NWDS-CAD-r-105/2016

FY16 Annual Results Presentation (20 Sep 2016)

Safe Harbour Statement

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The information contained in our presentation is intended solely for your personal reference. In addition, such information contains projections and forward-looking statements that reflect the Company’s current views with respect to future events and financial performance. These views are based on assumptions subject to various risks. No assurance can be given that future events will occur, that projections will be achieved, or that the Company’s assumptions are correct. Actual results may differ materially from those projected. Shareholders of the Company and potential investors are advised to exercise caution when dealing in the shares of the Company.

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• Summary for FY16

• Results Highlights

• Our Strategy

• Our Retail Network and Store Pipelines

• Open Forum

Agenda

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Summary for FY16

Summary for FY16

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Retail Network • No. of stores was 41 as of 30 June 2016, with a total GFA of 1,614,180 sq.m.

covering 21 cities in the PRC • Terminated operation of Beijing Shishang Store and Ningbo Trendy Store

Decline in Revenue • Revenue declined 9.2% from HK$4,029.4 million in FY15 to HK$3,659.9 million

in FY16

Profit for the Period • Profit for the year was HK$45.4 million

Same-store Sales • SSS for self-owned stores declined by 8.9%

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• Increased the proportion of direct sales and lease-out projects from 38.1% of revenue in FY15 to 44.9% in FY16

• Department Store Business

Introduced more sports, children’s and cosmetics brands to optimize the merchandise mix

Introduced themed interior designs to enhance shopping ambience

Summary for FY16 Operations Highlights

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• Direct Sales Business Introduced the new private label, n+ Natural Taste Plus, specializing in

selling European-style artisan bread products in May 2016

• Positioned as Lifestyle Department Store Expanded operating area of lifestyle-related facilities to 23% of total GFA Introduced “Happy Slide” in Shanghai Pujian Branch Store in April 2016

• Exercised stringent cost control, resulting in 8.4% decrease in operating expenses

Summary for FY16 Operations Highlights

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Results Highlights

15,258 13,077

0

4,000

8,000

12,000

16,000

FY15* FY16**

HK

D m

n

Financial Highlights

9

GSP

EBIT (reported)

Revenue

Net profit (reported)

4,029 3,660

0

1,000

2,000

3,000

4,000

5,000

FY15* FY16**

HK

D m

n

*For the year ended 30 June 2015 ** For the year ended 30 June 2016

70

45

0

20

40

60

80

100

FY15* FY16**

HK

D m

n

231 210

0

50

100

150

200

250

FY15* FY16**

HK

D m

n

GSP includes concessionaire sales (net of VAT), direct sales (net of VAT), rental income, management and consultancy fees and other income.

Commission income

from concessionaire

54.0%

Direct sales 27.4%

Rental income 17.5%

Management & consultancy

fees 1.1%

Revenue Analysis

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Revenue contribution by segment Revenue contribution by region

For the year ended 30 June 2016

Central Western

17.8%

Northern 51.1%

South Eastern 31.1%

13,502

11,224

0

5,000

10,000

15,000

FY15* FY16**

HK

D m

n

2,442 1,977

18.1% 17.6%

0%

5%

10%

15%

20%

500

1,000

1,500

2,000

2,500

3,000

FY15* FY16**

HK

D m

n

Concessionaire commission Commission rate

Revenue Analysis

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Direct sales and its gross margin

Concessionaire gross sales revenues Concessionaire commission

Rental income Management & consultancy fees

54

40

0

20

40

60

80

FY15* FY16**

HKD

mn

*For the year ended 30 June 2015 ** For the year ended 30 June 2016

895 1,003

19.7% 24.6%

0%5%10%15%20%25%30%

0

200

400

600

800

1,000

FY15* FY16**

HK

D m

n

Direct sales Gross margin

639 639

0

200

400

600

800

FY15* FY16**

HK

D m

n

Expense Ratios

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Rental expense Staff expense

Water & electricity expense Promotion, advertising & related expense

Depreciation & amortisation expense

1,192 1,164

7.8% 8.9%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

0

400

800

1,200

1,600

FY15* FY16**

HK

D m

n

Expenses % to GSP

344 301

2.3% 2.3%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

0

100

200

300

400

500

FY15* FY16**

HKD

mn

Expenses% to GSP

251

166

1.6% 1.3%

0.0%

0.4%

0.8%

1.2%

1.6%

2.0%

0

100

200

300

400

FY15* FY16**

HKD

mn

Expenses

159 129

1.0% 1.0%

0.0%

0.3%

0.6%

0.9%

1.2%

1.5%

0

100

200

300

FY15* FY16**

HK

D m

n

Expenses% to GSP

747 633

4.9% 4.8%

0.0%

0.8%

1.6%

2.4%

3.2%

4.0%

4.8%

5.6%

0

200

400

600

800

1,000

FY15* FY16**

HK

D m

n

Expenses % to GSP

*For the year ended 30 June 2015 ** For the year ended 30 June 2016

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Our Strategy

Catalysts

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• New Management Team

• Refined Store Management 3-Tiered Active Store Management “One Store, One Strategy” Store Positioning

• Customer-oriented Operations Strategies

“NWDS’ Chief Experience Officer” Project “NWDS’ Theory of Happiness”

Themed Interior Design “Best Quality, Best Price, Best Taste” Merchandising Strategy

• Transaction-centric Marketing Strategies

Cooperate with Banks / Financial Institutions to Foster Transaction Headquarters-led Marketing Activities

• Tiered and Digitized Customer Relationship

“Customer-Member-Fan” Customer Relationship Management The Digitization of Membership and Marketing Tactics

New Management Team

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Strategic Management

Mr. David Niu, CEO • Over 20 years of experience in department store sector • Worked as top management at NWDS and two other leading

department store operators in China

Operations Mr. Simon Wang, Operations Director & Regional Director – South Eastern China • Over 10 years of experience in department store sector • Extensive operation experience gained from three other leading

department store operators in China

Marketing Mr. Calvin Yang, Director of Sales and Marketing • Over 10 years of experience in sales and marketing • Experienced in developing marketing management system and

CRM system

Refined Store Management

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• Categorize stores by its operating capabilities • Deploy specific and tiered operations tactics

• Highly localize to its local customers • Differentiated merchandise and service offerings in its business circle

3-Tiered Active Store Management

“One Store, One Strategy” Store Positioning

Customer-oriented Operations Strategies

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“NWDS’ Theory of Happiness” • Provide customer-oriented shopping experience by responding to and satisfying all

customers’ needs

“NWDS’ Chief Experience Officer” Project • Collect voice of customers

Customer-oriented Operations Strategies

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“NWDS’ Theory of Happiness” – Shopping Ambience

• Set up Themed Interior Design

• Increase in-store catering and recreational facilities F&B or other joint ventures Target to increase lifestyle-

related facilities to 30% of total GFA

Customer-oriented Operations Strategies

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“NWDS’ Theory of Happiness” – Merchandise Mix • “Best Quality, Best Price, Best Taste” Merchandising Strategy

Deepen concessionaire partnership with strategic brands Merchandize portfolio optimization Continue to strengthen direct sales to differentiate from peers

Transaction-centric Marketing Strategies

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Cooperate with Banks / Financial Institutions to Foster Transaction • Provide exclusive shopping offers to the their customers

Headquarters-led Marketing Activities • Increase the number of inter-store marketing campaigns to 4 per year • Headquarters to provide stores with framework, brand/ payment partnership and

extended marketing channels

Tiered and Digitized Customer Relationship

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The Digitization of Membership and Marketing Tactics • The attachment of VIP membership to bank or third party payment accounts • Data segmentation to analyze customers’ behaviors for target marketing

“Customer-Member-Fan” Customer Relationship Management • Tiered relationship management for better engagement • “Members” will be divided into “Royal”, “Diamond”, “Platinum”, and

“Happy” categories

Fan

Member

Customer

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Our Retail Network and Store Pipelines

New Managed Store in FY17

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Yibin Project

Location: Ideal City, Eastern CuiBai Road, Yibin, Sichuan Province Managed Store: GFA: approx. 27,000 sq.m. Expected to commence operation in late Sep 2016

• The new managed store in Yibin further reinforce our “radiation city” strategy

Store Portfolio

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Gross Floor Area (GFA) of Store Portfolio

Note: Beijing Shishang Store ceased to be a self-owned store since Jan 2016 Ningbo Trendy Store ceased to be a self-owned store since Jun 2016

As of 30 June 2016

(approx. sq.m.)

Self-owned stores 1,460,980 (37 stores)

Managed stores 153,200

(4 stores)

Total 1,614,180 (41 stores) Beijing

240,300

Shanghai 420,930

Others in South

Eastern China

102,600

Central Western

China 332,100

Others in Northern

China 365,050

Self-owned Store Area Breakdown (approx. sq.m.)

Stores in the Pipeline

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FY17* FY18* FY19* Total

Self-owned stores Phase II of Shenyang Nanjing Street Store Project: 25,400 sq.m. (Greenfield)

Hubei Jingmen Project: 35,000 sq.m. (Greenfield)

Phase I of Shenyang Nanjing Street Store Redevelopment Project: 26,300 sq.m. (Greenfield)

Sub-total 25,400 sq.m. 35,000 sq.m. 26,300 sq.m. 86,700 sq.m.

Managed Stores Sichuan Yibin Project: 27,000 sq.m.

Chongqing Tongliang Project: 26,200 sq.m.

Total 52,400 sq.m. 61,200 sq.m. 26,300 sq.m. 139,900 sq.m.

*The above schedule is for reference only and may be subject to change.

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Open Forum