Post on 10-Jun-2020
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These materials have been prepared solely for the use at the presentation by Biostime International Holdings Limited (“the Company”) and
have not been independently verified. No representation or warranty, expressed or implied, is made and no reliance should be placed on
the accuracy, fairness, correctness or completeness of the information presented or contained in these materials. The Company or any of
its affiliates, advisers or representatives accepts no liability whatsoever for any loss howsoever arising from any information presented or
contained in these materials. The information presented or contained in these materials is subject to change without notice and its
accuracy is not guaranteed.
These materials contain certain forward-looking statements with respect to the Company, including its beliefs and expectations about the
future as at the date of this presentation. These forward-looking statements are based on a number of assumptions regarding the
Company's operations and factors beyond the Company's control, including but not limited to, the political and economic environment in
which the Company and its subsidiaries will operate in the future. Our actual results of operations, financial condition or business
prospects may differ materially from those expressed or implied in these forward-looking statements for a variety of reasons and as such,
no reliance should be placed on these forward-looking statements. The Company and its affiliates, advisors and representatives undertake
no obligation to update these forward-looking statements for events or circumstances that occur subsequent to such dates. This
presentation does not constitute or form part of any offer for sale or invitation, or solicitation of an offer to subscribe for or purchase any
securities in the United States, Hong Kong or anywhere else. No part of this presentation shall form the basis of or be relied upon in
connection with any contract or commitment whatsoever. The information of the presentation should not be relied upon as representation
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redistributed to any other person (whether within or outside your organization/firm) in any manner. You agree to treat the contents of this
presentation and these materials as strictly confidential.
Disclaimer
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Presentation Team
Mr. Luo Fei Chairman & CEO
Mr. Adem Karafili COO, Swisse Wellness Group
Mr. Jason Wang Chief Financial Officer
Presenter Title
Ms. Laetitia GarnierGeneral Manager of Group Strategy
and International Business
Ms. Joy Tsai Investor Relations Director
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Key Financial Information
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(RMB million) For the six months ended 30 June
2016 20151 Change (%)
Revenue 3,008.3 1,962.9 53.3%
EBITDA2,3 949.9 295.2 221.8%
Net profit3 404.9 205.0 97.6%
Operating cash flow 551.4 147.4 274.0%
Basic EPS RMB 0.57 RMB 0.34 67.6%
2016 Interim Results Highlights
Notes:
1. Swisse Wellness was acquired in October 2015 and its financial results were not included in 1H 2015
2. EBITDA stands for earnings before interest (net of interest income and finance cost), taxes, depreciation and amortization
3. The net profit and EBITDA for the six months ended 30 June 2016 included foreign exchange gain of RMB 91.3 million, and the net profit
and EBITDA of same period in 2015 included foreign exchange loss of RMB 11.5 million
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Revenue and EBITDA Contribution by Segment
1H 2016 Revenue Mix
57.3%
42.7%
Baby nutrition and care ("BNC")
Adult nutrition and care ("ANC")
47.5%
52.5%
Baby nutrition and care ("BNC")
Adult nutrition and care ("ANC")
1H 2016 EBITDA Mix
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Business Review
Wide range of products targeting different age groups
Pregnancy Infants
Biostime
ADiMIL
Biostime
ADiMIL
Adults
Healthy Times Organic
Swisse Wellness
BM Care
ADIMAMA
Premium
Nutritional Milk
Milk Calcium
Chewable Tablet
Premium
Nutritional
Milk
Premium formula
Specialty formula Baby diapers Baby shower care Baby wipes
Baby
cereal
Teddy
puffs
Baby biscuits
Baby food
Ultivite multivitamin
Ultiboost
Superfoods
Active Skincare
Probiotic sachetsDried Baby Food
Swisse Wellness
Kids supplement
Swisse
Pregnancy
ultivite
Baby care
Innovative All-round Premium Nutrition and Care Provider for
the Entire Family
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13.1%
8.1%
7.9%
7.7%
6.3%
14.3%12.3%
9.5%7.4% 7.3%
5.8% 4.8% 4.8% 3.9% 3.4%
#6 IMF player with leadership in the super premium category
33.1%
18.0%
13.5%
6.9%
4.4%
Source: Nielsen 1H 2016 report
#3 in overall IMF sales in baby stores #3 in supreme tier infant formula market
Biostime is a Leading Premium Infant Nutrition and Care
Provider in China
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Swisse Wellness – Market Leader in Australian and Chinese
Markets with Strong Brand Recognition
#1 in Australia VHMS1
Notes:
1 Source:IRI Worldwide
2 Source : Market Engine 1H 2016 Report. Sales on Alibaba platform for the six months ended 30 June 2016 (RMB million).
18.3% 17.2%
7.8% 6.6% 5.4%
346
234182
119 118 94 86 85 73 72
#1 in Online China VHMS2
Market Performance in Chinese Market
Cross-border O2O: offline display in Chinese stores and sold through
Mama100 online platform
Opened 1st flagship store on Tmall and established strategic partnerships
with leading CBEC platforms (JD.com, Netease Kaola, VIP.com, etc.)
#1 brand in the healthcare category on both Tmall and Taobao platforms
Focus on strengthening brand awareness through passive sales and global
brand ambassadors including Nicole Kidman
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(RMB million)
Activate official sales through cross-border e-commerce (CBEC), achieving 16.7% of total Swisse net
sales in Q2.
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Biostime Group is Committed to Establish a Global Footprint
while Leveraging a Strong Base in China
Strong Footprint across China
Beijing
Shanghai
Guangzhou
Headquarter
Global Distribution Network
As of 30 June 2016, BNC’s1 presence in Chinese market includes:
613 regional distributors
Over 38,820 points of sale, including 27,524 specialty stores, 6,056 supermarkets and 5,240 VIP
pharmacies
Markets operated by PGT Launch time
Singapore March 2015
United Kingdom October 2015
Italy February 2016
Netherlands May 2016
Note:
1. Baby Nutrition and Care11
Recent Marketing Campaigns and Consumer EducationAngry Birds Campaign (愤怒的小鸟”合”你一起玩) May - July 2016
OfflineRoadshow
TVCPlacement
E-commerce MAMA 100
Leveraging the premiere of Angry Birds Movie
and Angry Birds’ identity, we initiated a series
of marketing activities including customized
TV commercial, in-store promotions, product
education, etc.
+
The campaign was well-received by
consumers and has achieved over 1.9 billion
views across online TV, television and movie
theaters
+
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Recent Marketing Campaigns and Consumer EducationMother’s Day Campaign (女神妈妈季), March – May 2016
+ Launched “Goddess Moms” campaign to encourage
busy mothers to pursue their own health and well-
being
Mini-movie by Athena Chu (朱茵) successfully drove
word-of-mouth via engagement and sharing of her
personal experiences
+
Biostime x Athena Chu mini-movie
Documentary of Biostime’s Normandy milk source
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+
This helped to promote Biostime’s commitment to superior and premium quality ingredients,
further building the brand and developing consumer trust across countries
Recent Marketing Campaigns and Consumer EducationMother’s Day Campaign (女神妈妈季), March – May 2016
+
Effective communication with consumers on product quality via product experience
activities with consumers in China coupled with consumer visits to products sourcing base
in Normandy, France
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Recent
Developments
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Source: Nielsen 1H 2016 Report
The Positive Effect of Two-Child Policy is Expected to Emerge in 2017
Opportunity and Challenge in Chinese IMF Market
Introduction of New IMF Policies to Accelerate Market Consolidation
5.66 5.83
3.93
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Incremental Second New-Borns (million)
Since 2013, the Government has frequently implemented infant milk safety rules to strengthen
consumer confidence in domestic IMF brands
Impact from the newly released IMF recipes registration rules:
Number of products and formulas to decrease
Smaller players to exit the market through inventory clearance
Stricter monitoring of product labeling and functional description
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New Organic IMF Products to be Launched
Biostime plans to launch organic IMF products under
Healthy Times brand at the end of this year
To tap into fast growing organic segment with
internationally recognized organic brand
To maintain high quality product standards to
promote infant health
+
+
+ To align with long-term business growth and
continue product innovation
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Regulatory changes
announced in 2Q 2016
VHMS: Regulatory Uncertainty Has Impacted Supply,
However, Underlying Consumer Demand for Swisse Products
Remains Strong
Supply side
impacted
Swisse well placed to
grow China sales
In April 2016, Chinese
authorities released key
changes to the regulation of
imported products
New measures for health
food
Positive Lists
Import taxation
Chinese authorities
subsequently announced a
one-year transitional period,
delaying enforcement of the
regulations until May 2017
Proposed new regulations have
impacted the China passive
sales and cross border trades
Widespread passive distributor
destocking more prolonged than
expected
Destocking has impacted
broader cross border buying
activities
Decreased number of Taobao
resellers, with many Daigou
exiting the category
There is some uncertainty
around the length of this impact,
however, recent scan data
suggests potential stabilisation
Underlying Chinese consumer
demand for Swisse products
remains strong
Maintained No. 1 VHMS
market share on Alibaba1 and
is No.1 brand in healthcare
category on Tmall and Taobao
platforms
Filing and registration process
for offline strategy expected to
deliver a compelling SKU
range of conventional food
products by December 2016
Passive resellers remaining
are sophisticated syndicates
Note:
1.Six months to 30 June 2016
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Swisse Officially Launched in China with a Gala Event Hosted
by Nicole Kidman
Swisse officially launched its brand to the
Chinese market in July 2016
Gala event hosted by Swisse global ambassador
Nicole Kidman in Shanghai
Attended by media, retail executives, senior
Government officials, local social media influencers
100% of media coverage was positive
Since launch,108.5 million media impressions equal
to RMB12.22 million advertising value
Record sales on Tmall following launch
Large scale marketing supporting new
channels
22% increase in market share on Tmall up until day
prior to event (14 July)
Record day on Tmall store following event with
approximately RMB 1 million sales
Over 50% week-on-week increase in scan (over the
subsequent month)
Record day on Tmall flagship store for 8 August
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Swisse’s Partnership with Arnold Classic Asia will Build Brand
Awareness and Promote Our Premium Sports Nutrition Category
Key health event in China
19-20 August in Hong Kong
Supporting launch of Sports
Nutrition range and promoting
VHMS range via multi-channel
marketing strategy
TMALL LIVE SHOW
3.5 hrs exclusive live show on TMall
promoting Sports Nutrition range
ONLINE PROMOTIONS
Promotional advertising across Tmall,
JD, VIP, Weibo, Wechat
SWISSE BOOTH
Interactive sessions educating
attendees about Swisse’s products
Swisse is the “Official Natural Health Partner of Arnold Classic Asia”
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Sponsorship & Partnerships
Strategic Partnerships with
Australian Olympic & Paralympic
Teams
Partner of the Australian Olympic
Committee since 2012
Event/TV
Media partnership with the TV
network that has exclusive coverage
rights within Australia
Commercials, including first 60
seconds commercial aired during the
Opening Ceremony with an
Australian audience of over 2.2M
people
Vignettes during ambassador events
Advertising
Digital outdoor advertising across
Australia
Print & Press advertisements
Ambassadors
14 Olympic & Paralympic
Ambassadors
PR campaign
PR & editorial pieces reaching
circulation of over 21.5M to date
Content pieces, daily videos &
blogposts
Social posts reaching over 3M+
people to date
Point of sale
In-store activities featuring Swisse
ambassadors and customer
promotions
Olympic-themed Duty Free Pop-up
Store at Sydney Airport
Swisse’s Support of the Australian Olympic and Paralympic
Teams is a Long Term Strategic Brand Investment 2016 Rio Olympics is Swisse’s Largest Ever 360˚ Brand Marketing Campaign
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Swisse Was an Official Partner of NetEase Champion House
for the Rio Olympics
Swisse advertising on NetEase digital, broadcast
and mobile channels reached over 514M people
Swisse products displayed in Champion House
Gift box presented to Chinese athletes
Swisse mentioned by host during interviews with Chinese
athletes
Interview with Swisse Olympic Ambassadors
Resulted in over 100% increase in Kaola sales during
coverage
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Additional
Financial Information
Gross Profit Margin by Products
1H 2016 1H 2015
% of total revenue Gross Profit Margin % of total revenue Gross Profit Margin
Baby Nutrition and Care 57.3% 65.4% 100.0% 58.2%
---Infant Formulas 48.5% 65.5% 86.5% 58.6%
--Other Pediatric Products 8.8% 64.3% 13.5% 55.7%
Adult Nutrition and Care1 42.7% 62.4% — —
Total 100.0% 64.1% 100.0% 58.2%
Gross Margin Analysis
Note:
1. Swisse Wellness was acquired in October 2015 and its financial results were not included in 1H 2015
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746.2
954.7
1H 2015 1H 2016
(RMB million)
38.0%
31.7%
1H 2015 1H 2016
S&D Expenses Ratio of Sales Selling and Distribution Expenses
Selling and Distribution Expenses
2525
4.1%
5.5%
1H 2015 1H 2016
(RMB million)
Administrative Expenses
Ratio of Sales
Administrative Expenses
80.2
165.4
1H 2015 1H 2016
Administrative Expenses
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156 154
1H 2015 1H 2016
2
31
1H 2015 1H 2016
54
1H 2015 1H 2016
Trade and Bills Receivables Turnover Days (1)
Inventory Turnover Days (2)
Trade Payables Turnover Days (3)
Notes:
1. Turnover days of trade and bills receivables is derived by dividing the arithmetic mean of the opening and closing balances of trade and bills receivables for the
relevant period by turnover and multiplying by 180 days. Turnover days of trade and bills receivables excluding Swisse is 1 day at 30 June 2016.
2. Turnover days of inventory is derived by dividing the arithmetic mean of the opening and closing balances of inventory for the relevant period by cost of sales
multiplying 180 days.
3. Turnover days of trade payables is derived by dividing the arithmetic mean of opening and closing balances of trade payables, for the relevant period by cost of sales
and multiplying by 180 days.
Working Capital Management
100
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Operating Cash Flow Inventory Balance Cash Balance
856.2
990.9
937.4 1,032.0
331.0
650.4
1,927 1,132.5
Pledged deposits
Time deposits
Cash and bank balances
147.4
551.4
1H 2015 1H 2016
Cash Flow
31 Dec 2015 31 Dec 2015
3,195.4
2,814.9
(RMB millions) (RMB millions) (RMB millions)
30 June 2016 30 June 2016
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Q&A Section
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