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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.
• About Best World
• 1Q 2016 Financial Highlights
• Strategy & Outlook
• Q&A
Content
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 412,000 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.
• 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
3rd Party Manufacturing
Marketing Tools
Product Registration
Product Concept
Direct Selling
About Our Direct Selling Model
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)
Overall Membership
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
DD
Transfer Price Transfer Price(a fraction of
members’ price)
Members’ Price
Best World HQ
Subsidiary
DDDDDD
DD
DDDDDD
vs Best World HQ
Agent
Our Business Segments
Direct Selling Export
• 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 SolidGoldPharmaceutical Co., Ltd. in 2014
• Established a Joint Venture in Dubai, the United Arab Emirates in 2016
Corporate Milestones
Our Markets
Our Brands
Our Brands
Recent Corporate Events
2015, 2009, 2008
Our Awards
1Q2016
Financial
Highlights
Financial Review � OVERVIEW
Steady Revenue growth• Gaining momentum in key markets
Stable financial margins• Stable distribution expenses
9.0 12.8 13.5
35.28.8
18.3 21.09.2
19.226.2
14.0
25.0
40.9
0.0
20.0
40.0
60.0
80.0
100.0
120.0
2013 2014 2015 2016Q3 Q4 Gross Profit Net Profit
Revenue by Business Segmentation
Direct Selling74.1%
Export13.3%
Manufacturing/Wholesale
12.6%
1Q2015
Direct Selling69.4%
Export27.9%
Manufacturing/Wholesale
2.7%
1Q2016
Direct Selling Export Manufacturing/Wholesale
Revenue by Region
Singapore 4.0%
China30.0%
Taiwan,57.4%
Indonesia 4.0%
Others 4.6%
1Q2016
Singapore China Taiwan Indonesia Others
Singapore 14.5%
China22.9%
Taiwan33.1%
Indonesia 3.5%
Others26.0%
1Q2015
China• Revenue increased
242.2% from $3.1 million for 1Q2015 to $10.6 million for 1Q2016
• Higher export orders due to increased demand for our skincare and functional food lines
120
2,195 3,088
10,566
973
3,296
5,366
694
3,117
4,805
784
4,372
6,512
2013 2014 2015 2016
China S$('000)
Q1 Q2 Q3 Q4
Taiwan• Revenue increased
352.9% from $4.5 million for 1Q2015 to $20.2 million for 1Q2016
• Series of successful marketing campaigns, opening of the third RC in Kaohsiung in 1Q2016 and successful new product launch
• Launch of online store allows customers and distributors to make purchase during holiday seasons
2,498 2,418 4,465
20,221
2,553 4,156
10,244
2,674
4,940
14,125
5,484
11,196
27,559
2013 2014 2015 2016
Taiwan S$('000)
Q1 Q2 Q3 Q4
• Revenue increased 199.8% from $0.5 million for 1Q2015 to $1.4 million for 1Q2016
• More active and productive distributors promoting the weight management line and series of successful promotion campaigns
1,098 881 467
1,400
944 883
745
1,339
618
2,380
845
514
2,914
2013 2014 2015 2016
Indonesia S$('000)
Q1 Q2 Q3 Q4
Indonesia
• Revenue declined 28.8% from $2.0 million for 1Q2015 to $1.4 million for 1Q2016
• Stiff market competition and higher involvement of Singapore top distributors in other growing key markets
• Plans for FY2016:• Promotion of brand
awareness, launch new products to attract new consumers and train existing distributors to take on the role of top distributors whom in turn will devote more turn to other growing key markets
2,109 2,077 1,958 1,394
1,801 2,024 1,958
1,788 2,304
1,767
2,446
2,432
1,735
2013 2014 2015 2016
Singapore S$('000)
Q1 Q2 Q3 Q4
Singapore
• Revenue from Other Markets declined from $3.5 million in 1Q2015 to $1.6 million in 1Q2016, as a result of lower contribution from Thailand, Philippines, Myanmar and Malaysia offsetting improvement from Hong Kong, Vietnam and Korea.
Other Markets
• Apart from new product launches, new strategies will be implemented on a country by country basis to stimulate new members recruitment and product demand.
Revenue by Products
Skin Care
70%
Health
Supplements
11%
Weight
Management
16%
Others
3%
Skin Care Health Supplements
Weight Management Others
FY2015
Skin Care
74%Health
supplements
8%
Weight
Management
11%
Others
7%
Skin Care Health Supplements
Weight Management Others
1Q2016
S$’000 As at 31 Mar 2016 As at 31 Dec 2015
Cash & Cash Equivalents 46,651 47,247
Non-Current Assets 17,200 17,804
Current Assets 83,311 76,599
Non-Current Liabilities 2,291 2,321
Current Liabilities 31,174 30,097
Net Gearing Net cash Net cash
Balance Sheet Highlights
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 15Direct Selling brands inTaiwan in 2015 by the FairTrade Commission of theRepublic of China (中華
民國公平交易委員會)
• The number one in Taiwan,Amway, has a marketshare of NT$11.7B
• Laid the groundwork inpreparation for its directselling market through:
- Registering all of itsproducts
- An established networkvia export agents
- Good understanding ofthe different cultures inkey provinces
• Top leaders trained inTaiwan will be forerunnersin China’s direct sellingmarket
• Positive results underscorenew motivated leaderdistributors that have beenacquired
• Continues to be an excitingmarket for the Group’sweight managementproducts
Tap into organic growth opportunities to gain access to new markets and/or new distribution channels
Attain exclusivity to new products/services
Tap into upstream value chain of business which are synergistic to ours
1
2
3
Growth Strategy
Market Outlook
Information source: directsellingnews.com (website was designed to offer a comprehensive global view of the direct selling industry.)
• Direct selling remains uniquely poisedfor expansion in both advanced andemerging markets
- Posted 6.5% three year CAGRfrom 2011 to 2014
• China and other Asian countries, plusemerging markets in Latin America,are fuelling much of the industry’sgrowth.
- Emerging markets as a wholeproduced 45% of all 2014 directretail sales, a 7% increase from2010 to 2014
• Beauty, personal care and wellnessproducts are the most popularglobally and regionally
Group Outlook • Continue to build on growth momentum in
key markets
• Application for direct selling license in Chinais in progress – potential market demandmay increase in multiple folds
• Continue to monitor the movement ofcurrencies of key markets which the Groupoperates in or trades in
• Cautiously optimistic of a positive FY2016performance, due to continual growth in keymarkets like Taiwan, China and Indonesia aswell as the launch of several new products inthe next few quarters
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
Thank You!
Q&A
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
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