SFG:Consolidated Interim Financial Report for Q1 2013 (unaudited)Tallinn, 2013-05-09 17:00 CEST --
Selected Financial Indicators
Summarized selected financial indicators of the Group for Q1 2013 compared to Q1 2012 and 31.03.2013 compared to 31.12.2012 were as follows:
|
in thousands of EUR |
Q1 2013 |
Q1 2012 |
Change |
|
Revenue |
32 059 |
29 088 |
10.2% |
|
EBITDA |
4 832 |
7 425 |
-34.9% |
|
Net profit for the period |
3 834 |
6 132 |
-37.5% |
|
Net profit attributable equity holders of the Parent company |
3 527 |
5 333 |
-33.9% |
|
Earnings per share (EUR) |
0.09 |
0.14 |
-36.0% |
|
in thousands of EUR |
Q1 2013 |
Q1 2012 |
Change |
|
Revenue |
32 059 |
29 088 |
10.2% |
|
EBITDA |
4 832 |
7 425 |
-34.9% |
|
Net profit for the period |
3 834 |
6 132 |
-37.5% |
|
Net profit attributable equity holders of the Parent company |
3 527 |
5 333 |
-33.9% |
|
Earnings per share (EUR) |
0.09 |
0.14 |
-36.0% |
|
Margin analysis, % |
Q1 2013 |
Q1 2012 |
Change |
|
Gross profit |
31.8 |
41.7 |
-23.8% |
|
EBITDA |
15.1 |
25.5 |
-41.0% |
|
Net profit |
12.0 |
21.1 |
-43.3% |
|
Net profit attributable equity holders of the Parent company |
11.0 |
18.3 |
-40.0% |
|
Financial ratios, % |
31.03.2013 |
31.12.2012 |
Change |
|
ROA |
15.4 |
18.3 |
-15.8% |
|
ROE |
24.2 |
28.8 |
-15.9% |
|
Price to earnings ratio (P/E) |
8.7 |
7.6 |
14.4% |
|
Current ratio |
4.2 |
4.6 |
-8.7% |
|
Quick ratio |
2.4 |
2.6 |
-7.7% |
Consolidated Statement of Financial Position
|
in thousands of EUR |
31.03.2013 |
31.12.2012 |
|
ASSETS |
|
|
|
Current assets |
|
|
|
Cash and cash equivalents |
17 801 |
16 260 |
|
Prepayments |
587 |
243 |
|
Trade and other receivables |
19 597 |
14 746 |
|
Inventories |
26 361 |
24 598 |
|
Total current assets |
64 346 |
55 847 |
|
|
|
|
|
Non-current assets |
|
|
|
Long-term receivables |
1 |
1 |
|
Investments in associates |
136 |
164 |
|
Available-for-sale investments |
529 |
492 |
|
Deferred tax asset |
259 |
231 |
|
Intangible assets |
506 |
443 |
|
Investment property |
1 729 |
1 618 |
|
Property, plant and equipment |
18 715 |
17 041 |
|
Total non-current assets |
21 875 |
19 990 |
|
TOTAL ASSETS |
86 221 |
75 837 |
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
Current liabilities |
|
|
|
Borrowings |
55 |
47 |
|
Trade and other payables |
12 589 |
11 171 |
|
Tax liabilities |
2 861 |
1 008 |
|
Total current liabilities |
15 505 |
12 226 |
|
|
|
|
|
Non-current liabilities |
|
|
|
Deferred tax liability |
2 280 |
2 162 |
|
Total non-current liabilities |
2 280 |
2 162 |
|
Total liabilities |
17 785 |
14 388 |
|
|
|
|
|
Equity |
|
|
|
Share capital |
15 760 |
15 760 |
|
Share premium |
13 822 |
13 822 |
|
Treasury shares |
-20 |
-20 |
|
Statutory reserve capital |
1 306 |
1 306 |
|
Unrealised exchange rate differences |
50 |
15 |
|
Retained earnings |
26 523 |
20 513 |
|
Total equity attributable to equity holders of the Parent company |
57 441 |
51 396 |
|
Non-controlling interest in equity |
10 995 |
10 053 |
|
Total equity |
68 436 |
61 449 |
|
TOTAL EQUITY AND LIABILITIES |
86 221 |
75 837 |
Consolidated Income Statement
|
in thousands of EUR |
Q1 2013 |
Q1 2012 |
|
Revenue |
32 059 |
29 088 |
|
Cost of goods sold |
-21 873 |
-16 959 |
|
Gross Profit |
10 186 |
12 129 |
|
|
|
|
|
Distribution expenses |
-4 244 |
-3 145 |
|
Administrative expenses |
-1 658 |
-1 769 |
|
Other operating income |
308 |
352 |
|
Other operating expenses |
-389 |
-723 |
|
Operating profit |
4 203 |
6 844 |
|
|
|
|
|
Currency exchange income/(expense) |
-4 |
386 |
|
Other finance income/(expenses) |
257 |
186 |
|
Net financial income |
253 |
572 |
|
|
|
|
|
Profit (loss) from associates using equity method |
-8 |
3 |
|
Profit before tax and gain/(loss) on net monetary position |
4 448 |
7 419 |
|
|
|
|
|
Income tax expense |
-1 295 |
-1 365 |
|
Profit before gain/(loss) on net monetary position |
3 153 |
6 054 |
|
|
|
|
|
Gain on net monetary position |
681 |
78 |
|
Profit for the period |
3 834 |
6 132 |
|
Attributable to : |
|
|
|
Equity holders of the Parent company |
3 527 |
5 333 |
|
Non-controlling interest |
307 |
799 |
|
|
|
|
|
Earnings per share from profit attributable to equity holders of the Parent company, both basic and diluted (EUR) |
0.09 |
0.14 |
Business environment
Silvano Fashion Group with its brand portfolio is a recognized market leader in the lingerie segment in Russia, Belarus, Ukraine, has exceptionally strong foothold in other Russian-speaking countries (including Kazakhstan and Moldova) and is a recognized player in the Baltic consumer markets.
While the private consumption is increasing in Ukraine, the Baltics and other markets of the Group, then more cautionary economic climate can be noticed in Russia and Belarus. In both countries, the central banks seem to advocate for the more conservative monetary policy – in Russia, to balance the capital outflows and manage the deteriorating import and export balance, in Belarus – to tame the inflation and to lower the cost of financing for the individuals and for the businesses. Overall, this signals somewhat cautionary outlook of our customers on the remaining three quarters of the year.
On the store openings, Q1 2013 the net increase (including openings and store closures primarily due to relocation) for Milavitsa stores was 15 units and 1 unit under the Lauma Lingerie brand. The Group therefore operated directly and via franchise a total of 598 stores (net increase of 16 stores compared to end of 2012). Total geography of our franchise partners now covers more than 20 countries, including Milavitsa and Lauma Lingerie branded stores.
Russia, our core market in terms of total sales and total number of stores (356 stores in total), showed 19 644 thousand EUR in sales for Q1 2013 compared to 18 609 thousand in Q1 2012. By the data of Ministry of Economy the Russia’s GDP advanced by 1.1% during the first quarter of 2013. The consensus growth estimate for 2013 GDP is 3.6%. Going forward, tighter access to credit, via higher interest rates and the likelihood of more prudent lending practices by banks, will translate to weaker household consumption.
In Belarus, the Group operates directly and via franchise a total of 54 stores. Our sales in Belarus totalled 7 434 thousand EUR for Q1 2013 compared to 6 594 thousand in Q1 2012. The country’s GDP growth for Q1 2013 totaled 3.5%, whereas consumer prices increased by 5.4%.
Ukraine seems to get over the distress, especially in the area of private consumption. With 88 stores, and significant portion of the wholesale activity, the country produced a sales of 2 109 thousand EUR in Q1 2013, compared to 1 574 thousand EUR in Q1 2012. The overall economic growth measured by GDP increased by modest 0.5% during the Q1 2013.
Baltic economies continue performing well. According to Swedbank estimates, the Baltic States shall outperform the rest of the EU, with Estonia, Latvia and Lithuania GDP estimates for 2013 of 3.3%, 4.3% and 4.0%, respectively. The Group operates directly and indirectly via franchise 39 stores in the region, whereas our sales there totalled 584 thousand EUR in Q1 2013, compared to 524 thousand EUR in Q1 2012.
Financial performance
Positive effect of the devaluation on the cost side has been leveled out by increased expenses for labor, outsourcing, and utilities and to some extent materials sourced from Belarus. Group applies hyperinflationary accounting rules according to IAS 29 on business conducted in Belarus.
The Group`s sales amounted to 32 059 thousand EUR during Q1 2013, representing a 10.2% increase as compared to the same period of previous year. Overall, wholesales increased by 8.3% and retail sales – by 22.1%.
The Group’s reported gross profit margin during Q1 2013 decreased and was 31.8%, as compared to 41.7% in the respective period of previous year. Consolidated operating profit for Q1 2013 amounted to 4 203 thousand EUR, compared to 6 844 thousand EUR in Q1 2012. The consolidated operating profit margin was 13.1% (23.5% in Q1 2012). Consolidated net financial income amounted to 253 thousand EUR in Q1 2013, respective amount in Q1 2012 was 572 thousand EUR.
Consolidated net profit attributable to equity holders of the Parent company amounted to 3 527 thousand EUR in Q1 2013, compared to 5 333 thousand EUR in Q1 2012; net profit margin attributable to equity holders of the Parent company was 11% against 18.3% in Q1 2012.
Financial position
As of 31 March 2013 consolidated assets amounted to 86 221 thousand EUR representing an increase of 13.7% as compared to the position as of 31 December 2012.
Trade and other receivables increased by 4 851 thousand EUR as compared to 31 December 2012 and amounted to 19 597 thousand EUR as of 31 March 2013. Inventory balance increased by 1 763 EUR thousand and amounted to 26 361 thousand EUR as of 31 March 2013. Changes in trade debtors and stock balance were in line with the seasonality trend of the business.
Equity attributable to equity holders of the Parent company increased by 6 045 thousand EUR and amounted to 57 441 thousand EUR as of 31 March 2013.
Current liabilities increased by 3 279 thousand EUR during Q1 2013. Current and non-current loans and borrowings increased by 8 thousand EUR to 55 thousand EUR (attributable only to OAO Yunona) as of 31 March 2013.
Sales structure
Sales by markets
|
in thousands of EUR |
Q1 2013 |
Q1 2012 |
Change |
|
Q1 2013
% from sales |
Q1 2012
% from sales |
|
Russia |
19 644 |
18 609 |
1 035 |
|
61.3% |
64.0% |
|
Belarus |
7 434 |
6 594 |
840 |
|
23.2% |
22.7% |
|
Ukraine |
2 109 |
1 574 |
535 |
|
6.6% |
5.4% |
|
Baltics |
584 |
524 |
60 |
|
1.8% |
1.8% |
|
Other markets |
2 288 |
1 787 |
501 |
|
7.1% |
6.1% |
|
Total |
32 059 |
29 088 |
2 971 |
|
100.0% |
100.0% |
The majority of lingerie sales revenue during Q1 2013 in the amount of 19 644 thousand EUR was generated in Russia, accounting for 61.3% of total sales. The second largest market was Belarus, where sales reached 7 434 thousand EUR, contributing 23.2% of lingerie sales (both retail and wholesale). Out of the 2 288 thousand EUR sales in the other markets major part is attributed to Kazakhstan and Moldova.
Sales by business segments
|
in thousands of EUR |
Q1 2013 |
Q1 2012 |
Change |
|
Q1 2013
% from sales |
Q1 2012
% from sales |
|
Wholesale |
26 937 |
24 874 |
2 063 |
|
84.0% |
85.5% |
|
Retail |
5 035 |
4 123 |
912 |
|
15.7% |
14.2% |
|
Other operations |
87 |
91 |
-4 |
|
0.3% |
0.3% |
|
Total |
32 059 |
29 088 |
2 971 |
|
100.0% |
100.0% |
During Q1 2013 wholesale revenue amounted to 26 937 thousand EUR, representing 84% of the Group’s total revenue (Q1 2012: 85.5%). The main wholesale regions were Russia, Ukraine, Belarus, Kazakhstan and Moldova.
Total lingerie retail sales of the Group in Q1 2013 amounted to 5 035 thousand EUR, representing a 22.1% increase as compared to the previous year.
As of 31 March 2013 there were altogether 598 Milavitsa and Lauma branded shops. Own retail operations were conducted in Belarus and Latvia. As of the end of Q1 2013 the Group operated 58 own retail outlets. As of 31 March 2013, there were 512 Milavitsa branded shops operated by Milavitsa trading partners in Russia, Ukraine, Moldova, Kazakhstan, Uzbekistan, Kyrgyzstan, Latvia, Azerbaijan, Armenia, Germany, South Africa, Lithuania, Estonia, Georgia, United Arab Emirates, Iran, Slovenia, Belgium and Italy, resulting in net increase of 16 shops in Q1 2013. Additionally, as of 31 March 2013, there were 33 Lauma Lingerie retail outlets operated by Lauma Lingerie trading partners in Lithuania, Latvia, Estonia, Belarus and Albania. For Lauma Lingerie, the Group expects further openings in Russia in the near future.
Investments
During Q1 2013 the Group’s investments into property, plant and equipment totaled 1 069 thousand EUR. Main investments were made into equipment and facilities to maintain effective production and to add capacity for production and logistics for future periods.
Personnel
As of 31 March 2013, the Group employed 3 215 employees including 382 in retail. The rest were employed in production, wholesale, administration and support operations.
Total salaries and related taxes in Q1 2013 amounted to 6 506 thousand EUR. The remuneration of key management of the Group, including the key executives of the subsidiaries, totaled 167 thousand EUR.
Aleksei Kadõrko
CFO
Silvano Fashion Group
+372 6845 000
aleksei.kadorko@silvanofashion.com
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