Convenience Retail Asia Limited · HKEX:831

Convenience Retail Asia — Q3 2008 Earnings Presentation

30 slides from Convenience Retail Asia's earnings presentation, Nov 7, 2008

  1. Slide 1: 3rd Quarter 2008 Results Announcement

    3rd Quarter 2008 Results Announcement 7 November 2008

  2. Slide 2: Agenda

    Agenda „ Current Status, Issues and Challenges „ 2008Q3 Financial Results Highlights „ 2008 Update & Outlook

  3. Slide 3: Current Status, Issues & Challenges

    Current Status, Issues & Challenges

  4. Slide 4: Hong Kong Retail Market

    Hong Kong Retail Market HK Retail Sales Value HK Consumer Price Index 30 8 Sep YTD: +5.0% Sep YTD: +14.1% 25 6.3 23.2 6.1 6.3 Year-on-year % change 5.7 Year-on-year % change 20.0 6 5.4 20 18.6 4.6 4.2 15 13.7 4 12.8 13.0 3.2 11.7 3.0 9.5 10.2 10 7.3 6.9 2.0 2.0 2 5 0 0 Jun Jul 2008 Jan 2006FY 2007FY

  5. Slide 5: Circle K Hong Kong Current Status, Issues & Challenges

    Circle K Hong Kong Current Status, Issues & Challenges „ Significant drop in customer sentiment to spend „ Still very high operating expenses (rental, labour, electricity and transportation) „ Differentiating strategies working well: ¾ “Always Something New” shopping experience ¾ Excellence and dept

  6. Slide 6: Circle K Hong Kong "Always Something New" Promotions

    Circle K Hong Kong “Always Something New” Promotions ASN ASN Media Promotion Mario Bling Bling ASN ASN Badges Confectionery Halloween Promotion Promotion Promotion

  7. Slide 7: Guangzhou Retail Market

    Guangzhou Retail Market GZ Retail Sales Value GZ City Consumer Price Index 30 Sep YTD: +20.6% 10 Sep YTD: +6.8% 26.1 26.1 25.2 8.6 25 8.2 20.8 8 7.5 Year-on-year % change 7.1 Year-on-year % change 19.3 19.9 7.0 18.9 19.3 6.7 20 18.5 5.9 6 5.7 15.0 15 4.7 10.8 4 3.4 10 2.3 2 5 0 0 Jun Jul 2008 Jan 20

  8. Slide 8: Circle K Southern China Current Status, Issues & Challenges

    Circle K Southern China Current Status, Issues & Challenges „ Low market sentiment driven by slumping stock and real estate market, plastic bags levy, Olympics, melamine milk „ Started franchising experiment for the 3rd store „ Performance of Dongguan market has been disappointing due to closing dow

  9. Slide 9: Saint Honore Group Current Status, Issues & Challenges

    Saint Honore Group Current Status, Issues & Challenges „ Overall brand rejuvenation progressing well ¾ Store renovation, new bakery, cake and festive products, marketing and promotion „ 2008 gross margin (and net profit margin) badly affected by increase in raw material cost and factory overhead „ C

  10. Slide 10: Saint Honore Group New Store Design & Products

    Saint Honore Group New Store Design & Products

  11. Slide 11: Q3 Financial Results Highlights

    2008Q3 Financial Results Highlights

  12. Slide 12: Number of Stores

    Number of Stores End of Opened Closed / Sep 2007 Changed to 2008 Franchise Circle K Hong Kong 270 15 (7) 278 Circle K Southern China 77 24 (14) 87 - Guangzhou (owned) 63 18 (8) 73 - Guangzhou (franchised) 1 2 - 3 - Dongguan 9 - (4) 5 - Shenzhen 4 4 (2) 6 Circle K Macau (J.V.) 16 1 (1) 16 Circle K Zh

  13. Slide 13: Group Turnover – 3rd Quarter

    2008 Financial Results Highlights Group Turnover – 3rd Quarter 3,500 2,916.7 3,000 10.8% 2,500 2,231.2 HK$ Million 2,000 1,500 810.8* 898.5* 1,000 209.9 176.9 500 645.6 705.5 0 2006 2007 2007Q3 2008Q3 Circle K St. Honore * Less inter-group sales: HK$11.7M in 2007Q3 and HK$16.9M in 2008Q3

  14. Slide 14: Group Turnover – Sep YTD

    2008 Financial Results Highlights Group Turnover – Sep YTD 3,500 16.5% 2,916.7 3,000 2,487.9* 2,500 2,231.2 2,135.2* HK$ Million 534.6 2,000 357.0 1,500 1,800.7 1,993.3 1,000 500 0 2006 2007 Sep YTD Sep YTD 2007 2008 Circle K St. Honore * Less inter-group sales: HK$22.5M in 2007Q3 and HK$40.0M in 20

  15. Slide 15: Gross Margin / Other Income

    2008 Financial Results Highlights Gross Margin / Other Income 40% 0.4% 37.6% 38% 37.2% 36.5% % of Turnover 36% 34% 33.2% 32% 30% 2006 2007 2007Q3 2008Q3 * Excluding interest income

  16. Slide 16: Store Operating Expenses

    2008 Financial Results Highlights Store Operating Expenses 35% 0.4% 30% 26.7% 26.4% 26.8% 24.7% 25% % of Turnover 20% 15% 10% 5% 0% 2006 2007 2007Q3 2008Q3

  17. Slide 17: Circle K Group Store Operating Expenses

    2008 Financial Results Highlights Store Operating Expenses Circle K Group Store Operating Expenses 30% 24.7% 25.2% 24.9% 24.9% 25% 6.7% 6.6% 7.0% 6.5% % of Turnover 20% 15% 8.2% 8.7% 8.6% 8.3% 10% 5% 9.8% 9.9% 9.6% 9.8% 0% 2006FY 2007FY 2007Q3 2008Q3 Labour Cost Rental Cost Other Expenses

  18. Slide 18: Group Net Profit – 3rd Quarter

    2008 Financial Results Highlights Group Net Profit – 3rd Quarter 100 86.9 75.1 0.4% 80 HK$ Million 60 40 27.8 27.9 20 0 2006 2007 2007Q3 2008Q3

  19. Slide 19: Group Net Profit – Sep YTD

    2008 Financial Results Highlights Group Net Profit – Sep YTD 100 86.9 3.0% 75.1 80 67.3 65.3 HK$ Million 60 40 20 0 2006 2007 Sep YTD Sep YTD 2007 2008

  20. Slide 20: Net Profit By Market

    2008 Financial Results Highlights Net Profit By Market (HK$ Million) 2007Q3 2008Q3 Change Hong Kong and 32.8 38.4 +17.1% Macau Markets China Market (5.0) (10.5) -110.0% Total 27.8 27.9 +0.4%

  21. Slide 21: Net Profit as % of Turnover – 3rd Qtr

    2008 Financial Results Highlights Net Profit as % of Turnover – 3rd Qtr 5% 0.3% 4% 3.4% 3.4% 3.0% 3.1% % of Turnover 3% 2% 1% 0% 2006 2007 2007Q3 2008Q3

  22. Slide 22: Net Profit as % of Turnover – Sep YTD

    2008 Financial Results Highlights Net Profit as % of Turnover – Sep YTD 5% 0.4% 4% 3.4% 3.0% 3.1% % of Turnover 3% 2.7% 2% 1% 0% 2006 2007 Sep YTD Sep YTD 2007 2008

  23. Slide 23: Basic Earnings Per Share – 3rd Qtr

    2008 Financial Results Highlights Basic Earnings Per Share – 3rd Qtr 20 15 0.3% 12.08 11.10 HK Cents 10 3.82 3.83 5 0 2006 2007 2007Q3 2008Q3

  24. Slide 24: Basic Earnings Per Share – Sep YTD

    2008 Financial Results Highlights Basic Earnings Per Share – Sep YTD 20 15 1.0% 12.08 11.10 HK Cents 9.13 9.22 10 5 0 2006 2007 Sep YTD Sep YTD 2007 2008

  25. Slide 25: 3rd Quarter

    2008 Financial Results Highlights 3rd Quarter 2007Q3 2008Q3 Change Number of Stores 454 501 + 10.4% Group Turnover (HK$M) 810.8 898.5 + 10.8% Group Net Profit (HK$M) 27.8 27.9 + 0.4% Net Profit as % of Turnover 3.4% 3.1% - 0.3% Basic Earnings Per Share 3.82 cents 3.83 cents + 0.3%

  26. Slide 26: September YTD

    2008 Financial Results Highlights September YTD Sep YTD Sep YTD Change 2007 2008 Number of Stores 454 501 + 10.4% Group Turnover (HK$M) 2,135.2 2,487.9 + 16.5% Group Net Profit (HK$M) 65.3 67.3 + 3.0% Net Profit as % of Turnover 3.1 2.7 - 0.4% Basic Earnings Per Share 9.13 cents 9.22 cents + 1.0%

  27. Slide 27: 2008 Update and Outlook

    2008 Update and Outlook

  28. Slide 28: Update & Outlook

    2008 Update & Outlook „ Financial tsunami to unfavorably impact on retail sales in 2008Q4 and 2009 „ Pressure on selling prices and gross margin because of the need to maintain market share „ Operating expenses and raw material cost to start downward adjustment in 2009Q2 „ Good opportunities to redu

  29. Slide 29: Update & Outlook: To Summarize

    2008 Update & Outlook To Summarize „ Satisfactory results in 2008Q3 despite market turmoil „ Challenging period ahead because of the financial tsunami „ Quick actions and plan in place to deal with challenges „ Very healthy balance sheet with cash of HK$484M and no bank loan

  30. Slide 30: Thank You!

    Retail : Uf) Thank You!

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