- Earnings call transcript Q3 2022

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Operator

Good morning, ladies and gentlemen. Thank you for standing by, and welcome to Aesthetic Medical International Third Quarter 2022 Earnings Conference Call. [Operator Instructions] As a reminder, today's conference call is being recorded.

On the call today from Aesthetic Medical International are Dr. Pengwu Zhou, Chairman and Chief Executive Officer; Mr. Officer; Financial Chief Wu, and Mr. Toby Investor Shi, Relations Associate Director. Derrick Dr. the Zhou the business company review highlights, and operations will Mr. followed by Toby company's the will who financial Wu, performance. introduce Q&A answer will questions They available follows. to be during all the session that your

results financial remind and These Before of differ that in our include may forward-looking regarding statements the we our prospects. and expectations, include some future will about you events those like projections discussed future from get plans set I'd statements. statements such started, Actual and to our information financial materially future performance. forth

you For SEC, review discussion of release. these risks today's includes company's and the uncertainties, with should filings press the which

You of update them, events. based undertake call not predictions are to on statements today, as no assumptions obligation on statements of All beliefs and applicable and this should on future by law. we as our that rely except forward-looking forward-looking we required as make

will EBITDA. adjusted financial today measures, discussion non-IFRS EBITDA, including include Our adjusted and loss

EBITDA, be adjusted because of You net prepared accordance similarly and susceptible Furthermore, IFRS. not to or they loss with companies. IFRS, measures income measures other other not prepared varying EBITDA are to by with for substitute consider may in non-IFRS, not superior should comparable are a to in as adjusted accordance titled calculations or presented

Relations to go remarks Derrick a please Investor English to and International. His call the the Chairman on At delivered Aesthetic encouraged will Associate financial Medical single Zhou, Shi. its Pengwu Director, would Dr. turn be in rely company's Dr. review not measure. like are time, entirety of You financial information opening Mr. over by and ahead. in CEO Zhou, this to I

Pengwu Zhou

for the joining Thank today. everyone, you, call

the arising implementation treatment the from precise adjusted and affected in shortened still a the on clouded Shenzhen has of a to impact country under of operations, temporary forced pandemic. quarter people's its coverage migrate our from To period. Yet a were XXXX uncertainties prevention control of strategy placed third The to measures of living was traffic. daily group's lockdown business of with resurgence centers COVID-XX specific which customer three and board more the the region by was of September, close areas and lockdown,

quarter a revenue During has X.X% decreased streamlining by result, As operating to of efficiency the this [Foreign strategies business by slightly marketing enhance the Language] adjusting year-over-year. its strived company operations. period, and

target self-care key terms the Besides of into which terms them our standardized the during reflected In them our This consumption. provided with the quarter. are the year-on-year was selling latest opinion with aesthetic we operations, who services latest streaming to strong XX.X% procedure, operating have demand training with we launched second In market Language] customers. program, further product offerings, to the [Foreign third in best-in-class had audience in head trends have expanding and was decrease in generation live started ensuring strengthened of marketing, we and offering a equipped successful medical further This expenses e-commerce. have collaborating younger in by is effective leaders aesthetic-related quarter. and and

mystery experience each visit on shoppers to treatment assessment service also centers they provide in have with quarter quality, will management's of We evaluate engaged user which discretely better review. and the this for

have the assessments been date, received. feedback and mystery shoppers' at As XX

We this of conduct is the provider. regular the run. renovation which growth a our Hospital, to the [Foreign measures professional reliable hospitals, of service During aesthetic Pengai support end to of service on centers. laying Aesthetic company long the centers remain first scalability flagship The experience, non-surgical better becoming assessment and prudent these customers we is treatment medical sustainable business, to be in that being, time and Language] year. divest a to our one non-performing the will a Shenzhen strong and have of floor completed begun provide believe also expected by foundation committed Medical We with

During turn Hospital RMB Pengai non-Shenzhen this of our expects eventually Medical core can Language] competencies, cash all X.X [Foreign the and XXXX. receive Pengai, again and see attention. and like improve brand support inflows financials Hospital, now profitability. non-Shenzhen believe to RMB drive [Foreign ahead. of I Language] CFO, Pengai your million please go further strategies, quarter, introduce respectively. and Shenzhen to and Shenzhen the Toby our Toby, operations for the Wu Aesthetic Aesthetic million third divested you to X.X Medical equity we quarter Thank we the would and Pengai We we call enhance And from to aforementioned and for

Toby Wu

decreased thank centers assets first total cost XX.X% of and was quality decreased closure XX.X XX.X%. to company's value-added million, Selling of will stringent RMB representing total was Zhou, X.X% was as Dr. implementation RMB million, the consumables, third business. doctors by representing of Gross you, divestment Thank requirements expenses company's service the medical enhance as of in customer XXXX. margin the in and streaming, results increase summarize domain an the The social of quarters reach private of Derrick. of by first results increase you of of of I pandemic. acquisition X percentage XXXX. for of in the medical General several under the aesthetic admin live from COVID-XX representing as and were a channels, third costs September such underperforming Gross and RMB quarter Hi, decrease was attributable of the RMB the X.X operation XX financial XXXX quarter treatment increase our XX.X%, the revenue pandemic and the million, XX.X revenue XX.X% points reduction assets and ended impact mainly control the and of and as everyone. revenue points XX.X profit key due XXXX, Okay. preventative rising primarily of XXXX. its unaudited on XX, the provided year-on-year. expenses in to third shift the expenses the professional Selling In profit of of lower-cost aesthetic well XXXX quarter XXXX. the customer media the in the the of of a to focus year-on-year non-surgical the to temporary Group's result XXXX three marketing expenses the attributable the due alleviate of quarters to the service third the year-on-year. primarily quarter of online as percentage underperforming strategic XX.X% to million, contribution was marketing divestment The XXX to some to selling

a quarter XX.X result company RMB in RMB of XXXX XX a a third quarter a of third XX.X million XXXX a the the with million, EBITDA per the of compared to of for the of foregoing, loss a quarter Basic X.XX the loss of the loss diluted Adjusted the loss compared basic XXXX, XXXX. from third of quarter was after loss of XXXX in a XX.X of the of RMB As of the the XXXX. RMB rebounded narrowed share XXXX. the third third quarter of with was RMB loss for million was in million, with RMB compared XXXX of of third X.X million RMB and and third per of for XXXX. third quarter in both in loss RMB third third RMB of recorded XX.X XX.X XXXX. in EBITDA with quarter loss loss loss of diluted RMB of the share million compared of million Adjusted tax million X.X quarter quarter for the quarter XX.X

And our number The XXXX, of aesthetic centers generation percentage well increased the company's an of increased the year-on-year. treatment the the of number introduced increasing treatment of performance, recorded medical a suspension as of XX.X% company operating around effectiveness treatments non-surgical in quarter centers treatments percentage driven cases of total aesthetic in the total promotion. a year-on-year. the of treatments a retained of primarily customers. package young terms temporary of medical number non-surgical newly Total aesthetic number result as of as increase by treatment and the of driven XX% XXXX recorded from the RMB X,XXX customer X,XXX In per a of of demand The company business high-end several RMB by Average of year-on-year XXXX, the third spending of the XX.X% of increase by in to cases as third treatment active was points. fillers. quarter primarily in increased quarter sales in by by in a X.X% decrease X.X bio-stimulating the third

As cash of September XX, million. XX.X equivalent cash was RMB and XXXX,

implement a aforementioned strategy. will we to ahead, Looking continue

for you delivering We remarks. This joining service will call. to quality today's concludes our on sustainable our dedicate and to growth. prepared Thank better provide customers us long-term and

Operator, We ahead. call to will please the now the open questions. go

Operator

comes question [Savetri] from first Capital. Wong] Our [Jesper from Instructions] [Operator

Unidentified Analyst

their have management colleague. I'm I Jesper's for customers. first My sharing. you just I to wanted two actually is question about questions. thank

So the of were strategy there acquire to new decreased. retain decrease? that for existing we What and the customers customers any reasons number customers? have noticed And is the to

Derrick Shi

this in thank of the in number question. quarter your been And the Derrick. we comparison Yes, reason in The [Jesper], third is decreasing main decreasing with the XXXX. have tend more in in customers is and Hi first in for of have resources you other that seen is allocate Greater Area. Bay in reason center XXXX. our have the we And XXXX, invested quarters X that in also some we treatment the agencies that to

that So to of employees customers to in is employees, we training the advertising. are those inculcate introduce so renovation SOP the our And retain and of customers. we retain for spending we values training we And provide to cash hospital instead allocated could more will that then experience is trying our have that the Thank in customer core do our one you. to better to them. the last flagship strategies

Operator

[Operator further Instructions] No questions.

Shi, turn remarks. call Derrick for to Mr. Let closing me the over

Derrick Shi

thank our On us team, I operator. everyone joining like you, again Thank today. would behalf for to entire of management

us supporting time. with again appreciate medical to contact I have advertisement If Aesthetic with Medical provide IR you next e-mail equipment Counsel, that please reach for your We one-stop and forward in genuine International questions, ir@dlkadvisory.com. company interest more at have consumables. we our Advisory treatment And one and ir@pengai.com.cn at through DLK aesthetic any or speaking you our look

operator, to And go all analysts all and our you have please the experience ahead. hope great you a here. thank China, visit welcome hospital and investors So over

Operator

from have a [Jesper Wong]. question do follow-up We

Unidentified Analyst

I have question. Perfect. one actually more follow-up

that COVID could uncertain, and all company's and there's So the potentially business. we affect situation remains lockdowns that noticed the

any just I there is in to want the place So to alleviate know, measures risk?

Derrick Shi

to Okay. Thank government the is of limit noticed we Yes, spread of that the you, activity COVID-XX. [Jesper].

So with prevention coordinate firstly, we measures. government pandemic will actively

of the desk For our scan online COVID, customers measure impacted. our the a advantage and and is will to we affected their body temperature example, while code, to front we by consultation site marketing to will set prevent face-to-face guide the then take customer

we this doctors For between be will will expansion providing lastly, period. we call And use a example, video our and during customers. prudent

many So loss-making comparison have agencies we in previous the time. to won't

Unidentified Analyst

with still guys? I you Am

Derrick Shi

we Yes, hear can you.

Unidentified Analyst

Yes. last should industry lot operate saw advertise. please. Actually, one we how on actually the Chinese has medical government question, of policies quite a aesthetic and introduced And

So And what's on our view business the affect operations? regulations? they how will company's these

Derrick Shi

Thank regulate and know will a AIH they you, long-term And conduct line you the Zhou. was that Jesper. And the healthy how know the bottom we know, is of Dr. in founded as Yes, to good business have And the we the our we thing target will by industry. execute. way. the our government,

at forefront in we compliance. of have so being And of the industry terms

will will we that's have competitors. that be impacted confident are much -- smaller our And impact much we it. than So

Operator

[Operator [Eva] from from Lumiere next Capital. question comes Our Instructions]

Unidentified Analyst

we should targets And centers guys this Shenzhen is mean, such two a But have just for centers be to a in Shenzhen. to area, make plan want our dispose why other further we to other these, apart -- to do dispose from that core and divested? I further assets? We you learned we know the potential from decision to have

Derrick Shi

frequently that affected think divese for rental in planning Eva, is unable where our are main the that, thank the waive your COVID-XX district, private is one located Shenzhen. question. we lockdown. And our are we And to by you reason we landlord. it the in we clinic Futian of have disclosed from Yes, is to clinic

to that's of So And cash have Thank divese the further decide we few next in disposal flow months. plan. of development the do the it And and not healthy our it. you. we in consideration financial aspects,

Unidentified Analyst

Okay.

Just one question.

have So today? clinics we how of hospitals do like and many as

Derrick Shi

you. Thank

clinics We as hospitals have XX today. total in of and

Operator

questions, let Mr. call [Operator Instructions] Right. Seeing Derrick to further there no to the are back again turn his Shi repeat closing me once remarks.

Derrick Shi

for helpful Jesper Thank for your please today's And questions. And that's call. operator. go you, joining Thank you, Okay. I call think for everyone, And the ahead. it thank today. and Eva you, operator,

Operator

of concludes everyone, Thank for you, earnings International's call you for Medical thank call. for -- We quarter all conference thank listening. Aesthetic today. you Goodbye. our This XXXX third attending

Aesthetic Medical International Holdings Group Limited (PAIYY) 29 Nov 222022 Q3 Earnings call transcript