China Resources Beer (holdings) Co. Ltd. · HKEX:291
China Resources Beer (holdings) — China Resources Enterprise — FY2012 Earnings Presentation
32 slides from China Resources Beer (holdings)'s earnings presentation, Mar 21, 2013
Slide 1: Financial and operational preview FY 2012
Financial and operational p review FY 2012 21 March 2013 1
Slide 2: Results Summary
Q4 2012 Q4 2011 change FY2012 FY2011 change Results Summary (restated)** (restated)** HK$m HK$m HK$m HK$m Turnover 28,068 26,139 +7% 7% 126,236 110,164 +15% 15% EBITDA 1,504 1,166 +29% 9,920 8,243 +20% Earnings 572 478 +20% 3,945 3,013 +31% Underlying net profit* profit (272) - -100% 100% 1 527 1,52
Slide 3: Turnover Breakdown - by Divisions
Turnover Breakdown - by Divisions Q4 Prop Q4 Prop change FY 2012 Prop FY 2011 Prop change 2012 2011 HK$m HK$m HK$m HK$m Core businesses Retail 20,439 73% 18,052 69% +13% 83,506 66% 70,088 63% +19% Beer 4 278 4,278 15% 4 585 4,585 17% -7% 28 064 28,064 22% 26 689 26,689 24% +5% Food 2,629 9% 2,968 11
Slide 4: Underlying Net Profit Breakdown - by Divisions
Underlying Net Profit Breakdown - by Divisions Q4 Prop Q4 Prop change FY 2012 Prop FY 2011 Prop change 2012 2011 (restated) (restated) HK$m HK$m HK$m HK$m Core businesses Retail (202) 95% 77 265% -362% 525 31% 808 41% -35% Beer (55) 26% (78) (269%) +29% 823 49% 785 40% +5% Food 47 (22%) 24 83% +96%
Slide 5: Segment assets
Segment assets Unique with four consumer businesses complementing each other Distribution of segment g assets: Movement in balance sheet items 31 Dec 12 31 Dec 11 change Beer (restated) HK$m HK$m 33% Assets: $42bn Total assets 127,488 113,649 +12% Liabilities: ($21bn) Total liabilities (73 704) (7
Slide 6: Change in operating cashflow
Change in operating cashflow CAPEX FY 2012 FY 2011 % change HK$m HK$m Grasping opportunities through expansion Cash inflow +8,939 +7,799 +15% 15.0 10.2 10.0 04 0.4 8.1 0.7 8.3 0.5 0.5 $bn 1.5 5.1 HK$ 3.9 5.0 3.0 ## 3.7# 4.0 3.3 - FY 2012 FY 2011 FY 2013 (budget) ( g ) Retail Beer Food Beverage # T
Slide 7: Beer (No.1 brand by volume in the world since 2008)
Beer (No.1 brand by volume in the world since 2008) Growth through: Solidifying market leader position and upgrade of product mix Q4 Q4 change FY 2012 FY 2011 change 2012 2011 HK$m HK$m HK$m HK$m Sales volume (million KL) 1.58 1.63 -3% 10.64 10.24 +4% Turnover 4,278 4,585 -7% 7% 28,064 26,689 +5%
Slide 8: Beer: geographical distribution of breweries
Beer (No.1 brand by volume in the world since 2008) Growth through: Solidifying market leader position and upgrade of product mix Geographical distribution of the breweries 5(1.1mkl) [-] Heilongjiang gj g Having presence in 22 out of 34 regions/cities (incl., autonomous regions, municipalities and
Slide 9: Beer: market share
Beer (No.1 brand by volume in the world since 2008) Growth through: Solidifying market leader position and upgrade of product mix Distribution of China beer market share: Total market share of top 4 players was 58% in 2011, of which Snow has 21%. 100% 18% 18% 20% 21% 21% 22% 80% In 2012 13% 14% 14
Slide 10: Beer: strong robust growth in turnover and profitability
Beer (No.1 brand by volume in the world since 2008) Strong robust growth in both turnover and profitability I HK$’m In HK$’ In HK$ HK$’m m 30,000 900 20,000 600 10,000 300 - - 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Turnover Earnings UNP "Brav
Slide 11: Retail
Retail Growth through: Multi-format with regional leadership Q4 Q4 Change FY 2012 FY 2011 change 2012 2011 HK$ HK$m HK$ HK$m HK$m HK$m (restated) (restated) Turnover 20,439 18,052 +13% 83,506 70,088 +19% Underlying EBITDA # 341 529 -36% 2,869 2,831 +1% Underlying net profit # (202) 77 -362% 525 80
Slide 12: Retail: Comparable margin
R t il Retail Growth through: Multi-format with regional leadership Reconciliation of underlying net profit margin Comparable UNP margin for those regions/business with scale FY 2012 FY 2011 % Comparable margin 1.5 1 3% 1.3% 1 3% 1.3% 0.7% 0.1% Loss incurred from UNP margin 1.2% Loss incurred from
Slide 13: Retail: geographical distribution of retail network
Notation: Retail shop no. (no. of hypermarket) [addition in past 12 months] Region Northern areas Retail New region 4 (4) [2] Inner Mongolia Growth through: Multi-format with regional leadership 4 (4) [-] Jilin Geographical distribution of retail network Northern west areas 130 ((19)) [3] Beijing
Slide 14: Retail: Winning market share by multiple-format
Retail Growth through: Multi-format with regional leadership Business model Winning market share by Multiple-format Multiple format store approach Multiple distribution centres (more than 12 D.C.) Trade-upp strategy gy Innovative in format Regional focus "Braving challenges" 14
Slide 15: Retail
Retail Growth through: Multi-format with regional leadership In a shopping mall In a city 6 formats in Guangzhou 5 formats in Beijing 5 formats in Nanjing: Taikoo Hui (Swire properties): Galleria (CR Land): "Braving challenges" 15
Slide 16: Food
Food Growth through: Quality premium products Q4 Q4 change FY 2012 FY 2011 change 2012 2011 HK$ HK$m HK$ HK$m HK$m HK$m (restated) (restated) Turnover 2,629 2,968 -11% 10,379 10,706 -3% Underlying EBITDA 138 91 +52% 662 639 +4% Underlying net profit 47 24 +96% 259 263 -2% Underlying EBITDA margin
Slide 17: Food: Supply base distribution
Food Growth through: Quality premium products Supply base distribution Hong Kong Source: Company data "Braving challenges" 17
Slide 18: Beverage
Beverage Growth through: strong partnership with Kirin Q4 Q4 change FY 2012 FY 2011 change 2012 2011 HK$ HK$m HK$ HK$m HK$m HK$m Sales volume (million KL) 0.65 0.54 +20% 3.51 2.64 +33% Turnover 858 650 +32% 4 766 4,766 3 112 3,112 +53% EBITDA 10 27 -63% 263 243 +8% Earnings (#) (2) 4 -150% 144 138
Slide 19: Beverage: Geographical distribution
Beverage Growth through: strong partnership with Kirin Geographical g p distribution Having presence in 8 out of 34 regions/cities (incl. autonomous regions, municipalities and SAR) in China Number of beverage plant: 27 (8 own factories; 19 OEM factories*) 2* Hebei 1 3* 1, Sichuan 5* Jiangsu 3* Hu
Slide 20: Appendix I – Details of Retail formats
Appendix I – Details of Retail formats 31 Dec 12 30 Sep 12 31 Dec 11 App. Average Major % of Average Self- Self- Self- Format brands areas turnover GP operated Franchised operated Franchised operated Franchised (sq.m) margin over I. Hypermarket 5,000 5 000 app.78% pp 19% 571 13 554 16 493 16 II. Sta
Slide 21: Appendix II – Historical track record of CRE
Appendix II – Historical track record of CRE Strong growth momentum in each businesses Retail (incl. investment property, Beer HK$’mn excl. non-core assets) HK$’mn HK$’mn HK$’mn 100,000 3,500 30,000 1,000 3,000 80,000 800 2,500 20 000 20,000 60,000 2,000 600 40,000 1,500 400 10,000 1,000 20,000 20
Slide 22: Appendix III – Historical operating summary
Appendix III – Historical operating summary Increasing market share and net asset without share dilution in past 7 years HK$/share HK$’m 20 12,000 16 97 16.97 15 15.77 9,000 12.85 10.53 10.79 9.59 9,920 10 6,000 8,009 8,244 8.12 6 374 6,374 4,966 4,237 3,547 5 3,000 2006 2007 2008 2009 2010 2011 2
Slide 23: Appendix IV – Strong growth in China
Appendix IV – Strong growth in China Strong growth in China According to McKinsey, top 225 cities of China will contribute app. 30% of global GDP growth in the next 10-15 years. Mega- and middleweight developing world cities: Mega- and middleweight developed cities: 45% of global growth 16% of glo
Slide 24: Appendix V – Better position for CRE
Notation: CRE’s CRE s presence Cluster’s Cluster s hub city Appendix V – Better position for CRE Expected cluster size: Small Sizable Mega Better positioning to capture strong growth in China According to McKinsey, more than 90% of China’s urban GDP in 2015 will come from 22 clusters. Huhehaote Ch
Slide 25: Appendix VI – Synergy with acquisition of Kingway
Appendix VI – Synergy with acquisition of Kingway More complement geographical footprint in both existing and new regions Stronger bargaining power on procurement of raw materials Extending overall utilization rate Competency with CR Retail Competency with CR Snow 88 retail stores in Shaanxi 2
Slide 26: Appendix VII – Historical major M&As in beer business
Appendix VII – Historical major M&As in beer business Strong bargaining power and lower acquisition cost on M&A CRB acquired 100% stake in Kingway beer US$/kl AB InBev acquired furhter Carlsberg acquired Tsingtao acquired ABInbev 2,500 1.31% stake of Zhujiang Shenzhen Jingyalong 12.25% stake in 100%
Slide 27: Appendix VIII – Global beer consumption summary
Appendix VIII – Global beer consumption summary Beer consumption per capita in China increased double in past 10 years (from 18 litres in 2001 to 36 litres in 2011 (provisional)). 147 111 78 78 75 60 46 37 36 22 22 Czech Germany USA Australia UK South Japan South China Taiwan Hong Republic Africa Ko
Slide 28: Appendix IX – Market share of Retail business
Appendix IX – Market share of Retail business Lower market concentration in China than other developed countries: Percentage of top 5 retailers to total grocery retail market share in the state: 63 60 59 47 40 20 9 7 Source: Euromonitor; Planet Retail; McKinsey and Company data Top ten Top five reta
Slide 29: Appendix X – CRE awards
A Appendix di X – CRE awards d Highlights of accolades received Since 2002 Produced q quarterly y financial and operational p review on a voluntary y basis. First conglomerate g company among the constituent stocks in the Hang Seng Index to initiate such a move 2005-2012 Named one of the outstandi
Slide 30: Appendix X – CRE awards (Cont'd)
A Appendix di X – CRE awards d (Cont'd) (C t'd) Highlights of accolades received 2010- Received awards for cover photo/design in the categories of food distributors, 2012 processors & wholesalers, manufacturing & Distributing, Food & Consumer Packaged Goods and Multi-Industry – Products & Services
Slide 31: Appendix X – CRE awards (Cont'd)
A Appendix di X – CRE awards d (Cont'd) (C t'd) Highlights of accolades received 2010–2012 Selected as one of the companies p receiving g "Global Chinese Business 1000 – Outstanding g Performance Award" by Yazhou Zhoukan 2011/2012 Awarded as one of the companies receiving the commendation in Corpo
Slide 32: Disclaimer
Disclaimer Data and information contained in this presentation is provided for informational purposes only. Neither Chi Resources China R E t Enterprise, i Li it d nor any off its Limited it subsidiaries b idi i shall h ll be b liable li bl for f any errors or delays d l i in the content, or for any
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