Convenience Retail Asia Limited · HKEX:831
Convenience Retail Asia — FY2003 Earnings Presentation
23 slides from Convenience Retail Asia's earnings presentation, Mar 3, 2004
Slide 1: 2003 Annual Results Presentation
2003 Annual Results Prese ntation A member of the Li & Fung (Retailing) Group 3 March 2004
Slide 2: 2003 Hong Kong Retail Sales Value Year-on-Year % Change
2003 Hong Kong Retail Sales Value Year-on-Year % Change 15 Total: $173 Billion 9.9 10 - 2.3% 6.7 5.2 4.0 5 1.2 0.1 0 -5 -2.5 -6.1 -6.5 -10 -11.1 -15 -12.6 -15.2 -20 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: HKSAR, Census and Statistics Department
Slide 3: Agenda
2003 Annual Results Presentation Agenda 2003 Financial Results Highlights 2004 Outlook & Update Questions & Answers
Slide 4: Financial Results Highlights: Group Turnover
2003 Financial Results Highlights Group Turnover + 9.5% 2,000 1,526.1 1,600 1,393.5 1,305.1 1,140.7 HK$ Million 1,200 800 400 0 2000 2001 2002 2003 No. of stores - HK 123 146 166 186 No. of stores - China - - 2 7 HK Retail Sales + 3.8% - 1.2% - 4.1% - 2.3%
Slide 5: Financial Results Highlights: Group Net Profit
2003 Financial Results Highlights Group Net Profit + 0.5% 80 60.4 * 60.7 60 54.7 * 40.0* HK$ Million 40 20 0 2000 2001 2002 2003 * Restated for income tax effect per SSAP No.12 (revised) and long service payment costs per SSAP No.34 (revised)
Slide 6: Net Profit By Market
Net Profit By Market 2002 2003 Change Hong Kong Market (HK$ Million) 61.6 69.2 7.6 China Market (HK$ Million) (1.2) (8.5) (7.3) Total (HK$ Million) 60.4 60.7 0.3
Slide 7: Net Profit as % of Sales
2003 Financial Results Highlights Net Profit as % of Sales 5.0 - 0.3% 4.5 4.3 * 4.2 * % of Sales 4.0 4.0 3.5* 3.5 3.0 2000 2001 2002 2003 * Restated for income tax effect per SSAP No.12 (revised) and long service payment costs per SSAP No.34 (revised)
Slide 8: Total 2003 Sales Increased Yet Comparable Stores Sales Dropped
Total 2003 Sales Increased Yet Comparable Stores Sales Dropped 15 10 10 9 10 8 % Change Total 2003 5 + 9.5% 0 Total 2003 -1.1 -0.6 -0.9 - 1.1% -1.6 -5 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Total Stores Comparable Stores
Slide 9: Slight Decline in Gross Margin / Other Income
Slight Decline in Gross Margin / Other Income - 0.2% 34 32.8 33 32.6 31.6 % of Sales 32 31.0 31 30 29 2000 2001 2002 2003
Slide 10: Tight Control of Store Operating Expenses
Tight Control of Store Operating Expenses 30 22.7 23.3 25 22.0 22.2 20 6.9 7.2 6.4 6.7 % of Sales 15 6.9 6.9 6.9 7.0 10 5 8.7 8.6 8.9 9.1 0 2000 2001 2002 2003 Labour Cost Rental Cost Other Expenses
Slide 11: Basic Earnings Per Share
2003 Financial Results Highlights Basic Earnings Per Share 10 9.1 * 9.1 9 8.4* 8.1* HK Cents 8 7 6 2000 2001 2002 2003 * Restated for income tax effect per SSAP No.12 (revised) and long service payment costs per SSAP No.34 (revised)
Slide 12: 2003 Financial Results Highlights
2003 Financial Results Highlights 2002 2003 Change Number of Stores 168 193 + 25 Group Turnover (HK$ Million) 1,393.5 1,526.1 + 9.5% Group Net Profit (HK$ Million) 60.4 * 60.7 + 0.5% Net Profit as % of Turnover 4.3% * 4.0% - 0.3% Basic Earnings Per Share 9.1 Cents * 9.1 Cents - Total Dividend Per Sh
Slide 13: 4th Quarter 2003 Financial Results Highlights
4th Quarter 2003 Financial Results Highlights 2002 2003 Change Group Turnover (HK$ Million) 360.8 394.0 + 9.2% Group Net Profit (HK$ Million) 17.1* 18.6 +9.1% Net Profit as % of Turnover 4.7%* 4.7% - Basic Earnings Per Share 2.6 Cents* 2.8 Cents + 0.2 Cent * Restated for income tax effect per SSAP N
Slide 14: Year-On-Year Quarterly Profitability Growth
Year-On-Year Quarterly Profitability Growth 30 28 * 20 9* 7 9 10 4* 2* % Change 2 0 -10 -20 -27 -30 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2002 2002 2002 2002 2003 2003 2003 2003 * Restated for income tax effect per SSAP No.12 (revised) and long service payment costs per SSAP No.34 (revised)
Slide 15: Achievements – Hong Kong: Excellence in Customer Services
2003 Achievements – Hong Kong 1. Excellence in Customer STF Services (Speed, Tidiness and Friendliness)
Slide 16: Achievements – Hong Kong: Customization of Store Types
2003 Achievements – Hong Kong 2. Customization of Store Types Mega store with “Hot & In” counter Mini store
Slide 17: Achievements – Hong Kong: Category Management Initiatives
2003 Achievements – Hong Kong 3. Great Category Management Initiatives Weekend Specials Premiums Redemption Microwave Lunch Boxes
Slide 18: Achievements
2003 Achievements Winner of “Award for Excellence in Training 2003” organized by The Hong Kong Management Association – Silver Award Selected as a Case Study for the Citigroup International Case Competition 2003 jointly organized with the HKUST Caring Company Award 2003/2004
Slide 19: Achievements: Refining Store Model in China
2003 Achievements Refining Store Model in China Fresh and hot bakery and gourmet hot drinks STF&F (Speed, Tidiness, Friendliness & Fun) 76% preferred Circle K 60 m2 small store model Reduced CAPEX per store by RMB200K Positive store contribution in November and December 2003
Slide 20: 2004 Update & Outlook
2004 Update & Outlook
Slide 21: Circle K Hong Kong – Quality Growth
2004 Update & Outlook Circle K Hong Kong – Quality Growth Overall consumer sentiment improving Deflation and high unemployment will continue Expect improvement in comparable store sales Our quality strategies Great customer experience Efficiency and cost control New product categories
Slide 22: Circle K China – Aggressive Growth
2004 Update & Outlook Circle K China – Aggressive Growth Differentiation and customer preference strategies Year of aggressive growth 40 stores by end of the year in Southern China Evaluate option of acquisition Expansion to Northern or Eastern China market
Slide 23: To Summarize
2004 Update & Outlook To Summarize Quality growth in Hong Kong Aggressive growth in China Building customer preference is the key Good balance between top line and profitability
Convenience Retail Asia — FY2003 Earnings Presentation on 6ix