Goodbaby International Holdings Limited Announces 2018 Interim Results

- Strong Commercial Business Platforms Fundamentals Performing in line with Strategic Plan

- Gross Profit Margin Significantly Improved by 5.7 Percentage Points to 42.0%

- Profit for the Period Grew by 6.6% to HK$134.2 Million

HONG KONG,Aug. 29,2018 --

For the six months ended 30 June 2018

2018

HK$ million

2017

HK$ million

Change

Revenue

4,425.7

3,295.6

+34.3%

Gross profit

1,859.1

1,195.1

+55.6%

Gross profit margin

42.0%

36.3%

+5.7 p.p.

Operating profit

217.1

179.4

+21.0%

Non-GAAP operating profit

284.2

194.7

+46.0%

Profit for the period

134.2

125.9

+6.6%

Non-GAAP profit for the period

188.8

139.8

+35.1%

Profitfortheperiodattributabletoownersoftheparent

132.9

124.7

+6.6%

Goodbaby International Holdings Limited ("Goodbaby International" or the "Company",SEHK stock code: 1086,together with its subsidiaries,the "Group"),a global leading parenting products company,today announces its interim results for the six months ended 30 June 2018 ("the Period").

Goodbaby International Holdings Limited management with brand product displays.

The Group's revenue for the Period increased by 34.3% to HK$4,425.7 million. During the Period,the Group's key strategic brands of Cybex,gb and Evenflo recorded an overall 8.3% growth in revenue,with respective revenue of approximately HK$955.8 million,HK$1,576.3 million and HK$839.2 million,representing growth of 24.9%,8.8% and a decline of 6.6%,respectively,compared to the first half of 2017. Following stable performance in the second half of 2017,the Group's Blue Chip business rebounded to growth of 8.8% in revenue to HK$611.5 million in the Period by continuously working in close cooperation with Blue Chip customers to provide outstanding manufacturing,research and development and overall service capabilities.

Benefiting from increased revenue contribution from key strategic brands,consolidation of the acquisition of Oasis Dragon Limited with higher gross margin and continued improvement in cost efficiency,the Group's gross profit margin increased by 5.7 percentage points to 42.0% for the Period.

Profit of the Group increased by 6.6% to approximately HK$134.2 million for the Period,while the Group's non-GAAP profit increased by approximately 35.1% to approximately HK$188.8 million. The Board does not recommend the payment of interim dividend for the six months ended 30 June 2018 (for the six months ended 30 June 2017: Nil).

Commenting on the Group's interim results 2018,Goodbaby International's Chief Executive Officer Mr. Martin Pos said,"We continued to focus on our strategic brands and realized strong performance from Cybex fueled by new product introductions and channel expansion,gb non-durables business in our China market and gb rebranded durables business in international markets. Leveraging the strong fundamentals of our overall commercial business platforms,we are fully capable of resolving short-term challenges and are confident in restoring our financial performance to historical growth levels in revenue and profitability to further strengthen our leading position in the industry."

Region APAC

The Group recorded growth of 5.4% in revenue in China market to HK$1,709.3 million in the Period,primarily driven by the continued strong profitable growth of 27.7% in the non-durables sector,with 26.2% growth in baby care and 30.5% growth in apparel and home textile products. Offsetting this increase is a 17.2% decline in gb durable products resulting from higher organizational prioritization during the transition toward the Group's consumer centric retail model which currently features non durable products. Supported by continued new product introductions and further channel development,Cybex brand realized 76.6% growth in the China market during the Period.

Revenue outside China declined by 13.5% to approximately HK$156.6 million in the Period,directly attributable to the negative impact of Rollplay revenues related to the Toys R Us,Inc. ("TRU") bankruptcy and liquidation and to the continuing impact of the Group's strategic closure of Geoby brand business in 2016. Revenues outside China will begin to stabilize as the TRU and Geoby impact diminishes. As an offset,the Group's non-wholly owned distribution platform formed in Japan in March 2018 has already started to produce impressive revenue results focusing initially on the Cybex product line. Revenue generated in Japan increased by 143% during the Period.

Region EMEA

Led by strong consumer reception to the Group's brand building and new product introductions from 2017,EMEA revenues for the Period grew by 26.5% to approximated HK$995.2 million. The impressive growth was partially subdued due to a challenging retail market in the UK,as all other key Euro countries including Germany achieved strong growth.

The Group's past investments in repositioning the gb brand as a technical/lifestyle premium brand continued to pay dividends as evidenced by 91.4% growth in total EMEA revenues to approximately HK$161.8 million for the Period,while Cybex sustained strong growth of nearly 22% with revenues approximating HK$835.1 million despite the UK market challenges. The Group fully expects Cybex to continue with its strong growth rates in the second half of 2018,and believes that its overall successful channel and product strategy combined with further efficiency gains in operations and supply chain will support the Group's profitability further.

Region Americas

The North American retail market challenges from late 2017 remain in 2018,primarily due to the ultimate bankruptcy liquidation of TRU and its subsidiary Babies R Us ("BRU"),which has resulted in a significant amount of available inventory in the market,placing top-line growth pressures on all juvenile product manufacturers. Revenue for the Americas region declined by 6.6% to HK$953.1 million as a result of these challenges. Excluding the impact of the TRU/BRU liquidation,Americas achieved a 1.2% revenue growth rate during the Period in all other channels. The Group expects the overall impact of TRU/BRU will diminish in the second half of 2018 and is confident that its future new product placements will drive a return to overall growth.

Cybex brand continued to realize rapid growth of 18.1% in revenue during the Period as it introduced additional consumer-oriented product solutions that reinforced Cybex as the premier premium technical/lifestyle brand. The Group will continue to focus its efforts and investments on brand building,developing and launching key new products focused on meeting consumer-driven needs,and ensuring optimized alignment of its distribution channels to drive sustainable growth.

Outlook

Looking ahead,Goodbaby International's Chairman Mr. Song Zhenghuan said,"We continued to achieve rapid development of our global brand management in the first half of the year,marking successful integration of our global sales,research and manufacturing. Riding on our significant breakthrough to a full-category children's product company and a retail-oriented operation model in China market,we are striving to develop our global horizontally and vertically integrated MBC ecosystem providing full-category,full-channel and global lifestyle solution services for our customers,with an aim of further enhancing the Group's value to strive for sustainable returns of our shareholders."

About Goodbaby International Holdings Limited

Goodbaby International is a world leading parenting products company. The Group serves millions of families through design,research and development,manufacture,marketing and sales of children's car safety seats,strollers,apparels and home textile products,feeding,nursing and personal care products,cribs,bicycles and tricycles and other children products. Goodbaby International serves families around the world with China,US and Germany as its mother markets.

With over 14,000 employees worldwide,Goodbaby International owns seven Research & Development centres globally,located in America,Europe and Asia and manages sales,marketing and distribution offices in 11 countries. It operates its own omni retail channel in China including its own online retail stores and more than 1,000 self-managed offline retail stores.

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