Seb Sa · EURONEXT:SK
Seb Sa — Groupe SEB — Investor Day (November 2018)
148 slides from Seb Sa's investor day presentation, Nov 23, 2018
Slide 1: General Presentation - Investor Days 2018
Part 1 INVESTOR DAYS – 21-23 Nov, 2018 GENERAL PRESENTATION Raymond SU 1
Slide 2: Content
CONTENT CONTENT 1. China macro-economics 2. SUPOR business overview 3. Product and market competition 4. Main levers 2
Slide 3: Sound macro-economic backdrop
Sound macro-economic backdrop Average growth rate over 4 years GDP growth driven by domestic at 6.8% consumption GDP growth rate Consumption contribution to GDP growth 8.0% 100% 79% 80% 7.5% 67% 60% 59% 60% 7.0% 6.9% 6.9% 6.7% 6.7% 40% 6.5% 20% 6.0% 0% 2015 2016 2017 2018.1-9 2015 2016 2017 2018
Slide 4: Consumption upgrade driven by strong structural fundamentals
Consumption upgrade driven by strong structural fundamentals Fast-growing middle-class Stronger consumption-ability by young generation Household number： Consumption in city (million) (tril.USD) 100% 100% 7% 90% 90% 80% 33% 80% 43% 44% 70% 54% 70% 52% 60% 60% 50% 50% 40% 40% 30% 91% 30% 67% 54%
Slide 5: Robust momentum in the cookware market
Robust momentum in the cookware market RSP Mil. RMB 25000 2014-17 CAGR 7% 19,459 20000 18,102 16,862 16,035 15000 10000 5000 0 2014 2015 2016 2017 Source: GFK 2014-2017 5
Slide 6: Robust momentum in the small kitchen electric market
Robust momentum in the small kitchen electric market RSP Mil. RMB 2014-17 CAGR 6% 60,000 55,876 52,134 48,773 50,000 46,652 40,000 30,000 20,000 10,000 - 2014 2015 2016 2017 Source: CMM 2014-2017 6
Slide 7: Content
CONTENT CONTENT 1. China macro-economics 2. SUPOR business overview 3. Product and market competition 4. Main levers 77
Slide 8: Where a Fascinating Journey begun…
Where a Fascinating Journey begun… Shanghai Hangzhou Yuhuan Yuhuan Pressure Cooker Factory, 1987 8
Slide 9: Major milestones
Major milestones Zhejiang Supor, 1994 Acquired three state owned Entered SDA, 2002 enterprises in Wuhan, 1996 Listed in Alliance with Entered South East Asia, 2008 SZ Stock Exchange, 2004 Groupe SEB, 2006 9
Slide 10: A decade of outstanding performances
A decade of outstanding performances MRMB Supor total sales 16,000 YoY Sales +28% 14,187 14,000 13,394 2007-17 CAGR 17% 11,947 12,000 10,910 10,497 10,000 9,535 8,383 8,000 7,126 6,889 6,000 5,622 4,116 3,622 4,000 2,934 2,000 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2017.1-9 2018.1-
Slide 11: A decade of outstanding performances
A decade of outstanding performances MRMB Supor net profit 1,400 1,308 YoY +23% 1,200 1,134 2007-17 CAGR 20% 1,103 987 1,000 897 800 765 641 600 525 515 443 400 355 299 215 200 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2017.1-9 2018.1-9 Note: Chinese GAAP 11
Slide 12: A decade of outstanding performances
A decade of outstanding performances MRMB Supor domestic sales 12,000 YoY +27% 10,212 10,359 10,000 2007-17 CAGR 18% 8,436 8,183 8,000 7,677 6,213 6,000 5,261 4,651 4,539 4,000 3,668 2,820 2,508 1,980 2,000 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2017.1-9 2018.1-9 Note: Chinese GAAP
Slide 13: A decade of outstanding performances
A decade of outstanding performances Supor export group sales MRMB 4000 3,715 3500 YoY +11% 3,188 3,131 2007-17 CAGR 36% 2,961 3000 2,689 2,678 2,458 2500 2000 1,784 1,619 1500 1,095 1000 658 446 500 169 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2017.1-9 2018.1-9 13
Slide 14: A decade of outstanding performances
A decade of outstanding performances MRMB Cookware sales 6,000 5,110 5,000 2007-17 CAGR 11% YoY Sales +13% 4,535 4,481 4,052 4,220 4,000 3,701 3,728 3,359 3,113 3,000 2,893 2,195 1,900 2,000 1,793 1,000 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2017.1-9 2018.1-9 Note: Chinese GAAP 14
Slide 15: A decade of outstanding performances
A decade of outstanding performances MRMB Electric appliance sales 10,000 YoY Sales +28% 9,077 9,000 8,873 8,000 7,466 2007-17 CAGR 23% 6,945 7,000 6,375 6,000 5,482 5,000 4,682 4,000 3,767 3,777 3,000 2,729 1,722 1,921 2,000 1,140 1,000 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2017.
Slide 16: 2017 sales breakdown
2017 sales breakdown Sales by Business Unit Sales by Business Type Electric Cookware Export non-SEB appliances 36% Group Sales 2% 64% 28% Domestic 70% Note: Electric appliances include small kitchen appliances business unit, and large kitchen appliance business unit 16
Slide 17: 2007-2017 market capitalization & share price
2007-2017 market capitalization & share price Market Capitalization Share Price 50.00 40 40.00 30 30.00 20 20.00 10 10.00 0 0.00 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018,10 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018.10 Share Price 11.05 5.53 9.50 14.30 10.11 8.41
Slide 18: Content
CONTENT CONTENT 1. China macro-economics 2. SUPOR business overview 3. Product and market competition 4. Main levers 18 18
Slide 19: A decade of category expansion in cookware
A decade of category expansion in cookware 2007 2017 5 categories in Cookware 4 new categories in Cookware 1 category in Kitchenware 5 new categories in Kitchenware 19
Slide 20: Leadership market positions in cookware
Leadership market positions in cookware Frypan Pressure Wok Cooker N° 1 Set Pot Pottery Pot Steamer 20
Slide 21: Strong momentum in kitchenware
Strong momentum in kitchenware Drinkware Knife Lunch Box Spatula Easy Storage Box Kitchen Tools 21
Slide 22: Undisputed cookware market leader
Undisputed cookware market leader Widening the gap vs ASD 2.3 X 2.4 X 2.3 X 2.2 X 2.0 X 2.7 X 1.9 X 2.4 X 1.6 X 2011 2012 2013 2014 2015 2016 2017 2017H1 2018H1 SUPOR ASD Source: ASD Annual Report 22
Slide 23: A decade of category expansion in SDA
A decade of category expansion in SDA 2007 2017 5 categories in small 9 new categories in small Kitchen Electrics Kitchen Electrics 6 new categories in home & linen care (since 2014) 23
Slide 24: Outstanding market positions in kitchen electrics
Outstanding market positions in kitchen electrics Induction Hob Rice N° 1 Cooker N° 2 Electrical Pressure Cooker Slow Baking Cooker Pan Kettle Blender N° 3 Hot Soymilk Pot Maker 24
Slide 25: Sharply strengthened market shares in Kitchen Electrics
Sharply strengthened market shares over the 10-year period in Kitchen Electrics Market Share No.1 No.2 No.3 No.4 No.5 (2017/2007) Midea Supor Joyoung Panasonic Philips 42.71% 33.12% 12.15% 2.78% 1.31% RC +3.76% +18.11% NA -4.01% +0.09% Midea Supor Joyoung MAZUBA Galanz 50.21% 25.06% 18.24% 0.91% 0.6
Slide 26: Strong momentum for young categories
Strong momentum for young categories Garment Air Purifier Steamer Vacuum Cleaner N° 1 Mite Lint Iron Predator Remover 26
Slide 27: Important inroads in the Large Kitchen Appliance business
Important inroads in the Large Kitchen Appliance business Gas Stove Range Hood Water Purification & related Steam Sterilizer Oven Oven Steam Box 27
Slide 28: Content
CONTENT 1. China macro-economics 2. SUPOR business overview 3. Product and market competition 4. Main levers 28 28
Slide 29: Supor's key success factors
Supor’s key success factors Strong and continuous innovation Sustained branding investment Strong distribution partnership and retail execution Continuously improved competitiveness A group of highly motivated and committed people 29
Slide 30: Strong and continuous innovation
Strong and continuous innovation Solid innovation model adapting to Chinese demand, based on strong local consumer insights Over 1,000 new products in 2017 Average product development cycle – 6 months Holds 4,039 patents, out of which 244 are invention patents Total 308 R&D engineers 384
Slide 31: Driving the transformation of wok
Driving the transformation of wok Alu Ceramic Fumeless Anti-Rust Iron Wok ThermoSpot Ti Pro Wok Wok 31
Slide 32: Driving the transformation of rice cookers' inner pot
Driving the transformation of rice cookers’ inner pot Spherical inner pot 1.0 Spherical inner pot 2.0 32
Slide 33: Cross-fertilization with Groupe SEB
Cross-fertilization with Groupe SEB Tefal Thermospot Pan Supor Thermospot Wok Red dot as a temperature indicator, letting you know when your pan is preheated to the right temperature Control oil temperature to avoid smoke 33
Slide 34: Transforming a Chinese iconic product into a global success story
Transforming a Chinese iconic product into a global success story Electric Pressure Cooker Cookeo Multi-Cooker 34
Slide 35: Supor's key success factors
Supor’s key success factors Strong and continuous innovation Sustained branding investment Strong distribution partnership and retail execution Continuously improved competitiveness A group of highly motivated and committed people 35
Slide 36: Drive brand to be more relevant to younger generation
Drive brand to be more relevant to younger generation Product packaging upgrade New celebrity – Ning Chang • Famous Taiwan actress • Good education background and sporty Store image (SI) upgrade • To support new category growth： Drinkware, LKA, HPC 36
Slide 37: Major campaigns in 2017
Major campaigns in 2017 - Vacuum High-Speed Blender True vacuum, True nutrition Integrate 8 mainstream channels Colors can never lie Spread to 614M+ people （8 TVs） TV + 259% HSB sales value （5 Smart TVs） OTT 2017FY YoY （31 railway stations） （5 trains） OOH 605K units （3 major video platforms） OTV HSB
Slide 38: Major digital campaign in 2018
Major digital campaign in 2018 - Low noise High-Speed Blender Data Marketing Practice of SUPOR Low Noise High-Speed Blender: Increase 90% CTR (in Market) by Focusing TA through Programmatic Buying Data Resource Consumer profile Advertising CTR Avg • Female In-depth Analysis Basic • Age：28-48 Info DM
Slide 39: Supor's media spending going digital
Supor’s media spending going digital to drive relevancy and efficiency 2015 2016 2017 33% 38% 46% 54% 67% 62% TV Digital 39
Slide 40: Supor, the Chinese consumers' favorite kitchen brand
Supor, the Chinese consumers’ favorite kitchen brand Unaided awareness: Supor ranking #1, Brand preference: Supor ranking #1, ahead of Midea by 7 pts ahead of Midea by 3 pts 43% 41% 39% 39% 40% 37% 37% 36% 36% 36%36% 37% 8% 8% 9% 8% 7% 8% 2% 2% 1% 1% 2% 2% 15 16 17 15 16 17 15 16 17 15 16 17 15
Slide 41: Supor, the favorite brand in kitchen electrics
Supor, the Chinese consumers’ favorite brand in kitchen electrics Unaided awareness: Supor ranking #1 Brand preference: Supor ranking #1 ahead of Midea by 2 pts ahead of Midea by 3 pts 35% 36% 36% 36% 34% 34% 33% 34% 32% 33% 31% 33% 21% 19% 18% 14% 14% 14% 15 16 17 15 16 17 15 16 17 15 16 17 15
Slide 42: Supor's key success factors
Supor’ key success factors Strong and continuous innovation Sustained branding investment Strong distribution partnership and retail execution Continuously improved competitiveness A group of highly motivated and committed people 42
Slide 43: Extensive distribution channels
Extensive distribution channels - Easy to reach More than 300 distributors all over China More than 60,000 retail points, covering 100% county cities SUPOR – the strategic partner with mainstream e-commerce platforms like Tmall, JD and Suning. 43
Slide 44: Extensive presence via Supor Life stores
Extensive presence on the Chinese territory via Supor Life stores Map of Life stores nationwide Life store 10 Community store in city and county town 10 Brand “showroom”, sales, service, and 6 20 experience center 18 24 3 47 First store opened in May, 2006 5 1 52 89 Owned by individuals 97
Slide 45: Supor key success factors
Supor key success factors Strong and continuous innovation Sustained branding investment Strong distribution partnership and retail execution Continuously improved competitiveness A group of highly motivated and committed people 45
Slide 46: Overview of Supor's manufacturing sites
Overview of Supor’s manufacturing sites CW SDA SUPOR 2017 Info. Production Volumes: 106 MPCS Total number of Employees: 10,690 Field: 880,149m2 WUHAN HANGZHOU SHAOXING YUHUAN Vietnam 46
Slide 47: Supor's industrial sites – Facts and figures
Supor’s industrial sites – Facts and figures Cookware: SDA Production volumes 2017: 59 MPCS Production volumes 2017: 47 MPCS YUHUAN Site: HANGZHOU Site: Year:1994 Year:2004 Fields: 118,180 m2 Fields: 66,000 m2 Employee: 1,947 Employee: 2,256 WUHAN Site: SHAOXING Site: Year:2005 Year:2009 Fields: 201
Slide 48: August 2009
August 2009 48 48
Slide 49: Focus on industry safety
Focus on industry safety 80 75 Number of loss time incidents No analysis 70 Lack of communication 60 Design defect Number of LTI 50 50 Lack of risk assessment 40 Lack of skills 32 30 22 Material/machine failure 20 15 10 Unsafe practices repeated 10 Individual human factors 0 2013 2014 2015 2016 2017
Slide 50: Supor key success factors
Supor key success factors Strong and continuous innovation Sustained branding investment Strong distribution partnership and retail execution Maintaining competitiveness through continuous improvement A group of highly motivated and committed people 50
Slide 51: Highly motivated and committed people
Highly motivated and committed people “Need pressure, not afraid of pressure, conquer pressure” Total staff: 12,362 Management Staff Sale & 3% Marketing 11% Technology/ Research / Development 15% 64% Male vs 36% Female Average age: 32 Indirect Labor 11% University Graduates 4% 271 Gold Medal
Slide 52: Supor, the story goes on: continued solid momentum
Supor, the story goes on: continued solid momentum Ambitions Priorities • Innovation • Continue to capture • Continued expansion in Tier 3-4 cities Chinese market’s brisk • Ongoing development in new categories dynamic • Capitalization on the online expertise • Enhance Supor’s status of • More categ
Slide 53: Innovation Presentation
INVESTOR DAYS – 21-23 Nov, 2018 INNOVATION PRESENTATION Walson WANG
Slide 54: Content
CONTENT CONTENT 1. SDA market 2. Rice-cooker 3. More innovative products 4. Conclusion 2
Slide 55: Robust Supor SDA business growth
Robust Supor SDA business growth Sales (M RMB) 9,000 Domestic Group Export Non-Group Export 8,575 8,000 7,355 7,000 2007-17 CAGR +22% 6,371 6,000 5,483 5,000 4,663 4,000 3,729 3,768 3,000 2,684 6,304 5,401 1,699 1,909 4,700 2,000 4,062 1,130 3,139 3,415 2,943 1,000 2,358 1,507 1,734 1,050 - 2007 200
Slide 56: Strong momentum in offline market
Strong momentum in offline market CHINA SDA Offline Market Share Delta(12-18) 100% 11.8% 9.8% 8.6% 18.1% 14.9% Others -14.1pts 22.7% 21.1% 80% 22.1% 22.3% 22.3% 25.3% 24.8% JY -1.2pts 23.5% 24.0% 60% 28.0% 29.3% 27.1% 23.4% 17.7% 19.3% 21.7% SUPOR +11.6pts 40% MD +3.8pts 20% 36.4% 38.8% 39.9% 39.8%
Slide 57: Outstanding market positions in large categories
Outstanding market positions in large categories N°1 33% N°2 25% 26% 34% 37% 28% N°3 26% 26% 16% Source: CMM 2012-2018.9YTD
Slide 58: SDA business development roadmap
SDA business development roadmap Start SDA, and enter into more new categories Product innovation & differentiation SDA New categories HPC 2002 2008 2014 6
Slide 59: SDA key success factors on innovation
SDA key success factors on innovation Dedicated consumer insight Full patent protection on innovation Sustained investments in R&D Strong innovation pool and research process Efficient innovation system Cross-fertilization with Groupe SEB 7
Slide 60: Consumer insight - Chinese traditional cooking intelligence
Consumer insight - leverage on Chinese traditional cooking intelligence into innovative products Team + Food sensory evaluation expert Institut National Supérieur des Sciences Agronomiques • Period: 24-month follow-up Process • Panel: 40 families nationwide • Forum: 100 times with communities & ex
Slide 61: Robust patent application
Robust patent application Patent Application Quantity Utility Model Invention Design 2,721 177 Patent risk control and 390 innovation protection through the whole product life cycle 2013-17 CAGR +83% 2,154 Patent mining and layout to create patent pool 104 156 1,188 Combination of Trademark, 5
Slide 62: Strong innovation pool
Strong innovation pool Product development dept. Inputs Product Strategic research dept. marketing dept. Filtering Triangle meeting Assessment Pre-research Innovation committee Next step Approved to research process Select & enter RP1 Product committee 10
Slide 63: SDA innovation system organization
SDA innovation system organization HQ: CEO SDA BU: Innovation Committee GM Sales VGM Strategic Marketing Director Industrial VGM Director of innovation HZ Site GM system Elaine Zhou Site technical OEM technical OEM purchasing Strategic deputy general Category director Industrial design director dire
Slide 64: Cross-fertilization with Groupe SEB
Cross-fertilization with Groupe SEB Soup & Co Soymilk Maker Easy Soup More compact, easier to clean and … €199 €99
Slide 65: Content
CONTENT CONTENT 1. SDA market 2. Rice-cooker 3. More innovative products 4. Conclusion 13
Slide 66: SDA innovation example - rice cooker
SDA innovation example - rice cooker Current market evaluation - Why need a new rice cooker inner pot Consumer insight of Chinese cooker - How develop a new inner pot Benefits from the rice cooker innovation - What achieved 14
Slide 67: Constant technological product upgrade
Constant technological product upgrade to meet consumers’ upmarket needs 2002 2006 2008 2011 2013 China RC market development stages ① Conventional RC ② Computerized RC ③ IH RC new developed ④ IH RC fast grow 15
Slide 68: Rice cooker inner pot evolution
Rice cooker inner pot evolution Flat Surface Heating Traditional Dome Heating Spherical Heating 3D Heating 1st Gen 2nd Gen 3rd Gen 4th Gen 5th Gen 6th Gen 7th Gen 8th Gen 9th Gen 10th Gen Aluminum Alloy AA Non-Stick Hard Anodized Hard Anodized Ceramic Steel + Ceramic 2.0 Spherical Titanized Shallow
Slide 69: Consumer insight - Why spherical inner pot
Consumer insight - Why spherical inner pot Inner pot in market
Slide 70: How to develop a new inner pot
How to develop a new inner pot, based on traditional rice cooking
Slide 71: New inner pot
S GROUPE SEB New inner pot
Slide 72: Spherical pot RC as a key growth driver…
Spherical pot RC as a key growth driver… Sales percentage of spherical pot RC 63% 59% 53% 43% 35% 9% 2013.8 2014 2015 2016 2017 2018.10 20
Slide 73: … leading to strong market share gains…
18% 23% 28% 33% 38% 43% 48% Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Spherical pot 1.0 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 1st Launch Aug 2013 May-13 Jun-13 Jul-13 Aug-13 Sep
Slide 74: … and improved average retail price
230 280 330 380 430 480 530 580 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Market Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Spherical pot 1.0 Oct-12 Nov-12 1st Launch Aug 2013 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 Supor May-13 Jun-13
Slide 75: Content
CONTENT CONTENT 1. SDA market 2. Rice-cooker 3. More innovative products 4. Conclusion 23
Slide 76: More innovative products - KE
More innovative products - KE First Digital LED display kettle First Silent High speed blender Dual pressure valve Fresh Breath EPC Anti-overflow IH First anti-overflow health pot 24
Slide 77: More innovative products - HPC
More innovative products - HPC Dust monitor Pressure Art design Mite Remover Garment Steamer Garment Steamer 25
Slide 78: Content
CONTENT CONTENT 1. SDA market 2. Rice-cooker 3. More innovative products 4. Conclusion 26
Slide 79: Leverage Chinese traditional cooking intelligence into innovative products
Supor, leverage on Chinese traditional cooking intelligence into innovative products Ambition Priorities • Continue innovation • Deep dive in consumer insight in mature categories • Penetrate into market-segmentation • Leverage on consumption upgrade • Develop more new • Enter into emerging categori
Slide 80: WMF Consumer in China
INVESTOR DAYS – 21-23 Nov, 2018 WMF CONSUMER IN CHINA Jack Pan
Slide 81: Content
CONTENT CONTENT 1. China premium cookware market 2. WMF Consumer in China 3. Key priorities 2 2
Slide 82: Market upmove driven by the rise of China's middle-class
Market upmove driven by the rise of China’s middle-class 2017 Household Income Per City Household Number (Million) 2016-2030 Month (K RMB) 2010 CAGR% 2016 2020F 2030F Premium Market Mainstream Market Mass Market < McKinsey & Company 3
Slide 83: Robust Chinese premium cookware market
Robust Chinese premium cookware market (M RMB) 2013-17 CAGR +9% 400.0 350.0 300.0 250.0 200.0 397.0 322.1 150.0 300.6 300.2 278.1 100.0 50.0 0.0 2013 2014 2015 2016 2017 Source: GFK, Premium Cookware Brands Market size, offline, 30 cities in China 4
Slide 84: Channel diversification of premium market
Channel diversification of premium market: B2B and ecommerce as key drivers Department Stores New Retail Channel Premium Outlet Premium Villages Boutique Stores ecommerce B2B/BL/TV 5
Slide 85: Content
CONTENT CONTENT 1. China premium cookware market 2. WMF Consumer in China 3. Key priorities 6 6
Slide 86: WMF Consumer China integrated into Supor in 2017
WMF Consumer China integrated into Supor in 2017 WMF Consumer Goods Co., established, Acquisition of WMF by Groupe SEB Upgraded WMF retail store image and opened the first self-run retail store 2010 2016 2018 2011 2017 Began online business, opened WMF China Integrated into Supor. Aligned WMF TMALL
Slide 87: Main product milestones
Main product milestones 2010 2016 2018 Started with 4 moment 2011 Launched SDA 2017 Launch insulation product lines jugs and mugs (preparing, cooking, Launched NATURamic range Launched local for drinking & dining) local new products (e.g. Chinese woks) 8
Slide 88: Cookware-focused portfolio, gradually diversifying
Cookware-focused portfolio, gradually diversifying 20% 2017 sales SDA > €50m 80% Cookware 9
Slide 89: Sustained growth in WMF brand awareness
Sustained growth momentum in WMF brand awareness Aided Brand Awareness 100% (Top 6 tier 1 and 2 cities only) 90% 86% 80% 79% 75% 76% 74% 70% +7 pts 73% 60% 54% 53% 52% 52% 50% 48% 50% 40% -5 pts 30% 30% 27% 29% 25% 22% 20% 15% +15 pts 10% 0% 2015Jan 2015Oct 2016Mar 2016Oct 2017Jun 2018Jun Source: Co
Slide 90: Solid Offline market share growth
Solid Offline market share growth GFK 2013-2018 YTD Premium Market Share (30 Cities) – Key Premium Brands +4.1 pts 28.4% 24.3% +4.9 pts 21.3% 21.0% 9.8% 4.9% 11 Source: GFK, 30 cities in China
Slide 91: Retail store layout in 2018
Retail store layout in 2018 长春 吉林 乌鲁木齐 秦皇岛 沈阳 鞍山 呼和浩特 北京 唐山 天津 大连 大同 东营 石家庄 阳泉 潍坊 烟台 The First Retail 太原 青岛 Store opened 邯郸 济南 in Shanghai in 郑州 泰安 徐州 镇江 2010 西安 南京 南通 洛阳 江阴 常州 成都 合肥 上海 无锡 苏州 武汉 杭州 重庆 宁波 湘潭 长沙 南昌 贵阳 福州 Business model change 厦门 广州 Improve retail store productivity 昆明 南宁 142 stores 深圳
Slide 92: Fast platform expansion and store footprint adjustment
Fast platform expansion and store footprint adjustment 1 Online store in 2013 20 Online Stores in 10 Key Platforms in 2018 TAOBAO AMAZON TMALL JD.COM SUNING Freshhema KAOLA MEI.COM RED VIP.COM 13
Slide 93: Doubling ecommerce stake in two years
Doubling ecommerce stake in two years 8% 18% 2015 2017 ecommerce Retail Other Note: other incl. B2B, TV, brand loyalty program 14
Slide 94: Enhance consumer relationship and satisfaction
Enhance consumer relationship and satisfaction Store as Media, Updated with New SI Brand Experiential Activities: Social E-commerce & Content Marketing 15
Slide 95: Content
CONTENT CONTENT 1. China premium cookware market 2. WMF Consumer in China 3. Key priorities 16 16
Slide 96: A more extensive coverage of all market segments
A more extensive coverage of all market segments Cookware Drinkware Kitchen Electric GSEB Competitor GSEB Competitor GSEB Competitor Top Premium Entry / Mid Mass 17
Slide 97: WMF + Supor: Global innovation mixed with local insights
WMF + Supor: Global innovation mixed with local insights WMF German Design DNA + Local product offering: Chinese Woks and Non-stick Range 18
Slide 98: WMF leveraging Supor's R&D and industrial expertise
WMF leveraging Supor’s R&D and industrial expertise… R&D Design of local for local products Manufacturing Lower cost High quality standards Supply chain Improved lead-time – divided by 2 19
Slide 99: … and a strong local IT Support
… and a strong local IT Support HR SYSTEM CRM SYSTEM BPM & SAP SYSTEM IT PURCHASING AFTERSALES SYSTEM 20
Slide 100: New journey just begins…
New journey just begins… 21
Slide 101: Investors Day - Coffee Business in China
Investors Day Coffee Business in China PCM WMF & Schaerer November, 2018
Slide 102: Agenda
Agenda 1. Coffee market in China - Market Size & Consumption - Specifics & our answers - Competitive landscape 2. PCM Business China 3. luckin coffee – the first Chinese coffee unicorn Page 1
Slide 103: Agenda
Agenda 1. Coffee market in China - Market Size & Consumption - Specifics & our answers - Competitive landscape 2. PCM Business China 3. luckin coffee – the first Chinese coffee unicorn Page 2
Slide 104: China – a coffee drinking country?
China – a coffee drinking country? Page 3
Slide 105: The inevitable rise of Chinese Coffee Market
1. Coffee market in China The inevitable rise of Chinese Coffee Market Fast- Average growing income middle class Higher Demand Affordability The equation of China's increasing coffee consumption Number of Coffee coffee consum- outlets ption Availability Attractivity Page 4
Slide 106: The rise of the middle class has just begun
1. Market size & consumption – Higher demand The rise of the middle class has just begun The Chinese middle class is … and it’s still growing already larger than in the USA… Share of middle class adults (in mio.), 20151 The middle class (and therefore the main potential for coffee consumption) is al
Slide 107: Higher income will lead to a democratization of coffee
1. Market size & consumption - Affordability Higher income will lead to a democratization of coffee Higher income will establish a much bigger target group that can afford coffee consumption Source: Jing DATA(Jul,2018) Page 6
Slide 108: Increase of potential coffee outlets in China
1. Market Size & Consumption - Availability Increase of potential coffee outlets in China Number of coffee shops in China Convenience stores per 1M people 800 unit：1000x 200 180 600 140,9 106 400 100 85 200 31,8 15,9 0 0 2007 2012 2016 2017 2018E 2020E Korea Japan China Compare to Japan & Korea, Con
Slide 109: Importance of fresh coffee still far behind many countries
1. Market Size & Consumption - Attractivity The importance of fresh coffee is still far behind many countries Coffee consumption in selected countries (2017) Split of consumption 2017 (value) unit：cup/person/year Increase rate 900 China (Average); 800 750 15% 700 Global 87% 13% Fresh coffee 600 Chin
Slide 110: Coffee is booming in China
1. Coffee market in China Coffee is booming in China, the whole industry is growing fast Market size of the Chinese coffee industry 1400 unit：billion CNY 1200 1000 1000 800 600 400 300 200 70 0 2015 2020 2025 The total market size of the Chinese coffee industry is expected to grow with a CAGR of rou
Slide 111: Coffee's evolution from the fringes to the mainstream
1. Coffee market in China Coffee’s evolution from the fringes to the mainstream of Chinese society Women Why the China Market Matters Hanging out at coffee shops with the newest drinks in hand represents a new lifestyle choice for urban Chinese consumers. As their living standards improve, Chinese c
Slide 112: Outlook Chinese Coffee Machines Market
1. Coffee market in China Outlook Chinese Coffee Machines Market 750 M€* China will be the second biggest Coffee Machine Market in the world 200 M€* Coffee Drinking 120 M€* becomes integral part The rise of coffee of society drinking 1999 2018 2022 2028 Starbucks brings Coffee to China *Marketsize F
Slide 113: Agenda
Agenda 1. Coffee market in China - Market Size & Consumption - Specifics & our answers - Competitive landscape 2. PCM Business China 3. luckin coffee – the first Chinese coffee unicorn Page 12
Slide 114: Overview – Our solutions for the main trends
Specifics of the Chinese market Overview – Our solutions for the main trends Automation & Premiumisation & New Retail & IoT Global & local players Self-Serve Quality Mindset 1 2 3 4 Technology Leadership & Innovation Leadership in Premium brand & quality Global footprint with 2 Connectivity FAPCM pr
Slide 115: Four mega trends reshaping China
Specifics of the Chinese market Four mega trends characteristic & reshaping China New Retail & IoT 4 Trends reshaping CHINA Chinese Coffee Business Page 14
Slide 116: New Retail & IoT
Specifics of the Chinese market New Retail & IoT New Retail & IoT • >800 Mio. smart phone users • Mobile Payment (WeChat, AliPay…) & Delivery Services dominating • By 2021, 80% of smartphone users will use mobile payment at POS • Mobile Payment transaction >15 trillion USD (2017) Page 15
Slide 117: New Retail & IoT - Changing the coffee market
Specifics of the Chinese market New Retail & IoT - Changing the coffee market “The New Retail model is the best combination of self-collection <-> delivery and online <-> offline to achieve optimal balance between product, price and convenience” – luckin coffee - Page 16
Slide 118: New Retail & IoT - Our solutions
Specifics of the Chinese market New Retail & IoT - Our solutions Page 17
Slide 119: New Retail & IoT - Our solutions
Specifics of the Chinese market New Retail & IoT - Our solutions Video available on youtube: https://www.youtube.com/watch?v=gGFxNvSDSR0 Page 18
Slide 120: Four mega trends reshaping China
Specifics of the Chinese market Four mega trends characteristic & reshaping China Automation & Self-Serve 4 Trends reshaping CHINA Chinese Coffee Business Page 19
Slide 121: Automation & Self-Serve
Specifics of the Chinese market Automation & Self-Serve Automation & Self-Serve • Rise of unmanned convenience stores and fully automated Food & Beverage concepts Page 20
Slide 122: Automation & Self-Serve – a big change for our customer segments
Specifics of the Chinese market Automation & Self-Serve – a big change for our customer segments ? Premium Coffee self-serve solutions for unmanned shop concepts Page 21
Slide 123: Automation & Self-Serve – high technology WMF based solutions
Specifics of the Chinese market Automation & Self-Serve – high technology WMF based solutions Video available on youtube: https://www.youtube.com/watch?v=t4r6nAkav9o Cafe X – a completely new user experience through the combination of WMF Coffee machines with a robot Page 22
Slide 124: Automation & Self-Serve – Our solutions
Specifics of the Chinese market Automation & Self-Serve – Our solutions Schaerer Premium Coffee Corner This is REAL coffee Schaerer’s answer to a growing demand of premium Coffee-to-Go! 3 grinders = 3 bean types Best Foam™ – premium fresh milk foam 2 milk types, 2 powder types, 4 syrup types
Slide 125: Four mega trends reshaping China
Specifics of the Chinese market Four mega trends characteristic & reshaping China 4 Trends reshaping CHINA Chinese Coffee Business Premiumisation & Quality mindset Page 24
Slide 126: Premiumisation & Quality mindset
Specifics of the Chinese market Premiumisation & Quality mindset Premiumisation & Quality Mindset • Booming middle class with growing quality mindset & spending • Consumption takes two paths, Western and Chinese • Lifestyle products are leveraged by social media such as WeChat Page 25
Slide 127: Premiumisation & Quality mindset – premium coffee concepts
Specifics of the Chinese market Premiumisation & Quality mindset – premium coffee concepts Fresh & Future Page 26
Slide 128: The 5 waves of coffee
Specifics of the Chinese market Premiumisation & Quality mindset - The 5 waves of coffee EUROPE CHINA “In China, all 5 waves of coffee happening at the same time” Page 27
Slide 129: Premiumisation & Quality mindset – Our solutions
Specifics of the Chinese market Premiumisation & Quality mindset – Our solutions Breakthrough Innovation • 1st ever fully automatic with the “look & feel & taste” of a semi-automatic coffee machine • Delivering benchmark espresso quality • Cutting out the barista training Page 28
Slide 130: Premiumisation & Quality mindset – Our solutions
Specifics of the Chinese market Premiumisation & Quality mindset – Our solutions WMF Dynamic Milk Flexible Touch Schaerer Best Foam™ iPhone touch experience Milk foam of top barista on WMF coffee quality, fully automated, machines – individualize with consistently high your machine! quality. WMF MyC
Slide 131: Customer Segment
Specifics of the Chinese market Premiumisation & Quality mindset – Our solutions Espresso 9000 S+ 5000 S 1500 S 1200 S 1100 S 300 cups/h 350 cups/h 250 cups/h 180 cups/h 100 cups/h 80 cups/h Schaerer Barista Coffee Art Plus Coffee Soul Coffee Vito Coffee Prime Coffee Club 300 cups/h 250 cups/h 250 c
Slide 132: Four mega trends reshaping China
Specifics of the Chinese market Four mega trends characteristic & reshaping China 4 Trends reshaping CHINA Chinese Coffee Business Global & local players Page 31
Slide 133: Global & local players
Specifics of the Chinese market Global & local players Global Brands investing in the market Local brands adapting the concepts Page 32
Slide 134: Global & local players – Our solutions
Specifics of the Chinese market Global & local players – Our solutions Global Footprint Local Organization Local subsidiaries Importers 11 subsidiaries and ~ 200 importers More than 20 People for globally PCM locally in China Approvals and contracts with many Shared Services & Facilities with WMF bi
Slide 135: 2 Faces to the customer
Specifics of the Chinese market Global & local players - Our solutions PCM Business in China link to the global functions in HQ Local PM Local Back office with strong Local IT Global Local Service Functions Local KAM Local Marketing Sales WMF Sales Schaerer 2 Faces to the customer 2 Brand Strategy w
Slide 136: Agenda
Agenda 1. Coffee market in China - Market Size & Consumption - Specifics & our answer - Competitive landscape 2. PCM Business China 3. luckin coffee – the first chinese coffee unicorn Page 35
Slide 137: Competitive landscape
Competitive landscape Besides the normal competitors, some new Chinese players are rising Traditional PCM Market Page 36
Slide 138: Overview – Our solutions for the main trends
Specifics of the Chinese market Overview – Our solutions for the main trends Automation & Premiumisation & New Retail & IoT Global & local players Self-Serve Quality Mindset 1 2 3 4 Technology Leadership & Innovation Leadership in Premium brand & quality Global footprint with 2 Connectivity FAPCM pr
Slide 139: Agenda
Agenda 1. Coffee market in China - Market Size & Consumption - Specifics & our answer - Competitive landscape 2. PCM Business China 3. luckin coffee – the first chinese coffee unicorn Page 38
Slide 140: PCM Business in China – Historical Timeline
PCM Business in China Historical Timeline WMF PCM China Groupe SEB acquires Continuous sales Outlook: WMF growth with a Accelerate multiple distributor End of partnership sales growth partnership network with DKSH for PCM 2016 2019 Till 2014 2005 2014 2018 Market Entry WMF KKR acquires WMF Appointme
Slide 141: Go-to-Market Model – Sales Channels
PCM Business in China Go-to-Market Model – Sales Channels Manufacturers Sales Channels Customers Consumers Example: Hotels KA Direct Restaurant Catering Travel Roasters value is Office created here Distributors QSR C-Store Hotel Projects Coffee Shop Page 40
Slide 142: Customer Success Stories in China
PCM Business in China Customer Success Stories in China C-Store C-Store QSR QSR Coffee Shop Bakery Page 41
Slide 143: Key Facts of WMF PCM Business in China
PCM Business in China Key Facts of WMF PCM Business in China Market Share Sales Mio. € 50 40 30 34 % 20 10 12 % 0 2014 2018 2014 2018 Installed Base Growth Rate (CAGR) 20000 2014 -> 2018 15000 10000 5000 63 % 0 2014 2018 Page 42
Slide 144: Agenda
Agenda 1. Coffee market in China - Market Size & Consumption - Specifics & our answers - Competitive landscape 2. PCM Business China 3. luckin coffee – the first Chinese coffee unicorn Page 43
Slide 145: luckin coffee – the first Chinese coffee unicorn
luckin coffee – the first Chinese coffee unicorn The extraordinary success story of luckin started just 12 month ago Nov. Jan. Jul. Nov. 2017 2018 2018 2018 Page 44
Slide 146: Expansion Rate in China – Starbucks vs. luckin coffee
luckin coffee – the first Chinese coffee unicorn Expansion Rate in China – Starbucks vs. luckin coffee 7000 6000 6000 STARBUCKS LUCKIN COFFEE 5000 4000 3300 2935 3000 2500 2000 2000 1000 0 2016 2017 2018E 2022E Page 45
Slide 147: Differences Starbucks vs. luckin
luckin coffee – the first Chinese coffee unicorn Differences Starbucks vs. luckin Affordability / Price Convenience Page 46
Slide 148: Multi-type store strategy - Any moment
luckin coffee – the first Chinese coffee unicorn Multi-type store strategy - “Any moment” “无限场景” ELITE 旗舰店 ELITE flagship store RELAX 悠享店 RELAX leisure store PICKUP 快取店 PICKUP express-pickup store KITCHEN 外卖厨房店 KITCHEN delivery kitchen store Page 47