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Ovs Earnings Release 2024
4189_rns_2024-06-12_c118095d-9bfa-4172-a8b1-8446d6813b6e.pdf
Earnings Release
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GROWTH REMAINS ROBUST IN THE FIRST QUARTER: SALES +5% AND EBITDA €29.7M
The Board of Directors of OVS S.p.A. approved the consolidated results for the first quarter February – April 2024:
- Net sales are €352.2 million, up by 5% on the first quarter of 2023, when they were already up sharply compared with the previous year. Upim brand performed particularly well;
- Adjusted EBITDA reached €29.7 million, up from €27.5 million in the first quarter of 2023. The EBITDA margin increased to 8.4%;
- Adjusted profit before tax was €10.1 million, up from €7.7 million in the first quarter of 2023;
- Net cash flow improved by €3.5 million compared to the same period of last year. During the quarter, the parent company purchased treasury shares for €20.6 million and paid dividends for €7.8 million. The adjusted net financial position at 30 April 2024 is €254.2 million;
- Sales performance, as of today, remains strong.
Statement by the Chief Executive Officer, Stefano Beraldo, on the results for the period and the business outlook
The group's main brands showed sales growth, despite delays in delivery caused by the Suez Canal crisis. This performance appears even more significant in view of the sharp increase recorded in the same period of the previous year.
The Upim brand delivered an excellent performance, both at direct stores and franchising ones.
The sales of the OVS flagship store in Venice opened in April exceeded all expectations. The store, which consists of four floors and 2,000 square meters, has given new life to a historic building that houses the complete range of apparel offering, including the new Piombo Contemporary collection - featuring a more minimal style and which is achieving great results throughout Italy - and a large beauty area, which occupies more than 150 square meters.
Owing also to the improvement of the commercial margin, the group increased its EBITDA compared to the first quarter of 2023.
Although forthe second consecutive year May weather was decidedly unfavourable,the increase in sales remains robust.
During the quarter, national contracts relating to the trade sector were renewed, with an impact that was more diluted over time than initially expected.
Key Economic and Financial Results
The table shows the main adjusted operating and financial results to represent the Group's operating performance.
| €m | 30 April 2024 Adjusted |
30 April 2023 Adjusted |
Change | Change % |
|---|---|---|---|---|
| Net Sales | 352.2 | 336.5 | 15.8 | 4.7% |
| EBITDA | 29.7 | 27.5 | 2.2 | 8.1% |
| EBITDA% | 8.4% | 8.2% | +26ppt | |
| EBIT | 14.2 | 11.7 | 2.5 | 21.2% |
| EBIT% | 4.0% | 3.5% | +55ppt | |
| PBT | 10.1 | 7.7 | 2.4 | 31.1% |
| Net Financial Position | 254.2 | 250.9 | 3.3 | 1.3% |
The adjusted results do not reflect the application of IFRS 16, Non-recurring events that do not concern ordinary operations, and the mark-to-market accounting of derivatives at the net financial position level.
Net sales
Net sales for the quarter amounted to €352.2 million, up 4.7% compared with the same period of 2023. Directly operated stores drove this growth, with sales up 5.1%. After a year of decline in 2023, the franchise channel resumed growth, with sales up 3.2%.
The OVS brand achieved sales growth mainly on a like-for-like basis. The Upim brand was supported by the like-for-like sales performance, the expansion of the sales network and the positive trend in the franchising business.
EBITDA
Adjusted EBITDA in the quarter came in at €29.7 million, up by €2.2 million compared with the €27.5 million recorded for the first quarter of 2023. The EBITDA margin also increased to 8.4% compared to 8.2% in the first quarter of 2023.
Both main brands shaped this result, with Upim's EBITDA benefiting from higher sales growth.
Profit before tax
Adjusted profit before tax rose to €10.1 million compared with €7.7 million in the first quarter of 2023, an improvement mainly driven by higher EBITDA.
Adjusted net financial position
As at 30 April 2024, the Group's net financial position, adjusted for the impact of the mark-tomarket and of the adoption of IFRS 16, was €254.2 million.
Cash absorption of the first quarter, which reflects the typical seasonality of our business, was €3.5 million lower than in the first quarter of the previous year. In the same period, the parent company purchased treasury shares for €20.6 million (8,955,000 shares purchased at an average price of €2.298) and distributed dividends for €7.8 million.
| €m | 30 April 2024 | 30 April 2023 |
|---|---|---|
| Net Debt adjusted for MtM hedging instruments and IFRS16 |
254.2 | 250.9 |
| Leverage on EBITDA Net Debt adjusted / |
1.38x | 1.34x |
| EBITDA Adjusted last 12 months Leverage last 12 months on EBITDA Average Net Debt adjusted of last 12 months / EBITDA Adjusted last 12 months |
1.37x | 1.23x |
Treasury shares
Treasury shares in portfolio as at 30 April 2024 stood at 37,955,437, or 13.0465% of share capital. As at 11 June 2024, the Company's treasury shares increased to 39,844,894, equal to 13.6960% of share capital.
The beneficiaries and maximum number of rights for the "2024-2026 Performance Share Plan" have been identified
With reference to the incentive plan named "Performance Shares Plan 2024-2026" (the "Plan"), approved by the shareholders' meeting on 30 May 2024, we hereby announce that - pursuant to Article 84-bis of CONSOB Regulation No. 11971/1999 (the "Issuers' Regulation") - that on today's date, the Board of Directors, following the favourable opinion of the Hiring and Compensation Committee, has identified 19 beneficiaries, in addition to the Chief Executive Officer. The beneficiaries include managers with strategic responsibilities, employees and contractors.
The Board of Directors also resolved to grant beneficiaries rights to receive Company shares for the maximum number of 2,956,008 for the Chief Executive Officer, 1,644,280 for Managers with Strategic Responsibilities and a total of 1,688,618 for the other beneficiaries.
For further information on the Plan, please see (i) the press releases of 17 April and 30 May 2024, (ii)the explanatory report on the fourth item on the agenda of the ordinary Shareholders' Meeting of OVS of 30 May 2024, and (iii) the information document prepared pursuant to Article 84 of the Issuers' Regulation, available on the Company's website, www.ovscorporate.it, and on the authorised storage facility at .
The information required by Schedule 7 of Annex 3A to the Issuers' Regulation is attached to this press release.
Other information
Company information
OVS S.p.A. is an Italian registered company (VAT No. 04240010274), with its registered office in Venice-Mestre, Italy. OVS S.p.A. shares have been listed on the Milan Euronext(formerly the Milan Electronic Stock Exchange) since 2 March 2015.
It is hereby noted that OVS has adopted the regime derogating from Article 70, paragraph 6 and Article 71, paragraph 1 of the Issuer's Regulation, as indicated in the informational prospectus.
Quarterly reporting
As indicated in the calendar of corporate events and pursuant to Article 82-ter of the Issuers' Regulation, OVS S.p.A. has decided to publish, on a voluntary basis, a quarterly update of its main economic and financial performance indicators, with a view to maintaining a timely and transparent dialogue on the dynamics of the Company's business with the financial community and with key stakeholders.
Declaration by the Financial Reporting Officer
The Financial Reporting Officer, Mr. Nicola Perin, declares, pursuant to paragraph 2 of Article 154-bis of the Consolidated Law on Finance (TUF), that the accounting information contained in this press release corresponds to the documentary results, books and accounting records.
Conference call
Tomorrow, 13 June 2024, at 15:00, a conference call will be held with analysts and investors, at which the main results for the period ended 30 April 2024 will be presented.
The conference call may be joined by dialling +39 02 8020911 from Italy, +44 1 212818004 from the UK and +1 718 7058796 from the USA (for journalists, +39 02 8020927).
A presentation will be available and can be downloaded from the "Investor Relations", "Presentations" section of the Company website at www.ovscorporate.it. A recording of the conference call will also be made available on the website the day after the call.
Forthcoming events in the financial calendar
Thursday, 19 September 2024 – Half-year report at 31 July 2024 Monday, 16 December 2024 – Interim management report for the third quarter of 2024
For further information Federico Steiner Investor Relations Barabino & Partners S.p.A. OVS S.p.A. [email protected] [email protected]
Tel. +39 335 42 42 78 Via Terraglio 17, 30174 Venice – Mestre
Disclaimer
- The information presented in this document has not been audited.
- The document may contain forward-looking statements relating to future events and OVS's operating, financial and income results. By their very nature, such forecasts include an element of risk and uncertainty, as they depend on the occurrence offuture events and developments. Actualresults may differ significantly from those announced due to a variety of factors.
Appendix
| €m | 30 April 2024 Reported pre-IFRS16 |
of which adjustments, normalizations and reclass |
30 April 2024 Adjusted |
30 April 2023 Reported pre-IFRS16 |
of which adjustments, normalizations and reclass |
30 April 2023 Adjusted |
|---|---|---|---|---|---|---|
| Net Sales | 352.3 | 0.0 | 352.2 | 336.5 | - | 336.5 |
| EBITDA | 25.8 | (3.9) | 29.7 | 25.0 | (2.5) | 27.5 |
| EBITDA% | 7.3% | n.a. | 8.4% | 7.4% | n.a. | 8.2% |
| EBIT | 8.3 | (6.0) | 14.2 | 7.2 | (4.6) | 11.7 |
| EBIT% | 2.3% | n.a. | 4.0% | 2.1% | n.a. | 3.5% |
| PBT | 6.3 | (3.8) | 10.1 | 3.1 | (4.6) | 7.7 |
The table shows the results adjusted to represent the Company's operating performance net of the effects of the application of the IFRS 16 international accounting standard, as well as non-recurring events unrelated to the core business.
EBITDA for the first quarter of 2024 is adjusted mainly for: (i) €3.2 million in net foreign exchange differences for forward hedging of goods in foreign currency sold in the period; (ii) €0.3 million in costs related to stock option plans (non-cash costs); and (iii) €0.4 million relating to discontinued businesses and other minor one-off charges.
Other adjustment items that impacted EBIT and PBT relate to: (i) costs of €2.1 million related to the amortisation of intangible assets linked to purchase price allocation, (ii) adjusted net financial income of €2.2 million, mainly relating to foreign exchange differences arising from the valuation of items denominated in foreign currency, including with respect to forward derivatives and foreign exchange differences.
SECURITIES-BASED COMPENSATION PLANS
TABLE 1 OF SCHEDULE 7 OF APPENDIX 3A TO CONSOB REGULATION NO. 11971/99
Date: 12/06/2024
| Name and Surname or category |
BOX 1 | |||||||
|---|---|---|---|---|---|---|---|---|
| Financial instruments other than stock options | ||||||||
| Section 2 | ||||||||
| Position (to be specified only for those indicated by name) |
New assignment instruments on the basis of the decision: | |||||||
| ☐ of the board of directors to propose to the shareholders' meeting | ||||||||
| X of the competent body for the implementation of the shareholders' meeting resolution | ||||||||
| Date of the relevant shareholders' meeting resolution |
Type of financial instruments |
Number of financial instruments assigned |
Date of assignment | Purchase price (if any) of the instruments |
Market price at assignment (*) |
Vesting period |
||
| Stefano Beraldo | Chief Executive Officer |
30 May 2024 |
Right to receive OVS shares free of charge, subject to specific terms and conditions |
2,956,008 | 12 June 2024 |
– | € 2.828 | 2024-2026 |
| Managers with strategic responsibilities (4) |
N/A | 30 May 2024 | Right to receive OVS shares free of charge, subject to specific terms and conditions |
1,644,280 | 12 June 2024 |
– | € 2.828 | 2024-2026 |
| Top management, employees, and contractors (15) |
N/A | 30 May 2024 | Right to receive OVS shares free of charge, subject to specific terms and conditions |
1,688,618 | 12 June 2024 |
– | € 2.828 | 2024-2026 |
(*) market price of OVS shares at the Euronext Milan on 12 June 2024 (i.e. the date of the assignment)