Corporate Presentation - Vincom Retail
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Disclaimer IMPORTANT: The information contained herein is preliminary and subject to change without notice, its accuracy is not guaranteed, has not been independently verified and may not contain all material information concerning Vincom Retail Joint Stock Company (the “Company”) and its subsidiaries (the “Group”). You should not rely upon it or use it to form the basis for any investment decision or commitment whatsoever. None of the Company, its shareholders, or any of their respective affiliates, directors, officers, employees, agents, advisers or any other person makes any representation or warranty (express or implied) or accepts any responsibility or liability for the accuracy or completeness of this presentation or any or all of the information in this presentation or otherwise made available. It is not the intention to provide, and you may not rely on these materials as providing, a complete or comprehensive analysis of the financial or trading position or prospects of the Group. No part of this presentation shall form the basis of or be relied upon in connection with any contract or commitment whatsoever. Further, nothing in this presentation should be construed as constituting legal, business, tax or financial advice. You should conduct such independent investigations and analysis of the Group as you deem necessary or appropriate in order to make an independent determination of the suitability, merits and consequences of investment in the Company. This presentation contains “forward-looking statements”. These forward-looking statements involve known and unknown risks and uncertainties, many of which are beyond the Company’s control and all of which are based on management’s current beliefs and expectations about future events. Forward-looking statements are sometimes identified by the use of forward-looking terminology such as “believe”, “expects”, “may”, “will”, “could”, “should”, “shall”, “risk”, “intends”, “estimates”, “aims”, “targets”, “plans”, “predicts”, “continues”, “assumes”, “positioned” or “anticipates” or the negative thereof, other variations thereon or comparable terminology. These forward-looking statements include all matters that are not historical facts. Forward-looking statements are not guarantees of future performance. These forward-looking statements speak only as at the date of this presentation, and none of the company, its shareholders, or any of their respective affiliates, directors, officers, employees, agents, advisers or any other person undertakes to update or revise any forward- looking statements as a result of new information or to reflect future events or circumstances. 1
Executive Summary Vincom Retail (“VRE”) is the largest and fastest growing retail developer, owner and operator in Vietnam Key investment highlights are as follows: Vietnam Economy Remains Resilient Amidst Covid-19 Outbreak Modern Retail Set to Take Off Largest and Most Dominant Retail Platform Proven Track Record of Ability to Leverage the Highly Scalable Platform Institutional Level Best-in-Country with Strong Operating Corporate Governance Vingroup Ecosystem Performance Market leader in terms of the shopping mall GFA in Vietnam’s major cities… …the direct proxy for consumer demand The Dominant and Fastest Growing Retail Platform in Vietnam 2 2
Vingroup & Vincom Retail: Market Leaders In Vietnam Largest Listed Company in Vietnam Vincom Retail A Key Subsidiary of Largest Real Estate Developer in Vietnam Vingroup JSC c. 168 mm sqm of Landbank(1) Hanoi 80 (8) Operational Ecosystem of Complementary Businesses Vincom Retail Malls Largest Retail Developer, Owner and Operator in (9) Vietnam Ho Chi Minh City 1.7 mn Retail GFA Residential Hospitality Healthcare Education Automobile Smartphone ~29% NLA leased to internal (sqm) and affiliated tenants(2) Premium Leading Leading Leading First Top 5 and large hospitality hospital private Vietnam- smartphone Vinhomes: scale real operator in operator school ese smart producer in Vietnam’s largest real estate Unique Multi format Model estate Vietnam operator and green Vietnam developer About 750 vehicle developer Approx. beds under More than manufactu- 2.8 million Largest in 17,500 operation 32,000 rer smart- VinFast: Vietnam rooms students phones sold Flagship automobile and e- 7 full- Vincom Center Vincom Mega Mall owned & registered 89,900 cars since motorcycle showrooms No. of Malls: 7 1,592 units managed service at 35 and electric launch(7) No. of Malls: 4 presold(3) general Retail GFA: 280,026 sqm Retail GFA: 444,098 sqm facilities(5) motor- Vinschool: (Contracted hospitals (17% total) (27% total) cycles sold Leading private school operator sales of and 5 since VND 6 clinics launch(6) trillion(4)) VinMart: Vietnam’s largest modern grocery retail chain by presence Vincom Plaza Vincom+ No. of Malls: 54 No. of Malls: 15 Retail GFA: 857,517 sqm Retail GFA: 71,936 sqm VinID: ~11 mn Members, Largest Loyalty Program in Vietnam(5) (52% total) (4% total) Vincom Retail is the Ultimate Consumer Play for Vietnam Note: (1) Refers to Vinhomes’ landbank (2) MSN-Vincommerce is an affiliated tenant (3) For 1QFY2021, estimated pre-sale under SPAs and pre-sale bookings under deposits, including BCC projects deposits (4) Include retail value only (5) (6) (7) (8) (9) As of 31 March 2021 3
Emergence Of Vincom Retail As A Clear Market Leader Establishing Platform Accelerating Growth With Early Years & Formation For Growth Dominant Market Share 2004 – 2013 2014 2015 2016 2017 2018 2019 – 2020 Royal City launched First Vincom Vincom Mega 10 new Vincom Listed on HOSE in Launched 20 Launched 13 (2019) shopping mall Mall Thao Dien shopping malls November shopping malls, and 1 (2020) Times City launched outside Hanoi & launched Introduction H&M opened 2 stores including Landmark shopping malls and US$200 million HCMC of Vincom+ format 81 expanded our in Hanoi and Ho Chi investment − VCP Ha Long international tenant Minh City “Best Retail US$100mm portfolio across key Zara opened first store malls (Uniqlo, Developer in follow-on in Hanoi Vietnam” by investment First Zara flagship Decathlon, CGV, Euromoney in 2012 store in Vietnam Key tenants added: Signed leasing H&M, Mango, Muji, 10 new Vincom First Robins opened at Vincom Inditex brands contracts for Pizza 4P’s, Haidilao) shopping malls & department store in Center Dong Khoi in (Stradivarius, Massimo Acquisition of 5 approximately Pioneer in Vietnam opened in HCMC Dutti, Pull & Bear), 191,000 sqm NLA Maximark malls experiential Royal City in April H&M and Old Navy c.US$390mm Vingroup and over 1,200 retail-tainment in 2014 follow on investment advertising contracts Vietnam Retail GFA (‘000 sqm) 7980 7,017 Leasing Revenue (VND bn) 2014 – 2020 CAGR: 6980 (1) 6,008 Leasing revenue: 20.1% 5,506 GFA: 22.0% 5980 1st Retail Mall 1st Integrated in Vietnam Project in 4,455 4980 Vietnam Investment by 3,805 Warburg 3980 Pincus IEO and 2,427 listed on 2980 1,927 HOSE 1,598 1,654 1,448 1980 Vincom Center Vincom Center Ba Trieu Dong Khoi 1,023 1,173 851 467 499 980 42 93 -20 2004 2010 2013 2014 2015 2016 2017 2018 2019 2020 No. of malls 1 2 5 6 23 31 46 66 79 80 17 Years of Operating Experience Achieving ~1.7 mm sqm of Retail GFA (~35x Increase Since 2004) Note: As of 31 March 2021 Leasing revenue is based on Vietnam Accounting Standard (VAS) Audited Consolidated Financial Statements for respective years 4 (1) Leasing revenue took into account the impact of Vincom Retail’s supporting package to tenants impacted by Covid-19 in 2020, totaling VND 865bn 4
Retail Consolidates Around The Dominant Local Landlord dominant local landlord Global examples clearly demonstrate retail consolidation around the Vincom Retail Significant parallels seen between VRE and regional retail leaders Vietnam’s largest retail developer, owner and operator Vietnam's GFA (mm sqm) current position at an early, higher growth stage of the retail 1.7 1.0 cycle translates to a stronger growth profile and a more dominant market share 2016 2020 SM Prime Central Pattana Vietnam Philippines’ largest retail real estate developer Thailand’s largest shopping mall developer arm of GFA (mm sqm)(3) Market Share by GFA(2) Central Group 50% GFA (mm sqm)(1) Market Share by GFA(1) 9.8 Thailand Philippines 28% 20% 2.2 15% 4.7 Singapore 0.9 2007 2019 2007 2019 Total Market Size (GFA sqm)(2) 2013 2020 2013 2020 7.8mm 10.7mm Total Market Size (GFA sqm)(1) Indonesia 5.6mm 18.9mm PT. Pakuwon Jati CapitaLand Integrated Commercial Trust Indonesia’s largest mall owner and operator Largest proxy for Singapore’s commercial real estate NLA (mm sq. ft) Market Share by NLA(3) NLA (mm sqm) Market Share by NLA(4) 15.4% 10.4 0.7 20.4% 5.6% 0.3 13.3% 3.3 2011 2020 2011 2020 Total Market Size (NLA sq. ft)(3) 2012 2020 2012 2020 Total Market Size (NLA sqm)(4) 58.9mm 67.4mm ~2.5mm ~3.2mm(5) Source: Company filings, Colliers, Statista, Urban Redevelopment Authority, Savills, Urbis. 1. Based on Central Pattana’s retail NLA in Bangkok Metropolitan Area and total shopping mall NLA in Bangkok Metropolitan Area. 2. Based on SM Prime’s retail GFA in Metro Manila and total retail GFA in Metro Manila. 3. Based on retail floor space supply in Singapore (2009-2024), extracted from Capitaland Mall Trust (CMT) Annual Report 2019 4. Based on PT. Pakuwon Jati’s retail NLA as of Dec-2012 and 3Q 2020 vs. shopping mall NLA of Jakarta 5 5
Key Investment Highlights Vietnam’s Economy Remains Resilient Amidst Covid-19 Outbreak 1 ‒ Vietnam On A Rebound – The Brightest Spot In SEA’s Economies ‒ Clearer Signs Of A Speedy Recovery; Ready For A “New Normal” 2 Huge Potential for Further Expansion in Vietnam’s Retail Space Modern Retail Set to Take Off Only Retail Platform With Nationwide Access Metro and Bus Infrastructure To Accelerate Retail Mall Footfall Multi Format Model Covers a Larger Market Opportunity 3 Solidified Position as Dominant Retail Platform in Vietnam 4 Ability to Leverage the Best-in-Country Vingroup Ecosystem 5 Institutional Level Corporate Governance 7
Vietnam On A Rebound – The Bright Spot In South East Asia’s Economies Vietnam continues to maintain the highest GDP growth among Southeast Asia countries for the next three years Estimated Real GDP growth (%) (9.5) 7.1 7.0 6.5 6.3 (5.8) 6.5 (5.0) 5.0 5.0 5.2 4.6 4.8 (1.1) 4.2 3.8 (7.2) 2.6 Philippines Thailand Singapore Malaysia Indonesia Vietnam 2021 2022 2023 Vietnam GDP continues strong growth in 2021 due to domestic consumption rebound, strong FDI inflow due to supply chain shift and accelerated public investment Forecasted domestic consumption grows Vietnam to become the new center of Highest level of public investment in terms 1 at top level of Southeast Asia 2 global supply chain 3 of GDP % to boost domestic economy Domestic consumption growth (%) Constant FDI disbursement despite ongoing Covid pandemic Public investment as % of GDP (2021 Target) (USD billion) 10.6 6.8 20.4 20.0 8.8 19.1 8.2 17.5 5.7 15.8 7.0 14.5 4.0 4.1 3.6 4.6 4.4 2.4 3.0 3.8 4.1 0.5 0.5 2015 2016 2017 2018 2019 2020 Q1/20 Q1/21 -2.1 Global corporations continue to relocate and expand factories -3.6 in Vietnam -4.7 2020 2021F Free Trade Agreements such as CPTPP, EVFTA and RCEP will Public investment is expected to keep increasing during the boost Vietnam’s international trades first half of 2021, with suitable monetary policy Source: GDP consensus from Bloomberg, GSO, CEIC, IMF and BMI 8
Promising Retail Outlook, Ready For A “New Normal" Mobility to retail malls and entertainment activities in major cities has returned to pre – Covid level Vietnam posts solid retail sales throughout the pandemic Mobility to retail malls and entertainment activities has rebounded Nominal Retail sales change YoY (%) 12.0 Vietnam Hanoi HCMC 10.0 7.0 5.7 6.5 4.0 3.7 2.0 1.4 1.4 1.8 -1% 0% 1.5 -0.14 -2.9 -8.4 -10.0 -9% -15.7 -13% -13% -24.4 -16% Dec-20 Mar-21 2020 2021F Rental outlook in Vietnam remains positive compared to regional countries % change in rental rate forecast Shanghai Guangzhou Beijing Taiwan Singapore Tokyo Hong Kong Brisbane Sydney Perth Melbourne Auckland HCMC Hanoi 2020 2021F 2019 - 2021 Cumulative Source: Google Mobility Index, CBRE Research, eMarketer 9
2 Huge Potential For Further Expansion In Vietnam’s Retail Space Low and fast growing disposable income per capita compared to neighboring countries, coupled with low mall NLA, presents an opportunity to enlarge Vietnam’s retail mall space to close the regional gap. Modern Retail is still at a Nascent Stage… …With the Growing Middle Class Set to Drive Next Wave of Consumption Vietnam has a Low Mall NLA compared to Thailand and Philippines(1) Vietnam’s Disposable Income per Capita is similar to Philippines in 2004 and Thailand in 1990, implying huge growth potential (1) NLA (mm sqm) Disposable income per capita (US$) 7.9 7.3 2,796 2,554 1,808 3.6x 950 1,018 3.3x Vietnam 2.9x 2.2 2017 2018 2019 2023 2024 Hanoi/ HCMC Bangkok Metro Manila 3,818 3,547 2,824 Strong supply which validates the market’s potential, backed by stable rental rate(2) Philippines 930 Rental rate (USD/sqm/month) Future Supply (sqm NLA) 150.0 Hanoi 156 120.0 73 29 2004 2019 2023 2024 90.0 60.0 1,054 1,054 1,127 1,209 30.0 6,902 7,246 - 6,221 1Q20 2Q20 3Q20 4Q20 1Q21 2020 2021F 2022F 2023F HCMC 150.0 70 120.0 114 57 Thailand 999 90.0 60.0 1,106 1,220 1,049 1,049 30.0 1990 2019 2023 2024 - 1Q20 2Q20 3Q20 4Q20 1Q21 2020 2021F 2022F 2023F Rent rate (CBD) Rent rate (Non CBD) Current Future Source: EIU, Colliers, CBRE Market Report in Hanoi and HCMC in 2020 and 1Q2021 10 Note: (1) Includes NLA pipeline 2020-2021 (2) As of 31 March 2021 10
2 Modern Retail Set to Take Off Vietnam is Starved for Modern Retail Format E-Commerce More Catalyst Than Threat Significantly Underpenetrated Modern Non-Discretionary Retail Remains E-Commerce Penetration(2) 2020/21(1) NLA per capita (sqm) (%) 2019A 2024E 1.8 40% 1.4 1.1 28% 0.5 0.5 0.5 0.5 21% 0.1 0.1 Low Penetration 15% vs Peers 13% HCMC Hanoi Beijing Jakarta Shanghai Manila Singapore Bangkok Kuala 11% 11% 10% 9% Lumpur 4% 5% 4% Modern Retail Format an Attractive Solution in Vietnam 2% 3% Attractiveness of Modern Attractiveness of Modern China Indonesia Singapore Philippines Malaysia Thailand Vietnam Retail to Consumers Retail to Tenants Vincom Retail Further Consolidates Leadership Limited alternatives for Significantly higher footfall and sales Position entertainment and social activities psm achieved compared to unorganized retail Malls: A Key Providing the Digital One stop platform for discretionary + Activity Hub Infrastructure transformation non-discretionary consumption Provides quality control with guaranteed infrastructure and logistics that helps to build brand equity Leading the service quality and customer experience Stand-alone Department Store Formats have Lost Out Destination for and a trustworthy partner of major international brands to be present in Vietnam for the first time Lotte Vietnam on losing streak Progressively applying digital transformation to enhance customers’ Parkson Vietnam shutters store experience via improved service quality since operations began …However, during its ten years of operation in Vietnam, Lotte Mart has …Parkson Vietnam has closed another of its stores as it continues to struggle Close and flexible connection between retail malls and e-commerce to support shoppers and tenants via a network of credible e-commerce partners never closed a year with profit… to make its business profitable… Utilize the readily available customer base from VinID Vincom Retail’s Disruption Has Already Leapfrogged the “Department Store” Phase Source: EIU, Euromonitor, Vietnam Investment Review, Inside Retail Asia, CBRE Vietnam (1) Includes NLA pipeline 2020-2021 (2) % E-commerce penetration represented by internet retailing over retailing. 11
2 Only Retail Platform With Nationwide Access Portfolio Leasing Creates Significant Bargaining Power… … and Ability to Attract Best-in-Class Tenant Portfolio, with more than 1,000 Unique Tenants(1) HANOI HAI • 80 malls across 43 PHONG cities and provinces(1) Fashion & Beauty DA NANG • 4 retail formats for specific areas DONG • Proven and NAI scalable retail CAN HCMC THO development platform Vietnam First stores in Entertainment Vietnam for Zara, F&B and H&M First stores in Hanoi for Uniqlo First store in retail (1) malls of Decathlon Anchor VRE’s dominant position and nationwide scale makes it Vietnam’s “Go-to” platform for international and established local brands Source: Company information as of 31 March 2021 (1) Non-controlling interest in a subsidiary of Masan Group which owns MasanConsumerHoldings, the largest manufacturer of consumer products by revenue, and VinCommerce, the largest consumer retail network in terms of number of grocery retail stores 12 12
2 Metro And Bus Infrastructure To Accelerate Retail Mall Footfall Most of VRE malls are covered by the upcoming metro lines in Ho Chi Minh City and Hanoi, and major VRE megamalls such as VMM Ocean Park, Smart City and Grand Park have extra cover of VinBus routes – significant boost in connectivity and footfall expected Metro Lines Under Construction Planned Lines Bus routes Ho Chi Minh City Hanoi District 9 1 4 VINCOM PLAZA Go Vap District Tay Ho VINCOM CENTER SAIGON RES VINCOM CENTER PHAM NGOC THACH District NGUYEN CHI THANH 4 VINCOM MEGA MALL 1 VINCOM MEGA MALL Ho Chi Minh THAO DIEN GRAND PARK City Airport 5 VINCOM CENTER TRAN DUY HUNG 3 1 2 3 4 CBD 1 Long Bien 5 District 1 VINCOM CENTER 3 Distirct Trau Quy BA TRIEU 2 District 2 VINCOM MEGA MALL SMART CITY 8 CBD VINCOM MEGA MALL VINCOM MEGA MALL OCEAN PARK VINCOM PLAZA TIMES CITY 3/2 1 2 3 4 5 VINCOM CENTER Ha Dong DONG KHOI District VINCOM MEGA MALL 6 7 8 9 10 ROYAL CITY 2 Hung Yen District 10 Province Hoang Mai Van Dien District Tan Phu District Preliminary VinBus routes as of 31 Dec 2020 (*) 1 Grand Park - Emart 2 Grand Park – Tan Son Nhat airport 1 Long Bien – Tran Phu – Smart City 2 Long Bien – Cau Giay – Smart City 3 Giap Bat – Smart City 3 Grand Park – Sai Gon bus station 4 Grand Park- Mien Dong bus station 4 Ho Tay water park – Smart City 5 VCP Long Bien – Smart City 5 Mien Dong bus station – National University NUA 6 Hao Nam – Ocean Park 7 My Dinh – Ocean Park 8 Ham Nghi – Ocean Park 9 Interconnected Complex – Ocean Park 10 Noi Bai – Ocean Park Vingroup’s mixed use and VRE’s mall models are suited to tap With urban metro lines opening for the first time in Ho Chi Minh City and Hanoi and extra coverage of VinBus routes, the shift on this trend, given their targeted positioning and proximity to from street retail to organized retail (malls) will accelerate the stations Note: (*) Business plan which is subject to change 13
3 Multi Format Model Covers A Larger Market Opportunity Annual Income Distribution Holistic Segment Coverage Across Formats Competitors (% of population in Vietnam)(1) Vincom Center Vincom Mega Mall Vincom Plaza Vincom+ Target Segment: Affluent Target Segment: City Center/ (6%) CBD consumers Integrated Lotte Middle & upper development Target middle income catchment area AEON Segment: Targets families Target Upper middle Middle across all Segment: income Income income segments Middle Focus on income / (24%) shopping – Upper middle experience based Target Segment: income shopping to Heart of provincial enhance customer town plus urban experience non-CBD Emerging consumers of (32%) key cities Family & BIG C GO activity hub Target Middle income Segment: Mass to Aspiring middle income (17%) Target Segment: Regional & non-CBD Vincom Retail has access catchment areas to addressable market Mass Mass to segment of over US$176bn (21%) middle income of retail revenue Source: BCG population and wealth models (1) MAC (Middle income and affluent customers) 14 14
3 Solidified Position As Dominant Retail Platform In Vietnam Distinguished retail formats and focused on wide range of lifestyle oriented consumers Prime Urban and High Growth Areas in Key Cities Unique Multi – Format Retail Model (Segmentation by GFA) 43 80 ~1.7mm Vincom Center Location: City-center, CBD Vincom Mega Mall Location: In integrated, Cities/ Operational Retail GFA Retail GFA: 40,000 – mixed-use projects 60,000 sqm Retail GFA: 60,000 – Provinces Malls (sqm) No. of Malls: 7 150,000+ sqm Total GFA: 280,026 sqm No. of Malls: 4 Total GFA: 444,098 sqm Key Cities North Vietnam (ex. Hanoi) 19 Vincom Malls 16.9% 16 Vincom Plazas 4.4% 26.9% 3 Vincom+ Hanoi 11 Vincom Malls 5 Vincom Centers 3 Vincom Mega Malls Central Vietnam 51.9% 20 Vincom Malls 3 Vincom Plazas 13 Vincom Plazas 7 Vincom+ Vincom+ Vincom Plaza Ho Chi Minh City Location: Medium-density, Location: High-density, 13 Vincom Malls non-CBD CDB of cities 2 Vincom Center South Vietnam (ex. HCMC) Retail GFA: 3,000 – 5,000 ex. Hanoi and HCMC sqm Retail GFA: 10,000 – 1 Vincom Mega Mall 17 Vincom Malls No. of Malls: 15 40,000 sqm 7 Vincom Plazas 15 Vincom Plazas Total GFA: 71,936 sqm No. of Malls: 54 2 Vincom+ Total GFA: 857,517 sqm 3 Vincom+ Proven and scalable retail 4 retail mall formats development platform Note: As at 31 March 2021 15
4 Ability To Leverage The Best-in-Country Vingroup Ecosystem c.168mm Access to Landbank from 29% Market Leading Retail Brands Form NLA leased to sqm of Vietnam’s Biggest Developer internal and Immediate Tenant Foundations Landbank(1) affiliated tenants(2) Vinhomes’s Landbank Breakdown c.30 years worth for mn sqm development Accelerates concept to completion 155 pipeline for Vinhomes Drives consumer footfall (3) Unparalleled land sourcing 13 expertise Launched Pipeline projects Up to Largest Loyalty Programme in Integrated Developments Provide 11m Vietnam Reinforces 100,000 Mega Malls with Natural Catchment Members(2) Captive Spending Residents(2) Times City (opened: 4Q2013) Ocean Park (opened 12.2020) Single card, nationwide access Guaranteed Footfall for Malls Benefits lock in repeat spending Note: 1. Refers to Vinhomes’ landbank 2. As of 31 March 2021 3. Non-controlling interest in a subsidiary of Masan Group which owns MasanConsumerHoldings, the largest manufacturer of consumer products by revenue, and VinCommerce, 16 the largest consumer retail network in terms of number of grocery retail stores 16
5 Institutional Level Corporate Governance Conflict Area Description Control • All transactions must be entered into on commercially reasonable basis as a statutory requirement. • Vingroup will continue to be VRE’s majority Decision Making • Significant related party transactions must be approved by the Board shareholder following the Offering of Directors or the general meeting of shareholders • Interested parties must abstain from voting • Non-compete from Vingroup on retail; VRE has a clear Right of First • Both Vingroup and VRE are in the business of property Competition Refusal (“ROFR”) for all stand-alone retail projects, retail development components and select mixed-use projects with well-defined criteria • The ROFR above gives VRE economies of scale in land sourcing, and delaying early-stage development costs Land Bank Access • Vingroup holds much larger land bank than VRE • VRE has ROFR on land that can be used for retail, at cost • VRE has an independent land sourcing team and primarily focuses on different types of projects than Vingroup • Allows VRE to expand faster with the key anchor tenants in place in advance of commencing construction Related Party Tenants • VRE has related party-tenants (Vingroup entities) • Leases are negotiated on an arms’ length commercial terms • Governed by related party rules under “Decision Making” • Fees are calculated based on comparable third-party service • VRE has contracts with Vingroup entities such as providers and Vingroup fees are allocated based on number of man Vinpearl and Vinmec for non-core services such as hours and assets under management Management Services lodging rental and periodic health check for Contracts • Helps VRE to manage expansion with minimum overhead as it can employees, and Vingroup for headquarters services share resources and costs with the rest of Vingroup such as marketing, treasury and corporate HR 17 • Governed by related party rules 17
1Q2021 Key Highlights
Financial Performance – 1Q2021 Revenue from leasing continued its recovery momentum from the 3rd quarter of 2020 Total revenue Leasing revenue VND billion VND billion % of previous year level % of previous year level 73.8% 82.2% 79.7% 116.8% 132.1% 90.6% 78.8% 88.9% 84.3% 118.1% (3.3%) 84.4% (2) (9.8%) 4.1% 3,253 2,226 1,645 1,712 1,686 1,630 1,760 1,449 1,307 1,608 1Q20 2Q20 3Q20 4Q20 1Q21 1Q20 2Q20 3Q20 4Q20 1Q21 Gross profit Leasing NOI (1) EBITDA VND billion VND billion VND billion % of previous year level % of previous year level % of previous year level 78.1% 67.3% 78.4% 112.7% 154.0% 86.1% 81.1% 91.3% 86.5% 132.1% 88.9% 73.1% 94.0% 110.5% 141.2% (6.3%) 11.5% 43.3% (2) 86.1% (2) (14.8%) (14.9%) 1,572 1,746 1,313 1,508 1,168 1,174 1,178 1,218 998 930 1,068 910 759 845 646 1Q20 2Q20 3Q20 4Q20 1Q21 1Q20 2Q20 3Q20 4Q20 1Q21 1Q20 2Q20 3Q20 4Q20 1Q21 Note: Based on VAS Consolidated Quarterly Financial Statements of 2020 and 1Q2021 These financial metrics took into account the impact of the rental support (VND300bn in 1Q, VND375bn in 2Q, VND145bn in 3Q and VND 46bn in 4Q). There was no rental support recorded in 1Q2021 (1) NOI for leasing of investment properties and rendering of related services is calculated by taking total income from leasing activities and from other property-related services less any property-related operating expenses which include land lease costs but exclude management expenses allocated from parent company (2) Total revenue, Gross profit, and EBITDA 4Q2020 surged due to revenue from delivery of shophouses 19
Key Operational Metrics Retail GFA Occupancy rate Change Change Change (‘000 m2) 1Q2020 1Q2021 1Q2020 1Q2021 4Q2020 (%) (ppts) (ppts) Vincom Center 280 280 - Vincom Center 92.1% 95.0% 2.3 93.1% 1.9% Vincom Mega Mall 388 444 14.4 Vincom Mega Mall 87.6% 87.3% 0.3 86.0% 1.3% Vincom Plaza 858 858 - Vincom Plaza 82.2% 80.4% 1.8 80.2% 0.2% Vincom+ 72 72 - Vincom+ 76.5% 74.4% 2.1 73.8% 0.6% Total 1,598 1,654 3.5 Total 84.9% 84.4% 0.5 83.8% 0.6% Note: As at March 31, 2021 20
Footfall Recovery Post Pandemic 1 Footfall Hanoi HCMC Million visitors Million visitors 5 2020 2021 5 2020 2021 4 4 3 3 2 2 1 1 0 0 Jan Feb Mar April May Jun July Aug Sep Oct Nov Dec Jan Feb Mar April May Jun July Aug Sep Oct Nov Dec Other Provinces Million visitors ● 1Q2021’s footfall stabilized versus 4Q2020, while footfall in March 12 2020 2021 bounced back to reach 90% of the footfall in March 2019 10 ● Hanoi experienced a good recovery thanks to tenant upgrade in 8 VCC Pham Ngoc Thach and Tran Duy Hung, which continued to attract visitors 6 4 ● Retail malls in HCMC were still affected due to a lack of international visitors. However, improvement is expected by the 2 end of 2021 with adoption of “vaccine passport” 0 Jan Feb Mar April May Jun July Aug Sep Oct Nov Dec 21
Tenants’ Sale On Track For Recovery 1 Food & Beverage Fashion Enterntainment Cinema (1) (2) Covid-19 relative impact in 2020 (1) (2) Least impact Least impact Medium impact Most impact Recovery in 1Q2021 Very strong Gradual recovery Gradual recovery Strong recovery recovery Entertainment and Cinema recovery marks a success in our commitment to support tenants overcoming 2 challenges posed by the pandemic ● In 2021, support package comes in the form of shopping vouchers ● The program has been activated since 1Q2021, and will be implemented and disbursed from 2Q2021 Source: Company report as of 31 March 2021 22
Business Highlights in 1Q2021 ANCHOR TENANTS COMMIT TO ACCOMPANY AND EXPAND THEIR NETWORKS IN NEW RETAIL MALLS, HIGHLIGHTS FOR RESIDENTIAL PROJECTS AND SUROUNDING AREAS FLAGSHIP BRANDS VMM SMART CITY Plan to launch in 3Q2021 LEASING PLAN AND TENANT GROWTH CHAIN TENANTS EXPANSION Area Achieved 7% 28% leasing target for 2021 23
Marketing Activities in 1Q2021 Spring Festival 2021 Lunar New Year International Women’s Day (15 Jan – 28 Feb 2021) (01 – 08 Mar 2021) Featured event “Secret Gift For Her” with participation of Lunar New Year Fair offering a variety of regional specialties, was held across Vincom malls including VCP Long Bien with “Happy famous singers namely Rapper G.Ducky, singer Hoang Dung, Tet” Fair, VCP Sky Lake with “Spring Book Festival” singer S.T Son Thach Retail malls were gorgeously decorated with colorful spring Dating and a surprise gift from a handsome man for first themes and landscapes female guest on International Women’s Day Series of traditional games for families and children: DIY Couple challenge and lucky drawing with vouchers and lucky money envelope, making toy figurines from sticky rice gifts by Vincom. Gifts for female customers (cosmetics, jewelry, accessories) from retail tenants Footfall in 1Q2021: Over 36.8 million 24
Apply Environmental Initiatives To Optimize Operational Activities “Sustainable Development” is the underlying principle throughout business operations of Vincom Retail. Operation is optimized as a results of: Energy saving and environmental protection initiatives (using clean energy, recycling waste, reducing chemical use) Technology application to standardize and automate processes and optimize operations Environmental protection initiatives Technology application in operation 1 2 1 2 Solar panels Cooling water treatment Optimize air- Automated technology for air- conditioning parking system conditioning system system Finish installing and deployment Replace chemical water Test – drive intelligent algorithm Complete trial of automated car of solar panels for 50 retail malls treatment system with E-water to control the air-conditioning parking system at Royal City. cooling technology for all retail system with a Singaporean Plan for implementation across malls partner large retail malls such as Times City, Đong Khoi, Ba Trieu Save nearly 9% of energy costs Eliminate the environmental Minimize human errors in Reduce headcount to operate of the entire retail malls system chemical pollutants used operation Reduce cash frauds Reduce carbon emission by Save costs by minimizing errors Improve customers’ experience 7,157 tons/ year and automating processes at retail malls 25
2021 Strategy Plan
2021 Strategies And Plan Continue to develop Vincom Center (VCC)/Vincom Mega Mall (VMM)/Vincom Plaza (VCP) in the big and Tier-1 cities to offer a dynamic and engaging experience to the residential community in Vinhomes’ 5 new shopping malls Product mega projects and surrounding areas New malls’ occupancy target: VMM 85%, Strategy Enhance customer experience, embrace digital technologies, and VCP and VC+ 95% (including committed ascertain the number one destination for customers by expanding and tenants) diversifying tenants’ portfolio with international and Vietnamese brands Expand the group of international, large, chain and anchor tenants (Fashion, F&B, Furniture, Home accessories, Supermarket, etc.) in Upgrade tenant mix at VCC Metropolis Tenant existing shopping malls (Hanoi), VCP Phan Van Tri (HCMC), VCP Strategy Pioneer in reaching and bringing international, prestigious brands Hung Vuong (Can Tho) and attractive retail models to Vietnam for the first time Accompany and support Vietnamese tenant groups Roll out Tenant Portal Digital Build data warehouse system Transform- Apply digital transformation initiatives to create a dynamic, engaging Enhance Vincom web/ Vincom app to ation customer experience and maximize operational efficiency facilitate customer experience to and at Vincom malls Implement marketing and communication Marketing Solidify Vincom Retail’s leading position for effective cooperation and plans for the grand openings of major consumers’ trust Strategy projects namely Grand World and Vincom Expand channels for brand communication: Web/App Mega Mall Smart City Enhance a quality service program to offer Customer Provide a safe shopping environment with quality products and services impressive shopping experience for the Optimize operating costs and energy costs Services continuously increasing end-users and customers Note: Company information 27
Sale Goals And Action Plan Goals Leading shopping malls Shopping malls of Vietnamese Pioneer in bringing shopping experiences from with presence across Vietnam prestigious domestic and international brands Action Plan 3 projects, including 1 Vincom Mega Mall 2 Vincom Plaza New opening 100,000 sqm GFA Increase nationwide retail GFA to ~1.8mn sqm Upgrade tenant mix 3 projects, including 1 Vincom Center 2 Vincom Plaza Number of stores Target tenants for finalizing Chain and 20% anchor tenants Area development >20% Note: Company information 28
Financial Update
Financial Performance In 1Q2021 vs 1Q2020 Figures in VND billion 1Q20 1Q21 YoY (%) Commentary Leasing of Investment Given the strong recovery of retail market in 1Q2021, no more support Properties and Rendering of 1,449 1,712 18.2 package in the form of rental rebates in the quarter Related Services Handed over 111 units from Bac Lieu, My Tho, Uong Bi in 1Q21 Sale of Inventory Properties 201 452 124.9 compared to 54 units in 1Q20 Mainly from commission fee for real estate brokerage at Grand World – Other Revenue 36 62 72.2 approx. VND 20 billion (no similar transaction in 1Q20), the rest was an increase in management fee of Condotels Total Revenue 1,686 2,226 32.0 Gross Profit(1) 759 1,168 53.9 Operating Profit / (Loss) 575 960 67.0 Profit / (Loss) before Tax 619 980 58.3 Profit / (Loss) after Tax for the 492 781 58.7 Period Profit / (Loss) after Tax and 492 781 58.7 Minority Interest Note: VAS Consolidated Quarterly Financial Statements in 2020, 2021 (1) Gross profit already subtracted D&A relating to investment properties accounted for under VAS 30
Financial Performance Total revenue Gross Profit (1) VNDbn VNDbn Gross Profit Margin (%) 50.8% 39.9% 47.6% 45.9% 45.0% 52.5% 9,124 9,259 185 215 8,329 172 4,404 2,027 (84) 3,825 (164) 3,433 2,149 3,641 (47) 735 5,518 2,801 806 1,034 951 112 48 2,226 411 7,017 6,008 62 3,752 1,169 (20) 5,506 1,686 36 2,882 2,954 4,455 452 2,342 759 (44) 201 1,449 1,712 668 135 1,002 187 2017 2018 2019 2020 1Q20 1Q21 2017 2018 2019 2020 1Q20 1Q21 Leasing of Investment Properties Sale of Inventory Properties Other Revenue Leasing of Investment Properties Sale of Inventory Properties Other Revenue Depreciation & amortization of Investment properties (VNDbn) 829 1,042 1,331 1,357 339 346 Leasing Net Operating Income (NOI) (2) Profit After Tax and Minority Interest VNDbn VNDbn Leasing NOI Margin (%) 69.3% 69.5% 70.6% 71.3% 69,2% 76.9% 2,851 4,955 2,404 2,385 4,274 3,829 1,905 3,089 492 781 998 1,313 2017 2018 2019 2020 1Q20 1Q21 2017 2018 2019 2020 1Q20 1Q21 Note: Based on VAS Audited Consolidated Financial Statements for respective years and VAS Consolidated Financial Statements for 1Q2021 (1) Depreciation and amortization relating to investment properties is below the graph and should be added back (to Gross Profit) under IFRS. Since 2018, “Other” segment includes results from management of Da Nang condotels which was incurring loss as the property was still ramping up after launch in May 2018. (2) NOI for leasing investment properties and rendering of related services is calculated by taking total income from leasing activities and from other property-related services less any property-related operating expenses which include land lease costs but exclude management expenses allocated from parent company. 31
Balance Sheet Total Assets Total Borrowings, Cash and Cash Equivalents VNDbn VNDbn 5,726 5,686 38,684 39,816 39,780 35,839 4,945 10,911 11,125 11,423 4,122 7,121 3,133 2,780 2,785 2,177 27,773 28,718 28,691 28,357 31/12/2018 31/12/2019 31/12/2020 (2) 31/03/2021 31/12/2018 31/12/2019 31/12/2020 (2) 31/03/2021 (1) Investment Properties and Investment Properties Under Construction Other Assets Borrowings Cash & equivalent (3) Total Equity (Net Debt / (Net Cash)) / Equity VNDbn VNDbn 28,509 26,954 29,336 30,117 2.7% 2.3% 1.0% 31/12/2018 (2) (2) 31/12/2018 31/12/2019 31/12/2020 31/03/2021 31/12/2019 31/12/2020 31/03/2021 Net cash Note: Based on VAS Audited Consolidated Financial Statements for respective years and VAS Consolidated Financial Statements for 1Q2021 (1) Investment Properties and Investment Properties Under Construction (IP/IPUC) are valued at development cost minus depreci ation and amortization and are not fair valued (2) Decline in other assets, cash and cash equivalents, total equity as well as increase in gearing ratio as of 31 December 2019 was due to the payment of cash dividends of VND 2,445bn in April 2019 and buy back 56.5 mil treasury shares completed in November 2019 (3) Net Debt / (Cash) = (Short-term Borrowings + Long-term Borrowings) – (Cash & Cash Equivalents + ST Investments). 32
Appendix
Updated Mall Openings Plan Until 2026 No. Model Number of projects Location Retail GFA (sqm) To be developed 2021 – 2026 1 VCC 2 Hanoi 95,000 Hanoi, HCMC, Hung Yen, Dong Anh, Can 2 VMM 27 2,413,000 Gio, Cam Ranh Hanoi, HCMC, My Tho, Bac lieu, 3 VCP 19 489,000 Hai Phong, etc. 4 VC+ 1 Thanh Hoa 3,000 TOTAL 49 3,000,000 ● 49 new shopping malls, increasing GFA retail floor from nearly 1.7 million sqm to approx. 4.7 million sqm ● Land bank for retail mall development is sourced from Vincom Retail self-developed projects and through Vingroup and its subsidiaries ● Depending on the pandemic situation, Vincom Retail can be flexible in development progress and openings of new retail malls Note: Numbers are rounded to the nearest thousand ('000) 34
Bridging VAS to IFRS Unit: VND Billion VAS Adj. IFRS Commentary on Adjustments 1Q2021 1Q2021 Leasing revenue and other related Realized unearned revenue of deposit from customer in relation to 1,712 45 1,757 services amortization of deposit Sale of inventory properties 452 452 Other revenue 62 Total revenue 2,226 45 2,271 Cost of leasing activities and other related (710) 367 (343) Mostly depreciation of malls included in VAS; excluded under IFRS services Cost of inventory properties sold (266) (266) Others (82) (82) Cost of goods & services (1,058) 367 (691) Gross profit 1,168 412 1,580 Selling expenses (92) (92) General and administrative expenses (64) 18 (46) Amortization of Goodwill included in VAS; excluded under IFRS Other income 21 21 Other expense (1) (1) Finance expense (154) (44) (198) Amortization of Deposit from customer Finance income 102 15 117 Amortisation of Deposit under BCC Profit before tax 980 402 1,382 Tax expense (199) (80) (279) Deferred tax arising from above adjustments Profit after tax 781 322 1,103 Note: Based on VAS Consolidated Financial Statements for 1Q2021 and conversion to IFRS by management, excluding impact from Investment Property and Investment Property Under Construction (IP/IPUC) revaluation gain/loss 35
Vietnam Swiftly Controlled Covid-19 More than 511,000 people have been vaccinated against Covid – 19 as of May 2nd, 2021(1). The Vietnamese Government plans to vaccinate 30 million people (~ 30% of its population) by the end of this year 1st wave of Covid-19 2nd wave of Covid-19 3rd wave of Covid-19 40% growth within 2 Visitors to shopping centers Pandemic was well under controlled months after social +40% 15 grew 32% after social by the end of March. Retail malls’ distancing was lifted distancing was lifted visitors are expected to grow 14 strongly from Q2 2nd Outbreak 13 13 (Jul 28 – Sep 20) 14 14 +40% 12 +32% 12 667 10 1st Outbreak 11 (Mar 5 – Apr 30) 10 9 Million visitors 433 317 4 155 109 59 30 0 0 1 0 0 3 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Community cases Shopping mall visitors Source: Minitry of Health, Company report as of March 31, 2021, (1) Our World in Data 36
Investor Relations Department Vincom Retail JSC 7 Bang Lang 1, Vinhomes Riverside, Viet Hung Ward Long Bien District, Hanoi, Vietnam Tel: +84 (24) 3974 9999 ext. 9545 Fax: +84 (24) 3974 8888 Website: ir.vincom.com.vn/en E-mail: ir@vincom.com.vn
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