Slide 1: Annual Results Presentation FY ended 31 Dec 2014
Annual Results Presentation For the Financial Year ended 31 Dec. 2014 Brand Marketing 0
Slide 2: Result Highlights - Year ended 31 Dec. 2014
Result Highlights - Year ended 31 Dec. 2014 (HK$ mil.) 2014 2013 (HK¢ per Share) 2014 2013 Group Revenue 2,989 3,013 Earnings Attributable 0.9 8.5 to Shareholders Operating Profit 41 112 Interim Dividends 1.0 1.7 Profit Attributable to 8 77 Proposed Final 2.0 5.3 Shareholders Dividends Net Cash 563
Slide 3: Group external sales remained stable at $3 billion
Group external sales remained stable at $3 billion 3,013 2,989 3,000 2,854 2,765 271 392 310 316 228 2,500 2,407 198 264 Paper Trading 290 228 206 786 2,000 727 (HK$ million) 768 706 Corrugated Box 573 1,500 Consumer Product 1,000 Packaging 1,728 1,672 1,452 1,513 1,399 500 Book and Package Printing
Slide 4: Earnings declined due to exchange fluctuations, absence of disposal gains, sales mix shift
Earnings declined primarily due to unfavorable exchange fluctuations, absence of disposal gains and sales mix shift EBITDA (HK$ million) Commentary 11% EBITDA as % of Sales 400 11% Net fair value losses of approx. HK$15m arising from forward currency and swap contracts (vs. HK$14m gain in 2013) for
Slide 5: Segment Revenue & Profits: Unfavourable sales mix shift
Segment Revenue & Profits: Unfavourable sales mix shift (Except for PT, margins of core BUs were dragged by reduced sales & capacity utilization Books and Package Printing (BPP) Consumer Product Packaging (CPP) Revenue (HK$m) Revenue (HK$m) 786 1,728 800 3% 1,800 1,672 728 1,500 3.0% 3.1% 600 2% 2%
Slide 6: Key Income Statement Items
Key Income Statement Items For the Year Ended 31 Dec (HK#039;000) 2014 2013 % Chg Commentary Revenue 2,989,333 3,013,490 -0.8% • Sales dropped slightly, and basically remained stable at around HK$3 bil. Cost of sales (2,587,616) (2,586,482) 0.0% • Core BUs (except PT) were dragged by Gross profit 401,7
Slide 7: Strong Financial Position: Robust Net Cash and Low Gearing
Strong Financial Position: Robust Net Cash and Low Gearing As at Dec 31 Current Assets up (HK$ million) 2014 2013 Changes 67m; with higher Cash & Deposits Assets by 178m and Non-current 1,429 1,499 (70) lower operating Current 2,386 2,319 67 working capital of Total Assets 3,815 3,818 (3) Inv. / AR
Slide 8: CNY (RMB) Exchange Rate Movement
CNY (RMB) Exchange Rate Movement • Consistent up-trend with spikes in the past signaled higher risks & needs for hedging • Weighted avg. rate basically unchanged in 2014; Minimal benefits from RMB spending • Losses from translation mainly due to significant Year-end rates depreciation (-2.4%) CNY (R
Slide 9: Exchange Movement Impact in P&L
2014 Exchange Gain/(Loss) Exchange Movement Impact in P&L RMB Euro GBP USD Total Eqv. ¥ mil. € mil. £ mil. $ mil. HK$ mil. 2014 Year-End Exch Rate 1.250 9.36 12.06 7.755 % Appr / (%Depr) vs. 2013 Year-End (2.4%) (12.3%) (6.2%) 0.1% Annual Sales - HKD entities ¥119 € 4.4 £4.5 $162 1509 Net Monetary A
Slide 10: Labor Cost Inflation
Labor Cost Inflation Announced higher %increase of minimum wage in 2015 than 2014 Minimum Wage Rate: Shenzhen / Wuxi / Zhongshan / Heshan (in RMB) 2,200 2,030 SZ Min. Wage Rate 2,000 12.2% 1,808 Location 2014 Incr% 1,800 13.0% 6.7% 1,600 1,630 Shenzhen 13% WX 1,600 13.6% 1,500 1,510 ZS 10.1% 12.1% 1
Slide 11: CAPEX Investment: Continue to grow our capabilities
CAPEX Investment: Continue to grow our capabilities with strengthened technology and value-added product offerings 180 Commentary 157 160 Unwavering long-term 141 investment commitments 140 and continued to drive 120 technological capabilities, process automation and (HK$ million ) 100 capacity upgr
Slide 12: Shareholders' Earning & Earnings per Share (EPS)
Shareholders’ Earning & Earnings per Share (EPS) Profit Attributable to Owners of HHPG Basic Earnings per share 180 20 160 156 18 17.3 140 16 14 120 (HK$ million) (HK Cents) 12 100 10 80 77 8.5 8 60 54 6.0 6 40 4 26 2.8 20 8 2 0.9 0 0 FY10/11 FY11/12 FY2012* FY2013 FY2014 FY10/11 FY11/12 FY2012* FY2
Slide 13: Proposed HK¢ 2 as final dividends
Proposed HK¢ 2 as final dividends The Group is confident to maintain decent dividend distribution 30 27 Commentary 25 2014 Dividends Interim (paid) 1 cent 20 Final (proposed) 2 cents 17 Total 2014 3 cents 15 Dividend yield: 2.8 % 10 Payout ratio: 333 % 7 5 5 4 5 3 2 5.3 5 2 3 2 2 1.7 1 0 FY10/11 FY1
Slide 14: Appendix: Current Business Outlook
Appendix: Current Business Outlook General business environment: opportunities and uncertainties China’s economic growth rate has been gradually adjusting to a “new normal”, softening but staying within a reasonable range. It may signal modest growth momentum in industrial output and softer domestic
Slide 15: Appendix: Current Business Outlook (Cont')
Appendix: Current Business Outlook (Cont’) 2. Increasing consolidation among export printers Challenges and opportunities also arise from stricter policy enforcement by the Government to de-register suppliers and printers using sub-standard manufacturing processes and inferior equipment. The trend t
Slide 16: ECO Factory
ECO Factory In year 2014, we consumed over 68,000 Tons FSCR and PEFC paper, and awarded various environmental recognitions. FSC: Forest Stewardship Council - Chain of Custody to ensure paper originates from well-managed forest PEFC: Programme for the Endorsement of Forest Certification Schemes - Cha
Slide 17: Workspace And Products Safety
Workspace And Products Safety Our factories have accredited different ethical standards, e.g. Raw Materials and products comply with international safety standards. Caring Company: We participated more than five years in Caring Company program ICTI-Care: International Council of Toy Industries – Car
Slide 18: Quality Products Produce From Hygienic Workspace
Quality Products Produce From Hygienic Workspace Our factories have achieved various quality and hygienic workspace standards GMI: Graphic Measures International Ltd, an approach adopted by some large retailing companies to monitor and measure the quality performance of packaging suppliers. PSA: Pri
Slide 19: Beluga + Design + Engineering Team
Beluga + Design + Engineering Team open work area to encourage communications, brainstorm new innovative ideas. Beluga has evolved into a platform that provides a total printing+digital solution for customers. We don’t just show our clients the technology and stop there. We go a step further by guid
Slide 20: Little Musician
Little Musician - 5 titles + Gift set - $2 Million dollar business - Distribution in various parts of Asia 19
Slide 21: Expansion into other markets
Expansion into other markets Cosmetics Education Games Event Management 20
Slide 22: Combination of print and digital multisensory products
Combination of print and digital to create a multisensory (Sight, Touch, Taste, Smell, Sound) to the product. Brand Marketing 21
Slide 23: Appendix: Four Complementary Hung Hing Business Segments
Appendix: Four Complementary Hung Hing Business Segments Book & Package Consumer Product Corrugated Box Paper Trading Printing Packaging Leader globally Major player in China Major player in South Major player in South Market position China China 56% (HK$1,672mm) 24% (HK$727mm) 7% (HK$198mm) 13% (HK
Slide 24: Appendix: Hung Hing established multi-locations infrastructure
Appendix: Hung Hing established multi-locations infrastructure Zhongshan Wuxi Printing & mfg. of folding cartons, litho Printing and manufacturing of folding lam and corrugated containers cartons, litho lam and corrugated Awarded ISO9001 and ISO14001 containers certifications Awarded ISO9001 certifi
Slide 25: Disclaimer
Disclaimer The presentation is prepared by Hung Hing Printing Group Limited (the “Company”) and is solely for the purpose of corporate communication and general reference only. The presentation is not intended as an offer to sell, or to solicit an offer to buy or to form any basis of investment deci
Slide 26: Thank you Q&A
Thank you Q&A A Leading Printer in Asia With unrivalled market leadership, well-balanced portfolio and sustained growth for over six decades, Hung Hing is in an excellent position to take advantage of growing opportunities as the economic recovery continues to build momentum. 25