Gome Retail Holdings Limited · HKEX:493
Gome Retail — H1 2013 Earnings Presentation
34 slides from Gome Retail's earnings presentation, Aug 27, 2013
Slide 1: 2013 Interim Results Announcement
2013 Interim Results Announcement 27th August, 2013
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: Content
Content 1. 2013 Interim Results 1. Performance Review (including Dazhong Appliances ) 2. Financial Results (including Dazhong Appliances ) 2. Mid – Long Term Strategic Transition 1. Strategic Review 2. Future Outlook 2013 Interim Report | Page 2
Slide 4: Performance Review
2013 Interim Results Performance Review (including Dazhong Appliances)
Slide 5: Performance Highlights
Performance Highlights Initial targets achieved in the strategic transition, results indicate business has bottomed out with steady improvements. Key Index 2012 1H 2013 1H 1 Revenue RMB 24.612 billion RMB 27.114 billion, 10.2% YoY 2 Consolidated gross profit RMB 4.148 billion RMB 4.973 billion, 19.9
Slide 6: Financial Results
2013 Interim Results Financial Results (including Dazhong)
Slide 7: Income Statement Summary
Income Statement Summary Increase RMB Million 2012 1H 2013 1H (Decrease) Revenue 24,612 27,114 10.2% Consolidated gross profit 4,148 4,973 19.9% Operating profit/(loss) (534) 349 165.4% Profit/(Loss) before tax (548) 432 178.8% Profit/(Loss) attributable to owners (607) 322 153.0% of the parent comp
Slide 8: Balance Sheet Summary
Balance Sheet Summary High cash balance Positive cash flow from operating activities RMB Million As at 31st Dec As at 30th June Change 2012 2013 Cash and cash equivalents 7,067 8,413 19.0% Pledged deposits 6,240 6,206 (0.5)% Inventories 7,779 6,441 (17.2)% Trade payables 6,630 5,592 (15.7)% Bill pay
Slide 9: Net Profit Analysis
Net Profit Analysis Strategic transition contribute to quarterly improvement in net profit and net profit margin Long term profitability strengthened Net profit/net profit margin analysis Net profit Net profit margin RMB million 300.0 246.0 2.0% 1.7% 200.0 100.3 1.0% 100.0 76.3 0.6% 0.8% (13.1)
Slide 10: Consolidated Gross Profit Margin Analysis
Consolidated Gross Profit Margin Analysis YoY improvement, consolidated gross profit margin restored to historical high RMB Million Consolidated gross 16.9% 18.3% 121H 131H profit margin Consolidated gross Revenue 24,612 27,114 profit 4,148 4,973 RMB Million Consolidated gross profit 4,148 4,973 1
Slide 11: Expenses Breakdown
Expenses Breakdown Continues improvement in cost control measures Labour/sales and rent/sales down due to network and labour optimization 121H 131H Change Operating expenses/sales RMB Million Selling & Distribution 15.3% 13.3% (2.0) p.p. 19.8% Expenses 18.4% 18.4% Rent 6.6% 5.5% (1.1) p.p. 16.8%
Slide 12: Store Indicators
Store Indicators Period-end Sale Area Average Sales Per Store RMB Million 1,000 sq.m 4,087 4,026 3,977 3,865 3,758 12.9 3,684 11.5 11.2 10.7 10.4 8.7 12Q1 12Q2 12Q3 12Q4 13Q1 13Q2 12Q1 12Q2 12Q3 12Q4 13Q1 13Q2 Sales per sq.m Same Store Sales Growth RMB Yuan 16.9% 3,749 15.1% 3,204 3,269 2,994 3,086
Slide 13: Strategic Review
Mid - Long Term Strategic Transition Strategic Review
Slide 14: GOME Optimized
Macro Environment Solid expansion in home appliances market Stable macro Dedicated to economy revenue growth Fierce GOME Optimized competition in management home appliances & market structure 2013 Interim Report | Page 13
Slide 15: Online/offline Integration: A Multi-Channel Retailer
Online/offline Integration: A Multi-Channel Retailer Multi-Marketing Web portals, search engines, micro blog, online community, digital media (CCTV), print media … Traditional appliances, 3C/mobile/IT products, ODM/OEM Multi-Product products, life style/digital/financial products Online/offline Plat
Slide 16: Online/offline Integration: Organizational Structure
Online/offline Integration: Organizational Structure Integrated management system unlocks greater potential GOME ELECTRICAL APPLIANCES HOLDING LIMITED Chairman, two Executive Directors Board of Director three Non-Executive Directors and five Independent Non-Executive Directors Senior Management Chai
Slide 17: Strategic Implementation
Strategic Implementation key measures 2013 strategy Achievement • Tier 1 market：network optimization with • Focus on trend setting stores • Gross profit margin 1.4 p.p. YoY Physical enhanced individual store performance • Close underperforming stores • Operating expenses 1.9 p.p. YoY Stores • Tier 2
Slide 18: Future Outlook
Mid - Long Term Strategic Transition Future Outlook
Slide 19: Online/offline Integration: A Multi-Channel Retailer
Online/offline Integration: A Multi-Channel Retailer Online/offline integrations contribute to competitive advantages Consistent shopping experience Inter-connected shopping One-stop shopping Simple, consistent experience across channels Complete end to end experience across channels Consolidated SK
Slide 20: Online/offline Integration: A Multi-Channel Retailer
Online/offline Integration: A Multi-Channel Retailer Online/offline integration creates personalized shopping experience Across channels Personalized price, discount, exchange & refund, reservation based on shopping record In-store interaction One account for all channels Loyalty points collected E-
Slide 21: Mid - Long Term Strategic Transition
Mid - Long Term Strategic Transition Profitability oriented to create long term value for shareholders Revenue Gross profit Expenses Implementation 2013 Interim Report | Page 20
Slide 22: Home Appliances Market in Next 3 Years
Home Appliances Market in Next 3 Years Size of home appliances market: (including e-commerce) Source of Growth: RMB Billion 7.5% GDP growth 2,500 2,023 Urbanization 2,000 1,812 1,623 1,455 Income doubling plan 1,500 1,306 1,194 1,053 Growing consumption 1,000 500 Technological innovation 0
Slide 23: Mid - Long Term Strategic Transition: Roadmap
Mid - Long Term Strategic Transition: Roadmap Revenue = satisfy consumer demand ►Convenience ►Number of SKUs and price ►Shopping environment ►Sales expertise ►Customer service (logistics) Gross margin = management of products ►Specialization of business branches ►Products adjustment based on market
Slide 24: Mid - Long Term Strategic Transition: Supply Chain
Mid - Long Term Strategic Transition: Supply Chain Long-term competitiveness based on continuous consolidation Phase 1（0 – 6 months） Phase 2（6 – 12 month） Phase 3（12 – 24 months） Headquarter 10 Procurement Brands Key branches & other brands Other branches A ▪ Change store layout ▪ Procurement planni
Slide 25: Mid - Long Term Strategic Transition: Logistics
Mid - Long Term Strategic Transition: Logistics From city based… to regional distributions centres Distribution centre Distribution centre Store Stores Coverage Key focus Target Contribution ▪ Increase transparency in logistics expenses ▪ Economies of scale 3rd party logistics platform ▪ Reduce redu
Slide 26: Mid - Long Term Strategic Transition: E-commerce
Mid - Long Term Strategic Transition: E-commerce Profitability oriented development Expansion follows integration B2C + platform +physical stores + mobile commerce+… B2C 3 GOME.COM.CN Market place Procurement Membership platform database National National after-sales Sharing logistics coverage cover
Slide 27: Mid - Long Term Strategic Transition: Target
Mid - Long Term Strategic Transition: Target Increase the proportion of differentiated products 2016 Reach 30% - 35% Physical stores: store optimization in tier 1 market network expansion in tier 2 market 2016 2016 Enter 30 – 50 new cities E-commerce: enhance experience & integration mobile commerce
Slide 28: Mid - Long Term Strategic Transition: Corporate Culture
Mid - Long Term Strategic Transition: Corporate Culture Trust is a pleasure Inspired to be trusted Trust, To uphold trust for a day is a mindset, to do it for 26 years is a faith. GOME is founded on trust, and reciprocates the trust placed in us through our words, actions and capabilities. We achiev
Slide 29: Appendix
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Slide 30: Revenue by Regions
Revenue by Regions 45% 131H: RMB 27.11 billion 37% 30% 18% 15% 10% 9% 9% 6% 6% 5% 0% Beijing Guangzhou Shanghai Shenzhen Xi'an Chengdu Tianjin Others 45% 121H: RMB 24.61 billion 37% 30% 18% 15% 10% 10% 9% 6% 5% 5% 0% Beijing Shanghai Guangzhou Shenzhen Chengdu Xi'an Tianjin Others 2013 Interim Repor
Slide 31: Revenue & Gross Profit Margin by Categories
Revenue & Gross Profit Margin by Categories Revenue by categories Gross profit margin by categories 30% 20% 18.7% 25% 25% 16.8% 16.7% 23% 16.3% 16.1% 16% 20% 13.8% 13.9% 20% 13.5% 18% 16% 12.1% 16% 11.6% 11.3% 12% 15% 15% 15% 10.0% 13%13% 9.4% 8.7% 8% 10% 9% 7% 6% 5% 4% 4% 0% 0% AV Air-Con Fridge Te
Slide 32: Store Network Expansion
Store Network Expansion As of 30th June 2013 Group GOME ChinaParadise Dazhong Cellstar Flagship stores 203 146 33 24 0 Standard stores 381 298 57 26 0 Specialized stores 489 366 68 9 46 Total: 1,073 810 158 59 46 T1 Market 687 476 115 55 41 T2 Market 386 334 43 4 5 Net store increase/decrease in -35
Slide 33: Stable Supplier Relationships
Stable Supplier Relationships Top 5 Suppliers in 131H 40.5% 12.5% 10.4% 7.1% 6.1% 4.4% Haier Samsung Midea Gree Hisense Total Top Five Top 5 Suppliers in 121H 36.9% 13.1% 10.4% 5.5% 4.1% 3.8% Haier Samsung Midea Gree Apple Total Top Five 2013 Interim Report | Page 32
Slide 34: Thank you!
Thank you!