Corporate Presentation Financial year 2017 The presentation herein may contain forward looking statements by the management of Best World International Ltd (BWI) that pertain to expectations for financial performance of future periods vs past periods. Such forward looking statements involve certain risks and uncertainties as they relate to future events. Actual results may vary materially from those targeted, expected or projected due to various factors. Such factors are, among others, general economic conditions, foreign exchange fluctuations, competitive product and pricing pressures as well as changes in tax regimes and regulatory developments. Such statements are not and should not be construed as management’s representation on the future performance of BWI. Therefore, the actual performance of BWI may differ significantly from expressions provided herein. The reader is cautioned to not unduly rely on these forward-looking statements. Neither the Group nor its advisers and representatives shall have any liability whatsoever for any loss arising, whether directly or indirectly, from any use or distribution of this presentation or its contents. This presentation is for information only and does not constitute an invitation or offer to acquire, purchase or subscribe for shares in BWI.
Corporate Presentation Welcome to Best World Overview of our business About Best World Business Model & Strategy Growth Areas FY2017 Financial Highlights
About Best World Our Vision To be a Global Leader in the creaFon of Beauty and Wellness products that enhance the lives of our customers. 3
About Best World Company Milestone 2016 Direct Selling license in China, Hangzhou July 2004 Listed on the Singapore Stock Exchange. 1990 1998 2006 2009 2010 Singapore Malaysia Hong Kong Korea Philippines 1990 1995 2000 2005 2010 2016 Founded in 1990 2005 2007 2016 2004 2014 UAE Best World InternaFonal Thailand Vietnam Indonesia AcquisiFon of specializes in Premium Skincare, Taiwan Zhejiang SoildGold. Health Supplements, NutriFonal Manufacture and & Wellness products. Distribute Aurigen supplements in China through retail drugstores 4
CAGR: 13.22% Membership Growth About Best World 2013 - 2017 Company Milestone 490,041 435,765 402,422 377,830 298,251 Network of over 490,000 and approximately 8.7% acFve distributors FY2013 FY2014 FY2015 FY2016 FY2017 5
About Best World Our Markets Our Markets Seoul Hangzhou Changsha Taipei Dubai Taichung Hong Kong Kaohsiung Manila Myanmar Bangkok Ho Chi Minh City Kuala Lumpur Johor Bahru Singapore Jakarta 6
About Best World BWL - Best World Lifestyle All our subsidiaries operate under the BWL brand 7
About Best World Core Products DR’s Secret, Aestier & Miraglo Brands for our Skincare 8
About Best World Core Products Aurigen Avance PentaLab Optrimax Health Supplements Health Supplements Personal Care Wellness & Weight Management Brands for our Health Supplements, Personal Care and Wellness products 9
About Best World Top Brands DR’s Secret Skincare contributed close to 89% of our revenue 10
About Best World Top Brands Avance and Optrimax contributed 6% and 3% of our revenue. 11
About Best World Strong Brand Equity and Credibility PR Awards 2017 Singapore Presdge Brand Award Gold Award for Best Investor RelaFons 2015, 2009, 2008 2017 Black Book AR 100 Award 200 Best Companies 2006 Under A Billion in Asia Pacific Singapore 1000 Company 2008, 2007 2016, 2015, 2014, 2013, 2010 SuperBrands Singapore Choice Avance 2011, 2010, 2009, 2008, 2006, 2004 Bronze Award for Annual Report Singapore 500 SME Best World AR 2005 – Happy World 2009, 2008 Grand Prix Winner Red Dot Design Awards Singapore Fastest Growing 50 Cerdficadon Best World AR 2005 – Happy World 2008, 2007, 2005 Best Annual Report Under Sesdaq Listed Company 2006 ASEAN Business Award 2008 12
Business Model & Strategy Best World Business Model 3rd Party Markedng Tools & Product Concept Direct Selling Manufacturing Product Registradon • ConceptualisaFon by • Develop and run the • Begin product • Launch sold via necessary tests on registraFon the Group’s in-house product products before any subsidiaries development team • Prepare markeFng product launch • In ASEAN (except • FinalizaFon of product Laos, Cambodia formula and start and Brunei), manufacturing Hong Kong, Korea and Taiwan • 3rd Party manufacturing in US, Korea and Taiwan 13
Business Model & Strategy Direct Selling as Major Revenue Contributor Group Revenue Direct Selling Export Manufacturing & Wholesale Singapore Taiwan China China Indonesia Myanmar Aurigen Others supplements FY2017 FY2017 FY2017 49.7% of sales 48.2% of sales 2.1% of sales FY2016: 70.9% of sales FY2016: 26.8% of sales FY2016: 2.3% of sales 14
Business Model & Strategy Our Winning Strategy Products Plan Attract, Retain, Educate People 15
Corporate Presentation Business Updates
Business Updates Conversion of Export Business to China Wholesale Impact • Increase in Revenue and Gross Profit due to recogniFon at a price higher than export price; • Decline in Other OperaFng Income; • Increase in AdministraFve Expenses due to staff & rental. • Increase in DistribuFon Expenses due to logisFcs and other related expenses but no commissions. 17
Business Updates Export vs China Wholesale Export China Wholesale } } Export Price Export Profit Export Profit Transfer Price Import Agent } Wholesale Profit Wholesale Price • Export to China expected to ceased in 2Q 2018 and will be replaced by China Wholesale • Export segment beyond 2Q2018 shall refer to Group exports to Myanmar 2017 EBITDA margin: 41.9% 18
Business Updates Direct Selling vs China Wholesale Direct Selling China Wholesale } } Export Profit Export Profit Transfer Price Transfer Price } Wholesale Profit Wholesale Price Sales Profit Member Price 2017 EBITDA margin: 25.7% 19
Business Updates Impact to the Group’s Profit Member Price Direct Selling Revenue } Direct Selling profit net of remaining commission Wholesale Price China Wholesale Revenue Wholesale profit net } of administraFve expenses & commission Export Price Export Revenue } Export profit Cost of Goods Sold 20
Corporate Presentation Growth Areas
Growth Areas Growth in the Global Beauty Industry Middle East & Africa 6% % Growth Eastern Europe 500 5% 5 Australia Skin care remains Value Sales % Growth Latin America 1% the largest value 470 14% sales by category 4 447 440 US$ billion 426 3 417 North America 410 21% 410 401 2 392 385 Asia Pacific 380 32% 1 Western Europe 350 0 21% 2010 2011 2012 2013 2014 2015 2016 Global Beauty and Personal Care Value Sales* Value Sales by Region (2015) * Constant 2015 prices, Fixed 2015 exchange rate 22 Informa;on extracted from Euromonitor Asia, “ Asian Beauty Consumers – Key Trends Shaping the Industry”, November 2016 and Reimagining Growth in the Global Beauty Industry, May 2017
Growth Areas China, World’s Second Largest Cosmetics and Personal Care Market Non-store Retailing 20% In 2022 (excl. direct selling) FY2017 Recorded Aims to Skincare* as a % export sales capture Direct of retail value of S$106.5 5%^(RMB Selling (2016) 16% (RMB 513M) 10B) of RMB 192.5 Billion to China market share Store-based Retailing 64% *Skincare also includes sun care and sets/kits Informa;on from Euromonitor Interna;onal, “ Beauty and Personal Care in China), April 2017 23 ^ Based on total retail value in 2016
Growth Areas Digitalisation and Social Selling Growth in no. of users Average number (since incepdon of each of friends 130 # social media plalorm) per user Facebook EN 295 % Facebook TCN 437 % 194* Wechat 455 % Weibo 210 % #Informa;on from Sta;s;c Brain, hWp://www.sta;s;cbrain.com/facebook-sta;s;cs/ 24 *Informa;on from China Watch, hWps://www.chinainternetwatch.com/19524/wechat-data-report-2016/#ixzz4ucJvgSdq
Growth Areas Digitalisation and Social Selling Best World’s Social Media Outreach Social media ROI = Brand Visibility, Brand Evangelizers and Referrals and Sales No. of Followers 25000 23,980 22,251 19,325 Average Reach & 18750 17,805 Engagement 16,284 14,341 Facebook EN 12,417 12500 46,035 10,877 9,393 Facebook TCN 7,844 103,236 6250 Wechat 4,318 4,056 3,959 3,655 3,545 3,383 3,201 3,027 47,811 2,762 2,511 2,046 1093 1161 990 1029 1046 1060 845 911 958 755 817 294 0 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec WeChat Facebook EN Facebook CHI 25
Growth Areas Skincare Manufacturing Facility Acquisidon of 4,550sqm facility • in Singapore for S$10 million in 2016 • to be commissioned by end-2019 Industry 4.0 • fully automated end-to-end with integrated communicaFon along the enFre chain for customizaFon and higher efficiency. 26
Growth Areas Skincare Manufacturing Facility Radonale • Greater control over raw material and in process Q.C and final product quality • Reduce lead Fme (approximate in six months) > less inventory > more cash > increase shareholder return and M&A • In anFcipaFon of greater demand from key markets 27
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