Li Ning Company Limited · HKEX:2331
Li Ning — FY2011 Earnings Presentation
25 slides from Li Ning's earnings presentation, March 2012
Slide 1: Li Ning Company Limited
LI NING COMPANY LIMITED — 4 (Incorporated in the Cayman Islands with limited liability) \ \ A J (Stock Code: 2331) \ /| AK —r A) \}( J is Mt [~\\ }
Slide 2: Agenda
Agenda Financial Highlights Business Review Outlook & Future Strategies Open Forum 1
Slide 3: Financial Highlights
Financial Highlights WAN= TA CR ANG
Slide 4: Summary of Income Statement
Summary of Income Statement FY2011 FY2010 Change For the year ended 31 December (RMB million) Revenue 8,928.5 9,478.5 -5.8% Gross Profit 4,114.5 4,481.6 -8.2% Operating Profit 631.0 1,546.8 -59.2% Profit Attributable to Equity Holders 385.8 1.108.5 -65.2% Earnings per Share (RMB cents) 36.70 105.84
Slide 5: Profit Margins and Expense Ratios
Profit Margins and Expense Ratios FY2011 FY2010 Change For the year ended 31 December Gross Profit Margin 46.1% 47.3% -1.2p.p. Operating Profit Margin 7.1% 16.3% -9.2p.p. Margin of Profit Attributable to Equity Holders 4.3% 11.7% -7.4p.p. R&D Expenses (as % of revenue) 2.6% 2.6% 0 A&P Expenses (as %
Slide 6: Key Operational Indicators
Key Operational Indicators FY2011 FY2010 Change For the year ended 31 December Inventory Turnover (Days) 73 52 21 Average Trade Receivables Turnover (Days) 76 52 24 Average Trade Payables Turnover (Days) 94 71 23 Cash Conversion Cycle (Days) 55 33 22 Return on Equity (ROE) (full year) 11.3% 36.7% -2
Slide 7: Summary of Balance Sheet
Summary of Balance Sheet 2011-12-31 2010-12-31 Change (RMB million) Cash and Cash Equivalents 1,196.5 1,470.4 -18.6% Bank Borrowings 838.1 312.2 168.4% Net Cash* 358.4 1,158.2 -69.1% Current Liabilities 3,063.1 2,371.6 29.2% Current Ratio (times) 1.56 1.77 -0.21 Total Liabilities to Total Assets Rat
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 91.4% 92.1% 51.7% 50.2% 43.8% 41.8% 6.5% 6.0% 8.6% 7.9% LI-NING brand apparel Revenue from LI-NING brand LI-NING brand footwear Revenue from other bra
Slide 9: LI-NING Brand Revenue Breakdown by Geography
LI-NING Brand Revenue Breakdown by Geography International International Market Market 1.9% Northern 41.7% -7.8% Eastern Southern 36.6% -9.8% 19.8% 0.5% Domestic Domestic Market Market 98.1% % of Total Change 8
Slide 10: Business Review
Business Review TA /\K CH ANG
Slide 11: An Analysis of the Sporting Goods Industry
An Analysis of the Sporting Goods Industry Current characteristics of the industry Contribution from footwear products is gaining importance Changes in the business Products priced in mid-to-low range remain the largest product segment at present, model of sporting goods yet the sales of products in
Slide 12: Leveraging on Brand Strengths
Leveraging on Brand Strengths Advertising & marketing Sports event Marketing promotion Running 2011 BWF World Superseries Launch of LI-NING ARC Basketball LI-NING Supreme 5 Mixed products Doubles Badminton Cup Launch of LI-NING 8th FINA World Championships Generation ultralight World Gymnastics runn
Slide 13: Seizing Opportunities in London 2012 Olympic Games
Seizing Opportunities in London 2012 Olympic Games Getting prepared for the London 2012 Olympic Games Attended brick unveiling ceremony of the IOC Olympic Museum and activated own countdown timer for the London 2012 Olympic Games on 26 July 2011 Full exposure of LI-NING brand Continuously support an
Slide 14: Top Endorsement Resources
Top Endorsement Resources Top-notch Athletes / Sports Teams / Tournaments Other important sponsorship resources Sports Clubs Badminton Chinese National Badminton Team* Badminton China Open / China Shanghai Badminton Team / Bayi Lin Dan Badminton Masters / China Badminton Badminton Team / Guangdong C
Slide 15: Pressing Ahead with Distribution Channel Reforms
Pressing Ahead with Distribution Channel Reforms Progress in 2011 Plan in 2012 Proactively controlled pace of store opening and Establish clearance channels at a reasonable and fast pace to focused effort on the reforms of distribution channel achieve practical and healthy store structure structure
Slide 16: Enhancing Product Competitiveness
Enhancing Product Competitiveness Research & Development and Design Centres in Beijing and Hong Kong Strengthen product quality while fusing innovative features that are aligned with Products for Professional Sponsorships – Develop superior the brand’s positioning and DNA sports gear for professiona
Slide 17: Supply Chain Management
Supply Chain Management Production facilities in Jingmen, Hubei The base continued to scale upwards The “LI-NING Logistics Centre” in Jingmen is at implementation and testing phase. It is expected to begin trial run in the first half of 2012 Strengthen supplier education Put greater effort in educat
Slide 18: Other Brands
Other Brands Reinforce its competitive edge in Table Tennis and maintain collaborative relationships with top-notch table tennis athletes and clubs Strengthen product research and development Same-store sales exhibited a persistent trend of significant growth Enhanced placement of advertising in out
Slide 19: Outlook & Future Strategies
Outlook & Future Strategies
Slide 20: Outlook in 2012
Outlook in 2012 Challenges faced by the industry Inventory problem at the retail end remains severe The interaction among suppliers, brands and distributors during industry transformation will influence value allocation Main tasks Adjust SG&A expenses structure, enhance operational efficiency Redu
Slide 21: Adhering to Long Term Strategies
Adhering 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
Slide 22: Vision, Mission and Core Values
Vision, Mission and Core Values Vision Mission Core Values A world’s leading brand Through sports, we Live for Dream in the sporting goods inspire people the Integrity and commitment industry desire and power to “We” Culture make breakthroughs Achieving excellence Consumer oriented Breakthrough 21
Slide 23: Open Forum
Open Forum
Slide 24: Investor Relations Contacts
Investor Relations Contacts http://www.lining.com http://www.li-ning.com http://www.irasia.com/listco/hk/lining/ http://www.hkex.com.hk investor@li-ning.com.cn 23
Slide 25: Disclaimer
Disclaimer This presentation incorporates information contained in the annual results announcement (the “Results Announcement”) for the period ended 31 December 2011 of Li Ning Company Limited (the “Company”). This presentation should be read in conjunction with the Results Announcement and is quali