Interim Results Presentation 17 August

Transcription

1 Interim Results Presentation 17 August

2 BUSINESS REVIEW AND OUTLOOK

3 BRAND + PRODUCT Cherry Chen ( 陳晨 ), Executive Director and Brand VP

4 FULL ENHANCEMENT OF BRAND VALUE Reinforcement and emphasis of brand DNA Development and sales of products compatible with market demands through analysis and application of end retail sales data to seize more business opportunities Immersion and upgrade of star products 4

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6 TRACKING MARKET DEMAND TO ENHANCE PRODUCT COMPETITIVENESS Stabilising product prices to maintain gross profit margin Product positioning Tracking market demand, adjusting product structure, and speeding up the precipitation of star products by analyzing the big data of our brand. Notable increase in overall order volume Rescheduling product launch based on the changes of consumers' matching, in order to seize market windows Mid-High Low-Mid 15FW 16FW Order volume Adding value through emphasis on quality and appearance Presentation of products by brand ambassador increases new and old consumers' recognition Enhancement in quality and appearance further increases the added value of products 6

7 KAPPA CHINA MARKETING REVIEW Asian pop and fashion superstar G-Dragon appointed brand ambassador to mark Kappa 100th anniversary in 2016 Reinforcing brand style and enhancing brand value and added value of products Enhancing interaction with consumers to facilitate full marketing coverage 7

8 360 INTEGRATED MARKETING Brand Marketing Product Marketing channel Enhancing interaction with consumers by deepen the brand culture to facilitate full marketing coverage to increase brand addiction Focused on Internet+ to embark on new marketing approach Increase product sales on all platforms through expanding brand promotion coverage and connecting both online and offline channel 8

9 MARKETING IN 2H2016 Ongoing enhancement and reinforcement of star products Offline marketing activities for 2H2016 9

10 BACK TO SPORTS Real-time adjustments to product mix according to market requirements Trend + Light Auxiliary Functions Increasing supply of functional products to enrich and diversify product lines Smart combination of product portfolio to enhance product competitiveness 10

11 INTEGRATION OF SINO-JAPAN OPERATIONS TO CENTRALIZE MANAGEMENT Centralized management allowing comprehensive resource sharing, amalgamation of strengths and complementary effects Leveraging premium resources of Japan and sharing R&D results on TC new technologies of Japan for reasonable application in brands under the Group Increasing technical input and intrinsic value of products to assure market leadership and competitiveness Continue to implement fast reaction method in supply chain 11

12 BRAND + RETAIL Daniel Yang ( 楊洋 ), Assistant to CEO and Finance Director

13 OVERVIEW OF CHANNEL PERFORMANCE 1H16 Enhancement of channel quality is crucial for future channel expansion Gross Sales +5% Same-store Sales Self-owned Store Sales +7% -2% 15SS 16SS 15SS 16SS 15SS 16SS 13

14 OVERVIEW OF OFFLINE CHANNELS 1H16 01 Net increase of 15 Kappa stores, up to a total of 1,282 stores self-owned retail stores accounting for 32% of total number of stores Expect mid-digit growth by the end of 2016 versus end of Stable pace of expansion with diverse channel types to satisfy consumers new approach of shopping Shopping Mall, Integrated Stores (Adults + Kids wear), Outlet Stores 14

15 E-COMMERCE 01 Sales of RMB107 million representing yoy growth 88.7% 02 Accounting for 21% of China sales, increasing by 9 percentage points yoy 03 Gross profit margin stood at 60% 15

16 KAPPA KIDS 01 RMB33 million, accounting for 6.5% of China Sales stores in total 16

17 JAPAN BUSINESS 01 The integration of Sino-Japan business began last year by adjusting the Japan business structure on all fronts. Currently, the first phase of adjustment is completed 02 The national launch of Phenix coinciding with Winter Olympics in 2022, focusing on core ski grounds to embrace the fast growth cycle of the ski market 17

18 FINANCIAL REVIEW Vincent Lui ( 呂光宏 ), Investment and Fund Management Director All amounts in RMB million, unless otherwise stated.

19 SUMMARY OF RESULTS 1H2016 RMB million YoY Change Revenue % Gross Profit* % Operating Profit Operating Profit excluding investment income Profit Attributable to Equity Owners Gross Profit Margin* 57.2% -0.4 ppts Operating Profit Margin 84.9% ppts Operating Profit Margin excluding investment income 12.2% -0.9 ppts Net Profit Margin 73.7% ppts Basic Earnings Per Share (RMB cents) Interim Dividend and Interim Special Dividend Per Share (RMB cents) % 19 * Before provision of inventories

20 SALES ANALYSIS 1H2016 By regional market RMB million As % of total sales YoY Change China % +6.8% Japan % +17.1% Total sales 650 China sales RMB million As % of total sales YoY Change Wholesale % -10.3% Retail % 14.7% Kids % N.A International and others 9 1.8% -10.0% Total sales

21 GROSS PROFIT MARGIN ANALYSIS 1H2016* By regional market YoY Change China 63.8% -0.3 ppts Japan 34.0% +2.3 ppts Group overall 57.2% -0.4 ppts China Kappa gross profit margin by product YoY Change Apparel 70.5% +1.4 ppts Footwear 56.5% -2.7 ppts Accessories 66.1% -1.0 ppts Kappa brand overall 66.6% +0.3 ppts Kappa Kids 55.6% N/A * Before Provision of inventories 21

22 EXPENSES ANALYSIS 1H2016 RMB million YoY Change Advertising and selling expenses % As % of total sales +19.6% +2.6 ppts Employees salaries and benefits % As % of total sales 9.8% -2.1 ppts Design and product development expenses % As % of total sales 2.9% -0.1 ppts 22

23 CHINA INVENTORY, TRADE RECEIVABLES AND TRADE PAYABLES 1H2016 RMB million YoY Change Net inventory* % Balance of trade receivables % Balance of trade payables % * Inventory structure optimized with higher percentage of new products YoY Change Inventory turnover days days Turnover of trade receivables days days Turnover of trade payables days 80-4 days 23

24 INVESTMENT AND FUND HK$Bn RMB million E average return on investment 8% 10% 10.2 Cash and bank balances* 1, Fixed income 41 High liquidity treasury products 2,469 6 Bank loans (903) 4 Alibaba 29% Total 3,252 2 *Equity investment 21% *including restricted cash Net Cash 9% 0 Market value Cash and investment Partners: Yunfeng, Fosun, Citic, and etc Investment in advanced technologies, financial services, new energy, medicine and manufacturing 24 Note: * excluding Alibaba The figures set out above are based on the exchange rate of HKD1: RMB as at 30 June 2016.

25 2016 INTERIM DIVIDEND The Group has maintained a relatively high dividend payout ratio to provide maximum assurance for shareholders earnings RMB cents Six months ended 30 June Basic Earnings Per Share Interim Dividend Per Share Interim Special Dividend Per Share Interim Dividend Payout Ratio 60% 70% 25

26 Q & A

27 INVESTOR RELATIONS CONTACT INFORMATION Website: Tel: +86 (10) Fax +86 (10) Address: Building 21, No. 2 Jingyuanbei Street, Beijing Economic-Technological Development Area Beijing, China Disclaimer Warning about Forward-looking Statements This presentation contains certain forward-looking statements in relation to the financial conditions, operating results and business of the Company. These statements represent the expectations or beliefs of the Company regarding future events, and are subject to risks and uncertainties, whether known or unknown. Such risks and factors might result in significant difference between actual results, performances or events and the results, performances or events stated or implied in such statements. Certain statements, such as those including words and expressions such as potential, estimate, expect, anticipate, target, intend, plan, believe, project and similar phrases expressed in different forms, are regarded as forward-looking statements. Forward-looking statements are subject to inherent risks and uncertainties. It should be noted that a number of factors might result in the actual outcome deviating from conditions expected or implied in the forwardlooking statements, and in some cases such deviation might be significant. The contents of the forward-looking statements are updated as at the date on which such forward-looking statements are made, and should not be assumed to have been revised or updated to reflect latest information or subsequent events. Market trends and factors that are expected to affect the operating results of the Company are set out in the sections headed Business Review and Outlook and Financial Review.

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