Convenience Retail Asia Limited · HKEX:831
Convenience Retail Asia — Q2 2006 Earnings Presentation
25 slides from Convenience Retail Asia's earnings presentation, Aug 2, 2006
Slide 1: Member of the Li & Fung Group
Member of the Li & Fung Group 2 August 2006
Slide 2: 2nd Quarter 2006 Results Presentation Agenda
2nd Quarter 2006 Results Presentation Agenda 2nd Quarter 2006 Financial Results Highlights 2006 Outlook & Update Questions & Answers
Slide 3: Hong Kong Retail Sales Value
Hong Kong Retail Sales Value Year-on-year % Change 20 Jan – June 2006 Total Retail : +6.4% 15 Supermarket : +6.0% 10 % 5 0 -5 01/05 02/05 03/05 04/05 05/05 06/05 07/05 08/05 09/05 10/05 11/05 12/05 01/06 02/06 03/06 04/06 05/06 06/06 Source: Census and Statistics Department, HKSAR
Slide 4: Guangzhou Retail Sales Value
Guangzhou Retail Sales Value Year-on-year % Change 25 Jan – May 2006 Total Retail : +13.8% 20 15 % 10 5 0 01/05 02/05 03/05 04/05 05/05 06/05 07/05 08/05 09/05 10/05 11/05 12/05 01/06 02/06 03/06 04/06 05/06 Source: Census and Statistics Department, HKSAR
Slide 5: Group Turnover – 2nd Quarter
2006 Financial Results Highlights Group Turnover – 2nd Quarter 2,500 1,995.2 2,000 1,736.5 + 9% HK$ Million 1,500 1,000 515.4 560.8 500 0 2004 2005 2nd Qtr 2005 2nd Qtr 2006
Slide 6: Group Turnover – June YTD
2006 Financial Results Highlights Group Turnover – June YTD 2,500 1,995.2 2,000 1,736.5 + 11% HK$ Million 1,500 1,075.2 969.6 1,000 560.8 515.4 500 454.2 514.4 0 2004 2005 June YTD June YTD 2005 2006
Slide 7: Number of Circle K Stores
2nd Quarter 2006 Financial Results Highlights Number of Circle K Stores 2nd Qtr 2005 End of 2005 1st Qtr 2006 2nd Qtr 2006 Hong Kong 218 230 235 238 Guangzhou 29 40 41 43 Dongguan - 5 6 7 Shenzhen - - - 1 Sub Total 247 275 282 289 Macau 5 11 13 15 Zhuhai 1 4 5 5 Total 253 290 300 309
Slide 8: Marketing and Promotions Hong Kong
Marketing and Promotions Hong Kong Good Day Garfield McDull Promotion Promotion
Slide 9: Marketing and Promotions Southern China
Marketing and Promotions Southern China
Slide 10: Gross Margin / Other Income
Gross Margin / Other Income Gross Margin/Other Income as % of Sales (Excluding Interest Income) 36% 35% + 1.3% 33.6% 34% % of Sales 33.0% 33% 32.3% 32.3% 32% 31% 30% 2004 2005 2nd Qtr 2005 2nd Qtr 2006
Slide 11: Upward Pressure On Store Operating Expenses
Upward Pressure On Store Operating Expenses 30% 24.5% 23.5% 24.2% 25% 23.2% 7.2% 6.8% 20% 6.6% 7.2% % of Sales 15% 7.3% 7.9% 7.4% 8.1% 10% 5% 9.3% 9.4% 8.9% 9.3% 0% 2004 2005 2nd Qtr 2005 2nd Qtr 2006 Labour Cost Rental Cost Other Expenses
Slide 12: Group Net Profit – 2nd Quarter
2006 Financial Results Highlights Group Net Profit – 2nd Quarter 80 73.6 66.3 70 + 7% 60 HK$ Million 50 40 30 20.9 22.3 20 10 0 2004 2005 2nd Qtr 2005 2nd Qtr 2006
Slide 13: Group Net Profit – June YTD
2006 Financial Results Highlights Group Net Profit – June YTD 100 80 73.6 + 9% 66.3 HK$ Million 60 40 32.4 29.8 20 20.9 22.3 8.9 10.1 0 2004 2005 June YTD June YTD 2005 2006
Slide 14: Net Profit as % of Sales – 2nd Quarter
2006 Financial Results Highlights Net Profit as % of Sales – 2nd Quarter 6% 5% 3.8% 4.0% 4.0% 3.7% 4% % of Sales 3% 2% 1% 0% 2004 2005 2nd Qtr 2005 2nd Qtr 2006
Slide 15: Net Profit as % of Sales – June YTD
2006 Financial Results Highlights Net Profit as % of Sales – June YTD 6% - 0.1% 5% 3.8% 3.7% 4% 3.1% % of Sales 3.0% 3% 2% 1% 0% 2004 2005 June YTD June YTD 2005 2006
Slide 16: Basic Earnings Per Share – 2nd Quarter
2006 Financial Results Highlights Basic Earnings Per Share – 2nd Quarter 12 10.9 9.9 10 8 + 0.2 Cent HK Cents 6 3.1 3.3 4 2 0 2004 2005 2nd Qtr 2005 2nd Qtr 2006
Slide 17: Basic Earnings Per Share – June YTD
2006 Financial Results Highlights Basic Earnings Per Share – June YTD 12 10.9 9.9 + 0.4 Cent 10 8 HK Cents 6 4.4 4.8 4 1.3 1.5 2 3.1 3.3 0 2004 2005 June YTD June YTD 2005 2006
Slide 18: 2nd Quarter 2006 Financial Results Highlights
2nd Quarter 2006 Financial Results Highlights 2nd Qtr 2005 2nd Qtr 2006 Change Group Turnover (HK$ Million) 515.4 560.8 +9% Group Net Profit (HK$ Million) 20.9 22.3 +7% Net Profit as % of Sales 4.0% 4.0% - Basic Earnings Per Share 3.1 Cents 3.3 Cents +0.2 Cent
Slide 19: June YTD 2006 Financial Results Highlights
June YTD 2006 Financial Results Highlights June YTD June YTD Change 2005 2006 Group Turnover (HK$ Million) 969.6 1,075.2 +11% Group Net Profit (HK$ Million) 29.8 32.4 +9% Net Profit as % of Sales 3.1% 3.0% -0.1% Basic Earnings Per Share 4.4 Cents 4.8 Cents +0.4 Cent Interim Dividend 1.5 Cents 1.5 Ce
Slide 20: Update & Outlook
2006 Update & Outlook
Slide 21: Hong Kong Market Outlook
2006 Hong Kong Market Outlook + Local consumer spending continues to increase gradually - Pressure on store operating expenses – rental, labour, utility - Cigarette and newspaper price reduction putting pressure on dollar per transaction - Fierce competition + Improvement in gross margin Actions: St
Slide 22: Pearl River Delta Market Outlook
2006 Pearl River Delta Market Outlook + Consumer spending continues to show strong growth + Strong comparable store sales growth and improvement in store contribution - Stable rental but upward pressure on labour and utility costs + Total Circle K stores to reach 70 - 80 + Integration for Sun-High c
Slide 23: Market Outlook To Summarize
2006 Market Outlook To Summarize Strong performance in Hong Kong markets Completion of acquisition of Sun-High chain First full year of multi-city expedited growth Peak investment year for the Pearl River Delta market
Slide 24: “Buy The Way” Korea Deal
“Buy The Way” Korea Deal CRA entered into a preliminary agreement with CCMP Capital Asia, a private equity fund, to purchase 2.5% of Buy The Way for a cash consideration not exceeding HK$30 million Buy The Way is one of the 5 leading convenience store chains in Korea with close to 1,000 stores 2005
Slide 25: Why CRA Wants to Get Involved
Why CRA Wants to Get Involved 1. Good upside potential for the Korea CVS industry 2. Phase-by-phase approach to enter Korean market 3. Expand source of profit and cash flow generation
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