2016 Interim Results Announcement 22 August 2016 1 - - PowerPoint PPT Presentation

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Interim Results Announcement

22 August 2016

2016

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PERFORMANCE HIGHLIGHTS

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10,000 20,000 1H2016 1H2015

20,121 21,840

150 300 1H2016 1H2015

220 280

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For the period ended 30 June 2016

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1H2016 FINANCIAL REVIEW

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1H2016 FINANCIAL REVIEW $&

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TURNOVER * - BY BUSINESS SEGMENTS

Motor & Motor Related Food & Consumer Products Others

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TURNOVER * - BY MARKETS

Mainland China Hong Kong & Macao Other Markets

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CONSOLIDATED BALANCE SHEET HIGHLIGHTS (Before LFA)

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CONSOLIDATED BALANCE SHEET HIGHLIGHTS (After LFA)

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NET GEARING

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Segment Turnover Segment Result From Operations Segment Margin

HK$'M 1H2016 % of total 1H2016 1H2016 Mainland China 11,264 73.5% 12,115

• 7.0%

141 70 101.4% 1.3% 0.6% +0.7%pt Hong Kong & Macao 2,873 18.7% 3,420

• 16.0%

306 420

• 27.1%

10.7% 12.3%

• 1.6%pt

Other Markets 1,191 7.8% 1,075 10.8% 99 90 10.0% 8.3% 8.4%

• 0.1%pt

15,328 100.0% 16,610

• 7.7%

546 580

• 5.9%

3.6% 3.5% +0.1%pt 1H2015 1H2015 1H2015

MOTOR AND MOTOR RELATED BUSINESS

$1B $1B

15 6" 6%!

FOOD & CONSUMER PRODUCTS BUSINESS

Segment Turnover Segment Result From Operations Segment Margin

HK$'M 1H2016 % of total 1H2016 1H2016 Mainland China 1,932 40.4% 2,134

• 9.5%
• 56
• 56
• 2.9%
• 2.6%
• 0.3%pt

Hong Kong & Macao 2,574 53.9% 2,848

• 9.6%

119 118 0.8% 4.6% 4.1% +0.5%pt Other Markets 272 5.7% 246 10.6%

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• 6
• 2.2%
• 2.4%

+0.2%pt 4,778 100.0% 5,228

• 8.6%

57 56 1.8% 1.2% 1.1% +0.1%pt 1H2015 1H2015 1H2015

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DCH PRC Market

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MOTOR AND MOTOR RELATED BUSINESS

1H2016 Operation Review

• No. of new vehicles sold in PRC (units)

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1H2016 1H2015 1H2016 1H2015 &!6?!

44,200 41,600 6.3% 11.0mn 10.1mn 9.2%

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2,200 2,300

• 3.5%

1.8mn 1.8mn 1.9%

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46,400 43,900 5.8% 12.8mn 11.9mn 8.1%

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MOTOR AND MOTOR RELATED BUSINESS

1H2016 Operation Review (&

• 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 5 3 Lexus 6 1 Mercedes Benz 4 1 Nissan 5

• SGM Buick

4

• Toyota

21 5 Others 3 1 Total no. of 4S shops / showrooms by 30 June 2016:

78 15

Total no. of 4S shops / showrooms by the reporting date:

78 15

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MOTOR AND MOTOR RELATED BUSINESS

1H2016 Operation Review $&

• Same Store Growth

Dealership sales breakdown

by units by revenue 1H2016 vs 1H2015 1H2016 vs 1H2015 New car sales 5.7%

• 0.3%

After-sales service

• 2.4%

5.2% 1H2016 vs 1H2015 New car sales unit 4.3% Service unit

• 1.1%

After-sales service revenue 5.9% % of dealership turnover 1H2016 1H2015 New car sales 89.6% 90.1% After-sales service 10.4% 9.9%

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MOTOR AND MOTOR RELATED BUSINESS

1H2016 Operation Review $&

• Overall PRC market +8.1%

New car sales increased with stable overall GP New 4S shops’ performance improving Inventory at normal level After-sales profitability enhanced Motor related business income increased Finance lease business grew and made contributions

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MOTOR AND MOTOR RELATED BUSINESS

Outlook

• Overall market 2016 expected +8%

Dealership business to rebound from the bottom of trading cycle Reactivate network expansion Enhance shareholder value with improved productivity Focus on motor related business including Finance Lease Develop New Energy Vehicle distributorship

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DCH (HK & Macao) HK Market

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MOTOR AND MOTOR RELATED BUSINESS

1H2016 Operation Review

• No. of new vehicles sold (units)

Hong Kong only, unit sold -17.4% Market share: 22.4%, +0.9% pt

1H2016 1H2015 1H2016 1H2015 &!6?!

3,400 4,300

• 22.7%

16,100 19,900

• 18.9%

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2,300 3,100

• 23.5%

7,800 10,200

• 24.1%

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5,700 7,400

• 23.0%

23,900 30,100

• 20.6%

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MOTOR AND MOTOR RELATED BUSINESS

1H2016 Operation Review + Outlook

• Overall Hong Kong market: -20.6%

DCH PC and CV outperformed with market share +0.9% pt Delivery of NEV buses to franchise operators Improved motor related business Yutong CV business commenced Unclear economic environment softening the motor market in 2H16 CV likely to be stable but PC most affected Stronger Japanese Yen reduces GP Further explore NEV especially CV opportunities

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MOTOR AND MOTOR RELATED BUSINESS

1H2016 Operation Review and Outlook

Singapore Taiwan

• Myanmar

Sales expected in 2H16 and make contributions to the Group Unit sales: +72.4% Unit sales: +4.4% Business remained stable in 2H16 CV market stable growth in 2H16, but PC affected by slow economy

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FOOD & CONSUMER PRODUCTS BUSINESS

1H2016 Operation Review

• Sales: -18.8%, affected by:

▪ Confectionery: -16.5% ▪ Snacks: -5.7% ▪ Beverages: -11.4% ▪ Dairy: -29.1% Explore high potential items: butter, cheese, ice-cream products FMCG Global commodity price stabilised Sales: +30.7%, driven by frozen meat, poultry and seafood Food Commodity One-stop trading and logistics solutions to our core customers: ▪ key account retailers ▪ leading e-commerce operators Supply Chain Logistics Food Service Logistics New food service delivery business in Wuxi started in June 2016 Dedicated to the hypermarket network in Jiangxu Province Cold Chain Accidental ammonia leakage in Shanghai cold storage in early June 2016, services interrupted

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FOOD & CONSUMER PRODUCTS BUSINESS

Outlook

• 2H16 expected better than 1H16 due to seasonal factor

Profitability likely be affected by the high inventory problem Brand owners / principals / distributors reviewing their distribution strategies in China Integrating LFA operation Cold chain expansion

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• FOOD & CONSUMER PRODUCTS BUSINESS

1H2016 Operation Review

FMCG

FOOD BUSINESS

Sales: -19.8% Global commodity price stabilised Profit margin improved Food Manufacturing / Processing Sales: -4.4%, driven by: ▪ Confectionery: -13.2% ▪ Dairy: +7.1% ▪ Wine & beverages: -8.9% ▪ Healthcare: -12.4% Sales: -19.9%, ▪ sluggish food service market in hotel segment ▪ coffee and tea improved sales to tea houses in Hong Kong Food Commodity

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• FOOD & CONSUMER PRODUCTS BUSINESS

1H2016 Operation Review $&

FOOD BUSINESS House brand Cheer sales: +32% 5 Cheer products: fresh milk / fresh egg / healthy rice / nuts / juice Retail House Brand Sales: -12.7%, ▪ poor consumer sentiments and no. of shops reduced Profit seriously affected Recovery measures to be implemented CONSUMER PRODUCTS BUSINESS Turnover: +7.8% Acquisition of Gilman Group enabled DCH to: ▪ enjoy economies of scale ▪ wider brand and product portfolio ▪ deeper market penetration

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FOOD & CONSUMER PRODUCTS BUSINESS

Outlook

2H16 business expected to be stable with continued contributions from mid- stream business Retail business environment remains challenging Food processing business expected to improve with newly merged production facilities in Yuen Long Logistics centres in Yuen Long (5,500 sqm) and in Hengqin, Zhuhai (45,000 sqm) will enlarge logistics services Explore further opportunities for consumer products in South East Asia countries

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FOOD & CONSUMER PRODUCTS BUSINESS

On 3 May 2016, DCH announced the acquisition of LFA at USD350 million The transaction was completed on 30 June 2016 Distribution business in: ▪ ▪ ▪ ▪ Food and Consumer Products ▪ ▪ ▪ ▪ Healthcare Products The business has operations in 10 major markets: ▪ Mainland China ▪ Hong Kong ▪ Macao ▪Taiwan ▪Thailand ▪ Malaysia ▪ Singapore ▪ The Philippines ▪ Indonesia ▪ Brunei LFA OVERVIEW

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FOOD & CONSUMER PRODUCTS BUSINESS

More balanced portfolio in the Group Increase shareholders’ values Expand to new markets in South East Asia Enter the fast-growing business of healthcare products LFA RATIONALE

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PROSPECT and STRATEGY

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PROSPECT and STRATEGY

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