Click here to load reader

JARDINE MATHESON · PDF file for more information Jardine Matheson Holdings Limited Jardine House Hamilton Bermuda Jardine Matheson Annual Report 2018 1. Highlights By Business* By

  • View
    4

  • Download
    0

Embed Size (px)

Text of JARDINE MATHESON · PDF file for more information Jardine Matheson Holdings Limited Jardine...

  • JA R

    D IN

    E M ATH

    ES O

    N A

    N N

    U A

    L R E

    P O

    R T 2

    0 1

    8

    JARDINE MATHESON

    A NNUA L REP ORT 2018

  • Jardine Matheson is a diversified Asian-based group with unsurpassed experience in the region, having been founded in China in 1832. We comprise a broad portfolio of market-leading businesses, which represent a combination of cash generating activities and long-term property assets and are closely aligned to the increasingly prosperous consumers of the region.

  • Contents

    Introduction 1 Highlights 2 Chairman’s Statement 4 Jardine Matheson Group Businesses at a Glance 7 Business Review 8 People and the Community 20 Financial Review 22 Directors’ Profiles 27

    Financial Statements 28 Independent Auditors’ Report 122 Five Year Summary 130 Responsibility Statement 131 Corporate Governance 132 Principal Risks and Uncertainties 138 Shareholder Information 139 Group Offices 140

    Where we operate

    We operate principally in Greater China and Southeast Asia, where our subsidiaries and affiliates can leverage and tap our vast experience, expertise, networks, and long-standing relationships in the region. Our goal is to help Group companies achieve sustainable growth over the long term by providing financial and other resources.

    Our philosophy

    Principled leadership, long-term perspective, innovative thinking and a commitment to mutual growth that inspires us. They also underpin our businesses which provide products, services, and experiences that impact the lives of many millions every day. These values also apply in our workspaces, where we strive to provide positive, safe working environments. We are also committed to improving communities through programmes that make a difference in environmental stewardship, education, mental health and more.

    Our operations

    Across the Group, our 469,000 employees work in a wide range of businesses in major sectors including motor vehicles and related operations, property investment and development, food retailing, home furnishings, engineering and construction, transport services, insurance broking, restaurants, luxury hotels, financial services, heavy equipment, mining and agribusiness.

    Jardine Matheson Holdings Limited is incorporated in Bermuda and has a standard listing on the London Stock Exchange, with secondary listings in Bermuda and Singapore. Jardine Matheson Limited operates from Hong Kong and provides management services to Group companies.

    www.jardines.com for more information

    Jardine Matheson Holdings Limited Jardine House Hamilton Bermuda

    1Jardine Matheson Annual Report 2018

    https://www.jardines.com

  • Highlights

    By Business*

    By Geographical Area*

    By Sector*

    27% US$471m

    Property

    22% US$379m

    Motor vehicles

    19% US$329m

    Retail & restaurants

    16% US$285m

    Engineering, construction &

    mining contracting

    2% US$44m

    Hotels

    11% US$185m

    Insurance broking & financial services

    3% US$51m

    Others

    Analysis of Underlying Profit of US$1,703m

    • Underlying earnings per share up 10%

    • Full-year dividend up 6%

    • Astra, Hongkong Land and Jardine Cycle & Carriage performed well

    • Dairy Farm Food business restructuring and repositioning announced

    • Conditional sale of Jardine Lloyd Thompson

    4%9% 10% 25% 16% 3% 6% 27%

    Jardine Motors

    US$175m

    Jardine Lloyd Thompson

    US$77m

    Hongkong Land

    US$438m

    Dairy Farm

    US$278m

    Mandarin Oriental

    US$45m

    Jardine Cycle & Carriage

    US$102m

    Astra

    US$465m

    Jardine Pacific

    US$164m

    56% Greater China

    40% Southeast Asia

    4% UK & rest of the world

    2 Jardine Matheson Annual Report 2018

  • * Based on underlying profit attributable to shareholders before corporate and other interests. # Excluding net debt of financial services companies. † Including expenditure on properties for sale and associates and joint ventures. Δ Restated due to changes in accounting policies upon adoption of IFRS 9 ‘Financial Instruments’ and IFRS 15 ‘Revenue from Contracts with Customers’ as set out in note 1 to the

    financial statements. Ω 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 38 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.

    Underlying Earnings per Share (US$) Net Asset Value per Share (US$)

    2018 Financial Highlights

    US$4,931m Underlying profit before tax

    US$86,258m Total assets

    469,000 People employed

    US$92,348m Gross revenue

    US$1,703m Underlying profit attributable to shareholders

    US$5,950m Net debt#

    US$12,249m Total capital investment†

    US$26,342m Shareholders’ funds

    Results

    2018 US$m

    2017 US$m

    restatedΔ

    Change %

    Gross revenue including 100% of associates and joint ventures 92,348 83,001 11

    Revenue 42,527 38,748 10

    Underlying profit before taxΩ 4,931 4,302 15

    Underlying profit attributable to shareholdersΩ 1,703 1,543 10

    Profit attributable to shareholders 1,732 3,943 (56)

    Shareholders’ funds 26,342 25,659 3

    US$ US$ %

    Underlying earnings per shareΩ 4.53 4.10 10

    Earnings per share 4.60 10.48 (56)

    Dividends per share 1.70 1.60 6

    Net asset value per share 69.91 68.19 3

    Underlying Earnings per Share (US$) Highlights

    2014 4.13

    2015 3.64

    2016 3.71

    2017 4.10

    2018 4.53

    2014

    2015

    2016

    2017

    2018

    Net Asset Value per Share (US$) Highlights

    51.60

    53.30

    58.19

    68.19

    69.91

    3Jardine Matheson Annual Report 2018

  • After a good performance in 2018 driven primarily by Astra, Hongkong Land and Jardine Cycle & Carriage, we expect the Group to face more challenging conditions in 2019 due to economic uncertainties affecting consumer sentiment and commodity prices.

    Overview The Jardine Matheson Group produced a good overall result for the year, with underlying net profit up 10% compared with the prior year. There were strong performances from Astra and Hongkong Land, as well as an improved performance from Jardine Cycle & Carriage’s non-Astra businesses, while Jardine Pacific, Jardine Motors and Dairy Farm were relatively flat against the prior year.

    Performance The Group’s gross revenue for 2018, including 100% of revenue from associates and joint ventures, rose by 11% from US$83.0 billion to US$92.3 billion, while the Group’s consolidated revenue for 2018 was US$42.5 billion, an increase of 10%. Underlying profit before tax for the year was up 15% at US$4,931 million. The underlying profit attributable to shareholders increased by 10% to US$1,703 million, with underlying earnings per share also 10% higher at US$4.53.

    Net profit including non-trading items for the year was US$1,732 million, which included the Group’s US$613 million share of the net gain in property valuations – principally arising from Hongkong Land’s investment properties in Hong Kong – offset by the Group’s US$296 million share of a restructuring charge in respect of Dairy Farm’s Southeast Asia Food business and a net loss of US$316 million due to unrealised fair value losses related to non-current investments. This compares with US$3,943 million in 2017, which reflected the Group’s US$1,949 million share of increases in property valuations and US$451 million of other net non-trading gains.

    Within the Group’s businesses, Jardine Pacific saw higher contributions from Jardine Schindler and JEC, and a steady performance at Gammon, offset by weaker performances by Jardine Restaurants and HACTL. There was a higher contribution from the interest in Greatview, which was acquired in June 2017. Jardine Motors’ business in Hong Kong and Macau produced steady earnings, but weaker performances were recorded in mainland China and the United Kingdom. Jardine Lloyd Thompson delivered both revenue and profit growth, with particularly good organic growth in its Global Specialty division.

    Hongkong Land produced a record performance with continuing earnings strength from investment properties. The contribution from development properties in mainland China was broadly in line with last year, while higher profits were recognised in Singapore.

    At Dairy Farm, while results in four out of five business formats showed improvement, the structural challenges in Food continued to erode performance at an increased rate. Overall sales increased and underlying net profit was up from the prior year, which had included costs incurred for the exit from various underperforming stores and stock clearance in the Southeast Asia Food business. Results in 2018 benefitted from particularly strong results from the Health and Beauty business and an increased contribution from Convenience stores, which were offset by further deterioration in performance from the Food business led by the supermarket and hypermarket formats. A significa

Search related