST MALAYSIA CONFERENCE 201410th of June 2014

A 129-Year-Old Brand HeritageListed on the Main Board of Bursa Malaysia with a market capital of RM 3 bil. The E&O Group derives its name from the Eastern & Oriental Hotel, a Penang heritage landmark which dates back to 1885, affirming our style, values and beliefs

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Eastern & Oriental Hotel

“1,000 Places To See Before You Die”New York Times #1 Bestseller by Patricia Schultz, 2010

Established by the famed Sarkies Brothers in 1885, whose architectural landmarks also include The Raffles Hotel in Singapore, The E&O Hotel is one of the most exclusive heritage 5-star hotels in Georgetown, Penang.

Extending its brand legacy to Property Development, the E&O Group is today a

Luxury Lifestyle Property Development Group

Finding a Niche - PositioningE&O Property Development (Early Days)

Suburban Developers

• Large pieces of land surrounding urban centers

• Residential, commercial, hotels

Malaysian Property

Landscape

Sime UEP

IOI Group

Guthrie

Berjaya

YTL

Lion Group

Sunway

MK Land

Sunrise

SP Setia

Glomac

Gamuda

Road Builders

IJM

E&O Property

Bandar Raya

Tan & Tan

Conglomerate Developers

• Prime land in city centre and rejuvenated sub-prime KL areas

• Diversified and established conglomerates

• Commercial and residential developments

Infrastructure Developers

• Core in infrastructure developments

• Self-contained township developments in rural ‘suburb’ areas

• Affordable, quality housing

Plantation Developers

• Large land banks

• Plantation land

• Township builders

• Established

• Infrastructure capabilities

Premium & Niche Developers

• Land banks in established neighborhoods, city centre

• Target high-end market

• Mainly gated, communities, emphasis on lifestyle and exclusivity

E&O Roadmap 1994-2014

Invest in Brands

Investing in Brands – E&O Hotel

Acquiring the E&O Hotel in 1994, we became the

custodians of a rich heritage brand and inherited a legacy of grace and refinement and appreciation of beauty that has set the direction for the

E&O brand today.

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Lone Pine HotelA colonial holiday retreat built in 1948; the only boutique

hotel along the popular Batu Ferringhi coastline in Penang

“Top 10 Boutique Hotels under USD$200 in the World”Trip Advisor, 2011

Investing in Brands – Lone Pine Hotel


Invest in Brands

Brand Building

Brand Building – Emphasis on Product Dua Residency (Large size units)

• Situated along Jalan TunRazak in the CBD area and within the vicinity of KLCC

• Launch in April 2004, 2 towers consisting of 288 units with standard sizes starting from 2,200 sq ft to 6,000 sq ft.

• Sold out within a short period and at benchmark prices as well

• It sets the trend of large size units development in KL

Brand Building – Emphasis on Product Seventy Damansara (Statement of Quality)

• Located next to the former official residence of the Prime Minister of Malaysia in Damansara Heights

• Seventy Damansara opened for sale in January 2006 as the most expensive detached home in Malaysia launched by a developer ranging from RM6 – 8 million per home.

• All units were launched near completion showcasing the quality of the development.

Brand Building – Emphasis on Product Idamansara (Hallmark of a Premier Property Brand)

• Premier residential address in Damansara Heights, 82 units of semi-detached and 9 units of detached homes were launched in May 2006 at a price benchmark of RM3 million per semi-detached home.

• Idamansara was completed and handed over in mid-2007 and made instant millionaire of all purchasers

• Secondary market for a semi-detached is currently ~RM5 million


Invest in Brands

Brand Building

Expansion

ExpansionVenturing beyond KL

As the E&O brand and products gained traction, the pressure to extend our landbanking beyond Kuala Lumpur intensified, leading to

E&O’s venture into Penang island with the Seri Tanjung Pinang project


Invest in Brands

Brand Building

ExpansionStrategicPositioning

Strategic PositioningStanding next to Giants

Joint Venture – CIMB Mapletree & Al-Salam Bank of Bahrain• E&OProp entered into a joint venture arrangement with a joint venture

company of CMREF 1 Sdn Bhd and Al Salam Bank of Bahrain inSeptember 2006 to develop 73 units of Villas By-The-Sea in Seri TanjungPinang.

• CMREF 1 Sdn Bhd is a private real estate fund jointly sponsored byCIMB Real Estate Sdn Bhd and Mapletree Dextra Pte Ltd of Singapore.

• The Chairman of Al Salam Bank (listed on Bahrain Stock Exchange) isH.E. Mohamed Ali Rashid Alabbar, who is also the Chairman of EmaarProperties – the world’s largest property development company, listedon the Dubai Financial Market. The shareholders and sponsors of AlSalam Bank, is similar to that of Emaar Properties.

• Emaar Properties was awarded the ‘Best Overall Developer(Residential)’ in the UAE. Its major developments includes the US$20billion Downtown Burj Khalifa development, King Abdullah EconomicCity (Saudi Arabia) as well as teaming up with Giorgio Armani to buildand manage 10 Armani hotels and resorts across the world (Milan,London, Shanghai, New York, Tokyo)

Strategic PositioningStanding next to Giants

Joint Venture – Khazanah Nasional Berhad & Temasek Holdings Pte Ltd• In June 2011, E&O’s subsidiary, Galaxy Prestige Sdn Bhd entered into a

shareholders’ agreement with Pulau Indah Ventures Sdn Bhd (PulauIndah) to undertake the development of an iconic wellness townshipin the Heritage Cluster in Medini Central of the Nusajaya flagship zoneof Iskandar Malaysia.

• Pulau Indah is a 50/50 commercial joint venture between Teluk RubiahVentures Sdn Bhd, a wholly-owned subsidiary of Khazanah NasionalBerhad, and Aneto Investments Pte. Ltd, an indirect wholly-ownedsubsidiary of Temasek Holdings (Private) Limited.

Joint Venture – Mitsui Fudosan• E&O’s partnership with Mitsui began in June 2011 with a marketing

collaboration agreement signed with Mitsui Fudosan Realty Co Ltd tomarket E&O properties in Japan.

• In March 2013, the relationship progressed with E&O and MitsuiFudosan Residential Co Ltd (Mitsui Residential) entering into a joint-venture agreement to develop The Mews Serviced Residences in KualaLumpur.


Invest in Brands

Brand Building

ExpansionStrategicPositioning

Growth & Development

Growth & DevelopmentTaking the brand to the next level

Focus on aspirational positioning

“needs may similar but

aspirations are unique”

The Mews

Avira

E&O Roadmap 1994 to 2014Building a Brand that Lasts

2007

Breaking New

Grounds

E&O Hotel reopens

70 DamansaraIdamansaraTestimony of luxury living

DuaResidencyLuxury Living in KLCC

STP 1 First Master Plan township.

St Mary

The Mews Mitsui Fudosan

Avira Khazanah/Temasek

2001 20052006

2009

2011

2014

Brand Building getting the product

right

Expansion extending landbanksbeyond KL

Consolidation & Strategic Positioning

building financial position and forging strategic

partnerships

Growth & Development

Focusing on next growth phase(2014 – 2017)

Market Cap RM200mil

Market Cap RM3bil

Investing in a Brand

leveraging on a rich heritage

1994

Acquisition of E&O Hotel

1996-2001

Restoration of E&O Hotel

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2014 – 2016 Business Plan : Growth & Development

Branding – Regional & International Exposure

Strategic Partnerships – Alliances & Collaborations

Growth Engines

Delivering Shareholder Value

Talent, Purpose & Values

Conclusion

SustainableGDV and PATper annum

Cumulative PAT target for

FY2014 – FY2016RM450m

and stretch of RM500m

Initial Target RM250m

Achieved RM262.6m

Sustainable PAT for Next 3 years and beyond

Building the Foundations

Next Growth and

DevelopmentsFuture

2011 – 2013 2014 – 2016 > 2016




Growth Engines


Conclusion


Branding - Regional & International Exposure

Framework (Local Supply – Global Demand)

JapanChina

Rest of World

Expatriate Community

Malaysian Diaspora

Strong Regional & International Brand

Global Demand outstrips Local Supply

Growth Trajectory uninhibited by competition

Sustainable profits & growth opportunities

Local Supply – Growth Engines

Penang

KL/Klang Valley

Iskandar

UK

Singapore Indonesia




Growth Engines

Current Assessment : Building Foundations


Conclusion


Strategic Partnerships : Alliances & Collaborations

Framework

Operationalizing Existing Partnerships

Establishing new international partnerships

Infusing International design and standards in

regional partnerships Marketing / Sales & Distribution

Design / Development

Hospitality / Leisure collaborations

Joint Investment

Pursuing additional international partnerships and operational collaborations

Regional

International

Strategic alliances and collaboration

with well renowned & international institutions




Growth Engines



Conclusion


Growth Engine 1 : Penang (Operationalize STP 2)

In the immediate term the focus is to complete the launches of the STP 1 developments.

STP 2 will be critical and the emphasis for the next 3 years is to operationalize it.

STP 1

Almost completed with a series of launches : • Andaman (final block)• Marina – Office /

Service Apartments• Super terraces

Strategy

Launch the respective developments over the

next 3 years as per schedule

STP 2

• 760 acres facing STP 1• Split into 2 islands,

each having a different composition of residential and commercial element

Strategy

Operationalize STP 2

STP 2 : The Next Catalyst

Up to 12,000 new homes

8 new districts

88 acres of open space which includes a network of green spaces/squares, park grounds, public spaces and coastlines

Over 12km of new island waterfront

International marina and yacht club

Leisure and cultural facilities including theatre and aquariums

New shopping high streets

A new commercial district

of hotels and office

space required

by MNCs

Land use Stage A Stage B

Acres 253 507

Residential 39% 50%

Commercial & mixed use

34% 15%

Public spaces, infrastructure & utilities

27% 35%

Total area : 760 acres

The Masterplan : Key Components

April 2011 - An Approval-in-Principle for the proposed project was obtainedfrom the Penang State Government.

24 August 2013 - A Public Dialogue was held to obtain public feedback on thedetailed environmental impact assessment (DEIA) study

13th Jan 2014 - the detailed environmental impact assessment (DEIA) reportwas submitted to the Department of Environment (DOE)

10th April 2014- The detailed environmental impact assessment (DEIA) reportapproval granted by Department of Environment.

21st April 2014 –Submitted STP 2 Land use master plan to Penang StateGovernment.

.

Where we are right now

Growth Engine 2 : Iskandar Medini

Avira

• Collaboration between Khazanah and Temasek

• Wellness Sanctuary / Resort complemented with Medini Estate which includes launches of Terrace Houses, Serviced Apartments, Semi-D, Bungalows, Commercial and Condos

Strategy

Deliver on the Medini development and identify /

develop complementary developments in the

Iskandar region

To be launched over 2014 -2019 | GDV of RM 3.5 billion

Growth Engine 3 : Klang Valley

E&O will focus on 2 - 3 additional developments to sustain our next phase of growth.

KL /Klang Valley

• The Mews • Jalan Conlay• Elmina West

Strategy

Strategic Partnership with Landowners

GDV of RM 3 billion

Princes House, London

Within close proximity to theinternationally renowned Covent GardenMarket, the Royal Opera House and somefamous hotels and theatres such as TheWaldorf, The Savoy and within the vicinityof top London’s renowned colleges such asLondon School of Economics, Kings Collegeand University College London

Growth Engine 4 : International Launched : February 2014 | GDV of RM 300 million

Strategy

Initial phase is to test the acceptance of our customers base of E&O brand overseas & followed by development

of a platform to efficiently implement multi-projects

Each of the growth engines will contribute to the top and bottom line in the next 3 years and beyond

FY2014 FY2015 FY2016 FY2017 FY2019FY2018

Target : GDV of RM1.0 b

Stretch : GDV of RM1.5 b

Target : GDV of RM3.0 b

Stretch : GDV of RM4.0 b

Building the base. Contribution by growth engine not necessarily fairly

distributed yet

Each of the Growth engines should be contributing fairly across the board and

not over reliant on 1 engine only

3 year Business Plan(2014 – 2016)

Next Beyond

Growth and Development Delivering sustainable profits




Growth Engines


Conclusion


Delivering Shareholders’ Value

The investments made in the 2014 – 2016 Business Plan will yield sustainable profits beyond 2016

This will translate into greater shareholder value

Market capitalisation has grown from RM200 million to close to RM3 billion (2004 to 2014)


Next Growth and

DevelopmentsFuture

2011 – 2013 2014 – 2016 > 2016




Growth Engines


Conclusion


Talent – Attract, Retain & Motivate

Rationale

People are core in driving the sustainable growth and development of E&O

Developing and nurturing talent must be embedded throughout thebusiness backed by a strong employee engagement programme

Today, E&O property development division employs 230 employees

Loyalty, Commitment, Dedication

E&O’s core senior management team have been with the Group for close to a decade, some longer.

Our Purpose

E&O designs and builds properties that cater to

aspirational lifestyle needs of discerning individuals

Our Values

We do things differently, always for the better,

with sincerity, integrity and passion

Purpose & Values




Growth Engines



Conclusion


Conclusion: Business Plan Built to Last

4 Growth Engines 3 Strategic Thrusts

Penang

PassionE&O Corporate

Values

Iskandar

KL/Klang Valley

International

Doing things differently, always for the better

Integrity

Regional / International Exposure

Strategic Partnerships & Collaborations

A.R.M Talent

Sincerity


Next Growth and

DevelopmentsFuture

2011 – 2013 2014 – 2016 > 2016

Thank You

cimb invest malaysia conference 2014 venture –cimb mapletree & al-salam bank of bahrain •...

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