Silvano Fashion Group
Quarterly report

Silvano Fashion Group Consolidated Interim Financial Report for Q4 and 12 months of 2017 (unaudited)

Selected Financial Indicators

Summarized selected financial indicators of the Group for 12 months of 2017 compared to 12 months of 2016 and 31.12.2017 compared to 31.12.2016 were as follows:

Financial performance

The Group`s sales amounted to 62 348 thousand EUR during 12 months of 2017, representing a 7.7% increase as compared to the same period of previous year. Overall, wholesales decreased by 0.2% and retail sales increased by 28.9%, measured in EUR.

The Group’s reported gross profit margin during 12 months of 2017 continued to improve decreasing to 51.2%, reported gross margin was 54.5% in the respective period of previous year. Consolidated operating profit for 12 months of 2017 amounted to 13 948 thousand EUR, compared to 16 543 thousand EUR in 12 months of 2016. The consolidated operating profit margin was 22.4% for 12 months of 2017 (28.6% in 12 months of 2016). Consolidated EBITDA for 12 months of 2017 was 15 735 thousand EUR, which is 25.2% in margin terms (18 430 thousand EUR and 31.8% for 12 months of 2016).

Reported consolidated net profit attributable to equity holders of the Parent company for 12 months of 2017 amounted to 10 914 thousand EUR, compared to net profit of 8 273 thousand EUR in 12 months of 2016, net profit margin attributable to equity holders of the Parent company for 12 months of 2017 was 17.5% against 14.3% in 12 months of 2016.
 

Financial position

As of 31 December 2017 consolidated assets amounted to 52 880 thousand EUR representing an decrease by 5.8% as compared to the position as of 31 December 2016.

Trade and other receivables decreased by 1 452 thousand EUR as compared to 31 December 2016 and amounted to 2 716 thousand EUR as of 31 December 2017. Inventory balance increased by 1 573 thousand EUR and amounted to 17 760 thousand EUR as of 31 December 2017.

Equity attributable to equity holders of the Parent company decreased by 2 428 thousand EUR and amounted to  40 974 thousand EUR as of 31 December 2017. Current liabilities increased by 123 thousand EUR during 12 months of 2017.

Investments

During 12 months of 2017 the Group’s investments into property, plant and equipment totalled 1 226 thousand EUR, in previous year same period 888 thousand EUR. Investments were made mainly into opening and renovating own stores, as well into equipment and facilities to maintain effective production for future periods.

Personnel

As of 31 December 2017, the Group employed 2 279 employees, including 506 people in retail operations. The rest were employed in production, wholesale, administration and support operations. In 31.12.2016 there were      2 163 employees, including 480 people in retail operations.

Total salaries and related taxes during 12 months of 2017 amounted to 13 994 thousand EUR (11 630 thousand EUR in 12 months of 2016). The remuneration of key management of the Group, including the key executives of all subsidiaries, totalled 891 thousand EUR.

Decisions made by governing bodies during 12 months 2017

On February 2, 2017 Silvano Fashion Group Extraordinary Meeting of Shareholders decided to change Silvano Fashion Group AS shareholders General Meeting decision from June 29, 2016 of its share buyback program terms and set the new maximum price at which Silvano Fashion Group AS may buy back its own shares within the own share buy-back programme is EUR 3.30 per share.

In connection with expiration of the term of the board member agreement, Kati Kusmin left the company from May 16, 2017.  AS Silvano Fashion Group  the Management Board continues with one member: Jarek Särgava. 

On June 29, 2017 Silvano Fashion Group held its regular Annual General Meeting of Shareholders. The Meeting adopted following decisions.

• The Meeting approved the 2016 Annual Report.
• The Meeting decided to distribute dividends in the amount 0.20 EUR per share (record date 13.07.2017, payment completed on 19.07.2017).
• The Meeting decided to re-appoint AS PricewaterhouseCoopers as the Group`s auditor for financial year 2017.
• The Meeting decided to cancel the 1 000 000 own shares acquired within the own share buy-back programme as approved by the shareholders of AS Silvano Fashion Group on 29th of June 2016;
• The Meeting decided to extend authority of the supervisory board member Mr. Toomas Tool for the next term of authority starting from 1 July 2017 till 30 June 2022.
• The Meeting decided to continue with the remuneration plan of the supervisory board members as approved by the annual general meeting held on 30 June 2012.
• On October 31, 2017, the decrease of share capital of Silvano Fashion Group AS was registered in the Commercial Register based on the resolutions adopted by the General Meeting of Shareholders of the Company held on June 29, 2017. The new registered share capital of the Company is 10 800 000 euros, which is divided into 36 000 000 ordinary shares with nominal value of 0.30 euros per share.

• Consolidated Statement of Financial Position

• in thousands of EUR	Note	31.12.2017	31.12.2016
  ASSETS
  Current assets
  Cash and cash equivalents		21 230	22 303
  Current loans granted		2	19
  Trade and other receivables	2	2 716	4 168
  Inventories	3	17 760	16 187
  Total current assets		41 708	42 677
  Non-current assets
  Long-term receivables		255	21
  Investments in associates		55	19
  Available-for-sale investments		320	369
  Deferred tax asset		900	1 012
  Intangible assets		217	291
  Investment property		920	1 091
  Property, plant and equipment	4	8 505	10 665
  Total non-current assets		11 172	13 468
  TOTAL ASSETS		52 880	56 145
  LIABILITIES AND EQUITY
  Current liabilities
  Trade and other payables	5	8 025	6 894
  Tax liabilities		849	1 857
  Total current liabilities		8 874	8 751
  Non-current liabilities
  Deferred tax liability		10	37
  Long-term provisions		52	0
  Total non-current liabilities		62	37
  Total liabilities		8 936	8 788
  Equity
  Share capital	6	10 800	11 100
  Share premium		8 567	10 787
  Treasury shares	6	0	-998
  Statutory reserve capital		1 306	1 306
  Revaluation reserve		710	710
  Unrealised exchange rate differences		-15 588	-10 968
  Retained earnings		35 179	31 465
  Total equity attributable to equity holders of the Parent company		40 974	43 402
  Non-controlling interest		2 970	3 955
  Total equity		43 944	47 357
  TOTAL EQUITY AND LIABILITIES		52 880	56 145

   

  Consolidated Income Statement

   

  in thousands of EUR	Note	4Q 2017	4Q 2016	12m 2017	12m 2016
  Revenue	8	12 283	12 250	62 348	57 892
  Cost of goods sold		-5 589	-5 987	-30 435	-26 333
  Gross Profit		6 694	6 263	31 913	31 559
  Distribution expenses		-2 947	-2 743	-12 081	-9 393
  Administrative expenses		-1 197	-1 365	-4 937	-4 846
  Other operating income		93	97	323	347
  Other operating expenses		-458	-335	-1 270	-1 124
  Operating profit		2 185	1 917	13 948	16 543
  Currency exchange income/(expense)		89	-2 574	1 221	-5 094
  Other finance income/(expenses)		29	5	176	149
  Net financial income		118	-2 569	1 397	-4 945
  Profit (loss) from associates using equity method		10	22	39	22
  Profit before tax		2 313	-630	15 384	11 620
  Income tax expense		-646	-855	-3 991	-3 724
  Profit for the period		1 667	-1 485	11 393	7 896
  Attributable to :
  Equity holders of the Parent company		1 605	-844	10 914	8 273
  Non-controlling interest		62	-641	479	-377
  Earnings per share from profit attributable to equity holders of the Parent company, both basic and diluted (EUR)	7	0,04	-0,02	0,30	0,22

   

  Consolidated Statement of Comprehensive Income

   

  in thousands of EUR	Note	4Q 2017	4Q 2016	12m 2017	12m 2016
  Profit for the period		1 667	-1 485	11 393	7 896
  Other comprehensive income for the period
  Exchange rate differences attributable to foreign operations		43	4 685	-5 183	5 486
  Revaluation of PPE at FV		0	1 065	0	1 065
  Total other comprehensive income for the period		43	5 750	-5 183	6 551
  Attributable to :
  Equity holders of the Parent company		112	5 053	-4 620	5 981
  Non-controlling interest		-69	697	-563	571
  Total comprehensive income for the period		1 710	4 265	6 210	14 447
  Attributable to :
  Equity holders of the Parent company		1 717	4 209	6 294	14 253
  Non-controlling interest		-7	56	-84	194

   

  Consolidated Statement of Cash Flows

   

  in thousands of EUR	12m 2017	12m 2016
  Cash flow from operating activities
  Profit for the period	11 393	7 896
  Adjustments for:
  Depreciation and amortization of non-current assets	1 787	1 887
  Share of profit of equity accounted investees	-39	-22
  (Gains)/ losses on the sale of PPE and IA	7	-32
  Net finance income / costs	-1 397	4 945
  Provision for impairment losses on trade receivables	-19	4
  Provision for long-term benefits	52	0
  Income tax expense	3 991	3 724
  Change in inventories	-1 573	-717
  Change in trade and other receivables	1 081	43
  Change in trade and other payables	-1 709	-641
  Income tax paid	-4 396	-4 280
  Net cash from operating activities	9 178	12 807
  Cash flow from investing activities
  Interest received	127	123
  Dividends received	1	3
  Proceeds from disposal of property, plant and equipment	463	36
  Proceeds from repayments of loans granted	-17	0
  Acquisition of property, plant and equipment	-1 226	-888
  Acquisition of intangible assets	-118	-106
  Acquisition of shares of a subsidiary	0	-3
  Net cash used in/from investing activities	-770	-835
  Cash flow from financing activities
  Dividends paid	-8 101	-9 220
  Acquisition of own shares	-1 522	-1 846
  Net cash used in/ from financing activities	-9 623	-11 066
  Increase in cash and cash equivalents	-1 215	906
  Cash and cash equivalents at the beginning of period	22 303	21 274
  Effect of exchange rate fluctuations on cash held	142	123
  Cash and cash equivalents at the end of period	21 230	22 303
  Jarek Särgava AS Silvano Fashion Group Member of the Board Phone: +372 6845 000 E-mail: info@silvanofashion.com