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3 rd Quarter 2003 Results Presentation

3 rd Quarter 2003 Results Presentation. A member of the Li & Fung (Retailing) Group. 4 November 2003. Hong Kong Total Retail Sales Value Year-on-year % Change. Jan-Aug 2003 : - 5% 2002 Total : - 4%. * Source: HKSAR, Census and Statistics Department.

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3 rd Quarter 2003 Results Presentation

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  1. 3rd Quarter 2003 Results Presentation A member of the Li & Fung (Retailing) Group 4 November 2003

  2. Hong Kong Total Retail Sales ValueYear-on-year % Change Jan-Aug 2003 : - 5% 2002 Total : - 4% * Source: HKSAR, Census and Statistics Department

  3. 3rd Quarter 2003 Result Presentation Agenda • 3rd Quarter 2003 Financial Results Highlights • 2003 Update & Outlook • Questions & Answers

  4. 3rd Quarter 2003 Financial Results HighlightsGroup Turnover – 3rd Quarter + 10% No. of Stores : 146 166 157 180 (HK) - 2 - 5 (China)

  5. 3rd Quarter 2003 Financial Results Highlights144 Comparable Stores Sales - 1%

  6. 3rd Quarter 2003 Financial Results HighlightsGroup Turnover – September YTD + 10% 1,132.1 1,032.8 No. of Stores : 146 166 157 180 (HK) - 2 - 5 (China)

  7. 3rd Quarter 2003 Financial Results HighlightsGroup Net Profit – 3rd Quarter * * + 6% * * Restated for Income Tax Effect Per SSAP No.12

  8. 3rd Quarter 2003 Financial Results HighlightsNet Profit as % of Sales – 3rd Quarter - 0.2% * * * * Restated for Income Tax Effect Per SSAP No.12

  9. Why 3rd Quarter 2003 Results?Higher Gross Margin/Other Income + 0.6%

  10. Why 3rd Quarter 2003 Results?Higher Expenses as % of Sales

  11. Why 3rd Quarter 2003 Results?Net Profit By Market

  12. 3rd Quarter 2003 Financial Results HighlightsGroup Net Profit – September YTD - 3% * * * 43.3 42.1 * Restated for Income Tax Effect Per SSAP No.12

  13. 3rd Quarter 2003 Financial Results HighlightsNet Profit as % of Sales – September YTD - 0.5% * * * * Restated for Income Tax Effect Per SSAP No.12

  14. 3rd Quarter 2003 Financial Results HighlightsBasic Earnings Per Share – 3rd Quarter * * + 0.1 Cent * * Restated for Income Tax Effect Per SSAP No.12

  15. 3rd Quarter 2003 Financial Results HighlightsBasic Earnings Per Share – September YTD * - 0.2 Cent * * * Restated for Income Tax Effect Per SSAP No.12

  16. 3rd Quarter 2003 Financial Results Highlights * Restated for Income Tax Effect Per SSAP No.12

  17. 2003 Update & Outlook

  18. 2003 Update & Outlook • Hong Kong • Deflation and relatively high unemployment to continue • Threat of SARS re-occurring • Consumer sentiment improving but consumers still cautious on spending • Chinese tourist sector to grow • Top line sales and net margin to improve

  19. 2003 Update & Outlook • China • Growth in retail continues due to economic growth and increase in disposable income • Consumer habit of using CVS more important than competition factor • Escalating social insurance cost • Expediting new store opening • Financial result close to expectation

  20. 2003 Update & Outlook Our China Strategies Benefits of CEPA 1. Lower qualifying requirements 2. Wholly-owned enterprise 3. Access to over 230 Prefectural & County Cities 4. Easier for acquisition

  21. 2003 Update & OutlookProjected Number of Circle K Stores

  22. 2003 Update & Outlook • Improving Hong Kong market conditions • Healthy growth in profitability and cash flow from operations since 2nd quarter • China strategies on track but need to speed up expansion • Better 2003 profitability outlook versus 2002’s

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