Central Retail Corporation Public Company Limited (CRC) Earnings Call Transcript & Summary

So I'm Rangsirach Pornsutee, Head of CRC Investor Relations. And this morning, I'd like to welcome you all to our call for an update on business and results for the fourth quarter and full year 2020. And together with you all, we have our management team, Khun Yol Phokasub, CEO; Khun Nicolo Galante, President; Khun Philippe, CEO Vietnam; Khun Ty Chirathivat, our Deputy CFO. And presentation today will take a little bit longer than usual about 1 hour 20 minutes as our management prepared to elaborate for you on our strategic refresh direction for this year and features. [Operator Instructions] And I now pass on to Khun Yol to start call.

Good morning everyone. I think we have a full agenda today, we'll cover about 2020 and also our strategic refresh choices. And also, we have a deep dive on financial overview. And we have, let's say, a quick summary -- outlook for next year and our conclusion. And we leave ample time for Q&A, right? So now let's go to the next page. 2020 was a platform business as usual. I think we were -- as you know, we've been hit badly, okay, in the quarter 2 last year due to government order to close down our strong network almost the whole quarter. However, we managed to turn around very fast. And in Q3, we returned to be profitable again, and Q4 was even better than Q3. Thanks to our fast response and our elicitive platform that we have that we have been building for the last few years. And this is really paying off nicely. We also continue in stepping up our competitiveness and making good strategic progress. We entered in 2021 in a good shape, but still a lot of challenges and opportunity ahead. Now let me just summarize about 2020 results. We are pleased that again our performance and we ended with total revenue of THB 194 billion minus 11% growth, EBITDA of about THB 11 billion and net profit about THB 700 million. Omnichannel sales continued to grow strongly and now contribute about 10% of our total sales and growing about almost 180% and we now have 24 million loyalty customer in our platform. When you look at the next page, okay, we also look -- we also received a number of awards and recognitions. Let me mention a few. We received, okay, the Best Equity Deal Of The Year, Best Employers Award, Outstanding Disability Employer and Global Honoree for Excellence in Retail. And In Vietnam, our GO! was awarded the Favorite Vietnamese Brand and Top 500 Largest Enterprises in Vietnam. Now let's move to the second part of our presentation. It about our Strategic Refresh. We have spent a lot of good deal of time shaping our strategy to ensure that we get the choice we make and the action we take best position us for the success. We are going to take you through [indiscernible] thinking now, starting with our vision and our purpose remain unchanged, and we are laser focus on our differentiation strengths and starting strategic choices that we are making for the future growth. Then there are 5 strengths we focus on -- the 5 strengths that we are focused on. First is our portfolio. We have a very powerful portfolio of leading category and brands. Our uniqueness that we have been building to deliver interconnected omnichannel excellence. And the third is our strong position in a growth markets. We have just around 85% of each country GDP that we operate. And we have the largest and active loyal customer platform and embedded in our central platform to be able to create high personalization. We focus to further strengthen our organization to ensure it is a focus-led and also Future Fit Organization. Let me walk you through quickly for our few strength. We have a powerful portfolio of leading category and brand portfolio. You can see that we have covered our category restoration that customers need [indiscernible]. And we are #1 and leading position in our category that we offer. We have the largest brand portfolio platform that our partners have trusted in including our private label. Now our private label has been very accepted in some category and actually outpaced national brands growth and now representing another 3% of our total business. We maximize the strength of both physical and digital platform and create a seamless interconnected amongst them. Plus the [indiscernible] platform as well as the digital payment and financial solution to offer the best experience and variety of omnichannel services that no one can match us easily. We are also partnering with Grab to create a quick commerce platform on demand. We started with Food and Tops grocery and very successful. And now we have expanded in this on-demand service into other category. Also present in Thailand, Vietnam and Italy and now cover more than 85% of our GDP and most importantly, run by the local, in fact, more than 90% are local. Now next is, okay, we had made strategic choice to laser focus on these 4 choices. The first is double down our Central Lifestyle platform. Khun Nicolo will review more in the next section on our Digital First. The second one is about Sharpening our focus to be category leadership, and we would like to share a good news, that with 11 years of our commitment to create a home improvement business from 0, our Thaiwatsadu is now #1 in home improvement business with revenue around THB 30 billion, #1 in Omnichannel home improvement retailer and #1 in revenue per store. This is a very good news for us. We plan to double the size within the next 5 years through both organic and inorganic growth and will expand beyond Thailand. In Vietnam, we focus on Food and Lifestyle Mall under the brand Big C and GO!. We see the opportunity of this business in Vietnam and the size can be easily double -- the market size for Food hypermarket in Thailand. We will maximize our synergy and fully unlock our potential and Khun Ty will cover this in a few minutes. And last but not least, our final strategic choice is to view a propose-led future fit organization and growth culture. We continue to upskill our people. We will unlock capacity through agility and Digital transformation. We are already learning operation at scale. So here are the 4 strategic choices. In summary, with action on our platform, Digital first, our portfolio, our economy, and our people. And with that, okay, let me hand over to Khun Nicolo.

Thank you, Khun Yol. Should we start with the 2020 performance and then we move to the strategy going forward. First of all, I mean, Digital First is not a new thing for us. As you can see, in this page, in 2020, digital enabled sales reached about 10% with a jump of 177%. 10% of our total revenue are enabled either through web or through app or through we call social commerce. And you can see the jump from 2019, we can see '17, '18, '19, we have built the platform and 2020 is the first year where we really leveraged the platform. Now you can see on the right, that this jump, of course, was helped by the second quarter, 262% when the stores were closed. But then when the store reopened in the third quarter and in the fourth quarter, we continue to grow these channels very, very fast. And then in the bottom of the page, you can see the split, of course, fashion is a big contributor, but Hardline is also growing very fast and Food is also growing very fast. And contrary to one year ago where we were representing omnichannel, we were only talking about Thailand. Now Vietnam and Italy represent already 12% of our omnichannel sales. If you look at the split on the left gives an idea when we talk about omnichannel, what do we mean? It's not just the web. Now we also have increasing importance of the app. Web and app account for 60% of our omnichannel sales, then 33% of what we call new channels or social commerce, meaning this is basically sales that we do by chatting from remote with the customer using Facebook, using line, using WhatsApp, using basically all the social platform that our customers use and 7%, and that is an increasing number, is E-ordering. So these are sales that are taken in the store using tablet and smartphone, when a product is not present in the store either because it's out of stock or because the store is too small to carry the brand or that product. Our staff can still sell using tablets and smartphones. That's what we call E-ordering. And then on the right, you see the mix in the key categories that in terms of performance in 2020, you can see there's been a very strong progress pretty much across all categories. Now, previous one. Now when we talk about -- sorry, Digital First. We talk about digital first. Now we are really focusing on 5 things. First of all, mobile. So digital first is also mobile first. Today, we want to be with the customer 24 hour a day, 7 days a week. And the only way to be there with them, even if they are not in the store is to be with them via the mobile. The second big topic is where we're really starting to move the first steps, but these are really promising first steps is personalization, leveraging all the data, all of our richness of data about customer behavior in store, out of store to offer them something that is just for them. Now as I said before, International, Vietnam and Italy are becoming -- are growing very fast, are growing even faster than Thailand. And we are basically leveraging our learning curve in Thailand to help these 2 countries accelerate. Our Digital First strategy is still relying on omnichannel. This is the fourth point. I mean we don't try to do the pure-play e-commerce only digital with -- our Digital First is still linking the mobile with our stores and with our staff in the stores. And then social commerce, which is basically our staff chatting via remote with the customer even when the customer are not in the store. Now let me share with you in the next page why this Digital First is a source of long-term growth, at least for the next 10, 20 years. These are data on 2020. And in 2020, you can see we are comparing the sales by customer for a group of customers just bought with us online. A group of customers that just bought with us in the store during 2020, then the group of customers that really bought at least once in the store and once online. This is what we call the omnichannel customer. You can see that this omnichannel customer in terms of spending with us, they spend 8x more than the online customer and 3x more than the store customer and the frequency, especially is much, much higher. So capturing this omnichannel customer and transforming the off-line customers and the online customer into omnichannel customer is a major driver of our growth. Now of course, we know in 2020, our top line didn't grow so people can ask, okay, is this causing -- is this transformation causing a cannibalization of our store sales and we monitor this in the next page, please, across all categories. And you can see in this page that -- and this has been the case every year that whenever customers start to buy online, this is an example of 2 of our department stores, banners, Central and Robinson. Whenever customers start to buy online, the sales in the store is only -- I do not know, reduce like the case of Central or just very marginally reduced, like the case of Robinson. So overall, whenever a customer start to buy online, we see an increase on this specific customer spending per year. So this is why we are very positive that this is the long-term direction for us to growth. Now in the next page, as I think we already announced at the end of last year, we launched a key tool to enable us this, let's say, intimacy with the customer 24 hours a day and 7 days a week, which is the Central app. We already had some app, a very important one was the one for grocery, Tops app. But now with Central App, we really think we have the platform to provide everything in the Central Retail can sell to the customer. As you can see, we launched it in December 2020, and we already reached 1 million downloads during January 2021. We had a target to have 4 million downloads reached by 2021, but we now believe that we will reach the 4 million downloads already in the first half of this year because it's -- customers are very, very appreciative and very, very eager to use the app. Next, the app is really an omnichannel app. That's why I say it's -- for us Digital First is digital link to the store. So here, you can see -- I'm not going to go into the detail, but that you can use the app in 3 different needs of the shopper, in 3 different moments, in 3 different shopping journeys. You can use the app, of course, the first one on the left when you buy online. Okay? That's like any other e-commerce app. We have more than 5,000 brands, some of them are exclusive, and we only sell authentic products. So only official brand products. No duplication, no fake, no gray import, no parallel markets. But also, we can use the app when you plan a store visit. For example, in the app, there is a button where you can check before you go to a store, if the brand is present in the store. So your trip is not done for nothing. You can check the store directory, the promotion, the events, you can book a restaurant, you can book hair cut with the app. You can also book a product online and then pay and pick it up in the store in one hour if the product is available. And then the final one is inside the store. We are encouraging people to use the app when they're inside the store. Scans QR codes that you will find inside the store, get additional coupons, get additional promotions from the brand and so on and so forth. So this is really an omnichannel app. And beyond now that we are so intimate with the customer through our apps like Tops app for grocery, Central app for lifestyle goods, we also use our knowledge of the customer to personalize. You can see that in the Tops app, there is a recommended for you section where basically every -- each one of us has a different set of products that are recommended based on the behavior. We have sorted the customer based on similar customer behavior. And now this week, we are launching, you can see it on the right, the Just For You section, which does exactly the same for the Central App. When we talk about social commerce, it's digitally enabled sales that we basically collect through LINE, through Facebook, sometimes even through telephone calls. And this is something that we -- that allowed us last year to stay close to the customer even when we're close and continue to serve them. And this year, we made a huge effort to make sure that we could assign what we call a Remote Personal Shopper to every customer in Thailand, who needs -- they just had to call our 4-digit number and they would be assigned a person. And this person will follow them every time they need something, they can relate to our personal shopper and the personal shopper will know them every month better, and we'll serve them every month better. Next, now as I said, the other point beyond personalization and mobile and Digital First is the internationalization and in the past, Vietnam used to be big online, mainly with Nguyen Kim. But now the big thing that happened in 2020 was the Food, the growth of our grocery and the partnership with the marketplaces -- with the leading marketplaces in Vietnam, like TIKI and Lazada. And you can see on the right, the results were quite spectacular because we've basically moved very, very quickly from the first quarter of 2020 to the fourth quarter to reach almost 5%, even more than 5% of our total sales in Vietnam with omnichannel and the average for 2020 has been 4%, much, much higher than the year before. Philippe, if you are on the line, you can maybe provide some more...

Yes. I mean thank you, Nicolo. On Vietnam, obviously, the COVID has been a trigger for us to accelerate our plan. We do have a plan on Food, but we decide to actually to start earlier. And we realize that on the top of that, to penetrate Ho Chi Minh and Hanoi which are mainly Internet-driven and digital driven, unlike the province, which is not as much digitalized, it was very important that we reinforce that in our stores. So we start by partnership, as Nicolo explained to you. And those partnerships were good, but probably very limited in terms of SKU, then we decide to move ourselves in the course of 2020. We've actually -- at full speed, full team dedicated branding, and we'll speak about it later on and keeping our partnership, but mainly starting to operate on our own and result has been quite amazing. In some of the months, we have reached even 9%. This has been a very good alternative because people in downtown don't want to go to hypermarket, as you know, and it was actually a very good alternative to get the price and the value for money of Big C without the burden of going to the hypermarket. And that's why our frequency has diminished, but our basket size has increased. And that's -- and we are now quite happy because we are actually the best in class in terms of Food online after only a few months. Of course, next step, I will explain to you what we are doing for 2021. Thank you, Nicolo.

Thank you, Philippe. And similar to Vietnam, 2020 has been also the year, I mean, even more because really, in Italy, we didn't have any presence online until 2020. If you can go to the next page, please. Italy. Now we launched Rinascente website, it's not yet completed because we're still missing the marketplace, which will allow the main luxury brand like Louis Vuitton and Dior and the likes to join but even if not completed, we had to push it during the COVID time and it has been growing very, very fast, launch in June, quite high conversion rate, a big acceleration towards the end of the year in parallel with the second COVID wave. In 2021, of course, we are going to make this much bigger with the marketplace feature, which will allow the luxury brand to join. So this is in a summary what we aim to do with a Digital First. Now as Khun Yol said, Digital First and Mobile First is a strategy in the contest of reaching the #1 position in every category we compete. Some categories are already #1 since a few years, like premium beauty and many others, but some category we were and that is definitely the case for DIY. DIY, we entered the market after there were already some established leader. We [indiscernible] 11 years ago. We basically built the business from scratch, opened the first stores, all organic, all internal and I'm proud to announce you that this year, after 11 years from the launch, we are now #1 in Thailand in terms of revenue and market share in DIY. It's very important achievement. Also, if you think about it, last year our sales grew 1.3% despite the stores, most of the stores being -- for 2 months. The average growth rate has been about 10% over the past 5 years. And if you look at the bottom of the page, the very, very important figure for this type of business, what really matters is your average sales per store. Most players and all of our competitors, what they experience is the more they store they open, the more their sales per store goes down. But in the case of Thaiwatsadu, our sales per store, which are the highest in the market continue to go up. And you can see that between 2016 and 2020, our average sale per store rather than going down as we were opening new store went up 12%. This makes our model basically an undisputed leader in the market. And on the right, you will see the 2 other pillars are the fact that we serve the customer omnichannel like in any other category, as Khun Yol mentioned before. And we have a very strong, in the past -- especially in the past 6 years, we built a very strong private label, which now accounts almost 20% of our sales. And this is basically the example and the template that we try to follow in every category, reach #1, be omnichannel, focus on improving the sales per store, not just spending.

Good morning, everyone. I think it's me, isn't Nicolo. Can you hear me, [ Jit ]?

Yes, po, we can hear you clearly.

Okay. Sorry. So let me go through the Food and -- after the omnichannel through the Food. Since actually one year, we have been telling you that our ambition is to become multi-format and multi-countries and probably also and Khun Ty will come back to retransferring experience from one country to another, where we could actually bring some added value. And you can see that, obviously, today, in Thailand, we are covering the 4 segments: hypermarket, supermarket premium and urban and also convenience and mini market. As well as the omnichannel, which has been started a bit before Vietnam, which also now accept the mini market part, has actually also a strong position on the Food. We believe the Food is important. And we believe the Food needs to be enhanced and continue to be grown. And of course, our position in Vietnam and Thailand is very different. When we are covering in Vietnam hypermarket, and we are #1 on hypermarket. We are also starting to launch 2 new formats on the rural and on the urban with the arrival of Tops when in actually Thailand, we are actually comforting our position on Tops markets, especially after the change of the environment of Thailand. And that leads me to the second slide where we believe that the next slide, sorry, when we believe that today Tops has a very strong strength being basically no equivalent in Thailand. And we believe that we need to continue to grow, but also at the same time to improve it. And that's why we are going through a transformation and cost optimization that you can see with a few savings. Tops was needing some restructuring, and we have done it both on supply chain and organization. But at the same time, we reinforce our store concept to be much more younger, and basically going through a different concept that we go on the next slide. Omnichannel has been part of the development. Nicolo has already explained that to you. And of course, our store network is so important that it enhance the omnichannel on the favorable side. And obviously, the Tops apps has been actually one of the best apps in Food business that we could have in Thailand. Private label is also part, even though the challenge of the private label because we are not a value for money proposal, but quality product, Tops. We have developed private label, which are much more added value. And we have reached 8% and the ambition is to be at 10% on 2021. On the next slide, you can see the number of concepts that the team has actually set up in Tops. So we have already a few stores, including West Gate, which has been actually changed completely with those new concepts, no matter if it's on the fresh product, which we think that we have a very strong advance but also new markets like organic health and babies and snacks, which we feel that can actually bring value. So the rollout will continue. We have actually transformed a few stores already and the rollout will continue in 2021 helping us to get a better profitability and obviously a better sales per square meter and mainly to be much more customer focused with the new generation of consumers that we have in Tops. We believe that with this transformation, Tops and Food hall are going to bring a very big differentiation compared to what exists in the market, which is towards hypermarket, at this point Big C on value for money, but also mini-market and convenience store. And definitively, with Food Hall and Tops market, we have a clear nonequivalent brand in Thailand. So we have a big market in all the cities in Thailand. When it comes to Vietnam on the next slide, we have continued to grow our market share. You have been updated recently on the last quarter about our gain of market share. This is the full year. So we have continued to gain market share despite the fact that obviously, our competitor has opened stores like [indiscernible] has been growing. WinMart has been restructuring but you can see that Big C and GO! actually now, it's a very strong brand, and we are now flirting with the market share of Co.opmart, which is the leader, which has been losing a few edge in the past few months in Vietnam. And that's mainly this market share has been win not only in Ho Chi Minh and Hanoi but also in the province, which we think there is a big potential for the value for money. Obviously, that has been helped by the fact that the COVID has accelerated and people are looking, especially on the economic situation of our value for money. On the next slide, as I was explaining to you on the cover slide of the Food, I'd like to actually explain what we have also transformed. We have decided, as you know, to penetrate the rural area. This is an exquisite concept, which is similar to Lanchi that we have in the North, but we decided to go in the Central and South. We have tested the model last year, and we are now ready to grow, and we have signed a second stores, and we have a plan, as you can see, which is quite ambitious to open 10 stores in 2021. This is basically a Mini GO! mall which is targeting the community in the rural area, and this is an untapped market. And we are pretty happy to be able to grow another model in Vietnam. On the right side, we also think that Big C was probably good on the province and on the value for money community, but it was very important to have a format similar to Tops in Thailand to actually cater the urban population. I mean Ho Chi Minh and Hanoi obviously, due to the GDP, due to the consumer patterns are very different than what's happening in the province. So we feel that it was important to develop a much more fresh, much more qualitative approach on the retail and the copy paste of the Tops market in Thailand. And we have actually transformed some Big C. Today is the 1st of March. There is 3 stores which are transformed, and we are going to continue this transformation on Big C to Tops for the urban Big C. And this is already a pretty good success with the dedicated team. On the next slide, I'd like to illustrate the potential that we have on the Food in terms of growth in Vietnam, you can see that today, the ambition -- because we are covering basically half of the profits in Vietnam, the ambition is to cover almost all the provinces because at 55 province, we are covering almost all the province and some of the province will be much more covered but not only covered in hypermarket and in GO!, but obviously, covering now the key city by Tops, but also the rural area of those provinces by Mini GO! or Lanchi, depends the area where we are. And that's basically to continue to serve on the size of the market of the Food, which is an equivalent to Thailand. So we believe that continuing to grow the FOOD will be a winning model for us. On the next slide, we have already talked about it with Nicolo and probably that's a good news for us as well. We have been able during the COVID to launch the e-commerce. And by partnership at the beginning, as I was explaining, but now our plan is to go full speed. The mobile app is going to be launched this month. It's already prepared both for Tops and of course Big C, GO!. We are also looking at much more stronger partnership with Tiki, which is which we have already tested, as Nicolo explained to you, with some hampers and some targeted operation, but we want to do something a bit more important on Food with them because we think that, obviously, Tiki being a local is a good partner. We also launched a new website called [indiscernible] which is going to be delivered service e-commerce and that's also a new branding, which is based on our GO! brand, but basically a new channel of sales and obviously, social media, as you know, which will be launched in July. The ambition is to reach 10%, 12%. We think that the Food has actually huge potential. So both GO! Big C and Tops are going to contribute to this. And that will allow us, as you know, the property is expensive in Vietnam to serve from the e-commerce rather than on the opening stores only. And the size of the market of Digital is as big as Thailand. So it's important for us to continue to accelerate. On the next slide, I'd like to come back to what Khun Yol was actually saying about our targeting expansion. We like to expand what IS working very well. You have seen the example of Thaiwatsadu but also Robinson Lifestyle and also some of the Department stores. Tops is going to continue to expand in our specialty stores. In Vietnam it is exactly the same. We are growing our business on a very profitable way. And that's why we continue our expansion in the country. On Italy -- in Italy, obviously, we are not going to have new stores, and we are going to focus, and this is on the right side of the slide. We are going to focus on the renovation. And that's also the plan for Thailand. We have now a good model with together as one with Central and obviously, some Robinson will continue to be rebrand as Central, but also -- and that's the core, we are going to renovate Chidlom and Ladprao and Rama II, which is a big ambition for the Thai team. In Vietnam, as you know, we don't have the Big C brand. So the work continued on the rebranding and after been doing 6 this year, we are going to go for 8. We opened 4 GO! mall but we remodeled 8 Big C to GO!, which basically will give us at the end of 2021, only 13 non-GO! units, which basically allow us to keep our plan, which was to finish the rebranding at the end of 2023. And we are quite happy about it. And if we can do more, we'll do more. On the next slide, this is what I wanted to illustrate as well on the GO! Mall. Of course, in this country, we are going head-to-head with Vincom and AEON. AEON has bigger unit, but less number of malls. We have much number -- much more number of units. And you can see that at the end of the 2020, we have 10 and 27 non-GO! We will have -- as I say, we will have only 13 at the end of this year because some of the Big C GO! will be transforming in Tops and the other will be on the GO! mall. So that gives us basically a very good concept when we are facing those competitor, we are facing now almost in every province. And our model of GO! basically copy on the lifestyle of Robinson is really bringing value. On the next slide, because that's always the question for Vietnam. I'd like to show you the next opening. So Ba Ria will open in Q2 with Thai Binh. Thai Binh will open in Q3, and Lao Cai will open in Q4. We wanted to do more. It has been very difficult in 2020 to secure more sites and to be ready for opening, you know what's happened in Vietnam, the COVID, obviously, but mainly you have the national party election. And obviously, every province was very slow at processing any land because nobody wanted to make decision until the new Prime Minister and the new cabinet has been elected. And that's why we have a very slow process last year. We will come back to it in 2022, obviously, with the land we are securing now. In Thailand, on the next slide, to illustrate also what is happening in Thailand. So as I say, Robinson will open in Ban Chang and Thalang and Ayutthaya, Robinson Lifestyle in Ban Chang and Thalang, which is in Phuket and Ayutthaya will be on CPN Mall. On the next slide, as I mentioned already, this is some of the design that we are actually preparing for Chidlom, Ladprao and Rama II, which is going to be a major renovation for the Thai Team and a big ambition for the team. And then the opening of 2 department stores, Chonburi and Khon Kaen as a -- sorry, Robinson rebranded. On the next slide, we are going to address 2 business units, which are Family Mart and Nguyen Kim, and I'm sure you have plenty of questions on that. Let's start by Family Mart. I mean obviously, going head-to-head with -- sorry, you want to go to NK already?

Do you want me to cover these slides?

Yes, you can cover Family Mart and we'll cover NK...

Okay. So before we dive into the financial section, we want to just give you some highlights on the projects that we acquired recently. So one was the Nguyen Kim, we acquired about 1.5 years ago. The second is Family Mart and also the one the most recent one is COL that we acquired just last month. So for Family Mart, these are one of the 2 businesses that is undergoing restructuring. Just to give you some numbers, at the end of December 2020, we have about 901 stores. So we had to shut down about 67 stores mainly because some of the locations are in the tourist locations. So there is no tourist at this point. So hence, rather we close down than we lose a lot more money. This business, the most significant impacted out of all our business in the 3 countries. Most of the locations are in tourist designated locations. So we saw an impact of about 40% to 50% sales drop. We also believe that in 2021, because I don't think tourists will be recovering that quickly. We will also see another tough year ahead for Family Mart. However, given the initiatives that we have listed here and also the cost control initiatives, hopefully, there will be improvement on the bottom line going forward. The 4 items here are the key items are the category, channel, concept and cost controls. So quickly on the category, we will be improving our ready-to-eat our private labels and also some imported brands from CFR, the Tops to increase our margin. We will bring in more variety of snacks & beverages for increasing our traffic. In terms of channel-wise, we are still going ahead with conversion of some of our own stores to franchise. We targeted another 100 stores for this year. We are connecting with the delivery guys, the Grab and Panda to grow the GrabMart and PandaMart, and we have seen tremendous growth here in the last 2, 3 months already. In terms of the concept and services, new initiatives here in terms of the healthy concept, which we have done well in Tops, and we're migrating that concept to Family Mart and also launching some of the new services as well as shown here. The big one is actually the cost control. So number one is we're still renegotiating the rent with a lot of landlords. We are reviewing the supply chain, increasing optimization on various points in terms of truck utilization, warehouse and so forth and also controlling our shrinkage. So these are the 4 points for Family Mart for the turnaround plan for this year. Next, then Nguyen Kim, Khun Philippe, you can step in any time here, but let me try to give an overview. Nguyen Kim is a company that we purchased outright in Q2 2019. It is still undergoing restructuring. But actually, in Q4, we have seen a good turnaround of the performance. Unlike Family Mart, however, the issues are actually internal. So in terms of operation or the team, compared to Family Mart, which is actually external factors from tourism. As of now -- as of end of 2020, we have 59 stores. We have closed about 11 stores in 2020 because location was not right. In terms of initiatives of this year, there are 5 key points: improving our margins, improving our assortments, making sure the offerings are suitable to our target customers, and expanding our e-commerce tremendously because the market size there as Khun Philippe was saying, is the same size as in Thailand, also for the electronic market and also continue to close loss-making stores. Just to point out that although we have 6 or 7 stores that we were closed, all the write-off cost has already been booked in 2020. Next slide. A few in terms of the assortments, we will be centralizing about 85% of the assortments through all the stores, 60 stores, by Q2, Q3, we will also be maximizing our margins. We already see some improvements happening in Q4, especially by making sure that we target -- sorry target the right mix of products and also discussing in terms of better collaboration with our key suppliers. In terms of our customers, we're going to be focusing on the age 25 to 44, these are the key high consumption customers and making sure that we have the right product to serve our customers. And also, we will refresh the look of some of our key stores going forward in '21. E-commerce, make sure that our delivery is almost nationwide. Unlike in Thailand, e-commerce in Nguyen Kim is actually a very profitable business. So we'll be speeding up the business there. The latest acquisition just recently done is the COL. We've been talking about this for many months already, so I'll quickly go through just a brief highlight. Last month, we had a tender offer of 99.73% of our shares completely done of about THB 12 billion, and this is fully funded by debt. Going from February 2021 onwards, the performance of family -- of COL will be integrated into CRC book. So the benefit of this is that we'll be booking about almost THB 10 billion in sales with a high profit margin and also high profit business into CRC this year. On the right-hand side, just to show you some of the synergies that we can extract from this acquisition, One is in terms of the revenue synergy, which is we can do cross listing of Thaiwatsadu and Power Buy SKUs into the OFM platform. We can also have increased margin by combining volumes in these Hardline segment. And thirdly, in terms of cost, we can make the team more productive, hence saving more in terms of personnel expense and other costs as well. The last one before I get into the financial is actually the synergies. So we've been talking about extracting values from the acquisitions, but actually, we'll be looking in terms of inwards as well. So CRC's key strength is pretty much due to the vast business holdings that we have in terms of the categories of Lifestyle, of Home, of Food and also of our reach across the 3 countries and through Central Group ecosystem. With the integrated network, we can leverage each of these units to maximize sales and lower costs. If you look at the diagram on the left-hand side, we can see that in terms of #1, #2, #3, you can actually maximize again, synergies within the categories or across the categories or even going across countries and within the center group. These are the 4 main areas that we'll be looking to going forward. We have already done some of the big synergies as explained before, one is the [ Project 1 ], which is a department store merger between Central and Robinson to extract the value. The second we mentioned before was Family Mart and also Tops. So going forward, there will be other synergy projects that we will start to quantify. And when that is more clear, we will share more inputs with you in later quarters. Here are some of the synergies that we have located in certain areas with the big impacts. So we group them into growth costs and also the tech capabilities. I won't go into all, but I'll highlight some of the few to clarify. For example, the first one in growth, the cross-listing of SKUs across all platforms. So for example, selling power by SKUs, kitchen equipment and Food Hall or Tops market or actually selling SKUs in terms of platform in Central App, for instance. Cross-selling can be, for example, on selling Thaiwatsadu construction materials to all CRC business units when they build new stores. So this is generating revenue and so forth. Business model exchange. Again, we have similar businesses in Vietnam and Thailand. So we can share the business models and also best practices across. Local product sourcing, we can actually sell our private labels from Thailand to Vietnam and Vietnam back to Thailand. In terms of costs, there is tremendous value by combining purchase orders between the categories and across countries. Optimizing team, increasing productivity, joint production of private label, joint logistics, again, just to name a few, but these are the key projects that ongoing, we will deep dive into and we'll share more information as we get more concrete information. Okay. So the financial overview. I'll first give a quick overview on the Q4 and the full year, and the later slides will go into a little bit more detail. I would just like to point out that the numbers here are a bit different from the numbers in the audited report mainly because we have adjusted 2 items. One has -- we have excluded the TFRS impact because we want to compare apple-to-apple with 2019. The second one is we normalized some of the nonoperational items out, again, just to make sure that it is in line with 2019 for easy comparison. So moving towards the left side. In terms of revenue, Q4, we achieved THB 51 billion or a decrease of last year by 14%. Again, this is mainly from a decrease in goods and also from rental income about the same proportion. In terms of revenue, we achieved THB 194 billion, a decrease of 11%. In terms of EBITDA, quarter, we achieved THB 3.848 billion, or a drop of about 42%. Again, this is because of lower sales, lower margin and even though we try to -- we had good savings of 8%, we still achieved a huge reduction in EBITDA. The margin is 7.5% in terms of full year, we achieved THB 10.765 billion, a drop of about 52%. Margin is 5.5%. This is in comparison to 10% margin of last year. In terms of NPAT, in the quarter, we got THB 1.4 billion. This is a 51% reduction or 2.8% margin. And in terms of full year is a surplus of THB 684 million, but a big drop of now 92% or 0.4% margin. Again, versus 2019, the margin for NPAT is about 4%. If we go to the next slide. This is the, our revenue. Our revenue is comprised of 3 components, which is the sales of goods, rental income and also in other income. Again, this one, we want to show in terms of the trend. On the left-hand side, you can see that our sales of goods has gone down on Q2, but slowly increased up to Q4 THB 45 billion now. But in terms of the growth rate, Q4 was a little bit lower than Q3, mainly due to the impact of COVID, that resurface in Thailand and also Italy and also due to some Tet cycle, which is faster last year than this year. In terms of our rental income, which is about 4% of our sales, we also see an increase upward from a low of Q2 now in Q4, the amount is higher than Q1. So it's recovered quite well. In terms of other income, which is about 7% of our total sales, these are items such as promotion income, logistics. Promotion income is about 50% of the total other income. Again, you can see the recovery from Q3 and the Q4 is getting back to Q1. In terms of EBITDA and EBIT, again, this is the trend. You can see that in Q2 once we had to close a lot of our stores -- almost all of our stores in Thailand and Italy and a few -- we see a huge drop and loss of EBITDA in Q2. But then ongoing, we see significant improvement in Q3 and Q4, leading to a surplus also because we had very good cost control measures in place in those in the second half. In terms of margin, you can see that we're running about 7.5% in Q4. However, in full year, it still 5.5%, as I mentioned, in 2019 is about 10%. On the NPAT side, you can see that the huge drop again in Q2. But again, it's a good recovery in Q3 and Q4. Next. This slide shows the sales in terms of our business segments. The red one is a Fashion, which is about 27% of our sales. This is primarily in Thailand and Italy. Hardline, which is about 30% is in Thailand and Vietnam. And for Food, 40% of our sales is from Thailand and Vietnam. Let me start with the left-hand side. Again, similar to the trends that I've shown just now, Fashion has shown a strong bounce up in Q3 but due to the COVID resurface in Q4, we had to close the stores in Italy and also it has impact in Thailand as well. So leading to a drop of 23%. However, if you compare the value of Q4 versus Q1, Q4 is higher than Q1 already for Fashion. In terms of Hardline, this is including Thaiwatsadu and Power Buy in Thailand and also Nguyen Kim in Vietnam. There is a recovery from Q2 to Q3, but Q3, Q4, the drag was mainly due to the restructuring of Nguyen Kim. If you remove Nguyen Kim's performance, Q3 and Q4 for Thailand was actually a positive 2% and positive 1% in Q4. In terms of Food, the trend is actually going southward and primarily due to Thailand, which is bogged down by Family Mart, which I mentioned from the tourists. So Family Mart and Food Hall has the most impact. Tops in Thailand is doing okay. And Vietnam is actually doing quite well. If you look at Vietnam itself, in 2020, the growth was positive and Vietnam contributes about 40%. In terms of the sales mix, if you look at the bottom left, you can see that Hardline is the one that is growing and Food as well a little bit and Fashion is one is dropping. Due to the change in the mix we can see that the gross profit margin for our business will actually go down because Fashion normally has much higher margins than Food and Hardline. In terms of the country, you can see that Vietnam is going up from 18% to 23%, increase of 5%, 500 basis points and Thailand going down, Italy going down, mainly because of the COVID, because COVID impacted Italy and Thailand the most. But again, Vietnam has also been expanding quite rapidly. In terms of gross profit, we have seen same similar trends in sales that has been recovering. And in terms of Q4, the gross profit is actually the highest of the year, sitting at 24.4%. This is due to the recovery in our Fashion business and also the improvement in the Food in Vietnam. However, for full year, our gross profit is still 23.2%, which is about 380 basis points below 2019. If you look at the bottom, you can see the gross profit dropped 22% Q4 and 24% full year. Again, the drop is coming from the lower sales and also the lower margin due to the huge discounts we have to provide to move our stocks. On the right-hand side, however, in terms of GP for rental, we have fully recovered and even surpassed last year, so that's good news. However, in terms of the amount, it's still a drop of about minus 24% year-on-year, mainly because of lower income due to lower occupancy and also due to the higher discount we have provided support to the tenants during the COVID time. In terms of SG&A, in Q4, we completed the quarter with a saving of 8%, which is similar to our full year at 8% saving as well. If you look at the right-hand side, it shows you the key items where the savings comes from. One is personnel; 2 is the depreciation, 3 is rental, 4 is utility, 5 is marketing and 6 is others. 6, others, actually increased slightly, mainly coming from the increase in shrinkage and obsolescence and also in terms of higher expense in terms of driving our omni business. So we spent more -- a little bit more on the tech and delivery as well. Going back to the left-hand side, you can see the Q4, the margin of SG&A is sitting at 29.1% which has come up in Q3 slightly lower than the full year 29.4%. If you compare this amount to 2019, we're about 100 basis points off, so 2019 was 28.4%. In terms of our balance sheet item, there are actually 2 key items that has affected our capital structure. One is the impact of TFRS and the second one is the IPO transaction that happened in February last year in 2020. If you look on the left-hand side, total assets, it has increased by THB 55 billion or a 30% increase. The main is coming from the item called ROU or called Right of Use. So you can see that in the '19, we don't have that item, but in '20, that item increased by THB 67 billion. Another item we want to highlight is the inventory. Inventory actually has decreased from THB 37 billion to THB 34 billion. That's resulted from the better management of our stocks, given the low sales. On the right-hand side, in terms of liability and equity, again, due to the TFRS impact, there is a new item called lease liability that came up by THB 58 billion. And also, there is an increase of equity of nearly THB 18 billion primarily coming from the net IPO proceeds. On the right-hand side, the key ratios, the numbers are actually very, very low. Again, this is because in 2020, we got a very, very low net profit of almost THB 300 million, so put in perspective in 2019, is quite different. So 2020, I can say is an outlier year. We should see significant growth and improvement in 2021. In terms of our capital structure, if you can highlight the net debt. Last year, we're about 50.8 billion. And end of 2020, we are at THB 48 billion. So in terms of our financial structure, we're stronger despite the impact -- huge impact of COVID into our -- the business. Net debt-to-equity is also reduced from 1.4x to 0.9x. Again, this is mainly from the IPO proceeds. And also net debt-to-EBITDA increased from 2x to 2.5x with our lowering of EBITDA performance. On the right-hand side, for the first time, we show you the mixture of our debt; last year, we had a short term of about 85% versus 15% long term. Throughout the year, because of the situation is quite uncertain, we increased the portion of the long term to 46% and short term, only 54%. However, our weighted cost of debt is still below 2%. Okay. A quick a few slides here. Again, I think you have this information, correct. So I won't go through all the details here, but I just want to highlight some of the items. In terms of Fashion, the big drop is, again, due to Italy. And Q4, again, because of the COVID resurgence, we saw a drop in same-store sales growth compared to Q3. If you look at the right-hand side, operational stats, there's only a reduction of 3 stores, and that's primarily coming from small stores in Supersports and CMG because some of the stores are located in tourists. So we had to... In terms of Hardline, as I mentioned just now, the Left-hand side sales, if you look at only Thailand, the growth is actually 2% positive for Q4. Full year is minus 3%, again, because we had to close the stores in Q2. Nguyen Kim actually had a positive in full year because last year was full year, while 2019 was actually only 7 months performance. Q4, you can see same-store sales growth. In Vietnam, it shrunk lower mainly because 2 things. One is restructuring in Nguyen Kim and the second one is that the Tet cycle is faster the previous year. In terms of the operational stats, you can see that in Nguyen Kim, we had to close down 11 stores from 70 to 59 last year while in Thailand, we increased stores, Thaiwatsadu 4 and Power Buy by 12. Food, if you look at Vietnam, you can see that in Q4, the growth there is positive too. And for full year, the positive 5%. So again, Vietnam Food is doing very, very well, same as Thaiwatsadu in Thailand. However, the drag is actually coming from Thailand and more specifically from Family Mart. In terms of the operational stats, you can see that in Thailand, we increased 18 stores in Tops, closed down 67 stores in Family Mart, increased 4 big stores, Big C GO!. One more slide on the property. Again, this is Vietnam and Thailand. You can see that in Q4, although it's minus 12%, Vietnam is actually doing much better at minus 1%, both for Q4 and full year. In terms of the margin, we're actually doing better in Q4, but a little bit more decrease in the full year. On the right-hand side, you can see the occupancy rate dropped from 83.6% (sic) [ 93.6% ] to 90.4% for full year. And in terms of the outlets, we increased Robinson Lifestyle by plus 1 and GO! Mall by plus 4. The last slide for the financial section is the CapEx. In full year 2020, we only used THB 11 billion. The original target was actually THB 18 billion. Again, this was due to postponement on many, many projects due to cash management. So we postponed many projects to 2021. If you look at the right-hand side, the mix by country or by segment quite similar to the year before. Again, in terms of expenditure, we'll be focusing a lot of the CapEx at Thaiwatsadu, GO! Mall, Vietnam and also Robinson Lifestyle. And on the bottom right, the key point is in the digital part, the 13% of CapEx contribution came up from about 5%, 6% last year. This year, with the push in Digital First strategy, we'll also be increasing this amount going forward. In terms of our outlook for 2021, on the left-hand side shows the GDP outlook from various sources from IMF, world economic and so forth. You can see that in 2021, Vietnam is targeted to grow about 7% and Italy about 6%. It's a big rebound from a drop. Thailand, about 4.5% and global, also about 4.5%. Typically, when we set our internal target, we'll be looking at a 2x GDP growth. So for example, Vietnam will be about 2x, Thailand due to the big drop in 2020, probably about 2x to 3x and Italy due to a huge drop, probably about 3x to 4x growth. In terms of CapEx, we target about THB 16 billion to THB 18 billion. So going from THB 11 billion from 2020. The usage will be from Thailand will be about 70%. Vietnam will be 25% because it's aggressive expansion and Italy about 3% to 5% because of the 3 renovation projects. So I will pass on to Khun Yol.

Okay. Thank you, Khun Ty. In conclusion, I think we focus on our differentiating strengths and we have made it crystal clear where to win, and we continue to strengthen our capability to win. And we will deliver our long-term value, okay, for our stakeholder right? So thank you.