SAKURA GROUP 櫻花集團 Company Profile
Established in 1978 Chairman of the Board：Chang, Yung Chieh Paid-in Capital：NTD 2.21 billion (Before the capital reduction was NTD 2.76 billion. Trading was resumed on 4th Nov., 2016.) Production Base ： Taiwan - Daya main div.／Daya 2nd div.／Shenkang ／Wufeng China - Kunshan, Jiangsu／Shunde, Guangdong
Employees: 925 (Taiwan) / 3,500 (China)
2 Corporate Structure
台灣櫻花 Capital： Taiwan SAKURA NTD 2,211mm http://www.sakura.com.tw/
43.19% 100% 100% Capital： 卜大實業 雅適 SAKURA BVI US 17.15mm Puda Topax 44.39% http://www.puda.com.tw/ http://www.topax.com.tw/ Capital：NTD 135mm Capital：NTD 217mm Capital： SAKURA Cayman US 5.85mm 100%
櫻花中國 Capital： 櫻花華南 SAKURA China RMB 320mm SAKURA http://www.sakura.com.cn/ Huanan
100% Capital： US 21.8mm 櫻 順 Capital： Ying-Shun RMB 80mm 3 SAKURA Milestones
1978 1987 1995 2008 2010 「SAKURA」 “free began to gained right of started producing established examination of produce kitchen agency of SVAGO and marketing the water heater” cabinet to and Electrolux. “Solar Water as the free constructors Heater” permanent
1980 1994 2014 “free oil filter 1997 2009 with a door to “SAKURA (China) Promoting the established the SAKURA door delivery” Bath and Kitchen four major franchising chain China began as the free Co., Ltd” officially upgrades, and store “Sakura to produce permanent began the reshaping the Kitchen Life kitchen production and experience of Store" appliance sales activities consumer with us 4 Brands of SAKURA GROUP
Water heater/ Imported Kitchen Appliance Kitchen Appliance Kitchen Solution Bathroom Solution
台灣廚電總代理
5 Product
Water heater/ Kitchen Kitchen Solution Appliance
Imported Bathroom Kitchen Solution Appliance
6 Business Concept meet the needs of local consumers 創新 Innovation NPS(new product systems)applied DFSS/DFMEA
High-pressure leak test Ignition Switch Test 品質 服務 SAKURA CARE Q u a l i t y Ser vice 24/7 service hotline all the year on duty service
Constant temperature and Withstand voltage test moisture duration test
7 Global Sakura Brand Distribution Network ODM/OEM Hong Kong Korea Australia USA Brazil Dominican Republic Ecuador OBM Myanmar Hong Kong Philippine Macau Indonesia USA Mexico Canada Peru Vietnam
8 Core Strategy in SAKURA GROUP
• Being a value-based enterprise and maximizing of the value for consumers and shareholders are our goal. 『Value for end-user』 R.O.E 『Value in brand mindshare 』 20% 『Value for shareholder (performance)』
9 Taiwan SAKURA_Sales Breakdown
FY2016 NTD 5.6 billion FY2016 NTD 3.38 billion Department Product Others 0.6 Others (E+W) Import 2.1 Dish dryer Export 4.6
Range YOY Water heater YOY hood Kitchen / Kitchen +7% +7% solution appliance Water heater 14.8 33.8 YOY +19% YOY Gas stove YOY +8% +7%
10 Taiwan SAKURA_Distribution FY2016 Sales Breakdown by Channel Segment Water Heater/ Brand store (103) Kithch Appliance
Dealer 12% Kitchenware 30% Distributor、Sanitary factory、 18% materials (700) Constructor (900)
20% 20% Hypermarket、 Store/shop (1500) Special dealer (300)
Retail Direct Kitchen channel Solution 31% 69% Wholesale (Constructor)
11 Taiwan SAKURA Future Growth Opportunities Keep promoting smart product and high-end 智能化 商 品 products penetration Constantly increase the market share of kitchen solution, both in retail and wholesale Deep plowing/ cross-industry/ internationalization explore new business opportunity and invest for future growth momentum
廚房 居家空間
12 Overall market Strategies in Taiwan SAKURA
Kitchen appliance Taiwan SAKURA Dual brand strategy Increase profit by the market is about market share in Taiwan promoting high-end 1.5million units (千台) product in bran S Increase market share in bran T Promote high-end kitchen appliance ELECTROLUX SVAGO Expend channel for kitchen solution Brand store
13 Taiwan SAKURA – Innovative product
16L 10L Wireless remote RF water heater thermostat water heater NTD 7,000 NTD 19,900
The two-burner Gas stove double-flame safety NTD 4,300 countertop stove NTD 13,900
Slope-side European-style Kitchen + Smart kitchen hood Hood (Cylcone series) Touch NTD 5,790 NTD 24,900 元
14 Water Heater - digital thermostat Overall market Market share(S+T) FY2013 FY2016 FY2013 FY2016
Digital, Digital, Others, S+T, Others, 37% S+T, 44% 47% 53% 47% Traditional Traditional 53% , 63% , 56%
Traditional (amount) % Digital(amount) % 100% 1.Wireless remote 59% 58% 57% 54% Increase 2.Built-in pump 50% 41% 42% 43% 46% value 3.High output
0% 2013 2014 2015 2016
15 Rang Hood - BLDC motor series Overall market Market share(S+T) FY2013 FY2016 FY2013 FY2016
European- European- S+T, S+T, style, 15% style, 25% Others 36% Others, 39% Chinese-style, Chinese-style, , 64% 61% 75% 85%
BLDC (sales) BLDC (amount) NTD mn number 300 26,000 30,000 1.BLDC 22,000 Increase 2. Perimeter suction value 200 14,800 20,000 3.European-style 7,900 224 100 199 10,000 67 128 - BLDC motor series accounts for 2013 2014 2015 2016 20% of total hoods sales qty
16 Stoves - smart stove
Overall market Market share(S+T) FY2013 FY2016 FY2013 FY2016 檯面爐 Table gas Table gas S+T, stove, 40% Built-in Others, Others, S+T, stove, 40% hobs, 50% 43% Built-in hobs, 50% 60% 57% 60%
Built-in (amount)% Table (amount)% 100% 1.Level 1 energy 60% 58% 58% 60% efficiency 50% Increase 2.Timer、temperature value control 40% 42% 42% 40% 3.Smart temperature 0% 2013 2014 2015 2016 sensor
17 2017 SAKURA spirit ~「Enjoy smarter lifestyle with integrated solution」
18 Kitchen Solution
Overall market Constantly increase the Increase brand stores to about 150,000sets market share 120 stores in 3 year
(1000 sets) set market share NTD Net Revenue Brand store 15.1% 30,000 16.0% mn 11.1% 520 103 9.8% 90 91 94 20,000 8.0% 100 7.9% 22,000 480 6.9% 8.0% 16,400 10,000 60 14,500 440 11,700 470 494 11,200 437 9,720 478 0 0.0% 400 20 2011 2012 2013 2014 2015 2016 2013 2014 2015 2016
19 SAKURA China 櫻花中國 SAKURA China grows stably in 2017 - Balance on market share and profit 1) Increase market share by the growth of the two key product series and distribution network expansion. 2) Increase profit by retail price maintenance and expense/stock control. 3) Elevate the brand to tier-1 group. 4) Total solution with kitchen cabinet and kitchen appliance (targeting at new constructions and renewal projects)
21 Two key product series (kitchen appliance and water heaters) European-style rang FY2016 Sales Breakdown by hook Product 1. Mainstream product(increase both Others, on quantity and price) 9% 2. Sakura has the Electric water advantage on brand, heater, 11% service and R&D Gas water Smart gas water heater heater, 33% Gas stove, 1. Growing segment due to the penetration of gas 16% pipe infrastructure Range hood, 2. Sakura has the advantage of R&D 31% 3. Few strong brand in the segment
22 Two key product series – European-style rang hood sales in Chinese-style sales in Europan-style Target and key strategy for 2017 Avg. price : RMB 1,057元 RMB 2,432元 1. European style range hoods account for 70% 80% 65% revenue 55% 45% + 20% 2. Expand the product line above the retail price RMB 35% 40% 3500 and increate the revenue of the price range 3. Increase the market share of the price range by 30- 0% 40%. 2013 2014 2015 2016 (the overall market share achieve more than 3%(1.7% for now) in 4 yrs)
• The market share of Sakura grows by 50% in the price range RMB 2500-3500 in 2016 (Changes in market share: Sakura 0.6%, Robam 1.8%, SACON/Siemens/Wanjiale 0.5%)
23 Two key product series – Smart gas water heater
零售量（万台） 零售额（亿元） 1. The sales trend of gas water heater vs. electric water 零售量增长 零售额增长 heater in China 4500 18% 3840 16.0% 16% 2. Gas water heater is main stream product 3600 14% 3. The high power models grow faster 10.3% 12.6% 12% 2700 2184 10% 7.0% 8% 燃氣熱水器零售量 1800 8.7% 1534 6.0% 6% 12L 13L 900 600 4% 零售量 同比增長 297 280 2% 12L 0 0% 热水器 燃气热水器 电储水热水器 30% 13L 53.5 % 16L Water 4.0 gas electric % heater 12.3 amount 8.7% 12.6% 7.0% % 外環：2016H1 sales 10.3% 16.0% 6.0% 內環：2015H1
24 Two key product series – Smart gas water heater Targets and key strategy for 2017
1. The sales of high power models accelerates(16L models account for 20% of revenue) 2. Key competitors: Rinnai, Noritz, and Haier 3. The market share target: grow from 1.5% to 2.3% 語音 系統 4. Margin of 12L model: 40~43%. Margin of 16L models: 45~49% 建立品 產品技術 超級服 牌門檻 售後服務 務管家
400專線 服務app
25 SAKURA China_Distribution SAKURA FY2016 Sales Breakdown by China Channel Segment Direct channel Dealer
8 Regional 20 Regional Others, Centers Agent 13.71% On-line Store, 43 Branches 20 Branches 8.87% Retailers, 44.97% Key Accounts, 32.45%
• 百貨商場 On-line Constructor Key Account Retailers • 建材市場 Stores • 綜合量販超市 • 精品店 • 區域家電連鎖 • 網絡C點 • 全國家電連鎖 • 專賣點 Consumers
26 Channel Development
FY2016 Sales Breakdown by Region
North China, Central China, 4.96% 2.02% Southwest China, 9.93% 1. Focus on east china – recover the brand to top 5 South China, East China, 2. Operating in south china, 10.97% 54.10% southwest china – elevate the brand to top 5
27 2017 Channel Strategy
Increase client royalty to gain complementary Individual higher turnover advantages between Enter kitchen cabinet stores Client different types of channel for brand’s exposure 精實開拓、升級百萬
Improve the management of Key Home channel dynamics and market share Account Decor variation 穩健經營、 品牌突圍、 Change the 銷售創新 潛力爆發 Build the distribution revenue structure network as the next for better value fast growing driver
28 2017 Channel Strategy - Better Access, Broader Reach A. Better Access : a) The number of counties with than 1 million revenue grows from 190 to 220. b) The average revenue of retail shop grows by 20%. B. Broader Reach a) Expand to tier 3/4 cities and 50 counties. b) The numbers of retail shops grows from 650 to 700. C. Sales increase by E-commerce
29 Stable Profit Growth - making structural adjustments、 ensuring steady growth Maintenance of retail price Elevate the brand and improve the retail price maintenance
Management improvement Expense management Stock control
30 Brand Management
1) Overall market share 2) Key competitive strategies Key strategies – product (price) development / channel development [hard index] – brand / service [soft index] Key competitors – SACON / VATTI / Rinnai 3) Total solution with kitchen cabinet and kitchen appliance (the trend of high quality decoration in China )
31 SAKURA China - Performance and Milestone Net revenue RMB mn Net income 2,000 1,744 1,545 1,439 1,430 1,458 1,500 1,359 1,161
1,000
500 308 115 37 42 29 48 (5) (14) 7 - 2010 2011 2012 2013 2014 2015 2016 2017Q1
-500
32 SAKURA Group Key Financial Indicators (consolidated)
Net Revenue Net Income EPS NTD mn NTD 6,000 5,601 3 5,149 4,851 2.75 4,485 2.5 4,073 3,775 4,000 3,486 2 1.97 1.89 1.75 YOY 1.5 1.52 +36 % 2,000 1.16 1 1.02 1,389 0.73 517 701 0.5 478 539 408 319 276 159 0 0 2010 2011 2012 2013 2014 2015 2016 2017Q1
33 SAKURA GROUR Income Statement (Consolidated) NTD mn 2010 2011 2012 2013 2014 2015 2016 2017Q1 Net Revenue 3,486 3,775 4,073 4,485 4,851 5,149 5,601 1,389
Gross Profit 1,056 1,130 1,214 1,371 1,461 1,617 1,825 493
Gross Profit Margin 30% 30% 30% 31% 30% 31% 33% 36%
Operating Expenses 852 880 928 1,000 960 1,012 1,124 304
Operating Profit 204 249 286 371 501 606 701 188
Nonoperation (Losses) 236 124 51 198 136 25 148 0.55
Profit Before Tax 440 373 337 570 637 631 849 189
Net Income 408 319 276 478 539 517 701 159
EPS (NTD) 1.52 1.16 1.02 1.75 1.97 1.89 2.75 0.73
34 Strategic Layout in SAKURA GROUP • Deep plowing in Taiwan ∙ Focusing on China ∙ Looking to Asia – Taiwan SAKURA: deep plowing、cross-industry、 internationalization – SAKURA China: elevate the brand、 improve the distribution network 、increase the market share expanding • Direction of development – Enterprise Development → smart enterprise – Kitchen Solution → home furnishing industry – Asian market development
35 THANK YOU!