Dfi Retail Group Holdings Limited · SGX:D01
Dfi Retail — Dairy Farm International Holdings — FY2016 Earnings Presentation
20 slides from Dfi Retail's earnings presentation, Mar 3, 2017
Slide 1: 2016 Full Year Results Presentation
2016 Full Year Results Presentation 3rd March 2017
Slide 2: Presentation Disclaimer
Presentation Disclaimer This Document (the “Document”) is for information purposes only. This Document is not intended to form the basis of any investment decision nor does it constitute a recommendation or advice as to how the reader should act on any matter. The information in this Document is an
Slide 3: Agenda
Agenda 2016 Highlights Strategic Initiatives Financial Results Outlook 3 March 2017 3
Slide 4: Investments continuing to support long-term priorities
Investments continuing to support long-term priorities Consumer-centric retailing IT Systems Range innovation (e.g. RTE) Exceptional availability and value Fresh DCs Corporate Brand Direct Sourcing Market leading accessibility IKEA online and Pick-up-Points E-commerce in Food, He
Slide 5: Profits buoyed by margin gains and associate contributions
Profits buoyed by margin gains and associate contributions Sales of subsidiaries up 2%*; total sales up 17%* Underlying net profit up 8%* to US$460m; stronger second half Margins up in Food, Home Furnishings; Health and Beauty lower Increased contribution from Yonghui and Maxim’s Final div
Slide 6: Greater China solid, margin improvement in Southeast Asia
Greater China solid, margin improvement in Southeast Asia Greater China Southeast Asia Sales: +5% -2% Op. Profit: Flat +43% • Hong Kong profit slightly down • Singapore profit recovery • 7/11 China expansion continues • Margin gains in Indonesia • Improved profit in Taiwan • Philippines turnaround •
Slide 7: Improved performance in key countries; although still work to do
Improved performance in key countries; although still work to do Sales Flat Op. Profit Slightly down Factors Rent, labour Store closures Price controls Store closures, trader sales curtailed Sales and operating profit of subsidiaries, in constant currency 3 March 2017 7
Slide 8: Pleasing progress in emerging businesses
Pleasing progress in emerging businesses Country Format Highlights H&B Rose integration Supers/Hypers RSCI profit turnaround Convenience 7-Eleven network expansion to 828 stores and increasing profitability Yonghui Yonghui significant network expansion (up 105 stores to 487 stores) and margin gains
Slide 9: Across formats, performance was more even
Across formats, performance was more even Sales Op Profit Stores – +13% -8 +5% +15% +46 +4% -5% -100 +6% +12% – +7% +4%* +71 +17%* +105%* +105 All in constant currency *Restaurants share of profit after tax; Yonghui represents full year movement 3 March 2017 9
Slide 10: Supermarkets and Hypermarkets
Supermarkets and Hypermarkets Fresh and Corporate Brand remain key priorities Fresh penetration +0.6% New fresh DC in Singapore Private label penetration +0.1% Improved international sourcing to leverage Group scale Hong Kong e-commerce enhancement 3 March 2017 10
Slide 11: Convenience Stores
Convenience Stores Ready-to-Eat and Guangdong expansion are biggest opportunities RTE participation +0.8% China network growth 7-Eleven Japan collaboration Enhanced service offers Direct sourcing 3 March 2017 11
Slide 12: Health and Beauty
Health and Beauty Range enhancements and network expansion key Private label participation +0.2% Optimize health range wherever practicable Stronger beauty offer New Rose Pharmacy e-commerce Solid base in high growth markets (Indonesia, Philippines, China, Vietnam) 3 March 2017 12
Slide 13: Home Furnishings
Home Furnishings Improving accessibility the biggest opportunity for IKEA Property expansion E-commerce launch Three new pickup points 3 March 2017 13
Slide 14: Restaurants
Restaurants Concept and product innovation driving growth at Maxim’s Product innovation (e.g. Lava Custard Mooncakes) New market expansion Introduction of new brands (e.g. Cova, The Cheesecake Factory) 3 March 2017 14
Slide 15: Solid improvement in profits
Solid improvement in profits Profit and Loss (US$’m) 2016 %△ CCY %△ Sales - Including Associates & JVs 20,424 14 17 - Reported 11,201 1 2 Operating Profit 459 6 7 Share of Results of Associates and JVs 118 39 42 Underlying Net Profit 460 7 8 Underlying EPS (US¢) 34.03 7 8 Fin
Slide 16: Growth in most formats despite market pressures
Growth in most formats despite market pressures △ △ Sales CCY (US$ m) 2016 2015 % % Food 8,168 8,197 n 0 1 Supermarkets & Hypermarkets 6,217 6,316 2 n 0 Convenience Stores 1,951 1,881 4 5 Health and Beauty 2,436 2,373 3 4 Home Furnishings 597 568 5 6 Key Associates Maxim's 2,019 1,88
Slide 17: Pleasing margin progress in Food
Pleasing margin progress in Food △ Op. Profit 2016 Margin1 (US$ m) 2016 % 2015 pp Food 267 3.3 0.4 Supermarkets & Hypermarkets 194 3.1 0.4 Convenience stores 73 3.8 0.4 Health and Beauty 175 7.2 0.6 Home Furnishings 71 11.8 0.6 513 4.6 0.2 Support Office (60) Underlying Operating Profit
Slide 18: Increase in debt due to YH subscription and working capital
Increase in debt due to YH subscription and working capital Higher working capital driven by timing of supplier payments and increased stock due to earlier CNY Net debt increased US$159m to US$641m Debt refinancing to extend maturity profile Underlying EBITDA up 3% to US$665m 3 March 2017 18
Slide 19: Capital expenditure 2016
Capital expenditure 2016 Additional investment in Yonghui Lower normal capital expenditure: -19% Supply chain/other New stores 7% IT 19% 36% Capex Total = (US$'m) US$245m 304 245 Store 38% refurbishment 2015 2016 3 March 2017 19
Slide 20: Positive about long-term prospects despite immediate pressures
Positive about long-term prospects despite immediate pressures Trading conditions remain uncertain Entering 2017 with some positive momentum Investing purposefully to meet changing consumer needs 2017 focus on growing sales whilst holding margin gains Continue to invest for long term growt
Dairy Farm International Holdings — FY2016 Earnings Presentation on 6ix