361 Degrees International Ltd. · HKEX:1361
361 Degrees International — H1 2013 Earnings Presentation
20 slides from 361 Degrees International's earnings presentation, Aug 20, 2013
Slide 1: 361 Degrees International Limited FY2013 Interim Results
361 Degrees International Limited FY2013 Interim Results August 2013
Slide 2: Disclaimer
Disclaimer These presentation slides have been prepared by 361 Degrees International Limited (the "Company") solely for use during its presentation held in connection with its results for the 6 months ended 30 June 2013 and may not be taken away, reproduced or redistributed. In particular, these pre
Slide 3: Agenda
Agenda Operational Highlights Financial Review Outlook & Strategies Q&A 3
Slide 4: Operational Highlights
Operational Highlights
Slide 5: Same store sales growth has weakened considerably although channel inventories remain healthy
Amidst a highly competitive market and lower restocking orders, same store sales growth have weakened considerably although channel inventories remain healthy FY2012 FY2013 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 SSSG(1) 6.9% 5.1% 4.1% 4.3% -1.5% -0.8% TBA TBA Channel 4.1x 4.3x 4.1x 4.1x 4.3x 4.4x TBA TBA Inventori
Slide 6: Franchised network remains a solid geographical base despite store closures
Franchised network remains a solid geographical base despite about store closures Q2 2013 Q1 2013 2012 2011 No. of Franchised Outlets No. of retail outlets 7,826 8,069 8,082 7,865 New Openings 196 149 541 810 Closures 439 162 324 209 Northern Region Total retail space 788,786 813,648 813,657 790,403
Slide 7: Continued investment in advertising is necessary to build brand equity
Continued investment in advertising is necessary to build 361°brand equity Key Strategic Partners Major Event Sponsorships Celebrity Athlete Endorsements Kevin Love Minnesota Timberwolves center, 2 time NBA All-star Stephon Marbury Beijing Ducks point guard, The collaboration with CCTV-5, a sports
Slide 8: 361° operates on a strategic mix between in-house production and third-party OEMs
361°operates on a strategic mix between in-house production and third-party OEMs Jiangtou Wuli 361°enjoys operational advantages with both factories Industrial Park Industrial Park located in Jinjiang City, Fujian Province. Both assets Site Area (sq.m.) 58,000 102,500 are unencumbered. There is
Slide 9: 361° Kids continues to make sound progress in a very fragmented market
361°Kids continues to make sound progress in a very fragmented market This is an independently-run business unit leveraging only on the 361°brand and its distributorship network. It sub- contracts manufacture to OEM specialists. There are a total of 1,678 point-of-sales throughout the country at
Slide 10: Financial Review
Financial Review
Slide 11: FY2013 Interim Results: Financial Highlights
FY2013 Interim Results: Financial Highlights For the six months ended 30 June 2013 2012 Change (%) Turnover (RMB mn) 1,998.2 2,869.1 -30.4 Operating profit (RMB mn) 306.1 643.8 -52.5 Profit attributable to equity shareholders (RMB mn) 205.3 595.6 -65.5 Basic EPS (RMB cents) 9.9 28.8 -65.6 Interim di
Slide 12: Revenues down 30% while gross margins shed 3.7 percentage points
Revenues for this interim period is down 30% compared with the same period last year whilst gross margins shed 3.7 percentage points Revenue by product Gross margins by product For the six months ended 30 June For the six months ended 30 June (RMB ’000) 2013 2012 Change (%) 2013 2012 Change Footwear
Slide 13: All three major product groups reported lower volumes and ASPs
All three major product groups reported lower volumes and ASPs Volume by Product Category ASP by Product Category (’000) For the six months ended 30 June 20,000 18,240 16,153 (RMB) 2013 2012 Change (%) 16,000 12,690 Footwear 91.2 107.6 -15.2 12,000 9,158 Apparel 57.1 62.4 -8.5 8,000 5,731 4,093 Acce
Slide 14: The Group continues to maintain tight discipline on costs
The Group continues to maintain tight discipline on costs Selling and Distribution Costs Administrative Costs For the six months ended 30 June For the six months ended 30 June RMB mn 2013 2012 Change (%) RMB mn R&D 48.8 35.4 +37.9 2013 2012 Change (%) Impairment A&P 196.2 263.8 -25.6 losses on 18.3
Slide 15: Accounts Receivables of the Group have not improved substantially
Accounts Receivables of the Group have not improved substantially RMB ‘000 At 30 Jun 2013 At 31 Dec 2012 Trade debtors Because of lack-lustre sales and a general credit crunch in the economy, Trade debtors 2,197,349 1,967,560 the Company’s trade debtors grew to Less: Allowance for doubtful debts (
Slide 16: Despite sluggish conditions, cash flow was positive for this interim period
Despite sluggish conditions, cash flow was positive for this interim period Contrary to initial expectations, the operations during this interim period generated net cash of RMB600 million. This was primarily achieved by tightening payments to suppliers and third parties such that the improvemen
Slide 17: Untangling the Convertible Bonds – Key Details
Untangling the Convertible Bonds – Key Details In April 2012, the Company issued unsecured convertible bonds with a principal amount of US$150 million due 2017 (the “convertible bonds”). The proceeds are kept in banks in Hong Kong and have been used to pay dividends and other off-shore payments.
Slide 18: Outlook & Strategies
Outlook & Strategies
Slide 19: Outlook & Strategies
Outlook & Strategies The industry has bottomed in 2013 but recovery will be gradual Industry Outlook Long-term fundamentals of the industry remain sound as rising disposable incomes and health awareness will lead to increased demand Continue to invest and monitor progress in the identified are
Slide 20: Q&A
Q&A
361 Degrees International — H1 2013 Earnings Presentation on 6ix