Etam Développement: 2016 Full-Year Results and Q1 2017 Net Sales

The Etam Group’s financial statements to 31 December 2016 were approved by the Managing Partners on 20 April 2017 and were subject to a limited review by the statutory auditors on 20 April 2017

CLICHY, France--()--Regulatory News:

Etam Développement (Paris:TAM):

I. 2016 FULL-YEAR RESULTS

€m   2016   2015   Change
Net sales   1,292.1   1,296.6   -0.3%
Like-for-like and at constant exchange rates -1.0%
Gross margin   58.3%   58.7%   -0.4 pt
           

 

EBITDA 1 100.7 95.4 5.6%
Operating income 49.0 52.4 -6.6%
EBIT   40.7   45.9   -11.5%
             
Net income (Group share) 22.8 25.8 -€3,0 m
Net debt 137.5 133.5 +€4,0m
Net debt/equity   36.1%   36.5%    

1 Operating income before depreciation, amortisation and income from asset sales

Net sales
The Etam Group generated net sales of €1,292.1 million, which includes a negative currency impact of €19.7 million relating mainly to the depreciation of the yuan against the euro. This represents an almost stable performance relative to 31 December 2015 and a decrease of 1% like-for-like and at constant exchange rates.

The Group’s performance varied significantly by region: In Europe, net sales increased thanks to the solid performance of the lingerie activities, both online and offline and in all countries. In China, net sales were severely affected by the decline in footfall and the slowdown in consumer spending in department stores.

Gross margin
The Group’s gross margin was 58.3% in 2016, down 0.4 points, mainly due to the increase in the cost of residual inventories in China.

EBITDA1 and operating income
The Group generated an EBITDA of €100.7 million compared with €95.4 million in 2015, and an operating income of €49.0 million compared with €52.4 million in 2015.

In Europe, operating income came to €68.3 million, up 14.3% compared with 2015, driven by the Group’s lingerie brands. In China, where the measures taken did not allow for an upturn in sales, the Group sustained an operating loss of €19.4 million compared with a loss of €7.4 million in 2015.

Net income
Consolidated net income was €18.2 million compared with €23.9 million in 2015. After taking into account non-controlling interests of €4.6 million, net income (Group share) was €22.8 million compared with €25.8 million in 2015.

At the next General Meeting, it will be proposed to pay a dividend of €0.70 per share for 2016, in line with the dividend paid for 2015.

Cash flow
After change in working capital requirement, cash flow from operating operations represented a cash surplus of €86.9 million compared with a cash surplus of €80.3 million in 2015. After investments, interests and taxes, the Group generated a positive free cash flow of €6.4 million in 2016 compared with a negative amount of €15.3 million in 2015.

After payment of dividends for €8.8 million and taking account other negative changes in cash flow of €1.8 million, net cash flow was a negative figure of €3.9 million compared with a negative figure of €16.9 million in 2015. This cash consumption increased the Group’s net debt, which stood at €137.5 million as at 31 December 2016 compared with €133.5 million as at 31 December 2015.

II. FIRST QUARTER 2017 NET SALES

€m   2017 Q1   Change   Change lfl1
Group net sales   324.6   -7.0%   -8,1%
Europe 231.6 2.1% -2,8%
China   93.0   -23.9%   -21,5%

Europe by country

France 2 206.1 1.5% -3.2%
Other countries 25.5 7.2% 1.0%

Europe by brand

ETAM 3 192.3 3.1% -2.3%
1.2.3   39.3   -2.6%   -4.9%

1 Like-for-like and at constant exchange rates including online activities
2 Including export sales
3 Including Undiz

In the first quarter of 2017, the Etam Group generated net sales of €324.6 million, including a negative currency effect of €1.6 million relating primarily to the depreciation of the yuan against the euro. This constitutes a fall of 7% compared to 31 March 2016. Like-for-like and at constant exchange rates, net sales were down 8.1%.

In Europe, net sales came to €231.6 million, up 2.1% or down 2.8% like-for-like and at constant exchange rate. After disappointing winter end-of-season sales, net sales from new collections increased like-for-like and at constant exchange rates. In addition, the gross margin rate on sales improved in the quarter compared to the same period of 2016.

In China, net sales fell by 23.9% to €93.0 million, including a negative currency effect of €1.6 million. Like-for-like and at constant exchange rates, sales were down 21.5% as the result of the poor performance of the Group’s main brands.

Due to the aggravated decline in sales and operating losses at Etam China, changes were made to the management team with the departure of the Chief Executive Officer, replaced by a tandem constituted of a Retail President arrived on 8 February 2017 and a Brands Director to join in May, a team whose mission is to refocus priorities on the product.

The situation in China affects significantly the Group's results at 31 March 2017.

III. CHANGES TO THE NETWORK

At March 31, 2017, the Etam Group had 3,854 sales outlets: 986 in Europe, 331 international franchises and 2,537 in China.

IV. OTHER INFORMATION

On 13 February 2017 the Commercial Court of Boulogne-sur-Mer approved a consortium in which the Etam Group holds a 20% stake to take over the employees and assets of Lucien Noyon, one of France’s oldest lacemaking companies based in Calais, under the new name of Noyon Dentelle.

The Etam Group is an international retailer of women’s lingerie, beauty products, ready-to-wear clothing
and accessories with 3,854 sales outlets as at 31.03.2017

The Etam Group will hold its general shareholders’ meeting on 30 May 2017
It will publish its net sales for the second quarter of 2017 on 20 July (after market close in Paris).

www.etamdeveloppement.fr
Etam Développement - ISIN code: FR0000035743 / Reuters: TAM.PA / Bloomberg: TAM FP

Etam Développement €10,961,739 – R.C.S. PARIS 308 382 035
Registered office: 78, rue de Rivoli - 75004 PARIS

Contacts

Etam Développement
Information for analysts and investors
Tel.: 01 55 90 72 79

Contacts

Etam Développement
Information for analysts and investors
Tel.: 01 55 90 72 79