Corporate Presentation FY2017 (Maybank)app.pmgasia.com/InvestAsean2018/pdf/SG_BestWorld...
Transcript of Corporate Presentation FY2017 (Maybank)app.pmgasia.com/InvestAsean2018/pdf/SG_BestWorld...
CorporatePresentation
Financialyear2017ThepresentationhereinmaycontainforwardlookingstatementsbythemanagementofBestWorldInternationalLtd(BWI)thatpertaintoexpectationsforfinancialperformanceoffutureperiodsvspastperiods.Suchforwardlookingstatementsinvolvecertainrisksanduncertaintiesastheyrelatetofutureevents.Actualresultsmayvarymateriallyfromthosetargeted,expectedorprojectedduetovariousfactors.Suchfactorsare,amongothers,generaleconomicconditions,foreignexchangefluctuations,competitiveproductandpricingpressuresaswellaschangesintaxregimesandregulatorydevelopments.SuchstatementsarenotandshouldnotbeconstruedasmanagementsrepresentationonthefutureperformanceofBWI.Therefore,theactualperformanceofBWImaydiffersignificantlyfromexpressionsprovidedherein.Thereaderiscautionedtonotundulyrelyontheseforward-lookingstatements.NeithertheGroupnoritsadvisersandrepresentativesshallhaveanyliabilitywhatsoeverforanylossarising,whetherdirectlyorindirectly,fromanyuseordistributionofthispresentationoritscontents.Thispresentationisforinformationonlyanddoesnotconstituteaninvitationoroffertoacquire,purchaseorsubscribeforsharesinBWI.
WelcometoBestWorldCorporatePresentation
Overviewofourbusiness
AboutBestWorld BusinessModel&Strategy GrowthAreas FY2017FinancialHighlights
TobeaGlobalLeaderinthecreaFonofBeautyandWellnessproductsthatenhancethelivesofourcustomers.
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OurVisionAboutBestWorld
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CompanyMilestoneAboutBestWorld
1990 1995 2000 2005 2010 2016
July2004ListedontheSingapore
StockExchange.
2014AcquisiFonof
ZhejiangSoildGold.ManufactureandDistributeAurigen
supplementsinChinathroughretaildrugstores
2016DirectSelling
licenseinChina,Hangzhou
1998Malaysia
2004Thailand
2005Vietnam
2006HongKong
2007IndonesiaTaiwan
2009Korea
2010Philippines
2016UAE
Foundedin1990BestWorldInternaFonalspecializesinPremiumSkincare,HealthSupplements,NutriFonal&Wellnessproducts.
1990Singapore
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CompanyMilestoneAboutBestWorld
Networkofover490,000andapproximately8.7%acFvedistributors
FY2013 FY2014 FY2015 FY2016 FY2017
490,041435,765
402,422377,830
298,251
MembershipGrowth2013-2017
CAGR:13.22%
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OurMarketsOurMarkets
Seoul
Hangzhou
TaipeiTaichungKaohsiung
Changsha
HongKong
Manila
Jakarta
KualaLumpur
JohorBahru
Singapore
Myanmar Bangkok
HoChiMinhCity
Dubai
AboutBestWorld
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BWL-BestWorldLifestyleAboutBestWorld
AlloursubsidiariesoperateundertheBWLbrand
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CoreProductsAboutBestWorld
DRsSecret,Aestier&Miraglo
BrandsforourSkincare
PentaLabPersonalCare
OptrimaxWellness&Weight
Management
AurigenHealthSupplements
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AvanceHealthSupplements
BrandsforourHealthSupplements,PersonalCareandWellnessproducts
CoreProductsAboutBestWorld
DRsSecretSkincarecontributedcloseto89%ofourrevenue
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TopBrandsAboutBestWorld
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TopBrandsAboutBestWorld
AvanceandOptrimaxcontributed6%and3%ofourrevenue.
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StrongBrandEquityandCredibilityAboutBestWorld
Singapore1000Company2016,2015,2014,2013,2010 SuperBrandsSingaporeChoice
Avance2011,2010,2009,2008,2006,2004
SingaporeFastestGrowing50Cerdficadon2008,2007,2005
200BestCompaniesUnderABillioninAsiaPacific2008,2007
SingaporePresdgeBrandAward2015,2009,2008
ASEANBusinessAward2008
Singapore500SME2009,2008
BestAnnualReportUnderSesdaqListedCompany2006
BlackBookAR100Award2006
GrandPrixWinnerRedDotDesignAwardsBestWorldAR2005HappyWorld
BronzeAwardforAnnualReportBestWorldAR2005HappyWorld
PRAwards2017GoldAwardforBestInvestorRelaFons2017
BeginproductregistraFon
PreparemarkeFng
Assertivelyimplementone-to-oneplatformswhereas.
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BestWorldBusinessModelBusinessModel&Strategy
DirectSelling
LaunchsoldviatheGroupssubsidiaries
InASEAN(exceptLaos,CambodiaandBrunei),HongKong,KoreaandTaiwan
ConceptualisaFonbyin-houseproductdevelopmentteam
Developandrunthenecessarytestsonproductsbeforeanyproductlaunch
FinalizaFonofproductformulaandstartmanufacturing
3rdPartymanufacturinginUS,KoreaandTaiwan
MarkedngTools&ProductRegistradon
3rdPartyManufacturingProductConcept
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DirectSellingasMajorRevenueContributorBusinessModel&Strategy
GroupRevenue
DirectSelling
SingaporeTaiwan
IndonesiaOthers
FY2017
49.7%ofsalesFY2016:70.9%ofsales
Export
ChinaMyanmar
FY2017
48.2%ofsalesFY2016:26.8%ofsales
Manufacturing&Wholesale
ChinaAurigen
supplements
FY2017
2.1%ofsalesFY2016:2.3%ofsales
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DirectSellingvsExportModelBusinessModel&Strategy
Export
ExportPrice(afractionofmembersprice)
ImportAgent
} ExportProfitTransferPrice
MemberPrice
DirectSelling
} ExportProfit
SalesProfit
2017EBITDAmargin:25.7% 2017EBITDAmargin:41.9%
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OurWinningStrategyBusinessModel&Strategy
Attract,Retain,Educate
Products
Plan
People
BusinessUpdatesCorporatePresentation
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ConversionofExportBusinesstoChinaWholesaleBusinessUpdates
Radonale Asannouncedinthetwoplenarysessionsended20March2018,theStateAdministraFveforIndustryandCommercewillbemergedwithChinaFDAandGeneralAdministraFonofQualitySupervision,InspecFonandQuaranFnetoform*.
AcFvatelicenseagreementwithexisFngDRsSecretExperienceCentresforbrandbuildingacFviFes,markeFngacFviFesandcustomerservicethroughoutciFeswearealreadyacFvein.
Impact IncreaseinRevenueandGrossProfitduetorecogniFonatapricehigherthanexportprice;
DeclineinOtherOperaFngIncome;
IncreaseinAdministraFveExpensesduetostaff&rental.
IncreaseinDistribuFonExpensesduetologisFcsandotherrelatedexpensesbutnocommissions.
*http://www.npc.gov.cn/npc/dbdhhy/13_1/2018-03/14/content_2048552.htm
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ExportvsChinaWholesaleSegmentBusinessUpdates
ExportPrice
ImportAgent
ExporttoChinaexpectedtoceasedin2Q2018andwillbereplacedbyChinaWholesale
Exportsegmentin2Q2018shallrefertoGroupexportstoMyanmar
TransferPrice
MemberPrice
}ExportProfit
ChinaWholesale}
WholesaleProfit WholesalePrice
ExportProfit}
Export
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DirectSellingvsChinaWholesaleBusinessUpdates
TransferPrice
MemberPrice
}ExportProfit
ChinaWholesale}
WholesaleProfit WholesalePrice
TransferPrice
MemberPrice
DirectSelling
SalesProfit
ExportProfit}
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ImpacttotheGroupsProfitBusinessUpdates
MemberPrice
WholesalePrice
ExportPrice
CostofGoodsSold
}
}
}DirectSellingprofitnetofremainingcommission
WholesaleprofitnetofadministraFveexpenses&commission
Exportprofit
DirectSellingRevenue
ChinaWholesaleRevenue
ExportRevenue
GrowthAreasCorporatePresentation
Assertivelyimplementone-to-oneplatformswhereas.
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MembershipEconomy
RelaFonal-iniFaltransacFonisstarFngpoint
Valueliesinthecommunity:generatesanongoingdatastreamtoimproveserviceandidenFfyopportuniFes
Importantmeasuresarememberschurnandengagement
CreateaselfgeneraFngrevenuestream
SubscripdonEconomy
ExplosiveriseofdigitalsubscripFonsandsuchasNeplix,Adobe,andSpoFfy
OffersadealtojusFfyrecurringrevenue
Basicformofthemembershipeconomy
TheRiseoftheMembershipEconomyGrowthAreas
Mindsetchange:FromOwnershiptoAccess
ReladonshipCentric
OwnershipEconomy
TransacFonal-iniFaltransacFonistheendingpoint
Importantmeasures=newcustomeracquisiFonandsales
Product+ServiceProduct
24*Constant2015prices,Fixed2015exchangerateInforma;onextractedfromEuromonitorAsia,AsianBeautyConsumersKeyTrendsShapingtheIndustry,November2016andReimaginingGrowthintheGlobalBeautyIndustry,May2017
GrowthintheGlobalBeautyIndustryGrowthAreas
US$billion
350
380
410
440
470
500
2010 2011 2012 2013 2014 2015 2016
447
426417
410401
392385
5
4
3
2
1
0
%GrowthValueSalesSkincareremainsthelargestvaluesalesbycategory
GlobalBeautyandPersonalCareValueSales*
Eastern Europe5%
Australia1%
Asia Pacific32%
Western Europe21%
North America21%
Latin America14%
Middle East & Africa6%
ValueSalesbyRegion(2015)
25
Skincare*asa%ofretailvalue
(2016)RMB192.5Billion
DirectSelling16%
Store-basedRetailing64%
Non-storeRetailing20%
(excl.directselling)
China,WorldsSecondLargestCosmeticsandPersonalCareMarket
GrowthAreas
*Skincarealsoincludessuncareandsets/kitsInforma;onfromEuromonitorInterna;onal,BeautyandPersonalCareinChina),April2017^Basedontotalretailvaluein2016
Aimstocapture5%^(RMB10B)ofmarketshare
In2022FY2017
RecordedexportsalesofS$106.5(RMB513M)toChina
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Skincare*asa%ofretailvalue
(2016)
TWD74.6Billion~SGD3.4billion*
DirectSelling20%
Store-basedRetailing67%
Non-store
Retailing13% (ex.directselling)
SummaryofBestWorldsTaiwanPerformanceGrowthAreas
BWIsCAGRforRevenue2014-2017
57.1%
TaiwansGDPGrowthfor2017^
2.86%
0
20
40
60
80
100
120
140
2014 2015 2016 2017
88
123
56.4
22.7
*Skincarealsoincludessuncareandsets/kitsInforma;onfromEuromonitorInterna;onal,BeautyandPersonalCareinChina),April2017*Exchangerateof1TWD=0.0451053SGDasat14November2017^DGBASTaiwan
Revenu
e(S$m)
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RejuvenatingtheTaiwanMarketGrowthAreas
IncreasingDistributorsEfficiency
ConvertUserstoDistributors
IncreaseconsumpFonpermember
Onlinestorecurrentlycontributes38%ofTaiwansalesandisexpectedtoincrease
Dualfocusonconsumersanddistributorswithstrategiestoimprovesalespermemberasopposedtoincreasenewmembers
EngagingtheRightDistributors
RejuvenadngtheTaiwanMarket
StrongpresenceinCentralandSouthernparts
NorthernTaiwanhaslargermarket
N
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FacebookEN295%FacebookTCN437%
Wechat455%
Weibo210%
Averagenumberoffriendsperuser
130#
194*
Growthinno.ofusers
(sinceincepdonofeachsocialmediaplaoorm)
DigitalisationandSocialSellingGrowthAreas
#Informa;onfromSta;s;cBrain,h]p://www.sta;s;cbrain.com/facebook-sta;s;cs/*Informa;onfromChinaWatch,h]ps://www.chinainternetwatch.com/19524/wechat-data-report-2016/#ixzz4ucJvgSdq
No.ofFollowers
0
6250
12500
18750
25000
Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
23,980
22,251
19,32517,805
16,284
14,341
12,41710,877
9,3937,844
4,318 4,0563,9593,6553,5453,3833,2013,0272,7622,5112,046755 11611093106010461029990958911845817294
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DigitalisationandSocialSellingGrowthAreas
BestWorldsSocialMediaOutreachSocialmediaROI=BrandVisibility,BrandEvangelizersandReferralsandSales
AverageReach&Engagement
FacebookEN46,035FacebookTCN103,236
Wechat47,811
FacebookEN FacebookCHI WeChat
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SkincareManufacturingFacilityGrowthAreas
Acquisidonof4,550sqmfacility inSingaporeforS$10millionin2016
tobecommissionedbyend-2019
Industry4.0 fullyautomatedend-to-endwithintegratedcommunicaFonalongtheenFrechainforcustomizaFonandhigherefficiency.
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SkincareManufacturingFacilityGrowthAreas
Radonale GreatercontroloverrawmaterialandinprocessQ.Candfinalproductquality
ReduceleadFme(approximateinsixmonths) >lessinventory>morecash>increaseshareholderreturnandM&A
InanFcipaFonofgreaterdemandfromkeymarkets
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NewProducts,NewMarkets,M&AGrowthAreas
NewMarkets DubaiRCasagatewaytootherGCCmarkets
DeepenpenetraFonintoKorea,IndonesiaandSingapore
M&AOpportunities
NewProduc
tLaunches
NewMarketsandD
eepen
PenetrationinExistingM
arkets
M&A Companiesthatprovideaccesstonewmarketse.g.Directsellingcompanies
Complementary productsandservices
NewProducts Averageof3-4productseachyear
EnhancesconsumerappealthroughproductinnovaFonandimprovement
FY2017FinancialHighlightsCorporatePresentation
FY2017FinancialSummary FinancialHighlights MembershipGrowth
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ComparisonwithotherDirectSellingCompaniesFY2017FinancialHighlights
-10%
0%
10%
20%
30%
40%
Avon Herbalife Natura (R$) Nu Skin Oriflame Tupperware USANA Best World
-9%
5%7%
5%
-4% -3%
12%
36%
5YEARSCAGR
Source: www.worldofdirectselling.com
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ComparisonwithotherDirectSellingCompaniesFY2017FinancialHighlights
2017Margins
-22.5%
0%
22.5%
45%
67.5%
90%
Avon Herbalife Natura (R$) Nu Skin Oriflame Tupperware USANA Best World
-1.7%
8.3% 6.8% 6.9% 5.8% 3.7%8.8%
25.2%
58.2%
66.8%
59.2%
67.2%62.2%
58.9%
70.3%
38.6%
61.6%
80.8%
70.3%
78.1%72.7%
67.4%
82.7%
69.1%
Gross Profit Operating Expenses Net Income
Source: www.worldofdirectselling.com
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FY2017PerformanceSummaryFY2017FinancialHighlights
FY2017(S$000)
FY2016(S$000)
Change%
Revenue 220,875 200,764 10.0
NPATAttributabletoOwnersoftheCompany
55,673 34,569 61.0
NetProfitMargin(%) 25.2 17.2 8.0pp
EPS*(cents) 10.12 6.28 61.1
* The weighted average number of ordinary shares (excluding treasury shares) for the 3 months ended 31 December 2017 is 550,088,514 (3 months ended 31 December 2016: 550,459,514). The weighted average number of ordinary shares (excluding treasury shares) for the 12 months ended 31 December 2017 is 550,321,559 (9 months ended 31 December 2016: 550,459,514). For comparative purposes, the earnings per ordinary shares for the prior corresponding periods are adjusted retrospectively pursuant to the share split of every one existing ordinary share into two ordinary shares on 25 May 2017
0
125,000
250,000
375,000
500,000
2010 2011 2012 2013 2014 2015 2016 2017
490,041
439,765402,422
377,830
298,251278,789
245,444229,498
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MembershipGrowthVSAverageRevenueperMemberFY2017FinancialHighlights
FY2017
490,041members
Revenuepermember2016vs2017Members
Ac;vedistributors,whichreferstomemberswhohavereceivedcommissionoverthelast12months,isapproximately8.7%RevenuereferstoDirectSelling+SalesinChinaatDirectSellingPrice
639 703
0
75
150
225
300
2014 2015 2016 2017
74.161.8
40.925
46.852.2
26.219.2
55.351.6
2118.3 44.735.213.512.8
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FinancialHighlights-RevenueFY2017FinancialHighlights
FY2014
FY20
17CAGR
:43.15%
Q4Q3Q2Q1
Revenu
e(S$m)
FinancialHighlights-MarginsFY2017FinancialHighlights
0
60
120
180
240
FY2013 FY2014 FY2015 FY2016 FY2017
220.9200.8101.775.341.1
77.4% 74.4% 75.6% 73.2%69.1%
3.5% 5.4%9.9%
17.2%25.2%
RevenueS$million GPM% NPM%
Stablefinancialmargins&highlyscalablebusinessmodelDecliningGPMbutimprovingNPMdueto: Growingexportsegment(lowerGPandnodistribuFonexpenses)
BeveroperaFngleverage(stabledistribuFonandadministraFveexpenses)
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S$m
FinancialHighlights-DividendsFY2017FinancialHighlights
0
7500
15000
22500
30000
FY13 FY14 FY15 FY16 FY17
22,553
12,661
4,4041,762614
43% 43% 44%
37%41%
TotalDividendsPaid(S$000) Dividendspayout%
DividendsPolicy Revisesdividendpolicytodistributeannualdividendsofnotlessthan40%ofnetprofit(from30%)
Strongcommitmenttoenhanceshareholderreturn
PaidoutS$71.3M(2004to2017includingproposedfinaldividends)
40
Dividen
ds(S$000)
FinancialHighlights-CashHoldingFY2017FinancialHighlights
Netcashposidonwithnegligibleborrowings
Managementiscurrentlyundergoingastrategicreviewofitsbalancesheettoenhanceshareholdervaluethrough:
M&AopportuniFes Dividendandsharebuybackprogramme
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FY2013(S$million)
FY2014(S$million)
FY2015(S$million)
FY2016(S$million)
FY2017(S$million)
CashandEquivalent
33.3 41.0 47.2 54.9 82.2
TotalBorrowings
3.5 6.0 0.018 7.4 7.4
NetCash 29.8 35.0 47.1 47.5 74.8
GearingRatio
0.07 0.11 0.00 0.08 0.06*CalculaFonsbasedonformulaNetDebt/TotalEquity
BestWorldsInvestmentThesisFY2017FinancialHighlights
2017-2020:TheBestisYettoBe Organicgrowth:-BuildonChinasgrowthmomentum-ExpectsTaiwantomaintainstablecontribuFonfortheGroup -DeepenpenetraFonintoIndonesiamarketwithHalalcerFfiedskincareproducts
PursueM&AopportuniFessupportedbystrongbalancesheetandcashflow
ExperiencedmanagementandreplicatedinnewandotherexisFngmarkets
Strivestoachievegoodcorporategovernancewithafocusonenhancingshareholdervalue
Highlyscalablebusinessmodelallowssuccesstobereplicatedinothermarkets
ThankyouCorporatePresentation