21 May 2019
VGI Group continued its robust performance in 2018/19.Posting the record-breaking revenue of THB 5,158mn and Net profit of THB 1,101mn O2O Solutions has driven the solid growth in every platform.
VGI Global Media Public Company Limited or VGI, the first and only leader of Offline-to- Online (“O2O”) Solutions announced the performance 2018/19 (April 2018 – March 2019) having the total revenue of THB 5,158mn, an increase of 31.0% YoY and net profit of THB 1,101mn, an increase of 30.1% YoY. Such positive results clearly demonstrate VGI’s success in applying O2O Solutions strategy combining the strength of each platform in its ecosystem.
Mr. Nelson Leung, CEO of VGI Global Media Public Company Limited cited that VGI has successfully transformed our business model from traditional offline Out-of-Home (“OOH”) media platform to be a complete ecosystem of Offline-to-Online (“O2O”) Solutions having Advertising, Payment and Logistics platforms. These developments were demonstrated by record-breaking of financial performance and will continue to expand our business through our platforms on the complete ecosystem.
ADVERTISING – Laying a strong foundation for growth by making strategic partnerships and creating innovative products. Recently, VGI unveiled 5 of its latest 45 metre-wide digital screens at Chong Nonsi Station as a pilot phase and expects to roll-out at an additional 3 BTS stations: Asoke, Phrom Phong and Sala Daeng by 2Q 2019/20. In 2018/19, Transit media revenue increased by 4.1% YoY to THB 2,354mn, mainly from the higher occupancy of digital media and merchandising space, in particular. Office Building and Other media segment revenue grew significantly, increasing by 22.4% YoY to THB 414mn. VGI has sustaining our leadership in this segment with a total of 180 buildings under management. Outdoor media segment revenue increased by 12.6% YoY to THB 1,079mn, mainly due to the ongoing revenue recognition of 35 digital billboards, which was rolled out in July 2017.
Moreover, VGI has successfully acquired 18.6% stake in PlanB Media Public Company Limited (“PlanB”), Thailand’s leading OOH advertising media provider, with a total investment of THB 4,620mn. This partnership will place both companies at the top of Thailand’s OOH market with more than THB 12,000mn worth in media capacity. This acquisition is a reflection of our platform’s flexibility to embrace strategic partners and leverage their strength to create endless opportunities and incentives.
VGI established a joint venture named VGI AnyMind Technology Company Limited with AdAsia Holdings (“AnyMind”), an AI solutions provider for the advertising, influencer marketing and human resource industries. The joint venture is owned 49.0% by VGI and 51.0% by AnyMind and others. Leveraging on AnyMind’s Technology and VGI Digital OOH media, VGI will be able to deliver performance-driven, dynamic and highly-targeted ads offline and online.
The Company also entered into agreement to form a joint venture named VClick Technologies Company Limited (“VClick”). VClick is joint venture between iClick Interactive Asia Group Limited (49.0%) – the largest online marketing and data technology platform in China, VGI (30.0%) and others (21.0%). The partnership helps to capture advertising opportunities in the Chinese consumer market by using data through their AI technology, improving mobile applications and launching 10,000 mobile charging stations with LED displays through VGI’s network across Thailand
PAYMENT – recorded a revenue of THB 1,311mn, an increase of 246.8% YoY. The increase was mainly due to the eight-month consolidation of Trans.Ad Group (a system integration and total solutions services provider) by MACO. In addition, this segment also benefited from the growth of Rabbit Group, which was mainly from an increase in project management fees, higher lead generation revenue as well as the increase in average number of policies sold from the boarder offering of insurance products. VGI continued to enhance its payment services and collaborate with the leading of vary industries to move towards a cashless society. VGI has partnered with SAHA Lawson Company Limited and SAHA Pathana Inter-Holding Public Company Limited. This is another step on our path to establishing our O2O ecosystem through Lawson stores, where Rabbit Card and Rabbit LinePay will facilitate seamless payment for a better consumer retail experience. Currently, Lawson convenience stores are present on Thong Lo, Ploen Chit and Sala Daeng station and they have plans to open the services on all BTS stations.
In this year, the number of Rabbit Cards reached 11.0mn cards, an increase of 23.0% YoY, exceeding the full-year target of 10.5mn cards as well as RLP serves more than 5.5mn users, representing an increase of 2.6mn users or 83.0% YoY from March 2018, surpassing the full-year target of 5.3mn users. This growth has been spurred by ongoing improvements in user interface, a successful user acquisition programme, as well as synergies with BTS Group (“BTS”), the leading rail mass transit operator and Advance Infor Services Public Company Limited (“AIS”), the number 1 telecommunications operator in Thailand.
LOGISTICS – VGI successfully acquired 23% in Kerry Express (Thailand) Limited (“Kerry”) with a total investment of THB 5,901mn. Kerry is the no.1 parcel delivery services with 1.2mn parcels delivered daily. This acquisition is a significant step for VGI to establish an O2O ecosystem covering Advertising, Payment and Logistics business. After the acquisition, we launched “Smart Sampling” through Kerry’s network which goes beyond just product giveaways by allowing brands to do multiple offline and online marketing activities, simultaneously to targeted demographics. After launching the service for almost 8 months, we have delivered more than 200,000 samples for top FMCG brands. In addition, we have also launched new media on 300 trucks of Kerry, which run around Bangkok and vicinities. This media enhanced our clients’ advertising to reach more than 10.8mn people in Bangkok and nearby provinces daily. Currently, VGI and Kerry have continued to enhance their delivery services with the launch of Kerry parcel shops on 2 BTS stations – Phrom Phong and Thong Lo and plan to open additional shop across all BTS stations.
Mr. Nelson Leung also added that 2018/19 was a successful and eventful year for VGI. Not only did we exceed our targets, but we also set new performance records. These positive developments reflect the consistent execution of O2O Solutions across our ecosystem. For 2019/20, we forecasts our growth approximately 20%, with a revenue target of THB 6,000 – 6,200mn. Our advertising business will benefit from utilising 10 new trains within BTS fleet expansion as well as our ongoing digital transformation strategy, particularly the roll out of new digital screens with a new innovative technology to provide precise, targeted and measurable advertising.
Moreover, we have established a new business unit under the name “Digital Lab” to grab the digital advertising market share, which has grown significantly in the past few years. Lastly, we aim to extract synergies from our collaboration with PlanB to deliver optimal value for clients through our OOH media network, which is centralised for cost efficiency, and explore new marketing channels together. For payment business, we will continue to expand the user base of Rabbit card and Rabbit LinePay and improve users’ experience by providing seamless cashless payments. This year, we expect the number of Rabbit cards to grow from 11.0mn to 15.0mn cards, an increase of 36% YoY, and the number of Rabbit LinePay users to grow from 5.5mn to 8.0mn, an increase of 45% YoY. We also have a plan to open additional shops across all the BTS network. Accordingly, the Company expects to see more synergies with Kerry from such expansion as well as new product development, including smart sampling and Kerry’s truck media.