Slides
Page 1
INTERIM RESULTS PRESENTATIONFY 2025/26
Page 2
Important Notice 2 This presentation and the accompanying documents (the “Presentation”) is prepared based on materials and information provided by Topsports International Holdings Limited (the “Company”).By receiving this Presentation, the Recipient acknowledges, represents and warrants to the Company (together with its subsidiaries, the “Group”) and its affiliates, directors, officers, employees, advisers and representatives (collectively, the “Relevant Parties”) that it has read, understood and accepted the terms of this Important Notice. If the Recipient does not accept these terms, it must immediately return this Presentation to the Company. This Presentation does not constitute an offer or invitation, or solicitation of any offer, for the issue, sale or purchase of any securities. Neither this Presentation nor the information contained in it nor any other information supplied by any of the Relevant Parties to the Recipient forms the basis of any contract or any other legal obligation and no legal relationship shall be created by the issue of this Presentation. This Presentation is not intended to form the basis of any investment or credit decision or any other risk evaluation, does not purport to contain all the information that may be necessary or desirable, and may not be considered as a recommendation by the Relevant Parties or any other person, in connection with an investment in the Company. The Recipient shall not rely on this Presentation. Each Recipient acknowledges, represents and warrants to the Relevant Parties that the Recipient is a professional investor, has the knowledge, experience and capability to conduct its own assessment of the Company and the relevant transaction of acquiring the shareholding in the Company and that it has and will conduct its own independent investigation with respect to the Company and its shares and have obtained or will obtain its own independent advice relating to the investment in the shares of the Company that it considers necessary or desirable. PresentationNone of the Relevant Parties shall have any responsibility for the use of this Presentation by the Recipient or its agents, advisers or representatives or other investors and no responsibility is accepted by the Relevant Parties as to the fairness, promptness, accuracy or completeness of this Presentation or the information contained in it or any supplement to it or any information supplied by or on behalf of the Company.Nothing contained in this Presentation (or any further information made available to a Recipient or its agents, advisers or representatives) is or should be relied on as a promise, representation or warranty as to the future. Moreover, the forecasts, estimates and projections contained in this Presentation have been prepared and based on information obtained by the Company from the Company’s daily operation and management, the publicly available sources and/or other sources and there is risk that the actual results will vary. No assurance, representation, warranty or undertaking is made or given by any person (including the Relevant Parties) that any forecast, estimates and projection is reasonable or will be achieved. Accordingly, Recipients must make their own investigations and enquiries regarding all assumptions, uncertainties and contingencies which may affect the operations and prospects of the Company.In addition, the Presentation may contain projections and “forward-looking information” that reflect the current views of the Company with factors that may cause the actual results, performance and financial condition of the Group, or industry results, to be materially different from any future results, performance or financial condition, expressed or implied by such forward-looking statements.The information contained in this Presentation may be updated, refined, modified, verified and amended, and the information may change materially. The Company shall not be responsible for updating, supplementing or modifying any of the contents of this Presentation and shall not be responsible for notifying the Recipient of any changes to the information contained in this Presentation. Content Certain information set forth in this Presentation is not independently verified. The Relevant Parties do not accept liability whatsoever for any loss or damage suffered or incurred by the Recipient or any other person or entity however caused (including negligence) relating in any way to this Presentation including, without limitation, the information contained in it, any errors or omissions however caused, or the Recipient, or any other person or entity, placing any reliance on this Presentation, its fairness, accuracy, completeness, promptness or reliability.The Relevant Parties do not accept any responsibility arising in any away for any errors in or omissions from the Presentation or for any lack of fairness, accuracy, completeness, promptness or reliability of the Presentation. The Relevant Parties do not accept any responsibility to inform the Recipient of any matter arising out of or coming to their notice which may affect any matter or information referred to and/or contained in the Presentation.The Relevant Parties have not authorized any person to make any statements or representations which are not expressly contained in or contemplated by the Presentation. Any liability, whether asserted in contract, tort (including negligence), equity or otherwise, of the Relevant Parties to a Recipient or to any other person or entity arising out of or in connection with the Presentation is, to the maximum extent permitted by law, expressly disclaimed and excluded.In no circumstances shall any of the Relevant Parties be responsible for any costs or expenses incurred by any Recipient in connection with any appraisal or investigation of the Company or arising out of the evaluation of information contained in this Presentation. Exclusion of Liability
Page 3
Sales impacted by weakening consumer demand and declining offline footfall, with pressure partially alleviated by Omni-channel layout. 02•Revenue decreased by 5.8% YoY to RMB 12.30 billion;•Offline same-store traffic decreased by double-digit YoY while online retail sales registered double-digit growth YoY; •Net cash generated from operating activities was RMB 1.35 billion (1.7 times of net profit); with cash and cash equivalents of RMB 2.54billionand net cash position of RMB 1.27 billion;•Interim dividend payout ratio of 102.2% (99.4% for same period last year);cumulative dividends distribution of RMB14.64 billion(1) since listed in 2019, with an aggregate payout ratio of 107.3%(1). •Gross profit margin slightly decreased by 0.1 p.p YoY to 41.0%;•SG&A expense ratio slightly rose by 0.1 p.p. YoY, benefiting from precise cost and efficiency management, as well as the continuous expansion and optimization of Omni-channel retail layout—including the ongoing streamlining of offline retail store networks, and the further expansion of online retail presence with favorable cost structure;•Profit attributable to equity holders decreased by 9.7% YoY , and profit margin attributable to equity holders declined by 0.3 p.p. YoY to 6.4%; 03 04Maintain an industry-leading dividend payout level based on a high-quality and stable capital foundation. Consumers as the core, proactively positioning in emerging presences and high-potential segments; continuous advancements in the efficiency and digital-intelligent capabilities of Omni-channel retail platform. 01•Rooted in offline operations to extend full-domain scenario coverage with agility while kept intensifying brand deployment in the running and outdoor categories, and pursuing innovations in retail store models;•Both offline and online channels focused on efficiency optimization;further development and efficiency enhancement of the Omni-channel retail ecosystem facilitated by digital and intelligent tools; 3 The operating de-leverage impact on net profit from declining revenue was partially alleviated by stable gross profit margin, a more flexible expense structure under the Omni-channel layout, and refined cost and efficiency management. Source: Company Interim Results AnnouncementNote: The Company’s first half of financial year ends on Aug 31 of each calendar year (1) Data as of FY25/26 interim, payout ratio is calculated based on profit attributable to the Company’s equity holders Prioritize the Rollout of Core Strategy and Proactively Address Market Shifts
Page 4
Financial Review
Page 5
5 13,054.7 12,298.6 1H FY2024/251H FY2025 /26 Weak consumer demand and foot traffic performance -5.8% 84.3%86.7% 15.7%13.3% 1H FY2024/251H FY2025 /26Retai lWholesale 87.6%88.4% 12.4%11.6% 1H FY2024/251H FY2025 /26Prin ci pal bra ndsOther brands YoY change down 5.8%RMB 12.30BNRevenue Revenue Analysis (1) Revenue YoY ChangeRetail and Wholesale business as % of revenue from sales of goodsPrincipal and Other brands as % of revenue from sales of goods Source: Company Interim Results AnnouncementNote:The Company’s first half of financial year ends on Aug 31 of each calendar year (1) Principal Brands include Nike and Adidas Principalbrands(1)OtherbrandsRetailWholesale
Page 6
6 41.1% 41.0% 1H FY2024/25change in discount rates零售和批发业务占比变化库存拨备及其他影响1H FY2025/261H FY2024/25 1H FY2025/26 -0.1p.p. YoY YoY Positive ImpactYoY Negative Impact Gross Margin Analysis(For illustration purposes, reference only） Change in Discount RatesRevenue Mix Change among Retail and WholesaleInventory Provision and Others Source: Company Interim Results AnnouncementNote:The Company’s first half of financial year ends on Aug 31 of each calendar year
Page 7
Proxy for Rental Expenses Staff Costs Staff: Agile and efficient talent pipeline strengthens cost-efficiency edges Others(1) 7 10.7% 11.5% 10.4% 10.5% 12.0% 11.2% 1H FY2024/251H FY2025 /26 33.1% 5.2% +1.6% 33.2% 12.1% -5.5% Total expense: Omni-channel layout and rigid cost control to mitigate operational pressure Rental: benefit from streamlined offline network + channel layout upgradeOffline: streamlined network + loss control and efficiency enhancement; Gross selling area decreased by 14.1% YoY; Others:Expenses increased as a result of YoY growth of retail online business (2) Expense Ratio AnalysisSelling, Distribution, General and Administrative Expenses Breakdown and as % of Total Revenue Expense amounts YoY change Source: Company Interim Results AnnouncementNote: The Company’s first half of financial year ends on Aug 31 of each calendar year(1) Rental expense estimated by summing up rental from operating leases and depreciation on right-of-use assets;(2) Other expenses mainly include depreciation of PP&E, service fees from e-commerce platform, logistics expenses, etc. Total SG&A expense decreased by 5.5% YoY, total revenue decreased by 5.8% YoY; Total SG&A expense ratio slightly raised by 0.1 p.p. YoY; Total rental expense(1) decreased by 12.1% YoYwith rental expense ratio decreased by 0.8 p.p.;Channel mix shift: higher retail revenue mix from online; Staff streamlining with store changes + tech-driven back-office efficiency optimization;No. of employees decreased by 16.1% YoY to 24,273;Both average workforce productivity and average cost per employee registered YoY increase; Other expense ratio raised by 0.8 p.p., primarily driven by YoY increased service fee for platforms due to growth of retail online business.
Page 8
1H FY2024 /25Net ProfitGross ProfitTotal ExpensesOt her Inc om eNet Fi nanceCosts & Taxes1H FY2025/26Net Profit -9.8% YoY 873.8 788.0 -325.0+236.1-38.2+41.3 1H FY2024 /25Net ProfitMar ginGross Margi nTotal ExpensesOt her Inc om eNet Fi nanceCosts & Tax1H FY2025/26Net ProfitMar gin -0.3p.p. YoY 6.7% 6.4% -0.1 p.p.-0.1 p.p.-0.3 p.p.+0.2 p.p. (1)(2) (1)(2) 8 Net Profit YoY Change (RMB million) Net Profit Margin YoY Change Source: Company Interim Results AnnouncementNote:The Company’s first half of financial year ends on Aug 31 of each calendar year(1) Total expenses mainly include selling and distribution expenses, and general and administrative expenses(2) Other income mainly includes government incentives YoY Positive ImpactYoY Negative Impact Net Profit and Net Profit Margin Analysis TotalExpenses(1)OtherIncome(2)TotalExpenses(1)OtherIncome(2)
Page 9
9 (RMB million)1H FY2024/25 1H FY2025/26 YoY ChangeInventory6,119.95,833.9-4.7%Turnover Days148.3 Days 150.0 Days +1.7 DaysTrade Receivables949.4 934.9 -1.5%Turnover Days16.1 Days 12.6 Days -3.5 DaysTrade Payables846.8 304.5 -64.0%Turnover Days14.8 Days 8.2 Days -6.5 DaysCash Conversion Cycle 149.7 Days154.4 Days+4.7 Days Source: Company Interim Results AnnouncementNote:The Company’s first half of financial year ends on Aug 31 of each calendar year Operating Working Capital Efficiency
Page 10
10 6,515.5 6,222.5 6,464.3 1H FY2023 /241H FY2024/251H FY2025 /26 In ventoryTrade ReceivablesTrade PayablesWorking Capital 23% 26% 26%营运资金占收入比重 (1) (2) (RMB million) Working Capital as % of Revenue(2) Source: Company Interim Results AnnouncementNote:The Company’s first half of financial year ends on Aug 31 of each calendar year (1) Period-end value (2) Calculated as average of beginning and ending value of each period Operating Working Capital Efficiency InventoryTradeReceivablesTradePayablesWorkingCapital(1)
Page 11
Beginning CashBalanceOperating CF befo retaxTaxCAPEXOt her Inves ting CFLease Li abi li tiesNet Borrowi ngsInterest PaidDividendEnd ing CashBalance2025/02/28 2025/08/31 2,587.4 +1,425.6-70.9-132.7+42.4-570.7+136.5 2,538.1 Net CFF：-1,313.7Net CFO：+1,354.7Net CFI：-90.3 11Positive ImpactNegative Impact -11.4-868.1 Free Cash Flow FCF + 1,222.1(1) (RMB million) Source: Company Interim Results Announcement(1) Free Cash Flow = Net cash generated from operating activities- Capital expenditures (1) 34% of beginning cash balance Solid Capital Reserve OtherInvestingCFLeaseLiabilitiesInterestPaid EndingCashBalance
Page 12
12 From FY2019/20 to FY2025/26interim:1)Returned RMB 14.64 billion(2) to shareholders through continuous high dividend payout;2)Aggregate dividend payout ratio of 107.3%(2) Cash Generation 1. Accelerate Organic Growth 2. Invest in New Expansion Opportunities 3. Return of Cash to Shareholders + + 789.1 806.2 1,222.1 1H FY2025/26Dividend Payout Ratio: Total Dividend Free Cash Flow(1) Net Profit(2) 102.2% 1.5 times Capital Allocation Strategy Source: Company Interim Results Announcement(1) Free Cash Flow = Net cash generated from operating activities- Capital expenditures;(2) Data as of FY2025/26 interim, payout ratio is calculated based on profit attributable to the Company’s equity holders （RMB MM） Solid Cash Generation Capability to Lay Solid Foundation for Dividend Payout
Page 13
Business Review
Page 14
Fluctuating market demand Rising of experience economyDeepening of Omni-channel integration Technology innovation drives efficiency Segmentation & diversification Integration of scenariosProfessional upskillingCentred on core strategies Broaden product and brand portfoliosRamp up product R&D investment Targeted on operational efficiency Market Insights for the First Half of the Financial Year Common Traits Among Industry PlayersMacro Environment and Retail MarketSports Industry Consumers 14
Page 15
To provide the one-stop Omni-operation solution for more partners in China under variety of sports formats 89.0million+ Users Recreational sports Performance sports Leisure sports IP culture Wholesale Distribution Prioritize the Rollout of Core Strategy and Proactively Address Market Shifts Omni-channel efficiency Talent pipeline Digital-intelligent competence 3Upgrades Emerging scenarios Promising market segments 2Scale Ups Joint Operation Investment 15
Page 16
Omni-Retail: Expansion, Lean Operation & Iteration-Alignment of Roles & Capabilities Traditional offlineAligned online store setup Transforming traditional stores’ singular function to multiple online fronts via an Omni-retail lens 1+ Platform-centrice-commerce Multi-point presence& Expanded product width (1xN) Content e-commercePrivate domainLocal life ServicesInstant retail Product ManagementTalent CompetenciesUser ServiceDigital-intelligent Platform 16
Page 17
17 -19.4%YoY-6.6%-14.1%YoY-4.6%+6.5%YoYSameperiodlast year+4.8% 4,688 Ongoing fluctuations in in-store footfall Prudent Expansion and Renovation, with Moderate Closure Brand-Tailored Approach Omni-Retail Synergy & Role Advancement Number of directly-operated retail storesstores Gross selling areaHoH HoH Selling area per store More Focused Resource AllocationSelling and distribution expense ratio decreased by 0.2 p.p. YoYCapital expenditure decreased by 36.0% YoY Omni-Retail Synergy: Optimization and Role Elevation of Offline Stores Note:TheCompany'sfinancialyearendsonthelastdayofFebruaryofeachcalendaryear,withthehalf-yearfinancialperiodendingonAugust31ofeachcalendaryear.
Page 18
18 Active co-creator of diverse sports cultures Exclusive partner in localized innovation Pioneering driver of emerging offline format Dedicated advocate for circular economy Omni-Retail Synergy: Joint Exploration of Offline Multi-Value
Page 19
3,600+3,700+800+2,300+ 19 Expansion of presence with integrated matrix approach tailored to scene-specific featuresYoY change of online retail sales(1)Double-digit growth Expanding coverage and presence with enhanced inventory efficiencyExpanded reach of interest-basedcontent engagementSophisticated services to deepenrelationships with usersTrain anytime with instant gear Accounts for Douyin and WeChat video channelsRednote accountsStores with a mini-program shopOffline stores connected Planned PurchasesInterest-Based PurchasesRecommendation-Driven PurchasesOn-Demand Purchases Platform-centrice-commerceContent-drivene-commercePrivate domainoperationsInstant retail Omni-Retail Synergy: Expansion and Streamlining of Online Note: Data as of 31 August 2025 (1) Incl. but not limited to Value Added Tax (VAT)
Page 20
User Operations: Value Delivery and Value Creation Membership GradesProductContentCouponOff-store Growth SystemNew UsersHigh-Value Users In-store Synchronize user grades with equivalent rights across all channels 89.0Users(1)million T5 T1 T4 T3 T2 Fostering joyous sports experiences and lifestyles 20(1) As of August 31, 2025, users include members and potential members (i.e. non-member WeChat followers)
Page 21
92.9% 21 Steadily growing user base Maintaining strong private domain user retention consistently in an Omni-channel ecosystem User Operations: Value Delivery and Value Creation Member sales remain the main contributor to total salesContribution(3) of members to retail sales value(2) from offline stores and WeChat Mini ProgramsStable sales contribution from re-purchasing membersContribution(3) of repurchasing members to total members retail sales value(2)Approx.60%Sustained contributions from high-value membersApprox. 35%Contribution to total retail sales value(2) from membersCompared to average transaction value of membersApprox. 6X89.0millionUsers(1) (1) Data as of 31 August, 2025. Users include members and potential members (i.e. non-member community friends);(2) Incl. but not limited to VAT; (3) Data for the first half of the financial year ended August 31, 2025
Page 22
22 用户连通 A More Digital, Intelligent and Efficient Digital Platform – Building Topsports' "Smart Retail Ecosystem" Omni-channel IntegrationOmni-channelIntelligenceOmni-channelPanoramicInsights Customer Acquisition & ConversionPayment & SettlementOrder FulfillmentRepurchase & Fission Linkage & Collaboration of Core Business UnitsSimplification & Efficiency Enhancement of Key Business ChainsIn-depth Construction of User Ecosystem & Value Enhancement of AI-empowered Ecosystem 22 Precise + EfficientScale Expansion + Cost-Effectiveness
Page 23
23 •Merchandise: Maximize inventory sharing•Membership: Promote the universality and value maximization of customer acquisition and operation•Marketing: Drive business with diversified coupon types and combinations•Service: Standardize and improve the efficiency of customer service work orders•Data: Realize data-driven decision-making under the unified middle platform •Intelligent Supply Chain: Conduct end-to-end timeliness management and control to enhance the efficiency and quality of distribution and replenishment•Intelligent Marketing & Sales: Realize product listing and dynamic upgrading, and conduct automated and precise communication•Intelligent Operation & Decision-making: Shift from "passive analysis" to "proactive intelligence" to drive the automation and precision of store operations •User Ecosystem: Build a "user ecosystem" covering all time periods, all scenarios and the entire life cycle•AI-empowered Ecosystem: Build an "empowered ecosystem" featuring virtual-real integration, scenario-driven operation and data interconnection 23 A More Digital, Intelligent and Efficient Digital Platform – Building Topsports' "Smart Retail Ecosystem" Omni-channel Integration Omni-channel Intelligence Omni-channelPanoramicInsights
Page 24
24 New Business Models and Services: Expanded Brand Presence and Competence Breakthrough Differentiated Running& Outdoor++China-Market Exclusive Pivotal Direction Talent AcquisitionMarket ResonanceProduct IterationBenchmark ImageScale Expansion Brand StrategyContent OutreachOmni-channel OperationsCommunity Cultivation Anchor in the mindServe Target GroupsSocial Media OutreachStar ProductsTake the LeadMulti-channel Presence24 Systematic Expansion
Page 25
25 norda™ unveiled a scenario-based standalone retail space at the Yunqiu Mountain Trail Run.norda™ hosted its first official brand event in China, the "Mountain Breeze as Escort, Wild Trails into Zen" trail running journey at Aranya Jinshanling. New Business Models and Services: Expanded Brand Presence and Competence Breakthrough 25
Page 26
26 New Business Models and Services: Multi-Functional Store Space Serving Running Culture and Community Social Infrastructure*One-Stop Service Venue* Cutting-Edge Curated Selection*A Go-To Destination for Refined Goods* Inter-Connection & Co-Creation*Cultural Community Hub* RunnerBrandCulture
Page 27
27 多元运动文化的积极共创者 本土化尝试的独家协作者 新门店类型的引领推动者 循环经济理念的深度践行者 27 Focus on Omni-channel retail, users, new business models and services to lay out plans for long-term growth Consistently focus on efficiency and fortify the resilience of the retail platform Optimize and improve the “precise + efficient” digital empowerment Actively implement ESG concepts, building a sustainable development path of ecological co-construction and value co-creation Future Plans For Development
Page 28
Q & A
Page 29
29 1H FY2025/26 1H FY2024/25 YoY / ChangeRMB million%RMB million% %p.p.Revenue 12,298.6100.013,054.7100.0- 5.8-Cost of Sales (7,261.2)- 59.0(7,692.3)- 58.9- 5.6+ 0.1Gross Profit 5,037.441.05,362.441.1- 6.1- 0.1Selling, Distribution, General and Administrative Expenses(4,080.9)- 33.2(4,316.9)- 33.1- 5.5+ 0.1Selling and Distribution Expenses (3,575.4)- 29.1(3,821.9)- 29.3- 6.4- 0.2General and Administrative Expenses(505.5)- 4.1(495.0)- 3.8+ 2.1+ 0.3Operating Profit993.88.11,120.98.6- 11.3- 0.5Core Operating Profit (excl. Other income)954.87.81,043.78.0- 8.5- 0.2Net Profit 788.06.4873.86.7- 9.8- 0.3Profit Attributable to Equity Shareholders789.16.4873.86.7- 9.7- 0.3RMB cents%RMB cents% %p.p.Earnings per Share - Basic and Diluted12.72- 14.09- -9.7-Interim Dividend per Share13.00- 14.00- -7.1- Appendix: Financial Overview Note: The Company’s first half of financial year ends on Aug 31 of each calendar year