Slide 1: Xiaomi Corporation Q2 2020 Results Announcement
Xiaomi Corporation Q2 2020 Results Announcement
Slide 2: Disclaimer
Disclaimer By attending the meeting where this presentation is made, or by reading the presentation materials, you agree to be bound by the following limitations: The information in this presentation has been prepared by representatives of Xiaomi Corporation (the “Company” , and together with its su
Slide 3: Revenue (H1 2020)
Revenue RMB billion YoY % In H1 2020 _ Total revenue was RMB103.2 billion, up 7.9% YoY Adjusted net profit’ was RMB5.7 billion H1 2019 H1 2020 @ Smartphones @ loT and lifestyle products @ Internet services ™@ Others * Defined as profit for the period, as adjusted by adding back (i) share-based compe
Slide 4: Revenue (Q2 2020)
Revenue RMB billion YoY % In Q2 2020 Total revenue was RMB53.5 billion, up 3.1% YoY Net income was RMB4.5 billion Adjusted net profit’ was RMB3.4 billion, up 46.6% QoQ Q2 2019 Q2 2020 @ Smartphones @ loT and lifestyle products @ Internet services ™@ Others * Defined as profit for the period, as adju
Slide 5: Overseas business has largely recovered from the pandemic
Overseas business has largely recovered from the pandemic Overseas smartphone activation trend! Overseas smartphone activation? has surpassed the pre-pandemic level 100% In overseas markets (excluding India), smartphone activation? has achieved 120% of the pre- pandemic level . se <« Supply constrai
Slide 6: Ranked Top in Europe with the highest YoY growth in Q2 20
Ranked Top 3 in Europe with the highest YoY growth’ in Q2 2020 Million units Europe smartphone shipments and market share Vendor Q2 2020 shipment volume Q2 2020 market share Q2 2019 shipment volume Q2 2019 market share Shipment YoY growth Samsung 12.7 29.9% 18.3 40.6% -30.8% Apple 9.0 21.3% 6.4 14.1
Slide 7: Relentlessly pursuing advanced technologies: Mi Ultra
Relentlessly pursuing advanced technologies: Mi 10 Ultra World’s first 120x Al super zoom camera World's first 120W wired and 50W wireless fast charging ‘At the time of launch DXQOMARK ge MOBILE CAMERA| SELFIE AUDIO Xiaomi Mi 10 Ultra 130 ; Huawei P40 Pro 128 103 59 Honor 30 Pro+ 125 Oppo Find X2 Pr
Slide 8: Xiaomi has been globally acknowledged for our innovation
Xiaomi has been globally acknowledged for our innovation FORTUNE GLOBAL 900 2020 Xiaomi ranked 422 #422 2020 Fortune Global 500 Up 46 places compared to 2019 )VATIVE COMPANIE: 2900880088 #24 Boston Consulting Group’s 50 Most Innovative Companies of 2020 a Derwent Top 100 Global Innovators™ 2020 The
Slide 9: Smartphones
Smartphones
Slide 10: Smartphones in Q2 2020
In Q2 2020 Smartphone revenue reached RMB31.6 billion, up 4.3% QoQ Smartphone shipments reached 28.3 million units Smartphone revenue RMB billion Q2 2019 Q2 2020 10
Slide 11: Our premium smartphones were well-received by the market
Our premium smartphones were well-received by the market Mainland China O cis Redmi K30 Pro GRIE-—SAISE REE SCH, fp = tl= Mi 10 Redmi K30 Pro No.1 in the price range of Best-selling 5G smartphone RMB3,500-4,500 during during JD 618 shopping JD 618 shopping festival festival ‘Smartphones with retail
Slide 12: Smartphone ASP growth driven by 5G and premium
Driven by 5G and premium smartphone rollouts, our smartphone ASP recorded 11.8% YoY and 7.5% QoQ growth in Q2 2020 Smartphone ASP RMB 11.8% Q2 2019 Q2 2020 Q1 2020 Q2 2020 12
Slide 13: Achieving great progress in the premium smartphone market
Achieving great progress in the premium smartphone market while making leading technologies accessible to the mass market Key mainland China smartphone models in H1 Retail price! RMB 5,000 4,000 3,000 2,000 1,000 ‘At the time of launch @ by Xk Mi 10 Ultra Mi 10 Pro {a Redmi K30 Pro 2| Redmi K30 Ultr
Slide 14: AIoT
AloT
Slide 15: IoT and lifestyle products in Q2 2020
In Q2 2020 loT and lifestyle products revenue reached RMB15.3 billion, up 2.1% YoY and 17.5% QoQ loT and lifestyle products revenue RMB billion ca 14.9 Q2 2019 Q2 2020 15
Slide 16: Our core strategy: Smartphone x AIoT
Our core strategy: Smartphone x AloT Smartphone is the cornerstone of our business model AloT platform will revolve around smartphone to build up a smart living ecosystem Al Smart devices Smartphone MIUI Big data and loT Cloud platform 16
Slide 17: Global leading consumer AIoT platform
Global leading consumer AloT platform 78° @ A 271.0 million 5.1 million 78.4 million A40.8million Connected devices' Users with 5 or more devices Al assistant MAU Mi Home APP MAU YoY growth of 38.3% connected to Xiaomi’s loT platform’ YoY growth of 57.1%? YoY growth of 34.1%? YoY growth of 63.9% * I
Slide 18: Enhanced the connectivity and user experience of our AIoT platform
Enhanced the connectivity and user experience of our AloT platform Ze ROS Xiaomi Share. Control hub of smart living One click configuration for Enhance interaction among smart smart devices devices, including smartphone, laptop, smart TV, smartwatch and Al speaker 18
Slide 19: No.1 TV brand in mainland China: continue to introduce innovative products
No.1 TV brand in mainland China: continue to introduce innovative products Entering premium TV markets with Mi TV LUX 65” OLED and Mi TV LUX Transparent Edition, the world’s first mass-produced transparent TV Global smart TV shipments in Q2 2020 reached ~2.8 million units, up 1.7% despite a decline
Slide 20: Further expand IoT products to overseas markets
Further expand loT products to overseas markets (bw) - Italy Poland France In H1 2020, we debuted our smart TVs in several new markets, including Italy, Poland and France bi Fal MiSmart MiTrue Wireless MiCurved Gaming MiTV Stick _ Mi Electric Band5 Earphones 2Basic Monitor 34” Scooter Pro 2 4) We he
Slide 21: Internet Services
Internet Services
Slide 22: Internet services in Q2 2020
In Q2 2020 Internet services revenue reached RMB5.9 billion, up 29.0% YoY Advertising was up 23.2% YoY Online games was up 54.5% YoY Other internet value-added services was up 27.0% YoY Internet services revenue RMB billion 29.0% Q2 2019 Q2 2020 @ Advertising ™ Online games @ Other internet value-ad
Slide 23: Strong user growth
Global MIUI MAU’ reached 343.5 million, an increase of 23.3% YoY Mainland China MIUI MAU’ in Q2 2020 was 109.7 million TV MAU? grew 41.8% YoY to 32.0 million ‘As of June in respective quarters ? As of June in respective quarters, including both TV and TV box users Strong user growth MIUI MAU? millio
Slide 24: Solid advertising growth despite the challenging environment
Solid advertising growth despite the challenging environment Advertising revenue RMB billion Advertising revenue increased 23.2% YoY and 3.1 15.6% QoQ in Q2 2020, mainly driven by: * the rapid growth of overseas internet advertising revenue 25 * gradual recovery of advertising budget Q2 2019 Q2 2020
Slide 25: Increasingly diversified revenue streams driving sustained revenue growth
Increasingly diversified revenue streams driving sustained revenue growth Internet services revenue RMB billion In Q2 2020, 39.0% of internet — services revenue was from internet services outside of 4.6 5.9 advertising and gaming from mainland China smartphones, up 39.5% YoY Q2 2019 Q2 2020 @ Fintec
Slide 26: Continued to expand our TV internet services
Continued to expand our TV internet services MIUI for TV 3.0 Increasing premium brand advertisers MIUI for TV Rolex Bottega Veneta ae j Bvlgari Tiffany&Co Cartier Celine Omega YSL Hermes Porsche New TV value added services, such as Karaoke 26
Slide 27: Overseas
Overseas
Slide 28: Overseas revenue reached RMB24.0 billion in Q2 2020
Despite the impact of the pandemic, overseas revenue reached RMB24.0 billion in Q2 2020, up 10.0% YoY, contributing to 44.9% of total revenue Revenue breakdown RMB billion 52.0 Q2 2019 @ Mainland China Mi Overseas Q2 2020 28
Slide 29: Smartphone market share ranked top in markets
Smartphone market share ranked top 5 in 50 markets and top 3 in 25 markets vn + O&O ®@w Ff OU India Spain Ukraine Poland Greece Belarus Myanmar No.2 ww & w France Russia Slovakia Croatia Latvia Nepal = 9 9,08 ZOO No.3 wy \ = Lithuania a - = Sweden Hungary 2er-vo* ¢oenzv se cece Italy a> w Turkey Qat
Slide 30: Ranked Top in Western Europe with YoY growth of 116% in Q2 2020
Ranked Top 4 in Western Europe with YoY growth of 116% in Q2 2020 Western Europe smartphone market share Rank Vendor Q2 2020 market share Shipment YoY growth #1 Samsung 31.6% -30.0% #2 Apple 27.6% 42.4% #3 Huawei 13.0% -25.9% #4 Xiaomi 12.4% 16.9% > Total 100% -5.1% Spain #1 France #2 Germany #4 Ita
Slide 31: India's smartphone brand
India’s smartphone brand for consecutive quarters: Q3 2017 to Q2! 2020 Q2 2020 market share: 2 source: Canalys 31
Slide 32: Financials
Financials
Slide 33: Gross margin by segment
Gross margin by segment Overall gross margin 14.4% Gross margin by segment in Q2 2020 14.0% * Smartphones 7.2% * loT and lifestyle products 11.4% * Internet services 60.3% Q2 2019 Q2 2020 33
Slide 34: Operating expense ratio increased
Operating expense ratio increased due to 1) continuous investment in R&D and brand building and 2) lower operating leverage due to the pandemic R&D expenses increased 25.8% YoY in Q2 2020 Operating expense ratio 11.2% 8.8% 3.0% Q2 2019 Q2 2020 @ R&D expense ratio 34
Slide 35: Efficient working capital management
Efficient working capital management AR turnover days Inventory turnover days AP turnover days Q2 2019 Q2 2020 Q2 2019 Q2 2020 Q2 2019 Q2 2020 The increase of the ~— turnover days was caused by longer inventory cycle for overseas smartphones and the impact of pandemic
Slide 36: Adequate cash resources and strong operating cash flow performance
Adequate cash resources and strong operating cash flow performance Cash resources! Q2 2020 adjusted operating cash flow RMB billion RMB billion 2.4 6.7 64.4 51.3 4.3 Adjustments for fintech? H1 2019 H1 2020 Net cash generated from Adjusted operating cash flow operating activities Mnclude (i) cash an
Slide 37: Three guiding principles of our business
Three guiding principles of our business Never cease to explore Offer products with the best Make the coolest products and innovate price-to-performance ratio 37
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