Upson International Corp. · PSE:UPSON
Upson International — Investor Presentation (October 2023)
40 slides from Upson International's investor presentation, October 2023
Slide 1: Upson International Corp.
Upson International Corp. Investor Presentation | October 2023
Slide 2: Disclaimer
Disclaimer This presentation does not constitute a prospectus or any kind of offering memorandum in whole or in part. This presentation does not constitute an offer to sell or the solicitation of an offer to buy any securities of the Company. There shall be no sale of these securities in any state o
Slide 3: Contents
01 Company Overview 02 Industry Overview Contents 03 Investment Highlights 04 Key Strategies 05 Financial Highlights
Slide 4: Company Overview
01 COMPANY OVERVIEW
Slide 5: Upson International Corp. Overview
Overview Largest retailer of Widest range of Strongest nationwide IT products from IT products in the presence (200+ stores) well-recognized brands Philippines (13,000 SKUs) Upson International Corp. Close to 30 years of Sells only untampered track record and and authentic strong reputation products
Slide 6: Key milestones
Key milestones The growth of our company from a simple distributor to the nation’s leading retailer of IT products Merged with Columbia Computer International Proton Microsystems, Corporation Inc. was founded on April 19, 1995 Opened 60 new stores Launched our Partnered with third party within the f
Slide 7: Store network
Store network We have 214 stores* strategically located in major markets and in fast-growing cities nationwide Retail Format North Luzon 41 branches 11 7 National 14 Capital Region South Luzon 68 branches 41 branches 22 Visayas 160 25 branches Octagon Micro Valley Mindanao Gadget King Octagon Mobile
Slide 8: Our store formats
Our store formats Through multiple retail formats, we provide our customers flexibility when purchasing their preferred products Prime Store Concept Store Mobile Store • Offers a complete • Dedicated stores • Focuses on product portfolio with a full product communication and • Average floor area of
Slide 9: Prime store
Prime store Our flagship store brand offering Focused on DIY components and Features IT accessories and our most extensive and complete PC customization as well as peripherals product line gaming-specific PCs and 160 stores peripherals 22 stores 14 stores UPSON INTERNATIONAL CORP | 9
Slide 10: Concept store Mobile store
Concept store Mobile store Dedicated stores providing full product suite of a single brand Specialty stores focusing on communication and 11 stores connectivity devices 7 stores Brother Concept Store Silvertec Concept Store Octagon Mobile Store SM North EDSA SM North EDSA Sta. Mesa HP Concept Store
Slide 11: Our product segments
Our product segments We are a leading retailer of IT products, including a wide range of hardware and software products Personal Computers Printing Communication Storage Components Networking Accessories Peripherals Software UPSON INTERNATIONAL CORP | 11
Slide 12: The Only One Certified for Untampered Product Lines
The Only One Certified for Untampered Product Lines 10/12/2023 UPSON INTERNATIONAL CORP | 12
Slide 13: Industry Overview
02 INDUSTRY OVERVIEW
Slide 14: Consumer electronics industry – Overview
Consumer electronics industry – Overview Php 157 billion is the estimated value of the PC and PC-related peripherals and components in PH consumer electronics retail industry (excluding mobile communications) in 2020. UIC leads the market followed by far second and third players, controlling 5.43% m
Slide 15: Consumer electronics industry – Outlook (1/2)
Consumer electronics industry – Outlook (1/2) Health and safety protocols due to the pandemic encouraged businesses and schools to adopt a hybrid arrangement, which then increased demand for online tools Import Growth (%) Data of Select Electronic Product Categories Year Office Equipment Consumer El
Slide 16: Consumer electronics industry – Outlook (2/2)
Consumer electronics industry – Outlook (2/2) Demand for consumer electronics will continue the uptrend until 2025, with estimated sales of Php 486.5 Billion by year 2025. Key industry trends Consumer Electronics Industry Sales (in Php millions) 500,000 Digital ecosystem (brand-centric compatibility
Slide 17: Investment Highlights
03 INVESTMENT HIGHLIGHTS
Slide 18: Investment highlights
Investment highlights We have relied on the following competitive strengths in order to become one of the country’s leading retailer of IT products 1. Leading IT retailer 2. Strong nationwide presence in terms of store network 3. Widest portfolio of the latest products from world-renowned brands 4.
Slide 19: 1. Leading IT retailer
1. Leading IT retailer Sales (2021) vs. competitors Number of branches vs. competitors (As of end-2021) Company C, Company D, 829 1,115 Company B, Company E, 592 Company G 69 1,575 Company F 27 Company F, 138 Company A, Company E 32 2,772 Company G, 116 Company D 29 Company C 53 Company B 20 Company
Slide 20: 2. Strongest nationwide presence in terms of store network
2. Strongest nationwide presence in terms of store network 214 branches as of June 30, 2023 Other Distribution Channels North Luzon Our products are available on our proprietary website: https://www.octagon.com.ph/ 41 branches National Capital Region South Luzon and on popular e-commerce platforms s
Slide 21: 3. Widest portfolio of the latest products from world-trusted brands
3. Widest portfolio of the latest products from world-trusted brands We have an active portfolio of 13,000 SKUs spanning across nine product categories Computers Communication Components Accessories Peripherals Products offered: Printers Storage Networking Software Carried Brands Exclusive Brands UP
Slide 22: 4. Operational Excellence and Competitive Pricing from Effective Supply Chain
4. Operational Excellence and Competitive Pricing from Effective Supply Chain • 28 years of experience in the industry • Gained valuable insights in store and warehouse operations In-depth know how • Results in good access to mall-based spaces, on-time opening of new stores, and operational efficien
Slide 23: 5. Rising profitability and cash-generation
5. Rising profitability and cash-generation Net Income (in Php Millions) Net Income CAGR of 66% from 2018 Key Performance Indicators 2019 2020 2021 2022 1H 2023 5.7% 700 6.0% Gross Profit Margin 20.9% 20.5% 22.0% 23.0% 21.8% 600 4.7% 4.5% 5.0% EBITDA Margin 9.6% 10.1% 11.2% 11.3% 10.1% 500 4.0% Net
Slide 24: 6. Proven and founder-led leadership team
6. Proven and founder-led leadership team Lawrence O. Lee Arlene Louisa T. Sy Rolando O. Raval Jr. • Chairman • President, CEO, and • Chief Operations Director Officer and Director • President from 2012 to 2021 • Has been with the • Has been with Company since 1995, Company since 2002 • Over 35 year
Slide 25: Key Strategies
KEY STRATEGIES astontion Remind
Slide 26: Key strategies
Key strategies We promote technological advancement, alongside achieving profitable and sustainable growth. Our key priorities are: 1. Further expand store network and penetrate markets with high growth potential 2. Develop more warehouses and respond quickly to changing consumer demands 3. Ensure a
Slide 27: 1. Expand store network and penetrate markets with high potential
1. Expand store network and penetrate markets with high potential We intend to cement our market leading position by adding 250 stores (25,000 sq.m.) in the next 3 to 5 years North Luzon 34 branches ✓ Nationwide reach, Nationwide service National Capital Region South Luzon ✓ Expand our footprint in
Slide 28: 2. Develop more warehouses and quickly respond to consumer demands
2. Develop more warehouses and quickly respond to consumer demands Key developments Warehouses will be in Manila, Add a total of Cabanatuan, Dagupan, Naga, nine (9) warehouses and Palawan, Iloilo, Bacolod, distribution facilities General Santos, and Zamboanga Work closely with Implement suppliers an
Slide 29: 3. Ensure availability of a complete line of authentic IT products
3. Ensure availability of a complete line of authentic IT products Offer a complete, high-quality, and up-to-date suite of IT products Sell authentic and untampered products Launch more SKUs in each product category Timely adjust merchandise mix Utilize strong relationship with suppliers UPSON INTER
Slide 30: 4. Excel in omni-channel experience and raise brand recognition
4. Excel in omni-channel experience and raise brand recognition 1 Physical 3 Store Increase sales on Seamless customer experience online retail Web OCTAGON Mobile 2 4 Integrate offline to online store Increase brand awareness Social UPSON INTERNATIONAL CORP | 30
Slide 31: 5. Launch new store formats
5. Launch new store formats NEW IN-STORE EXPERIENCE DIFFERENT PRODUCT MIX MATCH MARKET DEMAND SELECTIVE UPSON INTERNATIONAL CORP | 31
Slide 32: 6. Explore opportunistic acquisitions
6. Explore opportunistic acquisitions Deepen market- leading position Opportunistic Enhance acquisitions competitiveness Promote synergy and improve financial performance UPSON INTERNATIONAL CORP | 32
Slide 33: Financial Highlights
05 . FINANCIAL vA S| HIGHLIGHTS GPAOO Stealth Gin. OE
Slide 34: Financial performance – Sales
Financial performance We have consistently improved our financial performance, despite the COVID-19 pandemic. SALES 12,000 23.0% 25.0% 22.0% 21.8% 20.9% 20.5% 10,000 20.0% 8,000 15.0% Millions 6,000 9,462 10.0% 4,000 8,152 8,568 7,570 2,000 4,517 5.0% 0 0.0% 2019 2020 2021 2022 1H 2023 Sales Gross P
Slide 35: Financial performance – Net Income
Financial performance We have consistently improved our financial performance, despite the COVID-19 pandemic. NET INCOME 700 5.7% 6.0% 600 4.7% 5.0% 4.5% 500 4.0% Millions 400 2.5% 3.0% 300 538 2.0% 200 1.1% 404 100 207 205 1.0% 85 0 0.0% 2019 2020 2021 2022 1H 2023 Net income NI Margin UPSON INTERN
Slide 36: Financial performance – EBITDA
Financial performance We have consistently improved our financial performance, despite the COVID-19 pandemic. EBITDA 1,400 14.0% 1,200 11.2% 11.3% 12.0% 10.1% 10.1% 9.6% 1,000 10.0% Millions 800 8.0% 600 6.0% 1,072 957 400 824 4.0% 725 200 457 2.0% 0 0.0% 2019 2020 2021 2022 1H 2023 EBITDA EBITDA Ma
Slide 37: Financial position
Financial position Below is a summary of our financial position during the last three years: Key Balance Sheet Items 2019 2020 2021 2022 1H 2023 Current Assets 4,403 3,491 3,311 3,728 5,290 Total Assets 5,471 4,410 4,164 4,689 6,294 Current Liabilities 3,822 3,622 3,194 3,512 3,478 Total Liabilities
Slide 38: Key performance indicators
Key performance indicators 2019 2020 2021 2022 1H 2023 Gross Profit Margin 20.9% 20.5% 22.0% 23.0% 21.8% Net Income Margin 1.1% 2.5% 4.7% 5.7% 4.5% EBITDA ( thousands) 725,293 824,428 957,149 1,071,983 456,846 EBITDA Margin 9.6% 10.1% 11.2% 11.3% 10.1% Return on Average Assets 1.6% 4.2% 9.4% 12.2% 3
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Slide 40: Upson International Corp.
Upson International Corp. Investor Presentation | October 2023
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