SINGER THAILAND PCL. March 11, 2010 Opportunity Day SINGER - - PowerPoint PPT Presentation

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SINGER THAILAND PCL. March 11, 2010 Opportunity Day SINGER - - PowerPoint PPT Presentation

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Opportunity Day SINGER THAILAND PCL. March 11, 2010 SINGER THAILAND PCL. March 11, 2010 Opportunity Day SINGER THAILAND PCL. March 11, 2010 D isclaimer This presentation is prepared by Singer Thailand Public Company Limited (SINGER)

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March 11, 2010

SINGER THAILAND PCL.

Opportunity Day

SINGER THAILAND PCL. March 11, 2010

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March 11, 2010

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Opportunity Day

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This presentation is prepared by Singer Thailand Public Company Limited (“SINGER”) solely for discussion with investors and/or analysts. The information contained in this presentation may include certain statements, estimates and projections concerning SINGER’s anticipated future performance, its business plan, market conditions as well as economic outlooks. No assurance is given that future events will occur; furthermore, actual results may differ materially from those anticipated. SINGER as well as its agents including but not limited to its affiliates, directors, employees and advisors do not make representation or warranty as to the accuracy or completeness of such information and do not assume any undertaking to supplement such information as further information becomes available or in light of changing circumstances. Investors and analysts are required to use their own discretion, analysis and/or evaluation with respect to the uses of information contained in this presentation for any purposes.

Disclaimer

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  • Company Overview
  • Key Strategy
  • New Opportunity
  • Financial Highlights
  • Company Activities

Agenda

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Opportunity Day

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Company Overview

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1996-7 1984 1957 1925 1889

First Business in the Kingdom of Thailand, Kiem Hua Heng was appointed to be the distributor for Singer Sewing Machines in Siam The first Company which introduced the Hire Purchase business Expanded business

  • f home appliances

by distributing top- quality refrigerators Listed on the SET, June 28 1984 Made record annual sales of 8,524 mil THB Total customer base reached 831,000 installment accounts

2010 2007-9 2006 2005 2004

His Majesty the King bestowed the Garuda emblem to Singer Thailand PCL. on May 24, 2004 Focused on motorcycle sales, representing 61% of total sales, with home appliances at 39% Business loss from provisions, write-offs Turnaround plan to solve the motorcycle problems and re- focus on sales of electrical home appliances with a replacement market by developing a trade-in approach Improvement Year by Year: -

  • 1. Credit Approval

Procedures

  • 2. Receivable &

Collection

  • 3. Sale Revenues

Background & Milestone

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SINGER BRAND Our Products

  • WHITE GOODS

– REFRIGERATOR – CHEST FREEZERS – BEVERAGE COOLER – WINE CELLAR – WATER COOLER – WASHING MACHINE – GAS RANGE – AIR CONDITION – WATER PUMP – MICROWAVE OVEN – ELECTRIC FAN – HOME SHOWER – RICE COOKER – ELECTRIC IRON

  • BROWN GOODS

– TELEVISION – HOME THEATRE – DVD

  • SEWING GROUP

– SEWING MACHINE – STREAM PRESS

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Live Insurance

  • Muang Thai

Computer (SVOA) Air Time Vending Machine Water Pump (Agricultural Equipments)

OTHER BRANDS Our Products

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Strong Customers’ Based

  • n C & D Groups

TARGET CUSTOMERS

  • Living in rural areas
  • Low range gov’t

Officer

  • Housewife, Farmer

2.2% > 30K 12.0% 10 – 30K

Population w/ income < 10K

Our target ~80%

  • f Thailand’s

population

Source : National Statistical Office

Our Customer Base

Thailand income distribution

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Of Total Sales, ~75% comes from the Central and East provinces of Thailand

Total Shop : 175 Branches (with 51 own premises) Total Sales Agents: 3,498 Persons ภาคใต ้ South

ภาคตะวันออก East

ภาคกลาง Central

36.10%

38.45%

7.37%

ภาคตะวันออกเฉียงเหนือ Northeast

Our Strong Distribution Network

ภาคเหนือ North

18.08%

Of Total Sales, ~75% comes from the Central and East provinces of Thailand

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Filter I

S/A Screening

  • Occupation
  • Income
  • Accommodation
  • Assets Security
  • Guarantors

Apply for HP

Filter II

CCO Screening

  • Credit Scoring
  • Black List
  • NCB

Filter III

UM / SM Review

  • All applications

From S/A must be Reviewed by Shop Manager

  • AC Pre-Checking

Approve HP

Credit Approval Flow

Credit Control Process : Good Credit Customer

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Shop Manager Salesman’s Guarantors Salesman HP Guarantors HP Customer

1 2 3 5 4 5 Steps for Refunding the Loss from HP Account

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Singer Call Center : Roles and Responsibilities

Warning Call After-sales Service Welcome Call Telesales

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SINGER THAILAND PCL.

Opportunity Day

13 Installment sales financing & personal loan business operators

  • AEON Thana Sinasap
  • GE Capital
  • EASY BUY
  • MIDA Assets
  • Singer Thailand

Competitive focus

  • Provides installment sales financing
  • Personal loans to consumers
  • Requires good credit histories
  • Requires monthly income of not less than Baht 4,000
  • Compete on approval period and interest rate
  • Focuses on rural households
  • Sells directly to customers
  • Charge rates that include financing costs and before and

after sales service expenses

  • Compete on relationship with rural agricultural households

and providing good before and after sales services

Industrial Environment

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Source: Thailand NMR Media Index 2008 (January – December 2008), The Nielsen Company (Thailand) Limited Any TV R efrigerator Washine Machine Digital Video Disk C omputer Air C onditioner Water Heater Microwave Oven

98 99 99 97 93 97 94 91 54 71 76 44 23 54 25 14 18 45 35 7 15 46 30 3 13 20 29 6 12 35 22 3 1 UPC . Rural = 35,371 UPC . Urban = 10,220 Greater B angkok = 8,995 Nationwide = 54,585

R/F W/M TV AIR

Household Durables Ownership Ratio

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Who are we?

SWOT

WEAKNESSES OPPORTUNITIES THREATS

INTERNAL EXTERNAL

STRENGTHS

1. Strong Brand Loyalty 2. Expertise on HP System 3. Strong Distribution Coverage 4. “Good Service” Brands 5. Strong Direct Sales Forces 6. Trade-in Campaign 7. Strong relationship with reputable suppliers 1. Product Differentiation 2. No Production Base 3. Low Education of Sales Forces 4. Rely on Customer Based C & D 1. Fade out of Direct Competitors 2. Multi-Product, Multi-Brand Trade – in 3. H P Behavior Growing up from Economic Decline 4. Government policy to support rural areas i.e. OTOP, village funds 1. Economic Decline 2. Setting up of Modern Trade in upcountry 3. Political Problems 4. Volatility for the Price of Agricultural Products

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Key Strategy

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  • 1. Continue with strong balance sheet management , inventory and cost control
  • 2. Continue to improve receivables quality, especially lower employee shortages, arrears

and reverts

  • 3. Continue to focus attention on high product gross margins to improve profitability
  • 4. To introduce a ZERO TOLERANCE PROGRAM to instill a new ethos into the business
  • 5. Boost revenue by a significant increase in air conditioner sales (now more affordable

to rural, lower income consumers on account of reduced taxes)

  • 6. Opening of 10 new sales depots in up-country more lucrative / well controlled markets
  • 7. Boost satellite dish and air time vending machine sales by the introduction of a

new supplier

  • 8. Change the recruitment policies for hiring sales agents to improve their quality and

productivity

  • 9. To introduce corporate risk management in action
  • 10. Search for strategic partners to broaden long-term opportunities and profits

The key strategies for 2010 / 2011 are as follows:

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Recruitment Program - Career Opportunity

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98% 2%

TV

Ownership Ratio Remaining market 90% 10%

Refrigerator

Ownership Ratio Remaining market

Current Consensus view: The Market for TV’s and Refrigerators are saturated and no growth opportunities exist, SINGER believes otherwise….

Replacement Market Opportunities

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98%

TV

Ownership Ratio Remaining market 90%

Refrigerator

Ownership Ratio Remaining market

Fantastic opportunities in the replacement market

MARKET POTENTIAL

Replacement Market Opportunities

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Singer TVC - Turn

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Singer TVC – Life Time Warranty

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New Opportunity

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Air Conditioner

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  • Free installation & 2 years maintenance
  • 900 Baht installment (Sweet Dream with 30Baht/Day

campaign)

  • Liability Free Insurance

3 Key Strategies To Achieve Air Conditioner Target 2010

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Direct Channel

  • Easy payment campaign : 900 Baht installment will be the main

advertising campaign support during the campaign of “Sweet dream with only 30 Baht /day”

  • Launch new business unit “Services oriented” to support our sales

team and free installation with 2 years maintenance to nationwide for Singer Air-con starting in Jan 2010

  • More competitive price due to lower cost
  • Widening product range to be variety for support more sales from

auction in real estate and government project in 2010

  • Emphasizing on 12K model for widely coverage the low ownership

ratio

Strategies of Air Conditioner

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Basic Information

WT-12KSN WT-18KSN 12000 BTU 18000 BTU

Good Sleep

Cooling mode + Heating mode

WT-9KSN 9000 BTU

2010 Air Conditioner Line Up

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Target Group of Air Conditioner

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“Air Conditioner” Campaign

Advertising & Promotion Main Theme 2010

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Launch campaign before other competitors and before summer season To offer easy conditions to own air conditioner with

  • nly 30 Baht/day with free installation and

maintenance for the whole payment period To speed up the customer decision to buy new air conditioner by offering on limited time or limited supply while stock last

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To Create Impact on Single Minded Key Message ... “Sweet Dream with only 30 Baht/Day”

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“ง่าย เกิน คาด”

“Easier Than Expected”

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รูปแบบใบปลิวโฆษณา

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Singer TVC - TID

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Freezer and Cooler

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  • Segmentation

Mini mart and Entrepreneur in upcountry

  • Targeting

Small Mini mart over 100,000 shops in the village all over Thailand

  • Positioning

Money making machine from singer is durable, saving and service at home

STP of Freezer

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  • Money making machine
  • Solution provider for upcountry mini mart
  • 1. Grocery shops
  • 2. Frozen food & ready meal
  • 3. Ice cream
  • 4. Flower shops
  • 5. Wire display shelves
  • Proven to save electricity cost compared with
  • ther competitors

Key Strategies for Freezer & Beverage Cooler

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Freezer & Beverage Cooler

36.5

2010 Model

8.8 8.8 13.5 9.5 6.5 33.5 26.6

LINE-UP Year 2010

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Freezer’s Target Group

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Air Time Vending Machine

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  • This machine can support 1-2 Call / Happy DTAC / TRUEMOVE.
  • Target group: those who already do top-up mobile phone using
  • nline through mobile phone, mini mart in upcountry especially in

city area

  • Start by using “Back to Back Order” strategy under Singer brand
  • Customer get income from 2 parts
  • Fix 3 Baht/time
  • 3.5% - 6.5% from the top up amount
  • To reduce risk, the customer must pay 10,000 Baht for down

payment with 6 or 10 installment terms. Credit Approval prior to product delivery

Air Time Vending Machine

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Air Time Vending Machine SG-ONLINE02

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Financial Highlights

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TV 12%

Refrigera tor 21%

Washing Machine 29% Sewing Machine 5% MTC 7% Freezer 15% Others 11%

Others 7% TV 10% Refrig erator 21% Washing Machine 31% Sewing Machine 5% MTC 2% Freezer 19% Air 5%

2008 2009

Sales Proportion by Product Categories

Top up celllphone Machine, 6%

Air 21% Freezer 15% MTC 1% Sewing

Machine 4% Washing Machine 25%

Refrig erator 16% TV 7% Others, 5%

Jan - 2010

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Sales Break down 2006 - 2009

Sales Breakdown

286 355 94 68 2,019 1,486 1,999 1,709 1,469 626 164 42 2006 2007 2008 2009

Non Singer Brands Singer Brands Motorcycles

After having switched the core business from motorcycles to electrical home appliances since Y2006 with replacement strategy, sale of electrical home appliances under Singer Brand has gradually improved until Y2009 that the company adopted pre- approval credit by Credit Control Officers, sale of electrical home appliances became lower for adjustment.

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Gross Margins

45% 50% 66% 0% 10% 20% 30% 40% 50% 60% 70% 2007 2008 2009 Year Percentage

From Y2007 to Y2009, the percentage of gross margin has gradually improved from 45% to 66% caused by the change of product mix from lower margin to higher margin as well as the result from the better price and conditions after having negotiation with major suppliers.

Product Gross Margin 2007 - 2009

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Selling, General and Administrative Expenses

1,522 1,185 1,027 2,953

  • 500

1,000 1,500 2,000 2,500 3,000 3,500

2006 2007 2008 2009 Year Million Baht

From Y2006 to Y2009, selling and administrative expenses have gradually improved with the company's cost reduction program

  • n going as a plan.

Reduction of S G & A Expenses

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Net Profit/(loss) - 2000-2009

THB: M. Baht

184.2 88.0 36.53 .

  • 81.6
  • 500.0
  • 1,233.0

240.0 197.0 167.7 133.4

  • 1,400.0
  • 1,200.0
  • 1,000.0
  • 800.0
  • 600.0
  • 400.0
  • 200.0
  • 200.0

400.0

2007 2008 2009 2004 2005 2006 2001 2002 2003 2000

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Cashflow from Operation 960 314 346

200 400 600 800 1,000 1,200 2007 2008 2009 Year Million Baht Though sale has been decreased year by year caused by a change of core business from motorcycles with high risk to electrical home appliances with lower risk, the company still have the positive operation cash flow.

Cash Flow 2007 - 2009

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60 Assets

1,395 222 285 1,132 201 248 200 400 600 800 1,000 1,200 1,400 1,600 A/R INVT. PPE Year Million Baht 2008 2009

Total assets as of Dec.2009 reduced by THB 325 mil. ( from 2,262 to 1,937) caused by A/R reduced by THB 262 million, inventory reduced by THB 21 mil. PPE reduced by THB 36 mil. Liabilities

1,596 179 100 820 153 500 1,000 1,500 2,000 S.T.DEBT L.T DEDT AP

Year

Million Baht 2008 2009

Total liabilities reduced by THB 350 mil caused by short & long term loans reduced by THB 294 mil and A/P reduced by THB 26 mil.

Balance Sheet 2008 - 2009

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Financial Highlights 2007 - 2009

'000 Baht

2007 2008 2009 Revenues 2,514.14 2,355.36 1,874.94 Gross Margin 1,081.87 1,081.10 1,077.11 S&A Expenses 1,291.54 1,047.87 905.85 Profit (Loss) from Sales

  • 427.35
  • 104.28

49.75 EBITDA

  • 331.25

29.21 130.47 Income Before Interest andTax

  • 392.96
  • 6.32

106.09 Net Profit (Loss)

  • 500.22
  • 81.60

36.53 Bank Interest 107.10 75.14 69.47

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Company Activities

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Annual General Meeting

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Special Sales Program - Shareholders

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Analyst Meeting

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Corporate Communication

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CSR Activities

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CSR Activities

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CSR Activities

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CSR Day Seminar

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วันกิจกรรมเดินวิ่งมาราธอน 2010 Singer Mission Impossible Race

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