Haier Smart Home Co., Ltd. Class A · SSE:600690
Haier Smart Home Co., Ltd. Class A — Qingdao Haier — Non-Deal Roadshow (September 2019)
36 slides from Haier Smart Home Co., Ltd. Class A's roadshow presentation, September 2019
Slide 1: Qingdao Haier Co., Ltd Roadshow Presentation
Qingdao Haier Co., Ltd Roadshow Presentation September 2019 Qingdao Haier Co., Ltd
Slide 2: September 2019
September 2019 1
Slide 3: Disclaimer
Disclaimer DISCLAIMER This presentation comprises certain written materials/slides prepared by Qingdao Haier Co., Ltd. (the "Company"). This presentation does not constitute or form part of any advertisement or marketing material, any offer or invitation to sell or issue, any offer or inducement or
Slide 4: Shareholding Structure
Shareholding Structure Hong Kong Securities D-share Other A-share Haier Group Clearing Company shareholders shareholders Total shareholding: 40.38% 9.5% 3.65% 4.25% 42.2% Qingdao Haier (600690.SH) 44.96% Haier Electronics（01169.HK） Refrigeratio Air Kitchen and Equipment Home Water Channel n conditio
Slide 5: Table of Contents
Table of Contents 1 FY18 & 1Q19 Performance Review 1 2 Investment Highlights 16 3 D Shares 18 4 Growth Strategy 21 5 Appendix 30 Qingdao Haier Co., Ltd 4
Slide 6: 1H19 Performance Review
1H19 Performance Review Qingdao Haier Co., Ltd
Slide 7: 1H19 Earnings Review
1H19 Earnings Review Revenue RMB bn 183.3 163.4 Solid revenue growth driven by consumption upgrade 42.7 48.0 global consolidation 2017 2018 1Q18 1Q19 RMB bn Net profit 6.9 7.4 All-time record profitability 2.1 2.0 2017 2018 1Q18 1Q19 Cashflow from operating activities RMB bn 18.9 Strong cash flow 16
Slide 8: Quarterly Revenue Growth
Quarterly Revenue Growth Mix upgrade + Globalization = Sustainable Growth Qingdao Haier Revenue growth Appliances industry growth in China 14.4% 12.4% 11.5% 10.4% 10.2% 6.8% 6.8% -6.6% -2.7% -2.1% 1Q18 2Q18 3Q18 4Q18 1Q19 Source: AVC Qingdao Haier Co., Ltd 2
Slide 9: Global Revenue Breakdown by Category
Global Revenue Breakdown by Category Revenue by category Equiment 1% Integrated channel services 14% Kitchen appliances Refrigerator Refrigerator continues to be the most 30% 14% significant contributor. Water heater 4% Washing Air conditioner machine 17% 20% Revenue growth by category RMB bn Revenu
Slide 10: Global Revenue Breakdown by Brand
Global Revenue Breakdown by Brand Revenue breakdown by brand FPA Casarte 4% 4% RMB bn GEA 33% Haier 54% Aqua 1% Leader 4% Revenue growth by brand 44% 30% 13% 15% 9% 3% Casarte Haier Leader GEA FPA Aqua Qingdao Haier Co., Ltd 4
Slide 11: GEA Performance Highlight
GEA Performance Highlight Significantly outperform industry Synergy effect Growth rate 13% Identified synergy projects totaling $79 million 2% 20 GEA stores opened in China Industry GEA Market share expansion Wide recognition 10 Major Appliance Movers &Shakers Overal 3.3 Washing machine 3.5 Kitchen
Slide 12: Overseas Revenue Breakdown by Region
Overseas Revenue Breakdown by Region Revenue breakdown by region ANZ Japan Others 6% 4% 4% Asean 4% Overseas South North 42% Asia America China 8% 68% 58% Europe 5% Revenue growth by region RMB bn 25% 25% 11% 10% 77.1 -1% 71.4 -17% -34% 2017 North South Asia Asean ANZ Europe Japan Others 2018 Americ
Slide 13: China Revenue Breakdown by Brand
China Revenue Breakdown by Brand Revenue breakdown by brand Leader 7% Casarte 7% Overseas 42% China Haier 58% 86% Revenue growth by brand RMB bn 44% 106.3 30% 92.3 8% 2017 Haier Casarte Leader 2018 Qingdao Haier Co., Ltd 7
Slide 14: China Revenue Breakdown by Category FY18
China Revenue Breakdown by Category FY18 ASP Volume Overall Market share 35.4 Refrigerator 9% 6% 15% 33.6 Washing 7% 6% 13% machine 11.5 Air conditioner 1% 2% 3% 18.1 Water heater 5% 4% 9% Source：CMM Kitchen 9% 10% 19% appliances Qingdao Haier Co., Ltd 8
Slide 15: China Revenue Breakdown by Category 1Q19
China Revenue Breakdown by Category 1Q19 ASP Volume Overall Refrigerator 3% 5% 7% Washing machine 3% 0% 3% -4% Air conditioner 2% -3% -2% Water heater 7% 5% Kitchen appliances 5% 5% 11% Qingdao Haier Co., Ltd 9
Slide 16: Stable Profitability
Stable Profitability FY18 Change LFL change* Reason Logistics expense recategorized Revenue 183,317 12.2% Gross profit Margin 29.0% -2.1pct -0.4pct GEA impacted by raw material inflation Selling expense ratio 15.6% -2.1pct -0.4pct Efficiency improvement of GEA General & admin expense 7.3% +0.2pct +0
Slide 17: Stable Profitability
Stable Profitability Gross profit margin Opex ratio Operating profit margin RMB m 31.3% 24.8% 6.9% 6.6% 5.7% 5.6% 22.9% 22.0% 29.2% 29.1% 21.4% 28.9% 2017 2018 1Q18 1Q19 2017 2018 1Q18 1Q19 2017 2018 1Q18 1Q19 • Gross profit margin decreased by 2.1 pct pt to • SG&A ratio decreased by 2 pct pt to 22.
Slide 18: GP Margin by Category
GP Margin by Category Gross profit margin by category GP margin Change Refrigerator 30.4% 0.6% Washing machine 33.9% 0.6% Air conditioner 31.7% -0.6% Water heater 45.6% 2.3% Kitchen appliances 31.0% -1.9% Qingdao Haier Co., Ltd 12
Slide 19: Strong Cash Flow
Strong Cash Flow Strong cash flow from operating activities Efficient working capital management RMB mm days DSO 50 18,934 DIO 47 16,703 2,787 DPO 94 CCC 3 2017 2018 • Strong operating profit growth and declining working capital contributed to a strong increase in cash flow from operating • Effectiv
Slide 20: Optimizing Leverage
Optimizing Leverage Borrowing trend Credit metrics overview RMB bn 36.7 71.3% Total liability / 69.5% 33.1 66.9% total assets Total financial 31 debt 2016 2017 2018 2016 2017 2018 3.2x 2.2x 1.9x Total financial debt/ EBITDA 13.4 2016 2017 2018 Net financial Debt 16.1x 2016 2017 2018 11.1x -5 10.5x -
Slide 21: Robust Returns
Robust Returns Continuously increasing return on equity (ROE) Active dividend payout policy RMB mm Payout ratio 30.0% 30.1% 30.0% 22.9 2,235 2,085 1,512 21.0 20.4 2016 2017 2018 2016 2017 2018 • In recent 3 years, ratio of cash dividend / attributable net profit for the year all • Average ROE has be
Slide 22: Investment Highlights
Investment Highlights Qingdao Haier Co., Ltd
Slide 23: Ecosystem resources Ecosystem
Vision To be the leading smart home solutions provider in the era of Internet of Things Ecosystem resources No.1 Major Appliances User-oriented Company Ecosystem Ecosystem resources resources Lifetime User World-class Brand Disruptive Portfolio Innovation Ecosystem resources Strong Electric applianc
Slide 24: Investment Highlights
Investment Highlights 1 Integrated household appliances leader with strong market positions globally and growth across all categories 2 Strong portfolio of brands targeting each consumer segment U+ Smart home: a leading interactive smart home solution provider built on a proprietary platform with 3
Slide 25: D-Shares
D-Shares Qingdao Haier Co., Ltd
Slide 26: Haier's Dual Listing on Frankfurt Stock Exchange
Haier’s Dual Listing on Frankfurt Stock Exchange Shareholder structure after D-share listing GIC, 3.6 D-Shares, 4.25 HKSC, 9.5 Haier Group, Freefloat, 42.2 40.38 As of 31 March 2019 Share information A-Shares D-Shares • The first and only Chinese Company prime listed in Germany Bloomberg symbol 6006
Slide 27: D-share Performance
D-share Performance Haier D share price since IPO D-Shares potential EUR 1.10 1.05 1.05 • Market Cap EUR 286.2 Mn. 1.00 1.00 - as of 30/04/19: Closing price EUR 1.08 0.95 0.95 • P/E ratio 6.6 D-Share (14.2 A-Share) • Attractive D share dividend yield of 4.8 % 0.90 0.90 • Shareholder-friendly dividen
Slide 28: Objectives for D-Share Offering
Objectives for D-Share Offering 1 Key pillar of strategy to become the top 2 players in the European market 2 Ability to raise direct funds in Euros offshore to pursue European development strategy 3 Improve brand recognition in European market 4 Raise funds as M&A currency for future growth 5 Build
Slide 29: Growth Strategies
Growth Strategies Qingdao Haier Co., Ltd
Slide 30: Growth Strategy in the Era of IoT
Growth Strategy in the Era of IoT 1 To continue expanding globally, in Europe in particular 2 To enhance Haier brand value through technology innovation and business model evolution 3 To develop Shunguang retail and social network to further penetrate the market 4 To develop U+ smart-home solutions
Slide 31: U+ Smart home
U+ Smart home Single product-centric The best customized consumer consumption experience, making users become lifelong Haier users 5 physical spaces Smart Smart Smart Smart Smart living room kitchen bathroom bedroom balcony Whole house Whole house Whole house Whole house Whole house Whole house Whol
Slide 32: COSMOPlat
COSMOPlat The core of COSMOPlat is to realize lifetime value for users through a user-centric mass customization model – A shift from physical space to a user-interactive cyberspace, rather than a simple replacement of person by machines – A transformation from producing for inventory to producing f
Slide 33: COSMOPlat
COSMOPlat Proprietary and the world’s leading manufacturing platform with full-process participation by users 9 interconnected factories “Gartner” NDRC – First national Supply “China 2025” IOT Increasing manufacturing efficiency Chainnovators model platform Award (2018) (2017) Delivery lead time dec
Slide 34: Appendix
Appendix Qingdao Haier Co., Ltd
Slide 35: Global Home Appliances Industry
Global Home Appliances Industry China and Asia are expected to continue to be the primary growth engine of global home appliances industry given strong economy growth and increasing consumption power Consumption upgrade in China is expected to continue to drive rapid industry growth across all major
Slide 36: Smart Home
Smart Home Consumer demands drive rapid development Major appliances have been Opportunities of redefining 1 of connected home appliances 2 gradually “connected” 3 competitive landscape CAGR: 42% Retail sales volume of global Convenience connected home appliances 236 (1) (mm Unit) 46.3% 27.5% Person