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MC Group Public Company Limited
“Very Good” score in 2017
from National CG Committee
Q2 FY2018-2019 Results Summary
18 February 2019 A leading multi-brand apparel & lifestyle products retailer
Financial performance in the years prior to the change of fiscal year from January-December to July-June, have been reclassified to the July-June period for management discussion and analysis purposes in this presentation.
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.
Financial performance in the years prior to the change of fiscal year from January-
December to July-June, have been reclassified to the July-June period for management
discussion and analysis purposes in this presentation.
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.
1
AGENDA
01 02 03
Company Business Financial
Overview Update Result
2
C O M P AN Y OVERVIEW 1 3
Key milestones
Extended Brand
Portfolio
Expanded
Brand Expanded Expanded Expanded
Portfolio Brand Portfolio Brand Portfolio Started CRM Brand Portfolio
Premium
Jeanswear Kidswear &
Launched membership
“Mc ” brand Expanded to program
Women's’ Skin care
Lifestyle Business
Jeans & “M&C”
Active wear
Street wear “U-P”
Acquired 51% in Topwear
1975 2005 2013 2015 2017
2008 2012 2016 2018 FY2019
Listed on the SET
Launched Expanded to Revamped Integrated
1st Mc Shop Expanded online website Middle East e-commerce warehouse
to management
Opened the first platform
Myanmar solution for E-
Free Standing Opened mcmc
& Laos commerce
Shop outlet stores in PTT
gas stations
Started as manufacturing Moving forward to become
Onto managing brands Emerged as a leader in
and selling through and distribution channels a leading apparel
traditional trade denim market in Thailand and lifestyle products retailer
4
MC Group’s Structure
MC Group PLC
(“MC”)
Lifestyle Business
Retail platform Operation Production
99.9% 99.9% 99.9% 99.9% 99.9% 99.9% 99.9%
P.K. Garment
Mc Jeans
Mc Look WoWme Winnerman MC Inter (Import-
Manufacturing
Jeanious Balance Limited Co., Ltd. Limited Export)
Co., Ltd.
Co., Ltd. Co., Ltd. (“WOWME”) (“WNM”) (“MCI”) Co., Ltd.
(“MJM”)
(“PKG”)
• Online and • Manage sales
omni channel force and
management warehouse
workforce for MC
51.0% 51.0% 55.0% 45.0%
Time Deco Aromatique Mcmillion
Top T 2015
Corporation Active (Thailand)
Co., Ltd
Co., Ltd. Co., Ltd. Co., Ltd.
• Supplier of • Importer, • Develop
innovative top wear retailer and skincare
technology under distributor of products
the brand “McT” famous int’l
watch brands 5
Management team
1 Mrs. Kaisri Nuengsigkapian
• Chairman of the Board
• Executive Chairman
2 Ms. Sunee Seripanu
• Chief Executive Officer
• Managing Director
3 Mr. Virach Seripanu 4 Mr. Somchai Soongswang
• Chief Operations Officer • Chief Commercial Officer
5 Mr. Bundit Praditsuktavorn
6 Mr. Nopadol Tangdenchai
• Chief Financial Officer
• Chief Information Officer
7 Mr. Sakesan Serksiri
• Chief Supply Chain
Officer
6
Overview
Integrated retail business …
Brand Retail platform
Mc Store
Poised to become a
leading multi-brand apparel Integrated warehouse solution
for e-commerce
and lifestyle products retailer
7
BUSINESS
UPDATE
2
Financial performance in the years prior to the change of fiscal year from January-December to July-June, have been reclassified to the July-June period for management discussion and analysis purposes in this presentation.
8
Mc Jeans-denim
Jeans market in Thailand
From FY13-14 to FY16-17, Mc’s denim sales
grew with the market due to expansion and
Total Jeans Market
55% Size in Thailand
marketing campaigns
45% THB 21,000 MB FY17-18 and FY18-19 slower-than expected growth
Premium and standard
in 2018
jeans brands
Source : Euromonitor due to
6.0% • one-time contraction from wholesale channel
Others (Super Premium, Economy
and non-brand) CAGR Growth up to 2022 • margin conservation strategy on the back of
sluggish economy
• Jeans is expected to post a retail value CAGR of Going forward
6% reaching THB 27,000 MB in 2022.
• In 2018, Jeans market grew from promotion
In light of expected recovery of the domestic economy,
campaigns and ‘fast fashion denim’ segment in MC looks to:
Bangkok
• Jeans remain classic items in most people’s “expand denim business and continue to
wardrobes and are gaining popularity for enhance 'Brand Equity’”
enhanced comfortable and style.
9Denim – Mc Jeans
Selvedge Series have been introduced with unique identity and premium feature that denim
people seek after…
10Denim – Mc Jeans
Selvedge denim are made out of narrow and tightly woven fabric with a clean look with
edges of single red stripe… …
11Non denim / Casual wear – Mc Jeans, U-P
From FY13-14 to Y17-18, more product varieties were
added particularly non-denim casual wear with high
quality fabric as well as special techniques.
• 4-year CAGR of non denim/casual wear has been 7%
Total Apparel Market Size
5.0%
in Thailand THB 310,000 MB
in 2017 CAGR Growth up to 2022
Source : Euromonitor
Going forward
Continue growth of casual wear products by
• U-P activewear
• Shirts, T-shirts and Jackets
• Seasonal products
12Non denim / Casual wear – Mc Jeans, U-P
The trend towards athleisure continues in
Thailand…
Teen lifestyle under ‘my Mc my best look’
concept…
13Sport Casual- U-P
Products and collections
CONCEPT
DESIGN
Fun Cool Energy Minimal
1st Collection – Dec 18 2nd Collection – March!
Monochrome & Pastel Lover…
14Lifestyle products – Mc Jeans
From FY13-14 to FY17-18, lifestyle products
growth with CAGR of 5% due to product
assortments
• FY18-19 saw slight decline due to domestic
consumption and Chinese tourist contraction in
certain periods
Note :Other lifestyle products (accessories, skin care, watches)
Going forward
• New collections of successful products
• Limited edition and quantity
• Content marketing e.g. product review by
micro influencer
• E-commerce
• New kiosks with enhanced brand visibility
15Watch - timedeco
Brand Portfolio Distribution channel expansion
Luxury Fashion Shop
Activities for smart watch
introduction
Brand concept Stores
Lifestyle Fashion Terminal 21, Pattaya
• New kiosks with brand concepts
• Social media marketing strategies to drive
exposure
• In-store promos continuously
16Watch- timedeco
Distribution channel expansion
www.timedeco.co.th Online/Home shopping
• Revamped timedeco.co.th website for more
efficiency in communication
17Distribution channel - offline & online
1. Free Standing Shops 2. Modern Trade 3. Mobile Unit 4. International Markets
Located mainly in Points of sales or sales New sales channel that Currently, expanded
commercial centers or in counters in department helps expand the reach through distributors with
the plaza sections of stores (both chain and to customers as well as presence in Myanmar,
department stores as local non-chain) as well build brand recognition Laos and Middle-east.
well as hypermarket and as hypermarket
PTT gas station
(Songkla, Pattani)
(Lampang)
POS as end of Dec 2018 2Q FY18-19 (Oct-Dec 18)
Geographical Analysis of Outlets Geographical Analysis of Sales
Free- Mobile Inter-
Brand Modern Total
Standing unit national
Trade
279 511 6 14 810
23 23
19 75 94
Total 321 586 6 14 927
# POS
Online
6 18Distribution Channel for sales growth
Offline channels: numbers adjusted to align with strategy
Offline channels : numbers adjusted to align with strategy
733 746 783 810
737
658
554
8 20 20 18 23
2 104 109
79 94 93 94
FY12-13 FY13-14 FY14-15 FY15-16 FY16-17 FY17-18 FY18-19(6M)
Time Deco mcmc Outlet Mc
New opening for MC: >30 POS
CAPEX: THB 80-100 mn. for POS Expansions (FY18-19)
19Outlet channel - mcmc
Newness…
Variety of products Community Store
and brands, suitable
with all ages and
genders End of season 50% -
Affordability 70% discount of MC’s
Quality products and others
lifestyle products at
affordable price
DNA
Convenience
Located close to
communities with
parking space
mcmc store presence
1. Gas station NORTH
NORTHEAST
WESTCENTRAL
2. Big box retailer
EAST
#Points of sales
3. Commercial
building in local
SOUTH 27 Jomtien Beach Pattaya, Chonburi (PTT Gas Station)
communities (end of Feb 19)
20Omni channel/E-market place
Omni channel sales growth +340% YoY (Jul-Dec)
Website traffic +35% QoQ
Ship to shop service* 9% contributed to all
shipments in FY18-19 (Jul-Dec)
*started on late-June 18
Products offering >5,000 SKUs
product mix from MC Group and
selected lifestyle product partners
21Go to market strategy
Digitalised lifestyle promotes greater online penetration
Out-of-home media
Drive higher traffic to offline stores by more featured in-store services
Exclusive products and promotion
Enhancing content review by workshop, etc.
22Going forward for same store sales…
Recognized brand equity and awareness Customer relationship management
Dominant position in Thailand for more than 40 years • Member as of Y2018: 650,000 and target
under Mc Jeans YE2019: 1,000,000
• Repeat purchase from members from data
• Mobile App for communication (Launched
by 1Q)
23Going forward for same store sales…
Product Assortments Varieties of lifestyle products with ‘New arrival’ to draw traffic
For instance, project “Mc X” offering special collaboration with famous celebrities, influencers…
24Going forward for same store sales…
Different sales campaigns from other retailers with fun and
Marketing campaign customer engagement year-round
25FINANCIAL RESULT
Q2 FY18 -19 (Oct-Dec 18) and 6M FY18-19 (Jul-Dec 18)
3
Financial performance in the years prior to the change of fiscal year from January-December to July-June, have been reclassified to the July-June period for management discussion and analysis purposes in this presentation.
26Results headlines
Q2 FY17-18 6M FY17-18
(THB millions) Q2 FY18-19 % YoY 6M FY18-19 % YoY
(Adjusted) (Adjusted)
Sales Revenue 1,194 1,099 -8% 2,084 1,914 -8%
Total Revenue 1,215 1,114 -8% 2,113 1,936 -8%
Gross Profit 648 620 -4% 1,122 1,107 -1%
Selling and general expenses (445) (417) -6% (840) (800) -5%
EBITDA 269 249 -8% 399 385 -4%
Net Profit 198 190 -4% 283 284 +0%
Gross Profit Margin 54.3% 56.4% 53.8% 57.9%
SG&A to Sales 37.2% 37.9% 40.3% 41.8%
Net Profit Margin 16.3% 17.0% 13.4% 14.7%
EPS (THB) 0.25 0.24 0.35 0.36
NOTE: MC Group Public Company Limited and its subsidiaries (“MC” or “the Company”) changed in accounting period starting
from 1 January to 31st December to the period from 1st July to 30th June, starting from the period ended 30th June, 2018 onward.
st
During the period, the Federation of Accounting Professions announced a new standard on international financial
reporting 15: Revenue from contracts with customers (IFRS 15) which is effective for annual reporting periods beginning on or after 1
January 2019, with earlier application permitted. The Company and its subsidiaries agreed to adopt the new IFRS 15 Revenue prior to
the effective date, resulting in the adjustment of financial statement in earlier period for comparison and impact toward result in
adoption of such new standard financial reporting. 27Sales Revenue
Annual Sales Revenue Quarterly Sales Revenue
(THB millions) (7.9%)YoY
(8.2%)YoY
NOTE: Adjusted quarterly sale revenue according to TFRS for indication
Sales revenue by channel
2Q FY17-18 (Oct-Dec) 2Q FY18-19 (Oct-Dec)
NOTE: Due to changing fiscal year end from December to June
and starting from period ended 30th June 2018 onward.
Adjusted annual sales revenue according to TFRS for indication.
Others = E-Commerce, International, Mobile, Outside promotion, Factory sales 28Distribution 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.)
NOTE: Adjusted sale revenue for comparison for new accounting period
29Total system growth (TSS) and Same-store sales growth (SSSG)
TSS & SSSG
Quarterly TSS &SSSG (YoY)
Note: Adjusted sale revenue for comparison for new accounting period
Remark: Hypermarkets are not included in the calculation in SSSG. 30Gross profit margin
(THB millions)
(4.3%) YoY
(1.3%) YoY
NOTE: Adjusted gross profit according to TFRS for indication
31SG&A to sales
% SG&A expense to sales SG&A breakdown
-6.2%
-4.8% YoY
YoY
NOTE: Adjusted SG&A expense to sales according to TFRS for indication
32(THB millions)
(3.6%)YoY (7.6%)YoY
NOTE: Adjusted EBITDA according to TFRS for indication
33(THB millions)
0.1%YoY
(4.2%)YoY
NOTE: Adjusted NPAT according to TFRS for indication
34Remained strong with net cash position
Consolidated balance sheet Net debt to equity ratio
(THB millions) FY17-18 Q2 FY18-19
Cash & Short term investments 1,011 1,212
Accounts Receivable 414 483
Inventory 2,179 1,929
Other Assets 1,266 1,221
Total Assets 4,870 4,844
Accounts Payable 210 256
Interest-bearing Liabilities 16 0
Other Liabilities 446 465
Total Liabilities 671 721
Shareholders' Equity 4,199 4,124
35Return on capital and inventory days
ROA ROE
(THB millions) (THB millions)
*Annualized *Annualized
Finished Good Inventory Days Cash Cycle
(Months) (Months)
NOTE: Adjusted sale revenue for comparison for new accounting period 36Share capital information and dividend payment
Stock Information Dividend Information
Announced dividend payment for the
Bloomberg/ Reuters : MC TB/ MC.BK
performance during 1 Jul to 30 Dec 2018 as
Share price (February 15, 2019) : THB 10.10
follows:
52 week range : THB 14.90/ THB 9.85
No. of paid up shares : 800 m DPS : THB 0.35
Par value : THB 0.50
XD : 1 Mar 2019
Market capitalization : THB 8,080 m
Avg. daily turnover (12 mths) : THB 11.0 m Record date : 4 Mar 2018
Free float : 38.3%
Foreign ownership/ Limit : 19.0% /49.0% Payment : 12 Mar 2019
Major shareholder : Ms. Sunee Seripanu (45.93%)
Dividend policy is not less than 50% of net profit
Shareholder Structure
37• www.mcshop.com
• www.mcjeans.com
Thank you • www.upactivelife.com
• www.timedeco.co.th
• mcshopthailand
Investor Relations • mcjeans
• mcladyjeans
MC GROUP Public Company Limited • Timedecowatch
• AromatiqueActive
ir@mcgroupnet.com • U-P Activewear
Tel: +662 117-9999 Ext 1210
www.mcgroupnet.com • mcshop_official
• mcjeans_official
• Timedecowatchclub
• upactivewear
• @mcshop.com
• @mc_jeans
• @upactivewear
www.mcshop.com Line ID: @mc_jeans
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