Convenience Retail Asia Limited · HKEX:831
Convenience Retail Asia — FY2005 Earnings Presentation
26 slides from Convenience Retail Asia's earnings presentation, Mar 9, 2006
Slide 1: 2005 Annual Results Presentation
2005 Annual Results Presentation Member of Li & Fung Group 9 March 2006
Slide 2: Agenda
2005 Annual Result Presentation Agenda Overall Hong Kong & Guangzhou Retail Markets 2005 Financial Results Highlights 2006 Update & Outlook Questions & Answers
Slide 3: Hong Kong Consumer Price Index
2005 Hong Kong Consumer Price Index Year-on-year % Change 3 1.8 1.7 1.8 2 1.6 1.3 1.4 1.1 1.2 1 0.8 0.8 0.8 0.5 0 % -0.4 -0.5 -1 -2 -3 -2.6 -3.0 -4 May Mar Jan 2005 Jun Nov Jul Aug Apr Oct Feb 2002 2003 2004 2005 Sep Dec Source: Census and Statistics Department, HKSAR
Slide 4: ACNielsen Economic Confidence Index
ACNielsen Economic Confidence Index 110 102 102 100 99 100 98 97 101 95 96 93 93 94 93 91 91 92 95 95 90 90 87 87 87 88 89 90 85 84 83 84 85 83 82 80 79 79 76 77 77 76 76 75 73 73 73 73 73 70 71 69 67 63 60 50 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10
Slide 5: Hong Kong Retail Sales Value
2005 Hong Kong Retail Sales Value Year-on-year % Change 20 16.4 15 10.8 10 8.6 6.8 7.1 7.1 6.8 6.2 6.1 6.2 4.1 4.9 4.8 % 5 4.1 0 -2.3 -5 -4.1 -10 Mar May Jan 2005 Jun Nov Jul Aug Apr Oct 2002 2003 2004 2005 Feb Sep Dec Source: Census and Statistics Department, HKSAR
Slide 6: Guangzhou City Consumer Price Index
2005 Guangzhou City Consumer Price Index Year-on-year % Change 5 4.1 4 3 2.0 2.1 1.7 1.5 1.8 1.8 1.6 2 1.4 1.0 0.7 0.7 0.7 % 1 0 0.1 -0.3 -1 -2 -2.4 -3 May Mar Jan 2005 Jun Nov Jul Aug Apr Oct Feb 2002 2003 2004 2005 Sep Dec Source: Bureau of Statistics, Guangzhou
Slide 7: Guangzhou Retail Sales Value
2005 Guangzhou Retail Sales Value Year-on-year % Change 25 21.3 20 15.9 16.5 15 13.6 13.9 13.3 13.2 12.4 12.9 13.2 12.1 11.4 % 9.8 9.9 10 9 7.1 5 0 May Mar Jun Nov Jan 2005 Jul Aug Apr Oct Feb Sep Dec 2002 2003 2004 2005 Source: Bureau of Statistics, Guangzhou
Slide 8: Group Turnover
2005 Financial Results Highlights Group Turnover +15% 2,500 1,995.2 2,000 1,736.5 * 1,515.8 * 1,383.6 * HK$ Million 1,500 1,000 500 0 2002 2003 2004 2005 No. of store – HK 166 186 205 230 No. of store - China 2 7 20 45 * Restated
Slide 9: Group Net Profit
2005 Financial Results Highlights Group Net Profit 100 +11% 80 73.6 66.3 * 60.4* 60.5 * HK$ Million 60 40 20 0 2002 2003 2004 2005 * Restated
Slide 10: Net Profit as % of Turnover
2005 Financial Results Highlights Net Profit as % of Turnover 6 - 0.1% 5 4.4 * 4.0 * 3.8* 3.7 4 % of Sales 3 2 1 0 2002 2003 2004 2005 * Restated
Slide 11: Strong Promotions & Turnover
2005 Financial Results Highlights Strong Promotions & Turnover Lucky Star Mcmug Miffy Garfield Tissue
Slide 12: Gross Margin / Other Income
2005 Financial Results Highlights Gross Margin / Other Income 34 33.0 33 32.3 * 32.3 * 32.2 * % of Sales 32 31 30 2002 2003 2004 2005 * Restated
Slide 13: Store Operating Expenses
2005 Financial Results Highlights Store Operating Expenses 30 24.5% 25 22.7%* 23.2%* 22.2%* 20 6.6 7.2 6.2 6.5 % of Sales 15 7.0 7.0 7.3 7.9 10 5 9.0 9.2 9.3 9.4 0 2002 2003 2004 2005 Labour Cost Rental Cost Other Expenses * Restated
Slide 14: Basic Earnings Per Share
2005 Financial Results Highlights Basic Earnings Per Share 14 + 1 Cent 12 10.9 9.9 * 10 9.1 * 9.1* HK Cents 8 6 4 2 0 2002 2003 2004 2005 * Restated
Slide 15: 2005 Financial Results Highlights
2005 Financial Results Highlights 2005 2004 Change Number of Stores 275 225 + 50 Group Turnover (HK$M) 1,995.2 1,736.5* + 15% Group Net Profit (HK$M) 73.6 66.3* + 11% Net Profit as % of Turnover 3.7% 3.8%* - 0.1% Basic Earnings Per Share 10.9 Cents 9.9 Cents* + 1 Cent Total Dividend Per Share Paid
Slide 16: 4th Quarter Financial Results Highlights
2005 Financial Results Highlights 4th Quarter 2005 2004 Change Group Turnover (HK$M) 524.2 442.9* + 18% Group Net Profit (HK$M) 20.9 19.4* + 8% Net Profit as % of Turnover 4.0% 4.4%* - 0.4% Basic Earnings Per Share 3.1 Cents 2.9 Cents* + 0.2 Cent * Restated
Slide 17: Year-On-Year Profitability Growth
Year-On-Year Profitability Growth 15 12 * 11.0 10.3 9.5 * % Change 9 6 3 * 0.2 0 2002 2003 2004 2005 * Restated
Slide 18: Achievements – New Markets
2005 Achievements – New Markets Circle K Macau Circle K Dongguan Circle K Zhuhai Market office set up in Shenzhen
Slide 19: Achievements
2005 Achievements Best Employers in Asia 2005 by Hewitt Associates LLC Caring Company Award 2005/2006
Slide 20: 2006 Update & Outlook
2006 Update & Outlook
Slide 21: 2006 Hong Kong Market Outlook
2006 Hong Kong Market Outlook Local consumer spending continues to increase gradually Pressure on store operating expenses Rising rental for stores up for renewal
Slide 22: Retail Rental Changes By Area
Retail Rental Changes By Area Index (Q1 1996=100) 160 140 120 Central Causeway Bay 100 Tsim Sha Tsui Mong Kok 80 Overall Prime 60 40 1996 1997 1998 1999 2000 2001 2002 2003 2004 Source: CB Richard Ellis 2005
Slide 23: 2006 Hong Kong Market Outlook
2006 Hong Kong Market Outlook Local consumer spending continues to increase gradually Pressure on store operating expenses Rising rental for stores up for renewal Inflation on labour and utility expenses Free newspapers and price war still developing Fierce competition Strong promotion
Slide 24: 2006 Pearl River Delta Market Outlook
2006 Pearl River Delta Market Outlook Income per capita and retail spending continue to increase Upward movements in raw material, energy and logistics cos ting Stable rental but upward pressure on labour and utility costs First full year of multi-city growth in Guangzhou, Dongguan, Shenzhen
Slide 25: 2006 Market Outlook To Summarize
2006 Market Outlook To Summarize Better market conditions but inflation pressure on oper ating expenses in Hong Kong Priority of opening stores throughout the PRD First full year of multi-city expedited growth Peak investment year for the Pearl River Delta market Impact on CRA’s profitabil
Slide 26: Annual Results Presentation
2005 Annual Results Presentation Member of Li & Fung Group 9 March 2006
Convenience Retail Asia — FY2005 Earnings Presentation on 6ix