2019/20 Interim Results Corporate Presentation
20 December 2019
20 December 2019 Disclaimer Stock code: 1373 This presentation - - PowerPoint PPT Presentation
2019/20 Interim Results Corporate Presentation 20 December 2019 Disclaimer Stock code: 1373 This presentation and/or these materials have been delivered to you on the basis of your representation that you are a person into whose possession this
20 December 2019
Stock code: 1373
International Housewares Retail Company Limited 2019/20 Interim Results
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inaccuracy or error in respect of, this presentation or these materials or otherwise.
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Stock code: 1373
International Housewares Retail Company Limited 2019/20 Interim Results
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International Housewares Retail Company Limited
Business Highlights Financial Performance Business Review by Market
Outlook and Strategies
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International Housewares Retail Company Limited 2019/20 Interim Results
Stock code: 1373
International Housewares Retail Company Limited 2019/20 Interim Results
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Profit increased 4.9% to HK$48.9m Revenue grew 7.2% to HK$1.16 B Singapore in profit with CSSG 15.3% 92% of profit from Hong Kong business Cash & Bank Balance HK$369 M Gross Profit increased 7.3% Interim dividend 5.5 HK cents per share
Stock code: 1373
International Housewares Retail Company Limited 2019/20 Interim Results
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Number of directly-owned stores
268 stores 6 stores 33 stores
46 stores in Singapore
7 stores in Macau
9 licence stores in four jurisdictions
62 Overseas Stores 311 Stores in Hong Kong
4 stores
FY2017 FY2018 FY2019 IH FY2020 Hong Kong
290 290 305 311
Singapore
57 48 44 46
Macau
8 8 7 7
355 346 356 364
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International Housewares Retail Company Limited 2019/20 Interim Results
Stock code: 1373
International Housewares Retail Company Limited 2019/20 Interim Results
For the six months to Oct 2019 Oct 2018 Turnover (HK$’000) 1,161,704 1,083,650 Gross Profit (HK$’000) 542,820 506,078 Net profit (HK$’000) 48,932 46,636 Profit attributable to equity holders (HK$’000) 48,135 48,831 Key ratios Gross Margin 46.7% 46.7% Operation profit Margin 5.8% 5.4% Net profit margin 4.2% 4.3% Total Dividend Interim dividend (HK cents) 5.5 5.3 Payout Ratio 83% 78%
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Stock code: 1373
International Housewares Retail Company Limited 2019/20 Interim Results
(HK$’000) Oct 2019 Oct 2018
Capex in the 6 months to Oct 19,599 10,201 Cash & cash equivalents as of Oct 368,667 415,101 Inventory Turnover days (1) 76 73 Trade Payable Turnover days (2) 46 44
9 Notes: 1. Inventory turnover = Closing inventory / (Cost of sales x2) x365 2. Trade payables turnover = Closing trade payables / (Cost of sales x2) x365
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International Housewares Retail Company Limited 2019/20 Interim Results
Stock code: 1373
International Housewares Retail Company Limited 2019/20 Interim Results
Revenue breakdown
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Macau Singapore Hong Kong
3.3% 15.3%
CSSG for IH FY20
12.1%
HK$’000
1,941,285 2,071,443 952,019 1,018,203 248,841 237,715 113,758 123,842 FY2018 FY2019 IH FY19 IH FY20 Hong Kong Singapore Macau 2,230,102 2,350,351 1,083,650 1,161,704 17,873 19,659 39,976 41,193
Macau Singapore Hong Kong
87.6% 10.7% 1.7%
% to total revenue IH FY20
Stock code: 1373
International Housewares Retail Company Limited 2019/20 Interim Results
Six months to Oct 2019 Oct 2018 Number of stores at 31-Oct 311 295 Total revenue growth 7.0% 3.1% CSSG 3.3% 2.2% % of sales to group’s revenue 87.6% 87.9%
Reinforce sourcing power on snacks & FMCG, store re-fit and re-balance project in progress to support further development of this category Continue focus on private label products development to cater customers needs (small home, multi-function) and to upgrade brand image through marketing and publicity Ongoing cost-efficiency improvement via cost structure analysis and implementation of control measures Solidify plans to improve sourcing efficiency in PRC mainland and to save local warehouse cost by expanding sourcing and warehouse/logistics facilities in Guangzhou Set up back-office in Guangzhou for easier recruiting right talents at lower cost, e.g. IT staff. Follow government’s housing plan to set up new stores in new developing residential areas Inter-linkages among physical store, Easy Buy, JHCeshop and J-fun form an unique O2O platform offering different retail channels for the convenience of customers Continue to develop business of selling vouchers & coupons of local renowned brand through our retail channels
12 * Comparable store sales growth represents a comparison between the store sales of those stores that were open throughout the periods being compared
Stock code: 1373
International Housewares Retail Company Limited 2019/20 Interim Results
Six months to Oct 2019 Oct 2018 Number of stores 46 46 CSSG 15.3% 6.0% Revenue growth 8.9%
% of sales to group’s revenue 10.7% 10.5%
Strong CSSG by in-store “Must Buy Corner” selling snack, personal care and household FMCG Open concept store in Q3 to showcase the sourcing power and brand image Project of launch in-store i-panel (Easy Buy) in progress Look for high potential locations for new store opening Make use of the Group’s sourcing and warehouse facilities in China to improve sourcing ability and reduce local warehouse cost With ongoing support from Headquarter and new recruited local talents, financial performance substantially improved.
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International Housewares Retail Company Limited 2019/20 Interim Results
Stock code: 1373
International Housewares Retail Company Limited 2019/20 Interim Results
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Maintain leading positing in Hong Kong Steadfast development in Singapore Seek right location in Macau for new store opening Ongoing enhancement of O2O platform – the unique JHC Omni-Channel Retailing Continue to Introduce new product categories; plan to transform ourselves into a convenience GMS retail chain
Stock code: 1373
International Housewares Retail Company Limited 2019/20 Interim Results
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33 stores in Hong Kong Strong CSSG, thanks to the contribution from new product categories – global beauty, FMCG and personal care products Increase SKUs, OEM products and exclusive branded products Diversify sourcing destinations, Korea, Japan, USA and Thailand, etc. Store re-fit, move forward to ELLA 3.0
Stock code: 1373
International Housewares Retail Company Limited 2019/20 Interim Results
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New Product Category ◆ FMCG New Retail Brand ◆ $mart
Attract traffic by category re-mix, strengthening facial & skincare, make- up and fragrance products New store layout & shelving cater for the new product category Good price, wide variety
New retail brand - $mart, build own VM personality & promotion calendar Offer similar products at JHC stores to empower sourcing ability through volume purchase
Stock code: 1373
International Housewares Retail Company Limited 2019/20 Interim Results
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Create digital content supported by internet search Modern design + multifunctional features & hero product for tiny home
Private Label Development ◆ Continuous Efforts on House Brand Building
Extra sales Start with basic range Extend to wireless & tech items in future Create customer value with strong local knowledge Inject new values in old products Consistent image across a series of OEM products Modern packaging to increase product visibility and brand awareness
Stock code: 1373
International Housewares Retail Company Limited 2019/20 Interim Results
Easy Buy
customers’ orders
reduce stockholding
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JHC Omni-Channel Retailing
Physical Retail Store Network
housewares convenience store
JHCeshop
renown local brands
pick-up
J Fun App
at store, eshop or Ipanal
Social media
post promotion message; publicizing house brand products
Stock code: 1373
International Housewares Retail Company Limited 2019/20 Interim Results
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Strengthening Backroom Supports and Operation System
Improve & Expand Operation Capacity of Supply Chain & Human Capital
The Group’s Guangzhou office adjacent to High-speed Rail GZ South Station has been put into
Sourcing and graphic designer functions at lower cost. Moving the existing own-
larger site in Panyu GZ and enhancing existing facilities in Yiwu are part of our overall supply chain efficiency upgrade.
ERP Revamp (SAP)
Blue-Print confirmed Staff training in progress Integration test scheduled in Q3 FY20 Target full launch in March 2020
Stock code: 1373
International Housewares Retail Company Limited 2019/20 Interim Results
Planned store expansion & estimated capital expenditures
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Store expansion
(Net increase of number of stores)
Actual at 31 Oct 19 Net increase 2HFY2020 Net increase FY2021 Hong Kong (incl. Ella) 311 5 10 Singapore 46 2 2 Macau 7 1 1 Total: 364 8 13
Estimated capital expenditure
HK$ million
2HFY2020 FY2021 New store openings 9 20 Ongoing renovations of existing stores 12 20 Others (incl. improvements to logistics & IT) 18 5
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International Housewares Retail Company Limited 2019/20 Interim Results
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International Housewares Retail Company Limited 2019/20 Interim Results