Corporate Presentation December 2011

1

Agenda

Introduction

Financial Summary

Retailing Overview

Marketing Strategy

Operations Review

Open Forum

2

Become the No.1 national beauty spa chain in China, in store growth, brand image and

attractiveness for franchisees

Recognized as

“Total Skincare Solutions Expert”

Strategic Objectives

3

Five Year Plan

Require Business model Organization Infrastructure

We will execute our strategy in phases 2010 Preparation and set up 2011 & 2012 Rapid roll out in China 2013 & 2014 International expansion

4

Professional Spa service

Products with US patent

Distribution network

License training

Research & Development

Manufacture of beauty and skin care products

Distribution of products

Government certified beauty training schools

Training of 7 professional beautician licenses

Department Store Counters

SPAs

Franchised SPA

Self-owned SPA

ISO accredited Factories in

Shanghai & Taipei

4 Logistics centers in China

Core Business

5

• Build a world-class leadership team with proven track record

– CEO: John Tseng

• Corporate VP, Eastman Kodak

• MD of Goodyear Greater China

– CFO/COO: Jacky Chan

• GM of Kodak China

• GM of Evergreen Packaging China

– VP Retail Operation: Antonio Lee

• Kodak Senior VP Retail Operation, Greater Asia Region

• Developed and managed over 10,000 stores

– CMO: Shirley Tai

• GM of Estee Lauder HK

• GM of Clinique China

Organization & Team

6

Financial Summary

7

Summarized Results in 1H2011

Turnover increased by 25.6% to HK$288.5 million

Net profit surged by 280.9% to HK$60.4 million

Gross margin maintain at a high level of 78%

Net cash increased slightly to HK$577.1 million with no borrowing despite dividend paid out of HK$90 million during the first six months

Interim dividend of HK$0.035 per share (Div. payout at 115.9%), same as 1H2010

8

Financial Summary

HK$ Million Chg %

2010 2011

Turnover 229.6 288.5 25.6%

Gross profit 159.4 224.4 40.8%

Profit before tax 36.6 80.1 119.0%

Net profit 15.8 60.4 280.9%

Dividend per share (HK cents)

- Interim (HK cents) 3.50 3.50 0.0%

Dividend payout (%) 440.7 115.9 -324.8

Basic EPS (HK cents) 0.79 3.02 280.2%

For six months ended

30 June,

9

Waterfall Chart – Change in net profit

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

HK

$000

1H2010 NET PROFIT to 1H2011 NET PROFIT

10

-120%

-80%

-40%

0%

40%

80%

120%

160%

200%

240%

280%

-120,000

-80,000

-40,000

-

40,000

80,000

120,000

160,000

Net profit (HK$'000) Net profit yoy growth rate

Net Profit Changes

Net profit growth momentum restored.

House

Clean Up

11

Key Ratios For year ended For six months Good /

31 December, ended 30 June, Chg Improv't

2010 2011

A/R days * 14 days 14 days -

A/P days * 37 days 52 days 15 days

Inventory turnover days * 131 days 111 days -20 days

ROE * (%) 4.0 15.5 11.5 pts

ROA * (%) 3.3 12.8 9.5 pts

Cash (HK$ million) 575.5 577.1 0.3%

Gearing Ratio Net cash Net cash N/A

Dividend payout (%) 511.7 115.9 -395.8 pts

Basic EPS (HK cents) 1.56 3.02 93.0%

* Annualised for comparison purpose.

Cash represents 61.0% of total assets as of 30 June 2011.

12

Stable Dividends and High Dividend Payout History

Historic dividend payout ratio >70%

0%

100%

200%

300%

400%

500%

600%

-

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

FY2008 FY2009 FY2010 1H2011

Div

ide

nd

pay

ou

t ra

tio

(%

)

HK

$'0

00

Stable Dividends

Interim dividend Final dividend Dividend payout ratio

13

Turnover Analysis for 1H2011 By Region By Products / Service

-27.4% yoy

1.2%

37.3% yoy

-4.2% yoy

19.0%

79.8%

The PRC Taiwan Others (incl. Hong Kong, Macau & Malaysia)

1.3%

98.7%

- 18.8% yoy

26.6% yoy

Product Sales Service Income

14

Geographical Revenue Breakdown

Expressed in HK$'000 1H2011 % 1H2010 % Variance Var (%)

PRC 230,278 80% 167,730 73% 62,548 37.3%

Taiwan 54,828 19% 57,229 25% (2,402) -4.2%

Others 3,370 1% 4,646 2% (1,275) -27.4%

Total 288,476 100% 229,605 100% 58,871 25.6%

Revenue By Type Breakdown

Expressed in HK$'000 1H2011 % 1H2010 % Variance Var (%)

Product sales 284,681 99% 224,889 98% 59,792 26.6%

Services 3,795 1% 4,674 2% (878) -18.8%

Entrustment 0 0% 42 0% (43) -102.4%

Total 288,476 100% 229,605 100% 58,871 25.6%

Distribution Network in Greater China

As at 30 June 2011 Franchisee

owned Entrusted

Self-

owned

Self-

owned

Total Spas Counters Spas Counters

The PRC 1,132 1,079 18 2 33

Taiwan 352 347 - 5 -

HK 1 - - -

Macau - - 1 -

Malaysia 32 - - -

Total 1,518 1,459 18 8 33

Others 34

15

Group Profitability

Group gross margin stood at 78% despite high inflation & higher labor costs

Improving operating margin mainly due to:

Strong sales in PRC as a result of increase in New Concept Store (NCS)

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

FY05 FY06 FY07 FY08 FY09 FY10 1H11

Gross margin

Gross margin (excl. non-cash inventory provision, Fonperi and Loss-Making Self-Owned Spas)

Operating margin

Operating margin (excl. one-off expenses & non-cash stock option expense)

16

Retailing Overview

17

26

1st May , 2010

• NCS Pilot Test in Xian

Aug , 2010

• Rolled out NCS in China

30th June , 2011

• 137 NCS opened in China

– 85 Upgrade

– 52 New

29

New Concept Store (NCS) Development

May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

new 0 0 0 0 4 5 7 16 29 29 30 38 45 52

upgrading 1 1 2 7 18 23 27 42 56 57 57 73 82 85

0

10

20

30

40

50

60

70

80

90

(May 2010 ~ June 2011 ，Cumulative )

30

New Concept Store (NCS) Development

RMB’000

Store No

50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50

$377 $377 $380 $375$387

$359 $356$344

$363 $371 $379 $390 $388 $391$412

$433$454

$526

0

50

100

150

200

$250

$300

$350

$400

$450

$500

$550

Jan/10 Feb/10 Mar/10 Apr/10 May/10Jun/10 Jul/10 Aug/10 Sep/10 Oct/10 Nov/10 Dec/10 Jan/11 Feb/11 Mar/11 Apr/11 May/11Jun/11

NCS Stores No. & SPS-12 Month Rolling

Store No. SPS

638 638 638 638 638 638 638 638 638 638 638 638 638 638 638 638 638 638

$218 $213 $217 $216 $220$208 $209 $208 $216 $223 $222 $218

$228 $232$243 $245 $242

$264

0

500

1,000

1,500

2,000

$100

$150

$200

$250

$300

Jan/10 Feb/10 Mar/10 Apr/10 May/10 Jun/10 Jul/10 Aug/10 Sep/10 Oct/10 Nov/10 Dec/10 Jan/11 Feb/11 Mar/11 Apr/11 May/11 Jun/11

Non-NCS Stores No. & SPS-12 Month Rolling

Store No. SPS

+47%

+27%

31

Channel Sales Performance (12-month Rolling Sales per Store (PRC))

70 Beijing

47 jilin

Chengdu 60

21 Fuzhou 65

Guangzhou

8 Harbin

8 Hainan

59 Hangzhou

27 Henan

26 Jiangxi

Chongqing

4

5 Xinjiang

5 Xiamen

59 xian

49 hubei

18 Wenzhou

14 Tianjin

64 Suzhou

36 Liaoning

68 Shenzhen

11 Shanxi

42 shandong

23 Ningbo

160 2 Shanghai

42 Nanjing

12 Heilongjiang

5 gansu

28

2 6

2

Zhejiang

Franchisee-owned (1111)

Self-owned Spa (2)

First-tier cities (344)

Second-tier cities (762)

Counters (53)

2

Inner Mongolia

1

8

5

1

5

1

guizhou

yunnan

xizang

hebei

xining

1

3

ningxia

guangxi

hunan

18 28

7

1

20

11 anhui

6

Nationwide Distribution Network in PRC (as of 30 Nov 2011)

32

• New Concept Store (NCS) – Upgrade from existing: Over 100 NCS

– Cumulatively over 250 NCS by end of 2011

– Continue NCS expansion in Carrefour Shopping Mall

• Net Store increase: 100

• Enhance new franchisee recruiting program

• Further enhance technical and retail management training program on NCS

33

Retail Outlook

Marketing Strategy

34

• 2011 Most Valuable Franchise Network (最值得加盟美容连锁网络) by China Beauty Expo

• 2011 Excellent Total Solution Beauty Centre (优质全方位美容美体中心) by PC Lady.com (leading female website)

• 2011 Top Ten Best Entrepreneur Investment (十大最具吸引力创业投资项目) by BJ International Franchisee Expo

• 2011 Most Valuable Franchise Network (最值得加盟美容连锁网络) by National Franchisee Expo

• 2011 National Reliable Brand for Consumer & Gold Medal of Chinese Quality Brands (全国消费者信得过单位 & 中国名优品牌金奖) by 中国诚信企业合作促进会

• 2010 Most Healthy Total Solution Beauty Centre (最健康全方位美容美体中心) by Trends Health magazine

• 2007 Honor and 2006 Silver Winner of the World’s Best Annual Report by International ARC Awards, New York

• 2007 Best Asia Brand Innovation award

• 2007 Best Asia Brand Innovative Figure award

• 2006 and 2005 Outstanding Enterprise in Hong Kong

• 2006 Bronze Winner of Asia Marketing and Promotion Award

• 2006 Bronze Winner of Best Asia B2B Events Award

• 2006 Best Asia Interactive Media Application Award

• 2005 Top 10 most influential beauty brands in China

• 2005 Top 10 most influential beauty franchised salons in China

• 2005 Golin Awards in Corporate Branding / Reputation Management

• 2005 Best Franchisee Network in China (with the highest consumer recognition rate of 49.7% by 2005 China Beauty Economy Annual Report)

• 2005 London International Advertising Award

• 2005 New York Global Longshi Advertising Award

• 2005 6 Honors for Corporate Identity Design by Hong Kong Designer Award

• 2005 8 Honors by Asia Times Advertising Creative Award

• 2005 Asia Pacific Interior Design Award for Central SPA

Renowned Brand

35

Anmi Series RMB100~325

Herbal Yabai Series RMB100~440

Counter Channel

NB-1 SCT Series RMB500~5888

NB-1 Yam Series RMB500~1000

Bio-Tech Series RMB200~400

Herbal Series RMB100~300

Essence Oils RMB230~1300

NB-1 Supplements RMB500~1150

Health Supplements RMB150~500

Franchisee Channel

Professional Spa & Beauty Products

36

Aroma Hair-loss Preventive Scalp Treatment RMB190

Aroma Bust Treatment & Firming Wrap RMB400

Digestion Enhancing Treatment RMB190

Aroma PMS Treatment RMB190

Aroma Body Sculpturing & Firming Treatment RMB400~450

Ultra Lympho Slim Up Treatment [Waist/ Stomach/ Pregnant lines / Thigh/ Buttock/ Shoulder] RMB990

Aroma Oriental Massage/ Energetic Lymphomassage RMB550

Yin & Yang Jade Massage Therapy RMB190

Facial Treatment [NB-1/ Natural Hormone/ Bio-tech / Han Herbal Whitening / Professional ] RMB280~590

Aroma Lympho Lift-up Therapy [Whitening/ Balancing/ Refining/ Brightening/ Rejuvenating/ Dark Circle/ Firming] RMB190

Aroma Pores & Dark Spot Back Treatment RMB400

Aroma Firming Neck Treatment RMB190

Aroma Muscle-relieving

Shoulder Massage RMB190

Whitening Ocean Wrap

[Arm/Full Body] RMB390

Body Herbal Scrub RMB390

Unique Professional Products for Head-to-toe Spa Programs

37

High end department store brands:

SKII (0.6%), Lancome (2.3%), Shisedo (1.7%), Estee Lauder (1.9%),

Mass hypermarket brands:

Olay (10.2%), L’Oreal (4.8%), Vichy (2.1%) ;

Ponds - Unilever (1.8%), Nivea (1.2%) Garnier Mini Nurse (1.1%)

Direct selling:

Mary Kay (6.1%) , Artistry - Amway (5.2%), Avon (2.6%)

Cosmetic drugstores:

Aupres (4.8%), Dabao (1.1%)

Source: Euromonitor Report June 2011

Retail Competition (Market shares 2010):

38

26

10

6

3

6

3

3

2

3

3

0

2

2

1

6

Olay

L’Oreal Paris

Avon

Dabao

Tjoy

Lancome

Ponds

Estee Lauder

Shiseido

Aupres

Nivea

Johnsons Baby

Mary Kay

Artistry

Natural Beauty

Top of Mind

All Respondents (Radom) n (Wtd) = 2423 n = 2421

15

22

16

13

16

18

13

6

8

7

3

21

23

36

58

Unaided Awareness

71

70

68

65

59

57

49

48

47

46

45

35

33

28

89

Total Awareness

Brand Awareness – Top 15 brands in China

39

Note: 以上列出品牌为目前使用前15位的品牌, 并根据总体认知排序

19

19

7

5

3

2

2

3

5

3

1

0

1

0

12

35

22

25

25

33

21

9

9

5

10

1

29

43

48

58

84

84

82

81

70

67

67

65

58

51

44

40

39

35

87

Top of Mind

Unaided Awareness Total Awareness

Lancôme

Estee Lauder

L’Oreal Paris

Olay

Shiseido

Aupres

Guerlain

Avene

Arden

Chlitina

Clinique

Chanel

Christine Dior

Biotherm

Natural beauty

Brand Awareness – Top 15 brands in Premium Users

40

- New brand positioning kicked off in Mar 2011: Qi 细养之美

brand imagery building for new consumer and franchisee recruitment A unique brand positioning to promote spa channel and NB product portfolios in an integrated manner

- New Key Visuals by portfolio and by function to build power brands

- New packaging design to be kicked off in Q4 2011

Winning concept for NB-1, Bio-Tech and Herbal for both NB and non-NB users in Focus Group conducted in July

- New POP and in-store merchandising in Q4 2011

New Communications Programs

41

2011 Strategic Imperatives Building Blocks and 1H Achievements

- New Product Launch

Skin Care: 8 SKUs in Q3 Supplements: 1 SKUs in Q3 Essence Oils: 3 SKUs in Q4

- PR and Promotion

Mega launch of Yam NPD and NB-1 re-promote in Q3 Key account programs target at >1M franchisees in Q3

- Brand Revamp Program

New packaging launch target in Q4 Test market for new TVC and franchisee recruitment ad target in Q4

42

Operations Review

43

Oracle 甲骨文 （Standard Costing 标准成本）

Cognos (BI) 数据分析系统

e-Banking /e-Payment 电子银行

E-flow 电子签呈

e-Payroll 电子人事系统

Microsoft Exchange Server 电子邮件系统

POS/CRM 零售客户管理

Systems Implementation

44

$0

$20

$40

$60

2H2009 1H2010 2H2010 1H2011

$59

$36

$19 $22

Trade Receivables HK$M

$0

$20

$40

$60

$80

$100

2H2009 1H2010 2H2010 1H2011

$89

$64

$47 $39

Inventory HK$M

$0

$5

$10

$15

$20

2H2009 1H2010 2H2010 1H2011

$12

$10

$13

$18

Trade Payables HK$M

$480

$510

$540

$570

$600

2H2009 1H2010 2H2010 1H2011

$559

$532

$576 $577

Cash HK$M

Group Working Capital

45

0

10

20

30

40

50

2H2009 1H2010 2H2010 1H2011

50

43

25

17

Legal Entities (PRC)

2,760

2,184

1,248

928

0

700

1,400

2,100

2,800

3,500

2H2009 1H2010 2H2010 1H2011

SKUs (PRC)

0

5

10

15

20

2H2009 1H2010 2H2010 1H2011

8 8 6

3

Legal Entities (TW)

1,772

1,294

868 744

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2H2009 1H2010 2H2010 1H2011

SKUs (TW)

PRC &TW Legal Entities and SKUs

46

0

100

200

300

400

500

600

700

800

900

1,000

2009 Dec 1H2010 2010Dec 1H2011

262

264, +1%

250, -5% 198,

-21%

232 228, -2%

230, +1% 237,

+3%

289 246, -15% 205,

-17% 169, -18%

210 220, +5% 263,

+20%

235, -11%

Distribution&Admin Production

Counter & SPA Sales, Retailing and Marketing

0

100

200

300

400

500

600

700

800

900

1,000

2009 Dec 1H2010 2010Dec 1H2011

777 770, -1%

782, +2%

686, -12%

198 169, -15%

157, -7%

143, -9%

18 19,+6% 9,-53%

10,+11%

China TW HK&Macau(includes Malaysia)

993 958, -4%

948,-1% 839,-11%

993

958,-4% 948,-1%

839,-11%

Group Headcount

47

Thank you! NB IR website: www.nblife.com/ir

48