2019 Interim Results

 Revenue rose by 13%¹ to HK$7.9 billion

Net profit up by 5.4% to HK$440 million

(18 July 2019 – Hong Kong) Vinda International Holdings Limited (stock code: 3331) announced today its unaudited interim results for the six months ended 30 June 2019.

2019 Interim Results Highlights:

–       Double-digit organic growth¹ in revenue despite challenging business environment

·    • Double-digit organic growth at 13%

·    • Mainland China’s organic growth at 15%

·    • Total revenue increased by 7.6% to HK$7.9 billion, driven by strong sales in all regions particular in mainland China

·   • Double-digit organic growth in e-commerce and B2B channel

·    • Strong performance of premium tissue portfolio and personal care in China

–        Improved gross margin thanks to favorable wood pulp price, continuous mix improvement and high-margin products focus

·    • Gross margin in 1H2019 was 28.1%, up by 1.5 percentage points compared to that in 2H2018

·    • Gross margin in 2019Q2 was 30%, 3.7 ppts higher than that in 2019Q1

·    Net profit increased by 5.4% to HK$440 million.

·    An interim dividend of 7 HK cents per share has been declared (1H2018: 6 HK cents per share)

–        Tissue segment

·    • Revenue from the Tissue segment amounted to HK$6.5 billion at a constant exchange rate of 15.5%, accounting for 82% of the Group’s total revenue

·   • Continued to optimise the Tissue portfolio by focusing on the promotion of higher-margin products such as Vinda Deluxe, Vinda Ultra Strong and Tempo

–        • Recorded double-digit growth in revenue from softpack, kitchen towel and wet wipes

–       Personal Care segment

·    • Revenue from the Personal Care segment reached HK$1.4 billion at a constant exchange rate of 2.9%, accounting for 18% of the Group’s total revenue

·    • Streamlined and repositioned the feminine care brand by relaunching Libresse in mainland China

–        Production capacity expansion to support growth

·   • Annual designed production capacity for tissue paper amounted 1.22 million tons as of 30 June 2019. Annual designed production capacity for tissue paper is expected to reach 1.25 million tons by the end of 2019

Mr. Christoph Michalski, CEOsaid, “We are glad that the Group achieved double-digit organic growth in revenue and gross margin recorded quarter on quarter improvement despite the fierce competition. The launch of Libresse and TENA pants in June marked another milestone for us. Both series are now self-produced in mainland China. Our strategy has not changed and we will continue to operate focusing on five areas below: 1) we will continue to step up our effort to innovate, focus on value-added portfolio and product differentiation to enhance the brand competitiveness and broaden the profit margins. 2) we will capture the growth opportunities by leveraging our competitive edge in e-commerce channel, efficient sales execution and channel expansion to add impetus to personal care business. 3) we will keep up efforts on cost-control while ensuring the wise use of budgets and precise use of resources. 4) we will continue to strengthen our production and operational efficiency, while keeping our production capacity expansion on track for sustainable growth. 5) we will strive to maintain a healthy financial position, good cash generation ability and improve the management of working capital so as to ensure the profitability of our products.” 

Mr. Li Chao Wang, Chairman said, “Our focus in this year is ‘Year of Excellence, Year of Personal Care’, highlighting the importance of excellence in sales execution, brand management, product innovation and operational efficiency. While driving growth in our core tissue business, we will also build on the good progress in developing our personal care business in mainland China. We will maintain the profitability of our products and strive to be a sustainable and risk-resilient company.”

  1. Remark 1: Organic growth: Year on year growth at a constant exchange rate