Haier Smart Home publishes half-year report 2020: Revenue and profit recovery following COVID-19 impacts

Haier Smart Home publishes half-year report 2020: Revenue and profit recovery following COVID-19 impacts Qingdao / Shanghai / Frankfurt, 31 August 2020 - Haier Smart Home Co., Ltd. (D-Share ISIN CNE1000031C1, A-Share ISIN CNE000000CG9, "Haier Smart Home" or the "Company") one of the listed subsidiaries of Haier Group, on 28 August 2020, published its 2020 half-year report. In H1 2020, the Haier Smart Home achieved a revenue of RMB 95.7 billion and net profit attributable to owners RMB 2.78 billion. Despite the impact of the COVID-19 pandemic on the Company's performance in H1 2020, the growth rate swiftly revived in Q2, ushering a turning point with increases in both revenue and net income attributable to shareholders in June by 20.6% YoY and 21.4% YoY, respectively. Through product and scenario solution leadership, high-end brand leadership, retail transformation, global operations and ecological capability building, Haier Smart Home dug deep into user demand, focused on expanding domestic demand, firmly grasped the opportunities and scored a successful growth despite an unfavorable economic environment.Domestic market: strong growth rate recovery in Q2 2020

Overall Outperforming the industry: In the context of the COVID-19 pandemic and the downturn in the industry, Haier Smart Home used digital transformation to improve operational efficiency and user experience through smart home scenarios solutions. Based on the smart home experiential cloud platform, by incorporating products, marketing, customers, users, logistics, and services into the digital platform, Haier Smart Home built differentiated competitiveness, increased market share, and optimized operational efficiency. In Q2 2020, the Company's domestic revenue increased by 14% YoY with optimized expenses.

Classic products leading position: In H1 2020, the offline and online retail market share of refrigerators, washing machines, air conditioners, water heaters, and kitchen appliances continued to increase. Among them, refrigerators and washing machines continued to expand their leading advantages in the industry, their offline market share was 3.0 and 1.5 as much as the nearest competitor, while the online market share was 2.2 and 1.3 times as much.

Boom in air conditioning business:Haier Smart Home has adjusted its air-conditioning business strategy and has greatly boosted performance through reform measures such as strengthening presence, improving efficiency and adjusting structure. In Q2 2020, the domestic revenue of household air conditioners increased by 20% YoY, while the revenue of high-end air-conditioners increased by more than 70% YoY in H1 2020.

Absolute premium leadership: Casarte, the Company's high-end brand, continued to lead the high-end home appliances market. In Q2 2020, Casarte thoroughly got rid of the impact of the pandemic and returned to a high-speed growth track with a revenue growth rate of 21% YoY, of which sales in May and June, respectively increased by over 30% YoY, with its market share in the lead as well.Overseas market: profitable operations and increased market shares Under the influence of the global pandemic and severe external market challenges, the Company's overseas business outperformed its peers. On the basis of local brand building and operations, safety measures for employees and resumed production, Haier Smart Home responded quickly with better-positioned products, distribution channels, and marketing strategies in a timely manner, accelerated the expansion of e-commerce channel networks, explored, and implemented new online marketing models, and overcame the impact of the pandemic. In H1 2020, the Company's overseas market achieved an increase in revenue by 0.6% YoY to RMB 47 billion, with the operating profit margin rising from 2.3% in Q1 to 3.8% in Q2. At the same time, Haier Smart Home outperformed local players in major overseas markets. For instance, the revenue in the North American market increased by 6.5% YoY, and the revenue in the Japanese market increased by 16.3% YoY.Unique Smart Home Experiential Cloud extends value chain of IoT applications Haier Smart Home continued its industry leadership in the Internet of Things (IoT) with the introduction of the Smart Home Experiential Cloud. In H1 2020 the Company launched the scenario-based "experiential cloud broadcast" activities on the Smart Home APP, with a broadcast team composed of makers, users, and ecosystem partners. In the Smart Home Experiential Cloud, a win-win situation is created to accelerate the deployment of complete smart appliances in households by combining the benefits of original technology with an open innovation system. Traditional household appliances are thus transformed into intelligent network devices, and complete scenario solutions such as intelligent kitchens and intelligent balconies are created. By bringing together households and ecosystem partners, the Smart Home Experiential Cloud offers users a comprehensive ecological service experience in clothing, food, housing and entertainment.

In addition, the Haier Smart Home leverages the unique Smart Home Experiential Cloud construction in the industry to drive sales of full-set home appliances. In H1 2020, the sales of the Company's smart home appliances increased by 20% YoY; the sales of full-sets grew by 55%. As a result, the share of sales of full-set was 29.6%, an increase of 4.8pct. The full-set sales volume of Haier Smart Home increased by 107% YoY.

Haier Smart Home continues to build ecological brands such as the Internet of Clothing, the Internet of Food, and the Internet of Air, and to explore new smart ecological business models. With reliance on the product system of the refrigerator, washing machine, and air conditioner, the Company has connected resources of the entire industry chain into the related fields. To take the Internet of Clothing as an example, Haier Smart Home has created an ecosystem for clothing washing, caring, matching and purchasing with respect to the washing machine. Users have direct access to resources such as laundry service providers and clothing brand vendors without having to leave home. In H1 2020, the Company's revenue derived from the smart home ecosystem increased by 96% YoY to RMB 3.8 billion.Next level of synergetic growth through privatization of Haier Electronics In H1 2020, Haier Smart Home continued to promote the transaction plan for the privatization of Haier Electronics (1169.HK). On 31 July 2020, Haier Smart Home and Haier Electric issued a joint announcement that Haier Smart Home intended to privatize Haier Electronics by means of an arrangement and proposed a transaction plan to scheme-shareholders. Once the privatization is completed, Haier Electronics will become a wholly-owned subsidiary of Haier Smart Home, and Haier Smart Home will be listed on the H-Share market, realizing an "A+D+H" (Shanghai + Frankfurt + Hongkong) capital market layout.

The joint use of a uniform platform for planning, research and development, marketing, service system and smart home life is intended to promote earnings growth through cross-selling and the exploitation of synergy potential. By optimizing global resource allocation, Haier Smart Home will also further accelerate the expansion of overseas business in washing machines, water heaters and water purifiers. In addition, privatization also will fully optimize the organizational and management structure, equity structure and financial performance of the Company and improves its competitiveness, releasing the "1+1>2" synergy effect and enhancing market competitiveness.About Haier Smart Home Co., Ltd.: Haier is one of the world's leading manufacturers of household appliances with a focus on smart home solutions and customized mass production. Haier Smart Home Co., Ltd. develops, produces and distributes a wide range of household appliances. These include refrigerators, freezers, washing machines, air conditioners, water heaters, kitchen appliances as well as smaller household appliances and an extensive range of intelligent household appliances. The Company distributes its products through leading household brands such as Haier, Casarte, Leader, Candy, GE Appliances, AQUA and Fisher & Paykel. Haier Smart Home Co., Ltd. has launched Smart Home Experiential Cloud, which connects homes, users, enterprises and ecosystem partners, and facilitates the integration of Haier's online, offline and micro-store businesses and supports user interaction to further optimize the user experience.IR contact: Yao Sun (Sophie) - Haier Smart Home Germany T: +49 6172 9454 143 F: +49 6172 9454 42143 M: +49 160 9469 3601 Email: y.sun@haier.de