TIDMDFI TIDMJAR TIDMJDS
RNS Number : 1330F
Dairy Farm International Hldgs Ltd
05 March 2020
To: Business Editor 5th March 2020
For immediate release
The following announcement was issued today to a Regulatory
Information Service approved by the Financial Conduct Authority in
the United Kingdom.
DAIRY FARM INTERNATIONAL HOLDINGS LIMITED
2019 PRELIMINARY ANNOUNCEMENT OF RESULTS
Highlights
-- Multi-year transformation making progress
-- Underlying profit impacted by social unrest in Hong Kong
-- Improvement in Southeast Asia Grocery Retail and Health and Beauty
"While difficult market conditions in Hong Kong impacted the
Group's financial performance during the year, the multi-year
transformation of the Dairy Farm Group continued to gain momentum
during 2019, with signs of progress across our businesses. The
Group's space optimisation plan, new store formats and improvement
programmes together generated greater efficiencies and started to
deliver tangible results. We expect this progress to continue in
2020, although t he Group's results are being materially impacted
by the ongoing COVID-19 outbreak. Performance for the remainder of
the year will depend on the duration, geographic extent and impact
of the outbreak and the measures taken to control it. "
Ben Keswick
Chairman
Results
Year ended 31st December
2018
2019 US$m Change
US$m restated %
Combined total sales including 100% of
associates and joint ventures 27,665 21,957 +26
Sales 11,192 11,749 - 5
Underlying profit attributable to shareholders
* 321 358 - 10
Net non-trading items 3 (273) n/a
Profit attributable to shareholders 324 85 +282
USc USc %
Underlying earnings per share * 23.72 26.48 - 10
Basic earnings per share 23.93 6.27 +282
Dividends per share 21.00 21.00 -
* the Group uses 'underlying profit' in its internal financial
reporting to distinguish between ongoing business performance
and non-trading items, as more fully described in note 35 to
the financial statements. Management considers this to be a key
measure which provides additional information to enhance understanding
of the Group's underlying business performance.
the accounts have been restated due to the change in accounting
policy upon adoption of IFRS 16 'Leases', as set out in
note 1 to the financial statements.
The final dividend of USc14.50 per share will be payable on 13th
May 2020, subject to approval at the Annual General Meeting to be
held on 6th May 2020, to shareholders on the register of members at
the close of business on 20th March 2020.
DAIRY FARM INTERNATIONAL HOLDINGS LIMITED
PRELIMINARY ANNOUNCEMENT OF RESULTS
FOR THE YEARED 31ST DECEMBER 2019
OVERVIEW
The Dairy Farm Group's multi-year transformation programme to
reshape and reorganise the business, adapting to the changing needs
of customers, continued to gain momentum during 2019. Opportunities
are being unlocked across the Group as the business seeks to
leverage its scale effectively and develop a more coherent approach
to improving its customer proposition, both by banner and at a
country level.
While the Group began to see some early benefits from its
transformation programme, profitability was impacted by market
conditions in Hong Kong in the second half of the year caused by
social unrest. The ongoing COVID-19 outbreak has added extra
complexity for the Group's businesses and t he Group's results are
being significantly impacted by it. Performance for the remainder
of the year will depend on the duration, geographic extent and
impact of the outbreak and the measures taken to control it . The
Group's diverse retail portfolio does, however, provide some
insulation against market uncertainties and Dairy Farm remains
firmly focused on the successful delivery of its
transformation.
OPERATING PERFORMANCE
Sales of US$11.2 billion for the year by the Group's
subsidiaries were 5% behind those of 2018. Total sales of US$27.7
billion, including 100% of associates and joint ventures, were 26%
higher, reflecting the investment in Robinsons Retail in the prior
year.
The underlying operating profit of the Group's subsidiaries was
US$437 million, 14% lower than 2018, primarily due to social unrest
in Hong Kong which disrupted trading at some of the Group's banners
in the second half of the year. Among the Group's subsidiaries, the
impact was greatest for Mannings, because of the significant
reduction in the number of visitors from the Chinese mainland to
Hong Kong. Ongoing investments in the IKEA store network in the
year also reduced Group profitability. Offsetting these impacts was
a significant improvement in profitability in our Southeast Asia
Grocery Retail business, as the space optimisation plan took
effect. The businesses also benefitted from transformation and
improvement programmes.
Underlying profit attributable to shareholders was US$321
million, down 10% from US$358 million last year. Underlying
earnings per share of USc23.72 were also down 10%.
The Group maintained solid net cash flows from operating
activities of US$1,288 million. Net debt at the end of 2019 was
US$821 million, an increase from US$744 million last year.
The Board is recommending an unchanged final dividend of
USc14.50 per share, giving a total dividend of USc21.00 per share
for the year, which is in line with 2018.
Food - Grocery Retail
The divestment of the Rustan Supercenters business, as well as
the execution of the Group's space optimisation plan in Southeast
Asia, led to overall sales for the Grocery Retail business reducing
by 12% to US$5.2 billion. Sales in Hong Kong and Macau Grocery
Retail rose in 2019.
There was a significant improvement in operating profit in the
Group's Grocery Retail business, from US$22 million in 2018 to
US$63 million in 2019. The improvement was driven by Southeast
Asia, as the space optimisation plan took effect. The foundations
for future growth by the business were also strengthened by the
ongoing transformation and improvement programmes.
Profits in Hong Kong and Macau Grocery Retail were impacted by
cost pressures and ongoing investments in people and capabilities,
but the Group has started to see improving trends in underlying
profit performance.
Convenience
Sales in the Convenience business increased by 4% to US$2.2
billion, driven by new store growth and strong like-for-like sales
in the Chinese mainland in particular. Enhancements to range and
services are proving popular with customers and the business
continues to focus on brand differentiation to support sales
growth. Profits for the year declined by US$6 million, however, as
a result of pre-opening costs in respect of the expansion of the
7-Eleven store network in Guangdong, as a net total of over 200 new
stores were opened in 2019. Profits in 2018 were also positively
impacted by a number of one-off items.
Health and Beauty
Total sales for the Health and Beauty Division increased by 1%
to US$3.1 billion, supported by the consolidation of Rose Pharmacy
as well as strong growth in other Southeast Asian markets.
Operating profit, however, declined by 11% to US$296 million, as
the business was impacted by the social unrest in Hong Kong. The
Group has been addressing these challenging conditions by
appropriate management of costs.
Weakness in North Asia Health and Beauty was partially offset by
strong revenue and like-for-like sales growth in Southeast Asia,
particularly in Indonesia and Malaysia. Guardian in Southeast Asia
delivered a strong performance during the year, with improvements
in operating standards, service and product availability, and it
benefitted from a growing middle-class customer base in Indonesia,
Malaysia, and Vietnam.
Home Furnishings
In Home Furnishings, sales for IKEA were up 6% in the year.
Operating margins were, however, adversely affected through a
combination of currency movements, cost of goods changes and
pre-opening costs in support of strong store expansion.
Associates
The contribution from key associate Maxim's declined to US$82
million from US$105 million in the prior year, as the business was
impacted by the ongoing social unrest in Hong Kong. Despite the
challenging market conditions in the second half, however, Maxim
reported a 4% growth in sales overall for the year, as it saw the
benefit of its acquisition of the Starbucks Thailand business.
Yonghui in the Chinese mainland reported strong sales growth and
positive like-for-like sales. Our share of results in Yonghui grew
from US$15 million in 2018 to US$23 million in 2019 and benefitted
from the partial sell-down by Yonghui of their investment in the
Yunchuang Technology business, which was announced in December
2018. The Group also benefitted from the contribution from its
interest in Robinsons Retail, which it acquired in late 2018.
TRANSFORMATION
The Group's multi-year transformation programme to reshape and
reorganise the business, adapting to the changing needs of
customers, continued to gain momentum during 2019. Opportunities
are being unlocked across the group as the business seeks to
leverage its scale effectively and develop a more coherent approach
to improving its customer proposition, both by banner and at a
country level. The Group's space optimisation plan, new store
formats and improvement programmes generated greater efficiencies
and started to deliver tangible results in the year.
CORPORATE DEVELOPMENTS
In May, Maxim's acquired the Starbucks franchise in Thailand,
with some 370 stores in operation, through a 64%-owned joint
venture.
As at 31st December 2019, Dairy Farm, including associates and
joint ventures, operated over 10,000 outlets across all formats,
compared with some 9,700 at 31st December 2018.
PEOPLE
Undoubtedly 2019 was a challenging year for many of our
businesses, however the hard work, resilience and determination of
colleagues and their commitment to serve our customers every day
has been outstanding. I would like to thank all the Group's
employees for their efforts in moving the Group towards becoming a
truly modern-day retailer that puts our customers first.
Neil Galloway stepped down as Group Finance Director at the end
of March 2019. The Board would like to express its gratitude for
the significant contribution Neil made to the Group over a number
of years. Clem Constantine showed strong leadership during his time
as interim Chief Financial Officer following Neil's departure, and
the Board confirmed his appointment to the role permanently in
November 2019.
Michael Kok stepped down from the Board on 8th May 2019 and
Simon Keswick retired as a Director with effect from 1st January
2020. It was announced on 20th January 2020 that Lord Sassoon will
retire from the Board on 9th April 2020. The Board would like to
express its gratitude for the significant contribution all three
Directors have made to the Group over many years. Clive Schlee will
join the Board with effect from 6th May 2020.
As separately announced on 5th March 2020, with effect from 15th
June 2020 the roles of Chairman and Managing Director, which are
currently held on a combined basis by Ben Keswick, will be
separated. Ben Keswick will remain as Chairman and John Witt will
take on the role of Managing Director of the Company.
PROSPECTS
Dairy Farm is undergoing transformation across all areas of its
business and this scale of change will take time to execute
successfully. However, good progress is being made in implementing
the Group's customer-focused and market-driven strategy and Dairy
Farm is well-placed to achieve long-term sustainable growth.
Performance for the remainder of the year will depend on the
duration, geographic extent and impact of the outbreak and the
measures taken to control it.
Ben Keswick
Chairman
GROUP CHIEF EXECUTIVE'S REVIEW
INTRODUCTION
Overall, the Group continued to make progress in 2019 in
improving the fundamentals underpinning our businesses as part of
our multi-year transformation. While we still have work to do to
complete phase one of our transformation plan which entails
building a strong retail foundation, we are pleased with the
progress so far and are turning attention to some areas of phase
two with the objective of delivering well consistently across all
facets of our business.
The Group's Grocery Retail profits increased significantly in
the year, driven by an improvement in Southeast Asia Grocery Retail
as the space optimisation plan delivered enhanced quality and
operating standards. While the turnaround of the Southeast Asian
businesses remains at an early stage, there are encouraging signs
of improvement.
Underlying performance for our Convenience format was pleasing.
We continued to invest in mainland China, with the network having
now grown to almost 1,300 stores. We also continued to invest in
IKEA, with two additional stores opened in 2019. E-commerce growth
was also strong for IKEA as improvements were made to website
functionality across the region.
The Group's investments in Yonghui and Robinsons Retail
delivered good returns. Underlying profit growth in Yonghui was
strong as it benefitted from the partial sell-down of their
investment in the Yunchuang Technology business, which was
announced in December 2018. Robinsons Retail successfully
integrated the Rustan acquisition in 2019.
The diversity of the Group's business mix from the perspective
of both direct and indirectly managed businesses, formats and
geography did provide some insulation from unprecedented market
challenges. In particular, the social unrest in Hong Kong
materially impacted the performance of the Group's Health and
Beauty division, as well as Maxim's.
FIVE STRATEGIC IMPERATIVES
1) Grow in China
7-Eleven delivered strong growth, with almost 1,300 stores now
opened, and we are pleased with the underlying performance of the
business with strong like-for-like sales growth throughout the
year. Strong focus has been put on the development of the
ready-to-eat offering, which has resulted in higher day time
traffic and converted consumer behaviour to encourage eating at
7-Eleven. On-top of this, digital and other services - such as
facial recognition payment - continue to be one of the key drivers
in China. There remains significant opportunity for growth in the
longer-term with Guangdong province the home to over 100 million
people. In the short-term, however, competition for site rentals
has intensified and we will remain disciplined in our property
growth strategy.
Mannings China reported good like-for-like sales growth in the
second half due to strong O2O e-commerce growth as well as
encouraging results from new format designs. We have also developed
a revised cross-border e-commerce platform for Mannings, with an
upgraded and integrated supply chain to support fulfilment and
accessibility. Our scale of growth in Mannings China has not
fulfilled its potential historically, but we see opportunities for
further space development through a realignment program which aims
to identify the optimal store format and size. There will be a
stronger focus on the Greater Bay Area where Mannings has strong
brand awareness and where the business can leverage the existing
scale of 7-Eleven in the region.
We continue to develop a strong and growing relationship with
Yonghui. Projects to leverage the scale of both companies are
beginning to bear fruit with partnerships in procurement enhancing
efficiency and reducing costs. In addition, Mannings branded
products have been introduced into almost 450 Yonghui stores. We
anticipate further shared learning and idea generation between the
two businesses going forward. We also continue to develop
relationships with China's technology companies, with a series of
trials taking place to better understand the changes in customer
expectations as regards the use of technology in this market and
beyond.
2) Maintain Strength in Hong Kong
The social unrest in Hong Kong negatively impacted our
operations in our home market last year. Reduction in tourist
traffic has had the greatest impact on Mannings within our
portfolio. Disruptions to stores have also impacted our key
associate Maxim's. IKEA's Hong Kong operations were also disrupted
by the social unrest.
However, even within Hong Kong, we benefitted to some extent
from the diversified mix of our businesses. While there was
disruption to stores, a clear trend towards more eating at home
supported solid like-for-like sales growth for Wellcome Hong Kong.
A combination of improvement programmes and a more disciplined
approach to store space saw an improving trend in underlying profit
performance. We remain confident about the future growth potential
of our Grocery Retail business in Hong Kong.
Performance for our Convenience format was pleasing with sales
and profit ahead of last year. This is despite challenging
conditions in the second half. In order to continue to build store
traffic and brand differentiation, aggressive development of
ready-to-eat and the Own Brand range was a key focus. This will
continue in 2020.
Faced with the current challenges, the Group is adopting a
prudent approach to cost control. The challenges in Hong Kong were
also difficult for our team members but their commitment towards
putting customers first was nevertheless unwavering and I would
like to thank all of them for their hard work and dedication.
3) Revitalise Southeast Asia
Profitability in our Southeast Asian Grocery Retail business
improved significantly in 2019 as we execute our multi-year
transformation plan. Greater efficiencies generated from
improvement programmes as well as our space optimisation plan
supported the strong growth in profits. While the turnaround
remains at an early stage, there are encouraging signs.
Our upscale stores continue to show signs of recovery as we
raise operating standards of quality, freshness, availability and
range. Remodelled pilot stores have been developed and initial
performance has been encouraging.
We continue to re-engineer our food offering within Giant to
focus on improving the customer proposition and optimising space. A
detailed plan is being executed and we are expecting to see
continued progress in 2020.
We are taking a holistic view towards space optimisation, of
which the conversion of a Giant hypermarket to an IKEA store in
Sentul, Indonesia is a good example. The store was opened in
November, only five months after handover and was the fastest IKEA
store opening in history.
Our Guardian Health and Beauty business remains a significant
opportunity for us in Southeast Asia. Over 1,000 stores have now
been opened across the region, with the business achieving strong
like-for-like sales growth overall in the region. Profits in
Singapore, Malaysia and Indonesia each achieved double-digit
percentage growth. Indonesia grew particularly strongly, driven by
strong retail execution as we introduced better, more relevant
range into stores and invested in store fitout in a cost-effective
manner.
Guardian is leveraging its strong brand name in the region both
from the perspective of Own Brand, as well as innovative
partnerships. Guardian Own Brand performance for products
introduced into Rose Pharmacy has been strong. Guardian Singapore
also entered into an exclusive partnership in 2019 with leading
Korean Health and Beauty retailer Olive Young to enhance its range
in the K-beauty segment.
We are continuing to invest in growth of the IKEA network across
the Group, but in particular in Indonesia. While this will have
some short-term impact on profits due to new store startup costs
and pre-opening expenses, we remain confident about our underlying
profitability for IKEA and its growth potential in the markets
where we operate the franchise.
Robinsons Retail made a positive contribution in 2019. The
adoption of the new lease accounting standard, IFRS 16, led to
Robinsons Retail reporting a decline in profits.
4) Build Capability
Since the start of 2018, we have significantly changed the
leadership team to assemble a group of people who have strong track
records in the Retail and Consumer industries. In addition to the
senior leadership team, we have also built management depth within
the business. There have been close to 200 middle-management new
hires since 2018. In addition, over 80% of senior managers have
taken new or expanded responsibilities.
The result of the strengthening of our capabilities has driven a
significantly different way of working and seen a significant
improvement in our ability to collaborate across functions, banners
and regions, which has led to successful execution of a number of
improvement programmes. We plan to change our Store Support Centre
to an open plan environment to facilitate better collaboration.
We are taking a proactive approach towards nurturing younger
talent within the organisation and collaborating more closely with
the Jardine Matheson Group. Graduates of the Jardine Executive
Trainee programme have taken opportunities in key areas of the
business including commercial operations, merchandising, digital
and finance management. We are also working more closely with
Jardines in developing a pipeline of junior talent and graduate
trainees.
We now have the ability to drive considerable changes necessary
to not only improve Dairy Farm's performance but to transform the
business to a modern-day retailer focused on delivering what
customers want, where and how they want it.
5) Driving Digital Innovation
Retail is rapidly changing and Dairy Farm has historically been
slow to respond to the pace of digital change.
Since the appointment of our Chief Digital Officer and Chief
Technology Officer in the fourth quarter of 2018, a significant
review of the previous ad-hoc programmes has been undertaken. Focus
and discipline in our IT investments has been enhanced and we are
confident that returns on our IT investments will improve over the
coming years.
We have now successfully consolidated our IT systems in
Singapore by introducing SAP and removing a significant number of
legacy systems.
We have invested in e-commerce across both our Home Furnishings
and Health and Beauty businesses. Enhanced website functionality
supported growth for IKEA. In addition, we have invested in
e-commerce infrastructure to support the growth of online sales for
our Health and Beauty businesses. E-commerce for Guardian Singapore
was relaunched in early 2020 with significant improvement in the
customer experience. We expect these investments to support online
sales growth for Mannings Hong Kong later in 2020.
Significant investments have also been made to enhance the
Group's own digital data analytics capabilities, which will support
the future growth of our businesses. In addition, progress is also
being made in our partnerships with technology companies, which
will support our digital transformation.
LEVERAGING SCALE
The key objective of our transformation is to leverage our
expertise and scale more effectively across our countries and
banners. This will be achieved by operating more effectively as one
company. While we fully recognise that there needs to be
localisation of the offer and customer proposition at both a banner
and a country level, we also believe there are significant
opportunities for us to drive efficiency and lower costs through a
more cohesive approach towards leveraging synergy and scale.
Improvement programmes have been a key area of focus to date and
will continue to be in 2020 and beyond. We are continuing to make
progress in improving consistency and lowering costs in areas such
as Procurement, Category Management, People Development, Store
Productivity, Supply Chain Optimisation and Business Process
Re-engineering. At the store level, we have been working on a
number of projects to improve the workflow for team members and
remove unnecessary duplication of work. For example,
auto-replenishment systems have been introduced into Mannings Hong
Kong, which reduces the amount of manual labour required for store
team members when re-ordering inventory. In addition, programmes to
introduce new systems and processes to improve fresh food quality
and lower waste are being implemented and have been introduced to
over 300 stores across the company, which are also yielding
significant cost savings. At the Store Support Centre level, we
have also taken a more centralised approach across functions to
leverage the scale of the organisation. As an example, we have
taken a centralised approach to marketing by moving away from
having different media agencies across each banner and country.
This has yielded a 90% reduction in the number of agencies we use
and considerable cost savings.
The Group is now adopting a more consistent approach to Own
Brand. One example is with the launch of the Meadows brand in our
Food businesses. The brand is common across markets and we are able
to leverage its scale in common sourcing, as well as marketing. The
number of SKUs brought to market has progressively increased with
focus on increasing range over time. The value proposition is
exceptional with high quality products introduced that are
significantly cheaper than branded equivalent products, helping to
support value-for-money in our store offer. In addition, customers
can find Meadows branded products across multiple banners including
our supermarkets and convenience stores. We are piloting other Own
Brand development options across our Health and Beauty businesses
and leveraging scale when opportunities arise.
IMPACTFUL GROWTH
As the business transforms there is a great opportunity to
improve the Group's impact on the communities it serves, by
demonstrating that Dairy Farm's business and commercial objectives
are closely correlated with addressing societal challenges and by
creating a consistent approach across our businesses to how they
address those challenges. The Group is developing an enduring
sustainable business architecture that is aligned with its
corporate strategy and commercial ambitions. There is much work to
do but the journey is underway to become a truly purpose-led
business.
BUSINESS REVIEW
FOOD
FOOD - GROCERY RETAIL
Consistent with the Group's strategy of proactively managing our
business portfolio, the Rustan Supercenters business was
successfully integrated into Robinsons Retail in 2019. The Rustan
deal as well as the execution of our store optimisation plan in
Southeast Asia led to sales for the Grocery Retail unit reducing by
12% to US$5.2 billion. Operating profit, however, increased close
to three-fold to US$63 million, compared to US$22 million reported
in 2018. The improvement in performance was driven by Southeast
Asia, as we continue to execute towards our multi-year
transformation plan, with the space optimisation plan also yielding
benefits.
Sales in Hong Kong and Macau were ahead of the prior year. While
the social unrest in Hong Kong did disrupt trading, Wellcome's
like-for-like sales grew as customers shifted towards eating at
home. Underlying profitability improvements have been encouraging
as we start to enhance efficiency across the business despite some
cost pressures.
Reported profitability was impacted by ongoing investments in
people and capabilities. Our price reinvestment campaign in Taiwan
led to improved performance in the second half, despite the market
backdrop of weak sentiment and fierce competition.
The divestment of the Rustan Supercenters business as well as
the Southeast Asian space optimisation plan impacted our reported
sales for Southeast Asia Grocery Retail.
However, the space optimisation initiatives as well as
improvements in format and range are delivering some encouraging
results, particularly in our upscale and smaller format stores.
Ongoing success in executing against our transformation plan
supported profit growth for the Southeast Asian grocery businesses
in 2019.
FOOD - CONVENIENCE
Convenience sales increased 4% to US$2.2 billion, driven by new
store growth and strong like-for-like sales in China. Underlying
profit performance for the Division was pleasing. Investments into
the growth of our China business, however, as well as the
non-recurrence of some one-off factors which positively impacted
profit in 2018 led to reported profits for the Division reducing by
US$6 million to US$82 million.
HEALTH AND BEAUTY
Sales for our Health and Beauty Division benefitted from strong
revenue and like-for-like sales growth in our Guardian business in
Southeast Asia. Improvements in the customer range, particularly in
the Beauty category, as well as investments in store fitout
supported sales growth. Like-for-like sales for both China and
Macau also improved over the course of the year as we continued to
improve the customer offer. However, these positives were offset by
the impact that the social unrest in Hong Kong has had on Mannings,
with the business seeing decline in foot traffic both from visitors
to Hong Kong and local customers.
Reported sales for our Health and Beauty Division were US$3.1
billion in 2019 , ahead of 2018, supported by the consolidation of
Rose Pharmacy.
Diversity in our business geography mix saw robust profit growth
by Guardian Indonesia, Malaysia and Singapore partially offset
challenging trading conditions which impacted Mannings Hong Kong.
The good performance of our Southeast Asia business was driven by
strong sales growth as well as better mark-down management.
Overall, operating profit for the Division reduced 11% to US$296
million.
In the Philippines, Rose Pharmacy's profitability also improved
materially. The acquisition of the remaining 51% interest in the
business in late 2018 allowed the Group to accelerate growth in new
stores as well as investment into Own Brands, with financial
performance improving as a result.
We continued to improve the customer offer throughout the Health
and Beauty Division. Some examples include the relaunched Mannings
cross-border e-commerce offering through a WeChat mini program,
with a significant increase in range and Guardian Singapore's
exclusive partnership with leading Korean health and beauty
retailer Olive Young.
We are also beginning to leverage the strong brands that we have
within our Health and Beauty portfolio, with the introduction of
Mannings Own Brand into almost 450 Yonghui stores across China, as
well as Wellcome Taiwan stores.
HOME FURNISHINGS
We continued to invest in the future growth of our Home
Furnishings business in 2019. Sales grew 6% to a record US$766
million. Taiwan and Indonesia both reported strong sales growth,
with two new store openings. In addition, e-commerce growth was
also strong across all markets with investments made to support
website functionality. Like-for-like sales in Hong Kong, however,
were impacted in the second half by the social unrest.
The IKEA team continues to innovate from the perspective of
store format with the conversion of the Giant hypermarket in
Sentul, Indonesia to an IKEA store, a good example of taking a
holistic view to space optimisation. The store was opened in
November, only five months after handover and was the fastest ever
IKEA store opening in history and the first ever hypermarket
conversion. Performance for the store since opening has been
pleasing. IKEA also introduced a pick-up point format in Bandung,
Indonesia in September 2019, a year ahead of the official store
opening in 2020.
Our investments into new stores, higher cost of goods as well as
currency fluctuations impacted operating profits in the short-term.
However, we remain confident in the future prospects of IKEA across
the region. Our first store in Macau will open in the first half of
2020. In addition to a new store opened in Southern Taipei in 2019,
good progress has been made with new store projects in Taiwan as
well as in Indonesia, which are anticipated to open in 2020. Our
strategic plans to meet the demands of the growing middle-income
consumer involve opening traditional and new IKEA formats.
RESTAURANTS
Maxim's reported 4% growth in sales to US$2.7 billion. The
acquisition of Starbucks franchise in Thailand through a 64%-owned
joint venture in May supported sales growth for the year. A
portfolio of over 370 retail outlets was acquired as part of the
deal. After this acquisition, Maxim's has now secured the Starbucks
franchise in six markets.
Profitability, however, was impacted significantly by the social
unrest in Hong Kong, with disruptions caused to restaurants and
shops, as well as reduction in foot traffic. Mooncake sales
performance did continue to grow in 2019.
It was another successful year for the introduction of new
concepts, with expansion of the Shake Shack franchise into China.
Shake Shack is expected to expand into Macau in 2020. Maxim's also
launched The Cheesecake Factory in Macau in 2019, with one opening
in the heart of the Cotai area.
In addition to the Starbucks Thailand acquisition, Maxim's
continues to diversify its business in Southeast Asia, as well as
growing its Starbucks business in the region. The Genki Sushi
franchise is also being expanded in Thailand, Singapore and
Malaysia.
OTHER ASSOCIATES
Yonghui delivered strong sales growth in the year, driven
largely by store openings, while also achieving positive
like-for-like sales. Underlying profit growth was strong due to the
partial sell-down of the investment in the Yunchuang digital
business as well as lower cost from employee share incentive
expenses.
Reported profitability for Robinsons Retail in 2019 was also
impacted by the adoption of IFRS 16 as its profits in 2018 were not
adjusted for the new lease accounting standard. Underlying profit
before interest, tax, depreciation and amortisation increased by
double-digit percentage.
YEAR AHEAD
The Dairy Farm transformation remains on track. Our efforts over
the past two years to enhance capability, change the way in which
we operate, to address underlying business challenges previously
neglected and to focus on consistently improving retail basics
across our business are all combining to enhance Dairy Farm's
prospects for the future. This cultural change to drive
Standardisation, Synergy and Scale is now integrated into our way
of working.
We also benefit from the diversity of our portfolio, not only in
terms of retail sector, format and geographical spread, but also in
the balance between Dairy Farm managed businesses and Dairy Farm
invested businesses. While we have seen some businesses with a Hong
Kong bias adversely impacted in their 2019 performance, others have
seen performance improve, most notably in Southeast Asia where our
turnaround plans are beginning to bear fruit. In addition, the
integration of our Rustan business into Robinsons Retail has proved
to be a successful financial investment decision in its first
year.
We are not ignoring the current short-term challenges and have
been pro-active in adapting to a changing operating environment,
seeking to optimise our current trading position in difficult
circumstances. However, the diversity of our portfolio does provide
the Group with greater resilience when facing external market
uncertainties such as the events of 2019 and the current COVID-19
challenges of 2020.
All sustainable business transformations take time to execute
and we are still in the early stages of that transformation.
Nonetheless, we are encouraged by our underlying progress to date,
remain resolute in our confidence in our turnaround plan and are
grateful for the determination and effort of all our team members
across Dairy Farm in their personal hard work to make a sustainable
performance difference over time, both for our shareholders and
most importantly, our customers.
Ian McLeod
Group Chief Executive
Dairy Farm International Holdings Limited
Consolidated Profit and Loss Account
for the year ended 31st December 2019
2019 2018
Underlying Non-
Underlying Non- business trading
business trading performance items Total
performance items Total US$m US$m US$m
US$m US$m US$m restated restated restated
Sales (note 2) 11,192.3 - 11,192.3 11,749.3 - 11,749.3
Cost of sales (7,658.5) - (7,658.5) (8,100.5) - (8,100.5)
----------- ------- --------- ----------- -------- ---------
Gross margin 3,533.8 - 3,533.8 3,648.8 - 3,648.8
Other operating
income
(note 3) 189.8 19.3 209.1 194.9 207.0 401.9
Selling and
distribution (2, 806.4 (2, 806.4
costs (2,700.7) - (2,700.7) ) - )
Administration
and other
operating ( 531.7 ( 495.9 (1 ,027.6
expenses (586.4) (30.2) (616.6) ) ) )
----------- ------- --------- ----------- -------- ---------
Operating profit ( 288.9
(note 4) 436.5 (10.9) 425.6 505.6 ) 216.7
( 171.7 ( 171.7
Financing charges (164.9) - (164.9) ) - )
Financing income 6.7 - 6.7 5.1 - 5.1
Net financing ( 166.6 ( 166.6
charges (158.2) - (158.2) ) - )
Share of results
of associates and
joint ventures
(note 5) 114.9 11.4 126.3 112.8 1.2 114.0
----------- ------- --------- ----------- -------- ---------
Profit before tax 393.2 0.5 393.7 451.8 (287.7) 164.1
Tax (note 6) (69.5) 0.8 (68.7) (93.8) (2.8) (96.6)
----------- ------- --------- ----------- -------- ---------
Profit after tax 323.7 1.3 325.0 358.0 (290.5) 67.5
----------- ------- --------- ----------- -------- ---------
Attributable to:
Shareholders of
the Company 320.9 2.9 323.8 358.2 (273.4) 84.8
Non-controlling
interests 2.8 (1.6) 1.2 (0.2) (17.1) (17.3)
----------- ------- --------- ----------- -------- ---------
323.7 1.3 325.0 358.0 (290.5) 67.5
----------- ------- --------- ----------- -------- ---------
US c US c US c US c
Earnings per
share
(note 7)
* basic 23.72 23.93 26.48 6. 27
* diluted 23.71 23.92 26.47 6. 27
----------- --------- ----------- ---------
Dairy Farm International Holdings Limited
Consolidated Statement of Comprehensive Income
for the year ended 31st December 2019
2019 US$m 2018 US$m
restated
Profit for the year 325.0 67.5
Other comprehensive income
--------- ---------
Items that will not be reclassified
to profit or loss:
--------- ---------
Remeasurements of defined benefit
plans 15.9 (12.0)
Tax relating to items that will not
be reclassified (2.4) 2.2
13.5 (9.8)
Share of other comprehensive income
of
associates and joint ventures 0.7 0.9
--------- ---------
14.2 (8.9)
--------- ---------
Items that may be reclassified subsequently
to profit or loss:
Net exchange translation differences
--------- ---------
- net gain/(loss) arising during the ( 91.1
year 25.5 )
- transfer to profit and loss 3.4 45.2
( 45.9
28.9 )
Cash flow hedges
--------- ---------
- net (loss)/gain arising during the
year (2.6) 3.1
- transfer to profit and loss (5.5) 1.8
(8.1) 4.9
Tax relating to items that may be
reclassified 1.6 (1.0)
Share of other comprehensive income
of
associates and joint ventures 2.8 -
( 42.0
25.2 )
--------- ---------
Other comprehensive income/(expense) ( 50.9
for the year, net of tax 39.4 )
--------- ---------
Total comprehensive income for the
year 364.4 16.6
--------- ---------
Attributable to:
Shareholders of the Company 362.1 37.1
( 20.5
Non-controlling interests 2.3 )
--------- ---------
364.4 16.6
--------- ---------
Dairy Farm International Holdings Limited
Consolidated Balance Sheet
at 31st December 2019
At 31st December At 1st January
2019 US$m 2018 US$m 2018
restated US$m restated
Net operating assets
Intangible assets 589.2 571.0 707.9
Tangible assets 820.2 756.6 1,086.7
Right-of-use assets 3,186.3 3,430.9 3,646.1
Associates and joint ventures 2,101.9 2,030.9 1,582.2
Other investments 6.8 7.4 6.9
Non-current debtors 142.4 151.3 113.8
Deferred tax assets 18.2 14.4 26.4
--------------
Non-current assets 6,865.0 6,962.5 7,170.0
Stocks 896.1 913.1 950.0
Current debtors 281.3 326.0 345.2
Current tax assets 26.1 35.2 27.1
Cash and bank balances 301.4 296.2 332.4
--------- --------- --------------
1,504.9 1, 570.5 1,654.7
Assets classified as held for
sale - - 11.2
--------- --------- --------------
Current assets 1,504.9 1, 570.5 1,665.9
--------- --------- --------------
(2 ,364.4 ( 2,429.6
Current creditors (2,315.4) ) )
( 412.7
Current borrowings (938.2) (1,025.7) )
Current lease liabilities (728.3) (736.1) (710.6)
( 71.6
Current tax liabilities (126.5) (84.3) )
( 84.2 ( 61.2
Current provisions (56.0) ) )
--------- --------- --------------
( 4,294.7 ( 3,685.7
(4,164.4) ) )
Liabilities directly associated
with assets ( 6.2
classified as held for sale - - )
--------------
( 4,294.7 ( 3,691.9
Current liabilities (4,164.4) ) )
--------- --------- --------------
( 2,724.2 ( 2,026.0
Net current liabilities (2,659.5) ) )
( 522.0
Long-term borrowings (184.0) (14.5) )
Non-current lease liabilities (2,577.5) (2,816.5) (2,944.0)
( 23.4 ( 41.3
Deferred tax liabilities (34.9) ) )
( 34.2
Pension liabilities (31.3) (47.6) )
( 42.7
Non-current creditors (13.2) (39.7) )
( 134.7 ( 129.4
Non-current provisions (125.1) ) )
( 3,076.4 ( 3,713.6
Non-current liabilities (2,966.0) ) )
--------------
1, 161
1,239.5 .9 1, 430.4
--------- --------- --------------
Total equity
Share capital 75.1 75.1 75.1
Share premium and capital reserves 59.2 58.3 57.9
Revenue and other reserves 1,074.9 993.0 1,238.1
--------- --------- --------------
Shareholders' funds 1,209.2 1,126.4 1,371.1
Non-controlling interests 30.3 35.5 59.3
--------- --------------
1,239.5 1 ,161.9 1,430.4
--------- --------- --------------
Dairy Farm International Holdings Limited
Consolidated Statement of Changes in Equity
for the year ended 31st December 2019
Attributable
Revenue Attributable to
Share Share Capital and other to shareholders non-controlling Total
capital premium reserves reserves of the Company interests equity
US$m US$m US$m US$m US$m US$m US$m
2019
At 1st January
- as previously
reported 75.1 33.9 24.4 1,313.6 1,447.0 43.9 1,490.9
- change in
accounting
policy (note 1) - - - (320.6) (320.6) (8.4) (329.0)
-------- -------- --------- ---------- ---------------- ----------------- -------
- as restated 75.1 33.9 24.4 993.0 1,126.4 35.5 1,161.9
Total
comprehensive
income - - - 362.1 362.1 2.3 364.4
Dividends paid by
the Company
(note 9) - - - (284.0) (284.0) - (284.0)
Unclaimed
dividends
forfeited - - - 0.1 0.1 - 0.1
Share-based
long-term
incentive plans - - 0.9 - 0.9 - 0.9
Change in
interests in
subsidiaries - - - 0.8 0.8 (7.5) (6.7)
Change in
interests in
associates and
joint ventures - - - 2.9 2.9 - 2.9
Transfer - 0.2 (0.2) - - - -
At 31st December 75.1 34.1 25.1 1,074.9 1,209.2 30.3 1,239.5
2018
At 1st January
- as previously
reported 75.1 33.1 24.8 1,557.0 1,690.0 65.7 1,755.7
- change in
accounting
policy (note 1) - - - (318.9) (318.9) (6.4) (325.3)
-------- -------- --------- ---------- ---------------- ----------------- -------
- as restated 75.1 33.1 24.8 1,238.1 1,371.1 59.3 1,430.4
Total
comprehensive
income - - - 37.1 37.1 (20.5) 16.6
Dividends paid by
the Company
(note 9) - - - (284.0) (284.0) - (284.0)
Dividends paid to
non-controlling
interests - - - - - (0.2) (0.2)
Unclaimed
dividends
forfeited - - - 0.4 0.4 - 0.4
Share-based
long-term
incentive plans - - 0.4 - 0.4 - 0.4
Change in
interests in
subsidiaries - - - (0.4) (0.4) (3.1) (3.5)
Change in
interests in
associates and
joint ventures - - - 1.8 1.8 - 1.8
Transfer - 0.8 (0.8) - - - -
-------- -------- --------- ---------- ---------------- ----------------- -------
At 31st December 75.1 33.9 24.4 993.0 1,126.4 35.5 1,161.9
-------- -------- --------- ---------- ---------------- ----------------- -------
Revenue and other reserves at 31st December 2019 comprised revenue reserves of US$1,388.5 million (2018:
US$1,330.6 million), hedging reserves of US$0.7 million (2018: US$4.3 million) and exchange reserves of
US$314.3 million loss (2018: US$341.9 million loss).
----------------------------------------------------------------------------------------------------------
Dairy Farm International Holdings Limited
Consolidated Cash Flow Statement
for the year ended 31st December 2019
2018
US$m
2019 US$m restated
Operating activities
--------- ---------
Operating profit (note 4) 425.6 216.7
Depreciation and amortisation 1,002.2 1,101.3
Other non-cash items 33.2 326.7
Increase in working capital (76.7) (20.5)
Interest received 7.1 3.9
( 168.2
Interest and other financing charges paid (166.7) )
Tax paid (25.1) (96.0)
--------- ---------
1,199.6 1,363.9
Dividends from associates and joint ventures 88.5 94.2
Cash flows from operating activities 1,288.1 1,458.1
Investing activities
--------- ---------
Purchase of subsidiaries (note 10(a)) (2.6) (54.6)
Purchase of associates and joint ventures
(note 10(b)) (3.8) (223.1)
Purchase of intangible assets (53.2) (33.2)
Purchase of tangible assets (233.3) (222.6)
( 0.3
Additions to right-of-use assets (18.4) )
Sale of subsidiaries (note 10(c)) - (1.6)
Sale of properties (note 10(d)) 22.6 32.6
Sale of tangible assets 5.7 1.9
Cash flows from investing activities (283.0) (500.9)
Financing activities
--------- ---------
Change in interests in subsidiaries (note
10(e)) (6.7) (3.5)
Drawdown of borrowings 1,778.4 998.2
Repayment of borrowings (1,662.6) (963.6)
Net (decrease)/increase in other short-term
borrowings (42.4) 67.1
Principal elements of lease payments (790.3) (814.7)
Dividends paid by the Company (note 9) (284.0) (284.0)
Dividends paid to non-controlling interests - (0.2)
Cash flows from financing activities (1,007.6) (1,000.7)
Net decrease in cash and cash equivalents (2.5) (43.5)
Cash and cash equivalents at 1st January 284.5 334.5
Effect of exchange rate changes 6.3 (6.5)
--------- ---------
Cash and cash equivalents at 31st December
(note 10(f)) 288.3 284.5
--------- ---------
Dairy Farm International Holdings Limited
Notes
1. Accounting Policies and Basis of Preparation
The financial information contained in this announcement has
been based on the audited results for the year ended 31st December
2019 which have been prepared in conformity with International
Financial Reporting Standards ('IFRS'), including International
Accounting Standards ('IAS') and Interpretations adopted by the
International Accounting Standards Board.
The Group has adopted IFRS 16 'Leases' from 1st January 2019.
Other amendments or interpretations, which are effective in 2019
and relevant to the Group's operations, do not have a significant
effect on the Group's accounting policies.
The Group has elected to early adopt the 'Interest Rate
Benchmark Reform: Amendments to IFRS 9, IAS 39 and IFRS 7'
(effective 1st January 2020) in relation to hedge accounting for
the Group's annual reporting period commencing 1st January 2019. In
accordance with the transition provisions, the amendments have been
adopted retrospectively with respect to hedging relationships that
existed at the start of the reporting period or were designated
thereafter. The amendments provide temporary relief from applying
specific hedge accounting requirements to hedging relationships
which are directly affected by the uncertainty arising from the
reforms and replacement of existing benchmark interest rates such
as LIBOR and other inter-bank offered rates ('IBOR reform'). The
forthcoming IBOR reform may take effect at different times and may
have a different impact on the hedged items (the fixed and floating
rate borrowings) and the hedging instruments (the interest rate
swaps and cross currency swaps used to hedge the borrowings). The
reliefs have the effect that the IBOR reform should not generally
cause hedge accounting to terminate. The reliefs under the
amendments will end when the uncertainty arising from the IBOR
reform are no longer present; or the hedging relationship is
discontinued. Early adoption of these amendments has no impact on
the Group's consolidated financial statements for 2019.
Apart from the above, the Group has not early adopted any other
standard, interpretation or amendments that have been issued but
not yet effective.
Changes in principal accounting policies
IFRS 16 'Leases' replaces IAS 17 'Leases' and related
interpretations, and introduces a comprehensive model for the
identification of lease arrangements and accounting treatments for
both lessors and lessees. The distinction between operating and
finance leases is removed for lessee accounting, and is replaced by
a model where a lease liability and a corresponding right-of-use
asset have to be recognised on the balance sheet for almost all
leases by the lessees, except for leases with a term ending within
12 months or
low-value assets. The Group's recognised right-of-use assets
primarily relate to property leases, which are entered into for use
as retail stores, distribution centres and offices. IFRS 16 affects
primarily the Group's accounting for lessees while the accounting
for lessors does not change significantly.
Prior to 2019, payments made under operating leases were charged
to profit and loss on a straight-line basis over the period of the
lease. Upon the adoption of IFRS 16, each lease payment is
allocated between settlement of the lease liability and finance
cost. The finance cost is charged to profit and loss over the lease
period using the effective interest rate method . The right-of-use
asset is depreciated over the shorter of the asset's useful life
and the lease term on a straight-line basis.
In addition, leasehold land which represents payments to third
parties to acquire interests in property, previously included in
intangible assets and tangible assets, is now presented under
right-of-use assets. Leasehold land is amortised over the useful
life of the lease, which includes the renewal period if the lease
is likely to be renewed by the Group without significant cost.
Changes to accounting policies on adoption of IFRS 16 have been
applied retrospectively, and the comparative financial statements
have been restated.
The effects of adopting IFRS 16
(a) On the consolidated profit and loss account for the year
ended 31st December 2018:
Increase/(decrease)
in profit
US$m
Other operating income 25.8
Selling and distribution costs 70.3
Administration and other operating expenses 41.7
Net financing charges (133.9)
Share of results of associates and joint
ventures (18.8)
-------------------
Profit before tax (14.9)
Tax 4.8
-------------------
Profit after tax (10.1)
-------------------
Attributable to:
Shareholders of the Company* (7.2)
Non-controlling interests (2.9)
(10.1)
-------------------
d
* Further analysed as:
Underlying profit attributable to shareholders (66.1)
Non-trading items 58.9
Profit attributable to shareholders (7.2)
-------------------
US c
Basic underlying earnings per share (4.89)
-------------------
Diluted underlying earnings per share (4.89)
-------------------
Basic earnings per share (0.53)
-------------------
Diluted earnings per share (0.53)
-------------------
(b) On the consolidated statement of comprehensive income for
the year ended 31st December 2018:
Increase/(decrease)
in total
comprehensive
income
US$m
Profit for the year (10.1)
Other comprehensive income
Items that may be reclassified subsequently to
profit or loss:
Net exchange translation differences
* net loss arising during the year 7.9
1
* transfer to profit and loss (1.5)
Other comprehensive expense for the year, net
of tax 6.4
------
Total comprehensive income for the year (3.7)
------
Attributable to:
Shareholders of the Company (1.3)
Non-controlling interests (2.4)
(3.7)
------
(c) On the consolidated balance sheet
at 1st January:
Increase/( decrease)
2019 2018
US$m US$m
Net operating assets
Intangible assets (95.7) (106.8)
Tangible assets (91.4) (97.5)
Right-of-use assets 3, 430.9 3,646.1
Associates and joint ventures (36.0) (18.8)
Non-current debtors (9.0) (48.8)
Deferred tax assets (9.4) -
Non-current assets 3,189.4 3,374.2
Current debtors (46.0) (5.5)
Current assets (46.0) (5.5)
---------- ----------
Current creditors 34.2 39.9
Current lease liabilities (736.1) (710.6)
Current provisions 19.9 (8.7)
---------- ----------
Current liabilities (682.0) (679.4)
---------- ----------
Net current liabilities (728.0) (684.9)
Non-current lease liabilities (2,816.5) (2,944.0)
Deferred tax liabilities 35.2 21.4
Non-current provisions (9.1) (92.0)
Non-current liabilities (2,790.4) (3,014.6)
---------- ----------
(329.0) (325.3)
---------- ----------
Total equity
Revenue and other reserves (320.6) (318.9)
---------- ----------
Shareholders' funds (320.6) (318.9)
Non-controlling interests (8.4) (6.4)
---------- ----------
(329.0) (325.3)
---------- ----------
(d) On the consolidated cash flow statement for the year ended
31st December 2018:
Inflows/(outflows)
US$m
Operating activities
Operating profit 137.8
Depreciation and amortisation 872.2
Other non-cash items (60.0)
Increase in working capital (1.4)
Interest and other financing charges paid (133.9)
------------------
814.7
Investing activities
Purchase of tangible assets 0.3
Additions to right-of-use assets (0.3)
------------------
-
Financing activities
Principal elements of lease payments (814.7)
------------------
(814.7)
------------------
Net change in cash and cash equivalents -
------------------
d
(e) Changes in principal accounting policies on adoption of IFRS 16
Leases
At inception of a contract, the Group assesses whether a
contract is, or contains, a lease. A contract is, or contains, a
lease if the contract conveys the right to control the use of an
identified asset for a period of time in exchange for
consideration.
Lease contracts may contain lease and non-lease components. The
Group allocates the consideration in the contract to lease and
non-lease component based on their relative stand-alone prices. For
property leases where the Group is a lessee, it has elected not to
separate lease and immaterial non-lease components and accounts for
these items as a single lease component.
As a lessee, the Group enters into property leases for use as
retail stores, distribution centres and offices. The Group
recognises right-of-use assets and lease liabilities at the lease
commencement dates, that is the dates the underlying assets are
available for use. Right-of-use assets are measured at cost, less
any accumulated depreciation and impairment, and adjusted for any
remeasurement of lease liabilities. The cost of the right-of-use
assets includes amounts of the initial measurement of lease
liabilities recognised, lease payments made at or before the
commencement dates less any lease incentives received, initial
direct costs incurred and restoration costs. Right-of-use assets
are depreciated using the straight-line method over the shorter of
their estimated useful lives and the lease terms.
The Group also has interests in leasehold land for use in its
operations. Lump sum payments are made upfront to acquire these
land interests from their previous registered owners or governments
in the jurisdictions where the land is located. There are no
ongoing payments to be made under the term of the land leases,
other than insignificant lease renewal costs or payments based on
rateable value set by the relevant government authorities. These
payments are stated at cost and are amortised over the term of the
lease which includes the renewal period if the lease can be renewed
by the Group without significant cost.
Lease liabilities are measured at the present value of lease
payments to be made over the lease terms. Lease payments include
fixed payments (including in-substance fixed payments) less any
lease incentives receivable, variable lease payments that depend on
an index or a rate, and amounts expected to be paid under residual
value guarantees. The lease payments also include the exercise
price of a purchase option reasonably certain to be exercised and
payments of penalties for terminating a lease, if the lease term
reflects the Group exercising that option. The variable lease
payments that do not depend on an index or a rate are recognised as
expenses in the period on which the event or condition that
triggers the payment occurs.
In calculating the present value of lease payments, the Group
uses the incremental borrowing rate at the lease commencement date
if the interest rate implicit in the lease is not readily
determinable. Lease liabilities are measured at amortised cost
using the effective interest rate method. After the commencement
date, the amount of lease liabilities is increased by the interest
costs on the lease liabilities and decreased by lease payments
made.
The carrying amount of lease liabilities is remeasured when
there is a change in the lease term, or there is a change in future
lease payments arising from a change in an index or a rate, or
there is a change in the Group's estimate of the amount expected to
be payable under a residual guarantee, or there is a change arising
from the reassessment of whether the Group will be reasonably
certain to exercise an extension or a termination option. When the
lease liability is remeasured, a corresponding adjustment is made
to the carrying amount of the right-of-use asset, or is recorded in
profit or loss if the carrying amount of right-of-use asset has
been reduced to zero.
The Group has elected not to recognise right-of-use assets and
lease liabilities for leases of low-value assets (i.e. US$5,000 or
less) and short-term leases. Low-value assets comprised IT
equipment and small items of office furniture. Short-term leases
are leases with a lease term of 12 months or less. Lease payments
associated with these leases are recognised on a straight-line
basis as an expense in profit and loss over the lease term.
Lease liabilities are classified as non-current liabilities
unless payments are within 12 months from the balance sheet
date.
(f) Critical accounting estimates and judgements
Leases
Liabilities and the corresponding right-of-use assets arising
from leases are initially measured at the present value of the
lease payments at the commencement date, discounted using the
interest rates implicit in the leases, or if that rate cannot be
readily determinable, the Group uses the incremental borrowing
rate. The Group generally uses the incremental borrowing rate as
the discount rate.
The Group applies the incremental borrowing rate with reference
to the rate of interest that the Group would have to pay to borrow,
over a similar term as that of the lease, the funds necessary to
obtain an asset of a similar value to the right-of-use asset in the
country where it is located.
Lease payments to be made during the lease term will be included
in the measurement of a lease liability. The Group determines the
lease term as the non-cancellable term of the lease, together with
any periods covered by an option to extend the lease if it is
reasonably certain to be exercised, or any period covered by an
option to terminate the lease, if it is reasonably certain not to
be exercised.
The Group has the option, under some of its leases to lease the
assets for additional terms. The Group applies judgement in
evaluating whether it is reasonably certain to exercise the option
to renew. That is, the Group considers all relevant factors that
create an economic incentive for it to exercise the renewal. After
the commencement date, the Group reassesses the lease term if there
is a significant event or change in circumstances that is within
its control and affects its ability to exercise or not to exercise
the option to renew. The assessment of whether the Group is
reasonably certain to exercise the options impacts the lease terms,
which significantly affects the amount of lease liabilities and
right-of-use assets recognised.
2. Sales
Including associates
and joint ventures Subsidiaries
---------------------- ------------------
2019 2018 2019 2018
US$m US$m US$m US$m
Analysis by operating
segment:
Food 19,907.3 15,424.7 7,375.6 7,992.2
- Grocery retail 17,603.4 13,320.6 5,190.2 5,888.1
- Convenience stores 2,303.9 2,104.1 2,185.4 2,104.1
Health and Beauty 3,400.8 3,225.7 3,051.0 3,035.8
Home Furnishings 765.7 721.3 765.7 721.3
Restaurants 2,701.2 2,585.5 - -
Other Retailing 890.0 - - -
---------- ---------- -------- --------
27,665.0 21,957.2 11,192.3 11,749.3
---------- ---------- -------- --------
Sales including associates and joint ventures comprise 100% of
sales from associates and joint ventures.
Operating segments are identified on the basis of internal
reports about components of the Group that are regularly reviewed
by the Board for the purpose of resource allocation and performance
assessment. Dairy Farm operates in five segments: Food, Health and
Beauty, Home Furnishings, Restaurants and Other Retailing. Food
comprises grocery retail and convenience store businesses
(including the Group's associate, Yonghui, a leading grocery
retailer in mainland China). Health and Beauty comprises the health
and beauty businesses. Home Furnishings is the Group's IKEA
businesses. Restaurants is the Group's catering associate, Maxim's,
a leading Hong Kong restaurant chain. Other Retailing represents
the department stores, specialty and Do-It-Yourself ('DIY') stores
of the Group's newly acquired Philippines associate, Robinsons
Retail.
Sales and share of results of Yonghui represent 12 months from
October 2018 to September 2019 based on their latest published
announcement (2018: nine months from January to September 2018) and
that of Robinsons Retail represent 11 months from the date of
acquisition, November 2018 to September 2019 based on their latest
published announcement (note 5) .
Set out below is an analysis of the Group's sales by
geographical locations:
Including associates
and joint ventures Subsidiaries
---------------------- ------------------
2019 2018 2019 2018
US$m US$m US$m US$m
Analysis by geographical
area:
North Asia 20,560.3 17,254.1 7,339.5 7,422.4
Southeast Asia 7,104.7 4,703.1 3,852.8 4,326.9
---------- ---------- -------- --------
27,665.0 21,957.2 11,192.3 11,749.3
---------- ---------- -------- --------
The geographical areas covering North Asia and Southeast Asia,
are determined by the geographical location of customers. North
Asia comprises Hong Kong, mainland China, Macau and Taiwan.
Southeast Asia comprises Singapore, Cambodia, the Philippines,
Thailand, Malaysia, Indonesia, Vietnam and Brunei.
3. Other Operating Income
2019 US$m 2018 US$m
Concession and service income 159.3 159.9
Rental income from properties 23.3 27.7
Profit on sale of businesses and properties 15.7 206.5
Adjustment to deferred consideration
for acquisition of
a subsidiary 3.6 -
Fair value gain on equity investments - 0.5
Net foreign exchange gains and others 7.2 7.3
--------- ---------
209.1 401.9
--------- ---------
4. Operating Profit
2019 US$m 2018 US$m
Analysis by operating segment:
Food 145.1 110.2
- Grocery retail 63.1 22.3
- Convenience stores 82.0 87.9
Health and Beauty 295.5 330.2
Home Furnishings 42.7 68.4
--------- ---------
483.3 508.8
Selling, general and administrative expenses (143.4) (103.0)
Underlying operating profit before adopting
IFRS 16 339.9 405.8
Effect of adopting IFRS 16 96.6 99.8
--------- ---------
Underlying operating profit 436.5 505.6
Non-trading items:
- business restructuring costs (15.6) (435.4)
- profit on sale of businesses and properties 15.7 206.5
- loss on reclassification of joint ventures
as subsidiaries (13.9) (60.5)
* adjustment to deferred consideration for acquisition
of a subsidiary 3.6 -
* fair value (loss)/gain on equity investments (0.7) 0.5
425.6 216.7
--------- ---------
Set out below is an analysis of the Group's underlying operating
profit by geographical locations:
2019 US$m 2018 US$m
Analysis by geographical area:
North Asia 443.4 513.7
Southeast Asia 39.9 (4.9)
--------- ---------
483.3 508.8
Selling, general and administrative expenses (143.4) (103.0)
Underlying operating profit before adopting
IFRS 16 339.9 405.8
Effect of adopting IFRS 16 96.6 99.8
Underlying operating profit 436.5 505.6
--------- ---------
Property lease payments and depreciation of reinstatement costs
under the lease contracts were included in the Group's analysis of
operating and geographical segments' results.
5. Share of Results of Associates and Joint Ventures
2019 US$m *2018 US$m *
Analysis by operating segment:
Food 40.9 14.8
- Grocery retail 40.7 14.8
- Convenience stores 0.2 -
Health and Beauty (1.4) (5.3)
Restaurants 82.1 104.5
Other Retailing 4.7 -
--------- ---------
126.3 114.0
--------- ---------
Share of results of associates and joint ventures included the
following gains/(losses) from non-trading items (note 8):
2019 US$m 2018 US$m
Share of Yonghui's fair value (loss)/gain
on equity investments (0.4) 1.2
Share of net gains from partial divestment
of subsidiaries by Yonghui 11.8 -
--------- ---------
11.4 1.2
--------- ---------
Results are shown after tax and non-controlling interests in the
associates and joint ventures.
* Included Yonghui's 12 months results from October 2018 to
September 2019 (2018: nine months from January to September 2018)
and Robinsons Retail's 11 months results from November 2018 to
September 2019 (note 2).
6. Tax
2019 US$m 2018 US$m
Tax charged to profit and loss is analysed
as follows:
Current tax (76.7) (102.1)
Deferred tax 8.0 5.5
--------- ---------
(68.7) (96.6)
--------- ---------
Tax relating to components of other comprehensive
income is analysed as follows:
Remeasurements of defined benefit plans (2.4) 2.2
Cash flow hedges 1.6 (1.0)
--------- ---------
(0.8) 1.2
--------- ---------
Tax on profits has been calculated at rates of taxation
prevailing in the territories in which the Group operates. Share of
tax charge of associates and joint ventures of US$30.7 million
(2018: US$29.0 million) is included in share of results of
associates and joint ventures.
7. Earnings per Share
Basic earnings per share are calculated on profit attributable
to shareholders of US$323.8 million (2018: US$84.8 million), and on
the weighted average number of 1,352.7 million (2018: 1,352.6
million) shares in issue during the year.
Diluted earnings per share are calculated on profit attributable
to shareholders of US$323.8 million (2018: US$84.8 million) , and
on the weighted average number of 1,353.4 million (2018: 1,353.4
million) shares in issue after adjusting for 0.7 million (2018: 0.8
million) shares which are deemed to be issued for no consideration
under the share-based long-term incentive plans based on the
average share price during the year.
Additional basic and diluted earnings per share are also
calculated based on underlying profit attributable to shareholders.
A reconciliation of earnings is set out below:
2019 2018
------------------------------ -----------------------------
Basic Diluted Basic Diluted
earnings earnings earnings earnings
p er share per share per share per share
US$m USc USc US$m USc USc
Profit attributable
to shareholders 323.8 23.93 23.92 84.8 6.27 6.27
Non-trading
items (note
8) (2.9) 273.4
----- -----
Underlying
profit attributable
to shareholders 320.9 23.72 23.71 358.2 26.48 26.47
----- -----
8. Non-trading Items
Non-trading items are separately identified to provide greater
understanding of the Group's underlying business performance. Items
classified as non-trading items include fair value gains and losses
on equity investments which are measured at fair value through
profit and loss; gains and losses arising from the sale of
businesses, investments and properties; impairment of
non-depreciable intangible assets and other investments; provisions
for the closure of businesses; acquisition-related costs in
business combinations; and other credits and charges of a
non-recurring nature that require inclusion in order to provide
additional insight into underlying business performance.
An analysis of non-trading items in operating profit and profit
attributable to shareholders is set out below:
Profit attributable
Operating profit to shareholders
2019 US$m 2018 US$m 2019 US$m 2018 US$m
Business restructuring costs (15.6) (435.4) (13.2) (421.1)
Profit on sale of businesses - 178.3 - 178.3
Loss on reclassification of joint
ventures
as subsidiaries (13.9) (60.5) (13.9) (60.5)
Profit on sale of properties 15.7 28.2 15.7 28.2
Adjustment to deferred consideration
for acquisition of a subsidiary 3.6 - 3.6 -
Share of net gains from partial
divestment of subsidiaries by
Yonghui - - 11.8 -
Others (0.7) 0.5 (1.1) 1.7
(10.9) (288.9) 2.9 (273.4)
--------- --------- ---------- ---------
In August 2019, the Group acquired the remaining 70%
shareholding in Jutaria Gemilang Sdn. Bhd. ('Jutaria') which
resulted in a loss on deemed disposal of US$9.5 million. Following
the acquisition, the Group disposed of its 30% economic interest to
a third party at no consideration. Together with the full
impairment charge on the goodwill arising from acquisition of
US$4.4 million, a loss on reclassification of a joint venture as a
subsidiary of US$13.9 million was charged to profit and loss (note
10(a)).
In 2018, the Group acquired the remaining 51% interest in Rose
Pharmacy, Inc. ('Rose Pharmacy') in the Philippines from its joint
venture partner and Rose Pharmacy became a wholly-owned subsidiary
of the Group in December (note 10(a)). Upon the completion of the
transaction, goodwill amounting to US$99.0 million was recognised,
followed by a goodwill impairment charge amounting to US$15.3
million. Together with the loss on deemed disposal of Rose Pharmacy
amounted to US$45.2 million, a loss on reclassification of a joint
venture as a subsidiary of US$60.5 million was recorded.
Business restructuring costs in 2018 related to the Group's
restructuring of its Southeast Asia Food business following the
completion of a strategic review. The charges mainly comprised
impairment charges on the carrying values of certain goodwill,
tangible assets and right-of-use assets as well as business
correction provisions which mainly represented expected payments to
tenants and employees. In 2019, apart from certain balance of
business restructuring costs incurred in Southeast Asia Food
business, the management also decided to exit some stores in
mainland China and the associated costs were charged to profit and
loss.
Profit on sale of businesses in 2018 included US$169.6 million
from the disposal of 100% interest in Rustan Supercenters, Inc.
('RSCI') under a partnership agreement with Robinsons Retail
Holdings, Inc. ('Robinsons Retail'), and US$8.7 million from the
disposal of 100% interest in Asia Investment and Supermarket
Trading Company Limited ('AISTC') (note 10(c)).
9. Dividends
2019 US$m 2018 US$m
Final dividend in respect of 2018 of USc14.50
(2017: USc14.50) per share 196.1 196.1
Interim dividend in respect of 2019 of USc6.50
(2018: USc6.50) per share 87.9 87.9
--------- ---------
284.0 284.0
--------- ---------
A final dividend in respect of 2019 of USc14.50 (2018: USc14.50)
per share amounting to a total of US$196.1 million (2018: US$196.1
million) is proposed by the Board. The dividend proposed will not
be accounted for until it has been approved at the 2020 Annual
General Meeting. This amount will be accounted for as an
appropriation of revenue reserves in the year ending 31st December
2020.
10. Notes to Consolidated Cash Flow Statement
(a) Purchase of subsidiaries
Net cash outflow for purchase of a subsidiary in 2019
represented US$2.6 million for acquisition of the remaining 70%
shareholding in Jutaria which operates mini-marts in Malaysia.
Goodwill, amounting to US$4.4 million arising from the acquisition,
was fully impaired after the fair value review (note 8). The fair
values of the identifiable assets and liabilities at the
acquisition date are provisional and will be finalised within one
year after the acquisition date.
Sales and loss after tax since acquisition in respect of the
subsidiary acquired during the year amounted to US$2.4 million and
US$0.2 million, respectively. Had the acquisition occurred on 1st
January 2019, consolidated sales and profit after tax for the year
ended 31st December 2019 would have been US$11,194.7 million and
US$324.8 million, respectively.
Net cash outflow in 2018 represented US$54.6 million for the
acquisition in December of the remaining 51% interest in Rose
Pharmacy which operate a health and beauty stores chain in the
Philippines. Following the acquisition, Rose Pharmacy became a
wholly-owned subsidiary of the Group (note 8).
The fair values of the identifiable assets and liabilities of
the subsidiary acquired during 2018 were finalised in 2019 with the
final fair values not materially different from that of the
provisional amounts.
(b) Purchase of associates and joint ventures in 2019 mainly
related to capital injection of US$3.8 million in the Group's
business in Vietnam.
Purchases in 2018 mainly related to the acquisition of the 7.85%
interest in Robinsons Retail at a total consideration of US$220.0
million and a capital injection of US$3.1 million in the Group's
business in Vietnam .
(c) Sale of subsidiaries
Sale of subsidiaries in 2018 related to the exchange of the
Group's interest in RSCI with Robinsons Retail with no cash
consideration received, while the disposed cash and cash
equivalents of RSCI and the associated transaction costs leading to
a net cash outflow of US$8.0 million. Together with the net cash
inflow of US$6.4 million from the disposal of the Group's 100%
interest in AISTC which operated a hypermarket in Vietnam, a total
net cash outflow of US$1.6 million was recorded (note 8).
(d) Sale of properties
Sale of properties in 2019 mainly related to disposal of a
property in Singapore while the sale in 2018 included disposal of
14 properties in Singapore.
(e) Change in interests in subsidiaries
In 2019, the Group acquired an additional 2.75% interest in PT
Hero Supermarket Tbk for a total consideration of US$6.7 million.
In 2018, an additional 1.29% interest was acquired for US$3.5
million.
(f) Analysis of balances of cash and cash equivalents
2019 US$m 2018 US$m
Cash and bank balances 301.4 296.2
Bank overdrafts (13.1) (11.7)
288.3 284.5
--------- ---------
11. Capital Commitments and Contingent Liabilities
Total capital commitments at 31st December 2019 amounted to
US$338.8 million (20 18 : US$408.5 million).
Various Group companies are involved in litigation arising in
the ordinary course of their respective businesses.
The Group has tax litigation with the Hong Kong Inland Revenue
Department relating to the tax treatment of intra-group royalties
for the tax years from 2012/13 to 2014/15 and a dispute for the
same subject matter from 2015/16 to 2019/20. The amount in dispute
for the period from 2012/13 to 2019/20 is approximately US$100
million. The exposure, net of amounts provided, is estimated to be
US $68 million. Having taken legal advice, the Directors are of the
opinion that the Group has strong grounds to support its
position.
Apart from the above, the Directors are of the opinion that
adequate provisions have been made in the financial statements.
12. Related Party Transactions
The parent company of the Group is Jardine Strategic Holdings
Limited and the ultimate parent company is Jardine Matheson
Holdings Limited ('JMH'). Both companies are incorporated in
Bermuda.
In the normal course of business the Group undertakes a variety
of transactions with JMH and certain of its subsidiaries,
associates and joint ventures. The more significant of such
transactions are described below.
Under the terms of a Management Services Agreement, the Group
paid a management fee of US$1.6 million (2018: US$0.4 million) to
Jardine Matheson Limited ('JML'), a wholly-owned subsidiary of JMH,
based on 0.5% of the Group's profit attributable to shareholders in
consideration for certain management consultancy services provided
by JML. The Group also paid directors' fees of US$0.5 million in
2019 (2018: US$0.5 million) to JML.
The Group rents properties from Hongkong Land Holdings Limited
('HKL'), a subsidiary of JMH. The annual lease payments paid by the
Group to HKL in 2019 were US$3.3 million (2018: US$3.4 million).
The Group's 50%-owned associate, Maxim's Caterers Limited
('Maxim's'), also paid annual lease payments of US$13.5 million
(2018: US$13.7 million) to HKL in 2019.
The Group sources information technology infrastructure and
related services from Jardine Technology Holdings Limited ('JTH'),
a subsidiary of JMH. The total fees paid by the Group to JTH in
2019 amounted to US$11.4 million (2018: US$10.5 million). Maxim's
also paid total fees of US$8.3 million (2018: US$6.4 million) to
JTH in 2019.
The Group also obtains repairs and maintenance services from
Jardine Engineering Corporation ('JEC'), a subsidiary of JMH. The
total fees paid by the Group to JEC in 2019 amounted to US$4.9
million (2018: US$7.2 million).
Maxim's supplies ready-to-eat products at arm's length to
certain subsidiaries of the Group. In 2019, these amounted to
US$32.4 million (2018: US$33.6 million).
There were no other related party transactions that might be
considered to have a material effect on the financial position or
performance of the Group that were entered into or changed during
the year.
Amounts of outstanding balances with associates and joint
ventures are included in debtors and creditors, as appropriate.
Dairy Farm International Holdings Limited
Principal Risks and Uncertainties
The Board has overall responsibility for risk management and
internal control. The process by which the Group identifies and
manages risk will be set out in more detail in the Corporate
Governance section of the Company's 2019 Annual Report (the
'Report'). The following are the principal risks and uncertainties
facing the Company as required to be disclosed pursuant to the
Disclosure Guidance and Transparency Rules issued by the Financial
Conduct Authority in the United Kingdom and are in addition to the
matters referred to in the Chairman's Statement, the Group Chief
Executive's Review and other parts of the Report.
Economic Risk
Most of the Group's businesses are exposed to the risk of
negative developments in global and regional economies and
financial markets, either directly or through the impact such
developments might have on the Group's joint venture partners,
associates, franchisors, bankers, suppliers or customers. These
developments could include recession, inflation, deflation,
currency fluctuations, restrictions in the availability of credit,
business failures, or increases in financing costs, oil prices, the
cost of raw materials or finished products. Such developments might
increase operating costs, reduce revenues, lower asset values or
result in some or all of the Group's businesses being unable to
meet their strategic objectives.
Commercial Risk and Financial Risk
Risks are an integral part of normal commercial activities, and
where practicable steps are taken to mitigate them. Risks can be
more pronounced when businesses are operating in volatile markets.
While the Group's regional diversification does help to mitigate
some risks, a significant portion of the Group revenues and profits
continue to be derived from our operations in Hong Kong.
A number of the Group's businesses make significant investment
decisions in respect of developments or projects and these are
subject to market risks. This is especially the case where projects
are longer-term in nature and take more time to deliver
returns.
The Group's businesses operate in areas that are highly
competitive, and failure to compete effectively, whether in terms
of price, product specification, technology, property site or
levels of service or to adapt to changing consumer behaviours,
including new shopping channels and formats, can have an adverse
effect on earnings. Significant competitive pressure may also lead
to reduced margins.
It is essential for the products and services provided by the
Group's businesses to meet appropriate quality and safety standards
and there is an associated risk if they do not, including the risk
of damage to brand equity or reputation, which might adversely
impact the ability to achieve acceptable revenues and profit
margins.
While social media presents significant opportunities for the
Group's businesses to connect with customers and the public, it
also creates a whole new set of potential risks for companies to
monitor, including damage to brand equity or reputation, which
could affect the Group's profitability.
The steps taken by the Group to manage its exposure to financial
risk will be set out in the Financial Review and in a note to the
Financial Statements in the Report.
Concessions, Franchises and Key Contracts
A number of the Group's businesses and projects are reliant on
concessions, franchises, management or other key contracts.
Cancellation, expiry or termination, or the renegotiation of any
such concessions, franchises, management or other key contracts,
could have an adverse effect on the financial condition and results
of operations of certain subsidiaries, associates and joint
ventures of the Group.
Regulatory and Political Risk
The Group's businesses are subject to a number of regulatory
regimes in the territories in which they operate. Changes in such
regimes, in relation to matters such as foreign ownership of assets
and businesses, exchange controls, licensing, imports, planning
controls, emission regulations, tax rules and employment
legislation, could have the potential to impact the operations and
profitability of the Group's businesses.
Changes in the political environment, including political or
social unrest, in the territories where the Group operates could
adversely affect the Group's businesses.
Terrorism, Pandemic and Natural Disasters
The Group's operations are vulnerable to the effects of
terrorism, either directly through the impact of an act of
terrorism or indirectly through the effect on the Group's
businesses of generally reduced economic activity in response to
the threat, or an actual act, of terrorism.
The Group businesses could be impacted by a global or regional
pandemic which seriously affects economic activity or the ability
of businesses to operate smoothly. In addition, many of the
territories in which the Group operates can experience from time to
time natural disasters such as earthquakes, volcanoes and
typhoons.
Technology Risk
The Group has invested significantly in and is heavily reliant
on its IT infrastructure and systems for the daily operation of its
business. Any major disruption to the Group's IT systems could have
a significant impact on operations. The ability to anticipate and
adapt to technology advancements or threats is an additional risk
that may also have an impact on the business.
Dairy Farm International Holdings Limited
Responsibility Statement
The Directors of the Company confirm to the best of their
knowledge that:
a. the consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards,
including International Accounting Standards and Interpretations
adopted by the International Accounting Standards Board; and
b. the sections of the Company's 2019 Annual Report, including
the Chairman's Statement, Group Chief Executive's Review, Business
Review and the Principal Risks and Uncertainties, which constitute
the management report, include a fair review of all information
required to be disclosed by the Disclosure Guidance and
Transparency Rules 4.1.8 to 4.1.11 issued by the Financial Conduct
Authority in the United Kingdom.
For and on behalf of the Board
Ian McLeod
Clem Constantine
Directors
The final dividend of USc14.50 per share will be payable on
13th May 2020, subject to approval at the Annual General Meeting
to be held on 6th May 2020, to shareholders on the register
of members at the close of business on 20th March 2020. The
shares will be quoted ex-dividend on 19th March 2020, and
the share registers will be closed from 23rd to 27th March
2020, inclusive.
Shareholders will receive their cash dividends in United States
Dollars, unless they are registered on the Jersey branch register,
in which case they will have the option to elect for their
dividends to be paid in Sterling. These shareholders may make
new currency elections for the 2019 final dividend by notifying
the United Kingdom transfer agent in writing by 24th April
2020. The Sterling equivalent of dividends declared in United
States Dollars will be calculated by reference to a rate prevailing
on 29th April 2020.
Shareholders holding their shares through CREST in the United
Kingdom will receive their cash dividends in Sterling only
as calculated above. Shareholders holding their shares through
The Central Depository (Pte) Limited ('CDP') in Singapore
will receive their cash dividends in United States Dollars
unless they elect, through CDP, to receive Singapore Dollars.
Shareholders on the Singapore branch register who wish to
deposit their shares into the CDP system by the dividend record
date, being 20th March 2020, must submit the relevant documents
to M & C Services Private Limited, the Singapore branch registrar,
by no later than 5.00 p.m. (local time) on 19th March 2020.
Dairy Farm
Dairy Farm is a leading pan-Asian retailer. At 31st December
2019, the Group and its associates and joint ventures operated over
10,000 outlets and employed some 230,000 people. The Group had
total annual sales in 2019 exceeding US$27 billion.
The Group provides quality and value to Asian consumers by
offering leading brands, a compelling retail experience and great
service; all delivered through a strong store network supported by
efficient supply chains.
The Group operates under a number of well-known brands across
five divisions. The principal brands are:
Food
-- Grocery retail - Wellcome in Hong Kong and Taiwan; Yonghui in
mainland China; Cold Storage in Malaysia and Singapore; Giant in
Indonesia, Malaysia and Singapore; Hero in Indonesia; and Robinsons
in the Philippines.
-- Convenience stores - 7-Eleven in Hong Kong, Macau, Singapore and Southern China.
Health and Beauty
-- Mannings in Greater China; Guardian in Brunei, Cambodia,
Indonesia, Malaysia, Singapore and Vietnam; and Rose Pharmacy in
the Philippines.
Home Furnishings
-- IKEA in Hong Kong, Indonesia, Macau and Taiwan.
Restaurants
-- Maxim's in Cambodia, mainland China, Hong Kong, Macau,
Malaysia, Singapore, Thailand and Vietnam (directly and via various
joint ventures or franchises).
Other Retailing
-- Robinsons in the Philippines operating department stores, specialty and DIY stores.
Dairy Farm International Holdings Limited is incorporated in
Bermuda and has a standard listing on the London Stock Exchange,
with secondary listings in Bermuda and Singapore. The Group's
businesses are managed from Hong Kong by Dairy Farm Management
Services Limited through its regional offices. Dairy Farm is a
member of the Jardine Matheson Group.
- end -
For further information, please contact:
Dairy Farm Management Services Limited
Kirsten Molyneux (852) 2299 1884
Marjorie Law (852) 2299 1788
Brunswick Group Limited
David Ashton (852) 3512 5063
Full text of the Preliminary Announcement of Results and the
Preliminary Financial Statements for the year ended 31st December
2019 can be accessed through the Internet at
www.dairyfarmgroup.com.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR EANDSEDXEEEA
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