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Convenience Retail Asia Limited 2017 Annual Results Announcement
7 March 2018
Agenda
Hong Kong Retail Market Key Highlight
2017 Financial Results Highlight
2018 Outlook
Question & Answer
2
HONG KONG RETAIL MARKET KEY HIGHLIGHT
3
Hong Kong Retail Market
4 Source: Census & Statistics Department HKSAR
-0.2 -3.7
-8.1
2.2
-0.2 -1.5
-7.1
1.9
-15
-10
-5
0
5
10 20
14
2015
2016
2017
Total Retail Sales Value & Volume
Value Voulme
4.6
1.3 0.8
-0.2
1.0
-0.7 -0.8 -2.0
-6
-3
0
3
6
9
2014
2015
2016
2017
Value Volume
Year
-on-
year
% c
hang
e
Year
-on-
year
% c
hang
e
Supermarkets Sales Value & Volume
Hong Kong Retail Market
5
South China Morning Post 2/3/2018
HK Economic Times 2/2/2018
HK Economic Times 20/2/2018 Sing Pao Daily News 27/12/2017
Sing Pao Daily News 31/12/2017
The 3 “Plus” Strategies
6
1. Focus on “Internet Plus” customers 2. Deliver “4P’s Plus” relevant customer experience 3. Transition to “B&M Plus” (O2O) business models
ASN Fun & Novelty “Internet+”
Customer
Copyright © Circle K Convenience Stores (HK) Limited
7
3 “Plus” Strategies Driving Growth
8
OK Stamp It – Customer Engagement Tools
1. For Value 2. For Fun 3. Social Sharing
4. e-Gift Coupon
5. Customer Experience
6. O2O Lucky Draw
Copyright © Circle K Convenience Stores (HK) Limited
O2O Shake Shake Lucky Star
9 Copyright © Circle K Convenience Stores (HK) Limited
11
OK Stamp It – KPIs
Monchhichi Promotion
Member Recruitment
Pokémon Promotion
Member Recruitment
Member Recruitment
Gudetama Promotion
Copyright © Circle K Convenience Stores (HK) Limited
0
200,000
400,000
600,000
800,000
1,000,000
23/0
6/20
16
06/0
7/20
16
19/0
7/20
16
01/0
8/20
16
14/0
8/20
16
27/0
8/20
16
09/0
9/20
16
22/0
9/20
16
05/1
0/20
16
18/1
0/20
16
31/1
0/20
16
13/1
1/20
16
26/1
1/20
16
09/1
2/20
16
22/1
2/20
16
04/0
1/20
17
17/0
1/20
17
30/0
1/20
17
12/0
2/20
17
25/0
2/20
17
10/0
3/20
17
23/0
3/20
17
05/0
4/20
17
18/0
4/20
17
01/0
5/20
17
14/0
5/20
17
27/0
5/20
17
09/0
6/20
17
22/0
6/20
17
05/0
7/20
17
18/0
7/20
17
31/0
7/20
17
13/0
8/20
17
26/0
8/20
17
08/0
9/20
17
21/0
9/20
17
04/1
0/20
17
17/1
0/20
17
30/1
0/20
17
12/1
1/20
17
25/1
1/20
17
08/1
2/20
17
21/1
2/20
17
03/0
1/20
18
16/0
1/20
18
29/0
1/20
18
11/0
2/20
18
>1 Million
OK Stamp It Won Multiple Awards
12
Marketing Magazine
- Mob-Ex Awards 2017 Best App – “Consumer Brand” &
“Most Responsive Mobile Campaign” - Marketing’s inaugural eCommAs Awards 2017
Best of Show - Brand Gold for Best Customer Retention Programme
Gold for Best Omni-Channel Process Gold for Best E-Commerce Campaign
Bronze for Best User Experience
Best (Top 1) 2017Q1 Ads Leaderboard
Circle K Pokémon Video for 「OK齊齊印」app
Best of 2016 Ads Leaderboard
DoReMi Monchhichi Golden Globe Tigers 2017 Awards
- For Excellence In Retail & Store Management - For Excellence & Leadership In Social Media
& Digital Marketing - For Excellence & Leadership in Branding & Marketing
Octopus Partner Awards 2016
- The Octopus Innovation Award
Re-inventing Strategy Lifting Customer Experience
13
>340,000 Members
Circle K Hong Kong Won 2017 Service and Courtesy Award By HKRMA
14
Fast Fashion Eyewear Chain from Japan Business Introduction
• Japan Quality • Always Fresh /
Fast Service • Value for Money
Japan Quality
16
Amazing Zoff SMART – Parts used in Hakuto’s lunar rover are made from Ultem, the same materials used in Zoff SMART.
Always Fresh New glasses, new mood, “Enjoy Your Glasses”
17
Fast Services (30 mins)
18
Value For Money
19
20
The First Store In Hong Kong City Plaza, Taikoo (opened 25th November 2017)
The First Store In Hong Kong City Plaza, Taikoo (opened 25th November 2017)
21
The Second Store In Hong Kong Telford Plaza, Kowloon Bay (opened 23rd February 2018)
22
23
The Second Store In Hong Kong Telford Plaza, Kowloon Bay (opened 23rd February 2018)
2017 FINANCIAL RESULTS HIGHLIGHT
24
Number of Stores End of 2016 Opened Closed End of
2017
Circle K Hong Kong 331 10 (9) 332
Circle K Guangzhou (franchised) 71 4 (11) 64
Circle K Macau (franchised) 30 2 (3) 29
Circle K Zhuhai (franchised) 16 4 (4) 16
Saint Honore HK & Macau 98 13 (9) 102
Saint Honore Southern China 41 8 (8) 41
Zoff Hong Kong - 1 - 1
CRA Group Total 587 42 (44) 585
25
Group Turnover
1,991 2,106
576 601
0
1,000
2,000
3,000
4,000
2016 2017
HK$
Mill
ion
2nd Half
Circle K Saint Honore
26
2,532*
+5.3%
∗ Less inter-group sales: HK$35M in 2H2016 & HK$40M in 2H2017
3,871 4,077
1,072 1,092
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
2016 2017
HK$
Mill
ion
Full Year
Circle K Saint Honore
4,871* 5,094*
∗ Less inter-group sales: HK$72M in 2016 & HK$75M in 2017
+4.6%
2,667*
Gross Profit & Other Income
27
37.2 37.5
30
32
34
36
38
40
2016 2017
% o
f Tur
nove
r
2nd Half
36.6 36.9
30
32
34
36
38
40
2016 2017
% o
f Tur
nove
r
Full Year
Group Store Operating Expenses
26.1 26.4
20
22
24
26
28
30
2016 2017
% o
f Tur
nove
r
2nd Half
28
+0.3%
26.2 26.3
20
22
24
26
28
30
2016 2017
% o
f Tur
nove
r
Full Year
+0.1%
Group Net Profit
88 93
0
50
100
150
2016 2017
HK$
Mill
ion
2nd Half
29
+6.1%
140 150
0
50
100
150
200
2016 2017
HK$
Mill
ion
Full Year
+7.7%
Net Profit by Market
(HK$ Million) Full Year
Change 2016 2017
Hong Kong & Macau Markets 162 169 +4.2%
Southern China Market (2) (5) -1.x%
e-commerce Group (20) (14) +34.3%
CRA Group Net Profit 140 150 +7.7%
30
Group Net Profit as % of Turnover
31
2.9 3.0
0
1
2
3
4
5
2016 2017
% o
f Tur
nove
r
Full Year
3.5 3.5
0
1
2
3
4
5
6
2016 2017
% o
f Tur
nove
r
2nd Half
0% +0.1%
Basic Earnings Per Share
32
18.50 19.75
0 3 6 9
12 15 18 21 24 27
2016 2017
HK C
ents
Full Year
11.63 12.22
0
2
4
6
8
10
12
14
16
2016 2017
HK C
ents
2nd Half
+5.1% +6.8%
2017 Financial Results Highlight – 2nd Half
2H2016 2H2017 Change
Number of Stores 582 585 +3
Group Turnover (HK$M) 2,532 2,667 +5.3%
Group Net Profit (HK$M) 88 93 +6.1%
Net Profit as % of Turnover 3.5% 3.5% -
Basic Earnings Per Share (HK cents) 11.63 12.22 5.1%
33
2017 Financial Results Highlight – Full Year 2016FY 2017FY Change
Number of Stores 587 585 -2
Group Turnover (HK$M) 4,871 5,094 +4.6%
Group Net Profit (HK$M) 140 150 +7.7%
Net Profit as % of Turnover 2.9% 3.0% +0.1%
Basic Earnings Per Share (HK cents) 18.50 19.75 +6.8%
Dividends (HK cents) Interim Dividend Final Dividend Special Dividend
3.5 13 27
4
14 -
+14.3% +7.7%
N/A 34
2018 OUTLOOK
35
2018 Outlook
Stagnant demand for Hong Kong consumers
Drastic shortage of frontline labour
Aggressive landlords
O2O retailing is the future
The importance of EFS (Easy, Fast & Simple)
36
37
ASN Fun & Novelty “Internet+”
Customer
The Future Is Bright & Clear
Quality & Profitable Growth Copyright © Circle K Convenience Stores (HK) Limited
THANK YOU !
38