Li Ning : ANNUAL RESULTS ANNOUNCEMENT FOR THE YEAR ENDED 31 DECEMBER 2015 (in PDF)

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ANNUAL RESULTS ANNOUNCEMENT FOR THE YEAR ENDED 31 DECEMBER 2015

FINANCIAL HIGHLIGHTS AND OPERATIONAL HIGHLIGHTS

• Returned to profitability and positive operating cash flow since 2011:

  • Revenue grew by 17% to RMB7,089 million

  • Net Profit attributable to equity holders of the Company improved by RMB795 million, from loss of RMB781 million to profit of RMB14 million

  • Operating cash flow increased by over RMB1 billion to RMB687 million

    
    

• Gross inventory (before provision and excluding Double Happiness) declined by 20% notwithstanding net addition of 313 direct Point-of-Sales (POS).

  
  

• Working capital improved significantly with Cash Conversion Cycle (CCC) shortened by 26 days.

  
  

• Achieved balanced channel expansion, with retail, wholesale and e-commerce all recorded double-digit revenue growth:

  • Same Store Sales Growth (SSSG) for overall platform recorded low-single-digit and high-single-digit growth for Q4 and full year, respectively

  • Maintained positive SSSG for overall platform in all four quarters throughout the year

    
    

• Double digit retail sell-through growth for all core product categories.

  
  

• Expansion in POS resumed with a net increase of 507 to 6,133 by the end of 2015:

  • Distributors' POS resumed expansion since 2011 and recorded a net increase of 194 POS.

    
    

• Trade fair orders for the third quarter of 2016 registered a low-teens growth on a year-on-year basis.

DOUBLE HAPPINESS UPDATE

•

The Company decided to dispose of its 10% equity interest in Double Happiness, and Double Happiness

will no longer be a subsidiary of the Company upon completion of this transaction.

•

Revenue and expenses of Double Happiness are not included in the Group's revenue and expenses for both

2015 and 2014.

•

It is expected that this transaction will be completed in the first half of 2016.

ANNUAL RESULTS

The board of directors (the "Board") of Li Ning Company Limited (the "Company" or "Li Ning Company") hereby announces the audited consolidated results of the Company and its subsidiaries (collectively, the "Group") for the year ended 31 December 2015, together with comparative figures of 2014, as follows:

CONSOLIDATED BALANCE SHEET	As at 31	December
Note	2015 RMB'000	2014 RMB'000
ASSETS Non-current assets Property, plant and equipment	740,305	861,173
Land use rights	79,788	372,113
Intangible assets	265,570	446,399
Deferred income tax assets	230,868	311,081
Available-for-sale financial assets	26,000	26,000
Investments accounted for using the equity method	27,796	20,848
Other receivables and prepayments	43,615	39,473
Total non-current assets	1,413,942	2,077,087
Current assets Inventories	4	959,652	1,289,332
Trade receivables	5	1,439,513	1,260,131
Other receivables and prepayments - current portion	309,389	379,277
Restricted bank deposits	495	2,593
Cash and cash equivalents	1,812,572	1,031,386
4,521,621	3,962,719
Assets of disposal group classified as held for sale	13	961,895	-
Total current assets	5,483,516	3,962,719
Total assets	6,897,458	6,039,806

As at 31 December

Note	2015	2014
RMB'000	RMB'000

EQUITY Capital and reserves attributable to equity holders of the Company

Ordinary shares	177,492	141,698
Share premium	2,168,867	1,298,537
Shares held for Restricted Share Award Scheme	(2,084)	(3,719)
Other reserves	1,308,230	984,398
Accumulated deficit	(472,602)	(469,056)
3,179,903	1,951,858
Non-controlling interests in equity	230,637	217,583
Total equity	3,410,540	2,169,441
LIABILITIES Non-current liabilities License fees payable	27,886	77,434
Borrowings	200,000	298,241
Convertible bonds	710,033	676,421
Deferred income tax liabilities	11,503	76,410
Deferred income	65,710	62,718
Total non-current liabilities	1,015,132	1,191,224
Current liabilities Trade payables	6	997,473	953,429
Other payables and accruals	696,168	1,104,541
License fees payable - current portion	63,357	57,880
Current income tax liabilities	3,777	9
Borrowings	366,499	550,782
Convertible bonds - interest payable	12,500	12,500
2,139,774	2,679,141
Liabilities of disposal group classified as held for sale	13	332,012	-
Total current liabilities	2,471,786	2,679,141
Total liabilities	3,486,918	3,870,365
Total equity and liabilities	6,897,458	6,039,806

CONSOLIDATED INCOME STATEMENT

Year ended 31 December

Note 2015 2014

RMB'000 RMB'000

Continuing operations Revenue	3	7,089,495	6,047,195
Cost of sales	7	(3,896,836)	(3,329,436)
Gross profit	3,192,659	2,717,759
Distribution expenses	7	(2,720,361)	(2,764,656)
Administrative expenses	7	(346,149)	(627,944)
Other income and other gains-net	8	30,920	31,779
Operating profit/(loss)	157,069	(643,062)
Finance income	9	6,343	10,444
Finance expenses	9	(139,546)	(152,622)
Finance expenses-net Share of profit of investments accounted for using the equity method	9	(133,203) 6,948	(142,178) 7,352
Profit/(Loss) before income tax	30,814	(777,888)
Income tax expense	10	(73,768)	(52,179)
Loss for the year from continuing operations	(42,954)	(830,067)
Discontinued operations Profit for the year from discontinued operations	13	104,559	86,563
Profit/(Loss) for the year	61,605	(743,504)
Attributable to: Equity holders of the Company	14,309	(781,481)
Non-controlling interests	47,296	37,977
61,605	(743,504)