Vinda International Holdings Ltd
Vinda International — H1 2011 Earnings Presentation
28 slides from Vinda International's earnings presentation, August 2011
Slide 1: Interim Results Announcement 2011
“ges __ Vinda International Holdings Limited {incorporated in the Cayman Islands with limited liability) Stock Code: 3331 Interim Results Announcement 2011
Slide 2: Disclaimer
Information contained in our presentation is intended solely for your personal reference and is strictly confidential. Such information is subject to change without notice, its accuracy is not guaranteed and it may not contain all material information concerning the company and/or its business. We m
Slide 3: Presenters
Mr. Li Chao Wang • Chairman Ms. Zhang Dong Fang, Donna • Chief Executive Officer Mr. Tsang Zee Ho, Paul • Chief Financial Officer 3
Slide 4: Results Highlights
I. Results Highlights II. Financial Highlights III. Business Review IV. Future Outlook V. Q&A 4
Slide 5: Results Highlights
Y-o-y Y-o-y growth growth 30.5% 12.5% Revenue: HK$2,194.6 million Total Sales Volume: 155,208 tons ● Recorded an impressive year-on-year growth of 30.5% in revenue. ● Mapped out a 6th five-year plan, the blueprint for the next five years with well-defined objectives and strategies for business devel
Slide 6: Financial Highlights
I. Results Highlights II. Financial Highlights III. Business Review IV. Future Outlook V. Q&A 6
Slide 7: Financial Highlights
For the six months ended 30 June (HK$ million) 2011 2010 Change Revenue 2,194.6 1,682.2 30.5% Cost of sales (1,587.3) (1,143.7) 38.8% Gross profit 607.3 538.5 12.8% Operating profit 248.0 264.6 6.3% EBITDA 344.4 332.1 3.7% Profit before income tax 252.1 256.8 1.8% Profit attributable to equity holde
Slide 8: Revenue by Product and Product Mix
For the six months ended 30 June (HK$ million) 2011 2010 Change Toilet roll 1,344.0 1,013.1 32.7% ● Toilet roll remained as the key revenue contributor, Handkerchief tissue 231.7 198.7 16.6% accounting for 61.2% of total sales. Box tissue 138.6 97.8 41.7% ● Softpack is the key growth Softpack 242.6
Slide 9: Distribution Channel Split by Revenue
Distribution Channel Split by Revenue 1H2011 1H2010 15.2% 16.2% 34.2% 30.9% 50.6% 52.9% Traditional channels Modern channels B2B (i.e. Distributors) (i.e. Hypermarkets,Supermarkets) (i.e. Corporate clients) ● Recently, modern channels have become increasingly important as sales channels in PRC. ● Th
Slide 10: Gross Profit Margin by Product
For the six months ended 30 June (HK$ million) 2011 2010 Change Toilet roll 26.6% 31.4% 4.8 p.p. Handkerchief tissue 32.8% 34.5% 1.7 p.p. Box tissue 30.5% 36.0% 5.5 p.p. Softpack 29.8% 32.9% 3.1 p.p. Paper napkin 22.9% 30.9% 8.0 p.p. Others 26.2% 30.3% 4.1 p.p. OVERALL 27.7% 32.0% 4.3 p.p. ● Compare
Slide 11: Cost of Goods Sold Breakdown
For the six months ended 30 June (HK$ million) 2011 2010 Change Pulp 46.6% 40.5% 6.1p.p. Packaging 9.1% 10.2% 1.1p.p. Chemicals 1.0% 1.0% - Water & electricity 7.9% 8.3% 0.4p.p. Pulp 46.6% Labour cost 3.3% 3.2% 0.1p.p. Depreciation 2.9% 3.3% 0.4p.p. Others 1.4% 1.5% 0.1p.p. TOTAL COGS 72.3% 68.0% 4.
Slide 12: Operating Expenditure and Effective Tax Rate
Operating Expenditure as % of Sales Effective Tax Rate 5.3% 5.3% 24.2% 11.2% 11.6% 22.8% 1H2010 1H2011 1H2010 1H2011 Administrative expenses Selling & marketing expenses ● The Group had granted 4,837,000 share options in 1H2011, ● Effective tax rate rose 1.4 p.p. to 24.2% in and the aggregate cost o
Slide 13: Working Capital Management
Receivable Turnover Days Payable Turnover Days Finished Goods Turnover Days 70 67 46 45 32 33 1H2010 1H2011 1H2010 1H2011 1H2010 1H2011 ● The Group maintained good working capital management during the period under review. As a result, receivable turnover days, payable turnover days and finished goo
Slide 14: Financial Position and Debt
For the six months ended 30 June (HK$ million) 2011 2010 Short-term debt 807.7 389.2 Long-term debt 649.9 529.9 Total debt 1,457.6 919.1 Cash and cash equivalents 530.0 332.5 Net gearing ratio* (%) 32.2 26.5 EBITDA/Net interest (times) 23.0 30.1 ● Solid financial resources for capital expansion and
Slide 15: Business Review
I. Results Highlights II. Financial Highlights III. Business Review IV. Future Outlook V. Q&A 15
Slide 16: Production Bases
● Seven strategically located production facilities, utilizing an asterisk(*) shaped production geo-matrix to maximize economies of scale. ● Average utilization rate in 1H2011 was running at full capacity. ● The plan to build a plant in Laiwu, Shandong Province has passed environmental assessment. N
Slide 17: Production Capacity Expansion
(year) 180 100 30 45 90 25 Target: 470 2011 180 100 30 20 40 Total: 370 2010 180 50 30 20 40 Total: 320 2009 2008 160 50 30 20 40 Total: 300 (‘000 ton) 0 50 100 150 200 250 300 350 400 450 500 Guangdong Hubei Beijing Sichuan Zhejiang Liaoning ● Additional capacity of 25,000 tons in Zhejiang commence
Slide 18: Sales Network Expansion
● Continuously expanded our sales network to penetrate various regions and cities. ● Successfully hosted our first-ever National Distributor Conference in May to introduce new products and boost sales of non-toilet roll products. ● As of 30 June 2011, Vinda had about 220,000 points-of-sales, 155 sal
Slide 19: Kung Fu Panda Series Licensing
● Vinda inked a two-year licensing agreement with DreamWorks Animation SKG, Inc., to launch “Kung Fu Panda Series” products. ● The two-year entitlement is valid till the end of 2012. ● Employed an online and offline marketing campaign named “Vinda – a Master in the Art of Gentle Pliability” (“維達柔韌有功
Slide 20: Brand Promotion and Star Products
● Effectively utilized public relations platform & various advertising mediums to enhance the brand image. ● Concentrated efforts in promoting “Star-products” . ● Upgraded the flagship brand, “Classic Blue Series”, and sustained continual sales growth ● Successfully secured an extension of the licen
Slide 21: Environmental Technology Upgrades
● Constantly introduced technological upgrades as environmental requirements in China tighten. ● Optimized sewage plant treatment to save water usage by approximately 1 million tons per annum. ● Improved water temperature control and waste emission systems to enhance production efficiency and reduce
Slide 22: Future Outlook
I. Results Highlights II. Financial Highlights III. Business Review IV. Future Outlook V. Q&A 22
Slide 23: Economic and Industry Environment
Economic Environment ⚫ Benefit from the array of economy stimulating measures implemented by the Central Government to maintain positive growth momentum of China’s economy. ⚫ With accelerated urbanization in China, high quality products gradually becomes the driving force of the market growth. ⚫ Pub
Slide 24: Wood Pulp Price Trend and Vinda's Strategies
Short-fibre wood pulp prices reached an all-time high 1000 in July 2010, and then stabilized for a year until finally Vinda’s strategies easing into a downward trend in July 2011 950 ● Maintain our well-established, strategic 900 partnership with existing suppliers and explore USD/ ton 850 new allia
Slide 25: Capacity, Distribution and Branding Plans
Production Capacity & Distribution Network Expansion ● Expand our production capacity in a systematic manner to meet demand, with a goal to reach 700,000 tons of annual production capacity in the medium term. ● Further penetrate our distribution network into second- and third-tier cities; target: 40
Slide 26: Personal Care, Efficiency and Teambuilding
Personal Care Product Business ● Strengthen new personal care product business by investing diapers(i.e. baby diapers, adult diapers) and sanitary napkins business ● Continue seeking acquisition & joint venture opportunities. ● Support V-Care business with Vinda’s extensive distribution network. Eff
Slide 27: Baby Diaper Business
Baby Diaper ● Completed trial production and test marketing of products under Babifit in 1H2011. ● Over 275 distributors joined the first trade fair in August, which recorded satisfactory results. Wide scale roll-out has commenced since late-August. ● Adopted a two-leg approach for production. (i.e.
Slide 28: Vinda International Holdings Limited
28 \Vinda International Holdings Limited
Vinda International Holdings — H1 2011 Earnings Presentation on 6ix