Opportunity Day The Stock Exchange of Thailand 2Q’16 Results Aug 10, 2016
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HomePro is the leading home improvement retailer in Thailand. Our product range covers 40,000 items. We operate 77 stores nationwide, providing complete services as One Stop Shopping to attain highest customer satisfaction. The HomePro’s stock is traded on the Stock Exchange of Thailand (SET - hmpro, BB - hmpro:tb).
Background 1996 : Formation of HomePro by Land & House group. : Listed in SET. 2001 : Selected as one of SET 100 list of companies. 2006 : Selected as one of SET 50 list of companies. 2010 : Introducing the new business “Mega Home” 2013 : Expanding our business overseas for the first time in Malaysia. 2014 July 16 : Operating 77 stores of HomePro, 9 stores of Mega Home and 1 store in HomePro format in Malaysia. What HomePro does? Thailand and Southeast Asia’s largest retailer of home improvement products which includes home improvement product (hardware, plumbing, painting, tools, outdoor living & garden), bathroom, kitchen, lighting, home appliances and household accessories, furniture and decorative products with full service support under HomePro format. With Mega Home business, there are more merchandise categories than above: construction materials, daily use products, office supplies, leisure goods and more household products are added. 4
Major Shareholders as at April 20, 2016 Top 10 Shareholders %Share 1. Land and Houses Plc. 30.2 2. Quality Houses Plc. 19.9 Land & House 30.2% 3. Mr. Niti Osathanuklor 4.7 4. Thai NVDR Co., Ltd. 2.6 Quality Others 5. Mr. Manit Udomkunnatum 2.6 House 39.6% 19.9% 6. Social Security Office 2.3 7. AIA Co., Ltd. 2.1 8. Sarasin Co., Ltd. 1.3 Niti Osathanuklor 4.7% 9. Chase Nominees Limited 1.3 Management Manit Udomkunnatum 10. State Street Bank Europe Limited 1.2 &Employee 2.6% 3% 11. Others 31.8 Market Capitalization : 147,293.42 MB (as at 9 August 2016) Paid-up Capital : 13,151,198,025 shares 5
Corporate Group Structure Home Product Center Plc. : Operating HomePro in Thailand Market Village Co., Ltd. Home Product Center Mega Home Center DC Service Center (Malaysia) Sdn. Bhd. Co., Ltd. Co., Ltd. Holds 99.99% of total Holds 100% of total Holds 99.99% of total Holds 99.99% of total shares shares shares shares Objective to manage Objective to operate Objective to operate Objective to operate rental space and a retail business in retail business under the warehousing and provide utilities Malaysia. trade name “Mega distribution. services to tenants. Home”. 6
Agenda 2Q’16 Financial Results Business Outlook
Footprint in Thailand as at June 30, 2016 Greater Bangkok : 22 stores Upcountry : 55 stores Greater Bangkok : 2 stores Upcountry : 6 stores Malaysia : 1 store 8
Sustainable Sales Growth Unit : MB FY. 52,513 47,965 1,176 28,258 40,007 1,547 25,535 34,542 4.6% 6.1% 28,258 25,535 H’ H’ 6 1H'15 1H'16 HomePro Subsidiaries 1H16 1H16 1H16, sales growth 10.7% YoY, driven by HomePro 6.1% and subsidiaries (Mega Home & Malaysia) 4.6%. In addition, the product categories that outperform in 2Q were seasonal products especially cooling merchandise. 9
Rising Other Income Unit : MB 7.1% 6.8% 6.8% 7.0% 6.6% FY. 3,730 3,244 2,719 20% 829 689 1,989 1,680 17% 1,160 991 1H'16 1H'15 1H'16 Others Rent & service %on Sales • Rental & Service Income increasing from the improvement and area expansion of Suvarnabhumi Market Village which was opened in May 2015 as well as an increase in rental space of new HomePro branch. • The increase in Other Income was mainly due to increasing joint-advertising income and in-store 10 promotion with vendor as well as service income from “Home Service” program.
SG&A Expenses Unit : MB 23.1% 23.5% 23.4% 23.2% 23.1% FY. 12,282 1,010 772 11,119 31% 9,245 6,527 6,009 5,237 5,516 5% 1H'16 1H'15 1H'16 Sales Related Admin Exp %on Sales 1H16, SG&A increased by 8.6% compared to the same period last year. The increases are mainly from Depreciation and Salary following the expansion of new stores. However, SG&A % to sales has marginally improved, resulting to the decrease from 23.5% in 1H'15 to 23.1%. 11
NPAT & EPS Unit : MB 7.7% 7.7% 6.9% 6.7% 6.6% 6.1% 0.25 0.27 0.28 FY. 0.25 3,499 3,313 3,068 2,671 0.14 1,857 0.12 1,554 1H'16 1H'16 NPAT %on Sales NPAT EPS 1H16 NPAT growth by 19.5% and NPAT % EPS in 2015 taking impact at ratio of 15:1 paid to sales increased from 6.1% to 6.6% in May 2015 (Final). 12
Dividend Unit : Baht/Share 2015 97.6 Final Dividend (payment date : 29/4/2016) 98.4 95.9 93.3 On 7 April 2016, AGM has passed resolution to pay cash dividend at Baht . 5/share. Interim Dividend (payment date : 22/9/2015) 0.37 On 25 August 2015, the Board of Director passed 0.31 0.19 resolution to pay cash dividend at Baht . 0/share. 0.25 0.09 0.04 0.03 2014 Final Dividend (payment date : 8/5/2015) Stock Dividend Cash Dividend On 9 April 2015, AGM has passed resolution to pay stock dividend and cash dividend as follows: Payout Ratio 1. Stock : 15 current shares /1 dividend share 2. Cash : Baht . 7 /share Interim Dividend (paid on 13/11/2014) 1. Stock : 8 current shares /1 dividend share 2. Cash : Baht . 889 /share 13 HomePro’s Dividend Policy is to pay not less than 40% of NPAT.
ROA – ROE - ROCE Unit : % ROCE 29.5 ROE 27.1 28.0 23.3 21.5 29.5 22.0 27.8 23.0 19.3 18.0 18.8 ROA 11.5 10.7 9.9 8.3 7.9 7.7 1H16 Net Profit ROA ROE ROCE 14
Agenda 2Q’16 Financial Results Business Outlook
Thai Consumer Confidence down since January CCI CPI 110 10 100 8 90 6 80 4 70 2 60 0 50 -2 CCI Inflation Rate Thailand Consumer Confidence Index (CCI) fell to 71.6 in June, compared with 72.6 in May and 72.7 in April. However, consumer prices rose for the third straight month in June, driven mainly by rising fuel and food prices. Thai consumer confidence dropped due to worries about the impact of Britain’s decision to leave the European Union on the domestic and global economy. Consumers were still concerned about low commodity prices and felt the country’s economic recovery was slow. However, consumer sentiment was expected to recover on prospects that the government spending and investment will aid growth. 16 Source : The center for economic and business forecasting, UTCC.
Continuous margin expansion through Private Label The main objective of the development and selection of private brand products is an adherence to build up value-added to customers. Therefore, the core element of private brand products is quality and worthiness. In addition to the Company’s increase of variety of products, it had continued to develop and select products with quality to continuously provide worthiness to customers. To date, we have a total of 36 private brands and over 1,000 items. 17
2016 Store Expansion Plan Malaysia 2016 No. of New stores 5 3-4 1 1Q Chaiyapruk 26 Feb Rojana 29 Apr 2Q Rojana Rama 3 (Relocation) 27 May Chaiyapruk Rama 3 Hat Yai 28 Jul 3Q Chonburi (Bang Sa Re) Sep 2 1-2 1 4Q stores stores store Hat Yai Our stores in 2016 Total (stores) 80 10 - 11 2
Our New Category, BIKE CLUB 26 Feb : Chaiyapruek 27 May : Rama 3 Complete and Congenial for Bike Lovers Bike Club offers over 300 series of bicycle from the top leading brands along with full range of services covering professional bike fitting, repair services, test track, bike accessories, fitness zone, healthy food & café. Bike Club established its first branch at HomePro Chaiyapruek with an area of more than 1,000 sq.m. as the biggest integrated cycling store in AEC. 19
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