anta ar11 ppt e final - todayir · credit limit for launching 6th generation store layout...
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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 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”.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 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 Group’s results ofoperations are described in the sections of “Financial and Operational Highlights”, “Financial Overview”, “Market and Business Overview” and “Prospects”.
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FINANCIAL & FINANCIAL & OPERATIONALOPERATIONALOPERATIONALOPERATIONALHIGHLIGHTSHIGHLIGHTS
Financial HighlightsFinancial Highlights
2011 2010 Changes
RMB million RMB million %
Turnover 8,904.8 7,408.3 ���� 20.2
Gross profit 3,762.4 3,170.6 ���� 18.7Gross profit 3,762.4 3,170.6 ���� 18.7
Profit from operations 2,011.5 1,736.8 ���� 15.8
Profit attributable to equity shareholders 1,730.1 1,551.1 ���� 11.5
Free cash inflow 1,219.5 1,269.0 ���� 3.9
RMB cents RMB cents %
Basic earnings per share 69.37 62.21 ���� 11.5
HK cents HK cents %
Dividends per share - Interim 26 20 Dividends per share - Interim 26
Final 26 25
52 45 ���� 15.6
% % % points
Gross profit margin 42.3 42.8 ���� 0.5
Operating profit margin 22.6 23.4 ���� 0.8
Margin of profit attributable to equity shareholders 19.4 20.9 ���� 1.5
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Network ExpansionNetwork Expansion
ANTA Stores No.
31 Dec 2011
31 Dec 2010
Changes
Eastern
31Dec 2011
31 Dec 2010
Changes
Eastern region
2,602 2,743 ���� 141
Southern region
2,403 2,268 ���� 135
Northern region
2,773 2,538 ���� 235
Total 7,778 7,549 ���� 229
ANTA stores
7,778 7,549 ���� 229
Sports Lifestyle series stores
887 749 ���� 138
Kids series stores
632 383 ���� 249
31 Dec 2011 31 Dec 2010 Changes
Total sales floor area of ANTA stores
959,000 sq. m. 872,000 sq. m. ���� 10.0%
Average sales floor area per ANTA store
123 sq. m. 116 sq. m. ���� 6.0%
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FINANCIALFINANCIALOVERVIEWOVERVIEW
TurnoverTurnover
Turnover by product
2011 2010 Changes
RMB million
% of turnover
RMB million
% of turnover %
Footwear 4,334.8 48.7 3,824.9 51.6 ���� 13.3
���� in turnover due to:
� ASP increase
� Additional product Footwear 4,334.8 48.7 3,824.9 51.6 ���� 13.3
Apparel 4,288.4 48.2 3,333.0 45.0 ���� 28.7
Accessories 281.6 3.1 250.4 3.4 ���� 12.5
Total 8,904.8 100.0 7,408.3 100.0 ���� 20.2
Turnover by region
2011 2010 Changes
RMB million
% of turnover
RMB million
% of turnover %
Eastern (1) 2,914.3 32.7 2,647.6 35.8 ���� 10.1
Southern (2) 3,291.6 37.0 2,559.5 34.5 ���� 28.6
� Additional product offerings
� Distribution network expansion
More balanced among regions to lessen the seasonality effect on our supply-chain
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Northern (3) 2,595.3 29.1 2,118.9 28.6 ���� 22.5
China 8,801.2 98.8 7,326.0 98.9 ���� 20.1
Overseas markets (4) 103.6 1.2 82.3 1.1 ���� 25.9
Total 8,904.8 100.0 7,408.3 100.0 ���� 20.2
(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 & Jilin.
(4) Overseas markets include Eastern Europe, Middle East and Southeast Asia.
GP MarginGP Margin
GP by product
2011 2010 Changes in GPGP (RMB million)
Footwear 1,848.2 1,706.6 ���� 8.3%
GP Margin ���� 0.5% pts to 42.3%
GP margin Footwear 1,848.2 1,706.6 ���� 8.3%
Apparel 1,801.0 1,358.7 ���� 32.6%
Accessories 113.2 105.3 ���� 7.5%
Overall 3,762.4 3,170.6 ���� 18.7%
GP margin by product
2011 2010 Changes in GP marginGP margin
Footwear 42.6 44.6 ���� 2.0%pts
Apparel 42.0 40.8 ���� 1.2%pts
Accessories 40.2 42.1 ���� 1.9%pts
GP margin
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GP margin ���� due to:
� The impact on the newly imposed city construction tax & education surcharge by the PRC tax bureau since December 2010
Accessories 40.2 42.1 ���� 1.9%pts
Overall 42.3 42.8 ���� 0.5%pts
Profit Profit MarginsMargins
OP Margin ���� 0.8% pts to 22.6% Margin of Profit Attributable to Equity Shareholders ���� 1.5% pts to 19.4%
OP margin Margin of profit attributable OP margin Margin of profit attributable to equity shareholders
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OP margin ���� > GP margin ����due to:
�Expenditures ����
�Partially offset by Gov. grants ����
Margin of profit attributable to equity shareholders ���� due to:
� OP margin ����
� Effective tax rate ����
Operating Operating ExpensesExpenses
A&P exp %* ���� 0.1% pts to
13.7% due to:
%
13.7% due to:
� Our continuous effort on brand building
Staff costs %* ���� 0.4% pts to
8.5% due to:
� Our management team achieves better operational efficiency
R&D costs %# ���� 0.5% pts to
3.7% due to:R&D
Staff
A&P
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* In terms of % of turnover # In terms of cost of sales
� In line with our R&D strategy
R&D
Effective Effective Tax RateTax Rate
Effective tax ���� 4.1% pts to
20.2% due to:
% Effective tax rate
20.2% due to:
� Certain subsidiaries in the PRC which were entitled to a lower preferential tax rate in 2010 have to be charged with higher preferential tax rate since 1 January 2011
� Dividend withholding tax
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Working Capital ManagementWorking Capital Management
2011 2010ChangeIn 365
daysIn 365 days
In 365 days
In 365 days
Average inventory turnover days
38 36 ���� 2 days
Average trade receivables turnover days
26 19 ���� 7 days
Average trade payables turnover days
37 36 ���� 1 days
Inventory
Payables
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Average receivable days ���� due to:
� Encouraging distributors to use un-utilisedcredit limit for launching 6th generation store layout
Receivables
Payables
Liquidity Liquidity & & Financial Financial ResourcesResources
2011 2010
RMB million RMB million
Profit before tax 2,160.1 1,843.1
Non-cash adjustments (3.9) 25.1
Working capital movements (453.8) (295.1)
Tax and interest (254.8) (140.3)
Operating cash inflow 1,447.6 1,432.8
CAPEX (229.8) (164.6)
Others 1.7 0.8
Free cash inflow 1,219.5 1,269.0
Cash & bank balances (including pledged deposits) 4,443.0 4,300.8
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Cash & bank balances (including pledged deposits) 4,443.0 4,300.8
� Sound working capital management & outstanding operating results
� Strong free cash flow supports future business development
� No bank and other loans
MARKETMARKET& & BUSINESSBUSINESS& & BUSINESSBUSINESSOVERVIEWOVERVIEW
Market ReviewMarket Review
China Maintains Steady &China Maintains Steady & Stable Stable China Maintains Steady &China Maintains Steady & Stable Stable
Market generally expects:
China Maintains Steady &China Maintains Steady & Stable Stable Economic DevelopmentEconomic Development
China Maintains Steady &China Maintains Steady & Stable Stable Economic DevelopmentEconomic Development
Chinese Government Works to Keep Chinese Government Works to Keep Prices StablePrices Stable
Chinese Government Works to Keep Chinese Government Works to Keep Prices StablePrices Stable
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Despite Challenges & Uncertainties, Despite Challenges & Uncertainties, MacroMacro--economic Policy economic Policy FavoursFavours the the
Growing Sportswear MarketGrowing Sportswear Market
Despite Challenges & Uncertainties, Despite Challenges & Uncertainties, MacroMacro--economic Policy economic Policy FavoursFavours the the
Growing Sportswear MarketGrowing Sportswear Market
� Mass market growth
Brand & ProductBrand & ProductDiversification Diversification StrategStrategyy
� High-end market calls for more product diversification
FILA’s unique brand � Mass market growth
fueled by urbanisation, wage increases & sports popularisation
� ANTA focuses on popular sports & market segments with high potential
� FILA’s unique brand position & stylish products differentiate to tap potential
Sports Lifestyle Kids
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Not Targeted
Sports Lifestyle Kids
Performance-based
Women Running
Low-end Market
COC Basketball
Chinese Olympic CommitteeChinese Olympic Committee
Our strategic partnership with
COC & CSD has distinguished us
further from peers & solidified
Our strategic partnership with
COC & CSD has distinguished us
further from peers & solidified further from peers & solidified
our image as “representative of
China’s sports industry”
further from peers & solidified
our image as “representative of
China’s sports industry”
� Outfitted CSD in 7th Asian Winter
Games
� Supported Olympic Day Run
� Celebrated 1-year countdown to
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� Celebrated 1-year countdown to
London Olympics & launched retro
edition of 1984 winning outfit
� Set up “COC Corner” in stores to
display CSD winning outfits & COC
licensed products
BasketballBasketball
Leveraging solid basketball
resources & interactive
marketing campaigns, we have
Leveraging solid basketball
resources & interactive
marketing campaigns, we have
� KG & Scola wear & endorse ANTA’s
high-end basketball shoes
� Co-launch eye-catching events with
our sponsored CBA & CUBA
marketing campaigns, we have
enhanced our leadership in
basketball sportswear segment
marketing campaigns, we have
enhanced our leadership in
basketball sportswear segment
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our sponsored CBA & CUBA
� Roll out marketing campaigns to
echo ANTA’s optimised products
� Hosted China Tours & “Street
Basketball Contests” to promote
basketball development in China
Women SportsWomen Sports
We have enriched product
portfolio & launched brand new
women’s sportswear series to
We have enriched product
portfolio & launched brand new
women’s sportswear series to
� Diversify products to fully address
women’s specific needs in
functionality & fashion
� Featured Guo Jingjing, Jane Zhang
women’s sportswear series to
expand our presence in fast-
growing female market
women’s sportswear series to
expand our presence in fast-
growing female market
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� Featured Guo Jingjing, Jane Zhang
& Zheng Jie in marketing campaign
“Rhythmic Bloom in the Heart”
� Promote more sports participation
& “Joyful Sports” spirit through
online marketing activities & games
RunningRunning
We have enhanced functionality
of our comprehensive range of
running products, which is well-
We have enhanced functionality
of our comprehensive range of
running products, which is well-
� Upgrade & apply A-Jelly technology
to diversify product offerings to fit
all type of runners
running products, which is well-
received by professional & casual
runners
running products, which is well-
received by professional & casual
runners
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� Launch integrated marketing
campaigns to highlight our
advanced footwear technologies,
functionality & protectiveness of
running shoes
Sports Lifestyle SeriesSports Lifestyle Series
Sports Lifestyle series
emphasises a blend of design &
colours & fashionable materials,
Sports Lifestyle series
emphasises a blend of design &
colours & fashionable materials,
� Expand product offerings & launch
comprehensive marketing
campaigns to foster distinctive
colours & fashionable materials,
which has gained a foothold in
trendy leisure sportswear market
colours & fashionable materials,
which has gained a foothold in
trendy leisure sportswear market
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campaigns to foster distinctive
image of Sports Lifestyle series
� Tailor in-store layout & product
display to highlight different
themes & features of products
Kids Sportswear SeriesKids Sportswear Series
Leveraging extensive experience
in developing sportswear, Kids
Sportswear series is well-
Leveraging extensive experience
in developing sportswear, Kids
Sportswear series is well-
� Focus on product functionality,
safety & quality to address parents’
concerns
� Launch interactive activities to
Sportswear series is well-
received by parents due to its
reliability & value-for-money
Sportswear series is well-
received by parents due to its
reliability & value-for-money
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� Launch interactive activities to
inspire creativity in children & to
increase their familiarity with ANTA
� Educate parents the importance of
choosing sportswear for kids by
online communications platforms
FFila ila Business in the PRCBusiness in the PRC
We integrate Fila’s worldwide
R&D & design talents with local
supply chain & market resources
We integrate Fila’s worldwide
R&D & design talents with local
supply chain & market resources
� Hosted the “Back to the Past FILA
Century” event, kicking off FILA’s
rejuvenation plans in China
� Optimise FILA stores’ image by
supply chain & market resources
to tap high-end market potential
supply chain & market resources
to tap high-end market potential
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� Optimise FILA stores’ image by
launching 3rd generation store
layout in 2012
� Leverage product innovation
capabilities to differentiate &
diversify Fila products
Extensive Network & Extensive Network & Effective Management Effective Management
� Adopt prudent & flexible
approaches in opening &
consolidating stores
Optimise store image, size
We continue to foster the overall efficiency of distribution network
� Optimise store image, size
& location by launching 6th
generation store standard
� Speed up refurbishment &
consolidation of stores to
enhance efficiency
� Enhance IT & management
systems for better
surveillance & analysis of
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surveillance & analysis of
retail performance
� Expand e-commerce
business & collaborate with
popular e-commerce
platforms
Strong Product Innovation &Strong Product Innovation &Stringent Quality ControlStringent Quality Control
New styles introduced in 2011:
2,400 (footwear), 3,600 (apparel) & 1,600 (accessories)
Product innovation
� Seek R&D & design
breakthroughs by internal
enhancement & external enhancement & external
collaboration
� Upgrade & diversify core
technologies to different
product categories
Quality control
� Adopt stringent tests & QC
measures in ANTA
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measures in ANTA
Technology Centre
� Closely monitor production
processes & help suppliers
boost QC capabilities
� Support national & industry
standard setting
Supply Chain Management &Supply Chain Management &Production BasesProduction Bases
We focus on sustaining
cost leadership
� Utilise a mix of in-house &
In-house production ratio in 2011:
Approx. 36.9% (footwear) & approx. 14.4% (apparel)
� Utilise a mix of in-house &
outsourced production to
maintain flexibility
� Strengthen monitoring
system & adopt cost
control measures to keep
abreast of cost trends
� Optimise operating
efficiency, workflow &
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efficiency, workflow &
manufacturing processes
to remain competitive
� Share market information
& cost-saving measures
with suppliers, OEMs &
ODMs
PROSPECTSPROSPECTS
ProspectsProspects
Riding on London Olympics to Riding on London Olympics to Enhance Brand DesirabilityEnhance Brand Desirability
Riding on London Olympics to Riding on London Olympics to Enhance Brand DesirabilityEnhance Brand Desirability
Creating InnovativeCreating Innovative Products to Products to CaptureCapture Market PotentialMarket Potential
Creating InnovativeCreating Innovative Products to Products to CaptureCapture Market PotentialMarket Potential
OptimisingOptimising Distribution ChannelsDistribution ChannelsOptimisingOptimising Distribution ChannelsDistribution ChannelsEnhancing Operational Efficiency Enhancing Operational Efficiency
through Solid Management Systemsthrough Solid Management SystemsEnhancing Operational Efficiency Enhancing Operational Efficiency
through Solid Management Systemsthrough Solid Management Systems
800 to
28
Kids series stores
Sports Lifestyle series stores
FILA stores
7,800 to
8,000
250 to
300
ANTA stores
800 to
900
800 to
900