Gome Retail Holdings Limited · HKEX:493
Gome Retail — H1 2017 Earnings Presentation
36 slides from Gome Retail's earnings presentation, August 2017
Slide 1: 2017 Interim Results Announcement
2017 Interim Results Announcement August 2017
Slide 2: Disclaimer
Disclaimer This presentation and the accompanying slides (the “Presentation”) which have been prepared by GOME Retail Holdings Limited (“GOME” or the “Company”) do not constitute any offer or invitation to purchase or subscribe for any securities, and shall not form the basis for or be relied on in
Slide 3: Contents
Contents 1. Financial Highlights 2. New Market, New Business, New Technology • Technology development enhanced revolution of new retail business • Market penetration integrated with construction of new scenarios • Business diversification through supply chain • Increase self-owned logistics capacity
Slide 4: 2017 Interim Operating Matrix
2017 Interim Operating Matrix* Online GMV: Offline GMV: RMB 20.5 billion Total GMV: RMB 41.2 billion RMB 61.7 billion 23% Growth YoY Mobile GMV Increased 75% YoY Mobile GMV Accounts for 74% of Total Online GMV * The financial information disclosed in this presentation includes data from Artway Devel
Slide 5: 2017 Interim Financial Highlights
2017 Interim Financial Highlights* Sales Revenue RMB 38.07 billion YoY Growth 7.8% Comparable Store Sales RMB 22.92 billion YoY Growth 2.3% Consolidate Gross Profit Margin 17.8% YoY Up 1.4 percentage points EBITDA RMB 672 million YoY Growth 59.1% Profit Attributable to Owners of the Parent RMB 122 m
Slide 6: 2017 Interim Financial Highlights – Key Financial Indicators
2017 Interim Financial Highlights* – Key Financial Indicators Sales Revenue Growth (YoY) Operating Expense Ratio 18.7% 17.2% 11.4% 16.3% 15.9% 8.8% 7.0% 7.8% 15.7% 15.5% 1H15 FY15 1H16 FY16 1H17 1H15 FY15 1H16 FY16 1H17 Consolidated Gross Profit Margin Net Profit Margin 17.7% 17.8% 17.8% 2.17% 1.87%
Slide 7: Contents
Contents 1. Financial Highlights 2. New Market, New Business, New Technology • Technology development enhanced revolution of new retail business • Market penetration integrated with construction of new scenarios • Business diversification through supply chain • Increase self-owned logistics capacity
Slide 8: GOME New Retail Ecosystem
GOME New Retail Ecosystem Integrating online and offline resources with internet technology to drive mutual customer acquisition Building GOME’s New Retail Eco-system with retail technology development Closed Loop of Customer Online Offline Traffic Connecting Members, Services, and Products; Providi
Slide 9: GOME Plus - Online and Offline Integration Connector
GOME Plus - Online and Offline Integration Connector Online Consumers Business Interaction Big Data Integration & Cloud Computing Physical Stores Connection Logistics Supply Chain Connection of Connection of Connection of Connection of Technology Upstream and Downstream Business Integration Online &
Slide 10: Contents
Contents 1. Financial Highlights 2. New Market, New Business, New Technology • Technology development enhanced revolution of new retail business • Market penetration integrated with construction of new scenarios • Business diversification through supply chain • Increase self-owned logistics capacity
Slide 11: Market Penetration
Market Penetration Potential Market Penetration China’s Offline Home Appliance Market 2016 Unit: RMB ‘000 million 3,500 3,321 3,000 Low Cost Multi-channel 2,500 2,261 2,000 Rapid Expansion 1,500 1,000 High Coverage Sharing First 500 0 Tier 1 & 2 markets Tier 3 & 4 markets The offline home applianc
Slide 12: Market Penetration
Market Penetration Market Development Plan Develop the county-level cities with existing stores of good performance. Expand to surrounding areas gradually. Through “Internet + Physical Stores” combination, use hot items to complement long tail products to achieve guaranteed profitability Self-oper
Slide 13: New Retail Scenario
New Retail Scenario Home Decoration and Household Scenario GOME invested RMB356 million in “iKongjian”, a standardized home Home decoration companies have been introduced into decoration company physical stores in Beijing, Zhejiang, Hangzhou and Chengdu Provide one-stop “Home Decoration + Househol
Slide 14: New Retail Scenario
New Retail Scenario Integrated Home Solutions Continually introduce renowned brands Home Water Central Air Conditioning & and products in integrated home Purification & Ventilation solution. Setup more display areas in Demineralization System physical stores System Integrated Floor Kitchen Heating
Slide 15: New Retail Scenario
New Retail Scenario VR Theatre Launch the First Professional VR Theatre in China Collaborate with hardware manufacturers, including HTC Vive, Samsung Gear VR etc. Signed contracts with leading international content providers such as Baobab Studio and Samhound Media, to offer global simultaneous re
Slide 16: New Retail Scenario
New Retail Scenario Diversified Entertainment and Leisure Stores Baking Class Smart Device Park eSports Comic and Animation Center Net-café and Online Games 16
Slide 17: Contents
Contents 1. Financial Highlights 2. New Market, New Business, New Technology • Technology development enhanced revolution of new retail business • Market penetration integrated with construction of new scenarios • Business diversification through supply chain • Increase self-owned logistics capacity
Slide 18: Supply Chain – Identify New Customer Needs
Supply Chain – Identify New Customer Needs Analyze big data to capture market trend. Develop new business oriented to customer needs Imported Cookware Household Product Small Household products Development Major Brands：Zwilling, Major Brands：DAPU, FUANNA, WMF, Silit, Fissler, etc. JaneHome, KinH
Slide 19: Supply Chain – High Margin Product Structure
Supply Chain – High Margin Product Structure Enhance product advantages and optimize high margin product structure rely on strong supply chain Product Differentiation Consolidated Gross Profit Margin Price Flatly Price 17.8% Competitive Advantages in High Margin Products Product Time Efficiency Firs
Slide 20: Contents
Contents 1. Financial Highlights 2. New Market, New Business, New Technology • Technology development enhanced revolution of new retail business • Market penetration integrated with construction of new scenarios • Business diversification through supply chain • Increase self-owned logistics capacity
Slide 21: Increase Self-owned Logistics Capacity
Increase Self-owned Logistics Capacity Intensive Logistic Network Coverage Set Up Self-owned Warehouses Logistic Network Coverage Set up Self-owned Warehouses Cities: 95.5%; Counties: 91.0%; Villages/Towns: 71.0% Warehouses under construction ：Xi'an, Shenyang, Ningbo To develop warehouse servi
Slide 22: Enhance After-sales Services
Enhance After-sales Services “Delivery + Installation” Services “2-24-7” After-Sales Services Set up “delivery + installation” Repair: Arrive in 2 hours team by providing training to Regular repair: Solve in 24 hours logistic and after-sales Missing parts: Solve in 7 days specialists “Three Deliveri
Slide 23: Elevate Standard of Logistics Services
Elevate Standard of Logistics Services Raise home appliance market barriers by fully promoting “Delivery + Installation” services Provide a model “Delivery + Installation” service for Extend “Delivery + Installation” services to air TV to form a logistic system with technical conditioning and drum w
Slide 24: Standardized Platform for After-Sales Services
Standardized Platform for After-Sales Services Using its closed service circle, GOME collaborated with service providers and manufacturers to develop a standardized after-sales service platform to offer a total service solution for home appliance: Purchase – Installation -- After-Sales Internal Manu
Slide 25: Apply Internet of Things in Future
Apply Internet of Things in Future To build GOME Smart Life by combining its standard linkage agreement, integrated scenario platform and smart products To interact with users upon the collection and analysis of data generated from backend intelligent devices Data Feedback Data After-sales Transmitt
Slide 26: Contents
Contents 1. Financial Highlights 2. New Market, New Business, New Technology • Technology development enhanced revolution of new retail business • Market penetration integrated with construction of new scenarios • Business diversification through supply chain • Increase self-owned logistics capacity
Slide 27: Income Statement Summary
Income Statement Summary （RMB in million） 1H2016 1H2017 YoY Change Revenue 35,312 38,073 7.8% Consolidated gross profit 5,780 6,788 17.4% Consolidated Gross Profit Margin 16.4% 17.8% 1.4 % pts. Operating Profit 28 256 814.3% Operating Profit Margin 0.1% 0.7% 0.6 % pt. Operating Profit Before Tax 64
Slide 28: Financial Position
Financial Position （RMB in million） As of 31 Dec. 2016 As of 30 June 2017 Change Financial Position Cash & Cash Equivalents 13,237 14,476 9.4% Pledged Deposits 5,383 7,449 38.4% Pledged Deposit Ratio (exclude DGPOL) 30.4% 31.0% 0.6 % pts. Inventories 11,606 12,253 5.6% Inventory Turnover Days* 64 67
Slide 29: Consolidated Gross Profit Margin
Consolidated Gross Profit Margin (RMB in million) 1H2016 1H2017 RMB in million Revenue 35,312 38,073 17.8% 16.4% Consolidated Gross Profit 5,780 6,788 2.3% 2.4% 0.6% Consolidate Gross Profit Margin 16.4% 17.8% 0.5% Gross Profit from Supplies 13.5% 14.9% 5,780 6,788 Other Income and Gains 2.9% 2.9% 1
Slide 30: Store Indicators
Store Indicators Period-end Sales Area Average Quarterly Sales Per Store ‘000 sq. meter RMB in million 11.2 12.0 9.7 9.7 9.4 5,502 5,428 5,265 5,226 5,182 2Q16 3Q16 4Q16 1Q17 2Q17 2Q16 3Q16 4Q16 1Q17 2Q17 Same-store Sales Growth and Comparable Quarterly Sales Per Sqm Number of Stores RMB 3,510 3,657
Slide 31: Tier 1 & 2 Market Revenue Breakdown
Tier 1 & 2 Market* Revenue Breakdown In 1H2017 Tier-1 market sales up 7.5% YoY, Tier-2 market sales up 8.7% YoY Sales Ratio of Tier-1 & Tier-2 Markets* Tier-1 & Tier-2 Market* Sales RMB in millions 28,673 75.5% 75.3% 26,662 24.5% 24.7% 8,650 9,400 Tier 1&2 cities Tier 3&4 cities Tier 1&2 cities Tier
Slide 32: Sales Revenue By Region
Sales Revenue By Region 1H2017 Revenue: RMB38.07 billion 1H2016 Revenue: RMB35.31 billion 49% 45% 14% 13% 9% 9% 9% 8% 7% 6% 6% 6% 6% 5% 4% 4% Beijing Shanghai Guanghzou Shenzhen Xi'an Chengdu Jinan Others 1H2016 1H2017 32
Slide 33: Revenue & Gross Profit Margin by Category
Revenue & Gross Profit Margin by Category Revenue by Category 20% 19% 18% 17% 19% 19% 18% 19% 14% 14% 9% 7% 3% 4% AV Air-con Fridge & Washing Tel-com Small appliances Computer Digital & Others Machine Gross Profit Margin by Category 19.2% 16.8% 17.2% 15.7% 16.2% 15.3% 14.8% 14.0% 11.1% 10.6% 10.0% 8
Slide 34: Nationwide Store Network
Nationwide Store Network China As of 30 Jun 2017 GOME Dazhong Cellstar Artway Group Total Paradise Flagship stores 197 35 24 - 104 360 Standard stores 301 39 17 - 134 491 Specialized stores 378 58 2 44 248 730 Total 876 132 43 44 486 1581 Among： T1 Market 459 88 35 37 249 868 T2 Market 417 44 8 7 23
Slide 35: Top Suppliers
Top 5 Suppliers 1H2017 GOME Top 5 Suppliers 42.9% 9.9% 9.7% 9.5% 8.5% 5.3% Haier Midea Apple Gree Hisense Top Five Suppliers 1H2016 GOME Top 5 Suppliers 41.5% 9.0% 8.8% 8.4% 7.8% 7.5% Haier Midea Apple Gree Huawei Top Five Suppliers 35
Slide 36: Thank You
Thank You