33rdrd Quarter 2005 Results Quarter 2005 Results PresentationPresentation
A member of the Li & Fung (Retailing) GroupA member of the Li & Fung (Retailing) Group 26 26 October 2005October 2005
Hong Kong Retail Sales ValueHong Kong Retail Sales ValueYearYear--onon--year % Changeyear % Change
0
5
10
15
20
25
%
01/0
4
02/0
4
03/0
4
04/0
4
05/0
4
06/0
4
07/0
4
08/0
4
09/0
4
10/0
4
11/0
4
12/0
4
01/0
5
02/0
5
03/0
5
04/0
5
05/0
5
06/0
5
07/0
5
08/0
5
Jan – Aug 2005Total Retail : +7.6%Supermarket : +5.6%
Source: Census and Statistics Department, HKSARSource: Census and Statistics Department, HKSAR
Guangzhou Retail Sales ValueGuangzhou Retail Sales ValueYearYear--onon--year % Changeyear % Change
0
5
10
15
20
25
%
01/0
4
02/0
4
03/0
4
04/0
4
05/0
4
06/0
4
07/0
4
08/0
4
09/0
4
10/0
4
11/0
4
12/0
4
01/0
5
02/0
5
03/0
5
04/0
5
05/0
5
06/0
5
07/0
5
08/0
5
Jan – Aug 2005Total Retail : +13.1%
Source: Bureau of Statistics, Guangzhou
Hong Kong MarketHong Kong Market3rd Quarter 2005 Update3rd Quarter 2005 Update
Free newspapersFree newspapers
Irrational rental increasesIrrational rental increases
Cigarette price warCigarette price war
Competition heating upCompetition heating up
Hong Kong MarketHong Kong Market33rdrd Quarter 2005 DevelopmentsQuarter 2005 Developments
Started renovation to 3GStarted renovation to 3G
Southern China & Macau MarketsSouthern China & Macau Markets3rd Quarter 2005 Update3rd Quarter 2005 Update
Pace of new store opening picking upPace of new store opening picking up
GuangzhouGuangzhou 3535
Zhuhai JV storesZhuhai JV stores 44
Macau JV storesMacau JV stores 99
TotalTotal 4848
Delay in obtaining approval for Dongguan SunDelay in obtaining approval for Dongguan Sun--High High acquisitionacquisition
2005 2005 Financial Results HighlightsFinancial Results HighlightsGroup Turnover Group Turnover –– 33rdrd QuarterQuarter
1,515.81,736.5
466.8 501.4
0
500
1,000
1,500
2,000H
K$
Mill
ion
2003 2004 3rd Qtr 2004 3rd Qtr 2005
No. of store No. of store –– HKHK 186186 205205 197197 223223
No. of store No. of store -- ChinaChina 77 20 20 15 15 3535
* * RestatedRestated
*
**
+ 7%+ 7%
Marketing & PromotionsMarketing & Promotions
2005 2005 Financial Results HighlightsFinancial Results HighlightsGroup Turnover Group Turnover –– Sep YTDSep YTD
1,515.8
1,736.5
466.8
428.4
398.3
501.4
515.4
454.2
0
500
1,000
1,500
2,000
HK$
Milli
on
2003 2004 Sep YTD 2004 Sep YTD 2005
No. of store No. of store –– HKHK 186186 205205 197197 223223
No. of store No. of store -- ChinaChina 77 20 20 1515 3535
1,293.61,471.0
* * RestatedRestated
*
**
+ 14%+ 14%
Improvement in Gross Margin / Improvement in Gross Margin / Other IncomeOther Income
32.2% 32.3%31.9%
34.5%
30%
31%
32%
33%
34%
35%
36%
% o
f Sal
es
2003 2004 3rd Qtr 2004 3rd Qtr 2005
Gross Margin/Other Income as % of Sales(Excluding Interest)
+2.6%+2.6%
* * RestatedRestated
***
Higher Store Operating ExpensesHigher Store Operating Expenses
9.2%
7.0%
6.5%
9.3%
7.3%
6.6%
9.1%
6.9%
6.5%
9.8%
7.9%
7.1%
0%
5%
10%
15%
20%
25%
30%
% o
f Sal
es
2003 2004 3rd Qtr 2004 3rd Qtr 2005
Labour Cost Rental Cost Other Expenses
22.7% 23.2% 22.5%24.8%
* * RestatedRestated
***
Higher Rental & Staff Cost in HKMore new stores in China
2005 2005 Financial Results HighlightsFinancial Results HighlightsGroup Net Profit Group Net Profit –– 33rdrd QuarterQuarter
60.566.3
20.2 22.8
0
10
20
30
40
50
60
70
80
HK
$ M
illion
2003 2004 3rd Qtr 2004 3rd Qtr 2005
+ 13%+ 13%
* * RestatedRestated
*
**
2005 2005 Financial Results HighlightsFinancial Results HighlightsGroup Net Profit Group Net Profit –– Sep YTDSep YTD
60.566.3
20.2
18.2
8.5
22.8
20.9
8.9
0
10
20
30
40
50
60
70
80
HK
$ M
illion
2003 2004 Sep YTD 2004 Sep YTD 2005
+ 12%+ 12%
46.952.6
* * RestatedRestated
*
**
2005 2005 Financial Results HighlightsFinancial Results HighlightsNet Profit as % of Sales Net Profit as % of Sales –– 33rdrd QuarterQuarter
4.0% 3.8%4.3%
4.6%
0%
1%
2%
3%
4%
5%
6%
% o
f Sal
es
2003 2004 3rd Qtr 2004 3rd Qtr 2005
* * RestatedRestated
***
+ 0.3%+ 0.3%
2005 2005 Financial Results HighlightsFinancial Results HighlightsNet Profit as % of Sales Net Profit as % of Sales –– Sep YTDSep YTD
4.0% 3.8% 3.6% 3.6%
0%
1%
2%
3%
4%
5%
6%
% o
f Sal
es
2003 2004 Sep YTD 2004 Sep YTD 2005
* * RestatedRestated
***
2005 2005 Financial Results HighlightsFinancial Results HighlightsBasic Earnings Per Share Basic Earnings Per Share –– 33rdrd QuarterQuarter
9.19.9
3.0 3.4
0
2
4
6
8
10
12
HK
Cen
ts
2003 2004 3rd Qtr 2004 3rd Qtr 2005
+ 0.4 + 0.4 CentCent
* * RestatedRestated
**
*
2005 2005 Financial Results HighlightsFinancial Results HighlightsBasic Earnings Per Share Basic Earnings Per Share –– Sep YTDSep YTD
9.19.9
3.0
2.7
1.3
3.4
3.1
1.3
0
2
4
6
8
10
12
HK
Cen
ts
2003 2004 Sep YTD 2004 Sep YTD 2005
+ 0.8 + 0.8 CentCent
7.07.8
* * RestatedRestated
*
**
33rdrd Quarter 2005 Financial Results Quarter 2005 Financial Results HighlightsHighlights
33rdrd Qtr 2004Qtr 2004 33rdrd Qtr 2005Qtr 2005 ChangeChange
Group Turnover (HK$ Million)Group Turnover (HK$ Million) 466.8*466.8* 501.4501.4 +7%+7%
Group Net Profit (HK$ Million)Group Net Profit (HK$ Million) 20.2*20.2* 22.822.8 +13%+13%
Net Profit as % of SalesNet Profit as % of Sales 4.3%*4.3%* 4.6%4.6% +0.3%+0.3%
Basic Earnings Per ShareBasic Earnings Per Share 3.03.0 Cents*Cents* 3.43.4 CentsCents +0.4 +0.4 CentCent
* * RestatedRestated
Sep YTD 2005 Financial Results Sep YTD 2005 Financial Results HighlightsHighlights
Sep YTD 04Sep YTD 04 Sep YTD 05Sep YTD 05 ChangeChange
Group Turnover (HK$ Million)Group Turnover (HK$ Million) 1,293.6*1,293.6* 1,471.01,471.0 +14%+14%
Group Net Profit (HK$ Million)Group Net Profit (HK$ Million) 46.9*46.9* 52.652.6 +12%+12%
Net Profit as % of SalesNet Profit as % of Sales 3.6%*3.6%* 3.6%3.6% --
Basic Earnings Per ShareBasic Earnings Per Share 7.07.0 Cents*Cents* 7.87.8 CentsCents +0.8 +0.8 CentCent
* * RestatedRestated
2005 2005 Update & OutlookUpdate & Outlook
2005 2005 Circle K Hong Kong OutlookCircle K Hong Kong Outlook
Arrival of PRC tourist peaked outArrival of PRC tourist peaked out
Gradual increase in retail sales Gradual increase in retail sales from local consumer spendingfrom local consumer spending
Free newspaper issueFree newspaper issue
Rental peaked but pressure on Rental peaked but pressure on lease renewallease renewal
Inflation pressure on people costInflation pressure on people cost
2005 2005 Circle China OutlookCircle China Outlook
Circle K Dongguan commences Circle K Dongguan commences operationsoperations
Complete Circle K Shenzhen Complete Circle K Shenzhen license and infralicense and infra--structure set upstructure set up
Circle K Guangzhou to reach Circle K Guangzhou to reach 45 45 –– 50 stores50 stores
2005 2005 Update & OutlookUpdate & OutlookForecast YearForecast Year--End Number of StoresEnd Number of Stores
Circle KCircle K
Hong KongHong Kong 234234
MacauMacau 1212
GuangzhouGuangzhou 5050
DongguanDongguan 1010
ZhuhaiZhuhai 55
ShenzhenShenzhen 00
Total 311
2005 2005 Update & OutlookUpdate & OutlookTo SummarizeTo Summarize
Consumer spending in Hong Kong Consumer spending in Hong Kong market improving but overall operating market improving but overall operating environment tougherenvironment tougher
Circle K Southern China enters multiCircle K Southern China enters multi--city city store growthstore growth
China store number to increase China store number to increase drasticallydrastically
33rdrd Quarter 2005 Results Quarter 2005 Results PresentationPresentation
A member of the Li & Fung (Retailing) GroupA member of the Li & Fung (Retailing) Group 26 26 October 2005October 2005
