Gome Retail Holdings Limited · HKEX:493
Gome Retail — GOME Electrical Appliances Holding — H1 2012 Earnings Presentation
26 slides from Gome Retail's earnings presentation, Aug 31, 2012
Slide 1: 2012 Interim Results Announcement
2012 Interim Results Announcement 31st August, 2012
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
Slide 3: Content
Content Financial Results for 1H 2012 Strategies and Outlook for 2H 2012 Appendix 2012 Interim Report | Page 2
Slide 4: Financial Results for 1H 2012
Financial Results for 1H 2012 2012 Interim Report | Page 3
Slide 5: 1H 2012 Business Highlights
1H 2012 Business Highlights During the reporting period, the external environment was critical, the Group undertook a number of initiatives to manage its strategic transition including: Sales revenue reached RMB23.13 billion, decreased by 22.4% y-o-y Sales decline reduced operating leverage, and
Slide 6: Challenges and Opportunities
Challenges and Opportunities Challenges analysis and strategic initiatives External - Marco slowdown - Property control Challenges - Policy expiration - Home appliances market continues to grow in Macro new market and penetration opportunities - New government policies stimulate spending Slow reac
Slide 7: Income Statement Summary and Analysis
1. Income Statement Summary and Analysis Operating results affected by internal and external factors RMB Million 1H2011 1H2012 Change Revenue 29,806 23,126 (22.4)% Consolidated Gross Profit 5,466 3,785 (30.8)% Operating Profit / (Loss) 1,597 (528) (133.1)% Profit / (Loss) Before Tax 1,666 (443) (126
Slide 8: Consolidated Gross Profit Margin Analysis
2. Consolidated Gross Profit Margin Analysis Operating results declined, gross profit under pressure 1H2011 1H2012 RMB Million Consolidated 18.3% 16.4% 1H2011 1H2012 gross margin Consolidated Revenue 29,806 23,126 gross profit 5,466 3,785 Consolidated gross 18.3% 16.4% (RMB Million) margin Gross pro
Slide 9: Expenses Breakdown
3. Expenses Breakdown Cost measures not yet reflected in 1H 2012 financials RMB Million 1H11 1H12 Change % Selling & Distribution Expenses 10.4% 14.9% 4.5 Rent 3.9% 6.3% 2.4 Sales Salaries 2.8% 3.4% 0.6 Advertising 1.1% 1.9% 0.8 Delivery 0.6% 0.7% 0.1 Utilities 0.6% 0.8% 0.2 Other S&D 1.4% 1.8% 0.4
Slide 10: Stores Indicator
4. Stores Indicator Store improvement plan started in Q2 Period-end sales area 1,000 sq.m Average sales per store RMB 10,000 Sales per sq.m RMB Yuan Same store sales growth Number of period end comparable stores： 680 669 662 661 788 763 2012 Interim Report | Page 9
Slide 11: Balance Sheet Summary
4. Balance Sheet Summary Improved inventory level generated strong cash flow As at 31st As at 30th RMB Million Change December, 2011 June, 2012 Cash and Cash Equivalents 5,971 8,232 37.9% Pledged Deposits 4,389 3,893 (11.3)% Inventories 9,625 6,853 (28.8)% Trade Payables 7,177 6,496 (9.5)% Bill Paya
Slide 12: Strategies and Outlook for 2H 2012
Strategies and Outlook for 2H 2012 2012 Interim Report | Page 11
Slide 13: Market Environment
1. Market Environment Physical stores remains the main channel, E-commerce grows in significance Home appliances market Online sales volume % of home Growth rate and market size appliances RMB Billion online sales GOME only has 8% of the market with E-commerce only has 10% of overall significant pot
Slide 14: Market Environment
1. Market Environment Tier 2 market will be the growth engine for future Home Appliance Market Breakdown by Cities RMB Billion; % CAGR Growth Driver 2,023 10% 26% 7% ▪ Urbanization furthered demand for home 1,053 appliance 1st Tier City 11% 26% 9% ▪ Product advancement and replacement 2nd Tier City
Slide 15: Strategic Layout
2. Strategic Layout Multi-Channel Retailer: online/offline businesses with one integrated infrastructure Consumer demand Oriented Tier 1 market Tier 2 market E-commerce (1st 2nd (3rd 4th Tier cities) Steady Tier cities) growth Same store Network sales growth coverage Supply Chain 100 billion Nation-
Slide 16: Tier 1 Market
3. Tier 1 Market Same store sales growth focused 1 2 3 Tier 1 market Tier 确定战略方2 market E-commerce （1 2 tier cities） （3 案选择标准 st nd rd th 4 tier cities） Multi-channel Retailer Total market value of approx. 632 billion by 2016 Growth Total market value of approx. 361 billion in 2012, of which GOM
Slide 17: Tier 2 Market
3. Tier 2 Market Strong growth engine for physical stores 1 2 3 Tier 1 market Tier 确定战略方2 market E-commerce （1 2 tier cities） （3 案选择标准 st nd rd th 4 tier cities） Multi-channel Retailer Total market value of approx. 1 trillion by 2016, exceeds tier 1 market Growth Total market value of approx. 50
Slide 18: E-Commerce
4 .E-Commerce Integrate online/offline infrastructure to become a multichannel retailer 1 2 3 Tier 1 market Tier 确定战略方2 market E-commerce （1 2 tier cities） （3 案选择标准 st nd rd th 4 tier cities） Multi-channel Retailer 1、High operating cost Current issues 2、Low gross margin facing B2C players 3、Continuo
Slide 19: Strengthening Supply Chain Operations
Strengthening Supply Chain Operations Boost product competitiveness and consolidated gross profit margin Supply chain elements Measures Merchandizing deliver right products to the right stores at right inventory level Ordering and Speed up inventory turnover, reduce loss caused by price reduction an
Slide 20: Appendix
Appendix 2012 Interim Report | Page 19
Slide 21: Sales by Regions
Sales by Regions 1H2011 Total: RMB 29.81 Billion 1H2012 Total: RMB 23.13 Billion 2012 Interim Report | Page 20
Slide 22: Sales by Product Categories
Sales by Product Categories 2012 Interim Report | Page 21
Slide 23: Gross Profit Margin by Product Categories
Gross Profit Margin by Product Categories Continuous increase in gross profit margin due to: Further optimization of product mix, increasing the sales proportion of high-margin products such as small home appliances, accessories, ODM/OEM products Strengthening collaboration with suppliers and
Slide 24: Store Network Expansion
Store Network Expansion As of 30th June, 2012 Group GOME China Paradise CellStar Flagship stores 213 168 45 0 Standard stores 376 323 53 0 Specialized stores 507 395 67 45 Total: 1096 886 165 45 T1 Market 690 530 121 39 T2 Market(1) 406 356 44 6 Net store increase in 1H12: 17 20 (2) (1) Number of st
Slide 25: Stable Supplier relationship
Stable Supplier relationship Top 5 suppliers for 1H2011 Top 5 suppliers for 1H2012 2012 Interim Report | Page 24
Slide 26: Thank you
Thank you 2012 Interim Report | Page 25
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