361 Degrees International Ltd. · HKEX:1361
361 Degrees International — H1 2022 Earnings Presentation
35 slides from 361 Degrees International's earnings presentation, Aug 23, 2022
Slide 1: 2022 Interim Results
361 Degrees International Limited Stock Code 1361.HK August 2022 2022 Interim Results
Slide 2: Content
1 Financial Review 4 Appendix Content 2 Business Review 5 Q&A Session 3 Brand Building
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 2022 and may not be reproduced or redistributed. In particular, these presenta
Slide 4: Steady Growth and Innovative Development
Steady Growth and Innovative Development 1 With challenges bring opportunities, seeking growth opportunities 2 Steady business growth with improved profitability 3 Kid’s and E-commerce businesses to stimulate new growth momentum 4
Slide 5: Financial Review
Financial Review “Flying Flame” Professional Marathon Running Shoes
Slide 6: Financial Overview
Financial Overview For the 6 months ended 30 Jun RMB mn 2022 2021 Change Revenue 3,653.8 3,107.1 +17.6% Gross profit 1,515.6 1,299.7 +16.6% Operating profit 771.9 710.2 +8.7% Profit attributable to equity shareholders 550.9 401.4 +37.2% Basic EPS (RMB cents) 26.7 19.4 +37.2% Profitability Ratios (%)
Slide 7: Revenue Analysis
Revenue Analysis Revenue Revenue by Products RMB mn % 3,653.8 62.5 1.0% 0.9% 1.7% 3,107.1 683.1 14.9% 16.0% 18.7% 25.7 1.1% 1.1% 45.5 2,686.1 498.2 1.3% 27.5 35.0 401.8 28.9 41.0% 37.6% 1,382.4 37.8% 1,167.7 1,100.7 42.0% 44.4% 40.5% 1,380.5 1,480.3 1,127.2 1H2020 1H2021 1H2022 1H2020 1H2021 1H2022
Slide 8: 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% 43.5% 41.3% 45.0% 43.0% 45.0% 1,800.0 41.8% 41.5% 41.0% 39.0% 37.0% 37.8% 40.0% 35.0% 1,515.6 1,600.0 33.0% 4.6 1H2020 1H2021 1H2022 35.0% 1,400.0 1,299.7 277.8 0.6 GPM o
Slide 9: Major Operating Expenses Analysis
Major Operating Expenses Analysis Major Operating Expenses as % of Revenue RMB mn 9.0% 9.2% 8.7% 8.3% 8.0% 7.4% 3.8% 3.6% 3.1% 1H2020 1H2021 1H2022 Advertising & promotion expenses Staff Cost R&D Selling and Distribution Expenses Administrative Expenses For the 6 months ended 30 Jun For the 6 months
Slide 10: Operating Profit and Net Profit Analysis
Operating Profit and Net Profit Analysis Operating Profit & Income Tax Expenses & Profit Attributable to Equity Operating Profit Margin Effective Tax Rate Shareholders & Margin of Profit Attributable to Equity Shareholders RMB mn / % RMB mn / % RMB mn / % 1,400.0 25.0% 22.9% 500.0 35.0% 30.7% 900.0
Slide 11: Balance Sheet Highlights
Balance Sheet Highlights RMB mn As at 30 Jun 2022 As at 31 Dec 2021 Change Current assets 11,095.6 10,083.3 +10.0% Current liabilities 3,020.6 2,668.0 +13.2% Net current assets 8,075.0 7,415.3 +8.9% Equity attributable to owners of the Company 7,699.2 7,116.8 +8.2% Net asset value per share* 4.4 RMB
Slide 12: Working Capital Cycle Analysis
Working Capital Cycle Analysis Working Capital Turnover Days 149 150 Inventories Trade & bills receivable 122 115 114 111 Trade & bills payable 87 Overall 76 2021 1H2022 Trade and Bills Receivables Ageing Analysis As at 30 Jun As at 31 Dec RMB ‘000 As at 30 Jun As at 31 Dec 2022 2021 RMB ‘000 2022 %
Slide 13: Liquidity Analysis
Liquidity Analysis Cash Flow For the 6 months ended 30 Jun RMB mn 2022 2021 Profit before income tax 767.3 677.3 Adjustment of non-cash profit and loss and items from non-operating activities 36.2 14.1 Change in inventories (15.7) 138.7 Change in trade and bills receivables (850.1) (481.5) Change in
Slide 14: Capital Strength
Capital Strength Financial Resources As at 30 June As at 31 Dec RMB ‘000 2022 2021 Pledged bank deposits 39,172 52,170 Deposits with bank with maturities > 3 months 2,000,000 2,000,000 Cash and cash equivalents 3,423,532 3,339,010 Total cash 5,462,704 5,391,180 Bank loans 207,556 207,837 Total borro
Slide 15: Business Review
Spencer Dinwiddie International Basketball Superstar Business Review
Slide 16: 361 Overview
361 Overview Brand Positioning “Specialised, Youthful and Internationalised” Operational Strategy Dual Drive of “Professional and Fashion” Market Positioning Cater to the “Mass Sports Market” and provide “High-Value” products 16
Slide 17: Sports Goods for Running
Sports Goods for Running Empower runners to achieve breakthrough with core technologies on running shoes • Meet all kinds of runners’ needs by supporting professional racing, daily training, outdoor cross-country, lifestyle and other sports scenes with self-developed core technologies • Launched a m
Slide 18: Sports Goods for Basketball
Sports Goods for Basketball Enhance brand value by integrating functionality and fashionable design • Work with a group of world-renowned spokesperson. After collaborating with Aaron GORDON, an international basketball superstar, and Kyranbek MAKAN, a well-known professional basketball player in the
Slide 19: Sports Goods for Comprehensive Training and Lifestyle
Sports Goods for Comprehensive Training and Lifestyle Cater the diverse needs of consumers through functionality and fashionable design • Integrate fashion elements to the comprehensive training and lifestyle products without sacrificing functionality, providing consumers with functional and customi
Slide 20: Sales Overview
361 Sales Overview Global sales network • The Group has 6,482 points-of sale, of which 5,365 are located in mainland China, increased by 95 compared to the end of 2021 Retail Performance • In the first half of 2022, 361 retail sales recorded mid-double-digit growth year-on-year, with high-double-dig
Slide 21: Global Sales Network
361 Global Sales Network City Distribution Average Size • 1st and 2nd tier cities accounted for 23.4%, and 3rd tier or lower cities • Average size of the store is 123 , increased by 3 compared to the accounted for 76.6% end of 2021 Channel Structure • Mall and department stores accounted for 29.9%,
Slide 22: Kids Overview
361 Kids Overview Focuses on “The Market for Children’s and Teenagers’ Sporting Goods” Follow the brand spirit of “One Extra Degree of Passion”, with the brand statement “Love it, Kids!” Committed to fulfilling “Children and Teenagers” needs on sport apparels in various types of sporting and living
Slide 23: Competitive Edges of Kids
Competitive Edges of 361 Kids Echo core brand’s market position in professional sports, focusing on children’s and teenagers’ sporting goods Professional Functionality • Adhered to doing a great job in children’s and teenagers’ sports wear, with a series of products such as running, rope skipping, f
Slide 24: Kids' Sportswear Sales Overview
361 Kids’ Sportswear Sales Overview In 1H 2022, the revenue of 361 Kids was RMB 683.1 million, accounted for 18.7% of the Group’s total revenue, representing an year-on-year increase of 37.1% Sales Network Sales Performance • The Group has 2,097 points-of sale for kids’ sportswear in mainland China,
Slide 25: E-commerce
361 E-commerce Improved quality and efficiency in E-commerce operations and drove rapid business growth • E-commerce integrates product sales, brand promotion and membership management; provides user-oriented quality online consumer experience • Core products are directly introduced to customers upo
Slide 26: E-commerce
361 E-commerce For 1H 2022, revenue from the E-commerce sales of web-exclusive products was RMB 781.8 million, accounting for 21.4% of the Group’s total revenue, representing a year-on-year increase of 60.3% Product and Sales Channel • Revenue from the sales of web-exclusive products accounted for 7
Slide 27: Brand Building
Aaron Gordon International Basketball Superstar Brand Building
Slide 28: Brand Resources
Brand Resources In 1H 2022, A&P expenses accounted for 9.2% of the Group’s total revenue Large scale Sports Events Top tier Athletes and Celebrities as Spokespersons • Large-scale comprehensive games: the 19th Asian Games in Hangzhou • Basketball players: Aaron GORDON and Spencer DINWIDDIE, 2022, th
Slide 29: Brand Owned Running Event — Track Three
Brand Owned Running Event — Track Three Enhanced cohesion among runners and tested our profession products in real matches • “Track Three” was founded in April 2021, which focuses on major cities nationwide through offline races and online communities • Accurately target on the runners, focus on rac
Slide 30: Brand Owned Basketball Event — Touch Down and Burn
Brand Owned Basketball Event — Touch Down and Burn Brand Owned Basketball Event Hosted Nationwide, building reputations among basketball lovers • Founded in 2020, successfully built notable reputation among basketball fans • Innovative and comprehensive mechanism, deriving various types of event suc
Slide 31: Appendix
Appendix Gong Jun 361°Global Spokesperson
Slide 32: Consumption Growth Momentum
Consumption Growth Momentum Global sports and fitness apparel market is expected CAGR of domestic footwear and apparel market in 2020-2026 to grow at a CAGR of 4.4% from 2020 to 2026 sportswear and children’s wear are expected USD billion to outpace other product categories 12.3% 221.3 9.7% 172 3.8%
Slide 33: Favorable Industry Development
Favorable Industry Development Domestic sporting good industry enjoys faster growth driven by multiple favorable factors Promote consumption through sports Market size of China’s sportswear market in 2016-2026 In July 2022, the General Administration of Sport issued a work plan to stabilise the econ
Slide 34: R&D Innovation
R&D Innovation In 1H 2022, R&D expenditure accounted for 3.1% of the Group’s total revenue • As of 30 June 2022, the Group obtained 274 patents with a total of 710 technicians engaging in product R&D. The Group has been awarded the title of National High and New Tech Enterprise, National Green Facto
Slide 35: Q&A
Q&A
361 Degrees International — H1 2022 Earnings Presentation on 6ix