Convenience Retail Asia Limited · HKEX:831

Convenience Retail Asia — FY2007 Earnings Presentation

36 slides from Convenience Retail Asia's earnings presentation, Mar 12, 2008

  1. Slide 1: Convenience Retail Asia Ltd 2007 Annual Results Presentation

    Convenience Retail Asia Ltd 2007 Annual Results Presentation 12 March 2008

  2. Slide 2: Agenda

    2007 Annual Results Presentation Agenda ƒ Overall Hong Kong & Guangzhou Retail Markets ƒ 2007 Key Highlight ƒ 2007 Financial Results Highlight ƒ 2008 Update & Outlook ƒ Question & Answers

  3. Slide 3: 2007 HK Retail Sales Value

    2007 HK Retail Sales Value Year-on-year % Change 35 30 28.6 2007 YTD: + 12.8% 25 Year-on-year % 19.5 20 16.8 15.8 16.8 14.3 14.3 15.2 15 10.2 10 6.8 7.3 4.9 5 3.2 -1.5 0 -5 Aug Apr Jun Jul Mar Jan 2007 Feb Sep May Nov Oct 2005 2006 Dec Source: Census and Statistics Department, HKSAR

  4. Slide 4: HK Consumer Price Index

    2007 HK Consumer Price Index Year-on-year % Change 5 2007 YTD: + 2% 4 3.8 3.4 3.2 Year-on-year % 3 2.4 2.0 2.0 2 1.5 1.6 1.6 1.3 1.2 1.3 1.0 1 0.8 0 May Mar Jan 2007 Jun Nov Jul Aug Apr Oct 2005 2006 Feb Sep Dec Source: Census and Statistics Department, HKSAR

  5. Slide 5: Guangzhou Retail Sales Value

    2007 Guangzhou Retail Sales Value Year-on-year % Change 35 2007 YTD: + 18.9% 30 24.7 25 23.2 Year-on-year % 22.1 20.5 20.1 19.8 20.8 20 17.1 17.8 17 15.0 15 13.2 13.2 10.0 10 5 0 Aug Apr Jun Jul Mar Jan 2007 Feb Sep May Nov Oct 2005 2006 Dec Source: Bureau of Statistics, Guangzhou

  6. Slide 6: Guangzhou City Consumer Price Index

    2007 Guangzhou City Consumer Price Index Year-on-year % Change 2007 YTD: + 3.4% 7 6 5.3 5.0 5 4.8 4.6 4.4 4.6 Year-on-year % 4 3 2.8 2.3 2.3 2.3 2.4 1.9 2 1.5 1.0 1 0 Aug Apr Jun Jul Mar Feb Sep Jan 2007 May Nov Oct 2005 2006 Dec Source: Bureau of Statistics, Guangzhou

  7. Slide 7: 2007 Key Highlight

    Convenience) Asia 2007 Key Highlight

  8. Slide 8: Key Highlight of 2007 Circle K Hong Kong

    Key Highlight of 2007 Circle K Hong Kong ƒ Maximizing differentiation and quality growth strategy very successful ƒ “Always Something New” campaign and supporting promotions generating favorable results ƒ Completion of upgrading stores to 3G format ƒ Strengthening food services choice ¾ In-store bak

  9. Slide 9: Circle K Hong Kong 3G Store Image

    Circle K Hong Kong 3G Store Image

  10. Slide 10: Circle K Hong Kong Innovative Promotions

    Circle K Hong Kong Innovative Promotions

  11. Slide 11: Key Highlight of 2007 Circle K Southern China

    Key Highlight of 2007 Circle K Southern China ƒ Consolidation of Guangzhou, Dongguan and Shenzhen stores into one management team ƒ Completed pilot test and ready for franchising in 2008 ƒ Focus in Guangzhou market and development of high sales stores

  12. Slide 12: Circle K Southern China

    Retail Rc Circle K Southern Ghina

  13. Slide 13: Key Highlight of 2007 Saint Honore Cake Shop

    Key Highlight of 2007 Saint Honore Cake Shop ƒ Completed integration of Saint Honore into CRA Group ƒ Strengthened fundamentals: ¾ Support systems ¾ Supply chain and logistics ¾ New EPOS ƒ Changing strategy from low price + volume to modern image + TFH (taste, fresh & hot) products + value pricing t

  14. Slide 14: Saint Honore Cake Shop New Store Image

    Saint Honore Cake Shop New Store Image

  15. Slide 15: 2007 Financial Results Highlight

    2007 Financial Results Highlight

  16. Slide 16: No. of Store – Circle K Group

    2007 Financial Results Highlight No. of Store – Circle K Group 2006 2007 ƒ Circle K Hong Kong 250 270 ƒ Circle K Guangzhou 52 63 ƒ Circle K Dongguan 8 9 ƒ Circle K Shenzhen 2 4 CRA Operated Circle K Stores 312 346 ƒ Macau J.V. 16 16 ƒ Zhuhai J.V. 6 10 Total Circle K Stores 334 372

  17. Slide 17: No. of Store – Saint Honore Group

    2007 Financial Results Highlight No. of Store – Saint Honore Group 2007 ƒ Saint Honore Hong Kong 81 y Cake Shop 66 y Bread Boutique 15 ƒ Saint Honore Macau 7 ƒ Saint Honore Guangzhou 9 Total Saint Honore Stores 97

  18. Slide 18: No. of Store – CRA Group

    2007 Financial Results Highlight No. of Store – CRA Group 2006 2007 ƒ Circle K Group 334 372 ƒ Saint Honore Group - 97 Total Number of Stores 334 469

  19. Slide 19: Group Turnover – 4th Quarter

    2007 Financial Results Highlight Group Turnover – 4th Quarter 3,000 38.2% 2,500 2,231.2 1,995.2 2,000 HK$ Million 1,500 1,000 * 782.4 566.2 135.6 500 655.2 0 2005 2006 2006Q4 2007Q4 Circle K St Honore * After consolidation adjustment (less inter-group sales HK$8.4M)

  20. Slide 20: Group Turnover – Full Year

    2007 Financial Results Highlight Group Turnover – Full Year 4,000 30.7% *2,916.7 3,000 491.8 2,231.2 HK$ Million 1,995.2 2,000 2,455.8 1,000 0 2005 2006 2007 Circle K St Honore * After consolidation adjustment (less inter-group sales HK$30.9M)

  21. Slide 21: Gross Margin / Other Income

    2007 Financial Results Highlight Gross Margin / Other Income 40 3.3% 38 36.5 % of Turnover 36 34 33.0 33.2 32 30 2005 2006 2007 * Excluding interest income

  22. Slide 22: Store Operating Expenses

    2007 Financial Results Highlight Store Operating Expenses 35 2% 30 26.7 24.5 24.7 25 % of Turnover 20 15 10 5 0 2005 2006 2007

  23. Slide 23: Circle K Group Store Operating Expenses

    2007 Financial Results Highlight Store Operating Expenses Circle K Group Store Operating Expenses 30 25.2 24.5 24.7 25 6.6 % of Turnover 7.2 6.7 20 15 8.2 8.7 7.9 10 5 9.4 9.8 9.9 0 2005 2006 2007 Labour Cost Rental Cost Other Expenses

  24. Slide 24: Group Net Profit – 4th Quarter

    2007 Financial Results Highlight Group Net Profit – 4th Quarter 100 75.1 10.5% 80 73.6 HK$ Million 60 40 19.5 21.5 20 0 2005 2006 2006Q4 2007Q4

  25. Slide 25: Group Net Profit – Full Year

    2007 Financial Results Highlight Group Net Profit – Full Year 120 15.7% 100 86.9 73.6 75.1 80 HK$ Million 60 40 20 0 2005 2006 2007

  26. Slide 26: Net Profit By Market

    2007 Financial Results Highlights Net Profit By Market 2006FY 2007FY Change (HK$M) (HK$M) (HK$M) Hong Kong & Macau 94.8 109.2 14.4 Markets China Market (19.7) (22.3) (2.6) Total 75.1 86.9 11.8

  27. Slide 27: Net Profit as % of Turnover

    2007 Financial Results Highlight Net Profit as % of Turnover 5 0.4% 3.7 4 3.4 3.0 % of Turnover 3 2 1 0 2005 2006 2007

  28. Slide 28: Basic Earnings Per Share

    2007 Financial Results Highlight Basic Earnings Per Share 20 8.8% 15 12.08 10.94 11.10 HK Cents 10 5 0 2005 2006 2007

  29. Slide 29: 4th Quarter

    2007 Financial Results Highlight 4th Quarter 2006Q4 2007Q4 Change Number of Stores 334 469 + 40.4% Group Turnover (HK$M) 566.2 782.4 + 38.2% Group Net Profit (HK$M) 19.5 21.5 + 10.5% Net Profit as % of Turnover 3.4% 2.8% - 0.6% Basic Earnings Per Share 2.88 Cents 2.95 Cents +2.4%

  30. Slide 30: Full Year

    2007 Financial Results Highlight Full Year 2006FY 2007FY Change Number of Stores 334 469 + 40.4% Group Turnover (HK$M) 2,231.2 2,916.7 + 30.7% Group Net Profit (HK$M) 75.1 86.9 + 15.7% Net Profit as % of Turnover 3.4% 3.0% - 0.4% Basic Earnings Per Share 11.10 Cents 12.08 Cents + 8.8% Total Dividend

  31. Slide 31: Year-on-year Profitability Growth

    Year-on-year Profitability Growth 20 15.7 15 % Change 10.3 11.0 9.5 10 5 2.0 0.2 0 2002 2003 2004 2005 2006 2007

  32. Slide 32: 2008 Update and Outlook

    Convenience) Asia 2008 Update and Outlook

  33. Slide 33: 2008 Hong Kong Market Outlook

    2008 Hong Kong Market Outlook ƒ Unusually cold weather in January and February ƒ Hugh increase in food cost ƒ Challenging rental increase on renewal ƒ Inflation in operating expenses becoming a major issue ƒ Robust consumer confidence and acceptance of price increase, new products & innovative promo

  34. Slide 34: 2008 Southern China Market Outlook

    2008 Southern China Market Outlook ƒ Run-away food cost increases such as pork, poultry and flour ƒ Escalating operational costs ƒ Increasing labour shortage ƒ Consumer sentiment to spend continues to be strong ƒ Aggressive store opening programme by launching the franchise model ƒ Further upgrading

  35. Slide 35: 2008 Market Outlook To Summarize

    2008 Market Outlook To Summarize ƒ Favourable consumer sentiments ƒ Hugh increase in food cost ƒ Inflation pressure on operating expenses ƒ Differentiation, innovation, operations excellence and control of expenses becoming even more important ƒ Solid cash-flow, balance sheet ƒ Actively seek new inv

  36. Slide 36: Thank You!

    Thank You!

Convenience Retail Asia — FY2007 Earnings Presentation on 6ix