#1S SINGER BANGLADESH LIMITED INVESTOR PRESENTATION S March 2019#2Today's Presenters P HI S Gavin Walker Chairman Singer Bangladesh Limited President & CEO Singer Asia Limited MHM Fairoz Chief Executive Officer Singer Bangladesh Limited. 2#3Company Profile Industry Retail and consumer finance Household consumer durables US$ 164m / BDT 13,7bn Revenue1 EBITDA1 EBITDA margin¹ US$ 20.0m / BDT 1,7bn 12.4% Net income 1 US$ 11.0m / BDT 921m Number of retail stores 2 Number of employees² Number of shareholders² 385 1,507 9,273 Note: 1. For 12 months ended 31 Dec 2018 2. As at 31 Dec 2018 3. Held via Retail Holdings Bhold B.V. Details of the group structure are provided in Appendix 1 Shareholder structure2 (Listed on DSE since 1983 & CSE since 2001) Institutions 14.8% Retail investors 20.8% Retail Holdings Bhold B.V. 57.0% S Foreign investors 7.4% 3#4Key Growth Drivers S 1. Robust economic fundamentals 2. Strong brand and reputation 3. Extensive product portfolio 4. Extensive distribution 5. Multiple financial services offerings . Great environment for long-term growth One of the most recognised brands in Bangladesh • A leading position in multiple product categories Largest retail distribution network in Bangladesh ⚫ Drives significant footfall to stores 4#5S Key Growth Driver 1 - Robust economic fundamentals BANGLADESH OPanchagarh River Thakurgaon ō Rangpuro Dinajpur o Nawabganj Rajshahi INDIA Gaibandha Great environment for long-term growth Lowacherra Forest Telepara Forest Kolkata (Calcutta) •Somapuri Mymensingh Sylhet Vihara Madhupuro Madhupur FR 0 Bhawal Kishoreganj Puthia Padma National Jessore a Khulna Park Savar Dhaka River Mainimati Ruins • Shariatpur INDIA Jhalakathi Kaptai Lake ° Pirojpur Bhola Kaptai Barguna Sundarbans NP. Chittagong Chittagong Hill Tracks Hiron Point Cox's Bazar MYANMAR (BURMA) 0 100 km BAY OF 0 60 miles St Martin Teknaf BENGAL Island Population demographics Strong GDP growth rates Electrification • Large population • Increasing MAC1 • 7.1%² Only 60%2 Low product penetration rates • Refrigerators 20%³ • Product replacement Increasing unit selling prices Note: 1. Middle & affluent class 2. World Bank 3. Product penetration rates amongst Bangladesh households remains very low in certain product categories (for example; air conditioners 3%, washing machines 2%, personal computers 5%, refrigerators 20%) - company estimates LO 5#6Key Growth Driver 2 - Strong brand and reputation SINGER is one of the most recognised brands in Bangladesh BEST BRANARD Bangladesh 2018 SINGER NO. 1 REFRIGERATOR BRAND 2018 Exceptional brand awareness AWARDED Superbrands SINGER TRUSTED INTERNATIONAL BRAND BANGLADESH'S CHOICE 2018 Notes: 1. Company history is set-out in Appendix 2 2. Awarded No 1 Refrigerator Brand in Bangladesh by Bangladesh Brand Forum / AC Nielson 3. Awarded super brand status in consumer durable industry • 114 years in Bangladesh¹ Brand association • Trust, quality, service & credit2&3 International Aspirational • Multi-national Company S CO 6#7S Key Growth Driver 2 - Strong brand and reputation SINGER is one of the most recognised brands in Bangladesh d ICSB ICSB National Award 2017 for Cerpose Geverance Excelence Gold Award Singer Bangladesh Ltd. Engineering Companies Category ICSB Secaries of A+ BB+ ST-4 AAA AA Corporate Governance • Corporate governance awards AAA ST-5 ST-1 AA Credit Rating Report Of Singer Bangladesh Limited EMERGING Credit Rating Ltd en independent house of risk assessment BBB- B AA+ B+ BB ST-2 BBB BBB+ ST-3 Strong balance sheet • AAA long-term credit rating² Notes: 1. Awarded annually by ICSB 2. Emerging Credit Rating Agency 7#8Key Growth Driver 3 – Extensive product portfolio - A leading position in multiple product categories Home appliances 68% 1 Consumer electronics 25% 1 Refrigerators & freezers Washing machines Air conditioners Furniture 2% 1 Televisions Laptops Sewing machines 4% 1 Sitting room sets Bedroom sets Dining room sets Zig-Zag model Straight stitch model Note: 20222 Others 1% 1 Instant power supply Voltage stabilizer S House brands - 90% 1 SINGER® TRUSTED INTERNATIONAL BRAND Third-party (including) - 10% 1 BEKO hp SAMSUNG ZOJE SEWING MACHINE Preethi Galanz Skyworth DELL Prestige 1. Based on sale of goods for 12 months ended 31 December 2018 8#9Notes: Key Growth Driver 3 - Extensive product portfolio Margin growth through local manufacturing / Significant capacity increases planned SINGER Refrigerators (Sonlu³) 250,000 units capacity Televisions (TCL³) . 400,000 units capacity INTERNATIONAL APPLIANCES LTD Manufacturer of SINGER Appliances Air conditioners 60,000 units capacity (Midea / Galanz³) SINGER SINGER SINGER SINGER SINGER PGER Furniture . Other products Capacity up to 4% of revenue If duty and transport savings are available 1. Current maximum capacity assuming a double shift 2. Of products sold during the 12 months ended 31 December 2018, 50% were manufactured or assembled in house to save duties and transport costs. This is likely to exceed 60% in 2019 3. Technical partners for factory and materials 9 S#10Key Growth Driver 4 - Extensive distribution Largest retail distribution network in Bangladesh GRUNDIG SAMSUNG Galanz SYMPHONY DELL Skyworth DDawlance Galanz Skyworth VID SIEMENS • 385 retail stores1 2 retail formats • SINGER SINGER SINCER SINGER SKYWIKI +/- 6% sqm growth p.a SINGER SINGER SINGER SINGER Mega SINGER Mega SINGER Mega SINGER Tonted by Cations Click Pick PRODUCT SHIPPING Search entre store here SERVICES BRANDS PROMOTION CASHONDEUVERY MINTY CARD SEARCH GIFTLIST SALES NETWORK- CORPORATE- SUPPORT TRUSTED RELIABLE SINGER নো ফ্রস্ট রেফ্রিজারেটর-এর সাথে ভোল্টেজ স্ট্যাবিলাইজার Microwave Ovens 0000000 Washing Machine V আকর্ষণীয় Note: 1. As at 31 December 2018 Musical Instruments OTEM 0.00 Lager Secure payments by 721 dealers1 E-commerce Country wide after sales network • Mom & pop shops • Institutions & NGO's • Cash on delivery • Fast delivery . 11 service centers 460+ service agents On-line, real-time computer system • Fast management information S 10#11S Key Growth Driver 4 - Extensive distribution Products Multiple store formats - Focus on increasing store sizes. SINGER Plus Total: 361 stores 1 Main retail format (ave. store size 159 sqm 1) HCDs, house brands, third-party brands and furniture SINGER Mega Total: 24 stores1 Larger flagship store format (ave. store size 291 sqm 1) Products Wider premium range of HCDs and furniture SINGER Mega সিঙ্গার মেগা SINGER Plus SINGER NEW YEAR OFFERS IR CONDITIONES SINCER WESTERN WI UNION SINGER Pro Total: 721 stores¹ Wholesale dealers (ave. store size 100sqm ¹) House brand HCDs Products 2. The retail stores comprise 80%, whilst the wholesale dealers 20% of total revenue (for 12 months ended 31 December 2018) Notes: 1. As at 31 December 2018 11#12Key Growth Driver 5 - Multiple financial services offerings Drives significant footfall to stores Consumer credit products¹ Initial Monthly Payment Payments • • Hire purchase Financial services (over 66,500 transactions per month 2) Consumer protection plans 66% of retail sales2 136,421 accounts³ Utilities payments (Bill Pay) Over 100 years experience Remittances (Western Union) Unique Singer processes1 Mobile phone re-loads (Grameen Phone) • Low credit default rates 1 • 94% of receivables in advance1 Mobile Money (Bkash) Note: 1. Details of credit granting, monitoring and collection processes are provided in Appendix 3, with details of receivables performance in Appendix 4 2. For the 12 months ended 31 December 2018 3. As at 31 December 2018 12 S#13- Financials Revenue growth BDT Billion 18 15 12 Note: 9 6 3 Revenue (BDT Billion / US$ Million)1 14 YEAR REVENUE CAGR BDT = 19% / US$ = 16% S USD million 180 150 120 90 60 60 30 0 0 2005 2006 2007 2008 2009 2010 2011 Revenue BDT billion 2012 2013 2014 2015 Revenue USD million 2016 2017 2018 1. Revenue for 12 months ended 31 December 2018 2. General election instability impacted 2009 and 2013, whilst 2015 was affected by civil unrest 13#14Financials Revenue analysis - 2018 Revenue % Interest earned and other Retail credit long term 2% Wholesale 19% 10% Retail credit - short term 42% Notes: 1. For 12 months ended 31 December 2018 Retail Cash 27% Retail - Singer Mega 9% S Wholesale 19% Interest & other 2% Retail Singer Plus 70% 14#15Financials Profitability ratios - Gross profit and total overheads S Gross profit Operating expenses 4,500 36% 4,500 36% 4,000 28.5% 32% 4,000 32% 28.8% 28.2% 3,500 26.7% Δ 28% 3,500 28% 3,000 24% 3,000 24% 18.6% 18.4% 17.7% 2,500 20% 2,500 16.6% 20% 2,000 16% 2,000 16% 1,500 12% 1,500 12% 1,000 8% 1,000 8% 500 4% 500 4% 0% 0% 2015 2016 ■Gross Profit BDT million--% of revenue 2017 2018 2015 2016 2017 2018 Operating expenses BDT million -% of revenue Notes: 1. For 12 months ended 31 December 2018 15#16Financials Focus on cost control - Components of total operating expenses as a % of revenue Employee benefits Advertising & promotion Rent and occupancy Royalty □ Depreciation & amortization Others 20.0% 18.6% 18.4% 18.0% 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 17.7% 16.6% 4.0% 2.0% 0.0% 2015 2016 2017 2018 5.8% 5.8% 5.4% 5.0% 3.6% 5.1% 5.0% 4.7% 2.9% 2.5% 2.4% 2.3% 1.5% 1.1% 1.1% 1.3% 0.8% 0.6% 0.6% 0.5% 4.0% 3.3% 3.3% 2.7% Notes: 1. For 12 months ended 31 December 2018 2. Others comprises items such as product guarantee costs, travel and vehicle costs, bad debts and other sundry expenses S 16#17Financials Profitability ratios - EBITDA 1,800 1,500 1,200 10.8% 9.9% 11.6% 900 600 300 EBITDA and net profit 18% 1,500 15% 1,200 12.4% 12% 900 9% 600 6% 300 3% 0% 2015 2016 2017 2018 EBITDA BDT million EBITDA margin % Notes: 1. For 12 months ended 31 December 2018 S Net profit 15% 12% 9% 6.8% Δ 6% 6.9% 5.5% 6.2% 3% 0% 2015 2016 Net profit BDT million 2017 2018 A-Net profit margin % 17#18Financials Summary - BDT in million (unless otherwise indicated) Income statement Revenue Revenue growth (%) EBITDA¹ EBITDA growth (%) Net profit Net profit margin (%) Net profit growth (%) S 2018 2017 2016 2015 2014 2013 13,701 11,059 9,007 6,911 7,262 6,605 23.9% 22.8% 30.3% 9.9% -1.5% 1,674 1,256 944 663 637 636 33.3% 33.1% 42.4% 0.2% -21.0% 921 746 546 369 362 382 6.7% 6.7% 6.1% 5.3% 5.0% 5.8% 23.5% 36.6% 48.0% -5.2% -22.1% Balance sheet as at end December Inventories 3,897 2,968 2,160 1,127 1,522 1,254 Trade receivable 2,225 1,856 1,538 1,042 881 946 Trade payable 1,646 1,508 1,158 804 735 719 Net working capital 4,476 3,316 2,540 1,365 1,668 1,481 Cash and cash equivalent 195 203 152 104 153 168 Total interest bearing borrowings 2,775 1,587 1,131 19 218 26 Shareholder's equity 2,299 2,160 1,947 1,417 1,527 2,633 Debt to equity ratio (times) 1.2 0.7 0.6 0.0 0.14 0.01 Notes: 1. 2. EBITDA calculated as net operating profit plus depreciation and amortization Information for the 12 months ended / or as at 31 December 2018 18#19SINGER Appendices SINGER IT'S THE SINGER NOT THE SONG S 19#20Appendix 1 Group structure - - UCL Asia Partners LLP 41.1% Retail Holdings NV 54.1% Gavin Walker (Sewko CEO) 4.8% SEWKO Holdings Limited 100% SINGER ASIA 57.0% 1 Singer Bangladesh Limited 83.8%2 International Appliances Limited (IAL) S 1. Singer Asia Limited shares in Singer Bangladesh Limited are held via wholly owned intermediate holding companies, with the immediate shareholder being Retail Holdings Bhold B.V. 2. Singer Bangladesh purchased the minority shareholder interests in IAL in early 2019 Note: 20 20#21Appendix 2 Growing and evolving during 114 years in Bangladesh - Single product / single brand - 52 years Multi-product single brand - 48 years Multi-product multi-brand - 13 years 1851 1905 1988 Isaac Merritt Singer Singer Singer founds commences commences I.M. Singer & operations in television Company Bangladesh assembly in ("Singer") and Bangladesh commences production of sewing machines in the United States 2005 Singer introduces an improved credit system and commences expansion of its distribution network Introduces third party brands 2008 Singer launches new financial services products, including inward remittance, in- store bill payment and mobile phone reload services 2012 Singer commences air conditioner assembling in Bangladesh 2014 Singer commences furniture manufacturing in Bangladesh 1856 Singer introduces installment payment plan 1957 Singer introduces sale of home appliances to complement sewing machine sales in the Asian markets 2004 " Singer forms Singer Asia to hold Asia interests UCL Asia acquires stake of Singer Asia 2007 First Singer Mega store opens in Bangladesh 2010 Singer implements new Information systems (SIS) 2013 Singer becomes distributor for additional third- party brands 2016 Singer commences refrigerator manufacturing in Bangladesh 21 S#22Appendix 3 - Proven credit approval, monitoring & collections process Unique features of Singer credit model: 1. Branch managers are commission only S 4. Advance payments by customers 2. Branch manager responsible for uncollectible accounts 3. Collection bonus system 5. 6. Branch manager can pay on behalf of customer Security deposit Credit Life Cycle: a systematic step-by-step approach to managing the credit process Approval process Customer Credit Department / Call Center Arrears Follow up Delinquency Letter Blacklist Monitoring Credit Application, Collections Photo and Identification Card Two Guarantors Point Scoring Multiple Payment Points Account Checker / Internal Audit Promise-To-Pay System Repossession Security deposit as at 31 December 2018 totals BDT 235m Execute Credit Agreement and Welcome Call Background Checks And Physical Visits Legal Recourse / Security Deposit Offset Monthly Performance Assessment: • Credit Dashboards • Balanced Scorecards • VIP Clubs 22#23Thousands 200 180 160 140 120 100 80 60 40 20 Jan-14 Appendix 4 - Low credit default rates BDT Millions 4,000 3,500 Significant improvements in arrears % and gross receivables materially increased ¹ Installment payments in advance¹ 3,000 2,500 2,000 1,500 1,000 500 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Gross Receivable Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Increasing number of accounts and paying percentage1 Jan-16 Net Receivable Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Arrears as a % of gross receivables Jul-17 Sep-17 Nov-17 Jan-18 Mar-18 May-18 Jul-18 Sep-18 Nov-18 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Note: 1. As at 31 December 2018 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Number of Accounts Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 -Paying % May-17 Jul-17 Sep-17 Nov-17 Jan-18 Mar-18 May-18 Jul-18 Sep-18 Nov-18 100.0% 95.0% 90.0% 85.0% 80.0% 75.0% 8.0% 5.9% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 94.1% % of customers who have made installment payments in advance Amounts in advance exceed arrears¹ BDT Millions 70.0% 44 65.0% 682 Amounts in arrears Amounts in advance Net advances = BDT 638M 23 S#24Thank you Shopwin SINGER S