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Benetton Group brands achieve good results in H1
02
Aug '10
The Benetton Group Board of Directors examined and approved the consolidated results for the first half of 2010.

Consolidated income statement
Group net revenues for the first half of 2010, characterised by continuing economic uncertainty in many countries of importance to the Group, reached €891 million (+1% over the comparative half year, corresponding to €9 million). Product mix contributed to this improvement, with a predominance of higher unit value categories; added to this was a positive trend against the euro of some important foreign currencies in the Group's geographical mix.

Again this year, as in 2009, we have reaffirmed the policy of matching deliveries of the Fall/Winter collection with the seasonal requirements of the sales network, continuing an attentive policy of improved service to clients. Consequently, a large part of the deliveries of these collections will be despatched in the third quarter.

Group brands achieved good results in the half year, with growth of Sisley and the 012 and Sisley Young brands, while the UCB brand substantially maintained its position.
Geographically, in established markets, the slow-down in Greece and Spain was offset by a solid performance in Italy. Regarding emerging markets, whose proportion of total sales increased to 13%, the strong growth achieved in Mexico (+60% currency neutral) and in India is of special note.

Gross operating profit of €425 million (47.7% of net revenues) was up (+€24 million) compared with €401 million (45.5%) in the comparative half year, due to the decisive contribution of efficiencies achieved in manufacturing and sourcing.

The contribution margin was €356 million (39.9% of revenues), compared with €336 million (38.2%) in the corresponding period of 2009, up by €20 million.

Due to the cost reduction actions launched during 2009, general expenses for the first six months of 2010 were maintained overall at the same level as in the comparative half year, even though there was an increase in advertising investments. There was, moreover, a further increase in non-recurring charges relating, among others, to the rationalisation program for directly operated stores, in particular in the USA.

As a result, operating profit (EBIT), was €63 million, up compared with €43 million in the corresponding period of 2009, with a percentage to revenues of 7.1%, compared with the previous 4.9%.

Improvements in financial management were associated primarily with the reduction in average indebtedness, containing interest expenses from €12 million in the first half of 2009 to €7 million in 2010, and the usual hedging operations to cover foreign exchange risks.

Net income, finally, was €40 million (4.5% of revenues), compared with €29 million (3.2%) in the corresponding period of 2009. This result was impacted by an increase in the average tax rate.

Consolidated financial situation
Compared with December 31, 2009, there was an increase in fixed assets (€23 million) as a result of the investment policy, further detailed below, and a reduction in working capital (€35 million) due to the improved payables/receivables position.


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