It Holding: the Bod approves 2003 consolidated results

It Holding bought back Euro 25.0 million of the Ferré bond, maturing in 2005, said Tonino Perna, Chairman of It Holding, during yesterday's Board meeting that approved the 2003 consolidated results of the Group. It Holding will cancel the securities for a total face value of Euro 25.0 million.

During 2003, while It Holding Group enjoyed an increase in revenues and gross profit and stability in Ebitda, it also wrote off some minor brands and other intangible assets for Euro 56.5 million, following to the strategy of focusing on core activities, which have high cash generative profiles and growth perspectives.

Consolidated net revenues were up 2.0% to Euro 668.2 million on the Euro 655.3 million of 2002. The growth in net revenues would have reached roughly 6.4% at constant exchange rates and not consolidating 2002 revenues from the ready-to-wear and accessories collections of Romeo Gigli, Gigli, and Husky, subsequently licensed to third parties.

The Group closed the year with consolidated Ebitda of Euro 72.4 million, down 4.4% on the Euro 75.7 million of 2002 mainly due to unfavorable exchange rate trends and increased advertising expenditure of Euro 44.1 million, which accounted for 6.6% of revenues (2002: Euro 28.8 million, 4.4% of revenues).

Ebita totaled Euro 42.2 million, or 6.3% as a percentage of net revenues (2002: Euro 50.0 million), following increased amortization due to the Ferré brand development plan.

The net loss for the year of Euro 72.8 million (2002: net income of Euro 5.1 million) was heavily influenced by the Group's decision to write off a portion of intangible assets in the financial statements. Not considering total amortization/depreciation of Euro 104.3 million, net income for the year would have been Euro 31.5 million (2002: Euro 47.6 million).

Net financial indebtedness decreased significantly, to Euro 273.9 million as of December 31, 2003 from Euro 301.6 million at the end of 2002, showing an improvement of 9.2%.

Revenues from the ready-to-wear and accessories division were up 1.5% on 2002 despite unfavorable exchange rate trends and the change in the consolidation area. At year end, this division accounted for a total of 85.8% of consolidated revenues.

Eyewear revenues (Allison) slipped from Euro 60 million in 2002 to Euro 57,1 million in 2003 and made up for 8.5% of 2003 consolidated revenues. Revenues from perfumes rose to Euro 25.5 million, an increase of 84.3% on the Euro 13.8 million of 2002. Royalty income totaled Euro 12.9 million, down 21.3% on 2002, mainly due to the internalization of Ferré Group licenses outside the Group, which will boost revenues in early 2004. Revenues from the Ferré brand were Euro 117.6 million, up 3.1% on the Euro 114.1 million of 2002.

'The It Holding Group is continuing the growth and development begun in previous years', affirmed Tonino Perna. 'We have successfully boosted our products' penetration in various target markets and devoted particular attention to reducing consolidated indebtedness. The results of the first few months of 2004 are not alone in strengthening the Group's performance and I am confident that the Group has all that it takes to pursue its development path in the year to come'.