1 Interim Results Announcem ent 14 August 20 14 20 14
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
AGENDA 2014 I nterim Results Announcement Financial Review Operation Review and Outlook New Business 3
4 Financial Review 1H2014
PERFORMANCE HIGHLIGHTS Group turnover Profit attributable to shareholders HK$’M HK$’M Non-operating profit HK$’M + 16.7% Adjusted net profit 30,000 1H14 vs 1H13 800 + 7.2% 22,094 1H14 vs 1H13 18,935 430 401 4 4 15,000 400 426 397 0 0 1H2014 1H2013 1H2014 1H2013 5
1H2014 FINANCIAL REVIEW For the period ended 30 June 2014 HK$'M 1H2014 1H2013 Turnover 22,094 18,935 + 16.7% Profit from operations 755 637 + 18.5% Operating margin 3.4% 3.4% -- Profit attributable to shareholders 430 401 + 7.2% Adjusted net profit * 426 397 + 7.3% Note: * The adjusted net profit for the period excluding net gain on remeasurement of investment properties and other non-operating items. 6
1H2014 FINANCIAL REVIEW (cont’d) For the period ended 30 June 2014 1H2014 1H2013 Basic earnings per share (HK cents) 23.47 21.91 + 7.1% I nterim dividend per share (HK cents) 9.30 8.68 + 7.1% NAV per share (HK$) 5.23 4.99 + 4.8% Return on equity (annualised) 9.5% 9.3% + 0.2% pt Return on capital employed (annualised) 7.3% 6.7% + 0.6% pt 7
TURNOVER * - BY BUSINESS SEGMENTS 1H2014 1H2013 Food & Others Consumer 0.1% Products 22.9% Motor & Motor Related 77.0% Note: * For sales to third parties only 8
9 1H2013 TURNOVER * - BY MARKETS For sales to third parties only 1H2014 Note: *
CONSOLIDATED BALANCE SHEET HIGHLIGHTS HK$'M 30 Jun 2014 31 Dec 2013 30 Jun 2013 Non-current assets 6,537 6,465 6,405 Current assets * 15,159 15,161 13,711 Current liabilities 9,070 10,194 8,459 Net current assets 6,089 4,967 5,252 Current ratio 1.67 1.49 1.62 Non-current liabilities 3,044 2,059 2,519 Net assets 9,582 9,373 9,138 Non-controlling interests 412 379 404 Shareholders' funds 9,170 8,994 8,734 * I ncluding I nventories 7,907 6,259 5,680 10
LIQUIDITY ANALYSIS HK$'M 30 Jun 2014 31 Dec 2013 30 Jun 2013 Cash and bank deposits 1,405 2,173 2,465 Total debt 7,382 7,424 6,008 Net debt 5,977 5,251 3,543 Shareholders' funds 9,170 8,994 8,734 Total capital 15,147 14,245 12,277 Net gearing ratio 39.5% 36.9% 28.9% 11
CONSOLIDATED CASH FLOW STATEMENT HIGHLIGHTS HK$'M 1H2014 1H2013 Profit before taxation 612 554 Depreciation, Amortisation & other non-cash items 409 328 Operating profit before changes in working capital 1,021 882 I ncrease in working capital (1,100) (306) Cash (used in) / generated from operations (79) 576 I ncome tax paid (61) (201) Net cash (used in) / generated from operating activities (140) 375 Dividends paid to shareholders of the Company (196) (162) Net cash used in other financing activities (226) (519) Net cash used in investing activities (179) (445) Net decrease in cash and cash equivalents (741) (751) 12
13 Operation Review and Outlook 1H2014
MOTOR AND MOTOR RELATED BUSINESS Segment Result From Operations Segment Turnover HK$’M HK$’M 17,235 14,578 646 567 1H2014 1H2013 1H2014 1H2013 Segment Turnover Segment Result From Operations Segment Margin % of HK$'M 1H2014 1H2013 1H2014 1H2013 1H2014 1H2013 total 76.9% 24.7% -0.4% -0.5% pt Mainland China 13,252 10,625 262 263 2.0% 2.5% 17.9% 6.3% 25.9% +1.6% pt Hong Kong & Macao 3,086 2,904 311 247 10.1% 8.5% 5.2% 1,049 -14.5% 57* 28.1% 5.4% +2.7% pt Other Markets 897 73 8.1% 100.0% 17,235 14,578 18.2% 646 567 13.9% 3.7% 3.9% -0.2% pt * Including the goodwill payment received from the transfer of Richmond Acura dealership 14
FOOD & CONSUMER PRODUCTS BUSINESS Segment Result From Operations Segment Turnover HK$’M HK$’M 4,844 141 4,333 110 1H2014 1H2013 1H2014 1H2013 Segment Turnover Segment Result From Operations Segment Margin % of HK$'M 1H2014 1H2013 1H2014 1H2013 1H2014 1H2013 total 40.8% 22.0% -40.0% -0.6% pt Mainland China 1,962 1,608 12 20 0.6% 1.2% Hong Kong & 2,555 53.1% 2,352 8.6% 128 120 6.7% 5.0% 5.1% -0.1% pt Macao Other Markets excl. 6.1% 320 -8.4% 5 -20.0% 1.6% -0.2% pt 293 4 1.4% GDVTR 4,810 4,280 144 145 -0.7% 3.0% 3.4% 100.0% 12.4% -0.4% pt GDVTR 34 0.7% 53 -35.8% -3 -35 91.4% -8.8% -66.0% +57.2% pt 4,844 100.0% 4,333 11.8% 141 110 28.2% 2.9% 2.5% +0.4% pt 15
MOTOR AND MOTOR RELATED BUSINESS 1H2014 Operation Review Mainland China No. of new vehicles sold in PRC (units) PRC Market DCH 1H2014 1H2013 1H2014 1H2013 40,500 33,300 9.6mn 8.7mn Passenger Cars +21.7% +11.2% Commercial 3,500 3,530 2.05mn 2.12mn -0.9% -3.2% Vehicles 44,000 36,800 11.7mn 10.8mn Total +19.5% +8.4% Note: - Figures included distributorship and dealership sales - The calculation of the variance % is based on the actual no. of units sold 16
MOTOR AND MOTOR RELATED BUSINESS 1H2014 Operation Review (cont’d) Mainland China Dealership Network Key Brands No. of 4S shop No. of showroom 6 1 Audi -- Bentley 7 Ferrari / Maserati 3 -- Honda 2 11 Isuzu / Qingling 5 4 6 -- Lexus 3 Mercedes Benz 1 Nissan 5 -- 4 SGM Buick -- Toyota 21 5 Others 8 1 Total no. of 4S shops / showrooms 79 14 as of reporting date: 17
MOTOR AND MOTOR RELATED BUSINESS 1H2014 Operation Review (cont’d) Mainland China Dealership Development (4S shop & Showroom) 12 greenfield projects (in 10 cities) in progress: Existing In Progress 18
MOTOR AND MOTOR RELATED BUSINESS 1H2014 Operation Review (cont’d) Mainland China Same Store Growth 1H2014 vs 1H2013 New car sales unit +12.7% Service unit -0.5% After-sales service revenue +9.7% Dealership sales breakdown % of dealership turnover 1H2014 1H2013 New car sales 91.2% 90.5% After-sales service 8.8% 9.5% by units by revenue 1H2014 vs 1H2013 1H2014 vs 1H2013 New car sales +21.6% +26.8% After-sales service +5.1% +16.2% 19
MOTOR AND MOTOR RELATED BUSINESS 1H2014 Operation Review (cont’d) Hong Kong & Macao No. of new vehicles sold (units) DCH HK Market 1H2014 1H2013 1H2014 1H2013 4,800 4,600 18,900 17,900 Passenger Cars +4.2% +5.3% Commercial 2,000 1,700 7,600 6,100 +18.3% +25.4% Vehicles 6,800 6,300 +8.0% 26,500 24,000 +10.4% Total Note: The calculation of the variance % is based on the actual no. of units sold DCH market share in Hong Kong by 30 June 2014 Overall 21.7% -0.3% point (1H13: 22.0%) 20
MOTOR AND MOTOR RELATED BUSINESS 1H2014 Operation Review and Outlook (cont’d) Mainland China Dealership Expansion � Dealership turnover: +25.8% � Increase in passenger car sales with an expanded dealership network � Commercial vehicles - Domestic: above the market - Import: sluggish � 79 4S stores and 14 showrooms as of today � Profitability affected by initial costs of the greenfield shops opened in the last 2 years Outlook � 12 greenfield projects rights secured including 8 4S stores and 4 showrooms � New strategy of network expansion: - collaboration with strategic partners in setting up shops with better economic values - showrooms and quick service centres - more M&A 21
MOTOR AND MOTOR RELATED BUSINESS 1H2014 Operation Review and Outlook (cont’d) Mainland China (cont’d) Enhancement of Motor Business profitability � To increase after-sales service revenue � Enhancing commission income from auto insurance and auto finance � Established a national insurance agency company to improve commission income � Lubrication oil blending business doubled the sales in 1H14 Outlook � Expand motor leasing business to Kunming and Ningbo � Setting up finance leasing business in China 22
MOTOR AND MOTOR RELATED BUSINESS 1H2014 Operation Review and Outlook (cont’d) Hong Kong & Macao � Replacement demand for commercial vehicles stimulated by HKSAR Government’s HK$11.4 billion ex-gratia payment scheme � Work closely with principals and body builders to ensure a smooth supply of commercial vehicles to meet the rising demand � The first supplier of electric buses in Hong Kong � Retrofitting the selective catalytic reduction device (SCR) for franchised bus Outlook � Expect to maintain good contribution from commercial vehicle business � New commercial vehicle service centre in San Tin, N.T. will commence operation in 2H14 23
MOTOR AND MOTOR RELATED BUSINESS 1H2014 Operation Review and Outlook (cont’d) Other Markets Taiwan � Unit sales: +75.3% � Market share in Japanese commercial vehicle: 13.5%, +3.2% point � Unit sales: +21.4% � Unit sales: -28.1%. 1H13 sales included a major tender to the Government Singapore Outlook � Semi-knock down assembly plant in Taichung to start operation in 2H14 Taiwan � Expecting strong demand in 2H14 triggered by infrastructure projects and Singapore the environmental policy of the Government � Explore business opportunities in Myanmar and other countries in the Other regions Indochina region 24
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