Home Product Center PCL. Analyst Presentation 3 rd Quarter 2008 Result November 13, 2008
Home Product Center Plc. HomePro is the leading home improvement retailer in Thailand. Our products range cover 60,000 items. We operate 33 stores nationwide, providing complete services as One Stop Shopping to attain highest customer satisfaction. HomePro The HomePro’s stock is traded on the Thailand “Total Home Solution”. Stock Exchange (SET:Hmpro). 1
Agenda Financial Result Business Outlook Service Mind. 2
9M’08 Financial Result 3
Footprint in Thailand (as at September 30,2008) 17 Bangkok Stores 16 Upcountry Stores 2 Chieng Mai Udonthani Phitsanulok Khonkan Nakornratchasima Ayutthaya Chonburi Hua-Hin Rayong Pattaya Samui Suratthani Phuket Kabi Had Yai 4 HomePro store network covers nationwide.
P&L Summary Unit : MB % on % on 9M’08 9M’07 VAR %G Sales Sales SALES 13,357.8 100.0 11,523.0 100.0 1,834.8 15.9 RENTAL & SERVICE 422.8 387.7 35.1 3.2 3.4 9.0 OTHER INCOMES 406.4 310.6 95.8 3.0 2.7 30.9 TOTAL REVENUE 14,187.0 106.2 12,221.3 106.1 1,965.7 16.1 COGS 10,187.8 76.3 8,868.2 77.0 1,319.6 14.9 SG&A 3,001.5 22.5 2,580.9 22.4 420.5 16.3 TOTAL EXPENSES 13,189.3 98.7 11,449.2 99.4 1,740.1 15.2 EBIT 997.7 772. 1 225.6 7.5 6.7 29.2 INTEREST 94.8 133.7 (38.8) 0.7 1.2 (29.0) TAX 286.0 168.7 117.3 2.1 1.5 69.5 NET PROFIT 616.8 469.7 147.2 4.6 4.1 31.3 5
Sustainable Sales Growth Unit : MB % 7 . % 7 1 7 . 7 = 1 R = G R A G C 15,944 A C 14,224 12,212 9,814 4,689 +18% 3,958 YoY 4,468 3,784 +18% 4,200 3,781 +11% 2004 2005 2006 2007 9M'08 9M’08, sales growth 15.9% YoY while 3Q’08 growth of 18.5%. 6
Rising Other Income Unit : MB 18.7% 18.7% 6.7% 6.2% 6.2% 6.1% 5.7% 5.3% 406 3.4% +31% 311 1,072 27.8% 880 27.8% 2.2% 1.7% 411 423 388 147 +9% +44% 102 220 122 114 109 +12% 2003 2004 2005 2006 2007 9M'07 9M'08 3Q'07 3Q'08 Rent & service Others %on Sales Increase in Other Income as contributed by increasing in Rental, Service and 7 Advertising Fees.
Stable SG&A Expenses Unit : MB 16.3% 16.3% 21.9% 22.5% 22.5% 22.4% 22.2% 21.7% 18.7% 18.3% 17.7% 3,585 20.9% 3,116 20.9% 3,001 2,581 2,278 1,737 1,235 1,040 860 2003 2004 2005 2006 2007 9M'07 9M'08 3Q'07 3Q'08 SG&A %on Sales Rise in SG&A in baht term as a result of operational expenses of new stores, in 8 particular, Salaries, Rental & Service, Energy cost and Depreciation.
Upward GP & EBIT 24.2% 23.7% 23.1% 22.8% 23.0% 23.0% 21.6% 21.1% 21.2% GP 7.8% 7.5% 7.2% 7.1% 6.7% 6.7% 6.3% 5.7% 4.5% EBIT 2003 2004 2005 2006 2007 9M'07 9M'08 3Q'07 3Q'08 EBIT on Sales %GP GP increased as a result of improving in product mix, especially increase in sales 9 of house brand product.
Net Profit Unit : MB % 3 % . 1 3 3 . 1 3 4.9% 4.6% 4.5% 4.2% 4.1% 4.1% 4.1% 3.9% 3.1% 40.2% 40.2% 710 617 601 505 470 381 230 207 164 2003 2004 2005 2006 2007 9M'07 9M'08 3Q'07 3Q'08 NPAT %on Sales 10 9M’08 NPAT growth by 31.3% and NPAT % to Sales increased over 9M’07.
EPS Unit : MB 33.3% 0.58 0.58 33.3% 0.51 0.37 617 30.7% 30.7% 470 0.27 710 601 0.32 0.12 505 0.09 0.24 381 207 230 161 2003 2004 2005 2006 2007 9M'07 9M'08 3Q'07 3Q'08 Net Profit EPS Note : 1. Equity raising 960 MBht in DEC 2006 at ratio 1:1 of 1 Bht /share. 11 2. EPS since 2007 onward taking full dilution impact of 1:1
B/S Summary Unit : MB VAR % 30 Sep 08 31 Dec 07 CASH & DEPOSIT 166.8 235.1 (68.3) (29.1) INVENTORY 2,836.0 2,547.6 288.4 11.3 Land Building & Equipment 8,333.2 8,339.6 (6.4) (0.1) OTHERS 1,169.1 1,152.1 17.0 1.5 12,505.1 12,274.3 230.8 1.9 TOTAL ASSETS FINANCIAL DEBT 2,332.3 2,953.2 (621.0) (21.0) ACCOUNT PAYABLE 3,529.7 3,206.4 323.4 10.1 OTHERS 2,029.5 1,791.2 238.3 13.3 TOTAL LIABILITIES 7,891.5 7,950.8 (59.3) (0.7) PAID-UP CAPITAL 1,933.5 1,924.9 8.6 0.4 SHARE PREMIUM 566.8 555.7 11.1 2.0 RETAIN EARNINGS 2,113.2 1,842.9 270.4 14.7 TOTAL EQUITIES 4,613.6 4,323.5 290.1 6.7 TOTAL LIABILITIES & EQUITIES 12,505.1 12,274.3 (230.8) 1.9 12
ROA – ROE – ROCE Unit : % 31.3 ROE 26.1 24.4 22.1 21.8 21.1 21.8 20.3 18.9 19.1 17.8 ROCE 16.1 13.5 14.0 18.4 17.4 11.5 16.8 11.0 12.1 7.2 6.6 6.6 5.5 5.8 5.9 4.4 3.2 3.0 4.0 ROA 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008F 9M’08 Annualized Net Profit 14
2008 Business Outlook 16
Gradually declining Consumer Confidence Index since Apr 08 CPI CCI 120 10 110 8 100 6 90 4 80 2 70 0 8 3 3 4 4 5 5 6 6 7 7 8 3 3 4 4 5 5 6 6 7 7 8 8 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 - - - - - - - - - - - - - - - - - - - - - - - - r r r r r r p n l t n l t n l t n l t n l t n l u u u u u u p c p c p c p c p c p e a a a a a a J O J O J O J O J O J A A A A A A S J J J J J J CCI Inflation Rate CCI fell to a 10-month low in September, eroded by growing political uncertainty, the global financial crisis and slowing export growth. Furthermore, the survey also said a weaker Thai baht and the higher cost of living were a concern. 17 Source : The center for economic and business forecasting, UTCC.
Regulation Update Upcoming Retail and Wholesales Business Act The Committee of Wholesales and Retail Business has been appointed in Aug-08 to draft the law under the Ministry of Commerce before seeking approval by the Cabinet. If it is passed by the Cabinet, National Legislation Assembly will continue further for approval process. 18
Margin expansion through House Brand 19 More than 1,000 products available only at HomePro.
2008 Store Expansion Plan Building Platform for Growth Chieng Mai 2 Stores Opening Schedule 8 th MAR Ayutthaya 29 th MAR Chieng Mai 2 Ayutthaya 5 th JUL Krabi HomePro Store the End of 2008 Krabi BKK 17 Stores Upcountry 16 Stores Total 33 Stores 20
Existing network expansion Rajapruk Hua-Hin 22 Expanding rental area for driving other income growth.
HomePro EXPO 8 Expo 8 with a competition for home lovers “HomePro Champion” final round for the prize with the concept of “Small space, Great idea”. 23
2008 Credit Rating Update The leading position among home improvement retailers in Thailand. Pursuing its store expansion strategy Well-accepted brand name 2008 A 2006 A- 2005 BBB+ 2004 BBB+ 2003 BBB 24
Contact us K.Rakpong , K.Renuka Tel+662-832-1416 Email : IR@homepro.co.th
Q & A
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