Higher raw materials price may hit Benetton profits this year
The Benetton Group S.p.A. Board of Directors approved the draft 2010 Financial Statements.
2010 confirmed the vitality of the Group, which was able to react with dynamism to difficult economic conditions in some of the principal European countries of major interest, limiting the relative fall in activity levels, whilst growing in almost all countries outside Europe, in particular in those with fast developing economies.
In light of these difficulties, the efforts of the Group have been rewarded with the income achieved for the year, boosted by further strengthening of the balance sheet. During the past year, there was also a continuation of the investment programme to develop and strengthen services provided to the network of commercial partners.
Franco Furnò, Director responsible for Commercial, Product and Human Resource areas declared: “I am satisfied, in these difficult circumstances, with the good results achieved in 2010, especially in emerging and high growth countries. The objectives for 2011 are to increase store profitability, by revitalizing the commercial offer of all product lines, strengthening brand attractiveness and reducing time to market, as well as continued improvement of the network where most of the large investment programme for the year is directed. These actions will have a return in the medium-term.”
Biagio Chiarolanza, Director responsible for Operations, foreign Business Units and Finance declared: “Programmes launched in 2009 and continued with determination in 2010 made it possible to achieve a good result on the cost and process front and therefore on profit. The Group intends to act vigorously in order to counter the increase in raw material costs and the expected erosion of margins.
“Actions have been put in place to improve efficiency in all areas and functions with particular emphasis on the production chain and direct sales activities in some countries within and outside Europe. The recent agreement for construction of a new production facility in Serbia also falls within this context. These measures as a whole will already generate benefits in the short-term, further increasing in the future.”
Group net sales in 2010 were €2,053 million compared with €2,049 million in 2009, with an increase of 0.2% (-1.9% currency neutral).
Apparel segment sales to third parties were €1,948 million, substantially the same as in 2009 (€1,947 million).
The result achieved in emerging and high growth countries was particularly satisfying, up by 13.8% overall at current rates (+ 6.8% currency neutral), validating actions taken by Group companies located in those territories.
EBITDA from ordinary operations was €311 million, equivalent to 15.2% of revenues (€332 million in 2009, 16.2% of revenues). Positively impacting this result were the product cost improvement programmes and, net of exchange rate variations, savings in general and administrative costs.