DSG International (Thailand) PLC

Transcription

1 DSG International (Thailand) PLC Opportunity Day March 17,

2 Agenda Executive Summary By Mr. Ambrose Chan, CEO Financial Performance By Mr. Yeoh Aik Cheong, CFO 3. Business Update By Ms. Chachanee A., GM-TH and Ms. Justine Wang, COO 4. Outlook By Mr. Ambrose Chan, CEO 5. Q&A 2

3 Agenda Executive Summary By Mr. Ambrose Chan, CEO Financial Performance By Mr. Yeoh Aik Cheong, CFO 3. Business Update By Ms. Chachanee A., GM-TH and Ms. Justine Wang, COO 4. Outlook By Mr. Ambrose Chan, CEO 5. Q&A 3

4 Executive Summary (1) 2015 was an exceptionally challenging year in most major markets Economic slowdown weakened consumer spending in Thailand Depressed commodities and oil prices affected export earnings in both Malaysia and Indonesia Low consumer confidence index and high household debts. Competitive price discounting to stimulate purchase intent and defend market share Deflated purchasing power resulted in shoppers, switching to budget segment Budget and mid-priced segments grew significantly though positive volume growth for most FMCG categories New market entry undeterred due to the relative high disposable diaper market potential Strong USD and low commodity prices led to massive currency depreciation Baht, Ringgit and Rupiah vs USD depreciated by 10%,30% and 20% respectively Strengthened USD affected the imported raw material costs DSG SEA suffered first-time decline in sales and recorded almost nil net profits. Profit decline was due to massive FX loss, declined sales revenue and competitive discounting activities 4

5 Executive Summary (2) DayPants for baby and adult diapers were well positioned to the changing consumer trend during economic recession All DayPants products registered positive volume and market share growth in most markets Fitti DayPants achieved triple-digit growth in Indonesia Aging population due to higher life expectancy and improved healthcare systems in SEA provided strong growth opportunity Certainty portfolio in most markets registered double-digit growth in both the tape and pant segments Certainty further strengthened its market leadership position in Thailand 5

6 Agenda Executive Summary By Mr. Ambrose Chan, CEO Financial Performance By Mr. Yeoh Aik Cheong, CFO 3. Business Update By Ms. Chachanee A., GM-TH and Ms. Justine Wang, COO 4. Outlook By Mr. Ambrose Chan, CEO 5. Q&A 6

7 Financial Highlights (1) 2015 Sales Revenue dropped by 9.1% to Baht 7,515m compared to 2014 Diminished consumer purchasing power has caused trading down to budget segment and heavy price discounting among the major competitors Net Profit decreased by 99.9% to Baht 0.07m from 2014 at Baht 437.1m Excluding FX impact, Net Profit dropped by 39.4% compared to the previous year, mainly attributable to declined sales revenue and competitive discounting activities. Commercial investments to defend against intense price competition amidst low purchasing power in key markets Lower commodity prices triggered rapid local currency depreciation and negative FX translation effects - Mitigated by proactive FX risk management and operational efficiency improvement Net Profit for Q4, 2015 showed a significant recovery over the previous two quarters Q4 improved to Baht 65.8m, from net losses of Baht 84.6m and Baht 94.1m in Q2 and Q3 respectively 7

8 Financial Highlights (2) %YoY Sales Revenue 7,515 8, % Net Profit % Normalized Net Profit (excl. FX impact) % EPS % NAV per share (Net Asset Value) Key Financial Ratio % Variance Gross Profit margin 33.9% 34.9% -0.98% SG&A (% of sales) 30.9% 28.9% +2.0% Net Profit margin 0.0% 5.28% -5.28% Gearing Ratio Net Debt/Equity Net Profit decreased resulting from lower purchasing power amidst economic slowdown, FX impact and promotional activities to stimulate sales and market share Final Dividend for 2015 will be paid on May 26, 2016 at the rate of Baht per share or Baht 18.9m Total 2015 dividend paid-out of Baht per share or Baht 56.7m 8

9 Sales Growth Total Gross Sales Adult Baby 2015 Gross sales dropped by 0.8% to Baht 7,957m in past 3 years Baby Pants grew significantly in DayPants category Certainty progressed aggressively from Econ Pants without cannibalizing normal Certainty Tape 9

10 Sales Revenue by Segment By Category By Country 10

11 Normalized Net Profit Million Baht Normalized Net Profit was applied to exclude the impact of FX volatility Lower profit was due to price competition, weak consumer sentiments and FX loss 11

12 Cash Flow Movement (Jan 1- Dec 31, 2015) Million Baht Capital expenditure increased to invest for long-term growth Capex funded by cash from operations and external borrowings 12

13 Working Capital Management Cash Conversion Cycle Inventory Days Unit: Month YoY Unit: Month YoY Unit: Month Account Receivable Days YoY Unit: Month Account Payable Days YoY

14 Leveraging Ratio Debt to Equity Ratio YoY

15 Agenda Executive Summary By Mr. Ambrose Chan, CEO Financial Performance By Mr. Yeoh Aik Cheong, CFO 3. Business Update By Ms. Chachanee A., GM-TH and Ms. Justine Wang, COO 4. Outlook By Mr. Ambrose Chan, CEO 5. Q&A 15

16 DSG Thailand - Market Performance Macro Economic Environment o o o 2015 overall economy was weak, slower down in major segments (Export, Agricultural and Private investment) Bomb attack in tourist district affected to tourism industry Currency devalue Thai Baht depreciation Market Environment o Overall FMCG market was getting soft due to consumer purchasing power o Decrease in newborn babies but increase in aging population o Diapers market growth still positive at +1.5%** (Baby -0.7%, Adult +15.9%) o Deep price cutting & promotion activities to secure market share DSG Market Performance o DSGT performed better than market, DSGT +5.2% while MKT +1.5%** o Successfully grew adult segment +25% while decline in baby 1.2%** o Baby economy segment is growing which BabyLove DayPants still No.1 brand in this segment in 2015 o Adult Diapers has been strong as No.1 & even getting stronger Key Marketing Highlights o o o Launch of innovation: BabyLove PlayPants NanoPower Continue social responsibility: Certainty CSR campaign & drive image of the brand Successful growth in E-commerce channel ** Nielsen data (2015) 16

17 DSG Thailand - Baby Innovation: BabyLove NanoPower Consumer Communication Digital Engagement with Parents New: DayPants XXL, NightPants S Digital Application: BabyBuddy App Hospital Sampling 17

18 DSG Thailand - Adult Consumer seminars & free sampling CSR at Ramathibodi Foundation 2 nd Year of AMCHAM CSR award Nurse seminars on incontinence New: DayPants XL 18 Big activity & great visibility in store

19 DSG Malaysia - Market Performance Macro Economic Environment o 2015 was a challenging year for Malaysia with deterioration of MYR, low crude oil & commodity prices and political controversy o Consumer remained cautiously in spending with recorded low sentiment index despite GDP growth of 4.5% from 6% in lowest since 2010 Market Environment o Soft market condition in baby diapers category post GST implementation o Dominated by tape category with 80/20 (tape/pant) contribution o Driven by mid-price ranged segment almost 70% contribution DSG Market Performance o DSGM declined primarily driven by severe pricing competition from major competitors & economic condition o Despite the decline in overall, DSGM continued to grow in selective strategic segment o PetPet DayPants grew ahead of segment growth, achieved double-digit value share in pants o Fitti regained its #1 position in budget segment o Certainty double it business in 2015 as our strategic focuses Key Marketing Highlights o Fitti relaunched in Dec 2014/Jan 2015, reached at No.1 in budget segment within 6 months o PetPet design facelift in April 2015 o Certainty DayPants organized a public 3-6km run to raise awareness of incontinence, rewarded Merit of Excellence in Promotional Marketing Awards of Asia (PMAA) Dragons of Asia Awards

20 Product Refreshment in 2015 DSG Malaysia Baby & Adult PMAA Awards for Certainty 20

21 DSG Indonesia Market Performance Macro Economic Environment o o o Indonesia's real GDP growth has been picking up over the quarters on the back of stronger investment and government spending, Increasing demand from major industrial economies rebounded Consumer Confidence Index to over 100 ( from October 2015 to Februay 2016 ) Rupiah suffered massive depreciation due to low oil price Market Environment o Diaper as the fastest growing category among FMCG researched by Nielsen in 2015 o Diaper in Indonesia grew at high double digit in and ranked as 2nd highest growth globally o Indonesia is one of the six countries with 17-million babies in 48 months DSG Market Performance o Triple growth in volume and value since 2013 o Our strategic Fitti DayPants growth in line with baby mid-range segment o Certainty is currently No.1 brand in Alfa Midi, 3rd largest retailer in Indonesia 21

22 DSG Indonesia Market Performance Key Marketing Highlights o o Relaunch of Fitti Rainbow Social Media and POSM across key retailers The highest mobile FB usage rate worldwide *15 percent of the world s tweets come from Indonesia, *Jakarta is now the world s number one city on Twitter. 22

23 Agenda Executive Summary By Mr. Ambrose Chan, CEO Financial Performance By Mr. Yeoh Aik Cheong, CFO 3. Business Update By Ms. Chachanee A., GM-TH and Ms. Justine Wang, COO 4. Outlook By Mr. Ambrose Chan, CEO 5. Q&A 23

24 Outlook H1/2016 remains challenging, in view of stabilizing regional currencies and improving commodity/oil prices Thai economy expected to grow moderately driven by domestic demand, public and private investments Indonesian and Malaysian economies might be recovered from currency stabilization and export earnings from higher commodity prices H2/2016, DSGT is cautiously optimistic anticipating improved economic climate DSGT is committed to invest on innovations for long term profitable growth 24

25 Agenda Executive Summary By Mr. Ambrose Chan, CEO Financial Performance By Mr. Yeoh Aik Cheong, CFO 3. Business Update By Ms. Chachanee A., GM-TH and Ms. Justine Wang, COO 4. Outlook By Mr. Ambrose Chan, CEO 5. Q&A 25

26 Thank You