SI NGER THAI LAND PRESENTATI ON
Presentation Topics Business • Company Overviews • I ndustrial Overviews Overviews • Competitors • 2008 Objectives 2008 Business • Credit Approval I mprovement • Receivables & Collection I mprovement Performance • Revenues I mprovement • 1. Financial Highlights Financial • 2. Gross Margin Highlights • 3. S&A Expenses • 1. Sewing Machine Donation • 2. Donation to Communities Corporate Social • 3. Quality Awards Achievement Responsibility • 4. Good Governance Awards • Defensive Strategy 2009 Strategy
Business • Company Overviews • I ndustrial Overviews Overviews • Competitors
Historical Background & Milestone 1889 1925 1957 1984 1996-7 First Business in the The first Company Expanded business Listed on the SET, Made record annual Kingdom of Thailand, which introduced the of home appliances June 28 1984 sales of 8,524 mil Kiem Hua Heng was Hire Purchase by distributing top- THB appointed to be the business quality refrigerators Total customer base distributor for Singer reached 831,000 Sewing Machines in installment accounts Siam 2004 2005 2006 2007-8 2009 His Majesty the King Focused on Business loss from Turnaround plan to I mprovement Year by Year: - bestowed the Garuda motorcycle sales, provisions, write-offs solve the motorcycle emblem to Singer representing 61% of problems and re- 1. Credit Approval Procedures Thailand PCL. on May total sales, with focus on sales of 2. Receivable & 24, 2004 home appliances at electrical home 39% appliances with a Collection 3. Sale Revenues replacement market by developing a trade-in approach
Our Products SI NGER BRAND NON-SI NGER BRAND INSURANCE • WHITE GOODS - MUANG THAI LIFE ASSURANCE – REFRIGERATOR COMPUTER PC (SVOA) – CHEST FREEZERS SATELLITE DISH (SAMART) – BEVERAGE COOLER Motorcycle (Suzuki, Yamaha, etc) – WINE CELLAR Agricultural Machine (Choomsin) – WATER COOLER – WASHING MACHINE – GAS RANGE – AIR CONDITION – WATER PUMP – MICROWAVE OVEN – ELECTRIC FAN – HOME SHOWER – RICE COOKER – ELECTRIC IRON • BROWN GOODS – TELEVISION – HOME THEATRE – DVD • SEWING GROUP – SEWING MACHINE – STREAM PRESS
Our Customer Base Thailand income distribution (2006) 2.2% Strong Customers’ > 30K Based on C & D Groups 12.0% 10 – 30K TARGET CUSTOMERS Population w/ - Living in rural areas income < 10K - Low range gov’t Officer Our target ~80% - Housewife, Farmer of Thailand’s population Source : National Statistical Office
Strong Distribution Network ภาคตะวันออกเฉียงเหนือ ภาคเหนือ Northeast North 18.08% •Of Total Sales, ~75% comes from ภาคกลาง 38.45% Central the Central and East provinces of ภาคตะวันออก 36.10% Thailand East Total Shop : 194 Branches Total Sales Agents : 3,697 Persons ภาคใต South 7.37%
Competitors: Direct Competitors 66% 70% 83% 88% 90% 25% 25% 14% 12% 10% 9% 5% 3% 0% 0% 2005 2006 2007 2008E 2009F DE MIDA SINGER 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
I NTERNAL STRENGTHS WEAKNESSES 1. Product Differentiation 1. Strong Brand Loyalty 2. No Production Base 2. Expertise on HP System 3. Low Education of Sales Forces 3. Strong Distribution Coverage 4. Rely on Customer Based C & D 4. “Good Service” Brands 5. Strong Direct Sales Forces 6. Trade-in Campaign SWOT OPPORTUNI TI ES THREATS 1. Fade out of Direct Competitors 1. Economic Decline 2. Multi-Product, Multi-Brand 2. Setting up of Modern Trade in Trade – in upcountry 3. H P Behavior Growing up from 3. Political Problems Economic Decline 4. Volatility for the Price of 4. Maintain the Price of Agricultural Agricultural Products Products by Government Action EXTERNAL
• 2008 Objectives • Credit Approval I mprovement 2008 Business • Receivables & Collection Performance I mprovement • Revenues I mprovement
Credit Control Process: Good Customer Credit Approval Flow Filter III Filter II Filter I UM / SM Review CCO Screening S/A Screening -All applications -Credit Scoring -Occupation From S/A must be -Black List -Income Reviewed by Shop -NCB -Accommodation Manager -Checkers' Report -Assets Security (Focus for all C-Shops -Guarantors And some of B & A Shops) Apply for HP Approve HP
Singer Call Center : Roles and Responsibilities Warning Call After-sales Service Welcome Call Telesales
5 Steps for Refunding the Loss from HP Accounts 5 Shop Manager In case of steps 1- 4 not 4 working, Shop Managers have to assume responsibilities for the loss occurred. If they Salesman’s Guarantors have not followed the In case of disappearance 3 company regulations of salesman, salesman’s guarantors will be sued under their commitments. Salesman 2 In case of the disappearance of the customer and guarantors, salesmen will assume the HP Guarantors responsibility by 1 In case the customer deducting from their security deposits or cash disappeared or does not have the ability to payment in place of pay or does not have customer and guarantors. HP Customer any valuable assets -Notices Issued which can be used -Cancel HP Contracts for payment then the -Take product back customer’s guarantors -Sue customer for the will be sued. remaining balance.
Motorcycle Business & Electrical Home Appliances (in Value) 2005 2008 Motorcycle 7% HA 45% Motorcycle 55% HA 93% Product Strategy: Since 2006 – Refocus on Electrical Home Appliances
Sales Proportion by Product Categories 2008 2007
Home Appliances Units Sale For the Year 2004 - 2008 PRODUCTS YEAR YEAR YEAR YEAR YEAR 2004 2005 2006 2007 2008 REFRIGERATORS 39,388 35,397 30,868 27,543 36,221 TELEVISION 40,084 36,280 24,976 23,680 26,044 WASHING MACHINE 51,228 47,870 30,193 30,900 56,072 SEWING MACHINE 10,170 10,830 8,715 10,036 11,922 STEREOS/AUDIO 4,027 741 2,926 2,274 1,996 VCD/DVD 4,306 4,845 1,782 4,014 4,196 FREEZER/BEV.COOLER 10,254 9,853 10,387 11,556 16,487 KITCHEN/GAS STOVE 5,645 5,315 4,954 4,345 3,309 AIR CONDITIONER 1,222 1,881 840 1,655 2,726 STRATEGY FOR 2008 AND BEYOND : PUSH UP HOME APPLIANCES
• 1. Financial Highlights Financial • 2. Gross Margin Highlights • 3. S&A Expenses
Financial Highlights 2006 - 2008 '000 Baht 2006 2007 2008 Revenues 3,813.12 2,514.14 2,355.36 Gross Margin 1,837.80 1,070.93 1,081.10 S&A Expenses 1,735.10 1,291.54 1,046.53 Profit (Loss) from Sales -1,113.29 -438.29 -102.92 EBITDA -1,014.07 -339.38 40.37 Income Before Interest andTax -1,075.78 -392.96 -6.32 Net Profit (Loss) -1,233.04 -500.22 -81.60 Bank Interest 156.95 107.10 75.14
Gross Margin Gross Margin Strategy for the Replacement Market -Trade-in That leads to: - 1. Changing in the proportion of sales HA Vs. MTC • HA shifts from 55% to 77% • MTC shifts from 25% to 7% 2. Improvement of Total Gross Margin • 38% in Y2006 to 50% in Y2008
S elling & Administrative Expenses S&A Reduction with the main reasons as below :- 1.) A significant decrease of Bad Debts due to a significant reduction of MTC accounts combine with the improvement of Installment Accounts Quality resulting from the strict pre-approval credit procedures. 2.) A cost reduction programs from the closing of the Non- profitable branches.
• 1. Sewing Machine Donation Corporate • 2. Donation to Communities Social • 3. Quality Product Awards Responsibility Achievement • 4. Good Governance Awards
Donation To Community
Quality Awards Achievement
Good Governance
2009 Strategy • Strategy for 2009
Strategy for 2009 Strategy: • Cautious and Prudent • Manageable expansion • Quality over quantity • Margin improvement • Tightening credit control • Collection focused • More efficient store utilization
SI NGER ... has a way to make your house a home Thank You
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