anta ar09 ppt final
TRANSCRIPT
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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 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”.
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AgendaAgenda
Financial & Operational Highlights
Financial Overview
Q & A
Agenda & Presenters
Market & Business Overview
Prospects
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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
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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
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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
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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
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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%
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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
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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
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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:
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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
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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:
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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
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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
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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
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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
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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
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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
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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
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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
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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%)
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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
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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
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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
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Production BasesProduction Bases
In-house production ratio:Approx. 41.9 % of footwear and 17.2% of apparel sold
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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
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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
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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]