Company Presentation Doh ohom ome Public lic Com ompany any Limi mited ted 10 March 2020
Table of Contents 1 Dohome Business Overview 2 Operating Results for FY2019 3 Business Outlook 1
Dohome Business Overview
Dohome Business Overview As of 31 December 2019 Target Customer Group One-stop Home Products Destination International Suppliers Domestic Suppliers End-users Resellers Contractors Government (Retail) (Wholesale) and Projects Agencies and State Enterprise Home Products Services & Solution Retail Space (226,029 sq.m.) Warehouse Space (255,178 sq.m.) Branches Delivery Service Repair and Maintenance Service Home Installation Service 10 5 branches in operation branches in operation 6 85 Design Center new branches within 2021 new branches within 2021 Dohome Dohome To Go Special Order Sales Team Call Center and Telesales 3 Website 3
Operating Results for FY2019
P&L Summary FY2018 FY2019 Changes THB mm % THB mm % THB mm % 18,445.4 99.5 17,868.7 99.4 -576.7 -3.1 Revenue from sales and services 89.8 0.5 103.1 0.6 13.3 14.8 Other incomes 18,535.2 100.0 17,971.8 100.0 -563.4 -3.0 Total revenue 15,760.9 85.0 14,910.7 83.0 -850.1 -5.4 COGS (1) 2,684.5 14.6 2,958.0 16.6 273.5 10.2 Gross profit 1,907.0 10.3 1,879.1 10.5 -27.9 -1.5 Selling & Administrative expenses 1.4 0.0 26.3 0.2 25.0 1,854.1 Other expenses 866.0 4.7 1,155.7 6.4 289.7 33.5 EBIT 320.2 1.7 298.0 1.7 -22.2 -6.9 Interest expenses 107.0 0.6 132.1 0.7 42.4 39.6 Tax expenses 438.8 2.4 725.5 4.0 269.5 61.4 Net income 387.9 2.1 407.8 2.3 19.9 5.1 Depreciation & Amortization 1,253.8 6.8 1,563.4 8.7 309.6 24.7 EBITDA Note: (1) Gross profit margin calculated based on revenue from sales and services 5
Revenue Breakdown by Product Group % to revenues from sales and services 16% 17% 18% 36% 35% 37% 48% 47% 44% 2017 2018 2019 Construction Materials Repair & Maintenance Home Decoration Key Changes ◼ In term of revenue breakdown by product group, the FY2019’s revenue from construction material dropped 10.5% YoY while other product groups’ revenue showed growth at 2.8% - 5.7% YoY. Thus, revenue contribution from construction material dropped from 48% in 2018 to 44% in 2019. ◼ As a result, product mix shifting towards more contribution to the repair & maintenance and home decoration product group which have higher margin leads to overall Gross Profit Margin slightly improved. 6
Revenue from Sales and Services THB mm 0.2% -0.7% -2.6% -2.5% -3.1% 18,576 18,445 17,869 4,436 4,325 2017 2018 2019 4Q2018 4Q2019 Annual Revenue from Sales and Services Growth Quarter Revenue from Sales and Services Key Changes FY2019’s total revenue from sales and services was down by 3.1% YoY, which was driven by the decrease in ◼ revenues from matured branches due to the slowdown in the country’s economic conditions, competitive landscape in the industry, and the big flooding in Ubon Ratchathani in September 2019 that negatively affected the sales in Ubon Ratchathani branch. For all the reason above, same store sales growth (1) has been declined at 5.3% in 2019. Moreover, the big flooding ◼ also affected the overall same store sales in 3Q2019 to decreased by 8.2% YoY. However, negative same store sales growth solely comes from construction material product group revenue, whereas repair & maintenance and decoration product group revenue sees a positive growth. Furthermore, revenues from branches in the ramp-up phase continued to increase, especially from Bangna branch ◼ which completed its first full-year operation in 2019 and from Phetkasem Branch which opened in November 2019. Note: (1) same store sales growth is considered only the revenue from branch which completed its full year operation. 7
Gross Profit and Gross Profit Margin THB mm / % to revenues from sales and services 16.9% 16.6% 16.2% 14.6% 13.4% 3,017 2,958 2,684 732 594 2017 2018 2019 4Q2018 4Q2019 Annual Gross Profit Gross Profit Margin Quarter Gross Profit Key Changes Gross Profit Margin increased from 14.6% in 2018 to 16.6% in 2019 due to: Revenue contribution from house brand expanded from 14.4% in 2018 to 16.0% in 2019 which is in conjunction ◼ with the company’s strategy to achieve 20% house brand revenue contribution by 2022 The increase in the gross profit margin of both house brand and non-house brand products ◼ An effectively managing inventory and internal policy results in the reversal of provision for obsolete and slow- ◼ moving inventory An increase in revenue from distribution center which started to cover cost ◼ Higher contribution from repair & maintenance and decoration product group ◼ 8
High Quality House Brand Products House Brand Products Revenue Contribution from House Brand ◼ The company gives high % to revenues from sales and services importance to product sourcing in order to obtain quality products at competitive prices ◼ The company has a House Brand development team to 16.7% 16.0% 14.4% 14.6% help ensure that a variety of product options are available for customers ◼ Conduct research to study the needs of customers and 2018 2019 4Q2018 4Q2019 the competitive landscape in the market in order to House Brand Product Examples optimize product selection ◼ House Brand product procured only from qualified suppliers, both domestically and internationally ◼ High-quality products meeting product standards with over 130 certifications issued by Thai Industrial Standard 9
High Quality House Brand Products Examples of House Brand Products with Thai Industrial Standards 10
Distribution Center Distribution Center Inventory Management at the Distribution Center Located in Pathum Thani and began operation in ◼ June 2018 Suppliers Store Total warehouse area of 41,580 sq.m. ◼ Functions: ◼ Receiving inventory ◼ Picking inventory ◼ Dispatching Inventory to customers and branches ◼ Revenue from distribution center started to be higher ◼ than cost which would reduce COGS Receiving Cross dock Picking Dispatching Customers Stores 11
Managing the Slow-Moving Inventory In 2019, Dohome managed the slow- moving inventory more efficient by launching the promotions and marketing campaigns on the slow moving goods throughout the year and especially in Dohome Fair big sale in December 2019. 12
Increase Other Income by Managing Leasable Space The Company efficiently managed leasable space both retail and warehouse area to increase rental income. Retail Area: Bang Bua Thong 13
Increase Other Income by Managing Leasable Space Retail Area: Chiang Mai 14
Increase Other Income by Managing Leasable Space Retail Area: Bangna 15
Increase Other Income by Managing Leasable Space Retail Area: Nakhon Ratchasima Retail Area: Udon Thani 16
Increase Other Income by Managing Leasable Space Retail Area: Phetkasem 17
Increase Other Income by Managing Leasable Space Warehouse Area: Phetkasem Udon Thani Rama 2 Chiang Mai Khon Kaen Bang Bua Thong Bangna 18
SG&A Expense THB mm / % to revenues from sales and services 11.2% 10.7% 10.3% 10.5% 8.7% 1,880 1,907 33 10 1,614 353 375 (6) 266 160 93 147 162 85 163 369 364 333 252 223 144 486 474 (2) (13) 101 89 28 35 35 644 643 41 623 93 92 62 56 160 166 2017 2018 2019 4Q2018 4Q2019 Selling Employee Expense Admin Employee Expense Depreciation and Amortization Delivery Expense Marketing Expense Others SG&A to Revenue from Sales and Services Allowance for bad debt (reverse ) Key Changes Selling and administrative expenses for FY2019 decreased by THB 27.9 mm or down 1.5% YoY, which mainly driven ◼ by the decrease in marketing expenses that resulted from the company’s policy to increase marketing effectiveness, the decrease in allowance for doubtful account receivables, and the increase in operating efficiency. 19
Improving Marketing Effectiveness The marketing expenses in 2019 saw a steady decrease from the prior year, due to company’s policy to increase marketing effectiveness by ◼ Focusing on digital marketing and advertising on social media such as Facebook and Line over traditional channels. ◼ Creating multi-channel selling through offline and online media such as Lazada and Shopee which is the online marketplace leader in Thailand. 20
Improving Marketing Effectiveness Digital Channel Social Commerce e-Marketplace Dohome’s Social Admin Chat & Shop 21
EBITDA and Net Profit EBITDA THB mm / % to total revenue 9.7% 8.7% 7.8% 6.8% 5.5% 1,807 1,563 1,254 341 246 2017 2018 2019 4Q2018 4Q2019 EBITDA EBITDA Margin Net Profit THB mm / % to total revenue 5.0% 4.0% 3.5% 2.4% 1.2% 931 726 152 53 439 2017 2018 2019 4Q2018 4Q2019 Net Profit Net Profit Margin EPS 0.90 0.31 0.46 0.04 0.08 (THB) 22
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