2q’14 earnings release - 코웨이 ir · 2018-01-10 · smallest size of ice-making water...
TRANSCRIPT
2Q’14 Earnings release
-1-
DISCLAIMER
This presentation contains historical information of the company which should
not be regarded as an indication of the future performance or results.
This presentation also contains forward-looking statements that are, by the
nature, subject to significant risks and uncertainties.
These forward-looking statements reflect our current views with respect to
future events and are not a guarantee of future performance or results.
Actual results may differ materially from information contained in the forward-
looking statements as a results of a number of factors beyond our control.
• Domestic health appliance business
• Overseas business
• Home-care and Cosmetics business
CONTENTS
1. 2Q’14 Earnings release
5. Appendix
2. Business Review
-2-
3. Consolidated Earnings
• Revenue / Profits
• Consolidated revenue / profits
• Non-consolidated financial reports
• Consolidated financial reports
• Subsidiary results
4. Business Review and Plan • 1H’14 Business Review and 2H’14 Plan
1. Revenue and Profits
1H’14 Revenue KW 1,018.1bn (+5.8%, YoY),
Operating profit KW 187.4bn (26.1%, YoY), Net Profit KW 131.3bn (+22.9%, YoY)
2Q’13 2Q’14
[Accounting standard: K-IFRS Non-consolidated financial reports]
60.6
2Q’13 2Q’14
496.9
12.2%
-3-
523.3
65.2
12.5%
1Q’14
494.8
1Q’14
66.1
13.4%
1H’13 1H’14 2H’13
962.1
1,018.1
2Q’13 2Q’14 1Q’14
79.4
97.6
89.8
18.1%
18.7%
16.0%
148.6
187.4
19.0% 18.4%
15.4%
1H’13 1H’14 2H’13
11.1%
131.3
12.9% 11.6%
1H’13 1H’14 2H’13
106.8
971.6 184.6
112.4
1) Loss on F/X changes :KW 7.1bn
*Financial report(Including disposal gain)
[Unit: KW bn] 1H'13 1H'14 YoY
Net Profit 140.7 131.3 -6.7%
1)
2)
2) 1H’13 : Excluding one-off gain of KW 34.0bn(Disposal gain of Woongjin Chemical stake)
Revenue Operating Profit Net Profit
[Unit: KW bn/ : Margin] [Unit: KW bn/ : Margin] [Unit: KW bn]
2.1 Health appliance business
Total accounts 5.57mn in 2Q’14 , Rental sales 371k historically high
-4-
- Total accounts 5.57mn in 2Q’14
(Rental net accounts : +53k ,Membership net accounts: +21k)
- High rental sales growth in 2Q’14 and increase of retention rate
from 77%(1Q’14) to 80%
Accounts *
- Rental sales 371k in 2Q’14 (+24.4% YoY, +17.2% QoQ)
- Rental sales 688k in 1H’14, (55.0% of annual target) (Target of ’14: 125k)
- Strong sales in main categories (Water purifier, Air purifier, Mattress)
Rental sales
- Health appliance revenue KW 429.9bn in 2Q’14 (+1.7% YoY, +3.9% QoQ)
- Rental revenue KW 346.7bn in 2Q’14 (+4.5% YoY, +1.3% QoQ)
- Lump-sum revenue -21.8% YoY, +35.6% QoQ in 2Q’14
(Impact of dehumidifier sales)
Health appliance
422.5 413.8 429.9
2Q’13 2Q’14 1Q’14
298k 317k
371k
2Q’13 2Q’14 1Q’14 * Excluding non-performing & 5-yr maturity pending accounts : Applies to all accounts in this material
5,474k 5,513k
5,574k
2Q’13 2Q’14 1Q’14
[Unit]
[Unit: KW bn]
[Unit: accounts]
2.1 Health appliance business
Rental sales growth for 4 consecutive quarters since ASP increase
317K
1Q’13 1Q’14 2Q’13 3Q’13 4Q’13
292K
257K
298K
318K
Rental sales
371K
2Q’14
-5-
Continued sales growth recovery after ASP increase
- Water purifier: Highest sales record during recent 5-yrs due to strong sales of compact-sized ‘Handbreadth’
water purifier and cold water purifier
- Air purifier: Strong sales driven by multi-functional air purifier such as dehumidifying air purifier
(Sales portion of multi-functional air purifier: 43.1%(2Q’13) 48.8%(2Q’14))
- Mattress: Expansion of product line-up to single, queen, king size of mattress and bed frame
[Unit]
ASP increase
2.1 Health appliance business
Water purifier lineup
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‘COWAY’ Water Purifier Competitiveness
Cold water purifier
Released on April 2013
Slim design, 15% increase of cold water
tank capacity
Premium compact size water purifier
‘Handbreadth 2’
Released on August 2013
Automatic extraction by sensing technology
Compact size Ice-making water purifier
Released on April 2014
Smallest size of ice-making water purifier
Sparkling water purifier
Released on July 2014
Cold water/ Sparkling water
function
Large capacity water purifier
Released on May 2014
Filter • In house developed 5-step filter system
• Certified as radiation removing RO-filter
• 14 ‘WQA’ certified water professionals
• Service area per CODY(1.3㎢)
• Cleaning and filter change service every 2 month
+ Sterilization and components change premium service
every year
Service
Tech. • No.1 in R&D: 350 R&D professionals
• Ex: Self-sterilization system, detachable ice tank,etc.
Design • Korea design ranking: No.3(by ’14 IF Design Award)
• ‘Coway’ water purifier: IDEA prize
Brand • Top of mind brand awareness : No.1 (76%) (*2nd 13.8%)
• Brand power: No.1 (16 consecutive years)
*WQA(Water Quality Association)
Strengthen No.1 position driven by competitiveness of water purifier
2.1 Health appliance business - Rental asset disposal expense
Maintain low cancellation rate and
rental asset disposal expense
40.9 44.0
59.8
KW 10.8bn of rental asset disposal expense
in 2Q’14
- 3.1% of rental revenue in 2Q’14
-7-
38.8 3.8% 3.6%
4.7%
2.9% 3.6%
38.1
9.5
2.8%
Slight increase in cancellation rate
Maintain around 1%
- Cancellation rate of main categories in 2Q’14
: Water purifier 0.99% / Air purifier 1.43% / Bidet 0.71%
2011 2010 2012 2013 2009 1Q’14 2Q’14 2011 2010 2012 2013 2009 1Q’14 2Q’14
10.8
3.1%
1.04%
1.16% 1.12%
1.06% 1.05%
0.95% 0.97%
Cancellation rate * Rental asset disposal expense
Monthly cancellation rate Rental asset disposal expense
% of Rental revenue
[Unit: KW bn]
* 2012 and before: Excluding non-performing accounts
* 2013, 1Q’14, 2Q’14: Excluding non-performing accounts and 5-yr maturity pending accounts
2.1 Health Appliance Business – New Product Release
Large-capacity dehumidifying air purifier (June)
- 4-step anti-virus filter / 10L per day
- Remove fine dust, yellow sand dust , and harmful virus
- Energy efficiency ratio : 1st grade
- Also has clothes drying function
Sparkling Water Purifier (July)
- RO-type premium water purifier with sparkling water function
- Premium product targeting on young generation
-8-
Water
Purifier
Air
purifier
Mattress
King size Mattress (May)
- Expansion of product lines by releasing king-size mattress
- Features: detachable top cover, independent spring
-Service: every 4 months
Introduction of innovative premium products to meet consumer trends
2.2 Overseas Business
Export revenue
-9-
Export revenue in 1H’14 :+32.8% YoY
ODM / Dealers
100.9
ODM revenue in 1H’14 (+21.1% YoY)
Continue to maintain strong sales in Chinese air
purifier market
Subsidiary revenue in 1H’14 (+87.3% YoY)
Strong export revenue driven by Malaysia and U.S.
subsidiaries
Continue to grow in Malaysia and U.S.
2Q’13 2Q’14
55.7
41.6
14.1
38.7
5.8
44.5
1H’13 1H’14
75.8
25.1
62.6
13.4
76.0
*51.4
*95.2
2Q’13 2Q’14 1H’13 1H’14
- Sales growth in Malaysia subsidiary
: 2Q’14: +13.0% YoY, 1H’14: +17.6% YoY
- Sales growth in U.S subsidiary
: 2Q’14: +11.0% YoY, 1H’14: +14.8% YoY
1Q’14
45.2
34.2
11.0
1Q’14
44.6
90.7
2H’13
50.1
68.6
18.5
2H’13
46.0
79.0
Overseas subsidiary revenue
Subsidiaries
[Unit: KW bn] [Unit: KW bn]
2.3 Home-Care & Cosmetics Business
Cosmetics
-10-
Home-Care
Home-Care revenue in 1H’14 +43.0% YoY
Cosmetics revenue in 1H’14 +8.0% YoY
22.3 22.1
43.2
40.0
2Q’13 2Q’14 1H’13 1H’14
14.9
10.1
27.1
19.0
2Q’13 2Q’14 1H’13 1H’14 1Q’14
12.2 20.9
1Q’14 2H’13
22.2
2H’13
36.4
Revenue in 1H’14 (+43.0% YoY)
- Mattress sales in 2Q’14 : 30k (+191% YoY)
- Total accounts in 2Q’14: 175K (+41% YoY)
- Impact of full lineup of mattress products and addition of
home-care service professionals
Revenue in 1H’14 (+8.0% YoY)
- Sales increase in 1H’14 driven by strong sales in home-
shopping channel (Home-shopping sales: +266%,YoY)
- Success of new product ‘Cell to cell essence’
(KW 7.0bn sales since introduction in Mar. 2014)
[Unit: KW bn] [Unit: KW bn]
1H’13 1H’14 2H’13
962.1
1,018.1
148.6
187.4
15.4%
1H’13 1H’14 2H’13
11.1%
1H’13
106.8
971.6 184.6
19.0% 18.4%
131.3
12.9%
1H’14
11.6%
2H’13
112.4
1H’13 2H’13
10.5%
112.1
128.0
1H’14
132.4
12.1% 12.0%
1H’13 2H’13
14.3%
151.6 187.4
1H’14
187.4
17.2% 17.8%
1H’13 2H’13 1H’14
1,091.9 1,063.8 1,054.5
[Accounting standard: K-IFRS non-consolidated financial report]
-11-
* Financial report(Including disposal gain)
[Unit:KW bn] 1H'13 1H'14 YoY
Net Profit 117.1 132.4 +13.1% 2) 1H’13: Excluding one-off gain of KW 5.0bn(consolidated) (Disposal gain of Woongjin Chemical stake)
1)
2)
Revenue KW 1,091.9bn (+2.6%, YoY), Operating profit
KW 187.4bn(23.6%, YoY), Net profit KW 132.4bn(+13.1%, YoY)
3. Consolidated Earnings Results
Revenue Net Profit Operating Profit
Consolidated
Non-consolidated [Unit: KW bn] [Unit: KW bn/ : Margin]
Consolidated
Non-consolidated [Unit: KW bn/ : Margin]
Consolidated
Non-consolidated
1) 1H’13: Excluding one-off gain of KW 34.0bn(non-consolidated) (Disposal gain of Woongjin Chemical stake)
3. Business Review and Plan
1H’14 Business Review
쇼피
2H’14 Business Plan
1H’14 Business review & 2H’14 Plan
▣ Maintain market leadership in key products
- Rental sales in 2Q’14: 371k (Historically high record)
Rental sales in 1H’14: 688k (55% of annual target) ducts
- Strong growth in key categories(Water purifier/Air purifier/Mattress)
- Introduced the smallest size of ice-making water purifier and sparkling
water purifier
- Sales / service agents(as of 1H’14) : 17,000 people
(Net addition: 2,200 people)
▣ Domestic health appliance business
- Improve cancellation rate
▣ Overseas health appliance business
- Strengthen ODM business capability through improvement
in design, technology, quality and cost competitiveness
-12-
- Discount store expansion : HI-MART, E-MART and etc.
- Home-shopping channel expansion
- Continue to grow home-care business
- Develop growth opportunity of overseas brand business
- Introduced premium humidifying air purifier and dehumidifying
air purifier
- Continue sales expansion with premium products
- Increase productivity and lower turnover rate of sales forces ▣ Strengthen product competitiveness by releasing
innovative products
▣ Strengthen sales/service network by increasing
number of sales agents
▣ New channel expansion
▣ Strong growth in home-care & overseas business
- Overseas sales growth in 1H’14: +33%,YoY due to increase
of exports to ODM and subsidiaries
- Home-care sales growth in 1H’14: +43%,YoY
: Mattress sales : 3k in 2Q’14 (+191%,YoY)
Appendix
-13-
• Non-consolidated financial reports
• Consolidated financial reports
• Subsidiary results
Balance sheet Jun. ‘14 Dec. ‘13
<Assets> 1,618.8 1,641.0
Current Assets 598.4 642.5
Cash and cash
equivalents 113.5 201.3
Accounts receivable 299.3 265.9
Inventories 48.2 40.9
Non-current Assets 1,020.4 998.6
PPE 608.7 596.8
Affiliates and subsidiaries 101.0 101.0
Intangible assets 150.1 150.9
<Liabilities> 666.1 673.7
Current liabilities 600.3 636.8
Short-term borrowings 304.6 172.0
Debenture
(Less than 1 year) - 116.1
Debenture
(More than 1 year) - 30.0
Non-current liabilities 65.8 36.9
Long-term borrowings - -
Bonds - -
<Stockholder’s Equity> 952.7 967.3
Liability / Equity 69.9% 69.6%
Net debt / Equity 20.1% 12.1%
-14-
Income statement 2Q’14 2Q’13 YoY
Revenue 523.3 496.9 5.3%
COGS 180.5 167.9 7.5%
Gross profit 342.8 329.0 4.2%
SGnA 245.2 249.7 -1.8%
Operating profit 97.6 79.4 23.0%
Margin(%) 18.7% 16.0% 2.7%P
Other income 0.2 11.3 -97.8%
Other expenses 8.5 6.9 22.7%
Financial income 0.4 1.3 -64.9%
Financial expense 3.1 4.3 -28.0%
Investment income from
investments in affiliated
companies - - -
Profit before income tax 86.7 80.7 7.4%
Corporate tax expenses 21.5 20.1 6.6%
Net profit 65.2 60.6 7.7%
Margin(%) 12.5% 12.2% 0.3%P
[Unit : KW bn] [Unit : KW bn]
Non-consolidated financial reports
-15-
Balance sheet Jun. ‘14 Dec. ‘13
<Assets> 1,618.8 1,667.9
Current Assets 598.4 691.4
Cash and cash
equivalents 113.5 238.7
Accounts receivable 299.3 212.6
Inventories 48.2 65.8
Non-current Assets 1,020.4 976.4
PPE 608.7 638.3
Intangible assets 150.1 176.8
<Liabilities> 666.1 727.0
Current liabilities 600.3 676.7
Short-term borrowings 304.6 181.8
Debenture
(Less than 1 year) - 116.1
Debenture
(More than 1 year) - 30.1
Non-current liabilities 65.8 50.2
Long-term borrowings - -
Bonds - -
<Stockholder’s Equity> 952.7 940.9
Liability / Equity 69.9% 77.3%
Net debt / Equity 20.1% 9.5%
Income statement 2Q’14 2Q’13 YoY
Revenue 556.9 556.5 0.1%
COGS 187.9 192.8 -2.6%
Gross profit 369.0 363.7 1.5%
SGnA 271.9 281.7 -3.5%
Operating profit 97.2 81.9 18.6%
Margin(%) 17.4% 14.7% 2.7%P
Other income 1.0 11.0 -91.2%
Other expenses 8.9 8.6 2.6%
Financial income 0.6 1.3 -56.4%
Financial expense 3.3 4.7 -28.8%
Investment income from
investments in affiliated
companies - - -
Profit before income tax 86.5 81.0 6.8%
Corporate tax expenses 20.2 21.3 -5.1%
Net profit 66.3 59.7 11.0%
Margin(%) 11.9% 10.7% 1.2%P
Consolidated financial reports
[Unit : KW bn] [Unit : KW bn]
-16-
Subsidiary 2Q’14 2Q’13 YoY 1Q’14 QoQ
Malaysia
Revenue 21.1 18.7 13.0% 18.8 12.3%
Operating profit 1.8 0.9 100% 1.3 38.5%
Margin 8.5% 4.8% 6.9%
U.S.
Revenue 10.4 9.4 11.0% 10.7 -2.8%
Operating profit -0.2 0.01 ㅡ -0.3 ㅡ
Margin ㅡ 0.1%
China
Revenue 10.3 17.5 -41.0% 13.7 -24.6%
Operating profit 0.1 0.1 ㅡ -0.5 ㅡ
Margin 0.97% 0.4%
Thailand
Revenue 2.7 3.1 -11.7% 2.8 -2.1%
Operating profit -0.1 -2.4 ㅡ -0.1 ㅡ
Margin ㅡ
Green Entech
Revenue 4.1 14.7 -72.1% 6.1 -33%
Operating profit -0.7 0.7 ㅡ -0.6 ㅡ
Margin ㅡ 4.7% -
Subsidiary results – 5 entities (4 overseas subsidiaries and ‘Green Entech)
[Unit : KW bn]