Cookie Consent by Free Privacy Policy website The Board of Directors approves the Consolidated Interim Report as of 31 March 2021
may 12, 2021 - salvatore.ferragamo.parfums

The Board of Directors approves the Consolidated Interim Report as of 31 March 2021


Salvatore Ferragamo Group three months Revenue +10.3%, Operating Profit (EBIT) at 7 million Euros, Net Profit at breakeven and Positive Net Financial Position5 of 169 million Euros

Retail Revenues up 20.8% at constant exchange rates2 vs. 1Q 2020 and digital channel growing triple-digit

Further acceleration of sales in the first part of 2Q notably in China, Korea, US and in the digital channel

• Revenues: 245 million Euros (+10.3% vs. 222 million Euros at 31 March 2020, +13.0% at constant exchange rates2)
• Gross Operating Profit (EBITDA1): 48 million Euros vs. 12 million Euros at 31 March 2020)
• Operating Profit (EBIT): 7 million Euros (vs. -36 million Euros at 31 March 2020)
• Net Profit: -0.6 million Euros (vs. -41 million Euros at 31 March 2020)
• Net Financial Position5 (net of IFRS16 effect): positive for 169 million Euros (vs. 123 million Euros positive at 31 March 2020)

The Board of Directors of #salvatoreferragamo S.p.A. (MTA: SFER), parent company of the #salvatoreferragamo Group, one of the global leaders in the luxury sector, in a meeting chaired by Leonardo Ferragamo, examined and approved the Consolidated Interim Report as of 31 March 2021, drafted according to IAS/IFRS international accounting principles (“non-audited”).

Notes to the Income Statement for 1Q 2021

Consolidated Revenue figures
As of 31 March 2021 the #salvatoreferragamo Group reported Total Revenues of 245 million Euros up by 10.3% at current exchange rates (+13.0% at constant exchange rates2) vs. the 222 million Euros recorded in 1Q 2020.
The increase in Revenues has been achieved despite the permanence, in some countries, of lock-downs of the commercial activities, bans and restrictions on international traffic, due to the Covid-19 pandemic.

Revenues by distribution channel
As of 31 March 2021, the Group's Retail network counted on a total of 638 points of sales, including 390 Directly Operated Stores (DOS) and 248 Third Party Operated Stores (TPOS) in the Wholesale and Travel Retail channel, as well as the presence in Department Stores and high-level multi-brand Specialty Stores.
In 1Q 2021 the Retail distribution channel posted consolidated Revenues up 17.2% (+20.8% at constant exchange rates2), showing a +14.7% at constant exchange rates and perimeter (like-for-like) vs. 1Q 2020, with the primary channel overperforming.
The Wholesale channel registered flat Revenues (-0.7% at current exchange rate and +0.3% at constant exchange rates2), despite the persistent negative trend of the Travel Retail channel.

Revenues by geographical area
The Asia Pacific area is confirmed as the Group's top market in terms of Revenues, increasing by 50.6% (+51.7% at constant exchange rates2) vs. 1Q 2020.
In 1Q 2021 the retail channel in Greater China posted a Revenue growth of over 105% vs. 1Q 2020 at constant exchange rates2 and +6.1% vs. 1Q 2019. In particular, the retail channel in China posted an increase in Revenues of over 128% vs. 1Q 2020 at constant exchange rates2, bringing the performance to +39.4% at constant exchange rates2 vs. 1Q 2019. The retail channel in Korea also posted a solid growth trend in 1Q 2021 (+33.7% vs. 1Q 2020 and +25.4% vs. 1Q 2019 at constant exchange rates2).

The Japanese market in 1Q 2021 registered a decrease in Revenues of 9.3% (-6.5% at constant rates2), penalized by the evolution of the pandemic and the consequent restrictions.

Overall the Asian continent represents currently over 51% of total Group’s revenues.

EMEA posted a decrease in Revenues of 20.5% (-22.5% at constant exchange rates2) vs. 1Q 2020, still strongly penalized by lock-downs of stores and by the lack of tourists’ flows in the period, due to the restrictions and bans imposed by the National Governments to limit the Covid-19 pandemic.

North America in 1Q 2021 recorded Revenues up by 9.9% (+18.2% at constant exchange rates2) vs. 1Q 2020.

Revenues in the Central and South America in 1Q 2021 were down 20.1% (-10.0% at constant rates2) vs. 1Q 2020, with a positive trend in all markets with the exception of Mexico, due to the continued lock-down.

Revenues by product category
All main product categories reported an increase in 1Q 2021 vs. the same period of last year.

Gross Profit
In 1Q 2021 the Gross Profit increased by 20.6% vs. 1Q 2020 to 157 million Euros. Its incidence on Revenues was up 550 basis points, moving to 64.2%, from 58.7%, mainly thanks to the increase of full- price sales, to a positive geographical, channel and product mix and to lower provisions for obsolescence.

Operating Costs
In 1Q 2021 Operating Costs decreased by 10.2% at current exchange rates (-6.8% at constant exchange rates2), to 150 million Euros, from 167 million Euros of 1Q 2020. The decrease is due to the effects of the containment measures on all lines of operating expenses already activated in 2020 and mainly regards the reduction of personnel costs as a consequence of the streamlining of the organization.

Gross Operating Profit (EBITDA1)
Gross Operating Profit (EBITDA1) amounted to 48 million Euros, from 12 million Euros of 1Q 2020, with an incidence on Revenues of 19.5% from 5.2%.

Operating Profit (EBIT)
The Operating Profit (EBIT) was positive for 7 million Euros vs. 36 million Euros negative in 1Q 2020.

Profit before taxes
The Profit before taxes in 1Q 2021 was positive for 3 million Euros vs. 48 million Euros negative in 1Q 2020.

Net Profit for the Period
The Net Profit for the period, including the Minority Interest, was at break-even (-0.6 million Euros) vs. 41 million Euros negative in 1Q 2020.
The 1Q 2021 Group Net Profit was negative for 1 million Euros vs. 39 million Euros negative in 1Q 2020.

Notes to the Balance Sheet for 1Q 2021

Net Working Capital
The Net Working Capital as of 31 March 2021 decreased by 4.0% to 321 million Euros, from 334 million Euros as of 31 March 2020. In particular the Inventory was down 9.2% (-12.5% at constant exchange rates).

Investments (CAPEX)
As of 31 March 2021, Investments (CAPEX) was 6 million Euros, up by 12.6% vs. 5 million Euros in 1Q 2020 due to more investments in the retail network and in the digital channel.

Net Financial Position
The Net Financial Position adjusted5, net of the IFRS16 effect, at 31 March 2021 was positive for 169 million Euros, vs. to 123 million Euros positive as of 31 March 2020.
Including the IFRS16 effect, the Net Financial Position at 31 March 2021 is negative for 402 million Euros.

The Management of the Company continues to pursue the reinforcement of the competitive positioning of the #salvatoreferragamo Group among the leaders in the luxury market. The market scenario remains volatile, due to the pandemic, even if gradually improving. Therefore, the Management of the Company does not deem to provide detailed forecasts regarding the performance in the various markets and distribution channels for the current year, thus confirming its commitment to the development of revenues in the channels with the highest potential and to the rationalization of costs.

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