corporate presentation · 2020. 11. 5. · corporate presentation. 1 disclaimer important: the...

November 2020

Corporate Presentation

1

Disclaimer

IMPORTANT: The information contained herein is preliminary and subject to change without notice, its accuracy is not guaranteed, has not been independently verified and may not

contain all material information concerning Vincom Retail Joint Stock Company (the “Company”) and its subsidiaries (the “Group”). You should not rely upon it or use it to form the

basis for any investment decision or commitment whatsoever.

None of the Company, its shareholders, or any of their respective affiliates, directors, officers, employees, agents, advisers or any other person makes any representation or warranty

(express or implied) or accepts any responsibility or liability for the accuracy or completeness of this presentation or any or all of the information in this presentation or otherwise made

available. It is not the intention to provide, and you may not rely on these materials as providing, a complete or comprehensive analysis of the financial or trading position or prospects

of the Group. No part of this presentation shall form the basis of or be relied upon in connection with any contract or commitment whatsoever. Further, nothing in this presentation

should be construed as constituting legal, business, tax or financial advice. You should conduct such independent investigations and analysis of the Group as you deem necessary or

appropriate in order to make an independent determination of the suitability, merits and consequences of investment in the Company.

This presentation contains “forward-looking statements”. These forward-looking statements involve known and unknown risks and uncertainties, many of which are beyond the

Company’s control and all of which are based on management’s current beliefs and expectations about future events. Forward-looking statements are sometimes identified by the use

of forward-looking terminology such as “believe”, “expects”, “may”, “will”, “could”, “should”, “shall”, “risk”, “intends”, “estimates”, “aims”, “targets”, “plans”, “predicts”, “continues”,

“assumes”, “positioned” or “anticipates” or the negative thereof, other variations thereon or comparable terminology. These forward-looking statements include all matters that are not

historical facts. Forward-looking statements are not guarantees of future performance. These forward-looking statements speak only as at the date of this presentation, and none of

the company, its shareholders, or any of their respective affiliates, directors, officers, employees, agents, advisers or any other person undertakes to update or revise any forward-

looking statements as a result of new information or to reflect future events or circumstances.

2

Vincom Retail (“VRE”) is the largest and fastest growing retail developer, owner

and operator in Vietnam

Key investment highlights are as follows:

Market leader in terms of the shopping mall GFA in Vietnam’s major cities…

…the direct proxy for consumer demand

Proven Track Record of

Highly Scalable Platform

with Strong Operating

Performance

Vietnam Economy

Remains Resilient

Amidst Covid-19

Outbreak

Ability to Leverage the

Best-in-Country

Vingroup Ecosystem

Modern Retail Set to

Take Off

Institutional Level

Corporate Governance

Largest and Most

Dominant Retail Platform

The Dominant and Fastest Growing Retail Platform in Vietnam

Executive Summary

2

3

Leading

hospital

operator

About 750

beds under

operation

7 full-

service

general

hospitals

and 5

clinics

Leading

hospitality

operator in

Vietnam

Approx.

16,800

rooms

owned &

managed

Premium

and large

scale real

estate

developer

Largest in

Vietnam

60,100

units

presold(3)

(Contracted

sales of

VND 91

trillion(4))

Leading

private

school

operator

About

28,600

students

registered

at 35

facilities(5)

Vingroup & Vincom Retail: Market Leaders in Vietnam

~26% NLA leased to internal

and affiliated tenants(2)

1.6 mnRetail GFA

(sqm)

79Operational

Malls

Hanoi

Ho Chi Minh City

Vincom Retail is the Ultimate Consumer Play for Vietnam

Note:

(1) Refers to Vinhomes’ landbank (2) MSN-Vincommerce is an affiliated tenant (3) For FY2019, including Vinhomes’ residential units (apartments, villas, townhouses, and shophouses). # unit rounded to nearest ’00

(4) Estimated pre-sale under SPAs and pre-sale bookings under deposits in FY2019. Including retails and bulk sales transaction value. Doesn’t include certain bulk sales transactions at advanced stage of discussion at the time of reporting

(5) (6) (7) (8) (9) As of 30 Sep 2020

Vincom RetailA Key Subsidiary of

Vingroup JSC

Largest Retail

Developer, Owner

and Operator in

Vietnam

Vincom Retail

VinID: ~10.4 mn Members, Largest Loyalty Program in Vietnam(5)

Largest Listed Company in Vietnam

Largest Real Estate Developer in Vietnam

Vincom Mega Mall

No. of Malls: 3

Retail GFA: 388,082 sqm

(24% total)

Vincom Plaza

No. of Malls: 54


(53% total)

Vincom CenterNo. of Malls: 7


(18% total)

Vincom+

No. of Malls: 15


(5% total)

Unique Multi format Model

(8)

(9)

c. 168 mm sqm of Landbank(1)

VinFast:

Flagship automobile and e-

motorcycle showrooms

Vinhomes:

Vietnam’s largest real estate

developer

Vinschool:

Leading private school operator

First

Vietnam-

ese smart

and green

vehicle

manufactu-

rer

55,800 cars

and electric

motor-

cycles

YTD(6)

Top 3

smartphone

producer in

Vietnam

1.3 million

smart-

phones sold

YTD(7)

VinMart:

Vietnam’s largest modern grocery

retail chain by presence

Ecosystem of Complementary Businesses

Residential Hospitality Healthcare Education Automobile Smartphone

4

Emergence of Vincom Retail as a Clear Market Leader

Early Years & FormationEstablishing Platform

For Growth

Accelerating Growth With

Dominant Market Share

2017 Listed on HOSE in

November

H&M opened 2 stores

in Hanoi and Ho Chi

Minh City

Zara opened first store

in Hanoi

Key tenants added:

Inditex brands

(Stradivarius, Massimo

Dutti, Pull & Bear),

H&M and Old Navy

2014 First Vincom

shopping mall

outside Hanoi &

HCMC

− VCP Ha Long

First Robins

department store

in Vietnam

opened in Royal

City in April 2014

16 Years of Operating Experience Achieving ~1.6 mm sqm of Retail GFA (~35x Increase Since 2004)

2015 Vincom Mega

Mall Thao Dien

launched

US$100mm

follow-on

investment

10 new Vincom

shopping malls &

Acquisition of 5

Maximark malls

2016 10 new Vincom

shopping malls

Introduction

of Vincom+ format

First Zara flagship

store in Vietnam

opened at Vincom

Center Dong Khoi in

HCMC

c.US$390mm Vingroup

follow on investment

2004 - 2013 Royal City launched

Times City launched

US$200 million

investment

Best Retail

Developer in

Vietnam” by

Euromoney in 2012

Note: As of 30 Sep 2020

Leasing revenue is based on Vietnam Accounting Standard (VAS) Audited Consolidated Financial Statements for respective years and Consolidated Financial Statements for 3Q2020

2018 Launched 20

shopping malls,

including Landmark

81

Signed leasing

contracts for

approximately

191,000 sqm NLA

and over 1,200

advertising contracts

4

2019 Launched 13

shopping malls and

expanded our

international tenant

portfolio across key

malls (Uniqlo,

Decathlon, CGV,

tiNiWorld, H&M,

Mango, Pizza 4P’s,

Haidilao)

Pioneer in

experiential

retail-tainment in

Vietnam

42 93467 499

851 1,023 1,1731,448 1,598 1,598

1,927

2,427

3,805

4,455

5,506

7,017

4,364

-20

980

1980

2980

3980

4980

5980

6980

7980

2004 2010 2013 2014 2015 2016 2017 2018 2019 9M2020

1 2 5 6 23 31 46 66 No. of

malls

Vincom Center

Ba TrieuVincom Center

Dong Khoi

1st Retail Mall

in Vietnam

1st Integrated

Project in

Vietnam

Leasing Revenue (VND bn)

Investment by

Warburg

Pincus

7979

2014 – 19 CAGR:

Leasing revenue: 30.0%

GFA: 26.7%

Retail GFA (‘000 sqm)

IPO and

listed on

HOSE

55

Retail Consolidates Around the Dominant Local Landlord

Global examples clearly demonstrate retail consolidation around the

dominant local landlord

Significant parallels seen between VRE and regional retail leaders

Vietnam's current position at an early, higher growth stage of the retail

cycle translates to a stronger growth profile and a more dominant market

share

Vincom Retail

Vietnam’s largest retail developer, owner and

operator

Scentre Group

Australia’s largest retail owner and

operator

SM Prime

Philippines’ largest retail real estate developerCentral Pattana

Thailand’s largest shopping mall developer arm of

Central Group

CapitaLand

Singapore’s largest retail mall owner and

manager

Simon Property

US’s largest shopping mall operator

Vietnam

Thailand

Singapore

Indonesia

Philippines

Australia

United States

1.0

2016 3Q2020

GFA (mm sqm)

2007 2019 2007 2019

GFA (mm sqm)(3)

Market Share by GFA(2)

2008 2019

Market Share by NLA(3)

1996 2007

2002 2008

Market Share by GLA(5)

Source: Company filings, Colliers, Statista, Urban Redevelopment Authority, Savills, Urbis.

1. Based on Central Pattana’s retail NLA in Bangkok Metropolitan Area and total shopping mall NLA in Bangkok Metropolitan Area.

2. Based on SM Prime’s retail GFA in Metro Manila and total retail GFA in Metro Manila.

3. Malls greater than 100,000 sq ft NLA. CapitaLand’s market share includes directly owned as well as owned through CapitaLand Mall Trust.

4. Based on Lippo Karawaci’s retail GFA in Indonesia, and combined shopping mall GFA of Jakarta, Greater Jakarta and Surabaya. Total Indonesian Retail GFA unavailable.

5. Based on Westfield Holdings’ GLA in Australia in 2002 and 2008, divided by total Australia shopping center GLA in 2001 and 2007. Westfield Holdings was restructured into Scentre Group in 2014.

6. Based on Simon Property’s retail GLA in the U.S, and total shopping mall GLA in the U.S.

Lippo Karawaci

Indonesia’s largest mall owner and operator

arm of Lippo Group


11.1mm

Total Market Size (GLA sqm)(6)

502mm 657mm

14.9mm

Total Market Size (GLA sqm)(5)

10.7mm7.8mm

Market Share by GLA(6)

Total Market Size (NLA sqm)(3)

3.2mm 3.6mm

Total Market Size (GFA sqm)(2)

2013 2019 2013 2019

GFA (mm sqm)(1)



20.5mm5.6mm


6.8mm 8.6mm

0.9

15%

4.7

23%

13%

17%

32%39%

2.23.6

28%

50% 19%

25%

2.1%3.4%

1.6

2012 2019

Key Investment Highlights

7

Vietnam’s Economy Remains Resilient Amidst Covid-19 Outbreak

‒ Stable Vietnam Macroeconomic Developments

‒ Leading the Regional Retail Market Recovery Post Covid-19

Huge Potential for Further Expansion in Vietnam’s Retail Space

Modern Retail Set to Take Off

Only Retail Platform With Nationwide Access

Metro and Bus Infrastructure To Accelerate Retail Mall Footfall

1

2

Multi Format Model Covers a Larger Market Opportunity

Solidified Position as Dominant Retail Platform in Vietnam

Ability to Leverage the Best-in-Country Vingroup Ecosystem4

Institutional Level Corporate Governance

3

5

Key Investment Highlights

8

Source: CEIC, General Statistics Office, State Bank of Vietnam (SBV), FactSet data as of 31 Oct 2020

(1) Asian Development Outlook 2020 (ADO) Report – Asian Development Bank, Sep 2020, CEIC.

Vietnam enjoys strong and stable macroeconomic fundamentals which gives it considerable flexibility to absorb any external or

fiscal shocks due to Covid-19 impact

1 Stable Vietnam Macroeconomic Developments

(Trade surplus, US$ bn)

Continued strong trade surpluses

(Foreign exchange reserves, US$ bn)

Steady growth in foreign exchange reserves

63.7 61.458.3 56.1 54.352.7 51.7 49.9 49.2 48.5

2016 2017 2018 2019 2020E

Public debt Government debt

(As % of GDP)

Improving fiscal position over the years with falling % of

public debt

Public debt as % of GDP has

shrunk nearly 10% in the

past 4 years

(Indexed chart)

Vietnam’s exchange rate has been among the most stable

in the region

(0.6%)

(0.1%)

(1.1%)

2.6%

(5.9%)

4.1%

90

100

110

120

Oct-19 Nov-19 Jan-20 Feb-20 Apr-20 May-20 Jul-20 Aug-20 Oct-20

Vietnam Dong per U.S. Dollar Indonesian Rupiah per U.S. Dollar

Singapore Dollar per U.S. Dollar Thailand Baht per U.S. Dollar

Malaysian Ringgit per U.S. Dollar Philippines Peso per U.S. Dollar

- 0 0 0 2 3 10 46 60

2,645

3,971

32 37

41

27

46

75

57

81

52

60

57

-

10

20

30

40

50

60

70

80

90

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

(Index)(No. of new cases)

Average new case/7 days Rapid response index

COVID-19 Outbreak In Vietnam Has Swiftly Been Under Controlled

Due To Government’s Strong Commitment And Determination(1)

Vietnam Targets To Spend Highest Level Of Public

Investment As % Of GDP And Has Made Strongest Rate Cuts

in 2020 YTD To Support Local Economy

10.4%

6.6%

3.9% 3.9% 3.8%2.6%

Vietnam Philippines Singapore Thailand Malaysia Indonesia

Public investment as % of GDP (2020

Target)

Policy

rate

cuts

(bps,

YTD)

200 175 N/A 75 125 100

36.5

49.155.5

72.9

100.0

2016 2017 2018 2019 2020E

Foreign reserves have built up nearly

threefold since 2016

1.8 2.1

6.8

11.1

16.5

2016 2017 2018 2019 Sep-20

Trade surplus balance in Sep-20 is more than

double vs. the same period last year and has

bypassed the full-year trade surplus of 2019

9

Source: Google Mobility Index; CBRE Research (Asia-Pacific Report for the first 8 months of 2020 and Vietnam market outlook for 3Q2020).

Fastest Footfall Recovery Amongst Regional Peers

-80%

-70%

-60%

-50%

-40%

-30%

-20%

-10%

0%

22-Feb 22-Mar 22-Apr 22-May 22-Jun 22-Jul 22-Aug 22-Sep

Vietnam Hong Kong Korea Thailand Singapore

Mobility level pre Covid-19 8.4%

0.4%

(1.0%) (1.5%)

(6.1%)

(11.6%)

(20.8%)

(32.4%)

(40.2%)

Vietnam China Australia Korea Indonesia Japan Thailand HongKong

Singapore

Whilst Retail Sales Across The Region Starts to Show Signs of Recovery,

Vietnam Proves Its Leading Position With Early and Fast Rebound

2Q2020 Nominal retail sales chg. YoY (%)

Rental Outlook In Vietnam Remains Stable And Not Experienced A

Decrease in Rental Rates

0% 0% 0%(2.4%) (2.6%) (3.0%)

(4.9%) (5.0%)(6.4%) (7.0%)

(10.0%)(10.0%)

(10.0%)

(30.0%)

-40%

-35%

-30%

-25%

-20%

-15%

-10%

-5%

0%

Ha

no

i

HC

MC

Ban

gko

k

Syd

ney

Melb

ourn

e

Beiji

ng

Gu

an

gzh

ou

Sha

ng

ha

i

Tokyo

Taip

ei

Sin

gap

ore

Auckla

nd

Pert

h

Ho

ng

Kon

g

2020F (As of Sep.) Q-o-Q change in rental rate (3Q20)

Solid Retail Leasing Enquiry Growth Expected

16,20010,718

31,600

67,862

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

HCMC Hanoi

2020F 2021F

+95%+533%

Index

(Sqm NLA)

1 Leading The Regional Retail Market Recovery Post COVID-19

10

Huge Potential for Further Expansion in Vietnam’s Retail Space

Low and fast growing disposable income per capita compared to neighboring countries, coupled with low

mall NLA, presents an opportunity to enlarge Vietnam’s retail mall space to close the regional gap.

Modern Retail is still at a Nascent Stage… …With the Growing Middle Class Set to Drive

Next Wave of Consumption

Disposable income per capita (US$)

Vietnam’s Disposable Income per Capita is similar to Philippines in

2004 and Thailand in 1990, implying huge growth potential (1)

Source: EIU, Colliers, CBRE Research (Hanoi and HCMC Market Insights 3Q2020)

10

2

Vietnam has a Low Mall NLA compared to Thailand and Philippines(1)

NLA (mm sqm)

Strong supply which validates the market’s potential, backed by

stable rental rate(2)

Note: (1) Includes NLA pipeline 2020-2021 (2) As of 30 Sep 2020

Future Supply (sqm NLA)

- 250 500 750 1,000 1,250 1,500

2020F 2021F 2022F 2023F

-

250

500

750

1,000

1,250

1,500

2020F 2021F 2022F 2023F

Current Future

Hanoi

HCMC

950 1,018

1,808

2,5542,796

2017 2018 2019 2023 2024

930

2,824

3,5473,818

2004 2019 2023 2024

999

6,2216,902 7,246

1990 2019 2023 2024

Vietnam

Philippines

Thailand

2.5

7.97.3

Hanoi/ HCMC Bangkok Metro Manila

2.9x

3.2x2.9x

0

30

60

90

120

150

4Q19 1Q20 2Q20 3Q20

Rental rate (USD/sqm/month)

Rent rate (CBD) Rent rate (Non CBD)

0

30

60

90

120

150

4Q19 1Q20 2Q20 3Q20

11

Source: EIU, Euromonitor, Vietnam Investment Review, Inside Retail Asia, CBRE Vietnam

(1) Includes NLA pipeline 2020-2021 (2) % E-commerce penetration represented by internet retailing over retailing.

Modern Retail Set to Take Off

Vietnam is Starved for Modern Retail Format E-Commerce More Catalyst Than Threat

E-Commerce Penetration(2)

28%

11%9%

4% 5% 4%2%

40%

21%

15%13%

11% 10%

3%

China Indonesia Singapore Philippines Malaysia Thailand Vietnam

2019A 2024E(%)

Vincom Retail Further Consolidates Leadership

Position

Attractiveness of Modern

Retail to Consumers

Attractiveness of Modern

Retail to Tenants

Modern Retail Format an Attractive Solution in Vietnam

Significantly Underpenetrated Modern Non-Discretionary Retail Remains

Malls: A Key

Activity Hub

Providing the

Infrastructure

Vincom Retail’s Disruption Has Already Leapfrogged the “Department Store” Phase

Low Penetration

vs Peers

Limited alternatives for

entertainment and social activities

One stop platform for discretionary +

non-discretionary consumption

Significantly higher footfall and sales

psm achieved compared to

unorganized retail

Provides quality control with

guaranteed infrastructure and logistics

that helps to build brand equity

Stand-alone Department Store Formats have Lost Out

Lotte Vietnam on losing streak

since operations began

…However, during its ten years of

operation in Vietnam, Lotte Mart has

never closed a year with profit…

Parkson Vietnam shutters store

…Parkson Vietnam has closed another

of its stores as it continues to struggle

to make its business profitable…

2

Digital

transformation

2020/21(1) NLA per capita (sqm)

Leading the service quality and customer experience

Destination for and a trustworthy partner of major international brands to be

present in Vietnam for the first time

Progressively applying digital transformation to enhance customers’

experience via improved service quality

Close and flexible connection between retail malls and e-commerce to support

shoppers and tenants via a network of credible e-commerce partners

Utilize the readily available customer base from VinID

0.1 0.2

0.5 0.5 0.5 0.5

1.1

1.4

1.8

HCMC Hanoi Beijing Jakarta Shanghai Manila Singapore Bangkok KualaLumpur

1212

Only Retail Platform With Nationwide Access

Portfolio Leasing Creates Significant Bargaining Power… … and Ability to Attract Best-in-Class Tenant Portfolio, with

more than 1,000 Unique Tenants(1)

Source: Company information as of 31 Oct 2020

(1) Non-controlling interest in a subsidiary of Masan Group which owns MasanConsumerHoldings, the largest manufacturer of consumer products by revenue, and VinCommerce, the largest consumer retail network in terms of number of grocery retail stores

2

CAN

THO

DONG

NAI

HCMC

DA

NANG

HANOI HAI

PHONG

VRE’s dominant position and nationwide scale makes it Vietnam’s “Go-to” platform

for international and established local brands

Vietnam

Fa

sh

ion

& B

ea

uty

F&

B a

nd

En

tert

ain

me

nt

An

ch

or (1)

First stores in

Vietnam for Zara,

H&M

First stores in

Hanoi for Uniqlo

First store in retail

malls of Decathlon

• 79 malls across 43

cities and

provinces(1)

• 4 retail formats for

specific areas

• Proven and

scalable retail

development

platform

13

Metro and Bus Infrastructure To Accelerate Retail Mall Footfall

Under Construction Planned LinesMetro Lines

With urban metro lines opening for the first time in Ho Chi Minh

City and Hanoi and extra coverage of VinBus routes, the shift

from street retail to organized retail (malls) will accelerateVingroup’s mixed use and VRE’s mall models are suited to tap

on this trend, given their targeted positioning and proximity to

the stations

2

Most of VRE malls are covered by the upcoming metro lines in Ho Chi Minh City and Hanoi, and major VRE megamalls such as

VMM Ocean Park, Smart City and Grand Park have extra cover of VinBus routes – significant boost in connectivity and footfall

expected

3

1

1

8

2

4

5

CBD

Van Dien

Ha Dong

District

Long Bien

Distirct

Tay Ho

District

Hoang Mai

District

Trau Quy

Hung Yen

Province

Hanoi

VINCOM MEGA MALLROYAL CITY

1

2

3

CBD

4

5

Ho Chi Minh CityDistrict 9

District 1

Go Vap District

District 2

Tan Phu District

District 10

VINCOM CENTER BA TRIEU

VINCOM CENTERTRAN DUY HUNG

VINCOM CENTER PHAM NGOC THACH

Ho Chi Minh

City Airport

Preliminary VinBus routes as of 31 Oct 2020 (*)

1 Grand Park - Emart 2 Grand Park – Tan Son Nhat airport

3 Grand Park – Sai Gon bus station 4 Grand Park- Mien Dong bus station

6 Hao Nam – Ocean Park 7 My Dinh – Ocean Park 8 Ham Nghi – Ocean Park

9 Interconnected Complex – Ocean Park

1 Long Bien – Tran Phu – Smart City 2 Long Bien – Cau Giay – Smart City 3 Giap Bat – Smart City

4 Ho Tay water park – Smart City 5 VCP Long Bien – Smart City

Noi Bai – Ocean Park

Mien Dong bus station – National University NUA5

10

Bus routes

1 2 3 4

1 2 3 4 5

6 7 8 9 10

VINCOM PLAZA SAIGON RES

VINCOM MEGA MALLTHAO DIEN

VINCOM MEGA MALLGRAND PARK

VINCOM PLAZA3/2

VINCOM CENTERNGUYEN CHI THANH

VINCOM MEGA MALLSMART CITY

VINCOM CENTER DONG KHOI

VINCOM MEGA MALLOCEAN PARKVINCOM MEGA MALL

TIMES CITY

Note: (*) Business plan which is subject to change

1414

Multi Format Model Covers a Larger Market Opportunity

Household Annual

Income

Distribution

(% of Households

in Vietnam)(1)

Target Segment:

City Center/

CBD consumers

Middle & upper

middle income

Target Segment:

Integrated

development

catchment area

Targets families

across all

income segments

* Focus on shopping –

experience based

shopping to enhance

customer experience

Target Segment:

Heart of provincial

town plus urban

non-CBD

consumers of

key cities

Family &

activity hub

Middle income

Target Segment:

Regional &

non-CBD

catchment areas

Mass to

middle income

Lotte

Target

Segment:

Upper middle

income

Holistic Segment Coverage Across Formats Competitors

Vincom Center Vincom Mega Mall Vincom Plaza Vincom+

AEON

Target

Segment:

Middle

income /

Upper middle

income

Vincom Retail has access

to addressable market

segment of over US$176bn

of retail revenue

Above

US$25,000

p.a

(1.6%)

US$3,000

p.a and

below

(17.5%)

US$3,000 –

US$5,000

p.a

(29.2%)

US$5,000 –

US$10,000

p.a

(38.3%)

US$10,000 –

US$25,000

p.a

(13.4%)

Source: EIU

Based on EIU estimates for year 2018. Definition refers to percentage of households with nominal disposable income per annum of various buckets.

3

BIG C GO

Target

Segment:

Mass to

middle income

15

Unique Multi-Format Retail Model

Vincom CenterLocation: City-center, CBD

Retail GFA: 40,000 –

60,000 sqm

No. of Malls: 7

Total GFA: 280,026 sqm

Vincom Mega MallLocation: In integrated,

mixed-use projects


150,000+ sqm

No. of Malls: 3


Vincom PlazaLocation: High-density,

CDB of cities

ex. Hanoi and HCMC


40,000 sqm

No. of Malls: 54


Vincom+Location: Medium-density,

non-CBD

Retail GFA: 3,000 – 5,000

sqm

No. of Malls: 15


(Segmentation by GFA)

Key Cities

43Cities/

Provinces

79Operational

Malls

~1.6mmRetail GFA

(sqm)

Distinguished retail formats and focused on wide range of lifestyle oriented consumers

Prime Urban and High Growth Areas in Key Cities

Note: As at 30 Sep 2020

4 retail mall formats

Proven and scalable retail

development platform

25.5%

51.7%

4.1%

18.7%

Hanoi

10 Vincom Malls

5 Vincom Centers

2 Vincom Mega Malls

3 Vincom Plazas

Ho Chi Minh City

13 Vincom Malls

2 Vincom Center

1 Vincom Mega Mall

7 Vincom Plazas

3 Vincom+

North Vietnam (ex. Hanoi)

19 Vincom Malls

16 Vincom Plazas

3 Vincom+

Central Vietnam

20 Vincom Malls

13 Vincom Plazas

7 Vincom+

South Vietnam (ex. HCMC)

17 Vincom Malls

15 Vincom Plazas

2 Vincom+

3 Solidified Position As Dominant Retail Platform In Vietnam

1616

Ability to Leverage the Best-in-Country Vingroup Ecosystem

Largest Loyalty Programme in

Vietnam Reinforces

Captive Spending

Integrated Developments Provide

Mega Malls with Natural Catchment

Access to Landbank from

Vietnam’s Biggest Developer

c.30 years

worth for

development

pipeline for

Vinhomes

Unparalleled

land sourcing

expertise

Vinhomes’s Landbank Breakdown

mn sqm

Single card,

nationwide access

Benefits lock in

repeat spending

Guaranteed

Footfall for

Malls

Market Leading Retail Brands Form

Immediate Tenant Foundations

Accelerates concept

to completion

Drives consumer

footfall

c.168mm sqm of

Landbank(1)

Up to

100,000Residents(2)

26% NLA leased to

internal and

affiliated tenants(2)

10.4m Members(2)

Note:

1. Refers to Vinhomes’ landbank

2. As of 30 Sep 2020

3. Non-controlling interest in a subsidiary of Masan Group which owns MasanConsumerHoldings, the largest manufacturer of consumer products by revenue, and VinCommerce,

the largest consumer retail network in terms of number of grocery retail stores

13

155

Launched Pipeline projects

Times City

(opened: 4Q2013)

Vinhomes Ocean Park

(expected opening: 4Q.2020)

4

(3)

17

Institutional Level Corporate Governance

Conflict Area Description Control

Decision Making• Vingroup will continue to be VRE’s majority

shareholder following the Offering

• All transactions must be entered into on commercially reasonable

basis as a statutory requirement.

• Significant related party transactions must be approved by the Board

of Directors or the general meeting of shareholders

• Interested parties must abstain from voting

Competition• Both Vingroup and VRE are in the business of property

development

• Non-compete from Vingroup on retail; VRE has a clear Right of First

Refusal (“ROFR”) for all stand-alone retail projects, retail

components and select mixed-use projects with well-defined criteria

Land Bank Access • Vingroup holds much larger land bank than VRE

• The ROFR above gives VRE economies of scale in land sourcing,

and delaying early-stage development costs

• VRE has ROFR on land that can be used for retail, at cost

• VRE has an independent land sourcing team and primarily focuses

on different types of projects than Vingroup

Related Party Tenants • VRE has related party-tenants (Vingroup entities)

• Allows VRE to expand faster with the key anchor tenants in place in

advance of commencing construction

• Leases are negotiated on an arms’ length commercial terms

• Governed by related party rules under “Decision Making”

Management Services

Contracts

• VRE has contracts with Vingroup entities such as

Vinpearl and Vinmec for non-core services such as

lodging rental and periodic health check for

employees, and Vingroup for headquarters services

such as marketing, treasury and corporate HR

• Fees are calculated based on comparable third-party service

providers and Vingroup fees are allocated based on number of man

hours and assets under management

• Helps VRE to manage expansion with minimum overhead as it can

share resources and costs with the rest of Vingroup

• Governed by related party rules17

5

3Q2020 Key Highlights

19

Note: Based on VAS Consolidated Financial Statements for 1Q and 3Q2020 and VAS Reviewed Consolidated Financial Statements for 2Q2020.

These financial metrics already took into account the impact of the rental support (VND300bn in 1Q, VND 375bn in 2Q, and VND145bn in 3Q) granted by Vincom Retail to tenants affected by COVID-19 during 9M2020

(1) NOI for leasing investment properties and rendering of related services is calculated by taking total income from leasing activities and from other property-related services less any property-related operating expenses which include land lease costs but

exclude management expenses allocated from parent company

V-shape Recovery Is Seen Across Key Financial Metrics

Financial Performance – 3Q2020

1,686

1,449

1,630

1,307

1,760

1,608

Total revenue Revenue from Leasing

(3.3%) 8.0%

(9.8%)

23.0%

VND bn

1Q20 2Q20 3Q20 1Q20 2Q20 3Q20

Total Revenue Revenue from Leasing

VND bn

73.8% 82.2% 79.7% 90.6% 78.8% 88.9%

% of 2019 level % of 2019 level

759

646

845

(14.9%)30.8%

VND bn

1Q20 2Q20 3Q20

Gross Profit

78.1% 67.3% 78.4%

% of 2019 level

1,068

910

1,218

(14.8%)

33.8%

VND bn

1Q20 2Q20 3Q20

EBITDA

88.9% 73.1% 94.0%

% of 2019 level

994931

1,172

(6.3%)

25.9%

VND bn

1Q20 2Q20 3Q20

Leasing NOI

85.8% 81.2% 91.1%

(1)

% of 2019 level

20

Retail GFA Occupancy rate

(‘000 sqm) 9M2019 9M2020 Change (%)

Vincom Center 280 280 -

Vincom Mega Mall 388 388 -

Vincom Plaza 787 858 9.0

Vincom+ 63 72 14.3

Total 1,518 1,598 5.0

1Q2020 2Q2020 3Q2020

Change

3Q Q-o-Q

(%)

Vincom Center 92.1% 92.5% 92.9% 0.4

Vincom Mega Mall 87.6% 87.2% 86.0% 1.2

Vincom Plaza 82.2% 82.5% 81.2% 1.3

Vincom+ 76.5% 76.0% 74.6% 1.4

Total 84.9% 85.0% 84.0% 1.0

Key Operational Metrics


21

F&B Entertainment CinemaFashion

Resumption of business activities & improved tenant sales resulted in less tenant support in 3Q2020 (VND145bn vs VND675bn

in 1H2020)

1 Footfall

2 Tenants’ sales as % of 2019 sales

3

(2)


(1) Operational NLA as % of leased NLA

2) Pre-Covid level is defined as the different periods between 1 and 31 Jan 2020

(1)

Time period Hanoi malls HCMC malls

% effective

operation

Footfall as % of

pre Covid

% effective

operation

Footfall as %

of pre Covid

1 July – 27 July: Before second wave of Covid-19 100% 109% 100% 86%

28 Jul – 30 Aug: Social distancing in Da Nang, Buon Ma Thuot, Hai Duong 100% 78% 100% 67%

1 Sep – 30 Sep: All stores reopened and activities resumed 100% 88% 100% 80%

(1) (2)

COVID-19 relative impact

Recovery status

Strong recovery

witnessed across

Hanoi and HCMC

Strong recovery

witnessed across

Hanoi and HCMC

Gradual recovery

witnessed across

Hanoi and HCMC

Gradual recovery

witnessed across

Hanoi and HCMC

Least

impacted

Least

impacted

Medium

impacted

Most

impacted

Tenants’ Recovery Post COVID-19

22

Upgrade tenant mix at key projects

All anchor tenants have been secured

16 Aug: MLB

opened at VCC

Ba Trieu

27 Aug:

Watsons

opened 400sqm

store at VCC

Dong Khoi

25 Sep: 2nd

Uniqlo store

opened at VCC

Metropolis

Events

Leasing

plan of

VMM

Ocean

Park

Chain tenants

Tenants in negotiation to expand

Tenants committed to expand in 3Q2020

+2 projects

+1 project

VCC Dong Khoi VCC Lieu Giai VMM Thao Dien

Adding new brands in fashion,

cosmetics and cuisine

Adding new fashion and

cosmetics brands

Adding big

fashion tenants

Tenant Base Continues To Expand In Vincom Malls

Business Highlights - 3Q2020

Anchor

Sports brand

Anchor Japanese

home appliance

retailer

Anchor Japanese

cosmetics brand

Anchor Japanese

cosmetics brand

Note: Business plan which is subject to change

23

1. Opening of VMM Ocean Park:

Complete the construction for tenants to complete their

fit-out on grand opening towards the end of December

2. Tenant mix upgrade plan supported by big tenants:

VCC Ba Trieu 2 and VCC Tran Duy Hung (Hanoi), VCP

Phan Van Tri (HCMC), VCP Can Tho 2 (Can Tho), VCP

Ha Long (Quang Ninh)

3. Tenanting process starts for 2021 pipeline malls

4. Develop retail tourism customer portfolio, improve

rental capacity

1. Vietnamese Women's Day - 20 October

Create a space for playground and photo-taking for

customers

Gift exchange program for female customers in Vincom

on 20 October

2. Black Friday - 27 November

Promotion program to stimulate year-end shopping

demand

3. Christmas 2020 & New Year 2021

Vincom Shopping Center becomes a brilliant fairy space,

with festive and exciting activities during December for

families and youth

Vietnamese Women's

Day (2019)

Black Friday

(2019)

VMM Ocean Park Grand World

Sales Marketing

Upcoming Sales And Marketing Plan for 4Q2020


24

Customer Relationship

ManagementFacility Management

(FM)

1 2

3Q2020 Results

CRM (Phase 2)

1

Automatic Car

Parking System

2

4Q2020 Plan

"Customer-centricity" guides the path to digital transformation; VRE benefits from being a part of Vingroup's special ecosystem

To improve operational efficiency: standardize processes, information and automate the data system to reduce manual work time and increase labor productivity

For tenants: creating channels to easily interact and exchange information with VRE departments (Sales and Operations)

For shoppers: enhance customer experience via a digital angle

Plan, assign work, control

maintenance results, checklist, note

repair incurred

Centralized management of M&E

systems

Capable of creating hundreds of tasks

from thousands of periodic plans.

Tasks may be handled via automatic

assignment from the system

Manage leasing activities and track

records with tenants/space

Manage operations and performance

of sales staff / sales departments

Manage the business layout of each

shopping mall

Reduce manual data entry in sales

and operations

Focus on data analytics

Shift and checklist assignment,

automatic maintenance and repair

Report quality errors immediately,

track corrective results on site

All tenant requests may be handled

through the online portal instead of

email and paperwork on site

Automatically assess the performance

of tenants and the retail malls

The Tenant Portal provides direct

communication with tenants regarding

resolution of complaints, proposals

and requests

Observe tenant health by chain and by

mall

Complete the trial implementation at

Royal City with automatic car parking

system for car lanes without staff on

duty, and support cashless payment

via VinID & banking app

Reduce cash fraud

Improve customer experience at the

mall

Reduce staff required at car parking

stations

Riding The Wave of Digital Transformation


25

Figures in VND billion 3Q2019 2Q2020 3Q2020 YoY (%) Commentary QoQ (%) Commentary

Leasing of Investment

Properties and Rendering of

Related Services1,807 1,307 1,608 11.1

Additional VND145 billion

(USD6.2m) support package for

tenants

Decreased ancillary revenue,

including advertising, utilities

revenue and parking of VND 80

billion

23.0

Lower support of VND 230

billion compared to 2Q

Increased ancillary revenue,

including advertising, utilities

revenue and parking of

VND110 billion

Sale of Inventory Properties 339 294 107 68.5 63.7

Due to timing of recognition

as revenue will be

recognized when shop-

houses are completed and

delivered. Bulk of the shop-

houses will be completed in

4Q.2020

Other revenue 62 29 46 25.5 57.5

Total Revenue 2,208 1,630 1,760 20.3 8.0

Gross Profit(1) 1,078 646 845 21.6 30.8

Operating Profit / (Loss) 890 467 673 24.4 43.9

Profit / (Loss) before Tax 901 446 716 20.5 60.7

Profit / (Loss) after Tax for

the Period717 343 572 20.1 66.8

Profit / (Loss) after Tax and

Minority Interest717 343 572 20.1 66.8

Note: VAS Consolidated Financial Statements for 3Q2020 and VAS Reviewed Consolidated Financial Statements for 2Q2020.

These financial metrics already took into account the impact of the rental support (VND 375bn in 2Q, and VND145bn in 3Q) granted by Vincom Retail to tenants affected by COVID-19

(1) Gross profit already subtracted D&A relating to investment properties accounted for under VAS.

Financial Performance in 3Q2020 vs 3Q2019

26

Figures in VND billion 9M2019 9M2020 Change (%) Commentary

Leasing of Investment Properties

and Rendering of Related

Services5,066 4,364 13.9

In 9M2020 VRE issued a supporting package of VND820 billion for

tenants affected by Covid-19

Sale of Inventory Properties 1,242 602 51.5

In 9M2019, VRE delivered more units in big projects e.g. Shophouse

Ca Mau, Mong Cai, Sa Dec… In 2020, some big projects will be

handed over in 4Q

Other revenue 167 111 33.7 Entertainment business and operation of Condotel Da Nang were

heavily impacted by Covid-19

Total Revenue 6,475 5,076 21.6

Gross Profit(1) 3,009 2,249 25.2

Operating Profit / (Loss) 2,449 1,716 30.0

Profit / (Loss) before Tax 2,467 1,782 27.8

Profit / (Loss) after Tax for the

Period1,968 1,408 28.5

Profit / (Loss) after Tax and

Minority Interest1,968 1,407 28.5

Note: VAS Consolidated Financial Statements for 3Q2020


(1) Gross profit already subtracted D&A relating to investment properties accounted for under VAS.

Financial Performance in 9M2020 vs 9M2019

27

1,905

2,404

2,851

2017 2018 2019

3,089

3,829

4,955

2017 2018 2019

Note: Based on VAS Audited Consolidated Financial Statements for respective years, VAS Consolidated Financial Statements for 1Q and 3Q2020 and VAS Reviewed Consolidated Financial Statements for 2Q2020.


(1) Depreciation and amortization relating to investment properties is below the graph and should be added back (to Gross Profit) under IFRS. Since 2018, “Other” segment includes results from management of Da Nang condotels which was incurring loss as the property

was still ramping up after launch in May 2018.

(2) NOI for leasing investment properties and rendering of related services is calculated by taking total income from leasing activities and from other property-related services less any property-related operating expenses which include land lease costs but exclude

management expenses allocated from parent company.

VNDbn

Total Revenue Gross Profit

VNDbn

4,4555,506

7,017

951

3,4332,027

112

185215

5,518

9,124 9,259

2017 2018 2019

2,342 2,882

3,752

411

806

735

48

(47) (84)

2,801

3,641

4,404

2017 2018 2019

50.8% 39.9% 47.6%

Gross Profit Margin (%)

Leasing Net Operating Income (NOI) Profit After Tax and Minority Interest

VNDbn VNDbn

Depreciation & amortization of investment properties (VNDbn)

829 1,042 1,331 339 336

Leasing NOI Margin (%)

69.3% 69.5% 70.6%

(2)

(1)

Financial Performance

1,4491,307

1,608

201294

1073629

461,686 1,6301,760

1Q2020 2Q2020 3Q2020

668 587

838

135 110

49 (44) (52)

(41)759

646

845

1Q2020 2Q2020 3Q2020

45.0% 39.6% 48.0%

994 931

1,172

1Q2020 2Q2020 3Q2020

68.6% 71.2% 72.9%

346

492

343

572

1Q2020 2Q2020 3Q2020

Leasing of Investment Properties Sale of Inventory Properties Other revenueLeasing of Investment Properties Sale of Inventory Properties Other revenue

28

VNDbn

Total Assets Total Borrowings, Cash and Cash Equivalents

Total Equity (Net Debt / (Net Cash))(3) / Equity

VNDbn

VNDbn VNDbn

21,481 27,773 28,718 28,090

16,652 10,911 7,121

11,989

38,133 38,684 35,839

40,079

31-Dec-17 31-Dec-18 31-Dec-19 30-Sep-20

Investment Properties and Investment Properties Under Construction Other Assets

5,974

2,780 2,785

5,716

4,095

3,133

2,177

4,119

31-Dec-17 31-Dec-18 31-Dec-19 30-Sep-20

Total Borrowings Cash and Cash Equivalents

26,094 28,509

26,954 28,361

31-Dec-17 31-Dec-18 31-Dec-19 30-Sep-20

7.2%

Net cash

2.3%

5.6%

31-Dec-17 31-Dec-18 31-Dec-19 30-Sep-20

(2)(2)

(2)

(2)

(1)

Note: Based on VAS Audited Consolidated Financial Statements for respective years and VAS Consolidated Financial Statements for 3Q2020

(1) Investment Properties and Investment Properties Under Construction (IP/IPUC) are valued at development cost minus depreciation and amortization and are not fair valued

(2) Decline in other assets, cash and cash equivalents, total equity as well as increase in gearing ratio as of 31 December 2019 was due to the payment of cash dividends of VND 2,445bn in June 2019 and buy back 56.5 mil treasury shares completed in

December 2019

(3) Net Debt / (Cash) = (Short-term Borrowings + Long-term Borrowings) – (Cash & Cash Equivalents + ST Investments).

Balance Sheet

Appendix

30

Note: Based on VAS Consolidated Financial Statements for 2Q2020 and conversion to IFRS by management

Unit: VND Billion

VAS

9M2020

Adj. IFRS

9M2020

Commentary on Adjustments

Leasing revenue and other related

services4,364 77 4,441

Realized unearned revenue of deposit from customers in relation to

amortization of deposit

Sale of inventory properties 602 602

Other revenue 111 111

Total revenue 5,076 77 5,153

Cost of leasing activities and other related

services(2,271) 978 (1,293) Mostly depreciation of malls included in VAS; excluded under IFRS

Cost of inventory properties sold (308) (308)

Others (248) (248)

Cost of goods & services (2,827) 978 (1,849)

Gross profit 2,249 1,055 3,304

Gain/loss from recording FV of IP/IPUC 1,204 1,204Fair valuations of the investment properties and investment

properties under construction (“IP/IPUCs”) are based on valuation

reports by independent valuers as of 30 June 2020

Selling expenses (145) (145)

General and administrative expenses (265) 54 (211) Amortization of Goodwill included in VAS; excluded under IFRS

Other income 75 75

Other expense (9) (9)

Finance expense (305) (183) (488) Amortization of deposit from customers

Finance income 181 (35) 146 Amortisation of deposit under BCC and deposit from customers

Profit before tax 1,782 2,095 3,877

Tax expense (374) (460) (834) Mainly deferred tax arising from fair value adjustment of IP/IPUC

Profit after tax 1,408 1,635 3,043

Bridging VAS to IFRS

Investor Relations Department

Vincom Retail JSC

7 Bang Lang 1, Vinhomes Riverside, Viet Hung Ward

Long Bien District, Hanoi, Vietnam

Tel: +84 (24) 3974 9999 ext. 9400

Fax: +84 (24) 3974 8888

Website: ir.vincom.com.vn/en

E-mail: [email protected]

corporate presentation · 2020. 11. 5. · corporate presentation. 1 disclaimer important: the...

Documents