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8/7/2019 CLSAHandout

1/10

C.P. Seven Eleven Public Company Limited

Investor Presentation : 2003 Results

February 27, 2004

Company Highlights


2/10

3

Share Capital Information

Price : Bt 66.50 per share Hi/Low : Bt 70/51 per share

Average turnover : Bt 132 million

No. of shares : 440 million (par Bt 5)

Market capitalization : Bt 29,260 million (USD 743 million)*

Major shareholders : CP Group 46.40%

AIA 9.09%

GIC 8.52%

Foreign room available : 49.8 million shares (11.13% of total shares)

First SET trade date : October 14, 2003Source: Stock Exchange of Thailand

As of February 24, 2004

*Exchange rate Bt39.4/USD

4

Group Structure

Shanghai Lotus

Supermarket

Chain Store

(SLS)

CounterService

(CS)

C.P. Retailing &Marketing

(CPRAM)

Retailink(Thailand)

(RTL)

Thai SmartCard

(TSC)

Gosoft(Thailand)

MAM Heart

Yangtze

Supermarket

Investment (YSI)

Ek Chor

Distribution

Co.,Ltd. Shanghai

(ECD)

Thailand

Other

countries

People

Republic

of China

49% 100%51%

54%45%

99.99% 97.76% 99.99%

100%

1%

China Retail

Fund (CRF)

Local

Partners

33.24% 99.99% 99.99%

Lotus Distribution

Investment (LDI)

DynamicManagement

(DM)

99.99%

As at December 31, 2003


3/10

Convenience Store Business : 7-Eleven Thailand

6

Competitive Advantages

Dominant 7-Eleven brand image

Strong supports by Licensor & CP Group

Extensive nationwide store network in prime locations (both stand

alone & with PTT gas station)

Advanced distribution center and IT system

Inclusive experienced management team Full integration of value-added retail services

Bill payment service from Counter Service

Retail maintenance service from Retaillink (Thailand)


4/10

7

Store Network

Stores Breakdown

Sub-area

5%

Franchise

28%

Corporate

67%

Upcountry

57%

Bangkok

43%

PTT

8%

Non PTT

92%

As at December 31, 2003

818 913 1,022

9041,129

1,375

0

500

1,000

1,500

2,000

2,500

3,000

2001 2002 2003

Stores

Bangkok Upcountry

Ample room for growth in both Bangkok and

provincial area Open in gas station as diversified growth

opportunity

8

Customer Base

1.60

1.912.06

0.0

0.5

1.0

1.5

2.0

2.5

2001 2002 2003

Million

visitors

Average No. of Customers per Day

Spending per Visit

40.0

46.0

52.0

10.0

20.0

30.0

40.0

50.0

2001 2002 2003

Baht

980983

977

950.0

960.0

970.0

980.0

990.0

1,000.0

2001 2002 2003

visitors

Average No. of Customers per Branch per Day

More than 2 million buyers each day Broad and distributed customer base makes

CP7-11 naturally diversified

Upward trend of spending per visit reflects

ability to match customers need


5/10

9

Product Mix & Margin

25.9% 26.1% 26.3%

10%

15%

20%

25%

30%

2001 2002 2003

%

Foods Margin (%) Non-Foods Margin (%)

21.1%

17.8%15.8%

10%

15%

20%

25%

30%

2001 2002 2003

%

Product mix by sales

24.4%22.8%

21.4%

25.0% 25.6% 26.1%

10%

15%

20%

25%

30%

2001 2002 2003

%

Total Total (Excl. T&E)

Gross Margin (%)

Non Foods

47%

Foods

53%

10

Sales & Inventory

Inventory Day

24.6 25.327.1

0

10

20

30

40

2001 2002 2003

Day

39,25345,175

50,395

0

10,000

20,000

30,000

40,000

50,000

60,000

2001 2002 2003

Baht

Average Sales/Store/Day

39,85346,175

51,550

0

10,000

20,000

30,000

40,000

50,000

60,000

2001 2002 2003

Baht

Same Store Sales/Store/Day

23,129

31,537

41,891

0

10,000

20,000

30,000

40,000

50,000

2001 2002 2003

Million Baht

Total Convenience Store Revenue


6/10

11

Future Plan

Total Capex in Convenience Business for 2004 320 stores expansion Bt900 million

250 stores renovation Bt150 million

Store assortment system Bt165 million

New distribution center Bt835 million

New vocational school Bt200 million

CPRAM frozen foods Bt250 million

Total Bt2,500 million

Supercenter Business : Lotus Shanghai


7/10

13

Business Overview

SLS geographical coverage includes 2 cities (Shanghai andChongqing) and 7 provinces along Yangtze River

Dominant Share strategy: open many stores as clusters inany single city in order to achieve economy of scale

As at December 31, 2003, we are the leader in Shanghaiwith 10 Lotus stores. Other 3 stores are located inHangzhou, Nanjing and Wu Xi.

Location / Store opening criteria:

Highly populated area

Reachable by mass transit system

Catchment area of 3-5 kilometers

Breakeven in 1-2 years

Two prototypes: Big format sales area of 12,000 - 15,000sq.m. and small format 7,500 - 9,000 sq.m.

Our expansion strategy is to lease instead of build newstores. Investment per new store is around RMB 40-60 mm.

10 Lotus

Supercenters

1 Lotus

Supercenter

2 Lotus

Supercenters

14

Lotus Strategy

Every Day Low Price (EDLP)

Dominant share strategy

Economy of scale in distribution, purchasing, information and

management

Product differentiation

Exclusive brand from CP Group

Advanced distribution center and information technology


8/10

15

Key Operating Highlights

Inventory Day

29.5 30.7

0

10

20

30

40

2002 2003

Day

Average Sales/Store/Day

9,038

12,71216,857

0

3,000

6,000

9,000

12,000

15,000

2001 2002 2003

Bt mn

Total Supercenter Store Revenue

1,067

855 821

0

200

400

600

800

1,000

1,200

2001 2002 2003

'000 RMB

Combination of factors contributing to sales/store/day trend:

Sales of new stores not yet fully recognized

Competition in the area

Change of town plan

Product price deflation

-2.6%-3.0%

-1.5%-0.8% -1.3%

-4.0%

-3.0%

-2.0%

-1.0%

0.0%

1998 1999 2000 2001 2002 2003

China RPI

(%Y-o-Y)

Source: World Bank / ADB

No. of Stores 6 10 13

16

Key Operating Highlights (Cont.)

Spending per visit

79.0

69.0 69.0

40.0

50.0

60.0

70.0

80.0

90.0

2001 2002 2003

RMB

12,988

11,691 11,946

7,500

9,000

10,500

12,000

13,500

15,000

2001 2002 2003

visitors

Ave. No. of Customers per Branch per Day

Product Sales Mix

Hardline

21%

Apparel

11%

Dry

Grocery

49%Fresh

Foods

19%

Gross Margin

19.5%

6.9%

12.4%

28.6%

10.1%

13.4%

30.2%

8.1%

19.3%

11.3%

0%

5%

10%

15%

20%

25%

30%

Fresh Foods Dry Grocery Apparel Hardline Total

%

2002 2003

Hardline

22%

Apparel

12%

Dry

Grocery

48%

Fresh

Foods

18%

2002 2003


9/10

Financial Highlights

18

Contributions from All Businesses

Contribution to Operating Profit

Contribution to Sales and Service Revenues

Convenience

store

business

69%

Supercenter

business

29%

Other

businesses

2%

Other

businesses

9%

Supercenter

business

10%

Convenience

store

business

81%

2002 Total Sales and service revenues = Baht 43,765 million

2002 Total Operating Profit = Baht 1,342 million

Other

businesses

2%

Supercenter

business

29%

Convenience

store

business

69%

2003 Total Sales and service revenues = Baht 58,382 million

2003Total Operating Profit = Baht 1,972 million

Other

businesses

11%

Supercenter

business

11%

Convenience

store

business

78%


10/10

19

Consolidated Performance

Net Profit & Net Margin

9641,339

925

2.2%

2.1%

2.8%

0

500

1,000

1,500

2001 2002 2003

Bt mm

0.0%

1.0%

2.0%

3.0%

%

Net Income Net Margin

Total Operating Revenue

45,843

60,993

33,0942.20%2.1%

2.8%

0

10,000

20,000

30,000

40,000

50,000

2001 2002 2003

Bt mm

0.0%

1.0%

2.0%

3.0%

Gross Profit & Gross Margin

6,260

8,927

11,562

19.4%

18.9%

18.8%

0

2,000

4,000

6,000

8,000

10,000

2001 2002 2003

Bt mm

4%

8%

12%

16%

20%

24%

%

Tota l SG&A % o f to ta l revenues

SG&A Expenses

5,886

10,923

8,184

18.7% 18.7%18.7%

0

2,000

4,000

6,000

8,000

10,000

2001 2002 2003

Bt mm

0.0%

5.0%

10.0%

15.0%

20.0%

%

Gross Profit Gross Margin

Note: Exclude interest income and extraordinary items

20

Key Financial Ratios

2,406

3,039

2,194

5.0%5.2%

6.6%

0

600

1,200

1,800

2,400

3,000

3,600

4,200

2001 2002 2003

Bt mm

0.0%

2.0%

4.0%

6.0%

8.0%

%

EBITDA EBITDA Margin

EBITDA & EBITDA Margin

6.1%

7.1% 6.9%

0.0%

2.0%

4.0%

6.0%

8.0%

2001 2002 2003

%

Return on Average Asset (ROAA)

17.7%15.8%

18.8%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

2001 2002 2003

%

Return on Equity (ROAE)Total Debt to Equity Ratios

Note: Exclude interest income and extraordinary items

1.5X1.7X

1.4X

0.0

0.5

1.0

1.5

2.0

2001 2002 2003

%

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