Convenience Retail Asia Limited · HKEX:831
Convenience Retail Asia — FY2014 Earnings Presentation
35 slides from Convenience Retail Asia's earnings presentation, Mar 18, 2015
Slide 1: Convenience Retail Asia Ltd 2014 Annual Results Announcement
Convenience Retail Asia Ltd 2014 Annual Results Announcement 18 March 2015
Slide 2: Agenda
Agenda Hong Kong & China Retail Markets Key Highlight 2014 Financial Results Highlight 2015 Update & Outlook Question & Answer 2
Slide 3: Hong Kong & China Retail Markets Key Highlight
Hong Kong & China Retail Markets Key Highlight 3
Slide 4: Consumer Confidence Index
Consumer Confidence Index Hong Kong consumer confidence index remained stable over the last quarter 120 110 110 111 111 111 111 110 108 108 108 108 110 107 105 104 106 104 111 107 107 108 107 106 107 107 105 105 100 104 103 103 94 94 99 98 96 97 96 90 94 94 92 91 92 91 93 89 88 89 89 80 85 70 Q1 Q
Slide 5: Hong Kong Retail Market
Hong Kong Retail Market Total Retail Sales Value Composite CPI 20 8 2014FY: -0.2% 2014FY: +4.4% 16 14.4 6.6 12 6 Year-on-year % change Year-on-year % change 5.2 5.1 4.9 8 4.6 4.8 4.2 3.5 3.9 3.9 4.0 3.9 4 4 3.7 3.7 3.6 1.4 0 -4 -2.2 -1.5 2 -3.9 -3.2 -4.0 -8 -6.9 -9.9 -12 0 201401 201402 201403 20140
Slide 6: China Retail Market
China Retail Market Total Retail Sales Value Consumer Price Index 18 4 2014FY: +12.0% 2014FY: +2.0% 15 12.5 12.4 12.2 3 11.8 12.2 11.9 11.9 11.6 11.5 11.7 11.9 Year-on-year % change Year-on-year % change 12 2.5 2.4 2.5 2.3 2.3 2.0 2.0 9 2 1.8 1.6 1.6 1.5 1.4 6 1 3 0 0 201401-02 201403 201404 201405
Slide 7: China Growth Keeps Softening in 2014
China Growth Keeps Softening in 2014 China Offline FMCG Sales China Offline FMCG Quarterly Growth Value Growth vs. YA vs. Year Ago % 8.5% 7.5% 17% 6.5% 15% 6.0% 5.7% 5.1% 7% 6% 4.0% 2011 2012 2013 Aug 2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 Jul-Aug 2014YTD 2014 Source: Nielsen 7
Slide 8: Key Highlight of the Hong Kong & Southern China Markets
Key Highlight of the Hong Kong & Southern China Markets Hong Kong Market Soft consumer demand Lease renewal at historical high increase despite drop in rental for prime locations Difficult to hire and retain frontline staff Newspaper and magazine volume decreasing Southern China Market Gro
Slide 9: New Products and Re-inventing
New Products and Re-inventing 9
Slide 10: New Products and Re-inventing
New Products and Re-inventing 10
Slide 11: FingerShopping.com
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Slide 12: Cross Promotion - Circle K x FingerShopping
Cross Promotion - Circle K x FingerShopping In-store Display MTR Walls Advertising 12
Slide 13: Update on Sinopec Project
Update on Sinopec Project past past upgraded upgraded 13
Slide 14: Update on Sinopec Project
Update on Sinopec Project past upgraded upgraded 14
Slide 15: Update on Sinopec Project
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Slide 16: Other Highlights
Other Highlights Green Plus Recognition Award 2014 1. Gold Award - Retail-Chain Store 2. Joint Energy Saving Award Silver Award - Excellence in Retail/Shopper Marketing at Marketing Excellent Award 2014 by the Marketing Magazine 16
Slide 17: 2014 Financial Results Highlights
2014 Financial Results Highlights 17
Slide 18: Number of Stores
Number of Stores End of End of Opened Closed 2013 2014 Circle K Hong Kong 335 16 (22) 329 Circle K Southern China 80 13 (4) 89 Circle K Macau (franchised) 25 3 (2) 26 Circle K Zhuhai (franchised) 11 2 (1) 12 Saint Honore HK & Macau 97 12 (7) 102 Saint Honore Southern China 44 7 (5) 46 CRA Group Tota
Slide 19: Group Turnover
Group Turnover 2nd Half Full Year 4,000 6,000 + 4.8% + 6.3% 5,000 4,521.3* 4,736.4* 3,000 2,497.8* 1,049.1 HK$ Million 2,349.7* 4,000 1,016.3 HK$ Million 576.9 2,000 547.1 3,000 2,000 3,760.4 1,000 3,578.3 1,839.3 1,959.0 1,000 0 0 2013 2014 2013 2014 Circle K Saint Honore Circle K Saint Honore ∗ Le
Slide 20: Gross Profit & Other Income
Gross Profit & Other Income 2nd Half Full Year 40 40 - 0.3% + 0.1% 38 37.4 38 37.0 37.1 36.9 % of Turnover % of Turnover 36 36 34 34 32 32 30 30 2013 2014 2013 2014 20
Slide 21: Group Store Operating Expenses
Group Store Operating Expenses 2nd Half Full Year 30 30 + 0.5% + 0.5% 28 28 26.6 26.8 26.1 26.3 % of Turnover % of Turnover 26 26 24 24 22 22 20 20 2013 2014 2013 2014 21
Slide 22: Group Net Profit
Group Net Profit 2nd Half Full Year 120 180 150.4 100 90.2 150 16.8 121.0 9.3 72.3 4.3 80 4.7 120 HK$ Million HK$ Million 60 90 40 60 20 30 0 0 -4.3 -9.1 -5.9 -14.6 -20 -3.5 -30 -3.5 2013 2014 2013 2014 FingerShopping Loss FingerShopping Loss Sinopec Project Sinopec Project Interest Income & Exchang
Slide 23: Net Profit by Market
Net Profit by Market 2nd Half Full Year (HK$ Million) 2013 2014 2013 2014 Hong Kong & Macau Markets 105.4 87.2 185.3 155.7 China Market (15.2) (14.9) (34.9) (34.7) CRA Group Net Operating Profit 90.2 72.3 150.4 121.0 23
Slide 24: Group Net Profit as % of Turnover
Group Net Profit as % of Turnover 2nd Half Full Year 5 5 4 3.8 4 3.3 % of Turnover 2.9 % of Turnover 3 3 2.6 2 2 1 1 0 0 2013 2014 2013 2014 Net Profit as % of Turnover: -0.9% Net Profit as % of Turnover: -0.7% Excluding FingerShopping, Sinopec Project and Excluding FingerShopping, Sinopec P
Slide 25: Basic Earnings Per Share
Basic Earnings Per Share 2nd Half Full Year 20 25 20.27 20 15 12.14 16.18 15 HK Cents HK Cents 9.73 10 10 5 5 0 0 2013 2014 2013 2014 Basic Earning Per Share: -19.9% Basic Earning Per Share: -20.2% Excluding FingerShopping, Sinopec Project and Excluding FingerShopping, Sinopec Project and In
Slide 26: 2014 Financial Results Highlight – 2nd Half
2014 Financial Results Highlight – 2nd Half 2H2013 2H2014 Change Number of Stores 592 604 + 12 stores Group Turnover (HK$M) 2,349.7 2,497.8 +6.3% Group Net Profit (HK$M) 90.2 72.3 -19.8% Excluding FingerShopping and Interest 85.2 80.2 -5.8% Income & Exchange Gain/(Loss) Net Profit as % of Turnover
Slide 27: 2014 Financial Results Highlight – Full Year
2014 Financial Results Highlight – Full Year 2013FY 2014FY Change Number of Stores 592 604 + 12 stores Group Turnover (HK$M) 4,521.3 4,736.4 +4.8% Group Net Profit (HK$M) 150.4 121.0 -19.5% Excluding FingerShopping and Interest Income 139.5 134.8 -3.4% & Exchange Gain/(Loss) Net Profit as % of Tur
Slide 28: 2015 Update & Outlook
2015 Update & Outlook 28
Slide 29: 2015 Update & Outlook
2015 Update & Outlook The years of strong retail growth for the Hong Kong market is over China market consumers spending sentiment definitely declining Volume not increasing yet operating expenses are still escalating Our strategy: Re-inventing our businesses (in fact, everything we do) to d
Slide 30: 2015 Plan: Re-inventing Ourselves to Deliver Superior Customer Experience
2015 Plan: Re-inventing Ourselves to Deliver Superior Customer Experience 1. 2. Showrooming (View offline, buy online) Pure Online Play Online * Instore promotions and POPM to promote online traffic Transaction 3. 4. Brick & Mortar * Raise the bar in customer Webrooming experience (Initiate online,
Slide 31: Saint Honore New Store Image
Saint Honore New Store Image 31
Slide 32: Circle K New-Generation Store Image
Circle K New-Generation Store Image Ice Cream Zone Value Zone Hot Drink Zone Hot & In Area 32
Slide 33: Omni-Marketing
Omni-Marketing Traditional Digital Superior customer experience Strong leading to high traditional ratings & social marketing + 4P’s sharing Brands Brands 33
Slide 34: To Summarize
To Summarize Satisfactory 2014 results despite the softening in demand 2015 even more challenging than 2014 Re-inventing ourselves, FingerShopping, Sinopec Project offer exciting future opportunities Expect major changes and actions to position for the future 34
Slide 35: Thank You!
Thank You! 35
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