Swire Pacific Ltd A

2024 Annual Results Analyst Briefing. Joining us at the briefing today are Mr. Guy Bradley, Chairman of Swire Pacific, Mr. Martin Murray, Finance Director of Swire Pacific, as well as Ms. Karen Tso, Managing Director of Swire Coca-Cola. Before we take a detailed look at our annual results for the year, we'd like to show you a short video highlighting Swire Pacific's key developments and achievements in the year. Enjoy the video. May we now invite Guy, Martin and Karen to please take us through the details of the annual results of 2024.

Good evening and thank you for joining us. In terms of strategic highlights, these are a good set of results in what I would characterize as a very challenging operating environment. We've continued, in spite of that operating environment, we've continued to invest, which demonstrates our confidence in the future. That's why properties have committed 67% of their 100 billion investment plan. They've continued to invest in the Greater Bay Area. They've increased their stake in the Indigo project in Beijing. And we also, in 2024, did the successful launch of our first residential project in Shanghai. On the beverage side, we invested in the Thai bottler, the big Thai bottler, Thai Namtip, and increased our stake to just under 56% in that business in Southeast Asia. Cathay Pacific continued to repay its government debt and more to the point, committed a further $100 billion over the next seven years in refleeting to capture the third runway systems growth. Lots of good examples of confident investment which should set us up over the next seven to 10 years. In terms of numbers, the recurring underlying profit at HK$9.3 billion shows here was down 11% versus the prior year. The prior year contains the impact of the US bottler that we sold in 2023. If you took that out, you'd actually get a small gain in recurring underlying profit in 2024, which I think supports the the strength of these results here. On the back of that, we were confident enough to increase our dividend by 5%. In terms of the specific business performance, I've described the recurring underlying profit as strong. I think we continue to focus on delivering value for our shareholders through a progressive dividend policy and through the buyback program that you know about. On the property side, Business-wise, 2024 was characterized by continued lower office rental income in Hong Kong. I think we can say that retail sales started to normalize in both the Chinese mainland and Hong Kong towards the end of 2024. And as I said earlier, we're very pleased to launch our first residential project in the Chinese mainland in Shanghai. In beverages, the overall profit decreased, driven by that disposal of the U.S. bottling business, but was partly offset by profit contributions from the newly acquired franchise in Thailand and Laos. The exciting news again in beverages was that recurring profit from the Chinese mainland went up by 11%, largely driven by price increases in that market. On the aviation front, the strong results were driven both by ongoing robust demand for passenger travel and strong cargo performance. And the Hayco Group achieved a 45% growth in recurring profit on the back of the upswing in the aviation sector. At this point, I will turn over to Martin to talk about the numbers in much more detail and how we're doing on the sustainability front.

Thanks, Guy. So again, a summary of the big picture numbers. You'll see, as Guy mentioned, all our profit, revenue, cash-generated numbers have been significantly impacted by the sale of the Swire Coca-Cola US business back in 2023. I've put the numbers underneath so you can see the extent of that. The difference in the statutory profit and the underlying profit as caused by the change in fair values in the investment property, which is about $6 billion. So really what we look at is the recurring underlying profit, which again was marginally up on that basis. And I think despite the disposal of SWAG Coca-Cola US and the lower recurring underlying profit overall, we continue with our progressive dividend policy. you can see here the adjustment on the second line which is the adjustment in relation to the investment property and then just going down we've got much smaller non-recurring items you'll see in the 2023 there you have the 3.5 billion sale of one island east and then the big number being the sale of the us business that allowed us to pay a special dividend in 2023 And then in 2024, the non-recurring items are much smaller, so a smaller stake of the remaining car parts in Tai Ku Shing, the deemed disposal of shares in Air China, the small remeasurement gain in the second phase of the Thailand, and then the deemed gain on Cadillac shares that we're holding, but much smaller under non-recurring items. And whilst this is the step change here, it really just shows the messages of the strength of the solid recurring profit in a difficult market. So on the property side, as Fanny just mentioned, the properties analyst briefing, lower office rentals in Hong Kong and higher net finances charges are the main reason for that decline. Beverages, the decline is all to do with the loss of business in SWAG Coca-Cola U.S., Obviously, we have a contribution from Thailand and Laos, but we had a strong increase in profitability from the Chinese mainland, which was very pleasing. But the story of the thing is, again, the continued strong performance from the aviation division, particularly in Cathay Pacific, with good yields and good cargo performance in 2024. This again just shows the recurring and non-recurring items that I've discussed, but per the division basis. Our net debt of 70 billion has a healthy gearing ratio of 22.1, 23.7, if you include the lease liabilities. Our weighted average cost of debt remains healthy at 4%. Our fixed rate basis is 64% of our gross borrowings are fixed. And again, we have a very strong over 43 billion of available liquidity and a very healthy maturity profile. We are very proud of our sustainability credentials. We should be in terms of Swire properties, beverages and aviation market leaders, which we are, and we're very proud with how well we're progressing to our 2030 commitments across the board under our five pillars of Swire Thrive. And then similarly, we're also very proud, particularly with Swire Properties, as Fanny recently mentioned, becoming number one in the Dow Jones Best in Class World Index for real estate management and development industry. I think the video showed our commitment to CSR and how proud we are for the developments we're doing across all three of our core provisions.