Li Ning Company Limited · HKEX:2331
Li Ning — H1 2009 Earnings Presentation
25 slides from Li Ning's earnings presentation, August 2009
Slide 1: Interim Results Announcement
Stock code: 2331 Interim Results Announcement August 2009
Slide 2: Agenda
Agenda Financial Highlights Business Review Future Plans Q&A 1
Slide 3: Financial Highlights
jy Financial Highlights
Slide 4: Solid Growth for Six Consecutive Years
Solid Growth for Six Consecutive Years RMB (million) Revenue RMB (million) Profit attributable to shareholders 5,000 600 CAGR: 38.7% CAGR: 53.1% 472.5 4,051.9 4,000 500 3,060.8 400 333.7 3,000 1,909.4 300 2,000 198.3 1,371.9 1,104.3 200 129.9 788.7 78.3 1,000 100 56.1 0 0 1H04 1H05 1H06 1H07 1H08 1H
Slide 5: Financial Highlights
Financial Highlights 1H2009 1H2008 change (RMB million) For the six months ended 30 June Revenue 4,051.9 3,060.8 32.4% Gross profit 1,936.6 1,482.2 30.7% Operating profit 685.8 452.6 51.5% EBITDA 773.3 495.3 56.1% Profit attributable to equity holders 472.5 333.7 41.6% Earnings per share (RMB cents)
Slide 6: Revenue Analysis by Product Categories
Revenue Analysis by Product Categories 1H2009 1H2008 Li-Ning Brand Li-Ning Brand Apparel Footwear Li-Ning Brand Li-Ning Brand Apparel Footwear 44.7% 42.4% 47.3% 45.3% 1.9% 5.5% 5.1% 7.8% Li-Ning Brand Other Brands Li-Ning Brand Other Brands Accessories/Equipment Accessories/Equipment 5
Slide 7: Revenue Analysis by Geography
Revenue Analysis by Geography 0.8% -5.1% 42.1% 26.3% 39.1% 22.6% 99.2% 24.8% 18.0% 26.2% % of total revenue revenue growth 6
Slide 8: Healthy Profit Margins
Healthy Profit Margins The Group’s and Li-Ning Brand’s Operating margin and profit margin gross profit margin attributable to equity holders 55.0% Li Ning Brand’s 20% gross profit margin 49.8% Operating profits 16.9% 50.0% 48.5% 48.8% 48.5% 48.7% 48.7% 14.8% 48.4% 47.8% 15% 14.0% 48.1% 48.7% 45.0% T
Slide 9: Key Financial Indicators
Key Financial Indicators 1H2009 1H2008 change (RMB million) For the six months ended 30 June Inventory turnover (days) 56 61 -5 Avg. trade receivable turnover (days) 47 47 0 Avg. trade payable turnover (days) 68 71 -3 Cash conversion cycle (days) 35 37 -2 R&D expenses (as % to revenue) 2.3% 3.0% -0.
Slide 10: Healthy Financial Position
Healthy Financial Position 1H2009 FY2008 change (RMB million) As at 30 June As at 31 Dec. Cash and Cash Equivalents 1,041.6 788.0 +32.2% (Including fixed deposits) Bank Loans 311.4 607.5 -48.7% Net Cash 730.2 180.5 +304.5% Current Liabilities 1,809.2 2,086.8 -13.3% Current Ratio 1.6 1.4 +0.2 Total L
Slide 11: Business Review
jy oa Business review
Slide 12: An Analysis of the Group's Competitive Strengths
An Analysis of the Group’s Competitive Strengths Core Competencies Brand Building and Key to Marketing differentiation Product Design and R&D Pillar Capabilities Enhancing Supply Chain operational Channel Support efficiency 11
Slide 13: Brand Differentiation – Establish Badminton as the Benchmark Sport
Brand Differentiation – Establish Badminton as the Benchmark Sport Sponsorship R&D Resources All-round Approach to Tap into Distribution Badminton Integrated Channel Marketing Acquisition of Kason brand 12
Slide 14: Extensive Sports Marketing Resources and Innovative Sports Marketing (1)
Extensive Sports Marketing Resources and Innovative Sports Marketing (1) Five Gold Medal Teams Sponsor the Chinese National Badminton, Table tennis, Diving, Gymnastics and Shooting teams to maintain the leadership of the China Olympics delegation Running / Track and Field Signed up of Elena Isinbaye
Slide 15: Extensive Sports Marketing Resources and Innovative Sports Marketing (2)
Extensive Sports Marketing Resources and Innovative Sports Marketing (2) Basketball 3 NBA players including Shaquille O’Neal, Baron Davis and Jose Calderon Sponsor Spanish and Argentina Basketball teams Tennis ATP partnership Leading tennis players, e.g. Yan Zi and Ivan Ljubicic Community Marketing
Slide 16: Product R&D and Design
Product R&D and Design R&D Centre R&D centres in Mainland China, Hong Kong and Portland, Oregon in the USA Li Ning Sports Science Research and Development Centre: 3 laboratories specialize in sports biodynamics, mechanical testing in footwear products, foot and shoe tree development Partnership Coop
Slide 17: Effective Distribution Management
Effective Distribution Management Drove forward expansion into second- and third-tier cities, No. of stores 2009-6-30 2008-12-31 2008-6-30 with 82% of the newly opened LI-NING brand stores LI-NING 6,809 6,245 5,853 established in such markets Other brands* 741 672 540 Strengthened the use of * Inclu
Slide 18: Effective Supply Chain Management
Effective Supply Chain Management Hosted 2 order fairs for LI-NING brand Optimized supply chain planning Established differentiating distribution logistics model Established a supplier information database Established procurement centres LI-NING Jingmen Logistics Centre to reduce procurement costs 1
Slide 19: Other Brands
Other Brands Business Strategies and Execution Principally engaged in table tennis equipment, Leverage the absolute cutting edge of the brand in including balls, rackets and tables table tennis to tap the indoor sports market Sold through integrated sports stores and Became the equipment sponsor of
Slide 20: Outlook and Strategies
Outlook and Strategies 19
Slide 21: Market Outlook
Market Outlook y Lingering global financial crisis Opportunities y Uncertainties in the macro-economic environment y Structural changes in China’s y Pressure for China to maintain economy to count on more growth momentum from domestic consumption in growth y Recent rebound stemmed from structural ch
Slide 22: Cement Leadership Position in China
Cement Leadership Position in China Strengthening of Fundamentals Sales Channel Expansion Plan As at year end No. of LI-NING stores Strategy-driven and capability- accretive market share acquisition 2009 7,100 Strengthen the association between 2010 7,800 the LI-NING brand and badminton 2011 8,600 B
Slide 23: Vision, Mission and Core Values
Vision, Mission and Core Values A world's leading brand Through sports, we inspire in people the desire and power in the sports goods industry to make breakthroughs Integrity and Commitment Breakthrough We Culture Live for Dream Consumer Achieving Oriented Excellence 22
Slide 24: Questions and Answers
Questions and Answers 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 Investor Relations Department Tel : +86 21 2326 7366 E-mail: investor@li-ning.com.cn 24