Ozner Announces 2014 Annual Results Revenue Increases 27.2%, Adjusted Net Profit Increases 23.5%

HONG KONG, March 25, 2015 /PRNewswire/ --

Highlights

• Turnover of the Group increased 27.2% to approximately RMB511.7 million, mainly driven by the growth of water purification business
• Gross profit increased 22.7% to approximately RMB334.7 million, gross profit margin decreased slightly from 67.8% to 65.4%
• Profit for the year attributable to equity holders of the Company decreased 19.0% to approximately RMB 123.9 million, mainly due to exchange gain/loss, one-off listing expense and share option expense
• If excluding one-off effects, adjusted net profit increased by 23.5% to approximately RMB190.2 million
• Total accumulative installations for corporate and household users significantly increased to 657,000 units, representing a y-o-y increase of 42.2%
• Number of distributors increased by 730 or 42.9% to 2,432

Financial Highlights

Ozner Water International Holding Limited ("Ozner Water" or "the Company", HKEx stock code: 2014) and its subsidiaries ("the Group"）announced its results for the year ended 31 December 2014. During the reporting period, the Group recorded revenue of approximately RMB511.7 million (2013: RMB402.3 million), representing an increase of 27.2% as compared with the same period last year, which is mainly attributed to the growth of the water purification business. Gross profit increased 22.7% to approximately RMB334.7 million (2013: RMB272.8 million).

Profit for the period attributable to equity holders of the Company was approximately RMB123.9 million (2013: RMB 152.9 million). The decrease was mainly due to exchange gain/loss recognized in connection with amounts due to Fresh Water Group, one-off listing expense and share option expense. If excluding such effect, Ozner Water's adjusted net profit increased by 23.5% from RMB154.0 million in 2013 to approximately RMB190.2 million for the reporting period.

The Board of directors does not propose any dividend for the year (2013: nil).

Business Review

During the reporting period, revenue from water purification business was approximately RMB411.3 million, accounting for approximately 80.4% of revenue for the period (2013: RMB314.0 million, accounting for approximately 78.0% of revenue for the period). Revenue from air sanitization business was approximately RMB100.4 million (2013: RMB88.4 million).

Leveraging the leadership in the corporate market, the Group strived to expand its presence in the household market. During the year, the number of the Company's distributor increased by 730. The number of newly installed machines amounted to 195,000 units, totaling accumulative installations of 657,000 units. The customer renewal rate was over 97%.

In August 2014, the first phase of the Shaanxi OZNER Environmental Technology Industrial Park started commercial production. The second phase of industrial park is under construction and is expected to be completed and put into production by the end of October 2015. By the end of 2017, Ozner's total designed capacity is expected to reach 570,000 units per year.

O2O Marketing Strategy

In 2014, Ozner implemented 5 O2O (offline to online) marketing strategies with an aim to build brand and reputation through various channels and platforms, including:

(1) Maintaining leadership in the corporate market and promoting group buying of household products

Ozner has corporate end users with 479,000 machines installed in various industries, such as finance, real estate, leisure and entertainment, education, medical service, etc. It has a large pool of high quality potential household end users with significant untapped potential. Upon listing, Ozner strengthened its efforts to convert its corporate end users to also become household users, and encouraged group-buying among employees of its corporate end users, such as Lenovo Group, ZTE Group, ICBC, etc.  

(2) Public non-profit water bars

Ozner launched the "public non-profit water bars" program to strengthen its off-line promotion. The water bars provide quality and free-of-charge direct drinking water at airports in Shanghai, Qingdao, Chongqing, etc. Drinkers are encouraged to swipe QR code to become a new member of the Ozner APP.

(3) Experience Stores

To increase brand recognition and enhance product experience, Ozner launched its first experience store in Shanghai in December 2014.

(4) Smart Cup and Ozner APP

In November 2014, Ozner launched its first purifier peripheral smart product -- Ozner Smart Cup. Together with the Ozner APP, the Smart Cup offers various functions such as water quality monitoring, health management, social media sharing and interaction. Upon downloading the Ozner APP, users will become an Ozner member. Users will receive product and brand information which would help convert them into users of Ozner water purifiers.

(5) Brand collaboration

For the year ended 31 December 2014, Ozner signed brand collaboration agreements with a number of corporate end users including Colour Life, iKang Healthcare Group, Inc., Longfor Properties, 139.com, China Merchants Bank, Ping An Wanlitong, dianrong.com, yummy77.com etc. The brand collaboration program is scheduled to be launched in 2015.

Future Prospects

Mr. Xiao Shu, Chairman and Chief Executive Officer of Ozner Water, said, "Looking forward into 2015, we are fully confident and motivated. It will be a critical year for our development of capacity, brand and channels, and will lay a solid foundation for the future of Ozner. With focus around our 'experience + mouth-of-word' core marketing strategy, we will strengthen our marketing activities and brand promotion in order to further increase brand awareness of Ozner Water. We will continue to promote 'Ozner Water experience stores' to cover more crowded areas in effort to establish brand image. In order to enhance the high-tech feel and experience of our products, we are planning to conduct further research and develop more smart products to increase client retention. In addition, the Company is exploring a new internet operation model that endeavors to provide Ozner water purifier users with healthy lifestyle products and services'. In terms of overseas expansion, the Company may also explore the overseas market by first taking Hong Kong as a foothold."

About Ozner Water International Limited

Ozner, as a leading drinking water solution provider in China, is a high-tech company focusing on R&D, manufacturing and leasing of water purifier. With superior proprietary technologies, our state-of-the-art purifiers produce high quality purified drinking water. We provide air sanitization services as well. We attribute our success also to the breakthrough "water purification lease and service" model, which revolutionized the conventional equipment-selling model. Incorporating Internet/Cloud technology, our proprietary logistics, warehousing, technician and service teams keep providing top-notch post-sales service to end users. The company generates revenue from annual service fees during the whole product life cycle, ensuring steady cash inflow and strong profitability. Ozner serves approximately 660k accounts customer. Managing more than 2,000 distributors, our proprietary post-sales team provides installation and maintenance services to customers in more than 150 cities in 30 provinces in China (excl. Tibet only).

[1] Adjusted for exchange gain/loss recognized in connection with amounts due to Fresh Water Group, one-off listing expense and share option expense