Gome Retail Holdings Limited · HKEX:493
Gome Retail — H1 2016 Earnings Presentation
37 slides from Gome Retail's earnings presentation, August 2016
Slide 1: 2016 Interim Results Announcement
2016 Interim Results Announcement August 2016
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 be
Slide 3: Agenda
Agenda 1. Financial Highlights 2. Strategic Transformation • New themed eco-system designed for attracting customer traffics • Supply chain management forging core competitive advantages • Greater customer intimacy to increase customer stickiness 3. Appendix 3
Slide 4: 2016 1H Operating Matrix
2016 1H Operating Matrix* Online GMV: Offline GMV: RMB13.3 billion RMB36.9 billion Total GMV: GMV from mobile RMB50.2 Increased 206% YoY billion YoY Growth in T1: 7.6% 22% growth YoY Mobile transaction accounts for 65% of total YoY Growth in T2: 24.9% online GMV YoY Growth in after-sale services GMV
Slide 5: 2016 1H Financial Highlights
2016 1H Financial Highlights Sales Revenue RMB 35.31 billion YoY Growth 11.4% Sales Revenue from Online Business YoY Growth 63.0% RMB 4.61 billion Operating Expense Ratio 16.3% YoY Up 0.8 percentage point Profit Attributable to Owners of the YoY Down 82.0% Parent RMB 124 million 5
Slide 6: 2016 1H Financial Highlights – Key Financial Indicators
2016 1H Financial Highlights – Key Financial Indicators Sales Revenue Growth (YoY) Operating Expense Ratio 16.3% 16.3% 16.3% 11.4% 8.8% 7.4% 7.0% 7.0% 15.7% 15.5% 1H14 FY14 1H15 FY15 1H16 1H14 FY14 1H15 FY15 1H16 Consolidated Gross Profit Margin Operating Profit Margin 18.8% 18.5% 17.7% 17.8% 2.5% 2
Slide 7: Agenda
Agenda 1. Financial Highlights 2. Strategic Transformation • New themed eco-system designed for attracting customer traffics • Supply chain management forging core competitive advantages • Greater customer intimacy to increase customer stickiness 3. Appendix 7
Slide 8: Rolling Out Total Retail Strategic Plan
Rolling Out Total Retail Strategic Plan Well-established customer interfaces to forge greater platform for attracting customer traffics Better membership operation to build customer intimacy and drive higher traffic growth Ultimately all translate into GMV Other Customer Tier-1 Tier-2 TV Channels Cu
Slide 9: Brighter Future Build upon Total Retail Ecosystem
Brighter Future Build upon Total Retail Ecosystem Value proposition – GOME is an online and offline integrated home solution provider Lifestyle & Gourmet Internet TV E-commerce Six New Retailing Themes Leisure & Home Internet of Entertainment Furnishing & Things (IoT) & Design Smart Devices Supply C
Slide 10: New Retailing Theme – Leisure & Entertainment
New Retailing Theme – Leisure & Entertainment Leisure & Entertainment theme with diversified choices Diversified entertainment for younger generation • Net cafe and online games • Community cinema • VR experiencing center 10
Slide 11: New Retailing Theme – Lifestyle & Gourmet
New Retailing Theme – Lifestyle & Gourmet Lifestyle & Gourmet theme Lifestyle and gourmet themes attracted broader customer groups • Integrated kitchen • Juice & Beverage bar • Hands-on baking classes • Afternoon tea • Simple restaurant 11
Slide 12: New Retailing Theme – Home Furnishing & Design
New Retailing Theme – Home Furnishing & Design One-stop home furnishing & design solution Home Furnishing Design Shopping Importing Partnering Partnering renowned with online & with Home Furnishing kitchen office furnishing Market Size in China cabinet decoration materials RMB in trillions 1.79 bran
Slide 13: New Retailing Theme – Internet TV
New Retailing Theme – Internet TV Focusing on trending industry – Providing Internet TV solutions Young Consumer focused to lift overall profitability • Over 20% consolidated gross margin • Content distribution + equity interests • One of 7 OTT license holders Content Provider Distributor TV Manufac
Slide 14: New Retailing Theme – Internet TV
New Retailing Theme – Internet TV Partnership New Content Alliance Business Model Open Platform TV Set Distribution TV selling in GOME would be all internet-based by 2018 14
Slide 15: New Retailing Theme – IoT & Smart Devices
New Retailing Theme – IoT & Smart Devices Product After-sales Sales Real time data analysis with Services targeted customer-tailored services prompt • AC maintenance, repairing and cleaning • Water purifier filter Microchip replacement Implementation • Air purifier filter replacement • More to come
Slide 16: New Retailing Theme – E-commerce
New Retailing Theme – E-commerce Continuously rapid growth of GOME online SKU expansion Merging online and office to deliver Best Possible Experience Open Supply Chain & Rapid GMV Growth SKU Expansion 114.5% 101.2% Partner with the Best FY14 FY15 1H15 1H16 • 1.9 million DAU • Customer acquisition co
Slide 17: New Retailing Theme – Behind the Theme, Technology Upgrades
New Retailing Theme – Behind the Theme, Technology Upgrades Self-developed Pangu System to perfectly replace third-party IT architecture Technology upgrade for better user experience, conversion rate lift to boost sales Better User Experience Higher Efficiency More Stable Lower Cost More Controllabl
Slide 18: Agenda
Agenda 1. Financial Highlights 2. Strategic Transformation • New themed eco-system designed for attracting customer traffics • Supply chain management forging core competitive advantages • Greater customer intimacy to increase customer stickiness 3. Appendix 18
Slide 19: Supply Chain – Industry Leading Logistics Services
Supply Chain – Industry Leading Logistics Services China's leading logistics services providers for large and medium size items Warehouse sharing – establish “cloud Comprehensive co-operation and alliance in warehouse” network through distribution logistic system with Haier centers Trunk line Anxun
Slide 20: Supply Chain – Strengthen Core Competitive Advantages
Supply Chain – Strengthen Core Competitive Advantages Strengthen core competitive advantages in retailing by focusing on merchandise selection Transparent Pricing Strategy in Stores Pricing Control Differentiated Power Merchandise pricing power Products Initial Innovative and Flatly Price flexible p
Slide 21: Supply Chain – Overseas E-commerce
Supply Chain – Overseas E-commerce Building global procurement platform Realizing global supply chain resources import and export capacity in the future Online Korea Mall Partner with second largest online distributor – Interpark in Korea for merchant selection and operation Japan Mall Direct operat
Slide 22: Agenda
Agenda 1. Financial Highlights 2. Strategic Transformation • New themed eco-system designed for attracting customer traffics • Supply chain management forging core competitive advantages • Greater customer intimacy to increase customer stickiness 3. Appendix 22
Slide 23: Customer Intimacy Strategy – GOME House Manager
Customer Intimacy Strategy – GOME House Manager Open-ended services platform to “close” the after-sales loop of repairing, maintenance, cleaning and recycling services Increase customer stickiness through E-data management More than one million followers on WeChat services account, more than 100% mo
Slide 24: Customer Intimacy Strategy – GOME TOGO Micro-Shop
Customer Intimacy Strategy – “GOME TOGO” Micro-Shop Strong exposure towards potential clients through Micro-Shop “Closing” online and offline loop Transforming from traditional to social media marketing strategy 82.4% Established Average MAU 112 thousand shop ratio Average of 1.73 million visitor pe
Slide 25: GOME Total Retail Ecosystem – Partnership for Brighter Future
GOME Total Retail Ecosystem – Partnership for Brighter Future Resources Age of Sharing Crossover Front - end Open-ended Back - end Supply Chain Diversified Product Portfolio Differentiated Product Storage Capacity Sharing Provided by Multiple Types of Retailer 25
Slide 26: Agenda
Agenda 1. Financial Highlights 2. Strategic Transformation • New themed eco-system designed for attracting customer traffics • Supply chain management forging core competitive advantages • Greater customer intimacy to increase customer stickiness 3. Appendix 26
Slide 27: Income Statement Summary
Income Statement Summary (RMB in millions) 1H2015 1H2016 YoY Change Revenue 31,692 35,312 11.4% Consolidated gross profit 5,611 5,780 3.0% Consolidated Gross Profit Margin 17.7% 16.4% (1.3) p.p. Operating Profit 694 28 (96.0)% Operating Profit Margin 2.2% 0.1% (2.1) p.p. Operating Profit Before Tax
Slide 28: Financial Position and Cash Flow Statement
Financial Position and Cash Flow Statement As of As of (RMB in millions) YoY Change 31 Dec. 2015 30 Jun. 2016 Financial Position Cash & Cash Equivalents 7,438 11,326 52.3% Pledged Deposits 3,881 4,870 25.5% Pledged Deposit Ratio 30.1% 30.2% 0.1 p.p. (exclude DGPOL) Inventories 10,176 11,341 11.4% In
Slide 29: Consolidated Gross Profit Margin
Consolidated Gross Profit Margin (RMB in millions) 1H2015 1H2016 Revenue 31,692 35,312 RMB in millions Consolidated Gross Profit 5,611 5,780 17.7% 16.4% Consolidated Gross Profit Margin 17.7% 16.4% Gross Profit Margin from Suppliers 14.9% 13.5% 2.2% 0.6% 2.4% Other Income and Gain 2.8% 2.9% 0.5% Inc
Slide 30: Analysis of Store Indicators
Analysis of Store Indicators Period-end Area Size of Physical Stores Average Quarterly Sales Per Store 1,000 sq.m. RMB in millions 5,502 11.7 13.1 12.5 11.7 11.2 9.7 3,719 3,934 3,952 3,931 3,833 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 Quarterly Sales Per Square Meter Same Store
Slide 31: Tier 1 & 2 Market Revenue Breakdown
Tier 1 & 2 Market * Revenue Breakdown 1H2016 Tier-1 market sales up 7.6% YoY, Tier-2 market sales up 24.9% YoY 1H2016 Sales Ratio of Tier-1 & Tier-2 Markets 1H2016 Tier-1 & Tier-2 Market Sales RMB in millions 26,662 24,769 78.2% 75.5% 8,650 24.5% 6,923 21.8% Tier 1&2 cities Tier 3&4 cities Tier 1&2
Slide 32: Sales Revenue by Region
Sales Revenue by Region 1H2016 Revenue：RMB35.31 Billion 1H2015 Revenue：RMB31.69 Billion 45% 39% 16% 14% 10% 9% 8% 9% 9% 7% 7% 6% 6% 6% 5% 4% Beijing Shanghai Guangzhou Shenzhen Chengdu Xi'an Chongqing Others 1H2015 1H2016 32
Slide 33: Revenue & Gross Profit Margin by Category
Revenue & Gross Profit Margin by Category Revenue by Category 20% 19% 18% 20% 20% 17% 18% 16% 14% 14% 9% 9% 3% 3% AV Air-con Fridge & Washing Tel-com Small appliances Computer Digital & Others Machine Gross Profit Margin by Category 18.4% 16.5% 16.4% 17.2% 15.1% 15.3% 14.8% 14.0% 11.9% 10.6% 10.8% 8
Slide 34: Revenue by Category on E-commerce Platform
Revenue by Category on E-commerce Platform Revenue by Category on E-commerce Platform 24% 22% 22% 19% 16% 16% 13% 13% 13% 14% 11% 12% 3% 2% AV Air-con Fridge Washing Tel-com Small Computer Digital & Others Machine appliances 1H2015 1H2016 34
Slide 35: Nationwide Store Network
Nationwide Store Network Store Network Summary Store Network Detail Listed Group China Target As of 30 Jun 2016 GOME Dazhong Cellstar Total Paradise Group As of 31 Dec 2015 1,223 Flagship stores 206 39 26 - 107 378 Number of stores newly opened 51 Standard stores 310 42 18 - 144 514 Specialized stor
Slide 36: Top 5 Suppliers
Top 5 Suppliers 1H2016 GOME Top 5 Suppliers 41.5% 9.0% 8.8% 8.4% 7.8% 7.5% Haier Midea Apple Gree Huawei Top Five Suppliers 1H2015 GOME Top 5 Suppliers 43.3% 9.9% 9.1% 8.5% 8.2% 7.6% Haier Gree Apple Midea Samsung Top Five Suppliers 36
Slide 37: Thank you !
Thank you !