Benetton on Tuesday published its first quarter financial results with revenue maintained at 449 million euro. The company experienced a cooling in demand, in a context of general weakness in the world economy and unfavourable euro exchange rate trends with the currencies of emerging countries.
Sales in established markets were down by 2.7% at constant exchange rates in the first three months of the year, substantially maintaining their level in the Mediterranean area in spite of the Spanish market slowdown.
Emerging markets grew, at constant exchange rates, by 2.0%. India, in particular, showed increased growth, there was a slowdown in performance in the Russian area, also associated with the fall in value of the local currency, while Turkey showed some growth.
The UCB adult brand and the children’s collections confirmed their good performance in the quarter, accounting for 52% and 30%, respectively, of total sales. As previously announced the Group is continuing with its programme to improve service to its clients, an increasingly critical factor in the current market downturn. In this sense, a reorganization of the sourcing, production and shipment schedule for the 2009 Fall/Winter collection has been planned, delaying the initial seasonal deliveries by a month, and therefore out of the second quarter. On the one hand, this will have a temporary impact on sales in the second quarter of 2009, over and above normal market trends, which will be fully recovered in the third quarter of the year, and, on the other hand, it will improve management of logistic costs.
Ongoing actions relating to the supply chain, which are generating improvements in terms of efficiency and effectiveness, have made it possible to contain the reduction of the gross operating profit to revenues ratio, which was 45.5% compared with 46.1% in the first quarter of 2008, influenced by the slight reduction in volumes and the continued negative exchange impact.
The contribution margin was 171 million euro, against 179 million in the comparative period of the previous year, and 38.1% of revenues.
Operating profit was 25 million euro and 5.5% of revenues. Net income was 18 million euro compared with 29 million in the first quarter of 2008. Normalized net income would be 21 million euro in the first quarter of 2009 against 25 million in the same period of the previous year.
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