#1波司登 BSD BOSIDENG 波司登國際控股有限公司 Bosideng International Holdings Limited 2009/10 Annual Results Corporate Presentation#2Disclaimer The information contained in this presentation is intended solely for your personal reference. Such information is subject to change without notice, its accuracy is not guaranteed and it may not contain all material information concerning Bosideng International Holdings Limited (the "Company"). The Company makes no representation regarding, and assumes no responsibility or liability for, the accuracy or completeness of, or any errors or omissions in, any information contained herein. In addition, the information contains projections and forward-looking statements that may reflect the Company's current views with respect to future events and financial performance. These views are based on current assumptions which are subject to various risks and which may change over time. 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This presentation does not constitute an offer or invitation to purchase or subscribe for any securities or financial instruments or to provide any investment service or investment advice, and no part of it shall form the basis of or be relied upon in connection with any contract, commitment or investment decision in relation thereto. 1#3Agenda Results highlights Financial review Business review Future plans and strategies Q&A session 2#4IVE WITH HUMOR 无可抵抗的魅力。 PARKR SLINCE & GOLDEN THEM LIKE DIAMOND Results Highlights#52009/10 Annual Results Highlights "Bosideng" was the leading down apparel brand in the PRC for 15 consecutive years from 1995 to 2009* The four core brands of down apparel products achieved a combined market share of 38.0% in the PRC* "Bosideng" brand value reached RMB16.22 billion* The Group's revenue increased significantly by 34.2% to RMB5,738.1 million Gross profit margin improved by 4.8 percentage points to 50.3% Net profit attributable to equity holders of the Company jumped by 44.2% to RMB1,078.6 million The board of Directors is pleased to recommend a final dividend of RMB8.8 cents * According to China Industrial Information Issuing Center ("CIIIC") and the National Bureau of Statistics of China According to RREFF Global Billboard Beijing Famous-Brand Evaluation Co., Ltd. 4#6Financial Review#7Financial Highlights (RMB million) Revenue Gross profit For the year ended 31 March 2010 Change 2009 (%) 5,738.1 4,275.1 +34.2 2,886.6 1,945.0 +48.4 Gross profit margin (%) 50.3 45.5 +4.8%pts Profit from operations 1,205.5 679.8 +77.3 Profit before income tax 1,277.4 776.1 +64.6 Net profit attributable to equity holders of the 1,078.6 748.3 +44.2 Company Earnings per share (RMB cents) - Basic and diluted 13.88 9.51 +46.0 Dividend per share Final (RMB cents) 8.8 8.0 +10.0 - Full year (RMB cents) 12.6 11.8 +6.8 6#8Revenue Analysis For the year ended 31 March 2010 2009 Change (RMB million) Revenue Revenue contribution Revenue Revenue contribution (%) (%) (%) Branded down apparel 4,688.9 81.7 3,747.6 87.7 +25.1 OEM management 646.8 11.3 527.5 12.3 +22.6 Menswear apparel 402.4 7.0 N/A N/A Total 5,738.1 100.0 4,275.1 100.0 +34.2 Aggregate segment results of branded down apparel and OEM management jumped from RMB4,275.1 million to RMB5,335.7 million in the year under review. Growth in segmental results is attributable to Down apparel: enhancement of sales channels and sales mix of branded down apparel, which increase overall sales and margin effective sales plan to control the selling price of inventories to be sold in the off-peak season OEM management : full utilization of the Group's resources during the off-peak season and improved consumer sentiment after global financial crisis Menswear apparel: Contribution from Bosideng Menswear 7#9Breakdown of Down Apparel Income Sales*: RMB4,688.9 million 2,900.3 61.9% Sales*: RMB3,747.6 million Bosideng+26.1% 2,300.1 61.4% 886.6 18.9% Snow Flying+3.7% 854.8 22.8% 2010 2009 Year ended 31 March 386.4 Year ended 31 March 8.2% Bingjie+81.2% 526.9 11.2% 213.3 5.7% 359.1 9.6% Kangbo+46.7% •Sales rebates are not deducted from total down apparel revenue or from revenues of each brand sales rebate for the year ended 31 March 2010 and 2009 were RMB36.7 million and RMB13.0 million respectively. 00#10Gross Profit Margin Analysis Branded down apparel OEM Management For the year ended 31 March 2010 GP margin 2009 Change GP margin (% points) (%) (%) 54.1 49.3 +4.8 22.0 18.3 +3.7 Menswear 51.4 N/A N/A The Group 50.3 45.5 +4.8 6#11Operational Expenditure RMB million 1,800 1,579.2 (27.5%) 1,600 1,400 1,316.8 (30.8%) 553.8 (9.7%) 1,200 483.5 (11.3%) 1,000 235.8 (4.1%) 800 287.0 600 (6.7%) 400 789.6 (13.8%) 546.3 200 (12.8%) 0 2010 2009 Other sales and distribution expenses Administrative expenses Advertising and promotion 10 10#12Inventories As at 31 March As at 31 March Change (%) 2010 2009 (RMB million) Raw 59.9 30.0 +99.6 materials Work in 6.2 4.0 +56.9 progress Finished 793.6 822.8 -3.6 goods 859.7 856.8 +0.3 11#13Strong Financial Position As at 31 March As at 31 March Change 2010 2009 (%) (RMB million) Net cash 3,469.5 4,898.9 -29.2 Available-for-sale 1,618.5 financial assets Held-to-maturity 400.0 570.0 -29.8 investments Current ratio 5.5 10.1 -4.6 Gearing ratio 0 0 Operating cash inflow/ 1,605.2 1,424.4 +12.6 (outflow) Adopted prudent funding and treasury management policies while maintaining a healthy overall financial position: ■ Net cash position of approximately RMB3,469.5 million No outstanding loans and bank borrowings Net cash, available-for-sale financial assets and held-to-maturity investments aggregate RMB5,488.0 million, as compared to RMB5,468.9 million in March 2009 12 12#14Well Managed Working Capital Cycle Average Inventory Turnover Days(1) 145.0 Average Trade and Bills Receivables Turnover Days(2) T Average Trade and Bills Payables Turnover Days(3) I I I I 110.0 2010 I I I I I I 40.0 I 2009 2010 76.0 2009 (1) Calculated as average inventory divided by cost of sales and multiplied by 365 days (2) Calculated as average trade and bills receivables divided by revenue and multiplied by 365 days (3) Calculated as average trade and bills payables divided by cost of sales and multiplied by 365 days 48.0 46.0 2010 2009 13#15Business Review#16Dominant Market Leadership Leading down apparel brand in the PRC for 15 consecutive years since 1995 / Market share reached 24.9%*, which is 3 times of the closest external competitor • Ranked No.2 with a 7.6%* market share •Ranked No. 7 and No.8 with a market share of 2.9% and 2.6%* respectively Bingjie Bosideng Snow Flying Kangbo Four core brands of down apparel products achieved a combined market share of 38.0%* * Source: report issued by China Industrial Information Issuing Center in 2009 15#17Strong Brand Equity BOSIDENG 2009 Most Valuable Chinese Brands Bosideng 13th - RREFF Global Billboard Beijing Famous-Brand Evaluation Co., Ltd. BOSIDENG 2009 Most Valuable Chinese Brands Snow Flying - 44th RREFF Global Billboard Beijing Famous-Brand Evaluation Co., Ltd. • "Bosideng" and "Snow Flying" respectively ranked the 13th and 44th with brand values of RMB16.220 billion and RMB5.109 billion in "2009 Most Valuable Chinese Brands", an influential consumer brand assessment in the PRC "Bosideng is ranked highest amongst all local apparel brands, with brand value nearly doubles that of the next highest-ranking apparel brand 2009 2008 Brand value (RMB billion) Ranking Brand value (RMB billion) Ranking Bosideng 16.220 13th 16.060 13th Snow Flying 5.109 44th 16#18Awards and Recognitions BOSIDENG 60 Years of China Brand Image Award China Brand Development Organizing Committee Committee of China Brand Forum BOSIDENG 160th of "World's Most Reputable Companies" Reputation Institute BOSIDENG 47th Brand of The Sixth China's 500 Most Valuable Brands World Brand Lab BOSIDENG National Business Card 2009 China Brand Research Institute BOSIDENG 60 Outstanding Brands on the 60th Anniversary of the PRC CCTV.com BOSIDENG Hua Pu China Brand Award 2009 Organizing Committee of the Third China Brands Festival BOSIDENG 2008-2009 The Most Popular Brand China Fashion Association Apparel and Product Committee Information Department of China General Chamber of Commerce BOSIDENG Best Selling Brand of 2008-2009 China National Garment Association Down Apparel Fair China Fashion Association Apparel and Product Committee 17 17#19Nationwide Retail Network Total: 5,620 (-42) Note: As at 31 March 2010 Northern China areas: 3,262 (-172) Eastern China areas: 1,189 (+28) Figures in bracket denote change as compared to 31 March 2009 Central China areas: 1,169 (+102) •Northern China areas: the three north-eastern provinces, Shanxi, Shaanxi, Xinjiang, Sichuan, Chongqing, Inner Mongolia, Gansu, Ningxia, Tibet, Yunan, Guizhou, Shandong, Beijing, Tianjin, Hebei, Qinghai •Eastern China areas: Jiangsu, Zhejiang, Shanghai, Anhui, Fujian •Central China areas: Henan, Hunan, Hubei, Jiangxi, Guangdong, Guangxi 18#20Optimized Sales Channel Mix • Increase self-operated outlets helped improve profit margin Store types Specialty stores - Operated by the Group Down apparel Menswear As at 31 March 2010 As at 31 March 2009 Change As at 31 March 2010 As at 31 March 2009 Change 3,296 3,860 -564 433 369* +64 7 31 -24 34 2* +32 3,289 3,829 -540 399 367* +32 - · Operated/ supervised by third party distributors Concessionary retail 2,324 1,802 +522 326 291* +35 outlets - Operated by the Group 988 694 +294 39 10* +29 Operated/supervised 1,336 1,108 +228 287 281* +6 by third party distributors Total 5,620 5,662 -42 759 660 +99 *Comparative figures as at 31 March 2009 as the Bosideng Menswear business was not part of the Group until May 19 2009.#21Multi-brand Strategy - Down Apparel "Bosideng" is positioned as a leading high end brand in the PRC down apparel market The second leading brand, "Snow Flying", is positioned as a major brand for casual, sports and down apparel "Kangbo" mainly provides basic styles and comprises principally menswear "Bingjie" is positioned as a trendy brand with characteristics of young, vogue, energetic and nice 20 20#22Multi-brand Strategy - Non-down Apparel Product types of "Bosideng Menswear" include casual wear, business casual wear and formal suits "Rocawear" is a trendy street brand came from the United States, product types comprise menswear, lady's wear and accessories with trendy, cool, styles "BOSIDENG VOGUE" is designed as metropolitan vogue style. The basic characteristics of this brand are stylish and casual OC 21#23Effective Marketing Strategies TV and magazines ASY FFICE WEAR OK Celebrities as endorsers CHIC 2010 MAN POO MUSIC MAN SIDING MAN MUSIC MAN Advertising in concerts 22 22#24Enhancing Brand Recognition by Opening Large Flagship Stores Uniform and standardize decoration styles, shop decoration and product display of retail channels. Established large flagship stores in flourishing business districts of major cities in China which provide consumers with a more spacious and comfortable shopping environment and effectively improved the brand recognition of the Group. BOSIDENG 世 界名,房 BOSIDENG SING Nanjing Road Flagship Store, Shanghai 23#25Menswear Business As the first step of the transformation of "Bosideng" brand from offering seasonal apparel products to non-seasonal apparel products, the Group acquired menswear business in May 2009. "Bosideng Menswear" made satisfactory progress and preliminary achievement and was awarded the "Best Brand with Highest Growth" in 2009 and "Best Innovation Award 2009". SIDENG MAN MAN 24#26Active Brand Promotion and Marketing Arranged a ceremony at the "Bird's Nest" stadium for the appointment of pop star Leehom Wang as the brand ambassador. Demonstrated the "Quality of Life" idealism of "Bosideng Menswear" through the collections of "Smart Business Wear", "Easy Office Wear" and "Cool Casual". Organized a product launch show for 2010 spring/summer series in September 2009 and launched the latest fall/winter series in CHIC2010 in March 2010, which was popularly received by the market. MAN IN SIDING MAN 25#27Further Optimized Retail Network MAN PEMAN ☐ As at 31 March 2010, "Bosideng Menswear" had a total of 759 retail outlets in China, 34 of them were operated by the Group 26#28Future Plans and Strategies 27 27#29Integrate and Expand Retail Network Increase efforts in building store image by engaging famous store designers to design a more stylish image and expand the number of large flagship stores in major cities in due course. Provide a complete shopping experience to consumers by opening "gallery-styled" flagship stores to display the full range of products under the Bosideng brands. *Continue to integrate and optimize sales channels of down apparel products and focus on market expansion for non-down apparel products. Number of retail stores of "Bosideng Menswear" is expected to reach 1,100 in 2011. **Plan to open more than 300 "Rocawear" freestanding stores and shop-in-shop concepts in the Greater China Region by 2013 Increase retail stores of "BOSIDENG VOGUE" based on business development. 28#30Promote the Development of Non-down Apparel Business Developing non-down apparel business including "Bosideng Menswear" Actively identifying non-down apparel brands with growth potential and good reputation for acquisitions, mergers or cooperation to enhance the Group's brand and product mix Offering high quality products to different consumer groups all-year-round, realizing the transformation of "Bosideng" into an international well- known integrated apparel brand operator BOSIDENG VOGUE Bosideng Menswear Rocawear 29#31Comprehensively Integrating Style Positioning of All Brands Increase the proportion of non- down apparel business. in the next 3 to 5 years m Transform "Bosideng" into an international well- known integrated apparel brand operator Drive the development of dominant brands such as "Snow Flying", "Kangbo" and "Bingjie" Implement multi-brand strategy, integrate style positioning of all brands to suit the needs of different consumer groups 30#32Enhance Brand Value by Expanding Retail Network and Improving Design Ability • Continue to expand and strengthen research, design and development team. • Facilitate exchange, learning and cooperation opportunities with local and international renowned research institutions. • Expand non-down apparel products and business and consolidate leadership in non- seasonal market trend by leveraging on excellent design capabilities. Increase marketing efforts and selectively adopt various flexible strategies for brand promotion. • Place more emphasis on the interaction with consumers by organizing different activities such as trial experience, exhibitions, and offering privileges. Expand e-commerce to non-down apparel products in order to provide a more convenient way of shopping for consumers. Strengthen and improve the construction of a corporate information system to enhance corporate management level. 31#33波司登 BSD BOSIDENG Q&A Session 32 2