Li Ning Company Limited · HKEX:2331
Li Ning — FY2008 Earnings Presentation
27 slides from Li Ning's earnings presentation, March 2009
Slide 1: 2008 Annual Results Presentation
2008 Annual Results Presentation March 2009
Slide 2: Agenda
Agenda Major Achievements in 2008 Financial Highlights Business Review Future Outlook & Strategies Open Forum 1
Slide 3: Major Achievements in 2008
jy Li Ning Company Limited (SBRARA A) (Incorporated in the Islands with limited liability) (Stock Code: 2331) iv] life with passion
Slide 4: Major Achievements in 2008
Major Achievements in 2008 Successful Conclusion of the Five-year Plan Branding Product Design and R&D Olympics-related marketing Established Li Ning Sports campaign a success Science R&D Centre Multi-brand strategy Product innovation Sales Network Streamlining Expansion of the Supply Chain Store ex
Slide 5: Five Years of Steady Growth
Five Years of Steady Growth RMB Mil Revenue RMB Mil Profit Attributable to Equity Holders 8,000 800 721.3 7,000 CAGR: 37.4% 6,690.1 700 CAGR: 55.8% 6,000 600 473.6 5,000 4,348.7 500 4,000 400 3,180.5 294.8 3,000 2,450.5 300 1,878.1 186.8 2,000 200 122.4 1,000 100 0 0 2004 2005 2006 2007 2008 2004 20
Slide 6: Financial Highlights
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Slide 7: Financial Highlights
Financial Highlights 2008 2007 Change (RMB Mil) For the year ended 31 Dec Revenue 6,690.1 4,348.7 53.8% Gross profit 3,220.4 2,082.8 54.6% Operating profit 960.2 609.9 57.4% EBITDA 1,070.5 681.8 57.0% Profit attributable to equity holders 721.3 473.6 52.3% Basic EPS (RMB cents) 69.63 45.83 51.9% Ful
Slide 8: Revenue Analysis by Product Categories
Revenue Analysis by Product Categories % Stable Growth of Footwear Products as a proportion of Total Revenue 100% 4.7% 0.4% 2.4% 5.0% 5.6% 7.6% 6.2% 8.6% 5.1% 12.1% 80% Other Brands 52.7% 49.5% 46.3% LI-NING Brand 60% 52.3% Accessories 53.3% LI-NING Brand Apparel 40% LI-NING Brand Footwear 20% 43.6%
Slide 9: LI-NING Brand Revenue Analysis by Geography
LI-NING Brand Revenue Analysis by Geography International Market 0.8% 59.1% Northern Region 40.9% 61.1% Eastern Region 40.2% 50.4% Southern Region Domestic Market 18.1% 27.7% 99.2% 49.6% % of total revenue revenue growth 8
Slide 10: Healthy Profit Margins
Healthy Profit Margins Operating Margin & % Gross Profit Margin % Margin of Profit Attributable to Equity Holders 50% 20% Operating Margin 49% 14.4% 48.1% 14.0% 47.9% 15% 12.7% 48% 47.4% 11.1% 9.6% 47% 46.5% GP Margin 10% 46.0% 10.9% 10.8% 46% 9.3% 5% 7.6% Margin of Profit 6.5% 45% Attributable to E
Slide 11: Key Financial Indicators
Key Financial Indicators 2008 2007 Change For the year ended 31 Dec Inventory Turnover (days) 61 70 -9 Avg. Trade Receivable Turnover (days) 48 53 -5 Avg. Trade Payables Turnover (days) 69 69 0 Cash Conversion Cycle (days) 40 54 -14 R&D Expenses (as % to revenue) 2.7% 3.2% -0.5 p.p. A&P Expenses (as
Slide 12: Healthy Financial Position
Healthy Financial Position 2008 2007 Change For the year ended 31 Dec Cash and Cash Equivalents* 893.7 861.1 3.8% Current Liabilities 2,086.8 977.4 113.5% Total Liabilities to Total Assets Ratio 51.8% 37.3% 14.5 p.p. Return on Equity (full-year) 39.6% 30.1% 9.5 p.p. CAPEX** 260.4 243.1 7.1% * Includ
Slide 13: Business Review
jy Li Ning Company Limited (SBRARA A) (Incorporated in the Islands with limited liability) (Stock Code: 2331) iv] life with passion
Slide 14: Successful Olympics Integrated Marketing Campaigns
Successful Olympics Integrated Marketing Campaigns The four Chinese Return of national teams Heroes Hero’s delivered stunning Assembly A letter to all Sponsored gear performances One team Olympics strategy — Hero Vans athletes in the world for Olympics Cooperation with Flagship Beijing Olympics Prot
Slide 15: Other Marketing Campaigns
Other Marketing Campaigns Basketball • Continued the cooperation with NBA players, including O’Neal and Hayes • Newly signed NBA player – Baron Davis, point guard of LA Clippers • China University Basketball Association (CUBA) • Nation-wide junior secondary school basketball events Tennis • Official
Slide 16: Product Research and Development
Product Research and Development Strong emphasis on product design, research and development • Design, research and development centres in mainland China, Hong Kong and Portland, Oregon in the United States • Continued to work with reputable educational institutions and professional bodies in conduc
Slide 17: Effective Sales Channel Management
Effective Sales Channel Management Continued to expand its sales channel Number of coverage, especially in second- and third-tier 2008-12-31 2007-12-31 stores cities Strengthened retail capabilities and enhanced LI-NING brand 6,245 5,233 overall service quality to improve same store Other brands* 67
Slide 18: Flexible and Effective Supply Chain Management
Flexible and Effective Supply Chain Management Continuously refine and improve supply chain and inventory management Hosted four large scale trade fairs of LI-NING brand and a total of five trade fairs of AIGLE and Z-DO brands Cost savings by continuous enhancement in the procurement process and eff
Slide 19: Other Brands
Other Brands Stronger retail level support with special emphasis on consumer communications Fine tune product mix to cater the tastes and preferences of the Chinese market Collaborate with hypermarkets on upgrading the sales information management Adopt a fast and responsive supply chain to streamli
Slide 20: Future Outlook and Strategies
Future Outlook and Strategies 19
Slide 21: Outlook
Outlook Business Environment Macro-economic uncertainties in 2009 add pressure on the business environment The sporting goods industry enters into a new cycle of growth after the conclusion of the Beijing Olympic Games, growth rate will slow down on a relative basis On the back of the global financi
Slide 22: Brand Reinvention and Product Innovation
Brand Reinvention and Product Innovation Further establish our capabilities in implementing product-driven integrated marketing strategy Revamp brand’s DNA to clearly define the Group’s positioning and target consumers Tap into more market segments and seek more sports marketing resources that are B
Slide 23: Distribution and Supply Chain Management
Distribution and Supply Chain Management Strengthen distribution management to enhance overall efficiency • Improve the monitoring and collection of Store Expansion Plan operating data and intelligence at the retail level • Focus on same store sales growth By End of No. of Stores • Broaden presence
Slide 24: International Expansion
International Expansion 2009-2013: preparation stage, focus more on developing capabilities for international expansion: • Talent • Supply chain • Product design • Branding • The expansion mode By 2018: become one of the world’s top 5 sports brands, with revenue contribution of 20% from internationa
Slide 25: Mission, Vision & Core Values
jy Mission, Vision & Core Values Li Ning Comgany Limited =SaRh27) MISSION people the desire and power to make breakthroughs / -e CORE VALUES, A world’s leading brand in the sports goods industry integrity, professionalism, passion, breakthroughs,
Slide 26: Li Ning Company Limited
jy Li Ning Company Limited (SBRARA A) (Incorporated in the Islands with limited liability) (Stock Code: 2331) iv] life with passion
Slide 27: Investor Relations
Investor Relations Contact Us 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 Email : investor@li-ning.com.cn 26