Message from the Chief Executive Officer

By 2020, the company was impacted by the Coronavirus outbreak. The epidemic started in China and spread to other countries around the world, resulting in an economic slowdown. The number of tourists has decreased; the consumers’ purchasing power was weakened, and the company has to close nearly 300 retail stores nationwide in accordance with the announcement on the closure of department stores and country. All of the above significantly affects overall sale of the company. Performance in 2020, the company had total income of 876.8 million baht decreased by 61.6% compared to the previous year with total income of 2020.8 million baht, net loss of 104.9 million baht decreased by 145.1% compared to the previous year with a net profit of 232.6 million baht.

COVID-19 and the economic crises that BEAUTY is facing significantly impact the company’s operating results – both income and profit, but the company’s restructuring significantly reduce expenses. In term of income, continuous adjustment strategies and expansion of new distribution channels allow BEAUTY products to continue to gain popularity and reach more domestic consumers. As for the international market, the company still receive orders from distributors in China, Asia, and other countries – a good signal of expansion and growth after the crises unfolded.

The company is aware of various factors that affect the overall performance of the company by closely monitoring the situation of the Coronavirus outbreak (COVID-19) in order to adjust the management strategies in 2021 – setting a 5% revenue target (Conservative Growth) and maintaining a net profit margin more than 5%. Management structure was adjusted. Production, sales, and administrative costs were significantly reduced. The size of the organization is also reduced to suit the changing of business models and economic situations. Apart from cost reduction, the company focuses on expanding effective distribution channels and develop new business models and international markets. In addition, the company adjusted the new format of distribution channels both domestic and abroad. A new business model must also be developed to prepare for continuous market expansion. In 2021, the company’s profitability, financial position, and cash flow will be strong capable of strengthening business development via 3 strategies 1. Re-Structure: adjust the management structure within the organization to increase the efficiency of the entire business while reducing the production, sales, and administrative expenses to stay and survive in the long-term business competitiveness. 2. Re-New: adjust domestic market strategy by focusing on expanding distribution channels that entail high potential to reach additional customer groups as follows; Consumer Product channels, Fast Moving Consumer Goods (FMCG), targeting large cosmetic wholesalers in major provinces (Local Distributor), retail channels (Retails) - close underperforming and high costs branches, additional online channels, and other effective distribution channels. The company is proactive expanding international market and modifying overseas distribution channels from Shop Model into Distributor Channel in order to increase competency in both offline and online market, penetrating especially into China market. 3. Re-Model: develop new business models which are in the process of revamping and developing new sales models to synchronize sales channels and product between online and offline channels.

The company is aware of various factors that affect the overall performance of the company by closely monitoring the situation of the Coronavirus outbreak (COVID-19) in order to adjust the management strategies in 2021 – setting a 5% revenue target (Conservative Growth) and maintaining a net profit margin more than 5%. Management structure was adjusted. Production, sales, and administrative costs were significantly reduced. The size of the organization is also reduced to suit the changing of business models and economic situations. Apart from cost reduction, the company focuses on expanding effective distribution channels and develop new business models and international markets. In addition, the company adjusted the new format of distribution channels both domestic and abroad. A new business model must also be developed to prepare for continuous market expansion. In 2021, the company’s profitability, financial position, and cash flow will be strong capable of strengthening business development via 3 strategies 1. Re-Structure: adjust the management structure within the organization to increase the efficiency of the entire business while reducing the production, sales, and administrative expenses to stay and survive in the long-term business competitiveness. 2. Re-New: adjust domestic market strategy by focusing on expanding distribution channels that entail high potential to reach additional customer groups as follows; Consumer Product channels, Fast Moving Consumer Goods (FMCG), targeting large cosmetic wholesalers in major provinces (Local Distributor), retail channels (Retails) - close underperforming and high costs branches, additional online channels, and other effective distribution channels. The company is proactive expanding international market and modifying overseas distribution channels from Shop Model into Distributor Channel in order to increase competency in both offline and online market, penetrating especially into China market. 3. Re-Model: develop new business models which are in the process of revamping and developing new sales models to synchronize sales channels and product between online and offline channels.

Lastly, I, as a representative of the company’s management and staff, are sincerely concerned about everyone’s well-being. Therefore, to stay safe as an individual from the Coronavirus 2019 (COVID-19) and maintain societal peacefulness, we would like to urge the behavioral changes to resonate with a new lifestyle (New Normal) while maintaining social distancing. We hope the best for everyone to get through the crisis safe and sound.

 

Dr. Suwin Kraibhubes

Chief Executive Officer

Beauty Community Public Company Limited

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