TABLE OF CONTENT - investor.matahari.co.idinvestor.matahari.co.id/.../files/2019-04/1q19-earnings-presentation_0.pdf · 2 TABLE OF CONTENT 2 Indonesia Macro Overview 4 Q1 2019 Key

1Q1 2019 EARNINGS CALL

April

2019

2

TABLE OF CONTENT

2

Indonesia Macro Overview 4

Q1 2019

Key Financial Highlights 6

Sales and DP/CV Mix 7

Same Store Sales Growth 8

Regional Sales and SSSG 9

Gross Profit and Margin 10

OPEX 11

EBITDA and Margin 12

Net Income and Margin 13

Inventory, Capex and Cash Position 14

Share Buyback and Dividends 15

Strategy and Operational Updates

Store Pipeline 17

Merchandise Initiative – OVS 18

Matahari Rewards and Big Data 19

Matahari.com 20

Summary 21

MACRO-ECONOMIC UPDATES

4

MACRO

4source: World Bank, Trading Economics

3.58%

3.30%

3.61%

3.25%

3.18%

3.40%

3.41%

3.23%

3.12%

3.18%

3.20%

2.88%

3.16%

3.23%

3.13%

2.82%2.57% 2.48%

Oc

t-1

7

No

v-1

7

De

c-1

7

Jan

-18

Feb

-18

Ma

r-1

8

Ap

r-1

8

Ma

y-1

8

Jun

-18

Jul-18

Au

g-1

8

Se

p-1

8

Oc

t-1

8

No

v-1

8

De

c-1

8

Jan

-19

Feb

-19

Ma

r-1

9

4.71%

4.67%4.73%

5.04%

4.92%

5.18%

5.02%

4.94%

5.01%

5.01%

5.06%

5.19%

5.06%

5.27%

5.17%

5.18%

1Q

15

2Q

15

3Q

15

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

3Q

18

4Q

18

126.1

122.5

121.6

122.2125.1

128.1

124.8

121.6

122.4

119.2

122.7

127

125.5 125.1

124.5

Jan

-18

Fe

b-1

8

Ma

r-1

8

Ap

r-1

8

Ma

y-1

8

Ju

n-1

8

Jul-18

Au

g-1

8

Se

p-1

8

Oc

t-1

8

No

v-1

8

De

c-1

8

Jan

-19

Fe

b-1

9

Ma

r-1

9

Inflation

Consumer Confidence Index GDP Growth

.

Q1 2019 FINANCIAL UPDATES

6

KEY FINANCIAL HIGHLIGHTS

6

QUARTER

(in Rp Bn) Q1 ‘18 Q1 ‘19 YoY

Gross Sales 3,368 3,318 -1.5%

SSSG 4.8% -1.7%

Gross Profit 1,218 1,174 -3.6%

EBITDA 398 287 -27.8%

Net Income 247 143 -42.2%

Gross Margin 36.2% 35.4% -80 bps

EBITDA Margin 11.8% 8.7% -310 bps

7

SALES PERFORMANCE

7

Q1 ‘18 Q1 ‘19

DP 38.1% 37.9%

CV 61.9% 62.1%

Sales and DP/CV Mix

3,368 3,318

FY ‘17 FY ’18

DP 37.2% 37.4%

CV 62.8% 62.6%

17,496 17,865

8

SAME STORES SALES GROWTH

8

4.8%

-1.7%

Q1 '18 Q1 '19

-1.2% 3.5%

FY '17 FY '18

SSSG (%)

9

REGIONAL SSSG PERFORMANCE

9

East Java

Sumatra

Bali and East Indonesia

West Java

Greater Jakarta

Central Java

Gross Sales by

Region (%)

Q1 2019

Greater Jakarta 27.3%

Java exc Jkt 33.1%

Outside Java 39.6%

Total Sales 100.0%

Kalimantan

SSSG Greater Jkt

Q1 : -2.0%

SSSG Java

Q1 : -3.3%

SSSG Outside Java

Q1 : -0.3%

10

MERCHANDISE MARGIN

10

1,218 1,174

Q1 '18 Q1 '19

IDR Bn

-80 bps

Gross profit as a % of Gross Sales

36.2% 35.4%

Gross profit and margins

6,203 6,343

FY '17 FY '18

35.5% 0 bps 35.5%

11

OPERATING EXPENSES

11

24.4%

26.7%

Q1 '18 Q1 '19

18.9% 20.2%

Q1 '18 Q1 '19

Note

1. Opex calculated as Adjusted Gross Profit less Adjusted EBITDA

Total Company

Total

Company

Comp store

19.4%

20.0%

FY '17 FY '18

Opex as a % of Gross Sales

12

EBITDA MARGIN DOWN 100 BPS IN Q4 AND 50 BPS IN FY

12

398

287

Q1 '18 Q1 '19

IDR Bn

Notes

EBITDA adjusted for severance pay

2,808 2,768

FY '17 FY '18

11.8% 8.7%16.0% 15.5% -310 bps-50 bps

EBITDA and EBITDA Margins

EBITDA as a % of Gross Sales

1,907

1,097

FY '17 FY '18

13

NET INCOME

13

Net Income as a % of Gross Sales

7.6%

10.9% 6.1%-400 bps

Net income and Margins

IDR Bn

After impairment

Before impairment

247

143

Q1 '18 Q1 '19

1,907 1,867

FY '17 FY '18

7.3% 4.3%

10.9% 10.5%

-300 bps

-40 bps

14

BALANCE SHEET

14

INVENTORY DAYS, CASH POSITION AND OUTSTANDING BANK LOAN BALANCE

(in IDR Bn) End Dec 2018 End Mar 2019

LTM Ave. Inventory Days 133 days 139 days

Cash on Hand Rp 1,184 bn Rp 673 bn

Outstanding Bank Loan Balance Rp 0 Rp 400 bn

CAPEX AND REFURBISHMENTS

(in IDR Bn) FY 2018 FY 2019

Capex Rp716 Bn Rp 600 - 700 bn

Refurbishments 13 15-20

15

SHARE BUY BACK AND DIVIDEND UPDATE

15

• Share buy back

• Additional buy back of shares

• Amount : 3% or 87,537,542 shares

(plus initial buyback will be total 10% max or 291,791,808 shares)

• Period : 18 months or until 25 October 2020

• Total cost : max Rp 1.4 trillion for Total Share Buyback (initial plus additional)

• Price : Rp 13,330 (equivalent to the initial buyback)

• Share retirement/cancellation

• 113,034,800 shares in treasury stock will be withdrawn and will reduce paid up and issued capital

• Dividend

• Rp933.6bn or 50% of net income before impairment (85% of net income) will be paid as

dividends

• Future dividends will be subject to board review annually

STRATEGY AND OPERATIONAL UPDATES

17

STORE PIPELINE

17

No Geographic area

Forecast

FY2018 FY 2019E Future Pipeline 2020 and onwards

# of stores # of stores # of stores % mix

1 Jabodetabek (Greater Jakarta) 41 0 7 19.0%

2 Java (Exc Greater Jakarta) 54 2-3 15 40.5%

3 Outside Java 64 2-3 15 40.5%

Total 159 4-6 37 100.0%

FY 2019 store opening plan:

o Large format stores

o Forecasting 4-6 new stores

o 1 opened in April (Bandung)

o Anticipating to close 2 stores

o Stand-alone mono brand store

o 1 opened in April (Surabaya, East

Java)

No. of stores

Retail Area (Sqm)

As of Dec 2018 159 992,105

Closures/net expansion/opening 0

As of Mar 2019 159 992,105

Large format store opening 1 5,200

Specialty store opening (361°) 1 117

As of Apr 2019 161 997,422

18

MERCHANDISING INITIATIVE UPDATE - OVS

18

• OVS is an Italian leading fashion retailer for

woman, man and kid segments

• Matahari is the exclusive distributor of OVS

products in Indonesia

• Product roll-out to existing large format Matahari stores:

• April 29: 3 stores (Karawaci, St Moritz, Atrium)

• May: 27 stores

• 2H 2019: 10 stores

• Plus additional stand-alone stores

19

MATAHARI REWARDS AND BIG DATA ANALYTICS

19

42.8%

49.8%

56.7%

61.4%

FY '16 FY '17 FY '18 YTD Mar '19

3.3

3.7

5.5

7.1

6.0

7.4

End

Dec '15

End

Dec '16

End

Dec '17

End

Dec '18

End

Mar '18

End

Mar '19

Growing member sales contributionNo. of active members (in millions of people)

20

MATAHARI.COM

20

Greater

Jakarta,

36.2%

Java excl.

G. Jkt,

53.9%

Outside

Java, 9.9%

Sales by region (Q1 ‘19)

Sales by category (Q1 ’19)

32.5%

20.9%

17.3%

11.5%

7.9%

2.8%

7.1%

34.1%

20.5%

27.9%

10.5%

0.2%2.5%

4.5%

Men/Youth boy Shoes Ladies/Youth girl Children Cosmetics Bags/Acc. Others

Large format Matahari.com

• Mataharimall.com app was phased out

and replaced with Matahari.com app

• On track to double online sales in 2019

21

SUMMARY

21

o Same store sales growth was -1.7% in Q1 2019 with overall sales growth down 1.5%

o YTD April performance, including the Easter Holiday has improved and is now slightly

positive

o The stores where exisiting initiatives are fully rolled out and space allocation optimized by

category are performing well above the chain average YTD

o Matahari.com successfully launched its new mobile app, and is growing rapidly. Our goal

is to be the #1 Fashion portal in Indonesia (currently #4)

o Omni-channel initiatives are on track

Thank [email protected]

23

NOTES

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24

NOTES

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