Daphne International Holdings Limited · HKEX:210
Daphne International — H1 2017 Earnings Presentation
36 slides from Daphne International's earnings presentation, Aug 30, 2017
Slide 1: 2017 Interim Results Presentation
2017 INTERIM RESULTS PRESENTATION 30 August 2017
Slide 2: Disclaimer
Disclaimer The information contained in this presentation is intended solely for your personal reference. Such information is subject to change without notice, its accuracy is not guaranteed and it may not contain all material information concerning Daphne International Holdings Limited (the “Compan
Slide 3: Summary of 1H 2017
Summary of 1H 2017 Sales of the Group decreased by 19.6% - YoY decrease of POS by 16.4% - Negative SSSG by 10.7% Group’s gross margin and operating margin were comparable to 1H 2016 Reduction of operating expenses (-19.7%) in line with sales decrease Operating loss narrowed by 17.7% E-comm
Slide 4: Financial Review
Financial Review
Slide 5: Group Financial Highlights
Group Financial Highlights (HK$ million) 1H 2017 1H 2016 Change Turnover 2,732.7 3,400.8 -19.6% Gross profit 1,522.0 1,884.2 -19.2% Operating loss (205.2) (249.5) -17.7% Loss attributable to shareholders (209.5) (163.6) +28.0% Basic loss per share (HK cents) (12.7) (9.9) +28.3% Interim dividend per
Slide 6: Group Turnover Breakdown
Group Turnover Breakdown Group Turnover Breakdown (For the six months ended 30 June) 2017: HK$2,732.7 million 2016: HK$3,400.8 million 14% 11% 86% 89% Core Brands business Other Brands business Note: Core Brands business refers mainly to the operations under the brands “Daphne” and “Shoebox” in Main
Slide 7: Group Gross Margin
Group Gross Margin Group’s gross margin improved by 0.3ppt YoY, although the women shoes’ mass market was still very competitive in 1H 2017 - Increased weighting of new products in the sales mix - Upheld stable pricing policy for new products 7
Slide 8: Group Operating Expense
Group Operating Expense Decreased by 19.7% YoY Group operating expense decreased in line with the decline in turnover Group Operating Expense (HK$ million) 3,000 2,670.7 2,667.2 2,598.8 2,500 2,182.1 -19.7% 1,751.9 2,000 1,500 1,000 500 0 1H 2013 1H 2014 1H 2015 1H 2016 1H 2017 8
Slide 9: Group Operating Profit Analysis
Group Operating Profit Analysis Group gross margin increased by 0.3ppt YoY Group operating margin dropped by 0.2ppt YoY Operating Profit Analysis (HK$ million) (For the six months ended 30 June) 0 -100 -200 -300 (205.2) (249.5) -400 -500 +207.8 -600 -362.2 +198.7 -700 1H 2016 Decline in Decrease
Slide 10: Inventory Level and Turnover Days
Inventory Level and Turnover Days Group inventory turnover days was 200 days, decreased by 32 days (2016: 232 days) Group inventory level continued to decrease to HK$1,254.7 million, a reduction of HK$159.8 million, as compared to that of 31 December 2016 Inventory Level (HK$ million) 2,091.6 2,
Slide 11: Working Capital and Capital Expenditure
Working Capital and Capital Expenditure Capital expenditure decreased by 30.6% YoY - Less new store openings and renovation in 1H 2017 1H 2017 1H 2016 Change Average inventory turnover (days) 200 232 -32 Average debtors turnover (days) 15 14 +1 Average creditors turnover (days) 138 124 +14 Cash co
Slide 12: Other Key Financial Indicators
Other Key Financial Indicators The Group maintained its net cash position As at 30 Jun 2017 As at 31 Dec 2016 Change Cash and bank balances (HK$ million) 850.2 989.5 -14.1% Bank loans (HK$ million) 242.8 296.7 -18.2% Equity attributable to shareholders (HK$ million) 3,283.8 3,371.4 -2.6% Current r
Slide 13: Operational Highlights
Operational Highlights
Slide 14: Group Sales Network
Group Sales Network Number of Points-of-Sales (POS) Continued store rationalisation - Core Brands had a net reduction of 306 5,464 (-466) POS, bringing the total to 4,292 317(-16) 4,900 (-564) - Other Brands had a net closure of 24 POS 4,570(-330) 302(-15) (For the six months ended 30 June) 278(-2
Slide 15: Core Brands Sales Network
Core Brands Sales Network Net reduction of 306 POS (including 259 directly-managed stores and 47 franchised stores) Number of POS As at 30 As at 31 Change % Change As at 30 Change % Change Jun 2017 Dec 2016 Jun 2016 Directly-managed POS 3,987 (93%) 4,246 (92%) -259 -6.1% 4,656 (90%) -669 -14.4% Fr
Slide 16: Core Brands Sales Network (cont’d)
Core Brands Sales Network (cont’d) Maintained greater representation in lower tier cities As at 30 Jun 2017 As at 31 Dec 2016 Change % Change No. % No. % Tier 1 Cities 448 10% 514 11% -66 -12.8% Tier 2 Cities 1,062 25% 1,125 25% -63 -5.6% Tier 3 Cities 817 19% 890 19% -73 -8.2% Tier 4-6 Cities 1,9
Slide 17: Core Brands Business - SSSG
Core Brands Business - SSSG Average selling price was RMB161, comparable to that of same period last year 1Q 2017 2Q 2017 1H 2017 Same-store -10.7% sales growth -11.3% -10.2% 17
Slide 18: Core Brands Business - Performance
Core Brands Business - Performance (HK$ million) 1H 2017 1H 2016 Change Turnover 2,465.1 3,113.6 -20.8% Gross profit 1,294.9 1,649.7 -21.5% Gross margin 52.5% 53.0% -0.5ppt Operating loss (191.1) (236.4) -19.2% Operating margin -7.8% -7.6% -0.2ppt Core Brands’ turnover decreased by Operating mar
Slide 19: Other Brands Business - Performance
Other Brands Business - Performance (HK$ million) 1H 2017 1H 2016 Change Turnover 380.9 388.8 -2.0% Gross profit 222.0 221.2 +0.4% Gross margin 58.3% 56.9% +1.4ppt Operating profit 4.1 1.7 +141.2% Operating margin 1.1% 0.4% +0.7ppt Turnover of Other Brands business E-commerce turnover continued
Slide 20: Outlook
Outlook
Slide 21: Brand Revamp - Full-fledged Uplifting
Brand Revamp - Full-fledged Uplifting Brand Identity E-commerce Brand Marketing Social Products Media DAPHNE Sales Stores Staff Channel Product Mix Packaging Organisational Structure 21
Slide 22: Progress and Next Steps
Progress and Next Steps Item Progress Made in 1H 2017 Next Step 1. New Brand • Launched new logo and brand identity in Q2 Ongoing efforts to Identity monitor the • Gave a facelift to company website, product consistency in packaging, marketing collateral, online stores, projecting the new official a
Slide 23: Progress and Next Steps
Progress and Next Steps Item Progress made in 1H 2017 Next Step 2. Brand • Efforts concentrated on core marketing Organise a 3-month Marketing programmes such as crossover projects and integrated marketing stopped the less cost effective marketing program under ‘Pink Crush’ activities theme to launc
Slide 24: DAPHNE X OPENING CEREMONY — Background
DAPHNE X OPENING CEREMONY — Background • Launch Date: 18 August, 2017 • Develop two seasonal collections for fall and winter of 2017 • Products were designed by OC, and produced, marketed and distributed by Daphne • Daphne is the first brand that OC collaborates with in Mainland China 24
Slide 25: DAPHNE X OPENING CEREMONY — Launch Event
DAPHNE X OPENING CEREMONY — Launch Event • 10 celebrities and KOLs, and more than 50 fashion media were invited • Pop-up store opened from 19 to 25 August, 2017 at Shanghai Times Square 25
Slide 26: DAPHNE X OPENING CEREMONY — Media Coverage
DAPHNE X OPENING CEREMONY — Media Coverage 26
Slide 27: DAPHNE X OPENING CEREMONY — Customer Feedback
DAPHNE X OPENING CEREMONY — Customer Feedback 27
Slide 28: Progress and Next Steps
Progress and Next Steps Item Progress made in 1H 2017 Next Step 3. New Store • Launched the prototype store of the new image To formulate a roll-out plan for for Daphne in June 2017 new-image store of Daphne Image 28
Slide 29: Progress and Next Steps
Progress and Next Steps Item Progress made in 1H 2017 Next Step 4. Product • Appointed the award-winning shoe F/W 2017 season will include first Upgrade designer to lead the Group’s design batch of products designed by function energised design team • Expanded and restructured the design team To put
Slide 30: Progress and Next Steps
Progress and Next Steps Item Progress made in 1H 2017 Next Step 5. Channel Mix • Continued store rationalisation and resulted Continue optimisation of 306 net closures under Core Brands store network according to market situation and sales • Made channel adjustment according to performance refined b
Slide 31: Progress and Next Steps
Progress and Next Steps Item Progress made in 1H 2017 Next Step 7. Revitalise • Revitalised the CRM programme to build To partner with online shopping CRM a better platform to improve connection sites to strengthen the customer with customers and expand customer base management mechanism • Increased
Slide 32: Progress and Next Steps
Progress and Next Steps Item Progress Made in 1H 2017 Next Step 9. Expand • Continued to achieve sales growth and Continue to drive omni- E-commerce remained profitable channel model by increasing Business online and offline interactions • Drove more interactions between online and in various aspect
Slide 33: Timeline for Key Events
Timeline for Key Events Q1 2017 Q2 2017 Q3 2017 Q4 2017 2018 Jan - Mar Apr - May Jun Jul – Sep Oct – Dec Jan • Preparation • Launch of • First new-image • Crossover with • Launch of F/W 17 and ground new logo and store of Daphne Opening Ceremony- products under new work brand identity Autumn 17 coll
Slide 34: Target Vision
Target Revive the growth path and achieve turnaround ASAP Vision To be the most popular mass-fashion brand with leading market share and customer reputation , whilst creating superior shareholder’s return 34
Slide 35: Thank You
Thank You — Q&A session s}5)
Slide 36: Investor Relations Contact
Investor Relations Contact Ms. Macy Leung +852 2367 9022 macyleung@daphneholdings.com 36
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