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2009 Q1 Results Announcement
May 2009
Disclaimer
This presentation and the accompanying slides (the “Presentation”) which have been prepared by GOME
Electrical Appliances Holding Limited (“GOME” or the “Company”) do not constitute any offer or invitation to
purchase or subscribe for any securities, and shall not form the basis for or be relied on in connection with any
contract or binding commitment whatsoever. They are only being furnished to you and may not be photocopied,
reproduced or distributed to any other persons at any time without the prior written consent of the Company. This
Presentation has been prepared by the Company based on information and data which the Company considers
reliable, but the Company makes no representation or warranty, express or implied, whatsoever, and no reliance
shall be placed on, the truth, accuracy, completeness, fairness and reasonableness of the contents of this
Presentation. This Presentation may not be all inclusive and may not contain all of the information that you may
consider material. Any liability in respect of the contents of or any omission from this Presentation is expressly
excluded.
Certain matters discussed in this presentation may contain statements regarding the Company’s market
opportunity and business prospects that are individually and collectively forward-looking statements. Such
forward-looking statements are not guarantees of future performance and are subject to known and unknown risks,
uncertainties and assumptions that are difficult to predict. The Company’s actual results, levels of activity,
performance or achievements could differ materially and adversely from results expressed in or implied by this
Presentation, including, amongst others: whether the Company can successfully penetrate new markets and the
degree to which the Company gains traction in these new markets; the sustainability of recent growth rates; the
anticipation of the growth of certain market segments; the positioning of the Company’s products and services in
those segments; the competitive environment; and general market conditions. The Company assumes no
obligation to update any forward-looking information contained in this presentation. Any forward-looking
statements and projections made by third parties included in this Presentation are not adopted by the Company
and the Company is not responsible for such third-party statements and projections.
ANNUAL RESULTS 2008 | Page 2
Table of Contents
Financial Review 2009 Q1
Business Review 2009 Q1
ANNUAL RESULTS 2008 | Page 3
Financial Review
2009 Q1
ANNUAL RESULTS 2008 | Page 4
Income Statement Summary
RMB Million 2008 Q1 2009 Q1 Change %
Revenue 12,176 9,801 (19.51%)
Consolidated Gross profit 1,870 1,549 (17.17%)
Profit from Operating Activities 532 321 (39.66%)
Profit before Tax 641 395 (38.38%)
Net Profit Attributable to Shareholders 513 322 (37.23%)
Consolidated Gross Profit Margin 15.36% 15.80% 0.44 Percentage Pts
Operating Profit Margin 4.37% 3.28% (1.09) Percentage Pts
Effective Tax Rate* 17.54% 17.47% (0.07) Percentage Pts
Net Profit Margin (Attributable to the Parent) 4.21% 3.29% (0.92) Percentage Pts
ANNUAL RESULTS 2008 | Page 5
* Effective Tax Rate = Tax charge/ PBT add back non-tax deductible items
Consolidated Gross Margin and Other Income
Analysis
RMB Million
2,000 15.36% 20%
18%
15.81%
16% Sublease Others
Government
14% Subsidy Income 8%
726
1% 3%
587
12%
1,000 10%
Air- Conditioner
8%
Installation Fee
1,145 6% 6%
962
4%
2% Management Fee from
Non-listed Gome Group
0 0%
7% Suppliers
2008 Q1 2009 Q1
75%
Other Income
Gross Profit
Consolidated Gross Margin
ANNUAL RESULTS 2008 | Page 6
Operating Expenses Analysis
As a percentage of Revenue:
12.5％
0.6% Other Operating
11%
1.3% Expenses 0.6％
Other Operating
1.3% Expenses 1.3％ 0.6% Administrative
Expenses 1.9％
Administrative 1.1%
1.1%
Expenses 1.5％ 0.8%
0.4%
0.8% 0.4%
0.4%
0.7%
0.4%
2.4%
0.8%
1.5%
Selling & Distribution
Selling & Distribution Expenses 10.0％
Expenses 8.2％
5.0%
4.0%
2008 Q1 2009 Q1
Rent Sales Salaries Advertising
Delivery Utilities Other S&D expenses
Administrative Salaries Other Administrative expenses Other expenses
ANNUAL RESULTS 2008 | Page 7
Business Review
2009 Q1
ANNUAL RESULTS 2008 | Page 8
Key Factors Impacting 2009 Q1 Performance
We saw consumer sentiment remaining weak throughout Q1 2009,
exerting downward pressure on volume growth.
ASPs continued to be under pressure during the reporting period.
However, revenue and net profit recovered in Q1 2009 as compared to Q4
2008.
ANNUAL RESULTS 2008 | Page 9
Operating Scale
Number of Stores Revenue 45,889
859 816 RMB million 42,479
726
572
24,729
17,959
259 12,176
9,801
2005 2006 2007 2008 1Q2009 2005 2006 2007 2008 1Q2008 1Q2009
Store Network Coverage Sales Area at Period End
Number of Cities Sq.m. 3,120,000 3,002,863
205 205
182 2,640,000
160 2,220,000
69 1,057,000
2005 2006 2007 2008 1Q2009 2005 2006 2007 2008 1Q2009
ANNUAL RESULTS 2008 | Page 10
Continued Improvement in Consolidated Gross Profit
Margin
20.0% 17.67%
16.77% 17.26%
17.5% 16.22% 16.41%
14.02%
15.0% 17.67%
15.78% 15.36%
14.98% 15.80%
12.5% 13.29%
12.90%
10.0%
7.5%
5.0%
2.5%
0.0%
06Q1
06Q2
06Q3
06Q4
07Q1
07Q2
07Q3
07Q4
08Q1
08Q2
08Q3
08Q4
09Q1
Strategies to stabilize and improve margins
Differentiation of Product Mix Increased sales of accessories
Optimization of Suppliers’ Contracts Extended Warranties
ANNUAL RESULTS 2008 | Page 11
Notes： Consolidated Gross Margin = (Gross Profit + Other Income) / Sales
Revenue Mix by Product
Audio Visual
5.47% 5.20% Refrigerators & Washing
7.23%% 7.74% Machines
34.10% Telecom
33.9%
9.56% 9.78%
Small Electrical Appliances
11.84% 11.71% Air Conditioners
18.26%
18.11%
Digital Products
13.89% 13.21%
IT
2008Q1 2009 Q1
Total: RMB 12.18 billion Total: RMB 9.8 billion
ANNUAL RESULTS 2008 | Page 12
3C products include Telecom ( Mobile Handsets), IT (Computers), Digital Products ( Digital Cameras and Camcorders)
Continuous Improvement in Gross Profit Margin by
Product
2008Q1
15.0% 13.43% 2009Q1
12.64%
10.52%
10.05% 8.91%
9.65% 10.05% 8.96%
10.0% 8.61% 8.52% 7.71%
7.64% 6.02%
5.70%
5.0%
0.0%
AV
Air Con
Appliances
Refrigerator
Telecom
& Washing
IT
Digital
Electrical
Machine
Small
ANNUAL RESULTS 2008 | Page 13
Stable Supplier Relationships
Top 5 Suppliers' Contribution to GOME's Purchases for 2008 Q1
32.5%
9.1% 8.0% 6.5% 4.7% 4.2%
Haier Samsung Sony Nokia Midea Total Top 5
Top 5 Suppliers' Contribution to GOME's Purchases for 2009 Q1 31.0%
9.4% 7.9% 4.8% 4.6% 4.4%
Haier Samsung Sony Midea Nokia Total Top 5
ANNUAL RESULTS 2008 | Page 14
More Room for Operating Efficiency Improvement
Same-Store Sales Growth (YoY) Sales per sq.meter
5.00% 3.11% RMB/sq.m.
1.63%
0.00%
6,000
2005 2006 2007 2008Q4 2009Q1
-2.50% 5,000
-5.00%
4,000
-10.00%
3,000
-15.00%
2,000
-20.00%
-20.75% 1,000
-25.00% Note: There were 604 comparable
stores in Q1 2009 0
-30.00%
1Q06
2Q06
3Q06
4Q06
1Q07
2Q07
3Q07
4Q07
08Q1
08Q2
08Q3
08Q4
09Q1
-35.00%
-36.00%
-40.00%
The decrease in same store sales was due to depressed sales volume and significant decline of ASP in
09Q1 as a result of the continuing global financial crisis and weak consumer sentiment. However, the
decrease was less than Q4 2008 and sales per sq. meter were slowly recovering in Q1.
The company will continue its strategic transformation from rapid store network expansion to individual
store productivity improvement, focusing on improving the SSS and sales per sq. meter in the rest of 2009.
ANNUAL RESULTS 2008 | Page 15
Thank You
ANNUAL RESULTS 2008 | Page 16
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