Company Presentation
Dohome Public Company Limited 05 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
One-stop Home Products Destination Target Customer Group
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 branches in operation 5 branches in operation 6 new branches within 2021 85 new branches within 2021 Design Center 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 %
Revenue from sales and services 18,445.4 99.5 17,868.7 99.4 -576.7 -3.1
Other incomes 89.8 0.5 103.1 0.6 13.3 14.8
Total revenue 18,535.2 100.0 17,971.8 100.0 -563.4 -3.0
COGS 15,760.9 85.0 14,910.7 83.0 -850.1 -5.4 (1) Gross profit 2,684.5 14.6 2,958.0 16.6 273.5 10.2
Selling & Administrative expenses 1,907.0 10.3 1,879.1 10.5 -27.9 -1.5
Other expenses 1.4 0.0 26.3 0.2 25.0 1,854.1
EBIT 866.0 4.7 1,155.7 6.4 289.7 33.5
Interest expenses 320.2 1.7 298.0 1.7 -22.2 -6.9
Tax expenses 107.0 0.6 132.1 0.7 42.4 39.6
Net income 438.8 2.4 725.5 4.0 269.5 61.4
Depreciation & Amortization 387.9 2.1 407.8 2.3 19.9 5.1
EBITDA 1,253.8 6.8 1,563.4 8.7 309.6 24.7
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%
47% 48% 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% -3.1% -2.6% -2.5%
18,576 18,445 17,869
4,436 4,325
2017 2018 2019 4Q2018 4Q2019 Quarter Revenue from Sales and Services Annual Revenue from Sales and Services Growth
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%
16.2% 16.6% 14.6% 13.4% 3,017 2,958 2,684
594 732
2017 2018 2019 4Q2018 4Q2019
Quarter Gross Profit Annual Gross Profit Gross Profit Margin
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 importance to product % to revenues from sales and services sourcing in order to obtain quality products at competitive prices ◼ The company has a House Brand development team to 16.0% 16.7% 14.6% help ensure that a variety of 14.4% 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 optimize product selection House Brand Product Examples ◼ 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 ◼ Total warehouse area of 41,580 sq.m. Suppliers Store ◼ 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: Udon Thani Retail Area: Nakhon Ratchasima
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
10.3% 10.5% 10.7% 11.2% 8.7%
1,907 1,880 33 10 353 1,614 375 (6) 266 160 93
85 162 147 163 364 369 333
223 252 144 474 486 (2) (13) 89 101 35 28 623 644 643 41 35 92 93 56 62 160 166
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 1,254 246 341 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%
931 726 152 439 53
2017 2018 2019 4Q2018 4Q2019 Net Profit Net Profit Margin
EPS 0.90 0.31 0.46 0.04 0.08 (THB)
22 Balance Sheet at a Glance
31 December 2018 31 December 2019 Assets THB mm % THB mm % Cash and Cash Equivalents 167.2 1.0 204.1 1.1 Accounts Receivable and Other Receivables 838.9 5.0 859.9 4.7 Inventory 6,260.2 37.5 7,048.2 38.8 Property, Plant and Equipment 8,890.7 53.3 9,705.3 53.5 Others 517.7 3.1 334.3 1.8 Total Assets 16,674.6 100.0 18,151.7 100.0 Liabilities Bank Overdrafts and Short-term Loan 6,577.0 39.4 5,731.7 31.6 Accounts Payable and Other Payables 2,128.1 12.8 2,488.2 13.7 Long-term Loan and Financial Lease Liabilities 3,048.2 18.3 3,339.1 18.4 Others 128.9 0.8 132.3 0.7 Total Liabilities 11,882.3 71.3 11,691.3 64.4 Shareholder’s Equity Issued and Paid-Up Capital 1,456.3 8.7 4,904.8 27.0 Retained Earnings 3,330.1 20.0 1,549.7 8.5 Others 6.0 0.0 6.0 0.0 Total Shareholder’s Equity 4,792.4 28.7 6,460.4 35.6
23 Key Financial Highlight
Cash Cycle Financial Ratios
0.9 0.8 20 18 17 0.8 AR Days Current Ratio
2017 2018 2019
2017 2018 2019 49 49 49 AP Days 3.1 2.5 1.8 2017 2018 2019 L/E
159 Inventory 156 Days 147 2017 2018 2019
21.7%
2017 2018 2019 11.2% 9.2% 126 116 127 ROE Cash Cycle
2017 2018 2019 2017 2018 2019
24 Business Outlook Existing Branches and Future Branch Expansion
As of 31 December 2019 Existing: Large Future: Large Chiang Mai (10 stores) New (3 stores) Ubon Ratchathani Q2/20: Surin Udonthani Nakhon Ratchasima Q3/20: Map Ta Phut, Rayong
Large Store Khon Kaen Rangsit Q4/20: Bang Lamung, Chon Buri
Branches Ubon Ratchathani Khon Kaen
Nakhon Ratchasima Udonthani Rama II Rangsit Surin Bang Bua Thong Bang Bua Thong Thepharak Chiang Mai Phetkasem Bangna Rama 2 Bang Lamung, Chon Buri Bangna Map Ta Phut, Rayong Phetkasem Existing: To Go Future: To Go (5 stores) New (6 stores) Makro Charansanitwong Jan/20: Tesco Lotus Bangna Dohome To Go Existing: 5 Stores Makro Sathorn Q2/20: 5 Branches Big C Bang Phli Tesco Lotus Korat Pantip Ngamwongwan
26 Ubon Ratchathani Branch
Ubon Ratchathani to get industrial estate
A partnership between Thai and Japanese companies plans to invest nearly THB 3 billion to build an industrial estate in Ubon Ratchathani, focusing on agriculture processing and biotechnology. Natawatana Lerdsurawitaya, managing director of Ubon Industry Co, announced a partnership with Kaigai Advisory Co, Wellness Life Project Thailand Co and Asian Dynamic Communication Co.
The companies recently signed a memorandum of understanding to establish the Ubon Ratchathani Industrial Estate, which is expected to begin construction by 2020 and conclude in 2022.
The estate is touted as a regional distribution centre connecting with Cambodia, Laos and Vietnam. The estate will also manufacture machinery for agriculture and other industries.
Mr Natawatana said the establishment of the industrial estate is a product of collaboration among the four partners, aiming to serve as a model of how industry-led sustainable development derives from foreign direct investment, enhances the local economy, provides employment and creates valuable socio-economic transformation in the region. He said the project targets generating an economic impact of more than 20 billion baht and providing 20,000 jobs by 2022.
Source: https://www.bangkokpost.com
37-47, Sri Mongkhon Road, Warin Chamrap Subdistrict, Warin Chamrap Location District, Ubon Ratchathani Province 34190
Opening December 1993
27 Nakhon Ratchasima Branch
New Motorway Construction Linking Bangkok with Korat
A motorway from Bangkok to Nakhon Ratchasima will be constructed to lessen traffic congestion on the current Friendship and Phahonyothin highways during long holidays or weekends. It will be a 196 km long highway called Highway 6 and it is part of the 535 km long project motorway connecting Bangkok to Nong Khai, a northeast Thai province bordering Laos where it will connect with its ASEAN neighbors.
The cost of this 196 km long motorway is estimated at THB 82.6 billion (USD 2.42 billion). Of this amount, THB 77.9 billion is the construction cost and THB 6.6 billion is for the land expropriation cost. The motorway will be consisted of 2 sections with the first one covering 103 km from Bang Pa-in to Pak Chong and the other 93 km covers Pak Chong to Nakhon Ratchasima.
This motorway project is one of the 20 mega infrastructure projects initiated by the government to boost economy and investment from 2015-2022. It is scheduled to be completed and open to service in 2020.
Source: Thai PBS, Thailand Board of Investment
412 Moo 2, Ratchasima - Chokchai Road, Nong Bua Sala Subdistrict, Muang Location District, Nakhon Ratchasima Province 30000
Opening September 2007
28 Rama ll Branch
Samut Sakhon Industrial Estate
Key Information 88/8 Moo 2, Rama II Road, Chai • Rama II Road is under construction to widen Location Mongkol Subdistrict, Mueang District, both inbound and outbound road into eight Samut Sakhon Province 74000 lanes Opening December 2014
29 Bang Bua Thong Branch
Key Information 88 Moo 5 Outer Ring Road, Lahan • Short distance to the Bang Bua Thong Location Subdistrict, Bang Bua Thong District intersection between Highway No.9 and No.345. Nonthaburi Province 11110 (completed in September 2019) • Highway No. 345 and 340 was widen both Opening October 2015 inbound and outbound road (completed in November 2019)
30 Chiangmai Branch
Key Information 88 Soi 8, Saraphi Subdistrict, Saraphi Location • Super Highway Chiangmai – Lampang was District, Chiang Mai Province 50140 widen both inbound and outbound road into eight lanes (completed in October 2019) Opening December 2015
31 Phetkasem Branch
Phetkasem Road
88/88 Village No. 11, Om Noi Subdistrict, Key Performance ▪ Location Krathum Baen District Samut Sakhon Gross Profit Margin: 18% – 20% ▪ Province 74130 Positive EBITDA: approximately at THB 1.XX mm per month Opening 1 November 2019 Key Information • Rama II Road is under construction to widen both inbound and outbound road into eight lanes 32 Phetkasem Branch
Automated Storage and Utilization of ASRS System to Retrieval System (ASRS) Increase Inventory Management Efficiency ◼ Phetkasem branch ◼ Improvement in inventory management efficiency through lower costs to store and retrieve inventory ◼ The company could potentially consider installing the ASRS system at other large store format warehouse in the future ◼ Being installed at the
Reduce required warehouse space Reduce the number of warehouse staff More efficient inventory management
33 Surin Branch
Location 483 Moo 10, Nok Mueang Subdistrict, Mueang District, Surin Province 32000 Store Area 30,516 Sq.m. Construction Period 15 December 2019 – 31 May 2020
34 Map Ta Phut (Rayong) Branch
Map Ta Phut Subdistrict, Location Mueang Rayong District, Rayong
Construction 1 November 2019 – 31 July Period 2020
Business Opportunities EEC Infrastructure:
Investment Completion Value Date High-speed rail THB 220 which connects 3 2023 billion airports U-tapao aviation THB 300 city and MRO 2023 billion center
Map Ta 3rd phase of the THB 55 Phut Map Ta Phut 2025 billion Seaport The Pattaya-Map THB 14 2020 Ta Phut Motorway billion
35 Bang Lamung (Chonburi) Branch
Bang Lamung Subdistrict, Bang Location Lamung District, Chonburi Province Construction 1 February 2020 – 30 Period September 2020
Business Opportunities EEC Infrastructure: Investment Completion Value Date High-speed rail THB 220 which connects 3 2023 billion airports U-tapao aviation 3rd phase of THB 300 city and MRO 2023 the Laem billion Chabang center Seaport 1st phase of the THB 0.5 Laem Chabang 2020 billion Seaport (Port A) 2nd phase of the THB 0.6 Laem Chabang 2019 billion Seaport (SRTO) 3rd phase of the THB 110 Laem Chabang 2025 billion Seaport
36 Eastern Thailand
Dohome plans to capture all strategic area in Eastern Thailand
Bang Lamung
Map Ta Phut
37 Eastern Thailand Outlook
38 Dohome To Go 6 Branches
1 2 3
Makro Charansanitwong Makro Sathorn Big C Bang Phli
4 5 6
Tesco Lotus Korat Pantip Ngamwongwan Tesco Lotus Bangna-Trad
Key Information • Adjusted product assortment to be more Household and Repair & Maintenance Service category • Higher Gross Profit Margin than large store format
39 Dohome To Go – Cosmo Walk
Dohome Togo
Key Information • The area is surrounded by a huge community including accommodation, office building, IMPACT Exhibition and Convention Center, and educational institutes such as St. Francis Xavier School, Sukhothai Thammathirat Open University, and Silpakorn University City Campus (SUCC). Cosmo Bazaar Building, Popular 3 Rd, Banmai, Location • Population in Muang Thong Thani is over Pak Kret District, Nonthaburi 11120 300,000 people and more than 30 million visitors / year. Opening Q2 / 2020
40 Q&A