Li Ning widened its loss in 2014 to RMB743.5 million ($125 mm) from RMB359.4 milion a year ago.
Revenues rose 15.6 percent to RMB6.73 billion ($1.13 bn) from RMB5.82 billion.
Li Ning warned in January that it expected to post a loss for 2014, partly because of the costs of its transformation plans, and the result was in line with analysts’ forecasts.
Financial And Operational Highlights
The Group has seen some favorable results in 2014, including (i) stronger revenue and growth momentum in direct-retail revenue and new products sell through mix continuing to improve; (ii) channels having seen significant reduction of old inventory and improvement to a healthier level with higher mix of new products; and (iii) channel network having been stabilized, with distributors business starting to grow The Group’s revenue increased 16 percent year-on-year to RMB6,728 million. Revenue growth accelerated in the second half of 2014, up 23 percent year-on-year EBITDA in 2014 was negative RMB323 million; while the second half EBITDA recorded a profit of RMB28 million; loss attributable to equity holders in the year was RMB781 million, RMB196 million of which occurred in the second half of 2014 EBITDA excluding provision for doubtful debts and one-time cost was at a loss, but improved meaningfully year-on-year with the loss narrowed by 82 percent for the second half and 48 percent for full year ,Working capital stabilized while inventory level increased mainly as a result of direct-retail expansion
2015 Outlook
The initiatives implemented in the past three years have built a solid foundation and 2015 will mark a step up in its growth phase. The three pillars to support operation, namely product, channel and retail capability, are the core competitiveness that the Group will focus on building in the future Digitalized operation will be the driving force for future growth in the next three years. We have in-depth collaboration with Marvel, Mi band, JD.com and others to build a new digitalized business status of Li-Ning. In March this year, we reached a strategic agreement with Mi band to jointly launch the “Smart” running shoes, while the products collaborated with Marvel will be launched in early April Operating cost and expense, working capital management and channel profitability are areas which still have significant room to be improved and strengthened With the proceeds raised from the equity financing, the Group will invest with clear objectives to support its business growth Appointment Of Interim Chief Executive Officer
The Board appointed the executive chairman, Li Ning, as the interim CEO with effect from Mar. 18 2015, and believes that the present arrangement facilitates business planning and execution of strategies, which is beneficial to the company and shareholders.
