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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.
Welcome to Best WorldCorporate Presentation
FY2017 Financial Highlights
Peer ComparisonFY2017 Financial Highlights Investment Merits Q&A
12.8 13.5
35.244.718.3 21
51.6
55.3
19.226.2
52.246.8
25.0
40.9
61.874.1
0
75
150
225
300
FY2014 FY2015 FY2016 FY2017
Q4 Q3
Q2 Q1
3
Financial Highlights - Revenue2017 Financial Highlights
75.3
101.6
200.8
220.9
2.7%Manufacturing & Wholesale Revenue
• Maintained at S$4.5 million compared to FY2016
4
Financial Highlights - Segmental Breakdown2017 Financial Highlights
FY2017 by Segment
Export 48.2%
Direct Selling 49.7%
Manufacturing & Wholesale
2.1%22.8%Direct Selling Revenue
• Primarily due to a decline in revenue from the Group’s key market of Taiwan• Offsetting the improvement from Singapore and Other markets
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
90.9%China
• 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
28.5%Taiwan
• 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
Financial Highlights - Geographical Breakdown2017 Financial Highlights
FY2017
China 50.0%
Taiwan39.8%
Indonesia2.4%
Others4.3%
Singapore3.5%
2.3%Indonesia
• 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
8.9%Singapore
• Due to positive response from marketing campaigns conducted during earlier quarters of FY2017
6
Financial Highlights - Geographical Breakdown2017 Financial Highlights
26.9%Others
• Primarily due to the increase in revenue from Hong Kong, Vietnam, Korea and Malaysia offsetting decline from Philippines and Thailand
FY2017
China 50.0%
Taiwan39.8%
Indonesia2.4%
Others4.3%
Singapore3.5%
7
Membership Growth VS Average Revenue per Member 2017 Financial Highlights
2017
490,041 members
Revenue per memberRevenue
As at 31 December 2017, total membership for the Group’s Direct Selling business stands at 490,041Active 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
298,251
377,830402,422
439,765
490,041
162216
318
639703
$0
$200
$400
$600
$800
$1,000
$1,200
0
100,000
200,000
300,000
400,000
500,000
600,000
FY2013 FY2014 FY2015 FY2016 FY2017
Financial Highlights - Margins2017 Financial Highlights
0
60
120
180
240
FY2013 FY2014 FY2015 FY2016 FY2017
77% 74% 76% 73% 69%
4% 5% 10%17%
25%
Revenue S$million GPM % NPM %
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)
8
200.8220.9
101.7
75.3
41.1
Financial Highlights - Dividends2017 Financial Highlights
6141,762
4,404
12,661
22,553
0
7,500
15,000
22,500
30,000
FY2013 FY2014 FY2015 FY2016 FY2017
43% 43% 44% 34% 41%
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$71.3M (2004 to 2017 including proposed final dividends)
9
Financial Highlights - Cash Holding2017 Financial Highlights
Net cash position with negligible borrowings
• Management is currently undergoing a strategic review of its balance sheet to enhance shareholder value through:
- M&A opportunities
- Dividend and share buyback programme
10
(S$million) FY2013 FY2014 FY 2015 FY2016 FY2017
Cash and Equivalents
33.3 41.0 47.2 54.9 82.2
Total Borrowings
3.5 6.0 0.018 7.4 7.4
Net Cash 29.8 35.0 47.1 47.5 74.8
Gearing Ratio
0.07 0.11 0.00 0.08 0.06
* Calculations based on formula Net Debt/Total Equity
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 2018
0.6
3.2
1.3
2.4
4.7
1.2
3.9
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
BEST WORLD INTL HERBALIFE LTD TUPPERWARE BRAND NU SKIN ENTERP-A USANA HEALTH SCI GRAPE KING BIO AMWAY MALAYSIA
PEG Ratio Across PeersPeer Comparison
11
-8%
2%
7%
1%-2% -3%
10%
36%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Avon Herbalife Natura (R$) Nu Skin Oriflame € Tupperware USANA Best World
5-YR Revenue CAGR Across Peers Peer Comparison
Strong revenue growth momentum
12Source: www.worldofdirectselling.com
61.6%
80.8%
70.3%
78.1%
72.7%
67.4%
82.7%
69.1%
58.2%
66.8%
59.2%
67.2%
62.2%58.9%
70.3%
38.6%
-1.7%
8.3% 6.8% 6.9% 5.8%3.7%
8.8%
25.2%
-10%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Avon Herbalife Natura NuSkin Oriflame Tupperware USANA Best World
Gross Profit Operating Expenses Net Income
Margins and Expenses Performance Across PeersPeer Comparison
Superior cost management and margins control13
Source: www.worldofdirectselling.com
Best World’s Investment Thesis2017 Financial Highlights
2017-2020: 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
Q&AThank you
Corporate Presentation