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

Good morning, everyone, analysts and fund manager. [Foreign Language]

[Foreign Language]

Good morning, everyone. [Foreign Language]

Thank you very much, Panet. Yes. Regarding the Vietnam, we have seen that the country has had a very strong recovery and is quite resilient, let's say, against COVID. The GDP growth year-on-year is at 8.8%. And quarter-on-quarter, actually, we have seen even better improvement with a little 14% versus previous quarter. What we see also in the market is that our retail and the retail as such is growing faster actually than the GDP, which is a very good sign. And you will see a little bit later on that actually even Central Retail is performing better and much better than actually the retail market as such. To restart back since March 2022, growing steadily at 300% year-on-year, we foreseen a full recovery of the tourist by 2024 actually. So when we look at our performance so far, the first 9 months of 2022, we overshoot the '19 sales by 153%, which is quite a good performance. And when we look actually our performance versus last year, it's plus 40% year-on-year with a 25% contribution inside CRC. This is done. Thanks to the great job that the team is doing in terms of recovery in each and every business unit that we have in the country. I mean we are improving our performance in property. We are leading, let's say, the position as a family-oriented mall, maybe the 39 malls. We have increased our leasable square meter [indiscernible] last year by 17%, which is also very good, is actually the positioning of -- and the leadership of our hypermarket business, where we are leader actually on this market when we look at Nielsen, and I will come back a little bit later with some numbers. And supermarket also grew quite steadily this 2022 full year. We are as well leading the market in omni-channel food with corporate high penetration of 7% in omni-channel. And I should mention as well that we confirm actually the turnaround of the [ VinMart ] with a position of #4 in the market, let's say, and you will see after that actually that we have as well a very strong market share development for [ VinMart ]. So if we move to property, you will see that actually, we got a sequential performance recovery after the mall fully reopened. We were able to reach actually an occupancy of 71% keeping stable ARR versus the quarter -- the previous quarter, sorry. This year, we opened one big mall in Lao Cai in April. Quite a successful one, actually, hypermarket is doing also very well in this mall. And the team has worked also on the rebranding and the renovation of three big malls, which have been done so far. We will continue, of course, to rebrand our mall, Big C Mall to become actually global in the future. We gave as well lower discount. Actually, when we look at the discount that we give, it's -- today, it's just because of remodeling. So we don't give any discount anymore due to COVID situation. And also to support, let's say, the positive development of our ARR. We have worked a lot on the tenant mix improvements with different concept that we have launched like Fashion and Brand On in something like 10 malls, very good supporting a good mix, let's say, of our tenants. One thing very important for us is, of course, the expansion. And on that one, we have built a very strong expansion team focusing on land acquisition. So far, when we look at Go Mall, we have more than 20 sites in the pipeline for our future expansion. If we look at our food business, which is the next slide, please. You will see that actually, Central Retail is performing much better than the total modern trade. Total modern trade in September was at 39%. Central Retail was at 88%. The reason why we were so strong actually in September is mainly due to the fact that [indiscernible] was completely shut down last year due to COVID. However, when we look at the performance year-to-date, we see that actually, we are trading almost 3x higher than the total modern trade. When we look actually at the performance of MCG in terms of market share, and this is a [indiscernible] data. You will see that when we compare ourselves with the Total modern trade. So we take all the formats available in the modern trade -- we have actually quite a good performance with a market share close to 20%, and we are growing versus 2022. When we look then comparable, let's say, per hypermarket and supermarket formats. Then the market share is even better, of course, because we are not having the series in this format, let's say. And we are trading at 35.3%, and we were even in July at 37%, which was one of the highest market share we have ever done in the country. It's mainly done and due to the fact that we continue to focus a lot on our food strategy developing, of course, a lot of food concept. We review every year, let's say, and we implement our strong category management, let's say, in food. One of the big pillar was the important on that one, we have a huge differentiation on this market. And as well a private level will be more and more, let's say, available in our shelf to support actually the growth in the future. One of also the big pillar that's supported actually, this growth this year is omni-channel. We are clearly a leader on this market and some months, actually in September, we were at 8% of penetration in the omni-channel, which is online sales, which is quite a very good performance. Our hypermarket also renovation on track and very successful. We still have 11 stores that will be rebranded in '22 in '23 -- sorry, in '20 and '24. So we should close definitely the Big C story at that time and promote actually our Go Brand. Supermarket, also opened two supermarkets in the first nine months, one Tops and mini mall, Mini Go in Go Dau. And we will also, in the last quarter, opened two additional Mini Go actually and two additional Tops. Some words regarding the performance on Hardline, which is also quite a good one. You see that last year, quarter 3 was quite difficult for us with a minus 53%. But since then, we have been able to grow steadily, let's say, with a big jump in the third quarter of this year, at plus 124%. What we see there is that in all the category, when we want to focus on is TV, small domestic appliance, major domestic appliance. We are significantly above the market even operating in a like-for-like environment. I mean the competition has opened quite some stores this year. And us, we were still with our 51 [ VinMart ] store, but having quite a strong commercial model, which actually allow us to have this gain of market share. A big focus also on customer satisfaction, online and omni-channel. So I mean, customer experience in store definitely has improved, but as well online, which allow us actually to get such kind of performance. And as well, we have redeveloped, let's say, and modernize our flagship store of Saigon, which will be fully opened by the end of this year with a brand-new concept that actually will be roll out in the future in our other flagship store, [ VinMart ]. Thank you very much. It's the end of my talk.

[Foreign Language]

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[Foreign Language]

Good morning. So omni-channel still continues with strong growth year-to-date at 21%. This outpacing the market growth in Thailand for e-commerce. Comparable has obviously been very strong with 2021, but still a strong share of business of 18% so nearly one out of five transactions in CRC are done in an omni-channel manner. This is always considering the recovery that both Yol and Ty just mentioned in our retail business. Some of our key performing channels are still online and personal shopping as well as social commerce. And we also continue with a very healthy profitability, which is the key highlight as we reach more scale and with strong unit economics, we expect this profitability to continue in the coming months and next year. In terms of our digital transformation, this will set a strong foundation for our digital business going forward, bringing digital practices and capabilities at high international standards. The progress that we've made so far are mainly on digital marketing with the launch of realtime customer interactions through our new Customer Data Platform, as well as performance marketing optimization tools, both on search and social and commerce, which is positively impacting our performance of marketing spend of our digital business in terms of efficiency. We've also launched in line with retail, a new model for price optimization and discount optimization, which is what we've achieved positively as well in our retail business on fashion category. And our main replatforming with the launch of four business units in Thailand as well as one in Vietnam is progressing. We are concluding the development of this replatforming in December when we will start the testing stage early in the new year, useful for our new relaunch. Following from that, we will also be launching advanced analytics and big data, as well as our in-store digitalization with a new only point-of-sale system, make generation point-of-sale system in our stores starting with our Central department store. And just also to mention a few highlights over the third quarter and fourth quarter this year. As Ty mentioned, we launched Tops Club, which is a similar format to Costco and some clubs in the U.S. So the app can be used both in stores as well as online. We've also launched a new Power buy app. This is a native app, which will improve unit economics in Power buy and our electronics business. We've seen already a much higher conversion rate driven by the app. So that will be a positive impact to both our top line as well as our bottom line. We've launched as well Tops Vista as a supplement site and also represents the first website format for over-the-counter and non-prescription products. And we've also launched a recently completed new reimplementation of our super sports business online with the launch also of a new native app. Again, similar to Power buy, we've seen very good strong EBIT economics with a much better conversion rate on the app as well as in the website. And then as well in Rinascente in Italy. We performed a new upgrade of the e-commerce platform, which is now resulting in a much, much faster e-commerce experience and therefore, have increased conversion rates as well. So the biggest focus in 2023 will be the launch of our biggest business units in Thailand. With a complete new platform, including a new look and feel and redesigns in line with our new positioning as well as our new homepage, single-page checkout where users can returning users can check out in three clicks. And also new mobile login registrations also aiming to have a much better experience and conversion rates.

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