Expert Meeting Minutes | Helen's 2022A Performance Meeting

1. What we did last year: from direct sales to franchising, standard output. Last year, the layout of the sinking market, especially the county area, joined the mode of barbecue and heating of small skewers of semi-finished products.

2. The plan to close 240 and 250 stores in 22 years, and dozens of stores will complete the closing process in the first half of this year. Potential store transfer to join or silence. There will also be store closures.

3. The unit price of third-party beverage purchases decreased slightly, and the gross profit margin increased. The decrease in gross profit of self-owned wine is due to the large number of promotions in the first half of the year. The strategy was adjusted in August and September, but many quiet effects were not released in Q4, and it has rebounded well since this month. Due to the pressure of the inventory deadline, the inventory was cleared in advance, which brought the gross profit of self-owned alcoholic beverages. The promotion of new beverages and alcoholic beverages this year is one direction.

Positioning: Adhere to the positioning of offline social platforms for young people. Focus on R&D.

Business: The offline social space has been greatly affected. Of course, we can slow down and consolidate our internal strength last year. Things done last year: direct sales to franchise, standard output.

Last year, the layout of the sinking market, especially the county area, used Helen Siyue, used new 3D materials for environment creation, added barbecue, and heated small skewers of semi-finished products.

In terms of operation, at the beginning of 22 years, many people were over-allocated for rapid development, and later it was streamlined. There were more than 400 people in the headquarters to more than 200 people, and the standard store with more than 40 tables in the store was reduced from 12 to 9 people. Some stores can expand their stores and add tables and chairs.

In terms of products, we will eliminate tail products and maintain the advantages of sku streamlining.

The unit price of third-party beverage purchases decreased slightly, and the gross profit margin increased. The decrease in gross profit of self-owned wine is due to the large number of promotions in the first half of the year. The strategy was adjusted in August and September, but many quiet effects were not released in Q4, and it has rebounded well since this month. Due to the pressure of the inventory deadline, the inventory was cleared in advance, which brought the gross profit of self-owned alcoholic beverages. The promotion of new beverages and alcoholic beverages this year is one direction.

In 22 years, 180 new stores were opened, and the consumption was 300 million.

The composition of last year’s 850 million: last year, 245 closed stores were selected to generate a loss of 2+000 million, of which 150 million was more than 190 stores closed in 22 years, and the remaining closed stores were completed in 23 years to complete the 22 advance provision, a total of tens of millions, closed The store has an average loss of more than 800,000 to 900,000. For the loss of franchise, I have selected more than 100 stores. There are many new stores in 21 and 22H1, and they are all near the breakeven. It is a pity that the store is closed. If it is replaced by franchise cooperation, a store is more than 1.3 million, which is a little higher than the closed store. More than 400 accumulated pre-tax losses from 18-22 were screened out, and they were depreciated. In 22 years, there was silence, 400-500 million, and a store’s performance depreciation of more than 1 million.

Why is the scale of provision for a single store different?

30% of the closed stores were opened in the 20s or earlier. The cost of opening a store in the early years was not high, which lowered the average value of closed stores, and some of them were old stores that were downgraded.

For franchisees, the cost of opening a store is high, and there is not much depreciation. According to the 21-year report, the investment in opening a store is 7+000 million, and 4-500 new stores are opened. Self-operated funds go to roll, the standard is low and the door is opened for entertainment, and the area is also small, many stores are 200-300 square meters. After the listing, compliance investment, kitchen area must reach the proportion, fire-fighting equipment, etc., the new investment is more than 100,000 and 200,000. Later, in the new store, the tables and area also increased (from the original 40s to the later 60s). The decoration standard has also been improved, the hall is beautifully stitched, and the warehouse is also tiled. In 21 years, the opening speed was fast, there was some waste, the cost input was high, and the depreciation period was low.

Unnecessary hard installation costs are reduced, warehouses are returned to simple versions, functions are merged, toilets are returned to basic requirements, and so on. Now the hard installation is within 1000 per level, which can also lower the threshold for joining and cooperation.

In the future, the investment in soft decoration will be higher, and the second half of the year will be decorated with new versions. The store will become more effective, and iterating the new environment will be a long-term barrier.

In the plan to close 240 or 250 stores in 22 years, there are still dozens of stores that will complete the closing process in the first half of this year. Potential store transfer to join or silence. There will also be store closures, but there will be no such situation as before, and the normal store closure process will continue.

Transfer franchise, more than 100, more than 20 pure new, 100 are transferred. In the future, new franchises will be the main focus, and in the future, new openings will be the main focus. The impairment is unlikely to be reversed.

Profit warning: 600 million, why is it higher: all stores that have lost money for 3 years, many stores have large depreciation of right to use assets and large accounting losses, so more than 400 stores have to be assessed for impairment, depending on the extent of impairment, see To the impact of A flow and so on. The accountant chose the prudent impairment rate option.

In terms of quantity, 200 new stores will be opened, and the number of openings within the year will depend on the pace of store construction, site selection optimization, and space is not a problem. New store structure, 160 pipelines, 50% in new cities, more than 10 first-tier stores, 15-20% in second-tier stores, and third-tier stores in the rest. Xinjiang, Ningxia and Inner Mongolia did not enter, and they are all in contact with franchisees. Ruian, Lu'an, Zhejiang, etc. will all enter.

Some stores are opened around the queuing stores, but neither point is good. Some stores are suitable for a circle of stores, and some are not suitable.

This year's store opening direction: blank areas, for example, there are still 50 or 60 stores in Wuhan, and Jiangxia and other places can still go. When the big shops are released, iterate the surrounding stores, and we will grab the shop of Wuhan University of Economics when it comes out. The small vendors forced us to expand the store, from 70 tables to 140 at the street corner of Wuhan in two weeks, and there are more than 30 such stores (not counting the newly opened stores).

Investment: compression in hard packaging and increased investment in soft packaging. In the future, the soft decoration will be rich and diverse. There are three types of stores this year: 50% of the store standard 300-350, 37 tables, 110-120 with hardware and software. 40% big shop, 450-600 flat, 60-95 table, 180-200 input. 10% flagship store, new environment display, 600-800 square meters. 95-100+ tables, 300w input.

2.5-3w per table into a table. The investment does not count the investment in fire-fighting equipment, etc., the demolition of a 5w shop, plus the fire-fighting needs 10w a shop. 200 stores correspond to 300 million capex.

In May, Singapore will open a new overseas store.

How did the franchise model work? In the early stage of cooperation, the products of the tavern are only the carrier, and the decoration equipment of the tavern must be controlled. Contract performance cost, 300 square meters, 40 tables, 120w investment, franchisees pay 40w for hard decoration, we prepare soft decoration, etc. to support 80w contract performance cost, 6-year amortization during the cooperation period is similar to the concept of depreciation, large stores will increase 2.5w per table . Franchise store commission, 40 table standard, 40w rent, 50w labor, 30w miscellaneous expenses, 70% gross profit margin. The store has a turnover of 350w, with a commission of 23%, and a turnover of 400w, with a ratio of 27%. 450w, ratio 30%. Now the profit and loss balancer is only 3 months, and the procurement cycle is 2 months. The franchisee has to pay some in advance, and it will be recycled later. Purchasing is done on behalf of the buyer, and we will discuss with you in a unified way, but the settlement is the store settlement, and our income is uniformly reflected in the commission. The franchise tax rate is 6%, and the product sales rate is 13%.

In 22 years, the proportion of franchising sales was not high, 11 million, which offset the amortization of contract performance costs, and directly made the net amount, 15 million income, and more than 7000 w turnover, with a commission of 16-17%. The future income is reflected in the franchise fee, 6% value-added tax, and the cost side is the amortization of the contract performance cost in the early stage. There is also the headquarters fee for the franchise, but it is not large at present. On the profit side, together with the direct sales segment, it pays income tax and registers in Qianhai to enjoy a 15% tax discount.

Franchisee selection: long-term accumulation.

The store performance in January and February was good, and there was a slight drop in March due to influenza A weather and other reasons, but we should be considered good in the industry. At present, the operation of 650 stores has resumed, and dozens of stores have been fully restored in March. Now the pace is slowing down. Many stores resumed work in March, and the staff could not keep up. They will resume work one after another in April. April Qingming is expected to usher in a complete recovery. The breakeven point of our opened stores is more than 6,000 daily sales, and the expenses of the headquarters are not included in depreciation and amortization.

Barbecue now accounts for only 1-2% of income. After that, the mode is to do the burning.

For a standard store, the rent is more than 40,000 per month + 9 people per month is 4-50,000 labor costs + 3,000 for miscellaneous expenses per month, and the daily sales are below 3,000, which is reduced to 3,000. Miscellaneous fees are about the same.

The impact of the epidemic on the consumption structure? First and second line relegation. Universities are greatly affected. Are currently being repaired.