Company Introduction Presented by Eric Wu Chairman and CEO 2016

Transcription

1 TAIWAN S NO. 1 MEDICAL SKINCARE Company Introduction Presented by Eric Wu Chairman and CEO 2016 Ticker:6523

2 Disclaimer The information and forecast contained in this presentation and released at the same time, including the information regarding business outlook, financial status, and business forecast, is produced according to the internal data of this Company and the status of overall macroeconomic development. The actual operational outcomes, financial status, and sales results in the future may differ from the forecast for various reasons, including but not limited to market demand; changes in policies, laws and regulations, and macroeconomic condition; and other risk factors beyond the reasonable control of this Company. Information contained in this presentation reflects the future outlook of this Company until the present time. This Company makes no guarantee, either expressed or implied, for its accuracy, integrity, or reliability. This Company assumes no responsibility for the update or revision of such information according to its future changes or adjustments. 2

3 DR.WU Company Introduction - Quick Facts About Us Founded 2003 by Dermatologist 1200 POS 7 Countries 12 Product Lines - 68 SKU 110 Staffs HQ in Taipei and Shanghai Current Market Cap of US$ 295 mn IPO June

4 DR.WU Company Introduction - Management Team & Shareholder Structure Jennifer Hsu, General Manager Eric I-Ju Wu, Chairman and CEO In Charge of Company Strategy and Development Columbia University, BS in Engineering DR.WU Skincare Co / GM W Clinic Group / GM AIG Investment Corp Taiwan / VC Associate In Charge of Operations, Sales and Marketing Joined DR.WU in June 2015 MBA in Marketing and Bachelor in International Trade Clarins Taiwan / GM Elizabeth Arden Taiwan / GM Johnson & Johnson (LifeScan) / Director Coca Cola Taiwan / Marketing Director Uniliver Taiwan / Marketing Manager PricewaterhouseCoopers LLP / Senior Financial Analyst Shareholder Stake Wu I Ju 27.3% DEF Investment Holdings 16.8% Donglin Biomedical 7.4% Wclinic Biotechnology 7.4% Hsieh Pie Lin 3.6% L Capital Taiwan Beauty Fidelity China Special Situations Fund 19.3% 2.0% Wei Nien Tzu 1.6% Grandeur Peak Global Reach Fund Grandeur Peak Emerging Markets Opportunities Fund 0.7% 0.6% Public Float 13.3% 62.5% 4

5 Leading Medical Skincare Brand DR.WU - Our Philosophy About Skincare Taiwan s No.1 Medical Skincare DR.WU is a line of highly effective skincare products developed with advanced patented technologies to target various problems in Asian skins. Our philosophy behind our pursuit for enhancing beauty and wellness is through simple, effective products backed by the latest discovery in Science, Biotechnology and Cosmetics. We believe in the partnership between innovation and science to bring about non-surgical solutions in enhancing one s beauty and wellness. 5

6 Leading Medical Skincare Brand DR.WU - Brand Origin of DR.WU Create perfect skin through simple but effective ways --Our Philosophy & Goal. DR. Wu Ying-Chin Eric Wu, Chairman & CEO Renowned Dermatologist and Aesthetic Surgeon in Asia Brand Founder of DR.WU Clinical Professor of National Taiwan University Hospital (NTUH) Founder and Chief Physician of WCLINIC and WSPA 1978 Opened his first dermatology clinic 1981 Institut National de la Santé et de la Recherche Médicale Immunology Researcher Developed esthetic medical treatments and dermatology ointments and emulsion formula 1996 Developed first Intensive Whitening Serum with Arbutin 1.5 Generation Entrepreneur Founder of DR.WU SKINCARE CO Columbia University, School of Engineering and Applied Science 1998 PwC Chairman s Office, Corporate Development Associate 2001 Return Taiwan to work for VC funds and started planning for reorganization of family business 2003 Founded DR.WU SKINCARE CO and launched first product under the Brand DR.WU 6

7 Leading Medical Skincare Brand DR.WU - The Milestones of DR.WU DR.WU Clinical Skincare brand and the Company were formally incepted 2006 Launch in SASA, Health Drugstores, Etc Full Launch in Cosmed Chain Drugstores DR.WU s Hydrating and Whitening Serum was recommend by Barbie Hsu the Beauty Queen Launch in Watsons Taiwan and regional expansion to Singapore. POS of total 900 stores Expanded business into Malaysia Have received recognitions from major Beauty Awards Expanded business overseas: Hong Kong, U.S.A,New Zealand and Yahoo! POS of total 500 stores. Product lines add to 6 series. DR.WU s Total Sales has reached No.1 in Cosmeceuticals Sector and launched over 100 SKU 2012 Launched product in Canada Chairman Eric Wu won TOP 100 MVP Managers award 2014 Received investment from L Capital Asia of LVMH Started E-commerce sales channel in China Setup of Medical Skincare Concept Stores in Taipei 101 Chairman Eric Wu received 2014 EY Entrepreneur Of The Year award Complete Listing on TPEX (6/16) Increase to 3 counters in Beijing and Shanghai Expand to Myanmar 2015 Went public and listed on Emerging Stock Market Board Received 2015 National Cornerstone Award & Entrepreneur Recognition Setup first counter in Shanghai and launch in 40 FIONA Beauty China stores 7

8 Leading Medical Skincare Brand DR.WU - Competitive Advantages and Our Success Formula Product Power Brand Power Sales Power Growth R&D by Authoritative Dermatologist in Asia Leading Cosmeceutical Brand Complete Coverage of Online/Offline Channels High Potential Markets + Necessity of Skincare Complete product line developed by authoritative dermatologists with patented formula in Asia 15% new product development rate Advanced knowledge and skills in R&D 100 patented active ingredients from global pharmaceutical companies 12 full product lines (cyclical, risk diversification, synergy), satisfying needs of Asian skin care Insist on applying 5 principles to develop high effectiveness, hypoallergenic and high quality products Market leader: Taiwan s No.1 Medical Skincare /First to enter the cosmeceutical market High popularity, high reputation, high reliability from consumers One of few Asian cosmeceutical brands to truly stem from doctors and clinics Only IPO cosmeceutical company founded by professional teams with medical background 100% penetration in drugstore chains Full coverage of virtual online stores Present footprint in overseas Chinese-speaking market First Taiwanese brand entering cosmeceutical market Non-surgical cosmetic medicine more common and reaching younger market which drives growth of cosmeceuticals Consumption habits changing from emotional to rational. Consumers trying to select cosmeceutical vs general skincare products Cosmeceutical market growing at double digits 8

9 Advanced Clinical Skincare Solutions - Brand Concept - Product Portfolio - Research and Development 9

10 Advanced Clinical Skincare Solution - Brand Concept EFFECTIVE Medical Professional, Scientific Testified Patented Active Ingredient with Effectiveness Functional Solutions Target Asian Skin Developed specifically for Asian skin type EXCELLENCE Innovation Technology, Good Quality of Process High Potency Effective and rapid result for the beautiful skin For Sensitive Skin Suitable for the fragile and tender skin after the cosmetic surgeries DR.WU CLINICAL SKINCARE Taiwan s No.1 Medical Skincare Brand Micro- Surgery Concept Skincare DR.WU is a professional brand positioned to offer Micro-Surgery Concept Skincare with fast effective functional Skincare. Mid to High-end Skincare solutions developed by renowned Asian dermatologist for Asian skins, Targeting year old. Micro- Surgery Concept Skincare Concept for the medicinal treatment -Continuation of medical skin care and maintenance at home TRUST No Additives. No Alcohol. High Concentration. High Grade Actives. High Safety Level. 40 Years of Clinical Studies Fix various skin problems based on 40 years of clinical experience CARING One on one Care, Exclusive Physician, Customized Programs, Corporate Responsibility 10

11 Advanced Clinical Skincare Solution - Complete Product Lines: 12 Key Lines x 68 sku HYALUCOMPLEX HYDRATING SYSTEM x11 35% BASIC CARE SYSTEM x3 MANDALIC RENEWAL SYSTEM x7 25% UV PROTECT SUNCARE SYSTEM x6 AGEVERSAL REPAIRING SYSTEM VITAMIN C + WHITENING SYSTEM ACNECUR ANTI-ACNE SYSTEM x6 12% x6 7% x5 12 SERIES- 68 SKU Average Retail Price USD 40 MINERAL MAKE UP PREMIUM SKINCARE SKINCARE FOR MEN x3 x6 x5 x8 x2 CAPSULE MASK FIRST AID SERIES 11

12 Advanced Clinical Skincare Solution - Research Core Competency & Safety Product Management DR.WU is developed based on such principles: No Additives, No Alcohol, High Concentration, High Grade Actives, that are safe and effective even for use on sensitive skins Global Technical Cooperation Laboratories over 100 international patented active ingredients Patented Formula Ying-Chin Wu, M.D. 40 years of clinical experience 200 Non-Additives Checks Optimized Quality DR.WU R&D Core Competency Assurance Feedback DR.WU Safety Management System 70 Quality Checks Innovative Technology 3 major Microinject Delivery Technology- Cellulose/Microinject mask 7 major cosmetic manufacturing companies ISO Certified (ISO9001/ISO022716/GMP) Clinical Safety Accurate Rigorous Process 12

13 Advanced Clinical Skincare Solution - Active Ingredients and Leading Research Lab Collaboration Cooperation Pharmaceutical MNC s Laboratories / USE over 100 Patented Active Ingredients 3 formulation patents and registered 85 trademarks -HyaluComplex Most advanced hydrating formula -Ageversal Properties of multi-peptides -SensiPhyte Anti-redness soothing factor DR.WU brand was registered over 5 markets -Taiwan, China, Hong Kong, Singapore, US, etc 13

14 Taiwan s No 1. Medical Skincare Brand - Brand Positioning and Competitors - Market Leader in Derma Skincare Sector - Marketing and Communication - Growth Potential of Derma Skincare 14

15 Taiwan s No.1 Medical Skincare Brand - Brand Positioning Among Derma Skincare and Doctors Brands DR.WU is a PROFESSIONAL brand positioned to offer Non-Surgical Cosmetic Medicine Concept Skincare with fast effective functional skincare High effectiveness Mid- to High-end Skincare solutions developed by renowned Asian dermatologist for Asian skins, targeting year-old segment Low price High price Low effectiveness 15

16 Taiwan s No.1 Medical Skincare Brand - Market Leader Among Derma Skincare Market TWD Million 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1, ,430 4, H1 Taiwan Pharmacy Market YOY 4% YOY 0.3% 3,278 3,287 1,152 1, Caring Mass Derma DR. WU 2015H1 YOY 15% 2016H1 100% 90% 80% 70% 60% 50% 40% 30% 2% 3% 3% 4% 5% 5% 4% 5% 11% 10% 9% 8% 27% 27% 30% 31% YOY 30% 53% 54% 52% 51% 20% 10% 0% 2016H1 Derma Market Share H H1 Others(AVENE Bio FOB..) DR. WU Vichy Curel Neogence DR. WU Sales of drugstores channel grew 30% YOY in 2016H1, and the growth rate is 2x higher than Derma, 7.5x higher than Caring. In Derma Market, DR.WU s market share is 31%, 4% increase compare to 2015H1, which is the highest growth rate among Derma brands. 16

17 Brand Power: Taiwan s No.1 Medical Skincare Brand - Growing Brand Awareness in Taiwan and China Brand Awareness, Positive Word of Mouth and Client Loyalty have surged coupled with Increasing attention from media Fans Facebook/Wechat/Weibo Fans/Baidu Index ,540 64,370 29,486 Index FB Fans Wechat Fans Weibo Fans Baidu Index 500, , , , , ,266 0 Jumei/Tmall/DRWU.COM Unique Vistors 275, ,423 92,886 34,076 drwu.com.tw UV drwu.com.cn UV Jumei UV Tmall Flagship UV 17

18 Marketing and Communication Degree All Around Marcom Strategy with Focus on Digital Offline Marketing PR Activities Digital Marketing Social Media Print Ads / Out Door Beauty column Pop Up Store Sampling Brand launch event/ Media gathering Media trip PR Editorials EPR KOL Management Vertical Beauty Portals Video Ads Short Movies Facebook WeChat Weibo Baidu Search Word-of-mouth 18

19 Brand Power: Celebrity Endorser - Brand Endorser for 2016: Hannah Quinlivan Continue Endorser in 2016, DR.WU has Successfully Enhanced Brand Awareness throughout ASIA: Hannah's marriage to Jay Chu who is the most popular singer in Asia and her recent has children announcement has created tremendous online chatter and followers. Videos of Hannah sharing her beauty tips using DR.WU Serum and Mask during New York Fashion Week, attracting 34,822,000 Unique Visitors. 19

20 Taiwan s No.1 Medical Skincare Brand - Taiwan Skincare Market: Mass vs Medical/Derma/Cosmeceuticals Taiwan s skincare market is estimated at NTD 8.6bn in 2015, with 5-year growth rate of 3-5% Caring-Mass Caring-Medical/Derma/Cosmeceuticals Annual growth rate of Medical Skincare market estimated at 10-15%, 3x that of Mass market 30% 33% 36% 40% 20

21 Taiwan s No.1 Medical Skincare Brand - Medical Skincare Demand Drivers Cosmeceutical market driven by changing consumption habits and surge in sensitive skin Global climate change leads to surge in number of people with sensitive skin: In addition, growing popularity of micro-surgery treatments results in increased demand for post-treatment sensitive skin repair. Hence the demand for hypoallergenic, nonirritating skin-care products. Consumption habits have migrated from emotional to rational: Main consumer age falls between 29 and 45 year-old women who are more independent and willing to invest on themselves. They spend wisely and are aware of personal demands. Therefore, strict inspection, scientific experiment, high effectiveness and hypoallergenic skincare products fit the demand from these clever consumers. Product safety is main concern. Hence skincare products with testimonies become increasingly attractive. Endorsement by professional teams, equipped with both effectiveness and safety: These are key for persuading consumers. Products with scientific experiment clinical data and approval by dermatologists provide "effectiveness and safety" signs to consumers. 21

22 Multi-Channel Distribution Strategy - Sales Distribution Network - Sales Contribution by Channel - Visual Merchandising - DR.WU 2.0 Visual Upgrades 22

23 Multi-Channel Distribution Strategy - Regional Sales Channel Distribution Complete Distribution Coverage of Online and Offline Sale Channels B&M Channel - Taiwan Drugstore chains channels Watsons (510) Cosmed (380) Your Chance Pharmacies (36) Department Store Taipei 101 concept store Far Eastern Mega City Far Eastern Paoching NEW JUN.,2016 Beauty Specialist SaSa(25) POYA(130) NEW APR.,2016 Others Duty Free Stores(13) W Clinics(4) Direct One Level Two Level EC Channel - Taiwan DRWU.COM YAHOO MOMOSHOP PCHOME BOOKS PAYEASY, 7net ETMALL Overseas markets Hong Kong, Macao(370) Singapore(60) Malaysia(62) U.S.A(10) Canada(25) New Zealand Myanmar NEW JUN.,2016 China Channel EC Channel TMALL JUMEI TAOBAO MEI.COM Cross Border Department Store Shanghai(2) Beijing(3) Cosmetic Stores FIONA Beauty Stores(40) 23

24 Multi-Channel Distribution Strategy - China Expansion Strategy: Online and Offline 2015 Q Q Q Q Q Q Q Q4 JUMEI.COM Flagship Store E Commerce TMALL.COM Flagship Store Cross Cross Border Boarder EC (JUMEI/TMALL) EC via Jumei/Tmall Intl JD.COM and Other EC platforms VIP.COM FIONA Beauty Stores (41stores) Store Based SUPER BRAND Shopping Mall Counter, Shanghai 3 new Counter, Beijing 1 new Counter, Shanghai Other Cosmetic Stores and Department Counters (Shanghai & Beijing ) 24

25 Multi-Channel Distribution Strategy - Sales Contribution by Channel 2014 Revenue By Channel 2015 Revenue By Channel NTD 000 Overseas China 40,048 13,636 6% 2% EC 126,436 19% China 138,671 16% Overseas 54,146 6% B&M 482,689 73% E Commerce 141,163 16% B&M 531,234 62% Channel YOY B&M TW 482, ,234 10% EC TW 126, ,163 12% China 13, , % Overseas 40,048 54,146 35% Total 662, ,214 31% 25

26 Multi-Channel Distribution Strategy - Medical Skincare Concept Store and Department Store Counter TAIPEI 101 MEDICAL SKINCARE CONCEPT STORE Far Eastern Mega City DEPARTMENT STORE 26

27 Multi-Channel Distribution Strategy - Chain Pharmacies and Personal Care Specialty Stores COSMED WATSONS MANNINGS SASA 27

28 Multi-Channel Distribution Strategy - Duty Free Channel EVER RICH DUTY FREE STORES TAIPEI / TAOYUAN / TAICHUNG / KAOSHING / KIMMEN 28

29 Multi-Channel Distribution Strategy - New 2.0 Stores in Beijing DR.WU 2.0 Concept Store Combine clinical and fashion to present light industry decor, customer can enjoy shopping here LONGFOR New Flagship Store in Beijing LONGFOR Paradise Walk Store (6/30) CapitaLand MALL Store (7/28) CAPITALAND 29

30 Multi-Channel Distribution Strategy - New 2.0 Stores in Taiwan POCHING New Flagship Store in Taipei Far Eastern Poching Store (6/28) 2.0 Concept Shop in Shop in Taipei POYA Watsons SASA POYA WATSONS 30

31 Multi-Channel Distribution Strategy - New 2.0 Stores Extension into Malaysia and Myanmar 2.0 Concept Shop in Shop in Oversea markets SASA Malaysia Beauty Diary Myanmar SASA MYANMAR 31

32 Our Future Prospects - Growth Strategy - Market Expansions - Product Innovation 32

33 Our Future Prospects - Growth Strategies: 1 Expand, 2 Innovate and 3 Control 1 Market Expansion Focus on market expansion in China and ASEAN countries for the next two years Continue diversify sales contribution from pharmacy channel to e-commerce, department counters. 2 Innovative Creation Continue to develop leading Cosmeceutical products and innovate at 15% New Product Development rate and Focus on functional facial products and expand to cosmetics and body and hair care categories 3 Internal Control Completion of IPO on TPEX in JUNE 2016 Enhance organization, finance, management and internal controls Successful execution of expansion plan with tight cash flow monitoring and inventory control 33

34 Our Future Prospects: Market Expansion - Global Skincare Market Potential Global share by Category NT$ 3.3tn global skincare market 62x Taiwan MKT NT$693bn China skincare market 13x Taiwan MKT China share by Category Taiwan share by Category NT$ 54bn Taiwan skincare market #1 brand in Taiwan s cosmeceutical market NT$157bn ASEAN skincare market 2.9x Taiwan MKT Store-Based Retailing Non-Store Retailing Channel Grocery Retailers Department Stores Beauty Specialist Parapharmacies/Drugstores SubTotal Direct Selling Internet Retailing Homeshopping SubTotal TOTAL '11 14% 14% 14% 0.4% 32% 32% 31% -0.7% 6% 6% 6% -0.3% 14% 14% 14% -0.6% 66% 65% 65% -1.0% 16% 15% 15% -1.2% 11% 12% 13% 1.5% 7% 8% 8% 0.7% 34% 35% 35% 1.0% 100% 100% 100% 0.0% 34

35 Our Future Prospects: 5 Year New Product Strategy - Extension to Other Categories Products renewal rate remain at 15% per year. Continue to develop high efficacy, non additive, medical skin care products. Diversified product portfolio, extent product form type and reach new demographic. 1-2 years 2-3 years 3-5 years Extent to Cosmetics and Body care.develop new products for younger Anti-Agers.Develop Hand and Foot care.develop Scalp and Hair care.suitable for Mother & Baby.Develop Organic and Natural Skincare concept Continuous formula upgrades for current products 35

36 Financial Performance - Major Financial Indicators - Income Statement Summary - Balance Sheet and Key Indices 36

37 Financial Performance - 1H2016 Major Financial Indicators 1,000, , , , , % 70% 60% 50% 40% 30% 20% 10% 0% 662, , , ,808 Sales YOY 31% 865, , , , , ,995 47% 60% YOY 53% 505, , , % 68.34% 68.44% 37.59% 36.10% Profitability Metrics Gross Margin Operating Margin Net Margin 30.63% 33.80% 26.40% 27.77% H1 Q4 Q3 Q2 Q1 300, , , , ,000 50, % 12% 12% 11% 11% 10% 10% 249,159 Operating Profit YOY 6% 265,041 90, ,356 YOY 151% 171, % 89,334 88,421 85, % 15,499 28,606 81,690 55,206 39, Debt ratio & Cash equivalents Cash equivalents Debt ratio 12.30% 12.04% 10.56% 1,171, , , H1 NTD 000 Q4 Q3 Q2 Q1 1,400,000 1,200,000 1,000, , , , ,000-37

38 Financial Performance - Income Statement Summary Consolidated Unit: NT$ Thousands Item H1 2016H1 YOY% Amount % Amount % Amount % Amount % YOY% Sales 662, % 865, % 30.5% 330, % 505, % 53.2% Cost of Sales 215, % 273, % 26.9% 110, % 159, % 44.6% Gross Profit 447, % 591, % 32.3% 219, % 346, % 57.4% Operating Expenses 197, % 326, % 64.9% 151, % 175, % 15.39% Operating Profit 249, % 265, % 6.4% 68, % 171, % 151.2% Non-Op Income & Expenses 43, % 8, % -80.9% (803) -0.2% (2,493) -0.5% 210.5% Profit Before Taxes 293, % 273, % -6.7% 67, % 168, % 150.5% Income Tax Expense 53, % 45, % -16.4% 10, % 28, % 161.8% Net Income 239, % 228, % -4.5% 56, % 140, % 148.4% EPS (NT$)

39 Financial Performance - Balance Sheets & Key Indices Consolidated Unit: NT$ Thousands Item Cash and Cash Equivalents 294, , ,415 1,171,037 Accounts Receivable 150, , , ,218 Inventories 94, , , ,889 Other Financial Assets 431, , , ,535 Total Assets 1,023,521 1,068,585 1,048,304 2,136,820 Total Liabilities 125, , , ,275 Total Shareholders' Equity 897, , ,822 1,879,545 Key Indices A/R Turnover Days Inventory Turnover Days A/P Turnover Days Current Ratio (%) ROE(%) Working Capital 876, , ,486 1,840,018 Cash from OP activities 176, ,449-31,681 95,568 39

40 Thank You Your Personal Doctor For Your Perfect Skin -DR.WU Contact Information Fiona Chiu, Financial Manager ext. 36 TEL: Mobile: