Presentation on theme: "INTERIM RESULTS HIGHLIGHTS FOR THE SIX MONTHS ENDED JUNE 30, 2006."— Presentation transcript:
INTERIM RESULTS HIGHLIGHTS FOR THE SIX MONTHS ENDED JUNE 30, 2006
Aug 2006Giordano 2006 Interim Results2 Group Financial Highlights For the Six Months Ended June 30 20062005 YOY Change Turnover (HK$M)2,0212,152- 6.1% Gross profit (HK$M) 1,0211,096- 6.8% EBITDA (HK$M) 253328- 22.9% Operating profit (HK$M) 184246- 25.2% Profit before tax (HK$M) 192261- 26.4% Profit attributable to shareholders (HK$M) 151187- 19.3% Earnings per share (HK cents)10.112.8- 21.1% Interim dividend per share Basic (HK cents) Special (HK cents) 4.5 2.0 4.5 2.0 ---- Dividend payout ratio (%)64.4%50.8%
Aug 2006Giordano 2006 Interim Results3 Group Financial Highlights For the Six Months Ended June 30 20062005 Net cash & bank balances (HK$M)606827 * Cash inflow from operating activities (HK$M)106148 Inventory turnover on sales (days)3430 Current ratio (x)2.62.6 * Gross margin (%)50.5%50.9% EBITDA margin (%)12.5%15.2% Operating margin (%)9.1%11.4% Net margin (%)7.5%8.7% * As at December 31, 2005
Aug 2006Giordano 2006 Interim Results4 Divisional Highlights Divisional Highlights For the Six Months Ended June 30 TurnoverOperating Profit 2006 (HK$M) 2005 (HK$M) YOY % Change 2006 (HK$M) 2005 (HK$M) YOY % Change Retail & Distribution 1,8691,953- 4.3%164214- 23.4% Garment Trading & Manufacturing 480520- 7.7%2032- 37.5% Intra-division Elimination (328)(321)+ 2.2%--- Total 2,0212,152- 6.1%184246- 25.2%
Aug 2006Giordano 2006 Interim Results5 Retail & Distribution Turnover by Brand For the Six Months Ended June 30, 2006 Giordano core line + Junior 87% (87%) Bluestar Exchange 8% (9%) Giordano Ladies 5% (4%) Note: 2Q05 figures in brackets
Aug 2006Giordano 2006 Interim Results6 Retail & Distribution Division Operations Highlights For the Six Months Ended June 30 Turnover (HK$M) Comp Store Sales Number of Outlets 20062005 YOY Change Giordano & Giordano Junior 1,6241,698- 4.4%- 5.9%1,530 Giordano Ladies 9284+ 9.5%+ 6.4%29 Bluestar Exchange 153171- 10.5%- 6.1%139 Retail & Distribution Total 1,8691,953- 4.3%- 5.3%1,698 First half gross margin deceased by 0.7 percentage points YOY. First half operating margin decreased by 2.2 percentage points YOY.
Aug 2006Giordano 2006 Interim Results7 Retail & Distribution Turnover by Market For the Six Months Ended June 30, 2006 Hong Kong 22% (21%) Mainland China 25% (24%) Others 13% (13%) Note: 2Q05 figures in brackets Malaysia 3% (3%) Indonesia 4% (3%) Australia 6% (5%) Singapore 10% (11%) Taiwan 17% (20%)
Aug 2006Giordano 2006 Interim Results8 Global Retail Network Number of Outlets As at Jun 30, 2006 As at Dec 31, 2005 YTD Change Giordano & Junior Giordano Ladies Bluestar Exchange Total Australia53-25552+ 3 Hong Kong5483799101- 2 Indonesia67-57262+ 10 Japan20-- 21- 1 South Korea150-- 168- 18 Mainland China6671136714706+ 8 Malaysia54-- 53+ 1 Middle East111-- 107+ 4 Philippines44-- 43+ 1 Singapore482-5048+ 2 Taiwan168854230237- 7 Thailand59-- 57+ 2 Others35-54039+ 1 Total1,530291391,6981,694+ 4
Aug 2006Giordano 2006 Interim Results9 Retail & Distribution Division Operations Highlights – CHINA For the Six Months Ended June 30 Turnover (HK$M) Comp Store Sales Number of Outlets 20062005 YOY Change Mainland China472464+ 1.7%+ 7.2%714 Unseasonable weather slowed sales in 1Q06. Sales decreased 2.0% YOY. 2Q06 sales up 6.1%. 1H06 sales up 1.7%, comp store sales up 7.2%, gross margin up 0.5 percentage point. Added 8 outlets in 1H06. Launched Giordano Concept Stores in Shanghai and Guangzhou.
Aug 2006Giordano 2006 Interim Results10 Retail & Distribution Division Operations Highlights – HONG KONG For the Six Months Ended June 30 Turnover (HK$M) Comp Store Sales Number of Outlets 20062005 YOY Change Hong Kong420412+ 1.9%+ 4.4%99 1Q06 sales increased 1.4% YOY; 2Q06 sales up 2.5% YOY. 1H06 sales up 1.9%, comp store sales up 4.4%. Closed 2 outlets in 1H06. Set up 5 Giordano Concept Stores.
Aug 2006Giordano 2006 Interim Results11 Retail & Distribution Division Operations Highlights – TAIWAN For the Six Months Ended June 30 Turnover (HK$M) Comp Store Sales Number of Outlets 20062005 YOY Change Taiwan322391- 17.6%- 13.7%230 Unseasonable weather and poor market conditions slowed sales in 1Q06. Sales decreased 25.6% YOY. Conditions slowly improving in 2Q06. 1H06 sales decreased 17.6%, comp store sales down 13.7%. Closed 7 stores in 1H06.
Aug 2006Giordano 2006 Interim Results12 Retail & Distribution Division Operations Highlights – SINGAPORE For the Six Months Ended June 30 Turnover (HK$M) Comp Store Sales Number of Outlets 20062005 YOY Change Singapore190205- 7.3%- 15.7%50 Intense competition and weakening consumer confidence in Southeast Asia slowed sales. 1H06 turnover decreased 7.3% YOY. Comp store sales down 15.7%. Opened second Giordano Ladies store in Raffles City. Added 2 stores in 1H06.
Aug 2006Giordano 2006 Interim Results13 Retail & Distribution Division Operations Highlights – OTHER MARKETS For the Six Months Ended June 30 Turnover (HK$M) Number of Outlets 20062005YOY Change Australia105100+ 5.0%55 Malaysia5665- 13.8%54 Indonesia6861+ 11.5%72 Thailand4344- 2.3%59 Japan2829- 3.4%20 Rising interest rates and fuel prices weakened consumer confidence in Southeast Asia and slowed sales. Added 10 outlets in Indonesia in 1H06. 1H06 turnover increased 5.0% in Australia. Added 3 outlets during the period. Japan sales up 5.5% in local currency terms, but down 3.4% after currency translation. Posted a small operating profit in 1H06. Closed 1 outlet.
Aug 2006Giordano 2006 Interim Results14 Retail & Distribution Division Operations Highlights – Korea & Middle East For the Six Months Ended June 30 Turnover (HK$M) Comp Store Sales Number of Outlets 20062005 YOY Change South Korea474478- 0.8%- 9.6%150 Middle East172145+ 18.6%+ 5.8%111 Unseasonable weather affected 1Q06 sales in Korea. Sales rebounded in 2Q06. 1H06 turnover decreased 0.8% in Korea. Comp store sales down 9.6%. Closed 18 outlets during the period. Middle East 1H06 turnover increased 18.6% YOY. Comp store sales up 5.8%. Added 4 outlets during the period, including the first store in India.
Aug 2006Giordano 2006 Interim Results15 Garment Trading & Manufacturing For the Six Months Ended June 30 20062005 YOY Change Sales including internal sales (HK$M) 480520- 7.7% Sales to external customers (HK$M) 152199- 23.6% Percentage of Retail & Distributions total purchase 31.2%31.3%NA Operating Margin (%) 4.2%6.2%NA Contribution to the Groups operating profit 10.9%13.0%NA 68.3% of divisional sales to Group companies, up from 61.7% in 1H05. Gross margin decreased by 2.5 percentage points due to increased price competition. Operating margin declined by 2.0 percentage points. Relocating part of operations from high cost Guangdong to lower cost Shandong.
Aug 2006Giordano 2006 Interim Results16 Outlook General After a disappointing 1Q06, performance began to improve in 2Q06. Interest rates have likely peaked, though high oil prices remain a concern. We expect operating conditions to begin improving in 2H06. Focus on driving brand differentiation with Giordano Concept Store strategy. Step up expansion of Giordano Ladies network. Opened first store in India and plan to add two more in 2H06. Plan to add about 50 outlets globally in 2H06, most of them in Mainland China. Launch new global CRM program in 2H06 to enhance customer loyalty.
Aug 2006Giordano 2006 Interim Results17 Outlook Giordano Launched 2 Concept Stores in China and 5 Concept Stores in Hong Kong in Spring 2006. Opened 4 Concept Stores in Taipei and 3 in Singapore in August. Mongkok Concept Store opening 4Q06. Target to have Concept Stores make up 15% of Giordano stores by 2008. Hong Kong Manson House Giordano Concept Store
Aug 2006Giordano 2006 Interim Results18 Outlook Hong Kong Causeway Bay Giordano Concept Store Hong Kong Causeway Bay Giordano Concept Store
Aug 2006Giordano 2006 Interim Results19 Outlook Taipei Square Giordano Concept Store Taipei 101 Giordano Concept Store
Aug 2006Giordano 2006 Interim Results20 Outlook Giordano Ladies Opened new stores in Xintiandi in Shanghai and Raffles City in Singapore in 1H06. Additional stores planned for the Beijing (1), Hong Kong (2) and Taiwan (1) in 2H06. Faster growth at about 10 outlets a year from 2007. Focus on regional centers like Hangzhou, Kaohsiung, Kuala Lumpur and Bangkok. Singapore Raffles City Giordano Ladies Store
Aug 2006Giordano 2006 Interim Results21 Outlook Shanghai Xintiandi Giordano Ladies Store
Aug 2006Giordano 2006 Interim Results22 Outlook Hong Kong Strategic new store openings in 2H06: Giordano Concept Store in Mongkok, Giordano Ladies in HK Airport and Shatin New Town Plaza. Mainland China Growth through new store openings (about 20 in 2H06) and comp store sales growth. Grow wholesale turnover with better merchandising.
Aug 2006Giordano 2006 Interim Results23 Taiwan Weak economy and political crisis continue to affect consumer confidence. Tough market conditions driving retrenchment and consolidation. Converted 4 locations to Concept Store format in August. Target to add 10 – 20 outlets in 2H06. Singapore Expect market conditions to improve in 2H06. Converted 3 locations to Concept Store format in August. Outlook
Aug 2006Giordano 2006 Interim Results24 Other Markets Consumer confidence slowly improving in Southeast Asia. Stable economic growth expected for Australia and Japan. Target steady expansion of network in in Australia (4) and Japan (2) in 2H06. South Korea Focus on growing sales through better merchandising. Target to add 10 – 15 outlets in 2H06. Middle East Consumer spending is expected to remain strong from high oil prices. Escalation in rentals and salaries a concern. Outlook
Aug 2006Giordano 2006 Interim Results25 Outlook India First Giordano store opened in May. Two more to open in 4Q06. Target to have at least ten stores in 2007 and 20 in 2008 in India. Chennai City Center Giordano Store
Aug 2006Giordano 2006 Interim Results26 Multi-brand + Multi-market Strategy BRAND POSITIONING AGNES B LEVIS GIORDANO Ladies ESPRIT GIORDANO Concept BOSSINI BALENO BLUESTAR ZARA Basic/Classic Affordable Premium Fashion GIORDANO Regular
Aug 2006Giordano 2006 Interim Results27 Multi-brand + Multi-market Strategy MARKET OPPORTUNITIES Stores at June 30, 2006 12 Mths Growth Target Remarks Mainland China71450 Faster store growth for Giordano, Giordano Ladies and Bluestar Exchange. Hong Kong & Singapore 1495Mature markets. Steady growth at 1 to 2 locations a year. Taiwan23030 Faster store growth for Giordano, Giordano Ladies and Bluestar Exchange. Southeast Asia22910 Faster store growth for Giordano. Launch Giordano Ladies in Kuala Lumpur and Bangkok. Launch Bluestar Exchange in Indonesia and Philippines. Australia555Continued roll-out of Giordano and Bluestar Exchange stores. Japan2010Faster store growth for Giordano. South Korea15015 Faster store growth for Giordano. Opportunity to launch Giordano Ladies and Bluestar Exchange. Middle East1105 Faster store growth for Giordano. Opportunity to launch Giordano Ladies and Bluestar Exchange. India110Steady penetration of Indian market with Giordano. Others4010 Total1,698150