23 August 2018 INTERIM 2 RESULTS 2018
Shandong Ruyi as controlling shareholder of Trinity Group
Ruyi Group INTERIM RESULTS 2018
Overview of Ruyi Group INTERIM 4 RESULTS 2018
Company Overview
• Founded in 1972, employees over 50,000 globally
• Ranks 1st among 500 textile and apparel enterprises in China
• Top 20 in Global Apparel and Luxury Industry
• Owns 19 holding companies in 13 countries and regions globally
• 5,800 points of sale in 80 countries and regions globally
• Market value of the Group’s listed companies including Ruyi Woolen group in China, Renown in Japan, SMCP in France and Trinity in Hong Kong exceeded HK$20 billion. Over HK$30 billion of assets in the private group entities of Ruyi. INTERIM 5 RESULTS 2018
Operation Driven by technology textile & fashion brand Textile Science and Global Leader in textile Fashion Leading Fashion Brands Technology science and technology Brands Operator in China
Polycore Color spinning Denim Home textile
Shirt Fabric Digital printing Worsted wool Clothing INTERIM 6 RESULTS 2018 Integrated Value Chain on Textile and Garment
Whole Wool Industry Chain
Wool Farm
Australia Wool New Zealand Company Wool Company
Xinjiang Ruyi Wool Spinning Co. Ruyi Woolen Textile WoolenTextile (Bulgaria)
Ruyi Woolen Garment Ningxia Garment Xinjiang Garment Tai’an Garment Germany Garment Japan Garment INTERIM 7 RESULTS 2018 Integrated Value Chain on Textile and Garment
Whole Cotton Industry Chain
Cotton Farm
Cotton Spinning
Clothing Fabric Digital Printing Knitting Denim Home Fashion Shirts Socks Towels INTERIM 8 RESULTS 2018
High-End Brand Internationalized brands portfolio, positioned with high-end customers, internet + online & offline sales network over the world Global fashion group Ruyi is revolutionary, using information and technology to Internet Big Data upgrade the Group into a fully Advanced Technology Fashion Brands manufacturing integrated enterprise with continued use of internet
Globalization
A globally unique profit model Technology Branding with an established new ecosystem of “vertical industry High- End chain + brand + internet retail”
Pragmatic Integrity Quality Excellence
Four Founding Elements INTERIM RESULTS 2018
Overview of Trinity Group INTERIM 10 RESULTS 2018
Market
• Casual Menswear trend • Competitive pricing • China retail online sales exceeded US$1 trillion in 2017 • Upward trend of accessible luxury INTERIM 11 RESULTS 2018
Company
• Overall SSSG up 10% • e-Commerce substantial growth • Licensing Agreement – HK$75 million • Partner with Secoo • Streamlined cost by reducing underperforming stores INTERIM 12 RESULTS 2018
Pioneering today’s trends with tomorrow’s dream
• Restructuring of retail • Following world casual network to streamline trend operating costs and Design and development lower back office cost Consolidation
• Solidify presence in • Expand portfolio and M&A Europe and greater create synergies Global exposure in China Presence
• Ability to transform into Omni – Channels • Partnership with Secoo Omni-channels retailer Group and other e- to provide seamless E-Commerce commerce partners experience INTERIMANNUAL 13 RESULTSREPORT 20182017 INTERIM RESULTS 2018
Results INTERIM 14 RESULTS 2018 Sales Analysis
HK$ million Total Sales Change in Change in Store Network Total Sales Same Store Sales Retail 2018 2017 In HK$ In HK$ 2018 2017 (1H) (1H) Chinese Mainland 386.9 367.4 +5.3% +10.8% 181 211 Hong Kong & Macau 271.4 245.4 +10.6% +9.3% 37 37 Taiwan 70.4 60.3 +16.9% +15.5% 37 41 Rest of the World 67.9 63.8 +6.4% +6.0% 12 17 RETAIL SUBTOTAL 796.6 736.9 +8.1% +10.1% 267 306 Wholesale and Licensing 93.5 125.5 (25.5%) GROUP TOTAL 890.1 862.4 +3.2%
• Hong Kong, Macau and Taiwan recorded double digits growth. • The growth in Chinese Mainland was adversely affected by the consolidation of store network but the same store sales growth indicated a sign of recovery. • The wholesale revenue declined as a result of the exit of stock clearance wholesale channel in Chinese Mainland in 2017. INTERIM 15 RESULTS 2018
Financials
HK$ million 2018 2017 18 vs 17 Variance Revenue 890.1 862.4 +3.2% Gross Profit 619.3 594.3 +4.2% Gross margin 69.6% 68.9% +0.7pp Core Operating Profit/(Loss) (160.5) (184.2) +12.9%
• The slight revenue increment indicated a preliminary sign of bottoming out. • The gross margin remained stable at approximately 70%. • Excluding the one off exchanges losses, the core operating losses for the period ended 30 June 2018 and 2017 would be HK$146.2m and HK$177.9m respectively. INTERIM 16 RESULTS 2018
Financial Reconciliation
HK$ million 2018 2017 18 vs 17 Variance Core Operating Profit/(Loss) (160.5) (184.2) +12.9%
Restructuring Costs (19.1) (60.1) +68.3% Net Finance Costs (11.1) (13.3) +16.0% Others (6.1) 0.6 na.
Loss Attributable to Shareholders (196.8) (257.0) +23.5%
• The restructuring cost for 2018 mainly represents the staff termination cost relating to our Europe operation. • Net finance cost began to decrease as a result of the subscription of Ruyi. INTERIM 17 RESULTS 2018
Headcount
2018 2017 2017 30 Jun 31 Dec 30 Jun
Total 2,117 2,283 2,345
• Significant headcount reduction: 228 personnel, 10% drop against Jun 2017 headcount.
• The headcount reduction mainly contributed by consolidation of store network and back office restructuring. INTERIM 18 RESULTS 2018
Gearing Ratio
2018 2017 30 Jun 31 Dec
Net Cash/(Debt) (HK$ million) 688.9 (1,169.3)
Gearing Ratio na. 35.0%
• Received net proceeds of HK$2,215 million from the Ruyi subscription. • Positive cash position after completion. INTERIM 19 RESULTS 2018
Results summary
• Menswear – changing trends (Less formal, more casual)
• Significant restructuring within the Company
• Same store sales in Chinese Mainland grew
• Gross margins stable INTERIM 20 RESULTS 2018 INTERIM RESULTS 2018
Growth Strategies & Outlook INTERIM 21 RESULTS 2018
Strengthening Global Business
• The capital injection of Shandong Ruyi is a transformational investment • Strengthen global network of brands through licensing arrangement with Ruyi • Focus resources on core business in Greater China • Optimize supply chain and the ability of product development • Strategic retail network expansion in Greater China • Improve brand influence in the country of origin • Strengthen licensing in APAC • Realize synergies in resources allocation • Reinforce e-Commerce presence • Make good use of technologies INTERIM 22 RESULTS 2018
Advancing Omni Channels Development
• Synchronize the Online and Offline business • Restructure e-Commerce team • Drive e-Commerce platform relationship • Boost sales with social media channels • Enhance sales functions of brand websites INTERIM RESULTS 2018
Thank you