Swire Pacific Limited Class A · HKEX:19
Swire Pacific Limited Class A — H1 2015 Earnings Presentation
45 slides from Swire Pacific Limited Class A's earnings presentation, Aug 20, 2015
Slide 1: 2015 Interim Results Analyst Briefing
2015 Interim Results Analyst Briefing Sustainable Growth Through Diversified Operations 20th August 2015 | Hong Kong
Slide 2: Agenda
Agenda 2 Strategy and Performance Highlights John Slosar, Chairman Financial Performance Property Aviation Beverages Marine Services Trading & Industrial Martin Cubbon, Corporate Development & Finance Director Outlook & Strategic Priorities John Slosar, Chairman
Slide 3: Strategy and Performance Highlights
Strategy and Performance Highlights John Slosar, Chairman
Slide 4: Strategy for Delivering Sustainable Growth
Strategy for Delivering Sustainable Growth 4 Strategy • On-going management of existing businesses with the aim of maximising their value. • Realisation of value where it has been maximised and redeployment of capital to new and existing businesses. Implementing Strategy Property: • Capital commitme
Slide 5: Strategy for Delivering Sustainable Growth
Strategy for Delivering Sustainable Growth 5 Beverages: USA • Additional territories in Colorado assumed in May 14. • New territories contributed 30% of sales volume and 16% of profits in USA in 1H 15. • Letter of Intent signed in Apr 15 to further expand franchise territory in Arizona. Mainland Chi
Slide 6: Strategy for Delivering Sustainable Growth
Strategy for Delivering Sustainable Growth 6 Trading & Industrial: Qinyuan Bakery • Acquired 65% of Qinyuan Bakery in Dec 14 for a total consideration of HK$849m. Taikoo Motors • Continue to expand the Taiwan based motors franchise with new Mercedes and Audi dealerships opening in the first half. Sw
Slide 7: Sustainable Long-term Growth in Shareholder Value
Sustainable Long-term Growth in Shareholder Value 7 Equity attributable to the Company’s shareholders Dividend per “A” Share +9% +7% HK$M CAGR HK$ CAGR (05-14) (05-14) 250,000 4 200,000 3 150,000 2 100,000 1 50,000 0 0 05 06 07 08 09 10 11 12 13 14 05 06 07 08 09 10 11 12 13 14 Note: Excludes HK$3 p
Slide 8: Financial Performance
8 Financial Performance Martin Cubbon, Corporate Development & Finance Director
Slide 9: 1H2015 Highlights
1H2015 Highlights 9 • 12% increase in attributable underlying profit to HK$4,833m. • 2% increase in dividends to HK¢112.0 per “A” share. • Modest increase in gearing of 0.4% pts to 22.8%. • Better results from Property, Aviation and Beverages Divisions. • Weaker results from Marine Services and Trad
Slide 10: Financial Summary
Financial Summary 10 Attributable Profit Revenue Cash Generated +23% + 5% -7% HK$M Jun 2014: HK$30,111m from Operations 9,000 Total Jun 2014: HK$7,698m $7,977 Jun 2015: HK$31,633m 8,000 Jun 2015: HK$7,189m Total 7,000 $6,484 6,000 Underlying Profit +12% Net Debt 4,833 Jun 2014: HK$4,330m +4% Dec 201
Slide 11: Financial Summary: Movement in Underlying Profit
Financial Summary 11 Movement in Underlying Profit HK$M 5,500 +53 (814) +706 5,000 +497 4,833 4,500 +150 (89) 4,330 4,000 2014HY Property Aviation Beverages Marine Trading & Head Office 2015HY Underlying Services Industrial Underlying profit profit
Slide 12: Financial Summary: Financing
Financial Summary 12 Financing Dec 11 Dec 12 Dec 13 Dec 14 Jun 15 Net debt (HK$M) 35,768 44,254 50,505 58,624 60,960 Gearing (%) 15.4% 17.8% 19.2% 22.4% 22.8% Interest cover (underlying) – times 10.4 6.7 5.5 6.1 6.0 Cash interest cover (underlying) – times 8.4 5.4 4.5 4.9 5.1 Net Debt Reconciliation
Slide 13: Financial Summary: Liquidity
Financial Summary 13 Liquidity Dec 14 Jun 15 Change % HK$M HK$M Bank balances and short-term deposits 10,115 9,606 -5% Total undrawn facilities - Committed 13,761 12,626 -8% - Uncommitted 9,634 9,613 -0.2% Refinancing Profile at 30th June 2015 HK$M 20,000 26 RMB 15,000 1,561 Non RMB 324 325 487 10,0
Slide 14: Property
PROPERTY Property
Slide 15: Property Results Highlights
PROPERTY Results Highlights 15 HK$M HK$M Change Jun 14 Jun 15 Change % (Swire Properties - 100% Jun 14 Jun 15 (Swire Pacific’s share) % basis) Attributable profit 5,286 6,936 +31% Attributable profit 6,461 8,493 +31% Underlying profit 3,058 3,208 +5% Underlying profit 3,775 3,938 +4% Valuation gains
Slide 16: Movement in Underlying Profit (Swire Properties)
PROPERTY Movement in Underlying Profit (Swire Properties - 100% basis) 16 HK$M 4,000 +51 (17) 3,938 +85 3,775 +44 3,500 2014HY HK property Mainland China Increase in profit Decrease in profit 2015HY Underlying profit investment income property from property from hotels Underlying profit investment i
Slide 17: Operating Statistics - Office
PROPERTY Operating Statistics - Office 17 Hong Kong Office Lease Expiry Profile* - at 30th June 2015 % 100 80 60 40 79 20 4 17 0 Jul - Dec 2015 2016 2017 and beyond * Based on percentage of the total rental income attributable to the division for the month ended 30th June 2015. Latest Rentals Occupa
Slide 18: Operating Statistics - Retail
PROPERTY Operating Statistics - Retail 18 Hong Kong Retail Lease Expiry Profile* - at 30th June 2015 % 80 60 40 68 20 6 26 0 Jul - Dec 2015 2016 2017 and beyond * Based on percentage of the total rental income attributable to the division for the month ended 30th June 2015. Occupancy Retail Sales Gr
Slide 19: Future Developments
PROPERTY Future Developments 19 Expected Completed Principal Property Investment Portfolio* Projects completion date (‘000 sq. ft.) Total Total Total Total Total Total Total Total Total Total Hong Kong 30,000 20,876 21,029 22,106 23,280 23,588 24,799 26,099 26,099 27,079 27,079 Kowloon Bay Commercia
Slide 20: Property Prospects
PROPERTY Prospects 20 Opportunities Challenges Property The pick-up in demand for Retail sales have begun to fall office space in Hong Kong is in Hong Kong and retailers are expected to continue. This becoming more cautious. should support occupancy While our malls remain fully let, Aviation lev
Slide 21: Aviation
AVIATION Aviation
Slide 22: Aviation Results Highlights
AVIATION Results Highlights 22 Attributable Profit Key Financial Data HK$M Jun 2015 Change % HK$M 1,200 Total 1,100 $1,063 HAECO group 1,000 +198% 190 Revenue 5,734 +7% 900 Operating profit 263 +2% 800 700 Attributable profit 190 -10% 600 500 Total Share of post-tax profits from an associated compan
Slide 23: Cathay Pacific Group Highlights
AVIATION Cathay Pacific Group Highlights 23 Key Highlights Performance in H1 15 was considerably better, reflecting a better result from subsidiaries and associates and a higher airline profit. Passenger demand was strong, but yield decreased due to strong competition, lower fuel surcharges, cur
Slide 24: HAECO Group Highlights
AVIATION HAECO Group Highlights 24 Key Highlights HAECO Hong Kong’s results improved significantly, mainly due to an 11% increase in airframe services manhours sold. Capacity for airframe work increased as the workforce grew. HAECO Americas and HAECO Xiamen’s results were disappointing, reflecti
Slide 25: Aviation Prospects
AVIATION Prospects 25 Opportunities Challenges Property CX expects its business to do well Weak demand for HAECO in the second half of the year. Americas and HAECO Xiamen’s airframe services. HAECO Hong Kong’s airframe Aviation maintenance capacity for the HAESL is expected to continue to lo
Slide 26: Beverages
BEVERAGES Beverages
Slide 27: Beverages Results Highlights
BEVERAGES Results Highlights 27 Attributable Profit KeyOperating Key FinancialHighlights Data HK$M Jun 2015 +13% Total Change % 500 Total HK$M $456 450 $403 Operating profit 547 +14% 400 Share of post-tax profits 350 from joint venture and 166 -9% 245 associated companies 300 258 Mainland China 250
Slide 28: Volume Analysis
BEVERAGES Volume Analysis 28 Overall sales volume grew by 9% to 551 million unit cases. Volume Analysis by Franchise Territory 100% 80% Other still 60% Water 40% Tea 20% Juice 0% Sparkling 14HY 15HY 14HY 15HY 14HY 15HY 14HY 15HY Mainland China Hong Kong Taiwan USA Segment Information Mainland Chin
Slide 29: Beverages Prospects
BEVERAGES Prospects 29 Opportunities Challenges Property The introduction of new products Juice sales in Mainland China and marketing campaigns offer remain weak. the opportunity to increase sales volume and gain market share. Rising costs, especially staff costs Aviation in Mainland China, re
Slide 30: Marine Services
MARINE SERVICES Marine Services
Slide 31: Marine Services Results Highlights
MARINE SERVICES Results Highlights 31 Attributable Profit Key Financial & Operating Data HK$M Swire Pacific Offshore group Total 800 700 $658 Jun 2015 Change % 600 HK$M 500 -124% Revenue 3,032 -14% 400 SPO 300 644 Total HUD Operating profit 49 -94% 200 100 ($156) Attributable loss (169) -126% 0 14 1
Slide 32: SPO – Movement in Attributable Profit
MARINE SERVICES SPO – Movement in Attributable Profit 32 HK$M 1,000 +196 (568) 800 644 600 400 (106) 200 (39) (140) (135) (169) 0 (21) -200 2014HY Increase in Decrease in Decrease in Increase in net Impairment Increase in Others 2015HY Attributable revenue from revenue from other revenue finance cha
Slide 33: SPO Capital Expenditure and Fleet Growth
MARINE SERVICES SPO Capital Expenditure 33 SPO Fleet Growth Vessels expected Additions Disposals Half-year to be received in Vessel class 2014 30th June 2015 2015 2016 2017 Anchor Handling Tug Supply Vessels 40 - - 40 - - - Large Anchor Handling Tug Supply Vessels 23 1 - 24 - - - Platform Supply Ves
Slide 34: Marine Services Prospects
MARINE SERVICES Prospects 34 Opportunities Challenges Property SPO’s fleet replacement program The oil price is expected to has reduced the average age and remain low and this will continue increased the specification of its to put pressure on oil and gas fleet. This is expected to continue comp
Slide 35: Trading & Industrial
TRADING & INDUSTRIAL Trading & Industrial
Slide 36: Trading & Industrial Results Highlights
TRADING & INDUSTRIAL Results Highlights 36 Attributable Profit Key Highlights HK$M Profits fell significantly at Taikoo Motors, 300 Taikoo Total -42% following the termination of the VW importership Motors group $212 business at the end of 2014. 250 Total Akzo Nobel An unfavourable sales mix and low
Slide 37: Trading & Industrial Prospects
TRADING & INDUSTRIAL Prospects 37 Opportunities Challenges Property Following the termination of its Occupancy and salary costs importership business, TMG continue to rise in Hong Kong continues to transform into a notwithstanding relatively weak Aviation multi-brand dealership business, retail
Slide 38: Outlook & Strategic Priorities
Outlook & Strategic Priorities John Slosar, Chairman
Slide 39: Outlook & Strategic Priorities
Outlook & Strategic Priorities 39 Outlook: • Overall outlook for 2H 15 is positive. • Principal favourable factors are good results from Swire Properties, better overall results from the Cathay Pacific group and profits from the sale of units at OPUS HONG KONG. • SPO is expected to remain weak as th
Slide 40: Appendix
Pi SwiRE PACIFIC Appendix
Slide 41: Corporate Structure
Corporate Structure At 30th June 2015 41 Swire Pacific Limited (‘A’ shares: 00019; ‘B’ shares: 00087) Sustainable growth in shareholder value over the long term Earnings per ‘A’ share : Equity attributable to the Attributable Profit: Underlying Profit: HK$5.30 Company’s shareholders per ‘A’ HK$7,977
Slide 42: Corporate Structure
Corporate Structure At 30th June 2015 Swire Pacific Limited 42 Property Aviation Beverages Marine Services T&I Trading Investment Properties Cathay Pacific group Swire Beverages Swire Pacific Offshore Hong Kong Airlines Has the right to manufacture, Operates a fleet of Swire Retail group: Pacific
Slide 43: Financial Summary: Profit Bridge
Financial Summary 43 Profit Bridge Jun 14 Jun 15 HK$M HK$M Attributable profit 6,484 7,977 Less: adjustments in respect of investment (2,154) (3,144) properties Underlying profit attributable to the 4,330 4,833 Company’s shareholders Other significant items: Loss on sale of property, plant and equip
Slide 44: Movement in Investment Properties
PROPERTY Movement in Investment Properties 44 HK$Bn 226 +3.2 225.6 224 +1.5 +1.2 (0.8) 222 (0.1) 220.6 220 218 1st Jan 2015 Capex Disposals Net transfers to Net valuation Net valuation 30th Jun 2015 property, plant gain in Mainland gain in Hong and equipment China Kong, USA and Singapore Revaluati
Slide 45: 2015 Interim Results Analyst Briefing
2015 Interim Results Analyst Briefing Sustainable Growth Through Diversified Operations 20th August 2015 | Hong Kong