Announcem ent 15 August 20 12 20 12 Interim Results Stock Code: - - PDF document

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20 12 Interim Results Announcem ent

Stock Code: 01828

15 August 20 12

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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

• 1H2012 Performance Highlights

– by Mr. Clement Hui, Chairman

• 1H2012 Group Performance

– by Mr. Donald Yip, Chief Executive Officer

• Operation Review & Outlook

– by Mr. Donald Yip, Chief Executive Officer

• Corporate Objective and Strategies

– by Mr. Clement Hui, Chairman

• Q&A

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1H2012 Performance Highlights

• Mr. Clement Hui

Chairman

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PERFORMANCE HIGHLIGHTS

Group Turnover

Year ended 31 December Six months ended 30 June

32,211 23,636 19,814 46,109 22,209 16,050 19,496 10,000 20,000 30,000 40,000 50,000 2007 2008 2009 2010 2011 2011 2012 HK$’M

19.3%

Year ended 31 December Six months ended 30 June

1,464 955 993 1,861 965 584 854 500 1,000 1,500 2,000 2007 2008 2009 2010 2011 2011 2012

Profit from operations

3.8%

HK$’M

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PERFORMANCE HIGHLIGHTS (cont’d)

Year ended 31 December

Dividend per share

HK Cents 6.43 4.51 10.68 14.30 12.77 2.13 11.78 12.74 11.29 2.95 5 10 15 20 25 30 2007 2008 2009 2010 2011 2012

Six months ended 30 June

Final dividend I nterim dividend

Year ended 31 December Six months ended 30 June

Profit Attributable to Shareholders

HK$’M 1,422 650 801 1,323 704 520 558 500 1,000 1,500 2,000 2007 2008 2009 2010 2011 2011 2012

18.9%

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1H2012 Group Performance

• Mr. Donald Yip

Chief Executive Officer

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For the period ended 30 June 2012

1H2012 GROUP PERFORMANCE

HK$'M 1H2012 1H2011 yoy Turnover 23,636 19,814

+ 19.3%

GP Margin 11.8% 12.6%

• 0.8% pt

Profit from operations 955 993

• 3.8%

Profit attributable to shareholders 650 801

• 18.9%

Adjusted net profit * 538 652

• 17.5%

Adjusted net profit margin 2.3% 3.3%

• 1.0% pt

Note: * The adjusted net profit for the period 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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For the period ended 30 June 2012

1H2012 GROUP PERFORMANCE (cont’d)

1H2012 1H2011 yoy Basic earnings per share 35.64 HK cents 44.06 HK cents

• 19.1%

I nterim dividend per share 11.78 HK cents 14.30 HK cents

• 17.6%

NAV per share HK$4.82 HK$4.37

+ 10.3%

Return on equity (annualised) 16.1% 22.3%

• 6.2% pt

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TURNOVER * - BY BUSINESS SEGMENTS

Food & Consumer Products 17.2% Motor & Motor Related 81.8% Logistics & Others 1.0%

1H2012

Motor & Motor Related 80.4% Logistics & Others 1.0% Food & Consumer Products 18.6%

1H2011

Note: * For sales to third parties only

yoy % change

Motor and Motor Related Business + 21.3% Food and Consumer Products Business + 10.4% Logistics Business + 27.4%

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TURNOVER * - BY MARKETS

1H2012

Hong Kong & Macao 21.4% Mainland China 72.8% Other Markets 5.8%

1H2011 Hong Kong & Macao 19.7% Mainland China 75.3% Other Markets 5.0%

Note: * For sales to third parties only

yoy % change

Mainland China + 23.5% Hong Kong & Macao + 9.5% Other Markets + 3.1%

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CONSOLIDATED BALANCE SHEET ANALYSIS

HK$'M 30 Jun 2012 31 Dec 2011 Non-current assets 5,700 5,962 Current assets 16,248 14,860 Current liabilities 10,480 10,057 Net current assets 5,768 4,803 Current ratio 1.55 1.48 Non-current liabilities 2,668 2,290 Net assets 8,800 8,475 Non-controlling interests 523 566 Shareholders' funds 8,277 7,909

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CONSOLIDATED CASH FLOW STATEMENT HIGHLIGHTS

HK$'M 30 Jun 2012 30 Jun 2011 Profit from operations 955 993 Depreciation, Amortisation & Other non-cash items 180 168 Operating profit before changes in working capital 1,135 1,161 I ncrease in working capital (2,212) (20) Cash (used in) / generated from operations (1,077) 1,141 I ncome tax paid (308) (187) Net cash (used in) / generated from

• perating activities

(1,385) 954 Net cash generated from / (used in) financing activities 1,116 (73) Net cash used in investing activities (383) (539) Net (decrease) / increase in cash and cash equivalents (652) 342

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LIQUIDITY ANALYSIS

HK$'M 30 Jun 2012 31 Dec 2011 Cash and bank deposits 2,033 2,854 Total debt 7,253 5,784 Net debt 5,220 2,930 Shareholders' funds 8,277 7,909 Total capital 13,497 10,839 Net gearing ratio 38.7% 27.0%

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HK$'M Consideration 405 Related selling expenses (3) Carrying amount of the property as at 31 Dec 2011 (324) Gain on remeasurement: 78 Disposal of an investment property in Hong Kong 58-60 Sai Yeung Choi Street, Mong Kok Completion: On or before 28 Dec 2012

ASSET DISPOSAL

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Operation Review & Outlook

• Mr. Donald Yip

Chief Executive Officer

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MOTOR AND MOTOR RELATED BUSINESS

HK$’M HK$’M

10,183 12,800 15,652 24,643 37,183 15,929 19,322

FY2007 FY2008 FY2009 FY2010 FY2011 1H2011 1H2012

483 641 815 1,301 1,672 927 761

FY2007 FY2008 FY2009 FY2010 FY2011 1H2011 1H2012

Segment Turnover

Segment Turnover Segment Result From Operations Segment Margin HK$'M 1H2012 % of total 1H2011 % of total Change % 1H2012 1H2011 Change % 1H2012 1H2011 Change % Mainland China 16,207 83.9% 12,965 81.4% 25.0% 595 731

• 18.6%

3.7% 5.6%

• 1.9% pt

Hong Kong & Macao 2,343 12.1% 2,229 14.0% 5.1% 164 183

• 10.4%

7.0% 8.2%

• 1.2% pt

Other Markets 772 4.0% 735 4.6% 5.0% 2 13

• 84.6%

0.3% 1.8%

• 1.5% pt

19,322 100.0% 15,929 100.0% 21.3% 761 927

• 17.9%

3.9% 5.8%

• 1.9% pt

Segment Result From Operations

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Mainland China

MOTOR AND MOTOR RELATED BUSINESS – 1H2012 Operation Review

• No. of new vehicle sold (units) in 1H2012

1H12 change % 1H12 change % Passenger Cars 33,352 +15.3% 7.6M +7.1% Commercial Vehicles 7,803 +8.6% 2.0M

• 10.4%

Total

41,155 +13.9%

9.6M +2.9%

OUTPERFORM

DCH PRC Market

Distributorship

Sold over 980 units (1H11: 620 units) +57.5% Sold approx. 4,400 units (1H11: 3,500 units) +24.8%

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MOTOR AND MOTOR RELATED BUSINESS – 1H2012 Operation Review (cont’d)

Dealership (4S shops)

New car sales revenue: +16.9% After-sales service revenue: +33.4%

(accounted for 9.2% of total dealership revenue)

Mainland China

New Dealership Network

66 shops (FY11: 65), added Ferrari / Maserati shop in Xiamen 19 greenfield rights secured: Bentley (5) Chevrolet (2) FAW Audi (2) FAW Toyota (5) SGM Buick (1) Lexus (4) Same Store Growth: New car sales unit: +3.5% Service unit: +9.3% After-sales service revenue: +23.4%

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Hong Kong & Macao

MOTOR AND MOTOR RELATED BUSINESS – 1H2012 Operation Review (cont’d)

Other Markets DCH Sales: over 4,800 units HK Market share: 18.8%

• Sales volume growth: +51.4% +11.4%
• Soft launched in May 2012
• more than 150 units has been delivered since 2011
• Taiwan: 3 dealerships in Taipei, Hsinchu and New Taipei City are well operating

Showroom and service centre in Taipei were opened in May 2012

• Singapore: Sales unit dropped 10.1% with a restricted no. of COE for new vehicles

I NFI NI TI – Opening Ceremony

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MOTOR AND MOTOR RELATED BUSINESS – Outlook 2012

Distributorship Dealership Mainland China

PRC market: Expect to grow by a mid-single digit

• Sales volume is expected to outperform the market, with 11 greenfield shops including Bentley,

Chevrolet, FAW Audi, FAW Toyota and Lexus to be opened in 2H12

• After-sales service remains strong and continue to grow
• Inventory level will be lowered towards the end of the year
• GP margin has stabilised
• Continue to be affected by the slowdown of the economy, yet we still expect a yoy growth
• Imported commercial vehicle is affected by the slowdown of the infrastructure projects, and

the strong Japanese Yen

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MOTOR AND MOTOR RELATED BUSINESS – Outlook 2012 (cont’d)

Other Markets Hong Kong Vehicle market: Steady

• showroom will be opened in 2H12
• The 1st electric bus will be delivered in August 2012
• Plan to add 2 new MotorMech service outlets
• Appointed as distributor of SINOTRUK truck (中國重汽)

Taiwan – Taipei showroom and bodywork shop will be opened – Showroom and service centres in Taichung and Kaohsiung will be in operation in 3Q12

Electric Bus

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FOOD & CONSUMER PRODUCTS BUSINESS

HK$’M HK$’M

HK$'M 1H2012 % of total 1H2011 % of total Change % 1H2012 1H2011 Change % 1H2012 1H2011 Change % Mainland China

1,516 38.0% 1,412 39.4% 7.4% 34 30 13.3% 2.2% 2.1% +0.1% pt

Hong Kong & Macao

2,166 54.2% 1,885 52.6% 14.9% 90 73 23.3% 4.2% 3.9% +0.3% pt

Other Markets excl. GDVTR

312 7.8% 286 8.0% 9.1% 11 10 10.0% 3.5% 3.5%

• 3,994

100% 3,583 100% 11.5% 135 113 19.5% 3.4% 3.2% +0.2% pt

GDVTR 80 2.0% 108 2.9%

• 25.9%
• 50
• 45
• 11.1%
• 62.5%
• 41.7%
• 20.8% pt

4,074 100.0% 3,691 100.0% 10.4% 85 68 25.0% 2.1% 1.8% +0.3% pt

Segment Turnover Segment Result From Operations

5,626 6,428 6,240 7,206 8,443 3,691 4,074

FY2007 FY2008 FY2009 FY2010 FY2011 1H2011 1H2012

149 150 111 181 210 68 85

FY2007 FY2008 FY2009 FY2010 FY2011 1H2011 1H2012

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FOOD & CONSUMER PRODUCTS BUSINESS – 1H2012 Operation Review

Mainland China Midstream

Food Commodity: Our JV with Brasil Foods has started distribution of frozen meat in the PRC FMCG - Sales growth +17.8%

• Products: Strong sales in Pocari Sweat, Country Goodness, Wyeth, Anlene / Anmum, Welch’s

Newly added: Barilla pasta, Kirin Afternoon Tea drinks

• Network: Regional headquarters in Beijing, Shanghai, Guangzhou, Kunming, Wuhan, Xiamen

Electrical appliances: Sales growth +34.8% mainly driven by trendy headphones and Audio-Visual products

Downstream

DCH AV outlets: More than 20 outlets have been set up in key cities such as Shanghai, Nanjing, Chengdu, Suzhou, Tianjin and Kunming etc.

Upstream

Pocari Sweat: Manufacturing plant phase-2 has started trial production in April 2012 CJ CheilJedang: Frozen dumpling plant has started trial production in June 2012

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FOOD & CONSUMER PRODUCTS BUSINESS – 1H2012 Operation Review (cont’d)

Hong Kong & Macao Upstream

Food processing: Revenue doubled, generated by Bayern Gourmet Food and Tai Luen Coffee

synergising with our existing Food Business

Midstream

Food Commodity: Sales growth +13.1%

Commenced distribution of Brasil Foods Sadia frozen meat from April 2012

FMCG: Sales growth +14.8%

Electrical appliances: Sales growth +26.1% Washing machines sales volume +20%, outperformed the market growth +7% Electrolux showroom opened in Wanchai

Downstream

DCH Food Mart: 85 shops in operation. Same store sales growth +3.8% DCH AV outlets: More than 10 outlets opened

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FOOD & CONSUMER PRODUCTS BUSINESS – Outlook 2012

Upstream

• Synergised with the successful food processing business in Hong Kong, start distribution
• f tea and coffee and processed meat products in the PRC and subsequent local

production under CEPA

• Enhance production capacity of Pocari Sweat and CJ frozen dumpling to support our

midstream distribution business

• After successful launch of Sadia brand in the PRC, start to set up food processing centre

under our JV with Brasil Foods to produce processed meat products in China

• To collaborate with our food and consumer products principals with local processing and

value-added services in the PRC market

• To expand the food processing facilities in China covering vegetables and frozen meat

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Midstream

• Strong growth in the PRC with an increasing demand for high quality FMCG and imported

frozen and chilled meat, while steady growth in Hong Kong market

FOOD & CONSUMER PRODUCTS BUSINESS – Outlook 2012 (cont’d)

• To launch Brasil Foods’ Sadia brand frozen meat in

Hong Kong and PRC

• Consumer product business will be expanded by additional

agencies and product lines eg: dairy products such as cheese, milk powder and liquid milk

• Strategic development on DCH house brand like Cheer and

BRIO to enhance long term profit margin

• Distribute processed meat like sausage and salmon in

the PRC under CEPA

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Downstream DCH AV shop

• More DCH AV shops will be established to capture a rising

demand for high-end AV products in the PRC

• In China, target to operate 60 DCH AV outlets by end of 2012

FOOD & CONSUMER PRODUCTS BUSINESS – Outlook 2012 (cont’d)

DCH AV Outlets

Food Mart

• In Hong Kong, plan to open 5 more Food

Mart to 90 outlets in 2012

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LOGISTICS BUSINESS

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

Segment Turnover Segment Result From Operations Segment Margin HK$'M 1H2012 % of total 1H2011 % of total Change % 1H2012 1H2011 Change % 1H2012 1H2011 Change % Mainland China 62 26.6% 33 17.6% 87.9%

• 8
• 3
• 166.7%
• 12.9%
• 9.1%
• 3.8% pt

Hong Kong & Macao 171 73.4% 155 82.4% 10.3% 13 10 30.0% 7.6% 6.5% +1.1% pt 233 100.0% 188 100.0% 23.9% 5 7

• 28.6%

2.1% 3.7%

• 1.6% pt

268 295 326 365 452 188 233

FY2007 FY2008 FY2009 FY2010 FY2011 1H2011 1H2012

17 17 25 22 18 7 5

FY2007 FY2008 FY2009 FY2010 FY2011 1H2011 1H2012

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LOGISTICS BUSINESS – 1H2012 Operation Review and Outlook 2012

Operation Review and Outlook

• PRC segment margin dropped due to pre-operating expenses of new facilities in Shanghai
• Shanghai cold chain facilities and new ambient warehouse are in full operation to support our

internal business and third party customers eg: General Mills, Yum! Brands

• Logistics facilities well established in Xinhui, Xiamen, Guangzhou, Shenzhen, Hong Kong

and Macao

• Provide all-rounded solution to customers in PRD and our principals
• To synergise with the Group’s Total Food Supply Chain strategy with more cost-effective

logistics services

• Obtained food safety certificate in Hong Kong for setting up a food inspection laboratory to

strengthen the food quality control

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Corporate Objective and Strategies

• Mr. Clement Hui

Chairman

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Corporate Objective and Strategies

Motor

– Optimistic in the PRC motor business in the long run. DCH is proud to be a prominent player in this key market and continues to adopt the following strategies:

• Focus on the Greater China market
• Strengthen after-sales services and to expand Motor Related

Business

• Supported by professional management and strong financial

backing

• To maintain sustainable growth with a diversified multi-brand

portfolio

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Food & Logistics

– Growing concern of food safety and increasing disposable incomes drive up demands for imported quality food products

• Total food supply chain through upstream, midstream and downstream development
• Continue to seek for more high quality food and expand the dairy product portfolio
• Continue to expand regional offices to other regional hubs in mainland China to

capture more trading business

• House brand development
• Supported by logistics to enhance food quality control and more effective logistics cost

control

• Collaboration with business partners and third party customers by providing value

added services

Consumer Products

• Expand the distribution channel and product range for AV products in the PRC
• Set up more DCH AV shops to meet rising demand for AV equipment in the retail

market

Corporate Objective and Strategies (cont’d)

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Balanced Portfolio Strategy

drives business forward

Corporate Objective and Strategies (cont’d)

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