anta sports announces 2010 interim results keep moving to ... · commercials (“tvc”) featuring...
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For immediate release
ANTA Sports Announces 2010 Interim Results
Keep Moving to Deliver Remarkable Results
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Continuous Growth with Strong Financial and Operating results
Assembled Strongest Sporting Sponsorship and Endorsement Resources
(16 August 2010, Hong Kong) ANTA Sports Products Limited (“ANTA Sports” or the
“Company”, stock code: 2020) is pleased to announce the interim results of the Company and
its subsidiaries (the “Group”) for the six months ended 30 June 2010 (the “period”).
Results Highlights
Six months ended 30 June
2010 2009 Change
RMB million RMB million
Turnover 3,453.1 2,817.0 +22.6%
Gross profit 1,509.8 1,169.1 +29.1%
Profit from operations 894.8 682.9 +31.0%
Profit attributable to equity
shareholders
760.2 608.3 +25.0%
Free cash inflow 735.5 537.3 +36.9%
RMB cents RMB cents
Basic earnings per share 30.50 24.43 +24.8%
HK cents HK cents
Interim dividend per share 20.0 12.0 +66.7%
Gross profit margin 43.7% 41.5% +2.2% pts
Operating profit margin 25.9% 24.2% +1.7% pts
Margin of profit attributable to
equity shareholders 22.0% 21.6% +0.4% pts
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Financial Summary & Operational Performance
� Robust Financial Performance
� Turnover increased by 22.6% to RMB3,453.1 million (2009 1H: 2,817.0 million),
attributable to the increase in average selling prices (“ASP”) and sales volume,
enhanced product offerings and the expansion of distribution network
� The Group’s gross profit margin increased 2.2 percentage points to 43.7% (2009
1H: 41.5%) as a result of strong brand equity, diversified product portfolio and
effective cost control
� In view of outstanding performance during the period, the Board of the Company
proposed an interim dividend of HK20 cents per share (2009 1H: HK12 cents),
making a payout ratio of 57.2 % of the 2010 1H profit attributable to equity
shareholders to sustain a better return to shareholders
� Solid working capital management and strong cash flow
� Average inventory turnover days: 38 days (2009 1H: 43 days)
� Average trade receivables turnover days: 17 days (2009 1H: 15 days)
� Average trade payable turnover days: 37 days (2009 1H: 32 days)
� Free cash inflow increased by 36.9% to RMB735.5 million (2009 1H: 537.3
million) as a result of remarkable working capital management and outstanding
operating performance
� Significant ASP and volume growth
� Footwear: ASP (wholesale) increased by 2.0% to RMB96.9 (2009 1H: RMB95.0);
volume increased by 9.3% to 18.0 million pairs (2009 1H: 16.4 million pairs)
� Apparel: ASP (wholesale) increased by 7.1% to RMB49.6 (2009 1H: RMB 46.3);
volume increased by 26.4% to 32.5 million pieces (2009 1H: 25.7 million pieces)
� Distribution network expansion and sales floor area optimisation
� Number of ANTA stores across China increased to 7,052 compared to 6,591 at
the end of 2009, representing a net increase of 461 stores
� Total sales floor area increased by 9.9% to 776,000 sq. m. compared to 706,000
sq. m. at the end of 2009
� Average sales floor area per store increased by 2.8% to 110 sq. m. compared to
107 sq. m. at the end of 2009
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Business Review
Strong brand equity and effective brand management strategy
During the period, the Group has further integrated our exclusive endorsement and
sponsorship resources, interactive promotion campaigns and outstanding store image as well
as quality products to bolster brand value and sustain business growth. The Group has
entered into exclusive sponsorships with elite athletes, influential sports associations and
top-tier leagues to enhance our professional brand image and customer loyalty. The strategic
partnerships with the Chinese Olympic Committee (the “COC”) and Chinese Sports Delegation
(the “CSD”) are good examples of how the strategy has advanced our brand differentiation,
particularly in associating ANTA as “the representative of China’s sports industry”.
The outstanding performance of the CSD in the Vancouver 2010 Winter Olympics, in
particular our endorsed athletes, offered excellent exposure for ANTA’s sportswear at victory
ceremonies and celebration events held in the “Home of China”. The positive market
feedback to the “Support China Altogether” advertising and marketing campaign for the
event has consolidated ANTA’s symbolic role for China’s sports industry. Moreover, the
alliance with the COC and its online media partner, Sina, in forming the “ANTA • China Sports”
channel provides an excellent opportunity for ANTA to maximise our marketing effectiveness
and brand equity through a better cultivation of the COC’s sponsorship rights.
The Group has strategically focused marketing resources on 3 core product segments:
basketball, tennis and running, employing effective marketing strategies such as athletes’
endorsement and sponsorship of influential sports leagues, to enhance the brand association
with the key sports. During the period, we have rolled out eye-catching events, including the
“I Love CBA” marketing campaign, Luis Scola’s China tour as well as the television
commercials (“TVC”) featuring A-Jelly running shoes to boost popularity of relevant sports
and sales of featured performance-based sportswear products.
ANTA Sports is renowned for integrating sports sponsorship resources and events with
different promotion channels to maximise exposure to target audience. In addition to the use
of creative TVC and advertisements, the Group also leverages the rising popularity of Internet
marketing and brand website to establish closer links with consumers. Furthermore, the
Group has strengthened our in-store marketing events and activities capabilities to reinforce
the interactions with consumers and our leading position in various local markets.
Strategically expanded distribution network and refined network management system
The Group has expanded the nationwide distribution network to over 7,000 ANTA stores with
a strategic focus on second and third tier cities to tap the tremendous market potential. We
managed the nationwide distribution network through over 50 regional distributors.
Meanwhile, Sports Lifestyle series stores and ANTA Kids stores have been expanding to
extend our reach to diversified segments. Furthermore, the Group has launched the official
online flagship store at taobao.com to capture the potential growth of e-shopping.
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During the period, the Group has continued to refine our distribution network management
system and work closely with our distributors to monitor and enhance store efficiency and
profitability. We have also organised various interactive activities at key ANTA stores and
provide standardised point-of-purchase advertising (“POP”) materials to ensure that our
branding activities can be effectively translated into prominent retail performance. Through
continuous efforts, ANTA Sports is the top seller of travel and sports shoes in terms of market
share for the ninth year in China.
30 Jun 2010 31 Dec 2009 Net increase
ANTA stores
Eastern region 2,598 2,451 +147
Southern region 2,128 1,991 +137
Northern region 2,326 2,149 +177
Total number of ANTA stores 7,052 6,591 +461
Sports Lifestyle series stores 495 343 +152
Kids series stores 300 228 +72
R&D innovation and creative product design
The Group identifies innovation and technology as our key to differentiate from others.
During the period, we have continued to strengthen our internal R&D team and collaboration
with external professionals to enhance our competitive edge in R&D. We have further
improved our A-Jelly technology and other existing technologies to offer more value-added
sportswear products. In support of a low carbon life concept, the Group has made use of
organic, chemical-free cotton as raw materials for our apparel products and enhanced the
“ergonomic 3-dimensional cutting technology” to improve the body hugging feature on our
apparel products. In addition, the Group continues to expand our product portfolio. During
the period, we have introduced more than 1,700 new styles to footwear products, 2,000 to
apparel and 1,000 to accessories, to meet the different tastes of customers.
Prospects
The Chinese government is expected to continue to drive economic growth by spurring
domestic consumption. Wage rises and a better welfare system will also help boost the
purchasing power and brand awareness of Chinese consumers. Moreover, urbanisation is
likely to bring in tremendous business opportunities, particularly in second and third tier cities.
These have given rise to optimism for the Group in our outlook for China’s domestic market
and the sportswear industry in particular.
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The CSD’s favourable response on the sportswear for the Vancouver 2010 Winter Olympic
Games has stood us in good stead for providing even better gear in the Guangzhou 2010
Asian Games and the London 2012 Olympic Games. In November, the Asian Games will be
held in Guangzhou. It is expected that the outstanding performances of Chinese athletes will
provide significant exposure opportunities for ANTA’s sportswear in victory ceremonies. The
Group will roll out corresponding TVC and POP series and strengthen the “COC licensed
product corner” in key ANTA stores across the country to boost the awareness of the Games
as well as sales. In addition, the Group will launch various interactive events to enable the
public to experience the Games more fully.
Basketball is a popular sport in China. That is why the Group has made the sport one of our
key development priorities. On 1 August, the Group has added to the endorsement list a
renowned NBA superstar, Kevin Garnett, who was named the NBA Champion, NBA Most
Valuable Player and NBA Defensive Player of the Year. After joining ANTA Sports as an
endorsed basketball player, he embarked on a China tour visiting major cities of the country.
We will launch a new “KG” basketball sportswear series together with a marketing blitz of TVC
and POP. In the coming NBA season, Kevin Garnett will be competing in basketball shoes
tailor-made by ANTA Sports, which will help enhance our brand reputation and creditability.
The Group is the sponsor of national top-tier leagues, CBA and CUBA as well as popular TV
program, “HOOPARK”. With Kevin Garnett joining Luis Scola and other CBA endorsers, the
Group has assembled the strongest portfolio of top-tier basketball sponsorship and
endorsement resources in China to support our sustainability in long run.
It is expected that the Chinese government’s further push on domestic consumption and
urbanisation will drive the expansion of population in lower tier cities. Our distribution
network is well established in second and third tier cities. The Group will continue to
cooperate with our regional distributors to explore new markets with high growth potential
for penetration and expansion. By the end of 2010, the Group plans to expand our retail
network to 7,400 ANTA stores, 600 Sports Lifestyle series stores and 350 Kid series stores. We
will provide more effective retail management and ordering training to further improve store
efficiency and retail performance so as to enhance the profitability and competitiveness of
our distributors and franchisees. Moreover, we will expand the Fila business in the PRC to
reach the high-end market through new product launches, network expansion and marketing
campaigns. By the end of 2010, around 200 FILA stores will be in operation in China’s first and
second tier cities. We believe that the Fila business in the PRC will become another growth
driver for the Group.
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Mr. Ding Shizhong, Chairman and CEO of ANTA Sports said, “Looking ahead, the long term
development of China’s sportswear industry is likely to benefit from the Chinese
government’s economic stimulus package and its sports industry invigoration plan. In view of
strong demand continues to drive the growth of the mass sportswear market, we will further
enhance our brand and product differentiation by leveraging our sponsorship resources,
initiating marketing campaigns and offering better quality and value-added products. With
our strong fundamentals, clear expansion strategy and effective execution capability, the
Group’s competitive advantages and leading position in the mass market will be further
strengthened and ultimately gain a bigger market share and continue to create higher value
and return for our shareholders.”
~ End ~
About ANTA Sports Products Limited
As one of the leading branded sportswear enterprises in China, ANTA Sports Products Limited
primarily designs, develops, manufactures and markets sportswear, including sports footwear,
apparel and accessories. The Group has established an extensive distribution network and
nation-wide retail outlets throughout China under the management of the distributors. The
Group places great emphasis on branding by integrating the resources from sponsorship of
sports leagues, placement of advertisements, online interaction with consumers and
endorsement of elite athletes with featured products in order to enhance brand and product
differentiation. For the past nine years, ANTA’s footwear has been enjoying a leading position
in the composite index on market shares in China.
For further information, please contact:
ANTA Sports Products Limited
Investor Relations Department
Tel: (852) 2116-1660
Fax: (852) 2116-1590
E-mail: [email protected] / [email protected]
Hill & Knowlton Asia Limited
Gary Li
Tel: (852) 2894 6239 / 9652 9002
E-mail: [email protected]
Carol Mak
Tel: (852) 2894 6283 / 6126 5261
E-mail: [email protected]