Börsiteade

Pealkiri

SFG:Consolidated Interim Financial Report for Q1 2013 (unaudited)

Teade

Tallinn, 2013-05-09 17:00 CEST (GLOBE NEWSWIRE) --


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      3 527    5 333  -33.9%
 company                                                                        
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      3 527    5 333  -33.9%
 company                                                                        
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       11.0     18.3  -40.0%
 company                                                                        

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            57 441      51 396
 Parent company                                                                 
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      0.09     0.14
 of the Parent company, both basic and diluted (EUR)                            

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       Q1 2012
                                               % from sales  % 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       Q1 2012
                                               % from sales  % 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
         [email protected]