Announcem ent 20 February 20 14 20 13 Annual Results - - PDF document

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Announcem ent 20 February 20 14 20 13 Annual Results - - PDF document

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1 Announcem ent 20 February 20 14 20 13 Annual Results FORWARD-LOOKI NG STATEMENTS Certain statements contained in this presentation maybe viewed as forward-looking statements. Such forward- looking statements represent the Companys

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20 February 20 14

Announcem ent 20 13 Annual Results

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FORWARD-LOOKI NG STATEMENTS

Certain statements contained in this presentation maybe viewed as forward-looking statements. Such forward- looking statements represent the Company’s expectations

  • r 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.

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AGENDA

  • Performance Highlights
  • Financial Review
  • Operation Review and Outlook
  • Corporate Objective and Strategies

2013 Annual Results Announcement

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FY2013 Performance Highlights

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PERFORMANCE HIGHLIGHTS

Group turnover

Year ended 31 December HK$’M

32,211 42,261 48,014 46,109 22,209 16,050 19,496

10,000 20,000 30,000 40,000 50,000 60,000 2007 2008 2009 2010 2011 2012 2013

  • 12.0%
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PERFORMANCE HIGHLIGHTS (cont’d)

889 1,231 679 1,061 566 944 435 12 361 (8) 85 25 92 101

  • 200

200 600 1,000 1,400 2007 2008 2009 2010 2011 2012 2013

Non-operating profit Adjusted net profit

PERFORMANCE HIGHLIGHTS

Profit attributable to shareholders

HK$’M Year ended 31 December

520 558 704 1,422 1,323 1,045 901

  • 13.8%
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Year ended 31 December

Dividend per share

HK Cents

6.43 4.51 10.68 14.30 8.68 12.77 10.72 2.13 11.78 8.88 12.74 11.29 2.95

5 10 15 20 25 30 2007 2008 2009 2010 2011 2012 2013 Final dividend I nterim dividend

PERFORMANCE HIGHLIGHTS (cont’d)

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FY2013 Financial Review

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FY2013 FINANCIAL REVIEW

For the year ended 31 Dec 2013

HK$'M FY2013 FY2012 yoy % Change Turnover 42,261 48,014

  • 12.0%

Profit from operations 1,451 1,775

  • 18.3%

Operating margin 3.4% 3.7%

  • 0.3% pt

Profit attributable to shareholders 901 1,045

  • 13.8%

Adjusted net profit * 889 944

  • 5.8%

Note: * The adjusted net profit for the year excluding non-operating items such as net gain on remeasurement

  • f investment properties and property held for sale and other non-operating items.
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FY2013 FINANCIAL REVIEW (cont’d)

For the year ended 31 Dec 2013

HK$'M FY2013 FY2012 yoy % Change Basic earnings per share (HK cents) 49.21 57.24

  • 14.0%

Final dividend per share (HK cents) 10.72 8.88

+ 20.7%

Total dividend per share (HK cents) 19.40 20.66

  • 6.1%

NAV per share (HK$) 5.12 4.87

+ 5.1%

Return on equity 10.3% 12.7%

  • 2.4% pt

Return on capital employed 7.3% 9.0%

  • 1.7% pt
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TURNOVER * - BY BUSINESS SEGMENTS

Note: * For sales to third parties only Food & Consumer Products 22.7% Motor & Motor Related 77.2% Others 0.1%

FY2013

Motor & Motor Related 80.4% Others 0.2% Food & Consumer Products 19.4%

FY2012

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TURNOVER * - BY MARKETS

Note: * For sales to third parties only

Hong Kong & Macao 20.2% Mainland China 74.5% Other Markets 5.3%

Hong Kong & Macao 25.5% Mainland China 67.6% Other Markets 6.9%

FY2013

FY2012

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CONSOLIDATED BALANCE SHEET HIGHLIGHTS

HK$'M 31 Dec 2013 30 Jun 2013 31 Dec 2012 Non-current assets 6,465 6,405 6,034 Current assets * 15,161 13,711 14,272 Current liabilities 10,194 8,459 8,218 Net current assets 4,967 5,252 6,054 Current ratio 1.49 1.62 1.74 Non-current liabilities 2,059 2,519 3,184 Net assets 9,373 9,138 8,904 Non-controlling interests 379 404 393 Shareholders' funds 8,994 8,734 8,511 * I ncluding I nventories 6,259 5,680 5,536

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LIQUIDITY ANALYSIS

HK$'M 31 Dec 2013 30 Jun 2013 31 Dec 2012 Cash and bank deposits 2,173 2,465 3,225 Total debt 7,424 6,008 6,409 Net debt 5,251 3,543 3,184 Shareholders' funds 8,994 8,734 8,511 Total capital 14,245 12,277 11,695 Net gearing ratio 36.9% 28.9% 27.2%

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CONSOLIDATED CASH FLOW STATEMENT HIGHLIGHTS

HK$'M FY2013 FY2012 Profit before taxation 1,274 1,526 Depreciation, Amortisation & other non-cash items 693 690 Operating profit before changes in working capital 1,967 2,216 Changes in working capital:

  • (I ncrease) / decrease in inventories

(599) 598

  • (I ncrease) / decrease in trade and other receivables

(1,186) 497

  • Decrease in trade and other payables

(307) (1,503) Cash (used in) / generated from operations (125) 1,808 I ncome tax paid (387) (555) Net cash (used in) / generated from operating activities (512) 1,253 Dividends paid to shareholders of the Company (321) (447) Net cash generated from other financing activities 624 126 Net cash used in investing activities (848) (354) Net (decrease) / increase in cash and cash equivalents (1,057) 578

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FY2013 Operation Review and Outlook

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MOTOR AND MOTOR RELATED BUSINESS

HK$’M HK$’M Segment Turnover

Segment Turnover Segment Result From Operations Segment Margin HK$'M FY2013 % of total FY2012 % of total Change % FY2013 FY2012 Change % FY2013 FY2012 Change % Mainland China

24,650 75.5% 31,959 82.8%

  • 22.9%

597 1,046

  • 42.9%

2.4% 3.3%

  • 0.9% pt

Hong Kong & Macao

5,827 17.9% 4,988 12.9% 16.8% 483 303 59.4% 8.3% 6.1% +2.2% pt

Other Markets

2,150 6.6% 1,666 4.3% 29.1% 104

  • 10

1140.0% 4.8%

  • 0.6%

+5.4% pt 32,627 100.0% 38,613 100.0%

  • 15.5%

1,184 1,339

  • 11.6%

3.6% 3.5% +0.1% pt

Segment Result From Operations

10,183 12,800 15,652 24,643 37,183 38,613 32,627

FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013

483 641 815 1,301 1,672 1,339 1,184

FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013

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FOOD & CONSUMER PRODUCTS BUSINESS

Segment Turnover Segment Result From Operations HK$’M HK$’M

Segment Turnover Segment Result From Operations Segment Margin HK$'M FY2013 % of total FY2012 % of total Change % FY2013 FY2012 Change % FY2013 FY2012 Change % Mainland China

3,921 41.3% 3,822 41.6% 2.6% 117 115 1.7% 3.0% 3.0%

  • Hong Kong & Macao

4,930 52.0% 4,681 51.0% 5.3% 273 236 15.7% 5.5% 5.0% +0.5% pt

Other Markets excl. GDVTR

637 6.7% 676 7.4%

  • 5.8%

10 31

  • 67.7%

1.6% 4.6%

  • 3.0% pt

9,488 100% 9,179 100% 3.4% 400 382 4.7% 4.2% 4.2%

  • GDVTR

110 1.1% 139 1.5%

  • 20.9%
  • 76
  • 81

6.2%

  • 69.1%
  • 58.3%
  • 10.8% pt

9,598 100.0% 9,318 100.0% 3.0% 324 301 7.6% 3.4% 3.2% +0.2% pt

5,802 6,622 6,471 7,466 8,779 9,318 9,598

FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013

166 167 136 203 240 301 324

FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013

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Mainland China

MOTOR AND MOTOR RELATED BUSINESS – FY2013 Operation Review

DCH dealership network * PRC Market Motor Business

+13.9% +6.4% +15.7% Change % 19.3M 3.8M 15.5M FY2012 +13.4%

  • 2.9%

+15.1% Change % 74,300 6,900 67,400 FY2012 22.0M 4.1M 17.9M FY2013 FY2013 Passenger Cars 77,600 Commercial Vehicles 6,700 Total 84,300

  • No. of new vehicles sold

Note: * Figures included Subsidiaries only

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20 Shenzhen (2 stores in SZ) Wuhan 2H2013 FAW Toyota (1) 3 greenfield added Lexus (2) FAW Jilin, FAW Mazda, Qingling (2), Renault (2) 6 shops closed Shenzhen FAW Toyota (1) 2 newly acquired Shaoxing GAC Toyota (1) Xinyu, Chuxiong FAW Toyota (2) Changsha Lexus (1) 7 greenfield added 1H2013 Kunming, Foshan Kunming, Chaozhou Locations Brands Total no. of 4S shops by the end of 2013: 75 shops (by the end of 2012: 69) FAW Audi (2) Chevrolet (2)

MOTOR AND MOTOR RELATED BUSINESS – FY2013 Operation Review (cont’d)

Mainland China

Dealership (4S shops)

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MOTOR AND MOTOR RELATED BUSINESS – FY2013 Operation Review (cont’d)

Mainland China

Lexus (1) Bentley (2) DF Honda (1) SGM Buick (1) FAW Toyota (5) Mercedes-Benz (2)

Dealership (4S development)

12 greenfield projects in progress:

Existing In Progress

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22 +7.1% +2.4% +8.6% FY2013 vs FY2012 +21.1% +4.6%

  • 9.9%

FY2012 vs FY2011 New car sales unit Service unit After-sales service revenue % of dealership turnover 10.3% 89.7% FY2013 FY2012 New car sales 89.7% After-sales service 10.3%

MOTOR AND MOTOR RELATED BUSINESS – FY2013 Operation Review (cont’d)

Same Store Growth: Dealership sales breakdown: FY2013 y.o.y. growth by revenue by units +8.4% +8.4% +3.3% +14.3% After-sales service New car sales

Mainland China

Note: All figures included Subsidiaries and JCE

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Hong Kong & Macao

  • No. of new vehicles sold:

DCH

MOTOR AND MOTOR RELATED BUSINESS – FY2013 Operation Review (cont’d)

DCH market share in Hong Kong 2013: Overall: 20.8% +1.4% point (FY12: 19.4%)

HK Market

+11.1% +26.8% +6.8% Change % 45,300 9,600 35,700 FY2012 +18.4% +20.0% +17.9% Change % 10,800 2,600 8,200 FY2012 50,300 12,200 38,100 FY2013 FY2013 Passenger Cars 9,700 Commercial Vehicles 3,200 Total 12,900

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MOTOR AND MOTOR RELATED BUSINESS – Outlook

Mainland China

Distributorship:

  • Recovery in Isuzu heavy duty truck sales with the rolling out of infrastructure projects

Dealership:

  • Annual target to open 10-15 shops
  • Adopt a balanced approach to expand the new dealership network
  • Work with strategic partners to open full scale 4S shops and showrooms
  • More M&A opportunities available in the market
  • Enhance operational efficiency and effectiveness of 4S shops from a brand and regional

management

  • Continue to improve after-sales service capabilities

PRC market: expects to grow at around 10% in 2014

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Motor Related Business:

  • National insurance agency company will start business in 2014 to increase auto insurance

commission income

  • Apart from Guangzhou and Shenzhen, used car trading business will be expanded to other cities
  • Finance leasing business will be resumed this year after VAT reform implemented
  • Expand more Independent service outlets to capture aftermarket demand
  • Lubrication oil blending business will continue to grow with the sole national distributor right of

Repsol has been extended for another 10 years

MOTOR AND MOTOR RELATED BUSINESS – Outlook (cont’d)

Mainland China

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Hong Kong & Macao

Passenger Cars: - Launching of new car models for Audi, Honda and Nissan

  • A favourable exchange rate environment

Commercial Vehicles: - HKSAR Government’s HK$11.4bn funding for the industry to replace aged diesel commercial vehicles

  • Truck and bus market expects to grow by around 25% in 2014
  • A favourable exchange rate environment

Electric Vehicles: - Rising demand for electric cars and buses with HKSAR Government’s green policy

  • f promoting electric vehicles
  • Exploring opportunities to supply electric buses to franchised bus companies

Vehicles emission control: - A major supplier of catalytic converters for LPG taxis and light buses

  • Tendering for supply of emission reduction devices for franchised buses

MOTOR AND MOTOR RELATED BUSINESS – Outlook (cont’d)

HK market: expects to remain stable

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Other Market

Taiwan

Isuzu - Achieved 10.3% share in Japanese commercial vehicle market in the first full year

  • peration in 2013
  • semi-knock down assembly plant in Taichung will start production in 2H14
  • expect growing market demand in 2014 with higher market share

Audi - The 3rd Audi 4S Shop in New Taipei City commenced operation in 2H13

  • 3 Audi dealerships gives DCH a strong presence in the northern Taiwan
  • Overall sales expected to grow in Taiwan market

MOTOR AND MOTOR RELATED BUSINESS – FY2013 Operation Review and Outlook (cont’d)

Singapore

  • Isuzu unit sales grew +71.1%, with an increase of COE quota for commercial

vehicles and the demand triggered by the infrastructure projects

  • expect to maintain sales momentum and margin in 2014 under favourable JPY

exchange rate

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FOOD & CONSUMER PRODUCTS BUSINESS – FY2013 Operation Review & Outlook

Mainland China

This is below our expectations due to:

  • shrinkage of the gift market
  • restriction of using public funding on dining and entertainment
  • delay in introduction of new brands

Segment Turnover: +2.6% FMCG

  • Turnover: +2.5% mainly driven by snack products

Food Business

Food Trading

  • Turnover: -4.6% as frozen meat / poultry business booked under JCE

Food Manufacturing

  • Pocari Sweat manufacturing business performing well
  • CJ dumplings factory’s supply further expanded from southern China to Hong Kong and Korea
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Regional / Brand Management Structure

  • Geographic expansion: - Expand our regional sales office to more 2nd and 3rd tier cities
  • Channel development: - Expedite direct penetration to the market
  • Develop multiple channels to modern retail, food services and the

general trades

  • Brand management: - Liaise with existing principals and bring new products to the market
  • Explore new agencies and products to meet the demand for quality

imported food in the PRC

  • Reduction in distribution and logistics cost
  • Better control of the value chain in the business

FOOD & CONSUMER PRODUCTS BUSINESS – FY2013 Operation Review & Outlook (cont’d)

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Hong Kong and Macao Food Business

FOOD & CONSUMER PRODUCTS BUSINESS – FY2013 Operation Review & Outlook (cont’d)

FMCG

  • Turnover: +10% mainly driven by dairy +32% and confectionary products +34%

Segment Turnover: +5.3% Retail Business

  • Turnover: Slightly increased with total number of retail food outlets increased to 91(2012: 85)

Food Trading

  • Turnover: -2.8% with frozen meat business booked under JCE

Food Processing

  • Turnover: +48.4%, contributed by acquisition of a food processing company in early 2013
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FOOD & CONSUMER PRODUCTS BUSINESS – FY2013 Operation Review & Outlook (cont’d)

  • Cheer in fresh milk, snacks, nuts and eggs has well developed in different sales platform

across all major supermarket chains in HK

  • Del Leche UHT milk targeted at both retail and food services customers in the PRC is

performing well

House Brand

  • Milk powder: Anlene, Anmum maternal milk powder, Ausnutria, Celia, Wyeth
  • Fresh milk: Cheer
  • UHT milk: Arla, Country Goodness, Del Leche, Delamere, Miralait, Pauls
  • Cheese: Arla, Bega, Lemnos, Merci Chef, Parmareggio, Tjiezi
  • Yogurt: Bauer,Yili,Yoplait
  • Butter: Anchor, Daisy Butter, Enrich, Isigny, Lurpak

Dairy Products

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FOOD & CONSUMER PRODUCTS BUSINESS – FY2013 Operation Review & Outlook (cont’d)

Consumer Products Business

  • Turnover of electrical appliances distribution: +4.4% in PRC, -7.9% in HK and Macao due to

a sluggish demand for white goods in HK

  • 68 DCH AV Shops and DCH Digi Shops in HK and China located in over 30 cities including

Beijing, Shanghai, Chengdu, Guangzhou and other second-tier cities

  • New products launched: Tchibo’s Cafissimo coffee makers, SOUL Electronics AV products
  • New showroom for AEG built-in electrical appliances will be opened in 1Q14 in Hong Kong
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Logistics Business

  • Turnover: +27.1% in PRC, +3.8% in HK and Macao
  • The new repacking centre in Shanghai commenced operations in 2H13
  • Guangzhou cold chain facilities synergizes with the existing logistics facilities in Shanghai,

Xinhui, Xiamen and Shenzhen to enlarge the logistics platform in eastern and southern China to support our Food business

FOOD & CONSUMER PRODUCTS BUSINESS – FY2013 Operation Review & Outlook (cont’d)

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e-Business Development

  • Through our in-house and external e-commerce portals to offer imported foodstuffs,

confectionary, beverages, dairy products and gift hampers and electrical appliances to consumers across Hong Kong and China

  • Sales contributed by our e-commerce business: +80% vs 2012
  • Further develop and invest in this channel to capture growing opportunities
  • Leverage on our expertise in distribution and logistics services

FOOD & CONSUMER PRODUCTS BUSINESS – FY2013 Operation Review & Outlook (cont’d)

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Corporate Objective and Strategies

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Corporate Objective and Strategies

Vision

Motor and Motor Related Business

  • To become one of the niche players of Motor and Motor Related Business in

the Greater China market Food and Consumer Products Business

  • To become one of the foremost, diversified and fully integrated distributors of

import and renowned food and consumer products in the Greater China market

Five-year Plan Targets Aims to reinvigorate our growth momentum for sustainable earnings growth for the next 5 years to 2018

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