Opportunity Day 2017 Year End Performance Review 19 March 2018 - - PowerPoint PPT Presentation

Opportunity Day 2017 Year End Performance Review

19 March 2018

CONFIDENTIAL │ PAGE 3

Table of contents

1 Background and Business 2 Key Financial Performance 3 2018 Outlook Q&A 4

CONFIDENTIAL │ PAGE 4

2010 - 2012 2013 2014 2015 2016 2017

• Founded Do Day Dream PLC. to focus on OEM Business of skin care products with

registered and paid-up capital THB 1 mn at par value of THB 100 each

• Founded NAMU LIFE Brand and launched the first product, “SNAILWHITE SECRETION FILTRATE

MOISTURE FACIAL CREAM”

• Main distribution channels are online (Line, Facebook and Instagram) and traditional trade
• Launched 3 more products of NAMU LIFE SNAILWHITE and expanded into body care product
• Expanded into modern trade and export to China, Hong Kong, Myanmar and Cambodia
• Increased share capital from THB 1 mn to THB 10 mn for business expansion
• Founded Namu Life Plus Co., Ltd to be the Company’s local distribution arm
• Launched 3 more products of NAMU LIFE SNAILWHITE and expanded into sunscreen and

cleansing products

• Invested in land with factory located in Rojana Industrial Park and started to renovate new plant
• Launched 4 more products of NAMU LIFE SNAILWHITE and expanded into body cleansing
• Started production in the new plant located in Rojana Industrial Park in October 2016
• Implemented SAP
• Increased share capital to THB 225 mn, focusing on international expansion
• Launched 8 more products of NAMU LIFE SNAILWHITE in facial skin care and body care
• Started to produce small size products (Sachet) selling through leading convenience stores
• Investment from NHTPEC, a private equity fund managed by Morgan Stanley
• Listed on the Stock Exchange of Thailand
• Founded Do Infinite Dream Co., Ltd to be IHQ for the Company’s international business

Our journey since 2010 has seen us become a leading skincare company in Thailand

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Vision, Mission and Core Values

VISION MISSION CORE VALUES

TO BE 1 OF TOP 3 MARKET LEADERS IN THE ASIAN BEAUTY INDUSTRY WE CREATE HEALTHY SKIN FOR EVERYONE TO BE TRULY BEAUTIFUL IN THEIR OWN UNIQUE WAY DYNAMIC DIFFERENT DEVELOP

Robust growth while always being adaptive Fresh and uniquely innovative Commitment to continuous improvement for sustainability and stability

Do Day Dream PLC. is a fast growing skincare manufacturer and distributor in Bangkok, Thailand. Formed in 2010, the company has reached THB 1.67 bn sales in 2017, within 6 years, or just 4 years after the launch of NAMU LIFE SNAILWHITE. Our customers include retail customers, local distributors and international distributors in several countries in Asia.

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Facial Skin Care Body Care Facial Cleansing

• Facial Cream
• SYN-AKE MIST
• Mask Shot
• Concentrate Facial Cream
• Miracle
• Royal Jelly Facial Cream
• Day Cream
• Overnight Firming Mask
• 7 Days Mask Sheets
• Gold Facial Cream
• Body Booster
• Body Booster

SPF 30/ PA+++

• Cleansing
• Whipp Soap
• Essential Toner
• Namu Facial Jelly Wash

Body Cleansing Sunscreen Giftset

• Sunscreen
• Sunscreen CC
• Crème Body Wash

1 2 3 4 5 6

Extensive product portfolio covering five categories of skincare

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Table of contents

1 Background and Business 2 Key Financial Performance 3 2018 Outlook Q&A 4

CONFIDENTIAL │ PAGE 8

438 955 1,237 1,674

2014 2015 2016 2017

Key financial metrics

Note: /1 Calculated based on sales before discount amounting to THB 1,012 mn, THB 1,291 mn, THB 1,713 mn in 2015, 2016 and 2017, respectively

/2 Others product group comprises of giftset, selling of packaging to related company, food supplement and OEM business /3 Distribution partner mainly distribute to traditional trade /4 Others comprise of sale from welfare of employee and retail customer who purchased lower than THB 100,000 /year

The Company has diversified away from Facial skin care products as they continuously introduced new and innovative products. The Company also shown balanced sales by distribution channels among modern trade, traditional trade and export. In addition, consignment sales has significantly decreased with

• nly sales through Watson, EVEANDBOY, Central and Robinson remain as consignment sales

Product Group/1 Distribution Channels/1

2014 2016 2017

Traditional Trade Modern Trade Distribution Partner/3 Export Others/4 Body Care Facial Skin Care Facial Cleansing Body Cleansing Sunscreen Others/2 0.9% 19.1% 29.7% 27.3% 23.1% 11.3% 30.0% 11.8% 46.6% 0.3% 35.7% 3.9% 31.3% 92.5% 3.2% 4.3% 83.1% 2.8% 4.3% 3.8% 4.6% 0.8% 77.7% 77% 4% 4% 8% 4% 3% 28.7% 6.0% 34.8% 29.9%

Sales (THB mn)

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775 1,091 1,161 180 146 513

955 1,237 1,674

2015 2016 2017 Domestic Export Sales

Sales breakdown by region

Unit :THB mn

11%

2016 2017

30%

2022F

50%

98% 99% 70%

Sales breakdown by region

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Comparison of overseas sales between 2016 and 2017

21 93

1Q16 1Q17

146 513

2016 2017 Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year

53 201

2Q16 2Q17

32 146

3Q16 3Q17

37 55

4Q16 4Q17

• Total export sales in 2017 is THB 513 mn, increase 251% from THB 146 mn in 2016
• Quarterly sales increased YoY
• Goal is to increase base sales quarterly to minimize short-term fluctuations
• We only represented less than 0.05% of China market size. Fluctuations could happen in quarters because of the following:

– Surge in sales usually happens when there is a new Chinese-specific product launch or a capture of a new customer – Tourists coming in to Thailand can have reverse correlation to export sales by quarter – In 2017, we launched Overnight Facial Mask in Q2 and acquired a new customer in Q3

353%

Growth

280%

Growth

362%

Growth

47%

Growth

251%

Growth

2017 Baseline 2016 Baseline Where will the 2018 baseline be?

(THB mn)

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53 20 1 2Q16 2Q17

Growth of overseas sales in 4Q17 is less than the other quarters ?

21 93 1Q16 1Q17 14 6 51 3 2016 2017 Quarter 1 Quarter 2 Quarter 4 Year 32 14 6 3Q16 3Q17 37 55 4Q16 4Q17

• DDD expects to receive CFDA for key products in early 2018
• CFDA requires some adjustments of the packages, expected to be complete within March/April 2018
• DDD group is currently arranging overseas sales structure which enables tax reduction. The creation of the new overseas

structure (IHQ) should be fully complete in March/April 2018

• DDD decides to optimize the tax expenses and wait for new CFDA-approved packages
• No new Chinese-specific product launched in 4Q17. Sales for a single day (11/11) occurred in 3Q17

353%

Growth

280%

Growth

362%

Growth

47%

Growth

251%

Growth

Quarter 3

(THB mn)

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Cost of good sold

(THB mn)

COGS to sales significantly decreased from 2015 thanks to economies of scale and better bargaining power with the suppliers which result in lower average cost of raw material and packaging

Note: /1 Others comprise mainly of utility expenses

 Significant portion of COGS attributable

to raw materials and packaging

 2015 - 2017 total COGS increased by

approximately 24% CAGR in the last three years in accordance with sales

 2015 - 2017 COGS as a % of sales

continuous drop due to ability to negotiate with key suppliers resulting in lower average cost together with economies of scale and more efficient production.

 2017 y-o-y COGS increased by 42.7%

primarily as sales revenue increased

 However, 2017 COGS as a % of sales

slightly increase due to expanding sales

• f body wash product, a product in a

highly competitive segment

223 318 344 459 10 6 1 2 10 18 16 51 56.7% 36.4% 30.3% 31.9% 2014 2015 2016 2017 Raw material and Packaging Freight Labor Depreciation Others % of Sales 348 375 535

3-Year Target : 28% - 32%

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Selling & administrative expenses

Note: /1 Others comprise mainly of depreciation and amortization expenses, rental, miscellaneous expenses , tax and other services and other selling and administrative expenses

(THB mn)

Selling & Administrative Expense has shown significant increase correlated with increase in sales activity. The increased was mainly attributable by advertising and promotional expenses and employee cost

 Selling and administrative expenses

mainly comprise advertising and promotional expenses and employee expenses

 2015 - 2017 total selling and

administrative expenses increased by 42% CAGR due to heavy spending on advertising to promote products as well as additional employees to support business expansion

 Advertising and promotional expenses

slightly dropped in 2016 due to lower advertising activity in 4Q2016

 2017 y-o-y advertising and promotional

expense increased 67.4% as the Company spent heavily to promote new product launched during the year

136 284 311 511 3 25 71 119 9 30 7 14 7 22 53 81 35.3% 37.8% 35.7% 43.2% 2014 2015 2016 2017 Advertising and Promotional Employee costs Freight Others % of Sales 361 442 724 Target : 38% 155

While comparing with AMORE and LOREAL, they spent a lot on marketing, with 50 – 60% SG&A in 2016.

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Media spending by type in 2017

TV, 42% OOH, 39% Online, 16% Other, 3% Media spending by type in 2017 In 2017, marketing communication strategy was to create exposure on radio, TV, print as well as out-of-home media advertising in prime locations.

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Media spending plan by type in 2018

TV, 42% OOH, 39% Online, 16% Other, 3% Media spending by type in 2017 Media spending by type in 2018 TV, 45% OOH, 25% Online, 30%

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Profitability

The Company has shown strong profitability growth over the past few years driven by strong brand awareness and innovative product launches. In 2017, gross margin remained relatively constant, while EBITDA margin and net margin softened from the increased promotion selling expenses for our new products launched over the year 2017

Gross profit (THB mn) and margin (%)

190 608 862 1140 43.3% 63.6% 69.7% 68.1% 2014 2015 2016 2017 Gross Profit % Gross Margin 37 254 441 452 8.4% 26.6% 35.5% 26.8% 2014 2015 2016 2017 EBITDA % EBITDA Margin 28 194 335 351 6.3% 20.3% 27.0% 20.8% 2014 2015 2016 2017 Net Profit % EBITDA Margin 3Y Target : 68% - 72% 3Y Target : 22% - 24% Target : 32%

(THB mn) Net profit (THB mn) and margin (%) EBITDA (THB mn) and margin (%)

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Financial position

Balance Sheet

2015 2016 2017 Days Sales Outstanding (days) 46 53 64 Days Inventories on Hand (FG) (days) 29 40 48 Days Payable Outstanding (days) 56 80 76 Return on Assets (%) 49.8% 51.4% 11.3% Return on Equity (%) 133.5% 108.6% 13.6% Debt to Equity Ratio (times) 1.2x 1.1x 0.1x Interest Bearing Debt to Equity Ratio (times) 0.5x 0.5x 0.1x

Key Financial Ratio 529 776 5,460 286 401 674 243 375 4,786 2015 2016 2017 Total Assets Total Liabilities Shareholders'Equity

Total assets increased mainly from the renovation of new factory and increase in inventories from raw material and packaging purchased at the end of 2016 Total liabilities increased mainly due to loan to finance new factory Total assets increased mainly due to increase in account receivable and cash and cash equivalent Total Equity increased mainly due to the initial public

• ffering (IPO) on Dec 2017

(THB mn)

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Table of contents

1 Background and Business 2 Key Financial Performance 3 2018 Outlook Q&A 4

CONFIDENTIAL │ PAGE 20

UPDATE : Market share performance as of Feb 2018

Source: The Nielsen Company as of February 2018

Facial Moisturizer SKU Ranking in Super/hypermarket/personal care store

Rank

Brand

Product Size

Package

Market Share (%) 2017 FEB18 1 Snail White Snail Wh.Secretion Filtr.Moist.Facial 50 Ml Bundled 0.3 4.5 2 Dermo Expertise Revitalift Anti-Wrink.Firm.Day Cr.Spf23 50 Ml Jar 1.6 2.0 3 Dermo Expertise Revitalift Anti-Wrinkle+Firming Night Cr 50 Ml Jar 1.3 1.5 4 Dermo Expertise Youth Code Pre-Essence 30 Ml Bottle 0.7 1.1 5 Olay Tot.Eff.7In1 Day Cr.Nor.Spf15 50 Gm Pump 1.1 1.1 6 Garnier Lig.Com.Wh.Speed Spf20 SR.Cr. 50 Ml Jar 1.1 1.0 7 All Other Other 30 Ml Pump 0.3 1.0 8 Olay Regenerist Micro-Sculpting Cr. 50 Gm Jar 1.3 1.0 9 Eucerin Pro Acne Solution A.I.Clearing Treatment 40 Ml Tube 0.0 0.9 10 Snail White Snail Wh.Secretion Filtra.Moist.Facial 50 Ml Jar 2.7 (1) 0.8

• Snail White bundled set was

ranked number 1 in super/ hypermarket/personal care store while a single jar was ranked number 10.

• Total Market Share for Snail

Filtrate is 5.3%.

• Snail White is running

behind in terms of the variety of SKUs.

• Despite premium price,

Snail White Mask Shot was ranked number 5.

• Stable sales without heavy

marketing spending.

• Encouraging signs to

introduce products in this category. Facial Mask SKU Ranking in Super/hypermarket/personal care store

Rank

Brand

Product Size

Package

Market Share (%) 2017 FEB18 1 All Other Other 100 Ml Pump 16.4 25.1 2 All Other Other 50 Ml Tube 10.0 10.1 3 All Other Other 1 Pc Sachet 6.9 5.2 4 Ele Mineral White Mask Plus 50 Gm Pump 4.8 5.2 5 Snail White Mask Shot 5 Pc Sachet 2.3 (7) 2.8 6 Ele Mineral White Mask Plus 50 Gm Tube 1.9 2.2 7 Voodoo Amezon Boost White Snake Ve. 30 Gm Jar 2.6 2.1 8 Faith In Face Other 1 Pc Sachet 1.9 1.9 9 Garnier Light Com.Night Yoghurt Slp.Mask 50 Ml Jar 1.6 1.7 10 Esfolio Other 25 Ml Sachet 2.5 1.7

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Strong 2018 outlook from three key drivers

• Broaden distribution channels through King Power Duty Free to help increase both

brand outlets and brand awareness for international consumers

• Currently sold in two out of nine branches (Srivaree and Suvarnabhumi Airport)

1

Expansion into King Power Duty Free

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King Power Duty Free Stores Expansion

Q2/2018 Q1/2018 Q1/2018 Q2/2018 TBC TBC TBC

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Strong 2018 outlook from three key drivers

• Broaden distribution channels through King Power Duty Free to help increase both

brand outlets and brand awareness for international consumers

• Currently sold in two out of nine branches (Srivaree and Suvarnabhumi Airport)

1

Expansion into King Power Duty Free

• Launching Sachets (small size product) with an aim to capture new customer

segments; younger age group and those in up-country

• Mainly sold through convenience stores and traditional trade channel with

more than >400k stores across Thailand

2

Penetrating through convenience stores and traditional trade channel

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Thai skincare market is currently driven by “sachet”

Source: The Nielsen Company as of February 2018

Total Thailand SKU Ranking of Facial Moisturizer as of Feb 2018

Rank Brand Product Size Package Share 1 Snail White Snail Wh.Secretion Filtra.Moist.Facial 50 Ml Bundled 2.9 2 Garnier Ageless White Day Spf30 Pa+++ Serum Cr. 7 Ml Sachet Cap 2.4 3 Garnier Sakura Wh.Pinkish Rad.Moi.Cr.Spf21 Pa+++ 7 Ml Sachet Cap 2.3 4 Garnier Lig.Com.Wh.Speed Mul.Act.Wh.Spf20 SR.Cr. 7 Ml Sachet Cap 2.1 5 Pond's Age Mira.Wrinkle Cor. Day Cr.Ratinol-C 7 Gm Sachet Cap 1.5 6 Dermo Expertise Revitalift Anti-Wrink.Firm.Day Cr.Spf23 50 Ml Jar 1.3 7 Dermo Expertise Revitalift Anti-Wrinkle+Firming Night Cr 50 Ml Jar 1.0 8 Smooth-E Natural Source Cream 10 Gm Reg 1.0 9 Nivea Men Creme UV 30 Ml Jar 0.8 10 Dermo Expertise White Perfect Spf17 Pa++ Serum Cream 7 Ml Sachet Cap 0.8 15 Snail White Day Cream SPF20 PA+++ 7 Ml Sachet Cap 0.7

• 5 out of 10 are sachets
• Snail White bundled set

ranked No. 1 while a sachet was ranked No. 15 in total Thailand.

• Snail White sachet ranked

7th in CVS in Feb 2018.

• Sachet format has a huge

potential to grow through traditional trade channels

• Snail White currently has a

very low weighted distribution in traditional trade channel.

• 7 ml sachet format will be a

key vehicle to penetrate in traditional trade channel. Convenience Stores SKU Ranking of Facial Moisturizer as of Feb 2018

Rank Brand Product Size Package Share 1 Garnier Sakura Wh.Pinkish Rad.Moi.Cr.Spf21 Pa+++ 7 Ml Sachet Cap 5.9 2 Garnier Ageless White Day Spf30 Pa+++ Serum Cr. 7 Ml Sachet Cap 5.7 3 Garnier Lig.Com.Wh.Speed Mul.Act.Wh.Spf20 SR.Cr. 7 Ml Sachet Cap 5.5 4 Pond's Age Mira.Wrinkle Cor. Day Cr.Ratinol-C 7 Gm Sachet Cap 4.0 5 Nivea Men Creme UV 30 Ml Jar 3.3 6 Smooth-E Natural Source Cream 10 Gm Tube 3.2 7 Snail White Day Cream SPF20 PA+++ 7 Ml Sachet Cap 2.9 8 Olay Nat.Wh.Pink.Fairness W/UV Protc.Wh. 7.5 Gm Sachet Cap +33% 2.9 9 Dermo Expertise White Perfect Spf17 Pa++ Serum Cream 7 Ml Sachet Cap 2.7 10 Olay Tot.Eff.7In1 Day Cr.Nor.Spf15 12 Gm Pump 2.7

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New penetration in Traditional Trade channel 1 NAMU LIFE Shop

at BTS Siam

21 Stores

Online & Special Channels

Channels Stores Online 9 Others 11

Pan Asian Distribution China Thailand Laos Cambodia Myanmar

New growth markets Existing market stronghold

Distribution Channels

Do Day Dream PLC.

>13,000 Stores

Modern Trade

Channels Stores Beauty 49 Health&Beauty 795 Hyper 200 Department Store 47 Supermarket 277 Convenience Store 9,247 Others 2,385

>1,300 Stores

Traditional Trade

Pharmacy Chain

>1,300 stores across 77 Provinces

ฉนสส

Collaboration with Sino-Pacific

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Strong 2018 outlook from three key drivers

• Broaden distribution channels through King Power Duty Free to help increase both

brand outlets and brand awareness for international consumers

• Currently sold in two out of nine branches (Srivaree and Suvarnabhumi Airport)

1

Expansion into King Power Duty Free

• Launching Sachets (small size product) with an aim to capture new customer

segments; younger age group and those in up-country

• Mainly sold through convenience stores and traditional trade channel with

more than >400k stores across Thailand

2

Penetrating through convenience stores and traditional trade channel

• Expanding to Chinese market, which has a value of more than THB 1 trillion (RMB

200 billion), through both online platforms and offline channels

• First Thai skincare brand sold in China Duty Free

3

Vibrant opportunity in Chinese market

CONFIDENTIAL │ PAGE 27

CFDA of Snail White Moisture Facial Cream

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First Thai skincare sold in Zhuhai Duty Free in China

DDD has recently got into an agreement to sell SNAILWHITE products in Zhuhai Duty Free store, located at the border between China and Macau. The store has twenty-five thousands of foot traffic going and out of China daily.

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Anticipated conservative growth of 30%, reaching THB 2.2bn in 2018

2013 2014 2015 2016 2017 2018F 438 90 1,237 955 2,176 1,674

Remark: Calculated from sales before discount. CAGR is calculated from 2013 to 2017

Sales and sales forecast (2013-2018F)

Unit: THB mn

1 2 3

Q4 2017 2018 Key drivers

Vibrant opportunity in Chinese market Cross-border Online All online + Offline Penetrating through convenience stores and traditional trade channel Expansion into King Power Duty Free 2 branches ~ 6 branches 1 Sachet product More products in Sachets, focusing on TT

Do Day Dream PLC. Investor Relations Department

Tel : 02-9173055 Fax : 02-9173054 E-Mail : ir@dodaydream.com Website : dodaydream.com

Thank you