1 October 2014
INVESTOR PRESENTATION
An amendment was made on page 19. 4th bullet point 1st sub-bullet point should read as “$9.0 million to be invested in store renovations”, instead of “$9.0 million to be invested in store renovations which will be acquired”. For further information please contact:
Sunbridge Group Limited Level 31, 120 Collins Street, Melbourne, Vic 3000 T: +613 9225 5077 F: +613 9225 5050 E: [email protected] www.sunbridge.com.au ABOUT SUNBRIDGE GROUP LIMITED
Sunbridge Group Limited (ASX: SBB) (“Company”) is a leading retailer of menswear in the People's Republic of
China (PRC). The Group owns and operates the “PANDIST邦迪.斯顿” and AGUESEADAN亚阁.仕丹” brands
of menswear, which are targeted at different age group segments of well-groomed upper middle class gentleman. The Group’s menswear products range from formal and business wear to casual and sporting apparel, and are currently sold in over 400 retail outlets across the PRC. As an integrated fashion enterprise, the Group is responsible for the design, sourcing and selling of their products. Founded in 1996, the Business has grown rapidly in recent years. The Group’s products are sold across an extensive distribution network, covering 28 provinces, autonomous regions and municipalities in the PRC and Hong Kong. The Group designs all of its clothing through its in-house design team but it outsources all of its production to Original equipment manufacturer (OEM) contractors which are located in the Guangdong and Wenzhou cities, which are well known apparel production hubs in the PRC. The Group believes that its outsourcing of production to third parties enables it to focus its valuable resources on key design, procurement, warehousing and distribution functions giving the Group a competitive edge. Quality is one of the Group’s top priorities, and the Group works closely with its OEM contractors to ensure that all of its apparel and accessories meet the high quality standards demanded by its target market.
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Sunbridge Group Limited ASX I HY2014 Investor Presentation October 2014
ASX:SBB
HY 2014 Results &
Company Presentation
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Sunbridge Group Limited ASX I HY2014 Investor Presentation 2
Company Snapshot
Jiayin Xu
Managing Director
Wayne Reid
Non-Executive
Chairman
Andrew Plympton
Non-Executive
Director
Ting Jiang
Non-Executive
Director
Dr. Qiangan Liu
Non-Executive
Director
Chow Yee Koh
Company Secretary
Market Capitalisation
Share Price as at 29 September) $0.085
Shares on Issue 471.1M
Market Cap $39M
Cash and cash equivalents $30.5M
Top 5 Shareholders
Jiayin Xu 54.94%
Citicorp Nominees Pty Ltd 13.53%
Finetrade International Limited 1.7%
Commsec Nominees Limited 1.05%
Picton Cove Pty Ltd 0.84%
Board of Directors
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Sunbridge Group Limited ASX I HY2014 Investor Presentation
Highlights
3
HY revenue of $43.8 million, up 31% PCP
NPAT up 11% to $6.75M vs $6.06 million in PCP
Strong cash and cash equivalents of $30.5 million
Company owned stores now number 24 – on track for 70 by year end
Products are distributed through over 420 authorised retail stores in the PRC
Second half sales in line with expectations
Pandist 2014 Collection
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Sunbridge Group Limited ASX I HY2014 Investor Presentation
Company Overview
4
• Sunbridge (ASX:SBB), designs, markets
and distributes high-quality business and
casual menswear – commenced trading
in 1996
• Two brands
• Pandist: 25 – 50 age group
• Agueseadan: 20 – 40 age group
• Introduces new designs for each season
to cater to changing trends
• Extensive distribution network:
• over 420 authorised retail stores
• 24 company-owned stores
• Products include suits, jackets, shirts,
trousers, sweaters and accessories and
are broadly divided into business formal,
business casual and fashion casual
100% 100%
100%
Corporate Structure
Mega Rich
International Creation
Limited
(HK incorporated)
Henjiasi Dress
Development Co., Ltd.
Jinjiang
Bangdisidun (Fujian)
Dress Development Co.,
Ltd.
Sunbridge Group Limited (Australia incorporated)
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Sunbridge Group Limited ASX I HY2014 Investor Presentation
Half-year results commentary
• Group NPAT of $6.75 million – up 11% from $AUD6.06 million in PCP
• Group revenue (excluding interest) up 31% to $43.8 million vs $33.4 million in PCP
• Group NPBT of $9.34 million, up 15% on PCP of $8.13 million
• FX translation loss impacting on comprehensive income of $AUD2.9 million
• Company-owned stores generated total revenues of $1.8 million, up from $0.7 million
• Balance sheet remains strong to fund growth - $30.5 million in cash and receivables
• Grew company-owned store network from 5 to 24
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Sunbridge Group Limited ASX I HY2014 Investor Presentation 6
Income Statement
HY2014 HY2013 Change
Revenue ($ million) 43.8 33.4 31.1%
Gross profit ($ million) 14.5 11.4 27.2%
EBIT ($ million) 9.3 8.1 14.8%
Net Profit ($ million) 6.8 6.1 11.5%
Basic EPS ($ cents) N/A N/A N/A
Profitability ratios
Gross margin 33.1% 34.1% -1.0 p.p.
EBIT margin 21.2% 24.3% -3.1 p.p.
Net margin 15.5% 18.3% -2.8 p.p. For
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Sunbridge Group Limited ASX I HY2014 Investor Presentation 7
A$ mil
Financial Performance
0
10
20
30
40
50
60
70
80
90
FY2010 FY2011 FY2012 FY2013 HY2014
Revenue Gross profit EBIT Net Profit
32.4% 34.2% 33.9% 33.8%
33.1%
22.0%
25.7%
28.9%
24.4%
21.9%
18.7%
22.0% 20.7%
17.5%
15.5%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
FY2010 FY2011 FY2012 FY2013 HY2014
Gross margin EBIT margin Net margin
43.8
14.5 9.3
6.75
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Sunbridge Group Limited ASX I HY2014 Investor Presentation 8
Consolidated Balance Sheet
Pandist 2014 Collection
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Sunbridge Group Limited ASX I HY2014 Investor Presentation 9
Cash Flow Statement
27.9
10
-1.6 -4 -1.9
30.5
-20
-10
0
10
20
30
40
50
60
70
80
Cash and cash equivalents
Cash and cash equivalents at 1 January Net cash from operating activities Net cash used in investing activities
Net cash provided by financing activities Effect of foreign exchange rate changes Cash and cash equivalents at 30 JuneFor
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Sunbridge Group Limited ASX I HY2014 Investor Presentation 10
Showcase Centre
• A 8-storey company headquarters near complete – total build cost of $2 million – $1.5m already expensed in the first half
• $500,000 in completion and fit out costs to be expensed in current half
• Building will be multi-purpose and income generating – will include new retail offering
• Warehousing facilities being doubled to facilitate store expansion
Artist impression of office building
Investment in Offices & Warehousing to drive growth F
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Sunbridge Group Limited ASX I HY2014 Investor Presentation 11
15,780.8 17,174.7 19,109.4 21,809.8
24,565.0 28,099.5
32,064.0 36,437.4
41,334.3 46,814.5
8.8%
11.3%
14.1%
12.6%
14.4% 14.1% 13.6% 13.4%
13.3%
0%
2%
4%
6%
8%
10%
12%
14%
16%
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
2008 2009 2010 2011 2012 2013 2014F 2015F 2016F 2017F
Per capital annual disposable income of urban households in China (RMB) Growth Rate
• As a result of China’s rapid economic growth and urbanisation disposable income has increased rapidly
• From 2008 to 2012, per capita urban household annual disposable income grew from RMB15,780.8 to RMB24,565.0-
CAGR of 11.7%
• China’s per capita urban household annual disposable income is estimated to reach RMB46,814.5 in 2017, representing an
estimated CAGR of 13.8% from 2012 to 2017
Increasing Urban Household Disposable Income
RMB
Source:NBSC, Frost&Sullivan
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Sunbridge Group Limited ASX I HY2014 Investor Presentation 12
Growth of the PRC Menswear Market
• Per capita consumption of menswear in the PRC increased to RMB806.5 in 2012 from RMB474.3 in
2008, representing a CAGR of 14.2%
• China’s per capita menswear consumption is expected to reach RMB1,654.8 in 2017, representing an
estimated CAGR of 15.5% from 2012 to 2017
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Sunbridge Group Limited ASX I HY2014 Investor Presentation 13
Pandist 2014 Collection F
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Sunbridge Group Limited ASX I HY2014 Investor Presentation 14
Aguesadan Products F
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Sunbridge Group Limited ASX I HY2014 Investor Presentation
Nationwide Distribution Network
15
• Over 420 stores across China including 24 self owned and operated stores
• Largest number of stores in coastal regions such as Jiangsu, Guangdong and Fujian provinces
Number of sales outlet growing at CAGR of 5.3% for FY2010 to FY2013
330
340
350
360
370
380
390
400
410
420
FY2010 FY2011 FY2012 FY2013
No of outlets
Distribution Coverage Retail Outlets
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Sunbridge Group Limited ASX I HY2014 Investor Presentation
Continued investment in marketing & branding
16
Increased spending on regional advertising
Sponsoring 2014 Asian Beach
Volleyball Championship
Advertising through Fashion Magazine &
Direct Marketing investment
Continued to upgrade retail outlets to
enhance and reinforce brand image
Commercial TV advertisement
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Sunbridge Group Limited ASX I HY2014 Investor Presentation
Product Design and Development
• In-house design team are based in
Guangzhou and Wenzhou which are
known as the apparels manufacturing
hubs of the PRC, and work closely with
OEM manufacturers
• Continued to develop new fabrics in close
cooperation with it suppliers
• Brought about 400 new Pandist products
to market for each season
• Pandist was honored with “the Most
Innovation Brand Award” in 2013
17
New generation flagship store design
Flagship store in Jinjiang
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Sunbridge Group Limited ASX I HY2014 Investor Presentation 18
Strategies
Brand Building
Sales Network Manage-
ment
Expand online sales
Product and fabric R&D
M&A opportunities
Our work in 2014
•Continue to increase advertising and promotion
activities to build-up and raise brand image
•Tie up with department store chain operators (e.g.
Vans and SM) and large wholesale distributors to
increase distribution network and sales
•Increase number of self-operated retail outlets
(either through new set-up or acquire from existing
retailers) to have better control over product
inventory, pricing, brand image and service
standards
•Establish online retail platform
•Escalate R&D efforts and increase proportion of
innovative products
•Explore M&A or business opportunities in Australia For
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Sunbridge Group Limited ASX I HY2014 Investor Presentation
Outlook & Growth Strategy
• Revenue and profit for second half in line with expectations
• Sales are stable with first few trading months
• SBB to deploy cash on hand of $30.5 million to drive growth
• Total investment of $16 million by end of calendar 2014:
• $9.0 million to be invested in store renovations
• $4.0 million on new store openings and acquisitions
• $3.0 million worth of short term loans to be repaid
• New objective of 70 company-owned stores by calendar year end
• SBB well positioned for growth in current half and beyond
19
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Sunbridge Group Limited ASX I HY2014 Investor Presentation 20
The information contained in this presentation is intended solely for your personal reference. Such information is subject to change without notice, its accuracy is not guaranteed and it may not contain all material information concerning Sunbridge Group Limited (the “Company”). The Company makes no representation regarding, and assumes no responsibility or liability for, the accuracy or completeness of, or any errors or omissions in, any information contained herein.
In addition, the information contains projections and forward-looking statements that reflect the Company’s current views with respect to future events and financial performance. These views are based on current assumptions which are subject to various risks and which may change over time. No assurance can be given that future events will occur, that projections will be achieved, or that the Company’s assumptions are correct. It is not the intention to provide, and you may not rely on this presentation as providing, a complete or comprehensive analysis of the Company’s financial or trading position or prospects.
This presentation does not constitute an offer or invitation to purchase or subscribe for any securities or financial instruments or to provide any investment service or investment advice, and no part of it shall form the basis of or be relied upon in connection with any contract, commitment or investment decision in relation thereto.
Disclaimer F
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Sunbridge Group Limited ASX I HY2014 Investor Presentation 21
ASX: SBB
Contact Details
Registered Office Level 31, 120 Collins Street,
Melbourne, Victoria 3000
Head Office No 11 Longhu, Shaohui Industrial Area, Jinjiang
City, Fujian Province, PRC
Website www.sunbridge.com.au
Tel 0411 397 819
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