Viomi Technology (VIOT) 27 Mar 232022 Q4 Earnings call transcript

Hello, ladies and gentlemen, thank you for standing by for Viomi Technology Co., Ltd.'s Earnings Conference Call for the Fourth Quarter and Full-Year 2022. At this time, all participants are in listen-only mode. Today's conference call is being recorded.

I would now like to turn the call over to your host Miss Claire Ji, the IR Director of the company. Please go ahead, Claire.

everyone. Hello, Rocco. you, thank And welcome to Co., Viomi Technology Ltd. And fourth full-year XXXX. conference call and the for earnings quarter

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

press IR You the up for by of the company's and company's can release sign distribution email download list ir.viomi.com. earnings section visiting website at

will Board today's begin of the conclude Chen, of the in Founder, The and Xiaoping company's prepared call Officer. with Mr. management and remarks call Directors with the session. is Chief a Executive Participating Chairman will Q&A

Before discussion Litigation made of statements we Act know continue, harbor US the please that Reform will contain provision safe the today's of forward-looking Securities Private XXXX. under

statements Forward-looking risks inherent involve and uncertainties.

be today. and views with other from XX-F except The assume statements any may Securities As the filings obligation materially included different Further does and Form not filed law. as Exchange regarding risks other such, annual update by expressed the forward-looking uncertainties and any is company's and required to as this in the actual on information company US company's report the Commission. result

unaudited GAAP Please information conference call unaudited and also as earning this that discussion of well know release include measures. Viomi's press non-GAAP as financial financial

reconciliation Viomi's press directly release the In most addition, measures contains of the non-GAAP unaudited a to unaudited comparable measures. GAAP

followed remarks please Chinese, Founder Mr. Chen, Chen CEO, in and by Xiaoping. translation. turn our will I to now Chen deliver over ahead. will his call the an go Mr. Mr. immediately English

for the year and remarks will translate founder's performance discussing Chen. of before our full I Mr. financial quarter And quickly you, XXXX. Thank fourth our

year-over-year impact scale our by the XXXX. in for and adjustments revenue the business joining and quarter conference XXXX external quarter, the experienced macro and fourth throughout was in Hello, everyone. the adverse pandemic greatly call. a full-year our factors we fourth headwinds, strategic Due you and today decline earnings us for to of Thank affected

by increased fourth X.X% benefiting quarter product fourth of XXXX, the our in margin from quarter the quarter-over-quarter efforts. gross our Nevertheless, in optimization portfolio

in despite also stable margin the gross XXXX kept full-year year. compared with as throughout Our XXXX fluctuations

the In the fourth operations. our on quarter, we our focused business uncertainties the of and scale facing optimizing accelerating recovery external environment, of

the We leveraged our enhance industry grew product sales continued strengthening and success this strengthen our with in X% product with core reflecting in categories holistically our advantages quarter-over-quarter category, water led portfolio, of by upgraded product Viomi's XXX% technology. we to our despite purification our product advanced year-over-year competitive First, to our AI product year's longest-standing of their functionalities the fourth and challenges, quarter competitiveness.

we forward, to market optimize Going will and further drive products' redouble our our distribution advantages, technological our efforts deepen channels, existing penetration.

control addition, cost our we operating efficiency, In improve measures. implemented to disciplined more

particular, a As fourth in In revenue second in as research quarter the expenses of a of and decreased year-over-year quarter. and and result, expenses compared on the narrowed revenue proportion scale. marketing a both similar development selling marketing, selling that XXXX with

We streamline improve will organizational and to costs, structure operational efficiency. optimize continue

and continuously we whole more customers of intelligent smart committed improving and useful While bring also user refining solution friendly operations, our experience house products. remain our to to

home further Fall across iteration hosted the solutions and upgrades energy protection, conservation side. four software software interaction, dimensions, 'AI: Helpful healthcare, online our the our and Software focused improving intelligence, XXXX one-stop on This from In proactive October, we X.X'. virtual product natural and Launching including event Event, environmental IoT

Technology app, home National of for and Science proprietary Science HomeMap Viomi's November, Precision and Awards Office by Award one-stop by platform, was solution the In Science the the and Technology Technology of IoT and Ministry China. awarded

Competition. patented Area and won including technologies, Vision, Hood a award Bay a Cultivation XXXX one Super X of Meanwhile, new Max of which in smart silver Layout with AI Greater appliance, we launched Range series AI our home High-Value Intelligent Pattern

purification. introduced also our integrated water ultra-slick XXXX with X, and Quanxian gallon fully Master integrated and Master AI AI Pro, purifier with washer embedded dryer, our design, an We

we In digital the category, smart devices door lock Super an peephole. with unveiled home our X smart ultrawide angle AI

progress further across on intelligent hardware underscores with both in philosophy user-friendly and innovation whole – useful provide focus innovation business product solid our technological to a and software products Our experience. customers house and

of In a addition development. to ongoing set to IoT were our optimize up October, in also doctoral we to and solution successfully XXXX, postdoctoral approval workstation product constantly talent our advancements, strive we first establish receiving through innovation the home After one-stop to half a workstation. authorized in technological

in whole and house the talents industry, forward, cumulative institutions intelligence incubate professional universities intelligent through will Moving and house industry. cooperate whole top projects promote Viomi with of development

XXXX, November of and state National the from Intellectual continuous to Office Intellectual intellectual in management. efforts once innovation List were XXXX, Enterprises Demonstration In reflecting Property we in Property our again XXXX included property

more end fourth than worldwide, As X,XXX to than are testament These more inventions. for patents applied innovation and strengths. X,XXX accumulated of capabilities we have our the with our authorized patents of the X,XXX technological quarter, and comprehensive achievements along global

others. rolling our negative environments [indiscernible] by our Despite stemming stores as merchants still offline in our COVID bundled as COVID-XX new outbreaks solutions the challenging flagship store progress, heights from opening reached on of policies [indiscernible], well XXXX. repeated in the sales among of

IoT XXX,XXX the XXX,XXX Our home RMB solutions growing one-stop RMB offline nationwide. orders popularity bundled merchants of unit, Viomi's to over per solution demonstrating ranging clearly from

refrigerators. successfully introduced as fourth such we the conditioners, and an machines, air in area Furthermore, to of product markets, washing quarter, overseas

business. additional will new growth serve our Moving driver as overseas a category for forward, this product

concentrating we In in to development the In confidence to summary, factors continue operations. consumption we year, strategy, will pandemic steady as adhere horizon. optimize uncertainties many we three with our still post on see our recovering,

expenses control operational and strictly to efficiency. continue improve First,

domestically markets optimize recovery and categories structure. And and scale. Second, product in extend the introduce business core focus thirdly, finally, product our of on accelerate product overseas new categories to

we sustainable returns the to brand forge for users to will sufficient consolidate the laying support we as strive profitability, delivering to ahead, healthy strong to maintain strength, and long-term development As business and our propel recovery shareholders. reserves we provide foundation brand continuously financial continue achieve of and for growth,

you. remarks. our that Thank And concludes founder's

will details. I XXXX go fourth in quarter results more and financial Now over our full-year unaudited

X,XXX.X XXX.X mainly compared million IoT@Home and million the to to XXXX. small RMB quarter of RMB were decline portfolio others. fourth from due revenues revenues and Net in a appliances was decrease The for

decreased to to @ Revenues portfolio million RMB The Home by from for XXX.X decline million adjustments quarter from XXXX. XX.X% fourth due of IoT RMB kitchen the smart was XXX primarily for products. SKU

RMB product of adjustment solutions portfolio by category. larger as purifiers revenues XXX.X was flux water to million primarily home from quarter increased for increase driven from this XXXX. million RMB The in Revenues of an water within XXX.X fourth the by from X% the a result increase

by the Revenues million decreased fourth to XXX.X of XXX.X X.X% XXXX. RMB from RMB from consumables million quarter for

million Revenues this by of from XXX.X from the adjustment category. small fourth to quarter RMB continued RMB XX.X% decreased primarily appliances XXX.X million for portfolio due within to XXXX, and others product the

XXX.X decline a Gross of clean-up of price for to fourth XX% to of XXX.X result RMB primarily was XX.X% a fourth profit portfolio our million for Gross million RMB decrease XXXX. XXXX. the was margin was certain adjustments. products the product as of compared in selling quarter due The quarter compared to the

quarter expenses. expenses, selling decreased by of expenses in marketing RMB million the from to and decrease XXXX, to due partially XXX.X and by operating increase offset an million The fourth RMB XXX.X for administrative a in XX.X% primarily general

the XX.X in a continued from million development development quarter research details, mainly R&D RMB decreased efficiency and well efforts as for of RMB XX.X% due related in as research improvement. experts by to greater fourth the million and expenses and decrease XX.X In XXXX, to salaries, company's

mainly XX.X% by RMB decreased of to XXXX, RMB expenses marketing expenses. the in and and for marketing Selling decrease million XXX.X to logistics XXX.X due a million fourth quarter from

in General primarily expenses due the fourth for compared million estimated to RMB of for and the same third client period. XXXX, party receivables increased RMB and by XX from an XX.X increase administrative million quarter allowance accounts to XX.X% a notes the to in recognized

the ordinary million. to was in tax from of to loss net an XXX.X deferred difference expenses. RMB net net loss tax which between income XXXX The XXX.X and and increase RMB was an Net million increase valuation attributable non-GAAP ordinary caused the shareholders loss attributable of company due operations mainly company was of in provided, to loss asset allowance in the shareholders

healthy. Additionally, our balance sheet remains

December deposits cash equivalents of XXX.X RMB cash of million. XXX.X RMB XX, RMB short-term and investments the RMB restricted million, of cash XX.X had million, As XXX.X of company of million XXXX, and short-term

briefly RMB key Next, were revenues financial full-year discuss let's million X,XXX.X for Net to XXXX. results compared some X,XXX.X XXXX. million for RMB

X,XXX.X Revenues decreased @ IoT million for RMB million XX.X% portfolio RMB from XXXX. to from X,XXX.X by Home

solutions for XXXX. Revenues from XXX.X decreased X.X% by million RMB million XXX.X water from RMB to home

decreased consumables million from XXXX. million RMB RMB for from XXX.X to XXX X.X% Revenues by

XXX.X million appliances and XXX.X others million RMB decreased small by from XX.X% XXXX. for RMB Revenues to from

Gross XXXX. was RMB XXXX. X,XXX.X to XX.X% million margin XX.X% to compared for XXX.X for from Gross improved million RMB profit

million XX.X% for from expenses RMB X,XXX.X X,XXX.X operating to Total by decreased million XXXX. RMB

X.X% RMB XXX RMB detail, research more million XXXX. for expenses In and decreased by to XXX.X from million development

S&M expenses XXX.X million to XXX for decreased XXXX. RMB XX.X% million by from RMB

to G&A XXXX. expenses XXX.X compared million XX.X% for RMB by increased to million XX.X RMB

of loss ordinary of to the non-GAAP RMB was and ordinary company XXX.X loss attributable million. company shareholders to XXX was attributable the Net net shareholders million RMB

And prepared this remarks. concludes our

for call now will We Q&A. the open

and I this Our join please questions. session and ahead. answer will Operator, founder go

question [Operator Stanley. Liang from Instructions]. today's comes Marcus Morgan first And with

small three have I questions.

Viomi so forward? robot Firstly, their making January question, vacuum prices going also sales my and with how ask for growth share does I how XXXX? and forward see the moderating going the market And year-to-date February trending can second lower, the prices, appears market

this is, see your you focused is how and the and in what question split on? revenue do XXXX? how question last overseas And between China Second are you expansion and overseas

first second your and recall – I Can question first one?

question the market would prices, February going is robot and trending And market competitors growth second do year-to-date company share? see you The lowering and vacuum is, your are January be, first question how forward how your as in the XXXX?

overall of consumption past In to observed attributable which offline of our recovery the is have we certain by of the degree months few rebound. offline a channel, XXXX,

impact the sales. of of However, on the XXX with have area. month, offline distributors the during with XXX past are epidemic to decoration repeated the along other the in and hand, backup which lead decreased, most the But prep [ph] inventory our has opened a marketplace offline to meters door in than of over we of of and stock square offline located number our stores newly XXXX more of in dealers, due volume shipment decreasing

steadily month channels up offline better proceeding the store, to rate expected over by offline over scale situation on to has are steadily our month to growth now, XXXX. expanding merchants. the XX% Based compared sales strategy are a larger We overall achieve and of increased

about like gas, our negative market, sector domestic in the high robot online price historically a atmosphere impacts the natural question brands subdued and overseas we [indiscernible] the second and consumption competition. market well, in the of large in sales XXXX. robotic the are And, know, vacuum a there leading account decreased lot overall under your cleaners, to and this scale fierce is And the the of all mainly this European sector for share, sold in where already market geopolitics

provide intelligent on. needs. diversified our customers' meet in For deepen house like will whole channels, In the optimize existing will product solution, sects keep water several further one-stop purifiers technology distribution models to this our we advantages so line we and meantime, and

last And, about earlier, your question to yes, we I believe due I And yeah, – mentioned the expectations. overseas mentioned. impact is

while revenue We for last products the overall industries. in XXXX from the IFA time, we September European in year, positive of first over is for decreased marketplace received But the customers and consumer XX% XXXX. Berlin world's our franchises many which proportion and technology the of a and new electronics in the the half feedback. significant to oversea second showcased participated in most in So, market number

the few and with reached other Southeast purifiers, of expanded And mitigate than hopefully, the be next achieve our compared the enriched And to that, machines, products and overseas would locks refrigerators sales more XXXX. countries, for we Asia water and sales categories certification the countries. decreasing we washing sales of And door believe home and in and conditioners, months product the in assembling a recovery And aiming million. air European air products. we sale cleaning XXXX in XX are XXXX, RMB accomplished with regions, smart doubled smart of overseas in conditioners of to appliance overseas past the

our comes [indiscernible] next CICC. today question with from And

three I have questions.

is better was The for than is this or year? market performing was XXXX? overseas environment in first what worse And And the market? Chinese it how one outlook overseas the the the

as bit we gas European about with market strickened perform Your first question, and the in subdued we by things little just European a historically consumption market discussed in lines. used simple of on countries remains and oversea and price geopolitics the the markets high of the product to the in expectations comparably XXXX natural focus

Asia we strickened overseas we been our So mentioned achieve has as and recovery. a XXXX and product Southeast XX%. over extended hopefully enriched And heavily in categories earlier, would sales sales overseas regions countries, and decreased the have like our

your And strickened XX% I rolling about on also, been hard And offline negative the question, both market effect asked this domestic channels business in believe growth, domestic of And decreased the the online basis. about about COVID and a by you have year-over-year policies. right? quarter

see However, optimizations by a of some revenue percentage we revenue by water products, larger in contribute proportion with purifiers.

gross improved margin overall quarter-over-quarter. Our than more X%

on efforts core purifiers advantages, to distribution optimize technological with our and and focus both categories will double we our especially product forward, will water online channels, offline. Looking we

backup store offline due offline the in the past of inventory year. decreased. impact channels, sales the repeated epidemic to lead volume in decrease with distributors the of our offline a to dealer of our a the of of Along regards and of number has shipment In

on the XXX than have other located most which meters stores we store [ph] in square prep newly XXXX hand, XXX area. But more with and over marketplace are opened decoration of the in

are on overall XXXX. a based scale the overall XX% expected And We and offline channel sales month has over extending month to are compared offline increased strategy. our achieve of steadily our proceeding to rate growth steadily situation,

concludes Thank for the I'd any conference to session. this to you comments. or turn closing And back question-and-answer and today's additional ladies gentlemen, over management like

us you joining Thank once Okay. for again today.

Piacente our company's through further relations Group, investor or to you us Thank on consultant. please information If you. the free contact The have website questions, feel contact the

you This you, call. everybody. for attending all concludes Thank thank today's today's We conference presentation.

and disconnect your have lines day. now may You wonderful a