2011 first quarter results · 2011 first quarter highlights revenue up 27.3% yoy – strong sssg in...
TRANSCRIPT
Lotte Shopping Co., Ltd.
Investor Relations
2011 First Quarter Results
June, 2011
Disclaimer
The financial information in this document are consolidated earnings results based on K-IFRS. The previous earnings results have also been restated in compliance with K-IFRS. This release includes preliminary figures that are still undergoing independent auditor review. The actual results may differ from those included in this release due to a variety of factors. Lotte Shopping Company undertakes no obligation to update or revise the preliminary provided in this release.
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A Leading Retailer in Korea Table of Contents
1. Q1 FY2011 Consolidated Financial Results
2. Q1 FY2011 Consolidated Financial Results by Division
3. Non-Operating Profit Analysis
4. Appendix.
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2011 First Quarter Highlights
Revenue up 27.3% YoY
– Strong SSSG in Department Store of +13.2%
– Increased M/S of Hypermarket business driven by its same store sales growth and GS store
acquisition
– Robust revenue growth of major subsidiaries above 50% year on year
Operating Profit up 18.1% YoY
– Continued margin improvement in Hypermarket business both in domestic and overseas
– Increased profit in Major subsidiaries
(Credit Card +22.7%, Home shopping +50.9%)
K-IFRS Adoption
– Once again proves Lotte Shopping’s dominant position in the market
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Consolidated Financial Results (K-IFRS)
Q1 FY’10 Q1 FY’11 YoY
Gross Sales 4.5 tr 5.7 tr +27.3%
Operating Profit 379 448 +18.1%
Profit before tax 393 441 +12.2%
Net Profit 299 342 +14.3%
(Unit : billion KRW)
*Number of consolidated affiliates: 34
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Q1 FY’10 Q1 FY’11 YoY
Sales Revenue
4,471 (100%) 5,690 (100%) +27.3%
Department Stores 1,720 (38.6%) 2,108 (37.2%) +22.6%
Hypermarkets 1,757 (39.5%) 2,169 (38.2%) +23.4%
Finance 298 (6.7%) 380 (6.7%) +27.8%
Others* 697 (15.6%) 1,034 (18.2%) +48.4%
Operating Profit 379 8.5% 448 7.9% +18.1%
Department Stores 216 12.6% 241 11.4% +11.3%
Hypermarkets 76 4.3% 90 4.2% +18.6%
Finance 58 19.5% 73 19.1% +25.1%
Others* 29 4.3% 44 4.4% +53.5%
Financial Summary by Division (K-IFRS)
(Unit : billion KRW)
* includes consolidation adjustments 6
Q1 FY’10 Q1 FY’11 YoY
Sales Revenue
1,720 (100%) 2,108 (100%) +22.6%
Lotte Department Stores 1,621 (94.2%) 1874 (88.9%) +15.7%
Lotte Midopa 99 (5.8%) 107 (5.1%) +7.6%
Lotte Square - 127 (6.0%) -
Operating Profit 216 12.6% 241 11.4% +11.3%
Lotte Department Stores 201 12.4% 218 11.6% +8.4%
Lotte Midopa 15 15.6% 16 14.7% +1.5%
Lotte Square - 8 5.9% -
EBITDA 245 14.3% 280 13.3% +14.1%
Lotte Department Stores 228 14.0% 251 13.4% +10.3%
Lotte Midopa 18 17.8% 18 16.8% +1.1%
Lotte Square - 11 -
Department Stores (K-IFRS) (Unit : billion KRW)
*Includes: 30 Lotte Department Stores (inc. Young Plazas & Outlets) / 1 Midopa store / 3 Lotte Square stores
Key Factors
Revenue: Up 22.6% YoY (SSSG +13.2%)
Steady Growth in all product category:
Luxury Goods + 32.5%, Sportswear & Kids +19.2%,
Home Appliances +18.3%, Women’s Wear +10.6%
OPM slightly declined due to
- increased depreciation of new stores
- consolidation of 3 Lotte Square stores
- increased lease expense caused by sale & lease back
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Q1 FY’10 Q1 FY’11 YoY
Sales Revenue
1,757 (100%) 2,169 (100%) +23.4%
Domestic 1,251 (71.3%) 1,599 (73.8%) +27.8%
Overseas 506 (28.7%) 570 (26.2%) +12.7%
Operating Profit 76 4.3% 90 4.2% +18.6%
Domestic 70 5.6% 86 5.4% +22.5%
Overseas 6 1.2% 5 0.8% -25.4%
EBITDA 111 6.3% 131 6.0% +17.9%
Domestic 96 7.7% 116 7.2% +20.8%
Overseas 16 3.1% 15 2.7% -1.0%
Hypermarkets (K-IFRS) (Unit : billion KRW)
Overseas Domestic
Included Entities: China, Indonesia, Vietnam
Revenue: Up 12.6% (SSSG +4.3%)
Enhancing Operation Efficiency by improving
- Revenue per person
- Private Brands
- Product-mix
Stores: China 81, Indonesia 22, Vietnam 2
Revenue: Up 27.8% YoY (SSSG +5.7%)
OPM: 5.4%, Down 0.2%p YoY
Private Brands revenue: 24.4% of total sales
- Margin decreased due to one-time loss of 16 billion KRW
caused by Guro store sales & lease back
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Key Factors
Operating Revenue up 27.8% YoY, Operating Profit up 22.7% YoY
Market Share: 7.4% (FY10) → 8.0% (FY11 1Q)
Average borrowing interest rate down 0.44%p (5.03% → 4.59%)
Lotte Card (K-IFRS)
FY’10 FY’11
Q1 Q2 Q3 Q4 Q1
Transaction Volume 8.9 8.4 10.0 11.1 11.2
No. of Card Holders 9,006 9,322 9,659 10,010 10,308
Delinquency Rate 1.44 1.49 1.69 1.46 1.77
Q1 FY’10 Q1 FY’11 YoY
Operating Revenue 298 380 27.8%
Credit Purchase 150 187 25.1%
Card Loan & Cash Advance
92 111 20.5%
Others 56 82 47.0%
Operating Expense 239 309 29.0%
SG&A 20 23 15.5%
Finance Expense 38 53 41.9%
Loan Loss Provision 21 23 7.9%
Card Expense 98 132 34.4%
General Expense 62 78 24.3%
Operating Profit 59 71 22.7%
Q1 FY’10 Q1 FY’11
Credit Purchase 58.3% 55.9%
Card Loan 18.2% 22.7%
Cash Advance 18.6% 16.1%
Installment & lease 4.9% 5.4%
Income Statement Summary Transaction Volume & Other Highlights
Earning Asset Portfolio
(Unit : tr. KRW, thousand, %)
(Unit : billion KRW)
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Q1 FY’10 Q1 FY’11 YoY
Sales Revenue 697 1,034 +48.4%
Lotte Super 319 399 +25.1%
Lotte Home shopping 140 169 +20.8%
Korea Seven 205 **414 +102.1%
Others* 33 51 +59.4%
Operating Profit 29 44 +53.5%
Lotte Super 9 11 +28.0%
Lotte Home shopping 17 26 +50.9%
Korea Seven -1 **8
Others* 4 -1
Other Subsidiaries
(Unit : billion KRW)
* includes consolidation adjustments ** includes Buy The Way
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Non-Operating Profit Analysis
(unit: billion KRW) Q1 FY’10 Q1 FY’11 YoY
Operating Profit 380 (8.5%) 448 (7.9%) +18.1%
Finance Income 78 (1.8%) 96 (1.7%) +23.2%
Finance Expense 76 (1.7%) 119 (2.1%) +56.4%
Equity Methods 12 (0.3%) 16 (0.3%) +36.7%
Profit Before Tax 393 (8.8%) 441 (7.8%) +12.2%
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Appendix
Consolidated Affiliates under K-IFRS
Income Statement (K-IFRS)
Balance Sheet (K-IFRS)
Store Network
Overseas Hypermarkets Result
Affiliate Ownership Established Principal Business
Lotte Midopa Co., Ltd. 79.0 % 1964.08.31 Department Stores
Lotte Card Co., Ltd. 92.5 % 2002.12.03 Credit Card and lending
eB Card Co., Ltd. 95 % 2009.10.19 Electronic Banking Business
Gyeonggi Smartcard Co., Ltd. 100.0 % 2005.05.20 Electronic Banking Business
Inchon Smartcard Co., Ltd. 100.0 % 2006.04.23 Electronic Banking Business
Chungnam Smartcard Co., Ltd. 100.0 % 2008.05.06 Electronic Banking Business
Woori Home Shopping & Television Co., Ltd. 53.0 % 2001.05.29 TV home shopping
Korea Seven Co., Ltd. 51.4 % 1999.05.16 Convenience Stores
Buy The Way Inc. 100.0 % 1990.06.30 Convenience Stores
Lotte Boulangerie Co., Ltd. 90.5 % 2000.09.05 Bakery, Confectionary
Lotte Square Co., Ltd. 100.0 % 2010.04.22 Department Stores
NCF Co., Ltd. 94.5 % 2003.03.05 Apparel Manufacturing
Lotte Gimhae Development Co., Ltd. 100.0 % 2010.03.08 Development
Lotte Suwon Station Shopping Town Co., Ltd. 95.0 % 2010.04.30 Retail
Sprint Fourth Securitization Specialty 0.9 % 2009.05.11 Special Purpose Company
Supreme First Securitization Specialty 0.9 % 2008.03.11 Special Purpose Company
Supreme Second Securitization Specialty 0.9 % 2010.02.22 Special Purpose Company
Supreme Third Securitization Specialty 0.9 % 2010.12.06 Special Purpose Company
Consolidated Affiliates * 34 Consolidated Companies
Domestic: 18 Affiliates
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Affiliate Ownership Established Principal Business
Lotte Vietnam Shopping Co., Ltd. 80.0 % 2006.11.29 Hypermarkets
Qingdao Lotte Mart Commercial Co., Ltd. 100.0 % 2007.12.28 Hypermarkets
Lotte Mart Co., Ltd. 100.0 % 2008.06.02 Hypermarkets
Lotte Shopping Holdings(Singapore), Ltd. 100.0 % 2008.08.08 Holding Company
PT Lotte Shopping Indonesia 80.0 % 1989.10.19 Hypermarkets
PT Lotte Mart Indonesia 100.0 % 2009.09.28 Holding Company
Lotte Shopping Holdings(Hongkong), Ltd. 100.0 % 2008.08.12 Holding Company
Lotte Mart China Co., Ltd. (formerly Times and its subsidiaries)
100.0 % 2007.03.15 Hypermarkets
LHSC Limited 65.0 % 2010.06.04 Holding Company
Lucky Pai Limited 63.2 % 2006.06.09 Retail
Liaoning Lotte Mart Co., Ltd. 100.0 % 2008.05.22 Hypermarkets
Lotte Cinema Vietnam Co., Ltd. 90.0 % 2008.05.02 Theatre
Lotte Mart Global Sourcing Center Co., Limited 100.0 % 2008.05.29 Retail
Lotte Business Management (tianjin) Co.,Ltd. 100.0 % 2009.04.29 Retail
Lotte Hotel & Retail Vietnam PTE.Ltd. 80.0 % 2011.01.26 Holding Company
Lotte Shopping India Pvt.,Ltd 100.0 % 2008.01.04 Retail
Overseas: 16 Affiliates
Consolidated Affiliates
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(Unit: billion KRW)
Income Statement (Consolidated K-IFRS)
Q1 FY’10 Q1 FY’11 YoY
Sales Revenue 4,471 5,690 +27.3%
Gross Profit 1,334 (29.8%) 1,702 (29.9%) +27.6%
SG&A 931 (20.8%) 1,222 (21.5%) +31.2%
Operating Profit 379 (8.5%) 448 (7.9%) +18.1%
EBITDA 465 (10.5%) 560 (9.9%) +20.4%
Profit before tax 393
(8.8%) 441 (7.7%) +12.2%
Net Profit 299 (6.7%) 342 (6.0%) +14.3%
Net Income of Controlling Company
285 324 +13.7%
Net income of minority interest equity
14 18 +28.6%
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1Q ’10 4Q ’10 1Q ’11 YoY
Total assets 24,906 29,095 29,526 +18.6%
Cash & Cash Equivalent 1,757 1,242 1,309 -25.6%
Inventories 1,374 1,670 1,667 +21.4%
Liabilities 12,174 15,451 15,541 +27.7%
Borrowings & Bonds 6,203 8,395 8,630 +39.1%
Equity 12,731 13,644 13,985 +9.8%
Share Capital 145 145 145 -
Balance Sheet (Consolidated K-IFRS)
(Unit: billion KRW)
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2007 2008 2009 2010 2011(E)
Domestic Year End Year End Year End Year End Opening Year End
Total Total Total Total Q1 Q2(E) Q3(E) Q4(E) Total(E)
Department Store full-line store 21 22 23 23 1 24
franchise store 3 3 3 6 6
young plaza 3 3 3 3 3
outlet mall - 2 3 4 1 1 6
Hypermarket 56 63 69 90 1 1 7 99
2007 2008 2009 2010 2011(E)
Overseas Year End Year End Year End Year End Opening Year End
Total Total Total Total Q1 Q2(E) Q3(E) Q4(E) Total(E)
Department Store Russia 1 1 1 1 1
China - 1 1 1 1 2
Hypermarket China *8 8 ***79 82 +1/-2 2 4 8 95
Vietnam - 1 1 2 1 3
Indonesia - **19 19 22 1 1 2 26
* acquired 8 CTA Makro stores in Beijing and Tianjin.
** acquired 19 Makro stores in Indonesia.
*** acquired 68 Times stores in China.(including 11 supermarket)
Store Network Store Network
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No. of stores Revenue
Growth
Overall SSS
China 81 540 +10.3% +3.0%
Indonesia 22 200 +14.5% +5.6%
Vietnam 2 28 +106.9% +31.5%
Total 105 768 +13.3% +4.3%
Note: Overseas Revenue Contribution Calculated Based on Internally Managed Revenue Data inc. VAT
Fixed Exchange Rate: 1RMB = ₩200, 100RP= ₩ 12.0, 100VND= ₩ 7.94
(Unit : billion KRW)
Lotte Marts in Overseas (as of Q1FY’11)
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