Convenience Retail Asia Limited · HKEX:831

Convenience Retail Asia — Q1 2008 Earnings Presentation

24 slides from Convenience Retail Asia's earnings presentation, May 7, 2008

  1. Slide 1: 1st Quarter 2008 Results Announcement

    1st Quarter 2008 Results Announcement 7 May 2008

  2. Slide 2: 2008Q1 Results Announcement

    2008Q1 Results Announcement „ Overall Hong Kong & Guangzhou Retail Markets „ 2008Q1 Key Highlight „ 2008Q1 Financial Results Highlight „ 2008 Update & Outlook

  3. Slide 3: Hong Kong Retail Market

    Hong Kong Retail Market HK Retail Sales Value HK Consumer Price Index 30 8 25 6.3 Year-on-year % change 23.2 Year-on-year % change 20.0 6 20 4.2 15 12.8 4 3.2 9.5 10 7.3 2.0 2.0 6.8 2 5 1.0 0 0 2005 2006 2007 200801 200802 200803 2005 2006 2007 200801 200802 200803 Source: Census and Statistics Depa

  4. Slide 4: Guangzhou Retail Market

    Guangzhou Retail Market GZ Retail Sales Value GZ City Consumer Price Index 25 10 8.6 18.9 19.3 Year-on-year % change 20 18.5 Year-on-year % change 8 7.0 15.0 15 13.2 5.9 6 10.8 10 4 3.4 2.3 5 2 1.5 0 0 2005 2006 2007 200801 200802 200803 2005 2006 2007 200801 200802 200803 Source: Bureau of Statisti

  5. Slide 5: 2008Q1 Key Highlight

    2008Q1 Key Highlight

  6. Slide 6: Key Highlight: Hong Kong Market

    2008Q1 Key Highlight Hong Kong Market „ Unusually cold weather in January and February „ Huge increase in food cost „ Challenging rental increase on renewal „ Inflation pressure on other operating expenses

  7. Slide 7: Key Highlight: Southern China Market

    2008Q1 Key Highlight Southern China Market „ Run-away food cost increases such as pork, poultry and flour „ Escalating operational expenses „ Increasing labour shortage „ Consumer sentiment to spend continues to be strong

  8. Slide 8: 2008Q1 Financial Results Highlight

    2008Q1 Financial Results Highlight

  9. Slide 9: Number of Store – Circle K

    2008Q1 Financial Results Highlight Number of Store – Circle K „ Total 373 Circle K stores ¾ 271 stores in Hong Kong ¾ 63 stores in Guangzhou ¾ 8 stores in Dongguan ¾ 5 stores in Shenzhen ¾ 16 stores in Macau ¾ 10 stores in Zhuhai

  10. Slide 10: Number of Store – Saint Honore

    2008Q1 Financial Results Highlight Number of Store – Saint Honore „ Total 100 Saint Honore stores ¾ 84 stores in Hong Kong ¾ 9 stores in Guangzhou ¾ 7 stores in Macau

  11. Slide 11: Group Turnover

    2008Q1 Financial Results Highlight Group Turnover 3,500 2,916.7 3,000 30.5% 2,500 2,231.2 HK$ Million 2,000 1,500 1,000 778.6* 596.8* 161.1 44.8 500 627.7 554.1 0 2006 2007 2007Q1 2008Q1 Circle K St. Honore * Less inter-group sales: HK$2.1M in 2007Q1 and HK$10.2M in 2008Q1

  12. Slide 12: Gross Margin / Other Income

    2008Q1 Financial Results Highlight Gross Margin / Other Income 40% 0.8% 38% 36.5% % of Turnover 36% 35.2% 34.4% 34% 33.2% 32% 30% 2006 2007 2007Q1 2008Q1 (Excluding interest income)

  13. Slide 13: Store Operating Expenses

    2008Q1 Financial Results Highlight Store Operating Expenses 35% 30% 26.7% 26.2% 26.2% 24.7% 25% % of Turnover 20% 15% 10% 5% 0% 2006 2007 2007Q1 2008Q1

  14. Slide 14: Circle K Group Store Operating Expenses

    2008Q1 Financial Results Highlight Store Operating Expenses Circle K Group Store Operating Expenses 30% 24.7% 25.2% 25.5% 24.1% 25% 6.6% 6.3% 5.3% 6.7% % of Turnover 20% 15% 8.2% 8.7% 9.1% 9.1% 10% 5% 9.8% 9.9% 10.1% 9.7% 0% 2006 2007 2007Q1 2008Q1 Labour Cost Rental Cost Other Expenses

  15. Slide 15: Group Net Profit

    2008Q1 Financial Results Highlight Group Net Profit 100 86.9 75.1 14.3% 80 HK$ Million 60 40 20 12.0 13.7 0 2006 2007 2007Q1 2008Q1

  16. Slide 16: Net Profit By Market

    2008Q1 Financial Results Highlight Net Profit By Market (HK$ Million) 2007Q1 2008Q1 Change Hong Kong and 17.4 22.8 + 31.4% Macau Markets China Market (5.4) (9.1) - 69.5% Total 12.0 13.7 + 14.3%

  17. Slide 17: Net Profit as % of Turnover

    2008Q1 Financial Results Highlight Net Profit as % of Turnover 5% 0.2% 4% 3.4% 3.0% % of Turnover 3% 2.0% 1.8% 2% 1% 0% 2006 2007 2007Q1 2008Q1

  18. Slide 18: Basic Earnings Per Share

    2008Q1 Financial Results Highlight Basic Earnings Per Share 20 8.7% 15 12.08 11.10 HK Cents 10 5 1.73 1.88 0 2006 2007 2007Q1 2008Q1

  19. Slide 19: 2008Q1 Financial Results Highlight

    2008Q1 Financial Results Highlight 2007Q1 2008Q1 Change Number of Stores 431 473 + 9.7% Group Turnover (HK$M) 596.8 778.6 + 30.5% Group Net Profit (HK$M) 12.0 13.7 + 14.3% Net Profit as % of Turnover 2.0% 1.8% - 0.2% Basic Earnings Per Share 1.73 cents 1.88 cents + 8.7%

  20. Slide 20: 2008 Update and Outlook

    2008 Update and Outlook

  21. Slide 21: 2008 Hong Kong Market Outlook

    2008 Hong Kong Market Outlook „ High inflation and its impact on operating expenses and food cost „ Short-term squeeze in both gross and net margin „ Innovative products, creative promotions, enhanced shopping experience to increase traffic and sales dollar per transaction „ Rejuvenating Saint Honor

  22. Slide 22: 2008 China Market Outlook

    2008 China Market Outlook „ Maintaining gross margin and tight control of operating expenses „ Start franchising of Circle K stores in 2008Q2 „ Balancing new store opening and P&L in 2008

  23. Slide 23: Highlight To Summarize

    2008Q1 Highlight To Summarize „ Satisfactory financial results „ Increase in food cost and high inflation „ Tougher year in terms of gross margin, expenses control and net profit margin „ Quality execution strategy in Hong Kong market „ Quality growth strategy in China market

  24. Slide 24: Thank You!

    Retail : Uf) Thank You!

Convenience Retail Asia — Q1 2008 Earnings Presentation on 6ix