Milan Station Holdings Limited · HKEX:1150
Milan Station — H1 2011 Earnings Presentation
31 slides from Milan Station's earnings presentation, August 2011
Slide 1: Milan Station Holdings Limited 2011 Interim Results Announcement
Milan Station Holdings Limited (Stock code: 1150) 2011 Interim Results Announcement August 2011
Slide 2: Disclaimer
These materials have been prepared by Milan Station Holdings Limited (the “Company” or “Milan Station”) solely for information use during its investor presentation and may not be taken away, reproduced, redistributed, disseminate, divulge or passed on, directly or indirectly, to any other person (wh
Slide 3: Agenda
1. Company Overview 2. Results Highlights 3. Financial Review 4. Business Review 5. Outlook and Future Plans 3
Slide 4: Company Overview
Company Overview
Slide 5: Business model and customer proposition
Pull Factors Urban lifestyle Lower cost Less storage space Frequent change of brands through trade-ins Environmental-friendly Economically-efficient Local and Overseas Traders Milan Station’s Expertise Identification of latest trends and most popular products Professional advice and
Slide 6: 14 retail shops in HK, the PRC and Macau
14 retail shops in HK, the PRC and Macau strategically located in prime shopping areas 1 Yuen Long Beijing 11 retail shops in HK 2 Beijing Hong Kong Macau 1 Tsuen Wan 1 Shatin 1 Mong Kok 1 Macau 1 Central 3 Causeway Bay 2 Tsimshatsui Photo to be added 1 Kung Tong 6
Slide 7: Promising revenue growth in the PRC
Promising Revenue growth in the PRC Business License on the sale of HK$ 000’ second-hand luggage bags and ornaments from the Administration for Industry and 46,046 Commerce of the PRC in Beijing 2,480 22,628 2008 2009 2010 Exemption on VAT of second- hand products Opening of the first Recorded a No
Slide 8: Awards and accreditations
Note 1: The Quality Tourism Services Scheme is administered by the Hong Kong Tourism Board and designed to promote accredited retail, dining and other establishments to tourists and visitors to Hong Kong alike Note 2: Organized by the Hong Kong Brand Development Council and The Chinese Manufacturers
Slide 9: Brand slogans over the years
• “Good taste also requires economic efficacy” 2001 • “You may pursue, you may own. The shopping formula, 2003 Milan Station, is redefined” • “The most wanted by ladies, I can achieve” 2008 • “The fastest way to get what I want, I am proud of it” 2010 9
Slide 10: Pricing, product examination and inventory management
Pricing Guidelines Product Examination Inventory Management • Guidelines for trade-in and • Average inventory turnover • First product examination at retail retail prices set by the chief days: 43-52 days between 2008 shops by qualified staffs before marketing officer and review on and 2010 the sell
Slide 11: 2011 1H Results Highlights
2011 1H Results Highlights
Slide 12: 1H2011 YOY Growth
1H2011 YOY Growth Turnover HK$ 430.2 mn 21.95% Net profit HK$ 34.2 mn 34.74% Hong Kong operations buoyed by strong consumer sentiment and tourist arrivals Impressive performance in PRC operations Margins on an uptrend Growing brand profile drove customer loyalty 12
Slide 13: Financial Review
Financial Review
Slide 14: Income statement summary 1H 2011 vs 1H 2010
(HK$’000) (%) 1H 2011 1H 2010 YOY Change For The Six Months Ended 30 June Revenue 430,182 352,744 ▲21.95% Cost of Sales 322,515 270,115 ▲19.40% Gross Profit 107,667 82,629 ▲30.30% EBIT 43,095 31,298 ▲37.69% EBITDA 45,183 34,478 ▲31.05% Net Profit 34,156 25,350 ▲34.74% Basic Earnings Per Share (HK ce
Slide 15: Operational data and key financial indicators
1H 2011 1H 2010 YOY Changes Operational Data For the six months ended 30 June Inventories (HK$’000) 114,581 75,276 +52.21% Inventory Turnover (days) 57.1 48.3 +8.8 Debtor’s Turnover (days) 3.2 3.1 +0.1 Creditor’s Turnover (days) - - - 2011 June 30 2010 June 30 YOY Changes Key Financial Indicators As
Slide 16: Revenue by product type, region and price range
By product type By region By price range HK$ Mn (%of revenue) HK$ Mn (%of revenue) HK$ Mn (%of revenue) Within HK$10,000 Unused products Hong Kong The PRC Macau HK$ 10,001-30,000 Second-hand products 23.9 5.56% HK$30,001-50,001 33.1 7.69% Over HK$50,000 18.2 5.16% 57.14% 196.4 45.65% 16.9 4.79% 40.0
Slide 17: Gross profit and margin by region, price range, product type
Gross profit by regions Gross profit by price range Gross profit by product type HK$ Mn HK$ Mn HK$ Mn 54.9 7.7 23.0 6.3 12.1 1.6 59.8 5.3 3.7 54.7 18.6 71.8 90.0 18.7 40.2 50.0 32.5 28.7 1H 2010 1H 2011 1H 2010 1H 2011 1H 2010 1H 2011 Within HK$10,000 HK$ 10,001-30,000 Unused products Second-hand pr
Slide 18: Operating expenses breakdown
Operating expenses breakdown Rents and rates HK$ Mn % of revenue HK$ ‘000 % of revenue 30,000 Rent and rate 7% 450 6.3% Administrative and other operating expenses % of revenue 20,000 6% 400 Selling expenses 5.5% 18.46 27,183 Cost of sales 10,000 19,273 6% 350 49.39 11.04 0 5% 300 40.40 1H 2010 1H 2
Slide 19: Use of IPO proceeds
Allocated Amount Usage up to 30 June 2011 Application (HK$ million) (HK$ million) Expansion of retail network in the PRC 140.0 1.0 Relocating and redecorating existing store in 12.0 0.4 HK Marketing and promotion 17.0 - Development of the “MS” brand product 4.0 - Exploration of online sales channel
Slide 20: Business Review
Business Review
Slide 21: Hong Kong 1H 2011 Revenue
Hong Kong 1H 2011 Revenue: HK$373.2mn ↑ 17.50% YoY • Strong tourist spending and retail sentiment • Demand for super-luxury handbags priced over HK$50,000 continued to increase in both sales volume and sales value, driving up total revenue • Continued to strengthen our competitiveness and leading po
Slide 22: The PRC 1H 2011 Revenue
The PRC 1H 2011 Revenue: HK$33.1mn ↑ 95.86% YoY • Solid retail sector and growing brand profile drove revenue growth • Increase in traffic and sales volume as second-hand luxury handbags gained popularity in the PRC • Prudent and selective store expansion. Secured 2 leases in Beijing and Shanghai re
Slide 23: Macau 1H 2011 Revenue
1H 2011 Revenue: HK$23.9mn Macau ↑ 31.32% YoY • Significant growth in Macau as a result of prosperous gambling and tourism industry 23
Slide 24: Revenue by region and district
Region / District 1H 2010 Revenue 1H 2011 Revenue YOY change Hong Kong Causeway Bay 130,372,778 165,664,560 27.1% Tsim Sha Tsui 82,939,259 95,832,512 15.5% Central 46,607,105 56,015,180 20.2% Mong Kok 32,405,250 33,363,281 3.0% Others 25,272,969 22,311,510 -11.7% 317,597,361 373,187,043 17.5% The PR
Slide 25: Customer loyalty programme, promotions and sponsorship
Customer Loyalty Programme Credit card promotions As of 30 June 2011, total number of Title sponsorship VIP clients increased to 9,129 Joined force with local banks to offer discount to credit In 1H2011, total sales from VIP clients accounted for HK$70.21mn Movies card holders and (up by 180
Slide 26: Outlook and Future Plans
Outlook and Future Plans
Slide 27: Key drivers and headwinds for 2H 2011
In the second half of 2011… Key Drivers • Job security and wealth effect bolster consumer sentiment in HK • Stronger RMB favors tourist spending in HK & Macau • Domestic consumption remains key policy priority in the PRC • Continual urbanization and emerging middle class in the PRC Headwinds • Persi
Slide 28: Store expansion plan to 24 outlets
Aim at opening up to 24 Milan Station outlets We are aggressively reaching out to a number of major mainland cities to speed up our expansion plan in the next 2 years in China by 2013 2 new stores in Beijing Continuously improve the Beijing by end of 2011. current mix of retail stores in HK Shanghai
Slide 29: Online sales channel and development strategy
Persist on our development strategy Develop online Diversify our product mix sales channel • Enhance our leading position in HK • Actively develop the PRC market • Engage experienced designers • Expand customer reach and sales amount at low cost to develop the “MS” brand in • Online sales on E-bay h
Slide 30: Leading position in market niche
Leading position in market niche Well-established retail network with strong brand recognition in prime locations Broad variety of Capable management international brand team names A recognized market leader in retailing of unused and second-hand luxury branded handbags and apparel products 30
Slide 31: Q&A Session
Q&A Session
Milan Station Holdings — H1 2011 Earnings Presentation on 6ix