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Sabina at a Glance Manufacturing footprint (1) Leading Thai women underwear manufacturer From OEM manufacturer to brand Yasothorn developer #1 Thai lingerie brand in term of revenue 5 mm/year Strong distribution nationwide with products sold across ~497 POS, Brand Burerum 10% ~81 shops in leading department stores and discount stores together 1.5 mm/year 2006 with sales channels in TV and online channels Chainat OEM Footprints in regional markets through local distributors including the 90% 2.4 mm/year Export OEM Middle East, Asia (Pakistan), and AEC (CLMV and Philippines) 2% 10% Thapra Manufacturing capacity of ~12 mm units with ability to manufacture 2017 1.7 mm/year complex products that required high skilled labor Sai 5 Brand 88% 1.4 mm/year Total manufacturing capacity of ~12 mm Wide product offering with ability to capture broad group of customers pieces Budget (<THB350) Medium (THB350-700) Medium-High (THB700-1,000) High (>THB1,000) Children (6-15 years) Teens (15-25 years) Young women (25-45 years) Women ( > 45 years) 2 Remark: (1) Estimate from number of sewing workers as of 1H2018
Sabina at a Glance (Cont’d) Wide product offering with ability to capture broad group of customers 3
Sabina at a Glance ( Cont’d ) Highly penetrated and robust distribution network Domestic International Traditional Store Retailing Channels Poland UK (Main OEM customers) Department Modern Shop stores and Special Event France Trade others A S E A N Laos Vietnam Cambodia Pakistan Philippines Distributors India Myanmar (1H2018) UAE Bangladesh 81 Shops 79 Department stores 308 Modern trade 2-3 Events per quarter 112 other channels Sabina stores Key channel for Key channel Key channel Key channel to OEM customers high value for mid-end for low price manage products products products obsolete International store and POS inventory Advertising Strengths OEM Customers 1H2018 channels Channels to gather customer behavior Vietnam 52 data for R&D Philippines 27 Non-stores Retailing Channels (NSR) Myanmar 10 TV Shopping 3 TV channels, 9 online, 1 Laos 5 direct catalog distribution channels Cambodia 3 Online New growth drivers with Bangladesh 4 minimal cost Pakistan 9 Consistently ranked the Best Direct Catalogue selling products in TV Purely distributed by local partners Manufacture only high margin channels since 2017 with no direct investment on the OEM products for selected brands stores 4
Sabina at a Glance (Cont’d) 1H2018 Performance Revenue ( 1H-2018 ) Revenue ( YEAR ) 2 1 G 16.2% 1,475.1M G 3.7% G 15.4% 1,224.6M 1,269.4M G 15% G 12% G 4% 1H - 2016 1H - 2017 1H - 2018 2016 2017 Target 2018 5
Sabina at a Glance (Cont’d) 1H2018 Performance Net Profit ( 1H-2018 ) 3 Net profit 2018 Net profit 2017 96.5 79 78 63 51 51 Q1 Q2 Q3 Q4 +54 % 6
Sabina at a Glance (Cont’d ) Financial overview by segment Sabina Brand Revenue NSR Revenue THB mm THB mm *Commenced in 2017 2,291 800 2,112 1,977 700 600 500 1,186 1,099 400 300 Sabina Brand 200 122 96 81% 32 100 - - - 2015 2016 2017 2015 2016 2017 1H 2017 1H 2018 1H 2017 1H 2018 1H2018 Revenue from Sales NSR 8% THB 1,469 mm (1) Sabina Export Revenue OEM Revenue THB mm THB mm OEM 9% 800 800 Sabina 700 Export 700 600 2% 600 500 500 400 400 256 300 300 220 212 200 200 133 102 64 59 52 100 29 23 100 - - 2015 2016 2017 1H 2017 1H 2018 2015 2016 2017 1H 2017 1H 2018 % Growth 7 Not include other revenue and service revenue
Strategy and Recent Development
Sabina Brand Consistently introduce new products Focused on 2006-2015 functional Doomm Series products, Small Cup easier to communicate value to 2016 customers Perfect Bra Big Cup 2017 Wireless Bra Perfect Bra Doomm Series All Cup 2018 1H2018 Wireless Bra Increase number of wireless bra from 7 to 14 SKU All Cup 9
Sabina Brand (Cont’d) Integrate marketing activities Market Survey Collaboration Viral Contents Omni-Channel Digital Marketing Be able to react to evolving Create interest and reach Create strong brand Stimulate the need to Create more engaging customers trend new group of customers awareness purchase the products platform Continuously gather feedback Use global level cartoon such Use Omni-channel creating Use of key opinion leaders as Disney’s frozen, as well as from customers using market Create viral contents : funny unify messages both online (KOL) and Influencer to further Thai’s artist cartoons that are strengthen a brand’s message survey and focus group videos by leading marketing and offline to interact with interview popular in social media agency as well as short movie customers in every series with more than 10M. touchpoints. views Recent highlight 8% Increase in sales following the release of the TVC New Wireless shape “Feel comfort like second skin” 1H2018 invested ~5% of sales revenue in marketing activities, focused on out of home and digital media channels 10
Sabina Brand (Cont’d) Store expansion 1H2018 Department store Discount store Shop Central Festival Imperial World Robinson Lifestyle Center Tesco Lotus Phuket Samrong Amatanakorn Phanatnikhom Special campaign 1H2018 Special event 1H2018 Sabina ‘Try Me’ campaign Hosted events with Big C Wholesale to online merchant Changing competitor to partners 11
Non Store Retailing New channels in 1H2018 Initiative to develop joint business plan with online marketplace + 2 Online channels Recent coordination with Shopee to launch Vietnam online store (1) + 2 Free TV channels Flash sale campaign with Shopee 12 Note: (1) Sell will be distributed by our local partners in Vietnam and revenue to be record in Sabina export revenue
OEM and Sabina Brand export OEM Sabina brand export Continue to offer innovation products New Store/POS expansion (1H2018) Vietnam +1 Introduce new Philippines +3 product to existing Myanmar +1 clients 1H2018 Offered Cambodia +2 swimwear to EU Bangladesh +6 clients A launch of conceptual store – Pakistan +2 to enhance brand image Introduction of street Expand big cup bra shop format in Vietnam – sales tap in to lower tier segment Maintain high margin with substantial larger pool customer of customers Expansion to online and TV Knowledge sharing to local partners channels oversea Increase sourcing Introduced data analysis on ability 1 Vietnam customers purchases Sourcing innovative To better manage inventory / raw material for effective ordering customers Philippines Conduct PC Training in 2 Vietnam and the Philippines To better served customers Myanmar 13
Cost Saving Initiatives Improve sewing line and manpower efficiency Working capital and inventory management Sit Stand 1.4 Efficiency 75% 90% 1.2 SIT Sam per pcs. 28 22 Consistently monitor and 1.0 0.9 0.9 focus on manufacturing Pcs./Process >40 <5 0.8 high demand products Work in Process ( days ) 60 15 Increased inventory 434 Man/ Line 30-40 15-20 394 390 374 turnover and significantly STAND reduced inventory days Skill Single Multi 297 268 5,100 Achieved up to ~600 4,500 4,200 800 3,900 manpower reduction 1,150 1,200 1,900 1,100 since 2011 1,600 1,450 1,400 Equivalent to ~THB 120 2013 2014 2015 2016 2017 2,400 1H 1,750 1,550 1,400 mm saving 2018 DIO (Days) 2011 2013 2017 1H-2018 Inventory Turnover (Times) Sewing Non sewing + PC PC total Product sourcing initiative By pieces Since 2017 Sabina has been sourcing budget price products from trusted sub Sourcing Sourcing contractors Target ~50% 4% 14% sourcing in With QC measure by SGS and ITS to ensure that the sourcing products meet the 5 years 2017 1H2018 standard Allow Sabina to free-up production capacity to higher margin products Produce Produce 96% 86% Drove up Sabina overall margin ( ~6% GP improvement vs. own production) 14
Income Statement 2010 2011 2012 2013 2014 2015 2016 2017 1H-2018 Revenue 1,893 1,927 2,032 2,189 2,165 2,308 2,397 2 , 679 1,475 COGS 1,215 1,073 1,013 1,061 1,012 1,099 1,125 1 , 307 710 %COGS 65% 56% 50% 49% 47% 48% 47% 49% 48% Gross Profit 653 828 1,002 1,116 1,141 1,198 1,258 1,355 760 % Gross Profit Margin 2010 35 % 44 % 50 % 51 % 53 % 52 % 53 % 51 % 52% 1H-2018 %COGS : Gross Profit Margin %COGS : Gross Profit Margin 65 : 35 Expense 569 735 846 964 967 1,005 1,054 48 : 52 1 , 066 544 Taxes 19 56 82 47 39 38 42 60 45 Net Profit 52 63 92 117 147 166 176 243 176 % Net Profit Margin 3% 3% 5% 5% 7% 7% 7% 9% 1 2 % Ratio Brand : OEM 55 : 45 75 : 25 90 : 10 90 : 10 85 : 15 85 : 15 90 : 10 9 0 : 10 9 1 : 9 15
Growth Strategy in 2018-2022 Customer centric product development Consistently introduce new products / collection that meet customers needs Backed by state-of-the-art marketing activities (plan to invest 5-6% of sales in marketing activities) Store expansion Price optimization Wider assortment in online and TV channels Joint business plan Stores expansion Sabina brand building Online and TV channels Strengthen distributors expansion oversea Maintain superb quality and Product innovation on-time delivery Now Looking Forward 16
Financial Performance
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