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Benetton consolidated revenues increase to 996 mn euro
Aug '08
The Benetton Group Board of Directors, meeting and chaired by Luciano Benetton, examined and approved the consolidated results for the first half of 2008.

Group net revenues for the first half of 2008 grew to 996 million euro (+2.9%), consistent with full year revenue forecasts previously communicated; this increase, at constant exchange rates and on a like for like basis, was equivalent to 5.1%. The apparel segment grew to 948 million euro, 5.8% at constant exchange rates.

Growth in the half year was determined by:
• the positive mix contribution, following enrichment of the offer with higher value product categories, and development actions in countries with high growth potential;
• the increase in the value of the euro in relation to the principal foreign currencies, and in particular the effect of movements in the Korean won, the US dollar and the GB pound.

Gross operating profit was 46.4% of revenues compared with 43.7% in the first half of 2007, with an increase of 39 million euro, positively influenced by the combined effects of mix, as well as the ever greater efficiency of supply chain management and sourcing activities, in a context of constant attention to product quality.

The contribution margin increased by 35 million euro, reaching 390 million, with a percentage of revenues which increased to 39.1% from 36.7%, containing a slight increase in variable costs, associated in particular with the rise in oil and transport costs.

The most significant elements which in the half year impacted on general and administrative expenses (+26 million euro) were:
• consolidation of operations, in particular in the US market;
• costs relating to supply chain improvement projects, the simplification of the structure of the collections and analysis for development of the Group's competitive structure in strategic markets;
• higher depreciation and amortization associated with the implementation of significant IT investments, in particular the development of SAP, made by the Group in previous years.
• Operating profit grew by 9 million euro to 116 million, with a percentage of revenues of 11.7% compared with 11.1% in the first half of 2007.

Ordinary EBITDA increased by 12 million euro to 156 million, equivalent to 15.7% of sales compared with 14.9% in the comparative half year.

As a result of the increase in interest rates, the average financial indebtedness and the strengthening of the euro against the principal currencies, financial expenses and currency hedging losses increased by 7 million.

Net income, of 72 million euro, grew by 2.5%.

Capital employed increased by 54 million euro compared with December 31, 2007; this was driven mainly by the increase in operating capital expenditure and by the restoration of the values of assets held for sale, net of the reduction in working capital compared with last year end. The working capital, which is cyclical in its movements during the year, increased by only 5 million euro compared with June 30, 2007.

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