2017Annual ResultsPresentation

22 March 2018

Highlights

01

Three-Year Plan (2017 - 2019) is on track with a strong start in its first year

Core Services Segment of supply chain solutions and logistics businesses delivered solid growth of 21.8% in core operating profit

Global network of 15,000 suppliers in over 40 markets well-positioned to absorb any shock from trade uncertainty

Declared a conditional special dividend of 47.6 HK cents per share and a final dividend of 2 HK cents per share for a total of 49.6 HK cents per share

Strategic divestment of three Product Verticals to generate US$1.1 billion of cash

Three-Year Plan Targets (2017-2019)

02

2019 Target

The Group

Three-Year Plan on Track

2017 2018 2019> >

Top Line

COP

COP Margin

Additional Capex

Stabilize Growth

Stabilize Growth

Stabilize Expansion

$150M for Digitalization over 3 years

Low double-digit by 2019(1)

Low double-digit CAGR

50+ bps by 2019

(1) Low double-digit total growth from 2016 to 2019 period; single-digit CAGR

03

2017 Financial Results

04

ReportedLike-for-like(2)

(US$ million) 2017 2016 Change 2017 2016 Change(Restated)(3) (Restated)(3)

Turnover 13,534 14,185 (4.6%) 13,534 14,751 (8.3%)

Total Margin 1,386 1,408 (1.5%) 1,386 1,495 (7.3%)As % of Turnover 10.2% 9.9% 10.2% 10.1%

Operating Costs 1,030 1,094 (5.8%) 1,030 1,177 (12.4%)As % of Turnover 7.6% 7.7% 7.6% 8.0%

Core Operating Profit 356 314 +13.3% 356 318 +11.8%As % of Turnover 2.6% 2.2% 2.6% 2.2%

2017 Results Highlights

(1) Group results with Discontinued Operations separately presented given the strategic divestment of three Product Verticals announced in 2017(2) Excluding the Asia consumer and healthcare distribution business, which was divested in June 2016(3) 2016 comparatives restated with adoption of New Accounting Standard HKFRS 15

• Core operating profit (COP) up 13%; COP margin increased 40 basis points

• Total margin percentage up 30 basis points to 10.2%

• Operating costs fell 6% and operating costs as % of turnover down from 7.7% to 7.6%

• Proposed a final dividend of 2 HK cents per share

05

Continuing Operations(1)

2017 Results Net Profit Analysis• Write-back of acquisition

payable of US$31m

• One-off reorganization costs of US$34m

• Net interest expense decreased while distribution to perpetual securities increased due to US$650m raised in 2016

• Profit attributable to shareholders from Continuing Operations increased 7%

2017US$M

2016US$M

(Restated)(1)

Change%

Core Operating Profit 356 314(2) +13.3%Write-back of Acquisition Payable 31 -One-off Reorganization Costs (34) (6)Amortization of Other Intangible Assets (23) (20)Asia Consumer and Healthcare Distribution Business - 4Gain on Disposal of Business - 8

Operating Profit 330 300 +9.9%Non-cash Interest Expenses (3) (4)Net Cash Interest Expenses (54) (71)Share of Profits from Associated Companies & Joint Venture 2 2Taxation (41) (32)

Profit for the Year (Continuing Operations) 234 195 +19.7%Distribution to Perpetual Capital Securities (64) (36)Non-controlling Interests (1) 1

Profit Attributable to Shareholders (Continuing Operations) 170 160 +6.5%

Profit Attributable to Shareholders (Discontinued Operations) (545) 61

Total (375) 221

(1) 2016 comparatives restated with adoption of New Accounting Standard HKFRS 15(2) Excluding the Asia consumer and healthcare distribution business, which was divested in June 2016

06

Services Segment2017 2016 ChangeUS$m US$m %

Turnover 12,013 12,622 (4.8%)

Total Margin 1,086 1,088 (0.2%)As % of Turnover 9.0% 8.6%

Operating Costs 784 839 (6.7%)As % of Turnover 6.5% 6.7%

Core Operating Profit 302 248 +21.8%As % of Turnover 2.5% 2.0%

• New Services segment includes Supply Chain Solutions and Logistics businesses

• Accounted for 89% and 85% of Continuing Operations’ turnover and COP respectively

• End-to-end supply chain services with significant synergies in cross-selling

07

Supply Chain Solutions2017 2016 ChangeUS$m US$m %

Turnover 10,989 11,718 (6.2%)

Total Margin 733 776 (5.5%)As % of Turnover 6.7% 6.6%

Operating Costs 506 588 (14.0%)As % of Turnover 4.6% 5.0%

Core Operating Profit 227 188 +21.2%As % of Turnover 2.1% 1.6%

• Turnover decline is decelerating year on year

• Strong growth in off-price sector in Europe; US facing retail store closures and ongoing destocking

• Operating costs decreased 14% and as % of turnover fell from 5.0% to 4.6%

• Cost savings from productivity enhancement and reduced receivable provisions

• COP grew 21% and COP margin improved 50 basis points to 2.1%

08

Logistics2017 2016 ChangeUS$m US$m %

Turnover 1,028 907 +13.3%

Total Margin 353 312 +13.1%As % of Turnover 34.3% 34.3%

Operating Costs 278 251 +10.6%As % of Turnover 27.0% 27.7%

Core Operating Profit 75 61 +23.8%As % of Turnover 7.3% 6.7%

09

• Growth mainly driven by market share gains, geographical expansion and success in new markets

• Robust consumption growth in Asia provided strong impetus to in-country logistics, particularly e-logistics

• COP increased 24% and COP margin improved 60 basis points to 7.3%

Products Segment (Continuing Operations)2017 2016 ChangeUS$m US$m %

Turnover 1,552 1,590 (2.4%)Total Margin 300 320 (6.2%)As % of Turnover 19.4% 20.1%

Operating Costs 247 255 (3.0%)As % of Turnover 15.9% 16.0%

Core Operating Profit 53 66 (18.6%)As % of Turnover 3.4% 4.1%

• Products segment consists of Onshore Wholesale business

• Turnover driven down by anemic consumer sentiment and unstable economic environment, particularly in Europe

• Total margin percentage declined 70 basis points to 19.4%, largely resulted from persistent promotional activities in the US and weak economy in Europe

• COP fell 19% and COP margin declined 70 basis points to 3.4%

• It will be restructured

10

Onshore Wholesale Business

Capital StructureDec 2017

US$MDec 2016

US$M(Restated)(1)

Bonds 752 1,253Bank Loans 25 29Total Debt 777 1,282Cash 349 985Net Debt 428 297

Total Equity 2,914 3,459Total Capital(2) 3,342 3,756Gearing Ratio(3) 13% 8%

• Maintained strong balance sheet and conservative gearing ratio

• Total debt reduced by US$505m after repayment of bonds

• Total available bank facilities was US$1.60b with US$1.57b undrawn, of which US$700m+ was committed lines

11

(1) 2016 comparatives restated with adoption of New Accounting Standard HKFRS 15(2) Sum of net debt and total equity(3) Net debt divided by total capital

Strategic Divestment I Simplifying Our Business

Product Verticals

Furniture

Spin-off StrategicDivestment

StrategicDivestment

Asia Consumer & Healthcare

Distribution Business

12

2014 2016 2017

Furniture

Special Dividend

US$520m

47.6 HK cents / share

Consideration

$1.1b Further strengthens capital structure

US$580m

Strategic Divestment I Strengthens Capital Structure

13

US

99.94% of the Independent Shareholder votes were in favor of the strategic divestment; the transaction is subject to regulatory approval

14

11InterimDPS

2FinalDPS

+ 47.6Special

DPS

+ = 60.6TOTALDPS

(HK Cents)

Dividend per Share (DPS)

Macro Environment

15

Global Network Absorbs Trade Uncertainty

• Increased complexities due to FTAs, geopolitical instability and rising costs

• Trump Administration’s tougher, protectionist stance on trade may disrupt the sourcing landscape

• Potential tariff hikes and new trade policies may accelerate the diversification of production base away from China

• Global footprint provides flexibility and diversification

• Li & Fung well positioned to weather trade uncertainty

16

Strong network of offices and suppliers across 40+ economies

Our goal is to create the supply chain of the future to help our customers navigate the digital economy and to improve the lives of one billion people in the supply chain.

17

Three-Year Plan Goal

18

Data Analytics Productivity Supply Chain

SolutionsGlobal Business

DevelopmentLF

Ecosystem

Speed Innovation Digitalization

Three-Year Plan Themes

Speed

19

Speed

Stabilize

40 weeksFirst week

Lead time

20 weeks

20

Speed

Stabilize

20 weeks 40 weeksFirst week

Lead time

1.25XIncreased speed

8 weeks

Increased speed 2X

GOAL

Reduced by 20%

21

TOTAL

40WEEKS

Speed I The Results

22

TOTAL

SALES

INVENTORY MARK-DOWN

25%

25% 30%

40WEEKS

Speed I The Results

3.1XSPEED

MaterialsManagement

Role Alignment

EmpowermentOf Vendors

Speed“Buckets”

1

23

Tactical Speed Strategies

13WEEKS

23

Speed I Using 3D to Enhance Speed

28DAYS

21DAYS

84DAYS

24

Speed I Using 3D to Enhance Speed

28DAYS

21DAYS

84DAYS

14

7

14

Increase speed

2X

3X

6X

Year 1 Year 2 Year 3

Customer Turnover

Speed

Inventory

+30% to 40% yearly

25

Year 1 Year 2 Year 3

Speed I Financial Implications

26

Data Analytics Productivity Supply Chain

SolutionsGlobal Business

DevelopmentLF

Ecosystem

Speed Innovation Digitalization

Three-Year Plan Themes

Innovation

27

MON TUE WED THUSUN FRIDAY

Successfully crowdfunded in ONE DAY!

Innovation I BetabrandCustomers co-designed product in 5 days

28

Data Analytics Productivity Supply Chain

SolutionsGlobal Business

DevelopmentLF

Ecosystem

Speed Innovation Digitalization

Three-Year Plan Themes

Digitalization

Resulting in operational improvements of digital product development time savings

29

10X

Digitalization I 3D Virtual Design

More customers

Increase in total number of

styles

More full-time 3D designers

12X40XIncrease in

weekly output per designer

3X

30

Digitalization I 3D Virtual Store

31

Data Analytics Productivity Supply Chain

SolutionsGlobal Business

DevelopmentLF

Ecosystem

Speed Innovation Digitalization

Three-Year Plan Themes

Productivity

32

We are shifting production-focused roles into five production “platforms”

Driving operational excellence and speed for our customers through KPIs and a

performance-driven culture

• Reduce layers• Less hierarchy• Faster decisions

From To

ProductDevelopment

Color, FabricProduction

Center of Expertise (COE)

Production

Generalists Specialists

India / SubCont. China

Vietnam (SEA)

Indonesia

Guatemala

Productivity

ProductDevelopment

33

85.7%

14.3%

78.9%

21.1%

79.2%

20.8%

57.3%

42.7%

40.5%

59.5%

33.4%

66.6%

33.4%

66.6%

30.8%

69.2%

32.2%

67.8%

100%

0%

50%

Jun 17 Jul 17 Aug 17 Sep 17 Oct 17 Nov 17 Dec 17 Jan 18 Feb 18

AutomationManual

Global Transaction Services

25.4%

Mar 18

74.6%

Productivity I Automation

34

Data Analytics Productivity Supply Chain

SolutionsGlobal Business

DevelopmentLF

Ecosystem

Speed Innovation Digitalization

Three-Year Plan Themes

LF Ecosystem

35

We will expand the LF Ecosystem using our convening power with access to US$2T+ of retail sales to bring together diverse players in the global supply chain and beyond.

LF Ecosystem

Consumer

Consumer Needs Product

Design Product Development

Vendor Compliance

Raw Material Sourcing

Factory Sourcing

Manufacturing Control

Shipping ControlForwarderConsolidation

Customs Clearance

Local Forwarding

Consolidation

Wholesaler

Retailer

Distribution & logistics

Raw materials / suppliers

InnovatorsBrands & retailers

Tech providers

Commercialpartners

Financial institutions

Consumer & market insight

In-store technologies / e-Com

e-Wholesaler

Virtual Sampling

Procurement platforms

Finished products marketplace

Production optimization

Fulfillment & warehouseDigital

Analog

Logistics

36

37

Logistics I In-country e-Logistics Growth

2010 2011 2012 2013 2014 2015 2016 - 2017

38

May 2017

Delhi site visit

Sep 2017

Completed Delhi facility

set up

Oct 2017

Delhi DC Go Live

Jan 2018

Completed Mumbai

facility set up

Mar 2018

Mumbai DC Go Live

Logistics I Geographic entry into India

39

Logistics I World Gateway Distribution Centre, Singapore

40

Voice Picking Vision Picking Drones

Goods to Man Field Operations Control Tower One Glance Dashboards

Logistics I Innovation & Digitalization

Summary

41

Three-Year Plan (2017 - 2019) is on track with a strong start in its first year

Core Services Segment of supply chain solutions and logistics businesses delivered solid growth of 21.8% in core operating profit

Global network of 15,000 suppliers in over 40 markets well-positioned to absorb any shock from trade uncertainty

Declared a conditional special dividend of 47.6 HK cents per share and a final dividend of 2 HK cents per share for a total of 49.6 HK cents per share

Strategic divestment of three Product Verticals to generate US$1.1 billion of cash