Yue Yuen Industrial (Holdings) Ltd. : Yue Yuen Announces 2012 Fifteen-Month Audited Results

PRESS RELEASE

Yue Yuen Announces 2012 Fifteen-Month Audited Results

? Due to the change of financial year end from September to December, comparisons in this document are audited figures for the 15 months period ended 31st December, 2012, against the proforma figures for the 15 months period ended 31st December 2011.

? The proforma figures have not been audited. They are derived by combining the audited figures for the 12 months ended 30th September 2011 with the unaudited figures for the 3 months ended December 2011. Both figures have previously been reported to the public.

? Management feels that the same time period comparison is useful. The official announcement compares audited 15 months against the audited 12 months in accordance with the listing rules.

? Turnover up 2.6% to US$ 9.19 billion for the 15 months period ended 31st December, 2012, compared to US$ 8.96 billion in the 15 months ended 31st December, 2011

? Recurring operating profit attributable to Owners of the Company down 3.8% to US$ 583.1 million for the 15 months period, compared to US$ 606.2 million of the last period

? Non-recurring operating profit for the period amounted to US$ 40.6 million

? Total net profit attributable to Owners of the Company amounted to US$ 623.7 million, up 3.0%

compared to US$ 605.8 million in fiscal 2011
(Hong Kong, 26 March 2013) - Yue Yuen Industrial (Holdings) Limited ("the Group", stock code: 551) today announced its audited consolidated results for the reporting period covering the fifteen months from 1st October 2011 to 31st December 2012. The future fiscal period will be from 1st January to 31st December.
Total turnover of the Group rose 2.6% for the period to approximately US$ 9,193.2 million. Recurring operating profit amounted to US$ 583.1 million. The Group also had non-recurring operating profit for the period. Please refer to the section Financial Highlights and Business Review, in the Company's announcement that provides detailed disclosure of the items that give rise to non-recurring operating profit. When aggregating both categories of profit, then the net profit attributable to Owners of the Company for the fifteen months period of the Fiscal Year 2012 amounted to approximately US$ 623.7 million.
The Board is pleased to propose a final dividend of HK$ 0.25 per share. When combined with the interim dividends declared earlier, the total dividends paid per share for the fifteen months period amounted to HK$ 1.25, compared to HK$ 0.90 for the twelve months period ended 30 September
2011.

Operations

For the 2012 fifteen months fiscal period, the Group's shoe manufacturing turnover grew by 0.6% to US$ 6,412.1 million, compared to US$ 6,374.7 million reported in the last period: sales of athletic shoes and casual/outdoor shoes were up by 0.7% and down by 0.1% respectively. Total shoe manufacturing

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volume decreased by 4.1% to 393.3 million pairs. The Group's shoe manufacturing turnover experienced growth for in the regions U.S.A and Asia, but fell in Europe.
With regards to the retail and wholesale business of sportswear in the Greater China Region, Sales increased by 11.9% to US$ 2,052.7 million in the fifteen months period compared to US$ 1,834.2 million reported in the last period, due to factors such as acquisition of the regional retailers and promotional sales following by liquidation of inventory.

Total Turnover by Product Category

(audited vs proforma) 2012

15 months

2011

15 months

(all figures rounded to millions )
	US$ millions	%	US$ millions	%	%change
Athletic Shoes	4,744.7	51.6	4,713.7	52.5	0.7
Casual/Outdoor Shoes	1,562.0	17.0	1,564.2	17.5	(0.1)
Sports Sandals	105.4	1.1	96.8	1.1	8.9
Retail Turnover	2,052.7	22.3	1,834.2	20.5	11.9
Soles, Components & Others	728.4	8.0	749.1	8.4	(2.8)
Total Turnover	9,193.2	100.0	8,958.0	100.0	2.6

Total Turnover by Geographical Market

(audited vs proforma) 2012

15 months

2011

15 months

( all figures rounded to millions )
	US$ millions	%	US$ millions	%	%change
U.S.A.	2,584.2	28.1	2,509.9	28.0	3.0
Europe	1,855.5	20.2	1,983.7	22.2	(6.5)
Asia*	3,909.1	42.5	3,645.3	40.7	7.2
South America	477.4	5.2	460.9	5.1	3.6
Canada	132.1	1.4	130.7	1.5	1.1
Other Areas	234.9	2.6	227.5	2.5	3.3
Total Turnover	9,193.2	100.0	8,958.0	100.0	2.6

*Excluding retail sales, Asia turnover was US$1,856.4 million and US$1,811.1 million, representing 20.2% and 20.2% of the total turnover in 2012 and in 2011 respectively.

During the period, the Group's gross profit increased by 5.2% to US$ 2,099.1 million (2011: US$ 1,994.8 million), as a result of the trend of stable spot prices for materials and energy units purchased. Gradual improvement in factory operating efficiency also contributed to the gross profit improvement. Meanwhile, selling, distribution and administrative expenses increased by 8.6% to US$ 1,466.2 million (2011: US$ 1,350.1 million) driven by inflation in the Asia environment, in particular China, leading to rising wages and to higher retail rental costs. Share of results from associates and jointly controlled entities increased by 27.5% to US$114.0 million (2011: US$ 89.4 million). As a result of the aforementioned items, the Group's net profit attributable to owners amounted to US$ 623.7 million.

Looking Forward

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The Group will closely observe the business needs of its customers both in the manufacturing and retail businesses. Ongoing supply chain integration and operations excellence programs in the manufacturing business will help improve quality and production. Improved sales strategies and inventory management will help the retail business gradually return to profitability. Both businesses will go through business enhancement processes in 2013, in preparation for better times in 2014. The long term trends for the sales of athletic footwear and apparel continue to be favourable with the steady global growth in the number of consumers, and the long run growth of consumer incomes.

Yue Yuen Industrial (Holdings) Limited

www.yueyuen.com

Jerry Shum

Investor Relations Director

Tel: [phone]

Fax: [phone]

E-mail: [e-mail]

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Consolidated Income Statement

For the fifteen months ended 31st December, 2012

2012

(audited)

15 months

2011

(proforma)

15 months

US$'000 US$'000

Turnover 9,193,226 8,957,989

Cost of sales (7,094,107) (6,963,236)

Gross profit 2,099,119 1,994,753

( % of turnover ) 22.83% 22.27%

Other income 194,801 216,269

Selling and distribution expenses (788,249) (696,760)

Administrative expenses (678,030) (653,328) Other expenses (244,853) (230,129) Finance costs (46,053) (47,159)

Fair value changes on derivative financial instruments (4,637) (26,145) Gain on deemed disposal of jointly controlled entities 5,898 24,849

Gain on disposal of subsidiaries 5,761 -

Fair value changes on investment properties 390 6,955

Fair value changes on consideration

payable for acquisition of business (2,085) -

Impairment loss on investments in an associate and jointly

controlled entities (9,345) (2,000) Impairment loss on loan to an associate (1,366) - Impairment loss on intangible assets (8,485) - Impairment loss of an available-for-sale investment - (100) Share of results of associates 58,702 48,618

Share of results of jointly controlled entities 55,332 40,844

Profit before taxation 636,900 676,667

Income tax expense (25,578) (31,167)

Profit for the period 611,322 645,500

( % of turnover ) 6.65% 7.21%

Attributable to:

Owners of the Company 623,701 605,764

( % of turnover ) 6.78% 6.76%

Non-controlling interests (12,379) 39,736

611,322 645,500

By Category:

Recurring operating Profit 583,130 606,185

( % of turnover ) 6.34% 6.77% Non-recurring operating profit/(loss) 40,571 (421)

Net Profit attributable to Owners of the Company 623,701605,764

Earnings per share
- Basic	US 37.82 cents	US 36.74 cents

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