2016 Results. 28 February Analyst Briefing

Transcription

1 2016 Results 28 February 2017 Analyst Briefing 1

2 FORWARD-LOOKING STATEMENTS Certain statements contained in this presentation maybe viewed as forward-looking statements. Such forwardlooking statements represent the Company s expectations or beliefs concerning future events and involve known and unknown risks and uncertainty that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. 2

3 AGENDA Financial Review Operation Review and Outlook - Motor and Motor Related Business - Food and Consumer Products Business Strategy 3

4 FY2016 Financial Review 4

5 PERFORMANCE HIGHLIGHTS Turnover +3.7% FY16 vs FY15 Profit attributable to shareholders -10.4% FY16 vs FY15 HK$ M 50,000 46,462 44,803 HK$ M 1,000 2H: 26,341 2H: 22, , H: 291 2H: 290 1H: 20,121 1H: 21,840 1H: 220 1H:

6 TURNOVER * - BY BUSINESS SEGMENTS # Note: * For sales to third parties only # 2H16 turnover only 6

7 TURNOVER * - BY MARKETS Mainland China Hong Kong & Macao Other Markets Note: * For sales to third parties only 7

8 FY2016 FINANCIAL REVIEW (cont d) For the year ended 31 December 2016 FY2016 FY2015 Basic earnings per share (HK cents) % Proposed final dividend per share (HK cents) % Total dividend per share (HK cents) % Return on equity 5.7% 6.2% -0.5% pt Return on capital employed 5.0% 5.0% - 8

9 CONSOLIDATED BALANCE SHEET HIGHLIGHTS HK$'M 31 Dec Dec 2015 Non-current assets 8,694 6,901 Current assets 16,721 14,257 Current liabilities 10,431 7,115 Non-current liabilities 5,740 4,555 Net assets 9,244 9,488 Non-controlling interests Shareholders' funds 8,732 9,047 Net gearing ratio 41.8% 37.6% 9

10 CONSOLIDATED CASH FLOW STATEMENT HIGHLIGHTS HK$'M FY2016 FY2015 (Before LFA) Net cash generated from operating activities 2,234 3,030 Net cash proceeds from / (used in) other financing activities 151 (2,455) Net cash used in investing activities (1,999) (610) Dividends paid to shareholders of the Company (204) (233) Net increase / (decrease) in cash and cash equivalents 182 (268) 10

11 FY2016 Operation Review and Outlook 11

12 MOTOR AND MOTOR RELATED BUSINESS Segment Turnover Segment Result From Operations HK$ M 32,598 34,097 HK$ M 1,014 1,095 2H:17,270 2H:17,487 2H:468 2H:515 1H:15,328 1H:16,610 1H:546 1H: Segment Turnover Segment Result From Operations Segment Margin HK$'M FY2016 % of total FY2015 FY2016 FY2015 FY2016 FY2015 Mainland China 24, % 24, % % 1.4% 0.3% +1.1%pt Hong Kong & Macao 5, % 6, % % 9.1% 11.8% -2.7%pt Other Markets 2, % 2, % % 6.3% 9.2% -2.9%pt 32, % 34, % 1,014 1, % 3.1% 3.2% -0.1%pt 12

13 MOTOR AND MOTOR RELATED BUSINESS FY2016 Operation Review Mainland China No. of new vehicles sold in PRC (units) DCH Overall market FY16 2H16 1H16 FY15 % change 2H15 1H15 FY16 FY15 % change Passenger Cars Commercial Vehicles 95,900 51,700 44,200 90, % 49,200 41, M 21.1M +14.9% 4,400 2,200 2,200 4, % 2,500 2, M 3.5M +5.8% Total 100,300 53,900 46,400 95, % 51,700 43, M 24.6M +13.7% Note: Market data sourced from China Association of Automobile Manufacturers Figures included distributorship and dealership sales The calculation of the variance % is based on the actual no. of units sold 13

14 MOTOR AND MOTOR RELATED BUSINESS FY2016 Operation Review (cont d) Mainland China Dealership Network Key Brands No. of 4S shop No. of showroom Audi 6 1 Bentley 7 -- Chevrolet 3 -- Ferrari / Maserati 3 -- Honda 11 3 Isuzu / Qingling 4 2 Lexus 7 1 Mercedes Benz 4 -- Nissan 5 -- SGM Buick 5 -- Toyota 22 6 Others 3 1 Total no. of 4S shops / showrooms as of 31 Dec 2016:

15 MOTOR AND MOTOR RELATED BUSINESS FY2016 Operation Review (cont d) Mainland China Same Store Growth FY2016 vs FY2015 New car sales unit +6.9% Service unit +1.4% After-sales service revenue +5.8% Dealership sales breakdown % of dealership turnover FY2016 FY2015 New car sales 90% 90% After-sales service 10% 10% by units by revenue FY2016 vs FY2015 FY2016 vs FY2015 New car sales +5.2% +5.9% After-sales service +0.3% +5.3% 15

16 MOTOR AND MOTOR RELATED BUSINESS FY2016 Operation Review (cont d) Mainland China Motor Related Business Finance lease business surged in 2016 Incomes from auto finance and insurance commission soared Continue to expand car rental business 16

17 MOTOR AND MOTOR RELATED BUSINESS Outlook Mainland China Overall market 2017 expected +6% Imbalance of supply and demand improved GP margin on new cars sales increasing Network expansion through M&A and greenfield projects Continue to improve finance lease penetration rate 17

18 MOTOR AND MOTOR RELATED BUSINESS FY2016 Operation Review Hong Kong & Macao No. of new vehicles sold (units) DCH (HK Only) HK Market FY16 2H16 1H16 FY15 % change 2H15 1H15 FY16 FY15 % change Passenger Cars Commercial Vehicles 6,000 2,900 3,100 7, % 3,700 3,600 34,500 41, % 4,400 2,200 2,200 5, % 2,700 2,800 15,500 19, % Total 10,400 5,000 5,400 12, % 6,300 6,500 50,000 61, % Note: Market data sourced from Transport Department, HKSAR The calculation of the variance % is based on the actual no. of units sold HK market share: 20.9%, +0.1% pt (FY15: 20.8%) Macao: market dropped by around 50% 18

19 MOTOR AND MOTOR RELATED BUSINESS FY2016 Operation Review Hong Kong & Macao Motor Related Business Airport service business performing well Tender awarded for: - equipment supply and asset management services from a major airline - environmental-friendly equipment installation (SCR devices) from franchised bus companies Pleasure Boat Business - No. of yacht boats sold increased by 57% (7 to 11 units) in

20 MOTOR AND MOTOR RELATED BUSINESS Outlook Hong Kong & Macao Overall HK market expected to slightly improve Benefited from weak Japanese Yen Motor related business profitability enhanced by environmental and airport projects Implementation of Euro 6 emission standard in 2018 likely to accelerate replacement of diesel trucks in 2017 Small impact on sale from new policy on electric car FRT subsidy 20

21 MOTOR AND MOTOR RELATED BUSINESS FY2016 Operation Review + Outlook Other Markets Singapore Unit sales: +20.5% CV replacement incentive schemes will expire in July 2017 Taiwan Unit sales: +13.1% for CV Disposal of Audi dealership business Myanmar Developing Isuzu and SGM Wuling ( 上汽通用五菱 ) business 21

22 FOOD & CONSUMER PRODUCTS BUSINESS Segment Turnover Segment Result From Operations HK$ M 13,833 10,710 HK$ M LFA:3, DCH 2H:5,174 DCH 2H:5,482 LFA: DCH 1H:4,778 DCH 1H:5,228 DCH 2H:87 DCH 1H:57 DCH 2H:123 DCH 1H: Segment Turnover Segment Result From Operations Segment Margin HK$'M FY2016 % of total FY2015 FY2016 FY2015 FY2016 FY2015 Mainland China 4, % 4, % % -2.6% -1.5% -1.1%pt Hong Kong & Macao 5, % 5, % % 4.7% 4.6% +0.1%pt Other Markets % % % -1.3% -2.1% +0.8%pt LFA (2H16) 3, % % , % 10, % % 1.8% 1.7% +0.1%pt 22

23 FOOD & CONSUMER PRODUCTS BUSINESS FY2016 Operation Review and Outlook FOOD BUSINESS Mainland China FMCG Food Commodity House Brand Sales affected by: Confectionery: -25.4% Snacks: -26% Beverages: -11.4% Dairy: -22.9% Steady sales growth in frozen meat, poultry and seafood Leverage on DCH Food Capture demand from food service sector Expect China Food market undergo restructuring DCH, including LFA, being a major player will benefit from this restructuring 23

24 FOOD & CONSUMER PRODUCTS BUSINESS FY2016 Operation Review FOOD BUSINESS Hong Kong & Macao FMCG Sales: -1.4%, driven by: Confectionery: flat Dairy: +7.3% Healthcare: -7.9% Snacks -2.3% Wine & beverages: -5.8% Others: +6.5% Food Commodity Food Manufacturing / Processing Sales dropped but profit margin improved Food service market: Sluggish 2 production factories merged to Yuen Long 24

25 FOOD & CONSUMER PRODUCTS BUSINESS FY2016 Operation Review (cont d) Hong Kong & Macao Retail Challenging retail environment No. of stores: 85 to 57 Revamped more than 10 stores Achieved positive same store growth House Brand 5 Cheer products: fresh milk / fresh egg / healthy rice / nuts / juice Cheer milk rank as top 5 brand in pasteurized milk category since

26 FOOD & CONSUMER PRODUCTS BUSINESS Outlook FOOD BUSINESS Hong Kong & Macao FMCG Expanding non-food items Food Commodity Food Manufacturing / Processing Commodity prices will continue to fluctuate Streamline production facilities Improve production efficiency Retail Remain challenging in 2017 Develop e-commerce platform House Brand Further expand distribution coverage and product range 26

27 FOOD & CONSUMER PRODUCTS BUSINESS FY2016 Operation Review and Outlook LOGISTICS BUSINESS PRC Turnover: dropped HK Turnover: maintained New food service delivery in Wuxi started in June 2016 Accelerating demand for cold chain service New ambient warehouse in Yuen Long completed Ammonia leakage incident settled New logistics centre in Hengqin to be launched in Q Further expand logistics business in HK, Macao and Southern China 27

28 FOOD & CONSUMER PRODUCTS BUSINESS FY2016 Operation Review and Outlook ELECTRICAL APPLIANCES BUSINESS PRC Turnover: +29.6% Hong Kong Turnover: +12.2% Strong sales: trendy earphones and audio products B&O Play % Shure +8.0% Acquisition of Gilman enabled DCH to enjoy economies of scale Expand business to Singapore and Southeast Asia Expand lifestyle appliances in HK and China 28

29 LFA FY2016 Operation Review + Outlook In 2H16, segment turnover: HK$3,881M segment result from operations: HK$106M segment profit after taxation: HK$85M segment margin: 2.7% Integration on schedule Business on track More synergy effect to come 29

30 FY2016 Strategy 30

31 STRATEGY Invest to grow Organic, Acquisition, Partnership Better balance between motor and consumer products Optimise geographic footprint re-evaluate local presence in mainland China grow business in South East Asia Manage brands refine brand mix for specific markets replace low yielding brands with higher growth ones Leverage the CITIC platform 31

32 STRATEGY Core Development Objectives Invest in People IT infrastructure Logistics infrastructure M&A Strategy 32

33 33