Lotte Shopping Co., Ltd.

Transcription

1 Lotte Shopping Co., Ltd. INVESTOR RELATIONS 27 th January 2011

2 Disclaimer The information contained in this presentation has not been independently verified. No representation or warranty express or implied is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained herein. It is not the intention to provide, and you may not rely on this presentation as providing, a complete or comprehensive analysis of Lotte Shopping Co., Ltd. s financial or trading position or prospects. The information and opinions in this presentation are provided as at the date of this presentation and are subject to change without notice. None of Lotte Shopping nor any of its respective affiliates, advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this presentation. Some of the information in this presentation may contain projections or other forward-looking statements regarding future events or the future financial performance of Lotte Shopping, as defined in the safe harbour provisions of the U.S. Private Securities Litigation Reform Act of Such forward-looking statements can be identified by the use of forward-looking terminology such as anticipates, approximately, are expected to, believes, expects, intends, may, seeks, should, will, will continue, would be or similar expressions or the negative thereof or other variations thereof or comparable terminology. These forwardlooking statements include all matters that are not historical facts, and actual results may differ materially. Lotte Shopping undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Financial information presented herein are being reviewed by our independent auditor, and such figures are subject to change. This presentation does not constitute an offer or invitation to purchase or subscribe for any securities and no part of it shall form the basis of or be relied upon in connection with any contract, commitment or investment decision in relation thereto. The shares of Lotte Shopping have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the Securities Act), or the securities laws of any state of the United States or other jurisdiction and may not be offered or sold within the United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and any applicable state or local securities laws. The following presentation may not be forwarded or distributed to any other person and may not be reproduced in any manner whatsoever. Any forwarding, reproduction or distribution of this presentation in whole or in part is unauthorized and may result in a violation of the Securities Act or the applicable laws of other jurisdictions. 2

3 FY10 4Q Earnings Results 3

4 Key Highlights for FY10 4Q Became the first Korean retailer to achieve 1 billion annual operating profit with double digit growth Strong earnings in Department Store and Hypermarket business High profit growth in Credit Card, TV Home shopping and CVS business SSSG improvement in Department stores and Hypermarket stores Department Stores: +6.1%(FY09) +7.8%(FY10) Hypermarkets: -0.5%(FY09) +4.7%(FY10) Expansion of core business Department Stores: Opening of Gwangbok Aqua Mall (Aug. 25, 2010) Cheongnyangri Store (Aug. 20, 2010) Yul-ha Outlet Store (Jul. 15, 2010) Hypermarkets: Opened 7 new stores Reinforcement of business portfolio through strategic M&A 3 Department Stores and 14 Hypermarts From GS Retail Lucky Pai TV Home Shopping (China) 4

5 Lotte Shopping at a Glance Financial Results (Unit : bil. KRW, %) FY10 3Q FY09 4Q yoy FY10 FY09 yoy Gross Sales 4.0 tr 3.4 tr +18.1% 14.1tr 12.0tr +17.3% Operating Profit % 1, % Profit before tax % 1, % Net Profit % 1, % 5

6 Department Stores: The market leader continues to grow OPM 1,851 4Q Q % % % 12.1% 254 4Q Q 2010 Gross Sales 2,097 2,730 6,148 FY09 Operating Profit 11.0% (Unit: billion KRW) FY % 6,921 3,100 FY10 (Unit: billion KRW) % 11.5% FY10 Revenue Growth: +13.3%(4Q,yoy), +12.6%(FY10,yoy) SSS : +7.8%(4Q,yoy), +7.8%(FY10,yoy) EBITDA margin Key points 4Q10 & FY10 FY 10 FY 09 4Q FY 10 4Q FY % 13.6% 13.9% 13.9% OPM of stores operated for over 2 years FY 10 FY 09 4Q FY 10 4Q FY % 12.8% 12.3% 11.4% Steady revenue growth in all merchandise (SSS) - imported luxury goods: 10.0%, women s cloths: 5.9%, men s cloths and sports outfits: 8.7% - accessories: 6.5%, foods: 10.5%, homewares: 6.8% 2011 expansion schedule: - Gimpo Skypark (Dec) - Daegu Bongmu Outlet (May), Paju Outlet (Dec) 6

7 Hypermarket: Hit the bull's eye on both revenue and profit 1, % Gross Sales 4,445 1,413 (Unit: billion KRW) % 5,426 Key points 4Q10 & FY10 Revenue Growth: +24.7% (4Q yoy), +22.1% (FY10 yoy) SSS: +2.8% (4Q yoy), +4.7% (FY10 yoy) OPM: +0.8%p(4Q), +1.9%p(FY10) EBITDA margin FY 10 FY 09 4Q FY 10 4Q FY % 7.7% 7.3% 7.0% OPM 3.8% % 4Q Q 2010 Operating Profit 4.6% (Unit: billion KRW) 5.7% 3.8% % 311 OPM of stores operated for over 2 years FY 10 FY 09 4Q FY 10 4Q FY % 7.5% 5.0% 4.4% Merchandise innovation (Develop Value Innovative Products ) - Tongken Chicken, Tongken laptop and halfprice Hanwoo beef: lower price, higher quality 2011 expansion schedule: 9 new stores - 1 in1q, 1 in 2Q, 1 in 3Q, 6 in 4Q 7

8 Hypermarkets in overseas: Successful start in the local market Overseas performance (managerial revenue inc. VAT) * No. of stores China 82 Indonesia 22 Vietnam 2 Total 106 Revenue 2,174 (mil. RMB) 16,750 (bil. RP) 3,375 (bil. VND) 663 (bil. KRW) 4Q Q~4Q 2010 Growth Growth Revenue Overall SSS Overall SSS 23.5% 7.8% 18.1% 8.1% 113.0% 25.6% 23.9% 8.3% 8,643 (mil. RMB) 64,475 (bil. RP) 10,101 (bil. VND) 2,582 (bil. KRW) 19.1% 9.4% 9.5% 6.4% 87.3% 32.3% 17.3% 8.8% * Constant exchange rate: 1RMB = 200, 100RP= 12.0, 100VND=\7.94 Key Factors Stable revenue growth - SSS 8.8%(FY10), Topline-sales : 17.3%(FY10) Expansion plan for China 13 (Open 15 new stores and scrap 2 stores), Indonesia 4, Vietnam 1 Operating strategy - Standardize work process (HR, Merchandise, interior, ISP, POS, furniture, cart) - Established integrated purchasing division for 4 entities under Shanghai corporate (Oct. 10) - Enhance PB, launch strategic marketing, and increase subsidies for co-promotion 8

9 The new growth drivers Lotte Super Sustainable growth through mutual partnership Maintains high growth rate - Revenue : +28.9%(4Q), +36.6% (FY10) Enhance online shopping mall business as a long-term growth strategy Store expansion in new towns with Ownertype franchise model - mutual win-win partnership with local merchants OPM of stores operated for over 2 years FY 09 FY 10 4Q FY 09 4Q FY % 2.9% 2.0% 3.6% Lotte Card Maximizing synergy within Lotte Shopping s retail business Revenue up driven by increased usage - Revenue : +24.5% (4Q), (FY10) - OP : +31.2%(4Q), +18.8%(FY10) Number of card holders : 8.7 million( 09) 10 million( 10) M/S : 6.5%(FY09) 7.4%(FY10) Delinquency ratio trend FY 09 FY 10 4Q 1Q 2Q 3Q 4Q 1.37% 1.44% 1.49% 1.70 % 1.42 % 9

10 The new growth drivers Lotte Homeshopping Leading the market growth Korea Seven Remarkable improvement in profitability Increasing revenue: +31.3% (4Q), % (FY10) (Market average: +17.7%) OP growth: +32.9% (4Q), % (FY10) M/S : 20.8% ( 09) 23.3%(FY10) Online Sales: +45.7%(FY10) Online & Offline synergy - Pop-up Studios inside Lotte Mart Stores Revenue growth: +20.4%(4Q), +14.5%(FY10) OP growth: +224% (4Q), % (FY10) - Enhancing investment efficiency with Owner-type franchise model store expansion Improved profit structure led by acquisition of BTW - Increased profitability driven by Improved buying power Increased revenue generated by income from franchisees 10

11 Non-Operating Profit Analysis (Unit: bnw) FY09 4Q FY10 4Q FY09 FY10 Operating Profit ,147 Non-Operating Profit Equity Method Gains Lotte Card Lotte Midopa Lotte Station Building * ** Lotte Square Lotte Homeshopping Oversea Business Others Interest Income/Expense Others -21 *** *** 147 Profit Before Tax ,329 * Includes good will amortization amount of 10 bnw (quarterly) ** Includes good will amortization amount of China Makro 3 bnw, Indonesia Makro 5 bnw (quarterly), Times goodwill amount of 12bnW from FY10 (quarterly) *** Gains from disposal of asset (1 Department Store, 5 Hypermarkets): bnw / Foreign currency translation loss: bnw 4Q, 58.5 bnw FY 10 (due to borrowing from Lotte Japan $ 30 bil.) 11

12 Appendix 12

13 Income Statement LotteShopping Q 2Q 3Q 4Q YTD 1Q 2Q 3Q 4Q YTD 1Q 2Q 3Q 4Q YTD Gross sales 2,695 2,621 2,617 2,992 10,925 2,904 2,892 2,868 3,353 12,017 3,290 3,317 3,531 3,960 14,098 Gross profit , ,015 3, ,035 1,189 4,182 Oprerating profit ,147 (%) 7.6% 7.7% 5.6% 7.1% 7.0% 7.9% 7.7% 5.8% 7.8% 7.3% 8.9% 8.9% 6.8% 12.6% 8.1% EBITDA , , ,443 (%) 10.3% 10.7% 8.9% 10.4% 10.1% 10.8% 10.8% 9.1% 10.7% 10.4% 10.7% 10.9% 9.1% 10.2% 10.2% Profit before tax ,329 discontinued operation Net profit , (Unit: KRW bn) Lotte Department Q 2Q 3Q 4Q YTD 1Q 2Q 3Q 4Q YTD 1Q 2Q 3Q 4Q YTD Gross sales 1,396 1,371 1,223 1,668 5,657 1,480 1,470 1,347 1,851 6,148 1,651 1,652 1,522 2,097 6,921 Gross profit , , ,273 Oprerating profit (%) 11.3% 12.4% 9.2% 11.9% 11.3% 11.8% 12.0% 8.7% 11.4% 11.0% 12.1% 12.7% 8.6% 12.1% 11.5% EBITDA (%) 13.6% 14.9% 12.3% 14.7% 13.9% 14.5% 14.9% 12.0% 14.0% 13.9% 13.8% 14.6% 11.2% 14.2% 13.6% Lotte Mart Q 2Q 3Q 4Q YTD 1Q 2Q 3Q 4Q YTD 1Q 2Q 3Q 4Q YTD Gross sales 1, ,092 1,024 4,169 1,109 1,073 1,131 1,133 4,445 1,247 1,237 1,530 1,414 5,427 Gross profit , ,365 Oprerating profit (%) 3.9% 2.8% 2.7% 1.2% 2.7% 4.2% 3.5% 3.6% 3.9% 3.8% 6.2% 5.9% 6.2% 4.5% 5.7% EBITDA (%) 6.8% 6.2% 5.9% 5.0% 6.0% 7.2% 6.8% 6.8% 7.4% 7.0% 8.0% 7.9% 8.1% 6.8% 7.7% 13

14 Capex* (unit:bnw) Year End Year End Year End Year End Year End Department Store ,188 Discount Store ,175 Others Oversea Business Total 1,246 1,464 1,833 2,079 2,753 14

15 Store Network Domestic Stores Year End Year End Year End Year End Opening Year End GS Retail Total Total Total Total 1H 2H Total Department Store full-line store * - 23 franchise store young plaza outlet mall Hypermarket * Open 1 new store, and scrap 1 store. Oversea Stores Year End Year End Year End Year End Opening acquisition/ Year End Total Total Total Total 1H 2H adjustments Total Department Store Russia China Hypermarket China - *8 8 *** Vietnam Indonesia - - ** * acquired 8 CTA Makro stores in Beijing and Tianjin. **acquired 19 Makro stores in Indonesia. ***acquired 68 Times stores in China.(including 11 supermarket) 15

16 Balance Sheet (Unit: KRW bn) Total assets 8,370 11,854 11,942 13,323 18,658 21,216 Current assets 1,390 3,465 2,153 1,943 2,033 2,593 Non-current assets 6,980 8,389 9,789 11,380 16,625 18,623 Total liabilities 5,149 4,350 3,768 4,478 6,327 8,091 Current liabilites 3,528 3,378 3,293 3,149 3,288 5,022 Non-current liabilities 1, ,329 3,039 3,069 Shareholder's equity 3,221 7,504 8,174 8,831 12,332 13,126 Paid-in-capital Capital surplus 1,148 4,652 4,652 4,651 4,651 4,651 Capital adjustments (16) (16) (32) Accumulated other comprehensive income ,867 2,703 Retained earnings 1,911 2,643 3,298 4,005 4,685 5,660 16

17 Thank You Lotte Shopping Investor Relations