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Growth in consolidated revenues - Benetton
May '10
The Board of Directors approves the 2010 first quarter results. Benetton Group, growth in consolidated revenues and net income. Revenues at 457 million euro, net income 20 million

In the first quarter of 2010, the market was still influenced by the general uncertainty in the global economy which is becoming progressively more settled. Signs of instability remain, however, in the markets of greatest relevance to the Group, particularly in Europe. In this context, Group net revenues in the period reached €457 million, up 1.8% (+1% currency neutral) due to the combined effect of:

• the mix of the collections, characterized in the period by product categories with higher unit values; this effect was partially offset by commercial policies implemented in favour of the sales network;
• satisfactory sales growth in directly operated stores;
• favourable exchange rates.

Revenue performance by geographic area, brand and collection
Established markets showed a currency neutral reduction in sales of 1.5%, with the Italian market substantially maintaining its position, and despite the slow-down in the Spanish and Greek markets; this contrasted with a better performance in continental Europe.

Emerging markets had a currency neutral growth of 19%, particularly in India where, having achieved a good presence in all the major cities in the country, the Group now aims to open new stores also in second and third tier cities.
Russia achieved positive results due to targeted actions to support the network. The refocusing of the existing network of stores in China was completed, and good growth was achieved on a like-for-like basis, following the coordinated action on product mix and the depth of the offer.

In Mexico, sales continued to grow in the quarter, with specific focus on store attractiveness.

Overall, the Spring/Summer orders collection is drawing to a close in line with expectations, with a slight fall compared with Spring/Summer 2009. Within the collections, the best result was achieved by the children's line, also due to the new offerings for young teenagers.

Profit and Loss Performance
Gross operating profit for the quarter grew, reaching €216 million (€205 million in the corresponding period of 2009), equivalent to 47.1% of revenues (45.5% in the comparative period). Efficiencies generated, since 2009, in production and the supply chain made a decisive contribution to this result.

The contribution margin was €180 million, against €171 million in the reference period, and 39.4% of sales.

Operating profit amounted to €35 million (€25 million in 2009), corresponding to 7.7% of revenues against 5.5%, due also to savings achieved through the reorganization plan.

EBITDA was €62 million (13.6% of revenues) against €50 million (11.1%) in the first quarter of 2009.

The improvement in financial expenses was attributable to both the reduction in interest rates as well as to lower average indebtedness in the period.

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