Convenience Retail Asia Limited · HKEX:831

Convenience Retail Asia — FY2018 Earnings Presentation

40 slides from Convenience Retail Asia's earnings presentation, Mar 13, 2019

  1. Slide 1: Convenience Retail Asia Limited 2018 Annual Results Announcement

    Convenience Retail Asia Limited 2018 Annual Results Announcement 13 March 2019

  2. Slide 2: Agenda

    Agenda  Hong Kong Retail Market Key Highlight  2018 Financial Results Highlight  2019 Outlook 2

  3. Slide 3: Hong Kong Retail Market Key Highlight

    HONG KONG RETAIL MARKET KEY HIGHLIGHT 3

  4. Slide 4: 2018 Retailing In Hong Kong Definitely not easy

    2018 Retailing In Hong Kong Definitely not easy % YOY % YOY 20 Total Retail Sales 10 Supermarkets Sales 15 10 8.7 7.6 4.6 5 2.2 1.9 5 0 1.0 1.3 1.2 0.8 -5 -0.2 -0.2 -1.5 -3.7 0 -8.1 -7.1 -0.2 -10 -0.7 -0.8 -15 -2.0 -1.9 -20 -5 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 Value Voulme Value Volu

  5. Slide 5: Hong Kong Retail Market

    Hong Kong Retail Market Hong Kong Economic Times 6/3/2019 Hong Kong Economic Times 6/3/2019 The Standard 3/1/2019 Ming Pao Daily News 14/2/2019 Ming Pao Daily News 12/2/2019 Oriental Daily News 21/12/2018 5

  6. Slide 6: The 3 "Plus" Strategies

    The 3 “Plus” Strategies ASN Fun & “Internet+” Novelty Customer 1. Focus on “Internet Plus” customers 2. Deliver “4P’s Plus” relevant customer experience 3. Transition to “B&M Plus” (O2O) business models 6

  7. Slide 7: 3 "Plus" Strategies Driving Growth

    3 “Plus” Strategies Driving Growth 7

  8. Slide 8: OK Stamp It

    OK Stamp It – Customer Engagement Tools Within App 2. For Fun 3. Social 4. e-Gift 5. Customer 6. O2O 1. For Value Sharing Coupon Experience Lucky Draw © Copyright 2018 Circle K Convenience Stores (HK) Ltd. All rights reserved. Patented. 8

  9. Slide 9: O2O Shake Shake Lucky Star

    O2O Shake Shake Lucky Star – Offline to Online Lucky Draw Game © Copyright 2018 Circle K Convenience Stores (HK) Ltd. All rights reserved. Patented. 9

  10. Slide 10: OK Stamp It – Total Members

    0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 21/06/2016 10/07/2016 29/07/2016 17/08/2016 05/09/2016 24/09/2016 13/10/2016 01/11/2016 20/11/2016 09/12/2016 28/12/2016 16/01/2017 04/02/2017 23/02/2017 14/03/2017 02/04/2017 21/04/2017 10/05/2017 29/05/2017 17/06/2017 06/07/2017 25/07

  11. Slide 11: Circle K Sales Sustaining Quality Growth

    Circle K Sales Sustaining Quality Growth 2017: Circle K sales grew 7% vs. other CVS 2% 2018: Circle K sales grew 4% vs. other CVS 3% Source: Nielsen 2017 & 2018 Business Review 11

  12. Slide 12: OK Stamp It Won Multiple Awards

    OK Stamp It Won Multiple Awards Marketing Magazine Global Awards for Retail Excellence by - Mob-Ex Awards 2018 the Asia Retail Congress & Economic Times Gold for Best App - Targeted Demographic Sliver for Best App - Consumer Brand Sliver for Best Reform of App - Asia eCommerce Awards 2018 Silver for

  13. Slide 13: Re-inventing Strategy Lifting Customer Experience

    Re-inventing Strategy Lifting Customer Experience Cake Easy eCRM exceeded 500,000 members by end of 2018 13

  14. Slide 14: Fast Fashion Eyewear Chain from Japan

    Fast Fashion Eyewear Chain from Japan • Japan Quality • Always Fresh / Fast Service • Value for Money

  15. Slide 15: The First Store In Hong Kong

    The First Store In Hong Kong City Plaza, Taikoo (opened 25th November 2017) 15

  16. Slide 16: The Second Store In Hong Kong

    The Second Store In Hong Kong Telford Plaza, Kowloon Bay (opened 23rd February 2018) 16

  17. Slide 17: The Third Store In Hong Kong

    The Third Store In Hong Kong Sunshine City, Ma On Shan (opened 21st July 2018) 17

  18. Slide 18: The Fourth Store In Hong Kong

    The Fourth Store In Hong Kong V City, Tuen Mun (opened 7th September 2018) 18

  19. Slide 19: The Fifth Store In Hong Kong

    The Fifth Store In Hong Kong Langham Place, Mongkok (opened 10th October 2018) 19

  20. Slide 20: Langham Place Opening Ceremony

    Langham Place Opening Ceremony - 20th October 2018 Popup shop at Langham Place 20

  21. Slide 21: The Sixth Store In Hong Kong

    The Sixth Store In Hong Kong TKO Plaza, Tseung Kwan O (opened 22nd December 2018) 21

  22. Slide 22: 2018 Financial Results Highlight

    2018 FINANCIAL RESULTS HIGHLIGHT 22

  23. Slide 23: Number of Stores

    Number of Stores End of End of Opened Closed 2017 2018 Circle K Hong Kong 332 9 (4) 337 Circle K Guangzhou (franchised) 64 6 (9) 61 Circle K Macau (franchised) 29 5 (2) 32 Circle K Zhuhai (franchised) 16 1 (4) 13 Saint Honore HK & Macau 102 4 (6) 100 Saint Honore China 41 - (10) 31 Zoff 1 5 - 6 CRA

  24. Slide 24: Group Turnover

    Group Turnover 2nd Half Full Year 4,000 +3.0% +4.4% 6,000 5,320* 2,746* 5,094* 3,000 2,667* 1,092 1,120 HK$ Million HK$ Million 601 597 4,000 2,000 1,000 2,106 2,192 2,000 4,077 4,284 0 0 2017 2018 2017 2018 Circle K Saint Honore Circle K Saint Honore  Less inter-group sales: HK$40M in 2H2017 & HK$

  25. Slide 25: Gross Profit & Other Income

    Gross Profit & Other Income 2nd Half Full Year 42 40 38.1 40 39.0 38 36.9 % of Turnover % of Turnover 38 37.5 36 36 34 34 32 32 30 30 2017 2018 2017 2018 25

  26. Slide 26: Group Store Operating Expenses

    Group Store Operating Expenses 2nd Half Full Year 30 30 +0.6% +0.6% 28 28 27.0 26.9 26.4 26.3 % of Turnover % of Turnover 26 26 24 24 22 22 20 20 2017 2018 2017 2018 26

  27. Slide 27: Group Net Profit

    Group Net Profit 2nd Half Full Year 150 +24.3% 250 +21.9% 116 183 200 HK$ Million HK$ Million 100 93 150 150 100 50 50 0 0 2017 2018 2017 2018 27

  28. Slide 28: Net Profit by Market

    Net Profit by Market (HK$ Million) Full Year 2017 2018 Change Hong Kong & Macau Markets 169 190 12.4% Southern China Market (5) (6) -6.7% Developing Businesses (14) (1) 92.6% CRA Group Net Profit 150 183 21.9% 28

  29. Slide 29: Group Net Profit as % of Turnover

    Group Net Profit as % of Turnover 2nd Half Full Year 5 6 +0.7% +0.4% 5 4 4.2 3.4 3.5 3.0 % of Turnover % of Turnover 4 3 3 2 2 1 1 0 0 2017 2018 2017 2018 29

  30. Slide 30: Basic Earnings Per Share

    Basic Earnings Per Share 2nd Half Full Year 20 +24.3% 30 +21.7% 15.19 25 24.03 15 19.75 HK Cents 12.22 20 HK Cents 10 15 10 5 5 0 0 2017 2018 2017 2018 30

  31. Slide 31: 2018 Financial Results Highlight – 2nd Half

    2018 Financial Results Highlight – 2nd Half 2H2017 2H2018 Change Number of Stores 585 580 -5 Group Turnover (HK$M) 2,667 2,746 3.0% Group Net Profit (HK$M) 93 116 24.3% Net Profit as % of Turnover 3.5% 4.2% 0.7% Basic Earnings Per Share (HK cents) 12.22 15.19 24.3% 31

  32. Slide 32: 2018 Financial Results Highlight – Full Year

    2018 Financial Results Highlight – Full Year 2017FY 2018FY Change Number of Stores 585 580 -5 Group Turnover (HK$M) 5,094 5,320 4.4% Group Net Profit (HK$M) 150 183 21.9% Net Profit as % of Turnover 3.0% 3.4% 0.4% Basic Earnings Per Share (HK cents) 19.75 24.03 21.7% Dividends (HK cents)  Interim D

  33. Slide 33: 2019 Outlook

    2019 OUTLOOK perem ee | "I La mE a aah ioe 33

  34. Slide 34: 2019 Hong Kong Retail Market More Challenging Than 2018

    2019 Hong Kong Retail Market More Challenging Than 2018 % YOY Supermarkets Sales 10 Value Volume 4.6 5 1.0 1.3 1.2 0.8 0 -0.7 -0.2 -0.8 -1.9 -2.0 -5 2014 2015 2016 2017 2018  Stagnant market yet rising operating expenses 34

  35. Slide 35: We Have The Right Strategies

    We Have The Right Strategies ASN Fun & “Internet+” Novelty Customer 35

  36. Slide 36: A.I. Retailing (A.I.R.) Zone in Circle K

    A.I. Retailing (A.I.R.) Zone in Circle K Circle K Causeway Bay Excelsior Store Circle K Liberte Place Cheung Sha Wan Store 36

  37. Slide 37: All About Executing Right

    All About Executing Right  Clearly defined brand values, customer experience and differentiation  Always staying up-to-date and relevant  Always reinventing 37

  38. Slide 38: To Conclude

    To Conclude ASN Fun & “Internet+” Novelty Customer 38

  39. Slide 39: Circle K Just Take It Easy!

    Circle K Just Take /t Easy!

  40. Slide 40: Thank You!

    THANK YOU! 40

Convenience Retail Asia — FY2018 Earnings Presentation on 6ix