Fourth Quarter 2017 Financial Highlights
Fourth quarter 2017 Operational Highlights
Fiscal Year 2017 Financial Highlights
Fiscal Year 2017 Operational Highlights
"We closed out the year with another quarter of outstanding financial and operational results which were primarily driven by growth from our existing online stores, the expansion of our portfolio of brand partners, and the expanding array of innovative technologies we offer our brand partners." commented Mr.
Mr. Beck Chen, Chief Financial Officer of
Fourth Quarter 2017 Financial Results
Total net revenues were RMB1,565.4 million (US$240.6 million), an increase of 23.0% from RMB1,272.5 million in the same quarter of last year.
Product sales revenue was RMB782.8 million (US$120.3 million), an increase of 1.5% from RMB771.0 million in the same quarter of last year. The increase was primarily attributable to the increased popularity of brand partners' products and Baozun's increasingly effective marketing and promotional campaigns, which were partially offset by a decrease in product sales revenue resulting from the transition of a leading electronics brand partner's business from the distribution model to the consignment model.
Services revenue was RMB782.6 million (US$120.3 million), an increase of 56.0% from RMB501.5 million in the same quarter of last year. The increase was primarily attributable to the rapid growth of the Company's consignment model and service fee model, and in particular, growth in sales of existing brand partners and the addition of new brand partners in the apparel category.
Total operating expenses were RMB1,389.7 million (US$213.6 million), compared with RMB1,209.6 million in the same quarter of last year.
Income from operations was RMB175.7 million (US$27.0 million), compared with RMB62.9 million in the same quarter of last year. Operating margin was 11.2%, compared with 4.9% in the same quarter of last year.
Non-GAAP income from operations was RMB189.9 million (US$29.2 million), compared with RMB72.0 million in the same quarter of last year. Non-GAAP operating margin was 12.1%, compared with 5.7% in the same quarter of last year.
Net income attributable to
Non-GAAP net income attributable to
Fiscal Year 2017 Financial Results
Total net revenues were RMB4,148.8 million (US$637.7 million), an increase of 22.4% from RMB3,390.3 million in fiscal year 2016.
Product sales revenue was RMB2,257.6 million (US$347.0 million), an increase of 3.7% from RMB2,176.4 million in fiscal year 2016. The increase was primarily attributable to the increased popularity of brand partners' products and Baozun's increasingly effective marketing and promotional campaigns, which were partially offset by a decrease in product sales revenue resulting from the transition of a leading electronics brand partner's business from the distribution model to the consignment model.
Services revenue was RMB1,891.2 million (US$290.7 million), an increase of 55.8% from RMB1,213.8 million in fiscal year 2016. The increase was primarily attributable to growth in sales of existing brand partners as they expand their online presence and the addition of new brand partners in the apparel category.
Total operating expenses were RMB3,892.5 million (US$598.3 million), compared with RMB 3,300.2 million in fiscal year 2016.
Income from operations was RMB256.3 million (US$39.4 million), compared with RMB90.1 million in fiscal year 2016. Operating margin was 6.2%, compared with 2.7% last year.
Non-GAAP income from operations was RMB315.3 million (US$48.5 million), compared with RMB124.3 million in fiscal year 2016. Non-GAAP operating margin was 7.6%, compared with 3.7% last year.
Net income attributable to
Non-GAAP net income attributable to
As of
Business Outlook
The Company expects total net revenues to be between RMB860 million and RMB890 million for the first quarter of 2018.
While the Company is transitioning more of its business from the distribution model towards the non-distribution model,
Conference Call
The Company will host a conference call to discuss the earnings at
Dial-in numbers for the live conference call are as follows:
International | +852 3027 6500 | |||||
U.S. Toll Free | +1 855-824-5644 | |||||
Mainland China Toll Free | 4008-210637 | |||||
Hong Kong | 3027 6500 | |||||
Passcode: 37425698# | ||||||
A telephone replay of the call will be available after the conclusion of the conference call through
Dial-in numbers for the replay are as follows:
International Dial-in | +852 3027-6520 | |||||||
U.S. Toll Free | +1 646-982-0473 | |||||||
Passcode: 319284839 | ||||||||
A live and archived webcast of the conference call will be available on the Investor Relations section of Baozun's website at http://ir.baozun.com/.
Use of Non-GAAP Financial Measures
In evaluating the Company's business, the Company considers and uses non-GAAP net income/(loss) from operations, non-GAAP operating margin, non-GAAP net income/(loss), non-GAAP net margin, non-GAAP net income (loss) attributable to
The Company presents the non-GAAP financial measures because they are used by the Company's management to evaluate the Company's operating performance and formulate business plans. Non-GAAP income/(loss) from operations and non-GAAP net income/(loss) enable the Company's management to assess the Company's operating results without considering the impact of share-based compensation expenses and amortization of intangible assets resulting from business acquisition. The Company also believes that the use of the non-GAAP measures facilitate investors' assessment of the Company's operating performance.
The non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. The non-GAAP financial measures have limitations as analytical tools. One of the key limitations of using non-GAAP income/(loss) from operations and non-GAAP net income/(loss) is that they do not reflect all items of income and expense that affect the Company's operations. Share-based compensation expenses and amortization of intangible assets resulting from business acquisition have been and may continue to be incurred in the Company's business and is not reflected in the presentation of non-GAAP income/(loss) from operations and non-GAAP net income/(loss). Further, the non-GAAP measures may differ from the non-GAAP measures used by other companies, including peer companies, and therefore their comparability may be limited. In light of the foregoing limitations, the non-GAAP net income/(loss) from operations, non-GAAP operating margin, non-GAAP net income/(loss), non-GAAP net margin, non-GAAP net income (loss) attributable to
The Company compensates for these limitations by reconciling the non-GAAP financial measures to the nearest U.S. GAAP performance measures, which should be considered when evaluating the Company's performance. For reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures, please see the section of the accompanying tables titled, "Reconciliations of GAAP and Non-GAAP Results."
Safe Harbor Statements
This news release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "target," "going forward," "outlook" and similar statements. Such statements are based upon management's current expectations and current market and operating conditions, and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond the Company's control, which may cause the Company's actual results, performance or achievements to differ materially from those in the forward-looking statements. Further information regarding these and other risks, uncertainties or factors is included in the Company's filings with the
About
For more information, please visit http://ir.baozun.com
For investor and media inquiries, please contact:
Baozun Inc.
Ms.
ir@baozun.com
Christensen
In
Mr.
Phone: +86-10-5900-1548
E-mail: carnell@christensenir.com
In U.S.
Ms.
Phone: +1-480-614-3004
Email: lbergkamp@ChristensenIR.com
Baozun Inc. | ||||||||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
(In thousands) | ||||||||
As of | ||||||||
December 31, 2016 |
December 31, 2017 |
December 31, 2017 |
||||||
RMB | RMB | US$ | ||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash and cash equivalents | 917,319 | 244,809 | 37,626 | |||||
Restricted cash | 50,832 | 48,848 | 7,508 | |||||
Short-term investment | 40,000 | 312,614 | 48,048 | |||||
Accounts receivable, net | 624,817 | 1,082,735 | 166,414 | |||||
Inventories | 312,071 | 384,672 | 59,123 | |||||
Advances to suppliers | 75,727 | 88,881 | 13,661 | |||||
Prepayments and other current assets | 108,495 | 211,992 | 32,583 | |||||
Amounts due from related parties | 38,772 | 88,795 | 13,648 | |||||
Total current assets | 2,168,033 | 2,463,346 | 378,611 | |||||
Non-current assets | ||||||||
Investments in equity investees | 33,443 | 24,268 | 3,730 | |||||
Property and equipment, net | 100,892 | 330,924 | 50,862 | |||||
Intangible assets, net | 26,984 | 66,150 | 10,167 | |||||
Land use right, net | - | 44,618 | 6,858 | |||||
Goodwill | - | 13,158 | 2,022 | |||||
Other non-current assets | 26,581 | 18,043 | 2,773 | |||||
Deferred tax assets | 12,332 | 15,528 | 2,387 | |||||
Total non-current assets | 200,232 | 512,689 | 78,799 | |||||
Total assets | 2,368,265 | 2,976,035 | 457,410 | |||||
Baozun Inc. | |||||||||||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||||
(In thousands, except for share and per share data) | |||||||||||
As of | |||||||||||
December 31, 2016 |
December 31, 2017 |
December 31, 2017 |
|||||||||
RMB | RMB | US$ | |||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||
Current liabilities | |||||||||||
Short-term loan | - | 172,000 | 26,436 | ||||||||
Accounts payable | 526,461 | 583,532 | 89,688 | ||||||||
Notes payable | 115,140 | 48,000 | 7,378 | ||||||||
Income tax payables | 15,811 | 30,420 | 4,675 | ||||||||
Accrued expenses and other current liabilities | 138,841 | 311,936 | 47,944 | ||||||||
Total current liabilities | 796,253 | 1,145,888 | 176,121 | ||||||||
Deferred tax liability | - | 3,710 | 570 | ||||||||
Total Non-current liabilities | - | 3,710 | 570 | ||||||||
Total liabilities | 796,253 | 1,149,598 | 176,691 | ||||||||
Baozun Inc. shareholders' equity: | |||||||||||
Class A ordinary shares (US$0.0001 par value; 470,000,000 shares authorized, 146,111,244 and 152,824,659 shares issued and outstanding as of December 31, 2016 and 2017, respectively) | 92 | 95 | 15 | ||||||||
Class B ordinary shares (US$0.0001 par value; 30,000,000 shares authorized, 13,300,738 shares issued and outstanding as of December 31, 2016 and 2017, respectively) | 8 | 8 | 1 | ||||||||
Additional paid-in capital | 1,761,430 | 1,823,925 | 280,332 | ||||||||
Accumulated deficit | (233,866 | ) | (25,000 | ) | (3,841 | ) | |||||
Accumulated other comprehensive income | 44,348 | 9,995 | 1,536 | ||||||||
Total Baozun Inc. shareholders' equity | 1,572,012 | 1,809,023 | 278,043 | ||||||||
Noncontrolling interests | - | 17,414 | 2,676 | ||||||||
Total equity | 1,572,012 | 1,826,437 | 280,719 | ||||||||
Total liabilities and shareholders' equity | 2,368,265 | 2,976,035 | 457,410 | ||||||||
Baozun Inc. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In thousands, except for share and per share data and per ADS data) |
|||||||||||||||||||||||||
For the three months ended December 31, | For the year ended December 31, | ||||||||||||||||||||||||
2016 | 2017 | 2016 | 2017 |
||||||||||||||||||||||
RMB | RMB | US$ | RMB | RMB | US$ | ||||||||||||||||||||
Net revenues | |||||||||||||||||||||||||
Product sales | 770,962 | 782,798 | 120,314 | 2,176,447 | 2,257,632 | 346,992 | |||||||||||||||||||
Services | 501,538 | 782,560 | 120,277 | 1,213,828 | 1,891,176 | 290,668 | |||||||||||||||||||
Total net revenues | 1,272,500 | 1,565,358 | 240,591 | 3,390,275 | 4,148,808 | 637,660 | |||||||||||||||||||
Operating expenses (1) | |||||||||||||||||||||||||
Cost of products | (679,146) | (630,276) | (96,872) | (1,921,856) | (1,917,467) | (294,709) | |||||||||||||||||||
Fulfillment | (227,701) | (339,530) | (52,185) | (540,857) | (818,173) | (125,751) | |||||||||||||||||||
Sales and marketing (2) | (246,860) | (343,007) | (52,719) | (658,819) | (910,843) | (139,994) | |||||||||||||||||||
Technology and content | (29,306) | (44,929) | (6,905) | (95,638) | (140,689) | (21,624) | |||||||||||||||||||
General and administrative | (26,150) | (33,033) | (5,077) | (88,274) | (116,554) | (17,914) | |||||||||||||||||||
Other operating income (loss), net | (402 ) | 1,067 | 164 | 5,235 | 11,250 | 1,729 | |||||||||||||||||||
Total operating expenses | (1,209,565) | (1,389,708) | (213,594) | (3,300,209) | (3,892,476) | (598,263) | |||||||||||||||||||
Income from operations | 62,935 | 175,650 | 26,997 | 90,066 | 256,332 | 39,397 | |||||||||||||||||||
Other income (expenses) | |||||||||||||||||||||||||
Interest income | 3,845 | 3,545 | 545 | 11,869 | 13,350 | 2,052 | |||||||||||||||||||
Interest expense | - | (3,497) | (537) | - | (4,252) | (654) | |||||||||||||||||||
Gain on disposal of investment | - | 4,664 | 717 | - | 5,464 | 840 | |||||||||||||||||||
Impairment loss of investments | - | (6,227) | (957) | - | (6,227) | (957) | |||||||||||||||||||
Exchange gain (loss) | 640 | 928 | 143 | 320 | (21) | (3) | |||||||||||||||||||
Income before income tax | 67,420 | 175,063 | 26,908 | 102,255 | 264,646 | 40,675 | |||||||||||||||||||
Income tax expense (3) | (6,784) | (28,586) | (4,394) | (16,831) | (54,251) | (8,338) | |||||||||||||||||||
Share of loss in equity method investment, net of tax of nil | - | 17 | 3 | - | (1,265) | (194) | |||||||||||||||||||
Net income | 60,636 | 146,494 | 22,517 | 85,424 | 209,130 | 32,143 | |||||||||||||||||||
Net (income) loss attributable to noncontrolling interests | 687 | 66 | 10 | 1,209 | (264) | (41) | |||||||||||||||||||
Net income (loss) attributable to ordinary shareholders of Baozun Inc. | 61,323 | 146,560 |
22,527 | 86,633 | 208,866 | 32,102 |
|||||||||||||||||||
Net income per share attributable to ordinary shareholders of Baozun Inc.: | |||||||||||||||||||||||||
Basic | 0.40 | 0.89 | 0.14 | 0.58 | 1.29 | 0.20 | |||||||||||||||||||
Diluted | 0.37 | 0.83 | 0.13 | 0.53 | 1.19 | 0.18 | |||||||||||||||||||
Net income per ADS attributable to ordinary shareholders of Baozun Inc.: | |||||||||||||||||||||||||
Basic | 1.20 | 2.67 | 0.41 | 1.74 | 3.87 | 0.59 | |||||||||||||||||||
Diluted | 1.11 | 2.48 | 0.38 | 1.59 | 3.56 | 0.55 | |||||||||||||||||||
Weighted average shares used in calculating net income per ordinary share | |||||||||||||||||||||||||
Basic | 152,670,367 | 164,471,581 | 164,471,581 | 149,935,100 | 162,113,815 | 162,113,815 | |||||||||||||||||||
Diluted | 167,379,536 | 177,081,330 | 177,081,330 | 163,926,674 | 176,115,049 | 176,115,049 | |||||||||||||||||||
Net income | 60,636 | 146,494 | 22,517 | 85,424 | 209,130 | 32,143 | |||||||||||||||||||
Other comprehensive income, net of tax of nil: | |||||||||||||||||||||||||
Foreign currency translation adjustment | 15,344 | (10,317) | (1,586) | 25,136 | (34,353) | (5,280) | |||||||||||||||||||
Comprehensive income | 75,980 | 136,177 | 20,931 | 110,560 | 174,777 | 26,863 | |||||||||||||||||||
(1) Share-based compensation expenses are allocated in operating expenses items as follows:
For the three months ended December 31, | For the year ended December 31, | ||||||||||||
2016 | 2017 | 2016 | 2017 | ||||||||||
RMB | RMB | US$ | RMB | RMB | US$ | ||||||||
Fulfillment | 514 | 720 | 111 | 1,755 | 2,904 | 446 | |||||||
Sales and marketing | 3,374 | 5,120 | 787 | 13,370 | 20,363 | 3,130 | |||||||
Technology and content | 2,069 | 2,818 | 433 | 7,875 | 13,822 | 2,125 | |||||||
General and administrative | 3,156 | 5,212 | 801 | 11,185 | 21,142 | 3,249 | |||||||
9,113 | 13,870 | 2,132 | 34,185 | 58,231 | 8,950 | ||||||||
(2) Including amortization of intangible assets resulting from business acquisition, which amounted to RMB nil and RMB0.4 million for the three months period ended
(3) Including income tax benefits of RMB nil and RMB0.1 million related to the reversal of deferred tax liabilities, which was recognized on business acquisition for the three months period ended
Baozun Inc. Reconciliations of GAAP and Non-GAAP Results (in thousands, except for share and per ADS data) |
||||||||||||||||||
For the three months ended December 31, | For the year ended December 31, | |||||||||||||||||
2016 | 2017 | 2016 | 2017 | |||||||||||||||
RMB | RMB | US$ | RMB | RMB | US$ | |||||||||||||
Income from operations | 62,935 | 175,650 | 26,997 | 90,066 | 256,332 | 39,397 | ||||||||||||
Add: Share-based compensation expenses | 9,113 | 13,870 | 2,132 | 34,185 | 58,231 | 8,950 | ||||||||||||
Amortization of intangible assets resulting from business acquisition | - | 391 | 60 | - | 782 | 120 | ||||||||||||
Non-GAAP income from operations | 72,048 | 189,911 | 29,189 | 124,251 | 315,345 | 48,467 | ||||||||||||
Net income | 60,636 | 146,494 | 22,517 | 85,424 | 209,130 | 32,143 | ||||||||||||
Add: Share-based compensation expenses | 9,113 | 13,870 | 2,132 | 34,185 | 58,231 | 8,950 | ||||||||||||
Amortization of intangible assets resulting from business acquisition | - | 391 | 60 | - | 782 | 120 | ||||||||||||
Less: Tax effect of amortization of intangible assets resulting from business acquisition | - | (98 | ) | (15 | ) | - | (196 | ) | (30 | ) | ||||||||
Non-GAAP net income | 69,749 | 160,657 | 24,694 | 119,609 | 267,947 | 41,183 | ||||||||||||
Net income attributable to ordinary shareholders of Baozun Inc. | 61,323 | 146,560 | 22,527 | 86,633 | 208,866 | 32,102 | ||||||||||||
Add: Share-based compensation expenses | 9,113 | 13,870 | 2,132 | 34,185 | 58,231 | 8,950 | ||||||||||||
Amortization of intangible assets resulting from business acquisition | - | 199 | 31 | - | 398 | 61 | ||||||||||||
Less: Tax effect of amortization of intangible assets resulting from business acquisition | - | (50 | ) | (8 | ) | - | (100 | ) | (15 | ) | ||||||||
Non-GAAP net income attributable to ordinary shareholders of Baozun Inc. | 70,436 |
160,579 |
24,682 |
120,818 |
267,395 |
41,098 |
||||||||||||
Non-GAAP net income attributable to ordinary shareholders of Baozun Inc. per ADS: | ||||||||||||||||||
Basic | 1.38 | 2.93 | 0.45 | 2.42 | 4.95 | 0.76 | ||||||||||||
Diluted | 1.26 | 2.72 | 0.42 | 2.21 | 4.55 | 0.70 | ||||||||||||
Weighted average shares used in calculating net income per ordinary share | ||||||||||||||||||
Basic | 152,670,367 | 164,471,581 | 164,471,581 | 149,935,100 | 162,113,815 | 162,113,815 | ||||||||||||
Diluted | 167,379,536 | 177,081,330 | 177,081,330 | 163,926,674 | 176,115,049 | 176,115,049 | ||||||||||||
______________
1 This announcement contains translations of certain Renminbi (RMB) amounts into U.S. dollars (US$) at a specified rate solely for the convenience of the reader. Unless otherwise noted, the translation of RMB into US$ has been made at RMB6.5063 to US$1.00, the noon buying rate in effect on
2 Non-GAAP income from operations is a non-GAAP financial measure, which is defined as income from operations excluding share-based compensation expenses and amortization of intangible assets resulting from business acquisition.
3 Non-GAAP net income attributable to
4 Each ADS represents three Class A ordinary shares.
5 Basic and diluted non-GAAP net income attributable to
6 GMV includes value added tax and excludes (i) shipping charges, (ii) surcharges and other taxes, (iii) value of the goods that are returned and (iv) deposits for purchases that have not been settled.
7 Distribution GMV refers to the GMV under the distribution business model.
8 Non-distribution GMV refers to the GMV under the service fee business model and the consignment business model.