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

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[Foreign Language] Please update on Vietnam section, and then we'll wrap up with omnichannel development costs.

Thank you very much. For Vietnam, we have seen last year let's say, a big change in terms of channel landscape with the COVID situation and the lockdown we face in the country. The good news is that since the quarter 1 we have seen quite a big improvement in hypermarket and supermarket coming back. All the population above 18 years old are vaccinated in the country. And they started also to vaccinate the children between 5 and 12 years old. So I mean, we are among -- in the world, I think, one of the best country in terms of vaccination, which means that also we are now able to live in a kind of safe environment, and that's also one of the proof is also the Southeast Asia games hosted in Hanoi, which is quite an important manifestation, let's say, in the country, having now quite a lot of tourist. We reopened the country mid of March for tourism, and we have seen really a ramp-up in the course of April. And now, let's say, that we see more and more tourists in the street, which is, for sure, helping our development. If we go to the food, we have opened 2 new store in early, let's say, April, February and April. Lao Cai that you see now in video. Lao Cai is situated in Sa Pa region, which is a very touristic region in Vietnam. Very strong opening. It was a soft opening, but obviously, much better than what we were expecting in terms of customer and therefore, sales as well. We are quite optimistic there because this region touristic is really at the border of China and the border of China is still closed. So it means for us quite a lot of opportunity when China will reopen. And in February 2022, we opened -- also [indiscernible] our second Mini go! that we optimized also in terms of assortment, store experience but as well efficiency. And there also quite a good opening. We have been over budget by 130%. It's mainly driven by the number of customers, but as well the basket. We have been able to improve our own food. And therefore, we have seen quite a nice increase actually of our nonfood penetration versus the first store we opened in the Center, something like 18 months ago. The impact of this in terms of margin is also quite impressive because you have a mix of sales improving by 10 points in nonfood and then a mix of margin improving by 3.5% in total. Tenant also, you see in the picture that we have Pizza Hut, but we have also KFC, having a very good performance there. And it's most probably that they will actually follow us in our next opening this year based on the success they had in [indiscernible]. We are already implementing also the learning of this very good opening of store #2 in the first one we opened once again in August 2020, and we see also this improvement working in terms of sales and development of our margin. If we go to the next slide to talk about the mall. We see that we have a positive development and some positive signal in terms of visitation, mainly due to the fact that we are in a post-COVID environment now and once again, tourists are back, but as well, the customers are back more and more during the weekend, feeling, let's say, a positive environment. And this is very good because actually, we were having quite negative customer development in the quarter last year, for sure, but starting to recover in the quarter 4 and quarter 1 of this year, month after month, we have seen visitation improving and now even being positive since beginning of May. So we can be also there I would say, optimistic on the recovery of our occupancy. Occupancy that could reach roughly 80% by the end of this year, mainly due to the improvement of our mall and turn on mix. Let's say, we have developed, let's say, [indiscernible] fashion plus, but as well [ Brandon ] which is to shift a little bit more into a more lifestyle, let's say, mall experience in some area in the country, and it's working quite well actually. We have very good return especially in fashion, which means that we're going to roll out this one during the year, to improve once again the mix. If we move to the next one, which is the hardline, there, as mentioned by Khun Ty, very good performance of NK, recovering in quarter 4 last year and confirming also this good trend in quarter 1 2022. Is it in terms of sales? Or is it in terms of EBIT? The good news there is that we have also a positive, let's say, market share development compared to our peer in the major category where we want to focus on. And in April, we also believe that we should be total once again taking market share, which is also very good news because it's the first time for a while there that we are, let's say, winning against the market. We opened also in April 4 new pilot COL zone, which is more focusing on air conditioning category -- in different malls that we have. It's a little bit too early to talk about the performance there. We will come back during our explanation for the quarter 2 to give you a little bit more flavor regarding the performance of this concept. It's done for Vietnam.

Thank you, David.

So in terms of omnichannel performance, and this being a year of market recalibration with the rebound of retail, where comparables are and will be challenging sometimes for the rest of the year. We have been outperforming omnichannel sales in all of our markets compared to the average growth in the market. A total of plus 44% growth, which is actually higher than the sales in Q3 2021 when we had majority of the lockdown starting at the end of July last year. The growth continues to be very strong in Vietnam with 88% growth mainly driven by our food business. Thailand with 31% where in [indiscernible] we focus mainly on profitability, and I'll share with you a couple of numbers in a second. And very good performance still of new sales channels, particularly personal shopping as well as social and COL and shop channels. In the case of Italy, we've also outperformed the market at a 35% growth, but we've seen a lot of good traction. And we still have a very strong sales contribution of 18%, mainly 1 out of 5 of sales that we make in the group are made omnichannel. So in terms of Thailand, in particular, a lot of development total omnichannel sales, as I mentioned, for growth in Thailand of 31% versus last year. Online was 23% with a much healthier conversion of nearly 30% compared to last year, which is also giving much better efficiency in terms of some of our costs like marketing. If we look at private sales values pretty much in line with previously with a slight increase in terms of [indiscernible] per basket, so bigger basket sizes. We have very, very good strong growth as well on Tops express delivery in line as well with some of the quick commerce players as Foodpanda and Grab. And also new features launched during the first quarter, which includes a new faster on-site search, both for central and Tops as well as further integration with the one loyalty program and Dolphin payment. A new subscription service for returning customers for Tops prime, which is similar to Amazon Prime as Khun Ty just mentioned. A much higher EBIT percentage margin this quarter versus last year and full year -- just to let you know, first quarter versus previous quarter, quarter 4, we had 124% increase on our profit line. And then versus Q3, nearly quadruple the profit growth versus that quarter. So really strong growth in that area. O2O channels plus 36%. As I mentioned earlier, personal shopping, very strong at 40% and also social commerce at 40%. And then new features launched in these channels include Central [indiscernible] Shop as well as marketplace Return and Click and collect. These are features that we couldn't offer for marketplace products. That basically means that today, all of our product catalog 100% is fully omnichannel. And then, of course, also the launch of new ordering tool into Central [indiscernible] Robinson stores. Looking at Vietnam growth, a staggering 88% growth of Omnichannel versus previous year. We're getting closer and closer to the double-digit online sales contribution, about 8%. And in terms of mobile apps that are performing very strongly. GO app now is top #5 Vietnam shopping app in the market, a great achievement, more than 2.2 million downloads so far. And 1 hour delivery available also as of Q4 last year. So additional new services coming through that app. Tops app and [indiscernible] app more than 66 downloads, including also 2 hours strong delivery. And 1 hour direct pick up at 1,000 pick points. So again, increasing our omnichannel services offering. Italy, also a strong growth of 35% versus previous year. Just worth mentioning the 3 million visitors, 64% year-on-year growth. We are working on additional enhancements and features for Rinascente during the course of the year. So we expect the performance of the website to further improve for the rest of the year as well and a 6% omnichannel sales contribution growing month-to-month. We are increasing omnichannel provision there.

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