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Corporate Presentation 9 June 2016 1

Corporate Presentation 9 June 2016 - listed companybestworld.listedcompany.com/newsroom/BW_June_9Corporate... · 2016-06-09 · Corporate Presentation ... product launches, services

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Corporate Presentation

9 June 2016

1

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

• About Best World

• Business Model & Financial Highlights

• Strategy & Outlook

• Q&A

Content

3

Our Vision

4

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 412,000 independent

distributors and members in

the 12 markets we operate in.

5

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.

6

• 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

Corporate Milestones

7

Our Markets

8

Our Brands

9

Our Brands

10

Recent Corporate Events

11

2009, 2008, 2015

Our Awards

12

Business

Model &

Financial

Highlights

13

• 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

3rd Party

Manufacturing

Marketing

Tools

Product

Registration

Product Concept

Direct Selling

Business Model

14

Direct Selling Business

D

Transfer Price Transfer Price

(a fraction of

members’ price)

Members’ Price

Best World HQ

Subsidiary

D D D

D

D D D

vs Best World HQ

Agent

Direct Selling Export

15

Business Model Segments

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

2010 2011 2012 2013 2014 2015 1Q2016

Membership (2010-1Q2016)

Business Model

16

Membership Growth

Financial Highlights

Steady Revenue growth

• Gaining momentum in key markets

17

S$’(M)

9.0 12.8 13.5

35.2 8.8

18.3 21.0 9.2

19.2

26.2

14.0

25.0

40.9

0.0

20.0

40.0

60.0

80.0

100.0

120.0

2013 2014 2015 2016

Revenue

Financial Highlights

Stable financial margins

• Stable distribution and administrative expenses

• Highly scalable with little capex required as key costs are mainly related to commissions 18

41.0

75.3

101.6

14.3

28.2

36.4

17.7 22.6

27.2

0.0

20.0

40.0

60.0

80.0

100.0

120.0

2013 2014 2015

S$’(M)

Margins

Financial Highlights

19

Net cash position with negligible borrowings

As at 31 March 2016, Best World has S$46.7 million in cash and cash equivalents

Cash

31.5

39.2 42.9

0

10

20

30

40

50

S$’(M)

Financial Highlights

20

Dividend Policy

• At least 30% of profit after tax

Dividends

0.3

0.8

2

43% 43% 44%

30%

32%

34%

36%

38%

40%

42%

44%

46%

0

0.5

1

1.5

2

2.5

S$ Cents

2013 2015 2014

Strategy

& Outlook

21

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

• Application for direct selling

license in China is in

progress – potential market

demand may increase in

multiple folds

• Laid the groundwork in

preparation for its direct

selling market through:

- Registering all of its

products

- An established network via

export agents

- 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

22

Continue to build on growth momentum in key markets through new product launches, services and opening of new regional centres

Explore inorganic growth opportunities to gain access to new markets, new distribution channels or gain exclusivity to new products/services

Tap into upstream value chain of business which are synergistic to ours

1

2

3

Growth Strategy

Thank You!

Q&A

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Appendix

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Revenue by Business Segmentation

Direct Selling 74.1%

Export 13.3%

Manufacturing/ Wholesale

12.6%

1Q2015

Direct Selling 69.4%

Export 27.9%

Manufacturing/Wholesale

2.7%

1Q2016

Direct Selling Export Manufacturing/Wholesale

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Revenue by Region

Singapore 4.0%

China 30.0%

Taiwan, 57.4%

Indonesia 4.0%

Others 4.6%

1Q2016

Singapore China Taiwan Indonesia Others

Singapore 14.5%

China 22.9%

Taiwan 33.1%

Indonesia 3.5%

Others 26.0%

1Q2015

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Revenue by Products

Skin Care 70%

Health Supplements

11%

Weight Management

16%

Others 3%

Skin Care Health Supplements

Weight Management Others

FY2015

Skin Care 74% Health

supplements 8%

Weight Management

11%

Others 7%

Skin Care Health Supplements

Weight Management Others

1Q2016

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Market Outlook

Information source: directsellingnews.com (website was designed to offer a comprehensive global view of the direct selling industry.)

• 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

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Investment Merits

Value Proposition

Established network of distributors

Wide range of products backed by

good reviews

Growth Prospects

Growing revenue driven by momentum

in key markets; awaiting license from

China

Stable margins due to economies of

scale and operational efficiencies

Strong Balance Sheet

Healthy cash position with low

gearing

Dividend policy of at least 30% of net profit after tax

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Taiwan Direct-Selling Market (2015) Rank Company Sales Figure

1 Amway NT$11.7B

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 31

Best World Products Before VS. After

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