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UCB brand confirms good performance at Benetton
May '09
The Benetton Group Board of Directors examined and approved the consolidated results for the first quarter of 2009.

The reference market in the first quarter of 2009 was influenced by the cooling in demand, in a context of general weakness in the world economy and unfavourable euro exchange rate trends with the currencies of emerging countries, in particular the Korean won, the Indian rupee the Turkish lira and the rouble. In this situation, Group net revenue performance in the period was appreciable, reaching 449 million euro, down by 2% at constant exchange rates (-3.4% at current exchange rates).

Sales in established markets were down by 2.7% at constant exchange rates in the first three months of the year, substantially maintaining their level in the Mediterranean area in spite of the Spanish market slowdown.

Emerging markets grew, at constant exchange rates, by 2.0%. India, in particular, showed increased growth, there was a slowdown in performance in the Russian area, also associated with the fall in value of the local currency, while Turkey showed some growth.

The UCB adult brand and the children's collections confirmed their good performance in the quarter, accounting for 52% and 30%, respectively, of total sales.

As already announced on more than one occasion, the Group is continuing with its programme to improve service to its clients, an increasingly critical factor in the current market downturn. In this sense, a reorganization of the sourcing, production and shipment schedule for the 2009 Fall/Winter collection has been planned, delaying the initial seasonal deliveries by a month, and therefore out of the second quarter. On the one hand, this will have a temporary impact on sales in the second quarter of 2009, over and above normal market trends, which will be fully recovered in the third quarter of the year, and, on the other hand, it will improve management of logistic costs.

Ongoing actions relating to the supply chain, which are generating improvements in terms of efficiency and effectiveness, have made it possible to contain the reduction of the gross operating profit to revenues ratio, which was 45.5% compared with 46.1% in the first quarter of 2008, influenced by the slight reduction in volumes and the continued negative exchange impact.

The contribution margin was 171 million euro, against 179 million in the comparative period of the previous year, and 38.1% of revenues. Operating profit was 25 million euro and 5.5% of revenues, compared with 10.2% in the first quarter of 2008. However, it must be taken into account that the start of the previously announced reorganization plan generated non-recurring costs in the quarter, while the comparative quarter in 2008 included extraordinary income relating to the sale of a
real estate asset (Villa Loredan). Net of the extraordinary items which affected the first quarters of 2009 and 2008 in opposite ways, the normalized operating result for the quarter just closed would be 29 million euro (6.4% of revenues) against 41 million in the first quarter of 2008 (9.0%).

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