De Rigo: net income increases in 2003
On March 30, the board of directors of De Rigo approved the consolidated results for 2003, which evidenced a strong improvement in the Group's profitability, as demonstrated by net income growth of 74.5%, as well as a substantial reduction of net financial debt.
Net sales amounted to Eur 504.8 m1, a decrease of 1.5% from the Eur 512.5 m posted last year. The decrease in net sales was primarily due to the appreciation of the Euro against other currencies in which De Rigo makes sales. When calculated on a constant exchange rate basis, De Rigo's consolidated net sales increased by 3.5%.
Ebitda increased by 16.9% to Eur 51.8 m from the Eur 44.3 m posted in 2002, and represented 10.3% of net sales, as compared with 8.6% last year.
Income from Operations grew by 49.1% to Eur 24.9 m from the Eur 16.7 m recorded in 2002, and represented 4.9% of net sales, as compared with 3.3% last year.
Net Income amounted to Eur 18.5 m, an increase of 74.5% from the Eur 10.6 m recorded in 2002 and represented 3.7% of net sales, as compared with 2.1% last year.
At 31st December 2003, the net financial position4 of the De Rigo Group was a debt of only Eur 3.6 m, as compared with the debt of Eur 63.2 m recorded at 31st December 2002. This very significant improvement in the Group's net financial position was primarily attributable to the cash generated by De Rigo's retail and wholesale businesses, as well as to the proceeds from the Group's sale of its interest in Eyewear International Distribution (Eid), which together allowed De Rigo to sharply reduce its outstanding bank debt.
Ennio De Rigo, Chairman of the De Rigo Group, commented on 2003's results: 'We successfully closed a year that had started with difficulty as a result of the negative effect on consumption of the Sars outbreak and the Iraqi war. The decline in our sales results caused by the appreciation of the Euro was largely offset by the impact of good customer response to our licensed brands collections and by the positive results of the strategy of supporting our owned brands collections. The successful implementation of marketing strategies at D&A and store network expansion at GO helped us to continue to gain market share in our retail business: this will continue to be our main focus for 2004. Our continuous research for greater efficiencies in our manufacturing and distribution processes, strong control of all operating costs and high attention to customer needs, well balanced with a targeted expansion strategy, have been the right choice to achieve a strong enhancement of our earnings results in a period in which our industry is suffering in terms of both sales and margins'.
De Rigo's shareholders have authorized the company to buy back up to 4.4 million of its ADSs in market transactions on the Nyse. At 31rst March, the Company has bought back 223,000 ADSs, representing an equivalent number of ordinary shares at an average price of USD 3.87 per ADS. The board of directors has resolved to ask the shareholders to approve an extension of the buy back plan for a further 18 months during the annual general meeting.
