Silvano Fashion Group Consolidated Interim Financial Report for Q1 of 2020 (unaudited)

Selected Financial Indicators

Summarized selected financial indicators of the Group for Q1 of 2020 compared to Q1 of 2019 and 31.03.2020 compared to 31.12.2019 were as follows:

in thousands of EUR	03m 2020	03m 2019	Change
Revenue	11 546	13 820	-16.5%
Gross Profit	7 146	6 455	10.7%
Operating profit	3 152	2 322	35.7%
EBITDA	4 248	3 158	34.5%
Net profit (loss) for the period	-1 440	3 080	-146.8%
Net profit (loss) attributable equity holders of the Parent company	-1 406	3 098	-145.4%
Earnings per share (EUR)	-0.04	0.09	-144.4%
Operating cash flow for the period	1 876	3 242	-42.1%
in thousands of EUR	31.03.2020	31.12.2019	Change
Total assets	41 682	46 309	-10.0%
Total current assets	25 866	27 123	-4.6%
Total equity attributable to equity holders of the Parent company	22 341	26 324	-15.1%
Cash and cash equivalents	6 350	5 152	23.3%
Margin analysis, %	03m 2020	03m 2019	Change
Gross profit	61,9	46.7	32.5%
Operating profit	27.3	16.8	62.5%
EBITDA	36.8	22.9	60.7%
Net profit (loss)	-12.5	22.3	-156.0%
Net profit (loss)  attributable to equity holders of the Parent company	-12.2	22.4	-154.5%
Financial ratios, %	31.03.2020	31.12.2019	Change
ROA	13.5	22.2	-39.2%
ROE	24.2	38.9	-37.8%
Price to earnings ratio (P/E)	8.2	7.3	12.3%
Current ratio	2.6	2.7	-3.7%
Quick ratio	0.9	0.8	12.5%

Financial performance

The Group`s sales amounted to 11 546 thousand EUR during Q1 of 2020, representing a 16.5% decrease as compared to the same period of previous year. Overall, wholesales decreased by 22.3%, measured in EUR.

The Group’s gross profit during Q1 of 2020 amounted to 7 146 thousand EUR and increase by 10.7% compared to previous year. The gross margin during Q1 of 2020 increased to 61.9%, from 46.7% in the respective period of previous year. The cost of sold goods decreased by 40.3%.

Consolidated operating profit for Q1 of 2020 amounted to 3 152 thousand EUR, compared to 2 322 thousand EUR in Q1 of 2019, increase by 35.7%. The consolidated operating profit margin was 27.3% for Q1 of 2020 (16.8% in Q1 of 2019). Consolidated EBITDA for Q1 of 2020 increased by 34.5% and amounted to 4 248 thousand EUR, which is 36.8% in margin terms (3 158 thousand EUR and 22.9% for Q1 of 2019).

Reported consolidated net loss attributable to equity holders of the Parent company for Q1 of 2020 amounted to        -1 406 thousand EUR, compared to net profit of 3 098 thousand EUR in Q1 of 2019, net profit (loss) margin attributable to equity holders of the Parent company for Q1 of 2020 was -12.2% against 22.4% in Q1 of 2019.

Financial position

As of 31 March 2020 consolidated assets amounted to 41 682 thousand EUR representing decrease by 10.0% as compared to the position as of 31 December 2019.

Trade and other receivables decreased by 318 thousand EUR as compared to 31 December 2019 and amounted to    2 292 thousand EUR as of 31 March 2020. Inventory balance decreased by 2 137 thousand EUR and amounted to 17 222 thousand EUR as of 31 March 2020.

Equity attributable to equity holders of the Parent company decreased by 3 983 thousand EUR and amounted to            22 341 thousand EUR as of 31 March 2020. Current liabilities decreased by 275 thousand EUR during    Q1 of 2020.

Investments

During Q1 of 2020 the Group’s investments into property, plant and equipment totalled 96 thousand EUR, in previous year same period 562 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 31 March 2020, the Group employed 1 856 employees, including 506 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 Q1 of 2020 amounted to 3 145 thousand EUR (3 350 thousand EUR in Q1 of 2019). The remuneration of key management of the Group, including the key executives of all subsidiaries, totalled 210 thousand EUR.

Consolidated Statement of Financial Position

in thousands of EUR	Note	31.03.2020	31.12.2019
ASSETS
Current assets
Cash and cash equivalents		6 350	5 152
Current loans granted		2	2
Trade and other receivables	2	2 292	2 610
Inventories	3	17 222	19 359
Total current assets		25 866	27 123
Non-current assets
Long-term receivables		265	334
Investments in associates		63	82
Available-for-sale investments		262	321
Deferred tax asset		1 589	905
Intangible assets		374	423
Investment property		705	869
Property, plant and equipment	4	12 558	16 252
Total non-current assets		15 816	19 186
TOTAL ASSETS		41 682	46 309
LIABILITIES AND EQUITY
Current liabilities
Short-term finance lease obligations		1 614	2 362
Trade and other payables	5	6 909	6 899
Tax liabilities		1 352	889
Total current liabilities		9 875	10 150
Non-current liabilities
Deferred tax liability		0	14
Long-term finance lease obligations		6 116	6 333
Long-term provisions		50	61
Total non-current liabilities		6 166	6 408
Total liabilities		16 041	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		-18 274	-15 697
Retained earnings		30 387	31 793
Total equity attributable to equity holders of the Parent company		22 341	26 324
Non-controlling interest		3 300	3 427
Total equity		25 641	29 751
TOTAL EQUITY AND LIABILITIES		41 682	46 309

Consolidated Income Statement

in thousands of EUR	Note	1Q 2020	1Q 2019
Revenue	8	11 546	13 820
Cost of goods sold		-4 400	-7 365
Gross Profit		7 146	6 455
Distribution expenses		-2 734	-2 905
Administrative expenses		-1 122	-1 092
Other operating income		59	66
Other operating expenses		-197	-202
Operating profit		3 152	2 322
Currency exchange income/(expense)		-4 730	2 031
Other finance income/(expenses)		-125	-110
Net financial income (loss)		-4 855	1 921
Profit (loss) from associates using equity method		0	1
Profit (loss) before tax		-1 703	4 244
Income tax expense		263	-1 164
Profit (loss) for the period		-1 440	3 080
Attributable to :
Equity holders of the Parent company		-1 406	3 098
Non-controlling interest		-34	-18
Earnings per share from profit attributable to equity holders of the Parent company, both basic and diluted (EUR)	7	-0,04	0,09

Consolidated Statement of Comprehensive Income

in thousands of EUR	Note	1Q 2020	1Q 2019
Profit (loss)  for the period		-1 440	3 080
Other comprehensive income (loss) that will be reclassified to profit or loss in subsequent periods		-2 225	-171
Attributable to :
Equity holders of the Parent company		-2 577	-283
Non-controlling interest		352	112
Total comprehensive income (loss) for the period		-3 665	2 909
Attributable to :
Equity holders of the Parent company		-3 983	2 815
Non-controlling interest		318	94

Consolidated Statement of Cash Flows

in thousands of EUR	03m 2020	03m 2019
Cash flow from operating activities
Profit (loss) for the period	-1 440	3 080
Adjustments for:
Depreciation and amortization of non-current assets	1 096	836
Share of profit of equity accounted investees	0	-1
(Gains)/ losses on the sale of property, plant and equipment	2	11
Net finance income / costs	305	-1 921
Provision for inventories	1	0
Provision for long-term benefits	0	2
Income tax expense	-263	1 164
Change in inventories	2 137	-1 298
Change in trade and other receivables	243	-1 484
Change in trade and other payables	-86	1 635
Change in finance lease obligations	0	1 377
Income tax paid	-119	-159
Net cash from operating activities	1 876	3 242
Cash flow from investing activities
Interest received	5	3
Proceeds from disposal of property, plant and equipment	28	36
Proceeds from repayments of loans granted	0	6
Acquisition of property, plant and equipment	-96	-562
Acquisition of intangible assets	-50	-75
Acquisition of shares of a subsidiary	-26	0
Net cash used in/from investing activities	-139	-592
Cash flow from financing activities
Repayment of finance lease	-682	-657
Interest paid  on finance lease	-136	0
Reduction of share capital	0	-7 200
Net cash used in/ from financing activities	-818	-7 857
Increase in cash and cash equivalents	919	-5 207
Cash and cash equivalents at the beginning of period	5 152	13 603
Effect of exchange rate fluctuations on cash held	279	-46
Cash and cash equivalents at the end of period	6 350	8 350

Jarek Särgava
AS Silvano Fashion Group
Member of the Board
Phone: [phone]
Email: [e-mail]

Attachment

• SFG consolidated interim financial report for Q1 of 2020