1 Sabina at a Glance Manufacturing footprint (1) Leading Thai women - - PowerPoint PPT Presentation

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Sabina at a Glance

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Remark: (1) Estimate from number of sewing workers as of 1H2018

 Leading Thai women underwear manufacturer  #1 Thai lingerie brand in term of revenue  Strong distribution nationwide with products sold across ~497 POS,

~81 shops in leading department stores and discount stores together with sales channels in TV and online channels

 Footprints in regional markets through local distributors including the

Middle East, Asia (Pakistan), and AEC (CLMV and Philippines)

 Manufacturing capacity of ~12 mm units with ability to manufacture

complex products that required high skilled labor

OEM 90% Brand 10% OEM 10% Brand 88% Export 2%

2006

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)

Wide product offering with ability to capture broad group of customers

2017

From OEM manufacturer to brand developer

Yasothorn

1.5 mm/year

Burerum

5 mm/year 2.4 mm/year

Chainat

1.7 mm/year

Thapra

1.4 mm/year

Sai 5

Manufacturing footprint (1)

Total manufacturing capacity of ~12 mm pieces

Sabina at a Glance (Cont’d)

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Wide product offering with ability to capture broad group of customers

Shop Department stores and

• thers

Modern Trade Special Event Distributors (1H2018) Strengths

 Key channel for high value products  Advertising channels  Channels to gather customer behavior data for R&D  Key channel for mid-end products  Key channel for low price products  Key channel to manage

• bsolete

inventory

Sabina at a Glance (Cont’d)

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Domestic International



Vietnam 52



Philippines 27



Myanmar 10



Laos 5



Cambodia 3



Bangladesh 4

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Pakistan 9

81 Shops 2-3 Events per quarter 79 Department stores 112 other channels 308 Modern trade

Traditional Store Retailing Channels Non-stores Retailing Channels (NSR)

 3 TV channels, 9 online, 1

direct catalog distribution channels

 New growth drivers with

minimal cost

 Consistently ranked the Best

selling products in TV channels since 2017

Sabina stores OEM customers

International store and POS 1H2018 OEM Customers

Manufacture only high margin OEM products for selected brands Purely distributed by local partners with no direct investment on the stores

UK (Main OEM customers) France Poland India A S E A N

Vietnam Philippines Myanmar Laos Cambodia Bangladesh Pakistan

Highly penetrated and robust distribution network

UAE  TV Shopping  Online  Direct Catalogue

Sabina at a Glance (Cont’d)

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1H2018 Performance

G 4% G 12% G 15%

2016 2017 Target 2018

1H - 2016 1H - 2017 1H - 2018

1,269.4M 1,224.6M

G 15.4%

G 3.7% G 16.2%

1,475.1M

Revenue (YEAR) 1 Revenue (1H-2018) 2

51 63 78 51

Q1 Q2 Q3 Q4

Sabina at a Glance (Cont’d)

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1H2018 Performance 79

Net profit 2018

+54%

Net profit 2017

Net Profit (1H-2018) 3

96.5

Sabina at a Glance (Cont’d)

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Not include other revenue and service revenue

Financial overview by segment

• 96

32 122

• 100

200 300 400 500 600 700 800 2015 2016 2017 1H 2017 1H 2018 1,977 2,112 2,291 1,099 1,186 2015 2016 2017 1H 2017 1H 2018

THB mm

% Growth

THB mm THB mm

64 59 52 23 29

• 100

200 300 400 500 600 700 800 2015 2016 2017 1H 2017 1H 2018 256 212 220 102 133

• 100

200 300 400 500 600 700 800 2015 2016 2017 1H 2017 1H 2018

Sabina Brand Revenue Sabina Export Revenue NSR Revenue OEM Revenue

THB mm

Sabina Brand 81% NSR 8% OEM 9% Sabina Export 2%

1H2018 Revenue from Sales THB 1,469 mm(1)

*Commenced in 2017

Strategy and Recent Development

Sabina Brand

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2017

Wireless Bra Perfect Bra Doomm Series

2016

Perfect Bra

Focused on functional products, easier to communicate value to customers

2018

Wireless Bra

Big Cup All Cup All Cup

2006-2015

Doomm Series

Small Cup

Consistently introduce new products 1H2018

Increase number of wireless bra from 7 to 14 SKU

Sabina Brand (Cont’d)

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8% Increase in sales following the

release of the TVC New Wireless shape “Feel comfort like second skin”

Create more engaging platform Use of key opinion leaders (KOL) and Influencer to further strengthen a brand’s message Create interest and reach new group of customers Use global level cartoon such as Disney’s frozen, as well as Thai’s artist cartoons that are popular in social media Create strong brand awareness Create viral contents : funny videos by leading marketing agency as well as short movie series with more than 10M. views Stimulate the need to purchase the products Use Omni-channel creating unify messages both online and offline to interact with customers in every touchpoints. Be able to react to evolving customers trend Continuously gather feedback from customers using market survey and focus group interview

Market Survey Collaboration Viral Contents Omni-Channel Digital Marketing

Integrate marketing activities

1H2018 invested ~5% of sales revenue in marketing activities, focused on out of home and digital media channels Recent highlight

Sabina Brand (Cont’d)

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Store expansion 1H2018

Central Festival Phuket

Special campaign 1H2018

Imperial World Samrong Shop Department store Robinson Lifestyle Center Amatanakorn Discount store Sabina ‘Try Me’ campaign

Special event 1H2018

Tesco Lotus Phanatnikhom Hosted events with Big C Wholesale to online merchant

Changing competitor to partners

Non Store Retailing

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Note: (1) Sell will be distributed by our local partners in Vietnam and revenue to be record in Sabina export revenue

New channels in 1H2018

+ 2 Online channels + 2 Free TV channels

Initiative to develop joint business plan with online marketplace

Flash sale campaign with Shopee Recent coordination with Shopee to launch Vietnam online store (1)

OEM and Sabina Brand export

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OEM Sabina brand export

Introduce new product to existing clients 1H2018 Offered swimwear to EU clients Expand big cup bra sales Maintain high margin customer Increase sourcing ability Sourcing innovative raw material for customers

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Vietnam +1

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Philippines +3

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Myanmar +1

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Cambodia +2

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Bangladesh +6

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Pakistan +2

New Store/POS expansion (1H2018)

Introduction of street shop format in Vietnam – tap in to lower tier segment with substantial larger pool

• f customers

A launch of conceptual store – to enhance brand image

Knowledge sharing to local partners Introduced data analysis on customers purchases To better manage inventory / effective ordering

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Conduct PC Training in Vietnam and the Philippines To better served customers

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Expansion to online and TV channels oversea

Philippines Vietnam Myanmar

Continue to offer innovation products

Cost Saving Initiatives

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SIT STAND

Sourcing 4% Produce 96%  Achieved up to ~600

manpower reduction since 2011

 Equivalent to ~THB 120

mm saving

 Consistently monitor and

focus on manufacturing high demand products

 Increased inventory

turnover and significantly reduced inventory days

 Since 2017 Sabina has been sourcing budget price products from trusted sub

contractors

 With QC measure by SGS and ITS to ensure that the sourcing products meet the

standard

 Allow Sabina to free-up production capacity to higher margin products  Drove up Sabina overall margin (~6% GP improvement vs. own production)

2017

Sourcing 14% Produce 86%

1H2018

By pieces

Sit Stand



Efficiency 75% 90%



Sam per pcs. 28 22



Pcs./Process >40 <5



Work in Process (days) 60 15

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Man/ Line 30-40 15-20

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Skill Single Multi Target ~50% sourcing in 5 years

390 434 394 374 297 268 0.9 0.8 0.9 1.0 1.2 1.4 2013 2014 2015 2016 2017 1H 2018 DIO (Days) Inventory Turnover (Times)

Improve sewing line and manpower efficiency Working capital and inventory management Product sourcing initiative

2,400 1,400 1,550 1,750 1,900 1,400 1,450 1,600 800 1,100 1,200 1,150 5,100 3,900 4,200 4,500 2011 2013 2017 1H-2018 Sewing Non sewing + PC PC total

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

35% 44% 50% 51% 53% 52% 53% 51% 52%

Expense

569 735 846 964 967 1,005 1,054 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% 12%

Ratio Brand : OEM

55 : 45 75 : 25 90 : 10 90 : 10 85 : 15 85 : 15 90 : 10 90 : 10 91 : 9

Income Statement

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2010

%COGS : Gross Profit Margin

65 : 35

1H-2018

%COGS : Gross Profit Margin

48 : 52

Growth Strategy in 2018-2022

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 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  Sabina brand building  Strengthen distributors  Stores expansion  Online and TV channels

expansion oversea

 Product innovation  Maintain superb quality and

• n-time delivery

Now Looking Forward

Financial Performance

117 147 166 176 243 114 176 5.4% 6.8% 7.2% 7.3% 9.1% 9.0% 11.9% 2013 2014 2015 2016 2017 1H 2017 1H 2018 Net Profit NPM 948 953 997 1,051 1,067 509 544 43.5% 44.3% 43.4% 44.1% 40.1% 40.5% 37.1% 2013 2014 2015 2016 2017 1H 2017 1H 2018 SG&A SG&A/Sales 51.3% 53.0% 52.1% 52.8% 50.9% 51.2% 51.7% 7.7% 8.7% 9.2% 9.2% 11.4% 11.5% 15.0% 2013 2014 2015 2016 2017 1H 2017 1H 2018 GPM EBIT Margin

Financial Highlights

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Solid top line growth with strong margin improvement

Rapidly trending down SG&A to sales

% THB mm % YoY Growth 7.7 %

• 1.1%

6.6% 3.9% 11.8% 3.7% 16.2% THB mm THB mm % YoY Growth 26.8 % 25.4% 12.7% 6.1% 38.4% 36.2% 54.0%

Consistently growing top line Significantly expanding net profit and NPM Strong GPM and steadily expanding EBIT margins

2,189 2,165 2,308 2,397 2,679 1,269 1,475 2013 2014 2015 2016 2017 1H 2017 1H 2018

Financial Highlights (Cont’d)

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Steadily improving working capital management

425 449 402 382 296 292 279 2013 2014 2015 2016 2017 1H 2017 1H 2018 71 56 50 49 45 52 51 5.1 6.5 7.3 7.5 8.1 7.1 7.1 2013 2014 2015 2016 2017 1H 2017 1H 2018 DSO (Days) A/R Turnover (Times) 37 41 42 41 46 36 41 9.9 8.8 8.7 8.9 8.0 10.2 9.0 2013 2014 2015 2016 2017 1H 2017 1H 2018 A/P Turnover Days (Days) A/P Turnover (Times)

Days inventory outstanding and inventory turnover Days sales outstanding and account receivable turnover Improving cash conversion cycle Account payable turnover days and account payable turnover

390 434 394 374 297 276 268 0.9 0.8 0.9 1.0 1.2 1.3 1.4 2013 2014 2015 2016 2017 1H 2017 1H 2018 DIO (Days) Inventory Turnover (Times)

Days

D/E

Key Financial Ratio

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Healthy balance sheet with ample debt room to raise fund whenever it is needed

1,566 1,664 1,754 1,895 1,821 1,829 741 552 484 492 382 541 0.47 0.33 0.28 0.26 0.21 0.30 2014 2015 2016 2017 1H 2017 1H 2018 Total Equity Total Liabilities D/E 8.4 9.7 10.3 10.3 13.3 11.7 16.7 2013 2014 2015 2016 2017 1H 2017 1H 2018 5.1 6.4 7.3 7.9 10.5 9.4 13.3 2013 2014 2015 2016 2017 1H 2017 1H 2018

Percent Percent

ROA ROE

Times

EPS

0.34 0.42 0.48 0.51 0.70 0.33 0.51 2013 2014 2015 2016 2017 1H 2017 1H 2018

Dividend Payment

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With ability to consistently distribute cash to investors

0.17 0.19 0.24 0.82 40% 40% 47% 117% 2014 2015 2016 2017 Total Equity

2014 2015 2016 2017 Dividend THB / Share 0.17 0.19 0.24 0.82 Payout Ratio 40% 40% 47% 117%

Payout Ratio Dividend

Dividend

Include dividend announced in 2018

Business Update

Sabina Brand

New Campaign : Happy mother’s day

Sabina Brand

New Campaign : Happy mother’s day

Sabina Brand

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Launching TVC on Second half year

Coming Soon

2017 1H 2018 2H/2018 2013

Sabina Brand Export

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Sponsorship : Miss Myanmar World

OEM

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Order confirmation Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

93%

Order confirm

93% of target

1H-2018 G 30.6%

Appendix

10%

BRAND

90%

OEM

0%

BRAND EXPORT

88%

BRAND

10%

OEM

2%

BRAND EXPORT

From OEM manufacturer to brand developer

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2006: No pricing ability with nominated supplier 2017: Ability to command retail price with variety supplier

Sale Report Brand and OEM (2006 - 2017)

60% 55% 50% 35% 30% 25% 10% 9% 11% 11% 9% 9% 40% 45% 50% 65% 70% 75% 90% 91% 89% 89% 97% 91%

1,346 1,163 959 551 556 441 185 200 242 250 216 220 848 903 994 1,099 1,310 1,459 1,824 1,978 1,911 2,044 2,108 2,254

500 1,000 1,500 2,000 0% 20% 40% 60% 80% 100%

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 OEM Sabina % Gross Profit 27% 26% 37% 37% 35% 44% 50% 51% 53% 52% 53% 51% % Net Profit Margin 8% 6% 9% 4% 3% 3% 6% 5% 7% 7% 7% 9% 2011: Thailand Great flood / Euro-zone crisis 2012: Minimum Wages hike to THB 300 2007-2008:Subprime 2010:UK Financial Crisis