China Resources Beer (holdings) Co. Ltd. · HKEX:291
China Resources Beer (holdings) — China Resources Enterprise — Q1 2013 Earnings Presentation
31 slides from China Resources Beer (holdings)'s earnings presentation, May 16, 2013
Slide 1: Financial and operational review Q1 2013
Financial and operational review Q1 2013 16 May 2013 1
Slide 2: Results Summary
Results Summary Q1 2013 Q1 2012 Change HK$m HK$m Turnover 36,153 33,348 +8% EBITDA 1,812 2,613 -31% Underlying EBITDA* 1,812 1,844 -2% Earnings 512 1,327 -61% Underlying net profit* 512 560 -9% EPS (HK¢) – Basic B i 21 55 -62% 62% ROE (%) (based on earnings) 1.2 3.4 -65% ROE (%) (based on underlying
Slide 3: Turnover Breakdown - by Divisions
Turnover Breakdown - by Divisions Q1 2013 Prop Q1 2012 Prop change HK$m HK$m Core businesses Retail 25,923 71% 24,150 72% +7% Beer 6,548 18% 5,778 17% +13% Food 2 433 2,433 7% 2 580 2,580 8% -6% Beverage 1,453 4% 929 3% +56% 36,357 100% 33,437 100% +9% L Less: iinter-co t t transactions ti (204) (89
Slide 4: Underlying Net Profit Breakdown - by Divisions
Underlying Net Profit Breakdown - by Divisions Q1 2013 Prop Q1 2012 Prop change HK$m $ HK$m $ Core businesses Retail 525 93% 560 95% -6% Beer (23) (4%) (33) (6%) +30% Food 57 10% 57 10% - Beverage 8 1% 6 1% +33% 567 100% 590 100% -4% N t corporate Net t iint. t & expenses (55) (30) Underlying Net Pr
Slide 5: Segment assets
Segment assets Unique with four consumer businesses complementing each other Distribution of segment g assets: Movement in balance sheet items 31 Mar 13 31 Dec 12 change Beer Total assets HK$m 132,406 HK$m 127,488 +4% 34% Assets: $44bn Total liabilities (78,255) (73,704) (+6%) Liabilities: ($23bn)
Slide 6: Change in operating cashflow
Change in operating cashflow CAPEX Q1 2013 Q1 2012 % change HK$m HK$m Grasping opportunities through expansion Cash inflow +4,843 +3,504 +38% 10.0 8.3 6.9 0.5 0.1 15 1.5 0.7 5.0 $bn 3.0 ## 31 3.1 HK$ 0.1 6.1# 0.7 33 3.3 2.3 - Q1 2013 Q1 2012 FY 2013 (budget) ( g ) Retail Beer Food Beverage # The C
Slide 7: Beer (No.1 brand by volume in the world since 2008)
Beer (No.1 brand by volume in the world since 2008) Growth through: Solidifying market leader position and upgrade of product mix Q1 2013 Q1 2012 change HK$m HK$m Sales volume (million KL) 2.30 1.98 +16% Turnover 6,548 5,778 +13% EBITDA 436 378 +15% Earnings (#) (45) (65) +31% EBITDA margin (%) 6.
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 and upgrade of product mix Geographical distribution of the breweries 5(1.1mkl) [-] Heilongjiang gj g Having H i presence iin 24 outt off 34 regions/cities i / iti (i (incl., l autonomous t regio
Slide 9: Beer: China beer market share
Beer (No.1 brand by volume in the world since 2008) Growth through: Solidifying market leader position and upgrade of product mix Distribution of China beer market share: Total market share of top 4 players was 61% in 2012, of which Snow has 22%. 100% 18% 20% 21% 21% 22% 80% 14% 14% 14% 14% 16% 14
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 I HK$’m In HK$’ In HK$ HK$’m m 30,000 900 20,000 600 10,000 300 - - 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Turnover Earnings UNP "Brav
Slide 11: Retail
Retail Growth through: Multi-format with regional leadership Q1 2013 Q1 2012 Change HK$ HK$m HK$ HK$m Turnover 25,923 24,150 +7% Underlying EBITDA # 1,224 1,299 -6% Underl ing net profit # Underlying 525 560 -6% 6% Underlying EBITDA margin (%) # 4.7 5.4 -13% Underlying net profit margin (%) # 2.0
Slide 12: Retail: geographical distribution of retail network
Notation: Retail shop no. (no. of hypermarket) [addition in past 12 months] Region Northern areas Retail New region 4 (4) [2] Inner Mongolia Growth through: Multi-format with regional leadership 4 (4) [-] Jilin Geographical distribution of retail network Northern west areas 132 ((8)) [5] Beijing j
Slide 13: Retail: Winning market share by multiple-format
Retail Growth through: Multi-format with regional leadership Business model Winning market share by Multiple-format Multiple format store approach Multiple distribution centres (more than 14 D.C.) Trade-upp strategy gy Innovative in format Regional focus "Braving challenges" 13
Slide 14: Retail: multi-format with regional leadership
Retail Growth through: Multi-format with regional leadership In a shopping mall In a city 6 formats in Guangzhou 5 formats in Beijing 5 formats in Nanjing: Taikoo Hui (Swire properties): Galleria (CR Land): "Braving challenges" 14
Slide 15: Food
Food Growth through: Quality premium products Q1 2013 Q1 2012 change HK$ HK$m HK$ HK$m Turnover 2,433 2,580 -6% EBITDA 142 152 -7% Net profit 57 57 - EBITDA margin (%) 5.8 5.9 -2% Net profit margin (%) 2.3 2.2 +5% The profitability was steady during reorganization of the business. Business Model
Slide 16: Food: Supply base distribution
Food Growth through: Quality premium products Supply base distribution Hong Kong Source: Company data "Braving challenges" 16
Slide 17: Beverage
Beverage Growth through: strong partnership with Kirin Q1 2013 Q1 2012 Change HK$ HK$m HK$ HK$m Sales volume (million KL) 0.97 0.68 +43% Turnover 1,453 929 +56% EBITDA 42 36 +17% Earnings (#) 14 11 +27% EBITDA margin (%) 2.9 3.9 -26% Net margin (%) (#) 10 1.0 12 1.2 -17% 17% Improvement in turnove
Slide 18: Beverage: geographical distribution
Beverage Growth through: strong partnership with Kirin Geographical g p distribution Having presence in 8 out of 34 regions/cities (incl. autonomous regions, municipalities and SAR) in China Number of beverage plant: 27 (8 own factories; 19 OEM factories*) 2* Hebei 1 3* 1, Sichuan 5* Jiangsu 3* Hu
Slide 19: Appendix I – Details of Retail formats
Appendix I – Details of Retail formats 31 Mar 13 31 Dec 12 31 Mar 12 App. Average Major % of Average Self- Self- Self- Format brands areas turnover GP operated Franchised operated Franchised operated Franchised (sq.m) margin Over I. Hypermarket 6 000 6,000 app.72% 20% 529# 13 571 13 534 16 II. Stand
Slide 20: Appendix II – Historical track record of CRE
Appendix II – Historical track record of CRE Strong growth momentum in each businesses Retail (incl. investment property, Beer HK$’mn excl. non-core assets) HK$’mn HK$’mn HK$’mn 100,000 3,500 30,000 1,000 3,000 80,000 800 2,500 20 000 20,000 60,000 2,000 600 40,000 1,500 400 10,000 1,000 20,000 20
Slide 21: Appendix III – Historical operating summary
Appendix III – Historical operating summary Increasing market share and net asset without share dilution in past 7 years HK$/share HK$’m 20 12,000 16 97 16.97 15 15.77 9,000 12.85 10.53 10.79 9.59 9,920 10 6,000 8,009 8,244 8.12 6 374 6,374 4,966 4,237 3,547 5 3,000 2006 2007 2008 2009 2010 2011 2
Slide 22: Appendix IV – Strong growth in China
Appendix IV – Strong growth in China Strong growth in China According to McKinsey, top 225 cities of China will contribute app. 30% of global GDP growth in the next 10-15 years. Mega- and middleweight developing world cities: Mega- and middleweight developed cities: 45% of global growth 16% of glo
Slide 23: Appendix V – Better position for CRE
Notation: CRE’s CRE s presence Cluster’s Cluster s hub city Appendix V – Better position for CRE Expected cluster size: Small Sizable Mega Better positioning to capture strong growth in China According to McKinsey, more than 90% of China’s urban GDP in 2015 will come from 22 clusters. Huhehaote Ch
Slide 24: Appendix VI – Synergy with acquisition of Kingway
Appendix VI – Synergy with acquisition of Kingway More complement geographical footprint in both existing and new regions Stronger bargaining power on procurement of raw materials Extending overall utilization rate Competency with CR Retail Competency with CR Snow 88 retail stores in Shaanxi 2
Slide 25: Appendix VII – Historical major M&As in beer business
Appendix VII – Historical major M&As in beer business Strong bargaining power and lower acquisition cost on M&A CRB acquired 100% stake in Kingway beer US$/kl AB InBev acquired furhter Carlsberg acquired Tsingtao acquired ABInbev 2,500 1.31% stake of Zhujiang Shenzhen Jingyalong 12.25% stake in 100%
Slide 26: Appendix VIII – Global beer consumption summary
Appendix VIII – Global beer consumption summary Beer consumption per capita in China increased double in past 10 years (from 18 litres in 2001 to 36 litres in 2011 (provisional)). 147 111 78 78 75 60 46 37 36 22 22 Czech Germany USA Australia UK South Japan South China Taiwan Hong Republic Africa Ko
Slide 27: Appendix IX – Market share of Retail business
Appendix IX – 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 28: Appendix X – CRE awards
A Appendix di X – 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 2005-2012 Named one of the outstandi
Slide 29: Appendix X – CRE awards (Cont'd)
A Appendix di X – CRE awards d (Cont'd) (C t'd) Highlights of accolades received 2010-2012 Received awards for cover photo/design in the categories of food distributors, processors & wholesalers, manufacturing & Distributing, Food & Consumer Packaged Goods and Multi-Industry – Products & Services
Slide 30: Appendix X – CRE awards (Cont'd)
A Appendix di X – CRE awards d (Cont'd) (C t'd) Highlights of accolades received 2011/2012 Awarded as one of the companies p receiving g the commendation in Corporate p Social Responsibility Award by CAPITAL and Capital Weekly 2011/2012 Ranked number 39 /46 in Fortune China 500 2011 Received 2 bes
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
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