Li Ning Company Limited · HKEX:2331
Li Ning — H1 2024 Earnings Presentation
39 slides from Li Ning's earnings presentation, August 2024
Slide 1: 2024 Interim Results
2024 (INCORPORATED IN THE CAYMAN ISLANDS WITH LIMITED LIABILITY) STOCK CODES：2331 (HKD counter) and 82331 (RMB counter)
Slide 2: Disclaimer
DISCLAIMER This presentation incorporates information contained in the interim results announcement (the “Results Announcement”) for the six months period ended 30 June 2024 of Li Ning Company Limited (the “Company”). This presentation should be read in conjunction with the Results Announcement and
Slide 3: Table of Contents
■ LI NING COMPANY LIMITED ■ 2024 INTERIM RESULTS TABLE OF CONTENTS 01 RESULTS 02 FINANCIAL HIGHLIGHTS REVIEW 03 STRATEGIC 04 OPERATIONAL DIRECTION PROGRESS 05 APPENDIX
Slide 4: Results Highlights
01 RESULTS ■ L I N I N G C O M P A N Y L I M I T E D 2 0 2 4 I N T E R I M R E S U L T S HIGHLIGHTS
Slide 5: 2024 interim results highlights
© 2024 interim results highlights: consolidated the foundation to achieve a pragmatic growth Financial highlights (in RMB) Operational highlights Revenue Gross margin Retail sell-through3 14,345million 50.4% low-single-digit 2.3% Improved by 1.6 p.p. YoY Net profit1 Net operating cash inflow Offline
Slide 6: Financial Review
02 FINANCIAL ■ L I N I N G C O M P A N Y L I M I T E D 2 0 2 4 I N T E R I M REVIEW R E S U L T S
Slide 7: Revenue: footwear category remained dominant
© Revenue：footwear category remained dominant Footwear Apparel Equipment & Accessories 2.3% (RMB million) Change YoY 14,019 14,345 13,394 13,579 864 1,126 12,409 873 935 743 5,640 5,375 5,801 6,770 4,907 7,515 7,844 6,759 6,720 5,874 2022H1 2022H2 2023H1 2023H2 2024H1 7 Revenue: group total ■ L I N
Slide 8: Revenue and sell-through mix
© Revenue and sell-through mix：a balanced mix of channel revenue and sell-through reduced financial risk Channel revenue mix Sell-through mix （incl. direct retail and wholesale） E-commerce Direct retail Wholesale Old product New product (current and last season) 100% 100% 47% 48% 43% 45% 49% 91% 87%
Slide 9: Online and offline: business environment under pressure
© Online and offline：business environment under pressure POS number (six months end) Sell-through growth，YoY% LN Brand LN YOUNG （excl. LN YOUNG） Offline channel Online and offline channels 7,668 7,677 7,603 7,448 7,112 1,308 1,428 1,438 1,281 1,175 Low- teens Low- 6,295 teens 6,167 6,240 6,239 5,937
Slide 10: Wholesale business
© Wholesale business：proactively regulated the pace of shipments in a uncertain environment to ensure the health of retail-end channels Business performance Sell-through and revenue change, YoY% Revenue（RMB million） Wholesale revenue No. of POS (period end) Wholesale revenue (excl. sell-in to specia
Slide 11: Direct retail business
© Direct retail business：optimized channel structure to enhance retail operational efficiency Business performance Revenue change analysis Revenue (RMB million) No. of POS (period end) 1,430 1,423 1,498 1,495 1,265 +307 -247 3,309 -24 +35 3,380 YoY 2% 3,309 3,384 3,380 2,716 2,475 Same New Closed Tr
Slide 12: GP margin analysis
© GP margin analysis：ensured gross margin improvement with enhanced retail discounting and channel-mix optimization 2023 H1 E-commerce Direct retail 2024 H1 Channel reported gross gross Others reported mix GP margin margin margin GP margin +0.5p.p. +0.4p.p. -0.2p.p. 50.4% +0.9p.p. 48.8% 12 Gross pro
Slide 13: Profitability analysis
© Profitability analysis：steady operation and effective risk management 2023 H1 Sales related variable costs Platform operation costs Other 2024 H1 Gross reported Logistics Advertising & Other income# Tax reported profit Direct retail net profit & EC business & New business Promotion expenses & Inte
Slide 14: Channel inventory
© Channel inventory: inventory turnover and aging structure remained healthy Inventory level (tag price) Over 12 months Turnover months (offline, e-commerce and warehouse） 7-12 months 6 months or less (new products) Turnover months (offline stores) 4.2 3.8 3% 3% 3% 4% 5% 3.6 3.6 3.9 100% 9% 9% 10% 9
Slide 15: Company inventory
© Company inventory：inventory level and aging structure maintained healthy and controllable At cost, before provision （RMB million） 6 months or less (new products) 7-12 months Over 12 months YoY 9% 6% 5% 5% 100% 7% 6% 2,549 2,628 2,457 15% 15% 14% 19% 22% 2,263 2,083 79% 80% 80% 76% 71% 2022 2022 20
Slide 16: Trade receivables
© Trade receivables：at a reasonably healthy level At gross amount, before provision （RMB million） 90 days or less 91-180 days Over 180 days 1% 3% 100% YoY 6% 12% 10% 9% 13% 12% 1,342 5% 6% 7% 1,260 1,244 1,259 1,173 83% 84% 84% 86% 85% 2022 2022 2023 2023 2024 2022 2022 2023 2023 2024 Jun Dec Jun De
Slide 17: Working capital efficiency
© Working capital efficiency：robust efficiency fueled recovery momentum Payables Trade receivables^ Inventory^ Working capital~ Working capital~ as % of revenue* （RMB million） 4000 3000 2,100 2,109 2,046 2000 1,758 1,456 8% 8% 7% 7% 1000 6% 0 -1000 -2000 2022H1 2022H2 2023H1 2023H2 2024H1 ~ Simple a
Slide 18: Balance sheet summary: healthy operating cash flow
© Balance sheet summary: healthy operating cash flow 19,050 19,225 18,098 17,976 17,581 Net cash position^ （RMB million） 2022 2022 2023 2023 2024 Jun Dec Jun Dec Jun Cash conversion cycle (days) 21 30 30 35 31 Net operating cash inflow 1,583 3,914# 1,942 4,688# 2,730 Dividends 0 1,219 955 1,434 976
Slide 19: Strategic Direction
03 STRATEGIC ■ L I N I N G C O M P A N Y L I M I T E D 2 0 2 4 I N T E R I M R E S U L T S DIRECTION
Slide 20: Capitalizing on industry development momentum
© Capitalizing on industry development momentum and comprehensively enhance LI-NING’s experience value Orderly economic recovery promotes consumer confidence, leading to the further increase in demand Product for sports products. experience National policies support the high-quality LI-NING’s develo
Slide 21: Single brand, multi-categories, diversified channels
© Ongoing focus to “single brand, multi-categories, diversified channels” Flagship stores LI-NING 1990 stores China LI-NING stores Basketball Theme stores LI-NING YOUNG stores Outlet stores 在線商城 Diversified channels Badminton Running Multi- categories Sports & Fashion Basketball Sports casual Fitnes
Slide 22: Developing functional technology to strengthen brand image
© Developing functional technology to strengthen brand image Retail sell-through-mix 1% Y change Retail sell-through* - Yo 33% (2024H1） Total value 1% 30% Running 25% Basketball 20% 22% 14% Fitness 7% Sports casual 7% Running Fitness Basketball Sports casual Others （Including China LN） ■ *Including
Slide 23: Running
© Running — deeply cultivating the professional running shoe matrix and expanding market share in the running sector Built mature professional running shoe matrix n The cumulative sales volume of the Super Light, Rouge Rabbit, and Feidian series exceeded 5 million pairs during the period. The core I
Slide 24: Basketball
© Basketball — industry-leading product upgrades and increased investment in developing youth basketball n In July 2024, the China girls' basketball team sponsored by Li Ning won ISF World School Basketball Championship 2024. n Li Ning continues to invest in youth basketball, building a diverse and
Slide 25: Fitness
© Fitness — expanding sports scenarios and creating multi-scenario fitness equipment with functional technology Men’s fitness Women’s fitness n Continuing to develop "FLOWAIR Air Cooling Technology" and n Focusing on general functional training, with trendy "FLEXAIR Air Cushion" functional IPs, conc
Slide 26: Sports casual
© Sports casual — inspired by sports elements, presenting rich, diverse and distinctive and fashionable sports products “SOFT” series: a collection China LI-NING launched for a relaxing stroll "剏(chuàng)" designer platform Focusing on everyday consumer Designers and brands have collaborated to unloc
Slide 27: Brand marketing: In My Name campaign
© Brand marketing — integrated brand resources to launch “In My Name" campaign in a year with major sporting events "In My Name" video series connect sports and consumers “In My Name” pop-up store 27 "In My Name, Fight for the Country" 2024 Chinese Table Tennis "In My Name, Moment of Glory", Team Dr
Slide 28: Brand marketing: technology and sports resources
© Brand marketing — strategically leveraging technology and sports resources to deepen the integration of sports and branding Event Resources Title sponsorship of the Hong Kong Open Badmint CBA All-Star Game Marathon Table Tennis Championships “In My Name” Technology Conference A comprehensive Relea
Slide 29: Operational Progress
04 OPERATIONAL ■ L I N I N G C O M P A N Y L I M I T E D 2 0 2 4 I N T E R I M PROGRESS R E S U L T S
Slide 30: Stable business performance in 2024H1
© Stable business performance in 2024H1, revenue and profit in line with expectations 2024 H1 Business l Revenue grew by 2.3% YoY to 14,345 performance million Business l Gross profit margin Development improved by 1.6p.p. Strategy YoY to 50.4% ■ L I N I N G C O M P A N Y L I M I T E D ■ 2 0 2 4 I N
Slide 31: Product operations
© Product operations: on-going efficiency improvements, maintained professional product ratio Product operations Product Professional Product sales product matrix structure New product New product Professional Running shoes Product Product 3-month 6-month products: core IP breadth depth discount rat
Slide 32: Product inventory
© Product inventory: at a healthy and controllable level Product inventory Channel Inventory Aging inventory to sales ratio cost structure Overall channel The value amount Company Aging structure inventory-to- of overall channel inventory cost of new and old sales ratio at inventory amount products
Slide 33: Retail operations
© Retail operations：offline operations face challenges Retail KPIs* Offline retail Offline Conversion Discount Average sell-through footfall rate rate selling price Offline retail Average daily Overall Retail Average selling sell-through footfall conversion rate discount rate price increased decreas
Slide 34: Channel quality and emerging markets
© Channel：enhanced high-tier market channel quality and consolidated emerging market channel Store Sell-through Big store* 9th generation performance structure penetration stores upgrade Total selling square Sell-through contribution Number of big stores The number of 9th footage increased by of hig
Slide 35: E-commerce
© E-commerce：improved operating environment, 2024 H1 operating indicators met expectations E-commerce Retail Online Retail discount Inventory traffic sell- Conversion through turnover rate Online direct Average Inventory Online traffic Conversion retail sell- discount rate turnover days increased by
Slide 36: Kidswear business
© Kidswear business：overall operating indicators remained stable and controllable Retail efficiency eased l Average selling price l Retail sell-through* incr increased by by mid-single-digit lined mid-single-digit l Unit per transaction dec by high-single-digi t Channel efficiency Average monthly st
Slide 37: Appendix
05 APPENDIX ■ L I N I N G C O M P A N Y L I M I T E D 2 0 2 4 I N T E R I M R E S U L T S
Slide 38: Summary of income statement and balance sheet
© Appendix 1 — summary of income statement and balance sheet 2024 2023 Better/ 30 Jun 31 Dec Better/ (RMB million) (RMB million) Six months ended 30 June (Worse) 2024 2023 (Worse) Revenue 14,345 14,019 2.3% Cash and Cash 6,147 5,444 12.9% Equivalents Gross Profit 7,236 6,839 5.8% Selling and distrib
Slide 39: Profit margins and key operating indicators
© Appendix 2 — profit margins and key operating indicators 2024 2023 Better/ 2024 2023 Better/ Six months ended 30 June （Worse） Six months ended 30 June （Worse） Gross Profit Margin 50.4% 48.8% 1.6p.p. Inventory Turnover (Days) 62 57 (5) Trade Receivables Operating Profit Margin 16.7% 17.7% (1.0p.p.)