1st half 2008 performance review - listed...
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SINGER Thailand Public Co., Ltd.
11stst Half 2008Half 2008
Performance ReviewPerformance Review
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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.
DDisclaimer isclaimer
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Agenda
I. Company Overview
II. Industry Overview
IV. Financial Performance
III. Business Strategy
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I. Company Overview
II. Industrial Overview
III. Business Strategy
IV. Financial Performance
Agenda
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IIcebergceberg
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SINGER’s Products
• WHITE GOODSWHITE GOODS–– REFRIGERATORREFRIGERATOR–– CHEST FREEZERSCHEST FREEZERS–– BEVERAGE COOLER BEVERAGE COOLER –– WINE CELLARWINE CELLAR–– WATER COOLERWATER COOLER–– WASHING MACHINEWASHING MACHINE–– GAS RANGEGAS RANGE–– AIR CONDITIONAIR CONDITION–– WATER PUMPWATER PUMP–– MICROWAVE OVENMICROWAVE OVEN–– ELECTRIC FANELECTRIC FAN–– HOME SHOWERHOME SHOWER–– RICE COOKERRICE COOKER–– ELECTRIC IRONELECTRIC IRON
•• BROWN GOODSBROWN GOODS–– TELEVISIONTELEVISION–– HOME THEATREHOME THEATRE–– DVDDVD
•• SEWING GROUPSEWING GROUP–– SEWING MACHINESEWING MACHINE–– STREAM PRESSSTREAM PRESS
INSURANCE INSURANCE -- MUANG THAI LIFE ASSURANCEMUANG THAI LIFE ASSURANCECOMPUTER PC (SVOA)COMPUTER PC (SVOA)SATELLITE DISH (SAMART)SATELLITE DISH (SAMART)Motorcycle (Suzuki, Yamaha, etc) Motorcycle (Suzuki, Yamaha, etc) Agricultural Machine (Agricultural Machine (ChoomsinChoomsin))
SINGER BRANDSINGER BRAND NONNON--SINGER BRANDSINGER BRAND
UC-36
UC-11
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SINGER SINGER HOME APPLIANCES UNITS SALESHOME APPLIANCES UNITS SALES 1996, 2004, 2005, 2006, 20071996, 2004, 2005, 2006, 2007 & PLAN 2008& PLAN 2008
STRATEGY FOR 2008 AND BEYOND : PUSH UP HOME APPLIANCESGAIN BACK MARKET SHARE
PRODUCTS YEAR 1996 YEAR
2004YEAR
2005YEAR
2006YEAR
2007PLAN
2008
REFRIGERATORS 196,009 39,388 35,397 30,868 27,543 35,000
TELEVISION 143,234 40,084 36,280 24,976 23,680 27,000
WASHING MACHINE 126,516 51,228 47,870 30,193 30,900 46,000
SEWING MACHINE 66,474 10,170 10,830 8,715 10,036 15,300
STEREOS/AUDIO 47,583 4,027 741 2,926 2,274 1,980
VCD/DVD 34,250 4,306 4,845 1,782 4,014 4,500
FREEZER/BEV.COOLER 24,086 10,254 9,853 10,387 11,556 14,000
KITCHEN/GAS STOVE 47,538 5,645 5,315 4,954 4,345 4,800
MICROWAVE 9,101 1,344 1,308 913 666 2,500
AIR CONDITION 6,495 1,222 1,881 840 1,655 3,000
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Company Strengths
•Extensive distribution network more than 200 shops and over 5,000
salesmen / collectors
•Long-established reputation on product offerings and after-sales services
•Strong understanding of customer demands
•Convenience of hire purchase
•Capacity to offer multi-products and “Trade-in” services
Utilizing the Company’s Strengths of …
…Singer will be able to:
•Expand and dominate the hire purchase market in rural Thailand
•Improve financial performance
•Allow customers to enjoy the values and services of Singer
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Geographical sales location
• Of Total Sales, ~75% comes
from the Central and Northeast
provinces of Thailand
ภาคใต
South
ภาคตะวันออก
East
ภาคกลาง
Central
ภาคตะวันออกเฉียงเหนือ
Northeast
ภาคเหนือ
North
36.10%38.45%
7.37%
18.08%
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General Market Potential
Singer’s Products
target ~80% of
Thailand’s populationPopulation w/ income < 5.5K
Population w/ income < 10K
Thailand income distribution (2006)
Source : National Statistical Office
53.8%
27.2%
7.8%
4.2%
2.2%
10 -15 K
20 – 30K
> 30K
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Company Performance in the second quarter Y2008
The Company has successfully
made a U-turn by converting a
core business based on
motorcycles into a core business
based on electrical home
appliances, this resulted in:
•Revenue decreasing by 11.8%,
•A significant decrease of
repossession losses , write-
downs in the value of used
motorcycle inventory and bad
debt provisions.
SINGER underwent a refocus core business through 2007/8
• Aggressive Implementations of a Trade-in Strategy for
multi brands , multi products to exploit a Replacement
market.
• TV Commercial expand to support Trade-in Strategy until
the end of Y2008.
• Event Marketing
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Key Success Factors “Tripod” Strategy
• RIGHT STRATEGY –
Refocus on electrical home appliances under replacement market.
• CREDIT CONTROL AND COLLECTION IMPROVEMENT
• SOLID AND PROFESSIONAL MANAGEMENT TEAM
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Proportion of Net Sale
Others16%
Motorcycle8%
Air Conditioner
3%
Television16%
Washing Machine
23%
Refrigerator & Freezer
29%
Sewing Machine
5%
1st
Half 20071st
Half 2007
Sewing Machine
4% Refrigerator & Freezer
39%
Washing Machine
29%
Television12%
Air Conditioner
5%
Motorcycle3%
Others8%
1st
Half 20081st
Half 2008
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Credit Granting ProcessCredit Granting Process
Filter IS/A Screening-Occupation-Income-Accommodation-Assets Security -Guarantors
Apply for HP
Filter IICCO Screening-Credit Scoring-Black List-NCB-Checkers' Report(Focus for all C-ShopsAnd some of B & AShops)
Filter IIIUM / SM Review-All applicationsFrom S/A must beReviewed by ShopManager
Approve HP
Credit Approval Flow
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Shop ManagersIn case of step 1-4 can Not be proceeded, Shop Managers have to taketheir responsibilities for the loss occurred in limited amount underthe company regulations.
Salesman's GuarantorsIn case of disappearanceOf Salesman, Salesman’sGuarantors will be Claimed Under their commitments.Salesman
In case of the disappearance Of the customer and Guarantors,Salesman will be claimed by deducting from their security deposit, or cash paymentHP Guarantors
In case of the customerDisappeared or do not have the ability to pay And also do not have anyValuable assets for forcingpayment in reciprocal,Customers’ Guarantors will be sued
5 Steps for Refunding of Loss from HP accounts5 Steps for Refunding of Loss from HP accounts
HP customers-Notices issued-Cancel HP contracts-Take product back-Sue customer for the remaining balance
Step I
Step II
Step III
Step IV
Step V
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I. Company Overview
II. Industrial Overview
III. Business Strategy
IV. Financial Performance
Agenda
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Industry environment
There are 13 Major non-bank consumer finance companies in Thailand
Credit-card operators Installment sales financing & personal loan business operators
•American Express
•DINERS Club Thailand
•General Card Services
•Krungsriayudhya Card
•Krungthai Card
•Tesco Card Services
•AEON Thana Sinasap
•GE Capital
•Cetelem
•EASY BUY
•MIDA Assets
•DE Capital
•Singer Thailand
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Installment sales financing & personal loan business operators
•AEON Thana Sinasap
•GE Capital
•Cetelem
•EASY BUY
•MIDA Assets
•DE Capital
•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
Industry environment
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SINGER’s two direct competitors (DE Capital, MIDA) in the direct selling hire purchase industry have decided focus on other industries thereby leaving SINGER as the sole company to sell on direct selling hire purchase
Singer is the
market leader
Industry environment
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Agenda
I. Company Overview
II. Industrial Overview
III. Business Strategy
IV. Financial Performance
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6P6-P Strategy 2008กลยุทธ 6-P ขบัเคลื่อนแนวทางการตลาดและการขายป 2008
•• P1 P1 ‐‐
PProduct strategy
•• P2 P2 ‐‐
PPricing strategy
•• P3 P3 ‐‐
PPromotion strategy
•• P4 P4 ‐‐
PPlace strategy
•• P5 P5 ‐‐
PPeople strategy
•• P6 P6 ‐‐
PPartnership strategy
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P1 P1 -- PProduct strategy
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P2 P2 -- PPricing Strategy
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ตัวอยาง การคํานวณราคาการขายแบบ Trade in
ตูเย็น ขนาด 16 คิวขายปกติ
• เงินสด 27,900.‐
• เงินผอน 39,800.‐
• เงินดาวน
2,000.‐
• คางวด 1,400.‐
• จํานวนงวด 27 งวด
ขายแบบ Trade in
สวนลด 3,000 บาท
• เงนิสด27,900.‐
• หักสวนลด
3,000.‐
• สทุธ
ิ 24,900.‐
• เงนิผอน
39,800.‐
• หักสวนลด
3,000.‐
• สทุธ
ิ 36,800.‐
• เงินดาวน
2,000.‐
• คางวด
1,400.‐
• จํานวนงวด
25 งวด
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• สื่อโทรทัศนชุด “เทิรน” บริการรับเทิรนถึงบาน ทุกยี่หอ
Turn
P3 P3 -- PPromotion strategy
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Singer Truck
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Singer Pickup
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สาขา อรัญประเทศ
สาขา รังสิต
Trade-in Banner
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New Singer Shop Design
P4 P4 -- PPlace strategy
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New Singer Shop Design
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Shop Renovate
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Singer Caravan
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Singer Caravan
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New Singer Uniform
P5 P5 -- PPeople strategy
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P6 P6 -- PPartnership strategySinger & SVOA Mobile show
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37
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Concert TV3
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Concert TV3
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แฟนพันธุแท
ตูเย็นซิงเกอร
ป 2552
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I. Company Overview
II. Industrial Overview
III. Business Strategy
Financial Performance
Agenda
IV. Financial Performance
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Highlights in the second quarter Y2008
•
The Company has generated a positive operating cash flow of Baht 53.0 Million for Q.2 Y2008, and total positive cash flow for the first half year equal to Baht 200.7 Million.
•
The long-term loans were reduced from Baht 683.3 Million at end December 2007 to Baht 521.6 Million at the end of June 2008.
•
The short-term loan was slightly increased from Baht 653.2 Million at the end December 2007 to Baht 654.0 Million at the end of June 2008.
•
Total borrowings have been reduced by Baht 160.9 Million.
•
The inventory of used motorcycles was reduced to 2,115 units.
•
At the end of June 2008, the percentage of paying accounts which is measuring how many accounts are paying from the total portfolio has been improving by 3.04% compared with the end of December 2007
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Historical Sales Performance
396
403
286
355
1,486
2,019
2,220
1,977
1,870
3,946
1,469
626
•Sales have decreased by over
60% over the past three years due
to the reduced selling of
Motorcycles
•Singer Brands and Non-Singer
Brands have been able to maintain
similar levels of sales of the past
four years
-62%
6,569
4,244
3,774
2,467
Units in ‘000 baht
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Product sale
564533
469 471
-
100
200
300
400
500
600
Q1 Q2Quarterly
Million Baht
Y2007 Y2008
Sales Performance Q1 & Q2-2008
• Product sales in Q.1& Q.2 of Y2008 lower than of Y2007 by 16.9% and 11.6% respectively caused by:
No focus on motorcyclesStrictly Pre-Approval CreditIncrease down paymentNot allowing Shops in three Southern provinces to sell New H/PEconomic Downturn
16.9%11.6%
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Gross Margin per Product
40%48% 50%
54%
Refrigerators Television Color WashingMachine
Sewing Machines
Gross Margins
45%40%
49%53%
Q1 Q2 Quarterly
Y2007 Y2008
Gross Margins
• Compared with Y2007, the combined
product margin in Y2008 climbed up
from 45% to 49% in Q.1’08 and from
40% to 53% in Q.2’08 due to an effect
of Singer’s on going business to refocus
on home appliances with higher product
margin than motorcycles.
• Sewing Machines offer the highest
gross margin, while refrigerators offer
the lowest
46
296369
2Q07 2Q08 Year
M.Baht
Selling, General and Administrative Expenses
Compared with Q.1&Q.2 in Y2007,
SG&A in Q.1 & Q.2 in Y2008 were
decreased by 46.8% and 19.8%
respectively mainly due to:
• A decrease of bad debt provision
caused by a strategic plans to solve
the motorcycle and arrears problems.
• A decrease in total salaries and
employee benefits
Units in ‘000 baht
19.8%19.8%
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Net IncomeNet Income
Baht: Million
2008Break-event Total Total
Line Year Year2006 2007
Q3
(1233.0)
(196.5)
Q2 Q3 Q4
(116.5)
(82.1)(105.0)
Q4 Q1
(713.1)
(233.3)
10.5
(500.2)
Q1 Q2
Q3 12.9
Return to Profitability
48
Cash Flow from Operations
• Under the cash flow
strictly control, Singer’s
Cash Flow from
Operations was able to
stay positive in each
quarter started from
Q.1’07 up to now.
Positive Cash Flow from Operations
Positive CashFlow From
Operations
366
190 218 186
960
148 201
1Q07 2Q07 3Q07 4Q07 Y2007 1Q08 2Q08
M. Baht
49
Liabilities653
257
427
654
482
40
S.T.DEBT L.T Debt<1yr L.T Debt>1 yr
M.Baht
Q207 Q208
Assets
231420
262410
1,6751,555
A/R INVT. PPE
M. Baht
Q207 Q208
Key Balance Sheet ItemsProvisions and write offs impacted
assets:
• A/R decreased by 7.1% mainly due to
more revert of motorcycle accounts
• Inventory increased by 13.4% due to
more new purchasing to serve with
more new sale of home appliances
pushed by trade-in strategy.
• Net PPE decreased by 2.4% due to a
plan to sell unearned assets.
Debt levels have been dramatically
reduced:
• Short term debt increased by 0.2%
• Long term debt decreased by 23.7%
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Closing Statement
Following our company and management restructuring, we aim at returning to profitability and sustainable growth
With our strengths in distribution network and long-established reputation, we have abundant opportunities to create market space, offer more and more products to our existing customers
Despite total sales declining, our net profits are on a positiveupwards trend, our operating cash flows have remained strong, allowing us to implement our business plan and new strategies
We expect to maintain our dominant position with profitability improvement
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