Li Ning Company Limited · HKEX:2331
Li Ning — FY2009 Earnings Presentation
26 slides from Li Ning's earnings presentation, March 2010
Slide 1: Li Ning Company Limited Annual Results Presentation
jy Li Ning Company Limited ($8 4RAa ) BOB EB RRS AR A WAFER = 2331 iF ERS LI NING COMPANY LIMITED Annual Results Presentation
Slide 2: Agenda
Agenda Financial Highlights Review of Operations Outlook & Future Strategies Open Forum 1
Slide 3: Financial Highlights
Financial Highlights 2 2
Slide 4: Consistent Growth for Six Consecutive Years
Consistent Growth for Six Consecutive Years Revenue Profit attributable to equity holders RMB million 8,386.9 RMB million 944.5 6,690.1 721.3 .9% R : 34 C AG :5 0.5% 4,348.7 CA GR 473.6 3,180.5 2,450.5 294.8 1,878.1 186.8 122.4 2004 2005 2006 2007 2008 2009 2004 2005 2006 2007 2008 2009 Basic earnin
Slide 5: Summary of Income Statement
Summary of Income Statement FY2009 FY2008 Change For the 12 months ended 31 December (RMB million) Revenue 8,386.9 6,690.1 25.4% Gross Profit 3,969.9 3,220.4 23.3% Operating Profit 1,341.9 960.2 39.7% Earnings before interest, tax, 1,524.9 1,070.5 42.4% depreciation and amortisation (EBITDA) Profit
Slide 6: Key Profit Margins and Expense Ratios
Key Profit Margins and Expense Ratios FY2009 FY2008 Change For the 12 months ended 31 December Gross Profit Margin 47.3% 48.1% -0.8p.p. Operating Profit Margin 16.0% 14.4% 1.6p.p. Margin of profit attributable to equity 11.3% 10.8% 0.5p.p. holders R&D Expenses (as % to revenue) 2.7% 2.7% 0 A&P Expen
Slide 7: Key Financial Indicators
Key Financial Indicators FY2009 FY2008 Change For the 12 months ended 31 December Inventory Turnover (days) 53 61 -8 Avg. Trade Receivable Turnover (days) 47 48 -1 Avg. Trade Payables Turnover (days) 70 69 1 Cash Conversion Cycle (days) 30 40 -10 Return on Equity (ROE) 41.3% 39.6% 1.7p.p. Return on
Slide 8: Solid Balance Sheet
Solid Balance Sheet FY2009 FY2008 Change As at 31 December (RMB million) Cash and Cash Equivalents 1,264.3 788.0 60.4% (Including fixed deposits) Bank Loans 260.0 607.5 -57.2% Net Cash* 1,004.3 180.5 456.4% Current Liabilities 1,864.9 2,086.8 -10.6% Current Ratio 1.7 1.4 +0.3 Total Liabilities to To
Slide 9: LI-NING Brand Revenue Breakdown by Product Category
LI-NING Brand Revenue Breakdown by Product Category 2009 2008 LI-NING LI-NING brand apparel brand footwear LI-NING LI-NING brand apparel brand footwear 49.2% 45.2% 48.8% 45.9% 5.3% 5.6% LI-NING brand accessories LI-NING brand accessories Note: Revenue from LI-NING brand accounted for 91.7% of the Gr
Slide 10: LI-NING Brand Revenue Breakdown by Geography
LI-NING Brand Revenue Breakdown by Geography Domestic Market 99.0% 99.0% 20.8% Northern 41.2% 41.2% 21.9% Eastern 39.2% 39.2% 18.0% Southern 18.6% 24.6% International Market 18.6% 1.0% 1.0% 52.2% % % of of Total Total Revenue Revenue Revenue Growth Note: Revenue from LI-NING brand accounted for 91.7
Slide 11: Review of Operations
Review of Operations 10
Slide 12: Continuous Breakthroughs by Building on Core Strengths
Continuous Breakthroughs by Building on Core Strengths The beginning of a new five-year plan Cooling Macro- of the Intensified Challenges economic Olympics competition downturn euphoria Achievements Successfully tapped into the badminton arena Enhanced the influence in metropolitans and 1st tier cit
Slide 13: Successful Inroads into the Badminton Sector
Successful Inroads into the Badminton Sector Li Ning Brand = Badminton Signed up the Chinese National Badminton Team in April 2009 Sponsored Sudirman Cup in May 2009 Sponsorship of the Singaporean National Badminton Team and the Singapore Open in July 2009 Sponsored the “BWF Super Series – 2009 LI-N
Slide 14: Best-in-class Sports Sponsorship Resources
Best-in-class Sports Sponsorship Resources Chinese National Gymnastics Team Five National Chinese National Table-tennis Team Gold Medal- Chinese National Diving Team winning Teams Chinese National Shooting Team Chinese National Badminton Team Running / Elena Isinbayeva, Russian pole vault athlete Tr
Slide 15: Multi-faceted Marketing and Sponsorship Programmes to Nurture Brand Preferences
Multi-faceted Marketing and Sponsorship Programmes to Nurture Brand Preferences “Inner Shine” campaign and promotion emphasizing the unique beauty of oriental women Ladies' Cooperated with Beijing CSI Fitness Fitness Investment Management Limited Teamed up with Lesmills China Sponsored the CUFL Orga
Slide 16: Consistent Commitment to Product R&D and Design
Consistent Commitment to Product R&D and Design to Enhance Product Competitiveness R&D and Design Centres R&D achievements and products R&D and Design centres in China, Hong Kong “LI-NING Bow” anti-shock technology and and Portland, Oregon, the USA “LI-NING Shoe Lasts” Li Ning Sports Science R&D Cen
Slide 17: Effective Channel Expansion
Effective Channel Expansion LI-NING Brand Testing in Overseas Markets Promoted sales channel reforms, Opened badminton specialty stores in established a comprehensive set of Singapore and Hong Kong respectively retail operating standards to improve single-store efficiency Opened the first store in P
Slide 18: Responsive and Flexible Supply Chain
Responsive and Flexible Supply Chain Hosted four trade fairs for the LI-NING brand Optimized supply chain planning and improved inventory turnover cycle Introduced retail logistics, launched direct delivery project service Planned to set up “LI-NING Jingmen Logistics Centre” Established a procuremen
Slide 19: Multi-brand Strategy Bears Fruit
Multi-brand Strategy Bears Fruit A well-known table-tennis brand An Italian fashion-sports label Distributes sporting products mainly in hypermarkets Famous badminton brand, mainly A French outdoor sporting targeting mid-end and mass segments goods brand 18 18
Slide 20: Outlook and Strategies
Outlook and Strategies 19 19
Slide 21: Market Outlook and Competitive Landscape
Market Outlook and Competitive Landscape China’s economy is undergoing structural changes. Income growth and lifestyle changes become the drivers of consumption of sporting goods Support from the government policies and regulations Global marketing of sports events raise awareness in sports China’s
Slide 22: Future Strategies
Future Strategies Sales Channel Expansion Plan Strategy highlights As at year end No. of LI-NING stores Keep building core 2010 8,000 competencies relating to brand and product 2011 8,700 2012 9,300 Continue to promote the 2013 10,000 Group's strategic brands / businesses Improve the sales channel m
Slide 23: Vision, Mission and Core Values
Vision, Mission and Core Values Through sports, A world-leading brand we inspire in people in the sporting the desire and goods industry power to make Vision Mission breakthroughs Core Values Live for Dream “We” Breakthroughs culture Consumer Achieving oriented Integrity and Excellence Commitment 22
Slide 24: Questions and Answers
Questions and Answers 23 23
Slide 25: Investor Relations
Investor Relations http://www.lining.com http://www.li-ning.com http://www.irasia.com/listco/hk/lining/ http://www.hkex.com.hk IR Department Tel: +86 21 2326 7366 E-Mail: investor@li-ning.com.cn 24
Slide 26: Disclaimer
Disclaimer This presentation incorporates information contained in the annual results announcement (the “Results Announcement”) for the year ended 31 December 2009 of Li Ning Company Limited (the “Company”). This presentation should be read in conjunction with the Results Announcement and is qualifi