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创科实业(00669) - 2023 - 年度财报
2024-03-27 09:31

Financial Performance - In 2023, the total sales reached a record of $13.731 billion, representing a 3.6% increase compared to 2022[7]. - Gross margin improved by 14 basis points to 39.5%, driven by the success of the MILWAUKEE business and new innovative products[14]. - Free cash flow reached a record $1.281 billion, an increase of $952 million from 2022[10]. - Net profit attributable to shareholders was $976 million, a decrease of 9.4% from the previous year[15]. - Operating working capital as a percentage of sales improved to 17.7%, down from 21.2% in 2022[11]. - Capital expenditures for the year were $502 million, a decrease of 13.7% compared to the previous year[15]. - The company achieved a net debt-to-equity ratio of 17.1%, down from 32.1% in 2022[16]. - The group’s revenue for the year was $13.7 billion, up 3.6% from $13.3 billion in 2022, while net profit attributable to shareholders decreased by 9.4% to $976 million[134]. - Gross margin increased to 39.5% from 39.3% in the previous year, driven by growth in the MILWAUKEE brand and high-margin aftermarket battery business[135]. - Total operating expenses for the year were $4.302 billion, representing 31.3% of revenue, up from 30.4% in 2022, primarily due to strategic investments and promotional activities[136]. - Shareholder equity increased to $5.7 billion from $5.2 billion in 2022, with net asset value per share rising by 10.2% to $3.13[137]. - The group generated free cash flow of $1.281 billion, significantly up from $329 million in the previous year[138]. - Total capital expenditure for the year was $502 million, down from $581 million in 2022, representing 3.7% of sales[141]. Market Performance - Sales growth in the North American market was 2.9%, while Europe saw a growth of 7.3%[14]. - MILWAUKEE's annual sales growth was 10.7%, with a second-half growth of 12.7%[14]. - The flagship MILWAUKEE business experienced a 12.7% sales growth in the second half of 2023, with expectations for continued double-digit growth in 2024[18]. - The electric tools business of the company achieved sales of $12.8 billion in 2023, representing a growth of 3.8% in reported currency and 4.1% in local currency[128]. - The flagship MILWAUKEE business grew by 10.7% in local currency, with all growth categories performing well, including a 9.9% increase in North America and a 13.7% increase in Europe[129]. - The RYOBI brand showed strong global performance in the second half of 2023, with new product launches aimed at enhancing growth in the DIY sector[131]. Product Development and Innovation - The company has introduced advanced lithium-ion battery technology, enhancing the performance of its power tools and establishing a leadership position in the rechargeable market[20]. - The ONEPWR carpet cleaning machine launched in 2023 offers six times lower energy consumption compared to traditional alternatives, showcasing the company's commitment to sustainability[22]. - The production network has expanded beyond China to include facilities in Vietnam, Mexico, and the USA, enhancing operational flexibility and efficiency[23]. - The introduction of AI and machine learning in tools has significantly improved productivity, with users saving up to $1 million on renewable energy projects[21]. - The Milwaukee brand has expanded its M12 system with multiple new solutions, including the M12 FUEL barrel grip saw and the M12 FUEL INSIDER ratchet, enhancing user performance and productivity[37]. - The introduction of the M18 REDLITHIUM FORGE XC6.0 battery and M18 dual-slot super charger further solidifies Milwaukee's leadership in battery and charging technology, providing the fastest charging times and longest battery life[43]. - The MX FUEL equipment system has entered the multi-billion dollar light equipment market, with new MX FUEL REDLITHIUM FORGE HD12.0 and XC8.0 battery packs improving operational time and performance[49]. - The company has launched high-performance outdoor power equipment solutions, including the M18 FUEL 17-inch dual battery lawn mower and the M18 FUEL telescoping pole saw, aimed at meeting the needs of tree care professionals[55]. - The introduction of NITRUS CARBIDE cutting blades in 2023 offers breakthrough performance with faster cutting speeds and improved durability[61]. - The PACKOUT modular storage system now includes over 100 interchangeable solutions, expanding its functionality for professionals[66]. - The launch of the new BOLT safety helmet in 2023 features IMPACT ARMOR padding for advanced protection against slips and falls[69]. - The RYOBI 40V system combines power and convenience, offering superior performance compared to gas-powered tools[85]. - The introduction of SHOCKWAVE Impact Duty automotive sockets with ARMOR-GUARD protection enhances durability during installation and removal[61]. - The company continues to focus on user-specific products, launching over 100 precision-engineered screw taps and dies in 2023[61]. - The new PACKOUT storage solutions include wall panels, hooks, and tool racks, allowing users to customize their storage combinations[66]. - RYOBI's WHISPER series is designed to reduce noise, providing users with high-performance tools in a quieter operation[77]. - RYOBI's 18V ONE+ HP Brushless WHISPER series 20-inch lawn mower can trim up to 1/3 acre on a single charge, powered by four 18V ONE+ batteries[93]. - The 80V HP lithium battery riding lawn mower offers a power equivalent to 23 horsepower and can cut 2.5 acres on a single charge, supporting a weight capacity of up to 500 pounds[93]. - RYOBI's WHISPER series products are designed to exceed gas-powered tools, providing significant noise reduction and enhanced performance[93]. - The USB LITHIUM product line, launched in 2022, offers over 20 portable solutions that can be charged via any USB-C cable, with continued development planned for 2024[98]. - RYOBI LINK modular storage system provides innovative solutions for tool organization and mobility, with new wall-mounted and mobile storage solutions set to launch in 2023[101]. - The 18V ONE+ HP SWIFTClean medium-duty cleaning machine features four times the suction power, marking a significant advancement in RYOBI's cleaning product line for 2023[104]. - RYOBI plans to introduce three new upright vacuum cleaners in 2024, including the innovative 18V ONE+ SWIFTClean that combines vacuuming and mopping capabilities[104]. - The company continues to invest in new product development, production, regional expansion, and in-store marketing initiatives to support ongoing growth[27]. - The company’s strategy focuses on strong branding, innovative products, exceptional talent, and operational excellence to drive sustainable growth[31]. - The company is committed to enhancing its M18 platform with comprehensive compatibility and continuous improvements to meet user needs[43]. - Advanced motor technology significantly enhances work efficiency, providing stronger power even with lightweight components[57]. Sustainability and ESG Initiatives - The company achieved an 8% reduction in greenhouse gas emissions in 2023, equating to a decrease of 8,000 tons of CO2 equivalent[145]. - The company aims to reduce absolute Scope 1 and Scope 2 greenhouse gas emissions by 60% by 2030, with significant progress already made[145]. - The company has established a comprehensive risk management system to identify and mitigate ESG-related risks, with no significant non-compliance cases reported in 2023[145]. - The company is focusing on the development of rechargeable lithium-ion battery products to enhance its commitment to clean technology and environmental protection[145]. - The company plans to continue its sustainable development strategy in alignment with the United Nations Sustainable Development Goals[145]. Corporate Governance - The company’s board of directors confirmed their responsibility for preparing the group’s accounts as of December 31, 2023[147]. - The company has not engaged in any purchases, redemptions, or sales of its listed securities other than the aforementioned share repurchases[146]. - The company reported a significant increase in production operations since 1988, with a focus on enhancing operational efficiency[153]. - The financial management team has been strengthened with experienced professionals holding multiple accounting qualifications, ensuring robust financial oversight[155]. - The company is expanding its market presence in Asia, leveraging the expertise of board members with extensive international experience[158]. - The appointment of a new legal and compliance officer aims to enhance corporate governance and regulatory adherence[156]. - The board includes members with a strong background in various industries, contributing to strategic decision-making and risk management[157]. - The company is actively pursuing new product development initiatives to drive future growth and innovation[154]. - The management team emphasizes the importance of compliance and corporate governance in maintaining investor confidence and market reputation[156]. - The company has established strategic partnerships to facilitate market expansion and enhance competitive positioning[158]. - The board's diverse expertise in finance, law, and international business is expected to support the company's long-term strategic goals[155]. - The company is committed to continuous improvement in operational performance and financial results, aiming for sustainable growth[153]. Shareholder Engagement and Compensation - The company recorded a total shareholder return of 19.5% over the past five years, outperforming the industry median of 14.2% and the average of 13.9%[189]. - The compensation committee held four meetings in 2023 to review and update the current compensation policies for directors and senior management[188]. - The company aims to align executive compensation with long-term shareholder interests by emphasizing performance-linked equity rewards[192]. - The board consists of 13 members, with 2 being women, ensuring a balanced skill set and diverse perspectives[186]. - The compensation committee recommended bonuses for the executive chairman, CEO, and other executive directors based on robust financial and operational performance in 2023[189]. - The company’s five-year performance metrics are at or above the 75th percentile compared to 19 peer companies in terms of revenue growth and EBITDA growth[189]. - The nomination committee conducted two meetings in 2023 to assess the independence of non-executive directors and review diversity policies[186]. - The company has adopted a board diversity policy since August 2013, which is available on its website[186]. - The compensation committee evaluates executive compensation competitiveness based on 19 peer companies in the same or related industries[188]. - The company ensures equal opportunities for all employees in hiring, training, and professional development without discrimination[186]. Stock Incentive Plans - Galli achieved a compound annual growth rate (CAGR) of 11.9% in revenue and 9.8% in earnings before interest and taxes (EBIT) over the past three years[193]. - The company's revenue growth is at the 87th percentile compared to major competitors, while EBIT growth is at the 52nd percentile[193]. - Galli's total compensation reflects strong financial performance, including record free cash flow, despite economic instability[194]. - The company's market capitalization increased from approximately HKD 12.6 billion in February 2008 to over HKD 170 billion by December 2023, representing a growth of over 13 times[194]. - The 2018 CEO stock incentive plan awarded Galli 1,000,000 shares based on achieving financial and operational targets, with shares expected to vest in January 2025[193]. - The 2020 CEO stock incentive plan allows for the annual award of 1,000,000 shares from 2022 to 2026, contingent on meeting performance standards[193]. - The 2018 stock incentive plan aims to attract and retain talent while rewarding contributions to the company's ongoing development[195]. - Galli's tenure as CEO has seen the stock price rise from HKD 8.40 in February 2008 to HKD 93.05 by December 2023, an increase of 1,008%[194]. - The company has made significant progress towards its environmental, social, and governance (ESG) goals over the past three years[193]. - The board approved the 2018 CEO stock incentive plan to recognize contributions and incentivize continued performance[195]. - A total of 14,096,000 shares have been granted under the 2018 Share Award Scheme, representing 0.77% of the issued share capital as of the revision date[198]. - The expense recognized for share-based payments under the 2018 Share Award Scheme for the year was $38,116,000[198]. - A total of 1,437,500 shares were granted to twelve directors under the 2018 Share Award Scheme, accounting for 0.08% of the issued share capital as of the revision date[198]. - The total expenditure, including related costs, amounted to $20,578,000 for the year[198]. - As of December 31, 2023, 1,575,000 shares were transferred to five directors and one selected grantee after vesting under the 2018 Share Award Scheme[198]. - The 2018 Share Award Scheme is valid for ten years from the adoption date, with no further contributions to the trust after the ten-year mark[196]. - If the number of shares granted exceeds 10% of the total issued share capital as of the revision date, further grants require shareholder approval[196]. - The company has the flexibility to set performance targets and/or clawback mechanisms for the awarded shares[197]. - The board will assess whether performance targets have been met before the shares vest[197]. - The total issued share capital as of the revision date is 1,834,797,941 shares[196]. - The company granted a total of 1,000,000 shares to Joseph Galli Jr. on December 22, 2023, with a vesting period until December 22, 2024[199]. - The share price at the grant date for the shares awarded to Joseph Galli Jr. was HKD 92.50, while the purchase price was HKD 111.23[199]. - The company has a total of 125,000 shares granted to Horst Julius Pudwill on December 22, 2023, with a vesting period until December 22, 2026[199]. - The share price at the grant date for the shares awarded to Horst Julius Pudwill was HKD 92.50, with a purchase price of HKD 111.23[199]. - The company awarded 1,000,000 shares to Joseph Galli Jr. on December 30, 2022, with a vesting period until approximately January 1, 2025[199]. - The share price at the grant date for the shares awarded to Joseph Galli Jr. on December 30, 2022, was HKD 87.10, while the purchase price was HKD 142.95[199]. - The company has a total of 75,000 shares granted to Chen Jianhua on December 22, 2023, with a vesting period until December 22, 2026[199]. - The share price at the grant date for the shares awarded to Chen Jianhua was HKD 92.50, with a purchase price of HKD 111.23[199]. - The company granted 300,000 shares to Horst Julius Pudwill on December 30, 2021, which have since vested[199]. - The share price at the grant date for the shares awarded to Horst Julius Pudwill on December 30, 2021, was HKD 154.90, while the purchase price was HKD 115.13[199]. - The company awarded a total of 75,000 shares under the 2018 Share Award Scheme on December 22, 2023, with a closing price of HKD 92.50[200]. - The company has a total of 12,500 shares that will vest on December 22, 2024, under the 2018 Share Award Scheme[200]. - The share price on December 30, 2021, was HKD 154.90, with 12,500 shares awarded[200]. - The company has a total of 10,000 shares awarded on December 21, 2020, with a vesting period until December 21, 2022, at a price of HKD 107.00[200]. - The company reported a total of 11,000 shares awarded on December 30, 2022, with a closing price of HKD 87.10[200]. - The company has a total of 12,500 shares awarded on December 22, 2023, with a vesting period until December 22, 2026, at a price of HKD 92.50[200]. - The company awarded 50,000 shares on March 21, 2018, with a vesting period from March 15, 2019, to March 15, 2022, at a price of HKD 47.00[200]. - The company has a total of 10,500 shares awarded on December 31, 2020, with a closing price of HKD 110.60[200]. - The company awarded 150,000 shares on May 20, 2019, with a vesting period from May 20, 2020, to May 20, 2022, at a price of HKD 50.20[200]. - The company has a total of 12,500 shares awarded on December 30, 2021, with a closing price of HKD 154.90[200].