Revenues up 16.1% at Italian cashmere house Brunello in H1

Two new openings have been added recently to these, Taichung in July and Lugano in August. Further new openings are expected to take place in the current quarter, in line with the plan to develop a commercial presence in the most exclusive streets of the world’s leading capital cities and resort localities, with agreements already signed for 10 new single store locations.

Analysis of operating results and net profit

Normalised EBITDA3 reached Euro 22.7 million (16.6% of revenues), representing an increase of 23.5% compared with Euro 18.4 million for the half-year to 30 June 2011 (15.7% of revenues).

This improvement is essentially due to the increase of retail channel sales, which reached 22.5% of Net Revenues, compared with 17.5% in the corresponding period of the previous year.

EBITDA for the first half of 2012 was affected by non-recurring costs of Euro 6.2 million arising from the IPO process; reported EBITDA for the period was of Euro 16.4 million (12.0% of Revenues), decreasing 10.5% compared to the first half of 2011.

Depreciation and amortisation rose from Euro 2.4 million (2.0% of revenues) in the first half of 2011 to Euro 3.0 million (2.2% of revenues) in the first half of 2012, due to the investments made to develop the directly operated stores, while there was a slight improvement in financial management with net financial expenses closing at Euro 0.9 million compared with Euro 1.1 million in the first half of 2011.

Normalised net profit amounted to Euro 11.9 million with a margin on sales of 8.7% and a growth of 35.1% from the corresponding period of the previous year. Including the effect of the non- recurring costs related to the IPO process, net profit moved from Euro 8.8 million in the first half of 2011 (7.5% of revenues) to Euro 7.6 million in the first half of 2012 (5.6% of revenues).

Balance sheet analysis

As of June 30, 2012, the Group’s net working capital increases by Euro 16.8 million to Euro 66.3 million from Euro 49.6 million as of June 30, 2011. This change is due to an increase in inventory of Euro 19.0 million, mainly linked to the development of the DOS store network, to an increase in purchases of raw materials and to a rise in third parties production in order to speed deliveries in third quarter of 2012.

Net financial debt has improved significantly falling to Euro 14.2 million compared to Euro 58.4 million as of June 30, 2011; this was favourably affected by the cash injection linked to the capital increase from the IPO.

In conclusion, investments of Euro 8.8 million were made in the first half of 2012, of which Euro 6.5 million in commercial capex and Euro 2.3 million in production and logistics capex.

Brunello Cucinelli S.p.A. is an Italian maison that operates in the absolute luxury goods sector, specializes in cashmere and has gradually become one of the most exclusive brands in the international informal luxury pret à porter sector.

Brunello Cucinelli S.p.A.