Synergy House Bhd · MYX:SYNERGY
Synergy House Bhd — Q3 FY2023 Earnings Presentation
32 slides from Synergy House Bhd's earnings presentation, November 2023
Slide 1: Synergy House Berhad Q3FY23 Results Briefing
SYNERGY HOUSE BERHAD Q3FY23 Results Briefing November 2023 Stock code on Bursa Malaysia: 0279
Slide 2: Disclaimer
DISCLAIMER This presentation may contain forward-looking statements that involve assumptions, risks and uncertainties. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements as a result of a number of risks, uncertainties and assumpti
Slide 3: Speakers
Speakers Tan Eu Tah Teh Yee Luen Kenneth Ng Executive Director Executive Director Chief Financial Officer November 2023 | page 3 / 32 | private and confidential
Slide 4: Agenda
AGENDA 1. Snapshot of Synergy House 4 2. Financial performance 9 3. Our Priorities & Strategies 23 4. Market outlook & Risk 25 5. Corporate Governance 29 6. Q&A Session 31
Slide 5: Snapshot of Synergy House
Snapshot of Synergy House We are a cross-border e-commerce seller and furniture exporter that specialises in beautifully designed and affordable ready-to-assemble home furniture. 9MFY23 Revenue 9MFY23 Profit After Tax B2B: 57.0% RM179.4 mil RM16.9 mil B2C: 43.0% Total marketplace: 10 2,496 SKU & des
Slide 6: Historical Share Price and Volume
HISTORICAL SHARE PRICE AND VOLUME 9-Nov Historical Closing Share Price and Volume Highest – RM 0.57 Volume – 2,583,700 7-Nov 0.60 Highest trading – RM0.595 1-Jun Opening – RM 0.35 0.55 Volume – 82,379,900 0.50 23-Nov 0.45 Current – RM 0.57 Volume – 1,679,500 0.40 0.35 0.30 Share price performance fr
Slide 7: Business model
Business model We are a cross-border e-commerce seller and furniture exporter 1 Market research 2 Design & Development (D&D) 3 We are not a traditional Outsourced Third-party manufacturers carry out production furniture manufacturer. They are our supplier 4 instead of our Furniture manufacturers Del
Slide 8: B2C Target and Current Markets and Platforms
B2C Target and Current Markets and Platforms Country Platform FY 2019: Lazada, Shopee Malaysia FY 2020: Wayfair US CURRENT USA FY 2022: Amazon US, Wayfair UK, Amazon UK, UK Cenports Commerce Canada FY 2023: Mano–Mano UK, Wayfair Canada FUTURE Germany Wayfair Germany, Amazon Germany, Amazon Canada, A
Slide 9: Agenda
AGENDA 1. Snapshot of Synergy House 4 2. Financial performance 9 3. Our Priorities & Strategies 23 4. Market outlook & Risk 25 5. Corporate Governance 29 6. Q&A Session 31
Slide 10: Q3FY23 Financial Highlights
Q3FY23 Financial Highlights Group’s Performance Q2FY2023 and Q3FY2023 Highlights of Q3FY23 Q2 Q3 QoQ 9M 1. Overall revenue growth of 18.1% in Q3FY23 as RM ‘mil FY23 FY23 (%) FY23 compared to Q2FY23. a. B2B sales increased by 33% mainly from Sales higher sales in US and UK. Revenue 58.6 69.2 18.1 179
Slide 11: Revenue by business segment
Revenue by business segment Q3 FY23 (RM million) Group’s Performance by Business Segment 26.5, 38% 1) For 3QFY23, B2C revenue contribution is 38% of total revenue while B2B at 62%. 42.7, 2) For 3QFY23, B2B sales increased by 33% due to 62% customers stocking up for year end sales while B2C sales rem
Slide 12: Revenue by business segment
Revenue by business segment RM’millions B2B B2C 1) The Group continues to grow the B2C segment while B2B remains stable due to the Group’s long term customers. 24.8 13% 49.6 26% 2) The Group expects the B2C sales contribution to increase further 77.1 43% with new countries and platforms, 5.3 4% whil
Slide 13: B2C Revenue by Platforms & Countries (con’t)
B2C Revenue by Platforms & Countries (con’t) Historical Revenue Contribution by B2C Overall (RM’000) 77,166 1) Continuous growth trend seen in the B2C. 2) For 9MFY23, B2C sales has exceed 49,627 12MFY22 by RM27.5m. 3) Traditionally, B2C sales peak towards the final quarter of the 24,777 calendar yea
Slide 14: B2C Revenue by Platforms & Countries (con’t)
B2C Revenue by Platforms & Countries (con’t) Historical Revenue Contribution by Wayfair US (RM’000) 58,999 (US) 37,190 1) Commenced selling on Wayfair US on 2020 and has seen continuously huge growth. 2) 9M FY23 sales has exceeded 12 14,409 months FY23 by RM22mil or by 59%. 3) Q3FY23 sales dipped by
Slide 15: B2C Revenue by Platforms & Countries (con’t)
B2C Revenue by Platforms & Countries (con’t) Historical Revenue Contribution by Wayfair UK (RM’000) 2,209 (UK) 1) Commenced selling on Wayfair UK in late FY2022. 2) Encouraging growth seen in FY23 notable in Q3FY23 where sales grew by 135% from Q2FY23. 177 3) Currently have approximately more than 1
Slide 16: B2C Revenue by Platforms & Countries (con’t)
B2C Revenue by Platforms & Countries (con’t) Historical Revenue Contribution by Amazon US (RM’000) 5,798 (US) 1) Commenced selling on Amazon US in mid FY2022. 2) Growth of 23% in Q3FY23 as 1,717 compared to Q2FY23. 3) Currently have approximately more than 260 SKU offered in the platform. FY 2022 9M
Slide 17: B2C Revenue by Platforms & Countries (con’t)
B2C Revenue by Platforms & Countries (con’t) Historical Revenue Contribution by Amazon UK (RM’000) 1,254 (UK) 1) Sales in Amazon UK commenced in late FY2022. 2) Sales in Q3FY23 grew by 55% as compared to sales in Q2FY23. 3) Currently have approximately more than 180 SKU offered in the platform. 0 FY
Slide 18: B2C Revenue by Platforms & Countries (con’t)
B2C Revenue by Platforms & Countries (con’t) Historical Revenue Contribution by Others (RM’000) 2,374 (UK) (US) (Canada) 1) Other platforms the Group is in are such as Mano Mano in UK, Cenports in USA and Wayfair Canada. 2) Above platforms collectively increased 208 by 80% in sales in Q3FY23 as comp
Slide 19: Costs contribution
Costs contribution Design and development (D&D) cost (RM million) 2.0% 2.0% 2.0% 1.9% 1.6% 1) D&D costs mainly comprise the payroll costs of D&D team, sample and 194.10 184.30 prototype assembly costs and other 179.40 miscellaneous costs. 2) Based on past trend, D&D cost is on 122.90 111.50 average
Slide 20: Costs contribution
Costs contribution Advertisement for B2C (RM million) 7.0% 1) Advertisement and promotions 3.1% remains a key factor in the B2C 1.7% 2.2% sales. 1.3% 77.24 2) Based on 9 months, the Group incurred approximately RM2.36mil 49.63 in advertisement costs or 3.1% of total B2C revenue. 3) Advertisement cos
Slide 21: Human Capital
Human Capital Manpower breakdown by department Design & 1) Group places utmost importance Marketing Development 61 39 in human capital. As at 31 Oct, we 40% 26% have 151 headcount. 2) Approximately 66% of total manpower is from the D&D and Marketing Department, which forms the key strength of the Gr
Slide 22: Snapshot of Balance Sheet
Snapshot of Balance Sheet Total assets Total cash (RM’mil) 1) Balance sheet continues to (RM’mil) strengthen with higher 14.7 % shareholder’s equity while 54.0 207.6 gearing maintains. (8.7%) 181.0 49.3 2) Recorded negative operating cash flow mainly due to Q2 FY23 Q3 FY23 inventory stocking up for
Slide 23: Agenda
AGENDA 1. Snapshot of Synergy House 4 2. Financial performance 9 3. Our Priorities & Strategies 23 4. Market outlook & Risk 25 5. Corporate Governance 29 6. Q&A Session 31
Slide 24: Our Priorities & Strategies
Our Priorities & Strategies 1 Marketplace and offering expansion a. Onboarding to new marketplaces in the USA, UK, Canada, Germany and France. b. Offer more product categories and SKUs to the market. c. Actively sourcing for well-established third-party manufacturers from Malaysia, China, Indonesia
Slide 25: Agenda
AGENDA 1. Snapshot of Synergy House 4 2. Financial performance 9 3. Our Priorities & Strategies 23 4. Market outlook & Risk 25 5. Corporate Governance 29 6. Q&A Session 31
Slide 26: Market Outlook
Market Outlook Global furniture e-commerce sales grew from USD82.49 billion (RM379.45 billion) in 2021 to forecasted USD110.71 billion North America (RM509.27 billion) in 2023. During the same period, global Particularly the United States, had a strong furniture e-commerce sales by key regions are s
Slide 27: Type of Furnitures Category
Type of Furnitures Category • Sectionals • Coffee Table & End Table • Cabinet & Chest • Bookcases Living • Sofa • Loveseats • Console Table • Futons & Daybeds • Chairs and Seating • TV Stands and Media Storage • Ottomans & Poufs • Fireplaces & Stove • Bed • Daybeds • Bedroom benches • Jewelry armori
Slide 28: Key risk and mitigation actions
Key risk and mitigation actions 1 Inventory Risk Mitigation Actions - Risk of obsolete inventories • Subscribed to market intelligence information to support - Acceptance of designs by customers product launching • Test the market acceptance of products through smaller batches (i.e 100 pieces) • Col
Slide 29: Agenda
AGENDA 1. Snapshot of Synergy House 4 2. Financial performance 9 3. Our Priorities & Strategies 23 4. Market outlook & Risk 25 5. Corporate Governance 29 6. Q&A Session 31
Slide 30: Corporate Governance
Corporate Governance Company adheres to strict corporate governance practices Policies are available on our Company website (www.synergyhouseberhad.com) as well as internal communication medium. Key internal controls and compliance policy - Designated Compliance Officer to support the corporate gove
Slide 31: Q&A Session
Q&A Session November 2023 | page 31 / 32 | private and confidential
Slide 32: Thank You
THANK YOU www.synergyhouseberhad.com ir@synergy-house.com November 2023 | page 32 / 32 | private and confidential
Synergy House Berhad — Q3 FY2023 Earnings Presentation on 6ix