2015
Annual Results
Presentation
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Disclaimer
Presentation team
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Mr. Luo Fei Chairman & CEO
Mr. Radek SaliExecutive Director
CEO, Swisse Wellness Group
Mr. Frank Cao Chief Financial Officer
Ms. Laetitia GarnierGeneral Manager of Group Strategy
and International Business
Presenter Title
Mr. Jason Xu Assistant CFO and Head of Investor Relations
Key Financial Information
RMB million For the Year ended 31 December
2015 2014 Changes(%)
Revenue 4,818.6 4,731.6 1.8%
EBITDA 626.4 1,142.6 (45.2%)
Net profit 293.3 806.8 (63.6%)
Operating cash flow 365.7 972.2 (62.4%)
Basic EPS RMB0.41 RMB1.34 (69.4%)
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Note:
1. The financial results of Swisse Wellness Group (“Swisse”) for the fourth quarter of 2015 have been
consolidated into the Group.
2. EBITDA stands for earnings before interest (net of interest income and finance cost), taxes, depreciation and
amortization.
3. The EBITDA of 2015 included transaction cost of RMB65.0 million in relation to the acquisition of Swisse and
exchange loss of RMB88.5 million. The EBITDA of 2014 included exchange loss of RMB8.2 million.
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2015 annual results highlights
RMB million For three months ended 31 Dec 2015
Revenue 1,119.6
EBITDA 387.6
EBITDA margin 34.6%
Note:
1. The above information is according to the management account and is about the Group’s baby nutrition
and care business in China only, excluding Swisse.
2. The EBITA of RMB387.6 million included exchange gain of RMB162.4 million.
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Biostime’s 4th quarter performance returned to normal
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2015 revenue mix
Note:
1. Swisse contributed to 17.6% of the Group’s total revenue for 2015 in just the 4th quarter.
Revenue (RMB million)
FY2015
BNC
Q4 2015
ANCConsolidated
3,968.7 849.9 4,818.6
82.4%
17.6%
Baby nutrition and care ("BNC")
Adult nutrition and care ("ANC")
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Revenue contribution by segment
Business Review
Innovative all-round premium nutrition and care provider for
the entire family
Multi-brand, one platform strategy – leveraging on its cross-selling platform
CRMSystem
Note:
CRM = Customer relationship management
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Wide range of products targeting different age groups
Pregnancy Infants
Biostime
ADiMIL
Biostime
ADiMIL
Adults
Healthy Times
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 sachetsBaby food supplement
Swisse Wellness
Kids supplement1
Swisse
Pregnancy
ultivite
Baby care
Innovative all-round premium nutrition and care provider for
the entire family (cont’d)
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12.7%
8.5%
8.2%
6.9%
6.3%
13.6% 13.1%
9.2%7.1% 6.9% 5.9% 4.9% 4.9% 3.9% 3.5%
Six largest IMF player with leadership in the super premium category
32.4%
16.0%
16.0%
7.8%
4.6%
Source: Nielsen December 2015 report
#2 in overall IMF sales in baby stores #2 in supreme tier infant formula market
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Leading premium baby nutrition and care provider in China Market leader across all major channels
Notes:
Supreme-tier segment refers to infant formulas with the price over RMB300 per can of 900g
High-tier segment refers to infant formulas with the price below RMB300 per can of 900g
High-tier63.0%
Supreme-tier37.0%
High-tier65.3%
Supreme-tier34.7%
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2015 2014
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Biostime infant formulas revenue mix
Interactive education
Mama100 APP
Hospital face-to-face classes
Mama100 magazine
Consumer events
Call centre
Product performance
experiences
Online and offline POS
management
Points system
Training
One-to-one consumer
relationship management
TraceabilityCRM
Database marketing
Cross selling
Precision marketing
Word-of-mouth incentive
Personalised coupon
Brand communication
TV, online TV
Digital marketing
Magazine
Star collaboration events
In store display
“BIOD” Model
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Biostime’s all-round innovative marketing model
5.9%
8.5%
6.1%
1.5%
Total Baby stores Supermarkets E-commerce
Strong footprint across China
Source: Nielsen
As of 31 December 2015, we have
728 regional distributors
Over 40,684 points of sale, including 28,785 specialty
stores, 6,695 supermarkets and 5,204 VIP Pharmacies
Beijing
Shanghai
Guangzhou
Headquarter
21.8% 20.2%
48.1%68.8%
7.6%30.1%
3.4%
IMF Industry average Biostime
E-commerce VIP Pharmacies
Baby specialty stores Supermarkets
Sales by channel in 2015
#10
Biostime’s market share by channel in 2015
Diversified Sales Channels
#6#2#6
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Biostime’s extensive nationwide network
710
380277 260 187 161 156 148 144 139
#1 Australian VHMS brand2
Notes:
1. H/S/N = Hair/Skin/Nail (Use Filter)
2. Aztec Scan Data for Year 2015
Source: Aztec, Bain & Swisse
Leading market share across all key products in Australia2
#1 #1 #1 #1 #1 #2 #2 #2 #2
#1 VHMS brand on Alibaba (sales in 2015, RMB m)
75.9%81.3%
52.3%
22.2% 26.0% 28.4%
15.9%10.2%
22.8%
H/S/N Milk Thistle Valerian Multi Krill Oil Calcium+vit D Bee Products EveningPrimrose Oil
GrapeseedExtract
18.5% 17.3%
8.9%6.6% 5.4%
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Swisse Wellness – market leader in Australia
with strong brand recognition
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Swisse direct sales into China has been activatedFirst global flagship store on Tmall opened on 8 March 2016
Prospects
Note:
1. Source: National Bureau of Statistics, PRC
2. Forecast by Euromonitor
14.9%
7.9%
4.9% 4.0% 2.7% 2.7%
0.7%
Avg = 5.0%
China Vietnam India Indonesia Philippines Thailand Japan
2015 Baby food market size (USDm)
20,536 496 2297803 798 842
122,082140,321
162,802187,848
215,570
246,318
0
50,000
100,000
150,000
200,000
250,000
300,000
2015 2016 2017 2018 2019 2020
Baby food market size and 2015-2020e CAGR2
Chinese IMF sales forecast2
(RMBm)
15.215.415.615.816.016.216.416.616.817.0
2007 2008 2009 2010 2011 2012 2013 2014 2015
New-borns in China1
1309
(m)
A two-child policy will lead to a rise on
the number of new-borns per annum.
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China is the largest IMF market globally and expected to
grow at double digit
1.261.36 1.42
1.85
Year 2012 Year 2013 Year 2014 Year 2015
23M 24M 26M 28M 30M
0%
20%
40%
60%
80%
100%
2012 2015 2020 2025 2030<18 18-24 25-34 35-44 45-54 64 65+
Source: Aztec Scan Data for Year 2015, Bain report, Euromonitor, UNPD
The Australian VHMS market is a ~$1.85bn market
that has grown at 13.7% CAGR over the last 3 years
1.6%
CAGR (2012-2030)
3.1%
Australian population will grow older based on
aging of baby boomers
1.4%
1.1%
1.6%
1.1%
1.0%
(AUDbn)
12 13 14 1518 20 22 24 26 28 30
0
10
20
30
40
2009 2010 2011 2012 2013 2014 2015F 2016F 2017F 2018F 2019F
CAGR
(2009-2014)
CAGR
(2015-2019f)
13%
China’s VHMS market to grow ~13% CAGR from 2015-
2019f
0
100
200
300
400
500
2006 2009 2012 2015 2018 2021 2024 2027 2030 2033 2036 2039 2042 2045 2048
Population aged 60 years old and above in China, 2016-
2050f
11%
(M)
1.4%
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Overview of the VHMS market in Australia and China
Leverage our core competencies and network to achieve these goals
Brand building
Adhere to multi-brand strategy while emphasizing on premium image
– Allocate more spending on emerging media and maintain certain exposure in traditional media
– Continue to develop in-house Customer Relationship Management system to achieve
precision marketing and consumer education
– Refine Swisse’s 360o marketing model
Category
expansion
The Group will continue to focus on category expansion and diversifying into higher growth
products through:
– invest in in-house R&D capabilities to develop new initiatives based on existing categories
– Within the nutrition and care categories, leverage on the Swisse acquisition to expand
complementary products
Channel expansion
Focus on further developing cross-border online sales while maintaining premium brand image
Accelerate channel expansion and increase product penetration to seize business opportunities
across China
Develop global presence through business partner
Further integration of online resources for various brands
Business
integration
Utilise the existing Biostime’s nationwide distribution network for Swisse
Improve operational efficiency and reduce cost
Leverage on Biostime’s proprietary CRM system to manage Swisse’s customer data and further
improve precision marketing as well as understanding of customer needs
Integration of Swisse and Healthy Times
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Group’s synergetic development strategyMulti pronged growth strategy
Appendix
Financial Information
Gross Profit Margin by Products
2015 2014
% of total revenue Gross Profit Margin % of total revenue Gross Profit Margin
Infant Formulas 69.6% 63.3% 84.1% 62.0%
Probiotic Supplements 8.1% 66.4% 9.0% 71.4%
Dried Baby Food and Nutrition
Supplements2.4% 49.2% 3.2% 49.1%
Baby Care Products 2.3% 22.8% 3.7% 47.2%
Adult Nutrition and Care 17.6% 61.3% - -
Total 100.0% 61.9% 100.0% 61.9%
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Gross Margin Analysis
1,587.8
1,975.8
2014 2015
(RMB millions)
33.6%
41.0%
2014 2015
S&D expenses ratio of sales Selling and distribution expenses
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Selling and distribution expense
3.7%
5.8%
2014 2015
(RMB millions)
Administrative expense
ratio of salesAdministrative expenses
175.3
2014 2015
280.1
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Administrative expense
176
162
2014 2015
1
24
2014 2015
65
2014 2015
Accounts Receivables Turnover Days (1)
Inventory Turnover Days (2)
Account Payable Turnover Days (3)
Notes:
1)Turnover days of accounts receivable 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 360 days.
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 360 days.
3)Turnover days of accounts payable 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 360 days.
90
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Working capital management
(RMB: million)(RMB: million)
4,493.3
(RMB: million)
Operating Cash Flow Inventory Balance Cash Balance
797.0
856.2
31 Dec 2014 31 Dec 2015
1,868.3
937.4
2,625.0
331.0
1,927.0
31 Dec 2014 31 Dec 2015
Pledged deposits
Time deposits
Cash and bank balances
3,195.4
972.2
365.7
2014 2015
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Cash flow
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