Sterling Holidays

Investor Presentation
April 2015

We are Indias first Vacation Ownership organization.

We are thought leaders and pioneers who defined

holidays for Indian families as early as 1986.

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

Product Range
Vacation
Ownership

MICE

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

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

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

Customer Acquisition

Confidential

- Lifestyle need-based segmentation

- Multi-channel sales initiatives

Revenue Streams

Vacation Ownership

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

Kodai Villapatti

7.52

Kodai Lakeview

2.99

Rameshwaram

2.19

Thekkady

2.8

Munnar
Peermade

PROPOSED GREENFIELD PROJECT

LAND BANK

CORBETT
BHIMTAL

GANGTOK

28.28

Coorg - Meraca

30

Coorg - Virajpet

5.75

Goa Chapora

4.51

Goa Vagator

0.99

Alibaug

Proposed Greenfield Projects

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 ARRs 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 OTAs, 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

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

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

PAT

-328

-413

-213

-160

45

Confidential

Financials : Balance Sheet

INR Mn
Share Capital

FY11

FY12

FY14

FY 15

511

597

677

889

901

181

-638

-345

-40

1,609

1673

309

41

295

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

1,210

483

Inventories

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

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

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

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!