20 10 Annual Results Announcem ent 2 March 20 11 1 1
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 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. 2 2
GROUP’S MANAGEMENT TEAM Mr. Clement Hui, Chairman Mr. Alex Chu, Deputy Chairman Mr. Donald Yip, CEO Mr. Francis Wai, CFO 3 3
AGENDA • Performance Highlights – by Mr. Clement Hui, Chairman • FY2010 Group Performance, Operation Review & Outlook – by Mr. Donald Yip, Chief Executive Officer • Corporate Objective and Strategies – by Mr. Clement Hui, Chairman • Q&A 4 4
FY2010 Performance Highlights Mr. Clement Hui Chairman 5 5
PERFORMANCE HIGHLIGHTS High Growth on the Fast Track High Growth on the Fast Track For the Year 2010 Group Turnover 45% Profit Attributable to Shareholders 98.7% Return on Equity 23% 6 6
FY2010 Group Performance Mr. Donald Yip Chief Executive Officer 7 7
FY2010 GROUP PERFORMANCE For the year ended 31 Dec 2010 HK$'M FY2010 FY2009 yoy Turnover 32,211 22,209 + 45.0% Profit attributable to shareholders 1,411 710 + 98.7% Adjusted net profit * 1,068 679 + 57.3% Adjusted net profit margin 3.3% 3.0% + 0.3% pt Note: * The adjusted net profit for the year excluding non-operating items such as net gain on disposal of properties and JCE etc. 8 8
FY2010 GROUP PERFORMANCE (cont’d) For the year ended 31 Dec 2010 FY2010 FY2009 yoy Basic earnings per share 78.33 HK cents 39.49 HK cents + 98.4% Full year dividend per share 23.45 HK cents 15.80 HK cents + 48.4% Final dividend per share 12.77 HK cents 11.29 HK cents + 13.1% NAV per share HK$3.92 HK$3.20 + 22.5% Return on equity 23.0% 13.8% + 9.2% pt 9 9
FY2010 GROUP PERFORMANCE (cont’d) HK$'M FY2010 FY2009 Change % Turnover * By Business Segment Motor and Motor Related Business 24,640 15,650 + 57.4% Food and Consumer Products Business 7,203 6,238 + 15.5% Logistics Business 263 233 + 12.9% Other Business 105 88 + 19.3% Total 32,211 22,209 + 45.0% By Markets Mainland China 22,260 14,055 + 58.4% Hong Kong & Macao 7,919 6,455 + 22.7% Other Markets 2,032 1,699 + 19.6% Total 32,211 22,209 + 45.0% Cost of sales (28,269) (19,295) + 46.5% Gross profit 3,942 2,914 + 35.3% GP margin 12.2% 13.1% -0.9% pt 10 10 Note: * For sales to third parties only
TURNOVER * - BY BUSINESS SEGMENTS FY2009 FY2010 Food & Logistics & Logistics & Food & Consumer Others Others Consumer Products 1.1% 1.4% Products 22.4% 28.1% Motor & Motor & Motor Motor Related Related 70.5% 76.5% Note: * For sales to third parties only 11 11
TURNOVER * - BY MARKETS FY2009 FY2010 Other Other Markets Hong Kong & Markets Hong Kong & 6.3% Macao 7.6% Macao 24.6% 29.1% Mainland Mainland China China 63.3% 69.1% Note: * For sales to third parties only 12 12
CONSOLIDATED BALANCE SHEET ANALYSIS HK$'M 31 Dec 2010 31 Dec 2009 Non-current assets 4,261 3,869 Current assets 10,483 7,606 Current liabilities 6,685 5,120 Net current assets 3,798 2,486 Current ratio 1.57 1.49 Shareholders' funds 6,804 5,457 Shareholders' funds per share (HK$) 3.75 3.04 Net assets 7,111 5,756 13 13
CONSOLIDATED CASH FLOW STATEMENT HIGHLIGHTS HK$'M 31 Dec 2010 31 Dec 2009 Operating profit 1,718 1,204 (I ncrease) / decrease in working capital (1,453) 209 Cash generated from operation 265 1,413 I ncome tax paid (340) (223) Net cash (used in) / generated from (75) 1,190 operating activities Net cash generated from / (used in) 369 (739) financing activities Net cash used in investing activities (333) (270) Net (decrease) / increase in cash and cash (39) 181 equivalents 14 14
LIQUIDITY ANALYSIS HK$'M 31 Dec 2010 31 Dec 2009 Cash and bank deposits 1,991 1,895 Total debt 3,302 2,436 Net debt 1,311 541 Shareholders' funds 6,804 5,457 Total capital 8,115 5,998 Gearing ratio 16.2% 9.0% 15 15
ASSET DISPOSAL in FY2010 Asset Disposal in FY2010 Disposal of entire 50% interest in JV with Shiseido Completion 2 July 2010 Consideration HK$500M Gain on disposal HK$331M Disposal of a property in Hong Kong 12 August 2010 Completion Consideration HK$124M Gain on disposal HK$122M Total gain on asset disposal in 2H2010: HK$453M 16 16
17 17 Operation Review & Outlook
MOTOR AND MOTOR RELATED BUSINESS HK$’M HK$’M Segment Turnover Segment Results From Operations 24,643 1,301 15,652 815 12,800 641 10,183 483 7,688 298 FY2006 FY2007 FY2008 FY2009 FY2010 FY2006 FY2007 FY2008 FY2009 FY2010 Segment Turnover Segment Results From Operations Segment Margin % of % of HK$'M FY2010 FY2009 Change % FY2010 FY2009 Change % FY2010 FY2009 Change % total total 19,350 11,755 953 581 4.9% 4.9% Mainland China 78.5% 75.1% 64.6% 64.0% -- 4,217 3,188 328 227 7.8% 7.1% Hong Kong & Macao 17.1% 20.4% 32.3% 44.5% +0.7% pt 1,076 709 20 7 1.9% 1.0% Other Markets 4.4% 4.5% 51.8% 185.7% +0.9% pt 24,643 100.0% 15,652 100.0% 57.4% 1,301 815 59.6% 5.3% 5.2% +0.1% pt 18 18
MOTOR AND MOTOR RELATED BUSINESS – FY2010 Operation Review Mainland China PRC market: Sold 18 million units of new vehicles, +32% DCH: Sold 58,800 units of new vehicles, +46% Distributorship Bentley: Leading in super luxury imported car Sold 815 units (2009: 421 units), +94% Added 4 Bentley dealership from 9 to 13 Opened Bentley Academy in Shanghai Isuzu: No.1 in Japanese imported heavy duty trucks Sold 6,953 units (2009:3,462 units), +101% 19 19
MOTOR AND MOTOR RELATED BUSINESS – FY2010 Operation Review (cont’d) Mainland China New dealership network Dealership - 4S shops: from 40 to 55, +15 shops in 8 cities - Representing 20 brands Nanjing Shanghai Wuxi Jiaxing Hangzhou Ningbo Qujing Fuzhou Meizhou Guangzhou Shantou Kunming Foshan Shenzhen Yulin Nansha Jiangmen Zhongshan Zhanjiang - Same store growth: car sales +21%, service units +9% - National awards received: ► National Top 10 4S Shops: GAC Toyota, FAW Toyota, DF Honda ► Four-Star Sales and After-Sales Service: SGM Buick National Top 10 20 20 ► National Best Dealership General Manager: FAW Audi 4S Shop Award
MOTOR AND MOTOR RELATED BUSINESS – FY2010 Operation Review (cont’d) Mainland China Motor Related Business 1 st - Independent service outlet, MotorMech, opened in Dongguan 4Q2010 Independent service outlet - Vehicles inspection and Used car centre in Guangzhou in operation - Motor leasing centres covering 5 cities in Shanghai, Beijing, Tianjin, Chongqing and Shunde. Lubrication oil blending plant - Lubrication oil blending plant in Xinhui has started production in Nov 2010 21 21
MOTOR AND MOTOR RELATED BUSINESS – FY2010 Operation Review (cont’d) Hong Kong HK Market: Sold 40,700 units of new vehicles, +40% Motor Business New vehicles sold by DCH: 9,214 units, +22% Market share: 23% Audi: Units growth: +35% due to more new models launched Showroom opened in Tsim Sha Tsui, Kowloon HK: Honda Showroom – Kowloon Bay Nissan: Units growth: +27%, as demand for luxury MPV Elgrand increased Isuzu: Units growth: +91%, due to replacement of pre-Euro and Euro I vehicles HK: Audi Showroom – Honda: Showroom relocated to Kowloon Bay Tsim Sha Tsui Motor Related Business - Steady growth in motor leasing, vehicle inspection, motor parts distribution - Market share of Yokohama high performance tyres: 35% taxi tyres: 66% Other Markets - Taiwan: Our Audi sales volume accounted for 26% of Audi’s total sales 2 nd Audi Terminal in Hsinchu, Dec 2010 TW: Audi Terminal – Hsinchu - Singapore: Business affected by COE prices 22 22
MOTOR AND MOTOR RELATED BUSINESS – Outlook 2011 Mainland China PRC market: A double-digit growth in total market expected Distributorship - Bentley: Appoint 5 dealerships in 2011; Sales volume target: +50% - Isuzu: Remain strong due to increasing demand Bentley Mulsanne Dealership - Target to open 10-15 4S shops, focusing on middle to luxury brands - 7 new 4S shops under construction including: Audi, Honda, Toyota, Lexus - Other brands under pursue: Mercedes Benz, SGM Buick etc. Motor Related Business Mercedes Benz showroom Horizontal expansion: - Plan to open 10 more independent service outlets in Guangdong province - Expand 4-5 motor leasing outlets in other cities Vertical expansion: GQ Honda 4S shop 23 23 - Pursuing upstream motor accessories manufacturing
MOTOR AND MOTOR RELATED BUSINESS – Outlook 2011 (cont’d) Hong Kong & Macao HK market: Steady DCH to capture demand for green vehicles: - Introduce 200 Nissan LEAF electric cars in 1Q2011 Electric Car - Nissan LEAF - Introduce electric bus - Introduce other green vehicles and products - Retrofit programme of Selective Catalytic Reduction Devices on Euro II and Euro III diesel buses Other Markets Electric Bus – Great Dragon - Taiwan: Explore expansion through existing dealership and new dealership - Singapore: Introduce Foton commercial vehicles 24 24
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