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



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




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


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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


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Agenda

I. Company Overview




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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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Concert TV3

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Concert TV3

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แฟนพันธุแท

ตูเย็นซิงเกอร

ป 2552

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I. Company Overview



Financial Performance

Agenda


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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

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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

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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

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Liabilities653

257

427

654

482

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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

1st Half 2008 Performance Review - listed...

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