Earnings Slides Q1 2015
Matahari Department Store
Q1 2015 Results Update
Earnings call: April 29th, 2015
Indonesia’s Most Preferred Department Store
1
Key Highlights Q1 2015
Financial Update
Summary
2
Key Highlights Q1 2015
3
Key Highlights Q1 2015
• Total gross sales increased by 7.6% over LY to Rp2,880.6 bn
• Delivered a 5.4% comp store sales growth
• Merchandise gross margin increased to 34.9% of gross sales, up 60 bps over LY
• EBITDA declined 2.6% over LY to Rp326.1 bn, at 11.3% of gross sales
• Reported net income increased by 50.3% from Rp123.1 bn in Q1 2014, compared
to Rp185 bn in Q1 2015
• Comparable net income increased by 22.3% from Rp151.3 bn in Q1 2014,
compared to Rp185 bn in Q1 2015*
*Net income before non-recurring expense related to prior years of Rp28.1bn
4
00
Financial Snapshot Q1 2015
Reported Net Income
EBITDA
Gross Sales
IDR Bn
IDR Bn
IDR Bn
00
185
200
00
150
00
100
00
00
6.4%
4.6%
50
2,677
2,881
Q1 '14
00
401
00
Q1 '15
Comparable Net Income
335
326
12.5%
11.3%
301
00
201
00
200
185
151
150
101
00
-
123
Q1 '14
Q1 '15
1
6.4%
100
50
Q1 '14
Q1 '15
5.6%
-
Q1 '14
Q1 '15
Net Income Margin
5
MDS’s exclusive brands continue to deliver strong performance
DP accounted for 34.9% of gross sales in Q1 2015, as compared to 34.4% in Q1 2014
% of Gross Sales
FY 2014
Q1 2015
Q1 2014
DP, 34.0%
DP, 34.9%
DP, 34.4%
CV, 65.6%
CV, 66.0%
CV, 65.1%
6
Retail store network as of March 2015
MDS Store Overview
No. of Stores
Kalimantan, Bali and East
Indonesia
31 stores (17 cities)
(1 new store)
Sumatra
22 stores (11 cities)
As of 31 Dec 2014
131
Additions
1
Closures
0
Total as of 31 Mar 2015
132
Greater Jakarta
36 stores (11 cities)
West Java
10 stores (7 cities)
Central Java
17 stores (8 cities)
East Java
16 stores (9 cities)
7
Opened 1 new store in Q1 2015; Forecasting 12-14 new stores in 2015
o In 2015, we are forecasting 12-14 new store openings
o 1 new store opened in Q1 2015
o MDS Singkawang – Kalimantan
o 2 new stores opened in April 2015
o MDS Plaza Buton – Bau Bau, South East Sulawesi
o MDS Plaza Kupang – East Nusa Tenggara
o Forecasting 9 new stores opening prior to Lebaran, additional 2 stores will be in Jakarta
No
Geographic area
As at 31 Dec 2014
As at 31 Mar 2015
Balance in 2015
Future Pipeline 2016 onwards
# of stores
% mix
# of stores
% mix
# of stores
# of stores
% mix
1
Jabodetabek (Greater Jakarta)
36
27.5%
36
27.3%
3
14
21.2%
2
Java (Exc Greater Jakarta)
43
32.8%
43
32.6%
3-4
18
27.3%
3
Outside Java
52
39.7%
53
40.1%
5-6
34
51.5%
131
100.0%
132
100.0%
11-13
66
100.0%
Total
8
Financial Update
9
9
Overall Sales growth slowed in the quarter
IDR Bn
16,000
14,000
14,421
12,735
5,500
12,000
5,000
4,500
10,000
4,000
8,000
3,500
3,000
6,000
2,881
2,500
2,000
4,000
1,500
1,000
2,000
-
2,677
500
-
FY'13
FY'14
Q1 '14
Q1 '15
10
Productivity improved, but lower traffic led to single digit SSSG
SSSG %
12.1%
10.7%
9.3%
5.4%
FY13
FY14
Q1'14
Q1'15
11
Merchandise margins improved 60 bps over LY
Gross profit and margins
IDR Bn
6,001
5,029
5,001
4,348
4,001
3,001
1,201
1,001
2,001
919
1,006
801
601
34.9%
1,001
401
34.3%
34.9%
Q1'14
Q1'15
34.1%
201
1
1
FY13
FY14
Gross profit as a % of Gross Sales
12
Operating leverage was lower on weaker sales
Opex(1) as a % of Gross Sales
Comp store
Comp store
14.0%
14.0%
FY13
FY14
Total Company
17.5%
18.5%
Q1 '14
Q1 '15
Total Company
21.8%
17.7%
18.2%
FY13
FY14
Note
1. Opex calculated as Adjusted Gross Profit less Adjusted EBITDA
Q1 '14
23.6%
Q1 '15
13
EBITDA decreased by 2.6% in Q1 2015
EBITDA and Margins
IDR Bn
3,001
2,411
2,501
2,096
2,001
1,501
401
16.7%
1,001
16.5%
335
326
12.5%
11.3%
Q1 '14
Q1 '15
301
201
501
101
1
Notes
EBITDA adjusted for severance pay
FY13
1
FY14
EBITDA as a % of Gross Sales
14
Q1 2015 comparable net income increased by 22.3% over 2014
Reported Net Income
Reported Net Income
IDR Bn
IDR Bn
1,600
1,400
1,200
1,000
800
600
400
200
-
1,419
1,150
185
200
150
9.8%
123
9.0%
100
6.4%
4.6%
50
-
FY13
Q1 '14
FY14
Comparable Net Income
Q1 '15
Comparable Net Income
IDR Bn
IDR Bn
1,600
1,400
1,200
1,507
1,150
1,000
800
600
200
10.5%
185
151
150
6.4%
100
9.0%
50
5.6%
-
400
Q1 '14
200
FY13
FY14
Q1 '15
Net Income as a % of Gross Sales
15
Lower debt in Q1 drove interest expense savings against LY
Total Gross Debt (in Rp Billion)
Commentary
Lower interest costs in Q1 generated
1,669
1,569
1,650
Rp33.4 Bn of savings compared to Q1
2014
1,280
Bank debt is forecast to be paid off by
the end of 2015
2013
1Q14
1H14
9M14
700
700
FY14
1Q15
Notes
1. Effective interest rate is computed by dividing interest expense (excluding amortization of upfront fees) during the relevant period by beginning gross debt of the relevant period
2. Total debt comprises of the bank loan
16
Sales growth and SSSG performance across geographic regions
Stores as at
March 2015
Store Mix
% to Total
Sales
(IDR Bn)
Sales
% Growth
SSSG%
Q1 ‘2015
Greater Jakarta
36
27.3%
856
7.2%
5.2%
Java exclude Greater Jakarta
43
32.6%
924
10.5%
10.5%
Outside Java
53
40.1%
1,101
7.1%
1.3%
Total
132
100.0%
2,881
7.6%
5.4%
Geographic Area
17
Financial Summary
Key Profit & Loss Items
IDR Bn
FY2013
FY 2014
Q1 2014
Q1 2015
12,735.0
14,421.4
2,677.4
2,880.6
SSSG
12.1%
10.7%
9.3%
5.4%
Growth
17.2%
13.2%
12.9%
7.6%
6,754.3
7,925.5
1,479.7
1,613.2
Growth
20.2%
17.3%
17.7%
9.0%
Gross Profit
4,347.8
5,028.6
919.4
1,005.6
34.1%
34.9%
34.3%
34.9%
2,912.4
3,352.7
550.5
566.7
22.9%
23.2%
20.6%
19.7%
2,095.8
2,411.1
334.8
326.1
16.5%
16.7%
12.5%
11.3%
1,523.6
1,850.5
181.5
240.6
12.0%
12.8%
6.8%
8.4%
1,150.2
1,419.1
123.1
185.0
Margin
9.0%
9.8%
4.6%
6.4%
growth
49.2%
23.4%
49.7%
50.3%
Gross Sales
Net Revenue
Margin
EBITDAR
Margin
EBITDA
Margin
Income before tax
Margin
Reported net Income
18
Summary
19
Summary
Despite the macro-economic challenges in Q1, the company was able to
drive positive SSSG and deliver a 22.3% increase in comparable net
income
Despite the weaker sales environment, the Company delivered significant
improvements in both Direct Purchase and Consignment margins
Although Q1 saw a reduction in expense leverage due to lower sales,
actual expenses came in lower than planned
A robust store pipeline for 2016, and beyond, indicates an opportunity for
an acceleration in store openings going forward
20
End of Presentation
21
Q1 2015 Results Update
Earnings call: April 29th, 2015
Indonesia’s Most Preferred Department Store
1
Key Highlights Q1 2015
Financial Update
Summary
2
Key Highlights Q1 2015
3
Key Highlights Q1 2015
• Total gross sales increased by 7.6% over LY to Rp2,880.6 bn
• Delivered a 5.4% comp store sales growth
• Merchandise gross margin increased to 34.9% of gross sales, up 60 bps over LY
• EBITDA declined 2.6% over LY to Rp326.1 bn, at 11.3% of gross sales
• Reported net income increased by 50.3% from Rp123.1 bn in Q1 2014, compared
to Rp185 bn in Q1 2015
• Comparable net income increased by 22.3% from Rp151.3 bn in Q1 2014,
compared to Rp185 bn in Q1 2015*
*Net income before non-recurring expense related to prior years of Rp28.1bn
4
00
Financial Snapshot Q1 2015
Reported Net Income
EBITDA
Gross Sales
IDR Bn
IDR Bn
IDR Bn
00
185
200
00
150
00
100
00
00
6.4%
4.6%
50
2,677
2,881
Q1 '14
00
401
00
Q1 '15
Comparable Net Income
335
326
12.5%
11.3%
301
00
201
00
200
185
151
150
101
00
-
123
Q1 '14
Q1 '15
1
6.4%
100
50
Q1 '14
Q1 '15
5.6%
-
Q1 '14
Q1 '15
Net Income Margin
5
MDS’s exclusive brands continue to deliver strong performance
DP accounted for 34.9% of gross sales in Q1 2015, as compared to 34.4% in Q1 2014
% of Gross Sales
FY 2014
Q1 2015
Q1 2014
DP, 34.0%
DP, 34.9%
DP, 34.4%
CV, 65.6%
CV, 66.0%
CV, 65.1%
6
Retail store network as of March 2015
MDS Store Overview
No. of Stores
Kalimantan, Bali and East
Indonesia
31 stores (17 cities)
(1 new store)
Sumatra
22 stores (11 cities)
As of 31 Dec 2014
131
Additions
1
Closures
0
Total as of 31 Mar 2015
132
Greater Jakarta
36 stores (11 cities)
West Java
10 stores (7 cities)
Central Java
17 stores (8 cities)
East Java
16 stores (9 cities)
7
Opened 1 new store in Q1 2015; Forecasting 12-14 new stores in 2015
o In 2015, we are forecasting 12-14 new store openings
o 1 new store opened in Q1 2015
o MDS Singkawang – Kalimantan
o 2 new stores opened in April 2015
o MDS Plaza Buton – Bau Bau, South East Sulawesi
o MDS Plaza Kupang – East Nusa Tenggara
o Forecasting 9 new stores opening prior to Lebaran, additional 2 stores will be in Jakarta
No
Geographic area
As at 31 Dec 2014
As at 31 Mar 2015
Balance in 2015
Future Pipeline 2016 onwards
# of stores
% mix
# of stores
% mix
# of stores
# of stores
% mix
1
Jabodetabek (Greater Jakarta)
36
27.5%
36
27.3%
3
14
21.2%
2
Java (Exc Greater Jakarta)
43
32.8%
43
32.6%
3-4
18
27.3%
3
Outside Java
52
39.7%
53
40.1%
5-6
34
51.5%
131
100.0%
132
100.0%
11-13
66
100.0%
Total
8
Financial Update
9
9
Overall Sales growth slowed in the quarter
IDR Bn
16,000
14,000
14,421
12,735
5,500
12,000
5,000
4,500
10,000
4,000
8,000
3,500
3,000
6,000
2,881
2,500
2,000
4,000
1,500
1,000
2,000
-
2,677
500
-
FY'13
FY'14
Q1 '14
Q1 '15
10
Productivity improved, but lower traffic led to single digit SSSG
SSSG %
12.1%
10.7%
9.3%
5.4%
FY13
FY14
Q1'14
Q1'15
11
Merchandise margins improved 60 bps over LY
Gross profit and margins
IDR Bn
6,001
5,029
5,001
4,348
4,001
3,001
1,201
1,001
2,001
919
1,006
801
601
34.9%
1,001
401
34.3%
34.9%
Q1'14
Q1'15
34.1%
201
1
1
FY13
FY14
Gross profit as a % of Gross Sales
12
Operating leverage was lower on weaker sales
Opex(1) as a % of Gross Sales
Comp store
Comp store
14.0%
14.0%
FY13
FY14
Total Company
17.5%
18.5%
Q1 '14
Q1 '15
Total Company
21.8%
17.7%
18.2%
FY13
FY14
Note
1. Opex calculated as Adjusted Gross Profit less Adjusted EBITDA
Q1 '14
23.6%
Q1 '15
13
EBITDA decreased by 2.6% in Q1 2015
EBITDA and Margins
IDR Bn
3,001
2,411
2,501
2,096
2,001
1,501
401
16.7%
1,001
16.5%
335
326
12.5%
11.3%
Q1 '14
Q1 '15
301
201
501
101
1
Notes
EBITDA adjusted for severance pay
FY13
1
FY14
EBITDA as a % of Gross Sales
14
Q1 2015 comparable net income increased by 22.3% over 2014
Reported Net Income
Reported Net Income
IDR Bn
IDR Bn
1,600
1,400
1,200
1,000
800
600
400
200
-
1,419
1,150
185
200
150
9.8%
123
9.0%
100
6.4%
4.6%
50
-
FY13
Q1 '14
FY14
Comparable Net Income
Q1 '15
Comparable Net Income
IDR Bn
IDR Bn
1,600
1,400
1,200
1,507
1,150
1,000
800
600
200
10.5%
185
151
150
6.4%
100
9.0%
50
5.6%
-
400
Q1 '14
200
FY13
FY14
Q1 '15
Net Income as a % of Gross Sales
15
Lower debt in Q1 drove interest expense savings against LY
Total Gross Debt (in Rp Billion)
Commentary
Lower interest costs in Q1 generated
1,669
1,569
1,650
Rp33.4 Bn of savings compared to Q1
2014
1,280
Bank debt is forecast to be paid off by
the end of 2015
2013
1Q14
1H14
9M14
700
700
FY14
1Q15
Notes
1. Effective interest rate is computed by dividing interest expense (excluding amortization of upfront fees) during the relevant period by beginning gross debt of the relevant period
2. Total debt comprises of the bank loan
16
Sales growth and SSSG performance across geographic regions
Stores as at
March 2015
Store Mix
% to Total
Sales
(IDR Bn)
Sales
% Growth
SSSG%
Q1 ‘2015
Greater Jakarta
36
27.3%
856
7.2%
5.2%
Java exclude Greater Jakarta
43
32.6%
924
10.5%
10.5%
Outside Java
53
40.1%
1,101
7.1%
1.3%
Total
132
100.0%
2,881
7.6%
5.4%
Geographic Area
17
Financial Summary
Key Profit & Loss Items
IDR Bn
FY2013
FY 2014
Q1 2014
Q1 2015
12,735.0
14,421.4
2,677.4
2,880.6
SSSG
12.1%
10.7%
9.3%
5.4%
Growth
17.2%
13.2%
12.9%
7.6%
6,754.3
7,925.5
1,479.7
1,613.2
Growth
20.2%
17.3%
17.7%
9.0%
Gross Profit
4,347.8
5,028.6
919.4
1,005.6
34.1%
34.9%
34.3%
34.9%
2,912.4
3,352.7
550.5
566.7
22.9%
23.2%
20.6%
19.7%
2,095.8
2,411.1
334.8
326.1
16.5%
16.7%
12.5%
11.3%
1,523.6
1,850.5
181.5
240.6
12.0%
12.8%
6.8%
8.4%
1,150.2
1,419.1
123.1
185.0
Margin
9.0%
9.8%
4.6%
6.4%
growth
49.2%
23.4%
49.7%
50.3%
Gross Sales
Net Revenue
Margin
EBITDAR
Margin
EBITDA
Margin
Income before tax
Margin
Reported net Income
18
Summary
19
Summary
Despite the macro-economic challenges in Q1, the company was able to
drive positive SSSG and deliver a 22.3% increase in comparable net
income
Despite the weaker sales environment, the Company delivered significant
improvements in both Direct Purchase and Consignment margins
Although Q1 saw a reduction in expense leverage due to lower sales,
actual expenses came in lower than planned
A robust store pipeline for 2016, and beyond, indicates an opportunity for
an acceleration in store openings going forward
20
End of Presentation
21