Haier Electronics Group Co.,Ltd2020/03/26 · Haier Electronics Group Co.,Ltd 2019 Annual Results Presentation March 2019 2019 Annual Results Presentation March 2019 2019 Annual Results

Haier Electronics Group Co.,Ltd

2019 Annual Results PresentationMarch 2019


2019 Annual Results Presentation

March 2019


海爾電器集團有限公司 (stock code: 01169)

August 2019

2

Disclaimer

This presentation and the accompanying slides (the “Presentation”) which have been prepared by HaierElectronics (the “Company”) do not constitute any offer or invitation to purchase or subscribe for anysecurities, and shall not form the basis for or be relied on in connection with any contract or bindingcommitment whatsoever. This Presentation has been prepared by the Company based on information anddata which the Company considers reliable, but the Company makes no representation or warranty, expressor implied, whatsoever, on the truth, accuracy, completeness, fairness and reasonableness of the contents ofthis Presentation. This Presentation may not be all-inclusive and may not contain all of the information thatyou may consider material. Any liability in respect of the contents of or any omission from this Presentationis expressly excluded.

Certain matters discussed in this presentation may contain statements regarding the Company’s marketopportunity and business prospects that are individually and collectively forward-looking statements. Suchforward-looking statements are not guarantees of future performance and are subject to known andunknown risks, uncertainties and assumptions that are difficult to predict. The Company’s actual results,levels of activity, performance or achievements could differ materially and adversely from results expressedin or implied by this Presentation, including, amongst others: whether the Company can successfullypenetrate new markets and the degree to which the Company gains traction in these new markets; thesustainability of recent growth rates; the anticipation of the growth of certain market segments; thepositioning of the Company’s products and services in those segments; the competitive environment; andgeneral market conditions. The Company is not responsible for any forward-looking statements andprojections made by third parties included in this Presentation.

August 2019

3

Business Segments

Haier Electronics Group

Washing Machine Water heater & Water purifier

Channel Services

- No. 1 brand in China

- Margin expansion

- Strong cash generation

- Next generation smart manufactory

- Distribution full range of Haier

Products through online and offline

- Franchise-model based offline

network

August 2019

4

Agenda

➢ Strategic position

➢ Overall Financial Review

➢ Washing Machine Segment

➢ Water Heater & Water Purifier Segment

➢ Channel Services Segment

➢ Logistics business


August 2019

5

Haier Electronics Strategies Overview

What drives our long-term growth?

Innovation in our DNA Solid brand portfolio Superior User Experience

5+7+N Smart Home

Clothing Water

Food

SecurityClean air

Information

Entertainment

Balcony

Bathroom

LivingroomBedroom

Kitchen

loT Ecosystem

Cutting-edge

technology

Innovative

organization

(premium)

(mass)

(value)

August 2019

66

Delivering Scenario-Based Solution

– Internet of Clothing

User Experience

Upgrade

Smart Home

Scenario

Washing

Chemicals ……

Marketing

R&D

Fabric

Logistics

……

Washing

Design

R&D

……

RFID

Design

WM

Deter-gent

Clothes

Storage

Care Purchase

Washing

Smart balcony

►By making alliance with apparel & shoes manufactures, washing & caring detergent providers,

cloth ironing products and smart closet , we aim to build the clothing ecosystem on Smart

Bedroom

5 Physical areas

7 loT solutions

N scenarios

August 2019

7

►Based on the water usage scenarios and leveraging U+ Cloud platform technology, we aim to provide users with

whole-house healthy drinking water, bathing and heating solutions, as well as health-related data management.

► By organic growth and strategic acquisition, we will devote to offering water using from household to

commercial areas, with all day inclusive services.

5+5+N

5 Solutions

1 Purified drinking water

2 Water softening 3 Sanitized bathing water

5 New energy adoption4 Whole-house heating

All-day & Anywhere

Household&

Commercial

Home

School

Office

Hospital

Restaurant

Airport

Delivering Scenario-Based Solution

– Water ecosystem

August 2019

8

Digital Empowerment

across the Value Chain（Launched in Dec 2019）

Smart HomeApp

Whole process

Multi-dimensional

Full Life-cycle

Digital Transformation –

Winning the digital consumer journey

Marketing

Online

Product

Online

Productiononline

Service

Online

Research

Online

Efficient delivery to consumers

Employee

Online

August 2019

9

Agenda




➢ Water Heater & Water Purifier Segment


➢ Logistic business


August 2019

10

2015-2019 Overall Financial Review

Growth trend from FY15 to FY19

➢ The 5-year growth CAGR of FY15-19 for the group’s overall revenue and net profit

attributable to owners of the Company were respectively 4.8% and 11.6%;

➢ NPM consistently gained from 5.0% to 5.5%, with NP growth rate of 2019 reaching

9.0%( excluding one-off non-cash gain of 3.16bn RMB from disposing logistic

business).

(￥100mn)

628.3 638.5

713.2 763.4 758.8

27.0 27.9 33.8 38.4 41.9

4.3% 4.4%4.7%

5.0%5.5%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

-

100.0

200.0

300.0

400.0

500.0

600.0

700.0

800.0

900.0

FY 15 FY 16 FY 17(restated) FY 18(restated) FY19

revenue NP NPM

August 2019

11

2019 Overall Financial Review –

Revenue & EBIT breakdown by segments

Revenue breakdown by segments

EBIT breakdown by segments

* Before inter-segment elimination

Washing Machine

24%

WH&WP9%

Channel Services

67%

234.0

87.5

664.7

WashingMachine

WH&WP

ChannelServices

+8.8%

+8.9%

-2.3%

(￥100mn)

Washing Machine

49%

WH&WP24%

Channel Service 27%

22.8

11.1

12.8

WashingMachine

WH&WP

ChannelServices

+11.3%

-3.4%

+11.1%

(￥100mn)

August 2019

12

2019 Overall Financial Review - Cash Usage

17.3

15.4

14

14.5

15

15.5

16

16.5

17

17.5

FY18(restated) FY19

Capex(￥100mn)

150 148

47 35

0

50

100

150

200

250

FY18(restated) FY19

Net cash & financial products

Net cash Financial products

(￥100mn)

total: 197total: 183

41.0 41.0

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

FY18(restated) FY19

Cash conversion cycle(Days)

43.5

47.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

50.0

FY18(restated) FY19

Cash flow from operation (￥100mn)

August 2019

13

Agenda




➢ Water Heater & Water Purifier

Segment



• Market

• Business Composition

• Financial Review


August 2019

14

WM Business Market - Consumption Upgrade

According to the offline data from China Market

Monitor, the consumption upgrade trend continued

in 2019

• Market share of front-load products in terms of

sales value increased by 2.6ppts to 76%, while the

ASP of front-load products is about 2.6 times of

that of top-load ones (￥4,407 vs. ￥1,725 )

• Products with higher ASP (￥6,500 and above)

and higher capacity (10kg and above) have been

gaining market share

Market share change

by price range

Market share change

by product type

Market share change

by capacity

* Data source: China Market Monitor (CMM)

(ppt) (ppt)

(3)

(2)

(1)

0

1

2

3

4

5

6

750- 1000- 1500- 2000- 2500- 3000- 3500- 4000- 4500- 5500- 6500- 6500+

(15)

(10)

(5)

0

5

10

15

20

23%-2.5ppt

76%+2.6ppt

1%

top-load front-load others

August 2019

15

WM Business Market – Haier’s Market Share

For FY19:

• Haier ranked No. 1 both online and offline in terms

of sales value, and the online and offline market

shares further climbed by 1.9ppts and 2.8ppts yoy

respectively

• According to the offline data of CMM, Haier’s ASP

(￥3,409) was about 19% higher than the domestic

average (￥2,868), and for the high-end market with

ASP higher than ￥6,500, Haier accounted for about

50% of total market share

Market share by price range (CMM-offline)


FY19 online market share change in terms of sales value

FY19 offline market share change in terms of sales value

36%

36%

18%

10% 9% 8%

3% 2% 2%

2.8

-0.1

-1.7

1.5

-0.3 -0.6

-1.2

-0.6

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

0%

5%

10%

15%

20%

25%

30%

35%

40% market share

market share change yoy (ppt)

34% 32% 33%

50%

13%15% 17% 18%17%

7%4%

1%0%

7%

18%

11%

0%

10%

20%

30%

40%

50%

60%

ASP<2500 2500≤ASP<4500 4500≤ASP<6500 ASP≥6500

Haier

Little Swan

Midea

Siemens

low-mid-end mid-end mid-high-end high-end

17% 14%

7%

3% 3% 2% 2%

1.9

-0.3

1.9

-2.5

-0.1

-0.5

0.1

-1.7

-3.0

-2.5

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

0%

5%

10%

15%

20%

25%

30%

35% market share


August 2019

16

Revenue growth

• In FY19, washing machine revenue grew by 8.9% to

RMB23.40 billion, higher than FY19 industry

average of -0.6% according to CMM (online &

offline combined)

• The FY15-19 CAGR is 11.9%

• Casarte and Leader brand grew by about 15% and

more than 30% respectively

WM Financial Review - Revenue Growth

(￥100mn)

Revenue increase breakdown by volume and ASP

for each brandfor each product type

149.5159.2

195.4214.9

234.0

0.0

50.0

100.0

150.0

200.0

250.0

FY15 FY16 FY17 FY18 FY19

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

front-load top-load

12%

5%

-3%

-5%

volume ASP

-5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

Casarte Leader Haier

8%

36%

4%6%

-1% -2%

volume ASP

August 2019

17

WM Financial Review - Revenue Mix Change

Revenue mix change by product type

Revenue mix change by brand Revenue mix change by channel

• Front-load products further gained share

• Leader brand’s revenue share increased by 2% with

growth rate of over 30%

• Online revenue gained share to 29%42%

40%

58%

60%

F Y 1 8

F Y 1 9

Top-load Front-load

84%

82%

6%

8%

10%

10%

F Y 1 8

F Y 1 9

Haier Leader Casarte

52%

48%

24%

23%

24%

29%

F Y 1 8

F Y 1 9

Haier franchise stores KA channels online

August 2019

18

WM Financial Review - Profitability

Segment results margin change

* The positive contribution from expenses items refers to expenses ratio decline.

卡萨帝纤诺洗干组合

%

9.5%0.2% 1.5%

0.6%

2.5%9.7%

0%

2%

4%

6%

8%

10%

12%

FY18 GPM S&D exp./Revenue G&A exp./Revenue others FY19

Margin change Main factors

GPM decrease Mainly due to productivity ramp-up in new factories and online share gained

S&D exp. % More exp. to enlarge market expension

G&A exp. % More R&D exp.

others More gov. subsidy; relocation compensation for the launch of new factories

August 2019

19

Agenda





Segment



• Market

• Business Composition


➢ Water Heater&Water Purifier Segment

August 2019

20

WH Business Market – Consumption Polarization

Market share change

by product type

Market share change

by price range

Market share change (gas products only)

by capacity


Monitor

• Market share of electric products in terms of sales

remained the same as 44%, while the ASP of gas

water heater is about 1.9 times of that of electric

ones(￥3,079 vs. ￥1598)

• Value for money products (￥2,500 below and

¥3000) and gas products with higher capacity (12L

and above) have been gaining market share

(ppt)(ppt)


-1

0

1

2

-8

-4

0

4

8

44%+0ppt53%

-0.01 ppt

3%

electric

gas

others

August 2019

21

WH Business Market – Haier’s Market Share


Online

FY19 Market Share Change by Channel

Offline

FY19 Market Share Change by Product type

Electric Gas

2018 2019

24.1% 23.9%

11.3%

7.3% 6.5%5.6%

3.2%

2.0

-0.1

-2.2

0.2

0.6

0.1

-1.4

-2.5

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

Haier Media AOS Vanward Macro Rinnai Noritz

market share


22.2%

20.5%

14.6%

7.7% 7.3%

5.6%4.0%

--2.1

2.4

0.7

0.2 0.2 -0.7

1.4

-2.5

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

0%

5%

10%

15%

20%

25%

AOS Haier Midea Vanward Macro Rinnai whirlpool

market share


19%

10%

12%

11%11%

38%

18%

12%

12%

11%11%

36%

AOS Haier Vanward Macro Midea Others

2018 2019

27%

29%

18%

4%

4%

19% 30%

26%

19%

3%

3%

18%

Haier AOS Midea Vanward Macro Others

August 2019

22

• Volume was the major driver for each product type

in FY19

• Heat-pump products achieved about 22% revenue

growth, about 4 times of that of electric one

• Carsate and Leader brand grew by over 35% and

over 10% respectively

WH Financial Review - Revenue increase breakdown

Revenue increase breakdown by volume and ASP

for each brandfor each product type

-10%

-5%

0%

5%

10%

15%

20%

25%

heat-pump gas electric

21%

15%13%

0%-2%

-7%

volume ASP

-10%

-5%

0%

5%

10%

15%

20%

25%

Casarte Leader Haier

11%

21%

8%

22%

-7%-5%

volume ASP

August 2019

23

WH Financial Review - Revenue Mix Change

Revenue mix change by product type

Revenue mix change by brand Revenue mix change by channel

For FY19:

• Gas product achieved higher revenue percentage

• Leader and Casarte both gained revenue share

• The contribution of online revenue rose by 5ppt

66%

65%

22%

23%

12%

11%

F Y 1 8

F Y 1 9

Electronics Gas Solar&Heat Pump

83%

81%

13%

14%

4%

5%

F Y 1 8

F Y 1 9

Haier Leader Casarte

29%

34%

61%

57%

10%

10%

F Y 1 8

F Y 1 9

online Haier franchise stores KA channels

August 2019

24

WP Business Market Landscape

Market share change

by price range

Market share change

by product type


(ppt)

Market share change

by product type

(6)

(4)

(2)

0

2

4

6

-1.00

-0.50

0.00

0.50

1.00

water dispenser drinking heater ultrafiltrationmachine

RO Machine


Monitor of 2019,

• the ASP of RO machine products is about 1.3 times

of that of ultrafiltration ones. (￥3,994 vs. ￥2,995 )

• Products with ASP from ￥4,000 to ￥5,000 and

product types including water dispenser and

drinking heater have been gaining market share.86.4%

6.3%5.7%

1.6%

RO Machine ultrafiltration machinewater dispenser drinking heater

August 2019

25

WP Business Market – Haier’s Market Share

According to the offline data of CMM,

For FY19,

• Haier ranked No.2 offline and No. 5 offline in

terms of sales value, and the online and offline

market shares further climbed by 0.5ppt and

2.4ppt yoy respectively.

• Haier’s ASP (￥3,453) was approximately equal to

the domestic average (￥3,529)


FY19 online market share change in terms of sales value

FY19 offline market share change in terms of sales value Market share by price range (CMM-offline)

23%21%

15% 13%

7%

5%

0.6

-5.7

-0.5 -0.1

2.4 2.5

-7.0

-6.0

-5.0

-4.0

-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

0%

5%

10%

15%

20%

25%

AOS Midea anjier qinyuan Haier whirlpool

market share


17%

24% 23%

16%

2%

7%

20%

53%

14% 15% 15% 14%16%

20%15%

5%

9%11%

8%

2%0%

10%

20%

30%

40%

50%

60%

ASP<2500 2500≤ASP<3500 3500≤ASP<5500 ASP≥5500

Midea

AOS

Anjier

Qinyuan

Haier

low-mid-end mid-end mid-high-end high-end

14%

13%12%

11%10%

6%

-1.0

0.5

3.1

-2.3

0

-1.1

-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

0%

2%

4%

6%

8%

10%

12%

14%

16%

Midea Haier Xiaomi qinyuan AOS anjier

market share


August 2019

26

WH&WP Financial Review - Profitability




GPM Gain from the steady decline in raw material prices and the decline in VAT rate; product structure optimization and switched channel.

S&D exp. % Lower logistics cost and warranty cost.

G&A exp. % Mainly due to the cost of new factories and the R&D expenses.

12.4% 0.3%0.6% 0.9%

0.3% 12.7%

0%

2%

4%

6%

8%

10%

12%

14%


August 2019

27

Agenda





Segment



• Market

• Business Flow Chart



August 2019

28

Growth rate(offline) comparison by product type

Home Appliance Industry

Growth rate comparison by channel

Haier’s retail sales growth rate is

higher than industry in major product

type

Note:

• Online and offline revenue consist of

refrigerator, air-con, washing machine, water

heater

• Haier’s data and industry data come from

CMM

10.8%

-1.7%

3.9%

-9.0%

-10.0% -5.0% 0.0% 5.0% 10.0% 15.0%

online

offline

industry haier

0.9%

-7.8%

4.4%

0.7%

-2.6%

-10.1%

-2.8%

-9.0%

fridgerator air-con. washing machine water heater

Haier industry

August 2019

29

Channel Services Financial Review - Revenue Breakdown

Revenue breakdown by product

• Refrigerator & Freezer, Washing machine,

Water heater, and Kitchenware further

gained share

• For online business, revenue share of Tmall

gained share

Online revenue breakdown

FY18 FY19FY18 FY19

Revenue breakdown by channel

43%

43%

14%

44%

43%

13%

Tmall JD eHaier+Shunguang

25%

75%

31%

69%

Online Offline

29.3%

30.8%

24.9%

22.1%

23.2%

25.5%

9.3%

10.4%

8.1%

6.5%

4.3%

4.7%

0% 20% 40% 60% 80% 100%

FY18

FY19

图表标题

Refrigerator & Freezer Air-con

Washing machine Water heater

TV Kitchenware & others

August 2019

30

Channel Services Financial Review - Profitability


* The positive contribution from expenses items refers to expenses ratio decline


S&D exp. % Online business gained share and led to more interactive marketing expense

G&A exp. % Downsized management expense andimproved management efficiency

1.9% 0.0% 0.1% 0.1% 0.0% 1.9%

0%

1%

1%

2%

2%


August 2019

31

Agenda





Segment





August 2019

32

Logistic Services Financial Review – Revenue growth

+6%

Revenue Growth

• In FY19, logistics revenue grew by 6%,

among which home appliance products

contributed 62% of the revenue

• Revenue from Cross-border and Ecological

both achieved fast growth

0

20

40

60

80

100

120

2018 2019

(￥100mn)

• Since Jul.26th 2019, the asset swap between

logistic business and water purification

business has been completed.

• Logistic business is now an associate

company where Haier Electronics holds 47% of

shares and book its shared profit using equity

method.

August 2019

33

Logistic Services Financial Review - Profitability

Logistics business margin change


Margin change

Main factors

GPM increase

Routes optimization and business mode adjustment led to lower cost

G&A exp. % Scale effects led to efficiency optimization

Others Mainly due to the disposal of Shengfeng business and warehouse in Wuhan

3.9%

1.7%0.4%

0.1%2.6%

3.6%

0%

1%

2%

3%

4%

5%

6%

7%


August 2019

34

Thanks! [email protected]

Documents

Haier Electronics Group Co.,Ltd2020/03/26 · Haier Electronics Group Co.,Ltd 2019 Annual Results Presentation March 2019 2019 Annual Results Presentation March 2019 2019 Annual Results