anta ar08 ppt yin - todayir · anta stores (sq.m.) no. of anta stores total sales floor area of...
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![Page 1: ANTA AR08 PPT yin - TodayIR · ANTA stores (sq.m.) No. of ANTA stores Total sales floor area of 571,204 433,843 31.7% ANTA stores (sq.m.) 5,667 4,716 951 2008 2007 Change Remarkable](https://reader033.vdocuments.mx/reader033/viewer/2022053004/5f0846537e708231d4213343/html5/thumbnails/1.jpg)
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DisclaimerDisclaimer
The presentation is prepared by ANTA Sports Products Limited (the “Company”) and is solely for the purpose of corporate communication and general reference only. The presentation is not intended as an offer to sell, or to solicit an offer to buy or to form any basis of investment decision for any class of securities of the Company in any jurisdiction. All such information should not be used or relied on without professional advice. The presentation is a brief summary in nature and do not purport to be a complete description of the Company, its business, its current or historical operating results or its future business prospects.
This presentation is provided without any warranty or representation of any kind, either expressed or implied. The Company specifically disclaim all responsibilities in respect of any use or reliance of any information, whether financial or otherwise, contained in this presentation.
This presentation contains certain forward-looking statements with respect to the financial condition, results of operations and business of the Company. These forward-looking statements represent the Company’sexpectations or beliefs concerning future events and involve known and unknown risks and uncertainty that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Certain statements, such as those that include the words “potential”, “estimated”, “expects”, “anticipates”, “objective”, :intends”, “plans”, “believes”, “estimates”, and similar expressions or variations on such expressions may be considered “forward-looking statements”.
Forward-looking statements involve inherent risks and uncertainties. Readers should be cautioned that a number of factors could cause actual results to differ in some instances materially, from those anticipated or implied in any forward-looking statement. Forward-looking statements speak only as of the date they are made, and it should not be assumed that they have been reviewed or updated in the light of new information or future events. Trends and factors that are expected to affect the Company’s results of operations are described in the “Business Review and the “Financial Review”.
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AgendaAgenda
Financial and Operational Highlights
Financial Overview
Q and A
Milestones
Market and Business Overview
Prospects
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PresentersPresenters
Mr. Lai ShixianMr. Paul Ling Ms. Claudia Lo
COOCFOVP –
Investor Relations
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Recognition in 2009� “Youth Global
Leader” Honoree
Recognition in 2009� “Youth Global
Leader” Honoree
MilestonesMilestones
Distribution Network� Number of ANTA stores
reached the 5,000 milestone and 9 flagship stores were opened
� ANTA’s brand exhibition hall and image store were set up
Distribution Network� Number of ANTA stores
reached the 5,000 milestone and 9 flagship stores were opened
� ANTA’s brand exhibition hall and image store were set up
Business Development� Trendy sneaker and Kids
sportswear business successfully launched
� Disposed of the international branded sportswear retail business
Business Development� Trendy sneaker and Kids
sportswear business successfully launched
� Disposed of the international branded sportswear retail business
Market Position� ANTA’s footwear has
been the lead in the “composite index on market share of sports footwear in China” for seven consecutive years from 2001 to 2007
Market Position� ANTA’s footwear has
been the lead in the “composite index on market share of sports footwear in China” for seven consecutive years from 2001 to 2007
Recognitions in 2008� “Ernst & Young
Entrepreneur of the Year China 2008”
� “Certificate of Excellence –IR Award 2008”
� “The Most Benevolent Foreign Enterprise – China Charity Award 2008”
Recognitions in 2008� “Ernst & Young
Entrepreneur of the Year China 2008”
� “Certificate of Excellence –IR Award 2008”
� “The Most Benevolent Foreign Enterprise – China Charity Award 2008”
Brand Equity� The “CBA ANTA Stars
Training Camp” and “China Tour” were held
� ANTA basketball shoes were showcased in the “Rookie Challenge” and Beijing Olympics 2008
Brand Equity� The “CBA ANTA Stars
Training Camp” and “China Tour” were held
� ANTA basketball shoes were showcased in the “Rookie Challenge” and Beijing Olympics 2008
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Financial HighlightsFinancial Highlights
���� 34.8% pts33.8%Dividend payout ratio
--8.0Special dividend per share (HK cents)
RMB millionRMB million
���� 25.0%8.010.0Final dividend per share (HK cents)
���� 41.9%25.335.9Basic earnings per share (RMB cents)
Change
���� 94.2%479.3930.7Operating profit
2007*2008
���� 66.4%
���� 84.9%
537.8
999.9
2,988.7
894.8Profit attributable to shareholders
1,848.6Gross profit
4,626.8Turnover
Strong profitability and sustainable financial growth
���� 1.3% pts18.0%19.3%Net profit margin
Gross profit margin
���� 4.1% pts16.0%Operating profit margin
33.5%
Change2007*2008
* Restated as a result of separate disclosure of operation discontinued in 2008 (“Restated”)
40.0%
20.1%
���� 6.5% pts
68.6%
���� 54.8%
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Operational HighlightsOperational Highlights
���� 9.6%92.0Average sales floor area of ANTA stores (sq.m.)
No. of ANTA stores
���� 31.7%433,843571,204Total sales floor area of ANTA stores (sq.m.)
���� 9514,7165,667
Change20072008
Remarkable store and product performance
35.658.635.355.2Average cost per unit sold (RMB)
33.9 ���� 43.6���� 46.423.618.326.8Volume sold (Million pairs/pieces)
Apparel
53.6
Apparel
57.0
Apparel FootwearFootwearFootwear
Average selling price#
(RMB) 88.094.0
Change (in %)20072008
# At wholesale price
100.8
���� 6.8 ���� 6.3
���� 5.8 ���� 0.8
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Financial OverviewFinancial Overview
Luis ScolaANTA’s endorsed basketball player,
Spanish League and
FIBA American Cup MVP,
Athens Olympics 2004 gold medalist
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Turnover by ProductsTurnover by Products
Balanced strong growth of products
(in %)
Change
100.0
3.7
41.8
54.5
% of turnover % of turnoverRMB millionRMB million
���� 45.93.9118.6173.0Accessories
2007*2008
���� 54.8
���� 52.9
���� 56.9
2,988.7
1,263.4
1,606.7
100.04,626.8Total
42.31,932.2Apparel
53.82,521.6Footwear
Remarkable increase in ANTA brand’s turnover due to:� Increase in average selling prices on both wholesale and retail levels� Additional product offerings� Expansion of distribution network
* Restated
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Turnover by RegionsTurnover by Regions
(in %)
Change
Total
International ���� 14.80.925.70.521.9
���� 54.8100.02,988.7100.04,626.8
99.5
21.0
35.2
43.3
% of turnover % of turnoverRMB millionRMB million
���� 81.517.9535.3971.4Northern region
2007*2008
���� 55.4
���� 34.7
���� 64.5
2,963.0
1,208.6
1,219.1
99.14,604.9China
40.41,628.5Southern region
40.82,005.0Eastern region
Notable increase in turnover in eastern & northern regions
Strong growth of turnover in eastern and northern regions due to:� Opening of new flagship stores in Beijing, Shanghai, Wuhan, Changsha and Hefei� Expansion of distribution network in Hunan, Shandong, Hubei and Henan with large
population
Notes: (1) Eastern region includes Hunan, Hubei, Henan, Anhui, Jiangxi, Zhejiang, Jiangsu and Shanghai.(2) Southern region includes Guangdong, Guangxi, Fujian, Hainan, Guizhou, Yunnan, Sichuan, Chongqing and Tibet.(3) Northern region includes Beijing, Hebei, Inner Mongolia, Shanxi, Shandong, Gansu, Ningxia, Qinghai, Tianjin, Xinjiang,
Shaanxi, Liaoning, Heilongjiang and Jilin.
* Restated
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ASP & Volume GrowthASP & Volume Growth
ASP growth (wholesale price) due to:� Increase in consumers’ disposable
income and demand on sportswear� Strengthened brand desirability� Provision of more supports and services
to distributors
Volume growth due to:� Upgrade of brand and ANTA store image � Opening of flagship stores at prime
locations� Widening of product range
Significant growth in ASP and sales volume
� 6.8%
� 6.3%
� 43.6%
� 46.4%
ASP Growth (Wholesale Price) Volume Growth
* Restated * Restated
* *
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Cost Efficiency & Cost BreakdownCost Efficiency & Cost Breakdown
(in %)
Change
OEM/ODM
���� 39.7100.01,988.8100.02,778.2Total
Sub-contracting charges
Raw materials
Overhead
Direct labour
Raw materials
Outsourced production
���� 9.611.0219.68.6240.6
���� 61.339.9793.546.11,279.9
15.0
5.5
5.5
19.3
% of total cost of sales
% of total cost of sales
RMB millionRMB million
���� 30.15.9117.2152.5
2007*2008
���� 48.7
���� 25.9
���� 17.3
280.0
120.9
457.6
14.1416.3Sub-contracting arrangement
6.1152.2
23.0536.7Self-production
Cost saving due to:� Shoe sole factory running in full capacity,
achieving scale effect� Purchase of raw materials in advance,
reducing price fluctuations� Purchase of raw materials together with OEM
suppliers, enjoying mass-purchase discount
� 5.8%
� 0.8%
* Restated
Effective cost control
*
Average Cost Per Unit Sold
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Outstanding Store PerformanceOutstanding Store Performance
2,9634,605Turnover+ (RMB million)
367,593505,268Sales floor area (sq.m.)
Change
679,587
8,061
84.3
4,360
Per store (RMB)
Per sq.m. (RMB)
Sales floor area per store (sq.m.)
No. of ANTA stores
881,171
2007*2008
9,114Weighted average sales contribution#
96.7
5,226Weighted average
Outstanding store performance due to upgrade and expansion of distribution network
* Restated# At ex-factory prices + Excluding international sales
No. of Stores and Total Sales Floor Area of Stores
���� 19.9%
���� 14.7%
���� 37.5%
���� 13.1%
���� 55.4%
���� 29.7%
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Margin AnalysisMargin Analysis
Impressive growth in gross profit margin
Gross profit and gross profit margin breakdown by product
Change in GP margin
40.0%
41.2%
38.0%
41.3%
GP margin GP marginGP (RMB million)GP (RMB million)
���� 5.4% pts35.8%42.471.2Accessories
2007*2008
���� 6.5% pts
���� 4.5% pts
999.9
422.8
534.7
33.5%1,848.6Overall
33.5%735.1Apparel
33.3%1,042.3Footwear
Gross profit margin expansion:� Increase in average selling prices for
footwear and apparel > changes in average costs of footwear and apparel
� 6.5% pts
*
Gross Profit Margin
* Restated
���� 8.0% pts
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Margin Analysis (contMargin Analysis (cont’’d)d)
Continuous growth in operating profit margin and net profit margin
Drive for operating profit margin ���� :
� GP margin gain partially offset by the increase of A&P expenses for the Olympics campaign and the expansion and enhancement of distribution network
Net profit margin growth < operatingprofit margin growth due to:� Decrease in interest income� IPO interest = non-recurring item
� 4.1% pts � 1.3% pts
* Restated * Restated
Operating Profit/(Loss) Margin Net Profit/(Loss) Margin
* *
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Operating Expenses RatiosOperating Expenses Ratios
R&D costs(as a % of cost of sales)
A&P expenses (as a % of turnover)
Staff costs(as a % of turnover)
* **
* Restated * Restated * Restated
� 1.4% pts � 0.5% pts � 0.1% pts
A&P expenses ���� due to: � Launching Olympic
campaigns
R&D costs ���� due to: � Enhancing R&D
capabilities
Staff costs remainedconstant despite thestrengthening of qualityand expansion of ourmanagement team
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Effective Tax Rate &Effective Tax Rate &Working Capital ManagementWorking Capital Management
In 365 days
In 366 days
5139Average trade and bills payables turnover days
20072008
14
44
15Average trade receivable turnover days
43Average inventory turnover days
Effective tax rate Asset / liabilities turnover ratios
* Restated
*� Sound control of inventory level � Healthy financial positions of our
distributors� Acceleration of the payment of payables
so as to obtain preferential terms on mass purchases
� 2.8% pts
Effective tax rate ���� because:� Certain subsidiaries in the PRC are
entitled to preferential tax treatments� Interest income derived from bank
deposits in Hong Kong is non-taxable
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Liquidity and Financial ResourcesLiquidity and Financial Resources
Strong Cash Flows
0.13.4Sales proceeds of fixed assets
(335.6)62.0Working capital movements
RMB millionRMB million
(24.8)Free cash inflow/(outflow)
(264.5)(177.4)CAPEX
-(14.7)Disposal of subsidiaries
239.6Operating cash inflow
68.925.3Tax and interest
(92.8)(34.1)Non-cash adjustments
599.1962.6Profit before tax
2007*2008
* Restated
1,015.8
827.1
� Remarkable improvement in working capital and outstanding operating results� Strong free cash flow supports high dividend payout ratio� No bank loans and interest expenses
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Strong Financial PositionsStrong Financial Positions
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Concentrations and CAPEXConcentrations and CAPEX
% of total sales% of total sales
37.0%33.7%Five largest customers in aggregate
12.1%11.9%The largest customer
2007*2008Major customers
% of total purchases% of total purchases
30.2%26.7%Five largest suppliers in aggregate
10.7%6.1%The largest supplier
2007*2008Major suppliers
* Restated
* Restated
� Expansion of footwear production facilities in Jinjiang� Development of new information management system� Establishment of an operational center in Xiamen
CAPEX in 2009 = RMB244.9 million
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Wang HaoANTA’s endorsed table tennis player, Beijing Olympics 2008 gold medalist
of table tennis men’s team
Market and Market and Business OverviewBusiness Overview
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Market ReviewMarket Review
China will maintain a “stable and relatively fast” economic growthSound potential in various sportswear market segments
Challenges:� Global financial crisis and economic
slowdown� Increase of unemployment rate and
decrease of income level� More cautious spending� Fast changing customers’ tastes and
preferences
Opportunities:� Fiscal and monetary policies to boost
economic growth� Increase in government spending to
create more jobs as well as to stabliseincome level
� Domestic demand stimulus plans to encourage consumption
� Sporting events promotion, raised health awareness and sport participation driving higher demand for sportswear
� Increasing demand for professional, stylish and value-for-money sportswear
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Competitive AdvantagesCompetitive Advantages
� Strong in-house production capabilities
� Stratified management system of suppliers
� Flexible OEM/ODM arrangement
� Diversified sponsorship resources
� Brand internationalisation
� Nationwide brand recognition and awareness
� Quick response to market demand
� Wide spread of our network
� Effective management of distributors
� Wide range of products
� Drive for national quality standards setting
� Strong alliance with designers and R&D institutes
Strong Brand Equity
R&D and Design Capabilities
Nationwide Distribution Network
Supply Chain Management
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Integrated Sponsorship ResourcesIntegrated Sponsorship Resources
Basketball: CBA
Table Tennis Volleyball
Basketball: International
MarathonANTA CCTV Sports
Personality
� Introduction of Luis Scola in China
� Scola’s designated basketball shoes
� Dalian International Marathon
� Potential CBA players
� CBA ANTA Stars Training Camp
� China Table Tennis Super League � ANTA National Volleyball League
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MultiMulti--dimensional dimensional Advertising ExposureAdvertising Exposure
Olympics promotional campaigns
Promotional campaigns for endorsed players
Interaction with consumers
� “Fuel Up China”
� “My Tough Backbone is Made of China Spirit”
� China Tour for Luis Scola and Steve Francis in August 2008
� “Harder Training brings brighter flame”
�� Online blogs and forums enhanced interaction with consumers
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Nationwide Distribution NetworkNationwide Distribution Network
���� 20.2%
���� 21.0%
���� 19.7%
���� 19.9%
Change Refurbished2008
5,667
1,524
1,783
2,360
Expanded
1,567
479
422
666
1952141,259Northern region
Consolidated2007
787
235
357
616
128
274
4,716Total
1,489Southern region
1,968Eastern region
Rapid growth of distribution network Distribution & retail network
N/A33
20072008
N/A
4,716
81
5,667
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Effective Store ManagementEffective Store Management
Smarter ANTA store image
Effective management of distributors and franchisees
� Organised “Display Management Competition” to improve ANTA store display
� Launched the fifth generation stores of better decoration and product display setting
� “Distributors Management Guidelines” to standardiseoperational procedures
� Incentive discounts offered under the stratified management system
� Introduced “Mysterious Shoppers” assessments� Provided frequent trainings for distributors and
franchisees to enhance inventory management and customer service
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Strong R&D and Design CapabilitiesStrong R&D and Design Capabilities
Fruitful R&D and design rewards
� “Hydrogen Running Shoes” - feather light but supreme shock absorbance
� Breathable footwear and apparel with “A-Cool” technology
� > 2,200 and 2,500 new footwear and
apparel styles designed by local and international designers
� “Scola II” basketball shoes designed by renowned sportswear designers
� Basketball shoes with “A-Cozel II” and “A-Core II”technology, enhancing the shock resistance capabilities and comfortableness
� “A-Form Running Shoes” - endurant and protective
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Stringent Quality ControlStringent Quality Control
Test the bending and anti-torsion ability of the footwear’s forepart
Shoe torsion resistance and flexibility measurement
Test the durability and safety of sports apparel
Apparel color and formaldehyde test
Test the fatigue resistance and durability
Fatigue and low temperature test
Test the permeability and comfort inside the shoe
Footwear comfort test
ContentsQuality control measures
� Fatigue resistance and durability test for footwear
� Measuring the feet size, body movement and stress burden of Steve Francis by advanced intruments
� Steve Francis tested his designated basketball shoes at the ANTA’sSports and Science Lab
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Supply Chain ManagementSupply Chain Management
Extensive in-house production scale
Stratified suppliers management system
� Proportion of self-production in 2008:
Footwear 50.0%; apparel 11.7%
� Conducted quarterly reviews to boost suppliers’performance and quality
� Collective purchase of raw materials to enjoy mass-purchase discounts
� Established the “Suppliers’ Quality Evaluation Handbook”and the “Suppliers’ Incentive Scheme” for suppliers
� Introduced more ODM to reinforce the design capabilities
ChangtingApparel produced: approx. 2.2M pcs
XiamenApparel produced: approx. 2.3M pcs
AnhaiShoe sole produced: approx. 9.3M pcs
Chendai and ChidianFootwear produced: approx. 12.6M pairs(23 footwear production lines and 3 footwear production lines in the trial stage)
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Jelena JankovicANTA’s endorsed tennis player,
one of the world’s top
female singles tennis players
ProspectsProspects
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ProspectsProspects
Market and products diversification
� Favourable response from the penetration into Kids sportswear and Trendy sneaker segments - the Group will continue to tap potential market segments
Sponsorship and endorsement
� Jelena Jankovic, our endorsed tennis player
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Prospects (contProspects (cont’’d)d)
Further penetration of distribution network
Enhancement of R&D and quality control capabilities
Optimisation of supply chain management
Store Expansion Planin 2009:ANTA Stores� �from 5,667 to 6,200Kids Series Stores� �from 81 to 200Trendy Sneaker Stores� �from 33 to 200
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Thank YouThank You
ANTA Sports Products Limited Hill and Knowlton Asia Limited
Investor Relations Department
Tel: (852) 2116-1660 (852) 2894-6283
Fax: (852) 2116-1590 (852) 2576-1990
E-mail: [email protected] / [email protected] [email protected]