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20230727_LPPF_Laporan Informasi dan Fakta Material_31354771_lamp3.pdf
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LPPF.IJ / LPPF.JK 1H 2023 Earnings Call 28 July 2023
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Agenda
No Topic Page Presenter
1 Executive Summary 3 Terry O’Connor
2 Lebaran Trading 4 Terry O’Connor
3 1H 2023 Financial Performance Updates 5–7 Niraj Jain
4 Strategy Updates 8 – 25 Terry O’Connor
5 Closing Remarks 26 – 27 Terry O’Connor
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Executive Summary
Softer Lebaran than expected; strategic initiatives advancing; merchandise acceleration lies ahead
1H23 performance :
o Sales at 1H23 reached IDR 7.4 Trn, or grew by 3.2 %, with flat SSSG as inflation took its toll. (Please note that 2Q23 had less Lebaran
trading days vs. 2Q22).
Stock Code:
o Lebaran started well, however last 14 days were challenging caused by THR payout delay, earlier holidays, and customers focusing
more on an extended mudik. Final week trajectory vs first 5 weeks trajectory resulted in a miss of IDR 287 Bn in our expected outcomes. LPPF
o Gross Margin 1H23 was 35.3 %, lower than 36.0% in 1H22, reflecting value passed back to customers and addressing of any inventory
overhang risk.
o EBITDA for the period was IDR 1,075 Bn vs 1,303 Bn LY. Net Profit was IDR 684 Bn, reflecting structural short-term cost pressure and Shares outstanding*
investment in labor and marketing reflecting higher seasonal growth expectations than materialized. (2024 learnings)
2,259 Mn
Strategic moves well advanced for year-end achievement, whilst tapping near-term opportunities:
o Suko opened in 20 stores, with strong initial performance leading to management pulling forward 12 further openings in 2023.
o House of Characters grouping all licensed partnerships for a compelling childrenswear and young adults collection Major Shareholder*
o Store expansion on track to open a minimum of 12 new stores. In aggregate, the new stores performed as planned, (% after cancellation)
performing above the hurdle rate
Auric Digital Retail 42.5%
o 8.2 Mn Active members, contributing to 78% of total sales surpassing pre-pandemic levels.
o Blibli launched in Jul’23; Tokopedia reboot in Aug’23; 2-3 new channels slated by year-end
o ETP, POS solution rolled out in 59 stores, with national completion in Q4 23, bringing greater merchandise insights, personalized #Stores at the end of 1H23
promotion capabilities and the digitization of our CV community and follow on omnichannel momentum
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o Work in progress for merchandise overhaul with tremendous potential to enhance our private label impact, taking our brand
portfolio to the next level and democratizing the world’s best ideas in merchandise concepts for a unique Matahari experience
Maximizing shareholder value
*latest position by 30 Jun’23
o Record dividend level for 2022 distributed within Q2; commitment to a minimum of 50% payout remains.
excluding treasury shares
o Net Debt position expected to improve across H2 for a healthy year-end position
o EBITDA guidance is around IDR 1.8-2.0 Trn vs. last year IDR 1.96 Trn.
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Lebaran Journey
2023 Lebaran Opportunity in Lebaran 2024
Well Prepared : Inventory, staff, Marketing and Bazaars Election timing followed by Easter timing and favourable THR and
• Wide stock ranges, freshness and quantity. payday timings.
• Peak season staff – More & earlier.
• Marketing: start early, digital content, KOL, Mudik with Matahari, Maturity of growth Initiatives.
In-store lucky draw.
• Aggressive bazaars location, increase 63% from 347 to 564 Rebalancing and multiskilling staff.
• New attractive Incentive scheme.
Reshaping Marketing cost to be lower cost, broader reach and
Good Start for Lebaran Trading for the 1st 30 days out of 44 days of segmented social media strategy.
Lebaran (day 44 to day 15 before Lebaran) +9.4% vs 2022
Challenging last 14 days of Lebaran Marketing focused on Digital content and CRM with less expensive
• THR payout delayed and instalment and partial payout heavy production.
of THR permitted.
• Additional Lebaran holidays pull forward to 19-25
from 21-26 Apr enabling early Mudik.
• Customers focus more on Mudik and Family gathering instead of
shopping.
• Final week trajectory vs first 5 weeks trajectory resulted in a miss
of IDR 287 Bn in our expected outcomes.
Softer Macro business reported
• Most businesses who serve customers in middle and lower
income group faced similar challenge.
• Ecommerce Business including marketplace also had softer
business, driven by increase in take rate.
• Consumer indebtedness on the rise.
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1H 2023
Financial Performance
Updates
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1st Half 2023 Financial Highlights
1st Half sales grew 3.2% with flat SSSG as inflation took its toll. EBITDA at 1.1Tn
Q2 1stQ2
Half Comparable 1st 1st
HalfHalf Q2
Comparable 1st Half
(in IDR Bn) (in IDR Bn)
2023 2022 Var Var % 2023 2022 Var Var % 2022
2023 2022 Var
Var %
Var Var
2023% 2022
2022 Var Var %
4,647 4,756
Gross Sales (110) -2.3% 7,392
4,647 7,160
4,756 233
(110) Gross
3.2% Sales
-2.3% 7,160
7,392 233
7,160 3.2%
233 4,647
3.2% 4,756
7,160 (110)
233 -2.3%
3.2%
-5.9%
SSSG% -0.4%
-5.9% SSSG% -0.4% -5.9%
1,634
Gross Profit1,722 (88) -5.1% 2,606
1,634 2,575
1,722 31
(88) Gross
1.2% Profit
-5.1% 2,537
2,606 70
2,575 2.7%
31 1,634
1.2% 1,722
2,537 (88)
70 -5.1%
2.7%
35.2%
GM% 36.2% 35.3%
35.2% 36.0%
36.2% GM% 35.4%
35.3% 36.0% 35.2% 36.2%
35.4%
(793)
OPEX (670) (123) 18.4% (1,532)
(793) (1,272)
(670) (260)
(123) OPEX
20.4%
18.4% (1,395)
(1,532) (137)
(1,272) 9.8%
(260) (793)
20.4% (670)
(1,395) (123)
(137) 18.4%
9.8%
840
EBITDA 1,052 (212) -20.1% 1,075
840 1,303
1,052 (212) EBITDA
(229) -20.1%
-17.6% 1,142
1,075 (67) -5.9%
1,303 840
(229) -17.6% 1,052
1,142 (212)
(67) -20.1%
-5.9%
18.1% 22.1%
EBITDA Margin% 14.5%
18.1% 18.2%
22.1% EBITDA Margin%
15.9%
14.5% 18.2% 18.1% 22.1%
15.9%
Comparable: excluding Covid rental concessions and participations/discounts.
• 2Q23 had less 12 Lebaran trading days vs 2Q22
• 44 days of Lebaran SSSG was flat
• EBITDA decrease, despite flat SSSG, was due to structural short-term cost pressure and investment in labor and marketing reflecting higher
seasonal growth expectations than materialized
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Balance sheet
Inventory in line with target despite slower Lebaran
ASSETS LIABILITIES & EQUITY
Jun Dec Jun Dec
(in IDR Bn) (in IDR Bn)
2023 2022 2023 2022
Cash and Bank Balance 322 354 Bank Loan 1,150 (0)
Trade Receivables 50 64 CV Trade Payables 483 664
Invent ories 944 896 DP Trade Payables 191 546
Right -of-Use Asset s 2,354 2,527 Lease Liabilit ies 2,822 462
Ot her Asset s 1,201 1,223 Ot her Liabilit ies 1,098 3,498
Fixed Asset s 712 686 Equit y (160) 580
TOTAL ASSETS 5,583 5,750 TOTAL LIAB. & EQUITY 5,583 5,750
Remarks:
• Inventory in line with last year, excluding movement in new stores and provision
• Equity turns negative post dividend payout in Q2 2023, likely to turn positive by year end
• Net debt projected to reduce to around IDR 200 Bn by year-end
•
•
Right-of-use assets and lease liabilities reflect asset and liabilities created as a result of following PSAK 73.
•
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Strategy Updates
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Matahari formula for how to win clearly defined
Environmental,
Merchandise Full Store Network Omnichannel Loyalty & Operational Social, &
OPEX Optimization
Potential Optimization Expansion Personalization Excellence Corporate
Governance
Curate customer- Rejuvenate, evolve Excel & expand in Increase customer Harmonize across Optimize operating Focus on kids
led range to grow and expand online with leading retention & spend via physical & digital cost to achieve as part of our giving
sales physical store omnichannel own loyalty and for best-in-class all- operating leverage back initiatives
& improve private network to full site and strategic data-backed round customer as the business
label offering potential marketplace personalization experience grows
partnerships
Key focus area to deliver Largely achieved
earnings growth in next 12-24 months
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Merchandising Full Potential
Merchandise transformation to gain traction based on green shoots with tremendous potential ahead
Curated Our private labels are under review for
Customer-Led Range enhancing further, both in numbers,
Assortment
Improved
branding, and product coverage,
Private Label reflecting modern lifestyles.
Development Best
Suko
Cole (Men) Expect pipeline of
Connexion (Ladies)
CV Management new introductions.
Better
Nevada
Right Space in the
Right Stores Entry - Good
Planning &
Anyday (New)
Allocation
Improved
Localization by
Store Format
Right Products at the
Right Time & Cost
Competitiveness
Margin
Cost
Optimization
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Merchandising Full Potential Ahead –
Building on Early stage success stories
Royal Sporting House Nevada Sport House of Characters Baby Fashion
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Merchandising Full Potential: Concept Focus
Beauty Denim
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New brand, new launch, June 2023
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HELLO
JAKARTA!
Fun
welcome
signage
20 Leading Products:
“Supima Cotton”
Current Categories:
Menswear & Ladieswear
Shop-in-shops
“Quick-dry” T-shirt, Woven, Bottom/Top,
doing well
“Soft-Touch” Knit Top, Outerwear, Dress
without marketing
spend
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32
Shop-in-shops
by year end
based on positive
initial results
Next Phase
Category
Expansion:
- Accessories
- Essentials
- Formal
- Tees
- Childrenswear
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Expansion of Characters as Theatre
Creating The Ultimate Lifestyle Destination for Kids
EXISTING NEW 2023 COMING SOON
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Store Expansion
Pipeline identified among 110 whitespace opportunities
38 The aggregate new stores performing
well, exceeding planned hurdle rate,
and expansion to continue.
4
7 1
Opened Fit out Balance Reopening Pipeline
in 2023
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Refurbishment, Mini Refits, Relocations
2022 renovated or refurbished store doing better than none refurbished stores
Rebranding and
20 transformation pace
continues based on
strong customer
acceptance.
15
Before
We will continue to
monitor any marginal
locations for potential
relocation to better sites.
After
2022 Action Stores YTD 2023 Refurbishment
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NEW CONCEPT
a curated multi-brand store
aspirational yet affordable
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BRAND
POSITIONING
o A curated multi-brand store
o Targeting millennials, young
professionals & families
o Age range 28 - 45 yrs, with
'middle income segment’
o Delivering stylish
aspirational international &
Indonesian brands
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EXPANSION
PLAN
2023
1st store by 'December' in 1st tier mall in
Jakarta, subject to availability
2024
3 store in 1st tier malls in 1st tier
cities ( Jakarta, Surabaya, Bali )
2025
5+ stores in 1st tier malls in 1st tier
cities ( Jakarta, Surabaya, Medan,
Yogyakarta, Bali, Makassar)
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Loyalty & Personalization
Positive customer metrics momentum, reflecting strong acceptance of our transformation progress by our shoppers
Net Promoter Score Jun'23 74 Top 5 Customer Comments
Personalization and excellent
channel operations resulting Dec'22 66 Price Discount Hospitality
in growing positive
customer feedback
Dec'21 53
Quality Completeness
Active Members* 1H23 8.2
in million
Active members passed 2022 6.9
the 8 Mn record
2021 4.0
*active member for the last 12 months
Average Member Contribution 1H23 77.6%
The success rate of Matahari
Rewards penetration going up 2022 65.9%
2021 51.8%
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Omnichannel Progress
Reach Multiple Single Pool One-Stop
Channels of Inventory Solution
.com Matahari primarily fulfils online continues to grow and optimize
orders from the centralized its paid marketing efforts to drive
warehouse (DC), expanding higher impressions, traffic, and
fulfilment from stores’ inventory conversion
now available in 25 stores
With Matahari, brands are amplifying
Exploring fulfillment options for +96%
their reach & exposure via
brands, such as dropship YoY app install
Matahari managed channels
Strong 3x 99.6% +36%
Growth in 3P Handover-to-logistics to YoY desktop session
Marketplace ship on the same day
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New POS System and Capabilities
Rolled out in 50+ stores
• Capability for new customer to register for
membership in POS
• Allowing customers to redeem the loyalty points
automatically in the POS system as they wish
• Capability for CV Partners, Merchandising,
Marketing, and other stakeholders to plan and
execute variety of Promotions
• Capability to provide CV Partners for Sales and
Inventory Visibility on daily basis
• Faster Stores Operation Execution
• Enabling single inventory, leveraging stores as
distribution points
• Capturing product information for 75%+
consignment sales
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ESG: MILKS*
Strengthening eco-friendly With customers, institutions,
material awareness and staff, providing support
with suppliers for communities
Expansion of recycling Completion of
capabilities 10 school library renovation
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*Environmental, Social & Governance: Materials, Inclusion & diversity, Labour best practice, Kids, Sustainable acts
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Closing
Remarks
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Progress on Strategic Initiatives Continues Building on Green Shoots
Merchandise Transformation Store Development & Concepts
o Strong Initial Performance in 20 Suko Stores, further 12 Suko openings in 2023 o Store expansion on track to open a minimum of 12 new stores. In aggregate, the new
o Anyday new private label launches in Q4 as entry-level fighter brand to offset stores performed as planned, performing above the hurdle rate.
inflationary pressures. o Store Capex repurposed to strategic locations. 1H23 performance for 2022
o Denim Shop concept to double, massive opportunity in Active with Nevada refurbished stores saw a better growth than non-rebranded stores; transformation
Sport and RSH, and in Beauty Category continues.
o House of Characters grouping all licensed partnerships for a compelling o MU&KU is our new upper middle multibrand concept ready to present to target
childrenswear and young adults collection. developers for late 2023/early 2024 launch.
o Large potential remains to further develop private label brands and recruit o Significant opportunity remains for expansion and revised format in tier-3 and other
exclusive consignment vendors price sensitive markets.
Operational Improvements Digital Capabilities
o NPS Improved to 74 from 66 in 2022. Personalization and excellent channel o ETP POS solution rolled out in 59 stores, with national completion in 4Q23,
operations resulting in growing positive customer feedback bringing greater merchandise insights, personalized promotion capabilities and
o 8.2 Mn Active members vs. 6.9 Mn last year, contributing to 78% of total sales the digitization of our CV community and follow on omnichannel momentum
surpassing pre-pandemic levels. o Blibli launched in Jul’23; Tokopedia reboot in Aug’23; 2-3 new channels slated
by year-end
o OMS & WMS solutions rolled out in 4Q23 /1Q24
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Contact us
PT Matahari Department Store Tbk
Menara Matahari 12th Floor,
Jl Bulevar Palem Raya No. 7
Karawaci, Tangerang 15811, Indonesia
Phone: +6221 547 5228 | +62811 9610 1111
Email: ir@matahari.com
www.matahari.com
DISCLAIMER: This presentation has been prepared by PT Matahari Department Store Tbk (“LPPF” or “Company”) for
informational purposes. Neither this presentation nor any of its content may be reproduced, disclosed or used
without the prior written consent of the Company.
This presentation may contain forward looking statements which represent the Company’s present views on the
probable future events and financial plans. These views are based on current assumptions, are exposed to various
risks, and are subject to considerable changes at any time. The Company warrants no assurance that such outlook
will, in part or as a whole, eventually be materialized. Actual results may differ materially from those projected.
The information is current only as of its date and shall not, under any circumstances, create any implication that the
information contained therein is correct as of any time subsequent to the date thereof or that there has been no
change in the financial condition or affairs of LPPF since such date. This presentation may be updated from time to
time and there is no undertaking by LPPF to post any such amendments or supplements on this presentation.
The Company will not be responsible for any consequences resulting from the use of this presentation as well as the
reliance upon any opinion or statement contained herein or for any omission.
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Thank you
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