Convenience Retail Asia Limited · HKEX:831
Convenience Retail Asia — FY2010 Earnings Presentation
34 slides from Convenience Retail Asia's earnings presentation, Mar 9, 2011
Slide 1: Convenience Retail Asia Limited 2010 Annual Results
Convenience Retail Asia Limited 2010 Annual Results 9 March 2011
Slide 2: Agenda
Agenda Overall Hong Kong & Guangzhou Retail Markets 2010 Key Highlight 2010 Financial Results Highlight 2011 Update & Outlook Questions & Answers
Slide 3: Hong Kong & Guangzhou Retail Markets
Hong Kong & Guangzhou Retail Markets
Slide 4: Hong Kong Retail Market
Hong Kong Retail Market Total Retail Sales Value Composite Consumer Price Index 40 2010FY: +18.3% 4.0 2010FY: +2.4% 35.8 35 3.5 3.0 3.1 2.8 2.8 2.9 Year-on-year % cchange Year--on-year % change 30 3.0 2.6 2.6 2.4 2.5 25 21.8 25 2.5 19.7 19.2 2.0 19.0 18.1 18.6 20 17.1 17.2 2.0 15.5 15.3 15 1.5 1.3 1
Slide 5: Hong Kong Retail Market
Hong Kong Retail Market Retail Value Retail Volume (2010 vs. 2009) (2010 vs. 2009) All retail outlets +18.3% +15.5% Other consumer durable goods 41.3% 49.8% Motor Vehicles and parts 40.4% 36.8% Jewellery, y watches & clocks, 36 1% 36.1% 26 0% 26.0% and valuable gifts Electrical goods & photographic
Slide 6: Guangzhou Retail Market
Guangzhou Retail Market Total Retail Sales Value City Consumer Price Index 45 2010FY: +24.2% 6.0 2010FY: +3.2% 40 37.3 5.0 4.4 4.3 35 33.1 3.9 3.8 3.9 3.6 3.6 Year--on-year % change Year--on-year % change 4.0 3.4 3.2 30 27.9 27.7 30 3.0 2.7 24.4 2.2 25 22.4 21.8 18.819.5 2.0 20 17.0 14.9 15.4 1.0 15
Slide 7: 2010 Key Highlight
Cony, Re a misAsia 2010 Key Highlight
Slide 8: Q4 Key Highlight Hong Kong Market
2010Q4 Key Highlight Hong Kong Market Strong overall retail sales growth ¾ Increase in PRC visitors ¾ Local consumers sentiment to spend ¾ Inflation Customers willing to accept reasonable price increase Raw material costs up 8.3% vs. 2009 Rental and labour cost all increasing g at the same t
Slide 9: New Products & Creative Promotions - Circle K
New Products & Creative Promotions - Circle K
Slide 10: New Products & Creative Promotions - Saint Honore
New Products & Creative Promotions - Saint Honore
Slide 11: Q4 Key Highlight Southern China Market
2010Q4 Key Highlight Southern China Market Very strong increase in overall retail sales: ¾ Government, policies to promote consumption ¾ Strong consumer sentiment to spend ¾ Inflation High inflation and resulting price increase Overall Circle K sales was satisfactory although affected by pre--
Slide 12: 2010 Financial Results Highlight
2010 Financial Results Highlight g g
Slide 13: Number of Stores
2010 Financial Results Highlight Number of Stores End E d off O Opened d Transfer T f Cl Closed d End E d off 2009 from/(to) 2010 Circle K Hong Kong 299 26 - (7) 318 Circle K Southern China 62 9 - (8) 63 - Guangzhou (owned) 57 9 (3) (7) 56 - Guangzhou (franchised) 4 - 3 (1) 6 - Shenzhen 1 - - - 1 Ci
Slide 14: Group Turnover – 4th Quarter
2010 Financial Results Highlight Group Turnover – 4th Quarter 4,000 3,322.7 3,349.3 11.3% 3,000 Million HK$ M 2,000 835.8* 929.9* 1 000 1,000 182.8 169.3 682.3 766.6 0 2008 2009 2009Q4 2010Q4 Circle K Saint Honore * Less inter-group sales: HK$15.8M in 2009Q4 and HK$19.5M in 2010Q4
Slide 15: Group Turnover – Full Year
2010 Financial Results Highlight Group Turnover – Full Year 5,000 6.7% 3 575 2* 3,575.2 4,000 3,322.7 3,349.3* Million 756.2 3,000 701.6 HK$ M 2,000 2,702.4 , , 2,881.9 1,000 0 2008 2009 2010 Circle K Saint Honore * Less inter-group sales: HK$54.7M in 2009 and HK$62.9M in 2010
Slide 16: Gross Margin & Other Income
2010 Financial Results Highlight Gross Margin & Other Income 4th Quarter 40% Full Year 37.1% 37.2% on-year % change 38% 36.9% 36.5% 36.1% 36% 34% Year-o 32% 30% 2008 2009 2010 * Excluding interest income
Slide 17: Store Operating Expenses
2010 Financial Results Highlight Store Operating Expenses 4th Quarter 40% Full Year 26.9% 27.4% 26.9% 30% 25.4% 25.9% over % of Turno 20% 10% 0% 2008 2009 2010
Slide 18: Group Net Profit – 4th Quarter
2010 Financial Results Highlight Group Net Profit – 4th Quarter 120 25.3% 88.9 90.4 100 HK$ Million 80 60 32.8 40 26.2 20 0 2008 2009 2009Q4 2010Q4
Slide 19: Group Net Profit – Full Year
2010 Financial Results Highlight Group Net Profit – Full Year 50.8% 200 136.4 Gain on disposal 150 of property 16.5 on HK$ Millio 88 9 88.9 90 4 90.4 100 119.9 H 50 0 2008 2009 2010
Slide 20: Net Profit By Market
2010 Financial Results Highlight Net Profit By Market 4th Quarter Full Year (HK$ Million) 2009 2010 2009 2010 Hong Kong & Macau 44 1 44.1 37 3 37.3 134 1 134.1 158 9 158.9 Markets China Market (17 9) (17.9) (4 5) (4.5) (43 7) (43.7) (22 5) (22.5) CRA Group Total 26.2 32.8 90.4 136.4
Slide 21: Net Profit as % of Turnover – 4th Qtr
2010 Financial Results Highlight Net Profit as % of Turnover – 4th Qtr 0.4% 5.0% 3.5% 4.0% 3.1% % of Turnover 2.7% 2.7% 3 0% 3.0% 2.0% 1.0% 0.0% 0 0% 2008 2009 2009Q4 2010Q4
Slide 22: Net Profit as % of Turnover – Full Year
2010 Financial Results Highlight Net Profit as % of Turnover – Full Year 1.1% 5.0% 3 8% 3.8% 4.0% 2.7% 2.7% of Turnovver 3.0% 2.0% %o 1.0% 0.0% 2008 2009 2010
Slide 23: Basic Earnings Per Share – 4th Qtr
2010 Financial Results Highlight Basic Earnings Per Share – 4th Qtr 20 25.1% 15 12.18 12.39 nts HK Cen 10 4.49 3.59 5 0 2008 2009 2009Q4 2010Q4
Slide 24: Basic Earnings Per Share – Full Year
2010 Financial Results Highlight Basic Earnings Per Share – Full Year 50.7% 25 18.67 20 12 18 12.18 12 39 12.39 HK Cents 15 10 H 5 0 2008 2009 2010
Slide 25: 4th Quarter
2010 Financial Results Highlight 4th Quarter 2009Q4 2010Q4 Change Number of Stores 493 526 +33 p Turnover ((HK$M)) Group 835.8 929.9 +11.3% Group Net Profit (HK$M) 26.2 32.8 +25.3% Net Profit as % of Turnover 3.1% 3.5% +0.4% Basic Earnings Per Share (HK Cents) 3 59 3.59 4 49 4.49 +25 1% +25.1%
Slide 26: Full Year
2010 Financial Results Highlight Full Year 2009 2010 Change Number of Stores 493 526 +33 33 Group Turnover (HK$M) 3,349.3 3,575.2 +6.7% Group Net Profit (HK$M) 90.4 136.4 +50.8% Net Profit as % of Turnover 2.7% 3.8% +1.1% Basic Earnings Per Share (HK Cents) 12.39 18.67 +50.7% T t l Dividend Total Di
Slide 27: Achievements
2010 Achievements Hong Kong Retail Management Association 2010 Service Retailer – Convenience Stores Category 2010 Service & Courtesy Award – Junior Frontline 2010 Service & Courtesy Level (Supermarkets / Award – Supervisory Level CVS Category) (Food F d Shop Sh C Category) t )
Slide 28: Achievements
2010 Achievements Hong Kong Trade Development Council Best Licensed Premium Promotion of the 7th Premier Asian Licensing Award 300th Store Celebration Employees Retraining Board Manpower Developer 1st 25th Anniversary Celebration
Slide 29: 2011 Update & Outlook
Cony, Re = misAsia 2011 Update & Outlook
Slide 30: 2011 Update & Outlook
2011 Update & Outlook It is the “inflation” year – raw material, rental, labour cost and other operating expenses all going up C Consumers are more willing to accept reasonable price increase $10 increase in cigarette tax is expected to affect sales in coming months Minimum wages effective 1
Slide 31: 2011 – 2013 Business Plan
2011 – 2013 Business Plan Guiding Strategy Strong Business & Irrelevant Differentiation, Yes Innovation M More C Competitive, titi Models Profitable & Growing M nvent B Store Business Expect Lower S Re--in No W ’t Won’t Results Re Survive No Yes Continuous Improvement
Slide 32: Re-invention of Business Models
Re-invention of Business Models Re- Circle K Saint Honore
Slide 33: To Summarize
To Summarize Despite operating challenges, 2010 turned out to be the best year ever: ¾ Record sales ¾ Record net profit ¾ Record profit growth ¾ Gain in brand equity ¾ People p development p and serving g culture After restructuring in 2009, Circle K Southern China back on track 2011 is expect
Slide 34: Thank You!
Convéhience) Retail Asia Thank You!
Convenience Retail Asia — FY2010 Earnings Presentation on 6ix