COURTS ASIA LIMITED Results Briefing l 29 May 2013 l Results for the year ended 31 March 2013

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1 COURTS ASIA LIMITED Results Briefing 29 May 2013 Results for the year ended 31 March 2013

2 Executive summary Financial highlights Operational updates 2

3 Executive summary 1 EBITDA up 11.1% to S$75 million, net profit increased 5.1% for FY March 2013 compared to FY March Sales up 9.6%, boosted by the opening of new stores and increased sales of tablets and smartphones 3 Gross profit up by 7.9% and GP margin remained constant at 32.0%. 4 Healthy balance sheet with strong cash position of S$89.0 million as at 31 March Outlook: Group s growth targets remain on track despite challenges in the macroeconomic operating environment 3

4 Executive summary Financial highlights Operational updates 4

5 Financial summary and key financial ratios (S$m unless otherwise stated) Income statement Q4 FY12/13 Q4 FY11/12 FY Mar 2013 FY Mar 2012 Sales Gross profit Basic EPS (cents) 2.40* Diluted EPS (cents) * Balance sheet As at 31 March 2013 As at 31 March 2012 Cash and bank balances Trade and other receivables Borrowings NAV per ordinary share (cents) Statement of cash flows Q4 FY12/13 Q4 FY11/12 FY Mar 2013 FY Mar 2012 Net cash provided /(used in) from operating activities (2.5) 11.4 Net cash used in investing activities (3.6) - (14.4) (5.3) Net cash provided from/(used in) financing activities (7.4) Notes: FY: Refers to the full-year period ended 31 March 1: Diluted earnings per share is calculated by dividing the Group's (loss)/profit after tax attributable to weighted average number of ordinary shares in issue and share appreciation rights granted under SAR Plan totaling to 527,500,000 2: Net asset value (for the issuer and group) per ordinary share based on the total number of issued shares excluding treasury shares of the issuer at the end of the financial year *On 1 Oct 2012, the no. of issued shares of the Company increased from 200 million to 500 million upon the consolidation of every 2 Shares in our issued shares into 1 Share and the sub-division of each Share in our issued shares into 5 Shares. Upon listing of the Company on SGX-ST on 15 October 2012, with the issue of new shares, the resultant number of issued shares of the Company increased to 5605 million.

6 Sales S$'000 FY12/13 Qtr 4 FY11/12 Qtr 4 % Change YTD12/13 YTD11/12 % Change Sales of goods 155, , % 657, , % Service charges 32,511 25, % 138, , % Transfer from / (to) unearned service charges 200 7, % (2,104) (3,910) -46.2% Earned service charges 32,710 33, % 136, , % Group Sales 188, , % 793, , % FY12/13 Qtr 4 S$'000 Qtr 4 Like-for-like sales growth Singapore: 6.0% Malaysia: 6.42% (in RM terms) FY12/13 Qtr 4 FY11/12 Qtr 4 % Change Sales of goods 155, , % Service charges 32,511 25, % 188, , % 6

7 Total sales Total sales and EBIT margin Total sales (S$m) EBIT margin (%) 4.3% 6.0% 8.6% 8.7% Net sales by geography Sale of goods cash/credit mix S$m Group % 24.3% 22.7% 21.9% 73.0% 75.7% 77.3% 78.1% Malaysia Notes: FY: Refers to the full-year period ended 31 March Singapore Sale of goods - credit Sale of goods - cash 7

8 Product range focused on 4 key segments % of FY Mar 2013 sale of goods Electrical Products Major White Goods Vision Small appliances Audio IT Products Computers Accessories Photography Mobile Furniture Mattresses Bedroom furniture Dining room furniture Living room furniture Home office products Services 42.2% 34.6% 18.4% 4.8% Warranty sales Other services Product replacement services Sale of goods cash/credit mix Singapore Sale of goods cash/credit mix Malaysia 13.7% 10.0% 9.2% 10.4% 65.7% 64.8% 61.9% 56.5% 86.3% 90.0% 90.8% 89.6% 34.3% 35.2% 38.1% 43.5% Sale of goods - credit Sale of goods - cash Sale of goods - credit Sale of goods - cash Notes: FY: Refers to the full-year period ended 31 March 8

9 Operating metrics Sales per sq. ft. 1 Like-for-like sales growth 2 Gross profit S$ Singapore Singapore , % 32.1% 31.5% 5.7% 8.2% 31.2% 30.4% MYR Malaysia FY2011 FY2012 FY % Malaysia 6.3% % FY2011 FY2012 FY2013 Gross profit (S$m) Gross profit margin (%) Notes: 1: Based on weighted average retail square footage and sale of goods from stores for each period, excluding sales from events held outside stores 2: Like-for-like sales (net merchandise sales) growth for a financial year is calculated based on stores which had been operating for the entire 12 months over that particular year and the entire 12 months over the preceding year. 9

10 Earned service charge income % 15.4% 16.5% 17.2% 15% % 40 5% % Malaysia (S$m) Singapore (S$m) % of net sales Notes: FY: Refers to the full-year period ended 31 March 10

11 Breakdown of expenses and EBITDA Breakdown of expenses S$m Others Impairment loss on trade receivables Salaries and wages Rental on operating leases Distribution and marketing EBITDA 2 9.3% 9.4% Segment Result by Geographical Location 3 5.4% % Notes: EBITDA (S$m) EBITDA margin (%) FY: Refers to the full-year period ended 31 March 1: Others include depreciation, amortisation, finance and other expenses 2: EBITDA calculated as profit before tax add finance expense and depreciation and amortisation expense (3) Malaysia Singapore 3: Segment results are profit before other income, income tax and finance expense. 11

12 Jun 07 Sep 07 Dec 07 Mar 08 Jun 08 Sep 08 Dec 08 Mar 09 Jun 09 Sep 09 Dec 09 Mar 10 Jun 10 Sep 10 Dec 10 Mar 11 Jun 11 Sep 11 Dec 11 Mar 12 Jun 12 Sep 12 Dec 12 Mar 13 Delinquency rates and impairment loss 16.2% 180+ days delinquency rates 4.9% 8.3% 3.0% -7.9% -1.9% Malaysia Singapore Impairment loss on trade receivables as a percentage of average portfolio 7.6% 3.1% 2.2% 6.1% 3.0% 5.1% 2.7% 2.6% 4.6% Singapore Malaysia Malaysia - normalised Notes: FY: Refers to the full-year period ended 31 March Significant reversal of over-impairment allowance of trade receivables in FY Mar 2011 mainly due to: over-provision for impairment loss in previous years improved credit monitoring and collections, resulting in improved credit risk position Net impairment allowance in FY Mar 2011 would have been larger by S$8m without an adjustment on the over-impairment allowance made in previous financial years This reversal of the over-impairment allowance of trade receivables in FY Mar 2011 is a non-recurring event 12

13 Allowance for impairment loss on trade receivables Singapore Malaysia 10.5% 3.4% 3.5% 2.6% 2.8% 6.8% 6.6% 5.3% Allowance for impairment loss on trade receivables (S$m) % of trade receivables at balance sheet date Allowance for impairment loss on trade receivables (S$m) % of trade receivables at balance sheet date Notes: FY: Refers to the full-year period ended 31 March 13

14 Working capital management Trade payable days Inventory days Days Days Notes: FY: Refers to the full-year period ended 31 March 14

15 Executive summary Financial highlights Operational updates 15

16 Makeover of Courts Toa Payoh Grand re-opening in March 2013 Launch of Courts Connect in Toa Payoh 16

17 Roll out of Courts Connect Launched Courts Connect in Megastore the first time in Singapore that services from all major telecommunications providers are under one roof Courts Connect is currently in five stores: o Megastore o Causeway Point o Clementi o Funan DigitaLife Mall o Toa Payoh Two upcoming Courts Connect in JEM and Ang Mo Kio, with plans to roll out Courts Connect islandwide by September

18 ecourts Update Embraced online and integrated it into retail experience From 7,000 SKUs to 9,000 SKUs Buy air-con online since February 2013 Credit online from March 2013 Partnered with Visa for its Bigger Better Sale Great Singapore Sale campaign 18

19 Completed new store openings, refurbishments and relocations across SG and MY in FY Mar 2013 Star Vista store in Buona Vista opened in September 2012 New stores opened Opened five stores Shah Alam (May 2012) Ipoh, Perak (Aug 2012) Mentakab, Pahang (Nov 2012) Jerteh, Terengganu (Jan 2013) Sungai Petani, Kedah (March 2013) Stores refurbished/relocated Refurbished four stores Lot One, Choa Chu Kang Causeway Point, Woodlands Megastore, Tampines Toa Payoh Refurbished six stores Kuantan Kota Bharu Kuching Ipoh Shah Alam Kajang Relocated two stores Kulai Kota Tinggi 19

Upcoming Store Activities across SG, MY,

Megastore in Bandar Sri Damansara, Klang

20 Upcoming Store Activities across SG, MY, ID to look forward to Calendar 2013 Calendar 2014 Singapore Malaysia Indonesia Opening of Courts in JEM on 11 June 2013 Opening of Courts in Westgate in end-2013 WEST GATE First Big-Box Megastore in Bandar Sri Damansara, Klang Valley opening by August 2013 Store Relocation: Klang (April) Bahau (May) Our biggest store yet at 140,000 sq. ft. in Bekasi, Eastern Jakarta. Operational in 2014 New stores: 2 New stores: 1 Big-Box + Plan 6 stores 20

21 Appendix 21

Unaudited results for the year ended 31 March 2013 Singapore: Contributed 68% of the Group s sales, an 11.3% increase compared to the last financial year. Like-for-like sales increased by 8.

22 Unaudited results for the year ended 31 March 2013 Singapore: Contributed 68% of the Group s sales, an 11.3% increase compared to the last financial year. Like-for-like sales increased by 8.2% as a result of continuing initiatives to grow sales through broad promotional activities and enhanced product ranges. Sales were boosted with the full twelve-month operations of the Bukit Timah and Clementi stores which were opened in December 2011 and January 2012 respectively. The online Store and Megastore Re-launches, in October 2012 and December 2012 respectively, alongside with the Star Vista store which commenced in September 2012 also contributed to higher sales. Malaysia: Contributed 32% of the Group s sales, registered a 6.1% (8.3% in RM term) increase as compared to FY11/12. Like-for-like sales increased by 6.3% (in RM terms) and the increase came mainly from digital products due to incremental sales of tablets and smartphones. Gross profit increased by 7.9% or $18.4 million due mainly to an increase in sales. The gross profit margin remained consistent at about 32% for both financial years. Other income and other gains - net increased by 18.4% mainly due to a one-time write back of impairment on overdue debtors and a fair value change on the interest rate swap derivative. The increase was partially offset by an absence of service fees from ARG in FY12/13. Distribution and marketing expenses increased was primarily attributable to an increase in sales. Administrative expenses increase was a result of higher occupancy costs such as branches rental costs and depreciation charge amounting to $5.7 million arising from the opening of new stores in Singapore and Malaysia; and higher salaries and wages due to increase in staff headcount. Finance expenses increased mainly due to higher interest expenses and higher amount of borrowings from Syndicated Senior Loan in Malaysia. This was partially offset by lower exchange loss incurred in FY12/13. 22

23 Unaudited Balance Sheet as at 31 March 2013 Cash and bank balances increased mainly due to proceeds from the issue of shares of $44.0 million and net proceeds from borrowings of $20.0 million. This was partially offset by an increase in net cash used in working capital mainly due to financing of receivables as a result of higher credit sales, payment to trade payables, capital expenditure incurred for new stores of $15.3 million and dividend payment of $12.6 million during the year ended 31 March Trade and other receivables (current and non-current) increased mainly a result of higher credit sales in Singapore. Inventories increased due to the stocking up of new stores in Singapore and Malaysia. Property, plant and equipment increased mainly due to additions for new stores in both Singapore and Malaysia such as renovations and fittings, partially offset by depreciation charge. Intangible assets increased mainly due to development costs incurred for the online store and enhancement made for enterprise resource planning (ERP) software, partially offset by normal depreciation of existing assets. Trade and other payables decreased mainly due to lower bonus accrual, partially offset by higher trade payables in both countries. Borrowings increased mainly due to proceeds from the renewal of the Asset Securitisation programme and HSBC term loan of $29.9 million and $13.8 million respectively in Singapore and $5.3 million proceeds from the Syndicated Senior Loan in Malaysia. This was partially offset by full repayment of a term loan of $30.1 million in Singapore. 23

24 Unaudited Statement of Cashflows for the year ended 31 March 2013 Group Group Q4 Q4 YTD Mar 13 YTD Mar 12 FY12/13 FY11/12 FY12/13 FY11/12 S$'000 S$'000 S$'000 S$'000 Cash flows from operating activities: Net profit 12,639 15,642 41,405 39,393 Adjustments for: Tax 3,203 3,125 9,958 8,704 Depreciation and amortisation 2,603 1,620 9,748 7,756 Amortisation of deferred income (1,143) (1,012) (3,641) (2,829) Interest expense 4,022 2,952 15,832 11,778 Interest income (555) (634) (4,187) (2,334) Amortisation of borrowing costs ,608 1,952 Loss/(gain) on disposal of property, plant and equipment net of deferred income 7 1, (22) Gain on disposal of non-current assets classified as held for sale - (1,131) - (1,131) Changes in fair value of derivative financial instruments (309) 602 (93) 1,164 Share-based compensation Placement and listing expense Operating cash flow before working capital changes 21,052 22,775 71,290 64,431 Changes in working capital Inventories (49) (927) (6,454) (6,882) Trade and other receivables (12,861) (17,276) (56,505) (51,215) Trade and other payables (1,458) 11,136 (510) 14,692 Cash generated from operations 6,684 15,708 7,821 21,026 Tax paid (net) (1,479) (1,262) (7,663) (8,009) Foreign currency translation differences 619 (440) (2,617) (1,682) Net cash provided by/(used in) operating activities 5,824 14,006 (2,459) 11,335 Cash flows from investing activities Additions to property, plant and equipment (3,451) (1,758) (15,331) (9,017) Additions to intangible assets (566) (1,793) (1,671) (2,373) Acquisition of a subsidiary * - Proceeds from sale of property, plant and equipment Proceeds from sale of non-current assets classified as held for sale - 2,966-2,966 Interest received ,393 2,334 Net cash used in/ (provided by) investing activities (3,607) 49 (14,420) (5,347) 24

25 Unaudited Statement of Cashflows for the year ended 31 March 2013 Group Group Q4 Q4 YTD Mar 13 YTD Mar 12 FY12/13 FY11/12 FY12/13 FY11/12 S$'000 S$'000 S$'000 S$'000 Cash flows from financing activities Repayment of syndicated facilities - (58,083) - (45,405) (Repayment)/proceeds from syndicated senior loan (716) 103,740 5, ,740 (Repayment)/proceeds of finance lease liabilities - net (47) (226) 526 (120) Proceeds from term loan - 11,117 15,000 11,117 Repayment of term loan (1,250) (3,191) (30,190) (9,131) (Repayment of)/proceeds from loan received on asset securitisation (3,979) (713) 29,924 (2,160) Decrease/(increase) in fixed deposits pledged as securities for banking facilities 3, ,114 (2,872) Decrease in deposits for asset securitisation 12, , Proceeds from placement and listing - net ,966 - Interest paid (4,022) (2,952) (15,832) (11,778) Dividend paid - (47,746) (12,582) (51,744) Net cash provided by/(used in) financing activities 5,696 3,473 50,202 (7,363) Net increase/(decrease) in cash and cash equivalents 7,913 17,528 33,323 (1,375) Cash and cash equivalents as at beginning of financial period/year 73,931 31,717 48,973 50,528 Effects of currency translations on cash and bank balances 54 (272) (398) (180) Cash and cash equivalents as at end of financial period/year 81,898 48,973 81,898 48,973 * Less than $1,000 The cash and cash equivalents comprise the following:- 25

26 Q&A To view the results presentation and briefing, please visit which will be available from 5 June,

COURTS ASIA LIMITED Results Briefing l 15 February 2013 l Results for the 3rd quarter ended 31 December 2012

COURTS ASIA LIMITED Results Briefing 15 February 2013 Results for the 3rd quarter ended 31 December 2012 Executive summary Financial highlights Operational updates 2 Executive summary 1 Net profit increased