The world’s leading supply chain solutions partner for brands and retailers –Li & Fung Limited — announced its annual results for the year ended 31 December 2018.
On a like-for-like basis and excluding the impact of the strategic divestment of the three Product Verticals in April 2018, which triggered a one-off disposal loss of US $ 114 million, core operating profit decreased 20 per cent to US $ 285 million.
This was largely due to decreases in turnover and total margin in the Supply Chain Solutions business, as well as continued investment in digitalisation in line with the company’s long-term strategic plan.
Similarly, turnover also decreased by 6.2 per cent to US $ 12.7 billion, mainly due to customers’ ongoing de-stocking, turnover and bankruptcies. Although, total margin percentage improved by 0.4 per cent to 10.6 per cent, primarily a result of the increased contribution from the higher-margin logistics business.
Spencer Fung, Group CEO of Li & Fung, said: “The year 2018 was a demanding year and we’ve made a fundamental reorganisation of our business in line with our ‘Three-Year Plan’ to build the Supply Chain of the future. We initiated a structural change with a new management team to focus on our core customers and operational excellence. This includes a Group President, a Chief Operating Officer and a Chief Digital Officer. We have the right strategy, and now the right structure and people in place. With all three elements in place, we have built the right foundation for the future. I am confident that we are on the right track.”
