This presentation contains forward-looking statements, which are based on current expectations and projections about future events, and include all

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Transcription:

This presentation contains forward-looking statements, which are based on current expectations and projections about future events, and include all statements other than statements of historical facts, including, without limitation, any statements preceded by, followed by or that include the words targets, believes, expects, aims, intends, will, may, anticipates, would, plans, could, should, predicts, projects, estimates, foresees or similar expressions or the negative thereof, as well as predictions, projections and forecasts of the economy or economic trends of the markets, which are not necessarily indicative of the future or likely performance of the Company, and projections and forecasts of their performance, which are not guaranteed. Forward-looking statements include statements about targeted selling space expansion, store openings, new store payback periods and margins and inventory days, which are subject to uncertainties regarding general economic conditions in Indonesia and globally, trends in our industry, our financial and other resources, our relationships with the brands we sell, and other factors. Such forward-looking statements, as well as those included in any other material discussed at the presentation, concern future circumstances and results and involve known and unknown risks, uncertainties and other important factors beyond the Company s control that could cause their actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions and estimates regarding the Company s present and future business strategies, including expansion plans and the environment in which they will operate in the future. Forward-looking statements are not guarantees of future performance. These forward-looking statements speak only as at the date of this presentation, the Company does not intend to supplement, amend, update or revise any forward-looking statements as a result of new information or to reflect future events or circumstances, except as required under applicable laws. These materials have not been independently verified and will not be updated. These materials, including but not limited to forward-looking statements speak only as at the date of this presentation and is not intended to give any assurances as to future results. The Company expressly disclaims any obligation or undertaking to supplement, amend, update or revise any materials, including any financial data or forward-looking statements, as a result of new information or to reflect future events or circumstances, except as required under applicable laws. Given the abovementioned risks, uncertainties and assumptions, you should not place undue reliance on these forecast and projections. Past performance is not necessarily indicative of future performance. This presentation contains certain non-gaap measures, including EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted net income and Adjusted net income margin, that are not audited, not included in the Company's audited financial statements and not presented in accordance with Indonesian Financial Accounting Standards. The measures have been used by management as a supplemental measure of the Company s performance. Although these measures are either contained in or fully reconcilable to line items on the Company's financial statements and/or based on management accounts, they may not be equivalent to similarly named measures used by other companies, and should not be considered as a measure comparable to income statement items for the year in the financial statements. This presentation also contains certain statistical data and analyses (the Statistical Information ) which have been prepared in reliance upon information furnished by the Company and/or third party sources for which the Company has obtained the necessary consents for use. Numerous assumptions were used in preparing the Statistical Information, which assumptions may or may not appear herein. As such, no assurance can be given as to the Statistical Information s accuracy, appropriateness or completeness in any particular context, nor as to whether the Statistical Information and/or the assumptions upon which they are based reflect present market conditions or future market performance. Moreover, any information from third party sources contained in these materials may not be used or relied upon by any other party, or for any other purpose, and may not, directly or indirectly, be reproduced, disseminated or quoted without the prior written consent of such third party. 2c

MAP Active by the numbers #1 sports retailer in Indonesia with dominant market share of 63% 1 in 2017 Operates 991 stores in 70 cities as of June 30, 2018 70+% of sales generated through our 10+ proprietary multi-brand chains 150+ brands, of which 40+ are exclusive brands c.us$380m sales in 2017 2 13.6% SSSG 3 and ~23% YOY revenue growth in 1H18 ~16% Adjusted EBITDA margin and ~10% Adjusted net margin in 1H18 ~47% YOY Adj. EBITDA growth and ~43% YOY Adj. net income growth in 1H18 1. International Sportswear-focused Sports Goods Store Retailers. Source: Market research 2. Based on USD IDR exchange rate of 13,380 for average of 2017 3. SSSG is the percentage change in revenue over the corresponding prior period generated by stores included in the comparison. A store is included in the prior period for all months during which it has been opened for 12 months and is included in the corresponding portion of the second period 3

Unrivalled nationwide retail network Presence across 70 cities, 991 stores and 180,378 sqm of selling space 1 and best positioned to capture significant market 2 growth of 12% Sumatra 10% of sales Sulawesi 4% of sales Kalimantan 3% of sales Java (Jakarta) 76% (36%) of sales Bali 5% of sales Others 2% of sales 1. As of Jun 2018, inclusive of store-in-store 2. International Sportswear-focused Sports Goods Store Retailers, according to market research 4

Growing leisure and kids segments Net revenue (IDRbn) Multi-brand banners 1 : Ogaan, Payless +22.3% 611 747 +19.6% Leisure Broad range of leisure footwear, accessories and apparel from well-known international and specialty brands 461 371 444 Multi-tier, multi-format strategy 10m to Dec 2015 2016 2017 1H17 1H18 Net revenue (IDRbn) Multi-brand banner: Kidz Station +1.3% Kids Diversified range of kids products including toys, clothing, footwear and early-education tools Multi-format approach via department stores and specialty retail contributing to full-family offering 400 521 527 +21.7% 251 306 10m to Dec 2015 2016 2017 1H17 1H18 1. Our leisure products are also sold in other sports-focused multi-brand chains 5

Future Growth Strategies 1 Profitable store expansion 2 Continue operational excellence 3 Focus on top brands Target 10% CAGR increase in selling area over next two years Maintain strong SSSG and further improve margins Focus on ROI and Productivity 4 Execute digital strategy 5 Explore geographic expansion 6 Strategic acquisitions and investments Enhance integrated digital retail platform MAP Active's website and Fitness Walking app (expected 4Q2018 launch) Expansion opportunities across South East Asia Opportunistic and complementary 6

Future Growth Strategies Development plans for online retail E-Commerce platform & Fitness APP Brand sites Standalone website expected to be launched in 4Q2018, that serves as an aggregator of all store brands and brand principals Mobile application that promotes walking as an entry form of exercise, while driving traffic to our website and collecting data Mono-brand sites that are developed and managed by MAP Active, to be launched in 4Q2018 7

Future Growth Strategies High performance badminton brand designed by Indonesia s first Olympic Champions, Alan Budikusuma & Susi Susanti THEIR SPELLBINDING VICTORIES AT THE 1992 BARCELONA OLYMPICS SHOWED A NATION THAT ANYTHING WAS POSSIBLE Acquired in Dec 2017 Goal to be the #1 value sport brand in ASEAN New high performance badminton technology launch Q4 2018 Expansion to the fitness walking & general sports categories in 2019 8

Key revenue drivers Selling space evolution (sqm) Same-store sales growth (%) 2 (1.3%) 8.5% 159,290 157,217 170,523 180,378 13.6% 11.1% 10m to 2015 2016 2017 1H18 Selling space Selling space growth Inventory days 1 8.3% LT Target of 120 days 201 168 144 2016 2017 1H18 2015 2016 2017 1H18 1. Inventory Days = Average Inventories / Cost of Goods Sold * Days, 2016/17 using 365 days, 1H18 using 180 days 2. 12.0% same-store sales growth in 1H17 9

Inventory aging Inventory as of Dec 2015 Inventory as of Jun 2018 16% 39% 61% 84% Aged over six months Aged less than six months 1. Inventory aged over six months 10

Improvement in working capital Cash conversion cycle (days) 1 Inventory days 2 180 201 168 144 151 128 2016 2017 1H18 Trade receivables days 3 8 9 9 2016 2017 1H18 Trade payables days 4 29 26 26 2016 2017 1H18 2016 2017 1H18 1. Cash Conversion Cycle = Inventory Days + Receivable Days Payable Days 2. Inventory Days = Average Inventories / Cost of Goods Sold * Days, 2016/17 using 365 days, 1H18 using 180 days 3. Receivable Days = Average Trade Receivables / Revenue * Days, 2016/17 using 365 days, 1H18 using 180 days. Calculation of trade receivables include third parties only 4. Payable Days = Average Trade Payables / Cost of Goods Sold * Days, 2016/17 using 365 days, 1H18 using 180 days. Calculation of trade payables include third parties only 11

Free Cash Flows Highly cash generative business with promising momentum in 1H18 Free cash flow 1 (IDRbn) 10m to Dec 2015 2016 2017 1H18 Adjusted EBITDA 312 573 742 464 Capital expenditure 2 (79) (86) (165) (101) Change in working capital nm 246 (37) 55 Tax paid (34) (170) (166) (89) Free cash flow nm 564 375 329 1. Free cash flow = Adjusted EBITDA less capex (based on cash flow additions to PP&E) less net cash outflow from change in working capital and less tax paid cash outflow (net of income tax restitution received) 2. Based on Additions to PP&E 12

Non-GAAP reconciliation of Adj. EBITDA and Adj. net income Reconciliation of adjusted EBITDA to net income (IDRbn) 2015 2016 2017 1H17 1H18 Net income for the year 636 257 293 85 32 Income tax expense 37 115 151 58 114 Finance cost 57 100 109 52 292 Interest income (2) (4) (5) (4) (4) Depreciation and amortization 83 113 127 62 72 Other gains and losses net (4) (7) 32 28 (19) Day 1 gain (508) 0 0 0 (28) Gain (loss) on foreign exchange 8 (8) (3) (0) 3 Loss on derivative financial instruments 1 4 1 (0) (1) Loss on disposal/sales of PPE 3 1 2 1 1 Gain (loss) on foreign exchange 8 (8) (3) (0) 3 Provision for decline in value of inventories 0 4 37 35 2 Adjusted EBITDA 312 573 742 316 464 Commentary Day 1 gain in fiscal year 2015 is the unamortized discount representing the difference between the nominal value and fair value of the IDR1.5tn bond assumed by MAA from MAPI at inception Reconciliation of adjusted net income to net income (IDRbn) 2015 2016 2017 1H17 1H18 Net income for the period 636 257 293 85 32 Day 1 gain (508) 0 0 0 (28) Amortized discount on non-interest bearing Bond 49 90 97 47 289 Provision for decline in value of inventories 0 4 37 35 2 Other gains and losses net (4) (7) 32 28 (19) Adjusted net income 174 344 458 195 278 13

Indonesia's #1 sports retail marketer #1 player in Indonesia's International Sportswear Market 1 63.4% Largest retail network of 991 stores across 70 cities 2 MAP Active Dominant player with no close competitor 4.3% #2 player Comprehensive coverage through a multi-tier, multi-format platform Powerful brand management capabilities across product brands and store banners Strong understanding of the Indonesian consumer through 20+ years of experience Best-in-class operational expertise and dominant knowhow in Indonesian sports retail marketing SPORTS (74.2% of 1H2018 net revenue) LEISURE (15.3% of 1H2018 net revenue) KIDS (10.5% of 1H2018 net revenue) Source: Market research 1. International Sportswear-focused Sports Goods Store Retailers 2. As of Jun 2018, inclusive of store-in-store 14

Future Growth Strategies Target to increase selling area at a 10% CAGR over the next two years with a focus on profitable growth Selling space evolution ('000 sqm) 1 CAGR: +10% Target 10% CAGR net increase in selling space over next two years or 100 150 new stores per year 159 157 171 Rolling pipeline of ~200 potential store locations for the next 12-months, in new and existing shopping centres, retail malls and department stores, which are all expected to grow going forward Significant potential in Indonesia's underpenetrated market, and to outperform the international sportswear retail segment 180 (as of Jun 2018) Growth led by new concept and brand launches, supported by logistics network and relationship with brand principals 2015 2016 2017 2018F 2019F 2020F Strong focus on profitability general new store criteria Target payback period of 12-24 months Target store-level operating margin of at least 15% 1. For illustrative purposes only 15

Planet Sports and Sports Station 2017 net revenue: ~IDR 571bn (11.2% of total) 2017 net revenue: ~IDR 1,906bn (37.5% of total) 16