Forward-Looking Statements 2 Certain statements contained in this - - PowerPoint PPT Presentation

Forward-Looking Statements

Certain statements contained in this presentation maybe viewed as forward- looking 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.

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1H2018 Results | Agenda

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Key Initiatives Consumer Products Review Motor Business Review Financial Review

1H2018 Results | Agenda

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Key Initiatives Consumer Products Review Motor Business Review Financial Review

Revenue (HK$’M) Financial Review | 2018 Half Year Results

23,352 24,474 25,639 1H2017 1H2018 Excluding HKFRS15

↑ 4.8%

Profit Attributable to Shareholders (HK$’M)

232 275 1H2017 1H2018

↑ 18.5% ↑ 9.8%

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Financial Review | Revenue by Business Segment

74.2% 25.7% 0.1%

Motor Business Consumer Products Business Others

65.7% 34.2% 0.1%

1H2018 1H2017

Revenue by Business Segment

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Financial Review | Revenue by Geography

Revenue by Geography

1H2018 1H2017

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60.0% 29.9% 10.1% 66.9% 26.2% 6.9%

Mainland China Hong Kong and Macao Other Markets

Financial Review | Earnings and Dividend

1H2018 1H2017 1H2018 1H2017

5.4% 5.1% 5.2% 4.5%

Return on Equity (Annualised) Return on Capital Employed (Annualised)

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Financial Review | Earnings and Dividend

HK$’M 1H2018 1H2017 % Basic earnings per share (HK cents) 14.89 12.66 17.6% Interim dividend per share (HK cents) 5.05 5.05 0% HK$ 30 June 2018 31 Dec 2017 % Net asset value per share 5.75 5.80

• 0.9%

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HK$’M 30 June 2018 31 Dec 2017 Non current assets 11,088 11,026 Current assets 15,892 16,225 Current liabilities 12,990 11,589 Non-current liabilities 3,368 4,950 Net assets 10,622 10,712 Non-controlling interests 546 567 Shareholders’ funds 10,076 10,145

Financial Review | Financial Position

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Financial Review | Net Gearing

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HK$’M 30 June 2018 31 Dec 2017 30 June 2017 Cash and bank deposits 1,083 1,138 1,713 Total debt 7,073 6,927 7,019 Net debt 5,990 5,789 5,306 Shareholders’ funds 10,076 10,145 9,231 Total capital 16,066 15,934 14,537 Net gearing ratio 37.3% 36.3% 36.5%

Financial Review | Consolidated Cash Flow Statement

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HK$’M 1H2018 1H2017 Change Net cash generated from operating activities 696 871 (175) Net cash (used in) / generated from investing activities (763) 252 (1,015) Net cash used in financing activities (25) (530) 505 Dividend paid to shareholders of the Company

• (68)

68 Net (decrease) / increase in cash and cash equivalents (92) 525 (617)

1H2018 Results | Agenda

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Key Initiatives Motor Business Review Financial Review Consumer Products Review

Consumer Products | Profile

Food & FMCG

• Nearly 70 years experience in distribution and trading
• Operations in 10+ economies in Greater China and Southeast Asia

Healthcare

• Operations in 8 economies
• Category coverage including pharmaceuticals, medical devices,

OTC, hospital consumables, diagnostics and nutrition Electrical Products

• Electrical, lifestyle, audio and home appliance distribution
• Operations in Hong Kong, Macao, China and Southeast Asia
• 35+ retail and service outlets

Logistics

• Internal and external FMCG customers
• Warehousing, transport, value-added services

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Consumer Products Business | Performance Highlights

Operating Profit /(Loss) (HK$’M)

2,244 1,751 4,306 3,501 1,444 1,028

1H2017 1H2018

Mainland China HK & Macao Other Markets

(40) (179) 156 172 22 4

Mainland China HK & Macao Other Markets

7,994 6,280 138 (3) 1H2017 1H2018

Revenue excluding HKFRS 15 (HK$’M)

2,244 1,856 4,306 4,274 1,444 1,271

1H2017 1H2018

Mainland China HK & Macao Other Markets

7,994 7,401

Revenue by Geography (HK$’M)

↓ 21.4% ↓ 7.4% ↓ 102.2%

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• Revenue decrease of 10.9%

including HKFRS 15 impact

• Operating profit increased due to:
• Commodity trading portfolio
• Manufacturing consolidation
• Food retail improvements

Consumer Products Business | HK & Macao Food and FMCG

Performance Review Agency distribution: Stable results with slight decrease in profit; enhancing portfolio and channel penetration Retail: Improved profitability after store rationalisation; continuing brand and customer experience enhancements Manufacturing: Consolidated in Yuen Long with improved profitability; upgrading product portfolio

+0.9%

Revenue (HKD) Operating Profit (HKD)

+20.9%

Commodity trading: Improved revenue and segment results despite market challenges

↓

excluding HKFRS 15 16

↓

Consumer Products Business | HK & Macao Food and FMCG

Food Manufacturing and Processing

Centralized workshop capable to offer more variety of seafood products Production capacity expanded allowing delivery of premium natural meat products

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Consumer Products Business | HK & Macao Food and FMCG

Agency Distribution

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Consumer Products Business | HK & Macao Food and FMCG

House Brands

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Consumer Products Business | HK & Macao Food and FMCG

Commodity Trading

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Consumer Products Business | HK & Macao Food and FMCG

Food Retail

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Consumer Products Business | HK & Macao Food and FMCG

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Outlook

• Revenue declined due to portfolio
• ptimisation
• Operating losses during ongoing

restructuring

• Implementing a wide range of business

enhancement initiatives

• Infrastructure and resource

integration

• Prudent inventory and cost control
• Realigned KPIs and incentives
• Channel mix review

Consumer Products Business | Mainland China Food and FMCG

• 9.3%

Revenue (HKD) Operating Loss (HKD)

• 231%

↓

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↓

Performance Review

Consumer Products Business | Electrical Products Distribution

Expand the project-based business Launch audio and lifestyle products

+6.0% +5.9%

Offset by:

• Warehouse relocation costs
• Warm winter impacting heating product

sales Improved performance from:

• Growth of property development projects
• Strong air-conditioner sales
• Consumer electronics in mainland China

Key Initiatives Revenue (HKD)

↓

Operating Profit (HKD) Manage margin impact from WEEE

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↓

Performance Review

Consumer Products Business | Electrical Products Distribution

Growth in lifestyle audio

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Consumer Products Business | Logistics Solutions

Strengthen network in Eastern and Southern China Commence operation of the Hengqin logistics centre in 2019

• Reduced revenue from strategic portfolio
• ptimisation
• Profit increase due to better utilisation and

synergies from consolidation

• 5.2%

Revenue (HKD) Operating Profit (HKD)

+50.0%

Key Initiatives

↓

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↓

Performance Review

Consumer Products Business | Logistics Solutions

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Hengqin Distribution Centre

Consumer Products Business | Other Markets Food and FMCG

Enhance operational efficiencies Focus on higher value categories

OPERATION REVIEW

• Agency distribution operations in

Singapore, Taiwan, Malaysia, Indonesia, Philippines, Japan, Brunei

• Restructuring in Singapore and East

Malaysia to focus resources

• Manufacturing focused on
• Productivity and yield

improvements

• Expansion in OTC and nutrition
• 37.8%

Revenue (HKD) Net Impact to Group

$25 million

Performance Review

↓ ↓

Key Initiatives

from restructuring

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Consumer Products Business | Healthcare Products Distribution

• Revenue decreased by 52% after the

impact of HKFRS 15

• Mainland China market shift to generic

and locally produced pharmaceuticals

• Market share and profitability growth in

Thailand and Singapore

• 9.5%

Revenue (HKD) Operating Profit (HKD)

• 10.3%

Transferring operations into new infrastructure in Hong Kong and Thailand Favorable market dynamics from rising incomes and aging populations Developing specialty services including emergency delivery, robotic pick & pack, cold chain and innovative Home-Health services Performance Review Key Initiatives

↓ ↓

excluding HKFRS 15 29

Consumer Products Business | Healthcare Products Distribution

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Auriga Health Distribution Centre

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Consumer Products Business | Healthcare Products Distribution

Nature’s Care

1H2018 Results | Agenda

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Key Initiatives Consumer Products Review Financial Review Motor Business Review

Motor Business | Overview

Motor Business

• 50+ years of motor distribution and dealership expertise
• Operating 100+ dealerships and 4S shops in Greater

China

• Diversified portfolio covering passenger cars, commercial

vehicles, electrical buses and special purpose vehicles Motor-related Business

• Wide portfolio of motor related services including

vehicle repair, used car sales, parts trading, vehicle rental, motor financing, auto insurance, yacht sales, airport services and engineering projects

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Motor Business | Performance Highlights

Revenue (HK$’M) Operating Profit (HK$’M)

11,770 14,628 2,649 2,892 919 650

1H2017 1H2018

Mainland China HK & Macao Other Markets

Operating Margin

278 482 168 235 70 54

1H2017 1H2018

Mainland China HK & Macao Other Markets

2.4% 6.3% 7.6% 3.3% 8.1% 8.3%

Mainland China HK & Macao Other Markets 1H2017

15,338 18,170 516 771

1H2018 1H2017 1H2018 1H2017 1H2018

↑18.5% ↑49.4% ↑0.9pt ↑1.8pt↑0.7pt

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• Unit sales increase of 10.5%
• Exposure to premium and

luxury segment

• Enhanced front line

performance

• Acquisition of new

dealerships in Zhejiang province

• Improved profitability from:
• Brand portfolio upgrades
• Pricing management and

inventory controls Operating Profit (HKD)

+24.3%

Revenue (HKD)

+73.4%

Performance Review

↓ ↓ ↓

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Motor Business | Mainland China

Motor Business | Mainland China

Motor Brands 4S Shops Showrooms

Audi 7

• Bentley

7

• Chevrolet

3

• Ferrari /

Maserati / Alpha Romeo 5

• Honda

11 4 Isuzu / Qingling 6 2 Lexus 9 1 Mercedes Benz 6

• Nissan

3

• SGM Buick

5

• Toyota

22 7 Others 2 1

Total June 30, 2018

86 15 1H2017 1H2018

+24.7%

New cars sales revenue

+31.2%

After-sales service revenue After-sales serviced units

570k

90.0% 10.0% New car sales After-sales service 90.5% 9.5%

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Dealership Performance Aftersales Revenue Share

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Motor Business | Mainland China

Shenzhen Auto Show

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Bentley Continental GT

Motor Business | Mainland China

Bentley Continental GT Video?

Motor Business | Mainland China

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Motor Business | Mainland China

Bentley Continental GT Video?

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• DCH passenger car unit sales

increased by 26.9% following change to EV subsidy, strong model launches and business enhancement measures

• DCH commercial vehicles sales

declined by 9.7%

• Operating profit increased from:
• Passenger car sales
• Efficiency enhancements
• Motor related business,

particularly aviation

• Operating margin increased from

6.3% to 8.1%

+9.2%

Revenue (HKD) Operating Profit (HKD)

+39.9%

Performance Review

↓ ↓ ↓ ↓

Motor Business | Hong Kong and Macao

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Motor Business | Hong Kong and Macao

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Sinotruk Streetwasher Vehicle Tender

Motor Business | Hong Kong and Macao

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Sinotruk Streetwasher Vehicle Tender

GSE Pooling Scheme

Motor Business | Hong Kong and Macao

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GSE Pooling Scheme

Motor Business | Hong Kong and Macao

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https://www.youtube.com/watch?v=QqGFjP3uJmc

Motor Business | Hong Kong and Macao

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Princess Yachts

Motor Business | Hong Kong and Macao

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Princess Yachts, Showroom in Central

• 29.3%

Revenue (HKD)

• 22.9%

Operating Profit (HKD)

• Revenue and profit decreased due to the delay of Euro VI vehicles in Singapore
• Operating margin increased by 0.7 points to 8.3% with increase commercial vehicle sales

in Taiwan and the exit of a passenger vehicle dealership in 2017

• Euro VI vehicle delivery has begun in Singapore

Performance Review

↓ ↓

Motor Business | Other markets

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1H2018 Results | Agenda

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Consumer Products Review Motor Business Review Financial Review Key Initiatives

Key Initiatives | 1H2018 Enhance operational excellence Build a service and performance culture

Key Initiatives

Leverage CITIC platform and drive synergy

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Key Initiatives | 1H2018

Big Big Shop with TVB

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Thank You and Q&A

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