MC GROUP Q2 2018 and FY2018 Results Summary Public Company Limited - - PowerPoint PPT Presentation

MC GROUP

Public Company Limited

Q2 2018 and FY2018 Results Summary

6 September 2018 A leading multi-brand apparel & lifestyle products retailer

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DISCLAIMER

The information contained in our presentation is intended solely for your personal reference only. In addition, such information contains projections and forward-looking statements that reflect our current views with respect to future events and financial performance. These views are based on assumptions subject to various risks and uncertainties. No assurance is given that future events will occur, that projections will be achieved, or that the our assumptions are correct. Actual results may differ materially from those projected.

AGENDA

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01

Company Overview

02

Recent Development

03

Financial Result

04

2019 Guidance

C O M P AN Y O V E R V I E W

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Launched

• nline website

JV with Phetkasem Holding to revolutionize top wear

2008

Opened the first Free Standing Shop

1st Mc Shop 2012 Expanded to Myanmar & Laos

2005

Launched “Mc ” brand 2013

Extended Brand Portfolio

Casual menswear Women's’ Jeans & Street wear

Extended Brand Portfolio

Acquired 51% in

1975

Expanded to Lifestyle Business

Kid’s Jeanswear Fashionable Ladies wear Value-for-Money Casual wear Premium Jeanswear

Started as manufacturing and selling through traditional trade Onto managing brands and distribution channels Emerged as a leader in denim market in Thailand 2014 2015 Expanded to Vietnam Expanded to Cambodia Alliance with PTT

Opened mc mc shop in PTT gas station

Listed on the SET

Extended Brand Portfolio 2016 Extended Brand Portfolio

Active wear “UP” Skin care “M&C”

Set up new subsidiary 2017

Invested 55% in to distribute home spa products

Expanded to Iran

Key milestones

Revamped e-commerce platform

CRM & membership program

2018 Moving forward to become a leading apparel and lifestyle products retailer

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WoWme Limited (“WOWME”) Look Balance Co.,Ltd Winnerman Co., Ltd. (“WNM”) MC INTER LIMITED (“MCI”) P.K. Garment (Import-Export) Co., Ltd. (“PKG”) 99.97% 99.98% 99.97% 99.97% 99.99%

• Manufactures

50% of total production

• With BOI

privilege

Mc Jeans Manufacturing Co., Ltd. (“MJM”) 99.97%

• Manufactures

20% of total production

• Without BOI

privilege

• Offers quality

Thai and foreign brands products and services through online platform

• Manages sales

force and warehouse workforce for MC

• Incorporated for

the future business and investment abroad

Time Deco Corporation Co., Ltd.

51%

• Importer,

retailer and exclusive distributor of famous int’l watch brands

New Businesses Operations Production

Mc Jeanious Co., Ltd. 99.99% Top T 2015 Co., Ltd.

51%

• Supplier of top

wear with latest fabric technology under the brand “McT”

MC GROUP PLC (“MC”)

Registered Capital 400 MB Paid-up Capital 400 MB Aromatique Active Co., Ltd. 55%

• Sales of skincare

and aromatic products

• Not yet commercially
• perated

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MC GROUP structure

302 Shops

• 1. Free Standing Shops

572 PoS

• 2. Modern Trade

6 Units

• 3. Mobile Unit

14 PoS

• 4. International Markets

Located mainly in commercial centers or in the plaza sections of department stores as well as hypermarket and PTT gas station New sales channel that helps expand the reach to customers as well as build brand recognition Points of sales or sales counters in department stores (both chain and local non-chain) as well as hypermarket

(Songkla, Pattani) (Lampang)

Currently, expanded through distributors with presence in CLMV and Iran.

894

PoS

FY2018

(Jan-Jun)

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Comprehensive network by type and geography

FY2018 (Jan-Jun) Geographical Analysis of Outlets FY2018 (Jan-Jun) Geographical Analysis of Sales Greater Bangkok 28% Upcountry 70% International 2% Greater Bangkok 39% Upcountry 60% International 1%

819 694 511 446 Points of Sales 897 894 866

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Comprehensive network by group and channel

Outlet numbers adjusted to align with growth for Mc and efficiency for Timedeco

Mc Y14 Y15 Y16 Y17 FY18 Free-standing Shop 232 263 282 285 288 Modern Trade 472 467 477 488 493 Mobile Unit 5 5 6 6 6 Total POS (Domestic) 709 735 765 779 787 International markets 21 23 25 13 14 Total 730 758 790 792 801 Timedeco Free-standing Shop 19 25 21 15 14 Modern Trade 70 83 86 87 79 Total 89 108 107 102 93 Total overall 819 866 897 894 894

89 108 107 102 93 730 758 790 792 801 200 400 600 800 1000 Y14 Y15 Y16 Y17 FY18 (June)

MC TDC

Points of Sale

R E C E N T D E V E L O P M E N T

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Q2 2018 activities & outlook

▪ Fiscal year changed from December to June ▪ Share customer base with alliance ▪ Continuously engage 4 target customer segments through new product developments & activities ▪ Strengthen products portfolio and enhance customer reach for better online shopping experience ▪ Nurture international market for medium to long term growth ▪ Re-launch new activewear collection U-P ▪ Turn “mcmc” to “mcmc outlet” store

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MC Club

MC Club’s members

Progress and indicative projection - year 2018

222,000 297,000 372,000 420,000 May Jun Jul Aug Sep

Forecast = >450K

▪ Strong growth in number of members which expected to reach >500K by the end of the year 2018 Membership means more… Members can enjoy special deals & offers all year. Sign up today at https://mcclub.mcshop.com/user FREE!

Biker

Billboard

▪ Continuously communicate with biker communities ▪ Launched new bikers product

✓ Video clip on social media ✓ Micro/macro -influencer ✓ Events with Yamaha

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Family

Gift with minimum purchase “Sarus rice” Gift with minimum purchase traditional loincloth Queen’s birthday special promotion

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Teens…

2018 FIFA world cup collection Concert co-sponsor with fun activities ‘Back to Basic’ T-shirt with good feedback by micro- influencer ‘Selvedge walker’ Mc sneaker – 2nd lot from high demand and recommend by customer reviews

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Teens

▪ Launched “Mc to Campus” events ▪ Establish brand awareness and create brand loyalty Launched new product for college wear

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Office workers

Wear to work concept

Exchange customer base by co-brand promotion with selected partners ‘Anti Mosquito’ shirt with innovative repellent fabric

Mc x Beauty Buffet promotion at shops!

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Watches

‘Mono brand’ Store (new) in addition to multi-brand store

Engaged by member card and celebrities

Skincare “Aromatique Active”

• Hand Cream
• Body Lotion
• Eau de Parfume

New Products

‘Happy Blue’ collection ‘Passion Blue’ collection

Engaged by blogger, influencer via social media

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Skincare “Aromatique Active”

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Brand building activities Baan Lae Suan Fair at BITEC exhibition center, Bangkok

Skincare “Aromatique Active”

Latest distribution channel via “TV Shopping” @GCJ O shopping

261

sets

within

7

days

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Mcshop.com

Living your life

Newness on mcshop.com…

Expand products variety…

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Apparel Health and Beauty Cosmetic and Skincare Watches Kitchenware

Newness on mcshop.com

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Ship to Shop

Newness on mcshop.com

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Awareness

Nurture international market for medium to long term growth…

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Lao PDR

CSR Program ▪ To build a good relationship with local people ▪ Supporting flood victim in Laos Social media marketing activity: ▪ To increase brand awareness and customer engagement

Nurture international market for medium to long term growth

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Myanmar

MDL8 branch Jeans zone at Junction Square, Yangon

New POS in Mandalay (Total 8 POS as of now)

Offline channels  numbers adjusted to align with strategy

End of 2017 # Points of sales

894

End of 2018 (Jan-Jun) # Points of sales

894

Remark: Mc POS (Opened 15 and closed 7 (from consolidated 2 POS and lease-ended 4 POS)

Online channels

# Points of sales

6

Brand Free- Standing Modern Trade Mobile unit

International

Total 267 488 6 13 774 18 18 15 87 102 Total 300 575 6 13 894

+ 8 Mc, +1 Mc International and -9 Timedeco

Strengthen omnichannel (offline <> online)

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Brand Free- Standing Modern Trade Mobile unit

International

Total 270 493 6 14 783 18 18 14 79 93 Total 302 572 6 14 894

• New 40 POS
• Enlarge/renovate POS

Offline – nationwide coverage in FY19 (Jul18-Jun19)

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New product U-P

DNA

Fun Cool Energy Minimal

Concept

Find ‘Warrix U-P’ collection SOON!...

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mcmc Outlet

Target Location Comfort

Convenience Quality

Variety of products and brands, suitable with all ages and genders End of season 50% - 70% discount

• f MC’s products and others

lifestyle products at affordable price

DNA

Located close to communities with parking space

• 1. Gas station
• 2. Commercial

building in local communities

• 3. Hypermarket

mcmc outlet store

F I N A N C I A L R E S U L T

Q 2 / 2 0 1 8 & F Y 2 0 1 8 ( J a n – J u n )

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Results headlines

(THB millions)

Q2/17 Q2/18 % YoY 6M17 6M18 % YoY

Sales Revenue

919 861

• 6%

2,139 1,974

• 8%

Total Revenue

930 869

• 7%

2,161 2,014

• 7%

Gross Profit

468 495 +6% 1,092 1,129 +3%

EBITDA

149 159 +7% 441 454 +3%

Net Profit

90 118 +31% 321 350 +9%

Gross Profit Margin

50.9% 57.5% 51.0% 57.2%

Net Profit Margin

9.7% 13.5% 15.0% 17.4%

EPS (THB)

0.11 0.15 0.40 0.44

NOTE: MC Group Public Company Limited and its subsidiaries (“MC” or “the Company”) have announced the approval of resolution to change in accounting period starting from 1st January to 31st December of every year to the period from 1st July to 30th June of next year, starting from the period ended 30th June, 2018 onward which will be for the 6 months period (starting from 1st January to 30th June 2018).

(THB millions)

Annual Sales Revenue Quarterly Sales Revenue Sales revenue by channel

Y2017(6M) FY2018(6M)

Others = E-Commerce, International, Mobile, Outside promotion, Factory sales 31

Free standing 61% Modern trade 33% Others 6%

60% 34% 6%

1,220 919 903 1,187 1,113 861 Q1/17 Q2 /17 Q3/17 Q4/17 Q1/18 Q2/18

Sales Revenue

• 6.3% YoY
• 7.7% YoY

NOTE: Due to changing fiscal year end from December to June, ratios of FY18 (Jan-Jun) will be compared with the 6-month period of prior year.

Modern trade (1)

’000 THB

Free standing shop

THB

Remark: (1) Figures are calculated based on modern trade sales revenue, before GP. Excluded sales from international markets and other source (i.e., exhibition etc.)

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Distribution channels performance

SSSG Quarterly SSSG (YoY)

Remark: Hypermarkets are not included in the calculation in SSSG.

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Same-store sales growth (SSSG)

(THB millions)

Gross Profit Gross Profit Margin Gross Profit Margin (excl TDC)

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Gross profit margin

+3.4% YoY +5.8% YoY

SG&A breakdown % SG&A expense to sales

(THB millions)

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SG&A to sales

374 367 367 447 389 372 386 481 400 382 760 782 33% 36% 42% 32% 32% 40% 43% 41% 36% 44% 36% 40% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 50.0% 100 200 300 400 500 600 700 800 900 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 17 18 Y16 Y17 Y18 YTD YTD SG&A % SG&A to sales

Personnel 43% Advertising and Promotion 8% Rent 29% Depreciation and Amortization 8% Others 12% +2.6% YoY +2.8% YoY

(THB millions)

• 35.0%

65.0%

EBITDA EBITDA Margin EBITDA Margin (excl TDC)

EBITDA margin

259 250 175 415 292 149 137 271 295 159 22.5% 24.7% 19.7% 29.0% 23.7% 16.0% 15.0% 21.8% 25.8% 18.3%

24.3% 25.8% 21.5% 30.7% 25.3% 16.6% 15.2% 22.5% 26.7% 20.2%

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Y16 Y17 Y18 898 928 1,098 848 454 25.7% 23.6% 24.5% 19.7% 22.6%

FY14 FY15 FY16 FY17 FY18 (6M)

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+3.0% YoY +6.7% YoY

NPAT margin

712 732 843 609 350 20.1% 18.5% 18.8% 14.1% 17.4%

• 10.0%
• 5.0%

FY14 FY15 FY16 FY17 FY18 (6M) 202 191 132 317 232 90 94 194 232 118 17.6% 18.8% 14.9% 22.2% 18.8% 9.7% 10.4% 15.6% 20.3% 13.5% 19.5% 20.5% 16.8% 23.8% 20.4% 10.5% 11.1% 16.6% 21.5% 15.3%

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Y16 Y17 Y18

(THB millions)

37

+8.8% YoY +31.0% YoY

Consolidated balance sheet Net debt to equity ratio

38

Remained strong with net cash position

(THB millions)

2017 FY2018 (6M) Cash & Short term investmen 971 1,011 Accounts Receivable 552 382 Inventory 2,216 2,145 Other Assets 1,342 1,289 Total Assets 5,082 4,827 Accounts Payable 381 210 Interest-bearing Liabilities 95 16 Other Liabilities 438 321 Total Liabilities 913 547 Shareholders' Equity 4,168 4,280

Return on capital and inventory days

ROA ROE Finished Good Inventory Days Cash Cycle

(THB millions) (THB millions) (Months) (Months)

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9.8 11.9 11.9 12.1 14.2 11.5 12.4 13.2 11.9 9.6 10.7 12.0 12.1 13.3 14.2

14 15 16 17 18 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Y16 Y17 Y18

Cash cycle (months) 10.1 12.6 12.1 12.5 14.4 11.5 12.2 13.3 12.1 9.1 10.8 12.3 12.5 13.6 14.4 14 15 16 17 18 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Y16 Y17 Y18 FG inventory days (months)

4,279 4,152 3,967 4,286 4,521 4,214 3,952 4,168 4,406 4,280

20% 20% 18% 21% 22% 16% 14% 15% 23% 17%

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Y16 Y17 Y18

Total Equity ROE

5,048 4,828 4,724 5,196 5,355 5,091 5,030 5,082 5,219 4,827

16% 16% 14% 16% 18% 12% 11% 12% 18% 14%

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Y16 Y17 Y18

Total Assets ROA

Dividend policy is not less than 50% of net profit

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Stock Information Shareholder Structure Dividend Information

Share capital information and dividend payment

Local Institutional 17% Retail 18% Major shareholder 46% Foreign Institutional 19%

DPS : THB 0.40 XD : 6 Nov 2018 Record date : 7 Nov 2018 Payment : 28 Nov 2018 Announced dividend payment for the performance during 1 Jan to 30 Jun 2018 as follows: Bloomberg/ Reuters : MC TB/ MC.BK Share price (August 31, 2018) : THB 13.10 52 week range : THB 17.20/ THB 11.20

• No. of paid up shares

: 800 m Par value : THB 0.50 Market capitalization : THB 10,480 m

• Avg. daily turnover (12 mths)

: THB 28.0 m

• Avg. daily turnover (6 mths)

: THB 12.7 m Free float : 43.1% Foreign ownership/ Limit : 19.0% /49.0% Major shareholder :

• Ms. Sunee Seripau (45.8%)

0.80 0.75 0.90 0.75 0.40 90% 82% 85% 98% 92%

FY14 FY15 FY16 FY17 FY18 (6M) DPS (THB) Payout ratio

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2 0 1 9 G U I D A N C E

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2019 Guidance…

97%

3%

Y2012

Sales revenue contribution by product type

42

Sales growth Gross profit margin Dividend payout : 5 % : 57 % : Not less than 50 % CAPEX : THB 80-100 mn

60% 28% 9% 3%

Y2018 (Jan-Jun)

55% 28% 8% 9%

Y2021F

Thank you

Investor Relations MC GROUP Public Company Limited ir@mcgroupnet.com Tel: +662 117-9999 Ext 1210

Line ID: @mc_jeans www.mcshop.com www.mcgroupnet.com

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• mcshopthailand
• mcjeans
• mcladyjeans
• Timedecowatch
• AromatiqueActive
• www.mcshop.com
• www.mcjeans.com
• mcshop_official
• mcjeans_official
• timedecowatchclub
• @mcshop.com
• @mc_jeans