31 slides from China Resources Beer (holdings)'s earnings presentation, May 16, 2012
Slide 1: Financial and operational review Q1 2012
Financial and operational review Q1 2012 16 May 2012 1
Slide 2: Results Summary
Results Summary Winning formula for long-term growth Q1 2012 Q1 2011 change (restated) HK$m HK$m Turnover 33,348 26,671 +25% Earnings 1,327 857 +55% Underlying net profit 560 660 -15% EPS ((HK¢) ¢) – Basic 55 36 +53% EBITDA 2,613 2,013 +30% ROE (%) 3.4 2.6 +31% Net cash 831 2 864 2,864 -71% 71% "A
Slide 3: Turnover Breakdown - by Divisions
Turnover Breakdown - by Divisions Q1 2012 Prop Q1 2011 Prop change HK$m HK$m Core businesses Retail 24,150 72% 19,019 71% +27% Beer 5,778 17% 4,902 19% +18% Food 2 580 2,580 8% 2 262 2,262 8% +14% Beverage 929 3% 567 2% +64% 33,437 100% 26,750 100% +25% Less: inter-co transactions (89) (79) Turnover
Slide 4: Underlying Net Profit Breakdown - by Divisions
U d l i N Underlying Nett P Profit fit B Breakdown kd - by b Di Divisions i i Q1 2012 Prop Q1 2011 Prop change (restated) HK$m HK$m Core businesses Retail 560 95% 532 79% +5% Beer (33) (6%) 20 3% -265% Food 57 10% 114 17% -50% Beverage 6 1% 10 1% -40% 590 100% 676 100% -13% Net corporate p int. & ex
Slide 5: Segment assets
Segment assets Unique with four consumer businesses complementing each other Distribution of segment g assets: Movement in balance sheet items Beer 31 Mar 12 31 Dec 11 (restated) change 34% HK$m HK$m Assets: $40bn Total assets 116,051 113,649 +2% Liabilities: ($22bn) Total liabilities (64,225) (63
Slide 6: CAPEX
CAPEX Grasping opportunities through rapid expansion 10.0 8.3 0.5 69 6.9 0.1 1.5 0.7 bn HK$b 5.0 3.0 6.1 1.7 0.4 3.3 05 0.5 0.8 ‐ Q1 2012 Q1 2011 FY 2012 (budget) Retail Beer Food Beverage "A Winning Formula for Long Term Growth" 6
Slide 7: Beer: Solidifying market leader position
Beer (No.1 brand by volume in the world since 2008) Growth through: Solidifying market leader position Q1 2012 Q1 2011 change HK$m HK$m Sales volume (million KL) 1.98 1.91 +4% Turnover 5,778 4,902 +18% EBITDA 378 480 -21% 21% Earnings (after 49% share to SABMiller) (33) 20 -265% EBITDA margin (%)
Slide 8: Beer: Geographical distribution of the breweries
Beer (No.1 brand by volume in the world since 2008) Growth through: Solidifying market leader position 5, [-] Heilongjiang Geographical g p distribution of the breweries 3 [-] 3, [] Jilin Having presence in 22 out of 34 regions/cities (incl., autonomous regions, municipalities and SAR) in China 13
Slide 9: Beer market share of key players
Beer (No.1 brand by volume in the world since 2008) Total market share of top 4 players was 57% in 2010, of which Snow has 21% Beer market share of key players 100% 18% 18% 20% 21% 80% 13% 14% 14% 14% 60% 14% 14% Marrket share 12% 11% 9% 10% 11% 11% 40% 11% 11% 11% 11% 20% 35% 33% 32% 32% 0% 2007
Slide 10: Beer: Strong robust growth in turnover and profitability
Beer (No.1 brand by volume in the world since 2008) Strong robust growth in both turnover and profitability In HK$’m In HK$ HK$’m m 30,000 800 600 20,000 400 10,000 200 - - 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Turnover Earnings UNP "A Winning Fo
Slide 11: Retail: Multi-format with regional leadership
Retail Growth through: Multi-format with regional leadership Q1 2012 Q1 2011 change HK$m HK$m Turnover 24,150 19,019 +27% Underlying EBITDA # 1,299 1,117 +16% Underlying net profit # 560 532 +5% Underlying EBITDA margin (%) # 5.4 5.9 -8% Underlying net profit margin (%) # 23 2.3 28 2.8 -18% The pr
Slide 12: Retail: Margin trend analysis
Retail Growth through: Multi-format with regional leadership Margin in Q112 was still under pressure. pressure Margin trend analysis on retail (excl. revaluation of investment properties) 25,000 7.5% 5.8% 5.9% 5.4% 20,000 4.6% 5.0% 4 2% 4.2% 3.8% 4.1% 3.1% 2.9% 2.7% 2.8% 2 3% 2.3% 15,000 2.5% 1.2%
Slide 13: Retail: Geographical distribution of retail network
Notation: Retail shop no. (no. of hypermarket) [addition in past 12 months] Region Retail New region Growth through: Multi-format with regional leadership Northern areas Geographical distribution of retail network 4 (4) [-] Jilin Having presence in 24 out of 34 regions/cities (incl. autonomous reg
Slide 14: Retail: Business model
Retail Growth through: Multi-format with regional leadership Business model Winning market share by Multiple-format Multiple format store approach Multiple distribution centres (more than 12 D.C.) Trade-upp strategy gy Innovative in format Regional focus "A Winning Formula for Long Term
Slide 15: Retail: Multi-format stores in shopping mall and city
Retail Growth through: Multi-format with regional leadership In a shopping mall In a city 6 formats in Guangzhou 5 formats in Beijing 5 formats in Nanjing: Taikoo Hui (Swire properties): Galleria (CR Land): "A Winning Formula for Long Term Growth" 15
Slide 16: Food: Quality premium products
Food Growth through: Quality premium products Q1 2012 Q1 2011 change HK$m HK$m Turnover 2,580 2,262 +14% Underlying EBITDA 152 217 -30% U d l i nett profit Underlying fit 57 114 -50% 50% Underlying EBITDA margin (%) 5.9 9.6 -39% Underlying net profit margin (%) 2.2 5.0 -56% The EBITDA and underlyi
Slide 17: Food: Supply base distribution
Food Growth through: Quality premium products Supply base distribution Hong Kong Source: Company data "A Winning Formula for Long Term Growth" 17
Slide 18: Beverage: Strong partnership with Kirin
Beverage Growth through: strong partnership with Kirin Q1 2012 Q1 2011 change HK$m HK$m Sales volume (million KL) 0.68 0.52 +31% Turnover 929 567 +64% EBITDA 36 21 +71% 71% Earnings (after 40% share to Kirin since Aug 2011) 6 10 -40% EBITDA margin (%) 3.9 3.7 +5% Net margin (%) (after MI) 06 0.6 1
Slide 19: Beverage: Geographical distribution
Beverage Growth through: strong partnership with Kirin Geographical g p distribution Having presence in 8 out of 34 regions/cities (incl. autonomous regions, municipalities and SAR) in China Number of beverage plants: 17 (8 own factories; 9 OEM factories*) 1* Hebei 1 1* 1, Sichuan 2* Jiangsu 3 Sha
Slide 20: Appendix I – Details of Retail formats
Appendix I – Details of Retail formats 31 Mar 12 31 Dec 11 31 Mar 11 App. Major Average areas % of Self- Self- Self- Format brands (sq.m) turnover Average operated Franchised operated Franchised operated Franchised GP margin I Hypermarket I. over 5,000 5 000 app 81% app.81% 19% 534 16 493 16 457 25
Slide 21: Appendix II – Historical track record of CRE
Appendix II – Historical track record of CRE Strong growth momentum in each of core businesses Retail (incl. investment property, Beer 30 000 30,000 900 80,000 excl.l non-core assets) t ) 2,500 2,000 60,000 20,000 600 $’mn HK$ HK$ HK$’’mn 1,500 HK$ $’mn $’mn 40,000 1,000 10,000 300 20,000 500 - -
Slide 22: Appendix III – Historical operating summary
Appendix III – Historical operating summary Increasing market share and net asset without share dilution in past 6 years HK$/share HK$’m 20 9,000 15.15 15 12 85 12.85 8,244 6,000 10.79 10.53 8,009 9.59 10 8.12 6,374 4,966 4 237 4,237 3,547 5 3,000 2006 2007 2008 2009 2010 2011 EBITDA from f core b
Slide 23: Appendix IV – Strong growth in China
Appendix IV – Strong growth in China Strong growth in China According to McKinsey, top 225 cities of China will contribute app. 30% of global GDP growth in the next 10-15 years. Mega- and middleweight developing world cities: Mega- and middleweight developed cities: 45% of global growth 16% of glo
Slide 24: Appendix V – Better position for CRE
Notation: CRE’s CRE s presence Cluster’s Cluster s hub city Appendix V – Better position for CRE Expected cluster size: Small Sizable Mega Better positioning to capture strong growth in China According to McKinsey, more than 90% of China’s urban GDP in 2015 will come from 22 clusters. Huhehaote Ch
Slide 25: Appendix VI – Market share of Retail business
Appendix VI – Market share of Retail business Lower market concentration in China than other developed countries: Percentage of top 5 retailers to total grocery retail market share in the state: 63 60 59 47 40 20 9 7 Source: Euromonitor; Planet Retail; McKinsey and Company data Top ten Top five reta
Slide 26: Appendix VII – Historical major M&As in beer business
Appendix VII – Historical major M&As in beer business Strong bargaining power and lower acquisition cost on M&A Tsingtao acquired ABInbev AB InBev acquired q furhter 100% stake in acquired q Henan 1.31% stake of Zhujiang Shenzhen Shandong Xin Weixue (5.0mkl) 2,500 Brewery (0.02mkl) Jingyalong Immens
Slide 27: Appendix VIII – Global beer consumption summary
Appendix VIII – Global beer consumption summary Beer consumption per capita in China increased from 16 litres in 1998 to t 35 litres lit in i 2010 (provisional). ( i i l) 135 2010 Global beer consumption p summary y (p (provisional)) (litre per capita) 107 93 83 83 75 47 38 35 24 23 Czech Germany UK
Slide 28: Appendix IX – CRE awards
A Appendix di IX – CRE awards d Highlights of accolades received Since 2002 Produced q quarterly y financial and operational p review on a voluntary y basis. First conglomerate g company among the constituent stocks in the Hang Seng Index to initiate such a move 2005-2011 Named one of the outstand
Slide 29: Appendix IX – CRE awards (Cont'd)
A Appendix di IX – CRE awards d (Cont'd) (C t'd) Highlights of accolades received 2010- 2011 Received awards for cover photo/design in the categories of food distributors, processors & wholesalers, manufacturing & Distributing and Multi-Industry – Products & Services in International Annual Report
Slide 30: Appendix IX – CRE awards (Cont'd)
A Appendix di IX – CRE awards d (Cont'd) (C t'd) Highlights of accolades received 2010 2011 2010–2011 Selected as one of the companies receiving "Global Global Chinese Business 1000 – Outstanding Performance Award" by Yazhou Zhoukan 2011 Received "The Largest Captialization Company Award" in Mainl
Slide 31: Disclaimer
Disclaimer Data and information contained in this presentation is provided for informational purposes only. Neither Chi Resources China R E t Enterprise, i Li it d nor any off its Limited it subsidiaries b idi i shall h ll be b liable li bl for f any errors or delays d l i in the content, or for any