Suning Tesco released its 2021 annual report: steady recovery in operations and continuous positive EBITDA

On April 29, Suning Tesco released its 2021 annual report and 2022 first quarter report. The report shows that with the support of Jiangsu Province, Nanjing Municipal Government and industrial investors, Suning Tesco has actively promoted cost reduction, efficiency improvement and income increase, and since the fourth quarter of last year, the company's operating conditions have actively improved and restored its hematopoietic capacity. In the fourth quarter of last year, the company's merchandise sales scale increased by 24.39% month-on-month, and the EBITDA (excluding the impact of operating cash flow factors on the basis of EBITDA) in November and December continued to be positive. EBITDA continued to be positive in the first quarter of 2022, achieving profitability in the core business of home appliances 3C in a single month in March.

Analysts pointed out that Suning Tesco accelerated the increase in revenue and loss reduction, the fourth quarter performance achieved a "V-shaped rebound", and the first quarter of this year continued to climb the positive trend, marking that Suning Tesco is throwing off the historical burden and returning to the track of steady development.

EBITDA has been normalized one after another, and the hematopoietic capacity has continued to improve

According to the announcement, in 2021, Suning Tesco achieved operating income of 138.904 billion yuan, and the scale of commodity sales in the fourth quarter increased by 24.39% month-on-month, of which the sales revenue of comparable stores of home appliances with the largest profit contribution weight increased by 21.91% month-on-month. The company achieved a single-month EBITDA profit in November and December. In the first quarter of 2022, EBITDA was 260 million yuan, achieving quarterly positive, achieving a profit in the 3C core business of home appliances in a single month in March, and the company's operating cash net inflow in the first quarter was 1.296 billion yuan, and obtained an incremental credit of 1.05 billion yuan, which effectively supplemented liquidity and ensured the continued stability of operation.

Since 2021, Suning Tesco has further focused on the core business of home appliance 3C, focusing on core competitiveness and improving operational efficiency. Offline, strengthen the upgrading of the store model, strengthen the customer acquisition ability and scene and experience construction in front of the store, and have 11,281 stores of various types by the end of 2021. Online, Tmall Suning Tesco flagship store achieved profits in the fourth quarter, and Suning Tesco's main station also significantly reduced losses and is expected to achieve profitability in 2022.

During the reporting period, the company's incremental businesses such as retail cloud, easy-to-pick cloud, and social cloud developed rapidly, among which the retail cloud, which focused on the sinking market, opened 2,678 new stores throughout the year, reaching a total of 9,178, and achieved a year-on-year increase in the scale of GMV in a single quarter by 27%.

While the operation continues to improve, the results of cost reduction and efficiency increase are obvious. The announcement shows that the company's total expense level in 2021 decreased by 14.35% compared with 2020, and the fourth quarter expense decreased by 30.73% month-on-month. Excluding the impact of the annual special provision for impairment of related assets, investment losses, deferred income tax and other factors, the company's net profit attributable to the shareholders of the listed company in the fourth quarter was a loss of 1.218 billion yuan, a significant reduction in losses from the previous quarter. In the first quarter of 2022, the total expenses fell by 43.53% year-on-year, and the net profit attributable to the shareholders of the listed company was a loss of 1.029 billion yuan, and the loss continued to narrow.

2021 is a difficult year in the development process of Suning Tesco, experiencing the impact of multiple factors and putting pressure on operating performance. Enterprises can gradually stabilize and resume operations, Suning Tesco said in the financial report: investors should be thanked for their understanding and trust in Suning Tesco, thanks to the government, industrial partners for suning Tesco's support; more thanks to the adherence of all Suning Tesco team, no matter how difficult the face, "persistent hard work, never say die" spirit of enterprise has always inspired us to go down, to come out, which is also the company can always maintain development confidence, for the momentum of starting again.

Clearly position the upgrade service strategy to provide users with home scene solutions

Facing the development of 2022, Suning Tesco said that it will further improve the company's liquidity by deepening the cooperation between banks and enterprises, accelerating asset revitalization, continuing to strengthen the commodity supply chain, and making every effort to accelerate the operation and repair, so as to achieve the annual profitability of the core business of home appliances 3C.

The announcement said that ensuring that the core business of home appliance 3C returns to the profitable track is the main line of work throughout the year. At the same time, the company will actively promote the rapid development of the three business systems of retail cloud, easy cloud and social cloud, and achieve breakthroughs in overall scale and profitability.

In order to enhance the company's core competitiveness, Suning Tesco further clarified its positioning and service upgrade strategy. According to the announcement, Suning Tesco is a retail service provider that provides users with home scene solutions. Based on the needs of users' family scenes, the company will build subdivision scene operation capabilities, commodity collocation and combination capabilities, logistics installation and fulfillment capabilities, and upgrade from "buyer electricity to Suning" to "customized family scenes to Suning" to create differentiated advantages.

As a retail service provider, Suning Tesco's service capabilities are not only for C-end users, providing users with different preferences with the most in-line and cost-effective products, but also for upstream brand enterprises, creating more professional brand building and enhancing capabilities and efficient promotion capabilities of new products, and improving business efficiency. Under the trend of home appliance and home improvement integration, Suning Tesco will also provide a package of service products covering commodity supply chain, retail operation and fulfillment services for a large number of small and medium-sized home appliance retail enterprises, extending the track and connotation of retail cloud.

According to the announcement, Suning Tesco will accelerate the upgrading of the new store model in 2022, launch the "one-size-one store" model in July and August, and gradually promote it after the pilot to achieve the national store upgrade goal. Suning Tesco will also improve the user's omni-channel experience service in the e-commerce business, and realize the integration and complementarity of online and offline in knowledge content, design participation, scene experience, transaction conclusion, performance service and other links, and further form the unique mind of Suning Tesco.

Suning Tesco said that it will comprehensively break through the large-scale customized procurement model, achieve a significant increase in business scale and revenue proportion, and will take the lead in making breakthroughs in home appliances in 2022, with omni-channel customized procurement targets accounting for 15%-20%.

In order to match the adjustment of business operations, in 2022, Suning Tesco will strengthen the construction of organizational self-drive, improve the matching of responsibilities and rights, strengthen the construction of incentive system, further delegate authority to regional terminals, and enhance the flexibility of theater-based organizations. At the same time, the company will also strengthen the construction of the 1200 project and talent echelon, boldly promote and appoint outstanding young cadres, introduce more senior middle and senior managers for key professional positions, continue to improve the company's ability structure and professional structure, and support the effective implementation of the strategy.

Industry insiders pointed out that from the fourth quarter, the first quarter of the data, Suning Tesco business fundamentals gradually improved, with the company's further strategic focus, clear business planning, the strategy is appropriate, is expected to accelerate the return to the market position. On April 29, the Politburo of the Central Committee held a meeting, affected by this, the A-share market rose in a straight line, the Shanghai Composite Index returned to 3,000 points, and Suning Tesco rose and stopped in the afternoon. The continuous development of the policy has accelerated the repair of investor expectations and confidence, and the trend of e-commerce, retail, logistics and other industries is optimistic, and Suning Tesco, as a typical representative of retail service providers, can expect future growth.