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2016.05
1
美的集团管理模式分享
Corporate Snapshot
2
1980
1993 2000
2001
JV with
Toshiba Carrier
2012
Brand
registered
Organization restructuring
IPO
MBO
completed
Management
Handover Established
1968 1997 1992 2011
Strategic
Transformation
2004 2013
Listing
as a whole
2014
Xiaomi Invested
in Midea
Three Listed Companies: Midea Group (SZ.000333), Little Swan (SZ.000418), Welling (HK.00382)
Multi-Brands:
2015
JV with
Carrier,, SIIX
Yaskawa
Electric Fan
1985
Electric
Motor
Rice
Cooker
1998
2000: Dish Washer
2001: Water Heater, Water Purifier
2002: Refrigerator
2003: ATW Heat Pump
2004: Wash Machine
2005: Vacuum Cleaner, Pressure Cooker
2006: Oven
2007: Air Purifier, Humidifier
2009: Lighting
1998: Compressor
1999: Commercial AC
Microwave Oven
Induction Cooker
Water Dispenser
Robotics Smart
Home
2016
Strategic
Partnership
with Toshiba
Corporate History
3
Residential
AC
Acquisition of
compressor
Liguang Aircon
Acquisition of
Royalstar,
Chunhua
2006 2007 2008 2010
Acquire Hualing,
CQ General Industry,
JV with Qinghua
Acquisition of Little
Swan; Increase
stake in Royalstar
Acquisition
of Miraco,
Guiya
Lighting
Widest range home appliances product categories, plus motors, logistics, financial services, etc.
Residential AC
Commercial AC
Refrigerator
Wash Machine
Compressor / Motor
Oven / Microwave
Hoods / Stove
Rice Cooker
Dishwasher
Water Heater
Small Appliances
Lighting
Logistics
Water Purifier
Air Purifier
Complete Kitchen
Smart Home
Every Year About 300mn Midea new products entering into over 100mn households
Product Categories
4
Unit: RMB yuan Source: 2015 Annual Report
online retail sales No.1 in home appliance industry #1
2015 Turnover Composition
Turnover Composition
5
Air-Conditioning, 64.5bn,
48%
Refrigerator, 11.4bn,
9%
Washer, 12.0bn,
9%
Small appliances, 35.4bn,
26%
Motor, 6.5bn,
5%
Logistics, 4.0bn,
3%
No.1 No.2 No.1 No.1 No.1 No.2 No.2 No.3 No.4 No.3
Source: China Market Monitor2015.1-12 (sales amount)
No.3 No.4 No.1
6
Market Share
Over 100 Industrial Design Awards
IF Design Award (Germany), Red Dot Design Award (Germany), IDEA Design Award (US)
7
Awards
#32,Fortune China Top 500
#436,Forbes Global Top 2000
#13,China non-State owned Company Top 500
#38,China Manufacturing Company Top 500
#6,Ruifu Global Ranking Top 100
A - / Stable
A - / Stable
A 3 / Stable
First Chinese home appliance manufacturer
assigned ratings by International Rating Agencies
8
Rankings & Ratings
Handan: Residential AC
Shunde, Guangzhou, Zhongshan: Residential AC, Commercial AC, Refrigerator, Microwave Oven, Gas Stove, Oven, Sterilizer, Small Appliances, Compressor, Motor, Lighting
Hefei, Wuhu: Residential AC, Commercial AC, Refrigerator, Hoods, Heater, Compressor, Motor
Guixi: Lighting
Wuxi, Suzhou, Huaian, Changzhou: Washer, Vacuum Cleaner, Heater, Motor
Wuhan, Jingzhou:] Residential AC
Chongqing: Residential AC, Commercial AC
China
14
9
China Footprint
Saudi Arabia
Residential AC, Refrigerator, Induction Cooker, Rice Cooker
Vietnam
All Categories
China
Residential AC, Commercial AC Residential AC
India
Egypt Residential AC, Commercial AC
Brazil
Residential AC
Argentina
Microwave Oven, Stoves
Belarus
Overseas
7
10
Global Footprint
Midea Group
Resi
den
tial
AC
Refr
igera
tor
Lau
nd
ry
Co
mm
erc
ial
AC
Liv
ing
Ap
plian
ces
Kit
chen
Ap
plian
ces
En
vir
on
men
tal A
pp
lian
ces
Wate
r H
eate
r
Part
s &
Co
mp
on
en
ts
9 Product Divisions
11
International Business Platform
Logistics
Platform
Treasury
Platform
E-Commerce Platform
Service
Platform
Supply Chain
Platform
Consolidate business support to 6 platforms to create synergies
Organization Chart
Midea
Group
Controlling
Shareholders
36%
Strategic
Investors
14%
Senior
Executives
5%
Others
45%
- Annual cash dividend ≥ 1/3 of net profit
- In 2015: DPS 1.2 yuan; Transfer of Capital reserve: 5
shares per 10 shares; cash dividend amount: 5.1bn
yuan; accumulated cash dividend amount: 12.7bn yuan
Two terms of share option scheme for employees;
Execution conditions: Net profit growth ≥ 15%
Two terms of “Partners” programs (ESOP).
12
Cash Dividend
Share Options
“Partners” Program
Governance
Dated: 31 March 2016
C 90
M 20
Y 0
K 0
C 0
M 0
Y 0
K 0
C 0
M 0
Y 0
K 90
C 0
M 0
Y 0
K 70
C 0
M 0
Y 0
K 60
C 0
M 0
Y 0
K 40
主色: 辅助色:
C 0
M 0
Y 0
K 25
C 0
M 0
Y 0
K 5
C 0
M 30
Y 100
K 0
温暖橙:
C 30
M 0
Y 100
K 0
健康绿:
C 70
M 0
Y 0
K 0
科技蓝:
Strategic Directions
13
C 90
M 20
Y 0
K 0
C 0
M 0
Y 0
K 0
C 0
M 0
Y 0
K 90
C 0
M 0
Y 0
K 70
C 0
M 0
Y 0
K 60
C 0
M 0
Y 0
K 40
主色: 辅助色:
C 0
M 0
Y 0
K 25
C 0
M 0
Y 0
K 5
C 0
M 30
Y 100
K 0
温暖橙:
C 30
M 0
Y 100
K 0
健康绿:
C 70
M 0
Y 0
K 0
科技蓝:
Vision:
Leader in Chinese home appliance industry;
Top 3 in worldwide white goods industry
Goal:
To be a consumer-oriented innovative company
Second Three Year
First Three Year
Third Three Year
14
Vision
C 90
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C 0
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Y 0
K 0
C 0
M 0
Y 0
K 90
C 0
M 0
Y 0
K 70
C 0
M 0
Y 0
K 60
C 0
M 0
Y 0
K 40
主色: 辅助色:
C 0
M 0
Y 0
K 25
C 0
M 0
Y 0
K 5
C 0
M 30
Y 100
K 0
温暖橙:
C 30
M 0
Y 100
K 0
健康绿:
C 70
M 0
Y 0
K 0
科技蓝:
战 略 主 轴
15
Leading Products
• Consumer-oriented products; improved productivity
• More investment in R&D; innovation; improved product mix
• Spin off loss-making categories; reduce product models
Global Operation
Efficiency Driven
• Set up International Business Platform
• Business model from OEM to OBM
• Joint Ventures with Carrier, Bosch, Toshiba, etc.
• M&A
• Launch“632”IT project to standardize process
• Invest on automation of the factory
• Promote T+3 model – production planning based on orders
• Consolidate business support to 6 platforms to create synergies
Strategic Focuses
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Y 0
K 90
C 0
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Y 0
K 70
C 0
M 0
Y 0
K 60
C 0
M 0
Y 0
K 40
主色: 辅助色:
C 0
M 0
Y 0
K 25
C 0
M 0
Y 0
K 5
C 0
M 30
Y 100
K 0
温暖橙:
C 30
M 0
Y 100
K 0
健康绿:
C 70
M 0
Y 0
K 0
科技蓝:
Business Strategy
Globalization Strategy
M-SMART H
om
e A
pp
lia
nc
es
Ma
nu
fac
ture
r
Sys
tem
In
teg
rati
on
So
luti
on
Pro
vid
er
产 业 框 架
M-Smart
16
6 platforms to support business development
Business Framework
Internet Strategy
Company-
oriented (Midea products)
Customer-
oriented (cross brands)
Users-
oriented (cross industries)
To meet
company’s
demand
To meet
customers’
demand
To meet
users’
demand
Resources
consolidation Fast
growth Delivery to home;
last kilometer
Consolidate logistics
of Midea products
divisions Upgrade information
system
3rd & 4th tier markets’
development
Improve efficiency,
reduce costs Diversification of
delivery methods &
products;
Expand non-Midea
customers
Covering 9.6mm km2 & 100cities; delivery within 24hrs
17
Logistics platform: End-to-end systematic solutions
Service Platform: Fast, Efficient & full-service
Founded as service sharing platform
Cleaning of home
appliances;
Water and air
quality test, etc.
Healthy Life
Installation and
repairing, recycling
of home appliances;
Technicians O2O
Convenient Life
I.O.T;
Personalized
services
Digitalized life
Multi-brand
services;
industry service
Sharing Life
Industry standard;
orphan brand;
Social welfare
Charity Life
Platforms
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Y 0
K 90
C 0
M 0
Y 0
K 70
C 0
M 0
Y 0
K 60
C 0
M 0
Y 0
K 40
主色: 辅助色:
C 0
M 0
Y 0
K 25
C 0
M 0
Y 0
K 5
C 0
M 30
Y 100
K 0
温暖橙:
C 30
M 0
Y 100
K 0
健康绿:
C 70
M 0
Y 0
K 0
科技蓝:
Child Star AC
No child sleeping curves
“Angel” protection mode
Fast cooling technology
3 color healthy filter
Beverly Washing
Dryer
Diamond cutting crafts
Accurate detergent adding
Innovative water flow
Twin Screen Smart
Fridge
Food management
Twin screen
Internet connected
Smart Rice Cooker
Titanium pot
IH big fire
Two direction 720 degree
boiling
M2 Water Purifier
No installation needed
Easy filter change
RO+, cold and hot water
WiFi smart management
Comfort Star AC
No wind feeling
Energy-saving
silent
Smart light reaction
Focusing on consumer-oriented research & characterized product features, to achieve differentiated competitive advantages.
Further investment on product R&D, to build a globally competitive R&D scheme and improve innovation capability.
Concentrate on research and innovation of fundamental and core technologies, smart home technologies.
18
Product Strategies
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C 0
M 0
Y 0
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C 0
M 0
Y 0
K 90
C 0
M 0
Y 0
K 70
C 0
M 0
Y 0
K 60
C 0
M 0
Y 0
K 40
主色: 辅助色:
C 0
M 0
Y 0
K 25
C 0
M 0
Y 0
K 5
C 0
M 30
Y 100
K 0
温暖橙:
C 30
M 0
Y 100
K 0
健康绿:
C 70
M 0
Y 0
K 0
科技蓝:
R&D investment:
Set up Central Research Institute, Smart-Home
Institute (Global Innovation Center)
Invested RMB 3bn, to build largest home appliance
R&D center in Asia
R&Ds center worldwide
Central Institute
Fundamental
& subversive
research
Common
technology
research
Four
Tier
R&D
Scheme
Divisions
Product
develop-
ment
Innovation Projects:
“Start from Scratch” Projects: new platform
development on existing product categories
“Second Track” Projects: new product R&D in new
fields such as health, smart, beauty, nutrition,
environmental protection
19
R&D Strategies
Individual
technology
research
“Twin
Smart“
Strategy
Yas-
kawa
Auto-
mation
Efort
KUKA
M-
SMART 1000 robots in use
RMB 5bn used in factory automation
Joint Ventures with YASKAWA (Japan)
Invested in ANHUI EFORT (17.8%)
Increased shareholding in KUKA (Germany) > 10%
Automated (Smart) Manufacturing
20
“Twin Smart” Strategy
Chip & Module
Open
Connection
Open
Protocol Open
Service Open
E-commerce
Open Open platform
for building smart home
M-SMART Bubble Products:
Bubble Robot
Bubble M-Box
Bubble Box
Bubble Smart plaster
Bubble Router
Over 80 smart product categories on market
Completed the development of WIFI Module, Midea Cloud and core
SDK of system
Finished protocol matching with JD, Alibaba, Xiaomi, Wechat Cloud
Established protocol matching with Homekit、Allseen、Thread、WIFI、
ZIGBEE Alliance
Established matching with Router company (Huawei, Xiaomi), mobile
internet platforms (Wechat, Baidu), smart hardware (ROKID robot), 3rd
-
party application (IFLYTEK, Moji Weather)
Smart Home: M-Smart
21
“Twin Smart” Strategy
22
HQ Globalization
Subsidiaries Localization
Global standardization
Local Differentiation
Business Mode:
OEM OBM
Brand Image:
Functional Brand
Emotional Brand
Aspirational Brand
Operation Mode:
Direct export Local Production
Joint Ventures, M&A:
Globalization
美的集团管理模式分享
23
Business Update
Revenue dropped due to active channel destocking; both gross and net profit margin increase
24
42
38
3.7 4.2
8.6%
10.9%
0%
3%
6%
9%
12%
15%
0
10
20
30
40
50
2015Q1 2016Q1
RM
B B
n
Operating Revenue Net Profit Net Profit Margin
Revenue & Margin
26.9%
29.9%
16.9% 16.6%
2015Q1 2016Q1
Gross Margin SG&A&Fin Cost ratio
25
Cash & Cash Flow
9.2
58.3
14.1
67.2
-
20
40
60
80
Cash Self-owned Fund
RM
B B
n
15Q1-EOP 16Q1-EOP
54%
15%
Abundant cash-in-hand; healthy cash flow generated from operating activities
2.5
6.6
0.0
2.0
4.0
6.0
8.0
2015Q1 2016Q1
RM
B B
n
Cash Flows from Operating activities
163.9%
Strong balance sheet with improved liquidity and reduced financial leverage ratio
26
Financial Liquidity & Leverage
64%
59%
15Q1-EOP 16Q1-EOP
Debt Asset Ratio
1.20
1.07
1.28
1.16
Current Ratio Quick Ratio
15Q1-EOP 16Q1-EOP
YoY inventory further reduced; inventory turnover days reduced
27
Inventory & Inventory Turnover
38
34
2015Q1 2016Q1
Inventory Turnover (Days)
Reduced 4
days
12.1
10.1 11.0
15.0
11.0 10.2
8.6
10.4 9.9
-60%
-40%
-20%
0%
20%
40%
-
4
8
12
16
20
14Q1-EOP
14Q2-EOP
14Q3-EOP
14Q4-EOP
15Q1-EOP
15Q2-EOP
15Q3-EOP
15Q4-EOP
16Q1-EOP
RM
B B
n
Inventory YoY
Steadily increased market cap & Stable dividend distribution
Cumulated dividend payment from 2013 to 2015 amounts to RMB 12.7Billion.
From Sept. 2013 to end 2015, market cap has increased 97%.
28
Market Cap & Dividend
RMB Bn
美的集团管理模式分享
29
Backup - Financials
Stable turnover growth; improving margin Improving Gross Margin; stable SG&A&Fin Costs
Net asset largely increased; ROE largely improved Sufficient cash; stable cash inflow
30
Key Financial Analysis
RMB Bn
RMB Bn
AC inventory Reduced; other categories grow rapidly Both inside and outside China market grow steadily
31
By Products & Regions
THANKS
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