统一企业中国(00220) - 2018 - 年度财报

Chairman's Statement Uni-President China achieved robust 2018 performance with 4.6% revenue growth and 17.2% profit after tax increase, driven by innovation and strong core brands Key Financial Indicators | Indicator | 2018 (RMB) | YoY Growth | | :--- | :--- | :--- | | Revenue | 21.772 billion | +4.6% | | Profit After Tax | 1.030 billion | +17.2% | - To address consumption upgrades and lifestyle changes, the Group launched several innovative products in 2018, including self-heating hotpot and meals, casual snacks, chilled tea and juice, and entered the plant-based protein (soy milk) sector[15][18] - Core brands performed strongly, with Tang Da Ren revenue showing stable growth and improving product structure; Uni-President Assam milk tea maintained its leading position in the category[16][19] - The Board recommends a final cash dividend of RMB 23.84 cents per share for the year ended December 31, 2018, totaling approximately RMB 1.030 billion[20][23] Management Discussion and Analysis This section analyzes the 2018 macroeconomic environment, industry trends, and reviews the operational performance, brand strategies, and product innovations across the food and beverage segments Economic Environment China's GDP grew by 6.6% in 2018, meeting targets, but quarterly growth slowed, while the food and beverage industry faced price adjustments and weakening demand - China's GDP grew by 6.6% year-on-year in 2018, aligning with the annual target of approximately 6.5%, though quarterly growth showed a declining trend, with the fourth quarter at 6.4%[28] - The food and beverage industry adjusted channel prices in 2018 due to rising raw material costs in 2017; however, market demand weakened from the third quarter, slowing industry revenue growth[29] - Consumption trends exhibited polarization: the instant noodle market diversified towards both lower-end and higher-priced products, while the beverage market saw a renewed preference for classic products[29] Business Review In 2018, the Group's total revenue reached RMB 21.772 billion, a 4.6% year-on-year increase, with food business revenue at RMB 8.425 billion (up 5.7%) and beverage business revenue at RMB 12.619 billion (up 3.6%) 2018 Business Segment Revenue | Business Segment | 2018 Revenue (RMB million) | YoY Growth Rate | % of Total Revenue | | :--- | :--- | :--- | :--- | | Food Business | 8,425.1 | +5.7% | 38.7% | | Beverages Business | 12,619.4 | +3.6% | 58.0% | | Total | 21,772.2 | +4.6% | 96.7% | Food Business Food business revenue reached RMB 8.425 billion in 2018, a 5.7% year-on-year increase, primarily driven by double-digit growth in the mid-to-high-priced brand "Tang Da Ren" - Instant noodle business revenue recorded RMB 8.425 billion, a 5.7% year-on-year increase, with the Tang Da Ren brand continuing double-digit growth, becoming the primary engine for business expansion[38][43] - The high-end brand Man Han Da Can focused on "Taiwanese semi-tendon and semi-meat beef noodles," aiming to develop the exquisite high-priced noodle market[45] - The Group entered the self-heating food sector, launching self-heating hotpot Zhu Shi Guang and self-heating meals Kai Xiao Zao, to meet consumer demand for convenient meals in various scenarios[48] Beverages Business Beverage business revenue in 2018 was RMB 12.619 billion, a 3.6% year-on-year increase, with strong performance in milk tea driven by "Assam" 2018 Beverage Category Revenue | Beverage Category | 2018 Revenue (RMB million) | YoY Growth Rate | | :--- | :--- | :--- | | Tea Beverages | 5,943.7 | +2.0% | | Juice | 1,723.4 | N/A | | Milk Tea | N/A | +13.6% | | Packaged Water (Aqua) | N/A | +12.9% | - Classic tea beverages Uni-President Iced Black Tea and Uni-President Green Tea drove growth in the tea beverage segment through marketing activities aligned with youth trends[53][56][58] - The company actively expanded into new categories, launching plant-based protein beverage Cheng Shi Dou soy milk and high-end bottle can series (e.g., Man Ya coffee, Chuan Qi tea), exploring the high-end market[97][98] Research and Development This section details the company's efforts in R&D innovation and food safety assurance, including patent achievements, new product development, and comprehensive quality control systems R&D In 2018, the Group's R&D center continued to innovate, holding 59 authorized patents and 56 pending patent applications by year-end - As of December 2018, the R&D center held 59 authorized patents and 56 pending patent applications, continuously strengthening its technological advantage[105] - Innovative development of self-heating dishes Kai Xiao Zao, which authentically restore the "wok hei" of Chinese cooking by controlling five key processes[107][109] - Launched a chilled cup series, including Tea•Instant Fresh and Fruit Symphony, with a shelf life of only 21 days and full cold chain transportation, maximizing product freshness and taste[113][115] Food Safety The Group prioritizes food safety, establishing a Food Safety Committee and Center to build a comprehensive monitoring system from supply chain to finished products - The Group established a Food Safety Committee and Food Safety Center, dedicated to the construction of food safety assurance systems, policy formulation, and risk monitoring[119] - The Group's Food Safety Testing Center has annually passed expert reviews by the China National Accreditation Service for Conformity Assessment (CNAS) since 2005[125] - As of the end of 2018, 29 of the Group's subsidiaries had passed ISO9001 quality management system certification, and 27 subsidiaries had passed ISO22000 food safety management system certification[127] Production Strategies The Group employs a strategy combining proprietary production capacity with outsourced manufacturing, forming long-term strategic alliances with professional co-packers to optimize resource allocation - The Group adopts a production strategy combining proprietary capacity with professional co-packing, forming strategic alliances with external independent third parties and affiliated enterprises to flexibly adjust production capacity[128] Financial Review This section provides a comprehensive review of the Group's 2018 financial performance, highlighting revenue and profit growth, improved gross margin, and a strong net cash position Financial Results For the year ended December 31, 2018, the Group's revenue was RMB 21.772 billion, a 4.6% year-on-year increase, with gross profit up 10.8% to RMB 7.289 billion Financial Performance Summary | Financial Indicator (RMB million) | 2018 | 2017 (Restated) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 21,772.2 | 20,821.9 | +4.6% | | Gross Profit | 7,288.6 | 6,576.9 | +10.8% | | Gross Profit Margin | 33.5% | 31.6% | +1.9 p.p. | | Operating Profit | 1,331.9 | 1,186.6 | +12.2% | | Profit Attributable to Equity Holders | 1,029.7 | 878.2 | +17.2% | | Earnings Per Share (RMB cents) | 23.84 | 20.33 | +17.3% | Financial Analysis As of the end of 2018, the Group held RMB 5.177 billion in cash and bank balances, with total financial liabilities of RMB 1.988 billion, maintaining a net cash position Key Financial Ratios | Indicator | 2018 | 2017 | | :--- | :--- | :--- | | Total Borrowings (RMB thousand) | 1,987,726 | 1,334,768 | | Net Cash (RMB thousand) | (3,188,752) | (1,447,963) | | Gearing Ratio | (31.78%) | (12.74%) | Turnover Days | Turnover Days | 2018 | 2017 | | :--- | :--- | :--- | | Trade Receivables | 9 | 9 | | Inventories | 33 | 30 | | Trade Payables | 37 | 32 | - Net cash inflow from operating activities in 2018 was RMB 2.563 billion, with capital expenditure of RMB 986 million, primarily for equipment upgrades, channel marketing asset deployment, and R&D investments[148] Significant Investments and Future Plans As of the end of 2018, the Group held financial assets at fair value through other comprehensive income of RMB 219 million, primarily equity investments in Haishun Fruit Juice Holdings and Wandashan Dairy - The Group holds equity investments in Haishun Fruit Juice Holdings Co Ltd (listed) and Heilongjiang Wandashan Dairy Co Ltd (unlisted), with a total fair value of approximately RMB 219 million[164] - There were no significant acquisitions or disposals of subsidiaries, associates, or joint ventures during the year[174][178] Human Resources As of the end of 2018, the Group employed 29,192 individuals, with total annual staff costs of RMB 3.217 billion, emphasizing talent development and performance-based remuneration Human Resources Overview | Indicator | 2018 | 2017 | | :--- | :--- | :--- | | Total Employees | 29,192 | N/A | | Total Staff Costs (RMB million) | 3,217.4 | 3,025.2 | Report of the Directors This report outlines the company's principal activities, financial performance, dividend policy, directors' and shareholders' interests, connected transactions, corporate governance, and business risks Principal Activities and Financial Overview The company is an investment holding company, with the Group's primary business being the production and sale of beverages and instant noodles in China - The Group's principal activities are the production and sale of beverages and instant noodles in China[190] - The Board recommends a final dividend of RMB 23.84 cents per share for the year, totaling approximately RMB 1.03 billion[193] Directors' and Substantial Shareholders' Interests This section discloses the shareholdings of directors and substantial shareholders in the company and its associated corporations Major Shareholders' Interests | Major Shareholder | Capacity | Number of Shares Held (Long Position) | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Uni-President Enterprises Corporation | Interest in controlled corporation | 3,050,893,983 | 70.63% | | Cayman President Holdings Ltd. | Beneficial owner | 3,044,508,000 | 70.49% | Continuing Connected Transactions During the reporting period, the Group engaged in various continuing connected transactions with the controlling shareholder, Uni-President Enterprises Group, all conducted on normal commercial terms and within approved annual caps Continuing Connected Transactions with Uni-President Enterprises Group | Transaction Type (with Uni-President Enterprises Group) | 2018 Actual Transaction Amount (RMB million) | 2018 Annual Cap (RMB million) | | :--- | :--- | :--- | | Sales of Products | 79.4 | 296.0 | | Purchases of Goods | 3,547.4 | 4,920.0 | | Logistics Services | 19.5 | 39.0 | | Technical Support Services | 51.3 | 59.0 | Business Review and Risk Factors This section reviews the Group's business performance and identifies key risks and uncertainties, including changes in consumer preferences, intense market competition, macroeconomic fluctuations, and supply chain risks - The Group faces key risks including: changes in consumer preferences, market competition, economic and financial market fluctuations, and supply chain disruptions[304][308][310][311][317] - The company adopted a dividend policy on December 31, 2018, targeting a final dividend payout of not less than 20% of the consolidated profit attributable to shareholders[331][335] Corporate Governance Report This report details the company's corporate governance practices in 2018, emphasizing adherence to the Corporate Governance Code and outlining the board's structure, responsibilities, and committee functions Board of Directors and Committees The Board of Directors, comprising executive, non-executive, and independent non-executive directors, leads and oversees the company, supported by four specialized committees Board Committees and Key Responsibilities | Committee | Chairman | Key Responsibilities | | :--- | :--- | :--- | | Audit Committee | Mr. Fan Jen-Da (Independent Non-executive Director) | Oversees financial reporting, internal controls, and external auditors | | Nomination Committee | Mr. Lu Chia-Hsing (Independent Non-executive Director) | Reviews board structure, identifies, and nominates director candidates | | Remuneration Committee | Mr. Chen Sheng-Te (Independent Non-executive Director) | Formulates remuneration policies and structures for directors and senior management | | Investment, Strategy and Development Committee | Mr. Lo Chih-Hsien (Chairman) | Reviews the Group's investment and development plans and policies | - The company adopted a board diversity policy, considering various factors such as gender, age, cultural background, skills, and experience when selecting directors[430][433] Risk Management and Internal Control The Board is responsible for maintaining a robust risk management and internal control system designed to identify and manage significant risks and safeguard assets - The Board is overall responsible for maintaining the Group's risk management and internal control systems, conducting annual effectiveness reviews[450][457] - The Group established an internal audit unit, reporting to the Board, operating under the guidance of the Audit Committee, and regularly reporting audit findings and internal control recommendations to the Board[458] Communication with Shareholders and Shareholders' Rights The company communicates with shareholders through various channels, including annual general meetings, announcements, and its website, ensuring shareholders can effectively participate in corporate governance - Shareholders holding not less than one-tenth of the paid-up share capital may request to convene an extraordinary general meeting[471] Financial Statements This section comprises the Independent Auditor's Report by PricewaterhouseCoopers, the Group's Consolidated Financial Statements (including income statement, comprehensive income statement, balance sheet, statement of changes in equity, and cash flow statement), and detailed notes Independent Auditor's Report PricewaterhouseCoopers issued an unmodified opinion on the Group's consolidated financial statements for the year ended December 31, 2018, confirming their fair presentation and compliance with disclosure requirements - The auditor, PricewaterhouseCoopers, issued an unmodified opinion on the consolidated financial statements[492] - Key Audit Matters identified were: - Revenue recognition: sales of goods - Deferred income tax assets[499] Consolidated Financial Statements This section presents the Group's core financial statements for the year ended December 31, 2018, including the consolidated income statement, comprehensive income statement, balance sheet, statement of changes in equity, and cash flow statement Consolidated Income Statement Summary (RMB thousand) | Indicator | 2018 | 2017 (Restated) | | :--- | :--- | :--- | | Revenue | 21,772,240 | 20,821,949 | | Gross Profit | 7,288,599 | 6,576,938 | | Operating Profit | 1,331,925 | 1,186,611 | | Profit for the Year | 1,029,704 | 878,216 | Consolidated Balance Sheet Summary (RMB thousand) | Indicator | December 31, 2018 | December 31, 2017 | | :--- | :--- | :--- | | Total Assets | 21,732,558 | 20,036,552 | | Total Liabilities | 8,510,251 | 7,221,075 | | Total Equity | 13,222,307 | 12,815,477 | Consolidated Cash Flow Statement Summary (RMB thousand) | Indicator | 2018 | 2017 | | :--- | :--- | :--- | | Net Cash Generated from Operating Activities | 2,563,204 | 2,452,763 | | Net Cash Used in Investing Activities | (3,389,508) | (782,159) | | Net Cash Generated From/(Used In) Financing Activities | 33,085 | (1,384,336) | | Net (Decrease)/Increase in Cash and Cash Equivalents | (793,219) | 286,268 | Notes to the Consolidated Financial Statements This section provides detailed explanations and supplementary information to the consolidated financial statements, covering key accounting policies, estimates, segment information, asset and liability breakdowns, and related party transactions - The Group adopted Hong Kong Financial Reporting Standard 9 "Financial Instruments" and Standard 15 "Revenue from Contracts with Customers" effective January 1, 2018; Standard 15 was adopted using the full retrospective method, and comparative figures for 2017 were restated accordingly[577][613] Segment Revenue (RMB thousand) | Segment Revenue (RMB thousand) | 2018 | 2017 (Restated) | | :--- | :--- | :--- | | Beverages | 12,619,416 | 12,179,014 | | Instant Noodles | 8,425,149 | 7,974,498 | | Others | 727,675 | 668,437 | | Total | 21,772,240 | 20,821,949 | - Significant transactions were conducted with related parties (primarily the controlling company Uni-President Enterprises and its subsidiaries), including raw material purchases (approximately RMB 4.20 billion) and finished product sales (approximately RMB 84 million)[1230]