MC GROUP Public Company Limited 1Q 2017 Results Summary 17 May 2017 - - PowerPoint PPT Presentation

CONFIDENTIAL

MC GROUP Public Company Limited

1Q 2017 Results Summary

17 May 2017

MC is Life

CONFIDENTIAL

MC GROUP Public Company Limited

1Q 2017 Results Summary

17 May 2017

MC is Life

Disclaimer

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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.

CONFIDENTIAL

Agenda

Pages Recent Developments 3 Financial Results 10 2017 Outlook & Guidance 22

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Recent Developments

CONFIDENTIAL

New Collections Focusing On Top-Wears

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Summer shirt: Hawaiian style New collars

Slim Half-Collar Collarless Mandarin Peter Pan

New shapes

Boyfriend Loose Bat Wing

New designs

CONFIDENTIAL

Q1 2017: Worthy & Fun Campaigns Continued

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Continued To Focus On Efficient Channel Management

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At the end of Q1 2017, the Company operated 883 outlets, 14 outlets less than end-2016 mainly as a result of the closure of international points of sales mostly in Myanmar due to the international dealership reprogram implemented since early 2017 focusing on allocating resources to specific areas to build customer base and brand awareness more effectively.

Brand Free- Standing Modern Trade Mobile unit Int'l Total 249 468 6 15 738 11 1 12 5 5 1 1 20 20 20 87 107 Total 301 561 6 15 883

End of 2016 # Points of Sales

897

End of 1Q17 # Points of Sales

883

(-14)

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

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More On-line Activities To Connect & Communicate With Customers

www.mcshop.com

On-line Promotions at mcshop.com Off-line & On-line Cross Promotions Participation to win prizes Introduction of Mr. & Ms. Mc Introduction of Product Content

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On-Track OMNI Channel Development

Tablet deployment and PC training at Mc Jeans shops (> 250 points of sales) Implementation of 14 days exchange guarantee at all Mc Jeans Shops

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TDC: Focused On Product Type and Brand Management

TDC has determined the sales strategy to focus on product type and brand management to match its distribution channels. TDC already relocated its office to be in the same area of MC’s. As a result, there will be more cross-promotions and effective operating expense management from the shared service utilization.

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Financial Results

Results Highlights

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Strong net profit growth albeit softening spending in Q1 2017

(THB millions)

Q1/16 Q1/17 % YoY

Sales Revenue

1,144 1,220 +7%

Gross Profit

592 624 +5%

EBITDA

259 292 +13%

Net Profit

202 232 +14%

Net Profit Margin

17.6% 18.8%

EPS (THB)

0.25 0.29

Modern Trade 39%

Moderate Sales Growth Despite Soft Spending in Q1 2017

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Annual Sales Revenue Quarterly Sales Revenue

+14% YoY

Free Standing 57% 52% 44% 4%

Q1/16 Q1/17

Other 4%

(THB millions)

Sales Revenue by Channel

+7% YoY

Higher sales revenue in Q1 2017 were mainly attributable to the increasing top-wear sales, promotional campaigns, and last year sales network expansion whereas the same-store sales grew by 0.4% yoy.

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

Flat Same-Store Sales Growth YoY

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Q1 2017 same-store sales growth grew by 0.4% yoy.

Total System Growth Same Store Sales Growth Remark: Hypermarkets are not included in the calculation.

TSS & SSSG Quarterly TSS & SSSG

Free standing shop Modern Trade

Same-Store Sales Growth by Channel

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SSG By Channel Free Standing

Remark: Hypermarkets are not included in the calculation.

Modern Trade

Bangkok Upcountry

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Lower GPM YoY from Apparel Promotions

(THB millions)

• 35.0%

65.0%

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

+5% YoY

Gross Profit Margin (GPM) of apparel business dropped due to promotional campaigns designed to stimulate customer spending and to promote top-wear sales. GPM of watch business improved yoy due to better promotional campaign and distribution.

+11% YoY

2016 Quarterly Gross Profit

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Improving %SG&A to Sales

Q1/17 SG&A Breakdown % SG&A Expense to Sales

(THB millions)

SG&A expenses increased yoy mainly as a result of higher personnel expenses. However, %SG&A expenses to sales improved yoy due to higher sales revenue growth.

+4% YoY +7% YoY

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Higher EBITDA YoY

(THB millions)

Thanks to better operating performance, EBITDA and EBITDA margin increased yoy.

+18% YoY

• 35.0%

65.0%

EBITDA EBITDA Margin EBITDA Margin (excl TDC)

+13% YoY

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Stronger Net Profit Growth

15% YoY

• 35.0%

65.0%

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

(THB millions)

Net profit increased 14% yoy thanks to higher sales revenue and effective cost management. Overall net profit margin (NPM) improved yoy to 18.8% thanks mainly to better NPM of apparel business.

14% YoY

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Financial Position Remained Strong with Net Cash Position

Consolidated Balance Sheet Net Debt to Equity Ratio

(THB millions)

2016 Q1/17 Cash & Cash Equivalent 1,277 1,532 Accounts Receivable 787 725 Inventory 1,989 1,925 Other Assets 1,144 1,173 Total Assets 5,196 5,355 Accounts Payable 425 396 Interest-bearing Liabilities 147 123 Other Liabilities 338 314 Total Liabilities 910 833 Shareholders' Equity 4,286 4,521

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Improving Profitability And Better Inventory Days

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

THB millions THB millions

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2017 Outlook & Guidance

2017 Outlook

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Given the sluggish consumption in Q1 2017, the Company expects sales revenue to grow approximately 10% in 2017, down from the previous estimate of 12%-15%. Sales growth drivers will be attributable to

• Continuous launch of new apparel collections during the year
• Introduction of new skin care product lines i.e., aromatic soap bar,

talcum powder, and perfume in Q2 2017

• Additional store rollout by 20-25 outlets for the remaining quarters and

store modernization

• Opening of skin care pop-up stores in the leading department stores by

Q2 2017

• Worthy and enjoyable promotional campaigns
• CRM implementation in Q4 2017

Focus will be more on the profitability and earnings growth.

2017 Guidance (Revised)

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Previous Revised Sales growth 12%-15 % 10% Gross profit margin In line with 2016 Maintained (~ 54%-55%) % SG&A to sales ~ 35% Less than 35% CAPEX THB 70 mn Maintained Effective tax rate 5%-7% 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