PRESS RELEASE
Main Points
- Sarantis Group’s turnover decreased by 17.23% to €46.48 mil. in Q1 2009 from €56.16 mil. in Q1 2008.
- Excluding the impact of foreign currency translation, Group sales increased by c. € 5 mil.
- Gross profit declined by 20.95% to €22.96 mil. in Q1 2009 from €29.04 mil. in the comparable prior-year period.
- Earnings before interest and taxes reached €2.68 mil. in Q1 2009, reduced by 62.92%.
- EATAM dropped to €1.05 mil. from €5.53 mil.
- The Group’s own brands’ turnover declined, increasing nevertheless their participation to total Group turnover.
- The Group’s old countries presented a 10.57% sales decline, however, excluding the foreign exchange translation impact, the old countries recorded sales growth of c. 6%.
Financial Results
In Q1 2009 consolidated turnover declined by 17.23% reaching €46.48 mil. from €56.16 mil. the comparable prior-year period. The drop in the Group’s consolidated turnover reflects the lower consumer spending and the continuing adverse macroeconomic environment. At the same time, the inventory destocking implemented by key accounts influenced further the Group’s sales. Moreover, it is important to note that the foreign exchange fluctuations had a negative effect on the consolidated Group sales, as the impact of the FX translation amounts to c. €5 mil., therefore, excluding the fx translation effect, group sales reduced by c.9%.
Gross profit reduced by 20.95% to €22.96 mil. in Q1 2009 from €29.04 mil. Gross profit margin settled at 49.39% versus 51.71%, largely affected by the adverse currency movements. Nevertheless, the negative impact was partly offset by the high participation of the own brands portfolio as well as more competitive raw material prices.
Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) posted a decrease of 56.48% to €3.57 mil. in Q1 2009 from €8.21 mil. in Q1 2008, while the EBITDA margin stood at 7.69% from 14.61% in the respective prior-year period.
Earnings before Interest and Tax (EBΙΤ) reached €2.68 mil. from €7.24 mil., reduced by 62.92% decrease and EBIT margin was reduced from 12.89% in Q1 2008 to 5.78% in Q1 2009.
The Group presented financial expenses amounting to €1.18 mil. mainly on the back of adverse fx rates volatility.
Earnings before taxes settled at €1.50 mil. from €7.03 mil. in Q1 2008, a reduction of 78.66% compared to the respective period of last year.
Earnings after taxes and minorities reached €1.05, reduced by 81.05% compared to the comparable prior-year period and the EATAM margin settled at 2.25% from 9.84%. The Group’s high tax rate is mainly due to the losses recorded by some of the Group’s countries.
Business Activity Analysis
It should be mentioned that the adverse conditions in the consumer sector as well as the further devaluation of the currencies in the Group’s foreign markets during the first quarter of 2009, had a negative effect on all the business categories of the Group.
However, it should be noted that the own brands continue to increase their participation to Total Turnover, in line with the management’s strategy.
The Household Products demonstrated a 16.18% drop during Q1 2009, with revenues reaching €20.03 mil. from €23.90 mil. in the respective period last year. The participation of own brands within this SBU remains at a high level and is equal to 99.13%.
Similarly, Fragrances and Cosmetics (F&C) recorded a sales decline of 16.25% during Q1 2009, amounting to €19.90 mil. from €23.76 mil. in the comparable prior-year period. In this SBU, own brands demonstrate a decline of 14.74%, increasing though their contribution to 67.77% from 66.57%.
With respect to Earnings Before Interest and Tax, Fragrances & Cosmetics EBIT decreased in Q1 2009 by 63.16%, compared to Q1 2008, while the fragrances & cosmetics EBIT contribution to total EBIT settled at 56.55%. The operating profits of own brands within this category stood at €1.26 mil. from €3.32 mil., reduced by 62.16% compared to the respective period last year.
Similarly, Household products EBIT was reduced by 51.96% to €1.04 mil. in Q1 2009 from €2.16 mil., with their contribution to total EBIT reaching 38.71% in Q1 2009 from 29.87% in Q1 2008. Own brands of this category posted an EBIT reduction of 52.02% reaching €1.04 mil. compared to €2.16mil. in Q1 2008.
Geographic market Analysis
Looking at the geographical analysis, the weakening in the Group’s sales across all regions reflects the adverse impact of lower consumer spending and the deteriorating macroeconomic environment as well as the devaluation of the currencies in the Group’s foreign markets.
It is important to note that excluding the foreign exchange translation impact, the Old Countries turnover during Q1 2009 increases by c. €5 mil., thus posting a c. 6% growth versus the comparable prior-year period. However, taking into consideration the foreign exchange impact, the Old Countries posted a sales decline of 10.57% reaching €25.95 mil. in Q1 2009 from €29.02 mil. in Q1 2008, while their contribution to total Group sales increased to 55.82% from 51.67%.
Similarly, the Greek market turnover presented a decline of 24.20% at €20.44 mil. from €26.96 mil., driven not only by the consumption slowdown but also by the Key Accounts destocking process.
As far as EBIT is concerned, the old counties of operation recorded an EBIT reduction of 57.24% to €1.01 mil. in Q1 2009 from €2.36 mil in Q1 2008, while the old countries EBIT margin settled at 3.88% in Q1 2009 from 8.12% in the respective period last year. Τhe Greek EBIT declined by 65.65% to €1.68 mil. from €4.88 mil. in Q1 2008.
Sarantis Group Q1 2009 financial results reflect the weakening in the consumer sector, which is expressed through sales reduction and inventory destocking by key retailers, as well as the devaluation in the Group’s foreign countries. Already, since 2008 the management of Sarantis Group has taken initiatives and implements strategies in order to mitigate the negative effects of the global economic crisis on its financial results. Basic commitment for the Group is the maintenance of a strong cash flow and debt position as well as the efficient working capital management.
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.
Financial Results Analysis
(233.8KB)
Contact
SARANTIS Group
26, Amaroussiou - Halandriou Street
151 25 Maroussi, Athens, Greece
Tel: +30 210 6173000
Fax: +30 210 6197081
e-mail: group-info@sarantisgroup.com
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