HONG KONG, March 27, 2018 /PRNewswire/ --
| For the year ended 31 December 2017 |
2017 HK$ million |
2016 HK$ million |
Change
|
| Revenue |
7,142.6 |
6,238.2 |
+14.5% |
| Gross profit |
2,746.8 |
2,111.5 |
+30.1% |
| Gross profit margin |
38.5% |
33.8% |
+4.7 p.p. |
| Operating profit |
312.5 |
213.6 |
+46.3% |
| Reported profit for the year |
184.4 |
212.2 |
-13.1% |
| Non-GAAP profit for the year |
293.7 |
221.3 |
+32.7% |
| Final dividend per share (HK cents) |
5 |
5 |
0% |
Goodbaby International Holdings Limited ("Goodbaby International" or the "Company", SEHK stock code: 1086, together with its subsidiaries, the "Group"), a global leading parenting products company, today announces its annual results for the year ended 31 December 2017 ("the Year").
The Group's revenue for the year increased by 14.5% to HK$7,142.6 million. During the year, the Group's own brand and private label Business recorded strong growth of 15.8% to approximately HK$7,523.3 million. In particular, key strategic brands Cybex, gb and Evenflo recorded revenue of approximately HK$1,753.6 million, HK$2,932.7 million and HK$1,734.4 million respectively, representing growth of 39.5%, 27.4% and 3.2% respectively compared with those in 2016. A narrowed year-on-year decline of 10.1% with revenue of approximately HK$1,103.1 million was recorded in the Blue Chip business following growth of approximately 1.6% in the second half of 2017, which was better than expected as the values the Group brought to its customers have been recognized and appreciated which helped enhance customers' trust and confidence in the Group.
Due to the increased revenue contribution from the Group's key strategic brands which has higher gross profit margin, improvement in cost competitiveness and the consolidation of the revenue from the acquired business from the acquisition of Oasis Dragon Limited during the consolidation period from 24 October 2017 to 31 December 2017 which also has higher gross profit margin, the Group's gross margin increased by 4.7 percentage points to 38.5% in 2017.
For the year ended 31 December 2017, the Group's reported profit for the year decreased by 13.1% to HK$184.4 million, attributable to certain one-off costs and finance cost related to the acquisition, provision for potential uncollectible receivables related to the liquidation of a leading customer and one-off unfavorable deferred tax assets adjustment due to the U.S. tax reform, while in 2016 the Group recorded a one-off favorable deferred tax assets adjustment. Non-GAAP profit for the year was HK$293.7 million, increased by 32.7% as compared with 2016. The Board has resolved to declare the payment of a final dividend of HK$0.05 per share for the year ended 31 December 2017 (2016: HK$0.05).
Commenting on the Group's annual results 2017, Goodbaby International's Chief Executive Officer Mr. Martin Pos said, "Attributable to our continuous focus on developments of our strategic brands, we recorded significant growth in both revenue and operating profit in 2017. With foundation laid out through development and enhancement of our brand driven business model, and leveraging our successful transformation into a global leading horizontally and vertically integrated maternity and baby care ("MBC") ecosystem through the acquisition of Oasis Dragon Limited, we are confident that our transformational change to further strengthen control over the full value chain and to implement our strategic plan will drive the Group to greater peaks riding on our crystalised brands portfolio and strategy, and to further strengthen our leading position in the industry."
Region APAC
The Group recorded strong full-year growth in China market. On a proforma basis, revenue from China market reached HK$3,165.0 million, representing a year-on-year increase of 19.8%, mainly driven by the Group's own retail omni-channel growth at 24.5% which accounted for more than 60% of revenue from China Market. The Group's gb brand and Cybex brand achieved strong growth of 24.0% and 100.8% respectively, offset by a slight decline in the Happy Dino brand which was under restructuring for a relaunch in 2018. With the successful acquisition of Oasis Dragon Limited, the Group integrated all brands and teams from China market into a new retail & sales organisation under one leadership team which started to drive the "one brand", "one team" and "one system" synergy. The Group has also transformed gb brand from durable goods into a lifestyle brand with multiple product lines and extended Cybex brand from a wholesale model into a retail and wholesale model.
Revenue outside China declined by 8.3% to approximately HK$546.3 million, which was mainly resulted from the strategic closure of Geoby brand business in 2016. To reinforce its footprint in APAC, the Group formed a non-wholly owned subsidiary with a local distributor in Japan in March 2018 to establish a comprehensive distribution network of its brands in the second largest market in Asia, and set up a new dedicated team as platform for all Group brands in South-East Asia.
Region EMEA
Led by the strong growth of Cybex and the gb Platinum and Gold ranges, revenue in EMEA grew by 38.2% to approximately HK$1,903.5 million in 2017.
On top of the Group's own solid growth in brand business in Germany, all other core European markets have also realised significant revenue growth. The strong growth in Cybex brand was attributable to the continued solid performance of car seat portfolio, as well as the rapid development of stroller collection through products like the Priam, Mios and Balios M. Another brand-building milestone was achieved in the first half of 2017 when Cybex recorded more than 1 million Facebook fans.
The gb Platinum and Gold range's rapid expansion in 2016 continued in 2017, supported by strong performance of the Pockit and Qbit strollers, as well as a completely new car seat trilogy comprised of the Idan, Vaya I-Size and Elian-FIX. Newly launched gb Vaya i-Size child car seat was rated "test winner" in 2017/11 ADAC testing.
Region Americas
The Group focused its investments on brand building, development of key product platforms and further alignment of its distribution channels in 2017. Revenue grew by 1.4% in region Americas to approximately HK$1,908.5 million in 2017. While 2017 was a challenging year for the overall North American retail market, the Group realised growth by aggressively aligning with consumer trends towards digital purchasing behaviour, launching key car seat and stroller product platforms focused on consumer-driven needs, and increasing flexibility of its supply chain structure, while absorbing the negative financial impact in relation to the bankruptcy of a leading baby retailer. These initiatives, together with the expected 2018 brand and key product relaunch, are expected to provide a solid foundation for the Group's sustainable growth.
Outlook
Looking ahead, Goodbaby International's Chairman Mr. Song Zhenghuan said, "Our positive financial results in 2017 are a direct outcome of our continuous development of our brand-driven strategy. The initiative in integrating operations on a large scale that we carried out in the past three years has now yielded notable results. Leveraging rapid development of our global brand business, significant breakthrough of product offerings and business model, improvement of new retail business in China, enhancement of our flexible supply chain structure, as well as highest standards in innovation and product quality, we are striving to develop our global leading horizontally and vertically integrated MBC ecosystem that can sustain growth in revenue and profit, with an aim of further enhancing the Group's value to strive for sustainable returns of our shareholders."
About Goodbaby International Holdings Limited
Goodbaby International is a world leading parenting products company. The Group serves millions of families through design, research and development, manufacture, marketing and sales of children's car safety seats, strollers, apparels and home textile products, feeding, nursing and personal care products, cribs, bicycles and tricycles and other children products. Goodbaby International serves families around the world with China, US and Germany as its mother markets.
With over 15,000 employees worldwide, Goodbaby International owns seven Research & Development centres globally, located in America, Europe and Asia and manages sales, marketing and distribution offices in 11 countries. It operates its own omni retail channel in China including its own online retail stores and more than 1,000 self-managed offline retail stores.
