Financial Results Announcement Six Months ended 30 ... - Irasia

transcript

新鲜便宜舒适便利. . .Fresh Inexpensive Comfortable Convenient. . .

Stock code: 6808

Financial Results Announcement

Six Months ended 30 September 2021

Speakers

Strategy Progress

Operating Environment

Financial Review

Expansion Status

新鲜便宜舒适便利 Fresh Inexpensive Comfortable Convenient. . . . . .

Kevin Lin Desory Wan

Chief Financial Officer

Chief Executive Officer

Executive Director

Xiaobei Gu

Head of

Investor Relations

OPERATING

ENVIRONMENT

Six Months ended 30 September 2021Operating Environment

-20.5%

11.7% 7.3%

1-2 3 4 5 6 7 8 9 10 11 12 1-2 3 4 5 6 7 8 9 10 11 12 1-2 3 4 5 6 7 8 9

2019 (by month) 2020 (by month) 2021 (by month)

TTL Retail Sales Growth % Online Physical Products Sales Growth %

Growth of Total Retail Sales of Consumer Goods & Online Physical Products Consumer Confidence Index (CCI)

124.1123.4

1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8

Growth Rate of Consumer Price Index (CPI) Sales Growth Rate of China Top 100 Key Retailers

1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9

Pork CPI Food CPI CPI

-32.8%

-12.4%

-15.2%

-4.2%-1.8%

7.4% 8%

1-4 5 6 7 8 9 10 11 12 1-4 5 6 7 8 9

2020 (by month) 2021 (by month)

Sales Growth Rate of China Top 100 Key Retailers

Source： (1), (2), (3) from National Bureau of Statistics of China. (4), (5) from the China National Commercial Information Center (CNCIC).

(1) (2)

(3) (4)

EXPANSION

STATUS

7Expansion Status

Covering 236 cities cross 29 provinces, autonomous regions

and municipalities. Secured 26 sites and 16 sites to open

hypermarkets and superstores respectively, of which 23

hypermarkets and 9 superstores were under construction.

During the six months ended 30 September 2021, the Group has

opened 3 hypermarkets and 37 mini stores, and closed 2 hypermarkets.

As of 30 September 2021, the Group had 491 hypermarkets, 6

superstores and 68 mini stores.

Xinjiang Uygur

Autonomous Region

Sichuan

GansuShaanxi

Ningxia

Autonomous Region

Guangdong

Fujian

Zhejiang

JiangsuHenan

Shanxi

Inner Mongolia

Autonomous Region

(west)

Inner Mongolia

Autonomous

Region

(north)

Liaoning

Taiwan

Qinghai

Yunnan

Jiangxi

Heilongjiang

BeijingTianjin

Shandong

Chongqing

Guizhou

Hainan

Shanghai

Guangxi

Zhuang

Autonomous

Region

RegionNo. of stores GFA (sqm)

(as of 30 September 2021) (as of 30 September 2021)

Hyper-

market

Super-

StoreTotal Hypermarket Superstore

StoreTotal

Eastern

China186 4 54 244 5,470,660 51,895 13,745 5,536,300

Northern

China52 1 0 53 1,358,286 10,283 0 1,368,569

N-Eastern

China53 1 0 54 1,675,664 5,850 0 1,681,514

Southern

China98 0 0 98 2,422,061 0 0 2,422,061

Central

China76 0 14 90 1,975,635 0 4,934 1,980,569

Western

China26 0 0 26 691,724 0 0 691,724

Total 491 6 68 565 13,594,030 68,028 18,679 13,680,737

Store no. breakdownGFA breakdown

Owned, 32.6%

Leased, 67.4% Owned,

23.3%Leased, 76.7%

STRATEGY

PROGRESS

• Create incentives for customers to shop offline and become offline experience centers:

Focus on categories that cannot be substituted online. Highlight the display such as seafood tank, poultry stall, meat

stall.

Focus on shopping experience that cannot be substituted online by creating hustle-and-bustle shopping

atmosphere, and selling products through associated display.

Adjust tenant mix and turn gallery into traffic inlet. At present, the tenants with traffic inflow accounts for

approximately 40% of total.

• Upgrade store warehouses, establish warehouse-based stores, and become logistics

fulfillment centers of online business:

Despite the impact from community group buying (“CGB”) business and intensified peer competition, the online

order keeps a continuous growth of more than 25%.

Enhance fulfillment capability of Tmall Inventory Sharing half-day-delivery (“猫超半日达”) business by sharing quick-

picking warehouses and conveyor-belt system in more stores.

Become the core supply chain service provider of Alibaba Group’s CGB business.

• The multi-format and omini-channel development:

Cautious expansion of RT-Super and accelerated expansion of RT-Mini.

The revenue of RT-Mini reached expectations and its loss narrowed.

By leveraging the supply chain scale advantage of hypermarkets, RT-Super will form a individual supply chain

system and provide support to hypermarkets afterwards.

Accelerate to establish supply chain capability of fresh product, facilitate direct sourcing from farm bases, and

deploy processing centers.

Strategy Progress 9

Six Months ended 30 September 2021Strategy Progress

Adhere to the established strategy, focus on capability building and create customer

value in the second half of the fiscal year.

• Improve supply chain capability of fresh products

Accelerate to construct processing centers of fresh products, with a coverage of approximately half

of the hypermarkets.

Fruits and vegetables will gradually adopt direct sourcing from the far-fields and near-fields.

Establish farm-based procurement system.

• Enhance customer operating capability

Digitization of the membership system.

Establishment of the marketing and content system.

• Continue to explore business model of multi-formats

Upgrade remodeling of hypermarket to version 2.0.

Pilot RT-Super and RT-Mini in specific cities.

FINANCIAL

REVIEW

12Financial Highlights

For the six months ended 30 September 2021

RMB in million 2021 2020 Change

Revenue (1)41,534 43,706 -5.0%

Gross Profit 10,933 11,748 -6.9%

Gross Profit Margin 26.3% 26.9% - 0.6ppt

EBIT 560 1,631 -65.7%

EBIT Margin 1.3% 3.7% - 2.4ppt

Profit for the period 112 905 -87.6%

Net Profit Margin 0.3% 2.1% - 1.8ppt

Profit attributable to equity shareholders 117 833 -86.0%

Earnings per share

-Basic and diluted (RMB) (2) 0.01 0.09

Note: The Group has initially applied HKFRS 16 at 1 January 2019.

(1) In our electronic appliance department, the business model was changed from self-operation to consignment from August 2018. Since then, only consignment fees received have been recognized in

revenue instead of gross sales.

(2) The calculation of basic and diluted EPS is based on the weighted average number of 9,539,704,700 ordinary shares in issue during the period.

2015 2016 2017 2018 2019 2020 PreviousPeriod

ReportingPeriod

3,144 3,345 3,545 3,808 4,078 3,502 1,711 1,773

93,270 97,096 98,775 95,551 91,279 91,984

41,995 39,761

Rental Income Sales of Goods

2015 2016 2017 2018 2019 2020 PreviousPeriod

ReportingPeriod

22,463 23,981 24,674 25,119 25,731 24,343

11,748 10,933

Gross Profit

23.3%23.9% 24.1%

26.9%26.3%

GP Margin

Revenue Gross Profit and Margin

RMB (million) RMB (million)

(1) In our electronic appliance department, the business model was changed from self-operation to consignment from August

2018. Since then, only consignment fees received have been recognized in revenue instead of gross sales.

(2) Previous Period: the six months ended 30 September 2020, hereinafter the same.

(3) Reporting Period: the six months ended 30 September 2021, hereinafter the same.

96,414100,441

102,32099,359

95,357 95,486

43,706

41,534

Financial Highlights

(2) (3)

(1)(1)

(2) (3)

4.2%4.4%

4.9%4.7%

5.1%4.9%

EBIT Margin

Operating Profit Net Profit and Margin

2015 2016 2017 2018 2019 2020 PreviousPeriod

ReportingPeriod

4,012 4,413

5,003 4,698 4,890 4,664

2015 2016 2017 2018 2019 2020 PreviousPeriod

ReportingPeriod

2,328 2,500 2,934

2,700 3,045 3,046

Net Profit

2.4% 2.5%

2.9%2.7%

3.2% 3.2%

Net Profit Margin

Note: The Group has initially applied HKFRS 16 at 1 January 2019 using the full retrospective approach. Under this approach, figures in the 4 years earlier than 2019 (i.e. since 2015) are restated

retrospectively.

(1) Showing profit for the period, i.e. including the non-controlling interests.

(2) In our electronic appliance department, the business model was changed from self-operation to consignment from August 2018. Since then, only consignment fees received have been recognized

in revenue instead of gross sales.

1.2%1.1% 1.1% 1.2% 1.2%

1.3% 1.3%

Operating Lease Rental as % of Revenue

8.5%9.0% 9.2%

10.1%10.8%

10.3%10.9%

Staff Cost as % of Revenue

2015 2016 2017 2018 2019 2020 PreviousPeriod

ReportingPeriod

2,633 2,876 2,895 2,847 2,807 2,480 1,209 1,175

16,565 17,565 18,406 19,317 19,523

19,118

9,524 9,887

Administrative Expense Selling and marketing expenses

19.9%20.5% 20.8%

22.3%23.4%

Total Opex as % of Revenue

Expenses Operating Lease Charges

2015 2016 2017 2018 2019 2020 PreviousPeriod

ReportingPeriod

1,114 1,089 1,142 1,158 1,120 1,225

551 458

Operating Lease Rental

Staff CostRMB (million)

2015 2016 2017 2018 2019 2020 PreviousPeriod

ReportingPeriod

8,163 8,999 9,421 10,016 10,297 9,856

4,740 4,927

Staff Cost

Note: The Group has initially applied HKFRS 16 at 1 January 2019 using the full retrospective approach. Under this approach, figures in the 4 years earlier than 2019 (i.e. since 2015) are restated retrospectively.

(1) In our electronic appliance department, the business model was changed from self-operation to consignment from August 2018. Since then, only consignment fees received have been recognized in revenue

instead of gross sales.

20,441

19,198

21,301

22,164 22,330

21,598

10,733

11,062

Six Months ended 30 September 2021Balance Sheet 16

Working Capital Days Net Cash Position

2015 2016 2017 2018 2019 2020 2021/9/30

10,492

13,483 13,267

17,476

20,144

Net Cash

(1) (2)

(3) (4)

Note:(1) The inventory turnover days and trade payable turnover days are calculated on average balances of inventory and trade payable, together with the cost of inventory during past 12 months.

Data has been restated since 2015.

(2) The balance of net cash position is calculated as the sum of cash and cash equivalents, financial assets measured at FVPL and time deposits minus bank loans.

(3) For the six months ended 30 September 2020 (“Previous Period”), the inventory turnover days and trade payable turnover days are calculated on average balances of inventory and trade

payable, together with the cost of inventory during past 6 months.

(4) For the six months ended 30 September 2021 (“Reporting Period”), the inventory turnover days and trade payable turnover days are calculated on average balances of inventory and trade

payable, together with the cost of inventory during past 6 months.

RMB (million)

2015 2016 2017 2018 2019 2020 PreviousPeriod

ReportingPeriod

49 53 55 57

65 65 60 59

81 84 85

78 82 81

Inventory Turnover Days Trade Payable Turnover Days

Six Months ended 30 September 2021Investment Return 17

CAPEX ROE

RMB (million)

(1) ROE is calculated by dividing net profit for the period by total equity amounts as at the end of the period.

(2) The Group has initially applied HKFRS 16 at 1 January 2019 using the full retrospective approach. Under this approach, figures in the 4 years earlier than 2019 (i.e. since

2015) are restated retrospectively.

(1) (2)

2015 2016 2017 2018 2019 2020 ReportingPeriod

1,871 2,044

2015 2016 2017 2018 2019 2020 2021/9/30

11.4% 11.6%

11.4%12.0%

Financial Results Announcement Six Months ended 30 ... - Irasia

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