Thistle Volume 1 2019
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VOLUME 1 2019 Mandarin Home-Grown Oriental: Innovation is Making London Property Reopens and a Difference MO Extends Global Footprint Art and A Capella to the Jardine International Fore at MINDSET Motors Pools Auto Expression Carnival in Expertise, Experience Hong Kong and Scale Innovation Begins at Home Digital projects make a difference in a host of key areas including customer engagement, improved cost efficiencies and increased productivity. Page 10 Contents Growth Strategy Mapped Out at Strategic Direction ‘Double Page 04 Happy’ Awards Night for Hactl Page 25 Jardine Cycle & Carriage Celebrates 120 Years of Teddy Love Fundraiser Southeast Asian Supports Mental Health Rehab Partnerships Programmes in Hong Kong Page 14 Page 29 The Pulse 04 Jardine International Motors Pools Auto Expertise, Experience and Scale livi: A New Venture in Virtual Banking Perspective 10 Home-Grown Innovation is Making a Difference Front Runners 14 Mandarin Oriental: London Property Reopens and MO Extends Global Footprint Astra Celebrates 62nd Birthday Branding Celebrating Success 22 Campaign Helps Hongkong Land Bags Prestigious Awards Maxim’s Group Strengthens its Reputation as a Community and Drive Record Environmental Leader Number of Grad For Our Future 26 Applications On the Up and Up – Strong Support for the 2018 MINDSET Challenge & Carnival Page 32 Jardine Aviation Academy – Flying High Our People 32 Branding Campaign Helps Drive Record Number of Grad Applications People in the Group Thistle Volume 1 | 2019 01 MD’s Desk Partner of Choice Providing clarity on our purpose, and the strategy charting our way forward was one of my main objectives when I addressed senior managers at the Strategic Direction meeting in March. Stronger, deeper As usual however, I opened with a review of the 2018 results which saw revenue (US$43 billion), underlying profit (US$1.7 relationships will billion), and earnings per share (US$4.53) all grow by 10% from 2017 to deliver a second consecutive year of solid growth. More lead, in many information about the results and our future strategy is detailed cases, to more in The Pulse section of this issue. To deliver on the strategy of building growth in core markets by collaboration and targeting opportunities arising from the growing middle-class populations in the region, we will focus harder on several areas, creative partnerships. especially relationships and what we need to do to continue to be the partner of choice in Asia. Finding new ways to add tangible value to our existing, and Executive Chairman and prospective new partners is critical and the recent announcement Managing Director of a Virtual Bank joint venture (JV) between Bank of China Hong Ben Keswick Kong, JD Digits, and ourselves, is a good example of this. You can read more about this milestone JV, what a Virtual Bank offers customers, and what each party brings to the table, in this edition of Thistle. Stronger, deeper relationships will lead, in many cases, to more collaboration and creative partnerships. This is another area we will strive to be more proactive in, whether with external players or internally across our businesses. The recent formation of Jardine International Motors (JIM) is an internal collaboration move that combines the experience, expertise and economies of scale of our Jardine Cycle & Carriage and Zung Fu Motors Group businesses. JIM aims to get closer to customers, enhance efficiencies and enable our auto business to be better placed to take on the disruptive technologies impacting the sector; and Ben Birks, who is leading JIM, talks more about these in The Pulse section. Home-grown innovation, especially digital solutions developed by our businesses and Innovate Jardines, are also profiled in the Perspective section. These advances, and many others covered in this issue, are forged on greater collaboration and co- operation; new ways of working; and being more outward- focused; and I look forward to showcasing more success stories in these respective areas in future issues. Ben Keswick Thistle Volume 1 | 2019 03 The Pulse Growth Strategy Mapped Out at Ben Keswick reviewed Group results and Strategic Direction shared future strategy and other insights. “Our strategy is to deliver growth through market- Mr Keswick said the Group’s traditional leading businesses in our core markets built around strengths – its reputation, diversity, and deep opportunities arising from Asia’s growing and market knowledge in Asia – mixed with a stronger increasingly prosperous middle class.” can-do, entrepreneurial spirit across all Group businesses offers a unique combination to drive This clear articulation of the Group growth strategy growth in the region. Delivering on strategy, he was one of the key messages delivered by Jardines highlighted three areas to focus harder on: Executive Chairman and Managing Director Ben relationships, speed, and people. Keswick in his speech at the Strategic Direction 2019 event in Hong Kong in March. Bolstering Relationships Expanding on this, he also outlined the Group’s target Regarding relationships, he said, “Our reputation opens growth rate in the near-future: “If we want to be doors in many markets across Asia so let’s work hard to perceived as a growth stock, we need to deliver an ensure that we continue to be the partner of choice annualised growth rate of at least 5% to 7% over the – adding tangible value – for a broader range of medium term.” prospective partners. Asia is Our Backyard “It is also important to work harder to make friends, and influence others at all levels – whether In terms of focus markets Mr Keswick said, “Our growth it’s customers, competitors, governments, tech prospects today, and in the future, are tied to Greater companies, start-ups, OEMs, suppliers, leading China and Southeast Asia – this is our backyard, it’s entrepreneurs or Asian families – to show them that where we have an advantage. In short, we believe we are open to talking, open for business, and open strongly in the future of Asia’s middle classes.” to exchanging strengths to help each other grow.” China’s middle-class opportunity is significant – the Driving a Momentum Shift 400 million middle-class citizens throughout the country today represent less than one-third of the total To position the Group for expansion in this ‘Asian population. And Southeast Asia’s middle class is Century’ – the century in which Asian economies are estimated to become two-thirds of its overall predicted to drive global growth – Mr Keswick called for population by 2030. a momentum shift across all businesses. 04 “We must improve our agility, speed, and ability to seek new Underlying Profit Contribution by Business opportunities in both the bricks-and-mortar and digital worlds. Some of you will have noticed that I didn’t say first mover because US$m 2018 Change 2017* there’s nothing wrong with being a fast follower – history shows Jardine Pacific 164 1% 162 that the second company often improves the original idea to enjoy Jardine Motors 175 -5% 184 the greatest success. The iPhone is a great example of this.” Jardine Lloyd Thompson 77 16% 67 People Hongkong Land 438 11% 397 A strong and vibrant internal culture was the third growth pillar Dairy Farm 278 6% 261 highlighted by Mr Keswick. Mandarin Oriental 45 26% 35 “Our people live and drive our culture every day. They are a critical Jardine Cycle & Carriage (ex. Astra) 102 24% 82 element of our business, and we, as a Group, must increase our Astra 465 19% 390 focus on the importance, and the needs of our people. Corporate & Other Interests (41) -19% (35) “We need to invest more in training. There’s a tendency to think of Underlying Profit 1,703 10% 1,543 training and reskilling as mostly for younger, or mid-level *Restated employees, but technology is forcing everyone – myself included – to take lifelong learning very seriously. Astra produced strong numbers especially in its heavy equipment and mining businesses. Hongkong Land also performed well with “Training is an area where the Group can add value in an impactful encouraging results from its property development activities. way – especially our talent and leadership programmes which are relevant for all businesses.” Jardine Cycle & Carriage produced better results in 2018 from both its Direct Motor Interests and its other regional Strategic Interests, including the first full year of dividend contribution 2018 Results Snapshot from Vinamilk in Vietnam. Financial Summary Dairy Farm delivered impressive results in Health and Beauty and Revenue Underlying Profit Underlying EPS Maxim’s, while IKEA and its convenience stores progressed well, but there was continued weakness in its Food business. It booked a significant charge for the restructuring of its supermarket and US$43bn US$1.7bn US$4.53 hypermarket businesses across Southeast Asia. A multi-year business transformation programme is now underway addressing + 10% + 10% + 10% various aspects of Dairy Farm’s businesses. Jardine Pacific, with its diverse group of pan-Asian businesses The Group enjoyed a solid year and performed well with a 10% rise – with strengths in construction and engineering – continued to in revenue, underlying profit, and earnings per share. make an important direct contribution to Jardines. Mandarin Oriental had a successful year in Hong Kong, and there is Profit by Geographies a growing momentum in both new hotel openings and a pipeline of Greater China’s contribution to underlying profit represented 56% future hotels around the world. of the Group total and Hong Kong remained the single largest contributor to the Group’s profit. Group businesses across Southeast Asia meanwhile, produced strong results to account for 40% of the Group’s total. Realising Our Digital Potential To oversee the development of Group digital plans and roll-out, Anne O’Riordan has been appointed to the newly created position of Group Director of Digital, Jardine Matheson Group, and will join the Jardine Matheson Limited Board.