Corporate Presentation

Transcription

1 Corporate Presentation Financial year 2017 The presentation herein may contain forward looking statements by the management of Best World International Ltd (BWI) that pertain to expectations for financial performance of future periods vs past periods. Such forward looking statements involve certain risks and uncertainties as they relate to future events. Actual results may vary materially from those targeted, expected or projected due to various factors. Such factors are, among others, general economic conditions, foreign exchange fluctuations, competitive product and pricing pressures as well as changes in tax regimes and regulatory developments. Such statements are not and should not be construed as management s representation on the future performance of BWI. Therefore, the actual performance of BWI may differ significantly from expressions provided herein. The reader is cautioned to not unduly rely on these forward-looking statements. Neither the Group nor its advisers and representatives shall have any liability whatsoever for any loss arising, whether directly or indirectly, from any use or distribution of this presentation or its contents. This presentation is for information only and does not constitute an invitation or offer to acquire, purchase or subscribe for shares in BWI.

2 Corporate Presentation Welcome to Best World FY2017 Financial Highlights FY2017 Financial Highlights Peer Comparison Investment Merits Q&A

3 Financial Highlights Financial Highlights - Revenue Q4 Q FY2014 FY2015 FY2016 FY2017 Q2 Q1 3

4 Financial Highlights - Segmental Breakdown Manufacturing & Wholesale Direct Selling Revenue 2.1% 22.8% Primarily due to a decline in revenue from the Group s key market of Taiwan Offsetting the improvement from Singapore and Other markets Export 48.2% FY2017 by Segment Direct Selling 49.7% 97.9% Export Revenue Growing consumers demand for DR s Secret skincare range in China Higher orders in 4Q2017 in anticipation of the long Chinese New Year in February Manufacturing & Wholesale Revenue 2.7% Maintained at S$4.5 million compared to FY2016 4

5 Financial Highlights - Geographical Breakdown Others 4.3% Singapore 3.5% Indonesia 2.4% China 90.9% Due to growing market demand for DR s Secret in the existing cities, which are represented by DR s Secret Experience Centres Demand expected to grow healthily for the rest of FY2018 Taiwan 39.8% FY2017 China 50.0% Taiwan 28.5% Due to stiffer market competition and online discounting but management has taken measures to tackle the issue To remain second largest market and most profitable subsidiary 5

6 Financial Highlights - Geographical Breakdown Others 4.3% Singapore 3.5% Indonesia 2.4% Indonesia 2.3% In local currency, revenue was stable at IDR 51.8b for FY2017 compared to IDR 52.4b for FY2016 Decline was due to the negative exchange rate movement between IDR and SGD Taiwan 39.8% FY2017 China 50.0% Singapore 8.9% Due to positive response from marketing campaigns conducted during earlier quarters of FY2017 Others 26.9% Primarily due to the increase in revenue from Hong Kong, Vietnam, Korea and Malaysia offsetting decline from Philippines and Thailand 6

7 Membership Growth VS Average Revenue per Member 600, , , , , , ,041 $1,200 $1,000 $ ,041 members 300, , $ ,000 $ , FY2013 FY2014 FY2015 FY2016 FY2017 $200 $0 Revenue Revenue per member As at 31 December 2017, total membership for the Group s Direct Selling business stands at 490,041 Active distributors, which refers to members who have received commission over the last 12 months, is approximately 8.7% Revenue from Direct Selling + Sales in China at Direct Selling Price 7

8 Financial Highlights - Margins % 74% 76% 73% 69% % 17% 4% 5% 10% FY2013 FY2014 FY2015 FY2016 FY2017 Stable financial margins & highly scalable business model Declining GPM but improving NPM due to: - Growing export segment (lower GP and no distribution expenses) - Better operating leverage (stable distribution and administrative expenses) Revenue S$million GPM % NPM % 8

9 Financial Highlights - Dividends 30,000 22,500 15,000 7, ,553 43% 43% 44% 34% 41% 12,661 4, ,762 FY2013 FY2014 FY2015 FY2016 FY2017 Total Dividends Paid (S$ 000) Dividends payout % Dividends Policy Revises dividend policy to distribute annual dividends of not less than 40% of net profit (from 30%) Strong commitment to enhance shareholder return Since 2004, paid out S$71.3M (2004 to 2017 including proposed final dividends) 9

10 Financial Highlights - Cash Holding (S$million) FY2013 FY2014 FY 2015 FY2016 FY2017 Cash and Equivalents Total Borrowings Net Cash Gearing Ratio Net cash position with negligible borrowings Management is currently undergoing a strategic review of its balance sheet to enhance shareholder value through: - M&A opportunities - Dividend and share buyback programme * Calculations based on formula Net Debt/Total Equity 10

11 5.0 Peer Comparison PEG Ratio Across Peers BEST WORLD INTL HERBALIFE LTD TUPPERWARE BRAND NU SKIN ENTERP-A USANA HEALTH SCI GRAPE KING BIO AMWAY MALAYSIA High growth company with PEG ratio of 0.6 Information source: Maybank Kim Eng 9 November Report on Best World International, China Continues to Deliver & Company Estimates Share prices updated to that of 26 February

12 Peer Comparison 5-YR Revenue CAGR Across Peers 40% 35% 30% 25% 20% 15% 10% 5% 0% -5% -10% -15% 36% 10% 7% 2% 1% -2% -3% -8% Avon Herbalife Natura (R$) Nu Skin Oriflame Tupperware USANA Best World Strong revenue growth momentum Source: 12

13 90% 80% 70% 60% 50% Peer Comparison Margins and Expenses Performance Across Peers 61.6% 58.2% 80.8% 66.8% 70.3% 59.2% 78.1% 67.2% 72.7% 62.2% 67.4% 58.9% 82.7% 70.3% 69.1% 40% 30% 38.6% 25.2% 20% 10% 0% -10% 8.3% 8.8% 6.8% 6.9% 5.8% 3.7% -1.7% Avon Herbalife Natura NuSkin Oriflame Tupperware USANA Best World Gross Profit Operating Expenses Net Income Source: Superior cost management and margins control 13

14 Best World s Investment Thesis : The Best is Yet to Be Organic growth: - Build on China s growth momentum - Expects Taiwan to maintain stable contribution for the Group - Deepen penetration into Indonesia market with Halal certified skincare products Pursue M&A opportunities supported by strong balance sheet and cash flow Experienced management and replicated in new and other existing markets Strives to achieve good corporate governance with a focus on enhancing shareholder value 14

15 Corporate Presentation Q&A Thank you