Li Ning Company Limited · HKEX:2331
Li Ning — H1 2011 Earnings Presentation
24 slides from Li Ning's earnings presentation, August 2011
Slide 1: Li Ning Company Limited
LI NING COMPANY (28 44 al) (Incorporated in the Cayman Islands (Stock Code: 2331)
Slide 2: Agenda
Agenda 1
Slide 3: Financial Highlights
Slide 4: Summary of Income Statement
Summary of Income Statement 3
Slide 5: Profit Margins and Expense Ratios
Profit Margins and Expense Ratios 1H2011 1H2010 Change For the six months ended 30 June Gross Profit Margin 47.3% 47.9% ‐0.6p.p. Operating Profit Margin 10.3% 18.1% ‐7.8p.p. Margin of profit attributable to equity 6.8% 12.9% ‐6.1p.p. holders R&D Expenses (as % of revenue) 2.6% 2.5% +0.1p.p. A&P Expe
Slide 6: Key Operational Indicators
Key Operational Indicators 1H2011 1H2010 Change For the six months ended 30 June Inventory Turnover (Days) 72 48 24 Average Trade Receivables Turnover 63 48 15 (Days) Average Trade Payables Turnover (Days) 91 70 21 Cash Conversion Cycle (Days) 44 26 18 Return on Equity (ROE)（half‐yearly） 8.6% 20.3%
Slide 7: Healthy Balance Sheet
Healthy Balance Sheet *Net Cash = Cash and Cash Equivalents – Bank Borrowings 6
Slide 8: LI-NING Brand Revenue Breakdown by Product Category
LI‐NING Brand Revenue Breakdown by Product Category LI‐NING Brand Revenue Breakdown Revenue from LI‐NING brand by Product Category to the Group Total 1H2011 1H2010 1H2011 1H2010 7
Slide 9: LI-NING Brand Revenue Breakdown by Geography
LI‐NING Brand Revenue Breakdown by Geography International Market 1.7% 1.7% Northern 43.6% 43.6% ‐6.0% Eastern 34.9% 34.9% ‐12.1% Southern Domestic 19.8% 19.8% 5.3% Market 98.3% 98.3% % % of of Total Total Change 8
Slide 10: Business Review
Slide 11: Diagnosing the Sporting Goods Industry and the Group
Diagnosing the Sporting Goods Industry and the Group Faced with challenges and opportunities during the industry transformation period, the Group proactively initiates reforms Intensifying competition Industry maintains Consumers’ increasing demand for double‐digit growth brand experience and sport
Slide 12: Short-term Strategies – Channel Reforms
Short‐term Strategies – Channel Reforms Status of implementation during 1H2011 Objectives Store number grew as planned. Revenue Target to consolidate 400 low‐efficiency sub‐ contribution from inventory clearance channels distributors by end‐2011 comprised 10% of retail revenue Rationalize store stru
Slide 13: Short Term Strategies - Branding
Short Term Strategies ‐ Branding Advertising and Marketing Events Sports Event Marketing Marketing Promotion Events： “The Stronger You Are, The Stronger I 14th FINA World Championships Become” basketball products series Sudirman Cup LI‐NING Hero Vans New generation of Ultralight running Singapore Op
Slide 14: Brand Strength
Brand Strength BrandZ Top 50 Most In the top 20 on “Best Chinese An All‐Star Cast of Valuable Chinese Brands Brands 2010” list issued by Forbes Professional China and Interbrand Sponsorship Resources Badminton Track & Field/Running Basketball Olympic Champion Tennis Women’s Football Teams Fitness To
Slide 15: Short Term Strategies - Product
Short Term Strategies ‐ Product Adjust pricing strategy to Drive application of product Roll out product with innovative Top notch products for meet consumers’ needs, focus technology platforms and concept and Chinese elements professional sponsorships to more on better value for establishment of pr
Slide 16: Supply Chain Management
Supply Chain Management Exercised control on cost stability and management Jingmen production facilities reached a sizable scale Construction of Jingmen Logistics Centre with trial runs scheduled for 1H2012 15
Slide 17: Other Brands
Other Brands Strong R&D and design Growing brand capability. Rolled out more awareness than 150 new products in 1H Persistent SSS growth 2011 and DHS footwear/apparel Drive differentiation in Adjust further the overall product structure and integrated marketing operation model in order to meet consu
Slide 18: Outlook and Strategies
Slide 19: Adhere to Long Term Strategies
Adhere to Long Term Strategies Strict adherence to brand positioning and essence of sports Fuse brand positioning and effective use of sports marketing resources to achieve brand differentiation Ensure creativity is converted into effective communication, highlight brand personality and accentuate C
Slide 20: Outlook
Outlook Low double‐digit industry growth for FY 2011 Extra boost in industry growth in 2012 led by Olympics Intensification in industry competition and cost escalation Undergo a period of transformation in next 2‐3 years Gross profit margin to decrease further in 2H 2011 Margin of profit attributabl
Slide 21: Vision, Mission and Core Values
Vision, Mission and Core Values Through sports, we inspire A world‐leading brand in the Live for Dream people the desire and power sporting goods industry to make breakthroughs Breakthroughs Consumer oriented Integrity and commitment Achieving excellence “We” Culture 20
Slide 22: Open Forum
Slide 23: Investor Relations Contacts
Investor Relations Contacts 22
Slide 24: Disclaimer
Disclaimer This presentation incorporates information contained in the interim results announcement (the “Results Announcement”) for the period ended 30 June 2011 of Li Ning Company Limited (the “Company”). This presentation should be read in conjunction with the Results Announcement and is qualifie