JS Global Lifestyle Company Limited

Dear investors and analysts, good morning. I'm Chen Bin from GIS Global IR department and welcome all of you to participate our 2023 annual results presentation. And before we officially start, please allow me to introduce the management here today. They are CFO and Executive Director of JS Global Lifestyle, Mr. Fan Run, Financial Director of JS Global Lifestyle, Mr. Liu Ningqing, CFO of Jiuyang, Mr. Kan Jiangang, and the Board Secretary of Jiuyang, Mr. Liao Mingxin. Without further ado, first of all, let's welcome our CFO and the Executive Director of JS Global Lifestyle to deliver our opening remarks. Thank you. Hello, everyone. Welcome you to participate in our 2023 annual results presentation. And I'd like to be on behalf of Adjust Global Lifestyle to extend gratitude to your long-term support and attention. And in the past year, the company experienced a big change since its IPO. Through strategic restructuring, we optimized resource allocation and adjusted our business portfolio, laying a solid foundation for our long-term growth and development. Today, we stand in a new starting point focusing on the business operations, specifically on the APEC regions, including the Greater China. We will continue to invest resources to present and penetrate into the new markets and introduce more innovative products and adapt to the needs of new regions for sustainable development and growth. Durham Division is where the group's fundamentals lie. Faced with increasingly competitive landscape and a more pronounced consumer grading situation in mainland China, we have continued to deepen our efforts in innovative and R&D. And we also launched a number of new products In particular, the zero-coating second-generation non-stick rice cooker, which allowed us to lead the industry in the categories of the rigid demand, in addition to the category of our blenders. And we also own a total of 13,181 patented technologies. In supply chain management, Zhejiang has improved its digital management capabilities and is committed to building a digital supply chain. chain management system. In terms of the channels, we have expanded the portfolios that actually manage the channels. It's transcended the construction of a retail terminal guide teams as actually laid out and expanded emerging channels coordinated the development of shelf e-commerce and content e-commerce by focusing closely on the user-centered and continuously improving the conversion rate and in 2023 we also smoothly transitioned our business in Shark Ninja APEC region and we also have a set up a consistent IT financial tax internal control and HR systems and have a positioning of the service-oriented headquarter, laid a solid foundation to further dig into the potentials of the APAC market in terms of the business. And we have acquired the distributors of Shark Ninja in Australia, Singapore, Malaysia, and New Zealand so that we can quickly develop into these markets. And in the Japanese market, we have consolidated our core strengths and advantages with our key products. and had promoted the vacuum series products adapted to the needs of the consumers there and have a greater growth of the team in Japan. And we also have reached a successful sales arrangement in the Philippine distributors in the year end. And with the smooth operation in Shark Ninja APAC region and the greater transition, we believe that in the coming few years, it will continuously contribute to our performance growth. And next, I'd like to invite our financial director, Leon and IR colleague, Mars, to introduce us the 2023 financial results and the business updates of the two segments. Thank you. Hello, good morning. I am Leon from JS Global Lifestyle and welcome again to attend today's 2023 annual results presentation. Looking back at 2023, our business performance was overall in line with the company's expectations. And as a result of the company's strategic restructure during the year, we're focusing today on the financials from continuing operations. The company's revenue from continuing operations was $1.43 billion USD. a slight decline of 3.2% a year, excluding sourcing. Revenue from a continuing operation was 1.21 billion USD, down 13.3 a year. On the gross profit margin side, excluding sourcing, our four-year gross profit was 319 million USD, down 12.9% a year. Gross margin, on the other hand, was flat with a slight increase of 0.1 percentage points. Adjusted EBITDA was 84 million USD equivalent to 5.9%, down 56.8%, and 7.2 percentage points year-on-year, respectively. Adjusted net profit from... continuing operation with a 38 million USD down 72.5% year-on-year adjusted profit margin at 2.6%. EPS for year is 1.5 cents, 40% lower year-on-year, mainly due to one-time charges for this thing of projects and declining performance of the joint segment and to the share-based compensation program. By segment, our revenue from continuing operations is comprised of Zhou Yang and Shark Ninja APAC segments, with the Shark Ninja APAC segment's share of revenue for the full year growing from 4.6% to 12.6%. And the financial statement level grew to around $152 million from about $64 million. million USD to 157 million USD on the same exchange rate basis at the financial statement level. Whereas in the prior year, only Japan was actually included in the Asia-Pacific segment reporting scope. Next year, we consolidated the new regions through acquisition and also included revenue from the sales to distributors in the reporting scope. The Zhejiang segment, on the other hand, declined from 1,325 million USD in the prior year to 1,053 million in the current year. And the decline of the Zhuo Yang segment was mainly attributable to the slow recovery of the consumer demand in mainland China and more intense competition in industry and the decline in the performance of the overall small home appliance industry during the year. The strong goals of the Shark Ninja APEC segment, on the other hand, was mainly contributed by Japan and the new markets, in addition to the different different calculation criteria due to the spin-off and the distribution acquisition. In Japan, we saw significant market share growth in the cordless vacuum cleaner category. And in terms of the new markets, we have entered four new markets, Australia, New Zealand, Malaysia, and Singapore through strategic acquisitions with Australia contributing the most. In addition, we have grown our Korean distributed business after the spin-off and have started to enter the Philippine market and by region. Revenue from China declined more sharply, which is basically more in line with the reason for the revenue decline in the Zhejiang segment. And in Japan, we achieved a good revenue growth through the continued launch of our line of cordless vacuum cleaners customized especially for the Japanese households, lifting from 64 million USD to about 92 million, a 43.7% improvement year-on-year. And in Australia and New Zealand, we accessed the new markets with the strategic acquisition and the revenue reached 44 million USD. We are confident that we will continue to grow well in this region and in other markets, which mainly comprise Champagne APAC, Korea and Southeast Asia regions. Revenue had to grow from 18 million USD to 32 million in the current year. This growth was mainly due to our strengthened partnerships with distributors and retailers in Korea and Southeast Asia, which enhanced the operation efficiency. And the gross profit margin excluding sourcing in 2023 is 32.5%. The year-on-year increase of 10 basis points in gross profit margin was mainly benefited from portfolio premiumization in Japan and the strategic acquisition where we have a structurally higher by selling directly to retailers and consumers, but partially offset by a relatively low gross margin from Zhejiang segment. Decrease in absolute amount of gross profit was mainly due to decrease in overall revenue of the continuing operation, excluding sourcing. Operationally, inventory turnover days for continuing operation decreased from 69 days to 51 days after the spinoff, mainly due to Zhou Yang's implementation of an active inventory management policy for accounts receivable and the bills turnover. It decreased from 131 days to 93 days. The decrease was mainly due to the new markets after the spinoff. including Australia and New Zealand who had relatively shorter accounts receivable turnover days. Accounts and notes payable turnover decreased from 260 days to 202 days. The very high turnover in fiscal year 2022 was due to two reasons. Firstly, the high billing period of Japan business to sharpen into before the merger. and the settlement of the original shark ninjas-related goods arrears after the merger in fiscal year 2023. And secondly, the continuation of Joanne's original relatively high billing period and Joanne's share of JS has increased significantly. On the balance sheet, capital expenditures from continuing operations were significantly reduced to approximately 10 million USD this year, primarily due to the spinoff, which resulted in consulting operations reducing their investments in assets such as tooling during the year. As of December 31, 2023, the company had repaid all of its interest-bearing borrowings, resulting in a debt-to-equity ratio of only 0.01%. and the return on invested capital from continuing operation was 12.8%. And next, I'd like to invite Marsh to introduce you the updates of our two segments business. However, first of all, I'd like to introduce you to Jouyang Segment's business updates from domestic and international sales. In terms of domestic sales, Jouyang Segment, in the face of challenging domestic and international environment in 2023, has continuously adhered to the brand concept of innovation and health. And we have realized the pioneering innovation in our core products this year, launching a number of innovative and consumer-friendly products in industry. Our second-generation zero-coating rice cooker on the basis of the first-generation zero-coating realized that the national standards for class 2 nonstick standard, which leads the development of the rice cookers in the industry, and also created a brand image of JL's healthy small home appliances in the category of rice cookers. our inverter light sound blender. The first application of the brushless motor had to reduce the unpleasant sound from the source and the noise has been lowered to 37 decibels. And this addressed the pain points of a lot of the customers. and our air fryer V2 fast antibacterial water purifier and heater and many other innovative products that improves the quality of their daily life of the consumers. In terms of the international sales, Zhou Yang's segment relying on the group's globalization development background has actively exerted its advantages in R&D and innovation, supply chain management, etc. And its revenue from export has been very eye-catching on The Asia statement, the overall revenue had increased to $2.2 billion from $1.3 billion of the previous year, representing a 68.8% young year growth, and it's mainly contributed by the increase in the ODM business. And currently, we cover... Various categories, including the pressure cookers, air fryers, grills, blenders, coffee makers, and beverage makers. By leveraging its R&D and innovation capabilities accumulated over the past three decades, Zhou Yang has gradually gone to become one of the most prominent suppliers to the Shark Ninja Group and to the Shark Ninja APAC division of the group. and it will also export more high-quality and differentiated small home appliances products to the global market in the future. And after the strategic restructure, the group had also spent a lot of efforts in the further developed Shark Ninja APEC region for its smooth transition and improved the team and systems and promoting the new products and extended more promotion activities to gain higher market share.

So we are consumer centered and have a deeper understanding of the consumers and then have more localized the products with the best cost of performance. At the same time, we are also improving our quality marketing activities.

We improve the brand image and the brand awareness of consumers is also enhanced at the same time.