Digiworld Corp. · HOSE:DGW
Digiworld — Investor Presentation (October 2021)
41 slides from Digiworld's investor presentation, October 2021
Slide 1: Digiworld Investor Presentation October 2021
DIGIWORLD Investor Presentation October 2021 Ms. Le Yen Nhi– IR Executive Email address: ir@dgw.com.vn Contact number: (+84) 28 3929 0059 - Ext: 1017
Slide 2: Introduction
Introduction o Vision o Executive summary o Milestones o Investment case Company overview Business overview Growth drivers Financial overview
Slide 3: Vision
Vision Digiworld is a billion-dollar company recognized for its role in the elevation of Vietnam with everyone in the company well-rewarded and fulfilling their life purpose. 3
Slide 4: Executive summary
Executive summary Company name Digiworld Corporation Digiworld is the leading Market Digiworld is a distributor of 30+ Expansion Services provider in world-class technology brands Ticker DGW (HOSE) Vietnam Year of Establishment 1997 Digiworld provides top-notch Our core strengths are in 5 value- Mar
Slide 5: Milestones
Milestones 1997 2008 2014 2018 Established Hoang Phuong Co., Ltd., the Awards: precursor of Digiworld Corp 2001 investment of $5m IR AWARDS 2015 2010 2003 Officially listed on HOSE under ticker 2019 Implementation of ERP system DGW Equitized into Awards: 2012 2016 2004 Established Ha Noi Awards: IR
Slide 6: Investment case
Investment case Benefiting from advancements in the rapidly evolving Vietnamese economy and taking advantage of the company’s position Strong economic growth at the intersection of Vietnam’s developed foreign trade relationships and rising domestic middle-class consumption, of Vietnam Digiworld brin
Slide 7: Company overview
Introduction Company overview o Business structure o Board of directors o Management team o Shareholder structure and commitment to minority shareholders o Development strategy o Cash dividend, M&A, Mobilization of capital, ESOP, Stock Option strategy o ESG & Sustainability o UN Sustainable Developm
Slide 8: Business structure
Business structure Market Expansion Services (MES) Market Analysis Full distribution Sales and marketing Digital After-sales 4PL Market Creating Registration Warehouse Channel Trade Brand E-distribution Customer Importation Distribution research plan and access service solutions execution strategy s
Slide 9: Board of directors
Board of directors Dang Kien Phuong Doan Hong Viet To Hong Trang Chairwoman and Deputy Member and General Director Member and Deputy General General Director 1993-1997 Director 1989-1994 Lien Phuong Co., Ltd. 1997-2000 Viettronic Thu Duc Co., Ltd. IT Head ANSV Telecommunication Co., Ltd. Accountant
Slide 10: Management team
Management team Dang Kien Phuong Doan Hong Viet To Hong Trang Chairwoman and Deputy Member and General Director Member and Deputy General General Director 1993-1997 Director 1989-1994 Lien Phuong Co., Ltd. 1997-2000 Viettronic Thu Duc Co., Ltd. IT Head ANSV Telecommunication Co., Ltd. Accountant 199
Slide 11: Shareholder structure and commitment to minority shareholders
Shareholder structure and commitment to minority shareholders Shareholder structure Commitment to minority shareholders Major shareholders (as of 30 September 2021) No. of shares % We are committed to creating value for minority shareholders and acting in Created Future Co., Ltd. (*) 29.7m 33.6 thei
Slide 12: Development strategy
Development strategy Owned brands (In-house/ Brands/Suppliers M&A) OEM: - Household electrical appliances - Others products Home Medicines and Studying & ICT Office equipment Appliances medical equipment Research D2C - F&B - Industrial Equipment Online/ Offline Consumers Currently In future 12
Slide 13: Cash dividend, M&A, Mobilization of capital, ESOP strategy
Cash dividend, M&A, Mobilization of capital, ESOP strategy Cash dividend strategy M&A history Cash dividend payment 50.0 45.69 43.0 43.0 40.0 27.72 32.48 Investment made: 2017 30.0 23.43 20.90 Digiworld’s share: 90% (indirectly) 20.0 Business description: CL is an FMCG distributor with 16 years of 1
Slide 14: ESG & Sustainability
ESG & Sustainability Awards Regulation on conflict of interest Purpose: for 5 consecutive years 1. Deliver integrity in our business operations, minimize financial (from 2016-2020) and resource losses that could affect our reputation. 2. Ensure clear understanding among our employees to avoid any vi
Slide 15: UN Sustainable Development Goals
UN Sustainable Development Goals Quality education Promote lifelong learning opportunities for all employees. With our business in technology products, regularly updating knowledge and expertise is compulsory. Employees of all categories, including management, are required to participate in annual t
Slide 16: Business overview
Introduction Company overview Business overview o Product portfolio o Value chain: One-stop solution o Distribution network (ICT) o Partnership with large companies (ICT) o Omnichannel fulfilling (CGHC) o Geographic footprint o Risk management o COVID-19 impact Growth drivers Financial overview
Slide 17: Product portfolio
Product portfolio Laptops Tablets Laptops & tablets Mobile phones Server – PC Storage devices Network & security solutions Internet of Things Home appliances Office equipment Toothbrush Toothpaste Washing powder and liquid Detergent liquid Dishwashing liquid Healthcare Products Consumer goods – heal
Slide 18: Value chain: One-stop solution
Value chain: One-stop solution Brand owners DGW’s Market Expansion Services (MES) Retailers Market analysis Importation, Research & Marketing Sales and Sourcing Manufacturing & marketing warehousing After-sales service Retail development execution distribution planning logistics Single service distr
Slide 19: ICT – Distribution network
ICT – Distribution network Suppliers Customers Consumers Mom & pop shops 4,000 points of sale Consumers (TCR IND) Network operators Mobile phones Online retailer Small to Medium Businesses and Small Office – Home Office Telecom retailer chain (TCR chain) 2,000 stores Laptops & Tablets Consumer Enter
Slide 20: ICT – Partnership with large companies
ICT – Partnership with large companies VND bn o Top 2 ICT Distributor ICT Revenue breakdown 16,000 o Largest distribution network Achievement o CAGR 44% o Revenue 5x in 10 years 14,000 15% o Inventory management with ERP from 2010 12,000 Key success o Receivable Management 13% factors o Trend catchi
Slide 21: Consumer Goods & Healthcare – Omnichannel fulfilling
Consumer Goods & Healthcare – Omnichannel fulfilling Suppliers Customers Consumers Consumer goods General trade Consumers D.Ps: 6,000 active selling outlets Modern trade 1,600 stores Consumer goods E-commerce Marketplace Healthcare Affiliates General trade – OTC 4,000 active selling outlets General
Slide 22: Geographic footprint
Geographic footprint DGW’s Office Hanoi Branch ▪ Office: Dong Da, Hanoi o Employees: ~55 people ▪ Warehouse: Hoang Mai, Hanoi o Capacity: 900 m3 o Total area: 1,800 m2 o SKU: 900 o Employees: ~36 people ▪ DCare: Dong Da, Hanoi Danang Branch DGW’s Warehouse ▪ Office: Thanh Khe, Danang o Employees: ~9
Slide 23: Risk management
Risk management Type of risk Risk Mitigation Measures Macroeconomic The Company proactively conducts detailed research on macro trends and relevant trade policies before making business decisions and negotiating with suppliers. Legal and Compliance Department takes charge of a regular study on laws
Slide 24: COVID-19 impact
COVID-19 impact Measures taken to protect employees, and to prevent the spread of the virus: o Work from home for those who are not required to be in the office. Health o Split management team to minimize risk, no more than 10 people in a room. o Ensure 2-meter distance in direct communication, face
Slide 25: Growth drivers
Introduction Company overview Business overview Growth drivers o Macroeconomic environment o Industry drivers o Competitive landscape and market share o New business & Investment projects o Business outlook Financial overview
Slide 26: Macroeconomic environment
Macroeconomic environment Vietnam's GDP growth by quarter Total retail sales of goods by months (Unit: Billion VND) 400,000 20.0% 9.0% 8.0% 350,000 15.0% 7.0% 300,000 10.0% 6.0% 250,000 5.0% 5.0% 200,000 0.0% 4.0% 150,000 3.0% -5.0% 100,000 2.0% 50,000 -10.0% 1.0% - -15.0% Mar-20 Mar-21 Jul-19 Jul-2
Slide 27: Industry drivers
Industry drivers Information and Communication Technologies (ICT) Consumer Goods & Healthcare (CGHC) Laptop segment in Vietnam o Large population but starts ageing market by price % population above the age of 35 in Vietnam o The trend of working from home 13.8% 12.4% 45.0% due to COVID-19 44.3% 30.
Slide 28: Growth strategy
Growth strategy Information and Communication Technologies (ICT) Consumer Goods & Healthcare (CGHC) Laptops & Tablets Expanding distribution network o Increasing market share with non-exclusive brands Exploiting technology in field sales management o Enhancing distribution in the high-end segment 20
Slide 29: Competitive landscape and market share
Competitive landscape and market share DGW’s market share Unique competitive advantages 41% 6% 17% 5% 0.01% o Strong financial capabilities & Great transparency o Local understanding and vast distribution network o Data-driven – ERP and DMS to serve clients’ goals o Tailor-made solutions to fulfil c
Slide 30: New business & Investment projects
New business & Investment projects Adding new brands to existing channel Laptops & Tablets Office equipment Laptops Tablets Desktop & network solutions IoTs Mobile phones Smart monitor Consumer Goods Medicine 30
Slide 31: Business outlook
Business outlook DGW’s revenue breakdown 2020-2025 Outlook 2,012 o Digiworld expects revenue growth of at least 20% and profit growth of at 5,703 least 25% per year in the next 5 years. 1,342 4,387 o Supported by the trends of digital transformation, increased use of high- 894 3,375 end products and
Slide 32: Financial overview
Introduction Company overview Business overview Growth drivers Financial overview o Financial highlights o Segment financials o Income statement summary and key margins o Balance sheet summary and key financial ratios o Earnings guidance
Slide 33: Financial highlights
Financial highlights Revenue in 3Q21 reached VND 3,825 billion, increasing 6% YoY, completing 25% of the year plan. Profit after tax in 3Q21 reached VND 107 billion, up 43% YoY, completing 36% of the year plan. Core business segment has strong growth: Revenue in 3Q21 for Laptops +45% YoY, Handset -2
Slide 34: 3Q21 business results
3Q21 business results Net Revenue Net revenue and net profit (YoY) Revenue breakdown (YoY) VND bn VND 5,200 VND bn 1,854 1,868 3,825bn 4,200 +39% +6% 1,381 1,280 3,624 3,825 1129 1015 3,200 2,200 2,615 405 414 467 Net profit 1,200 +45% +43% 66 62 123 52 75 107 VND 200 3Q19 3Q20 3Q21 Laptops & Tablet
Slide 35: Revenue growth of same brands
Revenue growth of same brands 3Q21 business results New brands VND bn Net revenue Revenue contribution 3,260 • Laptop & Tablet New brands 20% • Mobile phone • Office Equipment 3,045 Current brands 80% 3Q20 3Q21 (same brands) 9M2021 business results • Office Equipment Net revenue Revenue contribution
Slide 36: Accumulated business results
Accumulated business results Accumulative net revenue for the last 4 quarters Accumulative net profit for the last 4 quarters VND bn VND bn 16,866 17,068 429 15,231 397 12,535 329 11,018 10,009 267 9,432 8,493 218 7,553 195 6,680 183 6,050 162 145 117 130 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21
Slide 37: 9M 2021 business results
9M 2021 business results Revenue Net revenue and net profit (YoY) Revenue breakdown (YoY) VND bn VND bn VND +53% 14,000 6,360 13,050 13,050bn 12,000 4,559 +42% 10,000 4,156 3,151 2,566 8,000 8,518 2,251 1,848 994 1,027 6,000 5,993 182 184 283 Net profit +50% +96% 4,000 2,000 Laptops & Tablets Mobile
Slide 38: Income statement summary and key margins
Income statement summary and key margins Income statement summary Profitability ratios Consolidated 6.9% 7.2% 6.4% VND (bn) 3Q20 3Q21 Total revenue 3,624 3,825 3.5% Cost of goods sold (3,393) (3,551) 2.6% 2.7% Gross profit 231 274 2.8% 1.9% 2.1% Interest expense (6) (8) Selling expense (125) (151) 3
Slide 39: Balance sheet summary and key financial ratios
Balance sheet summary and key financial ratios Balance sheet summary Leverage ratios Consolidated VND bn 2,000 73% 90% VND (bn) FY20 3Q21 1,800 1,600 70% Cash and cash equivalents 878 570 45% 1,400 50% 1,200 1,457 Investments and advances 60 66 1,000 30% 800 1,059 1,067 Total assets 3,069 3,761 600
Slide 40: Earnings guidance
Earnings guidance FY2021 Revenue plan Revenue & net profit YoY (with 2021E) Revenue breakdown YoY (with 2021E) VND bn VND bn VND 12,535 15,200 6,384 7,500 15,200bn 8,488 4,350 5,000 3,896 5,937 2,975 2,200 1,362 1,536 FY2021 Net profit plan 110 163 267 300 255 265 500 VND 2018A 2019A Net revenue 202
Slide 41: Thank you!
THANK YOU! Ms. Le Yen Nhi- IR Executive Email address: ir@dgw.com.vn Contact number: (+84) 28 3929 0059 - Ext: 1017