361 Degrees International Ltd. · HKEX:1361
361 Degrees International — FY2012 Earnings Presentation
19 slides from 361 Degrees International's earnings presentation, Mar 5, 2013
Slide 1: FY2012 Results Presentation
361 Degrees International Limited FY2012 Results Presentation 5 March 2013
Slide 2: Disclaimer
Disclaimer The information contained in this presentation is intended solely for your personal reference. Such information is subject to change without notice, its accuracy is not guaranteed and it may not contain all material information concerning 361 Degrees International Limited (the “Company”).
Slide 3: Agenda
Agenda Operational Highlights Financial Review Outlook & Strategies Q&A 3
Slide 4: Operational Highlights
761 Operational Highlights
Slide 5: Despite a very competitive market, same store sales growth remains positive
Despite a very competitive market, same store sales growth remains positive FY2012 Q1 Q2 Q3 Q4 SSSG(1) 6.9% 5.1% 4.1% 4.3% Channel Inventories(2) 4.1x 4.3x 4.1x 4.1x 361°has a very strong presence in the Northern and Western Regions of China which continue to enjoy strong economic growth and less
Slide 6: Poor sales at recent trade fairs mean a weaker FY2013
Poor sales at recent trade fairs mean a weaker FY2013 Trade Fair Order Summary 2012 2012 2013 2013 Autumn Winter Spring/Summer Autumn November 2011 March 2012 July 2012 November 2012 Order Book Growth -26%(1) -23% -19% -10%(1) (Wholesale value, y-o-y) The Spring/Summer Trade Fair is the largest of t
Slide 7: Network size continues to grow very modestly, with penetration into remote locations
Network size continues to grow very modestly, with penetration into the more remote locations 2012 2011 No. of Franchised Outlets No. of retail outlets 8,082 7,865 New Openings 541 810 Closures 324 209 Northern Region Total retail space (sq.m.) 813,657 790,403 3,090 e-POS, a front-end system, is c
Slide 8: Continued investment in advertising is necessary to build 361° brand equity
Continued investment in advertising is necessary to build 361°brand equity Key Strategic Partners Major Event Sponsorships Celebrity Athlete Endorsements Kevin Love Stephon Marbury The collaboration with CCTV-5, a sports-only national channel is a key asset because of its extensive coverage of all
Slide 9: Investment in R&D drives the 361° Product Philosophy: Performance and Value
Investment in R & D drives the 361°Product Philosophy: Performance and Value Two key partnerships: Asian R&D Centre in Guangzhou Beijing Institute of Fashion Technology Strong R&D team Over 30 patents as at 31 December 2012 Footwear – 116 R&D staff Apparel and accessory – 289 R&D staff
Slide 10: 361° has two factories with production capacity up to 70% of Footwear and 15% of Apparel
361°has two factories with production capacity up to 70% of Footwear and 15% of Apparel Jiangtou Wuli Footwear Lines 14 Lines 9 Lines Apparel None 2 Workshops Production workers 2,600 3,200 Cost of Investment RMB 55 million RMB 800 million 361° enjoys strong economies of scale with both factories
Slide 11: The Kidswear business in China is extremely fragmented
The Kidswear business in China is extremely fragmented 2011 2012 2012 2013 Fall / Winter Spring / Summer Fall / Winter Spring / Summer Order book growth 60% 53% 20% -5% Number of dedicated outlets Store Format This is an independently-run unit leveraging only on the 361° 2,000 brand and its distri
Slide 12: Financial Review
761 Financial Review 12
Slide 13: FY2012 Annual Results: Financial Highlights
FY2012 Annual Results: Financial Highlights For the year ended 31 December 2012 2011 Change (%) Turnover (RMB mn) 4,950.6 5,568.7 -11.1 Operating profit (RMB mn) 864.4 1,385.0 -37.6 Profit attributable to equity shareholders (RMB mn) 707.2 1,133.1 -37.6 Basic EPS (RMB cents) 34.2 54.8 -37.6 Total di
Slide 14: Revenues declined by 11% as both Footwear and Apparel saw weaker deliveries and lower GP%
Revenues declined by 11% as both Footwear and Apparel saw weaker deliveries and lower GP% Revenue by product Gross margins by product For the year ended 31 Dec For the year ended 31 December (RMB ’000) 2012 2011 Change (RMB ’000) 2012 2011 Change Footwear 2,212,306 2,813,015 -21.4% Footwear 40.4% 42
Slide 15: S&D costs rose 18% because of full impact of recent signings and rack subsidies
S & D costs rose 18% because of full impact of recent signings and rack subsidies but other costs remain under control Selling and Distribution Costs Administrative Costs For the year ended 31 December For the year ended 31 December RMB mn 2012 2011 Change RMB mn Change (%) 2012 2011 (%) A&P 523.5 4
Slide 16: Analysis of Key Balance Sheet Items
Analysis of Key Balance Sheet Items The Group had net assets of RMB 4.7 billion, of which just over RMB 1.0 billion comprised fixed assets, primarily the two production factories. Trade debtors at 31 December 2012 of RMB 1.9 billion was a small improvement from RMB 2.1 billion in the previous ye
Slide 17: Outlook and Strategies
761 Outlook and Strategies 17
Slide 18: Outlook and Strategies for 2013
Outlook and Strategies for 2013 Outlook Strategies Industry has undergone many challenges Need to maintain better product in the past two years, including: positioning and brand differentiation o excessive inventories Identify six key growth drivers (Kids, Outdoor, Overseas, E-Commerce, Ski o
Slide 19: Q&A
Q&A 19
361 Degrees International — FY2012 Earnings Presentation on 6ix