Dfi Retail Group Holdings Limited · SGX:D01
Dfi Retail — Dairy Farm International Holdings — H1 2018 Earnings Presentation
20 slides from Dfi Retail's earnings presentation, Jul 27, 2018
Slide 1: 2018 Interim Results
2018 Interim Results 27 July 2018
Slide 2: Disclaimer
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 an overview only
Slide 3: Solid Overall Results, but Mixed Individual Performance
Solid Overall Results, but Mixed Individual Performance • Consolidated sales up 6% at constant currency • Underlying profit 2% higher • Strong Health and Beauty results, particularly North Asia • Continuing decline in Southeast Asia Food • Positive performance from other formats • Restructured organ
Slide 4: Resilience in Overall Portfolio
Resilience in Overall Portfolio Profit and Loss (US$'m) 1H2018 %△ CCY %△ Sales - Including Associates & JVs 12,215 17 13 - Subsidaries 5,929 8 6 Underlying Operating Profit 218 9 9 Share of Results of Associates and JVs 62 2 n 0 Underlying Net Profit 215 2 1 Underlying EPS (US¢) 15
Slide 5: Positive Sales Performance in Most Markets
Positive Sales Performance in Most Markets Sales (US$'m) 1H 2018 %△ CCY %△ Food - Supermarkets and Hypermarkets 3,072 2 0 North Asia 1,344 4 4 Southeast Asia 1,728 1 (2) Food - Convenience Stores 1,029 6 5 Health and Beauty 1,481 20 19 Home Furnishings 346 14 13 Key Associate
Slide 6: Profit Conversion More Challenging
Profit Conversion More Challenging Op. Profit Op. Profit △ (US$'m) 1H 2018 1H2017 $ △ Food - Supermarkets and Hypermarkets 33 71 38 North Asia 55 64 9 Southeast Asia (22) 7 29 Food - Convenience Stores 36 34 2 Health and Beauty 154 89 65 Home Furnishings 34 33 1 257 227 30 Central G&A
Slide 7: Operating Cash Flow Solid
Operating Cash Flow Solid (US$'m) 1H2018 1H2017 EBITDA 343 308 Operating Cash Flow 312 306 Capex (138) (150) Free Cash Flow 174 156 Investments and Net Financing Cost (245) (200) Net Cash Flow (71) (44) 1H2018 FY2017 Net Debt 670 599 7
Slide 8: Measured Capex in 1H while Investment Strategy Assessed
Measured Capex in 1H while Investment Strategy Assessed Supply Chain Supply Chain & Others & Others 7 IT Systems 7 IT Systems 14 17 1H 2018 1H 2017 Store (US$ m) Store (US$ m) Refurbishment Refurbishment New Stores 27 138 New Stores 41 150 88 87 8
Slide 9: Strategy Update
Strategy Update 2018 Interim Results 27 July 2018 9
Slide 10: Key Improvement Programmes to Underpin Business Strategy
Key Improvement Programmes to Underpin Business Strategy Business Strategy Improvement Programmes Build capability Fresh Labour Supply Chain Productivity Efficiency Drive Grow in digital China innovation Assortment Procurement Optimisation Centralisation Maintain Revitalise HK SE Asia strength 10
Slide 11: Three Phases to Build Sustainable Growth
Three Phases to Build Sustainable Growth Making a Difference for Every Building a Strong Base Delivering Consistently Well Customer 1. Build a strong leadership team 1. Establish leadership strength in 1. High performing teams with strong Performance depth succession plans 2. Define store brand cust
Slide 12: Key Improvement Programmes to Underpin Business Strategy
Key Improvement Programmes to Underpin Business Strategy Business Strategy Build capability Drive Grow in digital China innovation Maintain Revitalise HK SE Asia strength 12
Slide 13: Build Capability: New Leadership Team in Place
Build Capability: New Leadership Team in Place = New Position ✓ = New leader Chief Executive Officer ✓ Ian McLeod Chief Customer CEO CEO North Group Finance & Officer, CEO Property Supply Chain Chief Digital HR Director Southeast Asia & Counsel IKEA Director Health & Director Director Officer Asia C
Slide 14: Grow in China: Expansion Continuing on Track
Grow in China: Expansion Continuing on Track • New CEOs appointed into 7-Eleven and Mannings • Improving performance in both businesses • Network expansion planned for both banners: − 1,000+ 7-Eleven stores by end 2018 • Technology trials in pilot: − O2O, scan&go, virtual wall, facial recognition •
Slide 15: Maintain Hong Kong Strength: Health & Beauty Outperformance
Maintain Hong Kong Strength: Health & Beauty Outperformance • Increased tourist market driving Mannings outperformance • Market share gains in Mannings and Wellcome • Excessive rent increases driving high cost pressure in HK − Larger retail outlets disproportionately disadvantaged • New store growth
Slide 16: Substantial Retail Rent Increases in Hong Kong
Substantial Retail Rent Increases in Hong Kong Top Five Largest Rent Renewal Increments (Supermarkets) Store 2014 2017 1. +55% +279% 2. +45% +118% 3. +21% +113% 4. +17% +82% 5. +13% +79% 16
Slide 17: Revitalise Southeast Asia: No Short-Term Fix
Revitalise Southeast Asia: No Short-Term Fix • Health and Beauty performance improving • IKEA Indonesia a strong growth business • Food performance decline a focus • Hypermarket performance weak in each market • Major transformation needed: 5 year timeline • Key Southeast Asia leadership now in plac
Slide 18: Drive Digital Innovation: Organisation Redesign Underway
Drive Digital Innovation: Organisation Redesign Underway • Two key new appointments - Chief Digital Officer - Group IT Director • Two transformation essentials - Fixed the basics - Step-change digital capability • Key workstreams - SAP integration and development - Accelerating digital - Major data
Slide 19: Summary
Summary • Leadership capability significantly improved • Fragmented, complex portfolio structure now removed • 5-year transformation plan priorities now in place • Multi-faceted, multi-sector, multi-program plan required • Southeast Asia Food malaise will take time to address • Building a better, cu
Slide 20: Thank you!
Thank you! 2018 Interim Results 27 July 2018 20
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