Interim / Quarterly Report • Aug 5, 2021
Interim / Quarterly Report
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Disclaimer
This Half-year financial report at June 30, 2021 has been translated into English solely for the convenience of the International reader. In the event of conflict or inconsistency between the terms used in the Italian Version of the report and the English version, the Italian version shall prevail, as the Italian version constitutes the official document.
| HALF-YEAR FINANCIAL REPORT AT JUNE 30, 2021 | 1 |
|---|---|
| CORPORATE BOARDS OF THE PARENT COMPANY | 3 |
| ORGANIZATION CHART | 4 |
| BRANDS PORTFOLIO | 5 |
| HEADQUARTERS | 6 |
| SHOWROOMS | 7 |
| MAIN FLAGSHIPSTORE LOCATIONS UNDER DIRECT MANAGEMENT | 8 |
| MAIN ECONOMIC-FINANCIAL DATA | 9 |
| INTERIM MANAGEMENT REPORT | 10 |
| HALF-YEAR CONDENSED FINANCIAL STATEMENTS AT JUNE 30, 2021 | 22 |
| FINANCIAL STATEMENT | 22 |
| EXPLANATORY NOTES | 26 |
| ATTACHMENTS OF THE EXPLANATORY NOTES | 55 |
| ATTESTATION OF THE HALF YEAR CONDENSED FINANCIAL STATEMENTS PURSUANT TO ART.81-TER OF CONSOB REGULATION N. 11971 OF MAY 14, 1999, AND SUBSEQUENT AMENDMENTS AND ADDITIONS |
59 |
| REPORT OF THE AUDITING COMPANY | 60 |
Massimo Ferretti
Deputy Chairman Alberta Ferretti Board of Directors
Simone Badioli
Directors
Marcello Tassinari – Managing Director Roberto Lugano Daniela Saitta Bettina Campedelli Michela Zeme Marco Francesco Mazzù
Stefano Morri
Fernando Ciotti Carla Trotti
Daniela Elvira Bruno
Compensation Committee
Board of Statutory Auditors
Members Roberto Lugano Michela Zeme
Risk and Sustainabylity Control Committee
Members Roberto Lugano Daniela Saitta
Via Delle Querce, 51 47842 - San Giovanni in Marignano (RN) Italy
Via San Gregorio, 28 20124 – Milan (MI) Italy
Via Erbosa I° tratto, 92 47030 - Gatteo (FC) Italy
Via Delle Querce, 51 47842 - San Giovanni in Marignano (RN) Italy
MILAN
(FERRETTI – PHILOSOPHY – POLLINI) Via Donizetti, 48 20122 - Milan Italy
(FERRETTI – PHILOSOPHY – MOSCHINO) 28-29 Conduit Street W1S 2YB - London UK
(GROUP) 30 West 56th Street 10019 - New York USA
(MOSCHINO) Via San Gregorio, 28 20124 - Milan Italy
(FERRETTI – PHILOSOPHY – MOSCHINO) 43, Rue du Faubourg Saint Honoré 75008 - Paris France
| ALBERTA FERRETTI | MOSCHINO |
|---|---|
| Milan | Milan |
| Rome | Rome |
| Paris | Capri |
| London | Paris |
| London | |
| POLLINI | New York |
| Milan | Seoul |
| Venice | Pusan |
| Bolzano | Daegu |
| Varese | |
Florence Venice
| 20 | |||
|---|---|---|---|
revenues |
Malues in millions of EURI | ||
| ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, operating margin (EBITDA) , |
Malues in millions of FHR) | F 20. |
0.6. |
| Coperating profit (EBIT) | Malues in millions of EURI | 2.81 | |
| : before taxes ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, |
Malues in millions of EURI | ||
| Malues in millions of FHR) | 13.3 F |
ጣጣ | |
| . | ues in units of EUR) |
||
| Malues in millions of EURI |
|||
| revenues | Malues in nercentagel | 18.7 |
| At June 30, At December 31, | - At June 30, -At December 31, | ||||
|---|---|---|---|---|---|
| 2021 | 2020 | 2020 | |||
| Net canital invested | Malues in millions of EUR) | 323.5 | 319.7 | 341.6 | २२० २ |
| ' financial indehtedness | Malues in millions of EURI | 141.O | 857 | ||
| Group net equity | Malues in millions of EURI | 161.7 | 148.2 | 159 Q | 71 A |
| net equity per share | Malues in units of EURI | ||||
| Current assets/ current liabilities | (Ratio) | ||||
| (Ratio) | nα | ||||
| Net financial indebtedness/ Net equity | (Ratio) | ns |
Aeffe Group operates worldwide in the fashion and luxury goods sector and is active in the design, production and distribution of a wide range of products that includes prêt-a-porter, footwear and leather goods. The Group develops, produces and distributes, with a constant focus on the qualities of uniqueness and exclusivity, its own collections both under its own-label brands, including "Alberta Ferretti", "Philosophy di Lorenzo Serafini", "Moschino" and "Pollini", and under licensed brands. The Group has also licensed to key partners the production and distribution of other accessories and products with which it supplements its product range (perfumes, children's lines, sunglasses and other).
The Group's business is divided, based on the various product lines and brands it sells, into two segments: (i) prêt-a-porter (which includes prêt-a-porter lines, lingerie and swimwear); and (ii) footwear and leather goods.
The Prêt-a-porter Division, which is composed of the companies Aeffe, Moschino and Velmar, is mainly involved in the design, production and distribution of luxury prêt-a-porter garments and lingerie, beachwear and loungewear.
In terms of the prêt-a-porter collections, the activity is carried out by Aeffe, both for the production of the Group's proprietary brands ("Alberta Ferretti", "Philosophy di Lorenzo Serafini", "Moschino", "Boutique Moschino" and "Love Moschino") and brands licensed from other companies. Aeffe also handles the distribution of all Division products both through the retail channel (via subsidiaries) and through the wholesale channel.
Velmar manufactures and distributes lingerie and swimwear collections, and specifically men's/women's lingerie, underwear, beachwear and loungewear. Collections are produced and distributed under the Group's proprietary brands, as "Moschino", and under third-party licensed brands.
The Prêt-a-porter Division also manages licensing agreements granted to other companies to manufacture Aeffe and Moschino branded product lines such as the "Moschino" brand licensing agreement relating to the Love line, "Moschino" branded perfumes and "Moschino" branded sunglasses.
Aeffe is the brainchild of designer Alberta Ferretti, who set up her own business in 1972. The history of the Parent Company has developed in parallel with that of its founder, whose personal involvement in fashion has been a key factor in Aeffe's development.
The growth of the Parent Company as an industrial and creative entity has been distinguished from the start by a multi-brand approach, with Aeffe producing and distributing the prêt-a-porter collections of leading fashion houses utilising the know-how acquired in the production of luxury prêt-a-porter lines.
This provides the context for the partnership between Aeffe and designer Franco Moschino, whose brand "Moschino Couture!" it has produced and distributed under an exclusive licence since 1983.
Between 1995 and 2013, Aeffe worked with designer Jean Paul Gaultier producing and distributing the women prêt-à-porter collections branded "Jean Paul Gaultier".
In 2001, Aeffe gained control of Pollini, an established manufacturer of footwear and leather goods. This allowed Aeffe to supplement the collections produced in-house with an accessories line.
In 2002, Aeffe took over Velmar, a firm that had collaborated with Aeffe for some time on the production and distribution of lingerie, beachwear and loungewear lines.
In 2007, Aeffe, obtained the Consob Nulla Osta to public the offering memorandum relating to the Public Offering and the listing on the MTA – Star Segment – of Aeffe S.p.A. ordinary shares, closes successfully the Offer of shares and starts to be traded on the MTA – Star Segment – by Borsa Italiana.
Moschino was founded in 1983 and grew during the 1990s to become an internationally renowned brand. Following the disappearance in 1994 of its founder, Franco Moschino, his family, staff and friends have kept the designer's legacy alive, respecting his creative identity and philosophy. Rossella Jardini, who has worked for Franco Moschino since 1981, succeeded him as artistic director and becoming in charge of brand image and styling.
The company provides design, marketing and agency services from the Milan showroom for Moschino collections in Italy and overseas.
The company also directly manages five single-brand Moschino stores, two in Milan, one in Rome, one in Capri and on-line.
In 2013 Jeremy Scott was appointed as creative director of the "Moschino" brand.
Velmar was created in 1983 in San Giovanni in Marignano and is active in the production and distribution of lingerie, underwear, beachwear and loungewear.
In 1990, a partnership began between Velmar and designer Anna Molinari to manufacture lingerie and beachwear lines. That same year, talks began with Aeffe and Genny.
Between 1990 and 1995, Velmar worked with Genny and Fendi, producing all of the swimwear lines designed by the two fashion houses. Between 1990 and 2001, Velmar worked with Itierre and Prada on the design and production of the active and sportswear lines sold under the "Extee" and "Prada" menswear labels.
Between 1995 and 1998, Velmar produced and distributed under licence the beachwear line for Byblos menswear and womenswear.
In 1998, Velmar signed a licensing agreement with Blufin for the production and distribution of "Blugirl" lines.
In 2001, Aeffe acquired 75% of Velmar. Again, this represented a natural progression of the existing partnership between the two companies.
In 2006, Velmar obtained a licence for the production and distribution of the men's beachwear and underwear lines and women's lingerie lines under the "Moschino" brand.
In 2010, Aeffe acquires the remaining 25% of Velmar's share capital.
In 2020 Velmar signed a multi-year licensing agreement with Chiara Ferragni for the production and distribution at global level of Chiara Ferragni underwear and beachwear collections.
Aeffe USA is 100% owned by Aeffe S.p.A. and was incorporated in May 1987 under the laws of the State of New York.
The company operates in the wholesale segment of the North American market (United States and Canada) distributing items of clothing and accessories produced by the Parent Company, Pollini S.p.A. and Velmar S.p.A. and other third-party licensed manufacturers, with different collections, of the brands produced by the Parent Company. The company also acts as agent for some of these lines. The company operates out of its showroom located in midtown Manhattan.
Aeffe Retail operates in the retail segment of the Italian market and directly manages 14 stores, both monobrand and multi-brand located in major Italian cities such as Milan, Rome, Venice, Florence and Capri, manages also an on-line mono-brand store.
Aeffe UK is 100% owned by Aeffe S.p.A. and manages the store in London's Sloane Street, which sells clothing and accessories under the Alberta Ferretti and Philosophy di Lorenzo Serafini brands.
Aeffe France is 99.9% owned by Aeffe S.p.A. and manages the store in Rue St. Honorè in Paris, selling apparel and accessories under the brand "Alberta Ferretti". The company also acts as an agent for the French market for the brands "Alberta Ferretti" and "Philosophy di Lorenzo Serafini".
Aeffe Shanghai, based in Shanghai, is a company 100% owned by Aeffe S.p.A., and its corporate purpose is the wholesale of clothing and accessories.
Aeffe Germany is 100% owned by Aeffe S.p.A. and manages the store in Metzingen in Germany, which sells clothing and accessories under the Group labels.
Aeffe Japan, company based in Tokyo and 100% owned by Aeffe S.p.A., has sold, starting from January 1, 2014, the distributing and franchising activities for the collections branded "Alberta Ferretti" and "Philosophy di Lorenzo Serafini" to Woollen Co., Ltd..
In 2014 the company, as owner of a new brand, has decided to develop it in the Japanese market and to that end has licensed it to a third party for the marketing of products in the country.
Moschino Japan, company based in Tokyo and 100% owned by Moschino S.p.A., has sold starting from January 1, 2014, the distributing and franchising activities for the collections branded Moschino to Woollen Co., Ltd..
In 2014 the company, as owner of a new brand, has decided to develop it in the Japanese market and to that end has licensed it to a third party for the marketing of products in the country.
Moschino Korea is 100% owned by Moschino S.p.A. and is based in Seoul. The company exclusively operates in the retail segment through flagship stores under direct management which sell Moschino-branded collections.
Fashoff UK operates by the showroom in London, acting as agent for the collections Moschino, Alberta Ferretti and Philosophy di Lorenzo Serafini.
The company also directly manages a single-brand Moschino store in London.
Moschino France is based in the Paris showroom and acts as agent for Moschino collections.
The company also manages one single-brand Moschino stores in Paris.
Bloody Mary, company based in New York and 100% owned by Moschino S.p.A., has signed, starting from 2014, a sublease contract for the management of a store placed at 401 West 14th Street New York. This contract ended in September 2018.
Moschino USA, company founded in 2014 with base in New York and 100% owned by Moschino S.p.A., directly manage a single-brand Moschino store in New York.
Moschino Asia Pacific, company founded in 2021 with base in Hong Kong and 100% owned by Moschino S.p.A., carries out commercial services for the Asian markets.
The footwear and leather goods Division, which is composed of Pollini and its subsidiaries, mainly handles the design, production and distribution of footwear, small leather goods, bags and matching accessories made from exclusive materials.
The operating activity is mainly carried out by Pollini, which directly handles the design, production and distribution of own-label products, as well as the production and distribution of brands licensed by Group companies.
The footwear and leather goods division also manages licensing agreements granted to other companies to manufacture "Pollini" products such as umbrellas, foulards and ties.
Pollini was established in 1953 in the shoemaking district of San Mauro Pascoli, following in the Italian tradition of handmade leather goods and shoes. Italy is a leading producer of footwear: due to expertise required to make these products, nearly all production sites are located in areas with a long-standing shoemaking tradition, such as San Mauro Pascoli, Vigevano and Strà (PD). The company's philosophy is focused on promoting Pollini in other countries as an amalgam of traditional quality and Italian style, offering a range of products that include shoes, bags and matching accessories.
Between 1957 and 1961, Pollini produced the footwear collections of the designer Bruno Magli.
In the 1960s and early 1970s, Pollini began making shoes under its own label, presenting "themed" collections (such as the "Daytona" sports footwear collection, inspired by the world of motorbike racing).
In the 1970s, Pollini rose to international fame: at that point, its collections were shown in Düsseldorf, Paris and New York, as well as in Milan and Bologna. Around the same time, the first stores opened in Milan, Verona, Varese and Venice.
In 1989, Pollini moved into its new office in Gatteo, in the Italian province of Forlì-Cesena. The new site measures 50,000 sq. m., just over a third of it indoor, with a production workshop and seven-storey building housing the showroom and offices. The new site brought the footwear and leather goods divisions and sales and administration offices under one roof.
In 2001, Aeffe and Pollini reached an agreement whereby Aeffe would acquire a controlling stake in Pollini. The acquisition was a natural progression of the increasingly concentrated partnership between the two companies, enabling the growth of the footwear and leather goods lines designed by Alberta Ferretti.
Always in 2008, Pollini has entered into new license agreements with Drops S.r.l., for the manufacturing of umbrellas, as well as Larioseta S.p.A., for the manufacturing and distribution of neckwear, including women's shawls, women's and men's scarves and ties.
In 2011 Aeffe S.p.A. has acquired the remaining 28% shareholding of Pollini S.p.A., becoming the sole shareholder.
Pollini Retail is active in the retail segment of the Italian market and directly manages 20 stores, between boutiques and outlets, in major Italian cities such as Milan and Venice.
Pollini Suisse directly manages the mono-brand Pollini store in Mendrisio, Switzerland.
Pollini Austria directly manages the mono-brand Pollini store in Pandorf, Austria.
| Malues in units of EUR) | $1^{\text{st}}$ Half | $%$ on | 1st Half | % on | Change | % |
|---|---|---|---|---|---|---|
| 2021 | revenues | 2020 | revenues | |||
| REVENUES FROM SALES AND SERVICES | 155,019,816 | 100.0% | 118,861,847 | 100.0% | 36, 157, 969 | 30.4% |
| Other revenues and income | 3,429,973 | 2.2% | 4,663,829 | 3.9% | (1,233,856) | (26.5%) |
| TOTAL REVENUES | 158,449,789 | 102.2% | 123,525,676 | 103.9% | 34924113 | 28.3% |
| Changes in inventory | (4,865,924) | (3.1% | 11,976,628 | 10.1% | 16,842,552) | [140.6%] |
| Costs of raw materials, cons. and goods for resale | 55,841,645) | [36.0%] | 54,021,601) | (45.4%) | ( 1,820,044) | 3.4% |
| Costs of services |
(43,986,960) | (28.4%) | (45,423,212) | (38.2%) | 1,436,252 | [3.2%] |
| Costs for use of third parties assets contained a contained and costs for use of third | (1,457,088) | [0.9%] | (2,681,762) | (2.3%) | 1,224,674 | (45.7% |
| Labour costs . |
30,621,509) | (19.8%) | 29,509,121) | (24.8% | (1,112,388) | 3.8% |
| Other operating expenses | (1,594,968) | (1.0% | (3,294,925) | (2.8% | 1,699.957 | (51.6%) |
| Total Operating Costs | (138, 368, 094) | (89.3%) | (122, 953, 993) | [103.4%] | (15,414,101) | 12.5% |
| GROSS OPERATING MARGIN (EBITDA) | 20,081,695 | 13.0% | 571,683 | 0.5% | 19,510,012 | 3,412.7% |
| Amortisation of intangible fixed assets | (2, 119, 393) | (1.4% | 2,232,547) | (1.9% | 113.154 | (5.1%) |
| Depreciation of tangible fixed assets | (2, 173, 934) | [1.4%] | 2,598,898) | (2.2% | 424,964 | (16.4%) |
| Depreciation of right-of-use assets | (7,838,881) | (5.1% | (8,061,148) | (6.8% | 222,267 | (2.8%) |
| Revaluations / (write-downs) and provisions | (313,087) | [0.2%] | (492,170) | [0.4%] | 179,083 | (36.4%) |
| Total Amortisation, write-downs and provisions. | 12,445,295) | $(8.0\%)$ | 13,384,763 | (11.3% | 939,468 | (7.0% |
| NET OPERATING PROFIT / LOSS (EBIT) | 7,636,400 | 49% | (12,813,080) | $(10.8\%)$ | 20,449,480 | (159.6%) |
| Financial income | 304,848 | 0.2% | 253,298 | 0.2% | 51,550 | 20.4% |
| Financial expenses | 603,519) | (0.4%) | 483,6281 | [0.4%] | (119, 891) | 24.8% |
| Financial expenses on right-of-use asset | (1,035,987) | (0.7%) | (1,082,854) | (0.9% | 46,867 | (4.3%) |
| [Total Financial Income/(expenses) | (1,334,658) | [0.9%] | (1,313,184) | (1.1% | (21, 474) | 1.6% |
| PROFIT / LOSS BEFORE TAXES | 6,301,742 | 4.1% | (14126, 264) | (11.9%) | 20,428,006 | $(144.6\%)$ |
| Total Income Taxes | 11,125,315 | 7.2% | 1,653,573 | 1.4% | 9,471,742 | 572.8% |
| NET PROFIT / LOSS | 17,427,057 | 11.2% | (12, 472, 691) | (10.5%) | 29,899,748 | (239.7%) |
| (Profit) / loss attributable to minority shareholders | 4,141,016 | [2.7%] | 1,572,965 | 1.3% | (5, 713, 981) | [363, 3%] |
| NET PROFIT / LOSS FOR THE GROUP | 13.286.041 | 8.6% | (10.899, 726) | (9.2%) | 24 185.767 | $(221.9\%)$ |
In the first semester of 2021, Aeffe consolidated revenues amount to EUR 155,020 thousand compared to EUR 118,862 thousand in the first semester of 2020, with a 30.4% increase at current exchange rates (+30.9% at constant exchange rates).
The growth in the first half of the year reflects the extremely positive contribution provided by all markets in which the Group operates. Even more significant is the positive trend posted in the 2Q 21 which registered a 76% increase exceeding pre-pandemic levels (EUR 74.9 million compared to EUR 71.1 million in 2Q 2019).
| Sales by brand | |
|---|---|
| ---------------- | -- |
| (Values in thousands of EUR) | 1 នា Half | Half | Change | |||
|---|---|---|---|---|---|---|
| 2021 | % | 2020 | % | % | ||
ta Ferretti ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, |
.8% |
.6% | ********* ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, |
4% | ||
| 1. | 76 | 6% |
196 | I46 |
œ. | |
| ,,,,,,,,,,,,,,,,,,,,,,,,,,, | .8% o |
3% | 188 |
2% | ||
| 186 | 2% | 963 | 4% | .1 | 3% | |
| ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, | 6% | --------------------------------------- 930 |
6% | |||
| Total | 155.020 | 100.0% | 118.862 | 100.0% | 36.158 | 30.4% |
In 1H 2021, Alberta Ferretti brand increases by 10.4%, generating 4.8% of consolidated sales, while Philosophy brand increases by 19.0%, generating 4.6% of consolidated sales.
In the same period, Moschino brand sales increase by 36.2%, contributing to 82.8% of consolidated sales.
Pollini brand records an increase of 12.3%, generating the 7.2% of consolidated sales.
Other brands sales decrease by 51.8%, equal to 0.6% of consolidated sales.
| Total | 155.020 | 100.0% | 118.862 | 100.0% | 36.158 | 30.4% |
|---|---|---|---|---|---|---|
| America ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, |
282 | 6.6% | 722 | 4.8% | 79.7% | |
| of the World |
872 34 |
.5% |
המס . |
21.1% |
981 . |
39.1% |
| be fitalv excluded. . |
183 51 |
33.O% | 934 | 31.9% | 249 |
34.9% |
| ********* ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, |
58.683 | 37.9% . |
145 | 7%. . |
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, 8.538 . |
.0% |
| 2021 | % | 2020 | % | % | ||
| (Values in thousands of EUR) | 1 st Half | 1 st Half | Change |
In the first Half 2021, the Group registered double-digit growth in all markets in which operates, with very strong increases in Europe, Asia, Rest of the World and America.
In Asia and in the Rest of the World, the Group's sales totalled EUR 34,872 thousand, amounting to 23% of consolidated sales, recording an increase of 39.2% at constant exchange rates compared to 1H 2020. The Greater China area and the Middle East drove growth, reporting 50% and 68% increase respectively. In particular, in 2Q 21 revenues grew by 79% compared to 2Q 20.
Sales in America, contributing to 6.6% of consolidated sales, posted an increase of 88.6% at constant exchange rates, thanks to the excellent trend of both the retail and the wholesale channels, online included. 2Q 21 sales grew by 272% compared to the corresponding period of 2020, surpassing the pre-pandemic levels.
At constant exchange rates, in 1H 2021, sales in Europe, contributing to 33% of consolidated sales, increased by 34.9% mainly thanks to the positive trend of Germany, UK and Eastern Europe in the wholesale channel. The retail channel continued to be partially influenced by the limited tourists' flow. 2Q 21 trend was very positive with a 68% increase compared to 2Q 20.
In 1H 2021, sales in the Italian market increased by 17% to EUR 58,683 thousand compared to 1H 2020, thanks to the excellent results achieved by the wholesale and e-commerce, with a positive trend in 2Q 21 (+63%) compared to 2Q 20.
| (Values in thousands of EUR) | Hali | Change | ||||
|---|---|---|---|---|---|---|
| 2021 | % | 2020 | % | % | ||
| ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, |
. | 194 |
28 | w ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, |
9% |
|
| 946 | m× | -8% | 83. |
|||
| 9% | ||||||
| Total | 155.020 | 100.0% | 118.862 | 100.0% | 36.158 | 30.4% |
The wholesale channel, contributing to 78.1% of consolidated sales, recorded a 40% growth at constant exchange rates. In 2Q 21, revenues amounted to EUR 56.1 million, with an 80% increase compared to 2Q 20.
The sales of directly-operated stores (DOS), including direct online, (retail channel), equal to 18% of consolidated sales, showed a good recovery in the last month of the semester compared to the first 5 months of the year thanks to the progressive easing of the restrictions to the international travels. The retail channel showed an increase of 3.5% at constant exchange rates compared to the correspondent period of last year. E-commerce sales, considered stand alone, posted instead a very positive trend in the period, recording excellent performances across all brands and geographies. In 2Q 21 the retail sales, equal to EUR 15.8 million, posted a 72% growth compared to the corresponding period of 2020.
Royalty incomes increased by 20.2% compared to 1H 2020 and represented 3.9% of consolidated sales, with a positive trend in 2Q21 (+33%) compared to 2Q 20.
Labour costs increase from EUR 29,509 thousand in 1H 2020 to EUR 30,622 thousand in 1H 2021 with an incidence on revenues which decrease from 24.8% in the first semester 2020 to 19.8% in the first semester 2021.
The workforce decreases from an average of 1,352 units in the 1H 2020 to 1,275 units in the 1H 2021.
| Total | אז | ||
|---|---|---|---|
| senior managers |
|||
| nasors |
. | ||
| ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, |
4W | ||
| 2021 | % | ||
| Average number of employees by category | Ihange |
In 1H 2021 consolidated EBITDA is EUR 20,082 thousand (with an incidence of 13.5% of sales) compared to EUR 572 thousand in 1H 2020 (with an incidence of 0.5% of sales), with an increase of EUR 19,510 thousand.
The marginality grew more than proportionally compared to the sales increase. This reflects both the significant sales increase and the positive results deriving from costs savings for personnel, rents and overheads, coming from the actions the Group put in place to face the consequences of the spread of the virus on a global scale.
More in detail, on the costs front, the actions were concentrated on: 1) request for a reduction in rents for boutiques and offices; 2) use of social safety systems and vacation periods not yet taken to make labour costs more flexible until the reopening of the stores; 3) postponement of costs related to advertising and public relations that are not detrimental to the strengthening and support of brands; 4) request, in all the countries where the Group operates, for all the facilities made available by the various government authorities to deal with the effects of the pandemic.
In 1H 2021 Ebitda of the prêt-à-porter division amounted to EUR 12,041 thousand (11.5% of sales), compared to the substantial breakeven (EUR 7 thousands) in 1H 2020, registering a EUR 12,043 thousand growth.
Ebitda of the footwear and leather goods division amounted to EUR 8,041 thousand (11.8% of sales) compared to EUR 565 thousand in 1H 2020 (1.2% of sales), with a EUR 7,476 thousand increase due to the sales progression.
Consolidated EBIT is positive for EUR 7,636 thousand compared to EUR 12,813 thousand negative in 1H 2020, showing an increase of EUR 20,449 thousand.
The result before taxes amounts to a profit of EUR 6,302 thousand compared with a loss of EUR 12,473 thousand in the first semester 2020, with a EUR 20,428 thousand increase.
Net Profit was equal to EUR 17,427 thousand, compared to the Net Loss of EUR 12,473 thousand in 1H 2020. The adjusted Net profit of the period, net of extraordinary fiscal benefits related to revaluations and realignments implemented in accordance with art. 110 of Law Decree 104/2020 ("August Decree"), amounted to EUR 2.5 million.
| (Values in units of EUR) | At June 30, At December 31, | At June 30, | |
|---|---|---|---|
| 2021 | 2020 | 2020 | |
| Trade receivables | 49,216,981 | 39,094,519 | 37,725,433 |
| Stock and inventories | 103,266,594 | 109,285,351 | 122,690,066 |
| Trade payables | ( 68,246,919) | (69,328,170) | 69,982,481) |
| Operating net working capital | 84236,656 | 79,051,700 | 90,433,018 |
| Other short term receivables | 29,492,264 | 28,570,739 | 33,584,641 |
| Tax receivables | 7,246,450 | 10,465,392 | 16,741,579 |
| Derivative assets | 197,947 | 47,331 | |
| Other short term liabilities | (17,998,549) | (16,676,076) | (19,296,094) |
| Tax payables | (4, 124, 510) | (3, 753, 375) | (4,006,833) |
| Derivative liabilities | (349,002) | ||
| Net working capital | 99,050,258 | 97,309,378 | 117,503,642 |
| Tangible fixed assets | 60,186,264 | 61,657,913 | 63,079,048 |
| Intangible fixed assets | 70,678,096 | 72,489,488 | 74,165,313 |
| Right-of-use assets | 93,034,493 | 100,471,903 | 101,962,295 |
| Equity investments | 30,269 | 131,558 | 131,558 |
| Other fixed assets | 2,132,012 | 2,615,956 | 2,693,191 |
| Fixed assets | 226,061,134 | 237,366,818 | 242,031,405 |
| Post employment benefits | (4,530,771) | (4,900,460) | (5,058,305) |
| Provisions | (1,578,798) | (1,543,670) | (1,931,102) |
| Assets available for sale | 436,885 | ||
| Long term not financial liabilities | (1,164,315) | (1,768,758) | (748, 753) |
| Deferred tax assets | 20,762,977 | 21,287,015 | 18,286,994 |
| Deferred tax liabilities | (15,068,735) | ( 28,016,336) | (28,908,242) |
| Net capital invested | 323,531,750 | 319,733,987 | 341,612,524 |
| Share capital | 24,949,859 | 25,043,866 | 25,053,416 |
| Other reserves | 110,534,935 | 131,311,933 | 132,591,665 |
| Profits/(Losses) carried-forward | 12,905,405 | 13,273,509 | 13,140,147 |
| Profits/(Loss) for the period | 13,286,041 | ( 21,396,847) | ( 10,899,726) |
| Group interest in shareholders' equity | 161,676,240 | 148,232,461 | 159,885,502 |
| Minority interest in shareholders' equity | 34,643,791 | 30,524,025 | 31,115,457 |
| Total shareholders' equity | 196,320,031 | 178,756,486 | 191,000,959 |
| Short term financial receivables | (2,776,843) | ( 651,944) | (714, 413) |
| Cash | $(42,576,814)$ $(39,828,260)$ | (27, 974, 637) | |
| Long term financial liabilities | 50,354,800 | 34,348,837 | 31,720,283 |
| Long term financial receivables | (2,037,324) | (2, 232, 542) | |
| Short term financial liabilities | 40,188,702 | 60,938,851 | 61,745,956 |
| Financial debt without FRS 16 | 45,189,845 | 52,770,160 | 62,544,647 |
| Short term lease liabilities | 13,151,159 | 12,974,406 | 13,225,729 |
| Long term lease liabilities | 68,870,715 | 75,232,935 | 74,841,189 |
| Financial debt | 127,211,719 | 140,977,501 | 150,611,565 |
| Shareholders' equity and financial debt | 323,531,750 | 319,733,987 | 341,612,524 |
Compared to December 31, 2020, net invested capital increased by 1.2%.
Net working capital amounts to EUR 99,050 thousand (32.4% of LTM sales) compared with EUR 97,309 thousand of December 31, 2020 (36.2% of sales).
The changes in the main items included in the net working capital are described below:
The variation in fixed assets of EUR 11,306 thousand to June 30, 2021 from December 31, 2020, is due to the amortisation of the period and to the capex made during the first half 2021.
Looking at the balance sheet as of 30th June 2021, financial debt with IFRS 16 effect amounts to EUR 127,212 thousand compared to EUR 150,612 thousand as of 30th June 2020, with a EUR 23,400 thousand improvement (EUR 140,978 thousand at the end of 2020) thanks to both better economic results achieved and to the effective management of working capital.
The financial debt net of IFRS 16 effects at the end of June 2021 amounts to EUR 45,190 thousand compared to EUR 62,545 thousand at the end of June 2020, registering a EUR 17,355 thousand improvement.
The shareholders' equity increases for EUR 19,564 thousand from EUR 178,756 thousand as of December 31, 2020 to EUR 196,320 thousand as of June 30, 2021.
The number of shares is 107,362,504.
Considering the particular nature of the Group's products, research & development activities consist in the continual technical/stylistic renewal of models and the constant improvement of the materials employed in production. Such costs were charged in full to the Income Statement.
During the period, there were no transactions with related parties, including intragroup transactions, which qualified as unusual or atypical. Any related party transactions formed part of the normal business activities of companies in the Group. Such transactions are concluded at standard market terms for the nature of
goods and/or services offered. Information on transactions with related parties, including specific disclosures required by the Consob Communication of July 28, 2006, is provided in Note "Related party transactions".
On 28 July 2021, Aeffe S.p.A. acquired from Sinv Holding S.p.A., Sinv Real Estate S.p.A. and Sinv Lab S.r.l., the minority stake of Moschino S.p.A., allowing Aeffe to take full ownership of the Company.
The transaction is part of the strategy related to the Moschino brand, which aims at the process of future integration of the womens' apparel collections into Aeffe Group to enhance their potential thanks to the exploitation of synergies.
The transaction has a high strategic value for the AEFFE Group and represents an important opportunity for business growth and development allowing an agile and flexible planning of medium-long term strategies and activities related to the Moschino brand, with the aim to strengthening its positioning and enhancing its high great growth potential.The operation is part of the development strategy focused on a completely independent business model, with full controll of the brand value chain, from product to quality and with positive effects on image, distribution and communication.
The consideration for the purchase of the shares, equal to Euro 66,571,000, was paid for Euro 30 million at the same time as the transfer of the shares, while the remining amount of Euro 36,571,000 will be paid to the sellers by 30 November 2021. The fairness of the price was confirmed by an independent fairness opinion issued by Deloitte Financial Advisory S.r.l. on 22 July 2021.
To pay the fee, Aeffe has used and will use cash on hand, existing credit lines and new medium / long-term loans.
The perdormance of the first semester 2021 has been characterized by a a significant increase in revenues and marginality for all Group's brands. Furthermore, on the strategic side, the acquisition of full control of Moschino and the relative integrated management will be important catalysts for the future development. Looking at the second part of the year, it is therefore positive and renew enthusiasm to face the upcoming challenges with initiatives aimed at increasingly enhancing the distinctiveness of Group's brands and the evolutions of the current context.
The rapid progress of the vaccination campaigns has been matched by a robust recovery of global economic activity – which has spread to the service sector – and of world trade. Prospects are, however, still very uneven across countries.
According to the projections released by the OECD in May, the world economy will grow by 5.8 per cent in 2021, exceeding pre-pandemic levels, driven by the strong expansion of the economy in the United States and China. Compared with the assessments made in March, the projections for global economic activity have been revised upwards by 0.2 percentage points for 2021 and by 0.4 percentage points for 2022.
The main elements of uncertainty surrounding the outlook for growth are linked to the course of the pandemic (which can affect consumption and investment), to how NRRP-related projects are implemented and to their ability to impact potential growth, as well as to how consumers respond to the re-opening of the economy.
| Malues in units of EURI | |
|---|---|
| 2021 | 2020 | |||
|---|---|---|---|---|
| Trademarks | 69,747,667 | 71,494,428 | (1,746,761) | |
| Other intangible fixed assets | 930,429 | 995,060 | (64, 631) | |
| Intangible fixed assets Lands |
(1) | 70,678,096 | 72,489,488 | 1,811,392) |
| 17,123,494 | 17,123,494 | |||
| Buildings | 26,437,768 | 26,729,357 | 291,589) | |
| Leasehold improvements Plant and machinary |
9,599,993 3,628,095 |
10,201,924 3,810,164 |
601,931 | |
| (182,069) | ||||
| Equipment | 333,318 3,063,596 |
350,754 3,442,220 |
(17,436) | |
| Other tangible fixed assets Tangible fixed assets |
(2) | 60,186,264 | [378, 624] (1,471,649) |
|
| Right-of-use assets | 93,034,493 | 61,657,913 100,471,903 |
(7,437,410) | |
| Equity investments | $\Omega$ | 30,269 | 131,558 | (101, 289) |
| Long term financial receivables | 14) (5) |
2,037,324 | (2,037,324) | |
| Other fixed assets | 0 | 2,132,012 | 2,615,956 | (483,944) |
| Deferred tax assets | (7) | 20,762,977 | 21,287,015 | (524,038) |
| NON-CURRENT ASSETS | 246,824,111 | 260,691,157 | (13,867,046) | |
| Stocks and inventories | $\left( 8\right)$ | 103,266,594 | 109,285,351 | (6,018,757) |
| Trade receivables | 19 | 49,216,981 | 39,094,519 | 10,122,462 |
| Tax receivables | (10) | 7,246,450 | 10,465,392 | (3, 218, 942) |
| Derivate assets | (1,1) | 197,947 | 197,947 | |
| Cash | (12) | 42,576,814 | 39,828,260 | 2,748,554 |
| Financial receivables | (13) | 2,776,843 | 651,944 | 2,124,899 |
| Other receivables | (14) | 29,492,264 | 28,570,739 | 921,525 |
| CURRENT ASSETS | 234.773.893 | 227,896,205 | 6,877,688 | |
| Assets available for sale | ||||
| TOTAL ASSETS | 481,598,004 | 488.587.362 | (6,989,358) | |
| Share capital | 24,949,859 | 25,043,866 | 94,007) | |
| Other reserves | 131,311,933 | 20,776,998) | ||
| Profits / (losses) carried-forward | 110,534,935 12,905,405 |
13,273,509 | [368,104] | |
| Net profit / (loss) for the Group | 13,286,041 | (21,396,847) | 34,682,888 | |
| Group interest in shareholders' equity | 161,676,240 | 148,232,461 | 13,443,779 | |
| Minority interests in share capital and reserves | 30,502,775 | 32,483,755 | (1,980,980) | |
| Net profit / (loss) for the minority interests | 4,141,016 | (1, 959, 730) | 6,100,746 | |
| Minority interests in shareholders' equity | 34,643,791 | 30,524,025 | 4,119,766 | |
| SHAREHOLDERS' EQUITY | (15) | 196,320,031 | 178,756,486 | 17,563,545 |
| Provisions | (16) | 1,578,798 | 1,543,670 | 35,128 |
| Deferred tax liabilities | 15,068,735 | 28,016,336 | (12, 947, 601) | |
| Post employment benefits | Ω (17) |
4,530,771 | 4,900,460 | (369,689) |
| Long term financial liabilities | 119,225,515 | 109,581,772 | 9,643,743 | |
| Long term not financial liabilities | (18) (19) |
1,164,315 | 1,768,758 | 604,443) |
| NON-CURRENT LIABILITIES | 141,568,134 | 145,810,996 | (4242,862) | |
| (1,081,251) | ||||
| Trade payables Tax payables |
(20) | 68,246,919 4,124,510 |
69,328,170 | 371,135 |
| Derivate liabilities | (21) | 3,753,375 349,002 |
[349,002] | |
| Short term financial liabilities | $\left(11\right)$ | 53,339,861 | 73,913,257 | (20,573,396) |
| Other liabilities | (22) (23) |
17,998,549 | 16,676,076 | 1,322,473 |
| CURRENT LIABLITIES | 143,709,839 | 164019,880 | (20,310,041) | |
| Liabilities available for sale |
Pursuant to Consob Resolution N. 15519 of July 27, 2006, the effects of related party transactions on the Consolidated statement of financial position are presented in the specific scheme provided in the attachment I and are further described in the paragraph "Related party transactions".
| (Values in units of EUR) | Notes | $1st$ Half | $1st$ Half | ||
|---|---|---|---|---|---|
| 2021 | % | 2020 | % | ||
| REVENUES FROM SALES AND SERVICES | (24) | 155,019,816 | 100.0% | 118,861,847 | 100.0% |
| Other revenues and income | (25) | 3,429,973 | 2.2% | 4,663,829 | 3.9% |
| TOTAL REVENUES | 158,449,789 | 102.2% | 123,525,676 | 103.9% | |
| Changes in inventory | (4,865,924) | (3.1%) | 11,976,628 | 10.1% | |
| Costs of raw materials, cons. and goods for resale | 1261 | (55,841,645) | (36.0%) | ( 54,021,601) | (45.4%) |
| Costs of services | (27) | (43,986,960) | (28.4%) | (45,423,212) | (38.2%) |
| Costs for use of third parties assets | (28) | (1,457,088) | (0.9% | (2,681,762) | [2.3%] |
| Labour costs | (29) | (30,621,509) | (19.8%) | (29,509,121) | (24.8% |
| Other operating expenses | (30) | (1,594,968) | (1.0% | (3, 294, 925) | (2.8%) |
| Amortisation, write-downs and provisions | (31) | (12,445,295) | (8.0%) | (13,384,763) | (11.3%) |
| Financial income/(expenses) | (32) | (1,334,658) | (0.9% | (1,313,184) | (1.1%) |
| PROFIT / LOSS BEFORE TAXES | 6,301,742 | 4.1% | (14126, 264) | (11.9%) | |
| Taxes | (33) | 11,125,315 | 7.2% | 1,653,573 | 1.4% |
| NET PROFIT / LOSS | 17,427,057 | 11.2% | (12, 472, 691) | (10.5%) | |
| (Profit)/loss attributable to minority shareholders | (4,141,016) | (2.7% | 1,572,965 | 1.3% | |
| NET PROFIT / LOSS FOR THE GROUP | 13,286,041 | 8.6% | (10.899, 726) | (9.2%) | |
| Basic earnings per share | (34) | 0.133 | 0.109) | ||
| Dilutive earnings per share | (34 | 0.133 | 0.109 |
(*) Pursuant to Consob Resolution N. 15519 of July 27, 2006, the effects of related party transactions on the Consolidated Income Statement are presented in the specific scheme provided in the attachment II and are further described in the paragraph "Related party transactions".
| (Values in units of EUR) | $1st$ Half | 1 st Half |
|---|---|---|
| 2021 | 2020 | |
| Profit/(loss) for the period (A) | 17,427,057 | (12, 472, 691) |
| Remeasurement of defined benefit plans | ||
| Income tax relating to components of Other comprehensive income that will not be reclassified subsequently to profit or loss |
||
| Total other comprehensive income that will not be reclassified subsequently to profit or loss, net of tax (B1) |
||
| Gains/(losses) on cash flow hedges | 394,350 | (19,263) |
| Gains/(losses) on exchange differences on translating foreign operations | 448,591 | 260,084 |
| Income tax relating to components of Other Comprehensive income / (loss) | ||
| Total other comprehensive income that will be reclassified subsequently to profit or loss, net of tax (B2) |
842.941 | 240.816 |
| Totale Other comprehensive income, net of $tax(B1)+(B2)=(B)$ | 842.941 | 240.816 |
| Total Comprehensive income $/$ (loss) (A) + (B) | 18,269,998 | (12,231,875) |
| Total Comprehensive income / (loss) attributable to: | 18,269,998 | (12,231,875) |
| Owners of the parent | 14,128,982 | (10,658,910) |
| Non-controlling interests | 4,141,016 | (1,572,965) |
| (Values in thousands of EUR) | Notes | $1^{\text{st}}$ Half | $1st$ Half |
|---|---|---|---|
| 2021 | 2020 | ||
| Opening balance | 39.828 | 28,390 | |
| Profit/loss before taxes | 6.302 | 14,126 | |
| Amortisation / write-downs | 12,445 | 13,385. | |
| Amoresseus , which would be a more than the set of the set of the set of the set of the set of the set of the Accrual (+)/availment (-) of long term provisions and post employment benefits |
(335) | .53) | |
| Paid income taxes |
927) | (142) | |
| Financial income (-) and financial charges (+) continued and the contract of the contract of the financial contract of the contract of the contract of the contract of the contract of the contract of the contract of the con | 1,335 | 1,313. | |
| Change in operating assets and liabilities | (3,030) | 11,026 | |
| Cash flow (absorbed) / generated by operating activity | (35) | 15,790 | (10,649) |
| Increase (-)/ decrease (+) in intangible fixed assets | 308) | 315) | |
| Increase (-)/ decrease (+) in tangible fixed assets . |
702) | 3,237) | |
| Increase (-)/ decrease (+) in right-of-use assets . |
401) | 691 | |
| Investments and write-downs (-)/ Disinvestments and revaluations (+) | 101 | ||
| Cash flow (absorbed) / generated by investing activity | (36) | (1,310) | (2.861) |
| Other variations in shareholders' equity | 137 | 601 | |
| Dividends paid | |||
| Proceeds (+)/repayment (-) of financial payments |
(4,744) | 22,282 | |
| Proceeds (+)/ repayment (-) of lease payments |
(6,185) | (7,711) | |
| Increase [-]/ decrease [+] in long term financial receivables [11] [12] [13] [13] [13] [13] [14] [14] [15] [15 | 396 | 438 | |
| Financial income (+) and financial charges (-) | (1,335) | (1, 313) | |
| Cash flow (absorbed) / generated by financing activity | (37) | (11, 731) | 13.095 |
| Closing balance | 42.577 | 27.975 |
(*) Pursuant to Consob Resolution N. 15519 of July 27, 2006, the effects of related party transactions on the Consolidated statement of cash flows are presented in the specific scheme provided in the attachment III and are further described in the paragraph "Related party transactions".
| (Values in thousands of EUR) | capital $\omega$ Shar |
premium reserve Share |
Cash flow reserve | reserves Other |
Value reserve ż |
IAS reserve | Reamisurement of defined benefit plans reserve |
Translation reserve | carried-forward Profit/(losses) |
Group profit / loss for the ğ |
equity interest in shareholders Group |
shareholders' equity Minority interest in |
Total shareholders' equity |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| At December 31, 2020 | 25,044 | 70,144 | (252) | 49,756 | 7,901 | 7,607 | (1,343) | (2,502) | 13,274 | (21, 397) | 148,232 | 30,524 | 178,756 |
| Allocation of 2020 income/(loss) | (21,028) | (369) | 21,397 | ||||||||||
| Dividends paid | |||||||||||||
| Treasury stock (buyback)/sale | (94) | (473) | (567) | ٠ | (567) | ||||||||
| Total comprehensive income/(loss) at 30/06/21 | 394 | 449 | ÷ | 13,286 | 14,129 | 4,141 | 18,270 | ||||||
| Other changes | ×. | $\sim$ | (118) | ٠ | ٠ | $\sim$ | ٠ | ٠ | ÷ | (118) | (21) | (139) | |
| At June 30, 2021 | 24950 | 69,671 | 142 | 28,610 | 7,901 | 7,607 | (1,343) | (2,053) | 12,905 | 13,286 | 161,676 | 34644 | 196,320 |
| (Values in thousands of EUR) | capital Share |
reserve premium Share |
Cash flow reserve | Other reserves | Fair Value reserve | IAS reserve | Reamisurement of defined benefit plans reserve |
Translation reserve | Profit/(losses) carried-forward | Net profit / loss for the Group | equity Ξ. interest ehold Group ā S |
shareholders' equity Minority interest in |
Total shareholders' equity |
| At December 31, 2019 | 25,286 | 70,775 | 53 | 44,748 | 7,901 | 7,607 | (1,286) | (1,976) | 6,586 | 11,693 | 171,387 | 32,688 | 204075 |
| Allocation of 2019 income/(loss) | 5,138 | ٠ | 6,555 | (11, 693) | |||||||||
| Dividends paid | |||||||||||||
Aeffe Group operates worldwide in the luxury goods sector and is active in the design, production and distribution of a wide range of products that includes prêt-a-porter, footwear and leather goods.
The Group develops, produces and distributes, with a constant focus on the qualities of uniqueness and exclusivity, its own collections both under its own-label brands, including "Alberta Ferretti", "Philosophy di Lorenzo Serafini", "Moschino" and "Pollini", and licensed brands.
The Group also has licensed to key partners the production and distribution of other accessories and products with which it supplements its product range (perfumes, junior and children's lines, watches, sunglasses and other).
The Group's business is divided, based on the various product lines and brands it sells, into two segments: prêt-a-porter (which includes prêt-a-porter, lingerie and swimwear) and footwear and leather goods.
The Parent Company Aeffe, an Italian legal entity incorporated as a public limited company (società per azioni) based in San Giovanni in Marignano (RN), is currently listed in the – STAR Segment – of the MTA, the Italian Stock Exchange operated by Borsa Italiana.
Aeffe is controlled by Fratelli Ferretti Holding S.r.l..
These consolidated financial statements include the financial statements of the Parent Company Aeffe and its subsidiaries and the Group's equity interests in affiliated companies. They consist of the balance sheet, income statement, comprehensive income statement, cash flow statement, statement of changes in equity and these notes.
The financial statements are expressed in euro, since this is the currency in which most of the Group's transactions are conducted. Foreign operations are included in the consolidated financial statements according to the principles stated in the notes that follow.
The half-year condensed financial statements at June 30, 2021 have been prepared in accordance with International Financial Reporting Standards –"IFRS"- (the designation IFRS also includes all valid International Accounting Standards -"IAS"-, as well as all interpretations of the International Financial Reporting Interpretations Committee -"IFRIC"-, formerly the Standing Interpretations Committee -"SIC"-), issued by the International Accounting Standards Board –"IASB"– endorsed by the European Commission according to the procedures in art. 6 of (EC) Regulation n. 1606/2002 of the European Parliament and Council dated July 19, 2002. In particular, these half-year condensed financial statements have been prepared in accordance with IAS 34 – Interim Financial Reporting.
In the "Accounting policies" section are showed the international accounting principles adopted.
Unless otherwise indicated in the measurement bases described below, these consolidated financial statements were prepared in accordance with the historic cost principle.
The measurement bases were applied uniformly by all Group companies.
The scope of consolidation at June 30, 2021 includes the financial statements of the Parent Company Aeffe and those of the Italian and foreign companies in which Aeffe holds control either directly or through its subsidiaries and associates or in which it exerts a dominant influence.
If necessary, adjustments were made to the financial statements of subsidiaries to bring their accounting polices into line with those adopted by the Group.
Companies are consolidated using the line-by-line method. The principles adopted for the application of this method are essentially as follows:
Subsidiaries are enterprises controlled by the Company. Control is the power to govern the financial and operating policies of an enterprise so as to obtain benefits from its activities. The financial statements of subsidiaries are consolidated from the date on which the Group acquires control and until the date when such control ceases.
The acquisition of subsidiaries is accounted for using the acquisition method. Acquisition cost is determined by adding together the fair values of the assets transferred, the shares issued and the liabilities assumed on the acquisition date, plus the costs directly associated with the acquisition. Any surplus acquisition cost over the Group's percentage share of the fair value of the identifiable assets, liabilities and contingent liabilities of the associate is recognised as goodwill.
If the Group's percentage share of the fair value of the identifiable assets, liabilities and contingent liabilities of the associate exceeds acquisition cost, the difference is immediately recorded in the income statement.
Intercompany balances, transactions, revenue and costs are eliminated in the consolidated statements.
Furthermore, intercompany business combinations are recognised by maintaining the same book value of assets and liabilities as previously recorded in the consolidated financial statements.
An associate is an enterprise in which the Group has significant influence, but has neither sole or joint control, by taking part in decisions regarding the company's financial and operating strategy.
Trading results and the assets and liabilities of associates are accounted for in the consolidated financial statements based on the equity method, except where they are classified as held for sale.
According to this method, equity interests in associates are recorded in the balance sheet at cost, adjusted to take account of changes following the acquisition of their net assets, excluding any loss in value of individual investments. Losses of associates that exceed the Group's percentage interest in them (including long-term receivables that essentially form part of the Group's net investment in the associate) are not recognised unless the Group has an obligation to cover them. The surplus acquisition cost over the parent's percentage share of the present value of the identifiable assets, liabilities and contingent liabilities of the associate on the acquisition date is recognised as goodwill. Goodwill is included in the carrying amount of the investment and
is subjected to impairment tests. The historical cost deficit compared with the Group's percentage share of the fair value of the identifiable assets, liabilities and contingent liabilities of associates on the acquisition date is credited to the income statement in the year of acquisition. With reference to operations between a Group company and an associate, unrealised gains and losses are eliminated in equal measure to the Group's percentage interest in the associate, except for cases where the unrealised losses constitute evidence of impairment of the asset transferred.
The companies included in the scope of consolidation are listed in the following table:
| Company | Location | Currency Share capital | Direct interest |
Indirect interest |
|
|---|---|---|---|---|---|
| --------- | ---------- | -- | ------------------------ | -------------------- | ---------------------- |
| kalian companies | |||||
|---|---|---|---|---|---|
| Aeffe Retail S.p.A. | S.G. in Marignano (RN) Italy | EUR | 8,585,150 | 100% | |
| Moschino S.p.A. | S.G. in Marignano (RN) Italy | EUR. | 66,817,108 | .70%. | |
| Pollini S.p.A. | Gatteo (FC) Italy | EUR. | .6,000,000 | 100% | |
| Pollini Retail S.r.l. | Gatteo (FC) Italy | EUR | 5,000,000 | 100% (i) | |
| Velmar S.p.A. | S.G. in Marignano (RN) Italy | EUR | 120,000 | 100% | |
| Foreign companies | |||||
| Aeffe France S.a.r.l. | Paris (FR) | EUR | 50,000 | 100% | |
| Aeffe UK Ltd. | and the state of the state of the state of the state of the state of the state of the state of the state of th The state of the state of the state of the state of the state of the state of the state of the state of the st London (GB) |
310,000 | 100% | ||
| Aeffe USA Inc. | New York (USA) | 600,000 | 100% | ||
| Aeffe Japan Inc. | IPY IPY IPY IPY IPY IPY IPY IPY IPY IPY IPY IPY IPY IPY IPS Tokio (J) |
_3,600,000 | 100% | ||
| Aeffe Shanghai Ltd | Shanghai (CN) | CNY | 17,999,960 | 100% | |
| Aeffe Germany G.m.b.h. | Metzingen (DE) | EUR. | 25,000 | 100% | |
| Divè S.a. (2008). | Galazzano (RSM) | EUR | 175,000 | 75% | |
| Pollini Suisse S.a.g.l. | Chiasso (CH) | CHF | 20,000 | 100% (i) | |
| Pollini Austria G.m.b.h. | Vienna (A) | EUR. | 35,000 | 100% (i) | |
| Fashoff UK Ltd. | London (GB) | GBP | 1,550,000 | 70% (ii) | |
| Moschino Japan Inc. | Tokio (J) | JPY. | 120,000,000 | 70% (ii) | |
| Moschino Korea Ltd. | Seoul (ROK) | KRW | 6,192,940,000 | 70% (ii) | |
| Moschino France S.a.r.l. | Paris (FR) | EUR ____ 50,000 |
70% (ii) | ||
| Moschino USA Inc. | New York (USA) | USD | 10,000 | 70% (ii) | |
| Bloody Mary Inc. ______ | New York (USA) | USD _____ | 100,000 | 70% (ii) | |
| Moschino Asia Pacific Ltd. | Hong Kong (HK) | HKD | 500,000 | 70% (ii) |
a) Opening of the company Moschino Asia Pacific Ltd..
The amounts in the financial statements of each Group enterprise are measured using the operating currency or the currency of the economic area in which the enterprise operates. These consolidated financial statements are presented in euro, which is the operating and reporting currency of the Parent Company.
Foreign currency transactions are converted into the operating currency at the exchange rate in force on the transaction date. Cash assets and liabilities denominated in foreign currencies are converted at the exchange
rate in force on the balance sheet date. Any exchange rate differences arising from the elimination of these transactions or from the conversion of cash assets and liabilities are posted to the income statement. Noncash assets and liabilities in foreign currencies that are measured at fair value are converted at the exchange rates in force on the date on which the fair value was determined.
The financial statements of companies outside the euro-zone are translated into euro based on the following procedures:
The exchange rates used for the conversion into euro of the financial and equity statements of companies included in the scope of consolidation are listed in the following table:
| Currency description | Average exchange rate |
Actual exchange rate |
Average exchange rate |
Actual exchange rate |
Average exchange rate |
Actual exchange rate |
|---|---|---|---|---|---|---|
| 1st Half 2021 | 30/06/2021 | FY 2020 | 31/12/2020 | 1st Half 2020 | 30/06/2020 | |
| Hong Kong OC | 9.3551 | 9.2293 | ||||
| ıminbi chinese (yua | 1.7960 | .6742 | 18747 | 8.0225 | .7509 | .9219 |
| ted States Dollar | -2053 | .1884 | -1422 | ിറാറ | .1198 | |
| United Kingdom Poun | 0.8680 | 0.8581 | 0.8897 | 0.8990 | 0.8746 | 0.9124 |
| Japanese Yen | 1298681 | 430C 31 |
.8458 | 4900 | 2668 | 6600 |
| 'h Korean Won | -580C | |||||
As part of the options available under IAS 1 for the preparation of its economic and financial position, The Group has elected to adopt a balance sheet format that distinguishes between current and non-current assets and liabilities, and an income statement that classifies costs by type of expenditure, since this is deemed to reflect more closely its business activities. The cash flow statement is presented using the "indirect" format.
With reference to Consob Resolution n. 15519 dated July 27, 2006 regarding the format of the financial statements, additional schedules have also been presented for the income statement, the statement of financial position and the statement of cash flows in order to identify any significant transactions with related parties. This has been done to avoid any compromising the overall legibility of the main financial statements.
The accounting policies adopted in the preparation of this half-year financial report are the same used as those used in the preparation of the consolidated financial statement as of December 31, 2020, except for the following interpretations and amendments to the accounting principles that have been mandatory since January 1, 2021.
Accounting standards, amendments and interpretations approved by the European Union, applicable
IFRS 17 "Insurance Contracts". On 18 May 2017, the IASB issued IFRS 17 "Insurance contracts" which establishes the principles for the recognition, measurement, presentation and representation of the insurance contracts included in the standard. The objective of IFRS 17 is to ensure that an entity provides relevant information that faithfully represents these contracts, in order to represent a basis for evaluating the reader of the financial statements of the effects of these contracts on the equity and financial situation, on the economic results and on the entity's cash flows. On June 21, 2018, the IASB resolved to clarify IFRS 17 "Insurance Contracts", to ensure that the interpretation of the standard reflects the decisions taken by the Board. The board agreed to clarify some points of the contracts subject to variable rates and to aspects related to IFRS 3 "business combination". The provisions of IFRS 17 are effective starting from financial years starting on or after January 1, 2021. From a first examination, the possible future adoption of this principle should not have a significant impact on the Group's consolidated financial statements.
Amendments to IAS 1 Presentation of Financial Statements: Classification of liabilities as current or noncurrent. Final changes in the classification of liabilities as current or non-current affect only the presentation of liabilities in the statement of financial position, not the amount or recognition of assets, liabilities, income or expense or information that the entities provide on these elements . Specifically, the changes:
On March 31, 2021, the IASB issued the document Covid-19-Related Rent Concessions beyond June 30, 2021 (Amendments to IFRS 16) by which the application period of the amendment to IFRS 16, issued in 2020, is extended by one year. relating to the accounting of the concessions granted, due to Covid-19, to the tenants.
The changes apply from 1 April 2021.
On May 7, 2021, the IASB published some amendments to IAS 12, the tax standard, to specify how deferred taxes on certain transactions that can generate assets and liabilities of the same amount, such as leasing and dismantling obligations, must be accounted for. .
The changes apply from January 1, 2023, but early application is allowed.
The principles listed in this paragraph are not applicable as they are not approved by the European Union, which, during the approval process, could only partially or not transpose these principles.
The table below illustrates the breakdown and the changes of this item:
| (Values in thousands of EUR) | Brand | otal | ||
|---|---|---|---|---|
| Net book value at January 1, 2021 | 71.494 | 995 | ||
| ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, | ≕מ | |||
| 1 | 308 | |||
| creases from business aggregations |
||||
| ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, | ||||
| tion diff. / other variations |
||||
| sation | ||||
| Net book value at June 30, 2021 |
Changes in intangible fixed assets highlight the following variations:
This item includes the Group's own-label brands ("Alberta Ferretti", "Moschino" and "Pollini"). A breakdown of brands is given below:
| (Values in thousands of EUR) | Brand residual life | June 30, | December 31, |
|---|---|---|---|
| 2021 | 020 | ||
| ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, | . . | ||
| ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, | 38.950 | ||
| ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, |
O.F | O89 | . |
| 69.748 |
The item other mainly includes software licences.
The table below illustrates the breakdown and the changes of this item:
| (Values in thousands of EUR) | 着 œ |
о ⊨ ā |
▭ | Ξ ō |
|||
|---|---|---|---|---|---|---|---|
| Net book value at January 1, 2021 | 17.123 | 26.730 | 10,202 | 3,810 | 351 | 3.442 | 61,658 |
| Increases | 363 | 135 | 24 | 138 | 680 | ||
| Disposals |
|||||||
| Translation diff. / other variations | 38 | ||||||
| Depreciation | 305) | ,008) | 32O) | $-42.$ | -499) | 2.174 | |
| Net book value at June 30, 2021 | 17.123 | 26,438 | 9,600 | 3.628 | 333 | 3.064 | 60,186 |
Tangible fixed assets are changed as follows:
The table below illustrates the changes of this item:
| (Values in thousands of EUR) | Buildings | Other | Total | ||
|---|---|---|---|---|---|
| Net book value at January 1, 2021 | 99.521 | 248 | 703 | 100,472 | |
| reases ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, |
|||||
| ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, | |||||
| ion diff. / other variations | 383 | ю | |||
| ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, ciation. |
7.627 | 59 | |||
| Net book value at June 30, 2021 | 92.277 | 213 | 544 | 93.034 |
The balance mainly includes the usage rights linked to the rental contracts of the retail channel, showrooms and other properties.
The entry is changed as follows:
This item includes holdings represented by the cost.
Non-current financial receivables change due to the reclassification among current financial receivables.
This item mainly includes receivables for security deposits related to commercial leases.
The table below illustrates the breakdown of this item at June 30, 2021 and at December 31, 2020:
| (Values in thousands of EUR) | Receivables | tabilities | ||||
|---|---|---|---|---|---|---|
| At June 30, At December 31, | At June 30, At December 31, | |||||
| 2021 | ||||||
Tangible fixed assets |
********* | |||||
| naible fixed assets . |
١o | 44 | ||||
| rowisions | ||||||
| ictible in future periods |
18 | |||||
| Income taxable in future periods | 1821 | 186 | ||||
| ses carried fonward ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, |
.428 | |||||
| fliabilities) from transition to IAS | ||||||
| Tota | 20.763 |
Changes in temporary differences during the period are illustrated in the following table:
| (Values in thousands of EUR) | penina balance |
Differences arising on translation |
Recorded in the income statement |
Other | Closina balance |
|---|---|---|---|---|---|
| fangible fixed assets | |||||
| ole fixed assets ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, |
251 | ||||
| isions | |||||
| ictible in future periods |
4.346 | ||||
| Income taxable in future periods ______ | ********* | 82 | |||
| losses carried forward |
|||||
| Other |
195 | 78 | |||
| assets (liabilities) from transition to IAS | 444 | 66 | |||
| Total | 6. Z29 | 15.766 | 3.3.AD |
The amount recorded in the income statement is mainy related to the extraordinary fiscal benefits related to revaluations and realignments implemented in accordance with art. 110 of Law Decree 104/2020 ("August Decree").
Deferred tax assets related to costs deductible in future periods mainly relate to the deferred taxation on provisions for doubtful investments and for risks and charges.
8. STOCKS AND INVENTORIES
This item comprises:
| (Values in thousands of EUR) | At June 30, At December 31, | hange: | ||
|---|---|---|---|---|
| 2021 | מממ | % | ||
| ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, Raw, ancillary and consumable materials. |
||||
| progress | 5.864 | שחר | 5% . |
|
| hed products and goods for resale. | 88 460 | -93.500 | 5.040 |
.4% |
| ince pavments | ||||
| Totai | 103.267 | 109.285 | 6.018) |
Inventories of raw materials and work in progress mainly relate to the production of the Autumn/Winter 2021 collections, while finished products mainly concern the Spring/Summer 2021 and the Autumn/Winter 2021 collections and the Spring/Summer 2022 sample collections.
This item is illustrated in details in the following table:
| (Values in thousands of EUR) | At June 30, At December 31, 2021 |
2020 | Change | % |
|---|---|---|---|---|
| nies ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, |
183 | |||
| . | ||||
| Tota | 49.217 | 39.095 | 10.122 | 25 Q% |
Trade receivables amount to EUR 53,183 thousand at June 30, 2021, with a 23.3% increase compared with the amount at December 31, 2020 mainly due temporary increase in trade receivables as of June 30, 2021 following the greater shipments made to wholesale clients in 1H 21 compared to1H 20.
Management considers that the fair value of amounts due from customers approximates their book value.
The allowance for doubtful accounts is determined by reference to a detailed analysis of the available information and, in general, is based on historical trends.
This item in illustrated in details in the following table:
| (Values in thousands of EUR) | At June 30, At December 31, | ||||
|---|---|---|---|---|---|
| 202 | |||||
| 1. | 1808 | .1 | 384 | . | |
| 558 | 63 | ||||
As of June 30, 2021, the Group's tax receivables amount to EUR 7,246 thousand, recording a decrease of EUR 3,219 thousand compared to December 31, 2020, mainly due to the decrease of VAT receivable.
The AEFFE Group, characterized by an important presence in international markets, is exposed to exchange rate risk mainly for purchases by the subsidiary Pollini in US Dollars (USD). The Group signs forward currency derivative contracts (USD) at term (Forward) with primary credit institutions to cover the aforementioned risk. These contracts are set up to cover a specific percentage of expected purchase volumes in USD. At the balance sheet date, the notional amount of forward currency contracts stipulated is USD 8,500 thousand (USD 7,000 thousand at 30/06/2020). All contracts opened at 30/06/2021 will expire in 2021.
The composition of the derivative financial instruments in place at June 30, 2021 and December 31, 2020 is summarized below with an indication of the respective current and non-current accounting values referring to the fair value and fair value of the cash flow hedge reserve, this last shown net of the related deferred tax effect:
| (Values in thousands of EUR) | At June 30, 2021 |
At December 31, 2020 |
||||
|---|---|---|---|---|---|---|
| Assets | Liabilities | Hedging Reserve |
Assets | Liabilities | Hedging Reserve |
|
| Forward contracts for cash flow hedge exchange rate risk |
- | - | $\overline{\phantom{0}}$ | - | - | |
| TOTAL NON CURRENT | $\overline{\phantom{0}}$ | $\overline{\phantom{a}}$ | $\overline{\phantom{a}}$ | $\overline{\phantom{0}}$ | ||
| Forward contracts for cash flow hedge exchange rate risk |
198 | - | 143 | (349) | ٠ | (252). |
| TOTAL CURRENT | 198 | $\overline{a}$ | 143 | (349) | (252) |
The cash flow hedge reserve relating to forward contracts hedging the currency risk on currencies amounts to EUR 198 thousand net of the related tax effect (EUR -55 thousand).
The transfer to the 1st Half 2021 income statement of the effect of the hedging transactions on exchange rate risk was equal to EUR 5 thousand brought to costs growth.
This item includes:
| (Values in thousands of EUR) | At June 30, At December 31, | Change | |||
|---|---|---|---|---|---|
| 2021 | 2020 | % | |||
| ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, and post office deposits l |
125 | .1 | |||
| heques |
28 | ||||
| 38 | 1% | ||||
| Total | 39.828 | 2.749 | .9% |
Bank and postal deposits represent the nominal value of the current account balances with credit institutions, including interest accrued on the balance sheet date. Cash in hand and equivalents represent the nominal value of the cash held on the balance sheet date.
The increase in cash and cash equivalent, recorded at June 30, 2021 compared with the amount recorded at December 31, 2020, is EUR 2.749 thousand. About the reason of this variation refer to the Statement of Cash Flows.
The item is compared with the respective value at December 31, 2020:
| (Values in thousands of EUR) | At June 30, At December 31, | Change | |||
|---|---|---|---|---|---|
| 2021 | 2020 | % | |||
| ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, Financial receivables |
|||||
| Total | 2.777 | 652 | 2.125 | 325.9% |
The item increased for the reclassification among current financial receivables of the non-current part.
This caption comprises:
| (Values in thousands of EUR) | At June 30, At December 31, | Ihange | ||
|---|---|---|---|---|
| 2021 | ||||
| for prepaid costs . |
-686 | |||
| tes for rovalties and commissions ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, |
159 | ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, | ||
| 189 | ||||
| income and prepaid expenses | . | |||
| ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, | i sm | |||
| Tota | 29.492 | 28.571 | 3.2% |
Other current receivables increase by EUR 921 thousand mainly for the increase of prepaid leases and credits for prepaid costs and of prepayments and accrued income generated by the seasonality of the business.
Credits for prepaid costs relate to the costs incurred to design and make samples for the Spring/Summer 2022 collections, which the corresponding revenues from sales have not been realised yet for and the partial suspension of the same costs for the Autumn/Winter 2020 collections.
Described below are the main categories of shareholders' equity at June 30, 2021, while the corresponding variations are described in the prospect of shareholders' equity.
| (Values in thousands of EUR) | At June 30, At December 31, | nae | |
|---|---|---|---|
| 2021 | 2020 | ||
| ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, . |
.950 | ||
| 142 | 394 | ||
| r reserves |
28.610 | 49 756 |
146 |
| ue reserve |
901 | ||
| 607 | |||
| defined benefit plans reserve _____ | . | ||
| lation reserve |
ио |
||
| [losses] carried-forward . |
905 | 74 | 369 |
| { oss) for the Group ______ | 286 | ||
| . | |||
Share capital as of June 30, 2021, totally subscribed and paid, (gross of treasury shares) totals EUR 26,841 thousand), and is represented by 107,362,504 shares, par value EUR 0.25 each. At June 30, 2021 the Parent Company holds 7,563,067 treasury shares, representing the 7.044% of its share capital.
There are no shares with restricted voting rights, without voting rights or with preferential rights. During the period, 376,028 treasury shares were purchased by the Parent Company for a total value of Euro 567,457.
The variation in the share premium reserve amounts to EUR 473 thousand and it is related to the purchase of treasury shares made during the period.
For the change in the cash flow hedge reserve of EUR 394 thousand, please refer to note 11 of the assets and liabilities for derivatives.
The changes in these reserves reflect the allocation of prior-year result of the Parent Company.
The fair value reserve derives from the application of IAS 16 in order to measure the land and buildings owned by the Company at their fair value, as determined with reference to an independent appraisal.
The IAS reserve, formed on the first-time adoption of IFRS, reflects the differences in value that emerged on the transition from ITA GAAP to IFRS. The differences reflected in this equity reserve are stated net of tax effect, as required by IFRS 1. Each difference was allocated on a pro rata basis to minority interests.
The reamisurement of defined benefit plans reserve amounts to EUR -1.343 thousand and it remains unchanged since December 31, 2020.
The translation reserve amounts to EUR -2,053 thousand and is related to the conversion of companies' financial statements in other currency than EUR.
The caption Profits/(losses) carried-forward decrease mainly as a consequence of the consolidated result recorded during the year ended at December 31, 2020.
The variation is due to the portion of result for the period ended at June 30, 2021 attributable to the minority shareholders.
Minority interests represent the shareholders' equity of consolidated companies owned by other shareholders and include the corresponding IAS reserve.
Provisions are illustrated in the following statement:
| (Values in thousands of EUR) | At December 31, | Increases | Decreases | At June 30, |
|---|---|---|---|---|
| 2020 | 2021 | |||
ions and similar obligations. ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, |
- | . | ||
| Total | 544 | ы. |
The supplementary clientele severance indemnity fund is determined based on an estimate of the liability relating to the severance of agency contracts, taking account of statutory provisions and any other relevant factor, such as statistical data, average duration of agency contracts and their rate of turnover. The item is calculated based on the actual value of the outflow necessary to extinguish the obligation.
The other provisions mainly relate to provisions for future charges and risks linked to organizational changes.
Potential tax liabilities for which no reserves have been established, since it is not considered probable that they will give rise to a liability for the Group, are described in the paragraph "Contingent liabilities".
The severance indemnities payable on a deferred basis to all employees of the Group are deemed to represent a defined benefits plan (IAS 19), since the employer's obligation does not cease on payment of the contributions due on the remuneration paid, but continue until termination of the employment relationship.
For plans of this type, the standard requires the amount accrued to be projected forward in order to determine the amount that will be paid on the termination of employment, based on an actuarial valuation that takes account of employee turnover, likely future pay increases and any other applicable factors. This methodology does not apply to those employees whose severance indemnities are paid into approved supplementary pension funds which, in the circumstances, are deemed to represent defined contributions plans.
Changes in the provision are illustrated in the following statement:
| (Values in thousands of EUR) | At December 31, | Increases | Decreases/ Other variations |
At June 30, |
|---|---|---|---|---|
| 2020 | 2021 | |||
| ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, Post employment benefits |
439 |
. | ||
| Total | 4900 | 70 | 439) |
Increases include the share of post employment benefits matured in the year and the related revaluation, while the entry decreases/other changes includes the decrease for the liquidation of the post employment benefits and the actuarial loss.
The following table contains details of long-term borrowings:
| (Values in thousands of EUR) | At June 30, At December 31, | Change | ||
|---|---|---|---|---|
| 2021 | 2020 | % | ||
| ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, rom financial institutions. |
50 355 | 34 349 | XЮ | |
| Total | 119.226 | 109.582 | 9.644 | 8.8% |
The entry "Loans from financial institutions" relate to the portion of bank loans due beyond 12 months. It is about unsecured loans and bank finance not assisted by any form of security and they are not subject to special clauses, except for the early repayment clauses normally envisaged in commercial practice.
Furthermore, there are no covenants to comply with specific financial terms other than the mortgage loan on a real estate based in Gatteo, headquarter of the subsidiary Pollini Spa.
Lease payables relate to the application of IFRS 16.
The following table contains details of bank loans as of June 30, 2021, including the current portion and long term portion:
| (Values in thousands of EUR) | Total amount | Current portion |
Long term portion |
|---|---|---|---|
Bank borrowings |
61.849 | $-1.494-$ | 50.355 |
| Total | 61.849 | 11.494 | 50.355 |
It should be noted that the amount due beyond five years amounts to EUR 105 thousand.
The item amounts to EUR 1,164 thousand at 30 June 2021, decreasing of EUR 604 thousand compared to 31 December 2020. The change is mainly attributable to the accounting in the short-term liabilities of the yearly amount of the substitute tax payable referring to the operations carried out as required by art. 110 of the Law Decree n. 104/2020 "August Decree".
The item is compared with the respective value at December 31, 2020:
| (Values in thousands of EUR) | At June 30, At December 31, | Change | |||
|---|---|---|---|---|---|
| 2021 | 2020 | % | |||
| $111111111111111111111111111111111111$ Trade pavables |
68.247 | LO61 | .6%) | ||
| Total | 68.247 | 69.328 | 1,081 | (1.6%) |
Trade payables are due within 12 months and concern debts for supplying goods and services.
Tax payables are analysed in comparison with the related balances as of December 31, 2020 in the following table:
| (Values in thousands of EUR) | At June 30, At December 31, | ||||
|---|---|---|---|---|---|
| 2021 | 2020 | % | |||
| ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, |
|||||
| 1 | |||||
| 616 | |||||
| ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, | 309 | ||||
Tax payables increase of EUR 372 thousand compared with December 31, 2020.
A breakdown of this item is given below:
| (Values in thousands of EUR) | At June 30, At December 31, | Ihange | |||
|---|---|---|---|---|---|
| 2021 | 2020 | % | |||
| ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, hanks ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, |
m. . . |
Annountennon announce 496 |
|||
| Tota | 53.340 | 73.913 | 20.573) | 27.8%) |
Current bank debts include advances granted by credit institutions, current loans and the current portion of long-term financing commitments. Advances mainly consist of withdrawals from short-term credit facilities to finance the working capital requirement.
Leasing payables relate to the application of IFRS16.
Other current liabilities are analysed on a comparative basis in the following table:
| (Values in thousands of EUR) | At June 30, At December 31, | -hange | ||
|---|---|---|---|---|
| 2021 | 2020 | % | ||
| tal security organization. | 3.306 | 5% | ||
| lovees . |
6895 | 79 | 2 416 | .9% |
| tors - credit balances |
263) |
.6%1 |
||
| ied expenses and deferred income . |
152 | 380 |
4% . |
|
| 3.439 | 3 743 | 304 | . 1%) | |
| Total | 16.676 | .9% |
The entry Other liabilities records an increase of EUR 1,323 thousand compared to December 31, 2020.
The increase in the amount due to employees is mainly assignable to the presence of the thirteenth monthly pay accrual as of June 30, 2021 which has no equivalent as of December 31, 2020.
Increase of the caption accrued expenses and deferred income which mainly refers to the deferred income relating to the deferment to the next half year of the revenues not of competence. The other liabilities mainly include commission payables.
In order to apply the IFRS 8 the Group has considered to delineate as operative sectors the same used by IAS 14 Segment reporting: Prêt-à porter Division and footwear and leather goods Division. Such decision has been taken because they represent business activities from which the entity may earn revenues and incur expenses, whose operating result are regularly reviewed by the entity's chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available.
Prêt-à porter Division is mainly represented by the companies Aeffe, Moschino and Velmar, operating in the design, production and distribution of luxury prêt-à porter and lingerie, beachwear and loungewear collections.
In terms of prêt-à porter collections, the activity is carried out by Aeffe, both for the production of the Group's own-label brands ("Alberta Ferretti", "Philosophy", "Moschino", "Boutique Moschino" and "Love Moschino") and brands licensed from other companies. Aeffe also handles the distribution of all Division products, which takes place via the retail channel through subsidiaries and via the wholesale channel.
Velmar manufactures and distributes lingerie and swimwear collections, and specifically men's/women's lingerie, underwear, beachwear and loungewear. Collections are produced and distributed under the Group's own-label brands such as "Moschino", and under third-party licensed brands.
The Prêt-a-porter Division also manages licensing agreements granted to other companies to manufacture Aeffe and Moschino branded product lines such as the "Moschino" brand licensing agreement relating to the love line, "Moschino" branded perfumes and "Moschino" branded sunglasses.
The footwear and leather goods Division, which is composed of Pollini and its subsidiaries, mainly handles the design, production and distribution of footwear, small leather goods, bags and matching accessories made from exclusive materials. The operating activity is mainly carried out by Pollini, which directly handles the design, production and distribution of own-label products, as well as the production and distribution of brands licensed by Group companies.
The footwear and leather goods division also manages licensing agreements granted to other companies to manufacture "Pollini" products such as umbrellas, foulards and ties.
The following tables indicate the main economic data for the first half-year 2021 and 2020 of the Prêt-à porter and Footwear and leather goods Divisions:
| (Values in thousand of EUR) | Prêt-à porter | Footwear and | Elimination of | Total |
|---|---|---|---|---|
| 1st Half 2021 | Division | leather goods Division. |
intercompany transactions |
|
| SECTOR REVENI | 68.202 | (18.081) | ||
| Intercompany revenues | (7,314) | (10, 767) | 18,081 | |
| Revenues with third parties | 97.585 | 57,435 | ||
| Gross operating margin (EBITDA) | 12,041 | 8.041 | 20.082 | |
| Amortisation | (9,939) | ( 2,194) | ||
| Other non monetary items: | ||||
| Write-downs | ן כרב | |||
| Net operating profit / loss (EBIT) | 1.902 | 5.734 | 4636 | |
| Financial income | 140 | 208 | -43) | |
| Financial expenses | (1,351) | 331) | 43 | |
| Profit / loss before taxes | 691 | 5.611 | ||
| Income taxes | 10,193 | 932 | ||
| Net profit / loss | 10.884 | 6.543 |
| (Values in thousand of EUR) | Prêt-à porter | Footwear and | Elimination of | [otal |
|---|---|---|---|---|
| 1st Half 2020 | Division | leather goods Division. |
intercompany transactions |
|
| SECTOR REVENUES | 88.630 | 47,691 | 17.459) | |
| Intercompany revenues | (4,856) | (12,603) | 17,459. | |
| Revenues with third parties | 83,774 | 35.088 | ||
| Gross operating margin (EBITDA) | 565 | |||
| Amortisation | 10,943) | ________ | 2.8931 | |
| Other non monetary items: | ||||
| Write-downs | 3841 | 1081 | ||
| Net operating profit / loss (EBM) | 11,320) | 1.493) | ||
| Financial income | 304 | 25 | 761 | |
| Financial expenses | 1,335) | 76 | ,566 | |
| Profit / loss before taxes | 12.351) | [1.775] | ||
| ncome taxes | 1.083 | 570 | ||
| Net profit / loss | 11.268) | 1.205) | 12.4731 |
The following tables indicate the main patrimonial and financial data at June 30, 2021 and December 31, of the Prêt-à porter and Footwear and leather goods Divisions:
| (Values in thousand of EUR) | Prêt-à porter | Footwear and | Elimination of | Total |
|---|---|---|---|---|
| At June 30, 2021 | Division | leather goods Division |
intercompany transactions |
|
SECTOR ASSETS |
359.921 | 135.389 | (41,721) | |
| of which non-current assets (*) | ||||
| Intangible fixed assets | 42.433 | 28.245 | 70.678 | |
| Tangible fixed assets | 52.231 | 7.955 | 60.186 | |
| Right-of-use assets | 86.016 | 7.018 | 93.034 | |
| Other non-current assets | 2.079 | 216 | (133) | 2.162 |
| OTHER ASSETS | 23.224 | 4,785 | 28,009 | |
| CONSOL DATED ASSETS | 383.145 | 140.174 | (41.721) | 481.598 |
| SECTOR LIABILITIES | 225,181 | 82,625 | (41,721) | 266,085 |
| OTHER LIABILITIES | 12,401 | 6,792 | 19,193 | |
| CONSOL DATED LIABLITES | 237.582 | 89.417 | (41, 721) | 285.278 |
| (Values in thousand of EUR) | Prêt-à porter | Footwear and | Elimination of | Total |
|---|---|---|---|---|
| At December 31, 2020 | Division | leather goods Division |
intercompany transactions |
|
| SECTOR ASSETS | 365.804 | 134.442 | (43.411) | |
| of which non-current assets (*) | ||||
| Intangible fixed assets | 43.518 | -28.971 | 72.489 | |
| Tangible fixed assets | 53,536 | 8.122 | 61.658 | |
| Right-of-use assets | 92.379 | 8.093 | 100.472 | |
| Other non-current assets | 4.471 | 447 | (133) | 4.785 |
| OTHER ASSETS | 27.327 | 4.425 | 31,752 | |
| CONSOL DATED ASSETS | 393.131 | 138,867 | (43, 411) | 488.587 |
| SECTOR LIABILITIES | 235,714 | 85,758 | (43,411) | 278,061 |
| OTHER LIABILITIES | 22,476 | 9,294 | 31,770 | |
| CONSOL DATED LIABLITES | 258,190 | 95.052 | 43.411 | 309.831 |
The following table indicates the revenues for the first half-year 2021 and 2020 divided by geographical area:
| (Values in thousands of EUR) | រ គ Half | Half | Change | |||
|---|---|---|---|---|---|---|
| 2021 | % | 2020 | % | % | ||
| ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, ltah |
58 1683 |
.9% | 14° . |
O% | ||
| ! | 183 | m× |
31.9% | 249 |
.9% | |
| 'the World | -594 | .1% | 39.1% | |||
| ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, |
282 | 6.6% | כי | 8% | 79.7% | |
| Total | 155.020 | 100.0% | 118.862 | 100.0% | 36.158 | 30.4% |
Revenues from sales and services derive mainly from the sale of goods with the recognition of "at poin in time" revenues when the asset was transferred to the customer. This is provided for both the Wholesale distribution (shipment of goods to the customer, and for retail distribution when the asset is sold through a physical store. With regard to the export of goods, the control can be transferred in various stages depending on the type of product). Incoterm applied to the specific customer This premise leads to a limited judgment on the identification of the control passage of the asset and the consequent recognition of the revenue.
A part of the group's revenues derives from the recognition of the Roylalties, agreed, based on a predetermined percentage in the contract with the customer, on the net turnover. The royalties accrue "at point in time", therefore at the time of issue by the Licensee, of the invoices for the sale of the products granted.
Most of the Group's revenues derive from list prices that can vary depending on the type of product, brand and geographical region. Some contracts with the Group's Retail Companies provide for the transfer of control with the right of return. Being intra-group transactions they do not impact the consolidated financial statements as they are eliminated.
With regard to the recognition of Royalties, these are calculated based on a percentage of the Licensee's net sales. The percentage may vary depending on the type of product.
| (Values in thousands of EUR) 1st Half 2021 |
Division | Prêt-à porter Footwear and Elimination of leather goods intercompany Division |
transactions | Total |
|---|---|---|---|---|
| Geographical area | 104899 | 68.202 | (18.081) | 155,020 |
| Italy | 42.577 | 31.902 | 15,796 | 58,683 |
| Europe (Italy excluded) | 23,880 | 27,944 | 641) | 51,183. |
| Asia and Rest of the World | 29,356 | 6.087 | 571) | 34,872 |
| America | 9,086 | 2,269 | 1,073) | 10,282 |
| Brand | 104899 | 68,202 | (18,081) | 155,020 |
| Alberta Ferretti | 7.417 | 674 | -6891 | 7,402 |
| Philosophy | 7,181 | 278 | 2831 | 7,176 |
| Moschino | 89,532 | 55,633 | 16,841 | 128,324 |
| Pollini | 11.188 | 41 | 11,186. | |
| Other | 767 | 429 | 264) | 932 |
| Distribution channel | 104899 | 68,202 | (18.081) | 155,020 |
| Wholesale | 71,476 | 63,148 | (13,588) | 121,036 |
| Retail | 22,960 | 5,024 | 38) | 27,946 |
| Royalties | 10,463 | 30 | (4,455) | 6,038 |
| Timing of goods and services transfer | 104899 | 68.202 | (18.081) | 155.020 |
| POINT IN TIME (transfer of significant risks and benefits connected to the property of the asset) |
94.436 | 68,172 | (13.626) | 148,982 |
| POINT IN TIME (Royalties accrual on Licensee's turnover) | 10.463 | 30 | (4.455) | 6,038 |
In the first semester of 2021, Aeffe consolidated revenues amount to EUR 155,020 thousand compared to EUR 118,862 thousand in the first semester of 2020, with a 30.4% increase at current exchange rates (+30.9% at constant exchange rates).
The growth in the first half of the year reflects the extremely positive contribution provided by all markets in which the Group operates. Even more significant is the positive trend posted in the 2Q 21 which registered a 76% increase exceeding pre-pandemic levels (EUR 74.9 million compared to EUR 71.1 million in 2Q 2019).
This item comprises:
| (Values in thousands of EUR) | 1 ទា Half | 1 នា Half | Change | |
|---|---|---|---|---|
| 2021 | 2020. | % | ||
ier income. |
3.430 | 4.664 |
.54 | |
| Total | 3.430 | 4664 | 1.2349 | (26.5%) |
In 1H 2021, the caption other revenues and income, which amounts to EUR 3,430 thousand, is composed by co-branding activities, time expiry of receivables and payables that arose in prior years, exchange gains on commercial transaction, rental income, sales of raw materials and packaging.
| (Values in thousands of EUR) | $1st$ Half | 1 st Half | Change | |
|---|---|---|---|---|
| 2021 | 2020 | % | ||
| ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, Raw, ancillary and consumable materials and goods for resale |
55,842 | 54,022 | 1.820 | 3.4% |
| Total | 55.842 | 54022 | 1.820 | 3.4% |
The entry purchase of raw materials increase of EUR 1,820 thousand.
This item mainly includes costs for the acquisition of raw materials such as fabrics, threads, skins and accessories, purchases of finished products for resale (products sold) and packaging.
This item comprises:
| (Values in thousands of EUR) | ||||
|---|---|---|---|---|
| 2021 | ||||
| ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, |
669 | . | ||
| sultancy fees. |
1. 18 |
78 | 460 | |
| 6. | ||||
| ransport . |
972 ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, |
.9% | ||
| --------------------------------------- | 888 | 783 | ||
| 79 | 6% | |||
| 383 | 305 | 78 | 6% | |
| 508 | ||||
| $\frac{296}{406}$ | ||||
| 3,578 | 97 | |||
Costs of services decrease from EUR 45,423 thousand in the 1H 2020 to EUR 43,987 thousand in the 1H 2021, down 3.2%. The decrease is mainly due to the decrease in "subcontracted work", "consultancy fees" and "adverting".
This item comprises:
| (Values in thousands of EUR) | ਤਾ Half | hange: | ||
|---|---|---|---|---|
| 2021 | 2020 | % | ||
| ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, nses |
1. . |
|||
| ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, | ||||
| Tota | 2.682 | 1.2251 | r%. |
The costs for use of third parties assets decreases by EUR 1,225 thousand from EUR 2,682 thousand in 1H 2020 to EUR 1,457 thousand in 1H 2021. The decrease is mainly attributable to the reduction in rents of the boutiques obtained through negotiations initiated with the main lessors starting from March 2020.
The item includes:
| (Values in thousands of EUR) | 1 នា Half | 1 នា Half | Change | |
|---|---|---|---|---|
| 2021 | 2020 | % | ||
| ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, iour costs ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, |
30.622 | 29.509. | . | .8% |
| Total | 30.622 | 29.509 | 1.113 | 3.8% |
Labour costs increase from EUR 29,509 thousand in 1H 2020 to EUR 30,622 thousand in 1H 2021 with an incidence on revenues which decreases from 24.8% in the first semester 2020 to 19.8% in the first semester 2021.
The workforce changes from an average of 1,352 units in the 1H 2020 to 1,275 units in the 1H 2021.
| Average number of employees by category | 2021 | Half 2020 |
Change | % |
|---|---|---|---|---|
| ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, |
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, | |||
| Office staff-supervisors |
130 | |||
| senior managers | ||||
| Total |
This item includes:
| (Values in thousands of EUR) | ||||
|---|---|---|---|---|
| 2021 | ||||
| ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, |
. . |
-086 | ||
| e-down of current receivables ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, |
5% | |||
| exchange losses |
1. |
|||
| rating expenses |
||||
| Tota | 3.295 | 1.6%) |
This item includes:
| (Values in thousands of EUR) | า รเ Half | រ នា Half | :hange | |
|---|---|---|---|---|
| 2021 | 2020 | % | ||
| ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, of intangible fixed assets 6. |
14 . |
|||
| tion of tangible fixed assets. h |
74 | 599 |
4% | |
| of right-of-use assets | -839 | 8.061 | ||
| .downs | 492 | 7 O | ||
| Total | 12. AZ | 13.385 | 1.0%) |
| (Values in thousands of EUR) | 1 st Half | Half | Change | |
|---|---|---|---|---|
| 2021 | 2020 | Δ | % | |
Interest income ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, |
61 | 179 | 1181 | 165.9%1 |
| Foreign exchange gains 208 | 39 . |
169 . |
433.3% | |
| Financial discounts | 36 | 35 | 2.9% | |
| Financial income | 305 | 253 | 52 | 20.6% |
| Bank interest expenses | 127 | 108 | 19 | 17.6% |
| Other interest expenses | 108 | 136 | 281 | (20.6%) |
| Foreign exchange losses | 103 | 46 | ו כ | 123.9% |
| Other expenses | 266 | 193 | 73 | 37.8% |
| Financial expenses | 604 | 483 | 121 | 25.1% |
| Leasing interest expenses | 1.036 | 1.083 | -471 | (4.3%) |
| Financial expenses on right-of-use asset | 1.036 | 1.083 | ( 47) | (43%) |
| Total | 1.335 | 1.313 | 22 | 1.7% |
The entry financial income/expenses remains substantially in line with the previous period.
This item includes:
| (Values in thousands of EUR) | 1 st Half | 1 st Half | :hange | |
|---|---|---|---|---|
| 2021 | 2020 | % | ||
| ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, taxes ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, |
2045 | . | ||
| erred income/fexpenses) taxes |
15.766 | 3.892 | .874) . |
305.1% |
| -related to previous vears | ы | 193 | n.a. | |
| Total income taxes | ( 11.125) | 1.654) | ( 9.471) | 572.6% |
Details of deferred tax assets and liabilities and changes in this item are described in the paragraph on deferred tax assets and liabilities.
The reconciliation between actual and theoretical taxation for the 1H 2021 and 1H 2020 is illustrated in the following table:
| (Values in thousands of EUR) | $1^{\text{st}}$ Half | Half |
|---|---|---|
| 2021 | 2020 | |
| Profit before taxes | 14,1261 | |
| Theoretical tax rate | 24.0% | 24.0% |
| Theoretical income taxes (RES) | 1.512 | ( 3.390) |
| Fiscal effect | 12.797 | 161 |
| Effect of foreign tax rates | -830 | 2,193 |
| Total income taxes excluding RAP (current and deferred) | (10, 455) | ( 1.358) |
| RAP (current and deferred) | (670) | ( 296) |
| Total income taxes (current and deferred) | (11.125) | 1.654 |
This reconciliation of the theoretical and effective tax rates does not take account of IRAP, given that it does not use profit before taxes to calculate the taxable amount. Accordingly, the inclusion of IRAP in the reconciliation would generate distorting effects between years.
The calculation of basic and dilutive earning/(loss) per share is based on the following elements:
| (Values in thousands of EUR) | Half " | Half |
|---|---|---|
| 2021 | 2020 | |
| From continuing activities | ||
| Earnings for determining basic earnings per share | 13.286 | |
| Earnings for determing earnings per share and continuum continuum continuum continuum continuum continuum continuum | 13,286 | |
| Dilutive effects | ||
| Earnings for determing dilutive earnings per share | 13,286 | [ 10.900] |
| From continuing and discontinued activities | ||
| Earnings for the period | 13,286 | |
| Earnings from discontinued operations [11] [12] [13] [13] [14] [15] [15] [15] [15] [15] [15] [15] [15 | ||
| Earnings for determining basic earnings per share 13,286 | 13,286 | |
| Dilutive effects | ||
| Earnings for determing dilutive earnings per share | 13,286 | 〔 10.900〕 |
| Number of reference share | ||
| Average number of shares for determing earnings per share | 99.799 | |
| Share options | ||
| Average number of shares for determing diluted earnings |
Group earning attributable to holders of ordinary shares of parent company AEFFE S.p.A., amounts to EUR 13,286 thousand (June 2019: EUR -10,900 thousand).
The calculation of diluted earnings per share for the period January - June 2021, matches with the calculation of basic earnings per share, as there are no tools with potential dilutive effects.
The cash flow generated during the first half of 2021 is EUR 2,749 thousand.
| (Values in thousands of EUR) | $1^{\overline{31}}$ Half | 1 នា Half |
|---|---|---|
| 2021 | 2020 | |
| Opening balance (A) | 39.828 | 28.390 |
| Cash flow (absorbed)/ generated by operating activity (B) | 15.790 | 10.649 |
| Cash flow (absorbed)/ generated by investing activity (C) | 11.31O) | 2.8611 |
| Cash flow (absorbed)/ generated by financing activity (D) | 11 731) | 13 O95 |
| Increase/(decrease) in cash flow $(E) = (B) + (C) + (D)$ | 2.749 | 415) |
| Closing balance $(F)=(A)+(E)$ | 42.577 | 27.975 |
The cash flow generated by operating activity during the first half of 2021 amounts to EUR 15,790 thousand.
The cash flow comprising these funds is analysed below:
| (Values in thousands of EUR) | ||
|---|---|---|
| 2021 | ||
| ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, |
||
| tion / write-downs ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, |
||
| (+)/availment (-) of long term provisions and post employment benefits | . |
|
| income taxes ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, |
927 | |
| icial income [-] and financial charges [+] 1. |
-335 | |
| nge in operating assets and liabilities | ||
| Cash flow (absorbed) / generated by operating activity |
The cash flow absorbed by investing activity during the first half of 2021 amounts to EUR 1,310 thousand.
The factors comprising these funds are analysed below:
| (Values in thousands of EUR) | 1 a ' Half | |
|---|---|---|
| 2021 | 2020 | |
Increase [-]/ decrease [+] in intangible fixed assets. |
||
| Increase (-)/ decrease (+) in tangible fixed assets |
||
| Increase [-]/ decrease [+] in right-of-use assets assets |
||
| Investments and write-downs (-)/ Disinvestments and revaluations (+) | ||
| Cash flow (absorbed) / generated by investing activity |
The cash flow absorbed by financing activity during the first half of 2021 amounts to EUR 11,731 thousand. The factors comprising these funds are analysed below:
| (Values in thousands of EUR) | 1 st Half | |
|---|---|---|
| 2021 | ||
| Other variations in reserves and profits carried-forward of shareholders' equity | ||
| Dividends paid |
||
| ceeds (+)/repayment (-) of financial payments . |
4 7441 | |
| ceeds (+)/repavment [-] of leasing payments 1. |
6.185) | |
| in long term financial receivables ease (-1/ decrease (+1 |
396 | 138 |
| Financial income (+) and financial charges (-) | ||
| Cash flow (absorbed) / generated by financing activity | 11.731 |
Regarding the long term incentive plans reserved to executive directors of Aeffe S.p.A., please refer to the indicated in the Report on remuneration available from the governance section of the following website: www.aeffe.com.
As required by ESMA guidance 32-382-1138 of March 4, 2021, in line with the "Warning no. 5/21 "of 29 April 2021 of Consob, it should be noted that the debt of the Aeffe Group at 30 June 2021 is as follows:
| (Values in thousands of EUR) | At June 30, | At December 31, |
|---|---|---|
| 2021 | 2020 | |
| A - Cash | 42,577 | 39,828 |
| B - Cash equivalents | 2,777 | 652 |
| C - Other current financial assets | - | - |
| D - Liquidity (A + B + C) | 45,354 | 40,480 |
| E - Current financial debt (including debt instruments, but excluding current portion of non | ||
| current financial debt) | 28,695 | 43,514 |
| F - Current portion of non-current financial debt | 24,645 | 30,399 |
| G - Current financial indebtedness (E + F ) | 53,340 | 73,913 |
| H - Net current financial indebtedness (G - D) | 7,986 | 33,433 |
| I - Non-current financial debt (excluding current portion and debt instruments) | 119,226 | 109,581 |
| J - Debt instruments | - | ( 2,037) |
| K - Non-current trade and other payables | - | - |
| L - Non-current financial indebtedness (I + J + K) | 119,226 | 107,544 |
| M - Total financial indebtedness (H + L) | 127,212 | 140,977 |
The financial situation of the Group as at 30 June 2021 shows a debt of EUR 127,212 thousand including the IFRS 16 effect, compared to the debt of EUR 150,612 thousand as of June 30, 2020, with an improvement of EUR 23,400 thousand (debt of EUR 140,977 thousand due to end of 2020) attributable to both the best results achieved and the effective management of working capital. The debt at 30 June 2021 relating to IFRS 16 amounts to EUR 82,022 thousand, of which EUR 13,151 thousand is current and EUR 68,871 thousand is non-current. Debt net of the IFRS 16 effect at the end of June 2021 amounts to EUR 45,190 thousand compared to the debt of EUR 62,545 thousand at the end of June 2020, recording an improvement of EUR 17,355 thousand.
On July 28, 2021, Aeffe SpA took over the 30% minority stake in Moschino SpA. The consideration for the acquisition of the shares, equal to Euro 66,571,000, was paid for EUR 30 million at the same time as the
transfer of the shares while the residual amount of EUR 36,571,000 will be paid to the sellers by 30 November 2021.
Reciprocal transactions and balances between Group companies included within the scope of consolidation are eliminated from the consolidated financial statements and as such will not be described here. Operations carried out with related parties mainly concern the exchange of goods, the performance of services and the provision of financial resources. All transactions arise in the ordinary course of business and are settled on market terms i.e. on the terms that are or would be applied between two independent parties.
The Group's business dealing with other related parties are summarised below:
| (Values in thousands of EUR) | st Half 1 |
st Half 1 |
Nature of the |
|---|---|---|---|
| 2021 | 2020 | transactions | |
| Shareholder Alberta Ferretti with Aeffe S.p.a. | |||
| Contract for the sale of artistic assets and design | 500 | 500 | Cost |
| Ferrim with Aeffe S.p.a. | |||
| Property rental | 59 | - | Cost |
| Commerciale Valconca with Aeffe S.p.a. | |||
| Commercial | 126 | 78 | Revenue |
| Property rental | 63 | 63 | Cost |
| Commercial | 723 | 537 | Receivable |
| Commercial | 63 | 59 | Payable |
| Aeffe USA with Ferrim USA | |||
| Commercial | 57 | 63 | Revenue |
| Commercial | 671 | 588 | Receivable |
| Commercial | 77 | 122 | Payable |
| Short term financial | 2,777 | 714 | Receivable |
| Long term financial | - | 2,233 | Receivable |
The following table indicates the data related on the incidence of related party transactions on the income statement, balance sheet, cash flow and indebtedness at June 30, 2021 and at June 30, 2020.
| (Values in thousands of EUR) | Balance | Value rel. | % | Balance | Value rel. | % |
|---|---|---|---|---|---|---|
| party | party | |||||
| st Half 1 |
2021 | st Half 1 |
2020 | |||
| Incidence of related party transactions on the income statement | ||||||
| Revenues from sales and services | 155,020 | 126 | 0.1% | 118,862 | 78 | 0.1% |
| Costs of services | 43,987 | 500 | 1.1% | 45,423 | 500 | 1.1% |
| Costs for use of third party assets | 1,457 | 122 | 8.4% | 2,682 | 122 | 4.5% |
| Financial income | 305 | 57 | 18.8% | 253 | 63 | 24.7% |
| Incidence of related party transactions on the balance sheet | ||||||
| Long term financial receivables | - | - | 0.0% | 2,233 | 2,233 | 100.0% |
| Trade receivables | 49,217 | 1,394 | 2.8% | 37,725 | 1,125 | 3.0% |
| Short term financial receivables | 2,777 | 2,777 | 100.0% | 714 | 714 | 100.1% |
| Trade payables | 68,247 | 140 | 0.2% | 69,982 | 181 | 0.3% |
| Incidence of related party transactions on the cash flow | ||||||
| Cash flow (absorbed) / generated by operating activities | 15,790 | ( 613) | n.a. | ( 10,649) | ( 411) | 3.9% |
| Cash flow (absorbed) / generated by financial activities | ( 11,731) | ( 88) | 0.8% | 13,095 | ( 10) | n.a. |
| Incidence of related party transactions on the indebtedness | ||||||
| Net financial indebtedness | ( 127,212) | ( 701) | 0.6% | ( 150,612) | ( 421) | 0.3% |
Pursuant to Consob communication DEM/6064293 dated July 28, 2006, it is confirmed that in the first half of 2021 the Group did not enter into any atypical and/or unusual transactions, as defined in that communication.
It is confirmed that in during the period no significant non-recurring events and transactions have been realised.
In consideration of the fact that there are no significant tax disputes, no provision has been set aside.
| ATTACHMENT I | Consolidated Balance Sheet with related parties |
|---|---|
| ATTACHMENT II | Consolidated Income Statement with related parties |
| ATTACHMENT III | Consolidated Cash Flow Statement with related parties |
Pursuant to Consob Resolution N. 15519 of July 27, 2006
| (Values in units of EUR) | Notes | At June 30, | of which | At December 31, | of which |
|---|---|---|---|---|---|
| 2021 | 2020 | ||||
| Trademarks | 69,747,667 | 71,494,428 | |||
| Other intangible fixed assets | 930,429 | 995,060 | |||
| Intangible fixed assets | (1) | 70,678,096 | 72,489,488 | ||
| Lands | 17,123,494 | 17,123,494 | |||
| Buildings Leasehold improvements |
26,437,768 9,599,993 |
26,729,357 10,201,924 |
|||
| Plant and machinary | 3,628,095 | 3,810,164 | |||
| Equipment | 333,318 | 350,754 | |||
| Other tangible fixed assets | 3,063,596 | 3,442,220 | |||
| Tangible fixed assets | (2) | 60,186,264 | 61,657,913 | ||
| Right-of-use assets | (3) | 93,034,493 | 100,471,903 | ||
| Equity investments | (4) | 30,269 | 131,558 | ||
| Long term financial receivables | (5) | - | 2,037,324 | 2,037,324 | |
| Other fixed assets | (6) | 2,132,012 | 2,615,956 | ||
| Deferred tax assets | (7) | 20,762,977 | 21,287,015 | ||
| NON-CURRENT ASSETS | 246,824,111 | 260,691,157 | |||
| Stocks and inventories | (8) | 103,266,594 | 109,285,351 | ||
| Trade receivables | (9) | 49,216,981 | 1,394,254 | 39,094,519 | 1,191,289 |
| Tax receivables | (10) | 7,246,450 | 10,465,392 | ||
| Derivate assets | (11) | 197,947 | - | ||
| Cash | (12) | 42,576,814 | 39,828,260 | ||
| Financial receivables | (13) | 2,776,843 | 2,776,843 | 651,944 | 651,944 |
| Other receivables | (14) | 29,492,264 | 28,570,739 | ||
| CURRENT ASSETS | 234,773,893 | 227,896,205 | |||
| Assets available for sale | (15) | - | - | ||
| TOTAL ASSETS | 481,598,004 | 488,587,362 | |||
| Share capital | 24,949,859 | 25,043,866 | |||
| Other reserves | 110,534,935 | 131,311,933 | |||
| Profits/(losses) carried-forward | 12,905,405 | 13,273,509 | |||
| Net profit/(loss) for the Group | 13,286,041 | ( 21,396,847) | |||
| Group interest in shareholders' equity | 161,676,240 | 148,232,461 | |||
| Minority interest in share capital and reserves | 30,502,775 | 32,483,755 | |||
| Net profit/(loss) for the minority interest | 4,141,016 | ( 1,959,730) | |||
| Minority interest in shareholders' equity | 34,643,791 | 30,524,025 | |||
| SHAREHOLDERS' EQUITY | (15) | 196,320,031 | 178,756,486 | ||
| Provisions | (16) | 1,578,798 | 1,543,670 | ||
| Deferred tax liabilities | (7) | 15,068,735 | 28,016,336 | ||
| Post employment benefits | (17) | 4,530,771 | 4,900,460 | ||
| Long term financial liabilities | (18) | 119,225,515 | 109,581,772 | ||
| Long term not financial liabilities | (19) | 1,164,315 | 1,768,758 | ||
| NON-CURRENT LIABILITIES | 141,568,134 | 145,810,996 | |||
| Trade payables | (20) | 68,246,919 | 139,876 | 69,328,170 | 112,257 |
| Tax payables | (21) | 4,124,510 | 3,753,375 | ||
| Derivate liabilities | (11) | - | 349,002 | ||
| Short term financial liabilities | (22) | 53,339,861 | 73,913,257 | ||
| Other liabilities | (23) | 17,998,549 | 16,676,076 | ||
| CURRENT LIABILITIES | 143,709,839 | 164,019,880 | |||
| Liabilities available for sale | |||||
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 481,598,004 | 488,587,362 |
Pursuant to Consob Resolution N. 15519 of July 27, 2006
| (Values in units of EUR) | Notes | st Half 1 |
of which | st Half 1 |
of which |
|---|---|---|---|---|---|
| 2021 | Rel. parties | 2020 | Rel. parties | ||
| REVENUES FROM SALES AND SERVICES | (24) | 155,019,816 | 125,542 | 118,861,847 | 77,837 |
| Other revenues and income | (25) | 3,429,973 | 4,663,829 | ||
| TOTAL REVENUES | 158,449,789 | 123,525,676 | |||
| Changes in inventory | ( 4,865,924) | 11,976,628 | |||
| Costs of raw materials, cons. and goods for resale | (26) | ( 55,841,645) | ( 54,021,601) | ||
| Costs of services | (27) | ( 43,986,960) | ( 500,000) | ( 45,423,212) | ( 500,000) |
| Costs for use of third parties assets | (28) | ( 1,457,088) | ( 121,602) | ( 2,681,762) | ( 121,259) |
| Labour costs | (29) | ( 30,621,509) | ( 29,509,121) | ||
| Other operating expenses | (30) | ( 1,594,968) | ( 3,294,925) | ||
| Amortisation, write-downs and provisions | (31) | ( 12,445,295) | ( 13,384,763) | ||
| Financial income/(expenses) | (32) | ( 1,334,658) | 57,023 | ( 1,313,184) | 62,713 |
| PROFIT / LOSS BEFORE TAXES | 6,301,742 | ( 14,126,264) | |||
| Income taxes | (33) | 11,125,315 | 1,653,573 | ||
| NET PROFIT / LOSS | 17,427,057 | ( 12,472,691) | |||
| (Profit)/loss attributable to minority shareholders | ( 4,141,016) | 1,572,965 | |||
| NET PROFIT / LOSS FOR THE GROUP | 13,286,041 | ( 10,899,726) |
Pursuant to Consob Resolution N. 15519 of July 27, 2006
| (Values in thousands of EUR) | Notes | st Half 1 |
of which | st Half 1 |
of which |
|---|---|---|---|---|---|
| 2021 | 2020 | ||||
| Opening balance | 39,828 | 28,390 | |||
| Profit / loss before taxes | 6,302 | ( 439) | ( 14,126) | ( 481) | |
| Amortisation / write-downs | 12,445 | 13,385 | |||
| Accrual (+)/availment (-) of long term provisions and post employment benefits | ( 335) | ( 53) | |||
| Paid income taxes | ( 927) | ( 142) | |||
| Financial income (-) and financial charges (+) | 1,335 | 1,313 | |||
| Change in operating assets and liabilities | ( 3,030) | ( 174) | ( 11,026) | 71 | |
| Cash flow (absorbed) / generated by operating activity | (35) | 15,790 | ( 10,649) | ||
| Increase (-)/ decrease (+) in intangible fixed assets | ( 308) | ( 315) | |||
| Increase (-)/ decrease (+) in tangible fixed assets | ( 702) | ( 3,237) | |||
| Increase (-)/ decrease (+) in right-of-use assets | ( 401) | 691 | |||
| Investments and write-downs (-)/ Disinvestments and revaluations (+) | 101 | - | |||
| Cash flow (absorbed) / generated by investing activity | (36) | ( 1,310) | ( 2,861) | ||
| Other variations in shareholders' equity | 137 | ( 601) | |||
| Dividends paid | - | - | |||
| Proceeds (+)/repayment (-) of financial payments | ( 4,744) | ( 88) | 22,282 | ( 10) | |
| Proceeds (+)/ repayment (-) of lease payments | ( 6,185) | ( 7,711) | |||
| Increase (-)/ decrease (+) in long term financial receivables | 396 | 438 | |||
| Financial income (+) and financial charges (-) | ( 1,335) | ( 1,313) | |||
| Cash flow (absorbed) / generated by financing activity | (37) | ( 11,731) | 13,095 | ||
| Closing balance | 42,577 | 27,975 |
The undersigned Massimo Ferretti as President of the Board of Directors, and Marcello Tassinari as manager responsible for preparing Aeffe S.p.A.'s financial reports, pursuant to the provisions of Article 154-bis, clauses 3 and 4, of Legislative Decree n. 58 of 1998 ,hereby attest:
of the administrative and accounting procedures applied in preparation of the Half year condensed financial statements at June 30, 2021.
The undersigned moreover attest that:
The Half Year condensed financial statements:
The interim management report contains a reliable analysis of important events which took place during the first six months of the current fiscal year and their impact on the half-year condensed financial statements, together with a description of the principal risks and uncertainties for the remaining six months of the year. The interim management report also contains information concerning related party transactions.
July 30, 2021
President of the board of directors Manager responsible for preparing Company's financial reports
Massimo Ferretti Marcello Tassinari
Ria Grant Thornton S.p.A. Via San Donato, 197 40127 Bologna
(Translation from the Original Issued in Italian)
T +39 051 6045911 F +39 051 6045999
To the shareholders of Aeffe S.p.A.
We have reviewed the accompanying condensed interim consolidated financial statement as of June 30, 2021, consisting of the consolidated statement of financial position, consolidated income statement, statement of comprehensive income, consolidated statement of cash flows and statement of changes in equity and related explanatory notes, of the Aeffe Group. Management is responsible for the preparation of this interim condensed financial statements in accordance with the International Financial Accounting Standards applicable to interim financial reporting (IAS 34) as adopted by the European Union. Our responsibility is to express a conclusion on this interim condensed financial reporting based on our review.
We conducted our review in accordance with review standard recommended by Consob (the Italian Stock Exchange Regulatory Agency) in its Resolution no. 10867 of July 31, 1997. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (ISA Italia) and, consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion on the interim condensed financial statements.
Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim condensed financial statements of the Aeffe Group as of June 30, 2021, are not prepared, in all material respects, in accordance with the International Financial Accounting Standards applicable to interim financial reporting (IAS 34) as adopted by the European Union.
Bologna, July 29, 2021
Ria Grant Thornton S.p.A.
Signed by Marco Bassi Partner
This report has been translated into the English language from the original, which was issued in Italian, solely for the convenience of international.
Società di revisione ed organizzazione contabile Sede Legale: Via Melchiorre Gioia n .8 – 20124 Milano - Iscrizione al registro delle imprese di Milano Codice Fiscale e P.IVA n.02342440399 - R.E.A. 1965420. Registro dei revisori legali n.157902 già iscritta all'Albo Speciale delle società di revisione tenuto dalla CONSOB al n. 49 Capitale Sociale: € 1.832.610,00 interamente versato Uffici: Ancona-Bari-Bologna-Firenze- Milano-Napoli- Padova-Palermo-Pordenone-Rimini-Roma-Torino-Trento. Grant Thornton refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Ria Grant Thornton spa is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another's acts or omissions.
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