MC GROUP Public Company Limited Q3 2017 Results Summary 15 November - - PowerPoint PPT Presentation

MC GROUP Public Company Limited

Q3 2017 Results Summary

15 November 2017

MC is Life

Disclaimer

1

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

Pages Results Highlights 3 Recent Development 5 Q3 2017 & 9M 2017 Financial Results 19

2

3

Results Highlight

Results Highlight

4

(THB millions)

Q3/16 Q3/17 % YoY 9M16 9M17 % YoY

Sales Revenue

880 903 +3% 3,031 3,041 +0%

Gross Profit

484 473

• 2%

1,625 1,564

• 4%

EBITDA

175 137

• 22%

683 578

• 16%

Net Profit

132 94

• 29%

525 416

• 21%

Net Profit Margin

14.9% 10.4% 17.2% 13.5%

EPS (THB)

0.17 0.12 0.66 0.52

5

Recent Development

CONFIDENTIAL

The Denim Focus

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Increasing just a touch of stretch into jeans – shape up your body.

• - - - - - - - - - - - - -

High waist gives a slim look and highlight the feminine curves.

MC COOL MC ME

CONFIDENTIAL

7

MC SELVEDGE DENIM

The Denim Focus

Flattering fits, premium fabrics (from Japan), custom washes and our new perfect detail … This is everything you need in a pair of jean.

CONFIDENTIAL

8

KAIHARA JACKET

The Jacket Focus

Mc proudly present the supreme collection from Kaihara denim who is the largest denim supplier in Japan and the leading denim supplier in the world. Mc continually produces jeans in Kaihara denim both premium fabric and innovation fabric.

CONFIDENTIAL

9

These jogger jeans are MC's most comfortable pants ever. Featuring a relaxed fit like sweatpants, with the look as denim. The stretchy easy waist design make them a great option for everyday casual

• wear. A trendy tapered cut gives

them a sleek style, ideal for seasonal looks.

Core Product Extension

MC JOGGER

CONFIDENTIAL

10

Core Product Extension

Denim Blazers create a great geek chic look. Or wearing a denim jacket creates a more relaxed appearance. Get to work with dark washed or raw denim styles from Mc denim jacket and Mc denim blazer.

SMART DENIM JACKET

CONFIDENTIAL

Core Product Extension

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Corduroy Collar Denim Jacket

The blue washed denim jacket is present

embroidered brand’s signature with

twill fabric appliqués

Embroidery Denim Jacket

It’s time for FALL ESSENTIALS takes on the classics mix corduroy fabrics with denim.

CONFIDENTIAL

12

Mc-T Innovation

Softech 180 g. 100% cotton Micro brush Dual Blend 165 g. 60% cotton 40% poly Micro brush T-Shirt Dri Balance 150 g. 75% cotton 21% poly 4%Spandex Polo Dri Balance 215 g. 65% cotton 35% poly T-Shirt Yarn dry 150 g. 100% cotton

CONFIDENTIAL

13

Activewear Innovation

THE FUSION OF FASHION AND FUNCTION

The Sportswear Windbreaker Jacket features a sleek design with hood for lightweight wind protection.

The Hoodies made from sustainable materials. - the brand's signature is reflective.

CONFIDENTIAL

14

Inspired by '90s styles, the Sports Light Jacket delivers lightweight coverage and an old-school look that can wear any day, anywhere.

Activewear Innovation

The Tech Fleece Jackets feature innovative fabric for LIGHTWEIGHT WARMTH

CONFIDENTIAL

Aromatique Active

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Masstique Home Spa

3 Collections with full line

• Body Lotion
• Shower gel
• Soap bar
• Talcum Power
• Eau de Parfum

▪

Specialist in aromatic skincare for more than 30 years

▪

Products are developed from natural extracts and pure essential oils exclusive from Charabot, a perfumery leader in Grasse, France

▪

Formulated without color, mineral oil, parabens, silicone and animal testing

▪

Our products are designed to make customers feel good nourishing their bodies and minds.

Deep Blue Light Blue True Blue

CONFIDENTIAL

Aromatique Active

16

Jun Jul Aug Sep Q4

Terminal 21 Robinson Ratchburi

Retailer

Pop-up Stores

Online Channel

Mega Bangna Robinson Lopburi

Centerpoint of Siam Square

BIG+BIH Bitec Bangna Promenade Robinson Petchburi Robinson Kanchanaburi

• Robinson Pitsanulok
• Seacon Square
• Potential location in

Bangkok and upcountry

Mc Shops >290 POS

Phuket – Jang Ceylon

• Online Channel
• Counter in Depart
• Retailers and Other channels

CONFIDENTIAL

Mcshop.com Revamp

17

New brand Landing Page with recommended collection and new products Mega Banner New Features

Outlet Numbers Adjusted due to Strategy

18

Total outlets declined by 18 points of sales in 3Q 2017 due mainly to the implementation

• f international dealership reprogram since early this year. New stores rollout and

enlargement remained on-track in 3Q 2017.

End of 2016 # Points of Sales

897

End of 3Q17 # Points of Sales

879

(-18)

Brand Free- Standing Modern Trade Mobile unit Int'l Total 249 471 6 20 746 11 1 12 5 5 10 1 1 21 21 21 86 107 Total 303 563 6 25 897

Brand Free- Standing Modern Trade Mobile unit Int'l Total 254 472 6 12 744 7 7 3 3 19 19 17 89 106 Total 297 564 6 12 879

19

Q3 2017 Financial Results

Modest Growth in Sales amidst multiple headwinds

20

Sales Revenue Quarterly Sales Revenue

0.3% YoY

9M16 9M17 (THB millions)

Sales Revenue by Channel

3% YoY

Despite the growth of 13.9% of free standing shops, national chain department stores, superstores and other channels; overall same store sales declined at the rate of 9.0% yoy as the Company continued to feel an impact from temporary contraction of revenue from upcountry local department stores as anticipated.

Others = International, Mobile, Outside promotion, Factory sales

Distribution Channels Performance

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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.)

Modern Trade (1)

’000 THB

Free Standing Shop

THB

Total System Sales (TSS) & Same-Store Sales Growth (SSSG)

22

Total System Growth Same Store Sales Growth

TSS & SSSG Quarterly TSS & SSSG

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

Free standing shop Modern Trade

Same-Store Sales Growth by Channel

23

SSG By Channel Free Standing

Remark: Hypermarkets are not included in the calculation.

Modern Trade

Bangkok Upcountry

24

Lower GPM yoy due to Special Promotional Offers

(THB millions) Gross Profit Gross Profit Margin Gross Profit Margin (excl TDC)

• 2% YoY

Gross Profit Margin (GPM) of the apparel business slipped yoy. Similarly for the watch business, the gross profit margin dropped as a result of higher volume of special price products sold amidst a slowdown in domestic consumption.

• 4% YoY

25

Higher %SG&A to Sales – Reflective to selling expenses

YTD 2017 SG&A Breakdown % SG&A Expense to Sales

(THB millions)

SG&A expenses increased yoy due mainly to higher selling expenses. The ratio of SG&A expenses to total sales revenue edged up on the back of modest revenue growth.

+5% YoY +3% YoY

• 15% YoY

26

Lower EBITDA YoY

(THB millions)

Due to lower operating performance, EBITDA and EBITDA margin declined yoy.

• 35.0%

65.0%

EBITDA EBITDA Margin EBITDA Margin (excl TDC)

• 22% YoY

27

Lower Net Profit YoY

• 21% YoY
• 35.0%

65.0%

Net Profit Net Profit Margin Net Profit Margin (excl TDC)

(THB millions)

Net profit dropped yoy due to lower GPM and higher SG&A to Sales. Overall net profit margin (NPM) declined yoy mainly as a result of lower NPM of apparel business.

• 29% YoY

28

Financial Position Remained Strong with Net Cash Position

Consolidated Balance Sheet Net Debt to Equity Ratio

(THB millions)

2016 Q3/17 Cash & Cash Equivalent 1,277 806 Accounts Receivable 787 567 Inventory 1,989 2,315 Other Assets 1,144 1,342 Total Assets 5,196 5,030 Accounts Payable 425 590 Interest-bearing Liabilities 147 112 Other Liabilities 338 376 Total Liabilities 910 1,078 Shareholders' Equity 4,286 3,952

29

Higher Inventory Days from Lower Sales

ROA ROE Finished Good Inventory Days (Months) Cash Cycle (Months)

THB millions THB millions

30

Consistent Dividend Payment

DPS THB 0.45 XD 23 Aug 2017 Book Closing 28 Aug 2017 Payment 8 Sep 2017

Remark: Dividend policy is not less than 50% of net profit

Announced dividend payment for the performance during 1 Jan 2017 to 30 Jun 2017 as follows:

2017 Guidance (Revised)

31

Previous Revised

Sales growth 3%

• 3 to -5%

Gross profit margin 52%-53% Maintained % SG&A to sales 35%-36% Maintained CAPEX THB 80 mn Maintained Effective tax rate 9%-10% Maintained Dividend payout Not less than 50% Maintained

Thank you

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

Line ID: @mc_jeans