Kingdee International Software Group Co., Ltd. · HKEX:268
Kingdee International Software — Investor Presentation (January 2014)
43 slides from Kingdee International Software's investor presentation, January 2014
Slide 1: Kingdee International Corporate Presentation
Kingdee International Corporate Presentation Stock Code: HK 268 January, 2014 Kingdee International Software Group Company Limited © 1993-2013 P1
Slide 2: Disclaimer
Disclaimer All information contained in this Presentation is provided for reference only. Some information relates to forward-looking statements of future events or future financial, business or development of the Company and are subject to various risks and uncertainties that could cause actual res
Slide 3: Agenda
Agenda Company Highlights Kingdee Strategy Financial and Business Review Cloud Initiatives Appendix: Financial Results Summary P3
Slide 4: Company Snapshot
Company Snapshot Kingdee is a leading provider of ERP software in China • ERP (Enterprise Resource Planning) is the integrated suite of software necessary to operate core business processes, connecting accounting, sales transactions, inventory, HR, customer relationship management (CRM) and other si
Slide 5: Investment Highlights
Investment Highlights Tremendous growth potential and huge market for the enterprise software industry in China • The Chinese enterprise software industry is expected to reach a size of US$14 billion, and Chinese ERP market is expected to reach US$1.6bn by 2016 (According to Gartner) • SME is still
Slide 6: Accolades
Accolades “No.1 market share for nine consecutive years in the Chinese market of ERP software for small and medium business” - by IDC “No. 1 of the Top of Mindness Ranking of Chinese ERP software developers” - China Management Software and Implementer Appraisal by the Institute of AMT “No. 1 of Chin
Slide 7: Positive Industry Outlook
Positive Industry Outlook 14.0 1.6 12.3 1.4 10.8 1.2 9.5 8.3 1.0 7.3 0.8 6.3 0.7 5.2 0.6 0.5 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 Inflation and higher labor cost push Chinese enterprises/SMEs to enhance their core competitiveness and management efficiency “
Slide 8: Product Overview
Product Overview Targeted Product type Product description customers Entry level standalone CD-ROM product to address the essential business Kingdee KIS application requirements of small enterprises. Only sold through indirect sales Small & Medium (“Keep it channel Enterprise Resource Planning (ER
Slide 9: Solid and Growing Customer Base
Solid and Growing Customer Base Manufacturing Conglomerate Real Estate F&B Healthcare Other Industries P9
Slide 10: Kingdee Strategy
Agenda Company Highlights Kingdee Strategy Financial and Business Review Cloud Initiatives Appendix: Financial Results Summary P10
Slide 11: Kingdee Strategy
Kingdee Strategy B2B B2B2C Focus on core strength of selling ERP software and investment in cloud platform Cloud platform allows a) upselling opportunities by leveraging demand for mobile solutions (under a subscription based revenue model) to complement traditional ERP; b) cross selling opportuni
Slide 12: Kingdee Strategy
Kingdee Strategy B2B B2B2C Industry Enterprise Mobile 3rd-Party Internet eHR Apps Solutions Apps Service CRM Youshang Maintenance Upgrades .com1 K/3 Cloud Cloud KIS K/3 EAS Management ERP Tremendous Cross- Selling Opportunities App Cloud Cloud M Store Hub Kingdee Cloud Platform BOS Cloud 1. Yousha
Slide 13: 2013 Business Strategy
2013 Business Strategy Well-Position to Drive Improved Profitability and Growth • Sales pipeline remains healthy • See some areas of improvement and expect pent-up demand as markets recover • Build upon large and growing customer base to sustain growth Focus on Growth Drivers, Innovation and Cloud M
Slide 14: Financial and Business Review
Agenda Company Highlights Kingdee Strategy Financial and Business Review Cloud Initiatives Appendix: Financial Results Summary P14
Slide 15: 1H13 Summary
1H13 Summary Leaner, Stronger, Faster: Significant Margin Improvement • “Leading-Product, Partner-First” strategy successfully improved sales executions, product mix and margins • Focused on cross-selling products, growing recurring revenues from subscription, maintenance and deepening relationships
Slide 16: Financial Highlights
Financial Highlights (RMB’000) 2013 1H 2012 1H Change Revenue 744,847 779,719 -4.5% Gross Profit 556,067 534,861 4.0% Gross Margin 74.7% 68.6% 6.1pts Operating Profit Excluding 61,102 -205,846 n/a Financial Costs - Net Operating Profit Before Tax 9,094 -224,891 n/a Tax Expenses -6,159 -906 579.8% Ne
Slide 17: Revenue Breakdown by Products
Revenue Breakdown by Products 250,000 (RMB’000) 200,000 2012 1H 2013 1H 150,000 100,000 50,000 0 KIS K/3 EAS APUSIC Others Growth rate 19.5% * -3.1% -8.9% -1.8% -33.5% Revenue including software licensing + implementation services * During 1H13, the company re-classified K/3 RISE to KIS flagship. KI
Slide 18: Revenue Breakdown by Segments
Revenue Breakdown by Segments Others 4% Others 6% Maintenance 23% Maintenance Training 21% 1% Sales of Sales of Software Software Training Implementation 49% Implementation 49% 1% 22% 21% Consulting 1% Consulting 2% (RMB’000) 2013 1H % of Turnover 2012 1H % of Turnover Change Sales of software licen
Slide 19: Software Revenue by Sales Channel
Software Revenue by Sales Channel In-Direct Sales In-Direct Sales 57% Direct Sales 44% Direct Sales 43% 56% % of % of % of % of (RMB’000) 2013 1H Software 2012 1H Software Change Turnover Turnover Revenue Revenue Direct sales 157,081 43.0% 21.1% 212,816 55.7% 27.3% -26.2% In-direct sales 208,547 57.
Slide 20: Operating Expenses Trending Down
Operating Expenses Trending Down 80.2% 60.9% 60.7% 58.3% (% of Revenue) 53.6% S&M 514 715 626 528 434 (RMB mn) 1H11 2H11 1H12 2H12 1H13 -31% y/y 17.0% 15.2% 12.3% 12.8% 11.9% 11.3% 10.9% 10.0% 9.9% R&D 7.2% G&A 84 85 93 108 126 104 151 118 99 84 1H11 2H11 1H12 2H12 1H13 1H11 2H11 1H12 2H12 1H13 +37%
Slide 21: Increase Productivity Per Head
Increase Productivity Per Head Total number of staff 9,203 8,932 8,483 8,277 8,158 8,031 7,755 7,687 7,493 7,182 6,941 6,815 6,723 Jun. Jul. Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May Jun. Reduced headcount by 13.3% to 6,723 employees in 1H13 With the closure or transfer of 14 sales branches t
Slide 22: Cloud Management Growth Momentum
Cloud Management Growth Momentum [ RMB 18.5 mn +200% y/y [ 70,000+ Enterprise Internet Business +RMB 9.0mn 60 Mobile Apps Mobile Apps +RMB 4.5mn 70,000+ mobile phones K/3 Cloud +RMB 5.0mn 10,000+ daily activations Cross-sell +RMB 80mn ERP contract Cloud Hub kdweibo.com 500,000+ The biggest Enterpris
Slide 23: Kingdee Software Parks
Kingdee Software Parks Kingdee has 3 software parks in strategic locations to gain customers and attract talents. Total Area Software Parks (m2) Year Completed Primary Use Location ~60,000 2009 — Kingdee headquarter Nanshan district, Shenzhen — For lease Shenzhen Software Park ~27,000 2008 — Kingdee
Slide 24: Cloud Initiatives
Agenda Company Highlights Kingdee Strategy Financial and Business Review Cloud Initiatives Appendix: Financial Results Summary P24
Slide 25: Investing in Innovation
Investing in Innovation Feb. Jun. Jul. Sep. KIS Flagship V1.0 EAS Financial Shared Services KIS Commerce V5.0 OA V6.2 EAS 4S V1.5 EAS Expense Budget KIS Standard V9.1.1 KIS Professional V12.2 K/3 Retail V12.3 EAS Cash Management KIS Mini V9.1.1 K/3 Apparel 12.3 K/3 Cloud V2.0 / Public Cloud KIS Inte
Slide 26: Cloud Management, Streamline Business Process
Cloud Management，Streamline Business Process Work Work Mobile Time Mobile Contacts CRM Mobile Mobile Mobile Mobile Mobile Flow Flow HR Mgmt Order Order Report Budget Inventory Request Rev. Expense Cash Business Insight Insight Insight Trip Collaboration Mobile Sales Mobile Mobile Sales Field Mobile
Slide 27: Computing Evolution
Computing Evolution High Y2K Global Financial Performance Crisis Computing Oracle & SAP Global share price Handset Act of 1991 record high Android 1.4B units Windows 95 Launched released Global iPad PC 1B launched Amazon & iPhone units eBay online launched Salesforce.com Salesforce.com Internet foun
Slide 28: Computing Evolution
Computing Evolution Cloud Mainframe Client/Server Computing Essentially Free Software Software license model Subscription model P28
Slide 29: Kingdee Strategy
Kingdee Strategy B2B B2B2C Cloud Management ERP Tremendous Cross- Selling Opportunities Kingdee Cloud Platform P29
Slide 30: Kingdee Strategy
Kingdee Strategy B2B B2B2C Enterprise Mobile 3rd-Party Industry Internet eHR Apps Solutions Apps Service CRM Youshang .com K/3 Maintenance Upgrades Cloud Cloud KIS K/3 EAS Management ERP Tremendous Cross- Selling Opportunities App Store Cloud Hub Kingdee Cloud Platform Cloud BOS M Cloud P30
Slide 31: Growth Opportunity
Growth Opportunity EAS K/3 KIS Industry Solutions Implementation Maintenance Cloud Mgmt P31
Slide 32: Growth Opportunity
Growth Opportunity License + Supports + Upgrades Cloud Hub Cloud + Terminals EAS K/3 Youshang.com KIS Mobile Industry Solutions Implementation SaaS Maintenance Cloud Mgmt P32
Slide 33: Growth Opportunity
Growth Opportunity New Innovations New Services License + Supports App Store + Upgrades Cloud Hub Cloud + Terminals EAS K/3 Youshang.com KIS Mobile Industry Solutions Implementation SaaS Maintenance Cloud Mgmt P33
Slide 34: Appendix: Financial Results Summary
Agenda Company Highlights Kingdee Strategy Financial and Business Review Cloud Initiatives Appendix: Financial Results Summary P34
Slide 35: Turnover by Segments
Turnover by Segments % of (RMB’000) 2013 1H % of Turnover 2012 1H Change Turnover Sales of software 365,628 49.1% 381,672 48.9% -4.2% license - KIS 100,559 13.5% 84,149 10.8% 19.5% - K/3 148,849 20.0% 155,537 19.9% -4.3% - EAS 88,010 11.8% 107,577 13.8% -18.2% - APUSIC 16,542 2.2% 16,853 2.2% -1.8%
Slide 36: Other Gains
Other Gains (RMB’000) 2013 1H 2012 1H Change VAT refund 62,179 71,916 -13.5% Government grant 38,326 8,825 334.3% Rental income - net 18,107 12,861 40.8% Re-measurement of the contingent consideration for 22,347 - n/a business combinations Others 9,358 1,966 376.0% Total 150,317 95,568 57.3% VAT % o
Slide 37: Selling & Marketing Expenses
Selling & Marketing Expenses (RMB’000) 2013 1H 2012 1H Change Advertising and marketing 46,670 86,919 -46.3% Sales promotion 37,207 58,627 -36.5% Sales commission expenses 36,182 46,769 -22.6% Salary of sales persons 204,002 297,519 -31.4% Outsourcing service fees 44,987 48,909 -8.0% Traveling 16,22
Slide 38: R&D & Administrative Expenses
R&D & Administrative Expenses (RMB’000) 2013 1H 2012 1H Change Salaries and staff welfare 154,595 148,566 4.1% Option expense 14,061 11,133 26.3% Professional service fee 7,058 8,829 -20.1% Traveling 5,168 5,969 -13.4% Meeting expenses 793 1,076 -26.3% Provision for doubtful debts -1,344 4,118 -132.
Slide 39: Balance Sheet Overview
Balance Sheet Overview (RMB’000) 30 Jun. 2013 31 Dec. 2012 Change Trade and other receivables 246,985 234,045 5.5% Cash at bank and in hand 659,432 898,002 -26.6% Total assets 3,825,380 3,981,350 -3.9% Current assets 1,437,090 1,562,527 -8.0% Borrowings 1,602,541 1,590,641 0.7% Trade and other payab
Slide 40: Cashflow Overview
Cashflow Overview Unaudited Six months ended 30 June (RMB'000) 2013 2012 Operating Cash Flows (RMB’000) Cash flows from operating activities 2008 285,675 Cash generated from operations 62,378 (174,090) 2009 215,345 Interest paid (40,647) (20,099) Income tax paid (857) (5,759) 2010 294,337 Net cash g
Slide 41: Thanks Q & A
ありがとう 感謝 ขอบคุณ Thanks 谢谢 terima kasih Q&A P41
Slide 42: Thanks
ありがとう 感謝 ขอบคุณ Thanks 谢谢 terima kasih Kingdee International Software Group Company Limited © 1993-2013 P42
Slide 43: Contact Us
Contact Us Branden Chen General Manager Investor Relations & Securities Dept. 86 (755) 8659 5896 [email protected] Summer Gan Director Investor Relations & Securities Dept. 86 (755) 8607 2596 [email protected] Yoriko Huang Assistant Manager Investor Relations & Securities Dept. 86 (755)
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