Tallinn, 2013-02-26 06:00 CET (GLOBE NEWSWIRE) -- Selected Financial Indicators
Summarized selected financial indicators of the Group for 12m 2012 compared to 12m 2011 and 31.12.2012 compared to 31.12.2011 were as follows:
| in thousands of EUR | 12m 2012 | 12m 2011 | Change |
| Revenue | 123 519 | 103 558 | 19.3% |
| EBITDA | 22 130 | 29 840 | -25.8% |
| Net profit for the period | 16 093 | 25 629 | -37.2% |
| Net profit attributable equity holders of the Parent company | 14 151 | 21 501 | -34.2% |
| Earnings per share (EUR) | 0.36 | 0.55 | -34.7% |
| Operating cash flow for the period | 4 907 | 28 080 | -82.5% |
| in thousands of EUR | 31.12.2012 | 31.12.2011 | Change |
| Total assets | 75 841 | 68 485 | 10.7% |
| Total current assets | 55 847 | 51 881 | 7.6% |
| Total equity attributable to equity holders of the Parent company | 51 400 | 42 464 | 21.0% |
| Loans and borrowings | 47 | 20 | 135.0% |
| Cash and cash equivalents | 16 260 | 17 967 | -9.5% |
| Margin analysis, % | 12m 2012 | 12m 2011 | Change |
| Gross profit | 34.2 | 44.8 | -23.6% |
| EBITDA | 17.9 | 28.8 | -37.8% |
| Net profit | 13.0 | 24.7 | -47.4% |
| Net profit attributable equity holders of the Parent company | 11.5 | 20.8 | -44.8% |
| Financial ratios, % | 31.12.2012 | 31.12.2011 | Change |
| ROA | 18.3 | 32.2 | -43.3% |
| ROE | 28.8 | 50.9 | -43.4% |
| Price to earnings ratio (P/E) | 7.6 | 5.5 | 38.7% |
| Current ratio | 4.6 | 3.6 | 26.9% |
| Quick ratio | 2.6 | 2.1 | 21.7% |
Business environment
General economic sentiment in the core markets of Silvano Fashion Group remained unchanged for the last quarter of the year. Though these markets are not isolated from the global, macroeconomic environment, the trend in consumers’ spending has remained stable. There are signs of cost inflation that may, in the near future, somewhat hinder the consumption patterns, yet these changes have, if any, a modest influence on our sales volumes in 2013.
On the store openings, Q4 2012 the net increase (including openings and store closures primarily due to relocation) for Milavitsa stores was 25 units and 4 units under the Lauma Lingerie brand. The Group therefore operated directly and via franchise a total of 584 stores by the end of 2012, net increase of 87 stores during 2012. This tempo of openings corresponds to net store openings for 2011 (85 units), and primarily serves for the stable growth of sales through own and franchise networks as opposed to less predictable wholesale component. Total geography of our franchise partners now covers more than 20 countries, including Milavitsa and Lauma Lingerie branded stores.
Acquisition of Ukrainian trading company in Q4 2012 (previously 74% not owned by the Group) does not facilitate immediate improvement of the Group’s EBITDA, but it is expected to increase the control over the sales channels and the development of the franchise network of both Milavitsa and Lauma stores in Ukraine.
The last quarter of 2012 for the Group was the period of building up the stocks in order to meet the demand in our core markets during first half of 2013. Combined with the seasonally lower sales, its primary effect lies in the increased inventories that tie up cash at least until the end of the Q1 2013. Nevertheless, due to the expected increasing business volumes this pattern is unavoidable for Group`s production companies in Latvia and Belarus.
Russia, our core market in terms of total sales and total number of stores (348 stores in total), showed 75 138 thousand EUR in sales for 2012 compared to 66 283 thousand in 2011. By the data of Ministry of Economy the Russia’s GDP advanced by 2.2% during the last quarter of 2012, up by 3.5% in 2012. The International Monetary Fund estimates growth rates slightly below 4% mark also for 2013 and 2014.
In Belarus, our number 2 market, the annual GDP growth remains slightly below the modest 2% whilst the Q4 was affected by smaller volume in construction and trade. Nevertheless, production volumes are rising, thus indicating favourable environment also for the Group for 2013. The preliminary CPI indicator (affecting the hyperinflationary accounting) amounted to 21.5% for the whole year. 2012 hyperinflation adjusted sales in Belarus totalled 31 494 thousand EUR compared to 23 702 thousand EUR in 2011.
The reflection of the Ukrainian economy by the State Statistics Service showed real GDP decrease by 2.7% in Q4 2012 compared to year earlier, resulting a modest 0.2% increase in GDP for 2012. EBRD has lowered its forecast for GDP growth to 1% from the previous 2.5%. Ukrainian sales totalled 6 357 thousand EUR for 2012 compared to 5 353 thousand in 2011.
Baltic economies continue performing well. Estonia’s preliminary GDP guidance is 3.7% in the Q4 2012. Latvia’s GDP continues buoyant and reached 5.1% in Q4 2012, the early guidance for 2012 GDP figure stands at 5.7%. Lithuania’s preliminary GDP growth indication is 3.1% for Q4 2012 and 3.4% for the whole year. Our sales in the region totalled 3 172 thousand EUR in 2012, compared to 3 063 thousand EUR in 2011.
Financial performance
Positive effect of the devaluation on the cost side has been levelled out by increased expenses for labour, outsourcing, utilities and to some extent materials sourced from Belarus. But main impact on reported results is coming from hyperinflationary accounting, which requires us to apply certain accounting methods that have negative influence on Group`s financial results and margins in 2012. Mainly this is due to the fact that Group`s major part of production expenses is generated in Belarus and Group has to hyperinflate them according to IAS 29 (12 m 2012 inflation rate in Belarus was more than 21%). But on the other hand Group`s sales in Russia are conducted via its subsidiaries and are not hyperinflated.
The Group`s sales amounted to 123 519 thousand EUR during 12 months 2012, representing a 19% increase as compared to the same period of previous year. Overall, wholesales increased by 17% and retail sales – by 32%.
The Group’s reported gross profit margin during 12 months 2012 decreased and was 34.2% (adjusted for hyperinflation accounting), as compared to 44.8% in the respective period of previous year. Consolidated operating profit for 12 months 2012 amounted to 19 522 thousand EUR, compared to 27 885 thousand EUR in 12 months 2011. The consolidated operating profit margin was 16% (27% in 12 months 2011). Consolidated net financial income amounted to 1 060 thousand EUR in 12 months 2012, respective amount in 12 months 2011 was 18 330 thousand EUR.
Effective tax rate for 12 months 2012 amounted to 27,6% (26% in 12 months 2011). Notwithstanding the decrease of income tax rate in Belarus from 24% to 18% starting from 1 January 2012, effective tax rate increased compared to 12 months 2011. This is due to the following facts: the Group fully utilized accumulated tax losses in one of Russian subsidiaries, the Parent company collected dividends from its subsidiary SP ZAO Milavitsa, application of hyperinflation adjustments to financial statements.
Consolidated net profit attributable to equity holders of the Parent company amounted to 14 151 thousand EUR in 12 months 2012, compared to 21 501 thousand EUR in 12 months 2011; net profit margin attributable to equity holders of the Parent company was 11.5% against 20.8% in 12 months 2011.
Financial position
As of 31 December 2012 consolidated assets amounted to 75 841 thousand EUR representing an increase of 10.7% as compared to the position as of 31 December 2011.
Property, plant and intangibles balances increased by 2 838 thousand EUR as compared to 31 December 2011 key reasons being the hyperinflation effect on opening balance and investments into new logistics centre in Belarus.
Trade and other receivables increased by 2 631 thousand EUR as compared to 31 December 2011 and amounted to 14 746 thousand EUR as of 31 December 2012. Inventory balance increased by 3 050 EUR thousand and amounted to 24 598 thousand EUR as of 31 December 2012. Changes in trade debtors and stock balance were in line with the seasonality trend of the business.
Hyperinflation effect on opening balance had a positive impact on the Group’s equity attributable to equity holders of the Parent company comprising 4 769 thousand EUR as of 31 December 2012. On the overall basis, equity attributable to equity holders of the Parent company increased by 8 938 thousand EUR and amounted to 51 400 thousand EUR as of 31 December 2012.
Current liabilities decreased by 2 186 thousand EUR in 12 months 2012. Current and non-current loans and borrowings increased by 27 thousand EUR to 47 thousand EUR (attributable only to OAO Yunona) as of 31 December 2012.
Sales structure
Sales by markets
| in thousands of EUR | 12m 2012 | 12m 2011 | Change |
12m 2012 % from sales |
12m 2011 % from sales |
|
| Russia | 75 138 | 66 283 | 8 855 | 60.8% | 64.0% | |
| Belarus | 31 494 | 23 702 | 7 792 | 25.5% | 22.9% | |
| Ukraine | 6 357 | 5 353 | 1 004 | 5.1% | 5.2% | |
| Baltics | 3 172 | 3 063 | 109 | 2.6% | 3.0% | |
| Other markets | 7 358 | 5 157 | 2 201 | 6.0% | 5.0% | |
| Total | 123 519 | 103 558 | 19 961 | 100.0% | 100.0% |
Sales in the major markets demonstrated a positive trend in terms of monetary revenue and pieces sold in 12 months 2012 as compared to the respective period in 2011.
The majority of lingerie sales revenue during 12 months 2012 in the amount of 75 138 thousand EUR was generated in Russia, accounting for 60.8% of total sales during 12 months 2012. The second largest market was Belarus, where sales reached 31 494 thousand EUR, contributing 25.5% of lingerie sales (both retail and wholesale) as compared to 23 702 thousand EUR in 12 months 2011. Out of the 7 358 thousand EUR sales in the other markets major part is attributed to Kazakhstan and Moldova.
Sales by business segments
| in thousands of EUR | 12m 2012 | 12m 2011 | Change |
12m 2012 % from sales |
12m 2011 % from sales |
|
| Wholesale | 102 862 | 88 006 | 14 856 | 83.3% | 85.0% | |
| Retail | 20 167 | 15 226 | 4 941 | 16.3% | 14.7% | |
| Other operations | 490 | 326 | 164 | 0.4% | 0.3% | |
| Total | 123 519 | 103 558 | 19 961 | 100.0% | 100.0% |
During 12 months 2012, wholesale revenue amounted to 102 862 thousand EUR, representing 83.3% of the Group’s total revenue (12 months 2011: 85%). The main wholesale regions were Russia, Ukraine, Belarus, Kazakhstan, Moldova and the Baltic States.
Total lingerie retail sales of the Group in 12 months 2012 amounted to 20 167 thousand EUR, representing a 19% increase as compared to the previous year. Certain part of the growth is attributable to inflationary environment in Belarus, however growth of sales measured in units totalled approximately 18% for 12 months 2012 over the same period last year.
As of 31 December 2012 there were altogether 584 Milavitsa and Lauma branded shops. Own retail operations were conducted in Belarus and Latvia. As of the end of 12 months 2012 the Group operated 58 own retail outlets (net increase of 2 stores in Q4 2012) with a total area of 5 015 square meters. As of 31 December 2012, there were 497 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 26 shops in Q4 2012, and increase by 76 shops compared to the end of Q4 2011. Additionally, as of 31 December 2012, there were 30 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.
