Convenience Retail Asia Limited · HKEX:831
Convenience Retail Asia — Q3 2003 Earnings Presentation
22 slides from Convenience Retail Asia's earnings presentation, Nov 4, 2003
Slide 1: 3rd Quarter 2003 Results Presentation
3 Quarter 2003 rd Results Presentation A member of the Li & Fung (Retailing) Group 4 November 2003
Slide 2: Hong Kong Total Retail Sales Value
Hong Kong Total Retail Sales Value Year-on-year % Change 10% Jan-Aug 2003 : - 5% 2002 Total : - 4% 5% 0% -5% -10% -15% -20% 01/02 03/02 05/02 07/02 09/02 11/02 01/03 03/03 05/03 07/03 * Source: HKSAR, Census and Statistics Department
Slide 3: Agenda
3rd Quarter 2003 Result Presentation Agenda 3rd Quarter 2003 Financial Results Highlights 2003 Update & Outlook Questions & Answers
Slide 4: Group Turnover – 3rd Quarter
3rd Quarter 2003 Financial Results Highlights Group Turnover – 3rd Quarter 1,600 1,393.5 1,305.1 1,400 1,200 + 10% HK$ Million 1,000 800 600 404.9 366.8 400 200 0 2001 Total 2002 Total 3rd Qtr 2002 3rd Qtr 2003 No. of Stores : 146 166 157 180 (HK) - 2 - 5 (Chin a)
Slide 5: Comparable Stores Sales
3rd Quarter 2003 Financial Results Highlights 144 Comparable Stores Sales - 1% 360 344.5 350 340.7 340 HK$ Million 330 320 310 300 3rd Qtr 2002 3rd Qtr 2003
Slide 6: Group Turnover – September YTD
3rd Quarter 2003 Financial Results Highlights Group Turnover – September YTD 1,600 + 10% 1,393.5 1,400 1,305.1 1,132.1 1,200 1,032.8 HK$ Million 1,000 404.9 800 366.8 600 343.4 377.6 400 200 322.6 349.6 0 2001 Total 2002 Total Sep YTD 2002 Sep YTD 2003 No. of Stores : 146 166 157 180 (HK) - 2 - 5 (C
Slide 7: Group Net Profit – 3rd Quarter
3rd Quarter 2003 Financial Results Highlights Group Net Profit – 3rd Quarter 70 60.5 * 60 55.0 * 50 + 6% HK$ Million 40 30 17.1* 18.2 20 10 0 2001 Total 2002 Total 3rd Qtr 2002 3rd Qtr 2003 * Restated for Income Tax Effect Per SSAP No.12
Slide 8: Net Profit as % of Sales – 3rd Quarter
3rd Quarter 2003 Financial Results Highlights Net Profit as % of Sales – 3rd Quarter 7% - 0.2% 6% 4.7% * 4.2% * 4.3% * 5% 4.5% 4% 3% 2% 1% 0% 2001 Total 2002 Total 3rd Qtr 2002 3rd Qtr 2003 * Restated for Income Tax Effect Per SSAP No.12
Slide 9: Higher Gross Margin/Other Income
Why 3rd Quarter 2003 Results? Higher Gross Margin/Other Income Gross Margin/Other Income as % of Sales (Excluding Interest) + 0.6% 34% 32.8% 32.9% 33% 32.3% 32% 31.6% 31% 30% 2001 Total 2002 Total 3rd Qtr 2002 3rd Qtr 2003
Slide 10: Higher Expenses as % of Sales
Why 3rd Quarter 2003 Results? Higher Expenses as % of Sales Expenses as % of Sales 2003 2003 vs. 2002 Store Operating Expenses - HK 22.3% + 0.3% - China 0.3% + 0.3% Distribution 1.7% + 0.2% Administrative Expenses 3.7% + 0.5% China Start-up Expenses - - 0.4% + 0.9 %
Slide 11: Net Profit By Market
Why 3rd Quarter 2003 Results? Net Profit By Market 3rd Qtr 2002 3rd Qtr 2003 Changes (HK$ M) (HK$ M) (HK$ M) Hong Kong Market 18.7 20.4 1.7 China Market (1.6) (2.2) (0.6) Total 17.1 18.2 1.1
Slide 12: Group Net Profit – September YTD
3rd Quarter 2003 Financial Results Highlights Group Net Profit – September YTD 70 - 3% 60.5* 60 55.0 * 50 43.3* 42.1 HK$ Million 40 17.1 18.2 30 20 16.3 16.6 10 9.9 7.3 0 2001 Total 2002 Total Sep YTD 2002 Sep YTD 2003 * Restated for Income Tax Effect Per SSAP No.12
Slide 13: Net Profit as % of Sales – September YTD
3rd Quarter 2003 Financial Results Highlights Net Profit as % of Sales – September YTD 7% - 0.5% 6% 5% 4.2% * 4.3% * 4.2%* 3.7% 4% 3% 2% 1% 0% 2001 Total 2002 Total Sep YTD 2002 Sep YTD 2003 * Restated for Income Tax Effect Per SSAP No.12
Slide 14: Basic Earnings Per Share – 3rd Quarter
3rd Quarter 2003 Financial Results Highlights Basic Earnings Per Share – 3rd Quarter 10 9.1* 8.5* 9 + 0.1 Cent 8 7 HK Cents 6 5 4 2.6 * 2.7 3 2 1 0 2001 Total 2002 Total 3rd Qtr 2002 3rd Qtr 2003 * Restated for Income Tax Effect Per SSAP No.12
Slide 15: Basic Earnings Per Share – September YTD
3rd Quarter 2003 Financial Results Highlights Basic Earnings Per Share – September YTD * 9.1 * - 0.2 Cent 10 8.5 * 9 8 6.5 * 6.3 7 HK Cents 6 5 4 3 2 1 0 2001 Total 2002 Total Sep YTD 2002 Sep YTD 2003 * Restated for Income Tax Effect Per SSAP No.12
Slide 16: 3rd Quarter 2003 Financial Results Highlights
3rd Quarter 2003 Financial Results Highlights 3rd Qtr 2002 3rd Qtr 2003 Changes Group Turnover (HK$ 366.8 404.9 + 10% Million) Group Net Profit (HK$ 17.1 * 18.2 + 6% Million) Net Profit as % of Sales 4.7% * 4.5% - 0.2% Basic Earnings Per Share 2.6 Cents * 2.7 Cents + 0.1 Cent * Restated for Income T
Slide 17: 2003 Update & Outlook
2003 Update & Outlook
Slide 18: 2003 Update & Outlook – Hong Kong
2003 Update & Outlook Hong Kong Deflation and relatively high unemployment to continue Threat of SARS re-occurring Consumer sentiment improving but consumers still cautious on spending Chinese tourist sector to grow Top line sales and net margin to improve
Slide 19: 2003 Update & Outlook – China
2003 Update & Outlook China Growth in retail continues due to economic growth and increase in disposable income Consumer habit of using CVS more important than competition factor Escalating social insurance cost Expediting new store opening Financial result close to expectation
Slide 20: Our China Strategies: Benefits of CEPA
2003 Update & Outlook Our China Strategies Benefits of CEPA 1. Lower qualifying requirements 2. Wholly-owned enterprise 3. Access to over 230 Prefectural & County Cities 4. Easier for acquisition
Slide 21: Projected Number of Circle K Stores
2003 Update & Outlook Projected Number of Circle K Stores 2002 2003 2004 Actual Forecast Forecast Hong Kong 166 191 220 Southern China 2 10 40 Eastern or Northern China - - 10 Acquisition / J.V. - - + Total 168 201 270+
Slide 22: 2003 Update & Outlook
2003 Update & Outlook Improving Hong Kong market conditions Healthy growth in profitability and cash flow from operations since 2nd quarter China strategies on track but need to speed up expansion Better 2003 profitability outlook versus 2002’s
Convenience Retail Asia — Q3 2003 Earnings Presentation on 6ix