for personal use only · 2014. 10. 1. · 1 october 2014 investor presentation an amendment was...

1 October 2014

INVESTOR PRESENTATION

An amendment was made on page 19. 4th bullet point 1st sub-bullet point should read as “$9.0 million to be invested in store renovations”, instead of “$9.0 million to be invested in store renovations which will be acquired”. For further information please contact:

Sunbridge Group Limited Level 31, 120 Collins Street, Melbourne, Vic 3000 T: +613 9225 5077 F: +613 9225 5050 E: [email protected] www.sunbridge.com.au ABOUT SUNBRIDGE GROUP LIMITED

Sunbridge Group Limited (ASX: SBB) (“Company”) is a leading retailer of menswear in the People's Republic of

China (PRC). The Group owns and operates the “PANDIST邦迪.斯顿” and AGUESEADAN亚阁.仕丹” brands

of menswear, which are targeted at different age group segments of well-groomed upper middle class gentleman. The Group’s menswear products range from formal and business wear to casual and sporting apparel, and are currently sold in over 400 retail outlets across the PRC. As an integrated fashion enterprise, the Group is responsible for the design, sourcing and selling of their products. Founded in 1996, the Business has grown rapidly in recent years. The Group’s products are sold across an extensive distribution network, covering 28 provinces, autonomous regions and municipalities in the PRC and Hong Kong. The Group designs all of its clothing through its in-house design team but it outsources all of its production to Original equipment manufacturer (OEM) contractors which are located in the Guangdong and Wenzhou cities, which are well known apparel production hubs in the PRC. The Group believes that its outsourcing of production to third parties enables it to focus its valuable resources on key design, procurement, warehousing and distribution functions giving the Group a competitive edge. Quality is one of the Group’s top priorities, and the Group works closely with its OEM contractors to ensure that all of its apparel and accessories meet the high quality standards demanded by its target market.

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mailto:[email protected]

Sunbridge Group Limited ASX I HY2014 Investor Presentation October 2014

ASX:SBB

HY 2014 Results &

Company Presentation

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Sunbridge Group Limited ASX I HY2014 Investor Presentation 2

Company Snapshot

Jiayin Xu

Managing Director

Wayne Reid

Non-Executive

Chairman

Andrew Plympton

Non-Executive

Director

Ting Jiang

Non-Executive

Director

Dr. Qiangan Liu

Non-Executive

Director

Chow Yee Koh

Company Secretary

Market Capitalisation

Share Price as at 29 September) $0.085

Shares on Issue 471.1M

Market Cap $39M

Cash and cash equivalents $30.5M

Top 5 Shareholders

Jiayin Xu 54.94%

Citicorp Nominees Pty Ltd 13.53%

Finetrade International Limited 1.7%

Commsec Nominees Limited 1.05%

Picton Cove Pty Ltd 0.84%

Board of Directors

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Sunbridge Group Limited ASX I HY2014 Investor Presentation

Highlights

3

HY revenue of $43.8 million, up 31% PCP

NPAT up 11% to $6.75M vs $6.06 million in PCP

Strong cash and cash equivalents of $30.5 million

Company owned stores now number 24 – on track for 70 by year end

Products are distributed through over 420 authorised retail stores in the PRC

Second half sales in line with expectations

Pandist 2014 Collection

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Company Overview

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• Sunbridge (ASX:SBB), designs, markets

and distributes high-quality business and

casual menswear – commenced trading

in 1996

• Two brands

• Pandist: 25 – 50 age group

• Agueseadan: 20 – 40 age group

• Introduces new designs for each season

to cater to changing trends

• Extensive distribution network:

• over 420 authorised retail stores

• 24 company-owned stores

• Products include suits, jackets, shirts,

trousers, sweaters and accessories and

are broadly divided into business formal,

business casual and fashion casual

100% 100%

100%

Corporate Structure

Mega Rich

International Creation

Limited

(HK incorporated)

Henjiasi Dress

Development Co., Ltd.

Jinjiang

Bangdisidun (Fujian)

Dress Development Co.,

Ltd.

Sunbridge Group Limited (Australia incorporated)

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Half-year results commentary

• Group NPAT of $6.75 million – up 11% from $AUD6.06 million in PCP

• Group revenue (excluding interest) up 31% to $43.8 million vs $33.4 million in PCP

• Group NPBT of $9.34 million, up 15% on PCP of $8.13 million

• FX translation loss impacting on comprehensive income of $AUD2.9 million

• Company-owned stores generated total revenues of $1.8 million, up from $0.7 million

• Balance sheet remains strong to fund growth - $30.5 million in cash and receivables

• Grew company-owned store network from 5 to 24

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Income Statement

HY2014 HY2013 Change

Revenue ($ million) 43.8 33.4 31.1%

Gross profit ($ million) 14.5 11.4 27.2%

EBIT ($ million) 9.3 8.1 14.8%

Net Profit ($ million) 6.8 6.1 11.5%

Basic EPS ($ cents) N/A N/A N/A

Profitability ratios

Gross margin 33.1% 34.1% -1.0 p.p.

EBIT margin 21.2% 24.3% -3.1 p.p.

Net margin 15.5% 18.3% -2.8 p.p. For

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A$ mil

Financial Performance

0

10

20

30

40

50

60

70

80

90

FY2010 FY2011 FY2012 FY2013 HY2014

Revenue Gross profit EBIT Net Profit

32.4% 34.2% 33.9% 33.8%

33.1%

22.0%

25.7%

28.9%

24.4%

21.9%

18.7%

22.0% 20.7%

17.5%

15.5%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

FY2010 FY2011 FY2012 FY2013 HY2014

Gross margin EBIT margin Net margin

43.8

14.5 9.3

6.75

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Consolidated Balance Sheet

Pandist 2014 Collection

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Cash Flow Statement

27.9

10

-1.6 -4 -1.9

30.5

-20

-10

0

10

20

30

40

50

60

70

80

Cash and cash equivalents

Cash and cash equivalents at 1 January Net cash from operating activities Net cash used in investing activities

Net cash provided by financing activities Effect of foreign exchange rate changes Cash and cash equivalents at 30 JuneFor

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Showcase Centre

• A 8-storey company headquarters near complete – total build cost of $2 million – $1.5m already expensed in the first half

• $500,000 in completion and fit out costs to be expensed in current half

• Building will be multi-purpose and income generating – will include new retail offering

• Warehousing facilities being doubled to facilitate store expansion

Artist impression of office building

Investment in Offices & Warehousing to drive growth F

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15,780.8 17,174.7 19,109.4 21,809.8

24,565.0 28,099.5

32,064.0 36,437.4

41,334.3 46,814.5

8.8%

11.3%

14.1%

12.6%

14.4% 14.1% 13.6% 13.4%

13.3%

0%

2%

4%

6%

8%

10%

12%

14%

16%

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

2008 2009 2010 2011 2012 2013 2014F 2015F 2016F 2017F

Per capital annual disposable income of urban households in China (RMB) Growth Rate

• As a result of China’s rapid economic growth and urbanisation disposable income has increased rapidly

• From 2008 to 2012, per capita urban household annual disposable income grew from RMB15,780.8 to RMB24,565.0-

CAGR of 11.7%

• China’s per capita urban household annual disposable income is estimated to reach RMB46,814.5 in 2017, representing an

estimated CAGR of 13.8% from 2012 to 2017

Increasing Urban Household Disposable Income

RMB

Source:NBSC, Frost&Sullivan

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Growth of the PRC Menswear Market

• Per capita consumption of menswear in the PRC increased to RMB806.5 in 2012 from RMB474.3 in

2008, representing a CAGR of 14.2%

• China’s per capita menswear consumption is expected to reach RMB1,654.8 in 2017, representing an

estimated CAGR of 15.5% from 2012 to 2017

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Pandist 2014 Collection F

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Aguesadan Products F

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Nationwide Distribution Network

15

• Over 420 stores across China including 24 self owned and operated stores

• Largest number of stores in coastal regions such as Jiangsu, Guangdong and Fujian provinces

Number of sales outlet growing at CAGR of 5.3% for FY2010 to FY2013

330

340

350

360

370

380

390

400

410

420

FY2010 FY2011 FY2012 FY2013

No of outlets

Distribution Coverage Retail Outlets

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Continued investment in marketing & branding

16

Increased spending on regional advertising

Sponsoring 2014 Asian Beach

Volleyball Championship

Advertising through Fashion Magazine &

Direct Marketing investment

Continued to upgrade retail outlets to

enhance and reinforce brand image

Commercial TV advertisement

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Product Design and Development

• In-house design team are based in

Guangzhou and Wenzhou which are

known as the apparels manufacturing

hubs of the PRC, and work closely with

OEM manufacturers

• Continued to develop new fabrics in close

cooperation with it suppliers

• Brought about 400 new Pandist products

to market for each season

• Pandist was honored with “the Most

Innovation Brand Award” in 2013

17

New generation flagship store design

Flagship store in Jinjiang

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Strategies

Brand Building

Sales Network Manage-

ment

Expand online sales

Product and fabric R&D

M&A opportunities

Our work in 2014

•Continue to increase advertising and promotion

activities to build-up and raise brand image

•Tie up with department store chain operators (e.g.

Vans and SM) and large wholesale distributors to

increase distribution network and sales

•Increase number of self-operated retail outlets

(either through new set-up or acquire from existing

retailers) to have better control over product

inventory, pricing, brand image and service

standards

•Establish online retail platform

•Escalate R&D efforts and increase proportion of

innovative products

•Explore M&A or business opportunities in Australia For

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Outlook & Growth Strategy

• Revenue and profit for second half in line with expectations

• Sales are stable with first few trading months

• SBB to deploy cash on hand of $30.5 million to drive growth

• Total investment of $16 million by end of calendar 2014:

• $9.0 million to be invested in store renovations

• $4.0 million on new store openings and acquisitions

• $3.0 million worth of short term loans to be repaid

• New objective of 70 company-owned stores by calendar year end

• SBB well positioned for growth in current half and beyond

19

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The information contained in this presentation is intended solely for your personal reference. Such information is subject to change without notice, its accuracy is not guaranteed and it may not contain all material information concerning Sunbridge Group Limited (the “Company”). The Company makes no representation regarding, and assumes no responsibility or liability for, the accuracy or completeness of, or any errors or omissions in, any information contained herein.

In addition, the information contains projections and forward-looking statements that reflect the Company’s current views with respect to future events and financial performance. These views are based on current assumptions which are subject to various risks and which may change over time. No assurance can be given that future events will occur, that projections will be achieved, or that the Company’s assumptions are correct. It is not the intention to provide, and you may not rely on this presentation as providing, a complete or comprehensive analysis of the Company’s financial or trading position or prospects.

This presentation does not constitute an offer or invitation to purchase or subscribe for any securities or financial instruments or to provide any investment service or investment advice, and no part of it shall form the basis of or be relied upon in connection with any contract, commitment or investment decision in relation thereto.

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ASX: SBB

Contact Details

Registered Office Level 31, 120 Collins Street,

Melbourne, Victoria 3000

Head Office No 11 Longhu, Shaohui Industrial Area, Jinjiang

City, Fujian Province, PRC

Website www.sunbridge.com.au

Tel 0411 397 819

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for personal use only · 2014. 10. 1. · 1 october 2014 investor presentation an amendment was...

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