introduction to do day dream - listed...

Do Day Dream

1H 2019

Information as of period ended 30 Jun 2019

Latest update on 27th Aug 2019

2

Financial Reports: Key Takeaways

1. Sales revenue was heavily affected by the cancellation of

SINO pacific (distributor) contract by the end of Q2 2019

• DDD has to accept returns from sino pacific which accounted in the reduction of net sales

• Sales directly to TT customers shall only begin after the cancellation of SINO Pacific

Contract

2 .Modern Trade performed better QoQ despite negative market

sentiment

3. The inbound tourist revenue was heavily affected by the

significant decline of the number of tourists.

4. Export revenue significantly increased QoQ from Q1 2019

as a result of ever-improving Philippines subsidiaries

5. % COGS increased in Q2 2019 compared to Q1 2019 due to

promotions imposed on aging/slow moving products to clear

out inventory

6. Selling expense slightly increased in Q2 2019 compared to Q1

2019 due to launches of new products. This is, however, much

lower than that of the same period in 2018

3

Revenue from sales 1H 2019

Revenue from sales (YoY)

Unit: THB Million

558

300

176

85

0

100

200

300

400

500

600

700

800

1H'2018 1H'2019

Domestic Overseas

734

384

-48%

-46%

-52%

24%

76%

22%

78%

Products Group Distribution Channels

Facial Skin Care64%Body

Care6%

Facial Cleansing

12%

Body Cleansing

8%

Sunscreen3%

Others7%

Facial Skin Care77%

Body Care3%

Facial Cleansing

4%

Body Cleansing

9%

Sunscreen2% Others

5%

Modern Trade51%Traditional Trade and

Distribution Partner26%

Export22%

Others1%

Modern Trade37%

Traditional Trade and Distribution Partner

39%

Export24%

Others0%

1H 2018

1H 2019

1H 2018

1H 2019

4


Revenue from sales (QoQ)

Unit: THB Million

171129

31

53

0

50

100

150

200

250

300

350

400

450

500

Q1'2019 Q2'2019

Domestic Overseas

182

Unit: THB Million

258

129

101

53

0

50

100

150

200

250

300

350

400

450

500

1H'2018 1H'2019

Domestic Overseas

359

182

-49%

-50%

-47%

28%

72%

29%71%

16%

84%

Revenue from sales (YoY)

-10%

-25%

202

29%

71%

71%

5


Revenue from sales (QoQ)

Unit: THB Million Unit: THB Million

0

50, 000, 000

100, 000, 000

150, 000, 000

200, 000, 000

250, 000, 000

300, 000, 000

1H 2018 1H 2019

Revenue from sales (6M YoY)

-24%

-62%

-57%

- 20,0 00,00 0

0

20, 000, 000

40, 000, 000

60, 000, 000

80, 000, 000

100, 000, 000

120, 000, 000

140, 000, 000

160, 000, 000

Q1 2019 Q2 2019

-103% -36%

-12%

34%

23%

6

Inbound Tourist Outlook

Source: Ministry of Tourism and Sports

Number of Inbound Tourist

7.006.11

8.006.44

3.17

2.76

3.12

2.53

0. 00

2. 00

4. 00

6. 00

8. 00

10. 00

12. 00

Q1'2018 Q2'2018 Q1'2019 Q2'2019Other Countries China

10.17

8.87

Unit: Million

Revenue from Inbound Tourist

395,916

293,602

401,269

275,904

175,724

147,738

172,530

138,614

0

100, 000

200, 000

300, 000

400, 000

500, 000

600, 000

700, 000

Q1'2018 Q2'2018 Q1'2019 Q2'2019Other Countries China

571,640

Unit: THB Million

573,798

Unit: Million

Jan Dec

0.86 0.79 0.79 0.75 0.76 0.760.87 0.89

0.76 0.81 0.79 0.82

0.971.2

1 0.990.87 0.9 0.94 0.87

0.64 0.65 0.680.84

0.5

1

1.5

0.5

1

1.5

NUMBER OF CHINESE TOURIST

2017 2018 2019

11.12

488,129

8.97

448,433-19%

-22%-17%

-20%

7

248

349 375

543

412

222

118

56.7%

36.4%

30.3%

32.5% 33.0%30.2% 30.7%

2014 2015 2016 2017 2018 1H 2018 1H 2019

Raw material and Packaging Freight Labor Depreciation Others % of Sales

Cost of goods sold 1H 2019

COGS

Unit: THB Million

190

608

862

1131

837

512

267

43.3%

63.6%

69.7%67.6% 67.0%

69.8% 69.4%

2014 2015 2016 2017 2018 1H 2018 1H 2019

Gross Profit % Gross Margin

Gross Profit

Unit: THB Million

8

Selling & administrative expenses 1H 2019

147

331 319

581

510

263

201

33.6% 34.6%

26.5%

34.7%

40.9%35.9%

52.2%

-50.0%

-30.0%

-10.0%

10.0%

30.0%

50.0%

70.0%

2014 2015 2016 2017 2018 1H 2018 1H 2019

Advertising and Promotional Employee Costs Freight Others % of Sales

Selling Expense

Unit: THB Million

730

87

135159

34 40

1.7% 3.2%

7.2% 8.1%

12.2%8.8%

18.5%

-50.0%

-40.0%

-30.0%

-20.0%

-10.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

2014 2015 2016 2017 2018 Q1 2018 Q1 2019

Employee Cost Miscellaneous Depreciation and amortization

Tax and other fee Others % Gross Margin

Administrative Expense

Unit: THB Million

9

Before IPO

Profitability 1H 2019

6.3%

20.3%

27.0%

20.8%

14.2%

22.9%

2.6%

-50.0%

-40.0%

-30.0%

-20.0%

-10.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

2014 2015 2016 2017 2018 1H 2018 1H 2019

Net Profit % of Sales

Net Profit

Unit: THB Million

5.00

17.60

2.300.57 1.49 0.55 0.01

2014 2015 2016 2017 2018 1H 2018 1H 2019

EPS

EPS

Unit: THB Per Share

10

Leading local skin care company in

Thai market, owner of

NAMULIFE SNAILWHITE,

Oxe’Cure, PRETTii FACE and SoS

11Source: The Nielsen Company* : Weighted Distribution

We are a top-of-mind brand in Thailand

Market Share of

Facial Moisturizer2017: 3.8%

2018 :4.3%

1H 2019 : 3.0%

No. 9in Thailand

Market Share

2017 : 5.0%

2018 : 4.1%

1H 2019 : 2.3%

Supermarket/Hypermarket

No. 10in Supermarket/

Hypermarket

No. 7in Convenience

Stores

Market Share

2017: 3.0%

2018: 6.6%

1H 2019 : 5.6%

Convenience Stores Open Trade

Market Share

2017 : N/A

2018 : 0.3%

1H 2019 : 0.4%

Main

Business

No. 14in Convenience

Stores

12Note : Information as of 1 Sep 2019

New Product

Extensive Product Portfolio Covering Five Categories of Skincare

21 Products43 SKUs

6 Products12 SKUs

4 Products4 SKU

1 Products1 SKU

Official Launched Jun 2019

17

2023To be top 3 market leader in Thai facial skin care

2038To be top 3 market leader in Asian facial skin care

2030To be top 3 market leader in ASEAN facial skin care

Mission Statement

18

1.Modern TradeMarket size: THB 34,468 mm

2.Traditional TradeMarket size: THB 30,560 mm

3.Inbound TouristMarket size: THB 9,728 mm

4.Export

Channels Growing the market share

19

Growing the market share


1.Modern TradePOS: 13,000 / 15,000

Market size : THB 34,468 mm

Expand from online channel to mainstream

Focus on CVS over Thailand within 2019

New Brand launch on Mar 2019,

List-in Modern Trade Channel (Focus on specialty Store)

Expand to new modern trade store (Focus on Drug Store)

Domestic penetration over 85%

PENETRATION

Channels

20



2.Traditional TradePOS: 5,000 / 400,000

Market size: THB 30,560 mm

PENETRATION

Market Share

Distribution 72%

28%

Leader in TT channel*

At the end of Sep 2018*

1%

2% - 3%

Rooms for improvement

5%

30%

Target - 2023

Channels

21





PENETRATION

Expand penetration in traditional

trade channel

Strengthen relationship with

upcountry distribution centers

Direct communication to target

customers

1

2

3

1%

2% - 3%

Rooms for improvement

5%

30%

Target - 2023

Channels

22





Wholesalers, retailer and mom-and-pop store in upcountry

Expand penetration

and build relationship

with wholesalers,

retailer in upcountry

Channels

23





Direct communication to target customers

Communication for TT Channel

SNAILWHITE roadshow in

Northeastern part of Thailand

Channels

24



3.Inbound TouristKing Power DFS: 8 / 9


CHANNEL COVERAGEIncrease point of sale in tourist attractions to

capture more potential customers

Revenue from Inbound Tourist

THB mm 2017 2018

1. Bangkok 596,281 681,329

2. Phuket 374,902 424,565

3. Chonburi 191,403 218,431

4. Surat Thani 75,326 85,884

5. Krabi 68,460 78,834

Channels

25



4.Export

CHINADistribution model

• Available only in Online

Channel (VIP, TAOBAO,JD)

• 4 Products with CFDA

• Created brand awareness

via online campaign with

beauty influencers

HONGKOKGDistribution model

• Available in Watsons,

SASA and Mannings Store

• Created brand awareness

via online channel and out

of home media s

PHILIPPINESPartnership Model

• Available in Watsons 330 stores

• Launch campaign “Unlock

Beauty” with Beauty influencers

to created brand awareness

Channels

26

Philippines

27

Philippines

B I L L B O A R D S A N D M A L L M A R K E T I N G

28

Philippines

S N A I L W H I T E S T U D I O :

W O K E U P L I K E T H I S P O R T R A I T S

29

Philippines

P R E S S A N D C O N T E N T F E A T U R E S

30

Philippines

A W A R D S

• Most Successful New Brand Of The Year (Beauty)

• Most Promising New Product Of The Year

“SNAILWHITE WHIPP SOAP”

• Best Exclusive Product Of The Year

31

Growth Drivers 2019

PhilippinesCreate Brand Awareness and

Expand Distribution Channel

New Product/Brand LaunchTotal New 8 Products, 13 SKUs

Traditional Trade ChannelExpand Distribution Coverage from 2% to 5%

Increase point of sales in top tourist provinces

32

Do Day Dream is still young. We have a big dream.

We never stop growing to be the market leader.

Road to 2023Mission: Top 3 market leader in Thai facial skin care in 2023(current: No. 6 as of 2018)

To be top 3: Gain at least 12% market share(current market share 4.3% as of 2018)

How to grow the market share: Domestic channels / new country / new product

• Modern Trade: Increase variety of products

• Traditional Trade: Increase penetration (from 1% to target 30%)

• Inbound Tourist: Effective communication tools

(airport WI-FI, KOL) and Increase present in tourist provinces

• Export: New overseas subsidiaries and distributors

33

TABLE OF CONTENTS

Appendix

34

Appendix: Financial position

(THB mn) Dec 31, 2017 Dec 31, 2018 31 Mar, 2019 30 Jun 2019

Cash and cash equivalents 4,388.52 1,774.48 1,212.31 1,452.97

Current investments-

2,399.56 2,903.01 2,510.90

Trade accounts receivable and other receivables 429.18 265.89 249.10 238.46

Inventories 291.68 391.58 397.72 384.28

Property, plant and equipment 278.56 274.22 266.80 262.04

Intangible assets 16.50 108.83 108.24 107.62

Other 56.05 63.64 37.62 41.70

Total Assets 5,460.49 5,248.20 5,174.80 4,997.97

Short-term loans from financial institutions 267.14 - - -

Trade accounts payable and other payables 309.28 156.90 146.31 150.78

Long-term loans from financial institutions 68.19 91.20 - -

Other 29.39 17.38 29.79 18.29

Total liabilities 674.00 265.48 176.10 169.07

Issued and paid-up share capital 316.00 317.89 317.89 317.89

Share premium on ordinary shares 4,347.91 4,399.86 4,399.86 4,399.86

Retained earnings (Inc. legal reserve) 154.29 269.34 288.28 118.26

Other (31.71) (4.37) (7.33) (7.11)

Total equity 4,786.49 4,982.72 4,998.70 4,828.90

Total liabilities and equity 5,460.49 5,248.20 5,174.80 4,997.97

Balance Sheet

• Assets

Cash spent as working capital to

acquire other assets such as higher

inventories or loan payments to

financial institutions mainly

contributed to the decline in total

assets.

• Liabilities

Total liabilities fell as short-term loans

from financial institutions and trade

payables and other payables

dropped.

• Equity

The increase in shareholders’ equity

was mainly caused by the Company’s

retained earnings from the Company’s

performance.

35

Appendix: Profit and loss statement

Statements of comprehensive income

Year ended December 31, Quarter ended (3 months)

(THB mn) 2016 2017 2018 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019

Revenues

Sales 1,236.8 1,674.4 1,249.6 355.2 517.2 384.0 418.0 374.3 359.2 249.8 266.3 202.23 182.19

Domestic sales 1,090.7 1,161.7 982.2 262.3 298.6 237.6 380.4 299.1 258.5 207.8 216.7 170.86 127.13

Export sales 146.2 512.8 267.4 92.9 218.6 146.4 37.6 75.2 100.7 41.9 49.6 31.37 55.06

Service income 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Other income 3.2 9.8 54.4 3.7 1.7 1.8 2.7 12.3 19.8 11.2 11.0 15.23 16.95

Total revenues 1,240.2 1,684.3 1,304.0 358.9 518.9 385.8 420.7 386.6 379.0 261.0 277.3 217.46 199.14

Expenses

Cost of sales 374.8 534.9 412.3 110.5 148.0 139.0 145.8 101.0 120.7 97.7 92.9 54.04 63.78

Selling expenses 354.5 580.9 510.5 146.2 146.6 147.4 140.6 119.6 143.4 108.7 138.8 97.10 103.41

Administrative expenses 87.1 143.4 158.7 23.8 39.2 41.9 30.1 34.1 41.1 52.0 31.5 40.14 42.50

Total expenses 816.4 1,259.2 1,081.6 280.5 333.8 328.3 316.4 254.7 305.2 258.4 263.2 191.28 209.68

Profit before finance cost and

CIT

423.8 425.1 222.4 78.4 185.1 57.5 104.3 131.9 73.8 2.6 14.1 26.18 (10.54)

Finance cost (5.8) (12.0) (9.5) (2.8) (3.1) (3.4) (2.7) (3.2) (2.9) (2.2) (1.2) (0.51) (0.04)

Profit before CIT 418.0 413.1 212.9 75.6 181.8 54.1 101.6 128.7 70.9 0.4 12.9 25.67 (10.58)

Income tax (82.8) (62.1) (28.4) (13.2) (35.2) (9.6) (4.1) (16.6) (7.9) (0.2) (3.7) (6.33) 2.06

Profit for the year 335.2 351 184.5 62.4 146.6 44.4 97.5 112.1 63.0 0.2 9.2 19.34 (8.52)

Earning per share (Adj.) 2.34 1.50 0.58 0.28 0.65 0.19 0.38 0.35 0.20 (0.002) 0.03 0.06 (0.03)

36

Key Financial Ratio 2017 2018 Q1 2019 Q2 2019

Days Sales Outstanding (days) 64 93 97 103

Days Inventories on Hand (days) 187 299 657 589

Days Inventories on Hand (FG) (days)

48 101 242 225

Days Payable Outstanding (days) 76 76 80 84

Cash Cycle (days) 175 316 674 601

84

136 139 1399

7 16 20

60

6267 61

133

180170 158

5

6 66

31 Dec 17 31 Dec 18 31 Mar 19 30 Jun 19

FG Semi-FG Raw Material Packaging Supply and other

292

391

Unit: Million baht

Packaging -7%

A

B

C

DSO increased due to revenue from sale declined

dramatically at 25% from last year

DIO significant changed came from the increasing

of inventories

2018, FG decreased QoQ but Packaging increased

due to new product launch in Q4

Inventories

397-3%

Appendix: Cash Cycle

384

37

Online

Cross-border e-commerce

CHINA

Not required CFDA

Mainstream

online platform

Required CFDA

• Market size is much bigger than

Cross-border e-commerce.

• Allow wholesale transaction

• Lower transportation cost due

to the bundle shipments

• Cross-border is temporary

which is subject to change

according to Chinses policy.

• Not eligible for wholesale

transaction

Offline

Required CFDA

• Currently in talk with one of the

distributors

ALREADY

ENTERED

Main benefits of CFDA

• More easily accessible

in Mainstream online

platform and offline

channels which the market is much bigger

than Cross-border e-

commerce alone

• No risk from the policy

change of Cross-border e-commerce

NAMU LIFE

SNAILWHITE

SYN-AKE MIST

Q3 2018

NAMU LIFE

SNAILWHITE

WHIPP SOAP

Q1 2018

NAMU LIFE

SNAILWHITE

CLEANSING

Q1 2018

NAMU LIFE

SNAILWHITE

FACIAL CREAM

Q1 2018

Appendix: China outlook

Products with CFDA

38

THAILAND

SINGAPORE

INTERNATIONAL

Parent and subsidiaries

DO DAY DREAM

Intermediary in trading

with foreign customers

DO DAY DREAM TRADING

100%

Investment arm for

overseas businesses

DO DAY DREAM HOLDING

100%

Domestic Distributor

NAMU LIFE PLUS

100%

International Headquarter

DO INFINITE DREAM

100%

Dermatological Skincare

DREAM DERMATOLOGY

95%

Skincare for millennials

SKIN MAKE SMILES

70%

Future potential partners to do

overseas business

POTENTIAL PARTNERS

Philippines Distributors

DO DAY DREAM PHILLIPPINES

CORPORATION

51%

Appendix: Company structure and shareholding structure

39

Thailand Market Outlook

29.7

46.1

66.65.3

6.7

7.8

13.7

18.7

23.8

5.1

8.5

11.1

2.2

4.2

7

2012 2017 2022F

Thailand Skincare Market Size

Facial Care Body Care Facial Cleasers Body Cleasing Sunscreen

Unit: THB Billion

7%

Facial Care 7.64%

Sunscreen 10.59%

Body Care 3.03%

Facial Cleansers 4.95%

Body Cleansing 5.46%

2017 -2022F CAGR Consumer Trend

• Consumers are now seeking sachet as both

trial and regular products which allow them to

try a new variants easily

• Consumers are shifting away from chemical-

containing products as they perceive natural

ingredients to be beneficial for skin care

• Aging Society in Thailand supports the

growth for anti-aging segment

Source: Euromonitor

Anti-agingUV/Whitening

Basic Care

Oil Control

116

52

84

40

Philippines

Philippines Market Outlook

5.98

10.9

7.2

9.5

126.6

8.6

10.1

1.2

1.6

1.9

0.2

0.4

0.6

2012 2017 2022F

Philippines Skincare Market Size

Facial Care Body Care Facial Cleasers Body Cleasing Sunscreen

Unit: THB Billion

5%

Facial Care 6.38%

Sunscreen 8.72%

Body Care 4.82%

Facial Cleansers 3.21%

Body Cleansing 2.78%

2017 -2022F CAGRConsumer Trend

• Consumer’s desire to improve

their looks was reflected in their

ongoing acceptance of global

trends, together with increasing

purchasing power.

• Consumer are not only adding

more such products to their daily

skin care routines but are also

trying out different formats

• High income consumers look for

more effective and gentler

products

Source: Euromonitor

35

28

21

CONTACT US

DO DAY DREAM PLC.

Investor Relations Department

Tel: +662-917-1219

Fax: +662-917-3054

Email: [email protected]

Website: www.dodaydream.com

Contact person

Ms. Chanoknan Thiemrat (Investor Relations)

Email: [email protected]

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