Recently, Spin Master released their 2017 earnings report. In 2017, gross sales increased by 32% compared with the previous year. Gross sales increased by 30.2% in the past five years; net profit increased by 44%, and net profit increased by 66% in the past five years. In the first quarter of 18 years, Spin Master surrendered a 45.5% increase in eye-catching results over the same period last year when the revenue of Hasbro and Mattel fell by 16% and 4% respectively.
Spin Master attributes strong revenue and profit growth to a matching growth strategy: innovative core product portfolio, global entertainment industry layout, increased international sales and strategic value-added acquisitions.
Sanwen Entertainment previously doubled its profit in the first half of the year. The company earned $1.15 billion in annual income from hatching toys and cute dog animation. The market value of the three major toy companies introduced Spin Master. To put it simply, Spin Master is a step-by-step initiative to launch high-quality star toys, precisely design products for different genders and age groups, and increase product lines and expand categories.
Spin Master's current business, including games, entertainment, outdoor, global business and other business five categories. In addition to the main business of toy manufacturing, Spin Master also has a subsidiary for media operations, IP operations, animation production and more. In 2015, Spin Master was listed on the Toronto Stock Exchange.
The star brand that helped Spin Master become the fourth-largest toy manufacturer in the United States was mainly the Wang Wang team and the Hach Magic Hatching Egg.
Spin Master's two explosions: Hatch Magic Hatching Eggs and Wang Wang Team
The Wang Wang team made great achievements in the 2013 Spin Master and TVOKids and Nick International Children's Channel. The animation became the top of the American Preschool Children's TV Festival, and the first month of the game was also broken. Spin Master launched a toy with the same animation. The world-famous Wang Wang team made great contributions to the company with a million-dollar profit growth and many awards. Sanwen Entertainment has analyzed in detail: how the animation of "Wang Wang Da Li Gong" has driven the stock price of Spin Master to rise steadily.
Hatch's Magic Hatching Egg is an electronic pet that was launched in 2016 and can be hatched and broken. It became the hottest Christmas gift of the year, once out of stock, and then sold for 6 times on Amazon.
Less than two months ago, Spin Master announced the acquisition of Gund, a US-based plush toy manufacturer, to expand its brand portfolio and add a new plush toy business. Sanwen Entertainment was successfully analyzed in the Wangwang team, and the company produced the 20th acquisition.
Explosive products contribute profits, and the business structure is adjusted accordingly
By comparing Spin Master's 2017 and 2016 annual sales data, we can see some of the following highlights:
Total revenue for 2017 was $ 1.551 billion, up 34.4% from $1,154 million in 2016; net income for 2017 was $ 160 million, up 61.9% from 2016, and price per share rose from $0.99 to $1.58; The post-EBITDA was $290 million, accounting for 18.8% of earnings, compared to 17.8% of total profit in 2016.
In terms of different businesses, the business structure in 2017 has undergone major changes. In 2016, only four quarters of the business modules: remote control and interactive products business, increased by 13.3% in 2017, accounting for 35.8%, becoming a support-oriented main business; and pre-school girls who previously accounted for sales Products relegated to the second line in 2017, accounting for 29.8%.
Sports, games, puzzles and fun assembly products accounted for 22.1% of the business structure, while boy sports and high-tech products declined year by year, falling to 6.8% in 2017, and outdoor toys (5.6%) are the last. An echelon of business.
The most important remote control and interactive product business sales in 2017 was 590 million US dollars, up 109.8% compared with 2016. The sales of this business doubled, mainly due to the explosion of Hachachi magic hatching eggs and robot baby Luvabella. Bright performance.
Preschool girl toys with sales of $490 million and sports games puzzles and fun assembly products with sales of $370 million rose slightly by 7.1% and 8.2%, respectively.
Sales of boy sports and high-tech products totaled $110 million, a decrease of 27.4%, mainly due to the decline in sales of toy products such as pets, toys, and authorized toys such as Angry Birds and My World.
Outdoor toys have nearly doubled sales to $93.12 million due to the partial assets of the Aerobie outdoor toy maker.
In addition, sales in Asia and other major regions increased the most, with sales of US$200 million in 2017, an increase of 51.5% from sales in 2016. The main growth driver is also from Hach's magic hatching eggs. It offset the decline in sales of authorized toy products such as Angry Birds and Teenage Mutant Ninja Turtles.
Sales in Europe increased by 35.7%, from US$270 million in 2016 to US$390 million. The growth was not only due to the favorable impact of changes in foreign exchange rates, but also mainly due to the success of the Wangwang team and the sales of Hach Magic Eggs in the UK. Increases and the growth of Bunchems in the French and Benelux regions.
Sales in North America exceeded $1 billion, reaching $1.08 billion, up 27.8% from 2016. The increase was mainly due to the increase in sales of Hach’s magic hatching eggs, the mighty team, and the sales of authorized toys for Star Wars. Sales of star products offset the decline in sales of products such as Air Hogs and Zoomer.
Spin Master also reported that their revenue for the first quarter of 2018 was $286 million, although Spin Master’s revenue was still lower than that of 2017, due to the important sales network toy, R Us, which is continuing to close their stores in the United States. Growth of 25.5%, the company's net income fell 13.8% to 8.7 million US dollars, but this was mainly due to the bad debt settlement of Toys R Us, their first quarter gross profit increased by 31.3% to 149 million US dollars, mainly Driven by the Hachi magic single and the robot doll Luvabella.
At the same time, Spin Master's other income increased by 45.5% in the first quarter of 2018 to 29.8 million US dollars, mainly from the licensing fees of Spin Master's own IP and TV distribution revenue, reflecting the company's brand building achievements.
Spin Master's strong growth is in stark contrast to the weakness of toy giant maker Mattel and Hasbro. Affected by the large number of closed stores in the United States and the United Kingdom, Hasbro’s revenue for the first quarter of 18 years fell 16% to $720 million, and net income lost $111 million. In the first quarter of the year, Mattel’s net sales fell 4%, and the adjusted operating income lost $160 million. Throughout the 14 to 17 years of revenue growth, Spin Master has maintained a far greater growth than Hasbro and Mattel.
In the past six months, although the share price of Hasbro and Mattel has experienced fluctuations or declines, Spin Master has performed well, reflecting the fact that the market is still full of confidence in the industry when it faces bankruptcy in R Us. The analyst said: "Although the impact of the potential liquidation may be disrupted by the industry in the past 18 years, it is important that the collapse of a single (although large) retailer will not shrink the market, after all, Parents’ purchasing intentions have not dropped significantly, and the number of children has not decreased significantly.â€
Light Capital Business Model: Toy manufacturers do not own any physical manufacturing assets
Spin Master disclosed that the reason for maintaining strong growth is that they maintain a light capital business model that emphasizes variable costs rather than fixed costs. As toy manufacturing suppliers, they focus on design rather than manufacturing, do not own any physical manufacturing assets, and do not own any storage facilities or animation studios. Their light asset structure enhances the ability to free cash flow and allows them to focus on the most value-added areas and diversify their supply bases to suit those most qualified and qualified low-cost producers.
In addition, Spin Master invests heavily in the innovation of toy products. They buy about 3,000 patents from about 200 creative people each year, and put 30-50 of them into the market. The cost of this “buy idea†accounts for 3% of net sales. 5%. Last year, the performance of the Spin Master was injected with a strong shot. The Hach Magic Hatching Egg was developed through the creative staff's internal network.
Spin Master has had two major acquisitions in the past year. One is that in April 2017, Spin Master bought Marbles, a manufacturer of high-quality brain-burning toys for about $4.7 million, and Marbles for educational toys marquee games. Otrio and Rock Me Archimedes are known for their business, which is part of the sports, gaming, puzzle and fun assembly products business.
Second, in May 2017, Spin Master acquired some of Aerobie's assets for $10.7 million. Aerobie is Coop's focus on manufacturing high-performance flying toys, which will be incorporated into Spin Master's outdoor toy business.
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