Silvano Fashion Group Consolidated Interim Financial Report for Q3 and 9 months of 2020 (unaudited)
Selected Financial Indicators
Summarized selected financial indicators of the Group for 9 months of 2020 compared to 9 months of 2019 and 30.09.2020 compared to 31.12.2019 were as follows:
| in thousands of EUR | 09m 2020 | 09m 2019 | Change |
| Revenue | 29 759 | 44 811 | -33.6% |
| Gross Profit | 18 097 | 22 657 | -20.1% |
| Operating profit | 8 370 | 10 090 | -17.0% |
| EBITDA | 11 042 | 12 745 | -13.4% |
| Net profit for the period | 1 198 | 9 764 | -87.7% |
| Net profit attributable equity holders of the Parent company | 1 000 | 9 292 | -89.2% |
| Earnings per share (EUR) | 0,03 | 0,26 | -88.5% |
| Operating cash flow for the period | 6 620 | 12 856 | -48.5% |
| in thousands of EUR | 30.09.2020 | 31.12.2019 | Change |
| Total assets | 41 593 | 46 309 | -10.2% |
| Total current assets | 27 936 | 27 123 | 3.0% |
| Total equity attributable to equity holders of the Parent company | 24 186 | 26 324 | -8.1% |
| Cash and cash equivalents | 9 856 | 5 152 | 91.3% |
| Margin analysis, % | 09m 2020 | 09m 2019 | Change |
| Gross profit | 60.8 | 50.6 | 20.2% |
| Operating profit | 28.1 | 22.5 | 24.9% |
| EBITDA | 37.1 | 28.4 | 30.6% |
| Net profit | 4.0 | 21.8 | -81.7% |
| Net profit attributable to equity holders of the Parent company | 3.4 | 20.7 | -83.6% |
| Financial ratios, % | 30.09.2020 | 31.12.2019 | Change |
| ROA | 5.5 | 22.2 | -75.2% |
| ROE | 9.7 | 38.9 | -75.1% |
| Price to earnings ratio (P/E) | 22.8 | 7.3 | 212.3% |
| Current ratio | 4.0 | 2.7 | 48.1% |
| Quick ratio | 1.7 | 0.8 | 112.5% |
Financial performance
The Group`s sales amounted to 29 759 thousand EUR during 9 months of 2020, representing a 33.6% decrease as compared to the same period of previous year. Overall, wholesales decreased by 34.4%, measured in EUR.
The Group’s gross profit during 9 months of 2020 amounted to 18 097 thousand EUR and decrease by 20.1% compared to previous year. The gross margin during 9 months of 2020 increased to 60.8%, from 50.6% in the respective period of previous year.
Consolidated operating profit for 9 months of 2020 amounted to 8 370 thousand EUR, compared to 10 090 thousand EUR in 9 months of 2019, decrease by 17.0%. The consolidated operating profit margin was 28.1% for 9 months of 2020 (22.5% in 9 months of 2019). Consolidated EBITDA for 9 months of 2020 decreased by 13.4% and amounted to 11 042 thousand EUR, which is 37.1% in margin terms (12 745 thousand EUR and 28.4% for 9 months of 2019).
Reported consolidated net profit attributable to equity holders of the Parent company for 9 months of 2020 amounted to 1 000 thousand EUR, compared to net profit of 9 292 thousand EUR in 9 months of 2019, net profit margin attributable to equity holders of the Parent company for 9 months of 2020 was 3.4% against 20.7% in 9 months of 2019.
Financial position
As of 30 September 2020 consolidated assets amounted to 41 593 thousand EUR representing decrease by 10.2% as compared to the position as of 31 December 2019.
Trade and other receivables decreased by 900 thousand EUR as compared to 31 December 2019 and amounted to 1 710 thousand EUR as of 30 September 2020. Inventory balance decreased 2 991 thousand EUR and amounted to 16 368 thousand EUR as of 30 September 2020.
Equity attributable to equity holders of the Parent company decreased by 2 138 thousand EUR and amounted to 24 186 thousand EUR as of 30 September 2020. Current liabilities decreased by 3 184 thousand EUR during 9 months of 2020.
Investments
During 9 months of 2020 the Group’s investments into property, plant and equipment totalled 191 thousand EUR, in previous year same period 1 143 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 September 2020, the Group employed 1 777 employees, including 498 people in retail operations. The rest were employed in production, wholesale, administration and support operations. In 31.12.2019 there were 1 888 employees, including 503 people in retail operations.
Total salaries and related taxes during 9 months of 2020 amounted 7 407 thousand EUR (9 846 thousand EUR in 9 months of 2019). The remuneration of key management of the Group, including the key executives of all subsidiaries, totalled 556 thousand EUR.
Decisions made by governing bodies during 9 months 2020
On June 30, 2020 Silvano Fashion Group held its regular Annual General Meeting of Shareholders. The Meeting adopted the following decisions.
- The Meeting approved the 2019 Annual Report.
- The Meeting decided leave the net profit undistributed and include the net profit of the financial year 2019 in retained earnings.
- The Meeting decided: To annul Article 5.7 of the Articles of Association which includes: The public limited company may be represented in all legal transactions only by two members of the Management Board jointly. To approve the new Articles of Association of the Company.
- The Meeting decided: To recall Toomas Tool, Mart Mutso, Risto Mägi, Triin Nellis and Stephan David Balkin from the Supervisory Board of SFG. To elect Toomas Tool as member of the Supervisory Board of SFG for the next 5-year period until June 30, 2025. To elect Mari Tool as member of the Supervisory Board of SFG for the next 5-year period until June 30, 2025. To elect Risto Mägi as member of the Supervisory Board of SFG for the next 5-year period until June 30, 2025. To elect Triin Nellis as member of the Supervisory Board of SFG for the next 5-year period until June 30, 2025. To elect Stephan David Balkin as member of the Supervisory Board of SFG for the next 5-year period until June 30, 2025.
- The Meeting decided: To appoint the auditing company Ernst & Young Baltic AS (registry code 10877299, located at Rävala 4, 10143 Tallinn) as the auditor of AS Silvano Fashion Group in 2020, 2021 and 2022 the financial years.
Consolidated Statement of Financial Position
| in thousands of EUR | Note | 30.09.2020 | 31.12.2019 |
| ASSETS | |||
| Current assets | |||
| Cash and cash equivalents | 9 856 | 5 152 | |
| Current loans granted | 2 | 2 | |
| Trade and other receivables | 2 | 1 710 | 2 610 |
| Inventories | 3 | 16 368 | 19 359 |
| Total current assets | 27 936 | 27 123 | |
| Non-current assets | |||
| Long-term receivables | 235 | 334 | |
| Investments in associates | 58 | 82 | |
| Available-for-sale investments | 245 | 321 | |
| Deferred tax asset | 1 511 | 905 | |
| Intangible assets | 364 | 423 | |
| Investment property | 648 | 869 | |
| Property, plant and equipment | 4 | 10 596 | 16 252 |
| Total non-current assets | 13 657 | 19 186 | |
| TOTAL ASSETS | 41 593 | 46 309 | |
| LIABILITIES AND EQUITY | |||
| Current liabilities | |||
| Short-term finance lease obligations | 581 | 2 362 | |
| Trade and other payables | 5 | 4 985 | 6 899 |
| Tax liabilities | 1 400 | 889 | |
| Total current liabilities | 6 966 | 10 150 | |
| Non-current liabilities | |||
| Deferred tax liability | 0 | 14 | |
| Long-term bank loans | 400 | 0 | |
| Long-term finance lease obligations | 6 405 | 6 333 | |
| Long-term provisions | 46 | 61 | |
| Total non-current liabilities | 6 851 | 6 408 | |
| Total liabilities | 13 817 | 16 558 | |
| Equity | |||
| Share capital | 6 | 3 600 | 3 600 |
| Share premium | 4 967 | 4 967 | |
| Statutory reserve capital | 1 306 | 1 306 | |
| Revaluation reserve | 355 | 355 | |
| Unrealised exchange rate differences | -18 835 | -15 697 | |
| Retained earnings | 32 793 | 31 793 | |
| Total equity attributable to equity holders of the Parent company | 24 186 | 26 324 | |
| Non-controlling interest | 3 590 | 3 427 | |
| Total equity | 27 776 | 29 751 | |
| TOTAL EQUITY AND LIABILITIES | 41 593 | 46 309 |
Consolidated Income Statement
| in thousands of EUR | Note | 3Q 2020 | 3Q 2019 | 09m 2020 | 09m 2019 |
| Revenue | 8 | 12 028 | 14 547 | 29 759 | 44 811 |
| Cost of goods sold | -4 506 | -7 383 | -11 662 | -22 154 | |
| Gross Profit | 7 522 | 7 164 | 18 097 | 22 657 | |
| Distribution expenses | -2 161 | -2 902 | -6 608 | -8 756 | |
| Administrative expenses | -935 | -1 114 | -2 868 | -3 401 | |
| Other operating income | 94 | 72 | 223 | 219 | |
| Other operating expenses | -133 | -191 | -474 | -629 | |
| Operating profit | 4 387 | 3 029 | 8 370 | 10 090 | |
| Currency exchange income/(expense) | -3 830 | 443 | -6 386 | 2 913 | |
| Other finance income/(expenses) | -111 | -147 | -345 | -367 | |
| Net financial income | -3 941 | 296 | -6 731 | 2 546 | |
| Profit (loss) from associates using equity method | -3 | 3 | -3 | 3 | |
| Profit before tax | 443 | 3 328 | 1 636 | 12 639 | |
| Income tax expense | -115 | -767 | -438 | -2 875 | |
| Profit for the period | 328 | 2 561 | 1 198 | 9 764 | |
| Attributable to : | |||||
| Equity holders of the Parent company | 255 | 2 370 | 1 000 | 9 292 | |
| Non-controlling interest | 73 | 191 | 198 | 472 | |
| Earnings per share from profit attributable to equity holders of the Parent company, both basic and diluted (EUR) | 7 | 0,01 | 0,07 | 0,03 | 0,26 |
Consolidated Statement of Comprehensive Income
| in thousands of EUR | Note | 3Q 2020 | 3Q 2019 | 09m 2020 | 09m 2019 |
| Profit for the period | 328 | 2 561 | 1 198 | 9 764 | |
| Other comprehensive income (loss) that will be reclassified to profit or loss in subsequent periods | -690 | 325 | -2 749 | 336 | |
| Attributable to : | |||||
| Equity holders of the Parent company | -741 | 227 | -3 138 | 34 | |
| Non-controlling interest | 51 | 98 | 389 | 302 | |
| Total comprehensive income (loss) for the period | -362 | 2 886 | -1 551 | 10 100 | |
| Attributable to : | |||||
| Equity holders of the Parent company | -486 | 2 597 | -2 138 | 9 326 | |
| Non-controlling interest | 124 | 289 | 587 | 774 |
Consolidated Statement of Cash Flows
| in thousands of EUR | 09m 2020 | 09m 2019 |
| Cash flow from operating activities | ||
| Profit for the period | 1 198 | 9 764 |
| Adjustments for: | ||
| Depreciation and amortization of non-current assets | 2 672 | 2 655 |
| Share of profit of equity accounted investees | 3 | -3 |
| (Gains)/ losses on the sale of property, plant and equipment | 3 | 23 |
| Net finance income / costs | 1 941 | -2 546 |
| Provision for inventories | 2 | 0 |
| Provision for long-term benefits | 0 | 5 |
| Income tax expense | 438 | 2 875 |
| Change in inventories | 2 991 | 241 |
| Change in trade and other receivables | 769 | 1 211 |
| Change in trade and other payables | -2 255 | -417 |
| Change in finance lease obligations | 0 | 547 |
| Income tax paid | -1 142 | -1 499 |
| Net cash from operating activities | 6 620 | 12 856 |
| Cash flow from investing activities | ||
| Interest received | 10 | 9 |
| Proceeds from disposal of property, plant and equipment | 34 | 61 |
| Proceeds from repayments of loans granted | 0 | 6 |
| Acquisition of property, plant and equipment | -191 | -1 143 |
| Acquisition of intangible assets | -83 | -165 |
| Acquisition of subsidiary net of cash acquired | -26 | 0 |
| Net cash used in/from investing activities | -256 | -1 232 |
| Cash flow from financing activities | ||
| Proceeds from borrowings | 400 | 0 |
| Repayment of finance lease | -1 619 | -1 646 |
| Interest paid on finance lease | -367 | 0 |
| Dividends paid | -424 | -7 730 |
| Reduction of share capital | 0 | -10 800 |
| Net cash used in/ from financing activities | -2 010 | -20 176 |
| Increase in cash and cash equivalents | 4 354 | -8 552 |
| Cash and cash equivalents at the beginning of period | 5 152 | 13 603 |
| Effect of exchange rate fluctuations on cash held | 350 | -95 |
| Cash and cash equivalents at the end of period | 9 856 | 4 956 |
Jarek Särgava
AS Silvano Fashion Group
Member of the Board
Phone:
Email:
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