Convenience Retail Asia Limited · HKEX:831

Convenience Retail Asia — FY2016 Earnings Presentation

40 slides from Convenience Retail Asia's earnings presentation, Mar 21, 2017

  1. Slide 1: Convenience Retail Asia Limited 2016 Annual Results Announcement

    Convenience Retail Asia Limited 2016 Annual Results Announcement 21 March 2017

  2. Slide 2: Agenda

    Agenda  Hong Kong Retail Market Key Highlight  2016 Financial Results Highlight  2017 Update & Outlook  Question & Answer 2

  3. Slide 3: Hong Kong Retail Market Key Highlight

    HONG KONG RETAIL MARKET KEY HIGHLIGHT 3

  4. Slide 4: Consumer Confidence Index

    Consumer Confidence Index 120 108 110 110 111 111 111 111 107 106 107 106 107 108 110 111 105 106 106 108 107 107 106 105 107 106 105 103 99 99 100 98 98 99 101 98 99 97 96 97 96 97 96 90 93 94 94 94 95 93 88 87 80 70 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2013 2014 2015 2016 Global Average

  5. Slide 5: Hong Kong Retail Market

    Hong Kong Retail Market 2016 Total Retail Sales Value 2016 Composite CPI 20 6 2016FY: -8.1% 2016FY: +2.4% 15 10 5 4.3 Year-on-year % change Year-on-year % change 5 4 0 3.0 2.9 -5 -4.0 -2.9 -2.9 3 2.7 2.6 2.7 -5.4 2.5 2.4 2.3 -6.6 -7.5 -8.3 -10 -9.8 -8.9 -7.7 -10.5 -15 2 1.2 1.2 1.2 -20 -20.6 1 -25 -

  6. Slide 6: Retail Sales & Mainland Visitor Arrivals

    Retail Sales & Mainland Visitor Arrivals Retail Sales Mainland Visitor Arrivals 30 20 18 20 12 14 8 6 Year-on-year % Change 10 4 2 0 1 0 2 -4 -2 -1 -5 -7 -7 -4 -5-4 -4-3 -5-4 -3 -10 -7 -7 -8 -8 -11 -7 -10 -8 -9 -8 -12 -10 -11 -20 -21 -30 -26 -40 2016 May 2016 Mar 2016 Nov 2016 Aug 2016 Dec 2016 Feb

  7. Slide 7: Hong Kong Retail Market

    Hong Kong Retail Market Apple Daily News 3/3/2017 Ming Pao Daily News 21/2/2017 Apple Daily News 8/2/2017 Oriental Daily News 4/1/2017 Hong Kong Economic Times 28/12/2016 Apple Daily News 18/11/2016 7

  8. Slide 8: Re-inventing Strategy Lifting Customer Experience

    Re-inventing Strategy Lifting Customer Experience 8

  9. Slide 9: OK Stamp It Easy Reward Easy Play

    OK Stamp It Easy Reward Easy Play 9

  10. Slide 10: OK Stamp It Easy Reward Easy Play

    OK Stamp It Easy Reward Easy Play Visit Circle K with Registration purchase for 30 days Special Privileges: -$30 OK Cash coupon within 3 consecutive -Extra stickers for Premium Redemption months to become -E-gifts with pleasant surprises GOLD member -St. Honore VIP offers -…… 10

  11. Slide 11: OK Stamp It Easy Reward Easy Play: For Value

    OK Stamp It Easy Reward Easy Play For Value 11

  12. Slide 12: OK Stamp It Easy Reward Easy Play: For Fun

    OK Stamp It Easy Reward Easy Play For Fun 12

  13. Slide 13: OK Stamp It Won Two Awards

    OK Stamp It Won Two Awards Best App - Consumer Brand & Most Responsive Mobile Campaign, by Marketing Magazine in Mob-Ex Awards 2017 13

  14. Slide 14: Circle K Flagship Store in Centre of Causeway Bay

    Circle K Flagship Store in Centre of Causeway Bay On the ground floor are The store novelty products has two floors 26 East Point Road, Causeway Bay On the first floor is the Simply Great Coffee along with seating 14

  15. Slide 15: Re-inventing Strategy Lifting Customer Experience

    Re-inventing Strategy Lifting Customer Experience 15

  16. Slide 16: Conversion to Frozen Dough Process Completed

    Conversion to Frozen Dough Process Completed 16

  17. Slide 17: 2016 Financial Results Highlight

    2016 FINANCIAL RESULTS HIGHLIGHT 17

  18. Slide 18: Number of Stores

    Number of Stores End of End of Opened Closed 2015 2016 Circle K Hong Kong 328 19 (16) 331 Circle K Guangzhou (franchised) 76 1 (6) 71 Circle K Macau (franchised) 27 4 (1) 30 Circle K Zhuhai (franchised) 18 2 (4) 16 Saint Honore HK & Macau 98 10 (10) 98 Saint Honore Southern China 41 4 (4) 41 CRA Gro

  19. Slide 19: Group Turnover

    Group Turnover 2nd Half Full Year 4,000 7,000 +3.0% +2.7% 6,000 4,728.2* 4,871.4* 3,000 2,532.4* 5,000 2,466.5* 1,080.9 1,071.8 HK$ Million HK$ Million 582.6 576.2 4,000 2,000 3,000 2,000 3,712.4 3,871.3 1,000 1,918.3 1,990.9 1,000 0 0 2015 2016 2015 2016 Circle K Saint Honore Circle K Saint Honore

  20. Slide 20: Gross Profit & Other Income

    Gross Profit & Other Income 2nd Half Full Year 40 40 38 37.2 38 36.6 % of Turnover 36.5 % of Turnover 36.1 36 36 34 34 32 32 30 30 2015 2016 2015 2016 20

  21. Slide 21: Group Store Operating Expenses

    Group Store Operating Expenses 2nd Half Full Year 30 30 +0.6% +0.3% 28 28 26.1 25.9 26.2 % of Turnover % of Turnover 26 25.5 26 24 24 22 22 20 20 2015 2016 2015 2016 21

  22. Slide 22: Group Net Profit

    Group Net Profit 2nd Half Full Year 200 200 159.2 150 128.4 150 25.0 139.6 HK$ Million HK$ Million 100 42.6 87.8 100 134.2 139.6 50 50 85.8 87.8 0 0 2015 2016 2015 2016 Continuing Operations Discontinued Operations Continuing Operations Discontinued Operations  Net Profit: -31.6%  Net Profit: -12.

  23. Slide 23: Net Profit by Market

    Net Profit by Market Full Year (HK$ Million) 2015 2016 Change Hong Kong & Macau Markets 165.6 162.3 -1.9% Southern China Market (9.8) (2.2) +77.2% e-commerce Group (21.6) (20.5) +4.6% Discontinued Operations 25.0 - -100% CRA Group Net Profit 159.2 139.6 -12.3% 23

  24. Slide 24: Group Net Profit as % of Turnover

    Group Net Profit as % of Turnover 2nd Half Full Year 8 6 6 5.2 4 3.4 2.9 % of Turnover % of Turnover 4 1.7 3.5 0.6 2 2 3.5 3.5 2.8 2.9 0 0 2015 2016 2015 2016 Continuing Operations Discontinued Operations Continuing Operations Discontinued Operations  Net Profit: -1.7%  Net Profit: -0.5%  Continu

  25. Slide 25: Basic Earnings Per Share

    Basic Earnings Per Share 2nd Half Full Year 24 27 21 24 21.12 18 17.02 21 18.50 18 3.32 15 11.63 HK Cents HK Cents 5.64 15 12 12 9 18.50 9 17.80 6 11.38 11.63 6 3 3 0 0 2015 2016 2015 2016 Continuing Operations Discontinued Operations Continuing Operations Discontinued Operations 25

  26. Slide 26: 2016 Financial Results Highlight – 2nd Half

    2016 Financial Results Highlight – 2nd Half 2H2015 2H2016 Change Number of Stores 588 587 -1 Group Turnover (HK$M) 2,466.5 2,532.4 +2.7% Group Net Profit (HK$M) 128.4 87.8 -31.6%  Continuing Operations 85.8 87.8 +2.3% Net Profit as % of Turnover 5.2% 3.5% -1.7%  Continuing Operations 3.5% 3.5% Nil

  27. Slide 27: 2016 Financial Results Highlight – Full Year

    2016 Financial Results Highlight – Full Year 2015FY 2016FY Change Number of Stores 588 587 -1 Group Turnover (HK$M) 4,728.2 4,871.4 +3.0% Group Net Profit (HK$M) 159.2 139.6 -12.3%  Continuing Operations 134.2 139.6 +4.1% Net Profit as % of Turnover 3.4% 2.9% -0.5%  Continuing Operations 2.8% 2.9%

  28. Slide 28: Other Highlights

    Other Highlights The Outstanding U Favourite Food Awards 2016 Brand Award with My Favourite Cake Shop Most Outlets by HKRMA Top 10 eCommerce Website Awards Top 5 YouTube Ads Metro Creative Awards 2016 for 2016 The Best Endorser by Google Hong Kong 28

  29. Slide 29: 2017 Update & Outlook

    2017 UPDATE & OUTLOOK pean eM eka i | i ei: rene 29

  30. Slide 30: Hong Kong Retail Market Still Correcting

    Hong Kong Retail Market Still Correcting  Declining PRC visitors spending 2016 Total Retail Sales Value 0  Stable local consumer volume -2 -4 -2.9 -2.9 -0.9 -4.0 Year-on-year % change -6 -5.4 -8 -6.6  Segmentation of rental market -10 -9.8 -7.5 -8.3 -8.9 -7.7 -12 -10.5 -14  Moderate labour cost

  31. Slide 31: Traditional Brick & Mortar Retailing Formats All Struggling

    Traditional Brick & Mortar Retailing Formats All Struggling 1 2 Online Showrooming Pure Play Online Transaction 3 4 Offline Brick & Webrooming Mortar Offline Online Initiation 31

  32. Slide 32: Existing Retailing Models

    Existing Retailing Models The Buying Process Offline Online Awareness   Considering   Decision   Transaction   Repeat   32

  33. Slide 33: New O2O Retailing Model

    New O2O Retailing Model The Buying Process Offline Online Awareness   Considering   Decision   Traffic into Stores Transaction   Repeat   33

  34. Slide 34: CRA Going-Forward Strategies

    CRA 3 Going-Forward Strategies 1. Focus on the internet+ customers 2. Execute our O2O retailing model well & gain market leadership 3. Reinvent everything we do to win customers 34

  35. Slide 35: 1. Focus On Internet+ Customer

    1. Focus On Internet+ Customer  Growing & expanding  How people communicate, work, influence or be influenced, decide, entertain, shop, live has totally changed  Fun/ joy, new, fresh, wellness, cool, value, discovery, sharing, ease & simplicity, immediate gratification, premiumization, experience

  36. Slide 36: 2. Our O2O Retailing Model

    2. Our O2O Retailing Model The Buying Process Offline Online Awareness   Considering   Decision   Traffic into Stores Transaction   Repeat   Making everything “Easy, Fast & Simple” for our customers 36

  37. Slide 37: 3. Reinvent Everything We Do To Win Customers

    3. Reinvent Everything We Do To Win Customers  4P’s plus customer experience  Premiumization, TFP, ASN, Fun, “Easy, Fast & Simple” are proven right values  Be good in digital marketing & CRM  Be “Data & Analytics” literate 37

  38. Slide 38: The Future is Bright & Clear

    The Future is Bright & Clear New Investment New Investment MIS eCRM Chef Skillset TFP Middle Income “Internet+” - Home Team People STF Customer Structure Speed Makers Collaboration Both Working 16 - 55 & Non Speed People Working ASN Competitiveness Structure Competitiveness Food Service & GS Simplif

  39. Slide 39: To Conclude

    To Conclude  2016 one of the toughest years  Emerged with great results:-  Maintaining growth in both turnover & operating profit  Solid O2O retailing model  Over 1/2 million OK Stamp It members & still growing  Hong Kong retailing market will continue to correct in 2017  Proven strategies pu

  40. Slide 40: Thank You!

    THANK YOU ! 40

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