361 Degrees International Ltd. · HKEX:1361
361 Degrees International — H1 2021 Earnings Presentation
36 slides from 361 Degrees International's earnings presentation, Aug 17, 2021
Slide 1: Interim Results
Interim Results 361 Degrees International Limited Stock code: 1361.HK August 2021
Slide 2: Contents
Financial Review Operational Review Contents Brand Building Industry Outlook Appendix 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 interim results for the 6 months ended 30 June 2021 and may not be reproduced or redistributed. In particular, these presenta
Slide 4: 361° Unlocked a Future Success with Passion and One Extra Degree of Effort
361°Unlocked a Future Success with Passion and One Extra Degree of Effort in the Sports Market With prominent advantages in the sports industry, China’s domestic brands’ structural competitive advantages prevailed Focused on core brand with “professional sports and fashion” as dual drivers New retai
Slide 5: Financial Review
Financial Review Aaron GORDON International Basketball Superstar
Slide 6: Revenue
Revenue Revenue Revenue Mix (RMB mn) Footwear 37.6% 41.0% Apparel Kids' Sportwear 1H 2020 3,237 3,107 44.4% RMB2,686 mn 3,017 2,798 2,686 Accessories 42.0% Others 1.1% 14.9% 16.0% 1.0% 1H2017 1H2018 1H2019 1H2020 1H2021 1.1% 0.9% Footwear Apparel Kids’ Sportwear Revenue (RMB mn) Revenue (RMB mn) Rev
Slide 7: Gross Profit and GP Margin
Gross Profit and GP Margin Gross Profit GP Margin (RMB mn) 42.3% 41.6% 41.8% 40.9% 1,255.7 1,322.7 1,299.7 1,184.1 Overall 1,015.8 37.8% Footwear Apparel Kids' Sportwear 1H2017 1H2018 1H2019 1H2020 1H2021 1H2017 1H2018 1H2019 1H2020 1H2021 Footwear Apparel Kids’ Sportwear GP/GP Margin (RMB mn) GP/GP
Slide 8: Operating Profit and Net Profit
Operating Profit and Net Profit Operating Profit Profit Attributable to Equity Shareholders (RMB mn) (RMB mn) 710.2 629.1 630.6 641.5 538.2 401.4 367.4 318.3 335.0 301.9 1H2017 1H2018 1H2019 1H2020 1H2021 1H2017 1H2018 1H2019 1H2020 1H2021 OP Margin NP Margin 12.9% 22.9% 11.4% 11.3% 22.5% 11.1% 11.2
Slide 9: Major Operating Expenses
Major Operating Expenses Operating Ratios 8.7% 9.0% 8.7% 8.5% 8.7% A&P 8.5% Staff costs 7.8% 8.0% 7.7% 7.4% R&D 3.8% 3.6% 3.6% 2.9% 3.1% 1H2017 1H2018 1H2019 1H2020 1H2021 Selling and Distribution Costs Administrative Expenses For the 6 mths ended 30 Jun For the 6 mths ended 30 Jun RMB mn 2021 2020
Slide 10: Financial Highlights
Financial Highlights For the 6 mths ended 30 Jun RMB mn 2021 2020 Change Revenue 3,107.1 2,686.1 +15.7% Gross profit 1,299.7 1,015.8 +28.0% Operating profit 710.2 538.2 +32.0% Profit attributable to equity shareholders 401.4 302.0 +32.9% Basic EPS (RMB cents) 19.4 14.6 +32.9% Profitability Ratios (%
Slide 11: Working Capital Cycle
Working Capital Cycle Working Capital Turnover Days (days) 179 158 160 159 149 146 151 151 Inventories 149 120 121 119 Trade & bills receivable 109 Trade & bills payable 94 112 111 107 Overall 90 85 70 1H2019 2019 1H2020 2020 1H2021 Trade and Bills Receivables Ageing Analysis As at 30 Jun As at 31 D
Slide 12: Liquidity and Capital Strength
Liquidity and Capital Strength Cash Flow Financial Resources For the 6 mths ended 30 Jun As at 30 Jun As at 31 Dec RMB mn 2021 2020 RMB’000 2021 2020 Profit before income 677.3 462.2 tax Pledged bank deposits 28,323 62,628 Adjustments for non- cash gain/loss and 14.1 131.6 Deposits with bank with no
Slide 13: Balance Sheet Highlights
Balance Sheet Highlights RMB mn As at 30 Jun 2021 As at 31 Dec 2020 Change Current assets 9,377.9 10,440.1 -10.2% Current liabilities 2,256.4 4,041.2 -44.2% Net current assets 7,121.5 6,398.9 +11.3% Equity attributable to owners of the 6,876.0 6,608.9 +4.0% company Net asset value per share (RMB) 4.
Slide 14: Operational Review
Operational Review AG1-PRO basketball shoes
Slide 15: 361° Overview
361°Overview Continue to position as a “specialized, youthful and internationalized” brand Feature product functionality while combining fashion concepts to realize the dual brand strategy of “professional sports and fashion” Cater to the “mass market”, deploy omnichannel retail coverage, provide co
Slide 16: Sports Goods for Running
Sports Goods for Running Geared up running products with professionalism, won popularity among runners with product strengths • Running products are equipped with core technology of the Group, demonstrating the brand’s technology, research and innovation strengths and displaying professional sports
Slide 17: Sports Goods for Basketball
Sports Goods for Basketball Continued expansion in the basketball market, effectively enhanced brand strength • Basketball products showcased both technology strength and fashion elements, went beyond the consumer circle and became a breakthrough in increasing brand equity; • Launched 3TECH embedded
Slide 18: Sports Goods for Comprehensive Training
Sports Goods for Comprehensive Training Comprehensive training products rooted in professionalism, focused on differentiated needs in sports • Fulfilled consumers' increasingly segmented and differentiated needs in sports with a wide range of products, creating differentiation competitive advantage;
Slide 19: Sports Goods for Lifestyle
Sports Goods for Lifestyle Unleashed driving force from fashion and anchored the favourites of young consumers • Highlighted fashion design concepts to meet the increasing expectations of young consumers for product comfortability, aesthetics and fashion sense; • Released wide-ranging co-branded IP
Slide 20: 361° Sales Overview
361°Sales Overview Global Sales Network • The Group has 6,072 point-of sales across the world, in which 5,155 point-of-sales are in mainland China. • Point-of sales in mainland China: In terms of city distribution, point-of sales in the 1st and 2nd-tier cities accounted for 23.7%, and point-of sales
Slide 21: 361° Kids Overview
361°Kids Overview Follows the brand spirit of “One Extra Degree of Passion” of the 361° core brand With the brand statement “Love it, Kids!”, 361° Kids focuses on the market for children’s and teenagers’ sporting goods Committed to fulfilling sports apparel needs of “children and teenagers” in vario
Slide 22: Differential Advantages
Differential Advantages Enhance differentiation-based competitive advantages, strengthened the Group’s 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 o
Slide 23: Kids' Sportswear Sales Overview
Kids’ Sportswear Sales Overview China Sales Network • The Group has 1,745 point-of-sales for kids’ sportswear in China. In which: In terms of city distribution, point-of- sales in 1st and 2nd-tier cities accounted for 29.2%, and point-of-sales in 3rd-tier or lower cities accounted for 70.8%; in term
Slide 24: 361° E-commerce
361°E-commerce Captured new opportunities in the post-pandemic era to accelerate high-quality growth in e-commerce • In 1H 2021, revenue from e-commerce sales of web-exclusive products was RMB 487.8 mn, accounting for 15.7% of the Group's total revenue, a yoy increase of 54.5%; • Engaged 361° offici
Slide 25: Brand Building
Brand Building GONG Jun 361º Global Endorser
Slide 26: Premium Brand Resources
Premium Brand Resources In 1H 2021, A&P expenses accounted for 8.0％ of the Group’s total revenue Large-scale Sports Events 20 Top-tier Athletes and Celebrities • Major comprehensive sports events: as Spokespersons The 19th Asian Games in Hangzhou 2022 • Basketball player: international basketball su
Slide 27: Premium IP Crossover
Premium IP Crossover Make room for brand growth with premium IP resource integration • Our mature crossover operation model has been widely recognized in the industry and won numerous awards; • In-depth strategic cooperation with the China Cotton Industry Alliance (CCIA) to provide products with hig
Slide 28: Consumption Experience Upgrade
Consumption Experience Upgrade Renewed store image to elevate shopping experience • 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 structure, strengthened
Slide 29: Industry Outlook
Industry Outlook XU Can WBA featherweight world boxing champion
Slide 30: Favourable Government Policies
Favourable Government Policies “The National Fitness Plan (2021-2025)” points out the domestic sports industry Action plan to further promote sports consumption Implementation Plan for Further Optimizing Supply to to reach RMB 5 trillion by 2025 Promote the Stable Consumption Growth and Facilitating
Slide 31: Consumption Growth Momentum
Consumption Growth Momentum Overall sportswear market sales in Spending Per Capita on Sports Goods various countries 2015-2020 CAGR in 2020 (USD) 307.3 13.5% 138.3 124.3 109.2 3.0% 1.4% 0.9% 89 0.7% -2.8% 32.4 Mainland Mainland 中 国 內 地 Japan 日 本 Singapore 新加坡 韩 国 美USA 国 英 国 中國內地 日 本 Singapore Japan
Slide 32: Favourable Industry Development
Favourable Industry Development The sports industry has been releasing its potential at an accelerated rate, advancing to the stage of higher-quality development 2015-2025 Market Size of China’s Sportswear Industry (RMB bn） Major sports events such as the Winter Olympics and Asian Games will be held
Slide 33: Appendix
Appendix 361-FENGYI III running shoes
Slide 34: Brand Positioning
Brand Positioning High-end Market Casual Professional Fashion Sports Mass Market 34
Slide 35: R&D
R&D In 1H 2021, R&D expenses accounted for 3.6% of the Group’s total revenue. The Group obtained approval for 387 patents as of 30 June 2021, gaining strong competitive edge in R&D. 361° “Flying Flame” shoes IAAF certified carbon running shoes 361° “Lightspeed” suit German Red Dot Design Award 2021
Slide 36: Q&A
Q&A Kyranbek MAKAN Well-known Chinese professional basketball player
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