China Resources Beer (holdings) Co. Ltd. · HKEX:291
China Resources Beer (holdings) — China Resources Enterprise — H1 2002 Earnings Presentation
33 slides from China Resources Beer (holdings)'s earnings presentation, Sep 4, 2002
Slide 1: China Resources Enterprise Interim Results 2002: Restructuring Efforts Start to Pay Off
China Resources Enterprise, Limited Interim Results 2002 Restructuring Efforts Start to Pay Off September 4, 2002
Slide 2: Table of Content
Table of Content Interim Highlights pp. 3 – 4 Financial Summary pp. 5 – 10 Business Review pp. 11 – 29 Prospects pp. 30 – 32 Disclaimer pp. 33 “Restructuring efforts start to pay off” 2
Slide 3: Opening Note / Interim Highlights
China Resources Enterprise, Limited Interim Result 2002 Opening Note / Interim Highlights Mr. Charley Song Deputy Chairman & Managing Director “Restructuring efforts start to pay off” 3
Slide 4: Interim Highlights
Interim Highlights Earnings excluding profit from asset disposal maintained in the absence of significant property development and banking profits, reflecting initial results of our restructuring exercise Interim dividend raised to HK9¢ from HK8¢ Earnings from petroleum and chemical business d
Slide 5: Financial Summary
China Resources Enterprise, Limited Interim Result 2002 Financial Summary Mr. Francis Kwong Executive Director “Restructuring efforts start to pay off” 5
Slide 6: Interim Summary
Interim Summary Year end 31 Dec H1 2002 H1 2001 % change HK$m HK$m Turnover 12,933 12,059 +7 Earnings 720 788 -9 Earnings ex-asset disposal profit * 720 729 -1 EPS (HK¢) 34.9 39.3 -11 DPS (HK¢) 9.0 ** 8.0 +13 Interim dividend payout ratio (% ) 26 20 +27 * Earnings excluding the profit of HK$59.1m fr
Slide 7: Turnover Breakdown – by Divisions
Turnover Breakdown – by Divisions Year end 31 Dec H1 2002 Prop (% ) H1 2001 Prop (% ) % change HK$m HK$m Petroleum and chemicals 4,558 35 5,150 42 -11 Retail 2,638 20 1,894 16 +39 Food processing and distribution 2,389 18 2,854 24 -16 Beverage 1,846 14 1,131 9 +63 Textile 1,000 8 0 0 na Property 303
Slide 8: Earnings Breakdown – by Divisions
Earnings Breakdown – by Divisions Year end 31 Dec H1 2002 Prop (% ) H1 2001 Prop (% ) % change HK$m HK$m Petroleum and chemicals 181 23 91 10 +100 Retail 17 2 (6) (1) na Food processing and distribution 172 22 221 25 -22 Beverage 42 5 48 5 -13 Textile 43 6 0 0 na Property 141 18 249 28 -43 Investmen
Slide 9: Geographical Breakdown of Turnover and Profit
Geographical Breakdown of Turnover and Profit The proportion of turnover and profit before tax from mainland China increased to 40% and 25% respectively in H1 2002, compared with 31% and 22% in H1 2001 Turnover Profit before tax 4 3 7 3 1 4 100 100 65 65 53 76 71 87 50 50 % % 40 31 32 25 22 13 0 0
Slide 10: Key Financial Data
Key Financial Data Year end 31 Dec H1 2002 FY2001 H1 2001 yoy % change P&L Finance costs (HK$m) 171 423 223 -23 Interest income (HK$m) 78 255 156 -50 Capitalised interest (HK$m) 0 0 0 na Balance Sheet Current ratio (% ) 173 160 168 +3 Net cash/(debt) (HK$m) -386 -1,685 -625 na Shareholders' equity (
Slide 11: Business Review
China Resources Enterprise, Limited Interim Result 2002 Business Review Mr. Francis Kwong Executive Director “Restructuring efforts start to pay off” 11
Slide 12: Petroleum and Chemicals
Petroleum and Chemicals Earnings doubled due to higher wholesaling margin of petroleum, turnaround of chemicals distribution business and continued growth of the local retail business Overall weaker oil prices year on year in H1 2002 explained the fall in turnover, but between January and June t
Slide 13: Petroleum and Chemicals: Turnover Breakdown
Petroleum and Chemicals Turnover breakdown of petroleum and chemicals distribution Year end 31 Dec H1 2002 H1 2001 % change HK$m HK$m Petroleum - Diesel 1,447 1,999 -28 - Fuel oil 1,303 1,379 -6 - Jet fuel 472 463 +2 - Others (lubricant, additive etc) 294 236 +25 LPG 257 306 -16 Petrochemicals 438 3
Slide 14: Retail: Turnover and Earnings Breakdown
Retail Retail business turnover and earnings breakdown Year end 31 Dec H1 2002 H1 2001 % change HK$m HK$m Turnover - Supermarket 1,665 1,072 +55 - Department stores in HK 573 514 +11 - Brand-fashion in China 399 307 +30 2,638 1,894 +39 Earnings - Supermarket 3 1 +182 - Department stores in HK 7 (17)
Slide 15: Retail: Supermarket
Retail 1. Supermarket Overall 55% turnover growth and improvement in profitability Turnover from China supermarkets rose by almost two times and EBITDA 72% though earnings were affected by initial start up costs Number of stores in China increased from 321 to 379 during H1 2002 whilst that in
Slide 16: Retail: Supermarket Turnover, EBITDA and Earnings
Retail Supermarket turnover, EBITDA and earnings breakdown Year end 31 Dec H1 2002 H1 2001 % change HK$m HK$m Turnover - HK 793 773 +3 - China 872 300 +191 1,665 1,072 +55 EBITDA - HK 18 18 -1 - China 23 13 +72 41 31 +30 Earnings - HK 2 (4) -165 - China 1 5 -75 - adjustment (1) 0 3 1 +182 “Restructu
Slide 17: Retail: Supermarket Network
Retail Supermarket network 30-Jun-02 31-Dec-01 30-Jun-01 No of self-operated stores - Hong Kong 71 70 68 - Beijing 22 19 17 - Tianjin 57 52 50 - Suzhou 97 98 88 - Xuzhou 1 1 - Zhongshan 23 - Shenzhen 100 84 56 370 324 280 No of franchised stores - Beijing 2 2 2 - Tianjin 2 2 2 - Suzhou 4 3 1 - Zhong
Slide 18: Retail: Department Stores and Brand-fashion
Retail 2. Department stores and brand-fashion Hong Kong department store business turned around with earnings contribution of HK$7m compared with a loss of HK$17m in H1 2001 Turnover grew 11% due to effective marketing campaigns, strong closure and renovation sales Chinese Arts & Crafts and CR
Slide 19: Retail: Brand-fashion Business in the Chinese Mainland
Retail Brand-fashion business in the Chinese Mainland 30-Jun-02 31-Dec-01 30-Jun-01 No of self-operated stores No of franchised stores Alfred Dunhill 29 6 26 6 23 6 Blue Navy 16 9 8 0 0 0 Bruno Magli 5 0 3 0 0 0 CK Jeans 13 2 4 0 0 0 Christian Lacroix 1 0 0 0 0 0 Emanuel Ungaro 2 0 0 0 0 0 Esprit/Re
Slide 20: Food Processing and Distribution
Food Processing and Distribution EBIT only declined by 3% despite the challenging environment Earnings contribution decreased by 22% mainly due to the loss of HK$50m interest income after a post-privatization dividend-payout Fall in foodstuff distribution turnover predominantly due to the upli
Slide 21: Food Processing and Distribution: Ng Fung Hong Breakdown
Food Processing and Distribution Turnover breakdown of Ng Fung Hong Year end 31 Dec H1 2002 H1 2001 % change HK$m HK$m Foodstuff distribution 1,531 1,918 -20 Food processing and stock raising 749 759 -1 Abattoir operation, transportation and others 154 225 -32 Inter-co transactions (46) (47) -4 2,38
Slide 22: Beverage
Beverage Earnings contribution of HK$42m represents a major recovery from HK$13m in H2 2001, despite a small decline from H1 2001 Became the second largest brewer in the mainland in terms of sales volume (third largest in FY2001) Beer sales volume soared 73% yoy to 1,129,000 k litres in H1 200
Slide 23: Beverage: Breweries and Snow Brand
Beverage Initial losses of newly acquired breweries have narrowed whilst existing breweries reported a 5% volume growth Sichuan breweries (62%-owned by CRB) contributed earnings of HK$26m to CRB after restructuring compared with a loss of HK$9m (from Leshan and Mianyang before merger with Blue S
Slide 24: Beverage: Sales Volume by Brewery
Beverage Sales volume by brewery Year end 31 Dec Province Area No of H1 2002 H1 2001 % change breweries '000 k litre '000 k litre Existing breweries Shenyang Liaoning North East 3 205 195 +5 Dalian Liaoning North East 1 84 86 -3 Jilin Jilin North East 1 106 94 +13 Tianjin na Central 1 48 48 -1 Ansha
Slide 25: Textile
Textile The acquisition of the business was completed in January 2002 with five months' contribution during the period First half was slow due to seasonality, relatively high cotton prices, weakened demand from US and surge in quota costs Technology upgrade will enhance productivity and around
Slide 26: Textile: H1 2002 Turnover and Operating Profit Breakdown
Textile Breakdown of H1 2002 turnover Breakdown of H1 2002 operating profit 33% 17% 6% 8% 17% 21% 60% 38% Textile trading Spinning and weaving Textile trading Spinning and weaving Garment trading Others Garment trading Others “Restructuring efforts start to pay off” 26
Slide 27: Property
Property Property development profit became insignificant as Villa Esplanada was already completed last year with all units predominantly sold Rental income slightly affected by the property downturn as most of our properties are for retail use with high occupancy rates Property business turnove
Slide 28: Property: Warehouse and Rental Occupancy
Property Warehouse profit fell 10% with occupancy rates for the godown and cold storage businesses fell to 85% and 82% respectively from 88% and 85% Average rental rate for the cold storage business increased by 5% in H1 2002 whilst that of the godown business was flat Pak Sik godown has start
Slide 29: Investments and Others
Investments and Others HIT’s local and Yantian operations reported overall throughput growth of 18% and an EBIT growth of 10% Weak local property market and lack of large scale infrastructure projects led to a 51% slide in earnings at Redland Concrete Measures have been taken to control costs
Slide 30: Prospects
China Resources Enterprise, Limited Interim Result 2002 Prospects Mr. Charley Song Deputy Chairman & Managing Director “Restructuring efforts start to pay off” 30
Slide 31: Prospects
Prospects Restructuring efforts have started to pay off as we have successfully reduced our reliance on the property development sector in Hong Kong We will commence the announcement of quarterly results on a voluntary basis starting from Q3 2002 so that investors can clearly measure the progres
Slide 32: Prospects: Retail Growth Plan
Prospects With the special approval from the State Economic & Trade Commission, the acquisition of China Resources Vanguard is an important step to implement our retailing plan of achieving RMB50bn turnover in mainland China in five years We anticipate rising significance of our supermarket turn
Slide 33: Disclaimer
Disclaimer Data and information contained in this presentation is provided for informational purposes only. Neither China Resources Enterprise, Limited nor any of its subsidiaries shall be liable for any errors or delays in the content, or for any actions taken in reliance thereon. This presentation
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