2022 was a year of extraordinary business challenges with volatile and complex operating environment. Despite the unprecedented input cost inflation, operational disruptions from COVID-19 related measures and currency swings, Vinda actively overcome the multiple challenges and delivered solid top-line growth in sales income through flexible pricing strategy, premiumization and diversified product portfolio.

With the arrival of post-pandemic era, the personal hygiene awareness of the public has greatly improved. And the constantly upgrading consumption view and diversification of household paper use scenarios drove the increasing demand for premium tissue products. In full recognition of great potentials in tissue market, Vinda continued to make committed investments in product innovation, brand development and commercial capabilities, for further improving our product strategic implementation toward premiumization and diversification. This enables the Group to continuously maintain steady business growth and leading position in the industry. During the Year under review, the total revenue of the Group increased by 4.0% to HK$19,418 million.

TISSUE BUSINESS

During the Year, Vinda launched various innovative tissue products and brand marketing campaigns, all of which were well received in the market and boosted the brand awareness and sales volume. The tissue segment continues to maintain the market leading position in mainland China and HKSAR. During the Year, Vinda developed a series of premium tissue products with innovation and conducted digital marketing with emerging e-commerce platforms. This has enabled the Group’s premium tissue portfolio to reach double-digit growth in mainland China and further strengthened our market position. In addition, Vinda is always committed to exploring potential opportunities. Our anticipation of the demand for elevated hand hygiene solutions in the mainland China market led to our launch of Tork QuickDry™ fast-drying hand towels, which delivered robust omni-channel sales within a short time. Vinda’s Tork products have been well received by customers, and are now present in high-end offices and properties, and “4F” classified international airports across mainland China. This demonstrates the product strength of the Group in professional hygiene market.

PERSONAL CARE BUSINESS

Vinda’s revolutionary innovative technology and marketing strategies have brought high-quality products and experiences to female consumers, which have boosted the rapid growth of the Group’s feminine care business. During the Year, Vinda further improved the Libresse sales through female-oriented marketing activities, further expanding the market share of the Group’s feminine care business, and successfully reached fourth place in the premium sanitary napkin market in mainland China. With the relaxation of the pandemic overseas, the interactive marketing and roadshows of Libresse in Malaysia gradually returned to normal, which delivered growth in both brand recognition and sales volume, and further consolidated its leading position.

The ageing demographic shows an important trend in China’s social development, and the huge elderly consumer base brings extensive development opportunities for the Group’s incontinence care business. In mainland China, Vinda has built over 300 TENA Experience Health Centres to engage target customers and boost offline and online sales. And in Malaysia and Singapore, the Group continued to lead the incontinence care market. The Group will continue to capture opportunities arising from demographic changes, strengthen the layout of incontinence care business in our main business areas, and drive sustainable profits growth.

Southeast Asia contributed major revenue to the Group’s baby care business, while the famous baby care brand Drypers continued to consolidate its No.1 position in Malaysia. During the Year, innovation was a key sales driver and brand awareness booster in several markets, including the launch of exclusive Drypers x CoComelon limited edition diapers in Southeast Asia, and the Libero Friendship limited edition in South Korea and Chinese Taiwan. Additionally, Vinda hosted several seminars for parents offering parenting guidance and achieved good exposure. The combination of high-quality products with excellent marketing promotion activities generated continuous sales and market share development for our baby care business.

E-COMMERCE BUSINESS

While channel revolution continues to accelerate, Vinda regards e-commerce business as a strong driver of the Group’s growth. Through collaboration with various e-commerce platforms, Vinda and Tempo received the best annual e-commerce sales to date and achieved outstanding performance during Double 11, as top sales tissue brand for 10 consecutive years. The Group’s e-commerce sales also recorded an organic growth¹ of 16.7% during the Year, accounting for 44% of the total sales. As an industry leader in e-commerce sales, Vinda is committed to expanding our online marketing cooperation platform, actively enhancing the Group’s competitive advantages in e-commerce, and continuously increasing market penetration.

ALLOCATION, OPTIMIZATION AND UPGRADE OF PRODUCTION CAPACITY

In order to meet the increased market demand of premium tissue product, the designed capacity for tissue reached 1,390,000 tons by the end of the Year, including the capacity expansion of tissue production in South and East China.

At the end of the Year, first phase of the Group’s new SEA headquarters in Malaysia was officially put into operation, which is the Group’s first innovation centre outside of China. Located on 30 acres of land, the new regional hub incorporates digital transformation and sustainability with state-of-the-art production, as well as warehousing and distribution facilities to expand the Group’s production efficiency. The completion of new SEA regional hub, which marks a higher level of production and sales synergies, will help the Group to accurately meet consumer demand in the Southeast Asian market and provide strong support for stable growth in our overseas market expansion.

RECOGNITION OF OUR SUSTAINABLE DEVELOPMENT

Vinda has maintained its strong commitment to sustainable development all across the Group. The Group accelerated the sustainable operations through green finance, which was fully recognized by the Hong Kong Quality Assurance Agency’s Outstanding Award for Green and Sustainable Loan Issuer (Fast Moving Consumer Goods Industry) – Visionary Sustainability – linked Loan Framework and Pioneering Organisation in ESG Disclosure Enhancement. Additionally, the Group fulfilled its sustainable development objectives during the Year, and received numerous awards and recognitions in different areas, including the Hong Kong Management Association’s 2022 “Certificate of Excellence in Environmental, Social and Governance Reporting”, the Bloomberg Businessweek’s “Leading Environmental Initiative Awards”, Platinum Award from The Asset’s “ESG Corporate Awards 2022”, as well as the “Best ESG Award” from Roadshow China. The Group will continue to actively participate in and improve our corporate governance, social responsibility, and environmental protection, so as to achieve long-term value returns with sustainable development.

In addition, during the Year, the Group actively participated in various social welfare activities, reaching out to the local community to provide material support and assistance to the disabled, underprivileged families, nursing homes, children’s homes and other groups, as well as spreading the proper health and scientific care knowledge. In response to the pandemic, the Group also actively participated in donations to support the pandemic and fully fulfilled its corporate social responsibility.

OUTLOOK

Going into 2023, business environment will still be challenging as uncertainty, complexity and inflationary effect are likely to remain. With the full lifting of COVID-19 restrictions in China, consumer confidence is expected to rebound. Vinda will fully leverage its advantages in product innovation and market execution for the tissue segment to further strengthen our market leading position. And we will continue to make committed investment for our personal care business to support the sales growth and share momentum. With flexible and disciplined pricing actions, continuous mix improvement and operation efficiency enhancement, the Group is confident that we are on the right track towards sustainable and profitable growth.

Looking ahead, Vinda will adhere to its vision of “To become Asia’s first choice for hygiene products and services”, be closely aware of the changes in consumer demand, drive the growth by high quality products and services and deliver even greater value to our shareholders and stakeholders in 2023 and beyond.

Remarks 1 Organic growth: Year-on-year growth excluding exchange rate effects