CONSOLIDATED FINANCIAL RESULTS 12M 2008

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• Sarantis Group’s turnover increased by 7.36% to €259.37 mil. from €241.59 mil. in 12M 2007.
• Gross Profit increased by 8.64% to €132.06 mil. in 12M 2008 from €121.56 mil. in 12M 2007
• Profit after tax increased by 3.62% to €25.38 mil. in 12M 2008.
• EATAM reached €25.39 mil. in 12M 2008.
• Among the Group’s major activities, household products posted the largest increase on an annual basis, by 14.17% to €110.81 mil., followed by fragrances & cosmetics that increased by 7.79% to €113.44 mil.
• The Group’s own brands developed further by 14.27%, increasing at the same time their participation to total Group turnover.
• All old countries continue to growth further increasing their contribution to total Group turnover.

In 12M 2008 consolidated turnover increased by 7.36% reaching €259.37 mil. from €241.59 mil. last year.

It should be noted that during 2008 we observe a satisfactory growth in the two basic sectors of activity, the fragrances & cosmetics and the household products, along with an overall growth pattern in the Eastern European markets.

Gross profit advanced by 8.64% to €132.06 mil. in 12M 2008. Gross profit margin was maintained at last year’s level, settling at 50.92% versus 50.32% in 12M 2007, as a result of the increased participation of own brands in the total Group turnover.

Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) posted a marginal growth rate of 0.14% to €37.51 mil. in 12M 2008, while the EBITDA margin stood at 14.46% from 15.51% in 12M 2007.

Earnings before Interest and Tax (EBΙΤ) posted a 0.48% decrease to €33.78 mil. from €33.94 mil. in 12M 2007 and EBIT margin was reduced from 14.05% in 12M 2007 to 13.02% in 9M 2008.

Earnings Before Tax settled at €32.74 mil. from €31.56 mil. in 12M 2007, an increase of 3.73% compared to last year.

Earnings After Tax increased by 3.62%, reaching €25.38 mil. from €24.50 mil. in 12M 2007 and Earnings after Tax and Minorities (ΕΑΤΑΜ) reached €25.39 from €25.54 mil., reduced by  0.62% compared to last year, while the EATAM margin settled at 9.79% from 10.57% in 12M 2007.

Over the course of 2008 and until the third quarter of 2008, the Group’s financial results maintained a steady course of development, both in terms of consolidated turnover and profitability.

However, during the fourth quarter of 2008, the Group’s performance was unexpectedly weakened demonstrating slowdown in turnover as well as deterioration in terms of profitability compared to the fourth quarter of 2007.

The main reasons of the Group’s fourth quarter weak performance are the devaluation of the currencies of the Group’s foreign countries, the Athens riots and the deteriorating consumption activity, the reduced earnings by the Estee Lauder JV, the one-off loss assumed due to the close of the aluminium hedge, the Group’s cost saving initiatives and  additional provisions for potential future bad debts.

In the categories of Fragrances & Cosmetics and Household Products, “own brands” recorded satisfactory growth rates, a fact that is in line with the management’s strategy.

Specifically, own brands recorded sales of €186.39 mil. in 2008 from €163.11 mil. in 2007, an increase of 14.27%. Their contribution to total consolidated sales increased to 71.86% from 67.52%.

Household products demonstrated a 14.17% growth during the year, with revenues reaching €110.81 mil. The own brands turnover within this SBU increased by 15.76%, offering a 95.70% contribution in this category’s sales

Fragrances and cosmetics (F&C) recorded a satisfactory growth rate of 7.79% during 12M 2008, amounting to €113.44 mil. In this SBU, own brands demonstrate a growth rate of 12.36%, increasing their contribution to 70.83% from 67.95% during 12M 2007.

With respect to Earnings Before Interest and Tax, it should be highlighted that the operating profit of Sarantis Group core business categories of fragrances & cosmetics and household products is particularly affected by the adverse factors mentioned above.

Fragrances & Cosmetics EBIT decreased in 12M 2008 by 5.86%, compared to 12M 2007, settling at €14.39 mil., while the fragrances & cosmetics EBIT contribution to total EBIT settled at 42.60% versus 38.98% in 12M 2007. Moreover, operating profits of own brands within this category stood at €12.03 mil. reduced by 5.57% compared to last year.    

Household products’ EBIT was reduced by 11.37% to €8.93 mil. in 12M 2008, with their  contribution to total EBIT reaching 26.44% in 12M 2008 from 25.70% in 12M 2007. Own brands of this category posted an EBIT reduction of 9.31% reaching €8.84 mil. compared to €9.74mil. in 12M 2007.

Looking at the geographical analysis, the Greek market turnover reduced by 0.46% at €106.75 mil. from €107.24 mil. mainly driven by the consumption slowdown as well as the adverse impact of the riots in Athens during December 2008. However, it is worth to mention that within the Greek market, the fragrances & cosmetics together with the household products recorded an increase of 3.86%.

Furthermore, despite the recent currencies devaluation, the Old Countries recorded a growth of 15.25%, increasing their contribution to total sales up to 58.58% in 12M 2008 from 54.57% in 12M 2007.

In total, turnover from the old countries of operation during 12M 2008 increased to 58.84% of total group turnover from 55.61% in 12M 2007, a fact underlining the management’s strategic choice for further penetration in the foreign markets.

As far as EBIT is concerned, the old counties of operation recorded an EBIT reduction of 3.63% to €14.80 mil. in 12M 2008 from €15.35 mil in 12M 2007, while the old countries EBIT margin settled at 9.74% in 12M 2008 from 11.65% in 12M 2007. In particular, the EBIT reduction of Poland was also attributed to the one off loss due to the closing of the aluminium hedge.

Τhe Greek EBIT contraction is partly due to reduction of the income from the Estee Lauder JV as well as all the aforementioned reasons.

In the middle of the particularly challenging economic and business environment, the Group remains focused on its strategic pillars of growth that consist of organic growth of the core business activities and emphasis on Sarantis own brands portfolio, increase of the existing market shares of own brands in the EE region, continuous examination of the situation in the economies of the Group’s foreign countries and modification of the business where deemed necessary according to the new market conditions and finally, focus on the successful implementation of SAP and “go live” on 1/1/2010 in Poland and Romania.