Chairman's Message
Extract from Annual Report 2017
Dear Fellow Stakeholders:

This year is a very exciting year for Minor. It is with great pleasure we mark this year as the celebration of Minor Group’s 50th anniversary. For me, our first 50 years was merely the beginning of our journey, to build a strong foundation for an even greater future to come.

Looking back, we have come a long way. Since Minor Group’s inception in 1967 with an advertising agency and a cleaning company, and Minor International’s beginning in 1978 with the Royal Garden Resort Pattaya, we as a company have been through countless impediments, whether they were the Asian financial crisis, political unrests, epidemics or natural disasters. But every time, we have emerged even stronger, and we have continued to grow our businesses successfully regardless. From a single hotel and one restaurant in Pattaya about 40 years ago, Minor International has expanded the businesses and today has a portfolio of over 150 hotels, 2,000 restaurants and 390 retail outlets across multiple brands. From capital of a bit over USD 1,000 and a handful of employees in Thailand, currently, Minor International’s market capitalization is over USD 6 billion, with over 66,000 employees in 32 countries.

Reflecting on our journey, I attribute our success to several key factors. We have always had a long-term strategic plan, which everyone in the organization supports. This strategic plan has led to business diversification, in terms of brands, business models and geographies, which have allowed us to deliver consistent growth overtime. We could only come this far with incredible contributions from an incredible team of people, both management and staff, who helped steer us in the right direction throughout our 50 years. These people created and built our portfolio of brands, again and again striving to satisfy our customers. Our commitment has been to deliver quality products and services that provide 100% satisfaction to our stakeholders. We could not have done it without the operational excellence that we have accumulated over time.

Another achievement during our 50 years that I would like to highlight is our sustainability development journey. We started off with each hotel property, each brand, each business unit doing what they could to give back to society by organizing their own individual corporate social responsibilities activities. Today, we have Corporate Sustainability Department that oversees our sustainability strategy and corporate-wide activities, to ensure that everyone is progressing in the same direction. I am proud to report that Minor International’s inclusions in many of the sustainability indices, including the Dow Jones Sustainability Emerging Markets Index, the FTSE4Good Emerging Index and the list of Thailand Sustainability Investment (THSI) by The Stock Exchange of Thailand, are testaments of our unwavering efforts.

Coming back to the present, in 2017, we continued to strengthen our business platform, just like what we have done in each and every year over the past 50 years, in order to ensure our path for growth. Minor International reported net profit of Baht 5,415 million in 2017, an increase of 18% from 2016 core net profit, attributable to the performance of all the three business units. Our key achievements in 2017 are as follows:

  • Minor Hotels focused on introducing our brands in our existing markets, strategically offering a wider range of choices to our customers and cross-selling our brands. We introduced the Anantara and AVANI brands for the first time in Europe with the launch of Anantara Vilamoura Algarve Resort and AVANI Avenida Liberdade Lisbon Hotel in Portugal, traditionally a Tivoli territory. In Australasia, where we have our Oaks properties, Minor Hotels introduced the AVANI brand for the first time, with the launch of AVANI Metropolis Auckland Residences in New Zealand and AVANI Broadbeach Gold Coast Residences in Australia. In addition to our prominent Anantara, AVANI and Oaks’ presence in the Middle East, we introduced the Tivoli brand with the debut of Souq Waqif Boutique Hotels by Tivoli in Doha, Qatar.
  • In other existing markets, we continued to expand our hospitality portfolio. Minor Hotels opened Anantara Guiyang Resort, a 218-room management contract, our third hotel in China. We strengthened our AVANI brand further in Thailand by entering into a 50% joint venture to invest and operate AVANI Hua Hin Resort & Villas, our fifth AVANI hotel in Thailand, and the 25th hotel in our Thailand portfolio. Moreover, Minor Hotels continued to upgrade our hotel portfolio in Portugal in order to further capture the rising demand as well as the potential of higher room rates. Following the completion of the renovation of five hotels, two in 2016 and three in 2017, we are in the process of renovating another four hotels, which will be completed in time for the high season in 2018.
  • In 2017, Minor Hotels made a leap forward by entering into two new markets. Oaks made its entrance into India with the opening of Oaks Bodhgaya, a 25% joint-venture hotel in Bihar, India. In addition, Minor Hotels entered into the UK with a 74% investment in Corbin & King, comprising six restaurants across London, which includes The Wolseley in Piccadilly, together with a management contract of the Art Deco five-star hotel, The Beaumont, in the heart of Mayfair. The investment will serve as a platform for further expansion in the UK market.
  • Minor Hotels announced a joint venture with Kajima Corporation to launch Avadina Hills by Anantara, a residential project adjacent to Anantara Layan Phuket Resort. Furthermore, after the adjustment of sales package back in mid-2015, Anantara Vacation Club demonstrated a robust business turnaround with revenue increase of 28% in 2017.
  • Minor Food continued to expand in China, a market which we believe has immense potential. Minor Food increased the shareholding in our key brand in the country, Riverside, the Sichuan barbecue fish restaurant concept, from 69% to 85%. In addition, we launched the franchise of Thai Express in China, with the opening of the first outlet in Beijing International Airport.
  • We believe that there is a substantial opportunity for Thai Food internationally. Therefore, Minor Food further strengthened its presence in the UK with a 70% investment stake in Grab Food, the Thai casual-dining restaurant, through the conversion of its loan to equity. In addition, Minor Food’s 50% joint venture, Patara Fine Thai Cuisine, acquired the existing four Patara outlets in the UK, resulting in seven Patara restaurants in the portfolio by the end of 2017.
  • Minor Lifestyle continued to build its portfolio by selectively adding new brands. In 2017, we introduced Joseph Joseph, the design-led houseware products from the UK and OVS, the Italian fashion brand for men, women and kids.
  • While we expanded our businesses, we did not compromise our financial position and made sure that our balance sheet remained strong. The MINT-W5 warrants program issued by Minor International was a success. With the exercise rate of 98.7%, Minor International received an additional equity of Baht 7.9 billion for the entire warrant program. As a result, not only did we have a lower leverage ratio, but we also have additional funding for future expansion.

Today, Minor is in a strong position to grow further and farther. Our five-year plan calls for a 15 - 20% compounded annual growth rate (CAGR) of net profit and a return on invested capital (ROIC) of over 13% by 2022. In order to achieve these goals, Minor International will drive growth of our multi-brand portfolio, maximize profitability and expand through strategic investments, joint-venture partnerships and acquisitions. We believe we have the right portfolio of brands, people and a strong financial position, and these elements will be the force behind our next chapter of growth and success.

I cannot end this message without expressing my sincere appreciation to my fellow board members, management and staff. In addition, on behalf of the Board of Directors, I would like to express my sincere gratitude to our stakeholders, whether they are our customers, business partners or shareholders for their continued support. 2017 has been a busy and rewarding year, and I look forward to working with everyone to deliver continuing strong results over the next 50 years and beyond.


William Ellwood Heinecke
Chairman and Chief Executive Officer
March 2018