IRVINE, California, Aug.12, 2014 /PRNewswire/ — With the summer season in full swing, now is the perfect time to get in shape for all of those fun upcoming beach and pool parties. Keeping yourself fit and healthy can seem like a daunting task, but with a solid plan in place and MoveIt4 on your side, you’ll be rocking your new fit self with confidence before you know it!
The best way to reach your fitness goals is to come up with a solid plan and stay focused on your achievements. Once you begin to see your progress, continuing to follow your plan will become easier and you will gain the confidence you need to keep moving forward. If you’re not sure how to come up with a fitness plan, visit MoveIt4 for great tips and nutrition advice. You can also follow their Facebook and Twitter feeds for daily help on how to stick to your fitness plan.
As the first part of your plan, focus on making your diet as healthy as possible: cut back on processed foods, fill up on all of the fresh fruits and vegetables that are now in season, and drink plenty of water to stay hydrated. Experts say that you should drink at least half of your body weight in ounces of water each day. Also, studies show that making your water ice cold will force your body to work harder and burn calories by maintaining its core temperature.
After ensuring your nutritional goals are set, it’s time to work out that body! Your first step should be to include plenty of cardio into your daily routine, and with the warm days the best place to do that is outdoors. If you are stuck in class all day, use your lunch break to incorporate a brisk half-hour walk into your day. Instead of driving to the grocery store this weekend, bike there and strap on a backpack to carry your food home. After work, go for a jog in your neighborhood while watching the sun set. Get creative: think of all the fun and different ways you can incorporate cardio into your schedule.
Next you will want to tone all of those muscles that you have been working out, which might sound difficult at first. However, the good news is that summertime provides plenty of ways to incorporate water sports into your fitness plan, which helps you tone quickly. Swimming, kayaking, bicycling, beach volleyball and tennis are all excellent ways to build muscle.Whatever toning exercises you choose, you’ll want to pay special attention to your abs and glutes, as those are the areas most prevalent during swimsuit season.
Now that you’re well on your way to achieving your summer fitness goals, you will want make sure to continue to stay motivated throughout the rest of the year. Consider planning ways to remain active when the seasons change by participating in a fall event, such as a charity run or group hiking trip. Check the MoveIt4 website for daily inspiration and don’t forget to reward yourself for all of your hard work, you deserve it!
“Just about everyone can get in shape and stay that way with the right motivation,” said Martin Matthews, Chairman and CEO of Interush. “MoveIt4 does an fantastic job of helping people stay on track with their fitness goals.”
The MoveIt4 website strives to turn information into inspiration for healthy living, and shows people how to take fitness and endurance and turn it into fun. People interested in staying fit and healthy can visit the MoveIt4 website for a variety of articles, tips, expert advice and celebrity mentor stories, all designed to increase wellbeing and quality of life.
MoveIt4 is powered by Interush, Inc. of Irvine, California. Interush, Inc. markets within the rapidly expanding information technology sector in Japan, Taiwan, Hong Kong, Mainland China, the U.S. and Canada. For more information, visit http://www.Interush.com.
Perfect for ages two to five, this endearing children’s app transforms learning the colors of the world into an engaging game with a variety of activities to inspire creativity and stimulate intellectual growth. Beautifully created with interactive animation and captivating sound effects, “Fun With Colors” combines three learning styles – visual, auditory and tactical engagement – to help children become well-versed with the primary colors.
With these three unique learning components, children will playfully discover the colors that surround them every day. A delightful story of friendship and harmony incorporates interactive components and easy-to-follow narration to help teach children all about the primary colors and how they are related.
Beautifully drawn illustrations come to life in a color-identification game in which kids fill in the correct color of familiar images. Once they’ve mastered the games, children can also paint and draw masterpieces of their own.
Features include:
Narration in English, German, Mandarin Chinese, Spanish, Brazilian Portuguese, and Turkish
Intuitive kid-friendly controls
No in-app purchases
Fun with Colors is available in the iTunes App Store.
About Bastei Entertainment:
Bastei Entertainment is the digital department of parent company Bastei Lubbe, a leading German trade publisher home to famed authors Dan Brown, Jeff Kinney, Ken Follett, and many more. Dedicated to the development of innovative products and global digital entertainment, Bastei Entertainment’s in-house development team continuously creates unique multi-media content which translates the written world into digital works such as eBooks and mobile applications.
Live Conference Call to be Held at 9:00 PM U.S. Eastern Time on August 11
BEIJING, August 12, 2014 /PRNewswire/ — Phoenix New Media Limited (NYSE: FENG), a leading new media company in China (“Phoenix New Media”, “PNM”, “ifeng” or the “Company”), today announced its unaudited financial results for the second quarter ended June 30, 2014.
Second Quarter 2014 Highlights
Net advertising revenues increased by 38.9% year-over-year to RMB291.0 million (US$46.9 million).
Income from operations increased by 14.8% year-over-year to RMB81.1 million (US$13.1 million). Adjusted income from operations[1] increased by 16.6% year-over-year to RMB89.5 million (US$14.4 million).
Net income attributable to Phoenix New Media Limited increased by 9.1% year-over-year to RMB84.5 million (US$13.6 million). Adjusted net income attributable to Phoenix New Media Limited increased by 10.4% year-over-year to RMB92.3 million (US$14.9 million).
Net income per diluted ADS[2] increased by 9.0% year-over-year to RMB1.09(US$0.18). Adjusted net income per diluted ADS increased by 10.3% year-over-year to RMB1.19(US$0.19).
[1]
An explanation of the Company’s non-GAAP financial measures is included in the section entitled “Use of Non-GAAP Financial Measures” below, and the related reconciliations to GAAP financial measures are presented in the accompanying “Reconciliations of Non-GAAP Results of Operation Measures to the Nearest Comparable GAAP Measures”.
[2]
“ADS” means American Depositary Share of the Company. Each ADS represents eight Class A ordinary shares of the Company.
Mr. Shuang Liu, CEO of Phoenix New Media, stated, “We are very pleased to complete the first half of 2014 with strong financial performance for both total revenues and net income exceeding Bloomberg consensus estimates, providing with us significant momentum into the second half of 2014. The second quarter witnessed an impressive operational growth characterized by the increasing traffic on our mobile platform, strong performance of in-house video content, and further expansion of several of our popular verticals. On the video side, we saw encouraging developments, as we began to air several new original productions that have been well received by both advertisers and the public. Two of these original productions were co-broadcasted with our parent company, Phoenix TV, demonstrating tangible progress on the convergence of the Phoenix Group’s media resources. Leveraging on this success in the second quarter and fueled by the large audience of many breaking news events, we had the opportunity to attract even more first-time users in recent months through providing comprehensive and in-depth coverage across our multiple platforms.”
Mr. Ya Li, President of Phoenix New Media, stated, “In the second quarter, the incremental revenue growth and operating margin improvement were largely supported by the strong 38.9% year-over-year growth in net advertising revenues, which reflected the rapid growth of traffic across our media platforms, as well as the successful integration of advertisement sales teams and emergence of our native advertising and marketing solutions. With the growing demand for lifestyle-oriented content by users, we are confident that ifeng’s converged multi-screen platform will continue to grow and expand its footprint in new media industry.”
Second Quarter 2014 Financial Results
REVENUES
Total revenues for the second quarter of 2014 increased by 12.8% to RMB410.9 million (US$66.2 million) from RMB364.2 million in the second quarter of 2013.
Net advertising revenues (net of advertising agency service fees), for the second quarter of 2014 increased by 38.9% to RMB291.0 million (US$46.9 million) from RMB209.5 million in the second quarter of 2013, primarily due to an increase in average revenue per advertiser (“ARPA”) of 23.8% to RMB0.9 million (US$0.1 million) and an increase in the total number of advertisers of 12.2% to 331.
Paid service revenues for the second quarter of 2014 decreased by 22.5% to RMB119.9 million (US$19.3 million) from RMB154.7 million in the second quarter of 2013. Mobile value-added services (“MVAS”)[3] revenues decreased by 30.7% to RMB91.1 million (US$14.7 million) in the second quarter of 2014 from RMB131.5 million in the second quarter of 2013, primarily due to the decrease in revenues generated from wireless value-added services with telecom operators. Games and others[4] revenues increased by 24.2% to RMB28.8 million (US$4.6 million) in the second quarter of 2014 from RMB23.2 million in the second quarter of 2013, primarily driven by the increase in games revenues.
[3]
MVAS includes wireless value-added services, or WVAS, mobile video, mobile digital reading, mobile games and other paid services through China’s three telecom operators’ platforms.
[4]
Games and others include web-based games, content sales, and other online and mobile paid services through the Company’s own platforms.
COST OF REVENUES AND GROSS PROFIT
Cost of revenues for the second quarter of 2014 increased by 13.9% to RMB197.5 million (US$31.8 million) from RMB173.4 million in the second quarter of 2013, primarily due to an increase in content and operational costs and sales taxes and surcharges. Content and operational costs increased to RMB83.7 million (US$13.5 million) in the second quarter of 2014 from RMB64.2 million in the second quarter of 2013, due to the increase in staff-related costs and cost of content production related to advertisement. Revenue sharing fees to telecom operators and channel partners decreased to RMB59.2 million (US$9.5 million) in the second quarter of 2014 from RMB68.0 million in the second quarter of 2013, primarily due to a decrease in MVAS revenues. Sales taxes and surcharges increased to RMB34.6 million (US$5.6 million) in the second quarter of 2014 from RMB21.1 million in the second quarter of 2013 due to the increase of net advertising revenues and the transition from Business Tax to Value-added Tax which became applicable to the Company starting from June 2014 as the Company is deemed to be in the telecom industry under applicable tax regulations. Bandwidth costs decreased to RMB19.9 million (US$3.2 million) in the second quarter of 2014 from RMB20.2 million in the second quarter of 2013, primarily due to improved bandwidth efficiency obtained through updated bandwidth management technology. Share-based compensation included in cost of revenues was RMB2.4 million (US$0.4 million) in the second quarter of 2014, compared to RMB1.9 million in the second quarter of 2013. The year-over-year increase in share-based compensation was primarily due to newly granted stock options in the last 12 months.
Gross profit for the second quarter of 2014 increased by 11.8% to RMB213.4 million (US$34.4 million) from RMB190.8 million in the second quarter of 2013. Gross margin for the second quarter of 2014 was 51.9%, compared to 52.4% in the second quarter of 2013, mainly due to the increase in content and operational costs and sales taxes and surcharges. Adjusted gross margin, which excludes share-based compensation, for the second quarter of 2014 was 52.5%, compared to 52.9% in the second quarter of 2013.
OPERATING EXPENSES AND INCOME FROM OPERATIONS
Total operating expenses for the second quarter of 2014 increased by 10.1% to RMB132.3 million (US$21.3 million) from RMB120.2 million in the second quarter of 2013. The increase in operating expenses was primarily attributable to the increase in staff-related expenses associated with the Company’s marketing and promotional initiatives. Share-based compensation included in operating expenses was RMB6.0 million (US$1.0 million) in the second quarter of 2014, compared to RMB4.2 million in the second quarter of 2013. The year-over-year increase in share-based compensation was primarily due to newly granted stock options in the last 12 months.
Income from operations for the second quarter of 2014 increased by 14.8% to RMB81.1 million (US$13.1 million) from RMB70.6 million in the second quarter of 2013. Operating margin for the second quarter of 2014 increased to 19.7% from 19.4% in the second quarter of 2013, mainly due to increased revenue contribution from advertising.
Adjusted income from operations, which excludes share-based compensation, for the second quarter of 2014 increased by 16.6% to RMB89.5 million (US$14.4 million) from RMB76.8 million in the second quarter of 2013.Adjusted operating margin for the second quarter of 2014 increased to 21.8% from 21.1% in the second quarter of 2013.
OTHER INCOME
Other income reflects interest income, foreign currency exchange gain or loss, gain on disposition of subsidiaries and acquisition of equity investments, loss from equity investments, and others, net. “Others, net” primarily consists of government subsidies. Interest income for the second quarter of 2014 increased to RMB12.6 million (US$2.0 million) from RMB7.5 million in the second quarter of 2013. Foreign currency exchange gain for the second quarter of 2014 decreased to RMB0.1 million (US$0.02 million) from RMB10.0 million in the second quarter of 2013.
NET INCOME ATTRIBUTABLE TO PHOENIX NEW MEDIA LIMITED
Net income attributable to Phoenix New Media Limited for the second quarter of 2014 increased by 9.1% to RMB84.5 million (US$13.6 million) from RMB77.4 million in the second quarter of 2013. Net margin for the second quarter of 2014 was 20.6%, compared to 21.3% in second quarter of 2013.Net income per diluted ADS in the second quarter of 2014 increased by 9.0% to RMB1.09(US$0.18) from RMB1.0 in the second quarter of 2013.
Adjusted net income attributable to Phoenix New Media Limited, which excludes share-based compensation, gain on disposition of subsidiaries and acquisition of equity investments, and loss from equity investments, for the second quarter of 2014 increased by 10.4% to RMB92.3 million (US$14.9 million) from RMB83.6 million in the second quarter of 2013. Adjusted net margin for the second quarter of 2014 was 22.5%, compared to 23.0% in the second quarter of 2013. Adjusted net income per diluted ADS in the second quarter of 2014 increased by 10.3% to RMB1.19(US$0.19) from RMB1.08 in the second quarter of 2013.
As of June 30, 2014, the Company’s cash and cash equivalents and term deposits and short term investments was RMB1.4 billion (US$224.8 million).
For the second quarter of 2014, the Company’s weighted average number of ADSs used in the computation of diluted net income per ADS was 77,756,324. As of June 30, 2014, the Company had a total of 604,375,981 ordinary shares outstanding, or the equivalent of 75,546,998 ADSs.
Business Outlook
For the third quarter of 2014, the Company expects its total revenues to be between RMB402 million and RMB422 million. Net advertising revenues are expected to be between RMB307 million and RMB317 million. Paid service revenues are expected to be between RMB95 million and RMB105 million. These forecasts reflect the Company’s current and preliminary view on the market and operational conditions, which are subject to change.
Share Repurchase Program
As of June 30, 2014, the Company had repurchased an aggregate of 109,563 American Depositary Shares (“ADSs”) at an aggregate cost of approximately US$1.2 million on the open market pursuant to the share repurchase program approved by the board in May 2014. Under the share repurchase program, the Company has been authorized to repurchase up to US$50 million of its outstanding ADSs for a period not exceeding twelve (12) months since May 14, 2014, the effective date of the program. The Company expects to continue to implement its share repurchase program in a manner consistent with market conditions and the interest of its shareholders, subject to the restrictions relating to volume, price and timing under applicable law.
Share Options
In July 2014, the Company granted options to purchase up to 17,646,000 Class A ordinary shares to its employees under its 2008 Share Option Scheme.
Other Events
In the second quarter of 2014, the classification of certain highly liquid principal-guaranteed investment products (“Products”) reported as cash and cash equivalents in previous periods were re-assessed and it was determined that these Products should have been classified as term deposits and short term investments to properly reflect the nature of these assets. These Products were issued by reputable commercial banks in China. The maturity periods of these Products were within three months and the principal amounts were guaranteed by the issuing banks. All of these Products were converted into known amounts of cash upon their maturity subsequent to the quarter end. The Company concluded the impact of the resulting classification adjustments (the “Classification Adjustments”), all of which are set forth in Annex A hereto, is not material to the previously issued financial statements taken as a whole based on assessment under the relevant guidance.
The Classification Adjustments had no impact on the Company’s consolidated statements of comprehensive income or the line items of the Company’s consolidated balance sheets other than cash and cash equivalents and term deposits and short term investments. In the consolidated statement of cash flows, the Company’s cash flows from investing activities, net changes in cash and cash equivalents and ending balances of cash and cash equivalents were amended, but no other line items in the consolidated statement of cash flows were impacted. The impact of the Classification Adjustments on the Company’s consolidated balance sheet as of December 31, 2013 and the consolidated statement of cash flows for the year ended December 31, 2013 will be reflected in the Company’s 2014 Annual Report on Form 20-F.
Conference Call Information
The Company will hold a conference call at 9:00 p.m. U.S. Eastern Time on August 11, 2014 (August 12, 2014 at 9:00 a.m.Beijing / Hong Kong time) to discuss its second quarter 2014 unaudited financial results and operating performance.
To participate in the call, please dial the following numbers:
International:
+6567239385
Mainland China:
4001200654
Hong Kong:
+85230512745
United States:
+18456750438
Conference ID:
78450764
A replay of the call will be available through August 18, 2014 by dialing the following numbers:
International:
+61290034211
Mainland China:
4006322162
Hong Kong:
+85230512780
United States:
+16462543697
Conference ID:
78450764
A live and archived webcast of the conference call will also be available at the Company’s investor relations website at http://ir.ifeng.com
Use of Non-GAAP Financial Measures
To supplement the consolidated financial statements presented in accordance with the United States Generally Accepted Accounting Principles (“GAAP”), Phoenix New Media Limited uses adjusted gross profit, adjusted gross margin, adjusted income from operations, adjusted operating margin, adjusted net income attributable to Phoenix New Media Limited, adjusted net margin and adjusted net income per diluted ADS, each of which is a non-GAAP financial measure. Adjusted gross profit is gross profit excluding share-based compensation. Adjusted gross margin is adjusted gross profit divided by total revenues. Adjusted income from operations is income from operations excluding share-based compensation. Adjusted operating margin is adjusted income from operations divided by total revenues. Adjusted net income attributable to Phoenix New Media Limited is net income attributable to Phoenix New Media Limited excluding share-based compensation, gain on disposition of subsidiaries and acquisition of equity investments, and loss from equity investments. Adjusted net margin is adjusted net income attributable to Phoenix New Media Limited divided by total revenues. Adjusted net income per diluted ADS is adjusted net income attributable to Phoenix New Media Limited divided by weighted average number of diluted ADSs. The Company believes that separate analysis and exclusion of the non-cash impact of share-based compensation, gain on disposition of subsidiaries and acquisition of equity investments, and loss from equity investments add clarity to the constituent parts of its performance. The Company reviews adjusted net income together with net income to obtain a better understanding of its operating performance. It uses these non-GAAP financial measures for planning, forecasting and measuring results against the forecast. The Company believes that using multiple measures to evaluate its business allows both management and investors to assess the Company’s performance against its competitors and ultimately monitor its capacity to generate returns for its investors. The Company also believes that non-GAAP financial measures are useful supplemental information for investors and analysts to assess its operating performance without the effect of non-cash share-based compensation, gain on disposition of subsidiaries and acquisition of equity investments, and loss from equity investments. Share-based compensation and loss from equity investments have been and will continue to be significant and recurring in its business. However, the use of non-GAAP financial measures has material limitations as an analytical tool. One of the limitations of using non-GAAP financial measures is that they do not include all items that impact the Company’s net income for the period. In addition, because non-GAAP financial measures are not measured in the same manner by all companies, they may not be comparable to other similar titled measures used by other companies. In light of the foregoing limitations, you should not consider non-GAAP financial measure in isolation from or as an alternative to the financial measure prepared in accordance with U.S. GAAP.
Exchange Rate
This announcement contains translations of certain RMB amounts into U.S. dollars (“USD”) at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from RMB to USD were made at the rate of RMB6.2036 to US$1.00, the noon buying rate in effect on June 30, 2014 in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or USD amounts referred could be converted into USD or RMB, as the case may be, at any particular rate or at all. For analytical presentation, all percentages are calculated using the numbers presented in the financial statements contained in this earnings release.
About Phoenix New Media Limited
Phoenix New Media Limited (NYSE: FENG) is a leading new media company providing premium content on an integrated platform across Internet, mobile and TV channels in China. Having originated from a leading global Chinese language TV network based in Hong Kong, Phoenix TV, the Company enables consumers to access professional news and other quality information and share user-generated content on the Internet and through their mobile devices. Phoenix New Media’s platform includes its ifeng.com channel, consisting of its ifeng.com website and web-based game platform, its video channel, comprised of its dedicated video vertical and mobile video services, and its mobile channel, including its mobile Internet website, mobile applications and mobile value-added services.
Safe Harbor Statement
This announcement contains forwarda？？looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forwarda？？looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and similar statements. Among other things, the business outlook and quotations from management in this announcement, as well as Phoenix New Media’s strategic and operational plans, contain forwarda？？looking statements. Phoenix New Media may also make written or oral forwarda？？looking statements in its periodic reports to the U.S. Securities and Exchange Commission (“SEC”) on Forms 20a？？F and 6a？？K, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about Phoenix New Media’s beliefs and expectations, are forwarda？？looking statements. Forwarda？？looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forwarda？？looking statement, including but not limited to the following: the Company’s goals and strategies; the Company’s future business development, financial condition and results of operations; the expected growth of the online and mobile advertising, online video and mobile paid service markets in China; the Company’s reliance on online advertising and MVAS for the majority of its total revenues; the Company’s expectations regarding demand for and market acceptance of its services; the Company’s expectations regarding the retention and strengthening of its relationships with advertisers, partners and customers; fluctuations in the Company’s quarterly operating results; the Company’s plans to enhance its user experience, infrastructure and service offerings; the Company’s reliance on mobile operators in China to provide most of its MVAS; changes by mobile operators in China to their policies for MVAS; competition in its industry in China; and relevant government policies and regulations relating to the Company. Further information regarding these and other risks is included in the Company’s filings with the SEC, including its registration statement on Form Fa？？1, as amended, and its annual reports on Form 20a？？F. All information provided in this press release and in the attachments is as of the date of this press release, and Phoenix New Media does not undertake any obligation to update any forwarda？？looking statement, except as required under applicable law.
SHENZHEN, China, August 12, 2014 /PRNewswire/ — Mindray Medical International Limited (NYSE: MR), a leading developer, manufacturer and marketer of medical devices worldwide, announced today its selected unaudited financial results for the …
SHANGHAI, August 12, 2014 /PRNewswire/ — 51job, Inc. (Nasdaq: JOBS) (“51job” or the “Company”), a leading provider of integrated human resource services in China, announced today its unaudited financial results for the second quarter of 2014 ended June 30, 2014.
Second Quarter 2014 Financial Highlights:
Total revenues increased 13.1% over Q2 2013 to RMB457.5 million (US$73.8 million), exceeding the Company’s guidance range
Online recruitment services revenues increased 15.8% over Q2 2013 to RMB312.0 million (US$50.3 million), which reflected the impact of a value-added tax (“VAT”) policy change effective June 1, 2014
Gross margin of 73.9% compared with 73.7% in Q2 2013
Income from operations decreased 2.4% over Q2 2013 to RMB122.4 million (US$19.7 million)
Fully diluted earnings per common share were RMB0.86 (US$0.28 per American depositary share (“ADS”))
Excluding share-based compensation expense, gain from foreign currency translation, convertible senior notes issuance costs, change in fair value of convertible notes and change in fair value of zero-strike call options, as well as the related tax effect of these items, non-GAAP adjusted fully diluted earnings per common share were RMB2.75 (US$0.89 per ADS), exceeding the Company’s guidance range
Cash and short-term investments increased to RMB4,207.9 million (US$678.3 million) as of June 30, 2014
Commenting on the results, Rick Yan, President and Chief Executive Officer of 51job, said, “In the second quarter, we made good progress in our customer acquisition efforts as we saw robust expansion of the unique employer user base in our online business. We were also pleased with the performance of our other HR services area which, despite operational adjustments we are currently undergoing in our HR outsourcing business, maintained solid growth and was lifted by increased contribution of our training and other services. We remain focused on our long-term vision to become the most comprehensive, end-to-end HR services provider in China and are pursuing initiatives, investments and opportunities to strengthen our market leadership and achieve this goal.”
Second Quarter 2014 Unaudited Financial Results
Total revenues for the second quarter ended June 30, 2014 were RMB457.5 million (US$73.8 million), an increase of 13.1% from RMB404.4 million for the same quarter in 2013.
Online recruitment services revenues for the second quarter of 2014 were RMB312.0 million (US$50.3 million), representing a 15.8% increase from RMB269.5 million for the same quarter of the prior year. The growth was principally due to an increase in the number of unique employers using online recruitment services, which was partially offset by a decrease in average revenue per unique employer and the impact of the VAT policy change effective June 1, 2014 (as described below in “Other Company News”). Unique employers increased 21.3% to 280,203 in the second quarter of 2014 compared with 231,011 in the same quarter of the prior year driven by strengthened customer acquisition efforts and increased usage of online recruitment services by employers. However, average revenue per unique employer decreased 4.6% in the second quarter of 2014 as compared with the same quarter in 2013 primarily due to the addition of new customers who generally purchase introductory, lower priced services and the effect of the VAT policy change on online recruitment services revenues.
Print advertising revenues for the second quarter of 2014 decreased 78.8% to RMB2.3 million (US$0.4 million) compared with RMB11.0 million for the same quarter in 2013 primarily due to the ongoing business transition away from print advertising services. The estimated number of print advertising pages generated in the second quarter of 2014 was 21 pages compared with 355 pages in the same quarter in 2013. The Company operates a print publication in the city of Xian as of June 30, 2014 compared with five cities as of June 30, 2013.
Other human resource related revenues for the second quarter of 2014 increased 15.6% to RMB143.2 million (US$23.1 million) from RMB123.8 million in the same quarter of 2013 primarily due to growth and usage of business process outsourcing and training services.
Gross profit for the second quarter of 2014 increased 13.9% to RMB325.8 million (US$52.5 million) from RMB286.0 million for the same quarter of the prior year. Gross margin, which is gross profit as a percentage of net revenues, increased to 73.9% in the second quarter of 2014 compared with 73.7% in the same quarter in 2013.
Operating expenses for the second quarter of 2014 increased 26.7% to RMB203.4 million (US$32.8 million) from RMB160.6 million for the same quarter of 2013. Sales and marketing expenses for the second quarter of 2014 increased 28.3% to RMB142.6 million (US$23.0 million) from RMB111.1 million for the same quarter of the prior year primarily due to additional sales headcount, higher employee compensation expenses and greater advertising expenditures. General and administrative expenses for the second quarter of 2014 increased 23.0% to RMB60.8 million (US$9.8 million) from RMB49.4 million in the second quarter of 2013 primarily due to higher share-based compensation expense and professional service fees as well as greater office, rental and depreciation expenses.
Income from operations for the second quarter of 2014 decreased 2.4% to RMB122.4 million (US$19.7 million) from RMB125.5 million for the same quarter of the prior year. Operating margin, which is income from operations as a percentage of net revenues, was 27.8% in the second quarter of 2014 compared with 32.3% in the same quarter of 2013. Excluding share-based compensation expense, operating margin would be 31.9% in the second quarter of 2014 compared with 36.2% in the same quarter of 2013.
In April 2014, the Company completed an offering of US$172.5 million in convertible senior notes. In connection with this offering, US$50 million of the net proceeds received by the Company was used to enter into zero-strike call option transactions, which were executed in the second quarter. As a result, in the second quarter of 2014, the Company recognized a mark-to-market loss of RMB28.9 million (US$4.7 million) associated with a change in fair value of convertible notes and of RMB24.9 million (US$4.0 million) associated with a change in fair value of zero-strike call options. The Company also incurred RMB47.2 million (US$7.6 million) in one-time issuance costs related to the convertible notes offering in the second quarter of 2014.
Other income in the second quarter of 2014 included local government financial subsidies of RMB32.6 million (US$5.3 million). The effective tax rate in the second quarter of 2014 increased to 36.0% compared with 17.5% in the second quarter of 2013 as a result of non-tax deductible items, primarily the convertible notes issuance costs and the changes in fair value of convertible notes and zero-strike call options, which comprised a large portion of the income before income tax base. The effective tax rate on non-GAAP results in the second quarter of 2014 was 15.0% compared with 15.6% in the second quarter of 2013.
Net income for the second quarter of 2014 was RMB52.0 million (US$8.4 million) compared with RMB119.2 million for the same quarter in 2013. Fully diluted earnings per common share for the second quarter of 2014 were RMB0.86(US$0.14) compared with RMB1.99 for the same quarter in 2013. Fully diluted earnings per ADS for the second quarter of 2014 were RMB1.72(US$0.28) compared with RMB3.98 in the second quarter of 2013.
In the second quarter of 2014, total share-based compensation expense was RMB18.3 million (US$3.0 million) compared with RMB14.8 million in the second quarter of 2013. The Company also recognized a gain from foreign currency translation of RMB5.3 million (US$0.9 million) in the second quarter of 2014 compared with a loss of RMB2.4 million in the second quarter of 2013.
Excluding share-based compensation expense, gain/loss from foreign currency translation, convertible senior notes issuance costs, change in fair value of convertible notes and change in fair value of zero-strike call options, as well as the related tax effect of these items, non-GAAP adjusted net income for the second quarter of 2014 increased 21.5% to RMB165.8 million (US$26.7 million) compared with RMB136.4 million for the second quarter of 2013. Non-GAAP adjusted fully diluted earnings per common share were RMB2.75(US$0.44) in the second quarter of 2014 compared with RMB2.28 in the second quarter of 2013. Non-GAAP adjusted fully diluted earnings per ADS in the second quarter of 2014 were RMB5.50(US$0.89) compared with RMB4.56 in the second quarter of 2013.
Six Months 2014 Unaudited Financial Results
Total revenues for the six months ended June 30, 2014 were RMB894.7 million (US$144.2 million), an increase of 14.0% from RMB784.7 million for the same period in 2013. Income from operations for the six months ended June 30, 2014 increased 0.5% to RMB242.2 million (US$39.0 million) from RMB241.0 million for the same period in 2013.
Net income for the six months ended June 30, 2014 was RMB170.4 million (US$27.5 million) compared with RMB228.0 million for the same period in 2013. Fully diluted earnings per common share for the six months ended June 30, 2014 was RMB2.81(US$0.45) compared with RMB3.81 for the same period in 2013. Fully diluted earnings per ADS for the six months ended June 30, 2014 were RMB5.63(US$0.91) compared with RMB7.63 for the same period in 2013.
Excluding share-based compensation expense, gain/loss from foreign currency translation, convertible senior notes issuance costs, change in fair value of convertible notes and change in fair value of zero-strike call options, as well as the related tax effect of these items, non-GAAP adjusted net income for the six months ended June 30, 2014 increased 16.7% to RMB303.4 million (US$48.9 million) from RMB260.1 million for the six months ended June 30, 2013. Non-GAAP adjusted fully diluted earnings per common share were RMB5.01(US$0.81) for the six months ended June 30, 2014 compared with RMB4.35 in the same period in 2013. Non-GAAP adjusted fully diluted earnings per ADS for the six months ended June 30, 2014 were RMB10.02(US$1.62) compared with RMB8.70 in the same period in 2013.
As of June 30, 2014, cash and short-term investments totaled RMB4,207.9 million (US$678.3 million) compared with RMB3,147.5 million as of December 31, 2013. Short-term investments consist of certificates of deposit with original maturities from three months to one year.
Business Outlook
Based on current market conditions and factoring in a full-quarter effect of the VAT policy change, the Company’s total revenues target for the third quarter of 2014 is in the estimated range of RMB455 million to RMB470 million (US$73.3 million to US$75.8 million). Excluding share-based compensation expense, any gain or loss from foreign currency translation, and any mark-to-market gain or loss associated with a change in fair value of convertible notes, as well as the related tax effect of these items, the Company’s non-GAAP fully diluted earnings target for the third quarter of 2014 is in the estimated range of RMB2.25 to RMB2.45 (US$0.36 to US$0.39) per common share. The Company expects total share-based compensation expense in the third quarter of 2014 to be in the estimated range of RMB21 million to RMB22 million (US$3.4 million to US$3.5 million).
Other Company News
Effective June 1, 2014, the Company’s PRC subsidiaries ceased paying a 3% business tax on gross revenues from value-added telecommunication services in China and instead became subject to a VAT of 6%, reflected directly at the net revenues level, while being permitted to offset input VAT supported by valid VAT invoices received from vendors against the VAT liability. Due to this policy change, the Company’s revenues, principally its online recruitment services revenues, have been reduced, which affects the comparability of revenue figures before and after June 1, 2014.
In June 2014, the Company’s shareholders approved an increase to a share repurchase program originally authorized in September 2008 from US$25 million to US$75 million.
Effective August 8, 2014, the Company changed the ratio of its ADS to common share from one (1) ADS to two (2) common shares to one (1) ADS to one (1) common share. The presentation of per ADS data contained in this press release does not reflect this ratio change.
Currency Convenience Translation
For the convenience of readers, certain Renminbi amounts have been translated into U.S. dollars at the rate of RMB6.2036 to US$1.00, the noon buying rate on June 30, 2014 in New York for cable transfers of Renminbi as set forth in the H.10 weekly statistical release of the Federal Reserve Board.
Conference Call Information
Management will hold a conference call at 9:00 p.m. Eastern Time on August 11, 2014 (9:00 a.m.Shanghai / Hong Kong time zone on August 12, 2014) to discuss its second quarter 2014 financial results, operating performance and business outlook. To dial in to the call, please use conference ID 5363023 and the following telephone numbers:
US:
+1-866-839-8029
Hong Kong:
+852-2598-7556
International:
+1-914-449-1588
The call will also be available live and on replay through 51job’s investor relations website, http://ir.51job.com. Please go to the website at least fifteen minutes early to register or install any necessary audio software.
Use of Non-GAAP Financial Measures
To supplement the consolidated financial statements presented in accordance with United States Generally Accepted Accounting Principles (“GAAP”), 51job uses non-GAAP financial measures of income before income tax expense, income tax expense, adjusted net income, adjusted earnings per share and adjusted earnings per ADS, which are adjusted from results based on GAAP to exclude share-based compensation expense, gain/loss from foreign currency translation, convertible senior notes issuance costs, change in fair value of convertible notes and change in fair value of zero-strike call options, as well as the related tax effect of these items. The Company believes excluding share-based compensation expense and its related tax effect from its non-GAAP financial measures is useful for its management and investors to assess and analyze the Company’s core operating results as such expense is not directly attributable to the underlying performance of the Company’s business operations and do not impact its cash earnings. The Company believes excluding gain/loss from foreign currency translation and its related tax effect from its non-GAAP financial measures is useful for its management and investors as such translation loss is not indicative of the Company’s core business operations and will not result in cash settlement nor impact the Company’s cash earnings. The Company believes excluding convertible senior notes issuance costs and its related tax effect from its non-GAAP financial measures is useful for its management and investors as such costs are one-time, non-recurring and not attributable to the underlying performance of the Company’s business. The Company believes excluding change in fair value of convertible notes and its related tax effect from its non-GAAP financial measures is useful for its management and investors as such change is not indicative of the Company’s core business operations and will not result in cash settlement nor impact the Company’s cash earnings. The Company believes excluding change in fair value of zero-strike call options and its related tax effect from its non-GAAP financial measures is useful for its management and investors as such change is not indicative of the Company’s core business operations and will not result in cash settlement nor impact the Company’s cash earnings. 51job also believes these non-GAAP financial measures excluding share-based compensation expense, gain/loss from foreign currency translation, convertible senior notes issuance costs, change in fair value of convertible notes and change in fair value of zero-strike call options, as well as the related tax effect of these items, are important in helping investors to understand the Company’s current financial performance and future prospects and to compare business trends among different reporting periods on a consistent basis. The presentation of these additional measures should not be considered a substitute for or superior to GAAP results or as being comparable to results reported or forecasted by other companies. The non-GAAP measures have been reconciled to GAAP measures in the attached financial statements.
About 51job
51job is a leading provider of integrated human resource services in China with a strong focus on recruitment related services. Through online recruitment services at http://www.51job.comand mobile applications, 51job enables enterprises to attract, identify and recruit employees and connects millions of job seekers with employment opportunities. 51job also provides a number of other value-added human resource services, including business process outsourcing, training, executive search and compensation and benefits analysis. 51job has a call center in Wuhan and a nationwide sales office network spanning 25 cities across China.
Safe Harbor Statement
Statements in this release regarding targets for the third quarter of 2014, future business and operating results constitute “forward-looking” statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the Private Securities Litigation Reform Act of 1995. These statements are based upon management’s current expectations, and actual results could differ materially. Among the factors that could cause actual results to differ are the number of recruitment advertisements placed, sales orders received and customer contracts executed during the remaining weeks of the third quarter of 2014; any accounting adjustments that may occur during the quarterly close; fluctuations in the value of the Renminbi against the U.S. dollar and other currencies; behavioral and operational changes of customers in meeting their human resource needs as they respond to evolving social, economic, regulatory and political changes in China as well as stock market volatilities; introduction by its competitors of new or enhanced products or services; price competition in the market for the various human resource services that the Company provides in China; acceptance of new products and services developed or introduced by the Company outside of the human resources industry; and fluctuations in general economic conditions. For additional information on these and other factors that may affect the Company’s financial results, please refer to the Company’s filings with the Securities and Exchange Commission. 51job undertakes no obligation to update these targets prior to announcing final results for the third quarter of 2014 or as a result of new information, future events or otherwise.
51job, Inc.
Consolidated Statements of Operations and Comprehensive Income
For the Three Months Ended
(In thousands, except share, per share and per ADS data)
June 30, 2013
(unaudited)
June 30, 2014
(unaudited)
June 30, 2014
(unaudited)
RMB
RMB
US$ (Note 1)
Revenues:
Online recruitment services
269,533
312,021
50,297
Print advertising
11,020
2,338
377
Other human resource related revenues
123,808
143,165
23,077
Total revenues
404,361
457,524
73,751
Less: Business and related tax
(16,391)
(16,478)
(2,656)
Net revenues
387,970
441,046
71,095
Cost of services (Note 2)
(101,949)
(115,234)
(18,575)
Gross profit
286,021
325,812
52,520
Operating expenses:
Sales and marketing (Note 3)
(111,117)
(142,568)
(22,981)
General and administrative (Note 4)
(49,438)
(60,805)
(9,802)
Total operating expenses
(160,555)
(203,373)
(32,783)
Income from operations
125,466
122,439
19,737
(Loss) Gain from foreign currency translation
(2,390)
5,337
860
Interest and investment income, net
18,572
22,030
3,551
Convertible senior notes issuance costs
————
(47,210)
(7,610)
Change in fair value of convertible notes
————
(28,879)
(4,655)
Change in fair value of zero-strike call options
————
(24,874)
(4,010)
Other income, net
2,879
32,303
5,207
Income before income tax expense
144,527
81,146
13,080
Income tax expense
(25,291)
(29,189)
(4,705)
Net income
119,236
51,957
8,375
Other comprehensive income:
Foreign currency translation adjustments
(3)
5
1
Comprehensive income
119,233
51,962
8,376
Earnings per share:
Basic
2.04
0.88
0.14
Diluted
1.99
0.86
0.14
Earnings per ADS (Note 5):
Basic
4.08
1.75
0.28
Diluted
3.98
1.72
0.28
Weighted average number of common shares outstanding:
Basic
58,400,383
59,285,976
59,285,976
Diluted
59,899,196
60,273,997
60,273,997
Notes:
1. The conversion of Renminbi amounts into U.S. dollar amounts is based on the noon buying rate of RMB6.2036 to US$1.00 on June 30, 2014 in New York for cable transfers of Renminbi as set forth in the H.10 weekly statistical release of the Federal Reserve Board.
2. Includes share-based compensation expense of RMB2,375 and RMB2,935 (US$473) for the three months ended June 30, 2013 and 2014, respectively.
3. Includes share-based compensation expense of RMB2,041 and RMB2,523 (US$407) for the three months ended June 30, 2013 and 2014, respectively.
4. Includes share-based compensation expense of RMB10,403 and RMB12,862 (US$2,073) for the three months ended June 30, 2013 and 2014, respectively.
5. Each ADS represents two common shares.
51job, Inc.
Consolidated Statements of Operations and Comprehensive Income
For the Six Months Ended
(In thousands, except share, per share and per ADS data)
June 30, 2013
(unaudited)
June 30, 2014
(unaudited)
June 30, 2014
(unaudited)
RMB
RMB
US$ (Note 1)
Revenues:
Online recruitment services
517,564
613,564
98,905
Print advertising
35,822
10,776
1,737
Other human resource related revenues
231,350
270,385
43,585
Total revenues
784,736
894,725
144,227
Less: Business and related tax
(32,037)
(34,149)
(5,505)
Net revenues
752,699
860,576
138,722
Cost of services (Note 2)
(201,312)
(222,049)
(35,794)
Gross profit
551,387
638,527
102,928
Operating expenses:
Sales and marketing (Note 3)
(212,550)
(274,521)
(44,252)
General and administrative (Note 4)
(97,858)
(121,796)
(19,633)
Total operating expenses
(310,408)
(396,317)
(63,885)
Income from operations
240,979
242,210
39,043
(Loss) Gain from foreign currency translation
(3,791)
5,876
947
Interest and investment income, net
35,849
43,700
7,044
Convertible senior notes issuance costs
————
(47,210)
(7,610)
Change in fair value of convertible notes
————
(28,879)
(4,655)
Change in fair value of zero-strike call options
————
(24,874)
(4,010)
Other income, net
3,019
32,378
5,219
Income before income tax expense
276,056
223,201
35,978
Income tax expense
(48,028)
(52,765)
(8,505)
Net income
228,028
170,436
27,473
Other comprehensive income:
Foreign currency translation adjustments
(0)
84
14
Comprehensive income
228,028
170,520
27,487
Earnings per share:
Basic
3.92
2.88
0.46
Diluted
3.81
2.81
0.45
Earnings per ADS (Note 5):
Basic
7.84
5.75
0.93
Diluted
7.63
5.63
0.91
Weighted average number of common shares outstanding:
Basic
58,153,065
59,260,210
59,260,210
Diluted
59,802,414
60,550,822
60,550,822
Notes:
1. The conversion of Renminbi amounts into U.S. dollar amounts is based on the noon buying rate of RMB6.2036 to US$1.00 on June 30, 2014 in New York for cable transfers of Renminbi as set forth in the H.10 weekly statistical release of the Federal Reserve Board.
2. Includes share-based compensation expense of RMB4,531 and RMB6,090 (US$982) for the six months ended June 30, 2013 and 2014, respectively.
3. Includes share-based compensation expense of RMB3,895 and RMB5,235 (US$844) for the six months ended June 30, 2013 and 2014, respectively.
4. Includes share-based compensation expense of RMB19,853 and RMB26,687 (US$4,302) for the six months ended June 30, 2013 and 2014, respectively.
5. Each ADS represents two common shares.
51job, Inc.
Reconciliation of GAAP and Non-GAAP Results
For the Three Months Ended
(In thousands, except share, per share and per ADS data)
June 30, 2013 (unaudited)
June 30, 2014 (unaudited)
June 30, 2014 (unaudited)
RMB
RMB
USD (Note 1)
GAAP income before income tax expense
144,527
81,146
13,080
Add back: Share-based compensation expense
14,819
18,320
2,953
Add back: Loss (Gain) from foreign currency translation
2,390
(5,337)
(860)
Add back: Convertible senior notes issuance costs
————
47,210
7,610
Add back: Change in fair value of convertible notes
————
28,879
4,655
Add back: Change in fair value of zero-strike call options
————
24,874
4,010
Non-GAAP income before income tax expense
161,736
195,092
31,448
GAAP income tax expense
(25,291)
(29,189)
(4,705)
Tax effect of share-based compensation expense, loss (gain) from foreign currency translation, convertible senior notes issuance costs, change in fair value of convertible notes and change in fair value of zero-strike call options
1
(124)
(20)
Non-GAAP income tax expense
(25,290)
(29,313)
(4,725)
Non-GAAP adjusted net income
136,446
165,779
26,723
Non-GAAP adjusted earnings per share:
Basic
2.34
2.80
0.45
Diluted
2.28
2.75
0.44
Non-GAAP adjusted earnings per ADS (Note 2):
Basic
4.67
5.59
0.90
Diluted
4.56
5.50
0.89
Weighted average number of common shares outstanding:
Basic
58,400,383
59,285,976
59,285,976
Diluted
59,899,196
60,273,997
60,273,997
For the Six Months Ended
(In thousands, except share, per share and per ADS data)
June 30, 2013 (unaudited)
June 30, 2014 (unaudited)
June 30, 2014 (unaudited)
RMB
RMB
US$ (Note 1)
GAAP income before income tax expense
276,056
223,201
35,978
Add back: Share-based compensation expense
28,279
38,012
6,128
Add back: Loss (Gain) from foreign currency translation
3,791
(5,876)
(947)
Add back: Convertible senior notes issuance costs
————
47,210
7,610
Add back: Change in fair value of convertible notes
————
28,879
4,655
Add back: Change in fair value of zero-strike call options
————
24,874
4,010
Non-GAAP income before income tax expense
308,126
356,300
57,434
GAAP income tax expense
(48,028)
(52,765)
(8,505)
Tax effect of share-based compensation expense, loss (gain) from foreign currency translation, convertible senior notes issuance costs, change in fair value of convertible notes and change in fair value of zero-strike call options
(0)
(124)
(20)
Non-GAAP income tax expense
(48,028)
(52,889)
(8,525)
Non-GAAP adjusted net income
260,098
303,411
48,909
Non-GAAP adjusted earnings per share:
Basic
4.47
5.12
0.83
Diluted
4.35
5.01
0.81
Non-GAAP adjusted earnings per ADS (Note 2):
Basic
8.95
10.24
1.65
Diluted
8.70
10.02
1.62
Weighted average number of common shares outstanding:
Basic
58,153,065
59,260,210
59,260,210
Diluted
59,802,414
60,550,822
60,550,822
Notes:
1. The conversion of Renminbi amounts into U.S. dollar amounts is based on the noon buying rate of RMB6.2036 to US$1.00 on June 30, 2014 in New York for cable transfers of Renminbi as set forth in the H.10 weekly statistical release of the Federal Reserve Board.
2. Each ADS represents two common shares.
51job, Inc.
Consolidated Balance Sheets
As of
(In thousands, except share and per share data)
December 31, 2013
(unaudited)
June 30, 2014
(unaudited)
June 30, 2014
(unaudited)
RMB
RMB
US$ (Note 1)
ASSETS
Current assets:
Cash
1,065,543
1,039,449
167,556
Restricted cash
15,489
3,472
560
Short-term investments
2,081,964
3,168,455
510,745
Accounts receivable (net of allowance of RMB3,347 and RMB804 as of December 31, 2013 and June 30, 2014, respectively)
— Combined telematics subscriber base in both countries to reach over 1.6 million by 2020
SAO PAULO, Aug. 12, 2014 /PRNewswire/ — Brazil and Mexico have a strong and well-developed automotive aftermarket, with service providers (SPs) offering stolen vehicle tracking (SVT), monitoring and immobilization solutions. However, passenger vehicle original equipment manufacturers (OEMs) are looking to go beyond the existing basic service offerings to create new revenue streams and boost their presence in these countries. Connected services are expected to play a vital role towards brand differentiation and maintaining market share in an increasingly competitive automotive market.
New analysis from Frost & Sullivan, Strategic Analysis of the Automotive Connected Services Market in Brazil and Mexico, finds that the total number of telematics service subscribers in Brazil will go up from 4,800 in 2013 to nearly 1,300,000 in 2020. Mexico’s telematics subscriber base, on the other hand, will grow from 2,000 in 2013 to approximately 330,000 in 2020. By the end of the forecast period, automotive connected services is expected to penetrate between 26 to 28 percent of new cars sales in Brazil and approximately 23 to 25 percent of new cars sold in Mexico. The study covers automotive connected services offered by vehicle OEMs and independent aftermarket solutions.
“In Mexico, the provision of automotive connected services in vehicles from General Motors, and the expected introduction of these services by other premium vehicle OEMs, will propel the market,” said Frost & Sullivan Automotive & Transportation Industry Analyst Yeswant Abhimanyu. “Likewise, the market in Brazil will expand as more vehicle OEMs venture towards offering telematics services.”
However, the high cost of vehicles in markets such as Brazil could dampen sales volumes, considering that over 60 percent of cars sold are from the price-sensitive A- and B- segments. Also, since purchasing vehicle insurance is not mandatory in Brazil, insurance-coupled telematics services might not find much acceptance among cost-conscious customers. As customers begin to realize the value of insurance in the event of car theft and other situations, insurance-coupled telematics offerings will grow in popularity.
The continued delay in the implementation of the Conselho Nacional de Transito (CONTRAN) 245 mandate that requires the installation of anti-theft equipment in all new vehicles in Brazil is also understood to be slowing market development. In light of the different possible scenarios, vehicle OEMs and other participants along the value chain are unsure whether to introduce telematics services just yet. This, along with a debate regarding the right mix of automotive connected services to offer customers, is slowing market introduction and current potential.
“Partnerships among vehicle OEMs and SPs are expected to pave the way for the advancement of the automotive connected services market in Brazil. While vehicle OEMs can take advantage of the bandwidth and scope that SVT and immobilization service providers have in the country, the SPs can move towards complete, high-end telematics service providers (TSPs),” noted Abhimanyu. “Vehicle OEMs might even extend their partnerships to hardware manufacturers and other value chain participants, using innovation and flexibility as key decision-making criteria to choose appropriate partners.”
SPs across Mexico could also consider partnering with vehicle OEMs to broaden their service offerings and thereby attract more customers. Focus should lie in providing advanced telematics services such as turn-by-turn navigation and automatic crash response.
Strategic Analysis of the Automotive Connected Services Market in Brazil and Mexico is part of the Automotive & Transportation (http://www.automotive.frost.com) Growth Partnership Service program. A complementing study, Voice of the Consumer (End Consumers – Car Owners) that looks at the consumer’s willingness to pay for connected services, the features of interest, and the effects of the smartphones, is also in progress.
For more information on this and related studies, please email Francesca Valente, Corporate Communications, at francesca.valente@frost.com.
About Frost & Sullivan
Frost & Sullivan, the Growth Partnership Company, works in collaboration with clients to leverage visionary innovation that addresses the global challenges and related growth opportunities that will make or break today’s market participants.
Our “Growth Partnership” supports clients by addressing these opportunities and incorporating two key elements driving visionary innovation: The Integrated Value Proposition and The Partnership Infrastructure.
The Integrated Value Proposition provides support to our clients throughout all phases of their journey to visionary innovation including: research, analysis, strategy, vision, innovation and implementation.
The Partnership Infrastructure is entirely unique as it constructs the foundation upon which visionary innovation becomes possible. This includes our 360 degree research, comprehensive industry coverage, career best practices as well as our global footprint of more than 40 offices.
For more than 50 years, we have been developing growth strategies for the global 1000, emerging businesses, the public sector and the investment community. Is your organization prepared for the next profound wave of industry convergence, disruptive technologies, increasing competitive intensity, Mega Trends, breakthrough best practices, changing customer dynamics and emerging economies?
Thousands of buyers are expected to meet their sourcing needs at the largest Asia products exhibition in South America
SAO PAULO, August 12, 2014 /PRNewswire/ — Global Sources (NASDAQ: GSOL) opened its…
LONDON, Aug. 11, 2014 /PRNewswire/ — Set to uncover the next generation of UK entrepreneurs, experts and disruptive innovators needed to enable businesses to adopt a circular economy approach, Resource (http://www.resource-event.com) is calling for innovative small companies and start-ups to join its Launch Pad initiative.
The Launch Pad has 10 subsidised spots for circular economy businesses and enablers to pitch their technologies, processes, platforms, service or offering to over 11,000* professionals looking to secure future materials sources and develop a model for profit in a circular economy.
Already confirmed on the Launch pad at the world’s leading event for the circular economy are WARPit and Bag:ReBorn. WARPit are the developers of a resource reuse network allowing staff to share (give away or loan) surplus physical resources within their organisation, and between organisations.
WARPit Founder Daniel O’Connor said: “As a company helping the public and private sector move towards zero waste, investing in The Launch Pad at Resource was a no-brainer for us. As a young business set up just three years ago we do not have the marketing reach of larger companies, so the Launch Pad will enable us to have a presence in front of thousands of circular economy players under one roof.”
Also taking part are Bag:ReBorn, a specialist packaging design company motivated by reuse and prevention. Designed to extend the life-cycle of two of the most short-lived plastic products on the planet; Bag Re:Born is an innovative waste/resource collection sack that is cleverly disguised as a reusable shopping bag.
Commenting on joining Resource’s Launch Pad, Richard Simmonite, the award-winning innovator behind Bag Re:Born said: “As a company, Bag Re:Born shares many of the core values of The Resource Event. We believe in disruptive innovation and supporting the circular economy; values inherent in our company slogan – ‘no excuse for single use’. We see Bag Re:Born playing a key role in reducing dependence on raw materials and changing consumer attitudes towards waste and reuse. As part of The Launch Pad, we look forward to working with like-minded companies towards a more sustainable future.”
With one in five British mid-sized businesses now classified as “high growth” and start-up activity on the rise in the UK, it is critical that business owners learn and adopt circular business models. According to the Ellen MacArthur Foundation, ’emerging innovators’ in the form of start up or small businesses hold the key to unlocking innovation barriers to circular progress.
Stephen Gee, Event Director, Resource said: “SMEs are the lifeblood of Europe’s economy, but both lack of available finance and knowledge currently prevent around fifty percent of business owners adopting circularity and exploiting the commercial opportunities it represents. The Launch Pad has been set up both to help SMEs break into the market and bring new thinking and disruptive innovation to the masses.”
The Resource Event; takes place 3rd to 5th March 2015 at London’s ExCeL. If you are keen to exhibit on the Launch Pad, please contact David Bradbury, Key Account Manager, Resource on M: +44(0)7920-547874, T: +44(0)20-7921-8213 or E: David.Bradbury@ubm.com.
— Concerns over economic uncertainty drops significantly for the first time in six years among CFOs of the largest media and entertainment companies
— Digital presents best opportunities for growth, and data analytics will provide insights to achieve strategies
— The US continues to be the most attractive market for investment, but emerging markets present opportunities for growth
NEW YORK, Aug. 11, 2014 /PRNewswire/ — The media and entertainment industry (M&E) has moved past the economic uncertainty of the global recession and shifted their primary focus from cost-cutting to growth, according to EY’s survey of CFOs of leading global M&E companies. The report, It’s Showtime! Digital drives the agenda, data delivers the insights (www.ey.com/ME_CFOstudy), which surveyed 50 large global M&E companies, shows CFOs are no longer worried about the global recession and are well-positioned to grow their companies through capitalizing on digital opportunities and through investments in technology, digital talent and infrastructure, as well as acquisitions and other deals. Only 26% of senior executives surveyed said global economic uncertainty would be a challenge during the next three years, compared to 62% two years ago, showing a dramatic decrease in concern over the economy.
John Nendick, Global Media & Entertainment Leader at EY, says:
“The CFOs told us in no uncertain terms that the economy is no longer an obstacle and now is the time for media and entertainment companies to invest in growth and focus on building their businesses. The industry is now poised to deliver on the promises it has been making the past several years but has been unable to achieve because of the economy. The CFOs recognize the recession is over and it’s showtime.”
Despite the opportunities for growth, the industry still faces many challenges. A majority of CFOs identified the greatest obstacles for the industry during the next three years as technology and platform disintermediation (64%), and an inability to persuade consumers to pay fair value for content (58%). Still others identified structural and regulatory uncertainty (42%) and reductions/reallocations of marketing budgets (26%) as major challenges for the future.
CFOs are positioning for growth and they see data analytics as the means to achieve it. They are placing significant emphasis on data to improve decision-making, systems and processes. But much work remains to be done. While 59% of CFOs feel their companies successfully use data to respond to and upsell existing customers, only 33% said their companies do a good job of using data to generate new business. And while only 39% of CFOs believe their organization is good at sharing data, 58% indicated that sharing data between business units would improve their organization’s overall effectiveness.
Conversely, as data analytics become more essential to business operations, growing concerns over effectiveness and data overload also increase. The industry expects its data storage to increase from 1,100 exabytes of available data in 2010 to 8,000 exabytes by 2015. CFOs expressed concern over the increasing difficulty of identifying any meaningful insight within this massively expanding amount of data.
Other key findings of the survey include:
Top priorities for the year ahead are the evolution of digital and online distribution (74%), cost reduction and business efficiencies (34%), creatively differentiating content (32%), extending brands globally (32%) and growth in new market segments (30%).
Emerging markets are no longer the top geographic focus for growth; 72% of M&E companies indicated their focus is on existing/core markets.
Seventy-two percent chose interactive media businesses as being best positioned to evolve and thrive in the future, followed by cable television networks and channels (42%), conglomerates (36%), film and television production (30%) and content and information services (30%).
The top actions identified to make companies more effective are attracting/retaining talent (58%), improved IT capabilities (42%), deeper understanding of market trends, customers and competitors (38%) and getting new products to market faster (30%).
CFOs prefer deals that give them either complete or majority ownership (61%) instead of making investments or having a minority interest (34%).
The average deal value during the first half of 2014 was US$939m, compared with US$220m in 2013 and US$157m in 2012, with cable operators driving the rise.
Howard Bass, EY’s Global Media & Entertainment Advisory Services Leader says:
“Recruiting and retaining talent is a significant concern for almost every CFO we surveyed. All agreed that talent, as well as establishing better collaboration between teams and different business units, are the most important factors for efficiently running their companies. The right talent means finding people who have the technical skills but are also digital savvy.”
About the survey The survey was conducted among 50 CFOs of some of the largest global media and entertainment companies, headquartered in 10 countries and representing almost half a trillion dollars in media and entertainment revenue. The survey spanned industry sectors including filmed entertainment; broadcast and cable networks; music/radio; media conglomerates; advertising; internet and interactive media; publishing and information services; and cable/satellite distributors. Thirteen percent of companies surveyed have annual revenue greater than US$25 billion; 9%, US$10-$25 billion; 17%, US$5-$9.9 billion; 30%, US$1-$4.9 billion; 13%, US$500-$999 million; and 18%, less than US$500 million.
About EY’s Global Media & Entertainment Center EY’s Global Media & Entertainment Center brings together a high-performance, worldwide team of media and entertainment professionals with deep technical experience in providing assurance, tax, transaction and advisory services to the industry’s leaders. Our network of professionals collaborate and share knowledge around the world, to provide exceptional client service and leverage our leading market share position to provide you with actionable information, quickly and reliably.
About EY EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.
EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com.
This news release has been issued by EYGM Limited, a member of the global EY organization that also does not provide any services to clients.
Weakness in Asian Currencies Overshadows Solid Growth in Local Markets
ZURICH, Aug. 11, 2014/PRNewswire/ —
Net sales growth of 6.7% at constant exchange rates
Depreciation of Asian currencies impact results negatively by 9.6%
Operating profit in a challenging market environment, at constant exchange rates, slightly above last year’s level
Impact from political unrest in Thailand more profound than expected at the beginning of the year
DKSH confirms outlook
Key figures of DKSH (in CHF millions)
At constant
exchange rates[1]
In CHF
In CHF
H1 2014
Changein %
H1 2014
Change in %
H1 2013
Net sales
5,071.8
6.7%
4,618.4
(2.9%)
4,754.5
Operating profit (EBIT)
144.8
1.4%
131.4
(8.0%)
142.8
Profit after tax
99.8
(4.9%)
91.7
(12.6%)
104.9
Free cash flow
166.7
(2.4%)
136.7
(20.0%)
170.8
Earnings per share (in CHF)
‒
‒
1.41
(11.9%)
1.60
Number of employees[2]
‒
‒
27,159
1.7%
26,693
[1]Against the backdrop of substantial foreign exchange rate depreciations and to make operating performance comparable, DKSH has since the full-year 2013 results communicated figures as well at constant exchange rates. For constant exchange rates, the 2014 figures have been converted at 2013 exchange rates
[2] As of December 31, 2013
DKSH (SIX: DKSH), the leading Market Expansion Services provider with a focus on Asia, continued to grow in the first half-year of 2014 at constant exchange rates in a challenging market environment. All Business Units and major countries positively contributed to net sales growth.
Net sales grew by 6.7% at constant exchange rates to CHF 5,071.8 million. Organic growth was 6.0%, while just 0.7 percentage points of net sales growth resulted from M&A activities. The depreciation of Asian currencies impacted net sales in total by 9.6%. Reported in Swiss francs, net sales accordingly reached CHF 4,618.4 million.
Despite the challenging political situation in our main market, Thailand, operating profit before interest and taxes (EBIT) at constant exchange rates increased by 1.4% and reached CHF 144.8 million. Reported in Swiss francs, EBIT accordingly reached CHF 131.4 million. Political unrest in Thailand was more profound and enduring than expected at the beginning of the year, resulting in negative economic growth. Over the past months, this caused a temporary lower demand for consumer goods, higher-margin luxury and lifestyle products as well as reduced industrial investments. The military takeover at the end of May, however, helped to stabilize the situation.
Profit after tax (PAT) has been impacted by profit hedging costs and accordingly reached CHF 99.8 million at constant exchange rates. Reported in Swiss francs, PAT accordingly reached CHF 91.7 million.
Although net sales grew in the first six months of 2014, free cash flow achieved, at constant exchange rates, CHF 166.7 million thanks to sound working capital management and thereby almost reached the high level of last year.
Dr. Joerg Wolle, President & CEO of DKSH, commented: “Despite the challenging market environment, DKSH again reported solid growth in numerous markets. This was achieved on the back of our robust business model and the rigorous implementation of our strategy.”
DKSH’s strategy for sustainable, profitable growth is centered on growing organically, through expanding business with existing clients, multiplying success stories from country to country and new business development, complemented by strategic bolt-on acquisitions.
DKSH continued to invest in the skills and training of its employees, its most important asset. At the end of June 2014, DKSH employed 27,159 specialists worldwide, representing an increase of 466 people or 1.7% compared to the year-end of 2013.
Confirmation of outlook
Commenting on the outlook Dr. Joerg Wolle said: “From today’s perspective, we expect to achieve a 2014 result which is above the record year 2013. This assuming constant exchange rates. The increasingly difficult political situation in our main market Thailand has temporarily resulted in lower demand for consumer goods and in reduced investment activities. While the current situation does not allow for providing an accurate forecast for the year, we are cautiously optimistic. This based on the recently improved consumer confidence index and increased growth forecasts for the Thai economy. The recent weeks can be considered as a potential trend reversal after thirteen months of continuously declining consumer confidence.
The growth outlook for our markets and the attractiveness of our business model remain very good. Because of increased uncertainty and complexity in some Asian markets, clients are increasingly outsourcing sales and distribution of their products in Asia to transparent and reliable partners like DKSH. Demand for our services therefore continues to rise. With our strongly diversified and scalable business model, DKSH is ideally positioned to benefit from the growing middle class, rising inner-Asian trade and increased outsourcing to specialist services providers like DKSH.”
Building on these firm foundations and based on current market views, as well as constant exchange rates, DKSH is confident of achieving over a three-year time frame up to 2016 net sales of around CHF 12 billion at a compound annual growth rate (CAGR) of 8%. Within the same time frame EBIT is expected to grow at a CAGR of 10% to a level of around CHF 380 million, which should translate into profit after tax of some CHF 270 million.
Analyst and investor conference/webcast
The live webcast of today’s media conference will be held at 9:30 a.m. CET (in German) and the live webcast of today’s analyst and investor conference will be held at 11 a.m. CET (in English). A recording of the webcast will be available on DKSH’s website.
DKSH is the leading Market Expansion Services provider with a focus on Asia. As the term “Market Expansion Services” suggests, DKSH helps other companies and brands to grow their business in new or existing markets.
Publicly listed on the SIX Swiss Exchange since March 2012, DKSH is a global company headquartered in Zurich. With 735 business locations in 35 countries — 710 of them in Asia — and 27,200 specialized staff, DKSH generated net sales of CHF 9.6 billion in 2013.
The company offers a tailor-made, integrated portfolio of sourcing, marketing, sales, distribution, and after-sales services. It provides business partners with expertise as well as on-the-ground logistics based on a comprehensive network of unique size and depth. Business activities are organized into four specialized Business Units that mirror DKSH fields of expertise: Consumer Goods, Healthcare, Performance Materials, and Technology.
With strong Swiss heritage, the company has nearly a 150-year-long tradition of doing business in and with Asia, and is deeply rooted in communities and businesses across Asia Pacific.
