Corporate Presentation
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.
Content About Best World FY2015 Financial Highlights Strategy & Outlook Q&A
Our Vision To be a global leading health and wellness company dedicated to creating products that enhance the lives of our customers.
About Best World Founded in 1990, Best World International specializes in Premium skincare, Health Supplements Nutritional and wellness products. Today, Best World is a key regional player with a network of over 402,000 independent distributors and members in the 12 markets we operate in.
About Best World In July 2004, Best World became the first direct-selling company to be public listed on the Singapore Stock Exchange. Through our wholly owned subsidiary in the PRC, we also manufacture and distribute the Aurigen line of supplements in China through drugstores in 28 provinces of PRC.
About Our Direct Selling Model Marketing through extensive regional network Sizeable member base with strong growth ensures push of new and existing products to drive top and bottom line growth Unique system of training classes and compensation scheme to effectively engage members Member s commission derived based on sales Highly scalable with little capex required as key costs are mainly related to commissions Marketing Tools Product Concept 3rd Party Manufacturing Direct Selling Product Registration
Overall Membership Growth 450,000 Membership (2010-2015) 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0 2010 2011 2012 2013 2014 2015
Our Business Segments Ideal model for each market Direct Selling Growth markets with track record and set regulations (e.g. Philippines, Taiwan) Export When market regulations are not clearly defined; appoint local distributor as lead (e.g. China, Myanmar) Manufacturing Large mature markets with domestic demand (e.g. China, Japan, US, Europe)
Our Business Segments Direct-selling BW HQ Member price Subsidiary Export BW HQ Export price (a fraction of member price) D D D D D D D D Agent Export Profit Direct Selling Profit
Corporate Milestones Founded in 1990 Opening of first business centre in Malaysia in 1998 Listed on SGX in 2004 Entered into Thailand Market in 2004 Expanded into Vietnam with new lifestyle center in 2005 Expanded outside South East Asia with Hong Kong Regional Center in 2006 Expanded into Taiwan Market in 2006 Grand launch of Indonesia Market in 2007 Entered into Korea Market in 2009 Ventured into Philippines in 2010 Completed acquisition of Zhejiang SolidGold Pharmaceutical Co., Ltd. in 2014 Established a Joint Venture in Dubai, the United Arab Emirates in 2016
Our Markets
Our Brands
Our Brands
Our Awards 2009, 2008, 2015
FY2015 Financial Highlights
Financial Review Overview Revenue growth slow but steady Incremental revenue from additional wholesale/ manufacturing segment Stable financial margins Stable distribution expenses
Income Statement Highlights S$ 000 4Q2015 4Q2014 % Change FY2015 FY2014 % Change Revenue 40,945 24,957 64.1 101,672 75,265 35.1 Gross Profit 30,611 19,241 59.1 76,867 55,990 37.3 Gross Profit Margin 74.8% 77.1% (2.3p.p) 75.6% 74.4% 1.2p.p Profit Before Tax 9,421 2,312 307.5 16,992 5,652 200.6 Attributable Profit to Owners of the Parent Company 3,714 2,052 81.0 10,104 4,054 149.2 Net Profit Margin 9.1% 8.2% 0.9p.p 9.9% 5.4% 4.5p.p Earnings Per Share (Cents) 1.69 0.93 81.7 4.59 1.86 146.6 P.P denotes percentage points NM denotes not meaningful
Revenue by Business Segmentation Manufacturing/ Wholesale 7% Export 14% 11% 9% 80% Direct Selling 79% 2014 2015 Direct Selling Export Manufacturing/Wholesale
Revenue by Region Philippines 2.8% Others 8.6% Singapore 7.3% China 19.4% 24.6% 12.5% 11.7% 30.2% 17.2% 3.8% Taiwan 55.5% 2014 Indonesia 6.4% 2015 Singapore China Indonesia Taiwan Phiippines Others
Revenue by Products Health Supplments 11% Weight Management 16% Others 3% Skin Care 70%
Balance Sheet Highlights S$ 000 As at 31 Dec 2015 As at 31 Dec 2014 Cash & Cash Equivalents Non-Current Assets Current Assets Non-Current Liabilities Current Liabilities 47,247 40,975 17,804 17,068 76,599 67,053 2,321 3,006 30,097 25,658 Net Gearing Net cash Net cash Strong Balance Sheet supported by healthy cash position and low gearing ratio Dividend Policy at least 30% of profit after tax
Strategy & Outlook
Growth Opportunities in Key Markets Taiwan China Indonesia Ranked among the Top 15 Direct Selling brands in Taiwan in 2015 by the Fair Trade Commission of the Republic of China ( 中華民國公平交易委員會 ) The number one in Taiwan, Amway, has a market share of NT$11.7B Opening of third RC in Southern Taiwan as well as leverage on social media to boost top line Laid the groundwork in preparation for its direct selling market through: - Registering all of its products - An established network via export agents - Good understanding of the different cultures in key provinces Top leaders trained in Taiwan will be forerunners in China s direct selling market Positive results underscore new motivated leader distributors that have been acquired Continues to be an exciting market for the Group s weight management products
Growth Strategy 1 Tap into organic growth opportunities to gain access to new markets and/or new distribution channels 2 Attain exclusivity to new products/services 3 Tap into upstream value chain of business which are synergistic to ours
Market Outlook Direct selling remains uniquely poised for expansion in both advanced and emerging markets - Posted 6.5% three year CAGR from 2011 to 2014 China and other Asian countries, plus emerging markets in Latin America, are fuelling much of the industry s growth. - Emerging markets as a whole produced 45% of all 2014 direct retail sales, a 7% increase from 2010 to 2014 Beauty, personal care and wellness products are the most popular globally and regionally Information source: directsellingnews.com (website was designed to offer a comprehensive global view of the direct selling industry.)
Group Outlook Continue to build on growth momentum in key markets Application for direct selling license in China is in progress potential market demand may increase in multiple folds Cautiously optimistic of a positive FY2016 performance, due to continual growth in key markets like Taiwan, China and Indonesia as well as the launch of several new products in the next few quarters
Investment Merits Value Proposition Growth Prospects Strong Balance Sheet Established network of distributors Growing revenue driven by momentum in key markets; awaiting license from China Healthy cash position with low gearing Strong range of products backed by good reviews Stable margins due to economies of scale and operational efficiencies Dividend policy of at least 30% of net profit after tax
Q&A Thank You!
Appendix
Taiwan Direct-Selling Market (2015) Rank Company Sales Figure 1 Amway NT$11.7N 2 Pro-Partner NT$7.1B 3 Melaleuca *NT$4.8B 4 Herbalife *NT$4.6B 5 Nu Skin *NT$4.5B 6 Market America *NT$4.3B 7 Total Swiss International Group NT$4.2B 8 Jeunesse Global NT$2.7B 9 E. Excel NT$2.3B 10 Avon Products *NT$2.1B *= Estimated Information extracted from: Power Networking Monthly magazine
Best World Products Before VS. After