3 rd Quarter 2002 Results Presentation

33rdrd Quarter 2002 Results Quarter 2002 ResultsPresentationPresentation

A member of the Li & Fung (Retailing) GroupA member of the Li & Fung (Retailing) Group CRA Website: www.cr-asia.comCRA Website: www.cr-asia.com31 October 200231 October 2002

Hong Kong Retail Value ChangeHong Kong Retail Value ChangeYear-on-Year % ChangeYear-on-Year % Change

-8.1%

3.8%

-1.2%

-4.2%

-12%

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

1999 2000 2001 Aug YTD 2002

* Source – HKSAR Census and Statistics Department* Source – HKSAR Census and Statistics Department

33rdrd Quarter 2002 Results Presentation Quarter 2002 Results PresentationAgendaAgenda

33rdrd Quarter 2002 Financial Results Highlights Quarter 2002 Financial Results Highlights

Update & 2002 OutlookUpdate & 2002 Outlook

Questions & AnswersQuestions & Answers

33rdrd Quarter 2002 Financial Results Highlights Quarter 2002 Financial Results HighlightsGroup Turnover 3Group Turnover 3rdrd Quarter 2002 Quarter 2002

972.9

1,140.7

1,305.1

350.4 366.8

0

500

1,000

1,500

HK

$ M

illio

n

1999 Total 2000 Total 2001 Total 3rd Qtr 2001 3rd Qtr 2002

No. of Store:No. of Store: 114114 123 123 146 146 141 141 157 157

+ 5%+ 5%

318.9

302.3

250

270

290

310

330

350

HK

$ M

illio

n

3rd Qtr 2001 3rd Qtr 2002

33rdrd Quarter 2002 Financial Results Highlights Quarter 2002 Financial Results Highlights121 Stores Comparable Sales121 Stores Comparable Sales

- 5%- 5%

33rdrd Quarter 2002 Financial Results Highlights Quarter 2002 Financial Results HighlightsGroup Turnover Sep YTD 2002Group Turnover Sep YTD 2002

972.9

1,140.7

1,305.1

628.4

350.4

666.0

366.8

0

500

1,000

1,500

HK

$ M

illio

n

1999 Total 2000 Total 2001 Total Sep YTD2001

Sep YTD2002

No. of Store:No. of Store: 114 114 123 123 146 146 141 141 157 157

+ 6%+ 6%

978.81,032.8

33rdrd Quarter 2002 Financial Results Highlights Quarter 2002 Financial Results HighlightsGroup Net Profit – 3Group Net Profit – 3rdrd Quarter 2002 Quarter 2002

6.6

48.1

65.5

20.2 20.8

0

10

20

30

40

50

60

70

80

HK

$ M

illio

n


+ 3%+ 3%

33rdrd Quarter 2002 Financial Results Highlights Quarter 2002 Financial Results HighlightsGroup Net Profit – Sep YTD 2002Group Net Profit – Sep YTD 2002

6.6

48.1

65.5

29.3

20.2

31.7

20.8

0

10

20

30

40

50

60

70

80

HK

$ M

illio

n


Sep YTD2002

+ 6%+ 6%

49.5 52.5

33rdrd Quarter 2002 Financial Results Highlights Quarter 2002 Financial Results HighlightsNet Profit as % of Sales – 3Net Profit as % of Sales – 3rdrd Quarter 2002 Quarter 2002

0.7%

4.2%

5.0%

5.8% 5.7%

0%

1%

2%

3%

4%

5%

6%

7%

8%


- 0.1%- 0.1%

33rdrd Quarter 2002 Financial Results Highlights Quarter 2002 Financial Results HighlightsNet Profit as % of Sales – Sep YTD 2002Net Profit as % of Sales – Sep YTD 2002

0.7%

4.2%

5.0% 5.1% 5.1%

0%

1%

2%

3%

4%

5%

6%

7%

8%


Sep YTD2002

33rdrd Quarter 2002 Financial Results Highlights Quarter 2002 Financial Results HighlightsBasic Earnings Per Share – 3Basic Earnings Per Share – 3rdrd Quarter 2002 Quarter 2002

1.3

9.8 10.1

3.1 3.1

0

2

4

6

8

10

12

14

HK

$ C

ents


33rdrd Quarter 2002 Financial Results Highlights Quarter 2002 Financial Results HighlightsBasic Earnings Per Share – Sep YTD 2002Basic Earnings Per Share – Sep YTD 2002

1.3

9.8 10.1

4.6

3.1

4.8

3.1

0

2

4

6

8

10

12

14

HK

$ C

ents


Sep YTD2002

7.7

+ 3%+ 3%

7.9

Why 3Why 3rdrd Quarter 2002 Favorable Results? Quarter 2002 Favorable Results?Higher Gross Margin/Other IncomeHigher Gross Margin/Other Income

30.4%

31.0%

31.6%31.5%

32.3%

30%

31%

32%

33%


+ 0.8%+ 0.8%

Why 3Why 3rdrd Quarter 2002 Favorable Results? Quarter 2002 Favorable Results?Offset By Higher Expenses as % of SalesOffset By Higher Expenses as % of Sales

Expenses as % of SalesExpenses as % of Sales 2002 vs 20012002 vs 2001

Store Operating ExpensesStore Operating Expenses (0.7%)(0.7%)

HigherHigher

China Start-up ExpensesChina Start-up Expenses (0.1%)(0.1%)

HigherHigher

33rdrd Quarter 2002 Financial Results Highlights Quarter 2002 Financial Results Highlights

33rdrd Qtr 2001 Qtr 2001 33rdrd Qtr 2002 Qtr 2002

Group Turnover (HK$ Million)Group Turnover (HK$ Million) 350.4350.4 366.8366.8 + +

5%5%

Group Net Profit (HK$ Million)Group Net Profit (HK$ Million) 20.220.2 20.820.8 + +

3%3%

Net profit as % of SalesNet profit as % of Sales 5.8%5.8% 5.7%5.7% - -

0.1%0.1%

Basic Earnings Per StoreBasic Earnings Per Store 3.1 Cents3.1 Cents 3.1 Cents3.1 Cents --

Sep YTD 2002 Financial Results HighlightsSep YTD 2002 Financial Results Highlights

Sep YTD 2001Sep YTD 2001 Sep YTD 2002Sep YTD 2002

Group Turnover (HK$ Million)Group Turnover (HK$ Million) 978.8978.8 1,032.81,032.8 + +

6%6%

Group Net Profit (HK$ Million)Group Net Profit (HK$ Million) 49.549.5 52.552.5 + +

6%6%

Net profit as % of SalesNet profit as % of Sales 5.1%5.1% 5.1%5.1% --

Basic Earnings Per StoreBasic Earnings Per Store 7.7 Cents7.7 Cents 7.9 Cents7.9 Cents + +

3%3%

Update & 2002 OutlookUpdate & 2002 Outlook

Update & 2002 OutlookUpdate & 2002 OutlookCircle K Hong KongCircle K Hong Kong

Rising Unemployment, Rising Unemployment,

Continuing Deflation, Continuing Deflation,

Declining Consumer ConfidenceDeclining Consumer Confidence

No Signs of RecoveryNo Signs of Recovery

Tough 4Tough 4thth Quarter 2002 Quarter 2002

-11.8%

7.2%

-3.7% -3.7%

-5.9%-7.7%

-4.1% -4.2%

-15%

-10%

-5%

0%

5%

10%

1/02 2/02 3/02 4/02 5/02 6/02 7/02 8/02

Month

Hong Kong Retail Value ChangeYear-on-year % change

* Source – HKSAR Census and Statistics Department* Source – HKSAR Census and Statistics Department

Update & 2002 OutlookUpdate & 2002 OutlookCircle K Hong Kong – Store GrowthCircle K Hong Kong – Store Growth

Beginning of YearBeginning of Year :: 146146

Opened So FarOpened So Far :: + 11+ 11

Construction in Progress/Construction in Progress/ :: + 8 + 8

Committed LeaseCommitted Lease

Target Store NumberTarget Store Number :: 170170

at End of the Yearat End of the Year

Update & 2002 OutlookUpdate & 2002 OutlookCircle K Hong Kong TacticsCircle K Hong Kong Tactics

Focus on Managing Pricing, Focus on Managing Pricing,

Gross Profit & Controlling Gross Profit & Controlling

ExpensesExpenses

Aggressive & Creative PromotionsAggressive & Creative Promotions

Develop Fast-growth Product Develop Fast-growth Product

Categories – Categories – Food Services, Food Services,

Phone Cards and Store ServicesPhone Cards and Store Services

Update & 2002 OutlookUpdate & 2002 OutlookCircle K ChinaCircle K China

Obtained Business LicenseObtained Business License

11stst Store Ready, Official Opening – Store Ready, Official Opening –

17 November 200217 November 2002

22ndnd Store Under Construction Store Under Construction

Grand Opening – 14 December 2002Grand Opening – 14 December 2002

Update & 2002 OutlookUpdate & 2002 OutlookTo SummariseTo Summarise

Tough Hong Kong Market Slowing Tough Hong Kong Market Slowing

Profit GrowthProfit Growth

About to Commence Business in About to Commence Business in

Southern ChinaSouthern China

China Start-up Cost to IncreaseChina Start-up Cost to Increase

44thth Quarter Profit Growth Under Quarter Profit Growth Under

PressurePressure

Fast Store Growth Starting in 2003Fast Store Growth Starting in 2003

Convenience Retail Asia LimitedConvenience Retail Asia Limited

Best Under A BillionBest Under A Billion200 Companies200 Companies

for 2002for 2002

HKRMA 2002HKRMA 2002Service & CourtesyService & Courtesy

AwardAward

SuperbrandsSuperbrandsHong Kong 2002Hong Kong 2002

3 rd Quarter 2002 Results Presentation

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