2018/19 Interim Results Corporate Presentation
20 December 2018
Stock code: 1373
International Housewares Retail Company Limited 2018/19 Interim Results
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2
Stock code: 1373
International Housewares Retail Company Limited 2018/19 Interim Results
Agenda
3 International Housewares Retail Company Limited 2018/19 Interim Results
Highlights & Financial Results
Development Projects
Outlook &Strategies
4 International Housewares Retail Company Limited 2018/19 Interim Results
Highlights & Financial Results
Stock code: 1373
International Housewares Retail Company Limited 2018/19 Interim Results 5
Results Highlights
5
Profit attributable to owners increased
by 24% to HK$48.8m
Revenue grew 2.2% to HK$1.08b
Singapore 6% CSSG
Hong Kong business remains solid with 3.1% sales growth
Cash & Bank Balance
HK$415 M
Proposed Interim divided 5.3 HK cents
per share
Gross Profit increased 3.2%
Stock code: 1373
International Housewares Retail Company Limited 2018/19 Interim Results
Retail Network
6
FY2016 FY2017 FY2018 1H FY2018 Net change
Hong Kong 277 290 290 295 +5
Singapore 62 57 48 46 -2
Macau 8 8 8 7 -1
Number of directly-owned stores
Hong Kong: 295 stores
Macau: 7 stores
Singapore: 46 stores
East Malaysia: 1 store
Australia: 2 stores
Cambodia: 3 stores
Vietnam: 1 store
7 Licence Stores 348 Direct-owned Stores
Stock code: 1373
International Housewares Retail Company Limited 2018/19 Interim Results
For the six months to Oct 2018 Oct 2017
Turnover (HK$’000) 1,083,650 1,060,007
Gross Profit (HK$’000) 506,078 490,306
Net profit from Hong Kong
Business (HK$’000) 51,142 44,088
Profit attributable to equity
holders (HK$’000) 48,831 39,378
Key ratios
Operation profit Margin 5.4% 4.2%
Net profit margin 4.3% 3.4%
Total Dividend
Interim dividend (HK cents) 5.3 5.2
Payout Ratio 78% 95%
Financial Performance – 1H FY2019
7
(HK$’000) Oct 2018 Oct 2017
Capex in the 6 months to Oct 10,201 14,110
Property acquired (capex) in the
6 months to Oct -- 36,889
Cash & cash equivalents as of
Oct 415,101 386,013
Inventory Turnover days (1) 73 77
Trade Payable Turnover days (2) 44 43
Notes:
1. Inventory turnover = Closing inventory / (Cost of sales x2) x365
2. Trade payables turnover = Closing trade payables / (Cost of sales x2) x365
Stock code: 1373
International Housewares Retail Company Limited 2018/19 Interim Results
Revenue Breakdown
Revenue breakdown
8
Macau
Singapore
Hong Kong 87.9%
10.5%
% to Group’s Revenue
1.6%
HK$’000
1,844,576 1,941,285
923,151 952,019
228,073 248,841
119,470 113,758
FY2017 FY2018 IH FY18 IH FY19
Hong Kong Singapore Macau
2,111,001
2,230,102
1,060,007 1,083,007
9 International Housewares Retail Company Limited 2018/19 Interim Results
Development Projects
Stock code: 1373
International Housewares Retail Company Limited 2018/19 Interim Results
Accelerate OEM Development. Create Anchor House Brands
10
House Brand
Consistent Image
across 450+ SKUs
Modernize Packaging -
boost instore visibility &
strengthen USPs
communication
“Re-Japanization” –
New Design, Old Values
Examples of new artwork :
Stock code: 1373
International Housewares Retail Company Limited 2018/19 Interim Results
Accelerate OEM Development. Create Anchor House Brands
11
House Brand
Consistent Image
across 450+ SKUs
Modernize Packaging -
boost instore visibility &
strengthen USPs
communication
“Re-Japanization” –
New Design, Old Values
Stock code: 1373
International Housewares Retail Company Limited 2018/19 Interim Results
Accelerate OEM Development. Create Anchor House Brands
12
House Brand
New Image, Positioning
Positive Disruption
Compelling Value Equation
Hero Products Focus
Extend Range
From 22 to 45 (2019)
Boost Marketing &
Publicity
Create Brand Content Digital Assets,
Support Search
Stock code: 1373
International Housewares Retail Company Limited 2018/19 Interim Results
Accelerate OEM Development. Create Anchor House Brands
13
House Brands
New Opportunity
Incremental, Modern
Lifestyle Category
Positive Space Efficient
Constant Improvement
Launch Dec-Jan
Phase 1 : basic staple range
Future expansion : more wireless, more tech items
2019 Projects Refresh the brands, Update Packaging
& Hero Products
Stock code: 1373
International Housewares Retail Company Limited 2018/19 Interim Results
Global Imported Goods : New Categories, Significant Impact
14
Global Imported Goods
Significant Sales Impact
Incremental Sales
Currently : 10% of sales
Traffic Booster
Fast Turn Inventory
Expand the reach of our direct sourcing – better prices, more
choices, quicker speed
Complementary to the JHC setup
Leverage sourcing strength
Convenience Booster for our customers
Categories : Personal Care, Snacks, Home-care, where the
main customer profile overlap strongly with JHC core
customers
New Learnings, New Challenges to handle & anticipate
Logistics
Store configuration
Range & Space rationalization
Stock code: 1373
International Housewares Retail Company Limited 2018/19 Interim Results
Logistics & Warehousing Developments
15
New Logistics Capabilities
Target :
Better Service, Reduce Stock Holding (offense)
Control Costs (defense)
Cross Dock Projects with key suppliers : minimize stock holding in JHC, and through
EZBuy orders, trigger delivery.
Cross Dock Format also allows suppliers benefit of Listing Full Range of products
broaden the range on offer without increasing inventory
Explore Setting up new Logistics Entity in ShenZhen with 3PL Partner in 前海 Bonded
Port Logistics zone that can provide incremental capabilities :
Next-Day Delivery
Direct Home Delivery capability to support & boost E-Commerce
Extended Hour Operations during peak periods
Allow storage rationalization to optimize storage & operating costs
Greater Flexibility to enable Future Opportunities :
Damage returns & Repairs management
Packing & Labelling operations
Selling products to mainland China domestic market
Stock code: 1373
International Housewares Retail Company Limited 2018/19 Interim Results
Omni Channel Retailing
16
New Integrated Channel
Unique Positioning : “Convenience百货”
wide product range of items on offer
shop at place & time of your convenience (online/offline)
Pick Up at 260+ JHC stores near you, or use Home-Delivery.
Enable new business incremental to goods :
Sell Vouchers & Coupons of established brands in HK
Sell Services
Leverage our customer footfall, and engagement channels (JFun,
EZBuy-Panel, FB)
Better management & use of store space :
“shared inventory” concept for bulky items, where stores hold 1 unit
as display set and orders are placed on EZ-Buy panel.
Cross-dock concept where supply is triggered only when there is
demand.
Stock code: 1373
International Housewares Retail Company Limited 2018/19 Interim Results
New & Incremental Business – B-to-B Collaborations
17
JHC has a Ready-Made Exposure & Sales Platform for B-to-B Parthers
We do more than just sell Vouchers & Gift Certificates
We create Brand Awareness & Drive Sales
We provide instant wide exposure & marketing for B-to-B partners, using our
marketing, advertising and publicity network :
260+ shops exposure immediate reach to more than 1.2m
Households
Comprehensive Marketing Support to drive Partner sales
Instore POS, I-Panel Banner & Staff Recommendation
EShop Banners, EDM, FB Advertising, Social Media Post
JFun Push Mail & Promotion to members in JFun App
Newspaper Ads
Clean & Efficient Management of Inventory using E-Platform
1. Pre-Order , 2. Collect, 3. Replenish Stock
Win - Win Opportunity for B-to-B partners
Promotion in JFun APP Highlight in eShop
Feature in EDM
& instore Leaflets
18 International Housewares Retail Company Limited 2018/19 Interim Results
Outlook & Strategies
Stock code: 1373
International Housewares Retail Company Limited 2018/19 Interim Results
Focusing in Hong Kong & Singapore
19
With infrastructure of JHC omni-channel retailing
being in place, to provide customers with blended
online & offline shopping experience
Ongoing effort on operation efficiency and
customer shopping experience improvement
through adoption of technological innovations
Maintaining leading position in Hong Kong &
steadfast development in Singapore
Accelerating OEM products and private label
development
2nd Market
Home Market
Stock code: 1373
International Housewares Retail Company Limited 2018/19 Interim Results
Simple ◆ Fast Retailing : 123 by Ella
20
Distinctive and fresh brand, bearing the imagine of simple & fast retailing
with tidy & cozy store offering trendy & lifestyle personal items.
32 stores spreading in different locations both of on street level and in mall
Leverage on the Group’s sourcing power to introduce more new and fresh
items (incl. imported FMCG & leisure food) to our customers
Exploring the chance of expansion through a franchise programme
Stock code: 1373
International Housewares Retail Company Limited 2018/19 Interim Results
Reinforce the leading position and sustainable growth
21
Product Online & Offline
Offer blended
shopping experience
of both online &
offline under an
increasing demand
for convenience and
flexibility by
customers
Plan to equip Easy
Buy with mobile
payment solution
Talents
Retain and attract
retail talents
Tailor training
programs for staff’s
further advancement
in & contribution to
the Group
Align staff’s personal
interests with those of
the Group and
shareholders by
setting up effective
KPIs.
System & Supply Chain
Embedded intelligence
software to allow
automated decision
process, e.g. product
replenishment
Installation of new ERP
system in order to have
a total solution for
operation efficiency
Accelerate OEM
product development
and private brand
image building
Stepping up
marketing effort to
enhance the presence
of private labels
Further enlarge global
sourcing products of
int’l brands - personal
care, household
chemical & leisure
food
Stock code: 1373
International Housewares Retail Company Limited 2018/19 Interim Results
Network Expansion Plan and CAPEX
Planned store expansion & estimated capital expenditures
22
Store expansion (Net increase of number of stores)
Actual at
31 Oct 18
Net increase
2HFY2019
Net increase
FY2020
Hong Kong (incl. Ella) 295 5 10
Singapore 46 2 2
Macau 7 1 1
Total: 348 8 13
Estimated capital expenditure HK$ million
2HFY2019 FY2020
New store openings 9 19
Ongoing renovations of existing stores 9 19
Others (incl. improvements to logistics & IT) 30 5
23 International Housewares Retail Company Limited 2018/19 Interim Results
Q & A
24 International Housewares Retail Company Limited 2018/19 Interim Results
Thank You!
Stock code: 1373