Luk Fook Holdings (International) Limited · HKEX:590
Luk Fook Holdings (International) — FY2014 Earnings Presentation
38 slides from Luk Fook Holdings (International)'s earnings presentation, June 2014
Slide 1: 2013/2014 Annual Results
2013/2014 Annual Results June 2014
Slide 2: Contents
CONTENTS Key Achievements Financial Review Future Plans and Strategies Open Forum Core Competences Company Profile 2
Slide 3: Key Achievements
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Slide 4: Key Achievements for FY2014: Three Record Highs
Key Achievements for FY2014 Reaching Three Record Highs Milestone Revenue surged 43.3% to Group’s largest flagship HK$19 billion, 10th consecutive store worldwide opened in year of record high, 8th Macau in Jun 2013 consecutive year of double digit growth Mainland’s first flagship store opened in Wu
Slide 5: Financial Review
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Slide 6: Financial Highlights
Financial Highlights Y-o-Y (HK$ m) FY2014 FY2013 Change Revenue 19,215 13,412 43.3% Gross Profit 4,214 2,830 48.9% Operating Profit 2,309 1,501 53.8% Profit for the Year 1,867 1,246 49.8% Profit Attributable to Equity Holders 1,865 1,243 50.0% Basic Earnings per Share HK$ 3.17 HK$ 2.11 50.0% Final D
Slide 7: Strong Financial Position
Strong Financial Position (HK$ m) FY2014 FY2013 Y-o-Y Change Average Inventory Turnover (Days) 1 138 days 162 days (24 days) Inventory Level 6,225 4,955 25.6% Net Cash 1,237 1,187 4.2% Bank Borrowings 568 0 N/A Gearing Ratio 2 7.4% N/A N/A Total Debt to Equity Ratio3 24.7% 16.9% 7.8 p.p. Return on E
Slide 8: Operating Performance
Operating Performance (HK$M) 20,000 19,215 30% 24.0% 23.7% 23.2% 21.9% 15,000 21.1% 13,412 20% 11,907 10,000 13.6% 12.9% 11.5% 8,091 11.2% 12.0% 11.5% 9.7% 10% 5,386 11.0% 9.7% 9.3% 5,000 2,309 1,614 1,501 1,867 1,046 891 1,369 1,246 622 524 0 0% FY2010 FY2011 FY2012 FY2013 FY2014 Revenue Operating
Slide 9: Revenue and Profit Analysis
Revenue and Profit Analysis Revenue by Market Revenue by Business Sales1 by Product 14,988 16,164 12,493 78.0%(78.8%) ↑41.8% ↑47.8% ↑53.6% 84.1%(81.5%) 67.2%(62.7%) Hong Kong, Retailing Gold & Platinum Macau & Overseas 618 ↑37.3% 3.2% (3.4%) Licensing 12.7% 4,227 32.8% (15.1%) 2,433 22.0% 22.0% ↑48.
Slide 10: Revenue by Business
Revenue by Business Hong Kong, Macau and Overseas Mainland China 96.8% (93.8%) ↑46.3% 39.0% (35.7%) ↑62.7% Retailing Retailing ↑37.7% 14.6% (15.8%) 3.2% (6.2%) Licensing ↓27.1% ↑42.2% Wholesaling Wholesaling 46.4% (48.5%) 10
Slide 11: Retail Revenue (Self-operated)
Retail Revenue (Self-operated) Retail Revenue by Region Retail Sales Performance FY2014 FY2013 100% 1% 1% 1% 7% 9% 10% Y-o-Y Y-o-Y SSSG SSSG 14% 16% 18% change change 80% Hong Kong 46.4% 22.0% 11.1% 7.2% & Macau 60% Mainland 62.7% 45.9% 36.3% 7.3% China 40% 78% 74% 71% Gold & 59.2% 36.0% 15.1% 9.8%
Slide 12: Retail Revenue by Product
Retail Revenue by Product Hong Kong, Macau & Overseas Mainland China 100% 100% 15% 15% 13% 37% 36% 31% 80% 80% 60% 60% 40% 85% 85% 87% 40% 63% 64% 69% 20% 20% 0% 0% FY2012 FY2013 FY2014 FY2012 FY2013 FY2014 Gold/ Platinum Gem-set Gold/ Platinum Gem-set 12
Slide 13: Average Ticket Size & Average Selling Price
Average Ticket Size & Average Selling Price Average Ticket Size Average Selling Price of Gem-set $ (in terms of respective currency ) $ (in terms of respective currency ) (Self-Operated Only) (Self-Operated Only) 13
Slide 14: Total Operating Expenses
Total Operating Expenses (HK$M) (% of Revenue) / 2,500 12% 10.8% 10.8% 10.0% 10% / 2,000 450 2.3% (↑43%) 124 8% / 1,500 (↑24%) 0.6% 0.5% 87 100 315 2.4% (↑30%) 6% 2.1% 0.7% 686 / 1,000 73 254 0.5% (↑67%) 3.6% 0.6% 67 0.5% 4% 59 411 3.1% 303 2.6% / 500 727 2% 4.2% 555 4.1% (↑31%) 3.8% 501 0 / 0% FY20
Slide 15: CAPEX
CAPEX (HK$M) 350 307 300 87 250 200 184 153 150 40 191 126 100 86 50 16 27 29 42 0 FY2012 FY2013 FY2014 Manufacturing Plants Office & Premises Shops 15
Slide 16: Inventory Analysis
Inventory Analysis Closing Inventories1 (HK$M) FY2013 FY2014 1,599(↑6.8%) Inventory Turnover Days by Market Inventory Turnover Days by Product (Self-operated) FY2014 FY2013 FY2014 FY2013 Gold 67 87 HK & Macau 77 91 Platinum 189 198 Mainland China 241 367 Gem-set 319 317 (including watches) Overall 1
Slide 17: Future Plans and Strategies
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Slide 18: Key Strategies
Key Strategies Revenue Growth Wholesale & Licensing: Maintain 15% growth in no. of licensed shop Become one of the suppliers of “3D-Gold” Online business: Double the existing no. of platform Gross Margin Improvement Increase mix of gem-set Focus on gem-set items of more affordable price range Produc
Slide 19: Extensive Retail Network
Extensive Retail Network For the year Current ended 31 March (as at Y-o-Y % 2014 2013 2012 June 17) Change Hong Kong 45 3.4% 45 37 32 +8 Macau 10 0.8% 10 9 6 +1 Self-operated - Tier I 20 1.6% 20 21 18 -1 - Tier II 38 2.9% 37 34 27 +3 - Tier III & IV 26 2.0% 26 23 16 +3 Sub-total 84 6.5% 83 78 61 +5
Slide 20: Global Distribution Network
Global Distribution Network Northern China Eastern China As at 31 Mar 2014 Self-operated: 21 (21) Self-operated: 17 (17) Licensed: 394 (339) Licensed: 144 (111) Total no. of outlets: 415 (360) Total no. of outlets: 161 (128) Southern China Central China Self-operated: 0 (1) Self-operated: 45 (39) Li
Slide 21: Distribution Network Expansion in FY2015
Distribution Network Expansion in FY2015 Optimise the retail network in Hong Kong and seek superior and prime locations to Hong Kong further strengthen our leading position in the market Target new casinos and resorts for future Macau years Within 5 self-operated shops Mainland China 15% growth in n
Slide 22: E-commerce
E-commerce Platforms Product Offering Target in FY15 E-commerce channels Focus on lower value Double existing no. of in Mainland China product s below platforms including Tmall of RMB3,000 to younger Double the revenue from Taobao customers e-commerce Introduce exclusive products 22
Slide 23: Online Marketing
Online Marketing With booming internet development and change in the internet users’ habits: Double spending on online marketing Shift from desktop advertising to mobile platforms Make efficient use of social media Allocate more resources on video website 23
Slide 24: Open Forum
LUKFOOK GROUP : » . ‘ Open Forum
Slide 25: Core Competences
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Slide 26: Vertical Business Model
Vertical Business Model By adopting vertical business model, the Group enjoys operational efficiency, cost effectiveness, market responsiveness and reliable supply, which has enhanced its competitiveness Extensive distribution network: Self-operated shops Distribution Licensed shops Corporate client
Slide 27: Quality Assurance
Quality Assurance Dual Quality Assurance Authentication Service No Fakes Logo Awarded “Quality Gold Mark” Attained “Authentication of “Natural Jadeite” by Gems & Passed regular checking by Natural Fei Cui (Jadeite)” & Jewelry Trade HK Customs Association of China ONLY subsidiary laboratory of Hong K
Slide 28: Branding
Branding Brand Building Mass media advertising, including the launch of a new TV commercial to further uphold the theme of “Love is beauty” Charity Marketing Campaigns Beauty Pageant Award Sponsorships Continuous branding efforts well-received by the industry and market Awarded “Brand of the Year–Re
Slide 29: Excellent Service
Excellent Service 01 Complimentary Certificate For Jadeite &Diamond 02 Professional Sales Team 03 Product Photo and Comprehensive Checklist on Invoice 04 Gem Examination Microscope 05 Free Engraving Service 06 Free Gift Cards 29
Slide 30: Appealing Product Design
Appealing Product Design Professional jewellery design teams in Hong Kong, Shenzhen and Nansha in the Mainland China Have attained over 150 awards Chuk Kam Jewellery Design Competition 2014 “Origin of Symbiotic Harmony” Award in Open Group “Inspiration of Live” Chuk Kam Jewellery Design Competition
Slide 31: Corporate Social Responsibility
Corporate Social Responsibility 01 Supported Charitable Activities 02 A charitable donation to the “Tung Wah Charity Gala 2013”, held by the Tung Wah Group of Hospitals 03 Title sponsorship of “The 2013 Sedan Chair Race & Bazaar” held by the Sedan Chair Charities Fund 04 Participated in “Food Angel”
Slide 32: Environmental Protection
Environmental Protection 01 Consecutively named the “Prime Awards for Eco- Business” – “Eco Jewellery Corporation” 02 Titled “Hong Kong-Guangdong Cleaner Production Partners (Manufacturing)” 03 Attained the honour of “Excellence Enterprise of National Cleaner Production Audit in Guangzhou” 04 Won th
Slide 33: Company Profile
» - Company Profile 33
Slide 34: About LUKFOOK
About LUKFOOK A leading jewellery retailer in Hong Kong and Mainland China Main Business The Group principally engages in the sourcing, designing, wholesaling, trademark licensing and retailing of a variety of gold and platinum jewellery, gold ornaments and gem-set Milestone Opened the first self-op
Slide 35: Supply Chain
Supply Chain 01 02 03 04 Sourcing and Production Quality Control Distribution Designing (from authorized suppliers) Raw Materials Self-operated Shops Retail revenue Licensed Shops Wholesale revenue Manufacturing Plants Labeling / Corporate Clients QC Wholesale revenue Finished Goods Royalty income**
Slide 36: Licensing Model
Licensing Model Joining Fee Licensing Revenue from Wholesale Royalty Income Fee Income Licensing Model Consultancy Fee Advantages Payment terms: Better understanding of local market Cash On Delivery Rapid market expansion Diversification of investment risk Enhancement of brand recognition Requiremen
Slide 37: Disclaimer
Disclaimer This presentation has been prepared by Luk Fook Holdings (International) Limited (the “Company”), and the information contained herein has not been independently verified. This presentation does not make any explicit or implicit representations or warranties and no undue reliance should b
Slide 38: Thank You!
7\ tee LUKFOOK GROUP Thank You! 38
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