Convenience Retail Asia Limited · HKEX:831

Convenience Retail Asia — FY2008 Earnings Presentation

37 slides from Convenience Retail Asia's earnings presentation, Mar 16, 2009

  1. Slide 1: Convenience Retail Asia Ltd 2008 Annual Results Presentation

    Convenience Retail Asia Ltd 2008 Annual Results Presentation 16 March 2009

  2. Slide 2: Agenda

    Agenda 1. 2008 Annual Results ¾ Overall Hong Kong and Guangzhou Retail Markets ¾ 2008 Key Highlight ¾ 2008 Financial Results Highlight 2. 2009 Update & Outlook 3. Questions & Answers

  3. Slide 3: 2008 Annual Results

    fn, ence) P Retail : Uf) 2008 Annual Results

  4. Slide 4: Hong Kong Retail Sales Value

    Hong Kong Retail Sales Value 30 2008FY : +10.5% 25 23.2 Year-on-year % Change 20.0 20 18.6 15 13.0 13.7 12.8 11.7 10.5 10.2 10 9.5 7.3 7.0 5 1.2 1.1 0.3 0 May Mar 06FY 07FY 08 FY Jul Apr Oct Jun Feb Aug Sep 08Jan Nov Dec Source: Census and Statistics Department, HKSAR

  5. Slide 5: Hong Kong Consumer Price Index

    Hong Kong Consumer Price Index 8 2008FY : +4.3% 6.3 6.1 6.3 Year-on-year % Change 6 5.7 5.4 4.6 4.3 4.2 4 3.2 3.1 3.0 2.0 2.0 2.1 2 1.8 0 May Mar 06FY 07FY 08FY Jul Apr Oct Jun 08Jan Feb Aug Sep Nov Dec Source: Census and Statistics Department, HKSAR

  6. Slide 6: Guangzhou City Retail Sales Value

    Guangzhou City Retail Sales Value 35 2008FY : +21% 30 Year-on-year % Change 26.1 26.1 25.2 25 23.0 22.2 21.0 19.9 19.3 20.8 21.1 18.9 19.3 20 18.5 15.0 15 10.8 10 5 0 May Mar 06FY 07FY 08 FY Jul Apr Oct Jun 08Jan Feb Aug Sep Nov Dec Source: Bureau of Statistics, Guangzhou

  7. Slide 7: Guangzhou City Consumer Price Index

    Guangzhou City Consumer Price Index 10 2008FY : +5.9% 8.6 8.2 Year-on-year % Change 8 7.5 7.0 7.1 6.7 5.9 5.9 5.7 6 4.7 4.5 4 3.4 3.4 2.3 2 1.4 0 May Mar 06FY 07FY 08 FY Jul Apr Oct Jun Feb Aug Sep 08Jan Nov Dec Source: Bureau of Statistics, Guangzhou

  8. Slide 8: 2008 Key Highlight

    Cony, fn, ence) P Retail : Uf) 2008 Key Highlight

  9. Slide 9: Key Highlight

    2008 Key Highlight „ Deteriorating economy, high raw material costs and operating expenses combined to make Q4 2008 a challenging one for retailers „ Total Circle K stores reached 395 in Hong Kong, Macau and the Pearl River Delta, while that of Saint Honore reached 105 „ CRA’s total store count reac

  10. Slide 10: Key Highlight

    2008 Key Highlight „ Circle K Hong Kong’s “Always Something New” marketing and promotions + excellent execution generating strong sales in Hong Kong market

  11. Slide 11: Key Highlight: Circle K Hong Kong

    2008 Key Highlight Circle K Hong Kong

  12. Slide 12: Key Highlight

    2008 Key Highlight „ Circle K Hong Kong’s “Always Something New” marketing and promotions + excellent execution generating strong sales in Hong Kong market „ Saint Honore’s store rejuvenation plus new products led to continued improvement in Q4 2008 sales and profitability

  13. Slide 13: Key Highlight: Saint Honore Group

    2008 Key Highlight Saint Honore Group

  14. Slide 14: Key Highlight

    2008 Key Highlight „ Circle K Hong Kong’s “Always Something New” marketing and promotions + excellent execution generating strong sales in Hong Kong market „ Saint Honore’s store rejuvenation plus new products led to continued improvement in Q4 2008 sales and profitability „ Plastic bag tax levy, me

  15. Slide 15: Key Highlight: Circle K Southern China

    2008 Key Highlight Circle K Southern China

  16. Slide 16: 2008 Financial Results Highlight

    2008 Financial Results Highlight

  17. Slide 17: Number of Stores

    2008 Financial Results Highlight Number of Stores End of Opened Closed / End of 2007 Changed to 2008 Franchise Circle K Hong Kong 270 23 (9) 284 Circle K Southern China 77 27 (22) 82 - Guangzhou (owned) 63 19 (11) 71 - Guangzhou (franchised) 1 4 - 5 - Dongguan 9 0 (9) 0 - Shenzhen 4 4 (2) 6 Circle K

  18. Slide 18: Group Turnover – 4th Quarter

    2008 Financial Results Highlight Group Turnover – 4th Quarter 3,500 2,917.6 3,000 6.1% 2,500 2,231.2 HK$ Million 2,000 1,500 782.4* 829.9* 1,000 135.6 168.1 500 655.2 674.2 0 2006 2007 2007Q4 2008Q4 Circle K St. Honore * Less inter-group sales: HK$8.4M in 2007Q4 and HK$12.4M in 2008Q4

  19. Slide 19: Group Turnover – Full Year

    2008 Financial Results Highlight Group Turnover – Full Year 5,000 13.9% 4,000 3,322.7* 2,917.6* HK$ Million 3,000 702.7 2,231.2 492.7 2,000 2,455.8 2,667.5 1,000 0 2006 2007 2008 Circle K St. Honore * Less inter-group sales: HK$30.9M in 2007 and HK$47.5M in 2008

  20. Slide 20: Gross Margin / Other Income

    2008 Financial Results Highlight Gross Margin / Other Income 0.5% 40% 38% 37.1% 36.6% % of Turnover 36% 34% 33.2% 32% 30% 2006 2007 2008 * Excluding interest income

  21. Slide 21: Store Operating Expenses

    2008 Financial Results Highlight Store Operating Expenses 0.2% 35% 30% 26.7% 26.9% 24.7% % of Turnover 25% 20% 15% 10% 5% 0% 2006 2007 2008

  22. Slide 22: Group Net Profit – 4th Quarter

    2008 Financial Results Highlight Group Net Profit – 4th Quarter 100 86.9 75.1 0.3% 80 HK$ Million 60 40 21.5 21.6 20 0 2006 2007 2007Q4 2008Q4

  23. Slide 23: Group Net Profit – Full Year

    2008 Financial Results Highlight Group Net Profit – Full Year 2.3% 120 100 86.9 88.9 75.1 80 HK$ Million 60 40 20 0 2006 2007 2008

  24. Slide 24: Net Profit By Market

    2008 Financial Results Highlight Net Profit By Market (HK$ Million) 2007 FY 2008 FY Hong Kong and Macau Markets 109.2 131.9 China Market (22.3) (43.0) Total 86.9 88.9

  25. Slide 25: Net Profit (% of Turnover) – 4th Qtr

    2008 Financial Results Highlight Net Profit (% of Turnover) – 4th Qtr 5% 0.2% 4% 3.4% % of Turnover 3.0% 2.8% 3% 2.6% 2% 1% 0% 2006 2007 2007Q4 2008Q4

  26. Slide 26: Net Profit (% of Turnover) – Full Year

    2008 Financial Results Highlight Net Profit (% of Turnover) – Full Year 5% 0.3% 4% 3.4% % of Turnover 3.0% 2.7% 3% 2% 1% 0% 2006 2007 2008

  27. Slide 27: Basic Earnings Per Share – 4th Qtr

    2008 Financial Results Highlight Basic Earnings Per Share – 4th Qtr 20 0.3% 15 12.08 11.10 HK Cents 10 5 2.95 2.96 0 2006 2007 2007Q4 2008Q4

  28. Slide 28: Basic Earnings Per Share – Full Year

    2008 Financial Results Highlight Basic Earnings Per Share – Full Year 20 0.8% 15 12.18 12.08 11.10 HK Cents 10 5 0 2006 2007 2008

  29. Slide 29: 4th Quarter

    2008 Financial Results Highlight 4th Quarter 2007Q4 2008Q4 Change Number of Stores 470 500 +6.4% Group Turnover (HK$M) 782.4 829.9 +6.1% Group Net Profit (HK$M) 21.5 21.6 +0.3% Net Profit as % of Turnover 2.8% 2.6% -0.2% Basic Earnings Per Share 2.95 cents 2.96 cents +0.3%

  30. Slide 30: Full Year

    2008 Financial Results Highlight Full Year 2007 2008 Change Number of Stores 470 500 +6.4% Group Turnover (HK$M) 2,917.6 3,322.7 +13.9% Group Net Profit (HK$M) 86.9 88.9 +2.3% Net Profit as % of Turnover 3.0% 2.7% -0.3% Basic Earnings Per Share 12.08 cents 12.18 cents +0.8% Total Dividend Per Share

  31. Slide 31: 2009 Update & Outlook

    Cony, fn, ence) P Retail : Uf) 2009 Update & Outlook

  32. Slide 32: 2009 Update & Outlook

    2009 Update & Outlook „ Economy and consumer sentiment going down quite quickly after CNY „ Customer suffering from USC (uncertainty, stress, confusion) and becoming less patient, less loyal and less desire to spend „ China’s export continued to drop drastically „ HKSAR Government announced an $8 in

  33. Slide 33: 2009 Strategies & Actions

    2009 Strategies & Actions „ Be prepared for a very tough year „ All staff aware of situation and mindset ready „ 4 strategies to ensure effectiveness: ¾ Customer engagement ¾ People engagement ¾ Execution excellence ¾ Tight F&A control

  34. Slide 34: 2009 Strategies & Actions: Hong Kong & Macau Markets

    2009 Strategies & Actions Hong Kong & Macau Markets „ In Hong Kong market, focus on profitability and cash flow generation of Circle K and Saint Honore businesses „ Upgrade quality of store networks „ Very conservative on new investment „ Circle K – “Always Something New” platform + excellence in ex

  35. Slide 35: 2009 Strategies & Actions: Southern China Market

    2009 Strategies & Actions Southern China Market „ Defensive approach for this market „ Improve quality of store network ¾ Close down unprofitable stores ¾ Conservative on new investment ¾ Strong differentiation versus other brands „ Rolling out franchising „ Strengthen “Hot & In’ food and drinks

  36. Slide 36: To Summarize

    To Summarize „ Satisfactory 2008 results despite challenges „ 2009 will be one of the toughest years for retailers „ Contingency plan prepared and actions taken to face challenges „ Expect to be affected but remain a strong and viable company „ Very healthy balance sheet and cash generating capabili

  37. Slide 37: Thank You!

    Retail : Uf) Thank You!

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