Published: 2019-08-23 22:59:00 CEST
Silvano Fashion Group
Half Year financial report

Silvano Fashion Group Consolidated Interim Financial Report for Q2 and 6 months of 2019 (unaudited)

Selected Financial Indicators

Summarized selected financial indicators of the Group for 6 months of 2019 compared to 6 months of 2018 and 30.06.2019 compared to 31.12.2018 were as follows:

in thousands of EUR 06m 2019 06m 2018 Change
Revenue 30 264 33 533 -9,7%
EBITDA 8 789 11 810 -25,6%
Net profit for the period 7 203 8 418 -14,4%
Net profit attributable equity holders of the Parent company 6 922 7 657 -9,6%
Earnings per share (EUR) 0,19 0,21 -9,5%
Operating cash flow for the period 8 331 7 949 4,8%
    
in thousands of EUR 30.06.2019 31.12.2018 Change
Total assets 50 240 45 504 10,4%
Total current assets 30 990 34 904 -11,2%
Total equity attributable to equity holders of the Parent company 26 991 27 462 -1,7%
Cash and cash equivalents 8 488 13 603 -37,6%
    
Margin analysis, % 06m 2019 06m 2018 Change
Gross profit 51,2 57,8 -11,4%
EBITDA 29,0 35,2 -17,6%
Net profit 23,8 25,1 -5,2%
Net profit attributable to equity holders of the Parent company 22,9 22,8 0,4%
    
Financial ratios, % 30.06.2019 31.12.2018 Change
ROA 21,1 22,9 -7,9%
ROE 34,2 34,7 -1,4%
Price to earnings ratio (P/E) 8,3 7,7 7,8%
Current ratio 2,3 2,4 -4,2%
Quick ratio 0,9 1,2 -25,0%

Financial performance

The Group`s sales amounted to 30 264 thousand EUR during 6 months of 2019, representing a 9.7% decrease as compared to the same period of previous year. Overall, wholesales decreased by 13.6%, measured in EUR.

The Group’s gross profit during 6 months of 2019 amounted to 15 493 thousand EUR and decrease by 20.0% compared to previous year. The gross margin during 6 months of 2019 decreased to 51.2%, from 57.8% in the respective period of previous year. The cost of sold goods increased by 4.3%.

Consolidated operating profit for 6 months of 2019 amounted to 7 061 thousand EUR, compared to 11 020 thousand EUR in 6 months of 2018, decrease 35.9%. The consolidated operating profit margin was 23.3% for 6 months of 2019 (32.9% in 6 months of 2018). Consolidated EBITDA for 6 months of 2019 decreased by 25.6% and amounted to 8 789 thousand EUR, which is 29.0% in margin terms (11 810 thousand EUR and 35.2% for 6 months of 2018).

Reported consolidated net profit attributable to equity holders of the Parent company for 6 months of 2019 amounted to   6 922 thousand EUR, compared to net profit of 7 657 thousand EUR in 6 months of 2018, net profit margin attributable to equity holders of the Parent company for 6 months of 2019 was 22.9% against 22.8% in 6 months of 2018.

Financial position

As of 30 June 2019 consolidated assets amounted to 50 240 thousand EUR representing an increase by 10.4% as compared to the position as of 31 December 2018.

Trade and other receivables increased by 293 thousand EUR as compared to 31 December 2018 and amounted to    3 941 thousand EUR as of 30 June 2019. Inventory balance increased by 914 thousand EUR and amounted to              18 559 thousand EUR as of 30 June 2019.

Equity attributable to equity holders of the Parent company decreased by 471 thousand EUR and amounted to            26 991 thousand EUR as of 30 June 2019. Current liabilities decreased by 1 498 thousand EUR during 6 months of 2019.

Investments

During 6 months of 2019 the Group’s investments into property, plant and equipment totalled 1 096 thousand EUR, in previous year same period 373 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 30 June 2019, the Group employed 1 988 employees, including 503 people in retail operations. The rest were employed in production, wholesale, administration and support operations. In 31.12.2018 there were 2 073 employees, including 500 people in retail operations.

Total salaries and related taxes during 6 months of 2019 amounted to 6 702 thousand EUR (6 474 thousand EUR in 6 months of 2018). The remuneration of key management of the Group, including the key executives of all subsidiaries, totalled 423 thousand EUR.

Decisions made by governing bodies after Q2 2019

On May 03, 2019 Silvano Fashion Group held its regular Annual General Meeting of Shareholders. The Meeting adopted the following decisions. 

  • The Meeting approved the 2018 Annual Report.
  • The Meeting decided to distribute dividends in the amount 0.20 EUR per share (record date 16.05.2019).

To pay to the entitled shareholders of AS Silvano Fashion Group as dividends EUR 0.20 per share as follows:
-       to pay dividends EUR 0.10 per share by 20 May 2019 latest, (payment completed on 20.05.2019);

  •  to pay dividends EUR 0.10 per share by 10 October 2019 latest;
  • The Meeting decided to recall Mr. Ants Susi from the Supervisory Board of SFG. The authorities of Mr. Ants Susi as the member of the Supervisory Board of SFG shall be deemed to have expired as of May 3, 2019.
  • The Meeting decided to elect Triin Nellis as the new member of the Supervisory Board of SFG, whose term of office shall start on May 3, 2019 and expire on June 30, 2021.
  •  
  • The meeting decided to amend the remuneration policy of the supervisory board members, approved by the shareholders’ meeting on June 30, 2012 as follows:

  -    to assign monthly gross remuneration of 5,000 euros for the chairman of the supervisory board;
   -    to assign monthly gross remuneration of 2,000 euros for the supervisory board;

  • The meeting decided to amend section 2.2. of the Articles of Association and reinstate it in the following wording: “All shares of the Company are registered shares. The nominal value of a registered share is 0,20 (twenty) cents. A share grants 1 (one) vote at the General Meeting. “;
  • The meeting decided:

  -   The share capital of SFG shall be increased by 3,600,000 EUR from 3,600,000 EUR to 7 200 000 EUR by   the increase of the nominal value of existing shares by 0,10 EUR per share, i.e. from 0.10 EUR to 0.20 EUR;  
  -   The share capital of SFG shall be increased via a bonus issue on the account of the share premium. The bonus issue shall be carried out on the basis of the 2018 annual report, that has been approved by the shareholders together with the decision on the distribution of profit. The bonus issue shall be carried out on the account of the share premium in the amount of 3,600,000 EUR. After the bonus issue, the new size of the share capital shall be 7,200,000 EUR that is divided into 36,000,000 shares with the nominal value of 0,20 EUR each share;
-    The list of shareholders who shall be entitled to participate in the bonus issue shall be fixed as at 17 May 2019 as at the end of the working day of the settlement system. The ex‑date is 16 May 2019; as of this date a person who acquired shares is not entitled to participate in the bonus issue. The increase of the nominal value of the shares shall take place immediately after the registration of the share capital increase with the Commercial Register;
On June 19,2019 Silvano Fashion Group held its  Extraordinary Meeting of Shareholders . The Meeting adopted the following decisions. 

The meeting decided to amend section 2.2. of the Articles of Association and reinstate it in the following wording: “All shares of the Company are registered shares. The nominal value of a registered share is 0.10 (ten) cents. One share gives 1 (one) vote at the General Meeting “.

The meeting decided:

  -    The share capital of SFG shall be reduced by a reduction of the nominal value of the shares by EUR 0.10 per share;
  -    To reduce the share capital, make a payment to the shareholders in the amount of EUR 0.10 per share. No payments will be made to the Company for its own shares. The disbursement shall be made to the hareholders not earlier than three months after entry of the reduction of share capital in the commercial register, provided that the claims submitted by the creditors in due time are secured or satisfied;
-      The share capital shall be reduced in connection with the adjustment of the Company's capital structure and finally the Company's share capital shall be consistent with the Company's strategic objectives. The amount of the reduced share capital is in accordance with the requirements arising from law and the Articles of Association of the Company. Following the decision, the new share capital will amount to EUR 3,600,000, divided into 36,000,000 shares with a nominal value of EUR 0.10 per share;
-     The list of shareholders entitled to the payment of share capital shall be fixed on 04.07.2019. at the end of the working day. Ex-date of the rights attached to the shares is 03.07.2019; as of that date, the acquirer is not entitled to receive any reduction in share capital.

 

 

Consolidated Statement of Financial Position

in thousands of EUR Note 30.06.2019 31.12.2018
ASSETS    
Current assets    
Cash and cash equivalents   8 488 13 603
Current loans granted   2 8
Trade and other receivables 2 3 941 3 648
Inventories 3 18 559 17 645
Total current assets   30 990 34 904
    
Non-current assets    
Long-term receivables   331 292
Investments in associates   70 64
Available-for-sale investments   325 305
Deferred tax asset   1 499 1 433
Intangible assets   351 261
Investment property   891 851
Property, plant and equipment 4 15 783 7 394
Total non-current assets   19 250 10 600
TOTAL ASSETS   50 240 45 504
    
LIABILITIES AND EQUITY    
Current liabilities    
Short-term finance lease obligations   997 0
Trade and other payables 5 10 552 14 163
Tax liabilities   1 778 662
Total current liabilities   13 327 14 825
    
Non-current liabilities    
Deferred tax liability   5 7
Long-term finance lease obligations   6 538 0
Long-term provisions   64 61
Total non-current liabilities   6 607 68
Total liabilities   19 934 14 893
    
Equity    
Share capital 6 7 200 3 600
Share premium   4 967 8 567
Statutory reserve capital   1 306 1 306
Revaluation reserve   355 355
Unrealised exchange rate differences   -14 889 -14 696
Retained earnings   28 052 28 330
Total equity attributable to equity holders of the Parent company   26 991 27 462
Non-controlling interest   3 315 3 149
Total equity   30 306 30 611
TOTAL EQUITY AND LIABILITIES   50 240 45 504

Consolidated Income Statement

in thousands of EUR Note 2Q 2019 2Q 2018 06m 2019 06m 2018
Revenue 8 16 444 17 376 30 264 33 533
Cost of goods sold   -7 406 -7 313 -14 771 -14 162
Gross Profit   9 038 10 063 15 493 19 371
          
Distribution expenses   -2 949 -2 990 -5 854 -5 928
Administrative expenses -1 195 -1 058 -2 287 -2 123
Other operating income 81 67 147 126
Other operating expenses -236 -235 -438 -426
Operating profit   4 739 5 847 7 061 11 020
          
Currency exchange income/(expense) 439 -201 2 470 -241
Other finance income/(expenses) -110 16 -220 40
Net financial income   329 -185 2 250 -201
      
Profit (loss) from associates using equity method -1 4 0 12
Profit before tax and gain/(loss) on net monetary position 5 067 5 666 9 311 10 831
        
Income tax expense   -944 -1 310 -2 108 -2 413
      
Profit for the period   4 123 4 356 7 203 8 418
Attributable to :          
  Equity holders of the Parent company 3 824 3 962 6 922 7 657
  Non-controlling interest 299 394 281 761
          
Earnings per share from profit attributable to equity holders of the Parent company, both basic and diluted (EUR) 7 0,11 0,11 0,19 0,21

Consolidated Statement of Comprehensive Income

in thousands of EUR Note 2Q 2019 2Q 2018 06m 2019 06m 2018
      
Profit for the period   4 123 4 356 7 203 8 418
      
Exchange rate differences attributable to foreign operations   182 877 11 205
Attributable to :      
  Equity holders of the Parent company   90 742 -193 125
  Non-controlling interest   92 135 204 80
          
Total comprehensive income for the period   4 305 5 233 7 214 8 623
Attributable to :      
  Equity holders of the Parent company   3 914 4 704 6 729 7 782
  Non-controlling interest   391 529 485 841

Consolidated Statement of Cash Flows

in thousands of EUR 06m 2019 06m 2018
Cash flow from operating activities   
Profit for the period 7 203 8 418
Adjustments for:   
  Depreciation and amortization of non-current assets 1 728 790
  Share of profit of equity accounted investees 0 -12
  (Gains)/ losses on the sale of PPE and IA 23 22
  Net finance income / costs -2 250 201
  Provision for impairment losses on trade receivables 0 1
  Provision for long-term benefits 3 1
Income tax expense 2 108 2 413
Change in inventories -914 -950
Change in trade and other receivables -332 -1 078
Change in trade and other payables 1 105 -943
Change in finance lease obligations 997 0
Income tax paid -1 340 -914
Net cash from operating activities 8 331 7 949
   
Cash flow from investing activities   
Interest received 4 19
Dividends received 0 1
Proceeds from disposal of property, plant and equipment 59 8
Proceeds from repayments of loans granted 6 0
Acquisition of property, plant and equipment -1 096 -373
Acquisition of intangible assets -118 -75
Net cash used in/from investing activities -1 145 -420
   
Cash flow from financing activities   
Repayment of finance lease -1 114 0
Dividends paid -3 919 -11 185
Reduction of share capital -7 200 0
Net cash used in/ from financing activities -12 233 -11 185
   
Increase in cash and cash equivalents -5 047 -3 656
Cash and cash equivalents at the beginning of period 13 603 21 230
Effect of exchange rate fluctuations on cash held -68 11
Cash and cash equivalents at the end of period 8 488 17 585

Jarek Särgava
AS Silvano Fashion Group
Member of the Board
Phone: +372 6845 000
Email: info@silvanofashon.com

Attachment


SFG interm report for Q2 and 6m of 2019.pdf