Taiwan Sakura Corporation · TWSE:9911
Taiwan Sakura — Q3 2021 Earnings Presentation
35 slides from Taiwan Sakura's earnings presentation, 2021
Slide 1: Sakura Group
goons ites SAKURA GROUP
Slide 2: Company Profile
Company Profile Chairman Chang, Yung-Chieh Paid-in Capital NTD 2.21 billion Production Base Taiwan Head Office／ Daya 2nd div. Shenkang／ Wufeng Employees：1,080 China Kunshan, Jiangsu (Sakura China) Shunde,Guangdong (Sakura Shunde) Employees：2,000 Head Office 1978 1992 Founded Stock listing 2
Slide 3: Operation Locations
Operation Locations Head Office Shenkang plant Range hood Punch/Sheet metal/Painting Sakura China Water heater、Range hood、 Gas stove、Wall-hung boiler、 • 4 production bases Kitchen solution Taiwan • More than 3,500 sales • 2 production bases locations • Jiangsu, Zhejiang, Shanghai, Sichuan Daya
Slide 4: Investment Structure
Investment Structure 台灣櫻花 Taiwan Sakura Capital：NTD 2,211mn 100% 43.19% 100% 100% 100% Total holding 櫻花家居 卜大實業 雅適國際 新加坡控股 44.39% Sakura B.V.I. Sakura Home Puda Topax Sakura Singapore Capital: USD 17.15 mn Capital: NTD 90 mn Capital: NTD 296 mn Capital: NTD 120 mn Capital: USD 4 mn 54.99% 45% 100% 越南
Slide 5: Brand Milestones
Brand Milestones 1978 “ SAKURA ” brand established 1980 “Free oil filters with a door-to- door delivery” as the free permanent service 1987 “Free examination of water heater” as the free permanent service 1994 “SAKURA (China) Bath and Kitchen Co., Ltd” officially began the production and sales activ
Slide 6: Business Concept
Meet the needs of Business Concept local consumers Innovation 創新 DFSS/DFMEA High-pressure leak test Ignition switch test More than 200 R&D personnel in the group The number of patents exceeds 500 Constant temperature and Withstand voltage test moisture duration test 品質 服務 Has the most test equipment
Slide 7: Core Mission
Core Mission A value enterprise and the maximum of the value for consumers and shareholders. ROE、Dividend yield Dividend Payout Strategy (%) (NT$) 25 5 EPS 19.6 4.06 4.08 18.8 18.4 Cash dividend per share 3.65 20 17.0 17.7 4 ROE 3.29 15 12.8 13.3 12.3 3 2.75 3.20 9.0 1.97 1.89 2.6 2.65 2.65 10 2 1.7
Slide 8: Brands & Products
Brands & Products Take the family as the core of the product layout Water Heater/ Kitchen Appliance Kitchen Solution House Deco Imported Kitchen Appliance Bathroom Solution 8
Slide 9: The Level of Brands
The Level of Brands Water Heater/ Kitchen Appliance Kitchen Solution House Deco High-end High- intermediate Keep going up Intermediate Basic 9
Slide 10: Sales channels
More than 3,500 sales locations Sales channels Sakura’s channel penetration rate exceeds 80% Distributor Brand store Taiwan Sakura Direct Dealer Regional Branches Regional Agents Sanitary materials Special dealer (kitchen solution、import department) (9) Kitchenware factory Store/Shop Land developer
Slide 11: Global Market Network
Global Market Network ODM/OEM Hong Kong Australia USA Brazil Dominican Republic OBM Hong Kong Myanmar Macau Philippine USA Mexico Canada Peru Vietnam 11
Slide 12: 2020 Revenue Breakdown
2020 Revenue Breakdown Total Revenue : NT$ 6.63 bn Revenue of Water Heater / Kitchen Appliance NT$ 4.25 bn Import Topax 14% Property 0.26 billion Export Developer 4% Kitchenware 0.39 billion Brand Factory 6% 6% 10% Distributor、 Sanitary Sakura Materials Brand Store 86% 30% 11% Channel Kitchen Soluti
Slide 13: 2020 Revenue Breakdown
2020 Revenue Breakdown Total Revenue : NT$ 6.63 bn Revenue of Kitchen Solution : NT$ 1.65 bn Import Export 0.26 billion 0.39 billion 4% 6% Brand store 28% Kitchen Solution Channel 1.65 billion Water heater & Land developer or Kitchen appliance Construction companies 25% 4.25 billion 72% 64% 13
Slide 14: Taiwan Market _ Water Heater & Kitchen Appliance
Taiwan Market _ Water Heater & Kitchen Appliance Taiwan overall market Market share in Taiwan energy-efficiency (1000 units) subsidies S+T Sakura Topax 1,661 46.8% 45.8% 42.2% 42.5% 42.1% 43.8% 42.7% 43.9% 1,572 1,592 1,584 1,557 1,527 1,537 1,525 38.8% 37.9% 36.8% 36.6% 36.0% 37.1% 36.3% 37.1% 6.1%
Slide 15: Product Innovation
Product Innovation 10L 16L RF Water Heater Intelligent Turbo Boost 加倍水量 NTD 7,500 Water Heater NTD 23,900 加倍舒暢 GMR : 25%-30% GMR : 40%-50% 智能恆溫 專利渦輪增壓 Gas Stove Intelligent Built-in Hob NTD 4,700 with Double Vertex GMR : 30%-35% Flames NTD 18,300 GMR : 35%-45% 智能操控 Slope-side Range 3D Ring Suction D
Slide 16: Gas Water Heater
Gas Water Heater (1000 units) Overall market Market share (S+T) 509 516 498 504 490 488 509 508 RF+FE Total FY2013 FY2020 491 497 467 463 447 (78%) 398 377 Others 343 339 (63%) Others S+T S+T 322 320 44% RF (Traditional) 293 288 292 47% 53% 56% 278 (53%) 251 237 244 RF 52% FE 59% 230 217 215 209 219
Slide 17: Gas Stove
Gas Stove (1000 units) Overall market Market share (S+T) 600 510 FY2013 FY2020 500 454 451 468 457 453 455 423 425 385 402 378 400 354 Market：450,000~500,000 units per year S+T S+T 300 Used house Others transfer Others 40% 42% 200 60% 58% Building use Building license 100 permit 2008 2009 2010 2011
Slide 18: Rang Hood
Rang Hood (1000 units) Overall market Market share (S+T) 500 Used house Market：350,000~400,000 units per year FY2013 FY2020 transfer 394 370 369 373 373 366 400 337 352 312 312 311 307 300 S+T 300 S+T 36% Others Others 45% 200 64% 55% Building use Building license permit 100 2008 2009 2010 2011 2012
Slide 19: Kitchen Solution
Kitchen Solution Overall Market Steady growth in Increasing benefits of about 160,000~180,000 sets Sales of Land Developer the Brand Stores Overall market (1000 sets) Sales of Property developer (NT$ mn) Sales of brand stores (NT$ mn) Brand stores 177 175 177 172 178 169 167 1,184 103 103 102 103 16
Slide 20: Development Plan _ Production Optimization
Development Plan_ Production Optimization Shenkang plant Daya plant Wufeng plant Range hood (Spraying) Water heater & Gas stove Kitchen solution Lack of space / It’s difficult to install automatic Inefficient flow of processing production line with the present space. New plant－Production line optimi
Slide 21: Development Plan _ Water Purifier
Development Plan_ Water Purifier Water Purifier 真正專業的淨水器＝ Market 淨 水 器 ＋ Over Hundred Brands Top barnd share <20% (Machine + Filter) NT$ 10bn • 售前/中/後 完整服務 Consumer • 隨時可查詢使用履歷 • 濾心更換專屬通知 Agent specialized Dealer • 借此平台與消費者互動 • 享有轉介商機 300stores • 淨水專業知識訓練 > • 取得完整消費者名單，分析商機潛力 Sales Amount Sakura • 強
Slide 22: RO water purifier
RO water purifier Erste PAeU TE HR Aa RS a me ae at Bante —He ri 7k Egat RS RK KE BSH
Slide 23: Development Plan _ House Deco
Development Plan_ House Deco Free customized design Consumer unsatisfied Big database about room types pain points Lack of decoration knowledge Unforeseeable design results Lack of transparency in service and charging New 100,000 manufacturing Using smart technology to ensure Manufacturing m
Slide 24: Whole House Customization
Whole House Customization Lobby Living Room Dining Room Kitchen Master Bedroom Walk-in Closet Bedroom Children's Room Elder's Room Study Room Balcony Others 24
Slide 25: Development Plan _ Vietnam Market
Development Plan_ Vietnam Market Market share of Gas stove Modern channel Property developer (H.C.M/Hanoi/Da Nang) 46% 39% 8% 6% Rinnai Sakura Paloma Others >200 brands 2018/11 Representative office 2021H2 Finish investment procedure 2019/12 Market business model decision 25
Slide 26: Financial Highlights
Financial Highlights Net Revenue Net Income (NTD mn) EPS (NTD) 6,628 6,299 5,986 5,601 5,644 5,149 5,277 4,852 4,485 3.29 3.65 4.06 4.08 2.75 3.31 1.75 1.97 1.89 701 720 800 889 893 722 478 539 517 2013 2014 2015 2016 2017 2018 2019 2020 2021/1-9 26
Slide 27: Financial Highlights
Financial Highlights 2013 2014 2015 2016 2017 2018 2019 2020 2021/1-9 (NTD mn) Amount % Amount % Amount % Amount % Amount % Amount % Amount % Amount % Amount % Net Revenue 4,485 100.0% 4,852 100.0% 5,149 100.0% 5,601 100.0% 5,644 100.0% 5,986 100.0% 6,299 100.0% 6,628 100.0% 5,277 100.0% COGS 3,114
Slide 28: Business Prospection
2021 had the highest average cost in 17 years Business Prospection 2021H1 had the largest number of 2020H2 had the lowest vacant rate (9.96%) house transferred in 17 years, and YoY in 12 years +25% 12% 11.5% The transaction volume of the new housing market is 11.2% stable, but the second-hand housin
Slide 29: Business Prospection
Business Prospection The market share of kitchen appliances keeps growing while the average 1 retail price and margin are going up by selling more high-end products Kitchen Solution is expected to keep growing the market share for 2 new houses and improve the operation efficiency of brand stores Exp
Slide 30: Sakura China
Sakura China 30 / SS OY HE > HE TE EI
Slide 31: China Market－Water Heater & Kitchen Appliance
China Market－Water Heater & Kitchen Appliance (RMB bn) Water heater Market Retail Sales Range hood Market Retail Sales Gas Stove Market Retail Sales YoY YoY YoY 12.3% 12.7% 17.4% 8.7% 7.2% 7.0% -3.3% 3.9% 0.8% -12.5% -7.5% -9.3% -2.0% -6.4% -3.0% -4.1% -5.9% -14.7% 43.3 62.5 67.0 65.7 38.4 37.9 21.5
Slide 32: Sakura China－Sales Channels
Sakura China－Sales Channels Sales Breakdown by Channel, 2020 Sakura China Others 2.9% Agent Online Offline 14.9% Retailer Main growing 33.6% power EC E-commerce Regional Agents Headquarters 24.2% (TMALL、JD、Suning、 PDD) (2) 、Branches(28) Key Account 24.4% Regional Agents Key Property Retailers Renova
Slide 33: Sakura China－Product structure
Sakura China－Product structure Water Heater/ Kitchen Appliance 2020 Revenue Breakdown Others Wall-hung Boiler 7% 4% Electric Water Heater Gas Water Heater 6% 26% Kitchen Solution Kitchen Solution 12% Range Hood Gas Stove 24% 21% 33
Slide 34: Sakura China－Overall Business Strategies
Sakura China－Overall Business Strategies Continue to focus on the management in regional and the 1 niche in the replacement markets. 2 E-commerce deployments / off-line distributor developments in 3-4 tier cities. 3 Managing Fixed costs / Enforcing Inventory management. 34
Slide 35: Thank You!
THANK YOU! 35