matahari department store corporate social responsibility a...

Matahari Department StoreCorporate Social Responsibility

A Strategic Perspective

Presentation byTravis Saucer

C E OMatahari Department Store

Lippo Group

PT Matahari Putra Prima Tbk.

Indonesia’s Leading Retail Group


2007 Exceeding 1 Billion Sales in US Dollars

MDS Department Store division2007F Sales: Rp5.0 trillion

Department Store

♦ 80 outlets

♦ 38 cities

Matahari Food Business (MFB) division

2007F Sales: Rp4.5 trillion

Hypermarket

♦ 38 outlets

♦ 20 cities

Foodmart

♦ 29 supermarket outlets

♦ 25 cities

Boston Pharmacy

♦ 42 Health & Beauty Centers (HBC)

TimeZone & Others2007F Sales: Rp318 billion

Arcade centre♦ 90 outlets ♦ 45 cities

Other operations directly held under Matahari

Distribution♦ In-house support♦ 3 centresProperty♦ Property management♦ Retail leasing

Note: No of outlets as of February 26, 2008


Indonesia’s Largest Department Store


Matahari Department Store Group

Target middle and upper middle income consumers: Particularly targets females/families between ages 15 to 45.

Store size typically ranges from 4,000 – 15,000 sqm – Modern, well-lit and well fixtured.

MDS competes on Fashion, Value and Quality.


2007 Matahari Department Store’s Most Successful Year in Its 50 Year History

Highest ever same store sales growth performance in 2007 at 13.7%

2007 EBIT Margin of 10.4% - highest ever, best of class worldwide

Develop long-term, strategic plan of multi-segment business to double sales within 5 years

Sales hit Rp 5 Trillion A Strategic Perspective

Matahari Department Store is the crown jewel for PT. Matahari Putra Prima Tbk!!!

Beginning in 2008 we will further dominate Indonesia with a major

expansion of Matahari Department Stores!!!


3,775

4,944

0

1,000

2,000

3,000

4,000

5,000

6,000

2007 2012

235 248

0

50

100

150

200

250

300

2007 2012

20

16

0

5

10

15

20

25

2007 2012

INDONESIAN ECONOMY SHOWS PROMISING GROWTH

Real GDP, 2007-12 (Rp T)

Real GDP/capita, 2007-12 (Rp M)

Population, 2007-12 (M)

Real GDP forecast to grow by 6% p.a. ..

... while population is growing at 1% per year ...

... resulting in increase of GDP/capita of 25%

by 2012

•+31 % +25 %•+6 %

Average income per capita projected to grow by 25% through 2012


Note: All figures in constant 2007 RpSource: EIU; BCG analysis

SingaporeSouth Korea

Hong KongJapanTaiwan

MalaysiaThailand

ChinaIndonesiaIndiaVietnam

Indonesia 2012

0

30

60

90

100 1000 10000 100000

DEVELOPMENT OF MODERN RETAIL EXPECTED TO ACCELERATEShare of modern retail to increase to 30% by 2012

GDP per capita in US$ (2004)

Modern retail as % of total retail sales, 2004%

Projected increase to 30%

of total retail sales in 2012

(1) Figure for 2007Source: IBM consulting; Press search; BCG analysis

1


Our number 1 strategy: Grow Matahari Department Store Faster!!!

Matahari Department StoreThe Crown Jewel


EXPAND MATAHARI STORE BASE MORE AGGRESSIVELY ...

Planned number of Matahari stores, 2007-2012

+58%

1. Figure end 2007 (excludes 2 Matahari stores that are converted to Parisian)Source: Matahari Real Estate and Store Planning

1

7985

95105

115125

2007 2008 2009 2010 2011 2012

Open 10 new stores a year starting 2008


... AND EXPAND GEOGRAPHICAL FOOTPRINTTHROUGHOUT INDONESIA

Source: Matahari Real Estate and Store PlanningNew stores in new citiesNew stores in current cities

Potential future locations

Existing stores


Matahari Department Stores Corporate Social Responsibility

• Our success comes with a responsibility to be a role model in giving back to the employees and the communities that support us


What Is Corporate Social Responsibility ?

Achieving commercial success in ways that

honor ethical values, respect people,

communities and the natural environment


Corporate Social Responsibility Divided into Four Areas:

Work Place – How do we treat the people who work for us?

Market Place – Good Governance practices Code of ethicsGlobally accepted accounting practices

Community – Seeing ourselves as a member of the community rather than an outsider

Environment – Reduce the resources we use and waste we produce


Benefits

A. Good reputation – attract the best people

B. Brand enhancement

C. Income appeal to investors and financial analysts

D. Increase sales and market share


Cost of Ignoring CSR

A. Risk of new business

B. Brand risk

C. Legal risk


Challenges

A. Choosing social issues

B. Selecting on initiative to address the issue

C. Developing and implementing program plans

D. Evaluation


Corporate Social Responsibility

Matahari 2006/2007


Matahari: Aid and Support on 2006 / 2007

Natural Disasters

1. Earthquake victims

2. Tsunami victims

3. Flood victims


June 2006, EARTHQUAKEMatahari disbursed aid to help the earthquake victims with food,blankets, medicine for more than 10,000 households.


February 2007, TSUNAMITogether with Yayasan Obor Berkat Indonesia, Matahari helped the victims of the tsunami


February 2007, FLOODTogether with Yayasan Obor Berkat Indonesia, Matahari helped the flood victims in Jakarta and greater Jakarta region



Arts, Humanities and Education for the Nation’s Future

1. Arts programs

2. Sport events

3. Scholarships to employees and the less fortunate

4. Teachers in isolated areas

5. Loaning of associates to universities


August 2007, TEACHERS SUPPORTIn cooperation with Foreign Affairs Department, Matahari donated special packages for teachers in isolated areas throughout Indonesia



Less Fortunate Members of the Community

1. Special Olympics

2. Orphanages

3. Blind and handicapped individuals


2006IKM donation to Orphanage


August, 2006Matahari donated Rp 100 million to Yayasan Putra Bahagia to help the unfortunate children


2006Donation to Orphanage


Employee Welfare

1. Scholarship to employee

2. Vocational study

3. Spiritual responsibility; establishment praying place i.emosque

4. Condolences contribution

5. “Koperasi Karyawan”- benefit of local loans to employee- special allocation of emergency of employee

6. Employee’s union – annual conference meeting


Employee voluntary blood donor for Indonesia Red Cross


Employee spiritual responsibility


Matahari Soccer Team


Worked with Others to Achieve More

1. Employees union

2. Customer donations

3. Matahari Suppliers Club

4. Indonesia Retail Association

5. Special Olympics

6. Louis Braille Institution

7. Organized Bazaars for funds

8. Ministry of Foreign Affairs to provide aid

9. UNICEF


September 2006Through a trade-in program, Matahari collected more than 10,000 pairs of jeans which were donated to social institutions in areas surrounding Matahari stores.


November 2006Rp 4 billion was donated by Matahari in cooperation with Matahari Suppliers Club (AMSC) to 33 social foundations, as part of the “Matahari Charity Day”.


October 2007Matahari in-cooperation with Dompet Dhuafa gathered funds to help those in needs.


Cause Marketing – Donate a portion of the profits of each bra we sell to the Breast Cancer Council

Trade Ins – Encourage our customers to donate uniforms/bags/shoes which will be donated to local orphanages in return for discounts on new merchandise

Matching Donations – donations by our customers will be matched by MDS and our suppliers

New Initiatives for 2008


CSR is beyond the old philanthropy of the past “Donate to good causes at the end of the year”

CSR is a year round responsibility that we accept for the environment around us

CSR is the difference we make to the world and the contributions to poverty reduction


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