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Sa Sa International Holdings Limited

Annual Results FY10/11For the year ended 31 March 2011

June 2011

1

Agenda

Financial Results

Business Review

Outlook & Strategies

1

2

Financial Results(For the year ended 31 March 11)

3

Year ended 31 Mar 11

(HK$M)FY 10/11 FY 09/10

+/- %

Change

Turnover 4,901.4 4,111.3 +19.2%

Gross profit 2,211.9 1,814.9 +21.9%

Operating profit 608.3 459.3 +32.4%

EBITDA 692.7 528.1 +31.2%

Profit for the period 509.3 381.9 +33.4%

EPS – basic 18.2 cents* 13.8 cents* +31.9%

Return on equity 37.6% 32.2% +5.4%

GP margin 45.1% 44.1% +1.0%

Net profit margin 10.4% 9.3% +1.1%

Group Financial Highlights

* Adjusted for the 1:1 bonus issue

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(HK$)FY 10/11 FY 09/10*

+/- %

Change

Final dividend per share 2.5 cents 2.5 cents --

Final special dividend per share 7 cents 7 cents --

Total annual dividend per share

– basic

– special

14 cents

4 cents

10 cents

14 cents

4 cents

10 cents

--

--

--

Dividend payout ratio ~ 77% ~100% --

Dividends

* Adjusted for the 1:1 bonus issue

5


(HK$M)FY 10/11 FY 09/10 +/- Change

– HK & Macau

– Mainland China

– Other markets (Singapore, Malaysia, Taiwan)

475.4

(22.5)

41.3

347.6

(18.6)

24.8

+127.8

-3.9

+16.5

494.2 353.8 +140.4

– sasa.com 15.1 28.1 - 13.0

Profit for the year 509.3 381.9 +127.4

Profit Centre Performance

— Contribution to Group

+/- %

Change

+36.8%

-21.0%

+66.5%

+39.7%

-46.3%

+33.4%

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Year ended 31 Mar 11 FY 10/11 FY 09/10 +/- Change

(HK$M)

CAPEX 136.7 74.1 +62.6

Cash generated from

operating activities443.1 414.7 +28.4

Dividends for the year 392.4 389.6 +2.8

Cash and bank balance618.4

(as of 31 Mar 11)

646.3(as of 31 Mar 10)

-27.9

Key Financial Indicators

Group

7

Business Review

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Group Turnover

— Geographical Analysis

Turnover

(HK$M)

% to Group

Turnover

Sales to

PRC

customers

at

Group Level

HK & Macau 3,922.6 80.0% (LY: 80.0%) 45.7%

Mainland China 145.5 3.0% (LY: 2.4%) 3.0%

Singapore 206.4 4.2% (LY: 3.9%) —

Malaysia 221.0 4.5% (LY: 4.2%) —

Taiwan 173.3 3.5% (LY: 3.6%) —

sasa.com 232.6 4.8% (LY: 5.9%) 1.9%

Total 4,901.4 100% 50.6%


Total Turnover: HK4,901.4M (+19.2%)

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Single-brand stores / counters"Sasa" stores

*Include 5 clearance outlets

An Overview of Retail Outlets

As of

1 Apr 10

Net +/-

(Apr 10 – Mar 11)

As of

31 Mar 11

HK & Macau 70 +8 78*

Mainland China 17 +9 26

Singapore 18 +2 20

Malaysia 30 +8 38

Taiwan 15 +4 19

Total 150 +31 181

As of

1 Apr 10

Net +/-

(Apr 10 – Mar 11)

As of

31 Mar 11

3 -1 2

18 +3 21

-- -- --

-- -- --

2 -1 1

23 +1 24


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Performance in Hong Kong & Macau

Year ended 31 Mar 11 1H 2H FY

YOY retail and wholesale sales growth +17.5% +20.6% +19.3%

YOY same store growth +9.3% +9.2% +9.3%

Av sales/ transaction

(HK$)

268(+10.2%)

330

(+9.3%)

301

(+9.9%)

Total no. of

transactions (M)

5.9

(+5.9%)

6.7

(+9.4%)

12.6

(+7.7%)

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Sales Performance in Other Markets

Retail and Wholesale(in local currencies)


1H 2H FY

Mainland China

YOY sales growth

YOY same store growth

+40.7%

-6.7%

+50.4%

+2.3%

+46.2%

-1.7%

Singapore

YOY sales growth


+16.7%

+5.2%

+19.7%

+5.2%

+18.2%

+5.2%

Malaysia

YOY sales growth


+14.9%

+5.3%

+12.8%

+4.1%

+13.8%

+4.6%

Taiwan

YOY sales growth


+8.8%

+1.2%

+12.5%

+2.7%

+10.8%

+2.0%

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Mainland China Market

Loss of RMB 19.3M (LY: RMB 16.4M)

Performance improved at operating level (before office overheads)

Losses reflect investments in management and supporting resources

26 “Sasa stores” and 21 Suisse Programme counters as of 31 March 2011

Set up internal auditresources for each cluster

Enhanced productportfolio

Scalable IT systemsupports thousands of stores and franchises

Increasing supportfrom landlords

Series of strategic measures


13

EasternChina

NorthernChina

Beijing

Tianjin

Qingdao

ShanghaiNingboShaoxing

―Sasa‖ stores

Suisse Programme counters

New outlets added in FY10/11


Network Expansion in FY10/11:

Added 9 “Sasa” stores

Added 3 Suisse Programme

counters

Another 8 “Sasa” stores to be opened :

Beijing (3), Shanghai (1) ,

Tianjin (1), Shenyang (2),

Wuhan (1)

1

1

23

1 111

13

Store image:new store

designStore locations

moreprominent

Store sizeNo.of brandsSKUs

No. of property business partners

No. of suppliers


Yichang

Central China

1

14

E-commerce — sasa.comTurnover: FY: HK$232.6 million (-3.5%)

Performance in 2H affected by:

New customs duty regulation in Mainland China from

September 2010

Under-performing outsourced logistics function

Market diversification

Tap online market within Mainland China

Building a dedicated local team in the Mainland

Further develop business at Sa Sa’s Taobao official store

Partner with more local online shopping sites

Accolades received:

Top 30 Best Global Online B2C Retailers 2010 at

“Global Netrepreneur Award 2010”

Top 10 Best Cosmetics Online Shop 2010 by Ifeng.com of

Phoenix TV


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Brand Management


*House brands = Own-brands + Sole-agent brands

House brands gaining recognition and popularity

• Awards received:– Suisse Programme: Boosting Solution

– Méthode Swiss: Oxygen Overnight Eyemask

– Collistar: Slimming Serum

– La Colline: Cell Recharge Cellular Re-Energizing Treatment

Broadened product categories, product concepts and market segments

• Beauty supplement: Hadatuko

• Mass brand: Color Combos

New products are well-received by market

e.g. Cyber Colors: Gemstone series

Sales growth of house-brand products: +24.5%

Sales mix of house-brand products: 42.1% (LY: 40.1%)

Restructured CMPD (buying department) with increased accountability of category teams

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Outlook

& Strategies

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Leveraging Core Strengths

to Tap Market Opportunities

China’s 12th Five-Year Plan

Integration of Hong Kong into Southern China

Rising Middle Class Strong RMB

Cosmetics and Skin Care Products

Top Mainland Tourists' Shopping ListStronger Local Consumer

Sentiment

• High brand equity

• Extensive retail network

• Wide range of products covering

broad price spectrum

• Effective sales technique

• Personalised customer service

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Broadening Business Horizons

Customer

Relationship

Management (CRM)

Product

Category

• New products

Promotions

Broaden customer base

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Traffic Turnover Profit

Market

Share

No. of stores

in Asia

19

sasa.com

Diversification of markets makes up loss of sales in China

Targeted marketing initiatives increase competitivenss

Customer Relationship Management (CRM)

Collaboration with PRC local online shopping websites : 360 buy.com and abang.com

Building new multi-country online platform that offers scalability and flexibility: facilitate more localized marketing and promotion activities

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http://www.sasa.com/SasaWeb/tch/sasa/home.jsp

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Category Management & Product Development

Broaden house brands to target more customer segments

Partner with suppliers and beauty brands

Department restructured to increase accountability- more improvements to

materialise

Stocking Strategy refinement -

growth supported, stock level optimized

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Existing cities with ―Sasa‖ stores

Strategic Development Plan for


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Network expansion strategy

• Foremost target: to accelerate network expansion

• Forming strategic alliance with renowned

commercial property developers

• Over 8 new cities to open ―Sasa‖ stores

• Central cluster now beginning to take shape

• Now recruiting heads of new clusters

• Supporting resources for new cluster now being

assembled

Suzhou

Beijing

Tianjin

Qingdao

Shenyang

Wuhan

Yichang

CentralChina

SouthernChina

WesternChina

EasternChina

NorthernChina

Shanghai

NingboShaoxing

As of 16 Jun 2011

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Retail Outlets in Mainland China Market

Sa Sa’s presence in the Mainland China market

Chengdu

Beijing

Shanghai

Shenyang

Shaoxing

Anshan

Suzhou

Tianjin

Yichang Ningbo

Qingdao

Wuhan

Changsha

Existing cities with ―Sasa‖ stores in FY10/11

Existing cities with Suisse Programme counters in FY10/11

New cities with ―Sasa‖ stores in FY11/12

Zhenjiang

Xiamen

Yinchuan

CentralChina

SouthernChina

WesternChina

EasternChina

NorthernChina

2222

Nanjing

Hangzhou

9 Provinces and 3 Municipalities

Stores Opened in 1Q of

FY11/12

Stores to be Opened in

2Q to 4Q of FY11/12

Northern China

Beijing (+2)

Tianjin (+1)

Shenyang* (+1)

Northern China

Beijing (+1)

Shenyang* (+1)

Eastern China

Shanghai (+1)

Zhenjiang* (+1)

Xiamen* (+1)

Central China

Wuhan (+2)

Western China

Yinchuan* (+1)

*4 new cities: Shenyang, Zhenjiang, Xiamen, Yinchuan

As of 16 Jun 2011

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Strategic Development Plan

for Mainland China Market (cont’d)

Key targets in Mainland China

Target to have

by end of March

>100 stores

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= 5 engines of growth(independent operation team for each cluster)

5 clusters

2013

Add 40-50 stores to

> 70 stores, covering > 15 cities

by end of March 2012

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Improve product offerings

Secure more owned labels products

Launch house brand products that are

“Made For China”

Adjust product offerings to cater for

local preferences

Increase local supplies

Stock more popular international

brands

Develop closer cooperation with

suppliers and beauty brands


Mainland China Market (cont’d)

25



Increase store sales productivity

Improve inventory supply and logistic

management

Strengthen selling, service and

supervisory skills of frontline staff

Improve incentive scheme of sales staff

26



Invest in and build human resources to facilitate rapid

expansion

• Strengthen management structure

• Build dedicated teams for key functions

• Operational management

• CMPD (purchasing)

• Marketing

• Training

• Training function – broaden scope of training

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No. of Retail Outlets

As of 31 Mar 10

As of

31 Mar 11

As of 16 Jun 11

By Mar 12

HK & Macau 70 78 81 >92

Mainland China 17 26 30 >70

Singapore 18 20 21 >24

Malaysia 30 38 39 >46

Taiwan 15 19 21 >23

Total 150 181 192 >255

As of 31 Mar 10

As of

31 Mar 11

As of 16 Jun 11

By Mar 12

3 2 2 2

18 21 19 30

-- -- -- --

-- -- -- --

2 1 1 1

23 24 22 33

Single-brand Stores/ Counters“Sasa” Stores

Network Expansion Plan in Asia

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Thank you!

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