Etam Développement: 2016 First Half Results

The Etam Group’s financial statements to 30 June 2016 were approved by the Managing Partners on 24 August 2016 and were subject to a limited review by the statutory auditors on 25 August 2016

PARIS--()--Regulatory News:

Etam Développement (Paris:TAM):

€m   30.06.16   30.06.15   Change
Net sales   633.8   645.4   -1.8%
Like-for-like -1.8%
Gross profit 364.6 369.5 -1.3%
Gross margin   57.5%   57.2%   +0.3pt
             
EBITDA* 36.6 27.0 35.5%
Operating income 15.2 16.5 -8.0%
Operating income in Europe 17.8 21.1 -3.3 M€
Operating income in China   -2.6   -4.6   +2.0 M€
Net income (Group share) 6.7 8.4 -1.7 M€
Net debt 164.0 159.7 +4.3 M€
Gearing   45.6%   45.6%    

* Operating Income before depreciation provisions and results from asset sales and disposal ( Cf. reconciliation with the financial statements in the 2016 Half Year report)
** Net debt to equity

SALES AND GROSS MARGIN

The Etam Group generated net sales of €633.8 million during the first half of 2016, including a negative currency effect of €9.4 million mainly due to the depreciation of the yuan against the euro. This represents a decrease of 1.8% compared to the first half of 2015 and the same decrease like-for-like and at constant exchange rates.

The Group gross margin of 57.5% increased by 0.3 point. In Europe, gross margin deteriorated by 1.1 points, mainly due to the higher cost of goods sold related to the appreciation of the US dollar against the euro and to higher discounts in Etam’s ready-to-wear activities. In China, the voluntary reduction of promotions in the first quarter of the year allowed for a gross margin improvement of 3.4 points on the first half year.

RESULTS

In the first half of 2016, the Group generated an EBITDA of €36.6 million, up 9.6 M€ compared to the first half of 2015.Operating income was affected by negative changes in stock provisions and in the value of assets compared to the first half of 2015 and reached €15.2 million, down 1.3 M€.

In Europe, in a declining market, Etam and Undiz’ lingerie operations and the 1.2.3 brand delivered a satisfactory performance, while Etam’s ready-to-wear business was affected by the scaling back of its offering. Operating income totalled €17.8 million, down €3.3 million compared with the first half of 2015.

In China, operating income for the first half of 2016 came to -€2.6 million compared with -€4.6 million in the first half of 2015, reflecting a slight improvement against the backdrop of a fall in sales in Department Stores.

Net financial charges represented an expense of €2.8 million against an expense of €3.9 million in the first half of 2015 thanks to a favourable change in the markt-to-market value of the currency hedging portfolio.

Consolidated net income Group share was €6.7 million, down €1.7 million, after taking into account non-controlling interests of -€0.4 million against -€0.6 million in the first half of 2015.

FINANCIAL STRUCTURE

The operating cash flow1 represented a cash inflow of €11.2 million, against a cash inflow of €1.6 million in the first half of 2015.

Net investments were €20.9 million in the first half of 2016 against €43.2 million in the first half of 2015.

After interests and taxes paid, the Group's free cash flow was negative of €29.0 million at 30 June 2016, against a negative amount of €47.7 million at 30 June 2015.

The net financial debt amounted to €164.0 million at June 30, 2016 against €159.7 million at 30 June 2015.

OTHER INFORMATION

The ninth edition of Etam lingerie live show, which will mark the 100-year anniversary of the brand, will open the Paris Fashion Week on September 27.

1. Operating Cash Flow is equal to EBITDA adjusted for changes in Working Capital, cash flows relating to operating income and expense, and other income and expense within the financial accounts.
2. Free Cash Flow is equal to Operating Cash Flow after net cash flows on investments, interest payments on net debt and income tax.

International retailer of lingerie, cosmetics, women’s ready-to-wear clothing and accessories
4,047 stores at 30.06.2016

Etam Développement will report its third-quarter sales on 20 October 2016 (after market close)

2016 Half-Year Results presentation is available on the website www.etamdeveloppement.com

Etam Développement: ISIN code: FR0000035743 / Reuters: TAM.PA / Bloomberg: TAM FP

Etam Développement  10 961 739 euros – 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
www.etamdeveloppement.fr

Contacts

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