Interim Report H1 2014

Transcrição

Interim Report H1 2014
Group Key Data
kEUR
H1 2014
H1 2013
Selected income statement data
Sales revenues
180,169
173,747
Cost of sales
-130,816
-125,190
Gross profit
49,353
48,557
Other operating income
1,146
785
-12,491
-10,926
Administrative expenses
-7,959
-6,726
Research and Development
-3,469
-2,950
-257
-289
Operating profit
26,323
28,451
Finance income
665
501
Finance costs
-5,079
-4,771
Profit before income tax
21,909
24,181
Income tax
-6,978
-11,027
Profit for the period
14,931
13,154
Selling and distribution expenses
Other operating expenses
Selected balance sheet data
Total assets
554,059
495,175
Total liabilities
183,959
132,292
Total equity
370,100
362,883
Selected cash flow data
Cash flow from operating activities
Cash flow used in investing activities
Cash flow from financing activities
Cash and cash equivalents at the end of the period
27,136
17,302
-13,379
-16,364
-3,789
-2,472
136,329
79,661
Other selected financial data
Gross profit margin1)
EBIT2)
27.4%
27.9%
26,323
28,451
EBIT margin3)
14.6%
16.4%
Adjusted EBITDA4)
30,818
32,607
Adjusted EBITDA margin5)
17.1%
18.8%
Number of employees6)
3,924
3,272
Number of stores
4,154
4,104
Gross profit margin is calculated as gross profit divided by revenues times 100
EBIT is calculated as net income less interest income plus interest expense plus tax expenses less tax refundable
EBIT margin is EBIT divided by revenues times 100
4)
Adjusted EBITDA is calculated as net income less interest income plus interest expense plus tax expenses plus depreciation and amortisation
plus expenses from land-use rights in Mainland China
5)
Adjusted EBITDA divided by revenues times 100
6)
Own employees including contract workers and trainees
1)
2)
3)
Content
1 Letter to the Shareholders
2 Interim Group Management Report
14Condensed Half-Year Consolidated
Financial Statements
27 Responsibility Statement
28 Review Report
29 Financial Calendar, Imprint
Joyou AG Interim Report H1 2014
Letter to the Shareholders 1
Letter to the Shareholders
Dear Shareholders,
the sales revenues rose to nearly EUR 180.2 million in the first half
of 2014, which was an increase of 3.7% over the first half of the previous year in Euro terms and 9.2% in RMB terms, which was in line
with our guidance.
Internationally, the near doubling of international sales is testimony
to the successful cooperation of the collaborative strategy with our
group companies, and I am confident that this will continue to provide future benefits to the Joyou Group.
This was despite that in the first six months 2014 the growth of China’s
gross domestic product slowed down to 7.4% from the first six months
of 2013 of 7.6%, and a month-on-month house prices growth rate decline, Joyou’s China domestic sales showed an increase of 0.5% in
Euro terms and 5.8% in RMB terms. International sales overall showed
a dramatic increase of 84.4% in Euro terms, and 94.1% in RMB terms.
In January 2014 the acquisition of our parent company by a joint venture vehicle owned by the LIXIL Group and the Development Bank
of Japan, has opened up further expansion potential and since the
close, there have been several initial meetings in China with various
teams from the LIXIL Group to start exploring potential synergies and
how they may be utilised which have already lead the first trial order
delivered to LIXIL.
Gross margin saw a slight decrease by 0.5 percentage points to 27.4%,
which was mainly the due to lower gross margin of international sales
due to their lower sales price.
The EBIT margin declined by 1.8 percentage points to 14.6%. Which
was the result of decreased Gross Margin and due to increases in operational expenses.
Net Profit showed strong gains of 13.5% mainly due to the non-occurrence of one off revocation of preferential tax rate that was booked in
the second quarter of 2013.
Our core growth strategy comprises of international sales, project development sales and increasing sales per store. Based on this strategy,
we will continue to build on favourable macro-economic growth drivers, particularly urbanisation and the growing consumer class in China.
Even if the market environment is still somewhat challenging in the
short term, nationally from the restrictive measures around the construction industry in China, and slowing GDP growth rates and internationally due to the general economic turmoil, we still give a positive
outlook forecast stretching into 2014. We expect growth of between
5% and 10% in RMB terms.
Domestically, in the China market, I am very proud of our excellent network of franchised retail stores. We are continuing to expand some
well performing stores and improving the sales per square metre in
existing stores. Our Experience Centres support the company’s move
into project business by acting as showrooms to project developers.
On behalf of Management, I would like to thank you for your continued support!
Mr Jianshe CAI
CEO
Joyou AG
Interim Group Management Report
for the half year 2014
page 3–13
1 Foundations of the Group
The business model and strategy of Joyou Group as described in
the Combined Management Report of Joyou AG and the Group for
the business year 2013 remain unchanged.
Interim Group Management Report 3
The following graph depicts the number of cities where the sales
price of New Homes (excluding affordable state housing), and
Existing Homes, increased in the statistical pool of 70 major cities in China in last 12 months to June 2014.
70
The organisational and management structure of the Joyou Group
is almost unchanged to the structure disclosed in the consolidated
annual financial statements as at 31 December 2013. In May 2014
Joyou Building Materials finalized the incorporation of a 100% subsidiary which is named Xiamen X-Time Trading Co. Ltd. The company’s principal activity is intended to be the trading of Joyou’s
luxury brand products. Currently the company is registered without any capital subscribed. It is intended that the issued share
capital will amount to RMB 10 Mio.
2 Economic Report
60
50
40
30
20
10
0
J ul.
A ug.
S ep.
Oct.
Nov.
Dec.
J an.
F eb. Mar.
New Homes
A pr.
May
J un.
E xisting Homes
The following graph shows the month-on-month change (%) of
sales prices of New Homes (excluding affordable state housing),
and Existing Homes, in the statistical pool of 70 major cities in
China in last 12 months to June 2014.
2.1 Economic Development
China's economy showed strong resilience in the first half of 2014,
with growth momentum rebounding in the second quarter and expansion in the first six months reaching 7.4% year on year.
Helped by an export recovery since April, and new sources of
growth emerging from the structural adjustment, expansion accelerated to 7.5% in the second quarter from 7.4% in the previous
one, according to the Chinese National Bureau of Statistics (NBS).
The Chinese government has set an official GDP target of 7.5% for
the full year 2014. That compares with GDP growth of 7.7% in each
of the past two years, 9.3% in 2011 and 10.5% in 2010.
Retail sales in China grew 12.1% year on year to RMB 12.42 trillion
(USD 2.02 trillion) in the January-June 2014 period, quickening from
the 12.0% growth registered for the first quarter according to the
NBS. The actual growth rate was 10.8% with inflation deducted.
This growth was boosted by strong figures in the online sector, according to data released by NBS. Retail sales growth in rural areas
continued to outpace that in urban China. In January-June 2014 period, sales in rural regions rose 13.2% from a year ago to RMB1.69
trillion, while that in urban areas climbed 12.0%. Overall sales in
the Chinese online sector witnessed strong growth in the first six
months, surging 48.3% year on year to RMB 1.14 trillion showing
the increasing importance of online sales as consumer sentiment
moves towards acceptance on this relatively new channel, while
overall sales of consumer goods amounted to RMB 11.12 trillion,
up 12.4% year on year according to the NBS.
The Chinese consumer price index, a main gauge of inflation, grew 2.3%
year on year in June, down from 2.5 % in May according to the NBS. In
June, inflation in the country's urban regions grew 2.4%, higher than
the 2.1% in the rural regions, NBS data showed. The figure remained
below the full year target set by the Chinese government at 3.5%.
0.9%
0.8%
0.7%
0.6%
0.5%
0.4%
0.3%
0.2%
0.1 %
0.0%
-0.1 %
-0.2%
-0.3%
-0.4%
-0.5%
-0.6%
J ul.
A ug. S ep. Oct.
Nov. Dec.
J an.
New Homes
F eb.
Mar.
A pr.
May
J un.
E xisting Homes
Note: Calculation is based on cumulative change across cities, divided by number of cities.
Considering the efforts of the Chinese government to cool down
China’s housing prices as reported in previous periods, it appears
that such measures are having the desired effects. Although house
sales prices do not directly affect Joyou’s business, which is driven
more by urbanisation and increased consumer spending, these
changes may cause volatility in the housing market, in particular
in project business new starts.
2.2 Development of Joyou Group
In the first six months of 2014 the following key developments
occurred for Joyou:
→→ LIXIL and DBJ Complete the Acquisition of 87.5% of GROHE
Group S.à r.l
→→ Capacity Expansion in Meiyu Ceramics Facility
→→ Joyou Promotes its Online Internet Sales Promotion Strategy
→→ Joyou supports Youth Rural Literary and Art Performance
→→ Jilin CAI Honoured at the “15th Fujian Outstanding
Entrepreneur Award”
→→ Joyou Rolls Out “Serving China”-Customer Service Strategy
→→ Joyou's First Half-Year Marketing Plan
LIXIL and DBJ Complete the Acquisition of 87.5% of GROHE
Group S.à r.l.
On 21 January 2014, LIXIL Corporation ("LIXIL") and the Development
Bank of Japan Inc. (“DBJ”), via their joint holding company GraceB
S.à r.l. ("GraceB"), completed the acquisition of 87.5% of the share
capital of GROHE Group S.à r.l. (“GROHE”), Joyou AG´s controlling
entity. Via GraceB and GROHE, LIXIL and DBJ together thereafter
held 72.3% of the shares in Joyou AG. 27.7% of the shares remain
in free float. With the completion of the acquisition, GROHE and
Joyou AG became part of the LIXIL Group on 21 January 2014. For
more information on the transaction, refer to section 2.2.1 of the
Combined Management Report of Joyou AG and the Group of the
2013 Annual Report.
Since the close, there have been several initial meetings in China
with various teams from the LIXIL Group exploring potential synergies for LIXIL, Grohe and Joyou and how they may be utilised.
As a result of these consultations, the first test orders were delivered to the LIXIL group in June.
Capacity Expansion in Meiyu Ceramics Facility
In June, Joyou finished the construction of the first flow kiln on
in second phase of Meiyu ceramics facility which is expected to
start commercial production in August. When it reaches full utilisation, this first of three kilns to be installed in the facility will increase Joyou’s existing in-house production capacity of ceramic
products by around 100%.
This second phase of the Meiyu ceramics facility has a production
floor space of some 120,000 square meters and the three kilns will
each have a length of 148 meters. The three-storey facility will have
a total of three environmentally friendly, natural gas powered flow
kilns station on the ground floor. It is designed to be a high-volume,
multiple-product ceramics facility, with maximum flexibility to adapt
to market conditions. After the successful testing phase, the first kiln
will commence commercial operation. The further two kilns are expected to be installed and go into operation in line with sales ramp-up.
Joyou Promotes its Online Internet Sales Promotion Strategy
Online sales, like in the rest of the world, are growing in China,
and Joyou’s centralised online sales team has been devising new
strategies to ensure that Joyou remains at the forefront of this fast
growth sales channel in China. Joyou launched the promotion using TMall , which ranked one of the number one Chinese B2C retail
websites in terms of transaction volume, serving over 180 million
buyers. TMall is owned by Alibaba, a privately owned Hangzhoubased group of Internet-based e-commerce businesses including
business-to-business online web portals, online retail and payment services. On the May Day Special Discount Program of Joyou
offered a varied array of incentives and marketing activities. In addition to the special-price products during the sales promotion, a
lottery was drawn for big prizes such as international tourist excursion. The activities stressed Joyou’s efforts to grow its online sales
and hence its role as leader of the Chinese sanitary-ware industry.
Joyou supports Youth Rural Literary and Art Performance
As part of its efforts in Corporate Social Responsibility, Joyou coorganised and supported the locals arts with a series of events titled “Wonderful Youth: China Dream” with the Youth Literary and
Art by Nan’an Municipal Youth League Committee, and Quanzhou
Normal College. Event performances were held on the premises
of the Joyou China Head Quarters on May 9, 2014. Secretary of
Nan’an Municipal Youth League Committee, Mr. Qinglin FU, Youth
League Committee Secretary of Quanzhou Normal College, Mr.
Zhixiong FU, Director of Joyou HR Administration Centre, Mr. Xuncai
WENG, Administration Manager of HR Administration Centre, Mr.
Fuyuan WU and Director of Quality Assurance Centre Mr. Jiangshan
JI watched the performance jointly with the employees of the company. This event was held to jointly support the local arts culture in
the city, and to give a welcome performance to Joyou’s employees.
contributions. In addition to that, quick consulting services will
be available 24 hours a day, 7 days a week and service for speedy
servicing of installations within 48 hours will be offered. For VIP
customers, Joyou “Happy Family” service teams will provide doorto-door maintenance, cleaning and repair services for products installed within the past two years. Joyou “Happy Family” campaign,
part of the wider ‘Serving China’ campaign, seeks to achieve full
customer satisfaction as a strategic competence.
Joyou's First Half-Year Marketing Plan
Jilin CAI Honoured at the “15th Fujian Outstanding Entrepreneur
Award”
The Entrepreneur Day & Annual Meeting of Chinese Entrepreneurs
2014 was held in Fuzhou. Leaders from relevant ministries, association of enterprises at national, provincial and municipal levels,
entrepreneurs as well as experts and scholars from all over China
attended the “seeking reform-based breakthrough and innovation– Chinese entrepreneurs” themed conference. State councillor Mr. Wang Yong attended the meeting. In his speech he emphasised that enterprises and entrepreneurs should implement the
essence of the 18th CPC Congress and the Third Plenary Session
of the 18th Central Committee, keep responsibility and mission
in mind, work on reform and innovation, seek growth, improvement and efficiency in stability, and make greater contribution to
sustainable economic and social development.
Joyou Rolls Out “Serving China”-Customer Service Strategy
On 20 February, at the Macalline Super-Mall in Suzhou, Joyou
kicked off a series of events and activities, including a press conference, informing the Jiangsu market about the strategic service
system, and its differentiating characteristics. Since 2013 Joyou
has been focusing on customer service as a key strength, and
thereby launched the “Serving China” service strategy, which encompasses a five-year customer service plan. Joyou is in the process of building 40 service teams with its independent distributors with 180 members per team, in Jiangsu, a province of nearly
80 million people, to provide services at stores in 20 districts of
14 counties, and will be rolled out across China.
Furthermore, the new service program “Happy Family” developed
by Joyou with certain independent distributors covers free consulting services for all sale stages from the pre-sale stage, onsale stage and post-sale stage, delivery and installation services
as well as a life-long maintenance service packages. While the
fulfilment of this service program rests with Joyou’s independent distributors, Joyou supports its distributors and provides cost
In accordance to the group's marketing plan, Joyou established the
“Serving China and Love Around” marketing strategy for 2014 and
launched four distinctive campaigns in the form of national tours,
i.e. March 15th Customer Service Day, May 1st Bathroom Cabinet
Day and Shower Head day, and a series of unique Buying-together
Festival in the first half of 2014. These campaigns generated a lot
of buzz amongst the industry and consumers immediately after
their launch. Joyou analysis shows that Joyou has carried out over
2,000 sessions in the first half of 2014 through a wide range of
marketing activities throughout China, where over 20 successive
large-scale Buying-Together Festivals covered 200 cities of China
and attracted up to 100,000 visitors, and ignited a craze for Joyou
Buying-Together Festival in China's bathroom market.
2.3. Results of Operations, Financial Position, Net Assets
and Segment Analysis
2.3.1 Results of Operations
Revenues increased from kEUR 173,747 in the six-month period
ended 30 June 2013 by kEUR 6,422, or 3.7%, to kEUR 180,169 in
the six-month period ended 30 June 2014. Measured in RMB terms,
Group revenues increased by 9.2% during this period. This increase
resulted from sales increases in GROHE Products (which includes
de-stocking of inventories and increased customer sales), Copper
and Semi-Finished Products and Shower Products but was offset
by a decrease in revenues from Bathroom Accessories, Ceramics
and Bathtubs and Other Faucets and Sanitary Hardware.
Cost of sales comprises costs of purchasing copper, zinc, other
metals and other parts, labour costs for personnel and contract
workers employed in production, depreciation of fixed assets
used for production purposes, trading goods and others. Cost of
sales increased from kEUR 125,190 in the six-month period ended
30 June 2013 by kEUR 5,626, or 4.5%, to kEUR 130,816 in the sixmonth period ended 30 June 2014. The growth was higher than
the sales growth-rate mainly due to lower gross margin of international sales due to their lower sales price. In addition, Cost of
Sales was affected by increased costs for copper, various components and also increased salaries.
Gross Margin amounts to 27.4% for the six-month period ended 30 June 2014 and has decreased compared to the 27.9% for
the six-month period ended 30 June 2013. Sales increased by
3.7% compared with cost of sales which increased by 4.5% as
described above.
Selling and distribution expenses increased from kEUR 10,926 in
the six-month period ended 30 June 2013 by kEUR 1,565, or 14.3%,
to kEUR 12,491 in the six-month period ended 30 June 2014. This
increase primarily resulted from an increase in advertising expenses as a result of expanding into regions in order to strengthen competition among the players on the Chinese sanitary-ware
market, leading to growth in revenue and also commissions paid
to non-exclusive agents for products delivered to projects that
were introduced by them.
Research and development expenses increased from kEUR 2,950
in the six-month period ended 30 June 2013 by kEUR 519 or 17.6%
to kEUR 3,469 in the six-month period ended 30 June 2014. The
increase was mainly attributable to an increase in research and
development on moulds of new products.
Administrative expenses increased from kEUR 6,726 in the sixmonth period ended 30 June 2013 by kEUR 1,233 or 18.3% to kEUR
7,959 in the six- month period ended 30 June 2014. The increase
was mainly attributable to an increase in provisions for bad debts
and also welfare benefits for employees.
Group Earnings Before Interest and Tax (EBIT) decreased from kEUR
28,451 in the six-month period ended 30 June 2013 by kEUR 2,128 or
7.5% to kEUR 26,323 in the six-month period ended 30 June 2014.
EBIT
Depreciation and
amortisation on
fixed assets
EBITDA
Expenses on
land-use rights
1 Jan. to
30 Jun. 2014
1 Jan. to
30 Jun. 2013
kEUR
kEUR
kEUR
%
26,323
28,451
-2,128
-7.5
4,183
3,834
349
9.1
30,506
32,285
-1,779
-5.5
Variance
Finance costs, which mostly comprises of interest expense, bank
charges, and exchange rate losses, increased from kEUR 4,771 in
the six-month period ended 30 June 2013 by kEUR 308, or 6.5%,
to kEUR 5,079 in the six-month period ended 30 June 2014. The
increase was mainly attributable to an increase in exchange rate
losses due to increased bank loan. The change was mainly caused
by the USD denominated 100 million USD Nomura syndicated loan,
which was drawn down on by Joyou in July 2013. This increase in
comparison to the first six months of 2013 was partly offset by the
effects of the non-recurring interest expenses in the prior year period arising from the revocation of the preferential tax rate for hightech enterprises in relation to Joyou Sanitation.
Note: Over the periods being reported there was a decline of 5.3%
in the value of the RMB against the Euro with the average rate for
the six-month period ended 30 June 2013 of 8.1209 rising to 8.5488
for the six-month period ended 30 June 2014.
2.3.2 Financial Position
Joyou Group presents its financial position using, among other
financial measures, cash flows from operating, investing and financing activities as well as economic debt.
1 Jan. to
30 Jun. 2014
1 Jan. to
30 Jun. 2013
Variance
kEUR
kEUR
kEUR
Cash flow from
operating activities
27,136
17,302
9,834
Cash flow used in
investing activities
-13,379
-16,364
2,985
Cash flow used in
financing activities
-3,789
-2,472
-1,317
Changes in cash
and cash equivalents
9,968
-1,534
11,502
128,008
79,620
48,388
-1,647
1,575
-3,222
136,329
79,661
56,668
Cash and cash equivalents at
the start of the reporting period
Foreign exchange movements
312
322
-10
-3.1
EBITDA adjusted
30,818
32,607
-1,789
-5.5
EBT
21,909
24,181
-2,272
-9.4
Finance income, which mostly comprises of interest income and
exchange rate gains, increased from kEUR 501 in the six-month
period ended 30 June 2013 by kEUR 164, or 32.7% to kEUR 665 in
the six-month period ended 30 June 2014.
Cash and cash equivalents at
the end of the reporting period
Net cash generated from operating activities increased from kEUR
17,302 in the six-month period ended 30 June 2013 by kEUR 9,834, or
56.8%, to kEUR 27,136 in the six-month period ended 30 June 2014.
The increase was mainly due to the net changes in working capital,
specifically increases in notes payable and decreases in inventories.
Cash flow used in investing activities decreased from kEUR -16,364
in the six-month period ended 30 June 2013 by kEUR 2,985 or
18.2%, to kEUR -13,379 in the six-month period ended 30 June
2014. This decrease was mainly attributable to the acquisition of
Yongsheng galvanisation facility in Q2 2013.
Finally, cash flow used in financing decreased from kEUR -2,472 in
the six-month period ended 30 June 2013 by kEUR 1,317, or 53.3%,
to kEUR -3,789 in the six-month period ended 30 June 2014. This
was caused by Joyou having settled the current portion of its longterm loans falling due for repayment.
Joyou is required to deposit cash with certain banks to serve as
collateral, mainly for letters of credit and notes payable, and therefore may not be used in the ordinary course of business of these
companies; so-called “Restricted cash”. Restricted cash as at 30
June 2014, 31 December 2013 and 30 June 2013 was kEUR 10,812,
kEUR 12,673 and kEUR 12,860 respectively.
2.3.3 Net Assets
The development of the asset and capital structure between the
dates 30 June 2013 and 30 June 2014, and between 31 December
2013 and 30 June 2014 is as follows:
Inventories decreased from kEUR 88,187 as at 30 June 2013 by
kEUR 11,473, or 13.0%, to kEUR 76,714 as at 30 June 2014 due to
decreases in Grohe products and finished goods. There was an
increase in inventories from kEUR 73,576 as at 31 December 2013
by kEUR 3,138, or 4.3% to kEUR 76,714 as at 30 June 2014. The increase was due to increases in finished goods.
Property plant and equipment increased from kEUR 161,861 as
at 30 June 2013 by kEUR 18,070, or 11.2%, to kEUR 179,931 as at
30 June 2014. This increase was mainly attributable increases in
the extension of the Yongsheng galvanisation plant, the continuing construction of Meiyu ceramics plant phase 2, and Luncang
employee accommodation block. The figure increased from kEUR
172,589 as at 31 December 2013 by kEUR 7,342, or 4.3% to kEUR
179,931 as at 30 June 2014. This increase was mainly attributable
to the investments in expansion of Yongsheng galvanisation facility and second phase of the Meiyu ceramics facility.
Cash and cash equivalents increased from kEUR 79,661 as at 30
June 2013 by kEUR 56,668, or 71.1%, to kEUR 136,329 as at 30 June
2014. The increase was mainly due to the taking out of a long-term
syndicated loan. The figure increased from kEUR 128,008 as at 31
December 2013 by kEUR 8,321, or 6.5% to kEUR 136,329 as at 30
June 2014. The increase was mainly due to increases in cash flows
from operating activities.
Non-current liabilities increased from kEUR 22,780 as at 30 June
2013 by kEUR 43,754, or 192.1%, to kEUR 66,534 as at 30 June
2014. The major item stated under non-current liabilities refers to
a long-term bank loan. The increase was mainly due to increases
in long-term loans. The figure decreased from kEUR 87,594 as at
31 December 2013 by kEUR 21,060, or 24.0% to kEUR 66,534 as
at 30 June 2014. The decrease was mainly due to the reclassification of the current portion of the long-term loans.
As our growth strategy is affecting our working capital needs, we
focus on monitoring its development. The development of our net
working capital is as follows in the periods under review:
30 Jun. 2014
31 Dec. 2013
30 Jun. 2013
kEUR
%
kEUR
%
kEUR
%
Inventories
76,714
55.8
73,576
53.8
88,187
61.9
Trade receivables
93,390
68.0
85,518
62.5
89,471
62.8
Amounts due from
Grohe Group
6,085
4.4
5,571
4.1
5,210
3.7
Trade payables
-3,829
-2.8
-5,526
-4.0
-5,761
-4.0
Amounts due to
Grohe Group
-1,362
-1.0
-959
-0.7
0
0.0
Notes payable
-33,628
-24.5
-21,427
-15.7
-34,576
-24.3
Net working capital
137,370 100.0
136,753 100.0
142,531 100.0
2.3.4 Performance by Segment
The following table presents Joyou’s revenue broken down by product segment categories for each of the six month periods ended
30 June 2013 and 30 June 2014. The table also presents each item
as a percentage of total revenues.
kEUR
Other
Faucets and
Sanitary
Bathroom
Bathroom
Cabinets Accessories
Hardware
Copper
and Semi-
Finished
Products
Grohe
Products
Total
Bathroom
Faucets
Kitchen
Products
Shower
Products
Ceramics
and
Bathtubs
62,616
23,090
32,639
20,855
8,025
6,216
12,847
9,084
4,797
180,169
34.8
12.8
18.1
11.6
4.5
3.5
7.1
5.0
2.7
100.0
H1/2014
Revenue
% of sales
H1/2013
61,811
22,469
32,387
20,900
7,800
6,302
13,225
6,154
2,699
173,747
% of sales
Revenue
35.6
12.9
18.6
12.0
4.5
3.6
7.6
3.5
1.6
100.0
Variance
805
621
252
-45
225
-86
-378
2,930
2,098
6,422
1.3
2.8
0.8
-0.2
2.9
-1.4
-2.9
47.6
77.7
3.7
Variance in %
CORE BUSINESS
2.3.4.1 Bathroom Faucets
Bathroom Faucets includes basin faucets, bathtub faucets, bidet
faucets, and sensor faucets which were manufactured by Joyou,
except for limited sales of Bathroom Faucets, the production of
which was out-sourced to external manufacturers.
Revenues from the sale of Bathroom Faucets increased from kEUR
61,811 in H1 2013 by kEUR 805, or 1.3%, to kEUR 62,616 in H1
2014. Measured in RMB terms, revenues from the sale of Bathroom
Faucets increased by 6.6% between the two periods under review.
There was an increase in volumes and also an increase in ASPs
in the category.
The percentage of revenues from Bathroom Faucets to total revenues decreased from 35.6% in H1 2013 to 34.8% in H1 2014.
2.3.4.2 Kitchen Products
Kitchen Products includes kitchen faucets, basin faucets and kitchen basins. All faucets within this product category were manufactured by Joyou except for some kitchen faucets whose production
was outsourced to external manufacturers and all kitchen sinks
were sourced from external manufacturers.
Revenues from the sale of Kitchen Products increased from kEUR
22,469 in H1 2013 by kEUR 621, or 2.8%, to kEUR 23,090 in H1
2014. Measured in RMB terms, revenues from the sale of Kitchen
Products increased by 8.2% between the two periods under review.
There was an increase in volumes and also an increase in ASPs
in the category.
The percentage of revenues from Kitchen Products to total revenues
decreased from 12.9% in H1 2013 to 12.8% in H1 2014.
2.3.4.3 Shower Products
Shower Products mainly comprises of shower faucets, shower
heads, and shower enclosures. All shower faucets were manufactured by Joyou except for limited sales, whose production was
outsourced to external manufacturers. Shower heads were mostly
sourced from external manufacturers. All shower enclosures were
manufactured by Joyou.
Revenues from the sale of Shower Products increased from kEUR
32,387 in H1 2013 by kEUR 252, or 0.8%, to kEUR 32,639 in H1 2014.
Measured in RMB, revenues from the sale of Shower Products increased by 6.1% between the two periods under review, due to
aggressive marketing campaigns.
Although the volumes of Shower Products increased over the period, this was offset in part by a decrease of the average sales
prices (ASPs).
The percentage of revenues from Shower Products to total revenues
decreased from 18.6% in H1 2013 to 18.1% in H1 2014.
2.3.4.4 Ceramics and Bathtubs
Ceramics and Bathtubs mainly comprises of ceramic sanitary-ware
such as wash basins and toilets, as well as bath-tubs. This product category was supplied through a mixture of out-sourced and
self-produced products, with self-produced products representing an increasing proportion of sales.
Revenues from the sale of Ceramics and Bathtubs decreased from
kEUR 20,900 in H1 2013 by kEUR 45 or 0.2%, to kEUR 20,855 in H1
2014. Measured in RMB, revenues from the sale of Ceramics and
Bathtubs increased by 5.0% between the two periods under review.
2.3.4.6 Bathroom Accessories
Bathroom Accessories mainly comprises of baskets, soap trays,
robe hooks, corner shelves and toilet paper holders. A mix of these
products comes from products produced by Joyou and products
bought from external manufacturers.
Revenues from the sale of Bathroom Accessories decreased from
kEUR 6,302 in H1 2013 by kEUR 86 or 1.4%, to kEUR 6,216 in H1
2014. Measured in RMB, revenues from the sale of Bathroom
Accessories increased by 3.8% between the two periods under
review.
The percentage of revenues from Bathroom Accessories to total
revenues decreased from 3.6% in H1 2013 to 3.5% in H1 2014.
COMMODITY BUSINESS
2.3.4.7 Other Faucets and Sanitary Hardware
In RMB terms, there was an increase in ASPs and also an increase
in volumes overall. The volume increases came from increases in
self-manufactured products which were offset by volume decreases in out-sourced products, whilst there was an increase in ASPs
for self-manufactured products and also for out-sourced products.
due to marketing campaigns.
The percentage of revenues from Ceramics and Bathtubs to total
revenues decreased from 12.0% in H1 2013 to 11.6% in H1 2014.
2.3.4.5 Bathroom Cabinets
Bathroom Cabinets mainly comprises of free standing and wallhung cabinets. This product category was supplied through a mixture of outsourced and self-produced products, with self-produced
products representing the vast majority, and an increasing proportion of sales.
Other Faucets and Sanitary Hardware mainly comprises of finished
small faucets, drainage covers, angle valves, and crude products.
Most of these products were produced by Joyou.
Revenues from the sale of Other Faucets and Sanitary Hardware
decreased from kEUR 13,225 in H1 2013 by kEUR 378 or 2.9%, to
kEUR 12,847 in H1 2014. Measured in RMB, revenues from the
sale of Other Faucets and Sanitary Hardware increased by 2.3%
between the two periods under review. The increase was mainly
attributable to an increase in volume which was partly offset by
a decrease in ASPs.
The percentage of revenues from Other Faucets and Sanitary
Hardware to total revenues decreased from 7.6% in H1 2013 to
7.1% in H1 2014.
2.3.4.8 Copper and Semi-Finished Products
Revenues from the sale of Bathroom Cabinets increased from kEUR
7,800 in H1 2013 by kEUR 225, or 2.9%, to kEUR 8,025 in H1 2014.
Measured in RMB, revenues from the sale of Bathroom Cabinets
increased by 8.3% between the two periods under review.
The increase was a result of Joyou’s strategy in relation to marketing and related promotions.
The percentage of revenues from Bathroom Cabinets to total revenues stayed the same at 4.5% between the two periods under
review.
Copper and Semi-Finished Products mainly comprise unfinished
products such as copper tubing and accessories. Most of these
products were produced by Joyou.
Revenues from the sale of Copper and Semi-Finished Products increased from kEUR 6,154 in H1 2013 by kEUR 2,930 or 47.6%, to
kEUR 9,084 in H1 2014. Measured in RMB, revenues from the sale
of Copper and Semi-Finished Products increased by 55.4% during
this period. The increase was the result of increased component
sales to GROHE group.
The percentage of revenues from Copper and Semi-Finished
Components to total revenues increased from 3.5% in H1 2013
to 5.0% in H1 2014.
Grohe Products
1 Jan. to
30 Jun. 2014
Domestic
Grohe Products comprises of sales of Grohe products including
those gained from Asian Product Lines for which Joyou is the master China distributor. These products mainly comprise of shower
faucets, shower heads, basin faucets, and bathtub faucets. All of
these products were purchased from Grohe.
Revenues from the sale of GROHE Products increased from kEUR
2,699 in H1 2013 by kEUR 2,098 or 77.7%, to kEUR 4,797 in H1 2014.
Measured in RMB, revenues from the sale of GROHE Products increased by 87.1% during this period. The increase was partly based
on de-stocking of inventories and partly based on increased customer sales.
Variance
kEUR
%
kEUR
%
167,999
93.2
167,148
96.2
851
0.5
12,170
6.8
6,599
3.8
5,571
84.4
180,169
100.0
173,747
100.0
6,422
3.7
International*
Sales revenues
2.3.4.9 Grohe Products
1 Jan. to
30 Jun. 2013
kEUR
%
* International includes Direct Exports, sales of components to Grohe group companies, and international sales through Grohe and LIXIL group companies including Joyou
International Trading (JIT)
Domestic sales (including GROHE Products) increased from kEUR
167,148 in H1 2013 by kEUR 851 or 0.5%, to kEUR 167,999 in H1
2014. Measured in RMB, revenues from the sale of Domestic
sales increased by 5.8% during this period.
The percentage of revenues from GROHE Products to total revenues
increased from 1.6% in H1 2013 to 2.7% in H1 2014.
International sales (direct exports and sales to Grohe group companies and international sales through Grohe and LIXIL group
companies including Joyou International Trading (JIT)) increased
from kEUR 6,599 in H1 2013 by kEUR 5,571 or 84.4% to kEUR
12,170 in H1 2014. Measured in RMB, revenues from the sale of
International sales increased by 94.1% between the two periods
under review. The increase was mainly due to an increase of sales
to Grohe group companies and international sales through Grohe.
2.3.4.10 Sales split
2.3.5 Employees
The following table presents Joyou’s revenues breakdown by domestic, i.e. sales to PRC customers (including Grohe products),
International sales (including sales through Joyou International)
for each of the six month periods ended 30 June 2013 and
30 June 2014. The table also presents each item as a percentage
of total revenues.
The number of employees engaged by Joyou Group as at 30 June
2014, 31 December 2013 and 30 June 2013 are 3,924, 3,379 and
3,272 employees, respectively.
3 Report on Events after the Reporting Period
4 Report on Forecast, Opportunities and Risks
On 31 July 2014, Joyou Hong Kong entered into a USD 300,000,000
facility agreement with three mandated lead arrangers being
Sumitomo Mitsui Banking Corporation, The Bank of Tokyo-Mitsubishi
UFJ, Ltd. and Mizuho Bank Ltd. The single currency facility has two
separate usable facilities of USD 150,000,000 each. They have a
contract period of five years with regular repayment instalments and
a final repayment of 50% on the termination date. The first facility,
Facility A, of USD 150,000,000 will be used to settle Joyou Group’s
existing loan agreements with Nomura and Standard Chartered. The
second facility, Facility B, of USD 150,000,000 is available to Joyou
Group within the next two years to provide additional funding for
certain investments for PPE, working capital as well as certain costs
to be incurred to execute the growth plans of Joyou Group. Joyou
Hong Kong will have to pay an interest-rate of LIBOR plus a margin
of 2.5 % as well as a commitment fee of 0.5 % with respect to unused and uncancelled amounts of Facility B. Furthermore, Joyou will
have to pay arrangement, agency and security agent fees as well
as certain transaction expenses. Beside a number of usual securities, Joyou Group will have to observe certain financial covenants.
Finally, the facility agreement is subject to certain change of control clauses and will restrict Joyou AG’s ability to pay out dividends
during the contract period of the agreement.
4.1 Forecast Report
Following the early repayment of facilities provided by Nomura and
Standard Chartered, Joyou Group will have to recognize unamortized
arrangement fees of EUR 268 (based on the €/RMB exchange rate
applicable at 30 June 2014).
There have been no other events material to the financial position
or financial performance of Joyou AG or the Joyou Group that have
occured after the reporting period.
Based on the experience in the first six months of 2014, we continue to believe that the statements about economic growth, and
the growth derived from the cooperation with GROHE Group to be
still valid, and unchanged.
With respect to the Chinese economic environment, a report, which
was released by the International Finance Research Institute under the Bank of China, a major state-owned commercial bank,
predicts that the third-quarter growth of GDP will rise to 7.6% on
expectations of improved external demand, domestic policies to
stabilise exports and the depreciation of the RMB. According to
the Economic Update June 2014 on China by the Beijing office of
the Worldbank, industrial production is expected to gain momentum in the rest of 2014, supported by recently taken growth-supporting measures by the Chinese government.
Building on the foundation of the strong pillars of growth, namely
urbanisation, the growing consumer class and its place as a market
leader, Joyou believes that it is well positioned for future profitable growth. For 2014, Joyou expects continued solid growth of its
consolidated revenues amounting to be between 5% and 10% in
RMB terms. International sales overall increased mainly through
sales gained through the collaborative efforts with Grohe Group.
We anticipate gross margin decline due to rapidly increased international sales, which have lower gross margins compared to domestic sales, and this decline will also affect our operating profit compared to 2013. In addition, the growth margin of several of
our segments were affected in the first six months by increasing
labour and raw material cost outpacing the development of average sales prices. Management believes that this development
may prevail for certain segments during the remainder of 2014 and
the Chinese economy as a whole may see lengthened declines in
growth rates. Consequently, statements relating to group revenue
growth and gross margin decline remain unchanged.
The net income and hence earnings per share (EPS) were affected by
unexpected increased foreign exchange losses caused by the RMB’s
devaluation in the first six months. As a significant part of our longterm debt financing is denominated in US Dollars, with the Group
using no financial instruments to hedge foreign exchange risks, this
fluctuation affected the Group’s profitability significantly in the first
six months. Joyou believes that a wider analyst consensus has moved
towards a prolonged devalued period around or marginally above
current levels. As certain other financing and tax items affecting our
profitability in 2013 are not to recur in 2014, we continue to expect a
substantial growth of our net profit for the period compared to 2013,
and hence EPS, although somewhat below our initial plan for 2014.
Investments in the main projects, upgrading of the Luncang brassware facility, the second Meiyu ceramics facility, the Luncang plastics facility, expansion of the Yongsheng galvanisation plant, and
the Luncang accommodation block for the employees, have continued and all of which are expected to see phases completed
in the second half of 2014. Financing for these investments was
secured at the end of 2012 and during 2013 thereby leading to a
strong cash position at the end of 2013. For 2014, we continue
to expect a significant negative cash flow and a reduction of the
cash position following the significant increase in cash outflows
from the aforementioned investment programme.
To finance these intended investments, Joyou will continue to explore further opportunities of financial instruments currently being used by the group. The new partnership with LIXIL has also
opened up new financing opportunities and strengthened existing relationships.
4.2 Opportunities and Risks
In the Combined Management Report 2013, prepared by Joyou
AG for the group’s financial year ended 31 December 2013, Joyou
Group reported extensively on the opportunities and risks arising
from business activities and other resources.
Following the completion of the acquisition of the GROHE Group
by LIXIL, LIXIL, the GROHE Group, and Joyou have started to explore potential synergies that may generate new opportunities for
Joyou to improve sourcing, technology, and sales. To date this has
already resulted in the first trial order shipped to LIXIL.
Based on the Management Board’s judgement the overall risk resulting from the sum of all individual risks remains in a good relationship to the opportunities identified. As such, the statements
expressed in the risk and opportunities section of the Combined
Management Report 2013, in addition to the new opportunities
described above, continue to apply.
5 Significant Transactions with
Related Parties
As disclosed in Note 30 to the consolidated financial statements
of Joyou AG for the twelve-months period ended 31 December
2013, Joyou Group companies entered into some transactions
with related parties. Related parties to the Company also include
GROHE Holding GmbH, Hemer, and Joyou GROHE Holding AG,
Düsseldorf, Germany, as well as all companies affiliated with the
GROHE Group. In addition, related parties also include all members of the Management Board including their close family members and companies over which members of the Management
Board or Supervisory Board of Joyou AG or their family members
can exercise considerable influence or hold a substantial amount
of the voting rights.
The persons and entities to be considered to be related parties
have changed significantly to those disclosed in the consolidated financial statements of Joyou AG for the twelve months period
ended 31 December 2013. In addition to those disclosed in that
report, as of the closing of the acquisition of GROHE Group S. à r.
l. by GraceB S. à r. l., on 21 January 2014, the Development Bank
of Japan, Inc. (DBJ), the LIXIL Corporation, and their respective
subsidiaries and affiliated entities also became related parties
of the Joyou Group. For a full listing of LIXIL’s group companies,
reference is made to the Annual Report 2013 of LIXIL available on
LIXIL’s website at www.lixil-group.co.jp/e in the investor relations
section. For a full listing of DBJ’s group companies, reference is
made to the Annual Report & CSR Report 2013 of DBJ available on
DBJ’s website at www.dbj.jp/en/ in the investor relations section.
Of particular importance to the Joyou Group of these new related
parties are AS America, Inc., doing business as American Standard
Brands ("American Standard") and LIXIL Corporation with its INAX
brand and their respective subsidiaries because they operate in
the same industry and geographic markets as the Joyou Group.
Consequently, they are in competition with the Joyou Group in such
markets. In addition, LIXIL-Haier Housing Products (Qingdao) Co.,
Ltd. is of some importance to the Joyou Group as the LIXIL Group
intends to expand sales channels through this joint venture with
China’s Haier Group, a leading producer of household appliances, to expand from the kitchen business to other businesses to
support growth of its plumbing fixtures business.
For transactions with related parties in the first half of 2014 refer
to Note 11 of the selected notes to the condensed interim consolidated financial statements as at 30 June 2014.
Hamburg, 11 August 2014
Joyou AG
Management Board
Jianshe CAI
Jilin CAI
Zufang LI
Gerald MULVIN
14 Condensed Half-Year Consolidated Financial Statements
Condensed Half-Year Consolidated
for the half year 2014
page 15–26
Condensed Half-Year Consolidated Financial Statements 15
Condensed Half-Year Consolidated
Condensed Half-Year Consolidated Statement of Comprehensive Income
kEUR
Six months
ended
30 Jun. 2014
Six months
ended
30 Jun. 2013
April to
June 2014
(2nd quarter)
April to
June 2013
(2nd quarter)
Revenue
180,169
173,747
98,405
96,303
Cost of sales
-130,816
-125,190
-72,125
-69,486
49,353
48,557
26,280
26,817
1,146
785
532
522
-12,491
-10,926
-6,583
-5,688
Gross profit
-7,959
-6,726
-4,009
-3,690
Research and development expenses
-3,469
-2,950
-1,853
-1,279
-257
-289
-113
-229
26,323
28,451
14,254
16,453
Operating profit
665
501
304
112
Finance costs
Finance income
-5,079
-4,771
-1,331
-3,362
21,909
24,181
13,227
13,203
Income tax
-6,978
-11,027
-3,746
-8,709
14,931
13,154
9,481
4,494
Exchange differences on translating foreign operations
-4,996
8,182
4,425
-3,031
Other comprehensive income for the period
-4,996
8,182
4,425
-3,031
Total comprehensive income for the period
9,935
21,336
13,906
1,463
14,979
13,017
-48
137
9,992
21,190
-57
146
Earnings per share
Euro
Euro
Basic
0.62
0.55
Profit attributable to:
Owners of the parent
Non controlling interests
Total comprehensive income attributable to:
Owners of the parent
Non controlling interests
Condensed Half-Year Consolidated Statement of Financial Position
kEUR
30 Jun. 2014
31 Dec. 2013
30 Jun. 2013
ASSETS
Current assets
Inventories
76,714
73,576
88,187
Trade receivables
93,390
85,518
89,471
Other receivables and prepayments
30,138
31,270
37,815
6,085
5,571
5,210
160
90
93
136,329
128,008
79,661
342,816
324,033
300,437
179,931
172,589
161,861
2,943
3,058
3,255
508
358
388
25,269
25,962
26,737
Amounts due from Grohe group
Amounts due from related parties other than Grohe group
Cash and cash equivalents
Non-current assets
Property, plant and equipment
Investment property
Intangible assets
Lease prepayments for land-use rights
Deferred tax assets
2,592
2,155
2,497
211,243
204,122
194,738
554,059
528,155
495,175
Short term loans
26,828
20,743
25,333
Short term portion of long term loans
28,629
14,147
14,667
Total assets
LIABILITIES
Current liabilities
Trade payables
3,829
5,526
5,761
Notes payable
33,628
21,427
34,576
Other payables and accruals
17,540
14,147
19,630
822
17
15
1,362
959
0
0
0
5,264
Amounts due to related parties other than Grohe group
Amounts due to Grohe group
Provisions
Income tax payable
4,787
3,432
4,266
117,425
80,398
109,512
65,566
86,658
22,000
968
936
780
66,534
87,594
22,780
183,959
167,992
132,292
Non-current liabilities
Long term loans
Provisions
Total liabilities
CAPITAL AND RESERVES
Equity attributable to owners of the parent:
Share capital
23,967
23,967
23,967
Capital reserves
115,546
115,546
115,710
Statutory reserves
Currency translation reserve
Retained earnings
Equity attributable to shareholders
Non-controlling interests
11,703
11,703
10,724
20,462
25,449
39,263
197,821
182,840
172,653
369,499
359,505
362,317
601
658
566
Total equity
370,100
360,163
362,883
Total liabilities and equity
554,059
528,155
495,175
Condensed Half-Year Consolidated Financial Statements 17
Condensed Half-Year Consolidated Statement of Changes in Equity
kEUR
Share
capital
Capital
reserves
Statutory
Reserves
Currency
translation
reserve
Balance as at 1 January 2013
23,967
115,710
10,710
31,090
Retained
earnings
Equity
attributable
to owners of
the parent
Noncontrolling
interests
Total equity
159,650
341,127
420
341,547
Transfer to reserves
0
0
14
0
-14
0
0
0
Total comprehensive income
0
0
0
8,173
13,017
21,190
146
21,336
Balance as at 30 June 2013
23,967
115,710
10,724
39,263
172,653
362,317
566
362,883
Withdrawals from reserves
0
0
979
0
-979
0
0
0
Transfer to reserves
0
-164
0
0
164
0
0
0
0
0
0
-13,814
11,004
-2,812
92
-2,720
23,967
115,546
11,703
25,449
182,842
359,505
658
360,163
Balance as at 31 December 2013
0
0
0
-4,987
14,979
9,992
-57
9,935
23,967
115,546
11,703
20,462
197,821
369,497
601
370,098
Condensed Half-Year Consolidated Statement of Cash Flows
kEUR
Six months
ended
30 Jun. 2014
Six months
ended
30 Jun. 2013
21,909
24,181
Operating activities
Profit before tax
Adjustments for non-cash items
7,682
7,721
Net changes in working capital
3,616
-11,061
Income tax paid
-6,071
-3,539
Cash flow from operating activities
27,136
17,302
Cash flow from investing activities
Purchase of intangible assets
Purchase of property, plant and equipment
Acquisition of subsidiaries, net of cash
-45
-29
-14,132
-4,701
0
-12,135
Proceeds from disposal of property, plant and equipment
133
0
Interest received
665
501
-13,379
-16,364
6,329
720
Cash flow used in investing activities
Cash flow from financing activities
Increase in short-term bank borrowings
Repayment of long-term bank borrowings
-7,019
0
Interest paid
-3,099
-3,192
Cash flow used in financing activities
-3,789
-2,472
Net increase in cash and cash equivalents
9,968
-1,534
128,008
79,620
Cash and cash equivalents at beginning of period
Foreign exchange movements
Cash and cash equivalents at end of period
-1,647
1,575
136,329
79,661
Selected Notes to the Condensed Half-Year Consolidated Financial Statements 19
Selected Notes to the Condensed HalfYear Consolidated Financial Statements
General Notes
1 Nature of Operations
Joyou AG and its subsidiaries (“Joyou” or “the Group”) design,
produce and sell products for bathrooms in China and internationally under its brand name “Joyou” and are also engaged as
a manufacturer of Original Equipment Manufacturing (“OEM”) /
Original Design Manufacturing (“ODM”) products for international sanitary-ware companies, wholesalers and trading companies
in the United States and Europe, as well as in certain emerging
markets, as well as Joyou branded international sales. In addition,
Joyou sells some products, components for faucets and semi-finished products to trading companies and sanitary-ware companies in China and the GROHE Group and also sells its products internationally through Joyou International Trading Limited (“Joyou
International”), a 100% owned subsidiary of the GROHE Group. It
also sells, through a master distributor agreement, certain GROHE
branded products within China.
Joyou’s operating facilities are based in Nan’an near Quanzhou in
the Fujian Province in China. The Group has established an extensive distribution network in China. Its retail distribution network
consists of stores being operated by unaffiliated store operators
who have been engaged by unaffiliated regional distributors that
Joyou has chosen for specific regions of China. Joyou also sells its
own brand products to large-scale construction projects in China,
such as commercial, civil and residential buildings.
With the closing of the acquisition on 21 January 2014, the GROHE
Group and hence Joyou AG and its affiliated companies became
part of the LIXIL Group, Tokyo, Japan. As a result the ultimate parent company of Joyou AG now is GraceA k.k., a Japanese holding
company, of which the LIXIL Group and the Development Bank of
Japan Inc. each hold a 50% interest.
2 General Information and Statement of
Compliance with IFRS
Joyou AG is the Group’s legal parent company. The company is a
publicly traded German limited liability stock corporation which
is domiciled in Germany. The business address of Joyou AG is
Gasstraße 18, Haus 6A, 22761 Hamburg. Joyou AG’s shares are
traded on the Prime Standard, a special segment of the regulated market (Regulierter Markt) of the Frankfurt Stock Exchange.
The Group has its significant business operations including all the
manufacturing operations in the PRC, held via a Hong Kong registered holding company, Hong Kong Zhongyu Sanitary Technology
Limited (“Joyou Hong Kong”). The address of the registered office
is Suite 3104-6, Central Plaza, 18 Harbour Road, Wan Chai, Hong
Kong, Special Administrative Region of the PRC. The principal activity of the company is the holding of investments.
These condensed half-year consolidated financial statements
of the Joyou Group are prepared for the six-month period ended 30 June 2014 with comparative financial statements as at 31
December 2013 and 30 June 2013.
The condensed half-year consolidated financial statements
have been prepared in accordance with Section 37w of the
German Securities Trading Act (WpHG) and the International
Financial Reporting Standards (IFRS) issued by the International
Accounting Standards Board (IASB) and its interpretations of the
IFRS Interpretations Committee (IFRS-IC) for half-year financial
information effective within the European Union. Accordingly,
these condensed half-year consolidated financial statements
do not include all of the information required in annual consolidated financial statements by IFRS.
The condensed half-year consolidated financial statements have
been reviewed. In the opinion of Joyou AG’s Management Board,
the condensed half-year consolidated financial statements include all adjustments required for a fair presentation of results
for half-year periods. Results of the period ended 30 June 2014
are not necessarily indicative of future results.
The preparation of half-year consolidated financial statements
in conformity with IAS 34 “Interim Financial Reporting” requires
the Management Board to make judgments, estimates and assumptions that affect the application of policies and reported
amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
The accounting principles and practices, as applied in the condensed consolidated half-year financial statements, correspond
to those pertaining to the most recent annual consolidated financial statements. A detailed description of the accounting
policies is published in the notes to the consolidated financial
statements of Joyou AG for the year ended 31 December 2013.
The condensed half-year consolidated financial statements of
Joyou Group are drawn up in Euros. Amounts are stated in thousands of Euros (kEUR) except where otherwise indicated. Because
the calculations of the individual items included are based on
the full figures, rounding differences may occur where amounts
are shown in thousands of Euros.
The half-year financial statements of the individual consolidated companies are prepared as of the closing date for the Group
half-year financial statements.
20 Selected Notes to the Condensed Half-Year Consolidated Financial Statements
The condensed half-year consolidated financial statements of
Joyou AG and subsidiaries for the period from 1 January to 30
June 2014 were authorised for issue in accordance with a resolution of the Management Board on 11 August 2014.
3 Significant Accounting Policies and
Changes in Estimates
3.1 Overall considerations and change in presentation
These condensed half-year consolidated financial statements
have been prepared using accounting policies specified by those
IFRSs that are in effect at the end of the reporting period (30
June 2014). With reference to the change in presentation as set
out below, the consolidated half-year financial statements have
been prepared in accordance with the accounting policies adopted in the consolidated financial statements for the year ended
31 December 2013. The accounting policies have been applied
consistently throughout the Group for the purpose of the preparation of these consolidated financial statements.
As stated in the annual report 2013, to improve the transparency of the half-year report the Group enhanced the disclosure of
administrative expenses as follows: Administrative expenses
previously included inter alia expenses for research and development. As research and development is a key driver of Joyou’s
future development, those expenses are now disclosed as a
separate line item within the statement of comprehensive income. Accordingly administrative expenses are reduced by the
amount of research and development expenses, which are now
disclosed separately. The disclosures of the comparative period
are reclassified accordingly.
3.2 Standards, amendments and interpretations to
existing standards applied for the first time in the
reporting period
The Group had to apply the following new standards, amendments
to existing standards or new interpretations for the first time:
→→ IAS 27 - Separate Financial Statements
→→ IAS 28 - Investments in Associates and Joint Ventures
→→ IAS 32 (Amendments) - Presentation – Offsetting Financial
Assets and Financial Liabilities
→→ IAS 36 (Amendments) - Recoverable Amount Disclosures for
Non-Financial Assets
→→ IAS 39 (Amendments) - Novation of Derivatives and
Continuation of Hedge Accounting
→→ IFRS 10 - Consolidated Financial Statements
→→ IFRS 11 - Joint Arrangements
→→ IFRS 12 - Disclosures of Interests in other entities
→→ IFRIC 21 - Levies
→→ Amendments to IFRS 10, IFRS 11 and IFRS 12:Transition
Guidance
→→ Amendments to IFRS 10, IFRS 12 and IAS 27: Investment
Entities
The first-time application of these standards and interpretations
did not have a significant impact on the net assets, financial position and results of operations of the Group
3.3 Published but not yet applied Standards, Amendments
and interpretations
At the time of preparation of the Group half-year consolidated financial statements, the following standards and interpretations of
the IASB as well as their changes and revisions either had not been
endorsed by the European Union or were not compulsorily applicable in the reporting period to which these half-year financial statements relate, and were therefore not applied by the Joyou Group.
→→ IAS 19 (Amendments) - Employee Contributions
→→ IFRS 9 - Financial Instruments and Subsequent Amendments
(Amendments to IFRS 9 and IFRS 7)
→→ Amendments to IFRS 9 and IFRS 7 - Mandatory effective date
and transitional requirements
→→ Amendments to IFRS 9, IFRS 7 and IAS 39 - Hedge accounting
→→ IFRS 11 (Amendments) - Accounting for Acquisitions of
Interests in Joint Operations
→→ IFRS 14 - Regulatory Deferral Accounts
→→ IFRS 15 – Revenue from Contracts with Customers
→→ Annual Improvements to IFRSs 2010 – 2012 Cycle
→→ Annual Improvements to IFRSs 2011 – 2013 Cycle
The aforementioned standards and interpretations are to be
applied in the Consolidated Financial Statements of the Group
from the 2015 financial year or later. Aside from additional or
modified disclosure requirements, Management currently expects there to be only a marginal effect on the consolidated
financial statements from the first-time application of these
standards, interpretations and amendments.
Selected Notes to the Condensed Half-Year Consolidated Financial Statements
3.4 Currency translation
The Management Board has determined the currency of the primary economic environment in which Joyou Group operates, i.e.
the functional currency, to be Renminbi (“RMB”). Sales and major costs arising from the provision of goods and services including major operating expenses are primarily influenced by fluctuations in RMB.
Exchange differences arising on the settlement of monetary items
or on translating monetary items at the reporting date are recognised as part of profit or loss except for exchange differences arising on monetary items that form part of the Group’s net investment
in foreign subsidiaries, which are recognised initially in a separate component of equity as foreign currency translation reserve
in the consolidated statement of financial position and reported
as part of profit or loss on disposal of the subsidiary.
The presentation currency of the Group is EUR, being the presentation currency of its German domiciled legal parent and holding
company, and therefore the financial information has been translated from RMB to EUR at the following rates:
EUR 1.00 =
Currency
Period end rates
Average rate
30 June 2014
RMB
8.4722
8.5488
31 Dec. 2013
RMB
8.3491
8.1769
30 June 2013
RMB
8.0280
8.1209
4 Significant Events and Transactions
As stated in note 1 with the closing of the acquisition on 21 January
2014 the GROHE Group and hence Joyou AG and its affiliated companies became part of the LIXIL Group, Tokyo, Japan. As published
in the BSRIA’s China Bathroom Study 2013, the LIXIL Group sells
taps and mixers, sanitary-ware and bath tubs of its American
Standard brand on the domestic Chinese market. While the market
position of the Joyou Group and the LIXIL Group for sanitary ware
and bath tubs was comparable according to BSRIA, Joyou has a
significantly higher market share in the taps and mixers segment.
Joyou AG will remain independent within the LIXIL Group. In particular there are no intentions for a delisting of Joyou AG. Joyou
AG´s management team will remain in place. Consequently, the
Management Board of Joyou does not expect limitations for the
execution of its growth strategy on both the domestic Chinese
sanitary-ware market and abroad.
In May 2014 Joyou Building Materials finalized the incorporation
of a 100% subsidiary which is named Xiamen Xtime Trading Co.
Ltd. The company’s principal activity is intended to be the trading
21
of Joyou’s premium X-Time brand products. Currently the company is registered without any capital subscribed. It is intended that
the issued share capital will amount to RMB 10 Mio.
5 Segment Reporting
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-maker.
The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Management Board of Joyou AG
that makes strategic decisions.
In identifying its nine operating segments, the Management Board
generally follows the Group’s product categories. These operating
segments are monitored and strategic decisions are made on the
basis of segmental gross margins. These segments also represent
reportable segments under IFRS 8.
The activities undertaken by the “Bathroom Faucets” segment include the sale of basin faucets, bathtub faucets, bidet faucets,
and sensor faucets which were manufactured by Joyou, except for
limited sales of bathroom faucets, the production of which was
outsourced to external manufacturers. The “Kitchen Products”
segment includes the sale of kitchen faucets and kitchen basins.
The “Shower Products” segment represents the sale of shower
faucets, shower-heads and shower enclosures. The segment of
“Ceramics and Bathtubs” mainly comprises bathtubs and ceramic
sanitary ware such as basins and t oilets. The segment “Bathroom
Cabinets” includes free standing and wall-hung cabinets. The segment “Bathroom Accessories” mainly comprises baskets, soap
trays, robe hooks, corner shelves and toilet paper holders. “Other
Faucets and Sanitary Hardware” mainly comprise small faucets,
drainage covers, angle valves, and crude products. In the segment
of “Copper and Semi-Finished Products” unfinished products such
as copper tubing and accessories are combined. Finally, the segment “GROHE Products” comprises sales of GROHE products including those gained from Asian product lines, for which Joyou is
the master China distributor.
The operating segments are not yet managed separately as Joyou
has grown significantly only in the past few years and the technologies and other resources used in the segments do not differ significantly. Hence revenue and costs are allocated to segments only
up to gross profit. With the exception of the assets recorded in the
GROHE Products and Ceramics and Bathtubs segment, which can
be separately identified, segment assets are allocated based on
the proportionate share in revenues. Due to the strategic goals of
Joyou, the intended further growth of the Group and its ongoing
organisational development, a change in the segmental structure
may become indispensable in the future.
During the period under review, there were no inter-segment transfers.
The accounting policies the Group uses for segment reporting under IFRS 8 are the same as those used in its consolidated financial
statements for the year ended 31 December 2013.
The gross profit disclosed in the segment reporting equals the segment operating profit. All of the Group’s non-current assets are located in the PRC.
2014
kEUR
Bathroom
Faucets
Kitchen
Products
Shower
Products
Ceramics
and
Bathtubs
Bathroom
Bathroom
Other
Faucets and
Sanitary
Hardware
Copper
Semi
Finished
Products
Grohe
Products
Total
Six months ended 30 June 2014
Revenue
Cost of sales
Gross Profit
Segment assets
62,616
23,090
32,639
20,855
8,025
6,216
12,847
9,084
4,797
180,169
-44,286
-17,051
-23,000
-14,775
-5,767
-4,292
-10,468
-7,625
-3,552
-130,816
18,330
6,039
9,639
6,080
2,258
1,924
2,379
1,459
1,245
49,353
168,600
62,172
87,884
132,134
21,608
16,737
34,592
24,460
5,872
554,059
Shower
Products
Ceramics
and
Bathtubs
Bathroom
Bathroom
Other
Faucets and
Sanitary
Hardware
Copper
Semi
Finished
Products
Grohe
Products
Total
2013
kEUR
Bathroom
Faucets
Kitchen
Products
Six months ended 30 June 2013
Revenue
Cost of sales
Gross Profit
Segment assets
61,811
22,469
32,387
20,900
7,800
6,302
13,225
6,154
2,699
173,747
-42,922
-16,025
-22,865
-14,675
-5,351
-4,394
-10,786
-4,907
-3,265
-125,190
18,889
6,444
9,522
6,225
2,449
1,908
2,439
1,247
-566
48,557
140,533
51,085
73,635
141,632
17,734
14,328
30,068
13,992
12,167
495,175
The Group’s revenues from external customers are divided into
the following geographical areas:
kEUR
Domestic
International*
Total
Six months
ended
30 Jun. 2014
Six months
ended
30 Jun. 2013
167,999
167,148
12,170
6,599
180,169
173,747
* International includes Direct Exports, sales of components to Grohe group companies, and international sales through Grohe and LIXIL group companies including Joyou
International Trading (JIT)
In comparison to the reporting for the first half-year 2013 indirect
exports are allocated into domestic sales as Joyou’s customers
are located in the PRC and the decision to export the goods sold
is not made under Joyou’s authority. The prior figures are adjusted accordingly.
Revenues from external customers in the Group’s economic domicile, PRC, have been identified on the basis of the internal reporting system.
Domestic means sales to customers located in the PRC, which includes sales of merchandise products acquired from the GROHE
Group, and indirect export. Indirect export relates to sales to
domestic customers that normally export the goods for resale.
International means direct exports and sales through Joyou
International and GROHE Group. Direct exports relate to sales to
customers located outside the PRC, i.e. the rest of the world. Sales
through Joyou International and GROHE Group mean sales made
by Joyou International and GROHE Group.
The totals presented for the Group’s operating segments reconcile to its key financial figures as presented in the financial statements as follows:
kEUR
Gross profit
Six months
ended
30 Jun. 2014
Six months
ended
30 Jun. 2013
49,353
48,557
1,146
785
-12,491
-10,926
23
Administrative expenses amounted to kEUR 7,959 in the reporting
period (previous period: kEUR 6,726). In comparison to the first six
months of 2013 the expenses increased by kEUR 1,233, which was
mainly attributable to to an increase in provisions for bad debts
and also welfare benefits for employees.
Finance costs increased by kEUR 308 and amount to kEUR 5,079
(previous period: kEUR 4,771). The item comprises interest on bank
loans, bank charges and provisions as well as exchange losses.
The following table shows a breakdown of finance costs for the
period under review for each category:
-7,959
-6,726
Research and development expenses
-3,469
-2,950
-257
-289
Operating profit
26,323
28,451
Finance income
665
501
Finance costs
-5,079
-4,771
21,909
24,181
Interest on provision
Income tax
-6,978
-11,027
Exchange losses
1,788
222
14,931
13,154
Total
5,079
4,771
kEUR
Interest on bank loans
Bank charges
Interest expenses capitalised
Total finance costs
Six months
ended
30 Jun. 2014
Six months
ended
30 Jun. 2013
2,841
2,793
435
628
15
1,128
1,310
0
6,389
4,771
6 Seasonality
Joyou’s business is, to a certain degree, subject to the effects of seasonality. Sales generally decrease in the first quarter of a year but increase in the second quarter, and are then weaker in the third, and
fourth quarters. This is mainly due to the Chinese New Year Holiday,
the exact date of which is ruled by the lunar calendar, which inevitably falls in first quarter. This week long festival, coupled with the
winter weather leads to a slowdown in the Group’s business cycle.
7 Analysis of Selected Items of the
Statement of Comprehensive Income
Selling and distribution expenses show an increase of kEUR 1,565
in comparison to the comparative period in 2013 and amount to
kEUR 12,491 in the reporting period (kEUR 10,926 in the first halfyear 2013). This increase primarily resulted from an increase in advertising expenses as a result of expanding into regions in order
to strengthen competition among the players on the Chinese sanitary-ware market, leading to growth in revenue and also commissions paid to non-exclusive agents for products delivered to projects that were introduced by them.
Research and development expenses amounted to kEUR 2,950 in
the previous period and increased due to an increase in research
and development on moulds for new products by kEUR 519 to kEUR
3,469 in the reporting period.
In total, finance costs increased slightly by kEUR 308. The increase
was mainly attributable to an increase in exchange rate losses,
mainly caused by the 100 million USD Nomura syndicated loan,
which was drawn down on by Joyou in July 2013. This increase in
comparison to the first six months of 2013 was partly offset by the
effects of the non-recurring interest expenses in the prior year period arising from the revocation of the preferential tax rate for hightech enterprises in relation to Joyou Sanitation.
8 Analysis of Selected Items of the Statement of Financial Position
The movements in all items in the statement of financial position between the annual financial statements as at 31 December 2013 and
the interim financial statements as at 30 June 2014 are described in the interim group management report. In addition to these explanations we provide the following information regarding the carrying amounts of property, plant and equipment.
Buildings
Machinery
Office
equipment
Motor
vehicles
Construction
in progress
Total
Balance as at 01 Jan. 2013
77,154
50,533
2,894
2,752
35,486
168,819
Currency translation adjustment
1,898
1,320
72
65
877
4,232
Acquisition through business combination
2,752
7,058
21
24
999
10,854
4,701
kEUR
Cost:
Additions
Reclassifications
Reclassifications to investment property
Acquisition through business combination
Additions
Disposal
63
1,951
81
46
2,560
1,094
234
0
0
-1,328
0
0
0
0
0
-33
-33
82,961
61,096
3,068
2,887
38,561
188,573
-3,166
-2,407
-119
-110
-1,746
-7,548
-653
-193
0
0
-13
-859
543
3,791
46
26
18,381
22,787
-80
-71
-8
-1
0
0
750
3,935
0
0
-4,685
0
80,364
66,214
2,994
2,803
50,498
202,873
-1,161
-943
-43
-41
-636
-2,824
88
1,570
77
69
12,328
14,132
Disposal
-10
-174
-52
-89
-38
-362
Reclassifications
619
671
0
0
-1,290
0
0
0
0
0
-142
-142
79,900
67,338
2,976
2,742
60,721
213,677
6,871
13,529
1,188
798
0
22,386
180
347
32
22
0
580
Charge for the period
1,378
1,890
267
210
0
3,746
8,429
15,766
1,487
1,030
0
26,712
-348
-649
-60
-41
0
-1,097
1,633
2,698
216
127
0
4,673
0
-3
-1
0
0
-4
9,714
17,812
1,642
1,116
0
30,284
-130
-239
-22
-14
0
-405
1,249
2,344
262
226
0
4,080
Reclassifications
Balance as at 31 Dec. 2013
Additions
Reclassifications to intangible assets
Accumulated depreciation:
Balance as at 01 Jan. 2013
Disposal
Balance as at 31 Dec. 2013
Disposal
0
-140
-46
-27
0
-213
10,833
19,777
1,835
1,301
0
33,747
Net carrying amount
As at 30 June 2013
74,532
45,330
1,581
1,857
38,561
161,861
As at 31 Dec. 2013
70,650
48,402
1,352
1,687
50,498
172,589
As at 30 June 2014
69,067
47,561
1,141
1,441
60,721
179,931
As at 30 June 2014, property, plant and equipment with a total carrying values of kEUR 33,630 (30 June 2013: kEUR 769) and land-use
rights with a total carrying value of kEUR 16,884 (30 June 2013: kEUR 1,442) are subject to a first charge to secure the Group’s bank
loans. It was caused by a new mortgage agreement with Standard Chartered Bank and with ICBC Bank.
9 Earnings per Share
The basic earnings per share have been calculated using the profit attributable to shareholders of Joyou AG (the legal parent) as
the numerator.
The weighted average number of outstanding shares used for
basic earnings per share for the six-month period ended 30 June
2014 and for the six-month period ended 30 June 2013 amounted
to 23,967,492 shares. The weighted average number of outstanding shares used was calculated on the basis of the number of ordinary shares of Joyou AG.
There were no contingent rights to the issue of shares as at 30 June
2014 or 30 June 2013. Consequently, there were no potentially dilutive ordinary shares at either reporting date.
25
LIXIL’s website at www.lixil-group.co.jp/e in the investor relations
section. For a full listing of DBJ’s group companies, reference is
made to the Annual Report & CSR Report 2013 of DBJ available on
DBJ’s website at www.dbj.jp/en/ in the investor relations section.
The ultimate parent company of Joyou AG now is GraceA k.k., which
became the majority shareholder of GROHE Group S.à r.l.
Related parties have provided guarantees for certain of Joyou
Building Material’s bank loans and for Joyou Sanitation
Technology’s bank loans as shown in the following table:
Million EUR
Joyou Building Materials
30 Jun.
2014
31 Dec.
2013
30 Jun.
2013
10.1
5.9
5.9
Joyou Sanitation Technology
11.2
11.2
9.1
Total
17.1
17.1
19.2
10 Commitments and Contingencies
As at 30 June 2014, Joyou Group has contractual commitments
from the construction of new plants of kEUR 18,447 (previous period: kEUR 4,071). Except for this, no material changes in commitments have occurred between the consolidated financial statements of the Group for the accounting period ended 31 December
2013 and the accounting period of the half-year consolidated financial statements ending 30 June 2014.
As at 30 June 2014 Joyou Group has no contingent liabilities to
be disclosed.
Transactions and amounts due from/to related parties
The composition of the amounts due from related parties is as
follows:
30. Jun.
2014
31. Dec.
2013
30. Jun.
2013
Joyou International Trading
3,502
3,057
2,294
GROHE Siam Ltd.
1,449
845
661
GROHE Hemer
385
0
0
GROHE Portugal
364
174
215
GROHE USA
19
kEUR
124
52
GROHE Group S.á r.l.
99
284
0
11 Related Party Disclosures
GROHE Shanghai
87
763
1,549
GROHE DAL
49
0
0
An entity or individual is considered a related party of the Group
for the purposes of the financial statements if: (i) it possesses the
ability, directly or indirectly, to control or exercise significant influence over the operating and financial decisions of the Group
or vice versa; or (ii) it is subject to common control or common
significant influence.
GROHE Canada
26
33
23
GROHE AG
GROHE Group
363
449
5,571
5,210
0
LIXIL Philippines
72
0
LIXIL Group
72
0
0
Mr Jianshe CAI
88
90
93
6,245
5,661
5,303
6,085
5,571
5,210
Total
Related party information
The persons and entities to be considered to be related parties
have changed significantly to those disclosed in the consolidated financial statements of Joyou AG for the twelve months period
ended 31 December 2013. In addition to those disclosed in that
report, as of the closing of the acquisition of GROHE Group S. à r.
l. by GraceB S. à r. l., on 21 January 2014, the Development Bank
of Japan, Inc. (DBJ), the LIXIL Corporation, and their respective
subsidiaries and affiliated entities also became related parties
of the Joyou Group. For a full listing of LIXIL’s group companies,
reference is made to the Annual Report 2013 of LIXIL available on
0
6,085
Reconciliation
Amounts due from GROHE
Group
Amounts due from related
parties other than
GROHE Group
Total
160
90
93
6,245
5,661
5,303
The composition of the amounts due to related parties is as follows:
kEUR
GROHE Shanghai
Sanitary Products
Company Ltd.
30 Jun. 2014
31 Dec. 2013
30 Jun. 2013
1,248
959
0
GROHE Pacific Pte Ltd.
114
0
0
Subtotal GROHE Group
1,362
959
0
822
17
15
2,184
976
15
1,362
959
0
Mr Jianshe CAI
Total
Reconciliation
Amounts due to GROHE
Group
Amounts due to related
parties other than
GROHE Group
Total
822
17
15
2,184
976
15
During the period from 1 January to 30 June 2014, Joyou purchased inventory from GROHE Group companies in a total
amount of kEUR 1,800 (previous period: kEUR 1,236) and realised sales on deliveries to GROHE companies in a total amount
of kEUR 12,231 (previous period: kEUR 7,903) in the same period.
The sales and costs of sales contain the resale of GROHE products to GROHE at an amount of kEUR 1,724 (previous period:
kEUR 1,939) to support the reduction in the holding of the products not selling well in China.
12 Events after the Reporting Period
On 31 July 2014, Joyou Hong Kong entered into a USD 300,000,000
facility agreement with three mandated lead arrangers being
Sumitomo Mitsui Banking Corporation, The Bank of Tokyo-Mitsubishi
UFJ, Ltd. and Mizuho Bank Ltd. The single currency facility has two
separate usable facilities of USD 150,000,000 each. They have a
contract period of five years with regular repayment instalments and
a final repayment of 50% on the termination date. The first facility,
Facility A, of USD 150,000,000 will be used to settle Joyou Group’s
existing loan agreements with Nomura and Standard Chartered. The
second facility, Facility B, of USD 150,000,000 is available to Joyou
Group within the next two years to provide additional funding for
certain investments for PPE, working capital as well as certain costs
to be incurred to execute the growth plans of Joyou Group. Joyou
Hong Kong will have to pay an interest-rate of LIBOR plus a margin
of 2.5 % as well as a commitment fee of 0.5 % with respect to unused and uncancelled amounts of Facility B. Furthermore, Joyou will
have to pay arrangement, agency and security agent fees as well
as certain transaction expenses. Beside a number of usual securities, Joyou Group will have to observe certain financial covenants.
Finally, the facility agreement is subject to certain change of control clauses and will restrict Joyou AG’s ability to pay out dividends
during the contract period of the agreement.
Following the early repayment of facilities provided by Nomura and
Standard Chartered, Joyou Group will have to recognize unamortized
transfer cost of both facilities of EUR 268 (based on the €/RMB exchange rate applicable at 30 June 2014).
There have been no other events material to the financial position
or financial performance of Joyou AG or the Joyou Group that have
occured after the reporting period.
Joyou AG
Management Board
Jianshe CAI
Jilin CAI
Zufang LI
Gerald MULVIN
Responsibilty Statement 27
Responsibility
statement
To the best of our knowledge, and in accordance with the applicable reporting principles for interim financial reporting, the interim
consolidated financial statements give a true and fair view of the
assets, liabilities, financial position and profit or loss of the Group,
and the interim management report of the Group includes a fair
review of the development and performance of the business and
the position of the Group, together with a description of the material opportunities and risks associated with the expected development of the Group for the remaining months of the financial year.
Joyou AG
Management Board
Jianshe CAI
Jilin CAI
Zufang LI
Gerald MULVIN
28 Review Report
Review Report
To Joyou AG, Hamburg
We have reviewed the condensed interim consolidated financial
statements – comprising the statement of financial position, the
statement of comprehensive income, the statement of changes in
equity, the statement of cash flows and selected explanatory notes
– and the interim group management report of Joyou AG, Hamburg,
for the period from 1 January 2014 to 30 June 2014 which form part
of the half-year financial reporting in accordance with section 37w
German Securities Trading Act (Wertpapierhandelsgesetz – WpHG).
The preparation of the condensed interim consolidated financial
statements in accordance with those IFRS applicable to interim financial reporting as adopted by the EU, and of the interim group
management report in accordance with the requirements of the
German Securities Trading Act applicable to interim group management reports, is the responsibility of the Company’s management. Our responsibility is to issue a report on the condensed interim consolidated financial statements and on the interim group
management report based on our review.
Based on our review, no matters have come to our attention that
cause us to believe that the condensed interim consolidated financial statements have not been prepared, in material respects,
in accordance with the IFRS applicable to interim financial reporting as adopted by the EU, or that the interim group management
report has not been prepared, in material respects, in accordance
with the regulations of the German Securities Trading Act applicable to interim group management reports.
We conducted our review of the condensed interim consolidated
financial statements and the interim group management report
in accordance with the German generally accepted standards for
the review of financial statements promulgated by the Institut der
Wirtschaftsprüfer (IDW). Those standards require that we plan and
perform the review so that we can preclude through critical evaluation, with a certain level of assurance, that the condensed interim
consolidated financial statements have not been prepared, in material aspects, in accordance with the IFRS applicable to interim financial reporting as adopted by the EU, and that the interim group
management report has not been prepared, in material aspects, in
accordance with the regulations of the German Securities Trading
Act applicable to interim group management reports. A review is
limited primarily to inquiries of company employees and analytical assessments and therefore does not provide the assurance attainable in a financial statement audit. Since, in accordance with
our engagement, we have not performed a financial statement audit, we cannot issue an auditor’s report.
Joachim Riese
Wirtschaftsprüfer
(German Public Auditor)
Düsseldorf, 12 August 2014
Warth & Klein Grant Thornton AG
Wirtschaftsprüfungsgesellschaft
Ralf Clemens
Wirtschaftsprüfer
(German Public Auditor)
Financial Calendar 2014
29
Financial Calendar 2014
November 14
Interim Report January through September of 2014,
Analyst Meeting
Contact information
Imprint
Joyou AG
Ian M. OADES
Vice President of Finance &
Head of Investor Relations
Owner and publisher
Joyou AG
Gasstraße 18, Haus 6A
22761 Hamburg
Germany
Tel.: +86 595 8618 8887
Fax: +86 595 8618 7886
e-mail: [email protected]
Internet: www.joyou.de
Kirchhoff Consult AG
Financial Communications
Herrengraben 1
20459 Hamburg
Germany
Tel: +49 40-609 186 0
Fax: +49 40-609 186 60
Internet: www.kirchhoff.de
Download
This half-year report is available in English and German on our
websites www.joyou.de or www.joyou.com.
Design concept
Kirchhoff Consult AG, Hamburg
www.kirchhoff.de
Gasstraße 18, Haus 6A
22761 Hamburg
Germany
Tel.: +86 595 8618 8887
Fax: +86 595 8618 7886
Internet: www.joyou.com

Interim Report H1 2014

Transcrição

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