3 rd Quarter 2004 Results Presentation A member of the Li & Fung (Retailing) Group 28 October 2004
2 Hong Kong Total Retail Sales Value Year-on-year % Change Source: Census and Statistics Department, HKSAR Overall Jan - Aug 2004: +12.1% Supermarket: + 0.8%
3 Guangzhou Total Retail Sales Value Year-on-year % Change Source: Bureau of Statistics, Guangzhou Overall Jan – Aug 2004: +12.3%
4 3 rd Quarter 2004 Results Presentation Agenda 3 rd Quarter 2004 Financial Results Highlights 2004 Outlook & Update Questions & Answers
Financial Results Highlights Group Turnover – 3 rd Quarter % No. of store – HK No. of store - China
Financial Results Highlights 165 Comparable Stores Sales – 3 rd Quarter + 5.2%
7 Strong Promotions Student Loyalty Food ServicesMedia
Financial Results Highlights Group Turnover – September YTD % No. of store – HK No. of store - China , ,308.5
9 Gross Margin / Other Income – 3 rd Quarter (excluding interest) - 0.1%
10 Upward Pressure on Store Operating Expenses – 3 rd Quarter 22.7% 23.3% 22.6% 23.3%
Financial Results Highlights Group Net Profit – 3 rd Quarter + 12%
Financial Results Highlights Group Net Profit – September YTD + 12% 42 47
Financial Results Highlights Net Profit as % of Sales – 3 rd Quarter
Financial Results Highlights Net Profit as % of Sales – Sep YTD
Financial Results Highlights Basic Earnings Per Share – 3 rd Quarter Cent
Financial Results Highlights Basic Earnings Per Share – Sep YTD Cent
17 3 rd Quarter 2004 Financial Results Highlights 3 rd Qtr rd Qtr 2004 % Change Group Turnover (HK$ Million) % Group Net Profit (HK$ Million) % Net Profit as % of Sales 4.5%4.3% - 0.2% Basic Earnings Per Share 2.7 cents 3.1 cents cents
18 Year-On-Year Quarterly Profitability Growth * * * * * Restated for income tax effect per SSAP No.12 (revised) and long service payment costs per SSAP No.34 (revised)
Update & Outlook
Update & Outlook Circle K Hong Kong – Quality Growth Consumer sentiment continues to improve gradually High unemployment & mild inflation Upward pressure on rental and utility costs Maintain quality growth strategy Existing number of stores: 200 Committed / In progress: 5 Forecast – end of 2004: 205
Update & Outlook Circle K China Stores sales and P&L continue to improve Existing number of stores:15 Committed / In progress: 7 Forecast – End of 2004:22 Speed up growth: Organic growth – Doing it right Entry into other cities Small store model trial Aggressive growth strategies to come
Update & Outlook To Summarize Hong Kong market improving gradually Rental cost is a concern China market – expansion strategy instead of P&L issue Ready for aggressive growth Customer brand preference, comparable store sales and profitability expected to continue trends of first 9 months of 2004
3 rd Quarter 2004 Results Presentation A member of the Li & Fung (Retailing) Group 28 October 2004