MC is Life MC GROUP Public Company Limited 1Q 2017 Results Summary 17 May 2017 CONFIDENTIAL
MC is Life MC GROUP Public Company Limited 1Q 2017 Results Summary 17 May 2017 CONFIDENTIAL
Disclaimer 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. 2
Agenda Pages Recent Developments 3 Financial Results 10 2017 Outlook & Guidance 22 CONFIDENTIAL 3
Recent Developments 4
New Collections Focusing On Top-Wears New shapes Summer shirt: Hawaiian style Loose Boyfriend Bat Wing New collars New designs Collarless Half-Collar Slim Peter Pan Mandarin CONFIDENTIAL 5
Q1 2017: Worthy & Fun Campaigns Continued CONFIDENTIAL 6
Continued To Focus On Efficient Channel Management 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. End of 1Q17 # Points of Sales End of 2016 883 # Points of Sales 897 (-14) Free- Modern Mobile Free- Modern Mobile Brand Int'l Total Brand Int'l Total Standing Trade unit Standing Trade unit 249 471 6 20 746 249 468 6 15 738 11 1 12 11 1 12 0 5 5 10 0 5 0 5 1 0 1 1 0 1 21 0 21 20 0 20 21 86 107 20 87 107 Total 303 563 6 25 897 Total 301 561 6 15 883 7
More On-line Activities To Connect & Communicate With Customers On-line Promotions at mcshop.com Off-line & On-line Cross Promotions www.mcshop.com Introduction of Mr. & Ms. Mc Introduction of Product Content Participation to win prizes 8
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 9
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. 10
Financial Results 11
Results Highlights Strong net profit growth albeit softening spending in Q1 2017 Q1/16 Q1/17 % YoY (THB millions) 1,144 1,220 +7% Sales Revenue Gross Profit 592 624 +5% 259 292 +13% EBITDA 202 232 +14% Net Profit 17.6% 18.8% Net Profit Margin EPS (THB) 0.25 0.29 12
Moderate Sales Growth Despite Soft Spending in Q1 2017 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. Annual Sales Revenue Quarterly Sales Revenue (THB millions) +7% YoY +14% YoY Sales Revenue by Channel Q1/17 Q1/16 Other 4% 4% Modern Free 44% 52% Trade Standing 39% 57% 13
Distribution Channels Performance Free Standing Shop THB Modern Trade (1) ’000 THB 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.) 14
Flat Same-Store Sales Growth YoY Q1 2017 same-store sales growth grew by 0.4% yoy. TSS & SSSG Quarterly TSS & SSSG Total System Growth Same Store Sales Growth Remark: Hypermarkets are not included in the calculation. 15
Same-Store Sales Growth by Channel SSG By Channel Free Standing Modern Trade Free standing shop Modern Trade Bangkok Upcountry Remark: Hypermarkets are not included in the calculation. 16
Lower GPM YoY from Apparel Promotions 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. 2016 Quarterly Gross Profit (THB millions) +11% YoY +5% YoY Gross Profit Gross Profit Margin Gross Profit Margin (excl TDC) 0 -35.0% 65.0% 17
Improving %SG&A to Sales 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. % SG&A Expense to Sales Q1/17 SG&A Breakdown (THB millions) +7% YoY +4% YoY 18
Higher EBITDA YoY Thanks to better operating performance, EBITDA and EBITDA margin increased yoy. (THB millions) +18% YoY +13% YoY EBITDA EBITDA Margin EBITDA Margin (excl TDC) 65.0% 0 -35.0% 19
Stronger Net Profit Growth 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. (THB millions) 15% YoY 14% YoY Net Profit Net Profit Margin Net Profit Margin (excl TDC) 65.0% 0 -35.0% 20
Financial Position Remained Strong with Net Cash Position Net Debt to Equity Ratio Consolidated Balance Sheet 2016 Q1/17 (THB millions) 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 21
Improving Profitability And Better Inventory Days ROE ROA THB millions THB millions Finished Good Inventory Days (Months) Cash Cycle (Months) 22
2017 Outlook & Guidance 23
2017 Outlook 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. 24
2017 Guidance (Revised) 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 25
Thank you Investor Relations MC GROUP Public Company Limited ir@mcgroupnet.com Tel: +662 117-9999 Ext 1210 Line ID: @mc_jeans 26
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