Tallinn, 2014-02-28 20:15 CET (GLOBE NEWSWIRE) -- Selected Financial Indicators
Summarized selected financial indicators of the Group for 12 months 2013 compared to 12 months 2012 and 31.12.2013 compared to 31.12.2012 were as follows:
| in thousands of EUR | 12m 2013 | 12m 2012 | Change |
| Revenue | 121 680 | 123 519 | -1.5% |
| EBITDA | 19 235 | 22 130 | -13.1% |
| Net profit for the period | 11 866 | 16 093 | -26.3% |
| Net profit attributable equity holders of the Parent company | 10 945 | 14 151 | -22.7% |
| Earnings per share (EUR) | 0.28 | 0.36 | -23.1% |
| Operating cash flow for the period | 18 612 | 4 907 | 279.3% |
| in thousands of EUR | 31.12.2013 | 31.12.2012 | Change |
| Total assets | 76 629 | 75 837 | 1.0% |
| Total current assets | 55 080 | 55 847 | -1.4% |
| Total equity attributable to equity holders of the Parent company | 52 370 | 51 396 | 1.9% |
| Loans and borrowings | 79 | 47 | 68.1% |
| Cash and cash equivalents | 19 165 | 16 260 | 17.9% |
| Margin analysis, % | 12m 2013 | 12m 2012 | Change |
| Gross profit | 35.2 | 34.2 | 3.0% |
| EBITDA | 15.8 | 17.9 | -11.7% |
| Net profit | 9.8 | 13.0 | -25.0% |
| Net profit attributable equity holders of the Parent company | 9.0 | 11.5 | -21.8% |
| Financial ratios, % | 31.12.2013 | 31.12.2012 | Change |
| ROA | 13.2 | 18.3 | -27.6% |
| ROE | 19.7 | 28.8 | -31.8% |
| Price to earnings ratio (P/E) | 9.6 | 7.6 | 26.4% |
| Current ratio | 4.7 | 4.6 | 1.3% |
| Quick ratio | 2.6 | 2.6 | -1.7% |
Consolidated Statement of Financial Position
| in thousands of EUR | 31.12.2013 | 31.12.2012 |
| ASSETS | ||
| Current assets | ||
| Cash and cash equivalents | 19 165 | 16 260 |
| Prepayments | 196 | 243 |
| Trade and other receivables | 10 846 | 14 746 |
| Inventories | 24 873 | 24 598 |
| Total current assets | 55 080 | 55 847 |
| Non-current assets | ||
| Long-term receivables | 0 | 1 |
| Investments in associates | 124 | 164 |
| Available-for-sale investments | 497 | 492 |
| Deferred tax asset | 460 | 231 |
| Intangible assets | 719 | 443 |
| Investment property | 1 592 | 1 618 |
| Property, plant and equipment | 18 157 | 17 041 |
| Total non-current assets | 21 549 | 19 990 |
| TOTAL ASSETS | 76 629 | 75 837 |
| LIABILITIES AND EQUITY | ||
| Current liabilities | ||
| Borrowings | 79 | 47 |
| Trade and other payables | 10 837 | 11 171 |
| Tax liabilities | 905 | 1 008 |
| Total current liabilities | 11 821 | 12 226 |
| Non-current liabilities | ||
| Deferred tax liability | 1 953 | 2 162 |
| Total non-current liabilities | 1 953 | 2 162 |
| Total liabilities | 13 774 | 14 388 |
| Equity | ||
| Share capital | 11 820 | 15 760 |
| Share premium | 13 822 | 13 822 |
| Treasury shares | -224 | -20 |
| Statutory reserve capital | 1 306 | 1 306 |
| Unrealised exchange rate differences | -1 214 | 15 |
| Retained earnings | 26 860 | 20 513 |
| Total equity attributable to equity holders of the Parent company | 52 844 | 51 396 |
| Non-controlling interest in equity | 10 011 | 10 053 |
| Total equity | 62 855 | 61 449 |
| TOTAL EQUITY AND LIABILITIES | 76 629 | 75 837 |
Consolidated Income Statement
| in thousands of EUR | Q4 2013 | Q4 2012 | 12m 2013 | 12m 2012 | |
| Revenue | 22 868 | 25 612 | 121 680 | 123 519 | |
| Cost of goods sold | -15 183 | -18 871 | -78 815 | -81 280 | |
| Gross Profit | 7 685 | 6 741 | 42 865 | 42 239 | |
| Distribution expenses | -5 076 | -4 604 | -17 200 | -14 533 | |
| Administrative expenses | -2 125 | -2 144 | -7 106 | -7 902 | |
| Other operating income | -145 | 1 060 | 351 | 1 556 | |
| Other operating expenses | -272 | -575 | -2 194 | -1 838 | |
| Operating profit | 67 | 478 | 16 716 | 19 522 | |
| Currency exchange income/(expense) | 48 | 21 | -275 | 475 | |
| Other finance income/(expenses) | 420 | 165 | 1 141 | 585 | |
| Net financial income | 468 | 186 | 866 | 1 060 | |
| Profit (loss) from associates using equity method | -4 | 25 | 5 | 34 | |
|
Profit before tax and gain/(loss) on net monetary position |
531 | 689 | 17 587 | 20 616 | |
| Income tax expense | 10 | 428 | -3 894 | -5 682 | |
| Profit before gain/(loss) on net monetary position | 541 | 1 117 | 13 693 | 14 934 | |
| Gain on net monetary position | -422 | 421 | -1 827 | 1 159 | |
| Profit for the period | 119 | 1 538 | 11 866 | 16 093 | |
| Attributable to : | |||||
| Equity holders of the Parent company | 236 | 1 666 | 10 945 | 14 151 | |
| Non-controlling interest | -117 | -128 | 921 | 1 942 | |
| Earnings per share from profit attributable to equity holders of the Parent company, both basic and diluted (EUR) | 0.01 | 0.04 | 0.28 | 0.36 |
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.
The 4th quarter of 2013 is characterized by the drop in sales of Silvano Fashion Group compared to the respective period a year ago. The sales volumes decreased in both wholesale segment as well as in the retail segment in our own stores and partner stores in our main markets. The turnover for Q4 2013 decreased by 2 744 thousand euros (-10.7%) compared to the Q4 in 2012. In addition to this, the currencies of the main markets of the Silvano Fashion Group became weaker, especially the Russia Rouble weakening against the currency basket (-8.3%) and against Euro (-2.5%) in Q4, 2013. From the beginning of 2013, Russia Rouble has depreciated by nearly 11.5% against Euro. At the same time, our production costs in Belarus (labour, rent, utilities, partially materials) have not reduced in Belarus Roubles.
In general, during 2013 the biggest drop in sales affected wholesale segment (100 259 thousand Euros vs. 102 682 thousand Euros in 2012). Sales in the retail segment, including franchise stores, rose to 20 707 thousand Euros compared to 20 167 thousand to the previous year. From the main consumer markets, the main backdrop we experienced in Russia (-3 812 thousand Euros), in Belarus (-700 thousand Euros) and in the Baltic states (-439 thousand Euros). This backdrop was unfortunately not offset by the growth in Ukraine (+2 157 thousand Euros) and in other markets (+955 thousand Euros).
According to the World Bank data, the economic growth (measured in GDP) in 2013 constitutes less than 2%. One of the factors describing the economic situation in Russia is the deterioration in consumer sentiment and business confidence, explained by the gloomy outlook of the global economy. Silvano Fashion Group was directly affected by the reduced purchasing power (weaker Russia’s Rouble) and reduced sales. Together with the wholesales segment, Russia generated annual sales of 71 326 thousand EUR, down from 75 138 thousand EUR a year ago. As of end of 2013, there are 383 Milavitsa stores in Russia.
Belarus economic growth is stalling because of cooling economic climate of its main export market – Russia. Primarily due to rapid income growth in the first half of the year, the consumption held firm. Starting from the second half of the year, the overall consumption delayed; for instance, the Group’s sales in Belarus in Q4 2013 decreased compared to previous year. Much of the near future of the market has to do with the recovery in the export markets, as well as with the competitiveness of Belarus as a sourcing country for Russian manufacturers. There are a total of 53 stores operated directly by the Group and 5 franchise stores. The Group’s sales revenue in Belarus reached 30 794 thousand EUR for 12 months of 2013 compared to 31 494 thousand EUR for the same period a year ago.
Ukraine was our stellar star for the first half of the year. The sales revenue advanced to 8 514 thousand EUR for 12 months of 2013 compared to 6 357 thousand EUR for the same period a year ago. Strength of our local franchise and wholesales partners were the driving factor for our sales. Given the political abrupt and sluggish economy, and probable weakness of Ukrainian Hryvnia (the currency managed to hold stable during 2013, but has de facto devalued by nearly 25% by the issuance of the report), 2014 sales are hard to predict. There are 101 franchise stores in total in the country as of end of 2013.
In the Baltics, the Group primarily operates via own stores and franchise partners. The Group operates 9 own stores, complemented by 34 partner stores in the region. The sales in the Baltic countries aggregated 2 733 thousand EUR for 12 months of 2013, compared to 3 172 EUR for the same period a year ago.
As referred to in our earlier quarterly reports, the other markets, with Kazakhstan in the lead, aggregated 8 313 thousand EUR in sales for 2013, compared to 7 358 thousand EUR a year before. The Group is making efforts to increase sales in other markets in 2014, as well.
On the store openings, Q4 2013 net increase (including openings and store closures primarily due to relocations) for Milavitsa stores were 29 units and 2 units under the Lauma Lingerie brand. The Group therefore operated directly and via franchise a total of 679 stores (net increase of 95 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.
Financial performance
The Group`s sales amounted to 121 680 thousand EUR during 12 months of 2013, representing a 1.5% decrease as compared to the same period of previous year. Overall, wholesales decreased by 2.5% and retail sales increased – by 2.7%.
The Group’s reported gross profit margin during Q4 improved year-on-year basis and stood at 33.61%, reported gross margin was 26.32% in the respective period of previous year. For 12 months of 2013, the gross margin aggregated 35.23%, compared to 34.2% a year ago. Consolidated operating profit for Q4 2013 amounted to 67 thousand EUR, compared to 478 thousand EUR in Q4 2012. For 12 months of 2013 the operating profit stood at 16 716 thousand EUR compared to 19 522 thousand EUR a year ago. The main reason for the drop is related to higher distribution expenses. The consolidated operating profit margin was 13.7% for 12 months of 2013 (15.8% in 12 months of 2012).
Consolidated net profit attributable to equity holders of the Parent company for Q4 2013 amounted to 236 thousand EUR, compared to 1 666 thousand EUR in Q4 2012. The net profit attributable to equity holders of the Parent company for 12 months of 2013 amounted to 10 945 thousand EUR, compared to 14 151 thousand EUR a year ago; net profit margin attributable to equity holders of the Parent company for 12 months of 2013 was 9.0% against 11.5% in 12 months of 2012.
Financial position
As of 31 December 2013 consolidated assets amounted to 76 629 thousand EUR representing an increase by 1.0% as compared to the position as of 31 December 2012.
Trade and other receivables decreased by 3 900 thousand EUR as compared to 31 December 2012 and amounted to 10 846 thousand EUR as of 31 December 2013. Inventory balance increased by 275 thousand EUR and amounted to 24 873 thousand EUR as of 31 December 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 974 thousand EUR and amounted to 52 370 thousand EUR as of 31 December 2013.
Current liabilities decreased by 405 thousand EUR during 12 months of 2013. Current and non-current loans and borrowings increased by 32 thousand EUR to 79 thousand EUR as of 31 December 2013.
Sales structure
Sales by markets
| in thousands of EUR | 12m 2013 | 12m 2012 | Change |
12m 2013 % from sales |
12m 2012 % from sales |
| Russia | 71 326 | 75 138 | -3 812 | 58.6% | 60.8% |
| Belarus | 30 794 | 31 494 | -700 | 25.3% | 25.5% |
| Ukraine | 8 514 | 6 357 | 2 157 | 7.0% | 5.1% |
| Baltics | 2 733 | 3 172 | -439 | 2.2% | 2.6% |
| Other markets | 8 313 | 7 358 | 955 | 6.8% | 6.0% |
| Total | 121 680 | 123 519 | -1 839 | 100.0% | 100.0% |
The majority of lingerie sales revenue during 12 months of 2013 in the amount of 71 326 thousand EUR was generated in Russia, accounting for 58.6% of total sales. The second largest market was Belarus, where sales reached 30 794 thousand EUR, contributing 25.3% of lingerie sales (both retail and wholesale). Ukraine represented a sales of 8 514 thousand EUR, contributing 7.0% of lingerie sales of the Group.
Sales by business segments
| in thousands of EUR | 12m 2013 | 12m 2012 | Change |
12m 2013 % from sales |
12m 2012 % from sales |
| Wholesale | 100 259 | 102 862 | -2 603 | 82.4% | 83.3% |
| Retail | 20 707 | 20 167 | 540 | 17.0% | 16.3% |
| Other operations | 714 | 490 | 224 | 0.6% | 0.4% |
| Total | 121 680 | 123 519 | -1 839 | 100.0% | 100.0% |
During 12 months of 2013 wholesale revenue amounted to 100 259 thousand EUR, representing 82.4% of the Group’s total revenue (12 months 2012: 83.3%). The main wholesale regions were Russia, Ukraine, Belarus, Kazakhstan and Moldova.
Total lingerie retail sales of the Group in 12 months of 2013 amounted to 20 707 thousand EUR, representing 17.0% of the Group’s total revenue (12 months 2012: 16.3%).
As of 31 December 2013 there were altogether 679 Milavitsa and Lauma branded shops. Own retail operations were conducted in Belarus and Latvia. As of the end of 12 months of 2013 the Group operated 62 own retail outlets. As of 31 December 2013, there were 581 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. Additionally, as of 31 December 2013, there were 36 Lauma Lingerie retail outlets operated by Lauma Lingerie trading partners in Lithuania, Latvia, Estonia, Belarus and Albania.
Own & franchise store locations, geography
| Own | Franchise | Total | |
| Russia | 0 | 384 | 384 |
| Ukraine | 0 | 101 | 101 |
| Belarus | 53 | 5 | 58 |
| Baltics | 9 | 34 | 43 |
| Kazakhstan | 0 | 29 | 29 |
| Moldova | 0 | 26 | 26 |
| Other regions | 0 | 38 | 38 |
Investments
During 12 months 2013 the Group’s investments into property, plant and equipment totalled 3 664 thousand EUR. Main investments were made into equipment and facilities to improve logistic facilities and maintain effective production for future periods.
Personnel
As of 31 December 2013, the Group employed 3 165 employees including 412 in retail. The rest were employed in production, wholesale, administration and support operations.
Total salaries and related taxes during 12 months 2013 amounted to 24 923 thousand EUR. The remuneration of key management of the Group, including the key executives of the subsidiaries, totalled 647 thousand EUR.
Decisions made by governing bodies during 12 months 2013
On 28 June 2013 Silvano Fashion Group held its regular Annual General Meeting of Shareholders. The Meeting adopted following decisions.
The Meeting approved the 2012 Annual Report.
The Meeting decided to distribute dividends in the amount 0.10 EUR per share (record date 12.07.2013, paid out on 15.07.2013).
The Meeting decided to reduce the share capital of the Company by reducing the nominal value of the shares by 0.10 EUR per share (record date 12.07.2013, paid out on 10.10.2013) and amend the Articles of Association accordingly.
The Meeting decided to adopt a share buy-back program in the following: effective period until 30.06.2014; maximum number of shares to be acquired not more than 400,000; maximum share price 2.50 EUR per share.
The Meeting decided to recall Mr Pavel Daneyko from the Supervisory Board due to the expiration of his term, and appointed Mr Mart Mutso as the new Supervisory Board member.
The Meeting decided to re-appoint AS PricewaterhouseCoopers as the Group`s auditor for financial year 2013.
In June, Silvano Fashion Group established a 100% subsidiary in Latvia (SIA Linret) for holding purposes. In December 2013, the group alienated 100% of the shares of Linret EST (Estonia).
Aleksei Kadõrko
CFO
Silvano Fashion Group
+372 6845 000
aleksei.kadorko@silvanofashion.com
