Investor Presentation - listed...

Investor Presentation September 2015

R E T A I L

Important Notice The information contained in this presentation is for information purposes only and does

not constitute an offer or invitation to sell or the solicitation of an offer or invitation to purchase or subscribe for share in Robinson Department Store Public Company Limited (“ROBINS” and shares in ROBINS, “shares”) in any jurisdiction nor should it or any part of it form the basis of, or be relied upon in any connection with, any contract or commitment whatsoever.

This presentation may include information which is forward-looking in nature. Forward-looking information involve known and unknown risks, uncertainties and other factors which may impact on the actual outcomes, including economic conditions in the markets in which ROBINS operates and general achievement of ROBINS business forecasts, which will cause the actual results, performance or achievements of ROBINS to differ, perhaps materially, from the results, performance or achievements expressed or implied in this presentation.

This presentation has been prepared by ROBINS. The information in this presentation has not been independently verified.

No representation, warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information and opinions in this presentation. None of the ROBINS or any of its agents or advisers, or any of their respective affiliates, advisers or representatives, shall have any liability (in negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with this presentation.

This presentation is made, furnished and distributed for information purposes only. No part of this presentation shall be relied upon directly or indirectly for any investment decision-making or for any other purposes.

This presentation and all other information, materials or documents provided in connection therewith, shall not, either in whole or in part, be reproduced, redistributed or made available to any other person, save in strict compliance with all applicable laws.

Agenda

Company Profile

Company Plan & Strategy

Financial Performance

3

Company Profile

4

Opened the first

store in Bangkok in 1979

Started to

expand outside Bangkok

Temporarily ceased

store expansion due to

the ASEAN economic

crisis in 1997

- Resumed the store

expansion in 2005

- Launched “The 1 Card”

as a membership card to

support the company’s loyalty program in 2006

Exploit Vietnam

opportunity, under

“Robins” Dept. Store

7 10 11 9 8 10 11 BKK

- 4 9 9 13 24 28 UPC

Listed on SET in 1992

CRC became a

major shareholder

Shifted towards fashion and

lifestyle products by spinning

off supermarket, electrical

appliances and sport accessories department

Re-launched a new

image as “Robinson

…Your Life Vitalizer” in 2003

- Launched a new store

model, “Robinson Lifestyle

Center”, and unparalleled

shopping experience in 2010

- Launched a new flagship

store at Rama9 as a part of

rebranding campaign to

enhance brand awareness in 2011

2 VN

1

3

1979-1992 1995 1996-1998 2000-2004 2005-2009 2010-2013 2014 2015

More than 36 years in retail business

5

Major shareholder and free float

• Strong synergy with CRC helps ROBINS to

strengthen supply chain management and back

office system, and enhance economies of scale.

• Those specialty stores and supermarket make

ROBINS store as a one stop shopping destination

and attract people traffic to stores.

Central Group’s portfolio of dominant retail brands in Thailand

CRC 54% Free float

46%

As of Mar 2015

Foreign Institutions

48%

Thai Institutions

23%

Individuals 29%

Strong synergy within Central Group

6

Robinson

Powerbuy Supersports

40.00% 40.00%

Powerbuy and Supersports are the most famous category killers in home electronics

and sport products in Thailand, offering wide range of product selections with good

price and services

40% Investment in Powerbuy and Supersports

7

19

79

19

82

19

84

19

89

19

90

19

92

19

93

19

94

19

95

19

96

19

97

19

98

20

00

20

01

2005

20

06

20

07

20

08

20

09

20

10

2011

20

12

20

14

UPC BKK

34 stores 39 stores 42 stores

2013 2014 2015F

10 in BKK

24 in UPC 11 in BKK

28 in UPC Thailand

Total stores

10 in BKK

32 in UPC

Total saleable area: 480,000 sqm

Total rental area: 324,000 sqm

As of July 2015

Currently 40 stores nationwide

8

Province Store Format Opening Date

Rayong In Shopping Complex 27 May 2015

Burirum Lifestyle Center 29 Jul 2015

Srisaman Lifestyle Center 4Q15

Maesod Lifestyle Center 4Q15

4 New stores in 2015

Total investment: THB 4 bn

9

Store formats

Lifestyle Center

In shopping complex

• Own shopping mall with size of 35,000-40,000 sqm

• Newly developed format integrating shopping mall and department store ambiance

to enhance customers’ shopping experience

• Total investment size of THB 700-1,000 mn

• Lease shopping mall space to open Robinson Department Store

• Saleable area 10,000-14,000 sqm

• Total investment size of THB 200-500 mn

10

Company Plan & Strategy

11

TO PROFITABLY G OW

OUR MARKET SHARE

OUR VISION

12

OUR MISSION

13

1. To put our customers and employees and suppliers at the heart of our business decisions.

2. To be locally relevant in our merchandising offering and our shopping experience.

3. To increase sales by expanding our customer base and increasing customer spend.

4. To make retail more than just shopping.

5. To invest in the future growth of our stores and people.

6. A Professional and Entrepreneurial approach by our management team to make it happen.

7. Attracting, retaining and growing the most talented people in the Retail Industry.

8. Exceeding the expectations of our shareholders, customers and employees.

Robinson

Department Store

Robinson

Lifestyle Centre International Brand

Management Robins

Vietnam

Tier 1 :

Rama 9

Udornthani

Chiangmai

Sriracha

Tier 2:

FashionIsland

Rangsit

Khonkaen

Had Yai Jungcelon

Chonburi

Bangna

Rattanatibet

Nakonsrithamrat2 (2016)

Tier 3:

Phitsanulok

Sukhumvit

Suratthani

Srinakarin

Chiangrai

Ubolratchtani 2

Bangrak

Rayong (2015)

Ayutthaya

Phuket

Tier 4:

Lampang

Bangkhae

Ubolratchtani 1

Close: Ladya (May-15)

Tier 1 :

Chanthaburi

Ratchaburi

Trang

Saraburi

Tier 2:

Nakornsithamrat 1

Kanchanaburi

Chachoengsao

Suphanburi

Srisaman (2015)

Lopburi (2016)

Tier 3:

Sakonnakorn

Surin

Roi Et

SamutPrakan

Mukdaharn

Burirum (2015)

Maesod (2015)

Tier 4:

Prachinburi

ROBINS @Royal City, Hanoi

ROBINS @Crescent,

Ho Chi Min City

25 17 7 2

60THB Store:

(Lifestyle Mall)

2016

R E T A I L

The Tier of store reflects the size of the opportunity (customer spending power and number of transactions)

TO PROFITABLY GROW OUR MARKET SHARE

14

OUR OBJECTIVES

15

To Profitably G ow Our Market Share

To continue to drive sales

To improve our gross margin

To manage the cost base

Investing for future growth

TO CONTINUE TO DRIVE SALES

16


17

• Annualized new stores & renovations

• Footfall & higher conversion rates

• Average transaction values

• New stores

• International brands

• On-line

LFL Sales

Non LFL Sales


18

Category %Contribution

2014 2015/2016 2020

Health & Beauty 14.9% 14.9% 14.9%

Ladies’ Fashion 7.3% 6.5% 6.0%

Shoes & Handbags & Luggage 11.3% 11.6% 12.0%

Jeans & Unisex 10.4% 10.6% 10.6%

Lingeries 7.1% 7.1% 7.1%

Watch & Jewellery 8.1% 7.5% 7.2%

Men’s Fashion 11.5% 11.1% 11.0%

Sport Fashion 1.9% 3.0% 3.3%

Home Electric & Hardware 14.2% 14.0% 14.0%

Kids 12.2% 12.5% 12.6%

Just Buy/60Baht 1.0% 1.2% 1.3%

Total 100.0% 100.0% 100.0%

R E T A I LBREAKDOWN OF OUR SALES


19

• Renovation of existing stores

• Playing into trends (Millennial Focus)

(Health, Sport, 60 Baht)

• Expand our customer base

• Attract new customers

• Increase customer spend

20

TO IMPROVE OUR GROSS MARGIN


21

Take greater accountability for our business

• Differentiation

• Margin benefit

• Playing into trends

• Expansion opportunities outside

of Department Stores to reach

additional customers

Nike is No.1 millennial brand.


22

• Proven successes

• Wider availability

• Greater choice

Aeropostale is a Top 15 millennial brand.

2016

TO IMPROVE OUR GROSS MARGIN 2014

23

Robinson Brands International Brands (exclusively operated by Robinson)

Key Consignment Brands

0%

91%

9%

Significant focus on securing the supply base of Differentiation (House-Brands)

TO IMPROVE OUR GROSS MARGIN 2015/2016

24




(Lifestyle Mall)

8%

82%

10%

TO IMPROVE OUR GROSS MARGIN 2020

25




(Lifestyle Mall)

13%

75%

12%

NEW

NEW


26

• Number One for Accessories in USA. • Claire’s Stores 3,500 Stores worldwide • Target Market 3-35 years old Females. • World’s Leading Ear Piercing Specialist.

International Brands

• 18 Doors in 2015 • 51 Doors in 3 years


27


• Over 300 Stores Across 14 Countries. • Sales just under 1B US$. • Retails over 70,000 unique products

every year



28


• One of the Largest Family Footwear Retailers in the world with more than 4,400 stores in more than 35 countries.

• Positioning is to be the First Choice for style and value in footwear for customers.



29


• Specialty retailer of casual apparel and accessories in USA.

• Target Market 14-17 years old young women and men.

• Focus selection of high-quality, active-oriented fashion and fashion basic merchandise at compelling values.

Opening Feb 2016


NEW

TO MANAGE THE COST BASE

30

TO MANAGE THE COST BASE

31

• Realize savings on new and renovated stores

• Operational efficiencies

• Invest where customer sees/feels the difference

• Head count existing, new and head office structure

MAKE IT HAPPEN.

INVESTING FOR FUTURE GROWTH 2015-2020

32

INVESTING FOR FUTURE GROWTH 2015-2020 NEW STORE PIPELINE

2015

Rayong CPN

Burirum Srisamarn Maesod 42

2016

Nakornsrithamrat 2 CPN

Lifestyle #18 Nov 44 Confirm

2017

CPN Lifestyle #19 Lifestyle #20 47

Plan

2018

CPN Lifestyle #21 Lifestyle #22 Lifestyle #23 51

2019


2020


INVESTING FOR FUTURE GROWTH 2015-2020

34

• 4 Stores opened in 2015

• 1 Department Store opening 2016

• 1 Lifestyle Malls opening 2016

• 25-150 MB per store

• All top 20 will have investment over the next 3 years

New stores

Renovations

KEY AREAS FOR INVESTMENT

R E T A I L


36

1. Investing in New Growth Categories/Playing Into Trends Reallocating space from underperforming categories to new and higher

performing categories and services

No.1 Health & Beauty

No.1 Sneaker (Sports Fashion) Stores

60 Baht business

2. Overhauling Robinson Existing Store Real Estate Space management and renovation with investment in visual

merchandise across all Top20 and potential stores over the next 3 years

3. To Make Retail More Than Just Shopping

Introducing new services to drive footfall into our stores and increase

dwell time e.g. F&B, Ear Piercing, Nail Bar, Kids Play Area, Optician

New innovative store environments


37

4. Increasing Our Customer Base by The Expansion of The International Brands (and House Differentiation)

International Differentiation (House-Brands)

Payless FOF Ladies

Claire’s Cuizimate Home

BabyShop Pacific Union Unisex

Mades/Yves Rocher Ohio Ladies

Aeropostale (New 2016) Just Buy 60 Baht

Robinson@Home

Robinson Luggage

Emilio Valentino Men



38

5. Improving Our Relationship and Support for Our Consignment Business Including Product Availability, Presentation and Service

We will be locally relevant in our merchandise offer across all our

Department Stores.

Significant support for consignment (Top brands) to amplify their presence across all stores and help invest in infrastructure to support their brands growth (Top sellers, replenishment, locations, stockroom, IT, people)

Our in-store experience will be improved by a focus on presentation and merchandising standards.

Invest in training of management and store teams to improve the quality and consistency of customer service.


39

6. Improving Our Gross Margins Our Gross margin has shown no improvement due to significantly heavy

promotional activity to drive sales. (and a dependency on consignment business)

Robinson wants to reposition the business with a better balance between full-price and discount and reduce the level of discounting and markdown activity to improve overall GP:

- Reducing The number of never ending promotions

- More “Light and shade”

- Value For Money during non promotional periods

- Move promotions to when customers have cash to spend e.g. PayDay


40

7. Realising Efficiencies

Capex savings on new and renovated stores with energy saving

initiatives

A more productive store network on a smaller footprint to improve sales per sqm. e.g. Seacon Square, Chiangmai, Tier3/4 Lifestyle Malls

Head count existing and new stores

8. Becoming a Digitally Led Retailer 2020

Focus on Click & Collect

Online infrastructure and supply chain initiatives


41

9. Putting The Right Resources in Place for The Future Development of Our Business

A complete review of head office function and roles and responsibilities

to underpin our key strategies:

- Re-organizing key areas of support functions to align with new

strategies priorities

- Continued implementing of future focused culture

- Supported by investment in technology systems

SUMMARY

42

• Focus on sales and margin g owth • Investing in key existing stores • Investing for future g owth in our people, stores and retail

innovation • Playing into trends • New exclusive International brands to deliver additional

market share (new sales channels) • Significant focus on cost management and efficiencies • St ong business fundamentals • Putting our customer, employee and supplier at the hea t of

our business decision

To Profitably G ow our Market Share.

Financial Performance

43

GDP & Consumption Growth

Year GDP Export Consumption

2013 2.8% -0.1% 0.8%

2014 0.9% -0.3% 0.6%

2015E*

(18-May-15

(16-Feb-15

2.7%-3.2%

3.0%-4.0%

3.5%-4.5%

-3.5%

0.2%

3.5%

1.8%

2.3%)

2.9%)

*NESDB, as of 17 August 2015

Source: Bank of Thailand, NESDB and UTCC

Consumer Confident Index Export (%YoY)

65

70

75

80

85

90

Ju

l-14

Au

g-1

4

Se

p-1

4

Oct-

14

No

v-1

4

De

c-1

4

Ja

n-1

5

Feb-1

5

Ma

r-15

Ap

r-15

Ma

y-1

5

Ju

n-1

5

Ju

l-15 -10.0%

-5.0%

0.0%

5.0%

Ju

l-14

Au

g-1

4

Se

p-1

4

Oct-

14

No

v-1

4

De

c-1

4

Ja

n-1

5

Feb

-15

Ma

r-15

Ap

r-1

5

Ma

y-1

5

Jun-1

5

• NESDB revised down 2015 GDP

growth for the third times this year

from 3.5% to 3.0%.

• Overall economy remained sluggish

QoQ with no sign of recovery in

economic key indicators.

Economic Conditions

44

17,630 21,620 24,300 23,896 11,896

2011 2012 2013 2014 6M15

5,500 5,860

2Q14 2Q15

Net Sales

Remark: SSSG Calculation based on number of stores fully operated throughout the previous year i.e. in 2015 there were 33 stores.

Growth 2011 2012 2013 2014 6M15 2Q14 2Q15

Same store sales 12.0% 10.3% 2.9% -5.8% -3.9% -7.0% -1.0%

Total store sales 19.2% 22.6% 12.4% -1.7% 4.0% 11.1% 6.5%

6.5% YoY 4.0% YoY

% Growth : Total Store Sales vs. Same Store Sales

THB mn

45

953 1,090 1,300 1,858 1,245

2011 2012 2013 2014 6M15

Gross Profit & %Gross Margin

Investment Income

1,346 1,440

24.5% 24.6%

2Q14 2Q15

4,304 5,309 5,914 5,843 2,931

24.4% 24.6% 24.3% 24.5% 24.6%

2011 2012 2013 2014 6M15 GP % GPM

7.0% YoY

3.2% YoY

439 622

2Q14 2Q15

41.9% YoY 45.5% YoY

2011 2012 2013 2014 2Q15

Rental area (sq.m.) 166,000 186,000 234,000 310,000 310,000

THB mn

THB mn

46

3,752 4,782 5,686 6,328 3,349

21.3% 22.1% 23.4%

26.5% 28.2%

16.8% 17.2% 17.6% 19.3%

20.3%

2011 2012 2013 2014 6M15

SG&A %SG&A to sales %Operating cost to sales

1,492 1,720

27.1% 29.4%

19.9% 21.2%

2Q14 2Q15

SG&A vs. Operating Cost

13.9% YoY 15.3% YoY

0%

2%

4%

6%

8%

2011 2012 2013 2014 6M15

Personnel

D&A

Utilities

Rent

Marketing

THB mn

47

1,997 2,255 2,289 2,234 1,273

11.3% 10.4%

9.4% 9.3%

10.7%

2011 2012* 2013* 2014 6M15

Operating Profit %Operating Margin

473 562

8.6%

9.6%

2Q14 2Q15

Operating Profit & %Operating Margin

Operating profit = EBIT - share of profit of associates *2012 and 2013 excluded non-recurring items

18.7% YoY 13.6% YoY

THB mn

48

205 402 358 404 211

2011 2012 2013 2014 6M15

Associates Income (POWERBUY & SUPERSPORT)

EBIT & %EBIT Margin

121 93

2Q14 2Q15

-23.6% YoY -1.4% YoY

595 654

10.8% 11.2%

2Q14 2Q15

2,202 2,657 2,647 2,638 1,483

12.5% 12.3%

10.9% 11.0%

12.5%

2011 2012* 2013* 2014 6M15

EBIT %EBIT Margin

10.1% YoY

11.2%YoY

*2012 and 2013 excluded non-recurring items

THB mn

THB mn

49

Core Profit & %Core Profit Margin

440 440

8.0% 7.5%

2Q14 2Q15

1,453 1,917 1,951 1,927 1,055

8.2% 8.9%

8.0% 8.1% 8.9%

2011 2012* 2013* 2014 6M15

Net Profit %Net Profit Margin

*2012 and 2013 excluded non-recurring items. Changed in deferred tax in 4Q12 bring net profit down by 413 MB.

-0.1% YoY 7.7% YoY

319 347

5.8% 5.9%

2Q14 2Q15

1,248 1,515 1,592 1,523 844

7.1% 7.0% 6.6% 6.4%

7.1%

2011 2012* 2013* 2014 6M15

Core Profit %Core Profit Margin

8.8% YoY 10.2%YoY

Core net profit = net profit - share of profit of associates – non recurring items

Net Profit & %Net Profit Margin

THB mn

THB mn

50

EBITDA & %EBITDA Margin

871 1,037

15.8%

17.7%

2Q14 2Q15

2,782 3,311 3,707 3,939 2,203

15.8% 15.3% 15.3% 16.5%

18.5%

2011 2012* 2013* 2014 6M15

EBITDA %EBITDA Margin

19.1% YoY 14.4% YoY

EBITDA = EBIT + Depreciation and Amortization + – non cash items

(exclude share of net profit from associates)

*2012 and 2013 excluded non-recurring item

THB mn

51

Strong Financial Position

-0.29

-0.36

-0.44

-0.33 -0.37

-0.17

0.06

0.19

2008 2009 2010 2011 2012 2013 2014 2015

Net DE(x)

Consolidated Financial Statements as of 30 June 2015

(THB mn)

Cash + current investments 1,001

PP&E + leasehold rights 16,573

Total assets 22,984

Liabilities 9,916

Share capital 3,943

Legal reserve 394

Retained earnings 7,835

Total equity 13,067

52

Statement of Income

(Unit : THB mn) 2Q15 2Q14 6M15 6M14

Revenue from sale of goods 5,860 5,500 11,896 11,441

Investment income 622 439 1,245 855

Other income 220 181 446 366

Total income 6,702 6,120 13,587 12,663

Cost of sale of goods 4,420 4,154 8,965 8,602

Selling and administrative expenses 1,720 1,492 3,349 2,941

Finance costs 19 9 37 10

Total expenses 6,159 5,656 12,351 11,553

Share of profit of associates 93 121 211 214

Profit before income tax expense 635 585 1,446 1,324

Income tax expense 150 99 293 230

Net Profit 440 440 1,054 979

Balance Sheets

(Unit : THB mn) 30-Jun-15 31-Dec-14 31-Jun-15 31-Dec-14

Assets Liabilities & Equity

Cash and cash equivalents 966 1,833 Trade accounts payable 3,655 4,245

Current investments 35 88 S-T loan from fin. Inst. 2,454 2,574

Trade accounts receivable 614 877 Other current liabilities 2,504 2,937

Inventories 1,552 1,509 Non-current liabilities 1,303 306

Other current assets 350 312 Total liabilities 9,916 10,062

Non-current assets 19,466 18,482 Total equity 13,067 13,040

Total assets 22,984 23,102 Total liabilities & equity 22,984 23,102

53

Investor Relations Robinson Department Store Public

Company Limited

[email protected]

Tel. +662 169 2500 Ext. 4750-2

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