Dfi Retail Group Holdings Limited · SGX:D01
Dfi Retail — Dairy Farm International Holdings — FY2014 Earnings Presentation
28 slides from Dfi Retail's earnings presentation, Mar 6, 2015
Slide 1: 2014 Full Year Results Presentation
2014 Full Year Results Presentation 6th March, 2015
Slide 2: Presentation Disclaimer
1 Presentation Disclaimer This Document (the “Document”) is for information purposes only. This Document is not intended to form the basis of any investment decision nor does it constitute a recommendation or advice as to how the reader should act on any matter. The information in this Document is a
Slide 3: Agenda
2 Agenda • Results Overview • Business Highlights • Financial Results • Outlook
Slide 4: Good Results in Most Formats but Challenging Trading Conditions in Food
3 Good Results in Most Formats but Challenging Trading Conditions in Food • Sales up 5% with growth in all divisions • Underlying profit 4% above last year • Record results from Health & Beauty, Home Furnishings and Restaurants • Announced 19.99% investment in Yonghui Superstores in China • Acquired
Slide 5: Both Sales and Profits Recorded Solid Growth
4 Both Sales and Profits Recorded Solid Growth (US$ m) 2013 2014 Change % Sales (Incl. Associates & JVs)1,2 12,432 13,103 5% Underlying Net Profit 2 480 500 4% Underlying EPS (US¢) 35.52 36.98 4% Normal Capex3 318 345 8% Net Cash 638 475 26% Final Dividend Per Share (US¢) 16.5 16.5 – Note:
Slide 6: Strong Sales Growth in Most Formats
5 Strong Sales Growth in Most Formats SALES Constant Rate (US$ m) 2013 2014 Change % Change % Food 8,240 8,404 2% 5% Supermarkets & Hypermarkets 6,459 6,544 1% 5% Convenience Stores 1,781 1,860 4% 5% Health and Beauty 2,219 2,455 11% 12% Home Furnishings 422 497 18% 20% Restauran
Slide 7: Margin Pressures Moderating in 2H2014
6 Margin Pressures Moderating in 2H2014 OPERATING PROFIT1 Margin2 (US$ m) 2013 2014 Change Subsidiaries Food 319 299 0.4 pts Supermarkets & Hypermarkets 248 226 0.5 pts Convenience stores 71 73 0.1 pts Health and Beauty 198 219 – Home Furnishings 43 50 0.1 pts 560 568 0.2 pts Restaurants (
Slide 8: Well-defined Strategies to Achieve Our Vision
7 Well-defined Strategies to Achieve Our Vision Vision Pioneers in ASIAN RETAIL Mission Bringing to ASIAN CONSUMERS the Benefits of Modern Retail Strategies Format Brands Operations Profitable Growth Passionate People Leadership Retail brands that Excellence in Based on For each of our win consumer
Slide 9: Still Big Opportunities for Modern Retail
8 Still Big Opportunities for Modern Retail China Modern grocery retail Traditional grocery retail Philippines Malaysia Vietnam Indonesia Source: Euromonitor 2014 country grocery retail market size
Slide 10: …and for Dairy Farm in Particular
9 …and for Dairy Farm in Particular US$3b US$793b US$20b US$26b US$13b 100% 80% 60% 40% 20% Dairy Farm 0% Vietnam China 1 Philippines Indonesia Malaysia Note: 1 Dairy Farm China number includes Yonghui Superstores Source: Euromonitor 2014 country grocery retail market size
Slide 11: Repositioning the Group for Long Term Growth
10 Repositioning the Group for Long Term Growth • Strategic partnership with Yonghui Superstores Co. in China • Entered Philippines’ health and beauty market • Additional 16% investment in Rustan’s, Philippines • Restructured Malaysian operations with local Bumi partner • Exited India • Ongoing IT a
Slide 12: Yonghui Partnership
11 Yonghui Partnership • A leading food retailer in China with sales of RMB 36.7b in 2014 • Dairy Farm to invest 19.99% of equity for RMB 5.7b • Transaction is expected to close in 1H2015 • Partnership across procurement, private label, fresh food and store development
Slide 13: Rose Pharmacy Acquisition
12 Rose Pharmacy Acquisition • Dairy Farm acquired 49% interest in Rose Pharmacy • Rose Pharmacy: a leading local pharmacy chain 241 stores Strong in Visayas / Mindanao • Plan to broaden health and beauty offer
Slide 14: Supermarkets & Hypermarkets
13 Supermarkets & Hypermarkets Gained market share in Hong Kong Growth of upscale supermarkets in Taiwan Continuing turnaround in Malaysia Cost increases in Indonesia
Slide 15: Key Priorities
14 Key Priorities Strengthening fresh offer across food formats Expanded corporate brand programme Widen advantage on imported range
Slide 16: Convenience Stores
15 Convenience Stores Strong performance in Hong Kong and Macau 39 net new stores in Southern China Store consolidation in Singapore
Slide 17: Key Priorities
16 Key Priorities Develop Ready-to-Eat New services Innovative marketing
Slide 18: Health and Beauty
17 Health and Beauty Record sales and profits China strong E-commerce launched in Singapore Pilot partnership with Melawai Pharmacy in Jakarta
Slide 19: Key Priorities
18 Key Priorities Corporate brand E-commerce Leverage health equity
Slide 20: Home Furnishings
19 Home Furnishings Record sales and profits Hong Kong and Taiwan strong Indonesia now open
Slide 21: Maxim's
20 Maxim’s Focus on HK and China Category innovation such as Urban Bakery, Wildfire, and The Cheesecake Factory Continued expansion of Starbucks in Vietnam
Slide 22: Profit & Loss Account
21 Profit & Loss Account (US$ m) 2013 2014 Change % Sales - Including Associates & JVs 12,432 13,103 5% - Subsidiaries 10,357 11,008 6% Operating Profit1 551 534 3% Share of Results of Associates and JVs 67 69 3% Net Finance Charge (3) (2) Profit Before Tax 615 601 2% Tax (102) (93) 9% P
Slide 23: Balance Sheet
22 Balance Sheet (US$ m) 31/12/2013 31/12/2014 Intangible Assets 408 566 Property 453 520 Other Fixed Assets 636 701 Associates and Joint Ventures 370 388 Net Working Capital (1,041) (1,027) Net Cash 638 475 Others (87) (100) Total Equity 1,377 1,523 Trade Creditors to Stock Ratio 1.6x 1.6x
Slide 24: Cash Flow
23 Cash Flow (US$ m) 2013 2014 Change % Operating Cash Flow 683 676 1% Normal Capex (318) (345) 8% Free Cash Flow 365 331 9% Asset Sales 51 30 41% Investment Capex (18) (118) 556% Change in Interest in Subsidiary / Capital Contribution from Non-controlling Interest 56 (2) N/A Net Drawdown/
Slide 25: DF Group Cash Flow
24 DF Group Cash Flow (US$ m) (71) 1,600 676 1,200 (345) 800 (118) (95) 30 400 (311) 638 475 0 2013 Operating CF Normal capex Investments Gross debt Dividends Sales of assets 2014 Net Cash acquired & Others Net Cash
Slide 26: Normal Capex
25 Normal Capex US$345m Group IT / Admin 6% Supply chain / others 9% Home Furnishing 9% IT 12% H&B 10% Store Refurbishment 29% Food 75% New Stores 50% By Format By Nature
Slide 27: Store Network by Format
26 Store Network by Format 2014 Net Adds 6,101 +362 5,739 5,527 881 +50 5,127 5,259 831 761 9 +1 Restaurants 650 707 8 7 Home Furnishings 7 7 1,800 +319 1,416 1,481 Health & Beauty 1,337 1,245 Convenience 2,301 2,279 -22 2,231 2,203 2,265 Stores Supermarkets 994 1,005 1,078 1,118 1,132 +14 & Hyperma
Slide 28: Outlook
27 Outlook • Expect challenging trading conditions to continue in some major markets • Continue to invest in new and existing stores, strengthen brand, improve operations and enhance shopper experience in all formats • Primary focus on organic growth, with selective acquisitions where we can enhance
Dairy Farm International Holdings — FY2014 Earnings Presentation on 6ix