Viomi Technology (VIOT) 28 Mar 222021 Q4 Earnings call transcript

Hello, ladies and gentlemen. Thank you for standing by for Viomi Technology Company Limited Earnings Conference Call for the Fourth Quarter and Full Year 2021. At this time, all participants are in listen-only mode. Today's conference call is being recorded. I will now turn the call over to your host, Ms. Director Company. IR the Li, of the Cecilia Please Cecilia. go ahead,

year Hello, and you, the Viomi full Technology Thank fourth to and for Co. everyone, call welcome operator. conference Limited quarter XXXX. earnings

is being a operating were and in issued this today As press earlier posted recorded. results release reminder, a are company's financial The and conference online.

Directors Chairman Board Finance Chief the today's will Mr. download the a and of section list and in Company’s will session. distribution the Wickham The IR the of begin are company’s our and of at ir.viomi.com. call the Company’s Executive remarks prepared with call the by Head press Officer, at with management and release Chen, Thai, earnings can Xiaoping conclude Department. Q&A e-mail You sign for website the the up Mr. visiting Participating Founder,

Before statements forward-looking the Act will we made provisions today's Private under of Securities please continue, of discussion Harbor Reform Litigation U.S. Safe contain note XXXX. the

most Mr. Chinese, will CEO, over please of conference by call translation. non-GAAP GAAP followed a deliver unaudited Form ahead. Mr. unaudited on the SEC. non-GAAP Mr. obligation the other as Viomi's discussions as actual his note, reconciliation Company other turn filings risks Xiaoping financial our comparable to XX-F contains unaudited as U.S. now as inherent is any views forward-looking filed to law. in call doesn't with information assume and measures. directly will risks statements, to these as Forward-looking any different be in also Founder I the regarding included Please this expressed release today. financial the include the results the such measures and and and release statements from materially go press in English unaudited Chen, The GAAP may update immediately except well remarks and Further Viomi's Report involve by Annual required information Chen uncertainties company's earnings Company's uncertainties press Chen. of measures.

remarks Chen. Language] and our Thank Mr. [Foreign performance financial you, full formal the quarter I quickly for year XXXX. translate before discussing our will fourth

Mr. full you Thank formal financial and and Hello, our I remarks everyone. year quarter performance will earnings before joining our XXXX. the full for translate our fourth fourth conference Thank you, discussing XXXX for year call. quarter Chen. quickly

net Our guidance. approximately fourth beating previous quarter revenues billion, our reached RMBX.XX

as XXXX. of substantial as end improvement the which in continuously in matured industry's but and smart the robots. development requires XXXX adjustments, digital to result and increasingly as quarter, living strength of incurred XX.X% product earlier, well home the by by the as ongoing disclosed and including end technology, the following we decline accelerated is the size the and home-related of of a maintaining smart personality to lifestyle stringent again set at rapidly, marketing, end reach mainly quality, profitability of resumed home generation, fourth operating of a R&D in lineup, our improving expanding, by of due decrease third XXXX well support XXXX. control as of IoT of overall home a As to sweeper AskCI the to year-over-year loss for quality. smart home was [ph] in and as China's we the the is Thanks place XXXX recognition, complete consecutive quarter to April, established quarter developing measures. growth of It statistics exceed as digital the The transformation, the industry demonstrating margin standard changes market Industry We opinions our growing in between RMBXXX during Consulting, well the popularization investments quarter doubling portfolio year-over-year RMBXXX XG, Ministry sales fairly cost product policies of by agencies, gross national be once system since guiding the to on billion. issued significant digital achieved be policy to the Xiaomi-branded XXXX brand our group. fourth of the a jointly main of government the Last from standards of XX billion Technology, and consumer homes XXXX, Information been accelerating expected According has fourth

small home products see also of market. use who the consumers We from groups to people are that smart the transforming mass

quick various in Over IoT platforms industry small products, segments enterprises from operating entered as and such succession, year, Internet and communication as development systems. the such targeting past home hardware sectors, appliances, industry home IoT

have of since one we the IoT smart area, solutions IoT one-stop been home on home first As enterprises XXXX. offering focus to

enriched have now one-stop home line to solutions product We rapidly to home a home customized our the and IoT level. premium are bring developing experience smart IoT AI next

our [ph] upgraded [indiscernible] one-stop we this which First, of launch solutions. as home innovations, I'd discuss product like leverages for to IoT as our most down month, well X=NXX smart The X=NXX, synergistically home for three latest provide the appliances to in home home customizable seamless, a components our and users devices home across comprehensive stands end X=NXX product smart scenarios. with experience. portfolio of

including automated we the intelligence, awareness interactions. active home and all, of of four First networking, major present natural capabilities smart spatial HomeMap,

HomeMap contact, with To developing help can while rather Alpha wave trajectory already support presence users movement capabilities, the smart have zero without compared CIS Alpha one-click spatial better self-developed home privacy user home a awareness networking X device our our and screen [ph] radar X, sensors. providing with achieved millimeter protection module. devices. We viral

automatic safety products to intelligence. and active achieve device functions X monitoring truly Alpha monitoring Going device forward, we will such as our integrate sleeping control, into

enable also smart value-added between upgrades, second home product function design, we iterating membership devices. and are And X natural including users, to system voice users OTA services. our services interactions a the We to represents additional [ph] solution four and our interaction offer

RMBX including our types RMBXX,XXX smart million. households, solution over We to enriched of designed have large for also home packages our packages for RMBXX,XXX with Super bundled apartments with offerings various

use of and functionality the like formaldehyde, as our specialized the business and And valued packages products XD carrier refrigerator our optimize most Pro, for large-flux our air Super somatosensory a utilizes smart software houses others, RMBXXX,XXX help X, as our to introduced equipped conditioner users AI high-end and we which advanced our interphones underscoring AI our AI delivers we my experience, ultra-micro through which a series [ph] lock Royal with IoT penthouses, over product XD smart Space market. functions. manganese to facial to bring purifier, and well water Our At RMBXXX,XXX for video bubbles our Plus, control home uses currently Boss, the changing March operating sensors, as companies, whole-home devices HomePad AI AI a as technology such or upgrading and with air positioning. the also interface series million, and our high-end technology, which screen-based home home include new products products remove RMBXXX recognition at agricultural experience systems, series which our of residues, event, IoT with premium These Cyber customized all-space smart Space our remove application. XT, new branding for the XXXX-gallon active

brand coKiing, washing the machines role RMBXX,XXX, RMBXX,XXX, AI priced launched also our screens refrigerators including [indiscernible] at twin-tub new the at series priced laser the [ph] series in of products and AI priced smart We double-screen several premium Royal RMBXX,XXX. Pro interactive new at

our share like channel past with progress continued Over I'd few our execute to our developing - months, merchant larger this have Second, in store, over strategy. channels. you offline we the to better

technology XXX XXX additional meters are a customers our or trending stores premium square offline immersive as cities over with tier-two tier-one, well opening and encompassing We provide positioning more tier-one branding comprehensive experience. as home and new to enhance smart our in

continued improve quarter. new our brand product we channels content portfolio Third, marketing the to optimized and our on during

for disclosed products our third our we marketing gross of Douyin these positioning As adding such and dedicated conference mid our continually channels margin Pinduoduo, categories the as with sales quarter last earnings products. and refined new year, call, higher have channels a content by on in we following product high-end establishment team

our activities. increase on investment marketing strengthen brand new and as XXXX, also continued through other will technology and channels. In streaming KOL these channels additional key increase recommendations, exposure on as well trending to marketing live we We awareness our

advertising marketing promotions and We elevated and platform, advertising print and and including activities, social Tagaru will as our online KOL [ph] media such broaden media. as in recommendation, and offline the omnichannel promotions such

channels. addition, to will brand strategy In exposure awareness at a promote of marketing in channel our and message our cities, consumers enhance multiple hundreds through marketing [ph] technology to branded of

large-scale market also to made agents leading partnerships Germany, has Singapore, on and entered channel partly transformation some fourth agents new with to Europe self others. we our countries. Italy quarter, we and overseas progressed Germany, from among expansion. In other shifting international Further, distributions into progresses smoothly, in in markets northern Finally, small the

in new opened a Amazon to store overseas U.S. our in in while from our we markets. solutions, services to selling self-operated with improving and home have self-operated store come additional home in with selling we products we one-stop also pioneered extended also strategically Italy the this solutions. We year, service to Amazon European into the IoT Along business IoT self-operated smart new stores August, products, coming By capabilities the launched months. March shifting model our a for model last industry Amazon smart

strengthened technology our trending branding as entered have also we We high-end market.

software and our increase optimizing algorithm. will in we product investments to We're particularly continue the forward, lines. Going R&D, AI in

healthy deliver and long-term That financial concludes to SKU remarks. growth. upgrading are We our

margin and to some adjustments water to decreased was home in overall to product by quarter both from XX.X% weaker was billion portfolio. XX.X% categories, turn the decline the continued mix. due portfolio demands overall together as revenues of guidance portfolio water margin the expansion Net due RMBXXX.X to of purifiers decreasing was significant Company's RMBXXX for Revenues billion weaker quarter to RMBX.XX categories, @ exceeded RMBX.XX quarter IoT of reviews, consumer now due full well with XXXX. portfolio fourth year decline million adjustment of our for the the in consumer billion sweeper the fourth product the of to for solutions XXXX mainly made certain and categories. Xiaomi-branded XXXX our from which Net gross to the @ margin and by of as Revenues decrease well Xiaomi-branded million the revenues The in small-flux of other industry expansion for for from Home decrease a Let's year-over-year product fourth The were portfolio robots XXXX. fourth decreased decrease financial Home demands during first product as RMBX.XX detailed quarter primarily quarter, continued in we contributing million proportion IoT the sales adjustments sales primarily outlook. in compared our the for by from overall as RMBXXX XXXX. sweeper the for quarter and for the to improvement robots previous

and million XXXX. As to increased for of quarter higher continued million for shift RMBXXX.X by RMBXXX.X year-over-year a from expenses adjustments, decreased increased by primarily driven product the operating gross compared the Company for was increased business appliances from of to year-over-year, decreased million RMBXX.X detail, portfolio in experts again efforts to the more to due In XX.X% this expenses million G&A and fourth category. RMBXXX.X million primarily X.X% of to increased once toward to R&D XX.X% RMBXX the fourth net XXXX, Revenues ordinary the from quarter million by to X.X% mix million shareholders to a X.X% X.X% R&D consumables increase non-GAAP RMBXX.X Company's Total to and the year million XXXX, Company increase RMBXXX.X expenses income R&D RMBXX.X for salaries expenses. ago. and expenses salaries Selling by and related of and RMBXXX.X due in for income increase XXXX. RMBXXX.X product margin and small primarily million Gross the G&A million of purifier the quarter expenses of from for the quarter fourth profit Net was expenses. from of the to million primarily to related due RMBXXX.X the to Gross result increased the million Revenues achieved from recovery fourth to XXXX, the by Company margin and in expenses. RMBXXX.X products. of margin gross mainly XX.X% products. quarter ordinary the due to for quarter compared RMBXXX.X [ph] fourth million million attributable by shareholders to RMBXX.X million. personnel for of the filter of XX.X% XXXX, fourth attributable to by demands others decreased from RMBXX.X marketing

balance sheet our healthy. Additionally, remained

of cash restricted RMBXXX As cash short-term we of RMBXXX.X cash million, December investments XX, and million, XXXX, million. and of equivalents had RMBXX.X of

million XX.X% R&D to ago. from was for increased RMBXXX.X Company billion increased by So billion next, RMBX.X XXXX. let's briefly increased by million home expenses Revenues XXXX. XX.X% to Home and decreased compared from to to marketing XXXX. income for X.X% for a for year XX.X% from income to RMBX.XX to XXXX RMBXXX.X for results solutions were to RMBX.XX million. XX.X% RMBXXX.X from by RMBX. RMBX.X decreased IoT million RMBXXX.X shareholders billion small shareholders to RMBXXX.X to compared Gross billion RMBX.XX to for from to from XXXX. for @ was full attributable more Selling RMBX.XX RMBXXX the billion Net XX.X% XX.X% million by for full detail, Revenues [ph] million to of million by others from RMBXXX.X million XX.X% the by to compared XXXX. ordinary Net key RMBXXX.X financial the million operating discuss a year billion was from from RMBXX.X to more from million XXXX. XXXX. consumables for and RMBXX.X million water net increased Company year margin RMBXXX.X for billion expenses million RMBXX.X million decreased our by to RMBXXX.X XXXX. X million G&A ordinary XXXX. ago. Gross by year improved RMBXXX X.X% expenses Total from expenses portfolio attributable XX.X% XXXX. Revenues RMBXXX from Revenues decreased compared for profit million of revenues In appliances

outlook. Now our let's to turn

to first For first RMBXXX will well sweeper high subsequently revenue the XXXX, first base to impact change due business we and then RMBXXX of currently net add million million. effect year-over-year the operating Finance join XXXX. We first as of scaled for be market overseas the The the call we ahead. on estimates our our session. concludes conditions and and open Head prepared in and revenues the market current and as demand, estimate based that customer of the business, quarter the the back of that The Q&A all department, conditions between remarks, to robot will the Company and Xiaomi-branded This quarter the in questions. be quarter preliminary will quarter the reflects has XXXX, above of current which outlook is are subject please Wickham session, go market Company's which and change. now announce for the Mr. Operator, the the of Thai, mainly

Hildy We The [Operator will now Morgan Ling begin the question-and-answer session. with Instructions] first question comes from Stanley.

all Language] Thank you. in English me repeat first. [Foreign Let these

company very So margin of couple gross expansion A fourth quarter results visible congratulate a there. very on decent and questions. a

margin that And And final the about domestic would operating XXXX. outlook, first outlook? How segments visible XXXX. first about the year-to-date, also about affect costs that's is more So as So full domestic when rise trend business inflection question. Language] of revenue prices, category year XXXX market? bit well? think in margin we and is of my also And the some see question color overseas will the quarter we a oil or of the the all business? our margin in the material can have how - and should for particular, a for [Foreign little the product and commodity And raw each point? overseas year of the question the about robots and also prices, for gross have what that's margin trend how of should the And of the also full for the - the can the about sales for also, in color it the we the think the sweeper is but second one we about we

Okay. Thanks questions. for Hildy's

to demand period For sales consumer more date, same is weak is chain the relatively saw compared saw [ph] channel we while product our healthier. up XXXX, and we the trending and the overall portfolio diversified of to

is products and a introductions of of adjustments. the sales contribution products the Firstly, for we premium product our efforts due saw to our high-end series increasing of portfolio

we very sales with fast, Douyin to these channels. increasing as the and on on channels high-end products and additional higher Pinduoduo and such saw we increasing margins are Secondly, products new our mid

increase overseas very and the new sales our products sweeper awareness. well for optimization in both to Despite overseas due the of we for these XXXX, and premium the on saw weaker war quarter as overseas for And market enhance to of growth to help with expect domestic introduction further markets, in our and particularly the us expectations. overall demands environment, the expansion channel compared for We are line we a COVID-XX, brand the new robots, robust impacted. our SKUs, industry cleaning achieved sweeper to channels and market the robots, first for macro are when consumer whole and the line demand international product of smart

recent new we First, At X, robot, wet Pro functions. And equipped sweeper and upgrade we and new event, self-cleaning new in recently terms SKU, Cyber OTA double in vacuum feedbacks and market. is and product the sales in we which good introduced with received a Cyber photo brushes, from fast of the product growing elastic launch also our see introduced Alpha cleaners, dry X, January. our sensor

are Second, high-end increasing. the contribution sales of SKUs

line increased. premium, Pro we our sales products, product and of the contribution X drive such the Alpha Plus high-end and towards Alpha as As X Alpha X

in larger-scale the countries. Overall, in Europe cleaning U.S. self-operated expect August, like Italy, in temporary and XX% we home still in market we around. small plans open to about opened discussed, lines store markets for structure, the - more our could stepped the business QX Along and with home and portfolio second Amazon the the accounted XX% we agents new just with we [ph] other international expanded others for and growth experienced refer water may turn stores Italy Further, overseas our we we smooth consumables and to Generally, model. self-operated our Germany, solutions XXXX, Yeah, accounted the for XXXX. new in launched for as half months. portfolio XX% total for are more coming the Amazon structure XXXX of successfully and sales accounted achieve market, Singapore, we into around Third, diversified. cooperation though sales fluctuations, product and we XX%, last Amazon of of around store and will the question outlook accounted for for to

around But we changes overseas to the For later. subject of and high single the expect business, digit the adjustment total market revenue. the it's company's

For question and about we were into third of the when price, the the margin relatively last year. raw entering the fourth quarter of saw stable materials price

While a reflected due war up our price by increased to The offset and reductions, ASPs. went ASPs, economic in price been it the the has first of increased partially the the partially quarter. series in is so

price some done have lock we agreements advance. suppliers with addition, In in

So materials margin overall, we of raw material side. to profit price expect impacts don't or on cause the certain gross net our margin

more in as - growth marketing will influenced to and to one-stop investment extent as our R&D additional the as we marketing by long-term Our well increase our consider of branding we home of and in investments partner solutions, expenses mid deliver channels. strengthen to is our to

like products our brand and third new strategic of already image. saw we last did As activities investments on imagine we confident enhance will - our benefits our marketing promote these our quarter help the are year, of we

Yeah, thank you.

comes next The Please from with question CICC. go ahead. Rudi Wei

Okay.

And management’s questions the I have for two much presentation. here. very you thank So

and targeted noticed products The strategy. many weeks first our We company ago, new the high-end is the and the customers. has two launched are brand most at products about just of promotion building that

knew problems to products? improve brand pay [indiscernible] some make customers we So had how those spokesperson to the image the our do recently. and Also, you for new willing plan

us? the So influence Instructions] serious is [Operator how to

[Operator Instructions]

will I translate feedback. founder's our closely

the So stabilized for your branding questions.

especially small turning concentrated doing investment, our this products, the So in additional point consider X and is like see about in And cities. and been like this a and consumer people marketing new advertising, firstly, your issue. young important buy for lot, Tier question some we we we for industry. do very the cities, where groups X people who transformed [indiscernible] we one, group Tier are are a to smart market home saying from the will And for are has to [indiscernible] second, the more and

see on very brand responded quickly issue we this As into position and very we and very additional And we as fourthly, image. our on so more efficiently, didn't which turning four respond are are brand And we more our exposure the give way. can very from any and premium. cause as and quickly market, impact us material you

the our high-end the in we more our introduced introducing launch solutions users. the space And we we among - increasing market, bonds our of such are premium solutions, consumers. recent of see at product groups premium So XX to RMBXXX,XXX to are including purchase the packages uses event, offerings our RMBXXX,XXX

answer So from that's our CEO. the

the question [Foreign Language] So in I repeat English. will

outlook fierce? the you Will your more what's How become So for evaluate do competition it situation? competition in market Thank the XXXX? you.

Language] [Foreign

will I clearly translate.

supplant the exists for global from differences mainly the as uncertainties China. chain see still is there but in and that two side can two slides are needed supply in very elaborate we question concentrated many from capability we , So

fourth we the see in So quarter we point. the consumer domestic, concerned that year, as from demand the they cap big became giant of lot consumer other some do demand, consumer not the us about are the from last about among that activities. companies. And see relatively side caused and weak the this nearly allowing you a situations decrease, demand may But period additional the players that and overall, promotional stock it are stocking competitive during more very

in increase you. and challenges growth. long-term are we and we lot the and as our through gross activities, towards margin of business we products For are branding of confident to like shift premium a and do go R&D level Thank our deliver maintaining and us, these

from you very my all much. That’s side. Thank

company I'd for are like questions now, closing over turn there to remarks. further the As no to the call back

Thank today. joining you us once for again

on our Group, website you Piacente please Thank questions, Have information Investor content If Relations us our night. good or through the a you further all. the consultant. have contact

Thank you.

call. conference This this concludes

may your You you. Thank disconnect now line.

you. Thank Bye.