Analyst Meeting 1Q’16 Results May 3, 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).
Agenda 1Q’16 Financial Results Business Outlook
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”. 5
Footprint in Thailand as at March 31, 2016 Greater Bangkok : 22 stores Upcountry : 55 stores Greater Bangkok : 2 stores Upcountry : 5 stores Malaysia : 1 store 6
P & L Summary Unit : MB % 1Q’16 % on 1Q’15 % on VAR Sales Sales Growth 13,631.5 12,280.3 1,351.2 11.0 Sales 100.0 100.0 Other Income 980.3 7.2 816.0 6.6 164.3 20.1 14,611.8 13,096.3 1,515.5 11.6 Total Revenue 107.2 106.6 10,219.0 9,105.8 1,113.2 12.2 COGS 75.0 74.1 3,181.8 2,936.6 245.2 8.4 SG&A 23.3 23.9 13,400.8 12,042.4 1,358.4 11.3 Total Expenses 98.3 98.1 1,211.0 1,053.9 157.1 14.9 EBIT 8.9 8.6 118.4 -17.8 -13.1 Financial Exp. 0.9 136.3 1.1 226.4 42.4 23.1 Tax 1.7 184.0 1.5 866.2 132.5 18.1 Net Profit 6.4 733.7 6.0 Depreciation 708.7 632.5 76.2 12.0 5.2 5.2 EBITDA 1,919.7 1,686.4 233.3 13.8 14.1 13.7 7
Sustainable Sales Growth Unit : MB FY. 52,513 47,965 40,007 34,542 12,280 13,632 1Q16 1Q16 8
Rising Other Income Unit : MB 6.8% 6.8% 7.2% 7.2% 7.1% 7.0% 6.6% 3,730 3,244 2,719 2,428 31.6% 447 980 340 533 476 11.9% 1Q16 1Q15 1Q16 Others Rent & service %of Retail Sales • Rental & Service Income increasing from Suvarnabhumi and Hua-Hin Market Villages well as higher rental income from the additional HomePro’s leasable areas. • The increase in Other Income was mainly due to increasing joint-advertising income and in-store 9 promotion with vendor as well as service income from “Home Care” program.
SG&A Expenses Unit : MB 23.3% 23.4% 23.9% 23.3% 23.2% 23.1% 22.5% 12,283 11,119 9,245 7,781 459 379 21.0% 3,182 2,723 2,558 6.5% 1Q16 1Q15 1Q16 Sale Related Admin Exp %of Retail Sales 1Q16, SG&A increased by 8.4% compared to the same period last year. The increases are mainly from Depreciation and Salary. However, SG&A % to sales has marginally improved, resulting to the decrease from 23.9% in 1Q'15 to 23.3%. 10
Profitability Ratio Unit : % 26.6 25.7 26.0 26.0 25.0 GP 14.1 14.5 14.3 14.6 14.1 EBITDA 9.4 10.5 10.3 9.6 8.9 EBIT 1Q16 %EBIT %EBITDA %GP 1Q16, GP has decreased to 25.0% due to change of the merchandising mix of HomePro sales and the blended margin of HomePro business and Mega Home business which has a lower gross margin structure. 11
NPAT & EPS Unit : MB 7.7% 7.7% 6.9% 6.7% 6.4% 6.0% 0.25 0.27 0.28 0.25 FY. 3,313 3,499 3,068 0.07 0.06 2,671 866 734 1Q'16 1Q'16 NPAT %on Sales NPAT EPS 1Q16 NPAT growth by 18.1% and NPAT % EPS in 2015 taking impact at ratio of 15:1 paid to sales increased from 6.0% to 6.4%. in May 2015 (Final). 12
Balance Sheet at a Glance Unit : MB 31 Mar 16 31 Dec 15 VAR % 373.6 13.8 Cash & Deposit 3,071.7 2,698.1 8,836.4 8,364.8 471.7 5.6 Inventory 404.5 1.2 Land Building & Equipment 33,787.9 33,383.4 Others 2,194.7 2,544.8 -350.1 -13.8 Total Assets 899.8 1.9 47,890.8 46,991.0 Financial Debt 14,370.3 14,377.1 -6.8 -0.0 Account Payable 12,718.8 12,773.3 -54.5 -0.4 Others 62.9 2.1 3,000.9 2,938.0 Total Liabilities 30,090.0 30,088.4 1.6 0.0 13,151.2 13,151.2 - - Paid-Up Capital 646.3 646.3 - Share Premium - 4,003.3 3,105.1 898.2 28.9 Retain Earnings Total Equities 17,800.9 16,902.6 898.2 5.3 13
Agenda 1Q’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 73.5 in March, compared with 74.7 in February and 75.5 in January. Consumers were concerned over the effects of the drought on agricultural sector, together with the softening confidence in global economy, China’s slowdown, higher domestic fuel prices, and high cost of living. However, the government has launched out several rounds of stimulus measures to boost up domestic spending and sought to accelerate infrastructure projects . Additionally, the government has announced tax breaks of up to Baht 15,000 per person during the Thai New Year in mid-April for spending on hotels and food in Thailand. 15 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. 16
2016 Store Expansion Plan Malaysia 2016 No. of New stores 5 3-4 1 1Q Chaiyapruk 26 Feb Rojana Rojana 29 Apr 2Q Rama 3 (Relocation) May Chaiyapruk 1 1 3Q store store 2 1-2 1 4Q stores stores store Our stores in 2016 Total (stores) 80 10 - 11 2
Rama 3 - relocated from Future Mart Future Mart Rama 3 Grand opening in May 2016 Apart from HomePro store, the second branch of “Bike Club” is also open at Rama 3. 18 18
2Q’16 Marketing Highlight Get up to 21% discount Shop Label No.5 energy saving products Save & Get up to 40% discount when pay with participating credit cards Spend THB 10,000 to THB 24,999 : Get THB 1,000 Saving-Energy coupon Get up to THB 4,990 free gifts* Spend THB 25,000 : Subject to the Company’s condition Get THB 1,500 Saving-Energy coupon
Contact us Q & A Tel +662-832-1416 Email : IR@homepro.co.th
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