Forward-Looking Statements 2 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.
1H2018 Results | Agenda 3 Consumer Products Key Review Initiatives Financial Motor Review Business Review
1H2018 Results | Agenda 4 Consumer Products Key Review Initiatives Financial Motor Review Business Review
Financial Review | 2018 Half Year Results 5 Revenue Profit Attributable to (HK$’M) Shareholders (HK$’M) ↑ 4.8% ↑ 9.8% ↑ 18 .5% 275 25,639 24,474 23,352 232 1H2017 1H2018 1H2017 1H2018 Excluding HKFRS15
Financial Review | Revenue by Business Segment 6 Revenue by Business Segment 1H2017 1H2018 0.1% 0.1% 74.2% 65.7% 25.7% 34.2% Motor Business Consumer Products Business Others
Financial Review | Revenue by Geography 7 Revenue by Geography 1H2017 1H2018 60.0% 66.9% 6.9% 10.1% 26.2% 29.9% Mainland China Hong Kong and Macao Other Markets
Financial Review | Earnings and Dividend 8 Return on Equity Return on Capital Employed (Annualised) (Annualised) 5.2% 5.4% 4.5% 5.1% 1H2017 1H2017 1H2018 1H2018
Financial Review | Earnings and Dividend 9 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%
Financial Review | Financial Position 10 HK$’M 30 June 2018 31 Dec 2017 Non current assets 11,088 11,026 Current assets 15,892 16,225 Current liabilities 12,990 11,589 Non-current liabilities 3,368 4,950 Net assets 10,622 10,712 Non-controlling interests 546 567 Shareholders’ funds 10,076 10,145
Financial Review | Net Gearing 11 HK$’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 12 HK$’M 1H2018 1H2017 Change Net cash generated from operating activities 696 871 (175) Net cash (used in) / generated from investing (763) 252 (1,015) activities Net cash used in financing activities (25) (530) 505 Dividend paid to shareholders of the Company - (68) 68 Net (decrease) / increase in cash and cash (92) 525 (617) equivalents
1H2018 Results | Agenda 13 Consumer Products Key Review Initiatives Financial Motor Review Business Review
Consumer Products | Profile 14 Food & FMCG • Nearly 70 years experience in distribution and trading • Operations in 10+ economies in Greater China and Southeast Asia Electrical Products • Electrical, lifestyle, audio and home appliance distribution • Operations in Hong Kong, Macao, China and Southeast Asia • 35+ retail and service outlets Logistics • Internal and external FMCG customers • Warehousing, transport, value-added services Healthcare • Operations in 8 economies • Category coverage including pharmaceuticals, medical devices, OTC, hospital consumables, diagnostics and nutrition
Consumer Products Business | Performance Highlights 15 Revenue by Geography Revenue excluding Operating Profit /(Loss) (HK$’M) HKFRS 15 (HK$’M) (HK$’M) ↓ 21.4% ↓ 7.4% ↓ 102.2% (3) 7,994 7,994 138 4 7,401 22 1,444 1,444 6,280 1,271 1,028 172 156 4,306 4,306 4,274 (40) 3,501 (179) 2,244 1,856 1,751 2,244 1H2017 1H2018 1H2017 1H2018 1H2017 1H2018 Mainland China HK & Macao Other Markets Mainland China HK & Macao Other Markets Mainland China HK & Macao Other Markets
Consumer Products Business | HK & Macao Food and FMCG 16 Performance Review Agency distribution: Stable results Revenue (HKD) ↓ excluding HKFRS 15 with slight decrease in profit; +0.9% enhancing portfolio and channel penetration Operating Profit (HKD) ↓ Commodity trading : Improved +20.9% revenue and segment results despite market challenges • Revenue decrease of 10.9% Manufacturing: Consolidated in including HKFRS 15 impact Yuen Long with improved profitability; upgrading product • Operating profit increased due to: portfolio • Commodity trading portfolio • Manufacturing consolidation Retail: Improved profitability after • Food retail improvements store rationalisation; continuing brand and customer experience enhancements
Consumer Products Business | HK & Macao Food and FMCG 17 Food Manufacturing and Processing Production capacity expanded allowing delivery of Centralized workshop capable to offer premium natural meat products more variety of seafood products
Consumer Products Business | HK & Macao Food and FMCG 18 Agency Distribution
Consumer Products Business | HK & Macao Food and FMCG 19 House Brands
Consumer Products Business | HK & Macao Food and FMCG 20 Commodity Trading
Consumer Products Business | HK & Macao Food and FMCG 21 Food Retail
Consumer Products Business | HK & Macao Food and FMCG 22 Outlook
Consumer Products Business | Mainland China Food and FMCG 23 Performance Review • Revenue declined due to portfolio Revenue (HKD) ↓ -9.3% optimisation • Operating losses during ongoing Operating Loss (HKD) restructuring ↓ -231% • 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 | Electrical Products Distribution 24 Performance Review Improved performance from: Revenue (HKD) • ↓ Growth of property development projects +6.0% • Strong air-conditioner sales • Consumer electronics in mainland China Offset by: Operating Profit (HKD) ↓ • Warehouse relocation costs +5.9% • Warm winter impacting heating product sales Key Initiatives Expand the project-based business Launch audio and lifestyle products Manage margin impact from WEEE
Consumer Products Business | Electrical Products Distribution 25 Growth in lifestyle audio
Consumer Products Business | Logistics Solutions 26 Performance Review Revenue (HKD) • Reduced revenue from strategic portfolio ↓ -5.2% optimisation • Profit increase due to better utilisation and Operating Profit (HKD) ↓ synergies from consolidation +50.0% Key Initiatives Strengthen network in Eastern and Southern China Commence operation of the Hengqin logistics centre in 2019
Consumer Products Business | Logistics Solutions 27 Hengqin Distribution Centre
Consumer Products Business | Other Markets Food and FMCG 28 OPERATION REVIEW Performance Review • Agency distribution operations in Revenue (HKD) ↓ Singapore, Taiwan, Malaysia, -37.8% Indonesia, Philippines, Japan, Brunei • Restructuring in Singapore and East Net Impact to Group from restructuring ↓ Malaysia to focus resources $25 million • Manufacturing focused on • Productivity and yield improvements • Expansion in OTC and nutrition Key Initiatives Focus on higher value categories Enhance operational efficiencies
Consumer Products Business | Healthcare Products Distribution 29 Performance Review • Revenue decreased by 52% after the Revenue (HKD) excluding HKFRS 15 ↓ impact of HKFRS 15 -9.5% • Mainland China market shift to generic and locally produced pharmaceuticals Operating Profit (HKD) ↓ • Market share and profitability growth in -10.3% Thailand and Singapore Key Initiatives Transferring operations into new infrastructure in Hong Kong and Thailand Developing specialty services including emergency delivery, robotic pick & pack, cold chain and innovative Home-Health services Favorable market dynamics from rising incomes and aging populations
Consumer Products Business | Healthcare Products Distribution 30 Auriga Health Distribution Centre
Consumer Products Business | Healthcare Products Distribution 31 Nature’s Care
1H2018 Results | Agenda 32 Consumer Products Key Review Initiatives Motor Financial Review Business Review
Motor Business | Overview 33 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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