Gross margin went up by 0.8 point year-on-year to 58.6%, mainly due to the favourable impact on mark-down rates of the good commercial performance of European collections, the reduction of purchasing costs in U.S. dollars and the better management of inventory levels.
The Group generated an operating income of €41.9 million in 2012 versus €41.5 million in 2011. In Europe, profitability was significantly improved, with an operating income of € 40.4 million versus €16.1 million in 2011, of which the most noticeable element was the turnaround of 1.2.3 to a profitable situation. On the other hand in China, the Group suffered a 12.6% drop in activity like-for like and at constant exchange rates. This drop was mainly due to the rapid evolution of distribution channels, the increased competition and the lack of attractively of its collections. As a consequence, the operating income dropped to €1.5 million in 2012 from €25.4 million in 2011.
Consolidated net income came to €13.4 million compared with €11.3 million in 2011. After China’s minority interests of €0.6 million, net income (Group share) totalled €12.9 million in 2012.In order to preserve the Group's financial structure; it will be proposed at the next shareholders' meeting that no dividend be paid for 2012.
The Group recorded an EBITDA of €100.4 million in 2012 against € 89.3 million in 2011. After change in working capital requirement, investments, interests and taxes paid, the Group's free cash flow was positive by € 80.6 million at December 31, 2012 compared to a negative figure of € 6.8 million at December 31, 2011.
After different adjustments for € 0.7 million, the net cash surplus is € 79.9 million for 2012. It was used to reduce the net debt, which stands at €100.6 million at 31 December 2012, from €180.5million at 31 December 2011.
2013 FIRST QUARTER SALES
The Etam Group generated net sales of €333.6 million in the first quarter of 2013, including a positive currency impact of €0.9 million relating to the rise of the yuan against the euro. This represents an increase of 0.7% compared to 31 March 2012 and of 1.8% like-for-like and at constant exchange rates.
In Europe, sales came to €195.0 million in the first quarter of 2013, up 3.4% or 4.1% like-for-like and at constant exchange rates. The positive performance of the brands continued in the first quarter of 2013.
In China, sales were €138.6 million in the first quarter of 2013, down 2.8% or 2.1% like-for-like and at constant exchange rates.
The Group financial position and results at March 31, 2013 do not require specific comments.
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