2017 Annual Results Presentation

Transcription

1 2017 Annual Results Presentation

2 Forward-Looking Statements Certain statements contained in this presentation maybe viewed as forwardlooking statements. Such forward-looking 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.

3 2017 Annual Results Agenda Financial Review Consumer Products Review & Outlook Motor Business Review & Outlook Key Initiatives

4 Financial Review 2017 Annual Results REVENUE (HK$ M) PROFIT ATTRIBUTABLE TO SHAREHOLDERS (HK$ M) 8.7% 56.9% 46,462 50,

5 Financial Review Revenue by Business Segment REVENUE BY BUSINESS SEGMENT % 0.1% 29.7% 70.2% 32.5% 67.4% Motor Business Consumer Products Business Others

6 Financial Review Revenue by Market REVENUE BY MARKET % 63.2% 10.1% 61.2% 27.8% 28.7% Mainland China Hong Kong and Macao Other Markets

7 Financial Review ROE & ROCE For the year ended 31 December 2017 Return on Equity Return on Capital Employed 5.7% 8.5% 5.0% 6.6%

8 Financial Review Earnings and Dividend For the year ended 31 December % Basic earnings per share (HK cents) % Interim dividend per share (HK cents) % Final dividend per share (HK cents) % Total Dividend % HK$ % Net asset value per share %

9 Financial Review Financial Position HK$ M Non current assets 11,026 8,694 Current assets 16,225 16,721 Current liabilities 11,589 10,431 Non-current liabilities 4,950 5,740 Net assets 10,712 9,244 Non-controlling interests Shareholders funds 10,145 8,732

10 Financial Review Net Gearing HK$ M Cash and bank deposits 1,138 1,160 Total debt 6,927 7,424 Net debt 5,789 6,264 Shareholders funds 10,145 8,732 Total capital 15,934 14,996 Net gearing ratio 36.3% 41.8 %

11 Financial Review Consolidated Cash Flow Statement Change Net cash generated from operating activities 2,005 2,234 (229) Net cash used in investing activities (611) (1,999) 1,388 Net cash (used in)/from financing activities (1,391) 151 (1,542) Dividend paid to shareholders of the Company (103) (204) 101 Net (decrease)/increase in cash and cash equivalents (100) 182 (282)

12 2017 Results Agenda Financial Review Consumer Products Review & Outlook Motor Business Review & Outlook Key Initiatives

13 Consumer Products Business Performance Highlights SEGMENT REVENUE (HK$ M) SEGMENT RESULT FROM OPERATIONS (HK$ M) 13,831 1, % 41.5% 16,408 2, ,235 8, ,794 4, Mainland China Hong Kong and Macao Other Markets Mainland China Hong Kong and Macao Other Markets

14 Consumer Products Segment Revenue by Market 2017 SEGMENT REVENUE BY MARKET % 34.7% 17.6% 28.7% 52.3% 53.7% Mainland China HK & Macao Other Markets

15 Consumer Products Business Mainland China Food and FMCG OPERATION REVIEW Segment Revenue (HKD) -10.2% IMSA China consolidation Under-performance of key brands Segment Result from Operations (HKD) +17.4% (reduced losses) Stock-clearing discounts Divest loss-making units Infrastructure and resource integration OUTLOOK Continue turnaround measures Review partnerships and M&A opportunities

16 Consumer Products Business HK & Macao Food and FMCG OPERATION REVIEW OUTLOOK Segment Revenue (HKD) +13.7% Segment Result from Operations (HKD) -14.1% Distribute more premium, healthy foods Expand into non-traditional channels Further develop the Cheer brand Earnings impacted by food trading and one-off costs incurred for manufacturing relocation After consolidation of IMSA business we combined into a very major Hong Kong and Macao distributor Enhance customer shopping experience Mobile payments Enhance efficiencies and synergies Extend product range

17 Consumer Products Business HK & Macao Food and FMCG FMCG Distribution

18 Consumer Products Business HK & Macao Food and FMCG Cheer brand development

19 Consumer Products Business HK & Macao Food and FMCG Food Retail

20 Consumer Products Business HK & Macao Food and FMCG Food manufacturing

21 Consumer Business Products Other Markets Food and FMCG OPERATION REVIEW Segment Revenue (HKD) +38.7% New platform for growth in Southeast Asia from LF Asia acquisition Line expansion and facility upgrade in Malaysia manufacturing OUTLOOK Enhance operational efficiencies Focus on higher value categories Malaysia Philippines Japan Singapore Thailand Indonesia Brunei Myanmar

22 Consumer Products Business Healthcare Products Distribution OPERATION REVIEW OUTLOOK + Segment Revenue (HKD) +98.0% Segment Result from Operations (HKD) % Favourable market dynamics Invest in infrastructure in Hong Kong and Thailand Solid performance in Greater China: Steady performance in Hong Kong, good growth in Macao but partly offset by supply constraints in mainland China Growth in Southeast Asia: Operational investment Expansion in Thailand and the Philippines Expand into new categories and markets Develop innovative Home- Health services

23 Consumer Products Business Healthcare Products Distribution Auriga Rebranding

24 Consumer Products Business Healthcare Products Distribution OPERATION REVIEW OUTLOOK + Segment Revenue (HKD) +98.0% Segment Result from Operations (HKD) % Favourable market dynamics Invest in infrastructure in Hong Kong and Thailand Solid performance in Greater China: Steady performance in Hong Kong, good growth in Macao but partly offset by supply constraints in mainland China Growth in Southeast Asia: Operational investment Expansion in Thailand and the Philippines Expand into new categories and markets Develop innovative Home- Health services

25 Consumer Products Business Healthcare Products Distribution DCH Auriga Health Centre

26 Consumer Products Business Logistics Solutions OPERATION REVIEW Segment Revenue (HKD) -0.4% OUTLOOK Segment Result from Operations (HKD) excluding one-offs +90.9% Continue productivity enhancements and integration Stable segment revenue Segment revenue increased due to restructuring and consolidation in mainland China Cost control initiatives underway: Improve the infrastructure utilisation Develop cold chain capabilities Leverage IMSA and intergroup synergies Commence operation of the Hengqin logistics centre in 2018

27 Consumer Products Business Logistics Solutions Hengqing Logistics Facilities

28 Consumer Products Business Electrical Products Distribution OPERATION REVIEW Segment Revenue (HKD) +2.4% Segment Result from Operations (HKD) -59.6% Healthy property market for project sales Successful launch of lifestyle audio products in China Increased warehousing costs Unfavourable weather and competitive discounting in seasonal products OUTLOOK Lifestyle electronics Expand project development business Online-to-offline sales experience

29 Consumer Products Business Electrical Products Distribution Lifestyle Audio

30 Consumer Products Business Electrical Products Distribution Property development Projects

31 Consumer Products Business Electrical Products Distribution The Crossover by Gilman

32 2017 Results Agenda Financial Review Consumer Products Review & Outlook Motor Business Review & Outlook Key Initiatives

33 Motor Business Performance Highlights SEGMENT REVENUE (HK$ M) SEGMENT RESULT FROM OPERATIONS (HK$ M) SEGMENT MARGIN 32, % 2,379 5,664 34,073 2,170 5,684 24,555 26, % 1,057 1, pt 3.4% 3.0 pt 2.3 pt 9.7% 7.4% 6.4% 9.4% % Mainland China HK & Macao Others Mainland China HK & Macao Others Mainland China HK & Macao Others

34 Motor Business Revenue by Market REVENUE BY MARKET 7.3% % 6.4% % 17.4% 16.7% Mainland China HK & Macao Other Markets

35 Motor Business Mainland China OPERATION REVIEW Segment Revenue (HKD) +6.8% Segment Result from Operations (HKD) % Revenue increased due to brand portfolio upgrades and acquisition of new dealerships in Zhejiang province Improved profitability from Upgraded brand portfolio Pricing management and Inventory controls Enhanced performance-based incentives Motor-related business grew due to: +33% in commission income from motor financing +44% finance leasing portfolio Enhanced cross selling incentives

36 Motor Business Mainland China DEALERSHIPS SALES (RMB) New Cars Sales Revenue (RMB) +8.3% After-sales service revenue (RMB) +7.5% After-sales serviced units +5.5%, 1.1 million Dealership Sales Share (RMB) Motor Brands 4S Shops Showrooms Audi 7 -- Bentley 7 -- Chevrolet 3 -- Ferrari / Maserati 3 -- Honda 11 4 Isuzu / Qingling 4 2 Lexus 8 1 Mercedes Benz % 90.5% New car sales 9.5% 90.5% After-sales service Nissan 3 -- SGM Buick 5 -- Toyota 21 7 Others 2 -- Total Dec 31,

37 Motor Business Mainland China OUTLOOK Optimize vehicle brand portfolio Expand dealership network Grow the motor related business Expand the used car business Promote cross selling

38 Motor Business Hong Kong and Macao OPERATION REVIEW Segment Revenue (HKD) +0.4% Market distortion from an EV subsidy and new diesel regulations Segment Result from Operations (HKD) -23.1% DCH unit sales +2.7% due to: Strong 2H model launches Macao replacement purchases Profitability declined against 2016 impacted by: Discounting to secure market share Yen exchange rates

39 Motor Business Hong Kong and Macao ISUZU: Awarded for 38 th Consecutive Year of Market Leadership

40 Motor Business Hong Kong and Macao OPERATION REVIEW Segment Revenue (HKD) +0.4% Market distortion from an EV subsidy and new diesel regulations Segment Result from Operations (HKD) -23.1% DCH unit sales +2.7% due to: Strong 2H model launches Macao replacement purchases Profitability declined against 2016 impacted by: Discounting to secure market share Yen exchange rates

41 Motor Business Hong Kong and Macao OUTLOOK Secure commercial vehicle market share Improve customer relationship management Enhance aftersales and maintenance services Build online to offline connectivity Build the motor related business

42 Motor Business Hong Kong and Macao 2018 Model Launches

43 Motor Business Other markets OPERATION REVIEW Segment Revenue (HKD) -8.8% Segment Result from Operations (HKD) +34.2% Taiwan revenue decreased due to Audi dealership market exit Singapore revenue decreased due to: Expiration diesel replacement incentives Slowdown in construction Segment result improved after Audi dealership exit OUTLOOK Vehicle range extension at Taiwan assembly plant Focus on launch of new Euro VI models in Singapore

44 2017 Results Agenda Financial Review Consumer Products Review & Outlook Motor Business Review & Outlook Key Initiatives

45 Key Initiatives Strategic growth POSITIONED FOR STRATEGIC GROWTH Build a Performance Culture Improve Operational Efficiency Invest in Growth

46 THANK YOU

47 Appendix Management Team Mr. Jijing ZHANG Chairman & Non-executive Director Holds various management position in CITIC Pacific, CITIC Mining International, CITIC Pacific China, CITIC Group, CITIC Securities Company Limited, China CITIC Bank corporation Limited, CITIC Resources Holdings Limited, CITIC Limited respectively Mr. Frank LAI CEO & Executive Director Former executive director, CFO & company secretary of China Resources Beer Former executive director, non-executive director, CFO and company secretary of China Resources Microelectronics Limited; CFO of Eagle Brand Holdings Limited Former executive director & CFO of Logic International Holdings Limited (now known as China Resources Gas Group Limited) Holds a Bachelor of Commerce degree from the University of Western Australia and a graduate diploma in Business and Administration from the Curtin University of Technology of Western Australia. He is a member of the Hong Kong Institute of Certified Public Accountants and a fellow member of CPA Australia Ms. Kitty Fung CFO & Executive Director Over 25 years of hands-on and diversified working experience in renowned MNCs and well known local organizations across consumer products/ fast moving consumer goods, manufacturing, publishing, banking and retails industries in the United States, Greater China and Asia Pacific regions Holds a Master of Business Administration and is a certified public accountant of the Hong Kong Institute of Certified Management Accountant and certified management accountant in the United States. She is also a chartered financial analyst of the CFA Institute. Mr. Wu Ying Ha CCO & Corporate Director Over 21 years experience in corporate management, especially in human resources and administration. Former vice president of CITIC Resources Holdings Limited, being responsible for human resources and administrative management of CITIC Resources Group Former assistant general manager and general manager of Human Resources & Administration of CITIC United Asia Investments Limited Former manager of General Manager Office and assistant general manager of International Tour Department of China Travel Service (Holdings) Hong Kong Limited Holds a Master s degree in Business Administration from Southeastern University, Washington, D.C.

48 Appendix Management Team Mr. Victor Lau Head of Motor Group & Executive Director Joined the Group in February 1973 and was appointed as a Director of Dah Chong Hong in January Over 30 years experience in the motor vehicle businesses of Hong Kong and the PRC Manages both commercial vehicles and passenger cars Champions the Isuzu distributorship business in the PRC, Hong Kong, Taiwan and Macao for the Group. Mr. Alex Lee Deputy Head of Motor Group & Executive Director Joined the Group in June 1999 and appointed as Executive Director of DCH with effect from 1 March Obtained a Bachelor of Engineering (Mechanical Engineering) degree from the Hong Kong Polytechnic University and received a Master in Business Administration degree from the Chinese University of Hong Kong. A member of The Hong Kong Institute of Engineers. He has more than 20 years experience in the motor industry. Ms. Betty Leung Head of Hong Kong Food Business & Corporate Director Manages food commodity trading, food manufacturing and processing, food retailing and food agency distribution. Over 30 years sales and marketing experience in sales, marketing, advertising and buying across different parts of the supply chain including manufacturing, distribution and retailing in the consumer product industry. The Chairlady of the Hong Kong Suppliers Association Mr. Timothy Collins Chief Executive Officer, DCH Auriga Over 25 years experience in the FMCG industry. From 1991 to 2003, he held multiple roles across Australia and Asia for Cadbury Schweppes. Manages healthcare products business and focuses on guiding DCH Auriga (formerly known as LF Asia) into a new era of growth Joined LF Asia in 2004 and became CEO in He has been essential to the company's development, leading the expansion of market coverage across Asia and orchestrating the sale of LF Asia to DCH in 2016.