38
May 2020 Corporate Presentation
May 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
Experienced
Management Team with
Strong Corporate
Governance
Largest and Most
Dominant Retail Platform
The Dominant and Fastest Growing Retail Platform in Vietnam
Executive Summary
2
3
Residential
Premium
and large
scale real
estate
developer
Largest in
Vietnam
60,100 units
pre-sold(2)
(Contracted
sales of VND
91 trillion(3))
Hospitality
Leading
hospitality
operator in
Vietnam
Apprx.
16,800
rooms
owned &
managed
Education
Leading
private
school
operator
About
28,000
students
registered at
31 facilities(1)
Healthcare
Leading
hospital
operator
About 750
beds under
operation
7 full-service
general
hospitals
and 5 clinics
3
Vingroup & Vincom Retail: Market Leaders in Vietnam
Full Suite of Leading Retail Brands
1.6mmRetail GFA
(sqm)
79Operational
Malls
Hanoi
Ho Chi Minh
Vincom Retail is the Ultimate Consumer Play for Vietnam
Note: Based on USD/VND of 23,420 as at 31 March 2020.
(1) Refers to Vinhomes’ residential landbank (2) For FY2019, including Vinhomes’ residential units (apartments, villas, townhouses, and shophouses) . # unit rounded to nearest ’00 (3) 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 (4) As of 31 March 2020
Vincom RetailA Key Subsidiary of
Vingroup JSC
Ecosystem of Complementary Businesses
Largest Retail
Developer, Owner and
Operator in Vietnam
VinMart:
Vietnam’s largest modern
grocery retail chain by
presence
Vincom Retail
VinID: ~9.6 mm Members, Largest Loyalty Program in Vietnam(4)
Largest Listed Company in Vietnam
Largest Real Estate Developer in Vietnam
Vincom Mega MallNo. of Malls: 3
Retail GFA: 388,082 sqm
(24% total)
Vincom PlazaNo. of Malls: 54
Retail GFA: 857,517 sqm
(53% total)
Vincom CenterNo. of Malls: 7
Retail GFA: 280,026 sqm
(18% total)
Vincom+No. of Malls: 15
Retail GFA: 71,936 sqm
(5% total)
Unique Multi format ModelVinFast:
Flagship electric motorcycle
and automobile showrooms
(1)
(1)
c. 165 mm sqm of Landbank(1)
4
42 93 467 499
8511,023
1,173
1,4481,598 1,598
5,000
1,927 2,427
3,805
4,455
5,506
7,017
1,449
-20
980
1980
2980
3980
4980
5980
6980
7980
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2,200
2,400
2,600
2,800
3,000
2004 2010 2013 2014 2015 2016 2017 2018 2019 1Q2020 2026
1 2 5 6 23 31 46 66
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
No. of 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 31 March 2020
Note: Leasing revenue is based on Vietnam Accounting Standard (VAS) Audited Consolidated Financial Statements for respective years and Unaudited Consolidated Financial Statements for 1Q2020
Retail GFA (‘000 sqm)
Vincom Center
Ba TrieuVincom Center
Dong Khoi
1st Retail
Mall in
Vietnam
1st Integrated
Project in
Vietnam
Leasing Revenue (VND bn)
Inflection
point:
Investment
by Warburg
Pincus
2014 – 19 CAGR:
Leasing revenue:
30.0%
GFA: 26.7%
2018 Launched 20
shopping malls,
including Landmark
81
Signed leasing
contracts for
approximately
191,000 sqm NLA
and over 1,200
advertising contracts
4
79
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
79 158
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 1Q2020
GFA (mm sqm)
2007 2016 2007 2016
GFA (mm sqm)(3)
Market Share by GFA(2)
2008 2017
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
Market Share by GFA(4)
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 3.3mm
Total Market Size (GFA sqm)(2)
2013 2019 2013 2019
GFA (mm sqm)(1)
Market Share by GFA(1)
Total Market Size (GFA sqm)(1)
20.5mm5.6mm
Total Market Size (GFA sqm)(4)
6.8mm 8.5mm
0.9
15%
4.7
23%
13%
17%
32%39%
2.23.5
28%
33%19%
25%
2.1%3.4%
1.6
2012 2017
Key Investment Highlights
7
Key Investment Highlights
Vietnam economy remains resilient amidst Covid-19 outbreak
Huge Potential for Further Expansion in Vietnam’s Retail Space
Modern Retail Set to Take Off
Only Retail Platform With Nationwide Access
Metro Infrastructure Will 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
8
4.4%
1.4%
3.0%
6.2%
5.1%
6.7%
-2.0%-1.2% -1.0%
2.0%
3.8%
5.0%
Malaysia Singapore Thailand Philippines Indonesia Vietnam
Pre Covid-19 Post Covid-19
Vietnam economy remains resilient amidst Covid-19 outbreak
Key retail trends
Vietnam GDP 2020 projected to be the least impacted in the region
● Brick and mortar remains
the primary way to
reach consumer
● Retailers will continue to
invest in physical stores
● Several new overseas
brands are expected to
enter Vietnam in 2020
● Entertainment and
experienced based
retailers are expected to
be a stronger demand
in 2020
● Malls are seen to
incorporate features
such as virtual
reality zones, smart
pick-up, experienced
based restaurants
● Live streaming is an
increasingly popular
strategy to market
products
● Retailers are required to
make significant
investments in technology
and logistics facilities to
improve fulfilment
capacity
● This segment of
population drives the
increasing spending in
entertainment, fashion
and F&B
● This trend is expected
to continue in the
coming years
● Building management are
expected to continue to
ensure high standard of
cleanliness post outbreak
● Features like temperature
check may become
standard procedure
during the flu season
● Retailers are advised to
invest in customer
analytics tools to better
understand customer
behaviour and tailor
service offerings
Brick and
mortal retail
remains upbeat1
Retailers venture
into omni-channel
strategy2
Shopping malls
continue to evolve
into activity centres3
Young population
to drive lifestyle
retail expansion4
Customisation
set to emerge as
key focus5
Stronger emphasis
on hygiene and
sanitation6
Fastest Urban Population Growth in Southeast Asia, with significant room
to run
Vietnam’s Urbanization Rate by
Year
(%)
Proportion of urban households in
Vietnam set to increase at a CAGR
of 2.6% p.a. over 2019 – 2026E
35.9% 36.6%
41.6%
2018 2019 2026E
0.8%
1.5%1.8% 1.9%
2.1%
2.6%
Sin
gap
ore
Tha
iland
Mala
ysia
Phili
ppin
es
Indo
ne
sia
Vie
tnam
Middle Income Population(1)
Growth2019 – 2021E CAGR (%)
17.0%
8.1% 7.1%
5.3%
2.9% 1.4%
Vie
tnam
Ph
ilippin
es
Indonesia
Th
aila
nd
Ma
laysia
Sin
ga
pore
Urban Population 2019A – 2026E Growth (%)
1
Source:
(1) Pre-Covid: FactSet consensus 31 Dec 2019; Post-Covid: FactSet consensus mid April 2020
(2) HIS Market Forecast 2020
(3) CBRE Real Estate Market Outlook 2020, April 2020
9
930
2,774
2004 2020E
999
6,881
1990 2020E
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 GFA, 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
Vietnam
Philippines
Thailand
2019 GFA per capita (sqm)
950 1,018 1,122
?
2017 2018 2019 Future
9
2
Vietnam has a Low Mall GFA compared to Thailand and
Philippines(1) which is Compounded on a Per Capita Basis
GFA (mm sqm)
0.1
1.0
0.5
Hanoi/ HCMC Bangkok Metro Manila
7.9x
4.4x~ 2.1
~ 8.5
~ 7.0
Hanoi/ HCMC Bangkok Metro Manila
3.3x4.0x
Strong supply which validates the market’s potential, backed by
high occupancy rates and high rental growth (2)
(‘000 sqm) Annual rental rate (US$/sqm/month)
Note: (1) As of 31 Dec 2019 (2) As of 31 Mar 2020
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
0
2
4
6
8
10
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
1Q
20
x 1
00000
NLA Hanoi NLA HCMC
Occupancy HN Occupany HCMC
(‘000 sqm)
0
20
40
60
80
20
13
20
14
20
15
20
16
20
17
20
18
20
19
1Q
20
HCMC Hanoi
10
Source: EIU, Euromonitor, Vietnam Investment Review, Inside Retail Asia, CBRE Vietnam
(1) % 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(1)
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
Malls are centres of gravity for all entertainment activities
High proportion of non-discretionary spend in malls
Malls will be platform and beneficiary of e-commerce penetration,
given nascent and under-developed logistics in Vietnam
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…
10
2
10.7 9.3 7.7 6.2 5.2 3.1 1.1 0.9
0.4 0.4
0.91.1
0.5 0.4
0.1 0.1
Shanghai Beijing Bangkok Singapore Jakarta KualaLumpur
HCMC Hanoi
Current supply (m sqm NLA)Supply per capita 2019 (sqm)
Digital
transformation
Progressively applying digital transformation to enhance customers’
experience
1111
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: Inside Retail Asia.
(1) As of 31 March 2020.
(2) First large format flagship store in Vietnam.
(3) Based on Inside Retail Asia.
(4) 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
• 79 malls across 43
cities and
provinces(1)
• 4 retail formats for
specific areas
• Proven and
scalable retail
development
platform
VRE’s dominant position and nationwide scale makes it Vietnam’s “Go-to” platform
for international and established local brands
Fa
sh
ion
& B
ea
uty
Vietnam
First Stores in
Vietnam for Zara,
H&M, Mango,
Decathlon(2)
1st Zara in Vietnam
…VND 5.5 billion(3) on opening day, believed to
be one of the most successful Zara opening
days internationally by turnover…
Inditex Brands
F&
B a
nd
En
tert
ain
me
nt
An
ch
or
(4)
12
Metro Infrastructure Will Accelerate Retail Mall Footfall
CBD
Under Construction Planned Lines
District 6
District 5
District 8
District 4
District 7
District 3
District 1Phú Nhuận
Bình Thạnh
Gò Vấp Thủ Đức
Ho Chi
Minh City Airport
4
2
6
3
5
Tân Bình
District 10
CBD
Ho Chi Minh CityVINCOM PLAZA
SAIGON RES
VINCOM PLAZA3/2
VINCOM MEGA MALLTHAO DIEN
VINCOM CENTERNGUYEN CHI THANH
VINCOM MEGA MALLROYAL CITY
VINCOM CENTER DONG KHOI
VINCOM MEGA MALLTIMES CITY
VINCOM CENTERBA TRIEU
3
8
5
2
67
4
1
3
Trung Văn
Dương Nội
Mai Dịch
Nhổn
Bách Khoa
Giáp Bát
Khu đô thị
Xa La
p. Long Biên
Phú Thượng
Nhật Tân
Ngoc Thuy
phường Xuân
Đỉnh
Phú Đô
Đại Mỗ
Văn Điển
Thanh Trì
Đông Ngàn
Trung Thôn
Ngọc Lâm
Metro Lines
Most of VRE malls are covered by the upcoming metro lines in Ho Chi Minh City and Hanoi – significant boost
in connectivity and footfall expected.
Hanoi
With urban metro lines opening for the first time in Ho
Chi Minh City and Hanoi, the shift from street retail to
organized retail (malls) will accelerateVingroup mixed use and VRE mall models are suited
to tap on this trend, given their targeted positioning
and proximity to the stations
1
5km
`
5km
2
1313
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 incomeTarget Segment:
Integrated
development
catchment area
Targets families
across all
income segments 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
Low 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$160bn
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
14
VCC18%
VMM24%
VCP53%
VC+5%
Prime Urban and High Growth Areas in Key Cities Unique Multi-Format Retail Model
4 retail
formatsProven and scalable
retail development
platform
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
Retail GFA: 60,000 – 150,000+ sqm
No. of Malls: 3
Total GFA: 388,082 sqm
Vincom PlazaLocation: High-density, CDB of cities
ex. Hanoi and HCMC
Retail GFA: 10,000 – 40,000 sqm
No. of Malls: 54
Total GFA: 857,517 sqm
Vincom+Location: Medium-density, non-CBD
Retail GFA: 3,000 – 5,000 sqm
No. of Malls: 15
Total GFA: 71,936 sqm
(Segmentation by GFA)
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+
Key Cities
79Operational
Malls
43Cities/
Provinces
~1.6mmRetail GFA
(sqm)
Note: As at 31 March 2020
Solidified Position As Dominant Retail Platform In Vietnam
Distinguished retail formats and focused on wide range of lifestyle oriented consumers
158+Operational
MallsBy 2026
~5.0mmRetail GFA
(sqm)
3
1515
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
mm 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.165mm sqm of
Landbank(1)
Up to
100,000Residents(2)
4% NLA leased to
internal tenants(2)
9.6m Members(2)
Note:
1. Refers to Vinhomes’ residential landbank
2. As of 31 March 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
152
Launched Pipeline projects
Times City
(opened: 4Q2013)
Vinhomes Ocean Park
(expected opening: 2020)
4
(3)
16
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 economy 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 rules16
5
1Q2020 Operational Update
18
● VinPro closure has impact of c.5.3% on blended OCC
- VCC not affected while VMM, VCP and VC+ saw
decrease in occupancy rate
● There was no material tenant contract liquidation in 1Q2020
Key Operational Metrics
(‘000 sqm) 1Q2019 1Q2020 Change (%)
Vincom Center 246 280 13.8
Vincom Mega
Mall(1) 395 388 1.8
Vincom Plaza 751 858 14.0
Vincom+ 63 72 15.0
Total 1,455 1,598 9.7
1Q2019 1Q2020 Change (bps)
Vincom Center 90.9% 92.1% 1.2
Vincom Mega Mall 90.5% 87.6% 2.9
Vincom Plaza 88.5% 82.2% 6.3
Vincom+ 84.5% 76.5% 8.0
Total 89.2% 84.9% 4.3
Note: As at 31 March 2020
(1) Due to re-categorizing some shop-offices from Investment Property to Inventory for sales
Retail GFA Average Occupancy
19
Operational And Marketing Highlights – 1Q2020
Selected Anchor tenants
(Expected opening June 2020)
2 marketing
campaigns
Vincom Center Pham Ngoc Thach reopened on
6 March 2020Occupancy 98%
Lunar New Year Campaign 2020
International Women's Day Celebration Campaign
1
2
8 million footfalls
100 million media reach
20
0
100
200
300
400
500
600
0
50
100
150
200
250
300
350
Daily confirmed cases (RHS) Total number of confirmed cases (RHS) Footfall (LHS)
Strict nationwide
social distancing
extended to 22 April
Strict nationwide social
distancing easing on April 23
in most cities and provinces
8 Vincom malls in Low
risk provinces resumed
on April 18
Most Vincom
malls reopened
on April 23, and
all reopened on
April 24
Public holiday
with picked up
footfall
Source: chinhphu.vn, CBRE Research, 1Q 2020
Suspended entry for
all foreign nationals
Suspended all
flights between
Korea and
Vietnam
Hanoi & HCMC shut down
bars, karaoke Suspended all visas
and entry for
travelers from 27
European countries
HCMC
closed
restaurants,
gyms, spas
Strict nationwide social
distancing for 15 days
Patient
N17
Phase 1: Beginning
Feb 5 – Mar 5
● 16 patients and all were
cured from Covid-19
● No new confirmed cases for
21 consecutive days
● On Mar 6, Patient 17 started
the second phase of Covid-
19 breakout
● Footfall: decreased 30%
compared to the same
period 2019
Phase 2: Breakout
Mar 5 – Mar 27
● # of new cases increased to
200
● Most were imported from
overseas
● Footfall: decreased 54%
compared to the same period
2019
● Reduced operating hours:
11am – 9pm
Phase 3: Social Distancing
Mar 28 – Apr 22
● Apr 1 – 15: mandatory social
distancing nationwide;
temporary closure of all 79
malls (non-essential stores
were closed). Essential-only
stores remained opened:
(VinMart supermarkets,
Medicare, and banks)
● Social distancing was extended
to Apr 22 for 10+ cities
● April 23: social distancing
order was lifted
Status of operations
● Since April 24, all 79 malls nationwide reopened
● Reduced operating hours:
Weekday: 11am – 9pm (Previously 9.30am – 10pm)
Weekend: 10am – 9pm (Previously 9.30am – 10pm)
• As the situation is more stabilized, Vincom Retail will
resume normal operating hours.
• Footfall: from Apr 23-May 17, average FF is ~50-60%
compared to the same period last year.
Updates on Impact of Covid-19
Confirmed Covid-19 cases in Vietnam
thousand
21
Customers
Tenants
Employees
Shareholders
Ensure a safe shopping environment:
● Disinfect stores and entire mall every week, disinfect all contact
surfaces in the mall every 2 hours. Provide hand sanitizer in all stores.
● Thermal screening of 100% staff and customers. 100% staff and
customers wearing masks in the mall
● By April 15: Announced total support package of maximum VND 600b
(USD 25.5m) in 2020
● Connect tenants with online service providers and online platforms:
~48,000 vouchers issued by tenants via VinID app. Supported ~170
tenants with online sale. Cooperated with OneID, Grabfood, Now
During mandatory social distancing period from April 1 – April 23:
● Reallocate workforces, adjust shifts
● Provide employees being asked to take leave partial pay (70% monthly
payment)
● Deploy work-from-home protocols, enforce effective work program to
reduce OT and excessive expenditures
● Preserve cash to support operations during the impacted period
● Implement maximum cost saving measures at all organization levels
● Revisit investment plan to ensure financial viability in near-term
Public engagement
Together WIN COV with
Vincom
Creative video campaign on social media
to spread positivity and inspiration
3 million media reach
Our initiatives during Covid-19
22
On 24 January 2020, Vietnam activated the Public Health Emergency Operations Centre to coordinate all information and
direction to control the outbreak, right after two Covid-19 infection cases were confirmed on 23 January 2020 and much earlier
than WHO’s recommendation
Since then, the Government of Vietnam has ordered strict and vigorous application of infection prevention and control
measures since the first confirmed cases
Vietnam continues to ensure that it is well prepared for a potential increase in demand for healthcare facilities by enhancing
surveillance of its health care facilities and community
The Government of Vietnam has also implemented various measures aimed at containing the spread of the virus, such as
enforcing social distancing, putting a stop to social events and gatherings of over 20 people, and regular disinfection of public
places such as shopping centers, parks, and tourist areas. Vincom Retail has been in compliance with these preventive
measures to help minimize the spread of the virus within its facilities / locations / operations
On 23 April 2020, the Government of Vietnam eased on social distancing measures
As of 18 May 2020, the Covid-19 situation has been relatively under control with 324 confirmed cases, 263 recovered cases
and 0 fatality. It is also the 32th consecutive day that Vietnam does not have any new confirmed cases within the community.
Source: WHO, MOH, public information as of 15 May 2020
1
2
3
4
5
6
Early, decisive and effective actions by the Government of Vietnam is expected to help Vietnam resume its normal operations
sooner than other countries
Effective Management of the Covid-19 Situation in Vietnam
23
Source: FactSet, EIU, public information.
(Indexed chart)
1.6 1.9
6.8
9.9
2016 2017 2018 2019
(Trade surplus, US$ bn)
50.3
48.4
45.9
42.2
2016 2017 2018 2019
(Public debt as % of GDP, %)
36.5
49.155.5
72.9
2016 2017 2018 2019
(Foreign exchange reserves, US$ bn)
Vietnam enjoys strong and stable macroeconomic fundamentals which will not only give it considerable flexibility to absorb any
external or fiscal shocks due to Covid-19 impact, but also enable the Government to provide necessary concession or subsidy
to help the companies and its people to withstand the present situation
Vietnam’s exchange rate has been among the most stable in the region Continued strong trade surpluses
Stable Vietnam Macroeconomic Developments
Steady growth in foreign exchange reserves Improving fiscal position over the years with falling % of public debt
80
90
100
110
Apr-19 Jun-19 Jul-19 Sep-19 Oct-19 Dec-19 Jan-20 Mar-20 Apr-20
Vietnam Dong per U.S. Dollar Malaysia Ringgit per U.S. DollarThailand Baht per U.S. Dollar Singapore dollar per U.S. DollarIndonesia Rupiah per U.S. Dollar Philippines Peso per U.S. Dollar
(2.29%)(0.95%)
(5.21%)(4.63%)
(8.99%)
1.69%
24
Potential benefits from government’s supporting policies
Tax Interest Rate ElectricityTAX
April 8, 2020
Government issued Decree 41/2020 / ND-CP
on extension of payment of Value-Added
Tax (VAT), Corporate Income Tax (CIT),
Personal Income Tax and land rental:
1. Deferred tax payment of CIT and VAT for
the months of April-July and the following
5 months.
2. Deferred land rental payment in the first
period of 2020 (due on May 31, 2020) for
5 months.
March 13, 2020
The State Bank of Vietnam issued Circular
01/2020-TT-NHNN on exemption and
reduction of interest rates to support
businesses affected by Covid-19 pandemic.
1. VCR now has outstanding debt of VND 2.6
trillion (USD 110.6m) with interest rate of
9.8% p.a.
2. VCR has sent official request letter to the
bank to sign up for 1.5% pa reduction in
interest rate
.
April 12, 2020
The government announced its agreement
with the Ministry of Industry and Trade's
proposal to reduce electricity price for the
period of April - June
Estimated increase in cashflow of
VND 483b (USD 20.5m) during the
4 months April-July of deferred tax
payment and land rental payment
Expected at least 0.5% pa
reduction in interest rate.
Saving of VND 6.5b (USD 277k)
interest expenses in minimum
Estimated saving of VND 10.8b
(USD 460k) electricity cost
25
Updates and Highlights on Vincom Mega Malls
Modern and inspiring exterior and
interior designs
Synchronize exterior and interior
design
Harmonize with the surrounding
Innovative architectural features
Key outdoor attraction
Optimize tenant mix, attracting
quality tenants1
2
3
4
Upgrade tenant mix for better customer
experience
Increasing F&B kiosks and Food
Street at 1st floor
Diversification in Entertainment
formats
Customer’s experience highlight
Natural environment with light effect
Highly interactive entertainment
Experience modern technology
The mega projects where Vincom
Mega Malls are located offer green
living spaces and premium
amenities, and are ideal weekend
destinations
Ocean Park: central lake and
salted water lagoon, safari,
Vinpearl Land
Smart City: Japanese Garden,
central lake, theme park
Grand Park: riverside park, light
park
Pioneers in experiential
retail-tainment in Vietnam
VMM Smart City
VMM Ocean Park
VMM Grand Park
Leverage on immediate captive
population of VHM mega projects to
attract quality tenants
Tenanting started 18 months in advance
3. Strategy Update
27
2Q 2020 Plan
Tenants review and lease plan
● Engage in tenant discussion regarding
difficulties after resuming businesses in
order to offer appropriate policies
● Continue lease plan for 3 projects
including Vincom Mega Mall Ocean Park.
Large stimulus and promotional
campaign post-Covid-19
● Launch stimulus and promotional campaign
“Victory presents – Proudly Vietnam”
(May 2020)
● Launch Summer Campaign (June 2020)
and Vietnam Red Sales Carnival 2020
(July 2020)
Upgrade IT infrastructure
● Customer Relationship Management:
Management of centralized database and
leasing activities, Management of
operational activities
● Facility Management: Assets
management, Maintenance and
Renovation, Supplies management and
Mobile App, Management of warranty
information
Tenants Mix
Chain tenants commit to expand in
Vincom malls in 1Q2020New tenants
Chain tenants in negotiation for
network expansion
ACFC+3 +1+1
+3+3 +3 +5
+5 +2 +4
28
2020
2026
2020 Plan and Development Roadmap Until 2026
2017
(IPO)2019 2020 … 2026
2017-20
CAGR
2020-26
CAGR
# of malls 40 79 82 … 158 27% 12%
GFA
(‘000
sqm)
1,120 1,600 1,770 … 5,000 17% 19%
Cities/
provinces
covered
24
(38%)
43
(68%)
43
(68%)…
63
(100%)
Target mall network
Strategy
In light of the current Covid-19 situation, we will delay the launch of 7 out of 10 malls originally scheduled to open in 2020 to 2021
For-sale business is expected to quickly pick up due to pent-up demand after Covid-19
Vincom Retail has identified a strong pipeline to follow nationwide expansion strategy, anchored around marque mega mall projects
1. Nationwide expansion strategy to reach 158+ malls, representing 5m sqm GFA and cover all of 63 cities and provinces by 2026
2. Solid pipeline of 79+ projects, all of which have been identified and paperwork are under way
3. Portfolio expansion anchored around 15+ mega malls located in Hanoi, HCMC and select top-tier cities, and Vincom plazas in CBD area of 2nd tier cities
4. Selected upgrades (from VC+ to VCP and VCP to VCC) when supported by local market conditions
5. Opportunistic M&A strategy to complement organic development by securing attractive locations in top-tier cities
VCC10%
VMM51%
VCP37%
VC+2%
Expected format breakdown by 2026
Total GFA
(sqm):
5.0 mm
29
Liquidity Position is Healthy, Management is Focused On Preserving Cash
Based on VAS Audited Consolidated Financial Statements for respective years and VAS Consolidated Financial Statements for 1Q2020
Note: (1) i. EBITDA is accumulated EBITDA in 12 months up to the reporting date; ii. Interest expense is accumulated interest expense in 12 months up to the reporting date; iii. Net Debt =Total Debt – Total Cash, Cash equivalents
&ST investment where ST investment includes termed deposits under VAS
Healthy Credit Metrics(1)
● Credit metrics remain healthy, reflecting the
company's low leverage and stable earnings
● VRE is fully compliant with outstanding borrowings
which often contains standard customary covenants.
No covenants related to EBITDA
0.52x
0.11x
0.54x
Debt/EBITDA Net Debt/EBITDA
31-Dec-19 31-Mar-20
18.0x 17.0x
EBITDA/Interest Expense
1. Covenants • Local loans and bonds do not carry any covenants linked to EBITDA
2. Cost Initiatives during
Covid-19 social
distancing
● Reduce non-essential expenses such as Advertising & Promotion and variable expenses such as utility costs
● Reduce operating hours of retail malls nationwide
● Rotate shifts to utilize human resources
● Apply for deferral in VAT, CIT, annual land fee payments, and lower interest rate from bank as a part of the government’s support on
Covid-19 impact
3. Capex saving for
2020
• Defer new mall construction and mall renovation
• Delay non-essential maintenance
• Delay some non-essential digitalization/transformation phases that do not affect operations
-0.06x
Financial Highlights
31
Financial Performance – 1Q2020
Revenue from Leasing
VND1,449 billion 9.4%YoY
Note: Based on VAS Consolidated Financial Statements for 1Q2020
(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.
Gross Profit
VND759 billion 21.9%YoY
EBITDA
VND1,068 billion 11.1%YoY
Leasing NOI(1)
VND999 billion 13.8%YoY
32
Figures in VND billion 1Q 2019 1Q 2020 Change (%) Commentary
Leasing of Investment
Properties and Rendering of
Related Services1,599 1,449 9.4
In 1Q2020 VRE issued part of the supporting package of
VND300 billion (USD12.7m) for tenants in our retail malls
nationwide who are impacted by Covid-19
Sale of Inventory Properties 601 201 66.6In 1Q2019, VRE delivered units in a big project Shophouse
Ca Mau
Other revenue 83 36 57.3
Total Revenue 2,284 1,686 26.2
Gross Profit(1) 972 759 21.9 Decreased in accordance with decreased in revenue
Operating Profit / (Loss) 771 575 25.4
Profit / (Loss) before Tax 778 619 20.4
Profit / (Loss) after Tax for
the Period611 492 19.5
Profit / (Loss) after Tax
and Minority Interest612 492 19.6
Financial Performance In 1Q 2020 vs 1Q 2019
Note: VAS Consolidated Financial Statements for 1Q2020
(1) Gross profit already subtracted D&A relating to investment properties under VAS.
33
1,905
2,4042,851
612 492
2017 2018 2019 1Q2019 1Q2020
3,089
3,829
4,955
1,159 999
2017 2018 2019 1Q.2019 1Q.2020
Note: Based on VAS Audited Consolidated Financial Statements for respective years and VAS Consolidated Financial Statements for 1Q2020
(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(1)
VNDbn
Financial Performance
4,4555,506
7,017
1,599 1,449
951
3,4332,027
601 201
112
185 215
8336
5,518
9,124 9,259
2,284 1,686
2017 2018 2019 1Q2019 1Q2020
Leasing of Investment Properties Sale of Inventory Properties Other revenue
2,342 2,882
3,752
870 668
411
806
735
140 135
48
(47)
(84)
(38)(44)
2,801
3,641
4,404
972 759
2017 2018 2019 1Q2019 1Q2020
Leasing of Investment Properties Sale of Inventory Properties Other revenue
50.8% 39.9% 47.6% 42.6% 45.0%
Gross Profit Margin (%)
Leasing Net Operating Income (NOI)(2) Profit After Tax and Minority Interest
VNDbn VNDbn
Depreciation & amortization of investment properties (VNDbn)
829 1,042 1,331 320 339
Leasing NOI Margin (%)
69.3% 69.5% 70.6% 72.5% 69.0%
34
VNDbn
Total Assets Total Borrowings, Cash and Cash Equivalents
Balance Sheet
Total Equity (Net Debt / (Net Cash))(4) / Equity
VNDbn
VNDbn VNDbn
21,481 27,773 28,718 28,677
16,652 10,911 7,121 8,238
38,133 38,684 35,839 36,916
31-Dec-17 31-Dec-18 31-Dec-19 31-Mar-20
Investment Properties and Investment Properties Under Construction Other Assets
5,974
2,780 2,785 2,786
4,095
3,133
2,177
3,093
31-Dec-17 31-Dec-18 31-Dec-19 31-Mar-20
Total Borrowings Cash and Cash Equivalents
26,094 28,509
26,954 27,446
31-Dec-17 31-Dec-18 31-Dec-19 31-Mar-20
7.2%
-1.2%
2.3%
-1.1%
31-Dec-17 31-Dec-18 31-Dec-19 31-Mar-20
(3)
(3)
(2)
(2) (2)
(1)
Note: Based on VAS Audited Consolidated Financial Statements for respective years and VAS Consolidated Financial Statements for 1Q2020
(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 declared in April 19 and buy back 56.5
mil treasury shares completed in December 2019
(3) Cash and Cash Equivalents include loan receivables
(4) Net Debt / (Net Cash) = (Short-term Borrowings + Long-term Borrowings) – (Cash & Cash Equivalents + ST Investments + Loan receivables)
Appendix
36
Bridging VAS to IFRS
Note: Based on VAS Consolidated Financial Statements for 1Q2020 and conversion to IFRS by management, excluding impact from Investment Property and Investment Property Under Construction (IP/IPUC) revaluation
gain/loss
Unit: VND Billion
VAS
1Q2020
Adj. IFRS
1Q2020
Commentary on Adjustments
Leasing revenue and other related
services1,449 34 1,483
Realized unearned revenue of deposit from customer in relation to
amortization of deposit
Sale of inventory properties 201 201
Other revenue 36 36
Total revenue 1,686 34 1,720
Cost of leasing activities and other related
services(781) 361 (421) Mostly depreciation of malls included in VAS; excluded under IFRS
Cost of inventory properties sold (66) (66)
Others (79) (79)
Cost of goods & services (927) 361 (566)
Gross profit 759 395 1,153
Selling expenses (61) (61)
General and administrative expenses (90) 18 (72) Amortization of Goodwill included in VAS; excluded under IFRS
Other income 45 45
Other expense (1) (1)
Finance expense (79) (142) (222) Amortization of deposit from customer
Finance income 47 127 174 Amortisation of deposit under BCC and deposit from customer
Profit before tax 619 398 1,018
Tax expense (127) (2) (129)
Profit after tax 492 396 889
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. 9852
Fax: +84 (24) 3974 8888
Website: ir.vincom.com.vn/en
E-mail: [email protected]
