Singer Bangladesh Limited · DSEBD:SINGERBD
Singer Bangladesh — Investor Presentation (September 2017)
25 slides from Singer Bangladesh's investor presentation, September 2017
Slide 1: Investor Presentation September 2017
BANGLADESH LIMITED INVESTOR PRESENTATION September 2017
Slide 2: Today's Presenters
Today’s Presenters Gavin Walker MHM Fairoz Chairman Chief Executive Officer Singer Bangladesh Limited Singer Bangladesh Limited President & CEO Singer Asia Limited 2
Slide 3: Company Profile
Company Profile Industry Retail and consumer finance Household consumer durables Revenue1 US$115m / BDT9,007m Shareholder structure2 (Listed on DSE since 1983 & CSE since 2001) EBITDA1 US$12.0m / BDT944m Foreign EBITDA margin1 10.5% investors 8.5% Retail investors Institutions Net income1 US$7.0m /
Slide 4: Key Growth Drivers
Key Growth Drivers • Great environment 1. Robust economic fundamentals for long-term growth • One of the most recognised 2. Strong brand and reputation brands in Bangladesh • A leading position in multiple 3. Extensive product portfolio product categories • Largest retail distribution 4. Extensive d
Slide 5: Key Growth Driver 1 - Robust economic fundamentals
Key Growth Driver 1 - Robust economic fundamentals Great environment for long-term growth Population • Large population demographics • Increasing MAC1 Strong GDP growth • 7.1%2 rates Electrification • Only 60%2 Low product • Refrigerators 20%3 penetration rates • Increasing unit selling Product repl
Slide 6: Key Growth Driver 2 - Strong brand and reputation
Key Growth Driver 2 - Strong brand and reputation is one of the most recognised brands in Bangladesh Exceptional brand • 112 years in Bangladesh1 awareness • Trust, quality, service & Brand association credit • Aspirational International • Multi-national Company Corporate • Winner of corporate Gover
Slide 7: Key Growth Driver 3 – Extensive product portfolio
Key Growth Driver 3 – Extensive product portfolio A leading position in multiple product categories Home appliances 72%1 Consumer electronics 20%1 Washing Air Televisions Smart phones/ Laptops Refrigerators & machines conditioners tablets freezers Furniture 2%1 Sewing machines 4%1 Others 2%1 Sitting
Slide 8: Key Growth Driver 3 – Local manufacturing and capacity
Key Growth Driver 3 – Extensive product portfolio Margin growth through local manufacturing / Significant capacity increases planned Refrigerators • 250,000 units capacity (Sonlu3) Televisions • 200,000 units capacity (TCL/Skyworth3) Air conditioners • 60,000 units capacity (Midea/Galanz3) • Capacit
Slide 9: Key Growth Driver 4 - Extensive distribution
Key Growth Driver 4 - Extensive distribution Largest retail distribution network in Bangladesh • • 2 retail formats 379 retail stores1 • +/- 6% sqm growth p.a • Mom & pop shops 486 dealers1 • Institutions & NGO’s • Cash on delivery E-commerce • Fast delivery Country wide after • 9 service centers sa
Slide 10: Multiple store formats – Focus on increasing store sizes
Key Growth Driver 4 - Extensive distribution Multiple store formats – Focus on increasing store sizes Total: 22 stores1 Larger flagship store format (ave. store size 230 sqm1) Total: 357 stores1 Products Wider premium range of HCDs and furniture Main retail format (ave. store size 123 sqm1) Products
Slide 11: Key Growth Driver 5 - Multiple financial services offerings
Key Growth Driver 5 - Multiple financial services offerings Drives significant footfall to stores Consumer credit products1 Financial services (over 62,000 transactions per month3) Consumer protection plans Hire purchase • 67% of retail sales2 Utilities payments (Bill Pay) • 146,586 accounts3 Remitt
Slide 12: Financials - Revenue growth
Financials - Revenue growth Revenue (BDT Billion / US$ Million)1 12 120 10 100 8 80 6 60 4 40 2 20 - - 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Revenue BDT billion Revenue USD million Note: 1. Revenue for 12 months ended 31 December 2016 2. General election instability impacted 20
Slide 13: Financials – Revenue analysis
Financials – Revenue analysis 2016 Revenue % Retail Wholesale Retail - Wholesale credit – 12% Singer Mega 12% long-term 10% 11% Interest & Interest & other other 3% 3% Retail Cash 28% Retail Retail - credit – Singer Plus short-term 75% 46% 13
Slide 14: Financials - Profitability ratios
Financials - Profitability ratios Gross profit and total overheads Gross profit Operating expenses 3,000 30% 3,000 30% 28.8% 26.7% 2,500 25% 2,500 25% 2,000 20% 2,000 20% 18.6% 18.4% 1,500 15% 1,500 15% 1,000 10% 1,000 10% 500 5% 500 5% - 0% - 0% 2015 2016 2015 2016 Gross Profit BDT million % of rev
Slide 15: Financials – Focus on cost control / increasing share of voice
Financials – Focus on cost control / increasing ‘share of voice’ Components of total operating expenses as a % of revenue 20.0% 18.6% 18.4% 18.0% 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% 2015 2016 Employee benefits 6.3% 5.9% Advertising & promotion 3.6% 5.1% Rent and occupancy 2.9% 2.5% Roya
Slide 16: Financials - Profitability ratios
Financials - Profitability ratios EBITDA and net profit EBITDA Net profit 1,200 12% 1,200 12% 10.5% 1,000 10% 1,000 10% 9.6% 800 8% 800 8% 6.1% 600 6% 600 6% 5.3% 400 4% 400 4% 200 2% 200 2% - 0% - 0% 2015 2016 2015 2016 EBITDA BDT million EBITDA margin % Net profit BDT million Net profit margin % N
Slide 17: Financials - Summary
Financials - Summary BDT million (unless otherwise indicated) 2016 2015 Income statement Revenue 9,007 6,911 Revenue growth (%) 30.3% 1 EBITDA 944 663 EBITDA growth (%) 42.3% Net profit 546 369 Net profit margin (%) 6.1% 5.3% Net profit growth (%) 48.2% Balance sheet Cash and cash equivalents 152 10
Slide 18: Financials – Dividends
Financials – Dividends Regular dividend flow Dividend yield1 % and dividend per share Dividend % of net profit 10.0% 20 400% 7.5% 15 300% 5.0% 10 200% 2.5% 5 100% 0.0% 0 0% 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 Dividend yield % Dividend per share (BDT) Notes: 1. Based on the share price
Slide 19: Appendices
IT’S THE SINGER NOT THE-SONG 19
Slide 20: Appendix 1 – Group structure
Appendix 1 – Group structure UCL Asia Retail Gavin Walker Partners LLP Holdings NV (Sewko CEO) 41.1% 54.1% 4.8% 100% 58.3%1 Singer Bangladesh Limited 83.85% International Appliances Limited (IAL) Note: 1. Singer Asia Limited shares in Singer Bangladesh Limited are held via wholly owned intermediate
Slide 21: Appendix 2 – Growing and evolving during 112 years in Bangladesh
Appendix 2 – Growing and evolving during 112 years in Bangladesh Single product / single brand – 52 years Multi-product / single brand – 48 years Multi-product / multi-brand – 12 years 1851 1905 1988 2005 2008 2012 2014 ▪ Isaac Merritt ▪ Singer ▪ Singer ▪ Singer ▪ Singer launches ▪ Singer ▪ Singer S
Slide 22: Appendix 3 - Proven credit approval, monitoring & collections process
Appendix 3 - Proven credit approval, monitoring & collections process Unique features of Singer credit model: 1. Branch managers are commission only 4. Advance payments by customers 2. Branch manager responsible for uncollectible accounts 5. Branch manager can pay on behalf of customer 3. Collection
Slide 23: Appendix – Low credit default rates
Appendix 4 – Low credit default rates Increasing number of accounts and paying percentage1 Installment payments in advance1 140 100.0% 120 97.0% 100 94.0% 80 91.0% 60 88.0% Thousands 40 85.0% 94.2% 20 82.0% - 79.0% Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 Jun-16 Dec-16 % of customers who have made Number
Slide 24: Financials – Summary of YTD Q3 Performance
Financials – Summary of YTD Q3 Performance BDT million (unless otherwise indicated) 30 Sep 2017 30 Sep 2016 30 Sep 2017 Income statement Revenue 9,321 7,725 5,936 Revenue growth % 20.66% 30.14% Gross profit 2,619 2,189 1,556 Gross profit margin % 28.10% 28.34% 26.21% EBITDA 1,098 848 599 Gross profi
Slide 25: Thank you
Thank you
Singer Bangladesh — Investor Presentation (September 2017) on 6ix