#1S SINGER BANGLADESH LIMITED INVESTOR PRESENTATION S March 2018#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 Revenue1 Retail and consumer finance Household consumer durables US$ 136m BDT 11,059m EBITDA1 EBITDA margin¹ US$ 15.4m / BDT 1,256m 11.4% Net income 1 US$ 9.2m BDT 746m Number of retail stores² Number of employees 2 Number of shareholders² 380 1,152 11,788 Note: 1. For 12 months ended 31 Dec 2017 2. As at 31 Dec 2017 3. Held via Retail Holdings Bhold B.V. Details of the group structure are provided in Appendix 1 S Shareholder structure2 (Listed on DSE since 1983 & CSE since 2001) Retail investors 20.0% Foreign investors 10.6% Institutions 12.4% Retail Holdings Bhold B.V. 57.0% 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 INDIA 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 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 5 LO#6Key Growth Driver 2 - Strong brand and reputation SINGER is one of the most recognised brands in Bangladesh Exceptional brand awareness • 113 years in Bangladesh 1 ср ICMAB BEST CORPORATE AWARD-2016 SINGER BANGLADESH LIMITED FIRST POSITION CATEGORY: MISCELLANEOUS ICMAB Brand association • Trust, quality, service & credit S ICSB ICSB National Award 2016 for Corporate Goverance Excellence Silver Award Singer Bangladesh Ltd. Engineering, Fuel & Power Companies Category ICSB of Chartered Secretaries of Rangladesh International • Aspirational • Multi-national Company • Winner of corporate governance awards2 Corporate Governance Strong balance sheet ⚫ AAA long-term credit rating 3 Notes: 1. Company history is set-out in Appendix 2 2. Awarded annually by ICSB and SAFA 3. Emerging Credit Rating Agency CO 6#7Key Growth Driver 3 - Extensive product portfolio A leading position in multiple product categories Home appliances 70% 1 Consumer electronics 20%1 Refrigerators & freezers Washing machines Air conditioners Furniture 2% 1 Televisions Smart phones/ tablets Laptops Sewing machines 4% 1 Sitting room sets Bedroom sets Dining room sets Zig-Zag model Straight stitch model House brands - 90% 1 SINGER® TRUSTED INTERNATIONAL BRAND Note: 1. Based on sale of goods for 12 months ended 31 December 2017 20222 Others 4% 1 Instant power supply Voltage stabilizer S Third-party (including) - 10%¹ Preethi Galanz BEKO hp SAMSUNG Skyworth ZOJE DELL Prestige SEWING MACHINE HUAWEI 7#8Notes: Key Growth Driver 3 - Extensive product portfolio Margin growth through local manufacturing / Significant capacity increases planned SINGER Refrigerators (Sonlu³) 250,000 units capacity INTERNATIONAL APPLIANCES LTD Manufacturer of SINGER Appliances SINGER SINGER SINGER SINGER SINGER PGER Televisions (TCL³) . 400,000 units capacity Air conditioners (Midea Galanz³) 60,000 units capacity Furniture Other products Capacity up to 4% of revenue 1. Current maximum capacity assuming a double shift 2. Of products sold during the 12 months ended 31 December 2017, 43% were manufactured or assembled in house to save duties and transport costs. This is likely to exceed 50% in 2018 3. Technical partners for factory and materials If duty and transport savings are available 8 S#9Key Growth Driver 4 - Extensive distribution GRUNDIG SAMSUNG Largest retail distribution network in Bangladesh • 2 retail formats Galanz SYMPHONY DELL Skyworth DDawlance Galanz Skyworth VID SIEMENS 380 retail stores1 • 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 2017 Musical Instruments OTEM 0.00 Lager Secure payments by 486 dealers 1 • Mom & pop shops • Institutions & NGO's E-commerce • Cash on delivery • Fast delivery Country wide after sales network . 11 service centers • 460+ service agents On-line, real-time computer system • Fast management information S 9#10S Key Growth Driver 4 - Extensive distribution Products Multiple store formats - Focus on increasing store sizes. SINGER Plus Total: 358 stores1 Main retail format (ave. store size 145 sqm 1) HCDs, house brands, third-party brands and furniture SINGER Mega Total: 22 stores1 Larger flagship store format (ave. store size 268 sqm 1) Products Wider premium range of HCDs and furniture সিঙ্গার মেগা SINGER Mega TAST Ⓡ SINGER Plus SINGER NEW YEAR OFFERS IR CONDITIONES SINCER WESTERN WI UNION SINGER' Pro Total: 486 stores1 Wholesale dealers (ave. store size 100sqm ¹) House brand HCDs Products 2. The retail stores comprise 85%, whilst the wholesale dealers 15% of total revenue (for 12 months ended 31 December 2017) Notes: 1. As at 31 December 2017 10#11Key Growth Driver 5 - Multiple financial services offerings Drives significant footfall to stores Consumer credit products¹ Hire purchase •64% of retail sales² 119,164 accounts³ Initial Monthly Payment Payments •Over 100 years experience Financial services (over 64,500 transactions per month 2) Consumer protection plans Utilities payments (Bill Pay) •Unique Singer processes 1 Remittances (Western Union) •Low credit default rates¹ Mobile phone re-loads (Grameen Phone) •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 2017 3. As at 31 December 2017 11 S#12Financials Revenue growth - 14 12 10 8 6 2 Revenue (BDT Billion / US$ Million)1 13 YEAR REVENUE CAGR BDT = 17% / US$ = 15% 140 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Revenue BDT billion Revenue USD million Note: 1. Revenue for 12 months ended 31 December 2017 2. General election instability impacted 2009 and 2013, whilst 2015 was affected by civil unrest 120 100 80 60 40 20 20 S 12#13Financials Revenue analysis - Retail credit-long term 10% Wholesale 15% 2017 Revenue % Interest _earned and other 2% Retail credit - short term Retail Cash 31% 43% Notes: 1. For 12 months ended 31 December 2017 Retail - Singer Plus 74% Wholesale 15% S Retail - Singer Mega 9% Interest & other 2% 13#14Financials - Profitability ratios Gross profit 3,500 Gross profit and total overheads 35% 3,000 28.7% 3,000 30% Δ 2,500 28.5% 2,500 26.7% 2,000 1,500 1,000 500 Notes: 1. 2. 25% 2,000 20% 1,500 18.6% 15% 1,000 10% 5% 500 0% 2015 2016 2017 Gross Profit BDT million % of revenue For 12 months ended 31 December 2017 Gross profit includes associate company income (IAL) 2015 S Operating expenses 35% 30% 25% 17.7% 18.4% 20% Δ 15% 2016 Operating expenses BDT million 2017 % of revenue 10% 5% 0% 14#15Financials - Focus on cost control / increasing 'share of voice' Components of total operating expenses as a % of revenue Employee benefits ■Advertising & promotion Rent and occupancy Royalty ☐ Depreciation & amortization Others 2 20.0% 18.6% 18.4% 17.7% 18.0% 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% 2015 2016 2017 5.8% 5.8% 5.4% 3.6% 5.1% 5.0% 2.9% 2.5% 2.4% 1.5% 1.1% 1.1% 0.8% 0.6% 0.6% 4.0% 3.3% 3.3% Notes: 1. For 12 months ended 31 December 2017 2. Others comprises items such as product guarantee costs, travel and vehicle costs, bad debts and other sundry expenses 15 S#16Financials Profitability ratios - 1,400 EBITDA 1,200 1,000 9.6% 800 600 400 200 S EBITDA and net profit Net profit 14% 14% 1,400 11.4% 12% 1,200 10.5% Δ 10% 1,000 8% 800 6% 600 5.3% 4% 400 2% 200 0% 2015 2016 2017 EBITDA BDT million EBITDA margin % Notes: 1. For 12 months ended 31 December 2017 12% 10% 6.7% 8% 6.1% 2015 2016 Net profit BDT million 2017 Net profit margin % 6% 4% 2% 0% 16#17Financials Summary - BDT in million (unless otherwise indicated) Income statement Revenue Revenue growth (%) EBITDA1 EBITDA growth (%) Net profit Net profit margin (%) Net profit growth (%) 2017 2016 2015 11,059 9,007 6,911 22.8% 30.3% 1,256 944 663 33.1% 42.4% 746 546 369 6.7% 6.1% 5.3% 36.6% 48.0% Balance sheet as at end December Inventories 2,968 2,160 1,127 Trade receivable 1,856 1,538 1,042 Trade payable 1,508 1,158 804 Networking capital 3,316 2,540 1,365 Cash and cash equivalent 203 152 104 Total interest bearing borrowings 1,587 1,131 19 Shareholder's equity 2,160 1,947 1,417 Debt to equity ratio (times) 0.7 0.6 0.0 Notes: 1. 2. EBITDA calculated as net operating profit plus depreciation and amortization Information for the 12 months ended / or as at 31 December 2017 17 S#18Financials Dividends. - Regular dividend flow Dividend % of net profit Dividend yield % and dividend per share 10.0% 20 400% S 7.5% 5.0% 2.5% 0.0% 15 10 300% 200% Maln 2012 2013 Dividend yield % Δ 5 100% 2014 2015 2016 Dividend per share (BDT) 0 0% 2017 2012 2013 2014 2015 2016 2017 Notes: 1. 2. Based on the share price at 31 December to which the dividend relates Includes cash dividends only 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% 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. Note: 20 20#21Appendix 2 Growing and evolving during 113 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 ("Singer") and assembly in 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 2013 Singer new Information systems (SIS) 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 2017 totals BDT 215m 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 160 140 120 100 80 60 40 20 Dec-14 BDT N Millions 3,000 Appendix 4 - Low credit default rates Significant improvements in arrears % and gross receivables materially increased¹ 3,500 2,500 2,000 1,500 1,000 500 Dec-14 Feb-15 Apr-15 Feb-15 Apr-15 Jun-15 Aug-15 Oct-15 Dec-15 Feb-16 Net Receivable Apr-16 Gross Receivable -Arrears as a % of gross receivables Increasing number of accounts and paying percentage1 Jun-16 Aug-16 Oct-16 Dec-16 Feb-17 Apr-17 Jun-17 Aug-17 Oct-17 Dec-17 Jun-15 Aug-15 Note: 1. As at 31 December 2017 Oct-15 Dec-15 Feb-16 Number of Accounts Apr-16 Jun-16 Aug-16 Oct-16 Dec-16 -Paying % Feb-17 Apr-17 Jun-17 Aug-17 Oct-17 Dec-17 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Installment payments in advance¹ 5.9% 94.1% % of customers who have made installment payments in advance Amounts in advance exceed arrears¹ 100.0% 98.0% BDT Millions 96.0% 94.0% 92.0% 90.0% 88.0% 86.0% 84.0% 44 682 Net advances = BDT 638M Amounts in advance 23 S#24Thank you Shopwin SINGER S