Benetton sees continuous growth in emerging markets
15 Nov '10
5 min read
The effective tax rate was 41% in the first nine months of 2010, higher than in the same period of 2009 (32%).
Finally, net income was €85 million (5.7% of revenues), compared with €82 million (5.5%) for the first nine months of 2009.
Consolidated financial situation Compared with September 30, 2009, working capital was down by €59 million, due to the combined effects of a reduction in inventories of €20 million and an increase in trade payables of €40 million.
Net financial indebtedness at September 30, 2010, traditionally the time of peak exposure to banks, was €645 million, lower than the €819 million at September 30, 2009. Compared with the financial position at December 31, 2009 (€556 million), there was a significant reduction in cash utilization from the start of the year (€89 million), against the reference period of the previous year (€130 million).
Summary of consolidated cash flows Cash flow generated by operating activities totalled €244 million, compared with €234 million in the comparative period.
In the first nine months of 2010, the Group made net investments of €101 million. These included €91 million of commercial and real estate investments and €10 million for manufacturing activities.
Outlook for the year Orders for the Fall/Winter collection are benefiting from positive signals coming from emerging markets, while uncertainty continues in the Group's most important markets. Overall, this collection presents a similar trend to the previous Spring/Summer collection.
The Group, in line with previous reports, is continuing its policy of significant commercial investments, with the renewal of important flagship stores in collaboration with well-known architects and new openings, also through the acquisition of assets/real estate in emerging markets. The great dynamism characteristic of Asian markets is supporting the growth of our activities in that area.
Efforts to contain manufacturing and general costs are continuing without interruption.
The latter part of the year is, however, being influenced by factors which will impact negatively on the final results: strong price increases of some raw materials, strengthening of the currencies of many emerging countries against the euro and higher borrowing costs resulting from the loan arranged in June to replace the expiring loan.
Due to the above, coupled with the presence of sizeable non-recurring expenses with a total value similar to the 2009 financial year, the result expected for the full year 2010 should produce operating margins on sales below 2009 levels.
The continued ability of the Group to generate cash will enable it to support large investment programmes, with benefits for future growth, also reducing the expected year-end net financial position compared with 2009.
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