Business and Initiatives Update

1st Feb 2021

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Agenda

No Topic Page
Q4 / FULL YEAR 2020 PERFORMANCE UPDATE

1 Key Financial Highlights 4-5

2 Store Update 6

OPERATIONAL UPDATE

3 Covid-19 Update 8

4 Nobu Update 9

5 Operational Update 10

SUMMARY 11

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Q4 / FULL YEAR 2020 PERFORMANCE UPDATE

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KEY FINANCIAL HIGHLIGHTS Unaudited figures

FOURTH QUARTER FULL YEAR

(in IDR Bn)
2020 2019 Variance % 2020 2019 Variance %
Gross Sales 2,739 4,220 -35.1% 8,599 18,035 -52.3%
SSSG% -34.6% -1.5% -52.4% 0.0%

Sales mix:
DP 35.4% 36.2% 36.2% 36.4%
CV 64.6% 63.8% 63.8% 63.6%

Gross Profit 858 1,372 -37.5% 2,816 6,116 -54.0%

GM% 31.3% 32.5% 32.7% 33.9%
OPEX (781) (999) -21.8% (2,838) (3,910) -27.4%
OPEX% -28.5% -23.7% -33.0% -21.7%
EBITDA 77 373 -79.3% (22) 2,207 -101.0%
EBITDA Margin% 2.8% 8.8% -0.3% 12.2%
Net (Loss) Income (206) 180 -214.3% (823) 1,367 -160.2%
Net Income Margin% -7.5% 4.3% -9.6% 7.6%

Information 4
BALANCE SHEET AS AT 31 December 2020 Unaudited figures

ASSETS LIABILITIES AND EQUITY

End Dec End Dec End Dec End Dec
(in IDR Bn) Variance (in IDR Bn) Variance
2020 2019 2020 2019

Cash & Bank 524 1,173 (649) Bank Loans 1,011 0 1,011

Trade Receivables 61 86 (25) Trade Payables 348 1,471 (1,123)

Inventories 889 1,099 (210) Employee Benefit Oblig. 502 520 (18)

Other Assets 4,013 1,042 2,971 Other Lliabilities 3,928 1,095 2,833

Fixed Assets 883 1,433 (550) Equity 581 1,747 (1,166)

TOTAL ASSETS 6,370 4,833 1,537 TOTAL LIAB. & EQUITY 6,370 4,833 1,537
Remarks:
• Fixed assets reduction of 550 Bn consists of:
o Cikarang land reclassified under other assets (investment property) 328 Bn
o 2020 Depreciation 339Bn
o 2020 Capex spent (172)Bn
o Closed stores / DC 55Bn
• Lease assets are reflected under other assets and lease liabilities are reflected under other liabilities
• Inventory (before provision) was 1.1 Tn. 72 Bn provision created in 4Q20.

Information 5
STORE UPDATE
Exited 2020 with 147 stores, Closed Unprofitable 6 Stores in Q4, 25 Stores in FY.
Q1-Q3 2020 Q4 2020
1. Lippo PLZ MAL Yogja
2. Lippo MAL Kuta
3. Keboen Raya BGR
12 4. Lippo PLZ MAL Gresik
5. Mayofield TC KWG
3 6. GTC TC Makassar

169 7
6
157
150 150 153
147
23 Watchlist
Stores
Opening Closed all Closed Open MDS as of Sep 20 Closed as of Dec 20
Specialty Stores Unprofitable Stores Unprofitable
MDS Stores MDS Stores

• 147 Stores include 23 watchlist stores.

• Expecting to close 6 out of 23 watchlist stores in 2021 and 17 to remain under watchlist .

Information 6
OPERATIONAL UPDATE

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COVID-19 UPDATE
Recovery continues, yet chance for sales pick-up obstructed yet again

Traffic recovery was interrupted yet again by the holidays’ activity restrictions in Dec’20, followed by PPKM in Jan’21.
Feb outlook remains challenging.

We keep serving our customers with strict health protocols and government regulation

To support government regulation, 100% WFH for Support Center has been initiated until further notice.
When we return to WFO, our staff will have rapid test beforehand, and we will keep the strict health protocols.

We have repaid the additional bank loan, taken in 2Q20. Currently, we are drawn to Rp 1 Trn.

We strictly control our expenses and maintain a very low Capex spending given the uncertainty.

January and February remained challenging due to PPKM extension.

Information 8
NOBU UPDATE
Credit Financing, Branchless Banking, ATM and Joint Promo
Credit Financing for MDS Supply Chain
o Nobu continuously maintaining relationship with suppliers
o Nobu tapping on resellers under the suppliers.
o Weekly cadence with both management teams to review needs.

Branchless Banking

o 1 Pilot store in Atrium; 31 stores targeted to have branchless banking in 2021

o 11 branch offices to open inside MDS stores (size approx. 20 sqm)

ATM Machine

o 1 ATM machine in Atrium; 5 ATM targeted in Q1 2021.

o New generation of ATM machines to be installed in MDS stores.
o It accepts cardless withdrawal including e-wallet and other banks
o MDS can deposit their cash sales into the ATM.

Joint promo

o Cashback program

Information 9
OPERATIONAL UPDATE

• Customer segmentation driven CRM best practices.

• Consignment vendor portal underway for future customer experience, insightful
Customers data and digital developments.
• Matahari Rewards relaunched in November. More Flexible points capability.
• New MVP Matahari.com platform launched in Nov. IOS launch in Dec.

• Assortment optimisation and Category strategies (House of Specialists).

• Exit negotiations concluded for Exit Brands and inventory flush out underway.
Operations • Working thru watchlist stores and renegotiating or exiting.
• Maintaining static headcount with less seasonal workforce planned.

• New Chief People Officer, Herni Dian, onboarded.

• Planning and Allocation Director, Daniel Swinburne, driving Inventory turns and better
Talent allocation strategy.
• Support Center modernization complete and performance culture review underway.
• 12 strategy workstreams reduced to 8 , 2 likely to be completed by H1-2021.

• Continuously engaging with Landlords for support.

• CIMB 1 Tn Bank facility renewed.
Financial • Conservative Capex stance to remain until post COVID.
• Multi-skilling project advanced for enhanced service/cost control.

Information 10
In Summary …..

Continued Fiscal Discipline :

Cleaning Up of House : • Commence Intake Plan building freshness for CNY and
• Exited Non Performing brands, Specialty Business. Lebaran preparation.
• Targeted marketing rebuild with ROI approach.
• Closed 25 unprofitable stores, 6 DC/Hubs, and 3 offices
• Continue to negotiate with landlords and vendors.
and downsized 1 floor MM.
• Review L&D plan for 2021 to align to strategic priorities.
• Revaluation of Cikarang land to its Realizable Value / Operate with safety first focus.
market price. • ROI and feasibility study based capex spending.
• Sold 175 Trucks.
Cost and Cash Discipline : Preparation for the Future :
• Negotiated with landlords / vendors for discounts • 1 new store (Balikpapan) to open before Lebaran.
including contractual ones. • Working on Consignment vendor data and process
innovation.
• Built provisions for NGF brands and aged inventories.
• PoS innovation: build visibility of loyalty members at PoS and
• Extended payment terms for all vendors. remove pink slip for CV products.
• Freeze on all Capex and controllable Opex. • Pilot New Format – working group formed including design
• Renegotiated agreements. agency.
• Revamping our own private labels and adding new product
• Launched New Dashboards for Manpower, Store offers.
Performance and Inventory Health. • Hired New CPO and New Director Planning and Allocation.

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CONTACT US

PT Matahari Department Store Tbk

8-12F Menara Matahari Jl. Bulevar Palem Raya No. 7
Lippo Karawaci 1200 Tangerang 15811, Indonesia

Phone: +6221 547 5333

Fax: +6221 547 5232
Email: [email protected]
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THANK YOU

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