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Page 1: ANTA AR09 PPT Final - TodayIR · ANTA store (sq.m.) 705,823 571,204 23.6% Total sales floor area of ANTA stores (sq.m.) 31 Dec 2009 31 Dec 2008 Change Remarkable store &product performance
Page 2: ANTA AR09 PPT Final - TodayIR · ANTA store (sq.m.) 705,823 571,204 23.6% Total sales floor area of ANTA stores (sq.m.) 31 Dec 2009 31 Dec 2008 Change Remarkable store &product performance

2

DisclaimerDisclaimer

The presentation is prepared by ANTA Sports Products Limited (the “Company”) and its subsidiaries (the “Group”) 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 Group. These forward-looking statements represent the Company’s expectations 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 at the date they are made, and it should notbe 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 Group’s results of operations are described in the sections of “Financial Overview”, “Business Overview” and “Prospects”.

Page 3: ANTA AR09 PPT Final - TodayIR · ANTA store (sq.m.) 705,823 571,204 23.6% Total sales floor area of ANTA stores (sq.m.) 31 Dec 2009 31 Dec 2008 Change Remarkable store &product performance

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AgendaAgenda

Financial & Operational Highlights

Financial Overview

Q & A

Agenda & Presenters

Market & Business Overview

Prospects

Page 4: ANTA AR09 PPT Final - TodayIR · ANTA store (sq.m.) 705,823 571,204 23.6% Total sales floor area of ANTA stores (sq.m.) 31 Dec 2009 31 Dec 2008 Change Remarkable store &product performance

FINANCIALFINANCIAL& & OPERATIONALOPERATIONALHIGHLIGHTSHIGHLIGHTS

Page 5: ANTA AR09 PPT Final - TodayIR · ANTA store (sq.m.) 705,823 571,204 23.6% Total sales floor area of ANTA stores (sq.m.) 31 Dec 2009 31 Dec 2008 Change Remarkable store &product performance

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Financial HighlightsFinancial Highlights

Special

Final

Interim

Dividends per share

���� 20.010.012.0���� 20.010.012.0

���� 39.9827.11,156.8Free cash inflow

���� 2.019.321.3Net profit margin

���� 3.620.123.7Operating profit margin

���� 2.140.042.1Gross profit margin

% points%%

%

%HK centsHK cents

%RMB centsRMB cents

RMB millionRMB million

���� 37.58.011.0

���� 39.835.9450.23Basic earnings per share

Change

���� 49.9930.71,394.8Operating profit

20082009

���� 39.8

���� 33.8���� 27.0

894.8

1,848.6

4,626.8

1,250.9Profit attributable to equity shareholders

2,472.9Gross profit

5,874.6Turnover

Enhanced profitability & healthy growth

Page 6: ANTA AR09 PPT Final - TodayIR · ANTA store (sq.m.) 705,823 571,204 23.6% Total sales floor area of ANTA stores (sq.m.) 31 Dec 2009 31 Dec 2008 Change Remarkable store &product performance

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Operational HighlightsOperational Highlights

���� 6.3%100.8107.1Average sales floor area per ANTA store (sq.m.)

���� 23.6%571,204705,823Total sales floor area of ANTA stores (sq.m.)

Change31 Dec 200831 Dec 2009

Remarkable store & product performance

* The comparative figures of eastern and northern regions have been restated as the Group has strategically moved Henan market from eastern region to northern region to balance the efforts on market development among the regions.

���� 147

���� 310

���� 924

Change

81228Kids series stores

31 Dec 2008

31 Dec 2009

33

5,667

343Sports Lifestyle series stores

6,591ANTA stores

���� 16.3%

���� 23.6%

���� 11.7%

���� 14.2%

ChangeANTA Stores No.

31 Dec 2008*

5,667

1,738

1,783

2,146

2,149Northern region

31 Dec 2009

6,591Total

1,991Southern region

2,451Eastern region

Page 7: ANTA AR09 PPT Final - TodayIR · ANTA store (sq.m.) 705,823 571,204 23.6% Total sales floor area of ANTA stores (sq.m.) 31 Dec 2009 31 Dec 2008 Change Remarkable store &product performance

FINANCIALFINANCIALOVERVIEWOVERVIEW

Page 8: ANTA AR09 PPT Final - TodayIR · ANTA store (sq.m.) 705,823 571,204 23.6% Total sales floor area of ANTA stores (sq.m.) 31 Dec 2009 31 Dec 2008 Change Remarkable store &product performance

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Turnover by ProductsTurnover by Products

%

Change

100.0

2.6

41.0

56.4

% of turnover % of turnoverRMB millionRMB million

���� 13.63.7173.0149.4Accessories

20082009

���� 27.0

���� 24.7

���� 31.5

4,626.8

1,932.2

2,521.6

100.05,874.6Total

41.82,409.9Apparel

54.53,315.3Footwear

� ASP � on both wholesale and retail levels

� Additional & better product offerings

� Expansion & enhancement of distribution network

Remarkable ���� in turnover due to:

Balanced strong growth of products

Page 9: ANTA AR09 PPT Final - TodayIR · ANTA store (sq.m.) 705,823 571,204 23.6% Total sales floor area of ANTA stores (sq.m.) 31 Dec 2009 31 Dec 2008 Change Remarkable store &product performance

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Turnover by RegionsTurnover by Regions

� Opening of new flagship stores in Xian & Zhengzhou, and renovation of flagship store in Shenyang

� Expansion of distribution network in Shandong and Henan with high population density

Notable ���� in turnover in northern region due to:

%

Change

Total

International(4) ���� 95.90.521.90.742.9

���� 27.0100.04,626.8100.05,874.6

99.3

26.3

35.5

37.5

% of turnover % of turnoverRMB millionRMB million

���� 36.824.41,129.31,544.9Northern region(3)

2008 (5)2009

���� 26.6

���� 27.9

���� 19.3

4,604.9

1,628.5

1,847.1

99.55,831.7China

35.22,083.1Southern region(2)

39.92,203.7Eastern region(1)

Notes: (1) Eastern region includes Hunan, Hubei, 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,

Henan, Shandong, Gansu, Ningxia, Qinghai, Tianjin, Xinjiang, Shaanxi, Liaoning, Heilongjiang and Jilin.

(4) International markets include Eastern Europe, Middle East and Southeast Asia.

(5) The comparative figures of eastern and northern regions have been restated as the Group has strategically moved Henan market from eastern region to northern region to balance the efforts on market development among the regions.

Notable growth in northern region

Page 10: ANTA AR09 PPT Final - TodayIR · ANTA store (sq.m.) 705,823 571,204 23.6% Total sales floor area of ANTA stores (sq.m.) 31 Dec 2009 31 Dec 2008 Change Remarkable store &product performance

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Healthy Growth in ASP & Sales Healthy Growth in ASP & Sales Volume; Effective Cost ControlVolume; Effective Cost Control

� Expansion of capacity in shoe sole factory

� Purchase of raw materials in advance, price fluctuations �

� Enjoy scale effect and mass purchase discount

Average Cost (Footwear) ����due to:

� Upgrade of brand and ANTA store image

� Opening of flagship stores at prime locations

� Widening of product range

Volume ���� due to:

� Consumers’ disposable income and demand on sportswear �

� Strengthened brand desirability

� Provision of more supports and services to distributors

ASP ���� due to:

Footwear ���� 1.8%

Apparel ���� 6.1%

Apparel ���� 17.6%

Footwear ���� 29.2% Footwear ���� 3.6%

Apparel ���� 4.5%

Page 11: ANTA AR09 PPT Final - TodayIR · ANTA store (sq.m.) 705,823 571,204 23.6% Total sales floor area of ANTA stores (sq.m.) 31 Dec 2009 31 Dec 2008 Change Remarkable store &product performance

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Impressive Growth in Impressive Growth in GP MarginGP Margin

� ASP for footwear and apparel � > changes in average costs of footwear & apparel

Gross profit margin expansion:

20082008 Change in GP margin

1,848.6

71.2

735.1

1,042.3

GP marginGP (RMB million)

���� 0.2% pts41.2%41.4%61.8Accessories

20092009

���� 2.1% pts

���� 1.0% pts

���� 3.1% pts

42.1%

39.0%

44.4%

40.0%2,472.9Overall

38.0%940.2Apparel

41.3%1,470.9Footwear

GP margin analysis by products

���� 2.1% pts

Page 12: ANTA AR09 PPT Final - TodayIR · ANTA store (sq.m.) 705,823 571,204 23.6% Total sales floor area of ANTA stores (sq.m.) 31 Dec 2009 31 Dec 2008 Change Remarkable store &product performance

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Continuous Growth inContinuous Growth inOP & NP MarginOP & NP Margin

� Tax provision �

Net profit margin ���� < operating

profit margin growth due to:

� A&P expenses � temporarily despite GP margin �

Operating profit margin ���� due to:

���� 3.6% pts ���� 2.0% pts

Page 13: ANTA AR09 PPT Final - TodayIR · ANTA store (sq.m.) 705,823 571,204 23.6% Total sales floor area of ANTA stores (sq.m.) 31 Dec 2009 31 Dec 2008 Change Remarkable store &product performance

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Operating Expenses Ratios &Operating Expenses Ratios &Effective Tax RateEffective Tax Rate

� Maintenance of R&D capabilities & quality control

R&D costs % remained constant due to:

� Further expansion of our management team

� More staff benefits

Staff costs % ���� 2.1% pts due to:

� Relatively more sponsorship budget to be reserved for 2010

A&P expenses % ���� 1.1% pts due to:

� Certain subsidiaries in the PRC which were entitled to either tax exemption or a lower preferential tax rate in 2008 have to be charged with higher preferential tax rate since 1 January 2009

� Non-taxable interest income derived from bank deposits in Hong Kong �

� Dividend withholding tax has been provided for the financial year

Effective tax rate ���� 6.3% pts due to:

Page 14: ANTA AR09 PPT Final - TodayIR · ANTA store (sq.m.) 705,823 571,204 23.6% Total sales floor area of ANTA stores (sq.m.) 31 Dec 2009 31 Dec 2008 Change Remarkable store &product performance

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Working Capital Working Capital ManagementManagement

� 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

Working capital improved due to:

In 366 days

In 365 days

3935Average trade payables turnover days

20082009

15

43

16Average trade receivable turnover days

38Average inventory turnover days

Assets / liabilities turnover days

Page 15: ANTA AR09 PPT Final - TodayIR · ANTA store (sq.m.) 705,823 571,204 23.6% Total sales floor area of ANTA stores (sq.m.) 31 Dec 2009 31 Dec 2008 Change Remarkable store &product performance

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Liquidity & Liquidity & Financial ResourcesFinancial Resources

-(400.0)Acquisition of subsidiaries

3,493.54,006.7Cash and bank balances (including pledged deposits)

3.41.5Others

62.0313.0Working capital movements

RMB millionRMB million

827.11,156.8Free cash inflow

(177.4)(133.4)CAPEX

(14.7)-Disposal of subsidiaries

1,015.81,688.7Operating cash inflow

25.3(83.5)Tax and interest

(34.1)13.2Non-cash adjustments

970.21,446.0Profit before tax

20082009

� Remarkable working capital management & outstanding operating results

� Strong free cash flow to support future business development

� No bank loans & bank interest expenses

Strong cash flow sustained due to:

Page 16: ANTA AR09 PPT Final - TodayIR · ANTA store (sq.m.) 705,823 571,204 23.6% Total sales floor area of ANTA stores (sq.m.) 31 Dec 2009 31 Dec 2008 Change Remarkable store &product performance

MARKETMARKET& & BUSINESSBUSINESSOVERVIEWOVERVIEW

Page 17: ANTA AR09 PPT Final - TodayIR · ANTA store (sq.m.) 705,823 571,204 23.6% Total sales floor area of ANTA stores (sq.m.) 31 Dec 2009 31 Dec 2008 Change Remarkable store &product performance

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Market ReviewMarket Review

Page 18: ANTA AR09 PPT Final - TodayIR · ANTA store (sq.m.) 705,823 571,204 23.6% Total sales floor area of ANTA stores (sq.m.) 31 Dec 2009 31 Dec 2008 Change Remarkable store &product performance

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Brand & ProductBrand & ProductDiversification Diversification StrategStrategyy

High-end Market

Mass Market

Low-end MarketNot Targeted

The Group has reinforced the diversification strategies to capture the opportunities in sportswear market segment

SportsLifestyle

KidsPerformance-based

COC, Basketball, Tennis & Running

Page 19: ANTA AR09 PPT Final - TodayIR · ANTA store (sq.m.) 705,823 571,204 23.6% Total sales floor area of ANTA stores (sq.m.) 31 Dec 2009 31 Dec 2008 Change Remarkable store &product performance

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Integrated Sponsorship Integrated Sponsorship ResourcesResources

Basketball

� Men/Women’s ANTA National Volleyball League, Men/Women’s ANTA National Grand Prize Cup & Men/Women’s ANTA National Championship Cup

� ANTA Beach Volleyball Championship Cup

� ANTA CCTV Sports Personality

� Wang Hao

Others

� Dalian International Marathon

� Yangzhou International Half-Marathon

� Chen RongMarathon

� China Tennis Grand Prix, “Swings for the Star” Junior Tennis Camp, “Tour 2016”Junior Tennis Tournament & the University Tennis Challenge

� Zheng Jie

� Jelena JankovicTennis

� CBA

� CUBA

� HOOPARK

� Luis Scola

� Tang Zhengdong, Wang Lei, Li Xiaoxu, Zhou Peng & Wu Ke

� Chinese Olympic Committee & Chinese Sports Delegation

� 5 Chinese National Water Sports Teams

Sports Sponsorship

� Yang Yang, Han Xiaopeng, Li Nina, Shen Xue & Zhao Hongbo, Pang Qing & Tong Jian, Zhang Hao & Zhang Dan & Zhou Yang

Athletes Endorsement

Olympics

Page 20: ANTA AR09 PPT Final - TodayIR · ANTA store (sq.m.) 705,823 571,204 23.6% Total sales floor area of ANTA stores (sq.m.) 31 Dec 2009 31 Dec 2008 Change Remarkable store &product performance

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Chinese Olympic CommitteeChinese Olympic Committee

Outfitted Olympic heroes in the National Day parade in ANTA’s sportswear

ANTA Sports sponsored outfit for the CSD in major international competitions in 2009

A design forum was held as a major part of the “CSD’s 2010 Guangzhou Asian Games Outfit Design Competition”

ANTA Sports signed renowned winter sports athletes & rolled out Winter Olympics TVC

ANTA Sports became the sportswear sponsor for 5 national water sports teams

Sponsored 23rd

Olympic Day Run

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BasketballBasketball

LiXiaoxu

Zhou Peng

LuisScola

ANTA Sports’ endorsed basketball elites

CBA – top-tier professional basketball league in China

HOOPARK – CCTV5’s popular basketball infotainment program

CUBA – influential university basketball league in China

Basketball sponsorship portfolio

Professional products to provide maximum protection & comfort

Page 22: ANTA AR09 PPT Final - TodayIR · ANTA store (sq.m.) 705,823 571,204 23.6% Total sales floor area of ANTA stores (sq.m.) 31 Dec 2009 31 Dec 2008 Change Remarkable store &product performance

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TennisTennis

“Dare to be Perfect”promotional campaign for the endorsed players Zheng Jie & Jelena Jankovic launched together with new tennis products

“Zheng Jie” & “JJ”tennis series targeting female consumers

ANTA Sports outfits the Tennis Duo with designated tennis sportswear in major competitions & fans meeting

Page 23: ANTA AR09 PPT Final - TodayIR · ANTA store (sq.m.) 705,823 571,204 23.6% Total sales floor area of ANTA stores (sq.m.) 31 Dec 2009 31 Dec 2008 Change Remarkable store &product performance

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RunningRunning

Sponsored DalianInternationalMarathon & YangzhouInternational Half-Marathon

Integrated marketing campaign to promote Dalian InternationalMarathon & related product series

Launched 170-gram “Hydrogen Running Shoes II”to echo promotion for Dailan InternationalMarathon

New A-Jelly technology enhanced the anti-compression & resilience capability of ANTA running shoes

Page 24: ANTA AR09 PPT Final - TodayIR · ANTA store (sq.m.) 705,823 571,204 23.6% Total sales floor area of ANTA stores (sq.m.) 31 Dec 2009 31 Dec 2008 Change Remarkable store &product performance

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Sports Lifestyle SeriesSports Lifestyle Series

Crossover with popular teens comic “Hezi”

Number of stores grew from 33 to 343, a net increase of 310

Black logo, unique store image & stylish products to reflect personal style

Page 25: ANTA AR09 PPT Final - TodayIR · ANTA store (sq.m.) 705,823 571,204 23.6% Total sales floor area of ANTA stores (sq.m.) 31 Dec 2009 31 Dec 2008 Change Remarkable store &product performance

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Kids Sportswear SeriesKids Sportswear Series

Protective kids sportswear that targets children aged 8-14

Orange logo, vivid image & stylish products

Number of stores grew from 81 to 228, a net increase of 147

Page 26: ANTA AR09 PPT Final - TodayIR · ANTA store (sq.m.) 705,823 571,204 23.6% Total sales floor area of ANTA stores (sq.m.) 31 Dec 2009 31 Dec 2008 Change Remarkable store &product performance

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FFILAILA

� Acquired FILA brand in the PRC, Hong Kong & Macau to target the high-end sportswear market

� Operates wholesale business in the PRC & retail business in Hong Kong & Macau for Fila products

� Synergy in supply chain & network management expertise

Number of Fila outlets:� Approx. 50 in the PRC� Approx. 10 in Hong Kong &

Macau

Page 27: ANTA AR09 PPT Final - TodayIR · ANTA store (sq.m.) 705,823 571,204 23.6% Total sales floor area of ANTA stores (sq.m.) 31 Dec 2009 31 Dec 2008 Change Remarkable store &product performance

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Nationwide Distribution NetworkNationwide Distribution Network

� Managed 6,591 ANTA stores (including 12 flagship stores) through more than 50 distributors

� Net increase of 924 stores (� 16.3%)

Page 28: ANTA AR09 PPT Final - TodayIR · ANTA store (sq.m.) 705,823 571,204 23.6% Total sales floor area of ANTA stores (sq.m.) 31 Dec 2009 31 Dec 2008 Change Remarkable store &product performance

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Effective Store ManagementEffective Store Management

Strong support system

� 3 regional centres & 6 branch offices

� Continuous guidance and training� Structured operational procedures� ERP system & weekly reports� Timely sharing of information &

feedback� Mysterious Shoppers Survey

Outstanding store image

� Standardised display guidelines� Examine store opening proposals,

store image & promotional events� 875 stores refurbished with better

store image

COC licensed products series

Basketball sportswear series

Tennis sportswear series

Kids sportswear series

Sports Lifestyle sportswear series

Running sportswear series

Page 29: ANTA AR09 PPT Final - TodayIR · ANTA store (sq.m.) 705,823 571,204 23.6% Total sales floor area of ANTA stores (sq.m.) 31 Dec 2009 31 Dec 2008 Change Remarkable store &product performance

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Advanced R&D CapabilitiesAdvanced R&D Capabilities

Recognition received in 2009

� First sportswear company accredited as “National Enterprise Technology Centre”

� Won Gold Award in “Footwear Design Competition 2009 – Professional Category, Sports Leisure Shoes”

Unveiled A-Jelly technology

� Strong anti-compression & resilience ability

� Bio-degradable material able to sustain impalement for excellent protection

Newly-introduced styles in 2009:2,300 footwear

3,400 apparel

2,000 accessories

Page 30: ANTA AR09 PPT Final - TodayIR · ANTA store (sq.m.) 705,823 571,204 23.6% Total sales floor area of ANTA stores (sq.m.) 31 Dec 2009 31 Dec 2008 Change Remarkable store &product performance

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Stringent QualStringent Qualiity Control &ty Control &Supply Chain ManagementSupply Chain Management

� Organise quarterly trade fairs in advance� Drive for product quality & workflow

optimisation

Quality control

� ISO international testing standards� Simultaneous raw material check � On-site examination� Assist national committees on sportswear

standards setting

�Obtain “CTC 2009 Certificate”, whichrecognises our efforts in QC management

Supply chain & operational management

� Enhance internal management & cost control systems

� Improve cost efficiency & responsiveness to market changes

Page 31: ANTA AR09 PPT Final - TodayIR · ANTA store (sq.m.) 705,823 571,204 23.6% Total sales floor area of ANTA stores (sq.m.) 31 Dec 2009 31 Dec 2008 Change Remarkable store &product performance

31

Production BasesProduction Bases

In-house production ratio:Approx. 41.9 % of footwear and 17.2% of apparel sold

Page 32: ANTA AR09 PPT Final - TodayIR · ANTA store (sq.m.) 705,823 571,204 23.6% Total sales floor area of ANTA stores (sq.m.) 31 Dec 2009 31 Dec 2008 Change Remarkable store &product performance

PROSPECTSPROSPECTS

Page 33: ANTA AR09 PPT Final - TodayIR · ANTA store (sq.m.) 705,823 571,204 23.6% Total sales floor area of ANTA stores (sq.m.) 31 Dec 2009 31 Dec 2008 Change Remarkable store &product performance

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ProspectsProspects

Sponsorship & endorsement Market & product diversification

ANTA Sports Lifestyle

ANTA – Official Sponsor of Equipment &

Sportswear for the CUBAANTA – Sole Equipment & Sportswear

Sponsor for the CBA

Sole Sponsor of Equipment & Sportswear

for Dalian International Marathon

Page 34: ANTA AR09 PPT Final - TodayIR · ANTA store (sq.m.) 705,823 571,204 23.6% Total sales floor area of ANTA stores (sq.m.) 31 Dec 2009 31 Dec 2008 Change Remarkable store &product performance

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ProspectsProspects

Distribution network expansion

Optimisation of supply chain & operational management

Enhancement of R&D & QC capabilities

ANTA stores: 7,200

Kids Sportswear

series stores: 300

Sports Lifestyle

series stores: 600

Store Expansion Plan in 2010

Page 35: ANTA AR09 PPT Final - TodayIR · ANTA store (sq.m.) 705,823 571,204 23.6% Total sales floor area of ANTA stores (sq.m.) 31 Dec 2009 31 Dec 2008 Change Remarkable store &product performance

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Q&AQ&A

Thank YouThank You

ANTA Sports Products Limited Hill and Knowlton Asia Limited

IR Department

Tel: (852) 2116-1660 (852) 2894-6283

Fax: (852) 2116-1590 (852) 2576-1990

E-mail: [email protected] / [email protected] [email protected]