JS Global Lifestyle Company Limited

Ma Chen, JS Global Life Investor Relations and Corporate Communication. Welcome to the JS Global Life 2024 Annual Performance Conference. So before we officially begin, please allow me to introduce the management team who are here today.

They are Madam Han Rui, Executive Director and CFO.

Mr. Lian Liu, COO and SVP Finance, Mr. Kenny Kan, COO of Zhuo Yang, Mr. Max Miao, Board Secretary of Zhuo Yang, and without further ado, please allow me to introduce Executive Director and CFO, Madam Han, to make an opening speech. Good morning. Thank you for attending the 2024 Annual Performance Conference of JS Global Life. Despite your busy schedule, here on behalf of JS Global Life, I would like to express my heartfelt gratitude to your long-term support and concern. 2024 is the first complete year of the JS century, a new development stage and a new starting point. We have optimized the allocation of resources, attracted global talent, and increased investment in R&D, user research, marketing, and sales channel expansion. In our core business, we have made some progress and achievements. At the same time, we also have recognized some shortcomings in certain areas. Today, my team and I will also show you some business achievements in 2020. Among them, Joy Young is still the sector with relatively large revenue of the overall group, facing the increasingly fierce competition pattern and consumption environment. in the operating area of Zhaoyang. We will still uphold the healthy and innovative DNA of Zhaoyang in Chengdu and further promote the research and development of innovative products. In order to solve the small but important issues of life, Zhaoyang has launched the third generation of non-stick zero-cold rice cooker to help consumers to make healthier rice that suits their own taste. We have also introduced an instant water purifier system that does not need to replace the filter for six years. We also have this Lightone 40 automatic wall-breaking soil-making machine with adjustable grinding degree and a series of new products with cordless, ultra-thin body and flat floor washer that can prevent hair from winding. As well as in Asia Pacific, we have also continuously made efforts to build the team with more perfect functions and more great progress. in IT, Finance, Internal Control, Legal Affairs, Talent Attraction, and Corporate Culture compared to the beginning of the completion of 2023. And at the same time, our team has also achieved outstanding achievements. The Japanese team continues to maintain a steady growth in market share and sales revenue by upgrading the dominant position of Cordless Vacuum Cleaner. And at the beginning of the year, we have first ever launched the Ninja Series products in Japan. So the Success achieved by the food processing products in one swoop by relying on the supportable stirring cup blender and laying a channel foundation and accumulated experience for the launching more kitchen appliances. So the markets Australia, New Zealand and South Korea have also performed brilliantly and achieved considerable growth in more cash queries. which accumulate the experiences for the subsequent categories and the products. In terms of regional expression, we cooperate with the well-known local distributors and formally enter Indonesia, Philippines, and Thailand through exclusive distribution agreements. We expect that these regions will also formally enter all kinds of channels in 2025 and start the layout of shark and ninja brand products. in Southeast Asia. With the gradual growth of F&A PAC, we believe the F&A PAC will also maintain steady growth in the next few years and make continuous contributions to the group's performance. Next, I would like to invite two colleagues to introduce the 2024 financial performance and the business upgrade. Thank you. Okay, so good morning. And we also can see that for 2024, the overall financial performance was gradually in line with the expectations of the company's management. Of course, there are also some price loss and areas that needed improvements. In 2024, the company's income for continuous exploration was USD 1.59 billion, up by 11.5% worldwide, excluding procurement services, the adjustment business sector. Revenue was 1.36 billion, while an increase of 13.1%. Companies' gross margin in 2024 was 510 million U.S. dollars, up 4.7% while excluding procurement services. The adjusted gross profit in 2024 was about 460 million U.S. dollars, while the adjusted gross margin rate was 34%, up by 1.5%. So the company's net profit decline significantly in 2024 mainly due to the decline in the performance of Zhuo Yang and the continuous investment of SNAPAC in exploring the market. In terms of different departments, our business income consists of SNAPAC and Zhuo Yang. So the revenue of SNAPAC has increased from 12.6% in the same period of last year to... 25.1% of 2024, which improves the original structure of global revenue has been improved. So from the kinetic energy point of view, the proportion is expanded to continue to rise. The Pacific increased from 152 million US dollars in the last year to 342 million, which needs to remind that is in the same period of 2023 as an APEC sales were mainly in the Japanese market and the other markets were consolidated one after another after the dealer acquisition in April and the split off in July and its YOY phase was not complete until then so the revenue of Joy Young decreased slightly by about 3% YOY mainly due to the fierce competition in the domestic market and the continuous weak performance of the overall small household appliances and Our water purifier, cooker, and other cooking products enjoy young decline, and which offset our growth in core categories such as soy milk machines and the cleaning products. In terms of gross margin, excluding procurement services, we have already mentioned that the overall adjusted gross margin was 34% up by 1.5%. So this change is mainly due to the introduction of high-end products with a higher gross margin and the implementation of strong product cost optimization in APEC, which offsets the small decline of Zhuo Yang. and the growth of adjusted gross margin mainly increases with the growth of total revenue of the APEC and the growth of overall gross margin has also driven the growth of the gross profit as a whole. So in terms of operating cycle, the inventory turnover days of continuous business declined from 51 days to 46 days, which mainly because as an APEC, revenue increased significantly this year and the increase rate exceeded the increase of inventory balance so which led to the decrease of the overall inventory turnover days. Counts receivable and The bill turnover decreased from 93 days to 90 days. The decrease was mainly due to the increase in the proportion of bill receivables transferred to suppliers by endorsement received this year, which has led to the decrease of the balance of the receivables, thus reducing the overall turnover days. So the termities of accounts payable and bills decreased from 202 days to 168 days, mainly because the proportion of business of Zhuo Yang and JS with relatively high accounting periods also declined. And in terms of capital expenditure and debt structure, The capital expenditure of continuous operation this year is about U.S. $27 million, which is mainly due to the lease ride assets and the decoration expenses brought by the relocation of new offices due to the increase in the number of teams in Asia-Pacific countries and the increasing investment in marketing-related assets such as the exhibition stands. By December 31st, 2004, the company had withdrawn an operating revolving loan of US$15 million at the end of last year to supplement the liquidity of S&A practice by the end of 2004. The debt-to-equity ratio was also very small, only 0.05 times. So that's the end for me. Now I would like to invite Mars to briefly introduce the business development of the company. Thank you, Leon. Hello. I will briefly introduce the upgrade of different businesses this year. Joy Young. in mid and late April has already held this product launch conference of Science and Technology Series 3.0. So it has led to the small home appliance of 3.0 to be launched. And in 2024, we have also launched a new series of cleaning products in 2024 as a whole. Zhou Yang mainly focuses on the performance of core categories in the retail market. However, due to the over-optimistic judgment of the consumption environment at the beginning of the year, Zhou Yang invested heavily, but we failed to achieve the expected results. From 25, Zhou Yang will also focus on the entry-level products and adopt the K-type product matrix, focusing on mid- and high-end and entry-level products. Improve the scale and profit margin of core kitchen appliances, improve quality and efficiency, and implement the cost assessments of the whole link. So that's the overall idea of Zhou Yang. So from the product perspective, in 2024, Zhou Yang grew against the trend of difficulty like a soy milk blender and... outperforming the broader market. We also have got this non-zero-coated ice cooker and different categories like boiling extraction kettle and washing machine as well as small capacity, frequency, conversion, and light and oil. We also have water appliances like the ordinary RO, and we also plan to provide more exclusive products for the e-commerce channels. So that's the Thank you. Thank you. live broadcasting by our own channel and support the vigorous development and e-commerce in live streaming and content e-commerce channels. This year, we also will strengthen the management of offline consoles in the offline stores and optimize the layout of online channel and improve the content e-commerce as our focus. Next, we will also update the SNAPAC. In terms of before, our group has helped this APAC to establish a more complete functional system and optimize the infrastructure, empower the APEC branch to accelerate the launch of the new products and categories in the business side, and gain more market share by expanding market activities. We also can see from this chart in 2023 S&P... APEC total revenue from sales to sell parties was 152 million and by 2024 it has increased significantly to 342 million of 125% Calculate a fixed rate, it is 349 million It reflects a strong growth momentum So from the perspective of original composition the biggest contribution to revenue was Australia and New Zealand and accounting for 43% and increased by over 200% YYY followed by Japan accounting for 32.7%, achieving a steady growth of about 30% under the fixed exchange rate. And then a proportion of South Korea business increased significantly as well, from 8.4% of last year to this year's 20.6%. For other regions, accounting for 3.7%. So these regions are mainly Malaysia and Singapore. The past year, Aston has successfully diversified the original revenue, especially in Australia, New Zealand, and South Korea, which has shown our ability of operating in different markets. Next, I will briefly share the business updates of the different ones. And we also can see we not only have increased our Global Lifestyle Company Limited Procurement Cleaner. It combines the lighter weight, stronger suction, and smarter technology to improve the consumer experience. After this launch, it has quickly been recognized by the market, which has helped us to the second place in 2024 of the market share in Japanese markets. As a second, further narrow the gap with our top competitors. With this momentum, we have also further broken this boundary of the category and has brought ninja branding to Japanese market for the first time, which is a very important milestone in our development.