361 Degrees International Ltd. · HKEX:1361
361 Degrees International — FY2021 Earnings Presentation
40 slides from 361 Degrees International's earnings presentation, March 2022
Slide 1: 2021 Annual Results
2021 Annual Results 361 Degrees International Limited Stock Code: 1361.HK March 2022
Slide 2: Content
1 Financial Review 2 Business Review Content 3 Brand Building 4 Industry Outlook 5 Appendix 6 Q&A
Slide 3: Disclaimer
Disclaimer These presentation slides have been prepared by 361 Degrees International Limited (the “Company”) solely for us during its presentation held in connection with its annual results for the 12 months ended 31 December 2021 and may not be reproduced or redistributed. In particular, these pres
Slide 4: Capture the Opportunities and Strive for Growth
Capture the Opportunities and Strive for Growth 1 Seize the opportunities and satisfy the expectations 2 Focus on core brand to demonstrate strategic determination 3 Drive business growth with dual driving forces of “Professionalism + Fashion” 4
Slide 5: Financial Review
Financial Review Aaron GORDON International Basketball Player
Slide 6: Net Profit and E-commerce Business Maintains Rapid Growth
Net Profit and E-commerce Business Maintains Rapid Growth Company logo or name Gross Profit E-commerce Net Profit Gearing Ratio Margin Platforms sales Attributable to Owners 3.8 p.p. 55.1% 45.0% 14.9 p.p. 41.7% RMB 1,227.4 m RMB 601.7 m 1.8% 6
Slide 7: Financial Overview
Financial Overview For year ended 31 December RMB mn 2021 2020 Change Revenue 5,933.5 5,127.0 +15.7% Gross profit 2,472.4 1,941.7 +27.3% Operating profit 1,083.1 822.7 +31.7% Profit attributable to equity shareholders 601.7 415.1 +45.0% Basic EPS (RMB cents) 29.1 20.1 +44.8% Profitability Ratios (%)
Slide 8: Revenue Analysis
Revenue Analysis Revenue Revenue by Products RMB mn % 5,933.5 1.5% 1.1% 1.3% 5,631.9 78.7 86.7 17.7% 18.2% 18.7% 5,127.0 1,106.8 998.9 58.7 1.8% 1.0% 1.1% 932.3 68.9 100.2 52.8 36.6% 39.0% 36.2% 2,147.0 2,059.1 2,001.8 2,532.1 42.4% 40.7% 42.7% 2,387.0 2,081.3 2019 2020 2021 2019 2020 2021 Footwear
Slide 9: Gross Profit and Gross Profit Margin Analysis
Gross Profit and Gross Profit Margin Analysis Gross Profit and Gross Profit Margin GPM of Footwear Product RMB mn/ % 47.0% 43.1% 45.0% 43.0% 40.4% 45.0% 41.0% 38.6% 41.7% 39.0% 3,000.0 40.3% 37.0% 35.0% 37.9% 40.0% 33.0% 2019 2020 2021 2,500.0 2,472.4 35.0% 10.0 2,269.6 456.0 5.6 30.0% GPM of Appare
Slide 10: Major Operating Expenses Analysis
Major Operating Expenses Analysis Major Operating Expenses as % of Revenue RMB mn 10.6% 11.1% 9.8% 10.2% 9.0% 9.1% 3.8% 4.0% 4.2% 2019 2020 2021 Advertisement and Promotion Expenses Staff Cost R&D Expenses Selling and Distribution Expenses Administrative Expenses For year ended 31 December For year
Slide 11: Operating Profit and Net Profit Analysis
Operating Profit and Net Profit Analysis Operating Profit and Income Tax Expenses & Profit Attributable to Equity Shareholders Operating Profit Margin Effective Tax Rate and Margin of Profit Attributable to Equity RMB mn/ % RMB Shareholders 1,400.0 20.0% 500.0 40.0% 18.3% RMB mn/ % 900.0 12.0% 18.0%
Slide 12: Balance Sheet Highlights
Balance Sheet Highlights RMB mn As at 31 December 2021 As at 31 December 2020 Change Current assets 10,083.3 10,440.1 -3.4% Current liabilities 2,668.0 4,041.2 -34.0% Net current assets 7,415.3 6,398.9 +15.9% Equity attributable to owners of the Company 7,116.8 6,608.9 +7.7% +0.4 RMB Net asset value
Slide 13: Working Capital Cycle Analysis
Working Capital Cycle Analysis Working Capital Turnover Days 159 Inventories 151 149 Trade & bills receivables 119 122 111 114 Trade and bills payables 87 Overall 2020 2021 Trade and Bills Receivables Ageing Analysis As at 31 December As at 31 December RMB ‘000 2021 2020 2021 % 2020 % Trade Receivab
Slide 14: Liquidity Analysis
Liquidity Analysis Cash Flow For year ended 31 December RMB mn 2021 2020 Profit before income tax 1,045.1 701.6 Adjustment of non-cash profit and loss and items from non-operating activities 96.6 103.8 Change in inventories (119.5) 390.8 Change in trade and bills receivables (384.9) (99.1) Change in
Slide 15: Capital Strength
Capital Strength Financial Resources As at 31 December RMB ‘000 2021 2020 Pledged bank deposits 52,170 62,628 Deposits with bank with maturities > 3 months 2,000,000 3,000,000 Cash and cash equivalents 3,339,010 3,451,331 Total cash 5,391,180 6,513,959 Bank loans 207,837 210,222 Senior unsecured not
Slide 16: Business Review
GUAN Siyang Elite Marathon Runner Business Review
Slide 17: 361° Overview
361°Overview Brand Positioning——“Specialized, Youthful and Internationalized” Dual Operational Strategy ——“Professional and Fashion” , feature product functionality while combining fashion concepts Mass Market—— Cater to the“Mass Sports Market” and provide consumers with high-value products 17
Slide 18: Core Products
Core Products Products with innovative technologies enjoyed great reception • “Flying Flame” —— An IAAF-certified carbon-plated running shoes we developed with LI Zicheng, the Asia and China marathon double champions • “International running shoes” —— Series of SPIRE and MERAKI won several internati
Slide 19: Sports Goods for Running
Sports Goods for Running Accumulate popularity among runners with advanced product functions • Running products are equipped with the Group’s core technology, supporting professional racing, outdoor cross-country, daily training, lifestyle and other sports scenes to meet all kinds of runners’ needs
Slide 20: Sports Goods for Basketball
Sports Goods for Basketball Integrate professionalism with fashion to enhance brand influence • AG series basketball shoes have received overwhelming response and multiple products with colors such as “Renew with one degree beyond” and “Ice Blades” have become star products that were sold out immedi
Slide 21: Sports Goods for Comprehensive Training
Sports Goods for Comprehensive Training Highlight product diversity and differentiation by satisfy the demand for functionality • Facing the increasingly differentiated sports needs of consumers, our products integrate various design elements on the foundation of professionalism and functionality •
Slide 22: Sports Goods for Lifestyle
Sports Goods for Lifestyle Leveraged on the driving force of fashion to appeal younger generations • Satisfy young customers’ demand for comfortable, good-looking and trendy products by adopting fashion design elements in product development • The model of co-branded IP products has become mature an
Slide 23: 361° Sales Overview
361° Sales Overview Global sales network • The Group has 6,144 point-of-sales around the world, in which 5,270 are in mainland China, increased by 105 year-on-year ➢ In terms of city distribution，point-of- sales in 1st and 2nd-tier cities accounted for 22.8%, and point-of-sales in 3rd-tier or lower
Slide 24: 361° Kids Overview
361° Kids Overview Follow the brand spirit of “One Extra Degree of Passion” of the 361° core brand With the brand statement “Love it, Kids!”, focusing on the sports market of children and teenagers Committed to fulfilling “Children and Teenagers” needs on sport apparels in various types of sporting
Slide 25: Differential Advantages
Differential Advantages Enhance differentiation-based competitive advantages to strengthen our leading position in the kid’s wear industry Professional Functionality • Partnered with China’s strongest football clubs (youth training) including Shenhua, Evergrande, Guoan and Luneng, carrying out coope
Slide 26: 361° Kids' Sportswear Sales Overview
361° Kids’ Sportswear Sales Overview China Sales Network • The Group has 1,896 point-of-sales for kids’ sportswear in mainland China, representing a year-of-year increase by 193 ➢ In terms of city，point-of- sales in 1st and 2nd-tier cities accounted for 28.4%, and point-of-sales in 3rd-tier or lower
Slide 27: 361° E-commerce
361° E-commerce E-commerce business maintains rapid growth with market potentials • In 2021, revenue from the e-commerce sales of web-exclusive products was RMB1,227.4 million • Revenue from the e-commerce sales accounting for 20.7% of the Group’s total revenue, increased by 55.1% year-on-year Under
Slide 28: Brand Building
GONG Jun 361º Global Endorser Brand Building
Slide 29: Premium Brand Resources
Premium Brand Resources In 2021, A&P expenses accounted for 10.2％ of the Group’s total revenue Large-scale Sports Events 22 Top-tier Athletes and Celebrities as Spokespersons • Large-scale comprehensive games: the 19th Asian Games in Hangzhou • Basketball players: international basketball stars Aaro
Slide 30: Supports Asian Games "One Extra Degree of Passion for China"
Supports Asian Games “One Extra Degree of Passion for China” Contributed four consecutive sponsorships to the Asian Games Allowing Chinese brands to thrive in the international arena • Based on 4 consecutive sponsorships and 12 years of dedicated support, 361°has become a sports brand closely linked
Slide 31: Brand Owned Events
Brand Owned Events Create brand owned events to forge strong ties with sports fans Running events - Track Three • “Track Three” was founded in April 2021, with offline events and online communities expanding together, radiating to core cities nationwide • With the event as the center, it integrates
Slide 32: Consumption Experience Upgrade
Consumption Experience Upgrade Improved sales network structure with gradually improving store image • Constantly renewed store image, upgrading to the latest 361°core brand 9th generation and 361°Kids 4th generation image stores significantly improved customer experience • Enhanced channel structur
Slide 33: Industry Outlook
Industry Outlook XU Can WBA Featherweight World Boxing Champion
Slide 34: Favourable Government Policies
Favourable Government Policies “The National Fitness Plan (2021-2025)” mentioned the target of forging a domestic sports industry to reach RMB 5 trillion by 2025 “Action plan to further promote sports consumption” "Health China Action" “Implementation Plan for Further Optimizing Supply to Promote th
Slide 35: Consumption Growth Momentum
Consumption Growth Momentum CAGR sales of sportswear in China outperformed Domestic per Capita Sports Goods Expenditure is Low, all product categories in 2015-2020 Expected to Rise under the Promotion of National Policies USD 307.3 16.1% 10.6% 10.4% 7.0% 138.3 124.3 109.2 89 3.4% 3.0% 2.3% 1.3% 0.9%
Slide 36: Favourable Industry Development
Favourable Industry Development Multiple positive factors are set to drive the sports industry forward Market Size of China’s Sportswear Industry in 2016-2026 Major sports events such as the Winter Olympics (RMB bn） and Asian Games will be held in China, together with China’s effective epidemic prev
Slide 37: Appendix
Appendix Flying Flame Professional marathon running shoes
Slide 38: Brand Positioning
Brand Positioning 高端市场 Market High-end Casual Fashion Professional Sports Mass Market 38
Slide 39: R&D Innovation
R&D Innovation In 2021, R&D expenditure accounted for 4.2% of the Group’s total turnover 3 TECH 2.0 upgrade launched • 3 TECH 2.0 running shoes was introduced on the brand day. The product has used ENRG-X E (an innovative material with stronger comprehensive performance), QU!KDRIVE and QU!KFOAM tech
Slide 40: Q&A
Spencer DINWIDDIE International Basketball Superstar Q&A
361 Degrees International — FY2021 Earnings Presentation on 6ix