Gome Retail Holdings Limited · HKEX:493
Gome Retail — FY2004 Earnings Presentation
21 slides from Gome Retail's earnings presentation, Mar 14, 2005
Slide 1: 2004 Annual Results Announcement
2004 Annual Results Announcement March March 14, 14, 2005 2005 Strictly Strictly private private and and confidential confidential
Slide 2: Disclaimer
Disclaimer This presentation, the document containing materials for this presentation that has been supplied to you (the “Document”) and subsequent discussion may contain certain forward-looking statements with respect to the financial condition, results of operations and business of GOME. These for
Slide 3: 1. Review of 2004 Annual Results
1. Review of 2004 Annual Results
Slide 4: Summary Financial Results
Summary Financial Results (HKD mm except per share data) Audited Apr 1, 2003 – Mar 31, 2004 Apr 1 – Dec 31, 2004 (12 Months) (9 Months) Revenue 9,654 9,166 Gross Profit 781 899 Operating Profit 440 569 Net Profit (After MI) 244 353 EPS (HKD cents)(1) 16 22 Dividend Declared (HKD cents) N/A 2.5 (1) B
Slide 5: Summary Financial Results (Cont'd)
Summary Financial Results (Cont’d) Audited Apr 1, 2003 – Apr 1, 2004 – Improvement Mar 31, 2004 Dec 31, 2004 Gross Margin 8.1% 9.8% 1.7% Operating Margin 4.6% 6.2% 1.6% Net Margin (After MI) 2.5% 3.9% 1.4% Higher proportion of exclusive models Better bargaining power due to increased purchasing scal
Slide 6: Summary Financial Results (Cont'd)
Summary Financial Results (Cont’d) (HKD mm except per share data) Unaudited* Improvement CY2003 CY2004 (YoY) Revenue 8,827 11,931 35.2% Gross Profit 646 1,148 77.8% EBITDA 334 776 132.4% Operating Profit 317 742 134.1% Net Profit (After MI) 166 458 175.9% EPS (HKD cents)(1) 11 28 154.5% (1) Basic an
Slide 7: Summary Financial Results (Cont'd)
Summary Financial Results (Cont’d) Unaudited* CY2003 CY2004 Improvement (YoY) Gross Margin 7.3% 9.6% 2.3% Operating Margin 3.6% 6.2% 2.6% Net Margin (After MI) 1.9% 3.8% 1.9% * Reviewed by auditor HK000JDC Confidential 7
Slide 8: Summary Financial Results (Cont'd)
Summary Financial Results (Cont’d) (HKD mm) As of Mar 31, 2004 As of Dec 31, 2004 Net Cash(1) 1,099 2,415 Total Accounts Payable 2,385 3,012 Return on Average Equity 45.2% 47.6% Return on Average Assets 12.1% 14.5% Accounts Payable Days 73 106 Inventory Turnover (Days) 26 33 (1) Includes pledged dep
Slide 9: Strong Revenue Growth
Strong Revenue Growth Revenue Performance Key Drivers (HKD bn) Macro economic growth in PRC 14.0 5.2% 11.9 Sustainable growth in the industry 12.0 +3 9.7 Increasing market share accounted 10.0 9.2 8.8 by specialist chains 8.0 Continuous own retail chain network 6.0 expansion 4.0 Apr 1, 2003 – Apr 1
Slide 10: Improving Revenue Mix
Improving Revenue Mix Revenue Breakdown by Product 2002 Nine Months Ended Dec 31, 2004 Small Electrical Digital Digital 4% Small Electrical 8% Appliances Appliances 10% Audio 10% Audio Computer Visual Visual 4% 35% Computer 26% 4% Telecommuni- Telecommuni- cations cations 14% Air 15% Refrigerators C
Slide 11: Expanding Gross Profit Margin
Expanding Gross Profit Margin Gross Profit and Margin Key Drivers Gross Profit Gross Margin (HKD mm) (%) Exclusive models 9.8% 1,400 9.6% 10.0% Direct purchases 8.1% 1,200 7.3% 8.0% Increasing purchasing power 1,000 6.0% Favorable terms from suppliers 800 1,148 4.0% Arising economies of scale 600 89
Slide 12: Increasing Contribution from Other Operating Income
Increasing Contribution from Other Operating Income Other Operating Income Composition of Other Operating Income Nine months ended Dec 31, 2004 Other Operating Other Operating Income/ Income Total Revenue (HKD mm) (%) Management Fee from Parent 700 5.0% 16% 4.0% Promotion 600 3.5% 3.8% 4.0% Income 3
Slide 13: Strong Growth of Net Profit
Strong Growth of Net Profit Net Profit and Margin(1) Key Drivers Net Profit Net Margin Strong revenue growth and gross (HKD mm) (%) margin expansions 700 5.0% 600 3.9% Other operating income an important 3.8% 4.0% contributor 500 400 2.5% 3.0% Effective cost control policy despite 300 1.9% network e
Slide 14: Optimal Operation Management
Optimal Operation Management Inventory Turnover Working Capital Model (Days) (Days) 35 33 120 106 30 30 26 100 90 25 80 73 20 60 15 40 10 5 20 2 2 1 0 0 Apr 1, 2003 – Apr 1 – CY2004 Apr 1, 2003 – Apr 1 – CY2004 Mar 31, 2004 Dec 31, 2004 (Unaudited) Mar 31, 2004 Dec 31, 2004 (Unaudited) (12-mths Audi
Slide 15: 2. Growth Strategy
Ue 2 Growth Strategy Agzee
Slide 16: Extensive Retail Chain Network
Extensive Retail Chain Network Number of Location Outlets Beijing 24 Tianjin 15 Chongqing 14 SHENYANG XINJIANG BENXI Chengdu 13 BEIJING INNER MONGOLIA LANGFANG TIANJIN Guangzhou 10 YANTAI Shenyang 9 JINAN ZIBO QINDAO QINGHAI Shenzhen 9 WEIFANG XIAN Wuhan 7 TIBET CHENGDU WUHAN Xian 7 CHONGQING Fuzhou
Slide 17: Proactive and Disciplined Expansion Plan
Proactive and Disciplined Expansion Plan Retail Network Expansion Plan Grow market share while Key maximizing profitability Number of Outlets Objectives 300 = 80% 274 Capture 10-15% market R CAG share by 2008 250 005E 02 -2 200 20 144 150 Aggressive roll-out of stores to enhance geographical coverag
Slide 18: Ensuring Effective Implementation of Expansion Plan
Ensuring Effective Implementation of Expansion Plan 3-Tier Management Head Office – Overall Strategy Structure Major investment decision Master contract negotiation Sales and marketing policy Internal control Regional and Branch Office – Strategy Execution Key Benefits Maximize resource utilization
Slide 19: Ensuring Effective Implementation of Expansion Plan (Cont'd)
Ensuring Effective Implementation of Expansion Plan (Cont’d) Human Resources Standardized Criteria Sales and Marketing Management for Store Locations Strategy Active recruitment and Standard Identify most effective training to enhance comprehensive store marketing and media human resources selection
Slide 20: Conclusion
Conclusion Well-Positioned to Capitalize on China’s Robust Consumer Retail Growth Dominant Electrical Appliance Retailer in PRC Strong Brand Recognition and Reputation to Support Growth Scalable and Profitable Business Model HK000JDC Confidential 20
Slide 21: Thank You
Thank You