CONSOLIDATED FINANCIAL RESULTS FY 2011

112M ’11 Consolidated Financial Results

The consolidated turnover increased by 0.58% versus last year’s and amounted to €221.29 million, from €220.01 mil in FY 2010.

Due to the negative economic environment in Greece and the drop in the local retail market, Sarantis Greek sales were down by 1.91%, while the Group’s foreign markets continued their positive course rising by 1.95%.

Negative impacts have been arisen also by the currencies valuations in the last quarter of 2011, an effect which seems to normalize during the first quarter of 2012.

The Gross profit during FY 2011 has been decreased by 2.35% to €105.55 mil., from €108.08 mil. last year.  The gross profit margin settled at 47.7% vs 49.13% in FY 2010, affected by the increased production cost.

Consequently the EBITDA posted a decrease of 8.23% to €19.63 mil. in FY 2011, from €21.38 mil., in FY 2010.

The earnings before interest and taxes reached €15.77 mil., from €17.55 mil., down by 10.13% and the EBIT margin settled from 7.97% in FY 2010, at 7.13% in FY 2011.

Profit before tax dropped by 24.50%, from €16.76 mil., in FY 2010 to €12.65 mil. due to increased financial expenses of €3.11 mil which were mostly attributed to increased interest payments.

The earnings after taxes and minorities reached €9.74 mil., reduced by 26.35% compared to FY 2010, while the EATAM margin stood at 4.40% from 6.01% in the respective

Despite the challenging economic conditions Sarantis Group has successfully managed to generate positive operating cashflows, a fact attributed to management’s focus behind the containment of operating expenses and the efficient working capital management.

Τhe Group’s working capital settled at €63.65 mil. in FY 2011 from €63.30 mil. in FY 2010 and €64.10 mil. in FY 2009, while working capital requirements over sales settled at 28.76% vs 28.77% in 12M 2010.

At the same time the Group benefits from a healthy capital structure and low leverage. In 12M 2011, the Group’s net debt settled at €3.19 mil.

Consolidated Turnover and EBIT SBU Analysis

During the twelve months of 2011, total group sales increased marginally. All sectors showed improved activity other than the subcategories of the distributed cosmetics and the selective division.

Cosmetics recorded a marginal sales growth of 0.36% amounting to €98.85 mil., from €98.49 mil., in 12M 2010.

In this SBU, the own brands demonstrate an increase of 6.56%, thus their contribution in this SBU’s turnover was increased from 67.19% to 71.34%. The sales growth in this business unit is driven by both existing brands as well as recent launches (BIOTEN in Greece and KOLASTYNA in Poland).

Sales of Household Products increased 1.82% amounting to € 98.29 million from € 96.54 million in the corresponding period last year. Sales of own brands in this category rose by 1.73% while their contribution to this category’s sales reached 99.67%.

The category of Other Sales exhibited an overall decrease of 3.29% during 12M 2011, driven by the subcategory of Selective products.

During FY 2011, consolidated revenues of own brands (cosmetics and household products) amounted to €168.55 million from €162.55 million in FY 2010, increased by 3.69%. Furthermore, their contribution to the total group turnover stood at 76.17%, significantly increased in comparison to the previous year's level.

Consolidated revenues of distributed brands during FY 2011 amounted to €52.74 million, from €57.46 million in FY 2010, decreasing by 8.21%. Their participation to the total group sales settled at 23.83%.

The Group’s operating earnings decreased during the FY 2011 by 10.13%, reversing the upward trend of the first nine months.

Cosmetics EBIT increased in FY 2011 by 33.07% reaching € 4.88 million from €3.66 million in FY 2010. The Cosmetics EBIT margin during FY 2011 settled at 4.93% vs 3.72% in FY 2010. This category’s contribution to total EBIT rose to 30.93% from 20.89% same period last year.

The operating profits of own brands within this category increased by 65.18% during FY 2011 standing at €4.58 million from €2.77 million in FY 2010.

The EBIT of Household Products reduced 20.08% during the FY 2011 to €5.77 million from €7.22 million in FY 2010. The EBIT margin of the household products stood at 5.90% during FY 2011 from 7.52% in FY 2010. The own brands of this category presented a declining EBIT of 20.10 % amounting to €5.78 million. The decrease in EBIT is due to higher production costs because of the increased prices of raw materials, aluminum and plastic.

The income from the Estee Lauder JV stood at €4.18 mil., during FY 2011, down by 19.99% versus the same period last year, but significantly improved compared to the first half of 2011 when it stood at €0.45 mil.

Consolidated Regional Analysis

The Group’s consolidated turnover was mainly supported by the Group's foreign markets and by the Greek market.

Despite the adverse economic environment in Greece and the drop in the Greek retail sector sales, Sarantis Group local market managed limit the sales' decrease to 1.91% while amounting to €76.54 mil., from €78.03 mil.

As far as the foreign markets of the Group are concerned, turnover was up by 1.95% to €144.75 mil from €141.98 mil in FY 2010.

It is also worth to note that the currency movements had considerable impact in the Foreign Countries turnover during the last quarter, (increase by 3.47% in local currency and c. 1.52% average currency devaluation). This impact seems to normalize during the first quarter of 2012.

During FY 2011, the foreign countries contribution to the Group’s sales stood at 65.41%, marginally increased in comparison to FY 2010.

The Group’s operating profit has been decreased by 10.13% during the FY 2011, attributed mainly by both Greek and Romanian market.

The Greek EBIT in FY 2011 was decreased by 14.43% to €8.32 mil., from €9.73 mil, in FY 2010.

Excluding the income from the Estee Lauder JV, Greek EBIT during FY 2011 amounted to €4.14 mil from €4.50 mil, down by 7.97%.

Greek EBIT margin, excluding Estee Lauder JV, stood at 5.41% from 5.76% in the respective period of 2010.

The foreign countries posted a decrease in EBIT of 4.77% during FY 2011, amounting to €7.44 mil., from €7.82 mil. Foreign countries EBIT margin during FY 2011 stood at 5.14% from 5.51% same period last year.

Objectives and Prospects

Sarantis Group consolidated turnover during the FY 2011 was marginally increased supported mainly by the operations of the Group’s foreign countries and less but not least by the Greek market. The increase in production costs due to rising raw material prices negatively impacted the gross profit.  Equally important was the negative impact of exchange rates on the turnover of affiliates, but which seems to be flattened in the first quarter of 2012. However, the generally positive performance of the Group resulted in the preservation of EBIT margins close to last year's levels.

The adverse conditions in the economic environment remained during the FY 2011, while the situation is not expected to improve in the foreseeable future. The management still focuses on aligning the cost structure with the expected revenues, and adjusts the product portfolio with the consumer trends.

The management remains dedicated to its policy, for sound capital structure, low net debt, containment of operating cost and in general for efficient management of working capital, with the objective to further enhance the Group’s financial position.

At the same time, the management, as always, remains focused on its strategic objectives that support and secure a profitable outlook for Sarantis Group and specifically on the following:

• Organic growth of the core business activities and emphasis on Sarantis own brands portfolio.
• Increase of the existing market shares of own brands.
• Continuous examination of the situation in the economies of the Group’s countries and modification of the business where deemed necessary according to the new market conditions.
• Examine possible acquisition targets in the Group’s foreign countries, as long as market share, profitability and cost structure allow for synergies. The Group’s management considers that current conditions are in favor of exploring possible new acquisitions.