ANTA Sports Announces 2022 Interim Results
Group Revenue Reaches RMB25.97 billion Multi-brand Strategy Continues to Drive Performance Beyond Expectations
Hong Kong, 23 August 2022 – ANTA Sports Products Limited ("ANTA Sports" or the "Company", stock code: 2020.HK, and its subsidiaries collectively the "Group"), a widely recognized global sportswear company, announced the Group's unaudited interim results for the six months ended 30 June 2022 (the "period").
- During the financial period, the Group's "Single-focus, Multi-brand, Globalization" strategy yielded remarkable results amid the Pandemic. Overall revenue hit another record high, having increased by 13.8% to RMB25.97 billion, beating market expectations;
- Although direct retail business and business in first- and second-tier cities made up a dominant portion of the Group's business, and took a relatively more severe hit as a result of the Pandemic, overall gross profit increased by 11.8% year-on-year to RMB16.11 billion, while overall gross profit margin fell only slightly by 1.2 percentage points to 62.0%. Overall profit from operations dropped by 1.9% to RMB5.79 billion, with overall operating profit margin falling by only 3.6 percentage points to 22.3%;
- By segment, during the financial period, ANTA segment's revenue increased by 26.3% year-on-year to RMB13.36 billion; FILA segment's revenue fell slightly by 0.5% to RMB10.78 billion. The incubation model of news brands has been further developed, all other brands' revenue leaped by 29.9% to RMB1.83 billion driven by DESCENTE and KOLON SPORT;
- Amer Sports Holding (Cayman) Limited ("AS Holdings", the Group's joint venture, owning the business of Amer Sports) is on the track of accelerated development. During the financial period, thanks to the satisfactory performance of Amer Sports' overseas business and its steady development in the Mainland China market, the revenue of AS Holdings grew by 21.1% to RMB9.67 billion. Its EBITDA grew by 28.2% to RMB714 million. The share of loss to the Group reduced significantly from RMB346 million in the same period of last year to RMB178 million for the financial period;
- On a consolidated basis, without the effect of share of loss of a joint venture, the profit attributable to equity shareholders decreased by 10.0% year-on-year to RMB3.77 billion for the financial period; on a consolidated basis, with the effect of share of loss of a joint venture, the profit attributable to equity shareholders decreased by 6.6% year-on-year to RMB3.59 billion for the financial period;
- Interim dividend increased by 3.3% year-on- year to HK62 cents per ordinary share, representing a payout ratio of 40.6% of profit attributable to equity shareholders;
- During the financial period, the Group's free cash inflow was RMB4.11 billion, reflecting a strong cash generating capability. Moreover, as of 30 June 2022, the Group's total amount of cash and cash equivalents, fixed deposits held at banks with maturity over three months, and pledged deposits reached RMB24.93 billion. Net cash position increased to RMB12.16 billion. The abundant fund reflected our sound risk capacity and ability to withstand high-pressure scenarios; and
- Number of ANTA stores in Mainland China and overseas stood at 6,660, while ANTA KIDS' stores stood at 2,563. The total number of FILA stores (including FILA KIDS and FILA FUSION standalone stores) in Mainland China, Hong Kong, Macao and Singapore reached 2,021. The total number of DESCENTE stores in Mainland China, Hong Kong and Macao reached 182. The total number of KOLON SPORT stores in Mainland China and Hong Kong stood at 153. We continue to improve and optimize our sales network, which will help expand our brand influence and promote the sustainable development of the Group.
- ANTA and ANTA KIDS
- As a leading sportswear brand in China, ANTA has been executing the "Lead to Win" acceleration plan announced last year. With the core strategies of being "Rooted in and Known for Performance Sport" and fostering "Brand Transformation and Growth", key performance indicators show that we are making progress as planned despite the impact of the Pandemic.
- As the official partner of COC, ANTA continues to provide sports equipment for 22 Chinese national teams. During the Tokyo 2020 Olympic Summer Games and the Beijing 2022 Olympic and Paralympic Winter Games, the general public in China witnessed the glorious moments of its Olympic athletes. During the financial period, leveraging on the branding opportunities brought by the "Two Olympics", ANTA deepened its association with the Olympic Games and the COC in consumers' minds.
- ANTA promoted its professional brand image by continuously sponsoring athletes such as Eileen Gu, Wu Dajing and Zhang Jike, amongst others. ANTA also actively promoted professional sports products, such as the authorized national flag series of the Beijing 2022 Olympic Winter Games and ANTA Champion series that well represent the Chinese sports industry. It also attracted young Chinese consumers through the strong influence of renowned celebrities, such as Wang Yibo, Bai Jingting and Guan Xiaotong.
- The sales of high-end basketball shoes and running shoes were satisfactory, while the spokesperson strategy also achieved decent results. ANTA focused on its position as a leading professional sports brand to attract high-spending consumer groups by enhancing high-end and high-performance products in its offerings, including FLASHLITE 4.0 and Nitro Mach 2.0, leading to a surge in the brand's share of voice and performance sports mindset.
- ANTA KIDS has been enjoying the advantage of being a first mover in the industry. After years of development, ANTA KIDS has established its leading position in the industry. It further launched a series of functional products for running, basketball, soccer and outdoor sports, to address the specific needs of children in various scenarios. The proportion of footwear and professional sports products increased progressively in ANTA KIDS' product offerings. ANTA KIDS launched the "Wind-riding Running Shoes 4.0" which applies Resilient Elastic technology. We also joined hands with China Tianyan to create "UFO4.0 Running Shoes" and "Swift Leaping" professional rope skipping shoes, leading to stronger brand differentiation.
- We further improved the management efficiency of its DTC model, as a result, store and product efficiencies have been enhanced at the store level. Under the DTC model, around 52% of approximately 6,600 of ANTA and ANTA KIDS stores in aggregate were directly operated by us, with the remaining 48% operated by franchisees under our operating standards.
- FILA, FILA KIDS and FILA FUSION
- Leveraging its strategy of “Top-notch Products, Top-notch Brands and Top-notch Channels”, FILA has seized the opportunity to expand in the performance sports market as backboned by its century-old legacy in the sports industry while retaining its fashion elements.
- FILA launched several crossover series with fashion brands. In order to establish an image combining fashion and professional sports in consumers' minds, FILA continued to expand its functional product offerings in different niche markets such as fitness, tennis and golf, amongst others.
- FILA focused on female fitness and established a new concept of "FILA Latte Girl" to portray a chic style for fitness. FILA also teamed up with Ning Chang, a renowned actress, to promote the strength, confidence and elegance of "FILA Latte Girl". In order to build a brand community, FILA GLAM-FITNESS and FILA GOLF CLUB communities held a series of events to enhance communications with target consumers.
- With its rapid development, FILA KIDS has established its leading position in the high-end kidswear market. Blending the concepts of youthfulness, upbeat attitude and trendy sports, FILA FUSION targets the younger customer segment.
- Having upheld the design-driven sports spirit of "DESIGN THAT MOVES" throughout 80 years of brand legacy, DESCENTE incorporates revolutionary technology with ingenious craftsmanship into each of its creations. DESCENTE has established itself in the Mainland China market, capturing the attention of core customers seeking high-tech materials and exquisite craftsmanship.
- During the financial period, DESCENTE further enhanced its professional brand image in the field of skiing by launching professional skiing equipment. We appointed famous actor, Eddie Peng as the latest brand ambassador to promote our brand's spirit. DESCENTE also continued its partnerships with Daniel Wu, a renowned movie star, and William Chan, a famous actor, to promote various series.
- KOLON SPORT
- KOLON SPORT continued to advocate a light outdoor lifestyle, releasing a range of new lightweight offerings. Benefiting from the robust demand for outdoor and camping products, the brand delivered robust growth despite a challenging market environment during the first half of 2022.
- To unlock the potential of women's sports market, KOLON SPORT is committed to expanding the product line for women. KOLON SPORT built a unique KOLON Girl image on International Women's Day with its brand endorser, Liu Shishi. In addition, through the establishment of "KOLON Road Lab", various themed activities were held to focus on high-end consumers' demands with a view to enhancing brand popularity in the camping market.
Adhering to Longtermism and Sticking to Strategic Goals
- The fundamentals of China's economy and the sportswear industry remain healthy, and the Group is cautiously optimistic about the development prospects of the industry. The Group's resilience was underpinned by its strategic planning and strong execution capabilities. Although market conditions have become more unpredictable, the Group continues to maintain a positive attitude that drives it to stride forward steadfastly. By adhering to "Benchmarking with High Standard" and the strategy of "Single-Focus, Multi-Brand, Globalization", it will seek breakthroughs in terms of brand, product and channel.
- 2022 presents both challenges and opportunities. In the face of challenges, we proactively implemented "Dynamic Management" to effectively address the situation and drive "High-quality Growth". In the face of opportunities, our brands formulated concrete strategies for different scenarios and will implement the strategies steadily with our strong execution capabilities to build core competencies.
- For the Performance Sports Group, ANTA and ANTA KIDS will continue to strengthen their footprint in the professional sports segment with innovations and technologies. We will focus on product categories that can increase brand awareness and aim to be the first brand that consumers associate with the Olympics. For the Fashion Sports Group, we will continue the implementation of our "Three Top-Notch" strategy to optimize FILA's product portfolio and venture into professional sports such as fitness and golf to revitalize FILA's sporting DNA. For the Outdoor Sports Group, we will seize opportunities arising out of new scenarios and unleash the tremendous potential of the outdoor sports market.
- In an increasingly volatile environment, we will further improve our operational efficiency and risk capability. We will continue to expedite digitalization, promote integration of online and offline models, increase our sensitivity to changes in demand and enhance overall work efficiency. At the same time, we will strengthen the adaptability of internal and strategic suppliers, thereby enhancing the overall flexibility of our supply chain that in turn enables us to rapidly respond to crises.
- The Group steadfastly upholds longtermism. In the face of challenges, we have been more determined than ever to adhere to our strategies and development goals to enhance the value of each brand, while strengthening each brand's competitiveness so as to maintain “High-quality Growth”.
Representative of ANTA Sports said: "ANTA Group's vision is to be the leading multi-brand sportswear group in the world. We will continue to adhere to Benchmarking with High Standard' with proper execution to advance our strategies steadily, we are confident that we can achieve business breakthroughs and succeed in all aspects amid the volatile market environment. ANTA Sports was listed in 2007 and after 15 years, the Group has evolved into a listed company with international competitiveness and modern governance standards. Over the past decades, we have remained inspired by our original aspiration in both good times and bad – to make every effort to produce quality footwear and apparel."
For more 2022 interim results-related documents and information about the Company, please visit our investor relations website http://ir.anta.com.
About ANTA Sports
ANTA brand was established in 1991, while ANTA Sports Products Limited, a widely recognized global sportswear company, was listed on the Main Board of HKEx in 2007 (Stock code: 2020.HK). For many years, ANTA Sports has been principally engaging in the design, development, manufacturing and marketing of professional sports products including shoes, apparel and accessories to Chinese consumers. By embracing an all-round brand portfolio including ANTA, FILA, DESCENTE and KOLON SPORT, and by setting up an investor consortium to successfully acquire Amer Sports in 2019, a global sportswear group that has internationally recognized brands including Salomon, Arc'teryx, Wilson, Peak Performance, Atomic, etc. ANTA Sports aims to unlock the potential of both the mass and high-end sportswear markets.
IR website: http://ir.anta.com
WeChat official account: antatiyu_20070710
For further information, please contact:
ANTA Sports Products Limited
Investor Relations Department
Tel: (852) 2116 1660
Fax: (852) 2116 1590
Citigate Dewe Rogerson
Tel: (852) 3103 0118