Tallinn, 2017-02-23 16:01 CET (GLOBE NEWSWIRE) -- Consolidated Interim Financial Report for Q4 and 12 months of 2016 (unaudited)
Selected Financial Indicators
Summarized selected financial indicators of the Group for 9 months of 2016 compared to 9 months of 2015 and 30.09.2016 compared to 31.12.2015 were as follows:
| in thousands of EUR | 09m 2016 | 09m 2015 | Change |
| Revenue | 45 642 | 51 871 | -12,0% |
| EBITDA | 15 978 | 13 484 | 18,5% |
| Net profit for the period | 9 381 | 8 331 | 12,6% |
| Net profit attributable equity holders of the Parent company | 9 117 | 7 908 | 15,3% |
| Earnings per share (EUR) | 0,25 | 0,21 | 18,2% |
| Operating cash flow for the period | 12 969 | 14 264 | -9,1% |
| in thousands of EUR | 30.09.2016 | 31.12.2015 | Change |
| Total assets | 55 159 | 53 635 | 2,8% |
| Total current assets | 43 540 | 40 870 | 6,5% |
| Total equity attributable to equity holders of the Parent company | 43 583 | 40 194 | 8,4% |
| Cash and cash equivalents | 26 097 | 21 274 | 22,7% |
| Margin analysis, % | 09m 2016 | 09m 2015 | Change |
| Gross profit | 55,4 | 46,2 | 19,9% |
| EBITDA | 35,0 | 26,0 | 34,7% |
| Net profit | 20,6 | 16,1 | 28,0% |
| Net profit attributable equity holders of the Parent company | 20,0 | 15,2 | 31,0% |
| Financial ratios, % | 30.09.2016 | 31.12.2015 | Change |
| ROA | 18,9 | 17,4 | 8,6% |
| ROE | 25,3 | 23,7 | 6,8% |
| Price to earnings ratio (P/E) | 7,7 | 5,0 | 54,2% |
| Current ratio | 5,8 | 4,2 | 36,0% |
| Quick ratio | 4,0 | 2,6 | 50,0% |
Consolidated Statement of Financial Position
| in thousands of EUR | Note | 30.09.2016 | 31.12.2015 |
| ASSETS | |||
| Current assets | |||
| Cash and cash equivalents | 26 097 | 21 274 | |
| Current loans granted | 6 | 6 | |
| Trade and other receivables | 2 | 3 757 | 4 120 |
| Inventories | 3 | 13 680 | 15 470 |
| Total current assets | 43 540 | 40 870 | |
| Non-current assets | |||
| Investments in associates | 0 | 1 | |
| Available-for-sale investments | 349 | 372 | |
| Deferred tax asset | 763 | 465 | |
| Intangible assets | 306 | 443 | |
| Investment property | 1 040 | 1 130 | |
| Property, plant and equipment | 4 | 9 161 | 10 354 |
| Total non-current assets | 11 619 | 12 765 | |
| TOTAL ASSETS | 55 159 | 53 635 | |
| LIABILITIES AND EQUITY | |||
| Current liabilities | |||
| Trade and other payables | 5 | 5 805 | 7 985 |
| Tax liabilities | 1 753 | 1 661 | |
| Total current liabilities | 7 558 | 9 646 | |
| Non-current liabilities | |||
| Deferred tax liability | 33 | 13 | |
| Total non-current liabilities | 33 | 13 | |
| Total liabilities | 7 591 | 9 659 | |
| Equity | |||
| Share capital | 6 | 11 400 | 11 400 |
| Share premium | 11 914 | 11 914 | |
| Treasury shares | 6 | -2 084 | -579 |
| Statutory reserve capital | 1 306 | 1 306 | |
| Unrealised exchange rate differences | -15 311 | -16 238 | |
| Retained earnings | 36 358 | 32 391 | |
| Total equity attributable to equity holders of the Parent company | 43 583 | 40 194 | |
| Non-controlling interest | 3 985 | 3 782 | |
| Total equity | 47 568 | 43 976 | |
| TOTAL EQUITY AND LIABILITIES | 55 159 | 53 635 |
Consolidated Income Statement
| in thousands of EUR | Note | 3Q 2016 | 3Q 2015 | 09m 2016 | 09m 2015 | ||
| Revenue | 8 | 15 047 | 17 373 | 45 642 | 51 871 | ||
| Cost of goods sold | -6 975 | -8 972 | -20 346 | -27 893 | |||
| Gross Profit | 8 072 | 8 401 | 25 296 | 23 978 | |||
| Distribution expenses | -2 420 | -2 312 | -6 650 | -7 095 | |||
| Administrative expenses | -1 216 | -1 544 | -3 481 | -4 809 | |||
| Other operating income | 81 | 78 | 250 | 324 | |||
| Other operating expenses | -231 | -282 | -789 | -854 | |||
| Operating profit | 4 286 | 4 341 | 14 626 | 11 544 | |||
| Currency exchange income/(expense) | -26 | 1 938 | -2 520 | 907 | |||
| Other finance income/(expenses) | 43 | 73 | 144 | 333 | |||
| Net financial income | 17 | 2 011 | -2 376 | 1 240 | |||
| Profit (loss) from associates using equity method | 0 | 1 | 0 | 1 | |||
| Profit before tax and gain/(loss) on net monetary position | 4 303 | 6 353 | 12 250 | 12 785 | |||
| Income tax expense | -1 055 | -1 074 | -2 869 | -4 454 | |||
| Profit before gain/(loss) on net monetary position | 3 248 | 5 279 | 9 381 | 8 331 | |||
| Profit for the period | 3 248 | 5 279 | 9 381 | 8 331 | |||
| Attributable to : | |||||||
| Equity holders of the Parent company | 3 131 | 5 152 | 9 117 | 7 908 | |||
| Non-controlling interest | 117 | 127 | 264 | 423 | |||
| Earnings per share from profit attributable to equity holders of the Parent company, both basic and diluted (EUR) | 7 | 0,08 | 0,13 | 0,25 | 0,21 | ||
Business results and financial position
The Group`s sales amounted to 45 642 thousand EUR during 9 months of 2016, representing a 12.0% decrease as compared to the same period of previous year.
The Group’s reported gross profit margin during 9 months of 2016 continued to improve increasing to 55.4%, reported gross margin was 46.2% in the respective period of previous year.
Over the year the Group managed to cut its production, commercial and administrative expenses. Compared to 9 months of 2016 commercial and administrative expenses diminished respectively by 6.3% and 27.6%. Personnel expenses decreased 26.1%; total number of employees increased by 1.7% compared to the end of 9 months of 2015.
Consolidated operating profit for 9 months of 2016 increased by 26.7% to 14 626 thousand EUR, compared to 11 544 thousand EUR in 9 months of 2015. The consolidated operating profit margin was 32.0% for 9 months of 2016 (22.3% in 9 months of 2015). Consolidated EBITDA for 9 months of 2016 was 15 978 thousand EUR, which is 35.0% in margin terms compared to 13 484 thousand EUR and 26.0% for 9 months of 2015.
Reported consolidated net profit attributable to equity holders of the Parent company for 9 months of 2016 increased by 15.3% and amounted to 9 117 thousand EUR, compared to net profit of 7 908 thousand EUR in 9 months of 2015, net profit margin attributable to equity holders of the Parent company for 9 months of 2016 was 20.0% against 16.1% in 9 months of 2015.
As of 30 September 2016 consolidated assets amounted to 55 159 thousand EUR representing an increased by 2.8% as compared to the position as of 31 December 2015.
Trade and other receivables decreased by 363 thousand EUR as compared to 31 December 2015 and amounted to 3 757 thousand EUR as of 30 September 2016. Inventory balance decreased by 1 790 thousand EUR and amounted to 13 680 thousand EUR as of 30 September 2016.
Equity attributable to equity holders of the Parent company increased by 3 389 thousand EUR and amounted to 43 583 thousand EUR as of 30 September 2016. Current liabilities decreased by 2 088 thousand EUR during 9 months of 2016.
Group`s results for 9 months of 2016 were defined by continued challenges in economies of its major sales markets – Russia, Belarus and Ukraine. Previously undermined by devaluations and high inflation rates purchasing power in region`s countries remains low, future expectations are still more on a negative or neutral side, therefore it is hard to see some kind of relatively fast recovery in growth rates of economies under discussion.
Russian statistics are somewhat improving compared to 2015, inflation rate is currently 6.9% in y-o-y basis and 3.9% from the beginning of the year. GDP declined by 0.7% during 8 months of 2016. Russian economy is starting to adapt to new reality, but purchasing power of population in real terms is still falling and in August decreased by 1,1%. Retail sales in Russian market has been stable in last months and decreased in August only by 0.1% compared last year. Group`s sales on Russian market totalled 25 170 thousand EUR, decline is 7.1% compared to 9 months of 2015. In local currency sales grew by 7.1% during 9 months. Group`s Russian subsidiary opened 12 more stores in Q3 of 2016, 2 more stores were opened in October 2016. The Group will continue opening own stores.
Belarusian economy at the moment isn`t demonstrating signs of stabilisation yet, GDP decreased by 3.1% in Q1 and 1.4% in Q2 2016 y-o-y basis. Annual average inflation rate is 12% and in September was reported 11.1%, slowing down a bit from August`s 11.8%. During 7 months 2016, real household income fell by 7% y-o-y basis. International financial institutions predict that in 2016 Belarusian GDP will fall by around 2%, inflation rate will be 11.5-12.5%. Retail turnover in comparable prices in Belorussia declined during 9 months by 3.1%. Major factors behind this are believed to be unreformed economy, particularly public sector and state-controlled entities, impact of recession in main trading partner – Russia, continued pressure on Belarusian rouble, low demand for consumption, high level of debts in economy. Group`s sales in Belarus in 9 months of 2016 were 13 885 thousand EUR and diminishing by 18.3% compared to 9 months of 2015. Sales in local currency increased by 7.5% at the same period. In Belarus the Group will focus on improving profitability of its retail business and will also continue to expand our store chain there depending on availability of reasonably priced selling areas.
Ukraine economy is expected to return to positive growth in 2016, supported by improving consumer and investor confidence, gradually rising real incomes easing of credit conditions, however the recovery is expected to be slow and fragile. Group`s sales in Ukraine in 9 months of 2016 reached the level of 1332 thousand EUR, which is 3.7% less than previous year. Sales in local currency increased by 14.3% during same period.
Sales by markets
Group`s sales results by markets measured in EUR:
| in thousands of EUR | 09m 2016 | 09m 2015 | Change, EUR | Change, % | 09m 2016, % of sales | 09m 2015, % of sales |
| Russia | 25 170 | 27 086 | -1 916 | -7,1% | 55,1% | 52,2% |
| Belarus | 13 885 | 16 986 | -3 101 | -18,3% | 30,4% | 32,7% |
| Ukraine | 1 332 | 1 383 | -52 | -3,7% | 2,9% | 2,7% |
| Baltics | 1 018 | 1 412 | -394 | -27,9% | 2,2% | 2,7% |
| Other markets | 4 237 | 5 003 | -766 | -15,3% | 9,4% | 9,7% |
| Total | 45 642 | 51 871 | -6 229 | -12,0% | 100,0% | 100,0% |
The majority of lingerie sales revenue during 9 months of 2016 in the amount of 25 170 thousand EUR was generated in Russia, accounting for 55.1% of total sales. The second largest market was Belarus, where sales reached 13 885 thousand EUR, contributing 30.4% of lingerie sales.
Group sales in its 3 major markets – Russia, Belarus and Ukraine – were 88.4% of its total sales. Measured in local currencies sales growth was accordingly 7.1%, 7.5% and 14.3%.
| 9m 2016 | 9m 2015 | Change | Change, % | |
| Russia, th RUR | 1 918 073 | 1 791 251 | 126 822 | 7,1% |
| Belarus, th BYN | 31 069 | 28 911 | 2 158 | 7,5% |
| Ukraine, th UAH | 37 787 | 33 067 | 4 720 | 14,3% |
Sales by business segments
| in thousands of EUR | 09m 2016 | 09m 2015 | Change, EUR | Change, % | 09m 2016, % from sales | 09m 2015, % from sales |
| Wholesale | 33 650 | 39 122 | -5 472 | -14,0% | 73,7% | 75,4% |
| Retail | 11 853 | 12 722 | -869 | -6,8% | 26,0% | 24,5% |
| Other operations | 139 | 27 | 112 | 414,1% | 0,3% | 0,1% |
| Total | 45 642 | 51 871 | -6 229 | -12,0% | 100,0% | 100,0% |
During 9 months of 2016 wholesale revenue decreased by 14.0% and amounted to 33 650 thousand EUR, representing 73.7% of the Group’s total revenue (9 months of 2015: 75.4%). The main wholesale regions were Russia, Belarus and Ukraine.
Group´s retail revenue decreased by 6.8% and amounted to 11 853 thousand EUR, this represents 26.0% of the Group`s total revenue. The decrease in retail revenue is mainly attributable to Belarusian operations.
| Own & franchise store locations by countries | Own | Franchise | Total |
| Russia | 22 | 387 | 409 |
| Ukraine | 0 | 50 | 50 |
| Belarus | 56 | 10 | 66 |
| Baltics | 8 | 25 | 33 |
| Other regions | 0 | 122 | 122 |
| Total | 86 | 594 | 680 |
At the end of the reporting period the Group and its franchising partners operated 631 Milavitsa and 49 Lauma Lingerie branded stores, including 86 stores operated directly by the Group.
Investments
During 9 months of 2016 the Group’s investments into property, plant and equipment totalled 571 thousand EUR. Investments were made mainly into opening and renovating own stores, as well into equipment and facilities to maintain effective production for future periods.
Personnel
As of 30 September 2016, the Group employed 2 063 employees, including 362 in retail. The rest were employed in production, wholesale, administration and support operations.
Total salaries and related taxes during 9 months of 2016 amounted to 8 798 thousand EUR (11 673 thousand EUR in 9 months of 2015). The remuneration of key management of the Group, including the key executives of all subsidiaries, totalled 704 thousand EUR.
Decisions made by governing bodies during 9 months 2016
On June 29, 2016 Silvano Fashion Group held its regular Annual General Meeting of Shareholders. The Meeting adopted following decisions.
- The Meeting approved the 2015 Annual Report.
- The Meeting decided to distribute dividends in the amount 0.15 EUR per share (record date 13.07.2016, payment completed on 15.07.2016).
- The Meeting decided to re-appoint AS PricewaterhouseCoopers as the Group`s auditor for financial year 2016.
- The Meeting decided to cancel the 1 000 000 own shares acquired within the own share buy-back programme as approved by the shareholders of AS Silvano Fashion Group on 29th of June 2015;
- The Meeting decided to adopt a share buy-back program in the following: effective period until 30.06.2017; maximum number of shares to be acquired not more than 1 000 000; maximum share price 2.70 EUR per share.
On October 31, 2016, the decrease of share capital of Silvano Fashion Group AS was registered in the Commercial Register based on the resolutions adopted by the General Meeting of Shareholders of the Company held on June 29, 2016. The new registered share capital of the Company is 11 100 000 euros, which is divided into 37 000 000 ordinary shares with nominal value of 0.30 euros per share.
Kati Kusmin
Member of the Management Board
Silvano Fashion Group Tel +372 6845 000 E-mail: info@silvanofashion.com
