Gome Retail Holdings Limited · HKEX:493
Gome Retail — 9M 2016 Earnings Presentation
42 slides from Gome Retail's earnings presentation, November 2016
Slide 1: 2016 First Nine Months Results Announcement
2016 First Nine Months Results Announcement November 2016
Slide 2: Disclaimer
Disclaimer This presentation and the accompanying slides (the “Presentation”) which have been prepared by GOME Electrical Appliances Holding 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
Slide 3: Contents
Contents 1. Financial Highlights 2. Strategic Transformation • New themed eco-system designed for attracting customer traffics • Supply chain management forging core competitive advantages • Greater customer connection to increase customer stickiness 3. Appendix 3
Slide 4: 2016 9M Operating Matrix
2016 9M Operating Matrix* Online GMV: Offline GMV: RMB21.6 billion RMB56.9 billion Total GMV: GMV From Mobile RMB78.5 Increased 177% YoY billion YoY Growth in T1: 11.3% 25% Growth YoY Mobile Transaction Accounts For 66% of YoY Growth in T2: 28.0% Total Online GMV * The financial information disclose
Slide 5: 2016 9M Financial Highlights
2016 9M Financial Highlights* Sales Revenue RMB 55.39 billion YoY Growth 15.0% Sales Revenue from Online Business YoY Growth 79.4% RMB 8.06 billion Operating Expense Ratio 15.7% YoY Down 0.3 percentage point Profit Attributable to Owners of the YoY Down 70.3% Parent RMB 247 million 5
Slide 6: Key Financial Indicators
2016 9M Financial Highlights* – Key Financial Indicators Sales Revenue Growth (YoY) Operating Expense Ratio 15.0% 16.3% 16.3% 16.3% 11.4% 8.8% 16.0% 7.4% 7.0% 7.0% 7.9% 15.7% 15.7% 15.5% 1H14 FY14 1H15 FY15 1H16 9M15 9M16 1H14 FY14 1H15 FY15 1H16 9M15 9M16 Consolidated Gross Profit Margin Operating
Slide 7: Contents
Contents 1. Financial Highlights 2. Strategic Transformation • New themed eco-system designed for attracting customer traffics • Supply chain management forging core competitive advantages • Greater customer connection to increase customer stickiness 3. Appendix 7
Slide 8: Rolling Out Total Retail Strategic Plan
Rolling Out Total Retail Strategic Plan Well-established customer interfaces to forge greater platform for attracting customer traffics Better membership operation to build customer intimacy and drive higher traffic growth Ultimately all translate into GMV Other Customer Tier-1 Tier-2 TV Channels Cu
Slide 9: Brighter Future Build upon Total Retail Ecosystem
Brighter Future Build upon Total Retail Ecosystem Value proposition – GOME is an online and offline integrated home solution provider Lifestyle & Gourmet Internet TV E-commerce Six New Retailing Themes Leisure & Home Internet of Entertainment Furnishing & Things (IoT) & Design Smart Devices Supply C
Slide 10: Implementation of New Retailing Theme Retail & Entertainment
Implementation of New Retailing Theme Product Trading Integrated System Home Furnishing & Design Mode Sales Solution Provider Home Furnishing Design Shopping Home furnishing, Traditional Home design, shopping Appliances Retailer One-stop solution provider “Retail & Entertainment” Leisure Store Produ
Slide 11: Leisure & Entertainment
New Retailing Theme – Leisure & Entertainment Leisure & Entertainment theme with diversified choices Diversified entertainment for younger generation Professional e-sports center (Dazhong Zhongta store) Net cafe and online games (Xiaomei Internet Cafe in Shenzhen) VR experiencing center (already lau
Slide 12: E-sports Center
New Retailing Theme – E-sports Center Dazhong Zhongta E-sports Center • Area: 1500 m2 • Target: Young generation around 20-30 years old • Average daily customer traffics on race day during trial period: 600 people • Profit Model: Net fee, sales of derivatives of game and animation, food and beverage
Slide 13: Lifestyle & Gourmet
New Retailing Theme – Lifestyle & Gourmet Lifestyle & Gourmet Theme Lifestyle and gourmet themes for family customer groups • Integrated Kitchen • Supermarket & Juice Bar • Hands-on Baking Classes • Simple Restaurant 13
Slide 14: Baking Class
New Retailing Theme – Baking Class Hands-on Baking Classes Through regular training courses and the experience of kitchen appliances to ultimately stimulate relevant sales in all set kitchen appliances, currently operating in 120 stores Ningbo Guangzhou Xi’an Shenzhen 14
Slide 15: Home Furnishing & Design
New Retailing Theme – Home Furnishing & Design Integrated Home Furnishing & Design Solutions Highly overlapped between the customers in home furnishing and electronics • Partnering with national home furnishing companies / Internet home furnishing companies； • Introduction of high-ended kitchen cabi
Slide 16: Home Water System
New Retailing Theme – Home Water System Water Cube Experience Center Showcasing the importance of drinking water quality, enhancing consumers’ awareness of water quality. 150 centers have been launched nationwide Shanghai Suzhou Xi’an 16
Slide 17: Internet TV
New Retailing Theme – Internet TV Focusing on Trending Industry – Providing Internet TV Solutions Young Consumer focused to lift overall profitability Content Provider • Over 20% consolidated gross margin • Content distribution + equity interests Distributor • Mango TV processing on schedule • The J
Slide 18: Internet TV
New Retailing Theme – Internet TV TV selling in GOME would be all Internet-based by 2018 Focus rate of Flat Panel Display Market in different products in • High Profit Margin Product + Equity Interests + China, 2016 3rd quarter Content Distribution Focus Rate 50.0% • Strengthen Platforms + Content A
Slide 19: IoT & Smart Devices
New Retailing Theme – IoT & Smart Devices Product After-sales Sales Real time data analysis with Services targeted customer-tailored services prompt • AC maintenance, repairing and cleaning • Water purifier filter Microchip replacement Implementation • Air purifier filter replacement • More to come
Slide 20: E-commerce
New Retailing Theme – E-commerce Continuously rapid growth of GOME online Integrating online and office to deliver better experience Open Supply Chain & Rapid GMV Growth SKU Expansion 115% 106% “Gome” online flagship store launched in May FY14 FY15 9M15 9M16 • Customer acquisition costs at RMB 79 •
Slide 21: Contents
Contents 1. Financial Highlights 2. Strategic Transformation • New themed eco-system designed for attracting customer traffics • Supply chain management forging core competitive advantages • Greater customer connection to increase customer stickiness 3. Appendix 21
Slide 22: Supply Chain – Industry Leading Logistics Services
Supply Chain – Industry Leading Logistics Services China's leading logistics services providers for large and medium size items Warehouse sharing – establish “cloud Comprehensive co-operation and alliance in warehouse” network through distribution logistic system with Haier centers Trunk line Anxun
Slide 23: Supply Chain – Industry Leading Logistics Services
Supply Chain – Industry Leading Logistics Services Internet-oriented Market-oriented The new logistics Rural Township-oriented system launched Newly built 6 centralized warehouses nationally has realized Upgrade small-size goods warehouse, (Beijing, Shanghai, Guangzhou, Chengdu, Network coverage the
Slide 24: Supply Chain – Strengthen Core Competitive Advantages
Supply Chain – Strengthen Core Competitive Advantages Strengthen core competitive advantages in retailing by focusing on merchandise selection Transparent Pricing Strategy in Stores Pricing Control Differentiated Power Merchandise pricing power Products Initial Innovative and Flatly Price flexible p
Slide 25: Supply Chain – Overseas E-commerce
Supply Chain – Overseas E-commerce Building global procurement platform Realizing global supply chain resources import and export capacity in the future Online Korea Mall Partner with second largest online distributor – Interpark in Korea for merchant selection and operation Japan Mall Direct operat
Slide 26: Contents
Contents 1. Financial Highlights 2. Strategic Transformation • New themed eco-system designed for attracting customer traffics • Supply chain management forging core competitive advantages • Greater customer connection to increase customer stickiness 3. Appendix 26
Slide 27: Customer Intimacy Strategy – GOME House Manager
Customer Intimacy Strategy – GOME House Manager Open-ended “Internet Plus” platform to effectively connect stores, members, logistics and after sales, and eventually improving shopping experience E-manual Members Front-end Smart Cloud E-warranty Card Logistics “One-click” Appointment Back-end After-
Slide 28: GOME House Manager's Service Network Coverage
Customer Intimacy Strategy – GOME House Manager’s Service Network Coverage Provide professional and high quality services of the closed-loop business, including home appliance repairing, cleaning, maintaining and recycling 2016Q3: Continued to develop new business, expand service areas and enhance c
Slide 29: Extended Service Chain and Enhanced Service Value
Customer Intimacy Strategy – Extended Service Chain and Enhanced Service Value Gather & Attract Interact & Merchandise O2O Terminal Consumer Demand Sales Launched Traffics Match Recommend Precision Product Service Connect & Interaction Promotion Information Resources Sharing Service Chain Extension
Slide 30: Partnership for Brighter Future
GOME Total Retail Ecosystem – Partnership for Brighter Future Resources Age of Sharing Crossover Front - end Open-ended Back - end Supply Chain Diversified Product Portfolio Differentiated Product Storage Capacity Sharing Provided by Multiple Types of Retailer 30
Slide 31: Contents
Contents 1. Financial Highlights 2. Strategic Transformation • New themed eco-system designed for attracting customer traffics • Supply chain management forging core competitive advantages • Greater customer connection to increase customer stickiness 3. Appendix 31
Slide 32: Income Statement Summary
Income Statement Summary (RMB in millions) 9M2015 9M2016 YoY Change Revenue 48,173 55,390 15.0% Consolidated Gross profit 8,564 8,875 3.6% Consolidated Gross Profit Margin 17.8% 16.0% (1.8) p.p. Operating Profit 864 167 (80.7)% Operating Profit Margin 1.8% 0.3% (1.5) p.p. Operating Profit Before Tax
Slide 33: Financial Position and Cash Flow Statement
Financial Position and Cash Flow Statement As of As of (RMB in millions) Change 31 Dec. 2015 30 Sep. 2016 Financial Position Cash & Cash Equivalents 7,438 11,355 52.7% Pledged Deposits 3,881 4,912 26.6% Pledged Deposit Ratio 30.1% 30.1% - (exclude DGPOL) Inventories 10,176 11,581 13.8% Inventory Tur
Slide 34: Consolidated Gross Profit Margin
Consolidated Gross Profit Margin (RMB in millions) 9M2015 9M2016 Revenue 48,173 55,390 RMB in millions Consolidated Gross Profit 8,564 8,875 17.8% Consolidated Gross Profit Margin 17.8% 16.0% 16.0% Gross Profit Margin from Suppliers 14.9% 13.3% 2.3% 0.6% 2.1% Other Income and Gain 2.9% 2.7% 0.6% Net
Slide 35: Analysis of Store Indicators
Analysis of Store Indicators Period-end Area Size of Physical Stores Average Quarterly Sales Per Store 1,000 sq.m. RMB in millions 5,502 5,428 11.7 13.1 12.5 11.7 11.2 9.7 9.7 3,719 3,934 3,952 3,931 3,833 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 Quarterly Sales Per Squa
Slide 36: Tier 1 & 2 Market Revenue Breakdown
Tier 1 & 2 Market * Revenue Breakdown 9M2016 Tier-1 market sales up 11.3% YoY, Tier-2 market sales up 28.0% YoY Sales Ratio of Tier-1 & Tier-2 Markets* Tier-1 & Tier-2 Market* Sales RMB in millions 41,866 37,604 78.1% 75.6% 13,524 24.4% 10,569 21.9% Tier 1&2 cities Tier 3&4 cities Tier 1&2 cities Ti
Slide 37: Sales Revenue by Region
Sales Revenue by Region 9M2016 Revenue：RMB55.39 Billion 9M2015 Revenue：RMB48.17 Billion 46% 40% 15% 14% 10% 8% 9% 8% 9% 7% 7% 6% 6% 6% 5% 4% Beijing Shanghai Guangzhou Shenzhen Chengdu Xi'an Chongqing Others 9M2015 9M2016 37
Slide 38: Revenue & Gross Profit Margin by Category
Revenue & Gross Profit Margin by Category Revenue by Category 21% 19% 20% 20% 19% 19% 16% 17% 13% 14% 8% 8% 3% 3% AV Air-con Fridge & Washing Tel-com Small appliances Computer Digital & Others Machine Gross Profit Margin by Category 18.4% 16.7% 16.4% 17.0% 15.0% 15.3% 13.7% 14.5% 11.9% 9.7% 10.0% 9.
Slide 39: Revenue by Category on E-commerce Platform
Revenue by Category on E-commerce Platform Revenue by Category on E-commerce Platform 23% 24% 20% 19% 15% 16% 12% 12% 13% 12% 13% 11% 7% 3% AV Air-con Fridge Washing Tel-com Small Computer Digital & Others Machine Appliances 9M2015 9M2016 39
Slide 40: Nationwide Store Network
Nationwide Store Network Store Network Summary Store Network Detail Listed Group China Target As of 30 Sep 2016 GOME Dazhong Cellstar Total Paradise Group As of 30 Jun 2016 1,186 Flagship stores 201 37 25 - 107 370 Number of stores newly opened 16 Standard stores 309 42 18 - 146 515 37 Specialized s
Slide 41: Top Suppliers
Top 5 Suppliers 9M2016 GOME Top 5 Suppliers 41.6% 9.3% 8.9% 8.3% 7.6% 7.5% Haier Midea Samsung Gree Apple Top Five Suppliers 9M2015 GOME Top 5 Suppliers 43.3% 9.9% 8.9% 8.6% 8.1% 7.8% Haier Gree Apple Midea Samsung Top Five Suppliers 41
Slide 42: Thank you !
Thank you !