Luxury and fashionable women’s lingerie brand Van de Velde announces its annual results for year 2012.
- Consolidated turnover rises by 1.1%.
- A decrease in wholesale turnover, a slight fall in gross margin and an important increase in costs, supporting long term growth, result in an ebitda decrease of 9.2%.
- The board of directors will propose to the general meeting of shareholders to maintain the dividend at € 2.15 per share.
- This confirms the confidence of the company in its growth and cash generation.
Turnover Development 2012
In 2012 Van de Velde achieved consolidated turnover growth of 1.1% (from € 179.8m to € 181.8m).
This turnover development can be explained as follows:
- A fall in wholesale turnover of 1.0%. This fall is mainly due to a decline in the first half of 2012; wholesale turnover increased by slightly more than 1.0% in the second half.
- A fall in the retail turnover of Intimacy of 12.6% in local currency and 5.3% in euro.
- In Continental Europe retail turnover of Rigby & Peller (formerly Oreia) rose by 7.0%, due to the opening of new stores in Germany and Spain.
- The contribution of retail turnover of Rigby & Peller in the UK was £ 9.2m (€ 11.3m) versus € 4.4m in 2011 (5 months).
Ebitda development
Consolidated EBITDA fell 9.2% to € 48.8m. This evolution is mainly attributable to a combination of the following factors:
- A fall in wholesale turnover with a slight fall in the gross margin due to rising stitching costs in China and higher stock depreciations (primarily raw materials).
- Planned investments in fixed costs to support long term growth (marketing, sales organisation, IT infrastructure and the further development of the retail organisation).
Impairment of goodwill and intangible assets with indefinite useful life
As reported earlier, the Andrés Sardá brand is suffering from the financial crisis in southern Europe, given that Spain is Andrés Sardá’s home market. Van de Velde continues to invest in this brand’s long-term future, for which additional marketing investments will be made in 2013.
The low point of 2010 is clearly behind us and all turnover figures since then have been higher than this low point. Andrés Sardá remains one of our three core brands, alongside Marie Jo/L’Aventure and PrimaDonna/Twist, and will be given the support it needs to achieve this ambition.
However, the development of turnover and the EBITDA contribution in 2012 and 2013 continue to be below expectations as set at the time of acquisition and as a consequence expections have been adjusted. This results in a partial impairment of € 8.0m of goodwill (€ 2.5m) and intangible assets with indefinite useful life (€ 5.5m) in connection with Andrés Sardá.
This impairment is purely an accounting measure representing a non-cash charge and accordingly has no impact on 2012 cash flow or future cash flows. Furthermore, this impairment does not affect the long-term ambition of this brand in any way.
Financial result and minority stakes (share of result of associates)
The financial profit was € 1.5m lower in 2012 than in 2011:
- In 2011 the financial profit included non-recurring revenue of € 2.0m as a consequence of the full accelerated repayment of a CDO.
- In both years the financial profit includes the adjustment of outstanding balances between Van de Velde and the minority shareholders of Intimacy, a gain of € 3.0m in 2012 versus € 1.9m in 2011.
- Dividend income was approximately € 0.7m lower (Top Form) and the sum of the other components were approximately in line with the previous year.
The result recognized under the equity method is primarily attributable to the contribution of Top Form (after adjustment for dividends paid). The contribution of Top Form is based on the change in shareholders’ equity up to and including 31/12/2012.
The negative result is primarily attributable to the loss (HK$ 60.0m) that Top Form reported for fiscal year 2012 (1/7/2011-30/6/2012). A limited loss of HK$ 3.3m was reported for the first half year of fiscal year 2013 (1/7/2012-31/12/2012).
Profit for the period
The recurring Group profit fell from € 41.2m to € 33.6m (-18.4%) and the recurring profit per share fell from € 3.09 to € 2.52 (-18.4%). When the impairment of Andrés Sardá is included, the fall in Group profit is 37.8%.
Cash position and solvency/liquidity
The cash position at the end of 2012 was €31.7m.
Solvency (share of equity in total equity and liabilities) of Van de Velde Group remained very high (86.3% at the end of 2012 versus 83.9% at the end of 2011). The current assets represented five times the value of the current liabilities (versus 4.7 at the end of 2011), an indication of very strong liquidity. Furthermore, the Group is completely self-financed.
VAN DE VELDE
Van de Velde NV is a leading player in the luxury and fashionable women’s lingerie sector. Van de Velde is convinced of the merits of a long-term strategy based on developing and expanding brands around the Lingerie Styling concept (fit, style and fashion), especially in Europe and North America.