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2016.11
1
美的集团管理模式分享
Corporate Snapshot
2
1980
1993 2000
2001
JV with
Toshiba Carrier;
Acquisition of
Royalstar, Hualing,
CQ General Industry
2012
Organization restructuring
IPO
MBO Management
Handover;
JV in India
Company
Established
1968 1997 1992 2011
Strategic
Transformation;
Acquisition of Carrier
Latin America
2004 2013
Listing
as a whole
2014
Multi-Brands:
2015
JV with Carrier,
Bosch, SIIX,
Yaskawa
Electric Fan
1985
Electric
Motor
Rice
Cooker
1998
2000: Dish Washer
2001: Water Heater, Water Purifier
2002: Refrigerator
2003: ATW Heat Pump
2004: Wash Machine
2005: Vacuum Cleaner, Pressure Cooker
2006: Oven
2007: Air Purifier, Humidifier
2009: Lighting
1998: Compressor
1999: Commercial AC
Microwave Oven
Induction Cooker
Water Dispenser
“Twin Smart “
Strategy
Smart
Home
2016
Strategic Partnership
with Toshiba;
Acquisition of Clivet;
Tender offer Kuka
Corporate History
3
Residential
AC
Acquisition of
Toshiba Macro,
Liguang Aircon
2005 2008 2010
Acquisition of
Chunhua
Acquisition of
Little Swan
Acquisition of
Miraco (Egypt)
Product Portfolio
4
One of the Most Extensive Product Portfolio of Any Global White Goods Players
Unit: RMB Bn Source: 2016 Semi-Annual Report
2016H1 Main Business Turnover Breakdown
Turnover Breakdown
5
No.1 No.2 No.1 No.1 No.1 No.2 No.2 No.3 No.2 No.3 No.3 No.3 No.1
6
Market Share
Over 100 Industrial Design Awards
IF Design Award (Germany), Red Dot Design Award (Germany), IDEA Design Award (US)
7
Awards
A - / Stable
A - / Stable
A 3 / Stable
First Chinese home appliance manufacturer
assigned ratings by International Rating Agencies
8
Rankings & Ratings
#481, The Fortune 2016 Global 500
#402, 2016 Forbes Global 2000
#6, R&F Global Ranking Top 100
First Chinese home appliance manufacturer
listed on the Fortune Global 500
9
Inside / Outside of China: 17 / 10 production facilities; ~90,000 / ~15,000 employees
Manufacturing Footprint
Midea Group
Kit
ch
en
Ap
plia
nces
To
sh
iba
Lif
es
tyle
(T
LS
C)
Lau
nd
ry
Refr
igera
tor
Liv
ing
Ap
pli
an
ces
Co
mm
erc
ial A
C
En
vir
on
me
nta
l A
pp
lia
nce
s
Wate
r H
eate
r
Part
s &
Co
mp
on
en
ts
10 Product Divisions
10
International
Business
Platform
E-commerce
Platform
M-Smart
Institute
Financing
Platform
Service
Platform
Procurement
Platform
Organization Chart
Resid
en
tial A
C
Logistics
Platform Central R&D
Institute
Midea
Group
Controlling
Shareholders
36%
Strategic
Investors
4%
Senior
Executives
4%
Others
36%
- Annual cash dividend: ≥ 1/3 of distributable profits
- In 2015: DPS 1.2 yuan; Transfer of Capital reserve: 5
shares per 10 shares; cash dividend amount: 5.1bn
yuan; accumulated cash dividend amount: 12.7bn yuan
Three terms of share option scheme for employees.
Two terms of “Partners” programs (ESOP) for key
senior management.
11
Cash Dividend
Share Options
“Partners” Program
Governance & Dividend
Dated: 30 Sept. 2016
C 90
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主色: 辅助色:
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K 0
温暖橙:
C 30
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Y 100
K 0
健康绿:
C 70
M 0
Y 0
K 0
科技蓝:
Strategic Directions
12
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Y 0
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C 0
M 0
Y 0
K 60
C 0
M 0
Y 0
K 40
主色: 辅助色:
C 0
M 0
Y 0
K 25
C 0
M 0
Y 0
K 5
C 0
M 30
Y 100
K 0
温暖橙:
C 30
M 0
Y 100
K 0
健康绿:
C 70
M 0
Y 0
K 0
科技蓝:
Industry Outlook in China
13
Improvement of
penetration rate
With the increased people’s income (growth rate of the real disposable income per capita
in China for 2016H1 is 6.5%) and accelerated urbanization, penetration rate of home
appliances in China is expected to be further improved.
Replacement of
existing appliances
Development of
Smart Home
Modernization of
distribution channel
Strengthening of
industry leaders
Globalization of
Chinese companies
In an era of internet+, with the improved technologies such as smart control, IOT, big data,
and the wide usage of mobile terminals, Smart Home is expected to experience rapid
development in China.
With the development of O2O business model and application of big data, e-commerce is
becoming a substantial channel for home appliance distribution, and home appliance
manufacturers are having increasingly close cooperation with internet companies.
With the competitive advantages in brand, technology, supply chain, services and
channels, home appliance industry is yet to be further consolidated and industry leaders
will be further strengthened.
Rooted in the enormous market in China, and with competitive advantages in scale,
cluster, and capital, Chinese manufactures will play a significant role in fast-growing
developing markets, as well as developed markets via M&A.
Considering that over 1.6bn units of home appliances sold in China, with the improved
quality and features of home appliances, and increased demand for premium products,
appliances are to be further upgraded and replacement market is enormous in China.
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K 90
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Y 0
K 70
C 0
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Y 0
K 60
C 0
M 0
Y 0
K 40
主色: 辅助色:
C 0
M 0
Y 0
K 25
C 0
M 0
Y 0
K 5
C 0
M 30
Y 100
K 0
温暖橙:
C 30
M 0
Y 100
K 0
健康绿:
C 70
M 0
Y 0
K 0
科技蓝:
Vision:
Leader in Chinese home appliance industry;
Top 3 in worldwide white goods industry
Goal:
To be a consumer-oriented innovative company
Second Three Year
First Three Year
Third Three Year
14
Vision
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K 90
C 0
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Y 0
K 70
C 0
M 0
Y 0
K 60
C 0
M 0
Y 0
K 40
主色: 辅助色:
C 0
M 0
Y 0
K 25
C 0
M 0
Y 0
K 5
C 0
M 30
Y 100
K 0
温暖橙:
C 30
M 0
Y 100
K 0
健康绿:
C 70
M 0
Y 0
K 0
科技蓝:
战 略 主 轴
15
Leading Products
• Consumer-oriented products; improved productivity
• More investment in R&D; innovation; improved product mix
• Spin off loss-making categories; reduce product models
Global Operation
Efficiency Driven
• Set up International Business Platform
• Business model from OEM to OBM
• Joint Ventures with Carrier, Bosch, Toshiba, etc.
• M&A
• Launch“632”IT project to standardize process
• Invest on automation of the factory
• Promote T+3 model – production planning based on orders
• Consolidate business support to 6 platforms to create synergies
Strategic Focuses
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K 60
C 0
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K 40
主色: 辅助色:
C 0
M 0
Y 0
K 25
C 0
M 0
Y 0
K 5
C 0
M 30
Y 100
K 0
温暖橙:
C 30
M 0
Y 100
K 0
健康绿:
C 70
M 0
Y 0
K 0
科技蓝:
Business Strategy
Globalization Strategy
M-SMART H
om
e A
pp
lia
nc
es
Ma
nu
fac
ture
r
Sys
tem
In
teg
rati
on
So
luti
on
Pro
vid
er
产 业 框 架
M-Smart
16
6 platforms to support business development
Business Framework
Internet Strategy
Company-
oriented (Midea products)
Customer-
oriented (cross brands)
Users-
oriented (cross industries)
To meet
company’s
demand
To meet
customers’
demand
To meet
users’
demand
Resources
consolidation Fast
growth Delivery to home;
last kilometer
Consolidate logistics
of Midea products
divisions Upgrade information
system
3rd & 4th tier markets’
development
Improve efficiency,
reduce costs Diversification of
delivery methods &
products;
Expand non-Midea
customers
Covering 9.6mm km2 & 100cities; delivery within 24hrs
17
Logistics platform: End-to-end systematic solutions
Service Platform: Fast, Efficient & full-service
Founded as service sharing platform
Cleaning of home
appliances;
Water and air
quality test, etc.
Healthy Life
Installation and
repairing, recycling
of home appliances;
Technicians O2O
Convenient Life
I.O.T;
Personalized
services
Digitalized life
Multi-brand
services;
industry service
Sharing Life
Industry standard;
orphan brand;
Social welfare
Charity Life
Platforms
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主色: 辅助色:
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温暖橙:
C 30
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Y 100
K 0
健康绿:
C 70
M 0
Y 0
K 0
科技蓝:
Child Star AC
No child sleeping curves
“Angel” protection mode
Fast cooling technology
3 color healthy filter
Beverly Washing
Dryer
Diamond cutting crafts
Accurate detergent adding
Innovative water flow
Twin Screen Smart
Fridge
Food management
Twin screen
Internet connected
Smart Rice Cooker
Titanium pot
IH big fire
Two direction 720 degree
boiling
M2 Water Purifier
No installation needed
Easy filter change
RO+, cold and hot water
WiFi smart management
Comfort Star AC
No wind feeling
Energy-saving
silent
Smart light reaction
Focusing on consumer-oriented research & characterized product features, to achieve differentiated competitive advantages.
Further investment on product R&D, to build a globally competitive R&D scheme and improve innovation capability.
Concentrate on research and innovation of fundamental and core technologies, smart home technologies.
18
Product Strategies
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主色: 辅助色:
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温暖橙:
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Y 100
K 0
健康绿:
C 70
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科技蓝:
R&D investment:
Set up Central Research Institute, Smart-Home
Institute (Global Innovation Center)
Invested RMB 3bn, to build largest home appliance
R&D center in Asia
R&Ds center worldwide
Central Institute
Fundamental
& subversive
research
Common
technology
research
Four
Tier
R&D
Scheme
Divisions
Product
develop-
ment
Innovation Projects:
“Start from Scratch” Projects: new platform
development on existing product categories
“Second Track” Projects: new product R&D in new
fields such as health, smart, beauty, nutrition,
environmental protection
19
R&D Strategies
Individual
technology
research
“Twin
Smart“
Strategy
Yas-
kawa
Auto-
mation
Efort
KUKA
M-
SMART 1000 robots in use
RMB 5bn used in factory automation
Joint Ventures with YASKAWA (Japan)
Invested in ANHUI EFORT (17.8%)
Launched voluntary tender offer for KUKA (Germany);
current shareholding 13.5%
Automated (Smart) Manufacturing
20
“Twin Smart” Strategy
Chip & Module
Open
Connection
Open
Protocol Open
Service Open
E-commerce
Open Open platform
for building smart home
M-SMART Bubble Products:
Bubble Robot
Bubble M-Box
Bubble Box
Bubble Smart plaster
Bubble Router
Over 80 smart product categories on market
Completed the development of WIFI Module, Midea Cloud and core
SDK of system
Finished protocol matching with JD, Alibaba, Xiaomi, Wechat Cloud
Established protocol matching with Homekit、Allseen、Thread、WIFI、
ZIGBEE Alliance
Established matching with Router company (Huawei, Xiaomi), mobile
internet platforms (Wechat, Baidu), smart hardware (ROKID robot), 3rd
-
party application (IFLYTEK, Moji Weather)
Smart Home: M-Smart
21
“Twin Smart” Strategy
22
HQ Globalization
Subsidiaries Localization
Global standardization
Local Differentiation
Business Mode:
OEM OBM
Brand Image:
Functional Brand
Emotional Brand
Aspirational Brand
Operation Mode:
Direct export Local Production
Joint Ventures, M&A:
Globalization
美的以5亿美元,受让
Midea + Clivet Midea + Toshiba Midea + KUKA
Acquisition of 80.1% stake in the
home appliances businesses of
Toshiba with a consideration of
c.US$500 million
Being licensed to use the Toshiba
brand worldwide for 40 years;
Obtained over 5,000 IP assets
Significant synergies in brand,
channels, R&D, supply chain, etc.
Launched a voluntary tender offer
at EUR115 in cash per KUKA
share
Aligned with the “Twin Smart”
Strategy, to improve intelligent
manufacturing capabilities and to
expand B2B business
With complementary strengths, to
fully explore the robotics market in
China in various areas
Acquisition of 80% stake in Clivet,
a European leading company
based in Italy
Improve market share on the
European as well as global
markets
Significant synergies in in product
offerings, market presence, supply
chain, manufacturing and
technologies
Recent Transactions
23
美的集团管理模式分享
24
Business Update
Revenue growth recovered; both gross and net profit margin further increased
25
Revenue & Margin
Note: Acquisition of TLSC was closed on 30 June 2016. Financial reports of TLSC has been consolidated since then.
26
Cash & Cash Flow
Abundant cash-in-hand; strong cash generation capabilities
Note: Acquisition of TLSC was closed on 30 June 2016. Financial reports of TLSC has been consolidated since then.
Cash conversion cycle became negative, cash usage ratio has been largely improved
27
Cash Conversion Cycle
Steadily increased market cap & Stable dividend distribution
Cumulated dividend payment from 2013 to 2015 amounts to RMB 12.7Billion.
From Sept. 2013 to Sept. 2016, market cap has
increased over 144%.
28
Market Cap & Dividend
RMB Bn
美的集团管理模式分享
29
Backup - Financials
Stable turnover growth; improving margin Improving Gross Margin; stable SG&A&Fin Costs
Net asset largely increased; ROE largely improved Sufficient cash; stable cash inflow
30
Key Financial Analysis
RMB Bn
RMB Bn
AC inventory Reduced; other categories grow rapidly Both inside and outside China market grow steadily
31
By Products & Regions
THANKS