Swire Pacific Limited Class A · HKEX:19
Swire Pacific Limited Class A — Swire Pacific Ltd A — H1 2024 Earnings Presentation
40 slides from Swire Pacific Limited Class A's earnings presentation, Aug 8, 2024
Slide 1: 2024 Interim Results Analyst Briefing
2024 INTERIM RESULTS ANALYST BRIEFING =. —_— 8TH AUGUST 2024 | HONG KONG Lgl Di@ Swire PACIFIC rs — %y
Slide 2: Disclaimer
DISCLAIMER This document has been prepared by Swire Pacific Limited (the “Company”, and together with its subsidiaries, the “Group”) solely for information purposes and information in it has not been independently verified. No representation or warranty, express or implied, is made as to, and no rel
Slide 3: Agenda
AGENDA ‣ FINANCIAL HIGHLIGHTS AND GROUP CORPORATE STRATEGY ‣ 1H2024 FINANCIAL PERFORMANCE ‣ BUSINESS REVIEW ‣ SUSTAINABILITY UPDATE ‣ OUTLOOK ‣ Q&A 3
Slide 4: Financial Highlights and Group Corporate Strategy
FINANCIAL HIGHLIGHTS AND GROUP CORPORATE STRATEGY GUY BRADLEY, CHAIRMAN
Slide 5: Swire Pacific – Strategic Highlights
SWIRE PACIFIC – STRATEGIC HIGHLIGHTS ‣ Achieved solid results in 1H2024 despite a challenging operating environment and impact from the disposal of Swire Coca-Cola, USA (SCCU) in 2H2023. ‣ Aviation Division continued to drive our underlying profit with robust demand for travel. ‣ Beverages Division
Slide 6: Swire Pacific – 1H2024 Highlights
SWIRE PACIFIC – 1H2024 HIGHLIGHTS 2% Recurring Underlying Profit 4% Dividend per ‘A’ Share HK$4.8Bn June 2023: HK$4.9Bn HK$1.25 June 2023: HK$1.20 Recurring Underlying Profit Excluding SCCU disposal 2% and new acquisitions 1H2024: HK$2.9Bn 1H2024: HK$0.9Bn(1) 1H2024: HK$1.8Bn 9% 1H2023: HK$3.2Bn 46%
Slide 7: Swire Pacific – Business Performance
SWIRE PACIFIC – BUSINESS PERFORMANCE ‣ Recurring underlying profit of HK$4.8Bn. ‣ Strong results from Aviation Division, offsetting the absence of profit from SCCU. ‣ Focus on enhancing returns for shareholders through ordinary dividends and our share buy-back programme. PROPERTY BEVERAGES AVIATION
Slide 8: 1H2024 Financial Performance
1H2024 FINANCIAL PERFORMANCE MARTIN MURRAY, FINANCE DIRECTOR
Slide 9: 1H2024 Financial Summary
1H2024 FINANCIAL SUMMARY Statutory Profit Underlying Profit Recurring Underlying Profit June 2023: HK$4,221m June 2023: HK$5,594m June 2023: HK$4,879m June 2024: HK$3,914m 7% June 2024: HK$5,576m 0% June 2024: HK$4,762m 2% Revenue Equity Attributable to the Dividends per Share Company’s Shareholders
Slide 10: 1H2024 Financial Summary – Reconciliation of Profits
1H2024 FINANCIAL SUMMARY – RECONCILIATION OF PROFITS June 2024 June 2023 HK$M HK$M Statutory profit 3,914 4,221 Adjustments in respect of investment properties 1,662 1,373 Sale of Taikoo Shing carparks Underlying profit attributable to the Company’s shareholders 5,576 5,594 Mainly gains on disposals
Slide 11: 1H2024 Movement in Underlying Profit
1H2024 MOVEMENT IN UNDERLYING PROFIT HK$M Higher net finance charges Loss of contribution from 8,000 arising from business SCCU of HK$913m and expansions and reduction lower profit from the in office rental income in Chinese Mainland, partly 7,000 Hong Kong offset by contribution from Thailand and L
Slide 12: 1H2024 Financial Summary – Profit/(Loss) by Division
1H2024 FINANCIAL SUMMARY – PROFIT/(LOSS) BY DIVISION Recurring underlying profit/(loss) Underlying profit/(loss) June 2024 June 2023 June 2024 June 2023 HK$M HK$M HK$M HK$M Sale of Taikoo Shing Property 2,898 3,188 3,133 3,195 carparks SCCU contributed Beverages 878 1,627 878 1,423 HK$913m in 1H2023
Slide 13: 1H2024 Financial Summary
1H2024 FINANCIAL SUMMARY Net Debt Movements (HK$Bn) Gearing Ratio Net debt at 1st January 2024 55.1 HK$M % 400,000 30.0 Cash from operations (5.3) 25.0 Disposal proceeds (1.6) 300,000 21.3 19.5 18.5 20.0 Capex and investments 9.0 13.8 13.6 19.8 200,000 18.0 17.0 15.0 Net dividends paid 2.3 12.2 10.0
Slide 14: 1H2024 Financial Summary
1H2024 FINANCIAL SUMMARY December December December June Change % Swire Pacific 2021 2022 2023 2024 (June 24 vs • Issued USD500m HK$M HK$M HK$M HK$M December 23) 5-year public bond in Bank balances and short-term deposits 22,894 11,614 14,082 16,746 +19% July 2024 Total undrawn facilities • Coupon o
Slide 15: Business Review
BUSINESS REVIEW GUY BRADLEY, CHAIRMAN ADRIAN CHOY, FINANCE DIRECTOR, SWIRE COCA-COLA MARTIN MURRAY, FINANCE DIRECTOR
Slide 16: Property – 1H2024 Overview
PROPERTY – 1H2024 OVERVIEW ► A slight decrease in underlying profit from HK$3,897m to HK$3,821m, mainly reflecting higher net finance charges and lower rental income from Hong Kong (partly due to rental loss from disposals) offset by a higher disposal gain. ► Developing new pipeline projects and ong
Slide 17: Property – 1H2024 Overview
PROPERTY – 1H2024 OVERVIEW Resilient performance despite market headwinds Underlying Profit (100% Basis) Movement in Underlying Profit (100% Basis) HK$M HK$M 5,000 4,500 Total Total -2% $3,821 $3,897 4,000 9 287 4,000 3,897 (246) 3,000 278 (32) 3,821 (24) (52) 2,000 -9% 3,888 3,534 3,500 1,000 0 3,0
Slide 18: Property – HK$100 Billion Investment Plan
PROPERTY – HK$100 BILLION INVESTMENT PLAN A clear path for growth over the next decade Chinese Mainland Taikoo Li Xi’an Taikoo Li Sanya (2) Increased stake at Taikoo Li Chengdu New Bund Mixed-use Project, Shanghai 44 Bn HK$ 50 Chinese Bn Mainland 65% Lujiazui Taikoo Yuan, Shanghai (3) HK$
Slide 19: Property – Upcoming Projects
PROPERTY – UPCOMING PROJECTS (1) Expected Attributable GFA Strong and diverse pipelines to be Completed Expected completion year 2024 2025 2026 2027 onwards 13.5M sq ft As at 6th August 2024 12.3M sq ft Artist Impression Artist Impression Artist Impression Artist Impression Empire City, As at 30th J
Slide 20: Property – Hong Kong Portfolio
PROPERTY – HONG KONG PORTFOLIO ► Resilient office performance supported by strong placemaking attributes, with overall occupancy (4) at 93%. ► For retail, the malls were almost fully let throughout 1H2024. The Mall, Pacific Place Cityplaza Pacific Place (5) 2.2M sq ft Occupancy 97% GFA Rental Revers
Slide 21: Property – Chinese Mainland Portfolio
PROPERTY – CHINESE MAINLAND PORTFOLIO ► An increasingly key contributor to rental income. ► Chinese Mainland portfolio contributed 41% attributable gross rental income in 1H2024. (1) ► Balanced contributions between Chinese Mainland retail and Hong Kong office portfolios. Attributable Gross Rental I
Slide 22: Beverages – Swire Coca-Cola – Continues Expansion into South East Asia
BEVERAGES – SWIRE COCA-COLA – CONTINUES EXPANSION INTO SOUTH EAST ASIA Continued investment in the Chinese Mainland and South East Asia expansion to drive long-term growth and profitability GREATER CHINA SOUTH EAST ASIA ► Profits increased in Hong Kong ► Conditionally agreed to acquire a majority st
Slide 23: Beverages – Swire Coca-Cola – 1H2024 Overview
BEVERAGES – SWIRE COCA-COLA – 1H2024 OVERVIEW EBITDA decreased due to the disposal of SCCU Chinese Mainland – EBITDA, excluding non-recurring item, was similar to 1H2023 in local currency terms, amid subdued domestic consumer spending. Hong Kong – EBITDA increased by 15%. The decrease in revenue and
Slide 24: Beverages – Swire Coca-Cola – 1H2024 Overview
BEVERAGES – SWIRE COCA-COLA – 1H2024 OVERVIEW Attributable Profit/(Loss) 1H2024 Category Mix 1H2024 Revenue Source 69% 75% HK$M Total 2,000 $1,423 47 70 1,500 56 Total $878 651 1,000 7% 14% 6% 284 3% 5% 2% 13% 6% 58 Sparkling Juice Energy drinks Chinese Mainland Hong Kong 500 72 913 Water Tea Other
Slide 25: Beverages – Swire Coca-Cola – Stable Business in 1H2024
BEVERAGES – SWIRE COCA-COLA – STABLE BUSINESS IN 1H2024 EBITDA margin decreased to 11.7% from 12.3% in 1H2023 also due to the disposal of SCCU Revenue by Region EBITDA Margin by Region HK$M -4% 20% 15,000 -1% % growth in HK dollar terms 16.0% % growth in local currency terms 15.2% 14.6% 15% 13.1% 10
Slide 26: Aviation – 1H2024 Overview
AVIATION – 1H2024 OVERVIEW Strong results from both Cathay group and HAECO group driven by ongoing robust demand for travel Attributable Profit/(Loss) Key Financial Data HK$M June 2024 June 2023 Change % HK$M Total Total 4,000 $2,093 $1,796 HAECO group 63 3,000 82 Revenue 10,445 8,464 +23% 2,000 597
Slide 27: Aviation – Cathay – 1H2024 Overview
AVIATION – CATHAY – 1H2024 OVERVIEW Strong first half performance including Liquidity position increased to fund some normalisation of yield preference shares buy-back Group Profit/(Loss) Available Unrestricted Liquidity (HK$Bn) (HK$Bn) 28.6 30.3 (9.9) (7.6) (5.1) 4.3 3.6 27.2 25.4 20.0 20.0 4.8 201
Slide 28: Aviation – Cathay – 1H2024 Overview
AVIATION – CATHAY – 1H2024 OVERVIEW from 2025 from 2026 Investing in our fleet 777-9 A320/1neo (2nd order) ► Agreed to purchase 30 Airbus A330-900 aircraft ► Secured the right to acquire 30 additional Airbus A330-900 aircraft from 2027 from 2028 A350F A330neo Financial ► Bought back the remaining 50
Slide 29: Aviation – Cathay – 1H2024 Overview
AVIATION – CATHAY – 1H2024 OVERVIEW Travel ► Entire aviation ecosystem, both in Hong Kong and globally, continues to face constraints with resources and supply chain. ► Will work towards reaching 100% of pre-pandemic passenger flights within Q1 2025. ► On track with recruitment and training. ► Some
Slide 30: Aviation – HAECO – 1H2024 Overview
AVIATION – HAECO – 1H2024 OVERVIEW ► Strong growth in recurring profit driven by continuous recovery of line maintenance activity and a growth in the demand for engine overhaul at HAESL and HAECO Engine Services (Xiamen). ► Absence of loss from the cabin business which was sold in September 2023, bu
Slide 31: Healthcare – 1H2024 Overview
HEALTHCARE – 1H2024 OVERVIEW ► DeltaHealth: Completed the control acquisition of DeltaHealth in April 2024. ► Columbia China: Total patient revenue increased by 14% year-on-year due to stable growth at Kaiyuan Orthopedic Hospital, and continued ramp-up of Columbia’s Wuxi and Jiaxing hospitals. New F
Slide 32: Healthcare – Building Healthcare Platforms
HEALTHCARE – BUILDING HEALTHCARE PLATFORMS CHINESE MAINLAND SOUTH EAST ASIA 68% Strategy Strategy ► Acquire majority control of hospitals and clinics which have ► Focus on selected emerging markets in South East Asia where Swire established centres of excellence has a presence, including Indonesia,
Slide 33: Sustainability Update
SUSTAINABILITY UPDATE TARGETS PROGRESS (4) 50% reduction in greenhouse gas emissions (1) We remain on track to meet our 2030 target, having reduced our emission by 30% against our by 2030 and Net-Zero by 2050 2018 baseline. We achieved a CDP Climate score of A- 65% waste diversion from landfill (2)
Slide 34: Sustainability Update
SUSTAINABILITY UPDATE Across our Group we are making progress on our sustainability priorities ► Adopter of the Taskforce on Nature-related Financial Disclosures (TNFD) ► Continued the pilot of our internal carbon pricing mechanism at Swire Properties, Swire Coca-Cola and HAECO ► Number 2 position i
Slide 35: Outlook
OUTLOOK GUY BRADLEY, CHAIRMAN
Slide 36: Outlook
OUTLOOK ‣ Remain confident on the medium term outlook for all our core businesses. ‣ Well-positioned to cope with any immediate adversity and economic challenges. ‣ Continue investing in our core markets. PROPERTY BEVERAGES AVIATION – CATHAY AVIATION – HAECO ‣ Focus on delivering on investment and ‣
Slide 37: Q&A
Q&A 8TH AUGUST 2024 | HONG KONG
Slide 38: 2024 Interim Results Analyst Briefing
2024 INTERIM RESULTS ANALYST BRIEFING =. —_— 8TH AUGUST 2024 | HONG KONG Lgl Di@ Swire PACIFIC rs — %y
Slide 39: Appendix
APPENDIX 8TH AUGUST 2024 | HONG KONG
Slide 40: 1H2024 Financial Summary – Return on Equity
1H2024 FINANCIAL SUMMARY – RETURN ON EQUITY Return on Equity 5-year 1H2024 average 15% Return on Equity 1.5% 0.1% Derived from: Recurring underlying profit 1.8% 0.9% Net non-recurring items 0.3% -0.2% 10% Net property valuation adjustments -0.6% -0.6% Recurring Disposal Property Disposal Others Divi