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

You can see that the latest forecast on the GDP growth globally, they're running about say, 6%. Vietnam you see good part is 6.5%; Italy 4.2% and Thailand, after we hit by COVID 3, I think the range is coming down between 1.8% to 3%. We have a long-term view -- over the long term, our strategy that remain unchanged, but we have to make a near-term strategic choice and focus to serve our customer needs and also the new emerging trends for our growth opportunity. For example, you can see that we are in the best position to serve wherever the customers are. For example, like @Home, I think we have the best in terms of the choices that we have on our category and portfolio, whether it's a small appliance, DIY, learning equipment, working needs, including eating and cooking at home. Our proven omnichannel can serve as the fastest and also the most efficient way. We also continue to expand a big growth opportunity, especially in DIY for Thaiwatsadu and also our top supermarket nationwide. And then you can see already that we are also expanding our Tops into Vietnam and the next will be Thaiwatsadu. If we compare COVID impact okay, for Q1 this year over Q1 last year. Obviously, our operations were much more impacted, both in Thailand and Italy. However, with our strong determination we managed to close Q1 this year equal to 90% of our performance before COVID. So our revenue we crossed THB 49 billion, minus 10%; EBITDA of THB 5,414 million minus 10% and net profit is about THB 500 million, minus 49%. And I would say that this is a very good progress, okay, in a difficult time and a lot of uncertainty. Now if you move to the next page, you can see that, okay, there is an uneven growth depending on COVID vaccination roll out and also how best to control the new infection. So you can see that if we get the latest up to date now for Thailand, we now approximate it about 2%, okay? So quite a long way to go. Vietnam is about 1% of the total population got vaccinated. Italy, as of now, it moved to -- from 24% to 29% already, but globally, it's about 9%, right? So for Thailand, the government and also the private entity are working together to help Thai people and foreigners in Thailand, to get vaccinated with about 70% of the total population by the end of the year. Now if you look at the next page, you can see, as I mentioned to you, that in terms of the Q1 this year, our operations got more impacted. If you can recall that in Thailand, we got second wave, let's say about Jan-Feb and then a bit of COVID 3 at the end of March. So we were lockdown in the few provinces and semi-lockdown in a way. And then -- in terms of the customer sentiment is very low. And then luckily today, I think this afternoon, the government just announced that we can open the restaurant. But unfortunately, you have to eat only one per table, right? In all the very red zones, okay, and provinces. In terms of Vietnam, I think the only minor impact of COVID. Italy also close to about 23 days, right? So you can see that again, Q1 this year, much more impact than last year. However, our results overall, I would say, is very good. Now if you look at the next page, you can see very clearly that, again, in terms of the new changing customer behavior, well @Home in terms of the health, much more concerned on the health. And in terms of, we are moving into digital economy, even much faster and higher penetration nationwide, regardless value-add or which country. In terms of grocery, now online is also going very well. And last but not least, with this type of COVID economy, people looking for the value for money. And this actually is good for us because we have a lot of private label in all the key categories that they need, and then we can serve them well. For the next page, you can see that, when you look at we continue to drive and leverage our differentiated strength in everything that we have in terms of portfolio that we are, I would say, one of the most diversified portfolio that we have in each country that we operate. And also we focus on the omnichannel excellence, and this omnichannel platform that we have been building for the last few years is actually moving from strength to strength. And so you can see the result we are running about 23% growth every month. We are also in a strong growth position in each key market. And our loyal customer-based platform is growing about, let's say, above 5% to 6% year-to-date. Our differentiation I would say this is the most ever fit to fight and also really lean and effective. And we have proven that we have the capability to execute. Now when you move to the next page, you can see that now with our long-term strategy remain unchanged. But in terms of strategic focus on the near term, we have to make some choice here. We see, as already mentioned that the growth opportunity @Home platform, nowadays, home become even more multiple purposed for living and for entertainment, @Home education, also work at home. At the same time, when you look at the DIY business and Thaiwatsadu, we have a very proven business model. And at the moment, we already occupy in Thailand only half of the country. So you can see the other half of the country that we have not actually opened up with Thaiwatsadu. So we have to double down in terms of expansion our proven success of Thaiwatsadu. And likewise, the same in terms of our Tops market. In terms of Central app, just as we launched, we got now a few million joining us and are pretty close to more than 0.5 million mainly are users. Now we are expanding our Central app to be everyday lifestyle app, focus on our key strategic customers, offering all the variety that we have and also be increasing the best, the newest, the fastest trend and your most public brands and SKU together with the published and personnel high prioritization for our customers. At the same time, in terms of grocery new on-demand is getting very popular. Our business in our top is growing about 300%. And also we doubled that in terms of servicing our customers through quick commerce through our partnership. Now in terms of online for food, now we double the size. And then happy to see that, okay, we are moving into breakeven now, okay? This is quite very tough for the grocery unlike to be breakeven. And you can see that, okay, it's a huge opportunity for the Internet retailer, okay, to play a big role in checking up B2B platform and then we are very happy to have COL into our family. And now we are strengthening the COL B2B platform and their multichannel together with all our cost listing category from all RBU in order to serve customers beyond the office. At the same time, as we have been building omni-channel and also the system that we have been using for the last few years, even though we are upgrading every single week, every single month. Now we have to embark on our new journey on our technology. So we have to upgrade, it will be a big upgrade, okay? And we could start from June. It could take us 6 months in parallel to keep our existing -- serving our customer. And by early next year, our platform will be much better, faster and much more efficient to serve our customers better. And this model, we could be -- that will be leveraged for our country in Italy and also in Vietnam. And last but not least, in terms of our financial, we are very prudent in terms of running our business, investment and so on. And in terms of CapEx, we -- as I -- we mentioned to you last time that okay, we earmarked about THB 70 billion to THB 80 billion for the investment. Now with all this circumstance and a lot of uncertainty. So we keep at least on our CapEx, now let's say 10% to 15% and closely monitor about the progress of the brand. Now I bring to the next page is about Q1 2021. I already mentioned that the Tops revenue, THB 49 billion, EBITDA THB 5,414 million and net profit THB 508 million and in terms of net sale area, and also net leasable area, we are growing about 5%. Now in terms of the omni-channel sale, I think we are very happy to announce that our sales contribution from omnichannel is closing at 13% of total sales. And in some BU and some categories, it's going up towards 30%, 40%. So this is result of our investment commitment to our customer in order to serve the customer wherever they are. And last but not least, now we have 24 million loyalty-based customer and growing about 5% to 7%. Before I pass over to Kun-Jit, allow me to summarize again, a few points here. First, we are very confident in our strategy and our ecosystem. Second, we plan to continue the strong momentum, and third, because of our financial strength, competitive position and importantly, our capability to execute. And we have made our strategic choices and now is the time to play an even more aggressive offense. Thank you. So I pass on to Kun-Jit to give more details.

Thank you, Kun-Yol. So let me give you more an update on strategic focus that Kun-Yol already mentioned, starting on the strategy to grow our successful business model of Hardline. So Hardline today represents over 1/3 or 35% of our total sales and the key growing BUs Thaiwatsadu. So first, the strategy for Thaiwatsadu is to expand the physical store network. On this slide, you already see on behalf 65 stores of Thaiwatsadu nationwide. 17 stores or 30% of the stores are in Greater Bangkok and the rest 39 stores in our country. So this year, we already plan to open 4 new stores. And just like in the past 2, 3 years, we've been opening 4 to 5 stores every year. For this first quarter 2021, we already opened 2 new stores Thaiwatsadu in January. And also the other 2 stores will be followed in Q2 and Q3 as planned for this year. Moreover, for the store coverage in Thailand, we plan to double our network stores or Thaiwatsadu nationwide in all the potential areas that we have still in Greater Bangkok in the Eastern corridor and countries. Moreover, for the opportunity for the store network, team is under study to expand to overseas. And obviously, the first country will be Vietnam, so we can strengthen our Hardline positions there. So this will be in the near future. On next slide, you saw, as I mentioned, we opened 2 new stores in Q1 and the 2 new store adding around over 3,000 selling space for the 2 stores, and we will have 2 more stores country, 1 Ayuttaya and Songkla to follow. Next one. Secondly, the strategy for Thaiwatsadu not only apart from the off-line network expansion. Thaiwatsadu is #1 omni home improvement retailer. As you can see, we had rolled out new and complete O2O channels since last year. The channels are from web stores, you can see under right and order social commerce and the marketplace, which we listed Thaiwatsadu products in the site of external party like JD and also in our CRC BU by OfficeMate and Robinsons. Even though the portion of the omni sales are 1% now, but the sale has grown significantly from the start rolling out in the second quarter. It's been growing 5x and on the right chart, you can see the breakdown of the -- where the omnichannel sales coming from and the key channels now are at the website, which was lastly launched in August last year and bring in around 70% of the omnichannel sales for Thaiwatsadu. Over for the next slide. Thirdly, third strategy from the first and second on the channel angle. Now Thaiwatsadu still also focusing on the product angle as well. Private label is one of the key areas. And we continue to expand the mix in all the key top-selling category piece from tools, from home decor and the small appliances, which we have over. As you can see on the left side, we have over 10-plus brand, the one prominent one, maybe everyone knows Kassa, for example, the Giant King Kong. So the mix has been growing. In the chart, you see from 11% on 5 years back and to one of last year was 17% of the sales mix. And for 2021, and here we target 19% and for quarter 1 now we're reaching 17% -- 17.3% for Thaiwatsadu. Also, not only on Thaiwatsadu on the product ample. We also bring in introduced new product assortment to match the lifestyle, the new lifestyle, especially as Kun-Yol mentioned, the @Home platform. So Thaiwatsadu bring in new category like home automation, solar energy, for example, this is to bring in sales opportunity and private label to improve our profit margin. Next slide. Also private margin doesn't end only the Hardline segment. As Kun-Yol mentioned at the front, the category and the brands or portfolio are one of our key differentiating strength. And we have the clear purpose of driving the growth of private label, not only the company to improve the profitability margin, but also this bring in and match the lifestyle with customer nowadays is seeking the value for money products. And as you can see, we have to offer private label in all the business segments in many brands, many banners from fashion, Central, Robinson, Home and Hardline and food, ranging from the high end my choice through the lower end like smarter, for example. And today, our mix contribution from the private label sale is around 9%. This is for total CRC and it's been growing 7% in the past 2, 3 years, and we target to improve our penetration to about 11% year. Moreover, apart from driving the numbers. We also are looking at affinity across that we can do together on the private label as well. For example, that we're working -- the team is working on cooling some things to drive efficiency in the speed market to introduce new SKU category, for example. Then moving on, still on the product angle. So opportunity that we're doing now for the @Home platforms that Kun-Yol was mentioning. This is the up-and-coming trends. Home is now serving as multipurpose also from working, learning, living. So if you're looking at another level of CRC, we -- from the 3 segments, Home, Hardline, Fashion and Food, we already offer 60 categories. And among these 60 categories, if you're looking closely, we will have the @Home-related category that approximately represents about 50% of total CRC sales, from fashion, from Hardline and from food. And not only that we are responding to the customer trends, bringing in new products, bringing in new SKU, we are serving the customer with new and innovative channels like you can see on the screens, the department store size, all the marketing activities, we are boosting the marketing and brand awareness with the online channels. And from the Hardline segment as well, our work-from-home, cook-from-home or play-from-home and also the trends that people are looking for more hygienic products with Tops are also focusing to increase this brand awareness for our @Home categories. So this then I would like to pass on to the Food segment, which is the growing category as well for Kun-Philippe to walk you through in details.

Thank you, Kun-Jit, and good afternoon to everyone. And Kun-Jit say and Kun-Yol also remind, we are pretty happy about the performance of our food business, both in Thailand and in Vietnam and despite the adversity because you know that we have a second wave of COVID, we have the third wave of COVID, but at the same time, we have the stockpiling last year. And despite that, the team has actually been very agile all on execution and innovation. And you can see one of the examples in Thailand with what we have done with our food. We reached now 5% of our sales in a contribution on our sales in omnichannel. We have been partnered with quick commerce, as you can see at the bottom of the slide. And this has been an acceleration -- a tremendous acceleration. Kun-Yol you also remind you that we are profitable which is quite unique in this segment. We have been over 2 million downloads on the apps. And of course, we have also -- that was already the strength of Tops, but we have also now full dedicated back office to make sure that we can actually have hubs and fulfillment centers to be sure that we are going to deliver the right service to the consumer on online. So that has been a very flexible attitude from the team to actually go against the adversity. On the next slide, similar to Vietnam -- to Thailand, Vietnam has actually done well. You know that the first quarter in Vietnam is always a challenge because you have this Tet holiday, which is a huge consumption on food business. And I'm quite happy actually to show you the result of the market share. You can see that despite a lot of people growing in the market, we have been growing quite fast. And we are now really head-to-head with the leadership in food, and we really hope to pass this very quickly. This has been possible by opening of new stores. We have been opening GO! in 15th of April, but this has been not on the first quarter, but we have remodeled 3 GO! hyper market. We have also launched our brand Tops, Kun-Yol has remind that in the introduction and it's really good that we have Tops now in the market. And obviously, as we already showed to you in the previous meeting that we had, our contribution of sales in online is reaching 5% and our omnichannel with the BigC/GO! apps is now doing super well. And we have already in Q1 reached 80% of the sales that we have last year in omnichannel in food. On the next slide, I'd like to go through the -- on the next slide, please, yes, I'd like to go through a few imaging picture. You cannot travel. So it's always very difficult to see what we are doing. So this is the Tops market, the conversion of exhibiting on the Tops market. This is bringing much more qualitative products, much more healthy products, which was really a niche in Downtown, Ho Chi Minh, Hanoi, Lao Cai City in Vietnam. On the right side of the slide, you can see the GO! Mall. This is Thailand. This store and this mall is actually is the biggest mall that we have ever opened. This is 36,000 square meter GFA, very similar to what Robinson is doing in Thailand. And yes, it's already #5 traffic in the total portfolio that we have in Vietnam. And you can see the modernity attached to it, and it's really a big breakthrough compared to what our competitors are doing. Moving forward, we will continue to maintain our opening plan with 2 more GO! malls. There is probably one mall will be -- sorry, on the previous slide, one mall, if you can -- one mall, we'll open -- we'll be a bit delayed 2 more to go. We have 7 more Tops to come, 4 from hyper conversion and new store. We are pretty happy about the performance of Tops, and we want to accelerate and execute faster. On the next slide, just to share with you what we already shared with you last time, but it's interesting to see the progress. So you can see that Vietnam as well as Thailand has also reached 5% of the total sales of food. We have launched our BigC/GO! apps. We are still moving on the different name, but step-by-step, BigC is disappearing. And we are the first one to introduce Zalo. Zalo is the #1 platform on commerce in Vietnam, and we are the first grocery retailer to actually be able to be on this platform, which has been a huge acceleration. And of course, besides our own apps and our own organization. So that's actually what I wanted to share with you on the food business in Vietnam and Thailand. What -- I will leave it now to Kun-Jit for the following slides. Thank you.

Thank you, Kun-Philippe. This is part of omnichannel in Thailand for Nicolo will walk us through detail.

Thank you. Good afternoon. So when it comes to omnichannel, probably the biggest innovation we launched in Q1 is the Central app. Actually, the Central app is something we launched in December 2020, but really, the scale up happened and also the advertising, the awareness, the promotional effort happened -- started to happen in Q1. As you can see, we position it as basically the way to shop all the benefit of central of Central retail without any problems and especially no problems with authenticity, no problems with delay shipments, no problem with fake products, et cetera, et cetera. As you can see, we reached 2 million download in Q1. This was the target we had for Q2. So it's -- there's been a very good acceptance from the customer perspective. We are way ahead or where we expect to be. And what you can see on the right, we achieved a significant number already of average monthly users. This now represent 60% of Central online sales. The conversion is 3x better than the web, the Central online website because really, the app provides a much more fluid customer experience and also the products that we list on Central app that are coming from other buyers have been growing quite fast, like plus 38%. So of course, as you know, also thanks to the COVID, there has been a trend and the shift of the customers towards buying through their mobile. But what we want to show you today is that we are really gaining market share in this new world and not just following the trend. So the first is really the launch of the app as a tool that customers can use in the store and where they are @Home by. If you turn to the next on -- the second thing that we are doing to really gain market share and move faster than the market is we are really synergizing. So we call it cross-listing. As we bring all the products of our different buyers on the website of the buyers where it makes sense that these products could be sold. The most important one would be Central app. Central app release not just Central products, but also Robinsons products, super store products powered by Thaiwatsadu, OfficeMate and B2S products. And this part, as I told you before, we're starting to see very promising growth. This is part of an effort that we are doing to really consolidate our online presence and to make really Central App the key and the door for the customer to access all the offer of Central Retail Corporation. Another thing that we are doing to accelerate and to win market share faster than the market is to use social commerce. This is just an example. Sometimes we use social commerce purely, let's say, digitally, like, for example, our Facebook Live sales, our Instagram sales and so on. At some time, this is a very important program. We use it by allowing customers to chat from remote without what we call our RPS, remote personal shoppers and to place their order and pay everything from remote, and then we deliver the customer. This was a program, the personal shopper program is a program that all the department store had in the past for their VIP, the very, very top spender. Customers, the innovation we launched especially in January when the second wave of COVID, beginning of January, and the second wave of COVID started, is really to offer this basically to every customer and especially to -- so we move from 85,000 customers covered by this service to almost 360,000 customers covered by this service in Q1. And of course, now with the third wave of COVID, this service is becoming even more popular and is driving a lot of our -- a very high proportion of our sales. These people are located in the store, but they chat through -- with the customer and then they deliver the customer what they want without the need for the customer to go to the store. As a result of this type of effort, our penetration today, you sit in the middle of the page, has reached as it was first quarter, now it's even higher in Q2 has reached 13% of our total CRC sales. You may say, okay, but not much more than what you had last year. It was already at 12%, yes, but 12% is very different from 13% because in second quarter 2020, when we're at 12%, it was because of our total sales were really very much down because of the store closures in Thailand and in Europe. So it was 12% of a very low base. Now is 13% of a base, which is 90% of what the sales were last year in Q1. So it's a much -- so the 13% really compares with the 4% in the first quarter of 2020. The growth even in Q1 continues to be very strong, more than 200%, where we expected the market, the online market where we are growing maybe 20%, 30%, 40%, we are growing at 100%. And on the right, you can see the split. And of course, fashion in Thailand still represent the majority of the sales, but especially we say, food in Vietnam and, to some extent, also Italy are coming back very strongly. Why we do all these efforts on omnichannel on how this digital channel because we believe this is a strategic advantage that will drive our business for many years to come, not just during the COVID. And every quarter, we do the same analysis, first of all, to make sure that when a customer buys not just online or offline anymore, but start to buy with more than one channel that the value of the customer is much bigger. Here, you can see that the value of customers that buy in the quarter -- in the first quarter this year, at least once from offline and once from online, is 5x higher than the customers that bought in the first quarter this year just from online and 4x higher than the customers that bought in the first quarter of this year just from the store. So it's not just doubling, it's actually quadrupling or quintupling. The other analysis that we do every quarter is to measure the value is not cannibalizing the sales of the store, but is actually incremental. So here, we compare, for example, the sales between Q1 2021 and Q1 2020. As you know, and Kun-Yol and Kun-Jit have already explained, they say, our total sales went down 10%. But if we look at the customer, they start buying online in first quarter 2021, in Central department store, which is one of the business unit, the fashion is the most affected sector by the crisis. These customers have grown their spend by 30% with almost no cannibalization of the store sales, which is the dark red part of the column. If we look at Robinson, there is a little bit of cannibalization. But the net effect of the online channel is still to grow the sales to provide incremental sales in the measure of 19%. So that is really proving that our strategy continues to be successful, continue to create value. And because of all these initiatives, we can clearly see quarter-after-quarter, we continue to gain share in the digital channels.

Yes. This is the part on the synergy and the B2B from the COL side Kun-Ty.

Yes. Good afternoon, everyone. Let me share a few updates on the COL since we made a big acquisition in February this year. So I'm sure everyone wants to know what is the progress and what kind of improvements we're doing. The first thing is the, we'll talk about cross listing. We already started cost listing about 600 SKUs of COL products, mainly in the office supplies and stationery to almost 1,000 stores in Tops and not FamilyMart. This generated about THB 3 million already. Again, we just started this 1 or 2 months ago. The second thing is that we will continue to provide more categories due to the success of the first part to Tops daily and FamilyMart on the book side and also on the gadget side. So this will start in a few months' time. On the right-hand side, talks about the private labels. COL actually has about 10,000 SKUs of private label. 20% of the business is from private label. And we will start listing, cross-listing these products across CRC platform very, very soon. Again, Kun-Nicolo just mentioned about B2S and COL in Central app. So that has already started. The third is the bottom part is the cost optimization that we are already beginning to see fruits. So with the integration of the store operation and the head office function between just the COL and the B2S, OfficeMate and B2S team, we already gained a saving of about 9%. We're actually aiming to save about 20% this year. On top of that, other savings will be in terms of reducing the COGS probably about 8% to 10% this year. Can you go to the next slide? The other slide is also about COL and how to enhance it. This is about tapping into the B2B business market for office supplies in Thailand. If you look at the left side, the office supply market here is THB 154 billion, and COL holds about 5% of the market share. COL's 2 largest categories are in the office supplies, it holds about 14% and about 12% in the computer and printer category. With CRC's product now, we're able to grow into the other categories, which is about THB 100 billion market size, which we haven't tapped yet. In Q1, we have already listed about 18,000 SKU mostly from Hardline, but some fashion, some food as well onto OfficeMate platform. Another 15,000 SKU or 15,500 SKU will be targeted to be added by the end of 2021. On the right-hand side, another way we can tap the -- this market is by growing up country as well. We have 2 formats here. So by growing the OfficeMate stores of about 300 to 400 square meter and the second one is a new format, which we are growing by the franchise model. We call it the OfficeMate Plus. You can see in 2021, we're forecasting to grow by about 21 stores. These stores are about 50 to 100 square meter and this will be a new driver for OfficeMate up country for the next 5 years. Please. This one talks about the restructuring or the transformation of FamilyMart similar to OfficeMate or COL, we bought this completely by May last year. So this company is undergoing a big transformation. I'll just highlight some of the key areas. So in terms of categories, we're going to add about 300 SKUs or about 10% of the overall to increase the sales and the margin. This is coming from the RTE part, the private label imported products, and this should be completed probably about in Q2. In terms of channel, we're also driving the franchise model. So we converted in Q1 about 30 stores already, and we plan to do no less than about 100 stores by the end of the year. The other part is the Quick Commerce. Kun-Philippe already mentioned part of it, but I just want to add a little bit here. We started to work with Quick Commerce at end of last year, but spread up in Q1. And again, this is working with Grab Mart, FamilyMart and Hardline. We've seen tremendous growth here. And hopefully, by the end of the year, the contribution of Quick Commerce, the overall sales of FamilyMart is probably going to be about 8% to 10%. So this is going to be a very important channel going forward. In terms of cost control, we have done very, very well in terms of the operation, in terms of utility costs, A&P people. And also, we're striving to, again, get the rent negotiation complete as fast as we can. In terms of the store closure and the temporary, we had to cancel these stores in the tourist locations, I think, about 120 or so. These are intent basis. So when the tourist comes back probably by early next year, we'll continue to open then. Again, these are the initiatives to save costs for FamilyMart. Given the latest , can you go back -- given the latest COVID on Phase 3, this turnaround is a bit slower than we expected, but we see a turnaround by probably around end of Q3 in terms of top line and bottom line. Next slide. For this one, I'll let Kun-Philippe, add a few comments and then Kun-Jit.

Thank you, Kun-Ty. So same as FamilyMart is also under restructuring, but we have now pretty much good signals. It's not finished. We still have a lot on our plate but we have pretty good signals. You remember that our action was mainly on store performance, customer omnichannel but also on costs. So the first part, which is not on this slide, is the cost. The cost has been actually reducing by 30%, which is helping us a lot on the moving the flexibility that Nguyen Kim more needed to pursue this competition. On the store performance, I'm really happy to share with you the fact that we have improve the margin tremendously compared to what it was last year. We are now gaining systematically 3 to 4 points every month. And on this part plus margin, we are pretty happy. We have also makes -- also a big effort on the omnichannel is representing 9%. It actually representing sometimes even 10% to 12%. It depends of the timing, but we are actually pretty good in terms of omnichannel performance. What remains still very important is the top line. We are definitively having a bigger work on the top line. There is good signals on the brand equity but also on our services, the brand equity is still very high on Nguyen Kim. And our services, as you can see now, what on time delivery is reaching now the same day at 74%. I remind all of you that 6 to 7 months ago, it was around 40% to 50%. And again, with some efforts. So we are quite happy to move on the right direction with Nguyen Kim still work in progress, but a lot have been already done. I just would like to summarize a bit as this is the last slide of Vietnam to actually share with you that on Vietnam, we are pretty, pretty confident. The opening plan is really delivering. The remodeling plan as well. So we are pretty happy that we can execute this plan. We know also that the food business after the first quarter is still continuing to grow. It's a very good signal for us. NK, as I share with you, is also on the right, Stage 1 is already finished, and we need now to move to Stage 2 and driving the top line. But at least profitability is already here. And macro, Kun-Yol has already shared with you. But on the top of that, the pandemic, even though we are in the third wave is pretty limited but the government is taking so much action that nobody can enter in the country. Quarantine is 1 month. So I don't think so. This wave that we are actually having is going to affect too much the business. So I'll finish on this slide and on Vietnam, hand over to Kun-Jit. Thank you.

So we're doing a lot. Kun-Ty still have more on the -- his focus to update us.

Again, this is just a quick update on the tech road map because omni business for us is very, very important going forward. So I want to share with you some of the exciting things that are happening. You can see that we are entering, let's say, the Phase III in 2021. For this phase, we are furthering enhancing the omni-channel experiences. By this I'm getting, like we'll be rolling out a few more new capabilities. So 1 hour Click-and-Collect will be rolled out in the department store in Robinson and Central by Q2. The 2-hour delivery in Bangkok will be rolled out again to the department store also in the first half. And there's another function called return your products at store. Everything will be ready by Q3. The other part is the increasing our product listing. Again, this is very important because the more products you have, the more success of purchase. So all of our CRC BU products will be completely listed in the Central app by the end of the year. Again, this is an incredible game changer when we complete this. The third part is the integration of our sister companies, which are the One and also the Dolphin Payments. This one will enable us to easy log in for our One customers and also link all the formation into the app as well. And Dolphin Payments easy-access -- easy to pay with and also gain better benefits provided by Dolphin. The fourth part will be to enhance the customer data insights to understand our customers even better and soon to monetize the data. The second part of the year, which will be the start of the fourth phase will be to make the Central app even more hyper personalized by adding more functions and enhancing the experience. And later on, we will also go into the off-line install to make it more digitalized. You can -- you see a lot of changes happening at the end of this year and also early next year at the store level as well. And lastly, in terms of the tech team, we are reinforcing our capabilities here. We have hired many new senior talents to join our tech, digital and data units, again to push the Central retail faster towards our new Central vision. Next, in terms of the -- again, because of the COVID situations that are happening, so we want to highlight to you, again, what are some of the initiatives we are doing at the moment and how these will transpire to reduce our SG&A. And the first one is the, I would say, protecting our profit. So how we reduce our OpEx? One is about people management. We adjust the work days and hours according to the traffic, we also reduced some of the hirings and also let the natural attrition takes its course. We're negotiating very hard in terms of rental with all the landlord, including the CG properties. We're also reducing A&P overall, but focusing more now on the online as we push ahead. In terms of liquidity, in terms of the stock wise, we are more stringent in terms of buying the stocks and focusing more on the top sellers. We're also focusing more on the inventory and especially the aging stocks to sell those quickly to increase liquidity there. In terms of nonmerchandise, we will reduce and postpone all the unnecessary purchases. And in terms of CapEx, we're pushing ahead with only the proven business model stores with high potential locations. We push ahead with all the major renovations because once done when the market, when the country opens, we'll be ready for that. And we'll be reducing some store expansions in tourist locations. So with these initiatives, we hope to improve our SG&A and also increase our liquidity going forward in these uncertain times. Next, please. This is just a quick snapshot of one of the cost savings that we're doing, and it's a good one that I want to highlight. In this year, in Thailand, we're installing 11 locations with solar roof, 4 in Robinson Lifestyle Center and 7 in Thaiwatsadu stores. Once this is completed, we will have 16 stores of Robinson and 14 stores in Thaiwatsadu that have completed. In terms of utility savings, Thaiwatsadu will be able to save about 50% per locations with the solar roof. And in terms of Robinson, about 15% to 20%. We will continue to do this another 2 to 3 years to make sure that all of our locations will be using solar roof. As for Vietnam, we started this and we will complete 20 malls by the end of 2021. The savings here will be about 10 to 15 per store of utility expense. Go ahead. Lastly, before I talk about the financial part, I want to highlight about the CapEx. Kun-Yol already mentioned this. Given the COVID situation, we're going to be reducing some of the CapEx as buffer going forward. So the CapEx that we provided before of THB 16 billion to THB 18 billion will be reduced about 15% to 18%. So probably about THB 13 billion to THB 15 billion that we'll be using this year. If you compare it against last year, it was about THB 11 billion. Some of the savings will come from the postponement of large projects. Again, as you can see on the right, is Robinson Lifestyle in Phuket, One GO! Mall and Hyper in Vietnam, postponement of a shift project turning Robinson into Central in Chonburi and several small, middle-sized stores as well. However, as for Q1, we have opened 31 new stores already and completed 3 renovations, including 2 big projects in Thaiwatsadu, Bowin and Suksawat. And for the remaining quarters, Q2 to Q4, we plan to open about 150 stores, 10 stores in the large format. I count the GO! Malls as 2 because you have one mall and one hypermarket. 140 small, medium-sized formats, and we'll undergo about 13 renovating projects. Again, this is the latest expansion plan today. Okay. We will get into the financial part. Before I start and go through the numbers, I want to highlight 3 things. Firstly, Q1 has been significantly impacted by COVID. Phase 3, especially in Thailand, and also in Italy. In Italy, we had to close about 3.5 weeks. And once we opened, there was friction -- a lot of restrictions on our operation as well. Thailand, we had Phase 2 -- sorry, Phase 2 starting December 18, which continued to impact in January and February. And in Vietnam, we also experienced some COVID as well. Secondly, the numbers that we'll go through will include COL business operation from February 21 -- February 2021. Again, we will have 2 months incorporate into the financials. So sales will increase. SG&A will increase and also profit. Thirdly, this is the second year that we adopted the financial TFRS 9 and 16. So it's pretty much like-for-like going forward with year 2020. In terms of the business highlights, it's quite similar to what Kun-Yol already mentioned. In terms of Q1, our sales reach almost THB 44 billion, but it's a decrease of about 10% year-on-year. If you exclude -- sorry, can you go back? If you exclude COL, it's a decline about 13% year-on-year. The good news, however, is what has been shared by Kun-Nicolo and Kun-Yol already. Our omnichannel sales contribution has jumped in Q1 last year, 4% to 13% this year, and the growth was 224%. So this is a significant improvement and according to our strategy. In terms of gross profit, we have declined 13% year-on-year to THB 11 billion. Percentage of sales, about 24.7% is slightly lower than year-on-year. SG&A saw a good saving up 8% year-on-year to THB 13.6 billion. If you exclude COL, the saving would be about 11%. In terms of percentage of revenue of 27.9%, which is quite close as other quarters. In terms of EBITDA, we're set at THB 5.4 billion, a reduction of 10%, again, primarily coming from a reduction in sales. In terms of a percentage of revenue is 11%, which is quite stable over the last 4 quarters. And in terms of NPAT, we're at THB 508 million. This is normalized, reduction of 49% year-on-year. Again, this is also from the impact from depreciation and some financing costs. Next slide, please. This one shows the 3 types of revenue we have, the sales of goods and services on the left, the rent and service income on the middle and the other income on the right-hand side. If you look at the sales of goods, this quarter, we saw a decline of 10% and same-store sales growth of minus 16%. If you look at the -- compared to different quarters pretty flat. Again, this is pretty much coming from the COVID that was experienced in all 3 countries. Rental and service income dropped by 13% year-on-year. Again, it's pretty flat in terms of growth by the other quarters as well. Other income is slightly better, it's only minus 3% compared to year-on-year. Next, please. In terms of our EBITDA on the left-hand side and NPAT on the right-hand side, both of these shows the normalized numbers. Our EBITDA is about THB 5.4 billion this quarter, minus 10% year-on-year. If you compare it to the other 2 quarters, you can see that is pretty much the same level in terms of value, even though we were hit pretty hard by COVID Phase 2 in Thailand and the store closes in Italy. EBITDA margin is 11%. So you can see that we are able to maintain our gross profit margin not too bad, but also we did a good saving in the SG&A to reach this kind of margin. In terms of NPAT, we're sitting at THB 508 million again. And better than Q2 and Q3 dropped from Q4 from last year because of seasonal but dropped from year-on-year, again, because of the sales drop and because of the financing costs as well. In here, I have to say that there is the TFRS impact, quite significant. It's about THB 100 million difference between Q1 this year and Q1 last year. If you were to take that difference out, the drop is only going to be about 29% year-on-year. In terms of our sales mix by segment is on the left-hand side, by country is on the right-hand side, Q1 this year is on top and Q1 last year is on the bottom. You can see highlighted in red that Hardline has grown quite significantly from 28% last year to 35% this year. Again, the growth is coming from the inclusion of COL. If you exclude it, it's still going to be quite high at about 30%. What has dropped, however, is the food and the fashion category by 2% or 3% each. On the right-hand side is by country. Thailand is still about the same at 70%, but the difference is in Vietnam, Italy. Italy dropped down a bit because of big sales drop while Vietnam sales increase. So the difference in sales mix. The next slide, please. This shows the sales trend by quarter for the different segments. Fashion on the left, Hardline on the middle and food on the right-hand side, 3 segments have different stories. In terms of the details, I'll actually share more in the later slides, but I'll just highlight something here first. If you look at the fashion side, it contributes about 22% of sales in quarter 1. The sales growth is about minus 21%. It's pretty -- it's been pretty flat in the last 2 quarters as well. However, if you look at the same-store sales growth, it's actually improving if you compare it to last 3 or 4 quarters. In terms of Hardline, we have seen big improvement from minus 14% last quarter to almost flat in Q1 and higher year-on-year if you compare to last quarter, last year. This number does not include COL. If you include COL, the growth will be about 10% this quarter. And you look at the bottom part, the same-store sale growth is minus 4%. It's pretty much same level as last year Q1. On the food side, however, it's the opposite story. The trend is a little bit lower as we go along from -- starting from Q1 last year. So this year, in Q1, we saw a drop of minus 16% total sales growth and a drop of minus 20%. If you look at same-store sales growth. The key issue is actually coming from FamilyMart. FamilyMart has a lot of store closures because of nonperforming stores. And also, we have about 100 stores that are temporarily closed and in tourist locations. So because of this, and also because last year, in Thailand, there was a big stockpiling effect because of the scare of COVID Phase 1. So the Q1 of the food in Thailand was quite high. While this year did not have that same stockpiling effect. Because of those 2 reasons, it has dragged on the year-on-year growth for food. Next please. This slide shows the gross profit. On the left-hand side is gross profit of sales of goods. On the right-hand side is gross profit for the rental. On the left-hand side, you can see that in Q1, our profit has reduced by -- from Q1 last year and also from fourth quarter of last year to 22.8%, primarily this is coming from a decline in gross profit in the fashion business, which is from Italy. The second part is actually from the food segment also from FamilyMart, as I mentioned before, which has dragged down the total sales. However, if you look at fashion for Thailand, the gross profit is actually improving. If you look at the gross profit value, is dropped by about 13% year-on-year. On the gross profit on the rental side, the margin is 74.2%. It looks a bit slightly drop from last year. But if you compare last year's base of average, it's about 71.9%. So it's still performing better. A slight decrease is primarily coming from Thailand because of we still continue to have discounts that we need to give to our tenants due to COVID Phase 2. In terms of the gross profit value, this dropped 17% year-on-year THB 1.2 billion. I saw questions that. We will come to that during the Q&A. In terms of the S&A, we are seeing good savings in the S&A year-on-year and also Q-on-Q. You can see that by year-on-year, we have a saving about 8%. Our SG&A is THB 13.6 billion. So it's still below last quarter drop. The saving is primarily coming from the right side. If you look at the details. So personnel expense, minus 9%, depreciation, marketing, utility. So every single line of the SG&A has reduced. If you look at the SG&A to revenue, the percentage is 27.9%. So this is better than last quarter, similar to Q3 and slightly above Q1. So it show that because -- even though with the reduction of 10% in sales were able to reduce SG&A quite well. This minus 8% includes COL. If you exclude COL, it's about minus 11%. Next, please. Our balance sheet increased about THB 8 billion compared to end of last year to THB 247 billion or THB 248 billion, a growth of 4%. The main reason is actually coming from the COL acquisition. If you look at the other assets, the other assets increased about THB 8 billion. THB 7 billion is coming from the goodwill from COL inventory and PPE mainly is coming from COL as well, but also from Hardline growth. Again, this is the left-hand side, total assets. Cash and cash equivalent reduced slightly by THB 2.4 billion. This is primarily from payback of some of the loans we have and also payment for some merchandise we have to buy for Q1. In terms of the liabilities and equity, the main difference is on the debt side. We incur loan of about THB 12 billion loan to acquire COL. So that part is actually going up. Okay. Capital structure. The main difference, again, is on the debt side, as I mentioned, with the increased loan to finance acquisition of COL and the decrease of cash slightly to pay back some of the loan and also merchandise payment. Net debt is standing at THB 61 billion right now, to increase from THB 48 billion. In terms of the ratio, increased net debt to equity increased 0.9x to 1x, and terms of net debt-to-EBITDA increased from 2.5x to 3.3x. In terms of the debt structure, long term and short term, the short term has increased from 54% to 61%. Again, this is from the financing of COL. But with Q3, we will refinance that loan to be long-term loan. So the long-term loan will increase to probably about 50% after -- within Q3. In terms of the performance essentially for, these are by segment. So to give you a little bit more detail of each of the units. Firstly, let's start with fashion. I mentioned before that fashion on the left-hand side sales. We see a decrease of minus 21% year-on-year sales. From Italy, it's a drop of minus 30% and from Thailand is a drop of 19%. If you compare, again, year-on-year and Q-on-Q, the drop is less. So the fashion business as a whole is actually improving. If you look at same-store sales growth at the bottom, Q1 fashion is minus 28% last year and Q1 this year is minus 20%, and Thailand and Italy both are improving slightly more so in Thailand. In terms of the EBITDA, we are seeing a drop of minus 35% year-on-year to THB 1.6 billion. Again, this is coming from a big drop in sales in Italy and also a very big drop in GP margin in Italy as well. The EBITDA margin is 13.9%, which is quite low from Q1 last year. In terms of our store numbers, we have opened 12 new stores this quarter and closed about 30. So the net is about minus 18. All the stores are coming from the mono brands in CMG and Super Sports. However, if you look at the change in NSA, there's a slight change there because of the completion of the renovation project in Rinascente, which saw the opening of 3,000 square meter space, hence the higher NSA growth. In terms of Hardline, these are very good numbers in terms of top line and bottom line. Top line is total is plus 10%. In Thailand, it's plus 18%. Vietnam, however, has a minus 20%, again, primarily is because of the decrease of about 12 stores in Nguyen Kim and also the turnaround situation there. However, if you look at Thailand, if we just have Thaiwatsadu by itself, that business unit is growing about 16%. If you come down below our same-store sales growth, you can see that this year, Hardline -- Thailand is improving, plus 1%, excluding COL compared to last year is minus 3%. For this year, for Vietnam, it's minus 21%. Last year, we didn't have any because we just acquired total so we can't compare. In terms of the normalized EBITDA we see that big growth of 39% year-on-year from THB 1.4 billion to THB 2 billion. Primarily, this is coming from the COL acquisitions and also Thaiwatsadu. Without the COL, the growth here will be about 15% for the EBITDA growth. However, if you look at just Thaiwatsadu alone, the growth in Thaiwatsadu EBITDA is plus 50%. In terms of the EBITDA margin, we're looking at 12.2% versus 9.7%. Again, this is coming from COL mainly. If you take COL out, this margin is about 10.1% is still better than the 9.7% EBITDA margin. In terms of the store network, we have increased about 220 stores, majority is coming from the COL acquisitions, which has the OfficeMate and B2S stores. This adds up about 216 stores. We also have power by new stores, about 12, and they open about 4 more stores for Thaiwatsadu and AUTO1. Nguyen Kim numbers drop, as I mentioned. We had to close 12 nonperforming stores last year and this quarter. So the difference is about 12. The store increase in terms of the NSA is mainly from the big stores in thaiwatsadu if that is open. In terms of the food, in total, we saw a drop of minus 16%. In terms of Thailand, it's minus 29% and Vietnam is up plus 3% top line. In terms of Thailand, as I mentioned before, the drop is because of the high base of last year in Q1 with a stockpiling effect and also due to the FamilyMart, which we closed stores and had some stores temporary close in tourist locations. Vietnam increased mainly because of the store expansion -- the new store expansion. At the bottom same-store sales growth, you can see that food dropped minus 20% versus last year plus 3%. And Thailand is minus 32% compared to minus 1% last year and Vietnam minus 2% versus 11%. In terms of the normalized EBITDA, we saw a drop of minus 15% year-on-year. Again, the drop is less than the sales drop primarily due to the better SG&A saving here. And also gross profit margin improved in most of the BUs except for FamilyMart. EBITDA margin is 8.6% and is similar to last year 8.6%. In terms of the store networks, we have reduced about 38 stores to about 1,211 stores. Again, this is coming primarily from the FamilyMart, which I mentioned before, and also on One Lanchi store in Vietnam. However, there are other formats that expanded our 2 BigCs, Vietnam and 7 more Tops market and food hall. Next slide, please. I think this will be my last slide. So this is the property side of our business. On the rental income, total property reduced minus 13%. In Vietnam is actually plus 8%, while Thailand is minus 18%. Again, this is primarily due to COVID Phase 2. The gross profit margin dropped to 74% from 77%. Primarily, this is due to the discounts again from the Thai market. And if you look at the right-hand side, we have new outlets. So Robinson Lifestyle opened one outlet, the Bowin, and GO! Mall opened 2 places. So it takes to 37. In the right side, you can see that the top part, the occupancy drop there from 94% to 89% or 90%, that's primarily coming from the Thai market.