Vitasoy Intl Holdings Aktie

Good afternoon, ladies and gentlemen. Thank you for joining us today for Vitasoy's Interim Results Briefing for Fiscal Year 2025 and '26. Before we start, I would like to introduce you to the senior management of Vitasoy Group. Sitting in the middle of the head table, we have Mr. Winston Lo, Executive Chairman of Vitasoy Group. On the right side of Mr. Lo, we have Ms. May Lo, Deputy Executive Chairman. On Mr. Lo's left hand side, we have Mr. Roberto Guidetti, Group Chief Executive Officer. Last but not least, we have Ms. Ian Ng, Group Chief Financial Officer.

In the following presentation, we'll first have Ian to provide us with a review on the company's financial performance, followed by Roberto's presentations on the business review of different markets and the outlook. We'll then have a Q&A session. Now let's invite Ian to speak to us. Ian, please.

Thank you, Angela. Good afternoon, ladies and gentlemen. Welcome to our interim results announcement briefing. Before we start our presentation, I would like to draw your attention to this disclaimer regarding the forward-looking statements in this presentation.

For the 6 months ended 30th September 2025, the group's revenue decreased by 6% to HKD 3.2 billion as compared with last year. mainly due to weak demand, higher trade spend and competitive pricing in the Chinese Mainland operation. The gross profit margin decreased to 51.1%. The savings from favorable raw material costs and production optimization, partially mitigated the adverse sales performance in the Chinese Mainland operation.

Profit from operations decreased by 4% to HKD 247 million, mainly attributable to a decline in gross profit. Profit to shareholders increased by 1% to HKD 172 million due to lower finance costs and income tax as compared with last year. Earnings per share was HKD 0.162, increased by 2% compared to last year.

Next, let's move on to CapEx. Capital expenditure for the period was HKD 57 million, slightly higher than last year. The financial position of the group remains strong. As of September 30, 2025, cash on hand was HKD 1.27 billion. Net of bank borrowing and lease liabilities, cash on hand was HKD 671 million.

The gearing ratio was 20% and excluding lease liabilities, the gearing ratio was 11%. For the first half of the financial year, return on capital employed remained at 14%. Taking into account the financial position and business development, the Board of Directors recommend an interim dividend of HKD 0.04 per ordinary share. Now I would like to invite our group CEO, Mr. Roberto Guidetti, to share with you the market review and talk about the outlook of the group's business. Thank you.

Thank you, Ian. Let me now review with you our business results overall and by geography. Group revenue decreased 6% during the first half of the financial year. The decline was mainly attributable to our Chinese Mainland unit as we are accelerating our capabilities to win with the new winning retail channels amid softer market conditions.

Hong Kong operation retained a strong performance but was temporarily affected by Vitaland Macau and the exports of the United States. As for other markets, Australian Singapore units sustained growth and improved their core business results. The group operating profit decreased by 4% Our Chinese Mainland operating profit margin was in line with last year at 11%. Hong Kong operations operating margin was at 12%, down 1.7 points. Australian and Singapore units both improved their bottom line. We also continue to reduce corporate expenses through sustained and effective cost control.

As for the outlook for the second half of the financial year, we will continue to accelerate our capabilities of our Chinese Mainland team to improve our top line. We are strengthening our resourcing to improve the performance in the general trade and also accelerate our growth in the new fast developing channels like online commerce, club stores, and snack chains.

Hong Kong operation will work to accelerate top line growth in the second half. Australian and Singapore units continue to accelerate the top line growth and further reduce the operating loss as compared with last year. While we recognize the short-term challenging context, we stay confident in our long-term potential for continuous scaling up.

Total group revenue decreased by 6% due to China underperforming, while Australia and Singapore increased revenues. The Chinese mainland unit remains the biggest operation by revenue at 55% of the group. And our Hong Kong operation maintained 34% revenue of total group sales. Australia and New Zealand unit grew from 8% to 9% of total group revenue.

Then on the operating profit, it was HKD 247 million, down 4% versus last year. The contraction is attributable to the decline in both our Chinese Mainland and Hong Kong units. At the same time, both Australia and Singapore continue their bottom line improvement, further reducing losses versus last year. The total result was also aided by our relentlessly driving cost reductions and efficiencies of corporate expenses.

Let's now move on to the by-market review. China total revenue was HKD 2.9 billion, down 7% versus last year. Operating profit decreased by 14% to HKD 326 million. I will now cover separately the Chinese Mainland and Hong Kong operation results.

Now in Chinese Mainland, the category yearly growth rate of plant milk and tea are slowing down. The plant milk category has declined by minus 10% whilst the tea category has decreased growth from double digit last year to only 5%, driven by the nonsugar segment where we do not have a sizable presence. The general trade channel, by general trade channel, we mean the independent mom-and-pop stores is slowing down and is being challenged by online, social and instant commerce, club stores, snack and on-premise chains.

During the period, we grew in the omnichannel and in the snack chains, proving that the appeal of our portfolio when executed properly and relevantly. Whilst plant meal market is experiencing a downward adjustment, Vitasoy, Vitasoy the brand market share in both soy and overall plant milk. VITA Tea is also gradually improving market share performance in the tea category behind the launch of our new VITA Lemon Tea.

Now going forward, we're focusing and acting simultaneously at the same time on 2 fronts. In the slowing general trade channel, we are working on improving our route to market to secure a stronger presence and ability to execute in full our winning portfolio, expand in new white spaces and also effectively leverage the yearly innovation. At the same time, in the growing new channels, we will want to provide and codevelop customized propositions. As we drive stronger execution of Vitasoy and VITA Tea, we will secure value competitiveness.

Now moving to the Hong Kong operation. Our Hong Kong beverage, our Hong Kong beverage operation performed strongly in the first half and sustained leadership, its leadership market shares in both plant mill and tea categories, confirming the strength of our equities and activities in this most established market. Despite a slower retail environment, particularly in the tea category, we were able to drive market share with accretive product innovations like VITA Lemon Tea.

Now we experienced the short-term challenges in Macau, in Vitaland and the exports of the United States. Macau was affected owing to slow economic recovery and the Vitaland was negatively impacted by lesser number of school days and frequent adverse weather conditions in the typhoon season. The imposition of and the frequent change to the tariffs imposed by the United States have had a negative impact on our North American business albeit not significant to the total group revenue. We're adjusting our commercial strategy and the tariff situation evolves.

Let us go through the overseas market, starting with the business in Australia and New Zealand. Revenue from Australia and New Zealand increased by 5% in local currency, reflecting our growth in a market where the adoption of planned mill continues to steadily develop. Riding on our recovery stability in manufacturing attainment, we were able to restore our activities and promotions with customers, thereby gaining penetration and market share with particularly increases in the almond milk.

We continue to drive our chilled category business with both the PET 1 liter and our yogurt platform. There is now ever more adding net incremental business in this exciting new category. At the same time, we have narrowed the loss in the first half as we improved operational efficiency and we will stay focused to accelerate improvements in the second half.

Now moving on to the Singapore market. Both our domestic and export tofu business gained momentum behind our disciplined execution and consistent price competitiveness. The imported beverage business is affected by lower priced competitive products, but showed resilience at consumer offtake level and potential for incremental growth in the second half of the financial year. At the same time, we have continued to drive cost reduction programs to reduce losses, so to gradually return this unit to profitability.

I would like to close the market review by new a brief update on our business in the Philippines. In the Philippines, the plant-based category continues to grow very healthily at double digit year-on-year since our entry with the old and the almond segments now leading the growth. Our joint venture in the Philippines with Universal Robina Corporation, URC, continue to sustain the business. we are determined to keep driving scale and improving profitability in this exciting market.

Now in summary, the external macro and competitive environment on the category, on the media and on the channels continue to evolve rapidly. We continue accelerating our capabilities to improve sales in our Chinese Mainland unit. Our goal is to improve performance in the general trade, whilst continue accelerating in new fast-developing channels. Our Hong Kong operation will work to accelerate growth in the second half of the financial year. Australia and Singapore unit will work to accelerate top line and more significantly reduce operating losses versus last year. While we recognize the short-term challenging context, we stay confident in our long-term potential for continuous scaling up. That is all of our sharing.

Good afternoon, ladies and gentlemen. Thank you for joining us today for Vitasoy Annual Results Briefing for Fiscal Year 2024 and 2025. Before we start, I would like to introduce you to the senior management of Vitasoy Group. Sitting in the middle of the head table, we have Mr. Winston Lo, Executive Chairman of Vitasoy Group. On the left-hand side of Mr. Lo, we have Ms. May Lo, Executive -- Deputy Executive Chairman. On Mr. Lo's right-hand side, we have Mr. Roberto Guidetti, our Group Chief Executive Officer. Last but not least, we have Ms. Ian Ng, Group Chief Financial Officer. In the following presentations, we'll first have Ian provide us with a review of the company's financial performance, followed by Roberto's presentations on the business review of different markets and the outlook. We'll then have a Q&A session.

Now let's invite Ian to speak to us. Ian, please.

Thank you, Angela. Good afternoon, ladies and gentlemen. Welcome to our annual results announcement briefing. Before we start our presentation, I would like to draw your attention to this disclaimer regarding the forward-looking statements in this presentation.

Let's have a brief overview of performance in the second half of the financial year 2024/2025. Net of currency impact, Vitasoy's group revenue increased by 1%, driven by sustained sales growth of core products in Mainland China, alongside solid achievement in Hong Kong operation. Gross profit margin improved to 50.9%, up 1.4 percentage points versus a year ago, mainly due to lower commodity costs and more efficient manufacturing footprint, partially offset by higher trade promotional expenses in Mainland China and the impact of unfavorable foreign exchange movements.

Profit from operations grew substantially by 641%, propelled by accelerated growth -- -- profit growth in Mainland China and improvement in the Australia business. EBITDA increased 29% year-on-year. This was mainly driven by the higher gross profit contribution and effective operating cost rationalization in our operations. Profit attributable to equity shareholders of the company was HKD 64 million versus a loss of HKD 46 million in the second half of the previous financial year.

Now let's talk about our full year performance. Our full year revenue grew 1%. Gross profit margin improved by 1.3 percentage points to 51.3%. Profit from operations and EBITDA grew 96% and 22%, respectively. Profit attributable to equity shareholders of the company increased substantially by 102% to HKD 235 million. Earnings per share was HKD 0.219, increased by 102% comparing to last year.

Now let's talk about CapEx. Capital spending for the period was HKD 124 million. Our free cash flow has been continuously improving as a result of stronger operating cash flow and relatively stable CapEx. The financial position of the group remains strong. As of 31st March 2025, cash on hand was $1.27 billion. Our net cash position increased to $657 million. Gearing ratio decreased to 20%. Excluding lease liabilities, gearing ratio decreased to 10%. The group's return on capital employed, ROCE, increased to 25%.

As a result of the group's improved financial performance, we recommend a final dividend of HKD 0.142 per ordinary share. Including the interim dividend of HKD 0.04 per share, total dividend for the financial year was HKD 0.142. Apologize. The final dividend of the year was HKD 0.102.

This ends the first section of the presentation. Now I would like to invite our Group CEO, Mr. Roberto Guidetti, to share with you the by-market review and talk about the outlook of the group's performance. Thank you.

Thank you. Thank you, Ian. Let me now share with you the review of our business overall and by geography. In the '24/'25 fiscal year, we have grown revenue, albeit moderately, while almost doubling our profitability. Group revenue increased by 1% for the full year. In renminbi terms, Mainland China improved in the second half, growing plus 2% versus last year, driven by improved commercial execution and successful product innovation across both VITASOY and VITA brands. Hong Kong and Australia sustained solid growth, reflecting strong brand equities and portfolio.

Group operating profit almost doubled at plus 96% versus a year ago in Hong Kong dollar terms plus 97% net of currency impact. Mainland China's operating profit grew plus 42%, achieving a 9% operating profit margin. Hong Kong operating profit was up plus 24%, a 12% operating profit margin. All other geographies improved profitability, driven by our focus on structural and operational efficiency.

In this new financial year, we will prioritize sustaining business scale and profitability in the context of geopolitical, economic and market slowdown conditions in our categories of plant milk and ready-to-drink tea. Mainland China will focus on sustaining scale while maintaining structural profitability. Hong Kong will continue solidifying our core portfolio, complemented by selective product innovation. And across the whole of China, we will secure value competitiveness of our portfolio. Our Australian and ASEAN units will keep driving top line growth while reducing their operating losses.

On the international tariff risk, we will work to mitigate the impact, leveraging our local sourcing, manufacturing and selling within our markets. While the short-term macro and category conditions are more challenging, we stay confident about our gradual improvement and long-term prospects. Our multi-category and multi-geography portfolio has further potential for both increasing shopper consumption and distribution expansion.

On the revenue side, total group grew plus 1%. In renminbi terms, Mainland China's revenue grew by 2% in the second half of the financial year, resulting in a growth of 1% for the full year amid intensified market competition. Australia continued to grow along the recovery of manufacturing stability. Mainland China remains the biggest market by revenue at 54% of the group.

On the operating profit, we almost doubled the operating profit for the total group. All markets improved results with both Australia and Singapore narrowing down the operating loss. We also drove improvements at both market and in quarter level by reducing our corporate expenses through streamlining headquarter roles and decreasing operating costs.

Let's now move to our review by market, starting with our biggest, China. China overall total revenue was HKD 5.6 billion, up 1% versus last year. Operating profit grew substantially by 33% to HKD 590 million. Both sales and profit grew in both Mainland and Hong Kong, and I will now cover Mainland and Hong Kong in detail separately.

In Mainland China, both VITASOY and VITA brands delivered growth. We have gradually reduced our pricing on VITA Tea so that in the new fiscal year, we will leverage a stronger value equation versus the relevant competition. Our strength in systematic innovation contributed to the results. VITASOY Banana and Strawberry and VLT Zero provided complementary incremental revenue. Despite the competitive pricing environment in the market, we improved profitability by increasing operating efficiency, lowering commodity prices and exercising disciplined cost control. Operating profit rose by 41% to achieve a 9% operating margin for the year.

In the new fiscal year, we aim to maintain our scale and profitability. Market category growth has slowed down across dairy, plant milk and ready-to-drink tea. Shelf price competitive pressure will remain significant. So sales growth must come from market share improvement. Value competitiveness will remain critical for the short term. We will continue to improve field sales execution, increase core portfolio and innovation availability of both brands at competitive pricing. At the same time, we will continue to build our equities via new campaigns of both brands that I would like to show to you now.

Let's start with VITASOY first. You will see core classic -- core VITASOY Classic featured in multiple consumption occasions. Then on VITA Tea, we will show you the new campaign for VITA Lemon Tea.

So in addition to these new marketing campaigns, we are excited to share with you that we just launched new core range products for both brands. On VITASOY, we have extended our low-sugar fruit range to enhance consumer relevance across multiple occasions. The new variant is VITASOY Peach made with real fruit juice. And on VITA, we have launched Ya Shi Xiang Lemon Tea, combining Ya Shi Xiang oolong tea famed for its unique aroma and rich flavor with distinctive zesty fragrant lemon to provide a new exciting lemon tea experience.

I hope you enjoyed the samples that we have provided today. We have obtained encouraging feedback and endorsement from shoppers and customers thus far on these new items. So we will launch the relevant marketing campaigns in both Mainland China and Hong Kong SAR to drive trial and awareness.

Here, I'm going to show you the [ activities ].

So we'll close the China section with an update on our Hong Kong operation. This unit, the Hong Kong unit, delivered yet another year of sales growth, underpinned by a strengthened core business and targeted innovations. Both brands, VITASOY and VITA, continue to lead the market in their respective categories, driven by strong fundamentals in sales execution and also creative innovative marketing activities. Operating profit grew by plus 24%, driven mainly by higher sales volumes, pricing actions and favorable commodity costs, all of which contributed to the resulting 12% operating profit margin for the year.

Let's now move to our overseas businesses, starting from Australia and New Zealand. Here, revenue grew plus 5% in local currency, following the full resumption of sales programs after the resolution of earlier production line issues. Results were improved also due to our new yogurt platform sales, which are all net incremental. In the second half, we continued to narrow the operating loss by more than 30% in local currency terms. For the full year, the operating loss decreased by 4% to AUD 15 million, 1-5.

While we have resolved the manufacturing issues, it is taking longer to improve our cost structure and recover our market position. And this has been exacerbated by a very competitive sales environment. We will continue to implement our commercial program to improve our brand presence and impact across the grocery and on-premise [ coffee sectors ].

Let me now close the segmental review by covering our Southeast Asian markets, starting from Singapore. Revenue slightly decreased compared with the previous year. Growth in the export tofu business and gradual recovery in domestic tofu offset some softness in beverage sales as we executed the transition to a new beverage distributor that we have now fully implemented. Structural cost efficiency initiatives significantly narrowed the operating loss, aided also by lower raw material costs and stringent cost control.

And now let's close that by market review by a brief update on our business in the Philippines. Our joint venture in the Philippines with Universal Robina Corporation, URC, continue driving scale in both take-home and on-the-go channels, sustaining market share growth and building this product category in the Philippines. We will continue to build this business for the long term. The market keeps growing and is now expanding from soy to a complete segmented plant meal market as both almond and oat segments are establishing sustained presence.

Now before we conclude the presentation, like every year, I would also like to give you an update of our progress on sustainability and on ESG. First of all, our 11th annual sustainability report will be available on our website in July, together with the annual report. This is our updated sustainability framework. You can see it over there as well, which contains our targets and KPIs to secure progress on our core work streams. These targets were set for '25/'26, 11 years ago, and we are making good progress in achieving them. You can find the details in our sustainability report, but I would like to highlight our progress on the '25/'26 target in more detail in the next few slides.

Our portfolio is sustaining strong progress on driving a plant-based, nutritious, low-fat and low-sugar offering, aligning our purpose. We are on track on our goal of water reduction, while the energy reduction target has not been progressing as rapidly due to lower capacity utilization versus the assumptions made 10 years ago. We stay dedicated to improving our energy efficiency and implementing strategies that drive sustainable energy consumption.

Going forward, we are pleased to announce an updated set of sustainability framework goals for 2030/'31, aiming to progress our most material opportunities. In addition to other portfolio and packaging goals that will remain in place, we will upgrade our 2030/'31 target for reducing sugar content in all food and beverages.

We will pursue this goal by continuing to refine our classic recipes as well as developing new products. We will tighten our previous broader moderate to 0 sugar goal for beverages, which has been from 7.5% to 0% sugar content with a new target of low sugar and no added sugar products from 5% to 0%, including both food and beverage offerings. This goal means that by 2030, 80% of our portfolio will be low sugar or no added sugar products, which is less than 5 grams of sugar per 100 ml or grams. This more ambitious goal will guide us to significantly reduce sugar content in our product offerings, reflecting a stronger focus on health trends and meeting consumer demand. On manufacturing, we have renewed our baseline here, and we will continue enhancing our efficiency.

Now externally, our ESG ratings results continue to sustain high performance, as shown in this table that will be made available on our website for your perusal. Our commitment has been recognized by leading global and local sustainability benchmarks. We are now ranked among the top 10% of companies in ESG performance in our sector, as assessed by indices such as the Dow Jones Sustainability Index, DJSI, and the Hang Seng Sustainability Index. These rankings reflect our comprehensive approach from managing our portfolio, packaging, reducing our carbon footprint and promoting sustainable operations to fostering inclusive workplaces and maintaining the highest standards of corporate governance.

Now in summary, in fiscal year '24/'25, we have achieved sales growth while almost doubling our operating profit. Mainland China showed improvement in the second half, driven by stronger commercial execution and sustained product innovation across both VITASOY and VITA brands. Hong Kong and Australia maintained solid growth, reflecting robust brand equity and portfolio strength. Group operating profit saw a remarkable increase of 96% in Hong Kong dollar terms, mainly driven by Mainland China and Hong Kong operation.

In this new financial year, we will prioritize sustaining business scale and profitability in the context of geopolitical, economic and market slowdown conditions in our categories of plant milk and ready-to-drink tea. Whilst the short-term macro and category conditions are more challenging, we stay confident about our gradual improvement and long-term prospects. Our multi-category, multi-geography portfolio has further potential for both increase in shopper consumption and distribution expansion.

That is all for our sharing. So we are now open for your questions. Thank you.