September 2016 http: //www.pouchen.com E-mail: ir@pouchen.com
Table of Contents Page 1. PCG’s Profile 2 2. Business Overview 3 3. Footwear Business – Yue Yuen 5 4. Retail Business – Pou Sheng 7 5. Financial Highlights 9 1
PCG’s Profile Pou Chen Group -- The largest footwear manufacture Group in the world • Founded in 1969; listed on the TWSE in 1990 • Paid in Capital: US$916 mn (NT$29.47 bn) • Market Cap.: US$3,931 mn (@NT$43.05 as of 2016/06/30) • Revenue: 1H2016 Consolidated Sales US$4,296 mn (NT$140.75 bn) • Product Mix: Footwear 70.1%, Retail 29.6%, Others 0.3% (as of 1H2016 Consolidated Sales) • Footwear Business Volume: Made 165.7 million pairs in 1H2016; made 317.5 million pairs in FY2015 – – Market Share: 20% of the combined wholesales value of the global branded athletic and causal footwear market (including JVs) – Customers: Leading international brands such as Nike, adidas, Asics, Salomon and Timberland • Retail Business - Target Market: The Greater China - POS: 8,222 POS (5,131 self-run and 3,091 sub-distributor) (as of 2016/06/30) 2
Business Overview Bus Business iness Se Segment gment Mi Mix Pou Chen: 1H2015 1H2016 FY2013 FY2014 FY2015 (Consolidated) (NT$mn; %) (NT$mn; %) (NT$mn; %) (NT$mn; %) (NT$mn; %) Footwear 195,313 72.6% 95,453 71.9% 98,725 70.1% 174,264 76.9% 183,292 75.1% Retail 51,249 22.6% 59,891 24.6% 72,927 27.1% 36,979 27.9% 41,573 29.6% Others 841 0.3% 328 0.2% 447 0.3% 1,152 0.5% 793 0.3% Total 269,081 100% 132,760 100% 140,745 100% 226,665 100% 243,976 100% (1) Yue Yuen and Pou Sheng, consolidated entities in Pou Chen’s consolidated financial statements, had changed their financial year end date from 9/30 to 12/31 in 2012. Therefore, their FY2012 annual information covering 15 months from 2011/10/01~2012/12/31. Due to the aforesaid change and TWSE regulation, Pou Chen’s FY2012 consolidated financial statements included Yue Yuen and Pou Sheng’s 2011/10/01~2012/12/31 information. (2) On January 1, 2011, Pou Chen adopted SFAS No.41 “Disclosure of operating segment information”, and had identified “Footwear business”, “Retail business” and “Others” as its three reportable segments. (3) Pou Chen originally diversified into electronics business by investing in GBM in 1999. On March 24, 2010, Pou Chen and its three subsidiaries disposed their 40% stake in GBM, which is engaged in manufacturing and selling PCB/PCBAs. After the transaction, Pou Chen lost the controlling power over GBM, and GBM is no longer included as a consolidated entity in Pou Chen’s consolidated financial statements. 3
Business Overview Pou Chen’s 8M2016 unaudited consolidated sales ended 2016/08/31 increased Y-o-Y by 4.2% to NT$183.5 bn. Revenue – Footwear Business Revenue - Retail Business (NT$mn) ( NT$mn ) 72,927 195,313 59,891 183,292 174,264 51,249 41,573 36,979 98,725 95,453 2013 2014 2015 1H2015 1H2016 2013 2014 2015 1H2015 1H2016 Revenue – Others Revenue - Total ( NT$mn ) ( NT$mn ) 269,081 1,152 243,976 226,665 841 793 140,745 132,760 447 328 2013 2014 2015 1H2015 1H2016 2013 2014 2015 1H2015 1H2016 4
Footwear Business – Yue Yuen Product Pr oduct Mi Mix 1H2015 1H2016 YoY FY2013 FY2014 FY2015 Yue Yuen: (US$mn; %) (US$mn; %) (US$mn; %) (US$mn; %) (US$mn; %) (%) Athletic Shoes 3,813 50.3% 3,870 48.3% 4,016 47.6% 2,005 47.2% 2,065 48.2% +3.0% Casual/Outdoor Shoes 1,357 17.9% 1,429 17.8% 1,366 16.2% 675 15.9% 611 14.3% -9.6% Sports Sandals 86 1.1% 85 1.1% 94 1.1% 53 1.3% 54 1.3% +3.6% Retail & Brand Licensee 1,727 22.8% 1,976 24.6% 2,298 27.3% 1,186 27.9% 1,268 29.6% +6.9% Soles, Components, Others 599 7.9% 653 8.2% 661 7.8% 326 7.7% 283 6.6% -13.0% Total 7,582 100% 8,013 100% 8,435 100% 4,245 100% 4,281 100% +0.8% Financial Highlights Financial Highlights FY2015 1H2015 1H2016 FY2013 FY2014 (US$mn) Revenue 7,582 8,013 8,435 4,245 4,281 Gross Profit 1,647 1,774 1,972 959 1,059 Gross Margin 21.7% 22.1% 23.4% 22.6% 24.7% Net Income (1) 435 331 390 210 249 Net Income Margin 5.7% 4.1% 4.6% 5.0% 5.8% (1) Net profit attributable to owners of the company, excluding “non - controlling interests”. 5
Financial Highlights – Yue Yuen Yue Yuen’s 8M2016 unaudited sales ended 2016/08/31 increased Y-o-Y by 0.2% to US$5.6 bn. Gross Margin Revenue ( US$mn ) ( US$mn ) Yue Yuen OEM/ODM 24.7% 10,000 25.0% 23.4% 24.0% 22.6% 8,000 22.1% 23.0% 21.7% 22.0% 6,000 20.2% 8,435 21.0% 19.8% 8,013 19.7% 19.5% 7,582 18.9% 20.0% 4,000 19.0% 4,245 4,281 1,972 1,774 1,647 18.0% 1,059 2,000 959 17.0% 0 16.0% 2013 2014 2015 1H2015 1H2016 2013 2014 2015 1H2015 1H2016 Net Income (1) Net Margin ( US$mm ) 435 390 331 249 210 5.7% 5.8% 5.0% 4.6% 4.1% 2013 2014 2015 1H2015 1H2016 2013 2014 2015 1H2015 1H2016 6 (1) Net profit attributable to owners of the company, excluding “non -controlling interests ”.
Retail Business – Pou Sheng Fina Financia ncial High l Highlights lights FY2014 FY2015 1H2015 1H2016 1H2015 1H2016 FY2013 (RMB$mn) (1) (US$mn) (US$mn) Revenue 1,777 1,981 2,300 7,402 8,313 1,187 1,268 Gross Profit 514 581 766 2,381 2,959 382 451 Gross Margin 28.9% 29.3% 33.3% 32.2% 35.6% 32.2% 35.6% Operating Profit 17 34 97 344 584 55 89 Operating Margin 1.0% 1.7% 4.2% 4.6% 7.0% 4.6% 7.0% Net Income (2) -39 5 64 164 385 26 59 Net Income Margin -2.2% 0.2% 2.8% 2.2% 4.6% 2.2% 4.6% (1) Pou Sheng has adopted RMB as its presentation currency from USD starting from 1H2016. In RMB terms, Pou Sheng 1H2016 revenue increased by 12.3% compared to the same period last year. (1) Net profit attributable to owners of the company, excluding “non -controlling interests ”. Stor Store Netw e Networ ork Directly-Operated Total (POS) Sub-Distributor 2015/12/31 4,943 2,893 7,836 Net Change 188 198 386 2016/06/30 5,131 3,091 8,222 7
Financial Highlights – Pou Sheng Pou Sheng’s 8M2016 unaudited sales ended 2016/08/31 increased Y-o-Y by 5.7% to US$1.6 bn. Gross Margin Revenue ( US$mn) ( US$mn) 3,500 38.0% 35.6% 3,000 36.0% 2,300 33.3% 32.2% 1,981 2,500 34.0% 1,777 2,000 32.0% 29.3% 1,268 28.9% 1,187 1,500 30.0% 766 581 1,000 28.0% 514 451 382 500 26.0% 0 24.0% 2013 2014 2015 1H2015 1H2016 2013 2014 2015 1H2015 1H2016 Net Income (1) Net Margin (US$mn) 64 4.6% 59 2.8% 2.2% 26 5 0.2% -2.2% -39 2013 2014 2015 1H2015 1H2016 2013 2014 2015 1H2015 1H2016 (1) Net profit attributable to owners of the company, excluding “non -controlling interests ”. 8
Financial Highlights – PCC (Consolidated) Footwear business maintained a steady growth in FY2015. Meanwhile, retail business had a stronger growth rate due to the growth in the same store sales, as well as growth in the net new store openings for the overall store network. Besides, benefited from the increase of non-operating income, PCC’s net income for FY2015 increased 10.6% compared with FY2014. FY2013 FY2014 FY2015 (NT$mn) Revenue 226,665 243,976 269,081 Gross Profit 50,528 55,269 64,505 Gross Margin 22.3% 22.6% 24.0% Operating Income 10,099 7,921 12,353 Operating Margin 4.5% 3.2% 4.6% 8,633 7,953 7,887 Non-operating Income, net Profit before taxation 18,732 15,874 20,240 Income Tax Expense 1,821 2,015 3,639 Net Income (1) 10,619 8,616 9,531 Net Income Margin 4.7% 3.5% 3.5% EPS (NT$) 3.62 2.93 3.24 (1) Net profit attributable to owners of the company, excluding “non - controlling interests”. 9
Financial Highlights – PCC (Consolidated) Both footwear manufacturing and retail businesses had profit improvement, PCC’s operating income for 1H2016 increased 52.6% compared to the same period last year. 1H2015 1H2016 Growth Rate (NT$mn) Revenue 132,760 140,745 +6.0% Gross Profit 30,714 35,459 +15.5% Gross Margin 23.1% 25.2% Operating Income 5,899 9,002 +52.6% Operating Margin 4.4% 6.4% Non-operating Income, net 4,718 2,953 -37.4% Profit before taxation 10,617 11,955 +12.6% Income Tax Expense 2,100 1,858 -11.5% Net Income (1) 4,779 5,171 +8.2% Net Income Margin 3.6% 3.7% EPS (NT$) 1.62 1.75 +8.0% (1) Net profit attributable to owners of the company, excluding “non - controlling interests”. 10
Financial Highlights – PCC (Consolidated) Gross Margin Revenue (NT$mn) (NT$mn) 70,000 26.0% 64,505 25.2% 55,269 60,000 50,528 25.0% 50,000 35,459 24.0% 40,000 30,714 269,081 24.0% 243,976 226,665 30,000 23.0% 140,745 132,760 23.1% 20,000 22.6% 22.0% 22.3% 10,000 0 21.0% 2013 2014 2015 1H2015 1H2016 2013 2014 2015 1H2015 1H2016 EPS/Net Margin Net Income (1) (NT$mn) (NT$) 6.00 7.0% 5.00 6.0% 3.62 10,619 4.00 5.0% 3.24 3.7% 9,531 3.6% 2.93 8,616 4.0% 3.00 4.7% 1.75 5,171 3.0% 1.62 4,779 3.5% 3.5% 2.00 2.0% 1.00 1.0% 0.00 0.0% 2013 2014 2015 1H2015 1H2016 2013 2014 2015 1H2015 1H2016 (1) Net profit attributable to owners of the company, excluding “non -controlling interests ”. 11
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