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Silvano Fashion Group
Quarterly Report • Nov 24, 2023
2224_ir_2023-11-24_9eec6b62-60e5-439c-896a-cf1a60adcdee.pdf
Quarterly Report
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AS Silvano Fashion Group
Consolidated Interim Financial Report for Q3 and 9 months of 2023 (unaudited)
(translation of the Estonian original) *
| Beginning of the reporting period 1 January 2023 |
|---|
| End of the reporting period 30 September 2023 |
| AS Silvano Fashion Group |
| 10175491 |
| Tulika 17, 10613 Tallinn |
| +372 684 5000 |
| +372 684 5300 |
| [email protected] |
| www.silvanofashion.com |
| Design, manufacturing and distribution of women's |
| lingerie |
| Ernst & Young Baltic AS |
* This version of our report is a translation from the original, which was prepared in Estonian. All possible care has been taken to ensure that the translation is an accurate representation of the original. However, in all matters of interpretation of information, views or opinions, the original language version of our report takes precedence over this translation.
| Management Report 3 | |
|---|---|
| Declaration of the Management Board 10 | |
| Consolidated Statement of Financial Position 11 | |
| Consolidated Income Statement 12 | |
| Consolidated Statement of Comprehensive Income 12 | |
| Consolidated Statement of Cash Flows 13 | |
| Consolidated Statement of Changes in Equity 14 | |
| Notes to the Interim Report 15 | |
| Note 1 Summary of significant accounting policies 15 | |
| Note 2 Cash and cash equivalents 15 | |
| Note 3 Trade and other receivables 16 | |
| Note 4 Inventories 16 | |
| Note 5 Property, plant and equipment 17 | |
| Note 6 Trade and other payables 18 | |
| Note 7 Equity 18 | |
| Note 8 Earnings per share 18 | |
| Note 9 Revenue from contracts with customers 18 | |
| Note 10 Transactions with related parties 19 | |
| Note 11 Operating segments 19 |
Management Report
General information about AS Silvano Fashion Group
AS Silvano Fashion Group (hereinafter "the Group") is a holding company that controls group of entities involved in the design, manufacturing, wholesale, franchise and retail sales of Ladies lingerie. The Group's revenue is generated by sales of Milavitsa, Alisee, Aveline, Lauma Lingerie, Laumelle and Hidalgo brand products through wholesale channels, franchised sales and own retail operated via Milavitsa and Lauma Lingerie retail stores. Key sales markets for the Group are Russia, Belarus, other CIS countries and the Baltics.
The parent company of the Group is AS Silvano Fashion Group (hereinafter "the Parent company"), which is domiciled in Estonia. AS Silvano Fashion Group registered address is Tulika 17, Tallinn, Estonia.
The shares of the Group are listed on the Nasdaq OMX Tallinn Stock Exchange and on the Warsaw Stock Exchange.
As of 30 September 2023 the Group employed 1 643 people (as of 31 December 2022: 1 616 people).
The Group comprises of the following entities:
| Location | Main activity | Ownership interest 30.09.2023 |
Ownership interest 31.12.2022 |
|
|---|---|---|---|---|
| Parent company | ||||
| Silvano Fashion Group AS | Estonia | Holding | ||
| Entities belonging to the | ||||
| Silvano Fashion Group: | ||||
| CJSC Silvano Fashion* | Russia | Retail and Wholesale | 100% | 100% |
| LLC Silvano Fashion | Belarus | Retail and wholesale | 100% | 100% |
| LLC Silvano Fashion | Ukraine | Wholesale | 100% | 100% |
| Silvano Fashion SIA | Latvia | Retail | 100% | 100% |
| CJSC Milavitsa | Belarus | Manufacturing and wholesale | 85.02% | 85.02% |
| JSC Sewing firm Yunona | Belarus | Manufacturing and wholesale | 58.33% | 58.33% |
| LLC Gimil | Belarus | Manufacturing and wholesale | 100% | 100% |
| JSC Lauma Lingerie | Latvia | Manufacturing and wholesale | 100% | 100% |
| Alisee SARL | Monaco | Holding | 99% | 99% |
| JCS Metropolitan Trade | Russia | Holding | 100% | 100% |
| Company Milavitsa ** | ||||
| LLC Baltsped logistik | Belarus | Logistics | 50% | 50% |
* Silvano Fashion CJSC is 100% owned by Metropolitan Trade Company Milavitsa CJSC (same was effective as of 31.12.2022).
** Metropolitan Trade Company Milavitsa LLC is owned by AS Silvano Fashion Group and SIA Silvano Fashion, each holding 50% (same was effective as of 31.12.2022).
In addition, as of 30.09.2023 the subsidiary of AS Silvano Fashion Group, CJSC Milavitsa, had investment in associate LLC Trade house "Milavitsa "Novosibirsk with a 25% ownership interest (same was effective as of 31.12.2022).
Business environment and results
The Group's sales amounted to 46 739 thousand EUR during the 9 months of 2023, representing a 6.3% increase as compared to the same period for the previous year. The Group's gross profit during the 9 months of 2023 amounted to 28 078 thousand EUR and increased by 27.2% compared to 9 months of 2022. The Gross margin during the 9 months of 2023 increased to 60.1% from 50.2% as compared to 9 months of 2022.
Consolidated operating profit for 9 months of 2023 increased by 53.3% to 16 267 thousand EUR, compared to 10 611 thousand EUR for 9 months of 2022. Consolidated EBITDA for 9 months of 2023 increased by 41.4% and was 18 630 thousand EUR, compared to 13 180 thousand EUR for 9 months of 2022.
Reported consolidated net profit for 9 months of 2023 amounted to 8 842 thousand EUR, as compared to net profit of 12 516 thousand EUR in the prior year's same period. Net profit attributable to equity holders of the Parent company for 9 months of 2023 amounted 7 912 thousand EUR.
Russia Economic Outlook
The Group's sales on the Russian market totalled 27 800 thousand EUR, increase is 3.5% compared to 9 months of 2022. Local currency sales increased by 28.9% during 9 months of 2023 compared to the same 9 months of 2022. Group will focus on improving profitability of its retail business, we will also continue to expand our store chain there depending on the availability of reasonably priced sales areas. At the end of the reporting period, there were a total of 54 stores operated by the Group itself (as of 31 December 2022: 49 stores).
Belarus Economic Outlook
The Group's sales in Belarus in the 9 months of 2023 were 11 846 thousand EUR and increased by 5.8% compared to the 9 months of 2022. Sales in local currency increased by 19.1% during the same period. At the end of the reporting period, there were a total of 59 stores operated by the Group itself (as of 31 December 2022: 59 stores).
Ukraine Economic Outlook
The Group's sales in Ukraine in the 9 months of 2023 were 121 thousand EUR and decreased by 45.2% compared to the 9 months of 2022.
Sales structure
Sales by markets
Group sales in its 2 major markets – Russia and Belarus– were 84.8% of its total sales. Measured in local currencies sales increase was accordingly – 28.9% in Russia, 19.1% in Belarus.
| 09m 2023 | 09m 2022 | Change | Change, % | |
|---|---|---|---|---|
| Russia, th RUB | 2 481 297 | 1 925 226 | 556 071 | 28.9% |
| Belarus, th BYN | 37 711 | 31 658 | 6 053 | 19.1% |
Group`s sales results by markets measured in EUR are presented below:
| 09m 2023 | 09m 2022 | Change, | Change, % | 09m 2023, | 09m 2022, | |
|---|---|---|---|---|---|---|
| in thousands of EUR | EUR | % of sales | % of sales | |||
| Russia | 27 800 | 26 851 | 949 | 3.5% | 59.5% | 61.1% |
| Belarus | 11 846 | 11 193 | 653 | 5.8% | 25.3% | 25.4% |
| Ukraine | 121 | 221 | -100 | -45.2% | 0.3% | 0.5% |
| Baltics | 1 129 | 1 388 | -259 | -18.7% | 2.4% | 3.2% |
| Other markets | 5 843 | 4 321 | 1 522 | 35.2% | 12.5% | 9.8% |
| Total | 46 739 | 43 974 | 2 765 | 6.3% | 100.0% | 100.0% |
The majority of lingerie sales revenue during 9 months of 2023 in the amount 27 800 thousand EUR was generated in Russia, accounting for 59.5% of total sales. The second largest market was Belarus, where sales were 11 846 thousand EUR, contributing 25.3% of lingerie sales (both retail and wholesale).
| 09m 2023 | 09m 2022 | Change, | Change, % | 09m 2023, | 09m 2022, | |
|---|---|---|---|---|---|---|
| in thousands of EUR | EUR | % of sales | % of sales | |||
| Wholesale | 29 903 | 27 864 | 2 039 | 7.3% | 64.0% | 63.4% |
| Retail | 16 810 | 16 085 | 725 | 4.5% | 35.9% | 36.6% |
| Other operations | 26 | 25 | 1 | 1.5% | 0.1% | 0.0% |
| Total | 46 739 | 43 974 | 2 765 | 6.3% | 100.0% | 100.0% |
Sales by business segments
During 9 months of 2023 wholesale revenue amounted to 29 903 thousand EUR, representing 64.0% of the Group's total revenue (9 months of 2022: 63.4%). The main wholesale regions were Russia and Belarus.
Our retail revenue increased by 4.5% and amounted 16 810 thousand EUR, this represents 35.9% of the Group`s total revenue.
Own & franchise store locations, geography
| Own | Franchise | Total | |
|---|---|---|---|
| Russia | 54 | 332 | 386 |
| Belarus | 59 | 0 | 59 |
| Baltics | 6 | 20 | 26 |
| Other regions | 0 | 86 | 86 |
| Total | 119 | 438 | 557 |
At the end of the reporting period the Group and its franchising partners operated 526 Milavitsa and 31 Lauma Lingerie brand stores, including 119 stores operated directly by the Group (as of 31 December 2022: 114 stores).
Selected Financial Indicators
Summarized selected financial indicators of the Group for 9 months of 2023 compared to 9 months of 2022 and 30.09.2023 compared to 31.12.2022 were as follows:
| in thousands of EUR | 09m 2023 | 09m 2022 Change | |
|---|---|---|---|
| Revenue | 46 739 | 43 974 | 6.3% |
| Gross Profit | 28 078 | 22 066 | 27.2% |
| Operating profit | 16 267 | 10 611 | 53.3% |
| EBITDA | 18 630 | 13 180 | 41.4% |
| Net profit for the period | 8 842 | 12 516 | -29.4% |
| Net profit attributable equity holders of the Parent company | 7 912 | 11 835 | -33.1% |
| Earnings per share (EUR) | 0,22 | 0,33 | -33.3% |
| Operating cash flow for the period | 15 369 | 12 493 | 23.0% |
| in thousands of EUR | 30.09.2023 31.12.2022 Change | ||
| Total assets | 68 338 | 63 991 | 6.8% |
| Total current assets | 56 832 | 50 309 | 13.0% |
| Total equity attributable to equity holders of the Parent | 50 010 | 44 786 | 11.7% |
| company | |||
| Cash and cash equivalents | 33 289 | 25 909 | 28.5% |
| Margin analysis, % | 09m 2023 | 09m 2022 Change | |
| Gross profit | 60.1 | 50.2 | 19.7% |
| Operating profit | 34.8 | 24.1 | 44.4% |
| EBITDA | 39.9 | 30.0 | 33.0% |
| Net profit | 18.9 | 28.5 | -33.7% |
| Net profit attributable to equity holders of the Parent company | 16.9 | 26.9 | -37.2% |
| Financial ratios, % | 30.09.2023 31.12.2022 Change | ||
| ROA | 11.9 | 19.0 | -37.4% |
| ROE | 16.8 | 28.1 | -40.2% |
| Price to earnings ratio (P/E) | 5.1 | 3.4 | 50.0% |
| Current ratio | 7.4 | 5.1 | 45.1% |
| Quick ratio |
Underlying formulas:
EBITDA = net profit for the period + depreciation and amortisation + net finance income + income tax expense Gross profit margin = gross profit / revenue
EBITDA margin = EBITDA / revenue
Net profit margin = net profit / revenue
Net profit margin attributable to equity holders of the Parent company = net profit attributable to equity holders of the Parent company / revenue
ROA (return on assets) = net profit attributable to owners of the Company for the last 4 quarters/ average total assets
ROE (return on equity) = net profit attributable to owners of the Company for the last 4 quarters/ average equity attributable to equity holders of the Company
EPS (earnings per share) = net profit attributable to owners of the Company/ weighted average number of ordinary shares Price to earnings ratio = Share price at the end of reporting period/earnings per share, calculated based on the net profit attributable to owners of the Company for the last 4 quarters
Current ratio = current assets / current liabilities
Quick ratio = (current assets – inventories) / current liabilities
Financial performance
The Group`s sales amounted 46 739 thousand EUR during 9 months of 2023, representing a 6.3% increase as compared to the same period of previous year. Overall, wholesale increased by 7.3%, measured in EUR.
The Group's gross profit during 9 months of 2023 amounted to 28 078 thousand EUR and increase by 27.2% compared to previous year. The gross margin during 9 months of 2023 increased by 19.7% compared to 9 months of 2022. The cost of sold goods decreased by 14.8%.
Consolidated operating profit for 9 months of 2023 amounted to 16 267 thousand EUR, compared to 10 611 thousand EUR for 9 months of 2022, increase by 53.3%. The consolidated operating profit margin was 34.8% for 9 months of 2023 (24.1% for 9 months of 2022). Consolidated EBITDA for 9 months of 2023 increased by 41.4% and amounted to 18 630 thousand EUR, which is 39.9% in margin terms (13 180 thousand EUR and 30.0% for 9 months of 2022).
Reported consolidated net profit attributable to equity holders of the Parent company for 9 months of 2023 amounted to 7 912 thousand EUR, compared to net profit of 11 835 thousand EUR for 9 months of 2022, net profit margin attributable to equity holders of the Parent company for 9 months of 2023 was 16.9% against net profit 26.9% for 9 months of 2022.
Financial position
As of 30 September 2023 consolidated assets amounted to 68 338 thousand EUR representing increase by 6.8% as compared to the position as of 31 December 2022.
Trade and other receivables increased by 449 thousand EUR as compared to 31 December 2022 and amounted to 1 493 thousand EUR as of 30 September 2023. Inventory balance decreased by 1 387 thousand EUR and amounted to 20 877 thousand EUR as of 30 September 2023.
Equity attributable to equity holders of the Parent company increased by 5 224 thousand EUR and amounted to 50 010 thousand EUR as of 30 September 2023. Current liabilities decreased by 2 224 thousand EUR during 9 months of 2023.
Investments
During 9 months of 2023 the Group's investments into property, plant and equipment totalled 896 thousand EUR, in previous year same period 228 thousand EUR. Investments were made mainly into opening and renovating own stores, as well into equipment and facilities to maintain effective production for future periods.
Personnel
As of 30 September 2023, the Group employed 1 643 employees, including 509 people in retail operations. The rest were employed in production, wholesale, administration and support operations. In 31.12.2022 there were 1 616 employees, including 499 people in retail operations.
Total salaries and related taxes during 9 months of 2023 amounted to 9 964 thousand EUR ( 8 938 thousand EUR in 9 months of 2022). The remuneration of key management of the Group, including the key executives of all subsidiaries, totalled 423 thousand EUR.
Decisions made by governing bodies during 9 months 2023
On the 24th of May 2023, AS Silvano Fashion Group proposed to the shareholders to adopt the resolutions of the annual general meeting of shareholders without convening the meeting.
The notice of the general meeting was published on May 24, 2023, in the information system NASDAQ OMX Tallinn https://view.news.eu.nasdaq.com/view?id=bc3e622810054b7a49a4f706f81ac5063&lang=en&src=listed and Warsaw Stock Exchange, on the website of SFG https://www.silvanofashion.com/investors/companyannouncements/ and in the daily newspaper Eesti Päevaleht.
On June 15, 2023 Silvano Fashion Group held its regular Annual General Meeting of Shareholders. The Meeting adopted the following decisions:
• Approved the 2022 Annual Report;
• Left the net profit undistributed and included the net profit of the financial year 2022 in retained earnings.
The protocol of the general meeting was published on the website of AS Silvano Fashion Group https://www.silvanofashion.com/investors/company-announcements/.
Shares of AS Silvano Fashion Group
As of 30 September 2023 registered share capital of AS Silvano Fashion Group amounted to 3 600 thousand EUR divided into 36 000 000 ordinary shares with a nominal value of 0.10 EUR each. The share register is electronic and maintained at the Estonian Central Register of Securities. The Company has been listed on Nasdaq OMX Tallinn Stock Exchange main list (since 21.11.2006) and on Warsaw Stock Exchange (since 23.07.2007).
As of 30 September 2023 AS Silvano Fashion Group 3 434 shareholders (as of 31 December 2022: 3 585 shareholders).
As of 30 September 2023 shareholders, whose interest in AS Silvano Fashion Group exceeded 5% included:
| Name | Number of shares | Shareholding |
|---|---|---|
| Major shareholders | 19 262 985 | 53.50% |
| BALTPLAST AS | 9 115 798 | 25.32% |
| AS SEB PANK CLIENTS | 8 000 000 | 22.22% |
| UNICREDIT BANK AUSTRIA AG | 2 147 187 | 5.96% |
| Other shareholders | 16 737 015 | 46.50% |
| Total number of shares | 36 000 000 | 100.00% |
As of 31 December 2022 shareholders, whose interest in AS Silvano Fashion Group exceeded 5% included:
| Name | Number of shares | Shareholding |
|---|---|---|
| Major shareholders | 19 267 985 | 53.52% |
| BALTPLAST AS | 9 115 798 | 25.32% |
| AS SEB PANK CLIENTS | 8 000 000 | 22.22% |
| UNICREDIT BANK AUSTRIA AG | 2 152 187 | 5.98% |
| Other shareholders | 16 732 015 | 46.48% |
| Total number of shares | 36 000 000 | 100.00% |
Share price development and turnover on the Tallinn Stock Exchange during 9 months of 2023 (EUR)
During 9 months of 2023 the highest and lowest prices of the AS Silvano Fashion Group` share on the Tallinn Stock Exchange were 1.204 EUR and 1.0498 EUR, respectively
Share price development on the Warsaw Stock Exchange during 9 months of 2023(PLN)
During 9 months of 2023, the highest and lowest prices of the AS Silvano Fashion Group` share on the Warsaw Stock Exchange were 7.6 PLN and 4.00 PLN respectively.
Declaration of the Management Board
The Management Board of AS Silvano Fashion Group has reviewed and approved Consolidated Interim Financial Report for Q3 and 9 months of 2023 (hereinafter "the Interim Report").
Member of the Management Board confirms that according to his best knowledge the Interim Report gives a true and fair view of financial position of the Group, its financial performance and its cash flows in accordance with International Financial Reporting Standards, as adopted by EU, and IAS 34 "Interim Financial Reporting".
Furthermore, Member of the Management Board confirms that in his opinion the Interim Report provides a fair review of significant developments in the Group's activities that occurred during the reporting period and their impact and describes significant risks and uncertainties that may affect the Group during future reporting periods.
The Interim Report has not been audited or otherwise reviewed by the auditors.
___________________________
Jarek Särgava Member of the Management Board November 24, 2023
Consolidated Statement of Financial Position
| in thousands of EUR | Note | 30.09.2023 | 31.12.2022 |
|---|---|---|---|
| Unaudited | Audited | ||
| ASSETS | |||
| Current assets | |||
| Cash and cash equivalents | 2 | 33 289 | 25 909 |
| Trade and other receivables | 3 | 1 493 | 1 044 |
| Prepayments and other tax receivables | 3 | 1 055 | 971 |
| Current loans granted | 33 | 10 | |
| Other assets | 85 | 111 | |
| Inventories | 4 | 20 877 | 22 264 |
| Total current assets | 56 832 | 50 309 | |
| Non-current assets | |||
| Non-current receivables | 286 | 301 | |
| Investments in associates | 79 | 82 | |
| Investments in other shares | 218 | 259 | |
| Deferred tax asset | 1 924 | 2 166 | |
| Intangible assets | 575 | 585 | |
| Investment property | 925 | 1 041 | |
| Property, plant and equipment | 5 | 7 499 | 9 248 |
| Total non-current assets | 11 506 | 13 682 | |
| TOTAL ASSETS | 68 338 | 63 991 | |
| LIABILITIES AND EQUITY | |||
| Current liabilities | |||
| Current lease liabilities | 612 | 2 373 | |
| Trade and other payables | 6 | 4 674 | 5 837 |
| Tax liabilities | 2 392 | 1 692 | |
| Total current liabilities | 7 678 | 9 902 | |
| Non-current liabilities | |||
| Deferred tax liability | 883 | 1 039 | |
| Non-current lease liabilities | 4 695 | 4 041 | |
| Non-current provisions | 34 | 41 | |
| Total non-current liabilities | 5 612 | 5 121 | |
| Total liabilities | 13 290 | 15 023 | |
| Equity | |||
| Share capital | 7 | 3 600 | 3 600 |
| Share premium | 4 967 | 4 967 | |
| Statutory reserve capital | 1 306 | 1 306 | |
| Unrealised exchange rate differences | -22 097 | -19 409 | |
| Retained earnings | 62 234 | 54 322 | |
| Total equity attributable to equity holders | |||
| of the Parent company | 50 010 | 44 786 | |
| Non-controlling interest | 5 038 | 4 182 | |
| Total equity | 55 048 | 48 968 | |
| TOTAL EQUITY AND LIABILITIES | 68 338 | 63 991 |
Consolidated Income Statement
| in thousands of EUR | Note | 3Q 2023 | 3Q 2022 | 09m 2023 | 09m 2022 |
|---|---|---|---|---|---|
| Unaudited Unaudited Unaudited Unaudited | |||||
| Revenue from contracts with customers | 9 | 15 332 | 17 604 | 46 739 | 43 974 |
| Cost of goods sold | -6 091 | -8 423 | -18 661 | -21 908 | |
| Gross Profit | 9 241 | 9 181 | 28 078 | 22 066 | |
| Distribution expenses | -2 517 | -3 093 | -8 071 | -8 120 | |
| Administrative expenses | -1 026 | -1 094 | -3 303 | -3 136 | |
| Other operating income | 78 | 130 | 194 | 349 | |
| Other operating expenses | -190 | -198 | -631 | -548 | |
| Operating profit | 5 586 | 4 926 | 16 267 | 10 611 | |
| Currency exchange income/(expense) | -991 | -949 | -3 582 | 5 036 | |
| Other finance income/(expenses) | -1 | 127 | -186 | -103 | |
| Net finance income | -992 | -822 | -3 768 | 4 933 | |
| Profit (loss) from associates using equity method | 7 | 10 | 19 | -1 | |
| Profit before tax | 4 601 | 4 114 | 12 518 | 15 543 | |
| Income tax expense | -1 181 | -1 425 | -3 676 | -3 027 | |
| Profit for the period | 3 420 | 2 689 | 8 842 | 12 516 | |
| Attributable to : Equity holders of the Parent company |
3 140 | 2 489 | 7 912 | 11 835 | |
| Non-controlling interest | 280 | 200 | 930 | 681 | |
| Earnings per share from profit attributable to equity holders of the Parent company, both basic and diluted (EUR) |
8 | 0,09 | 0,07 | 0,22 | 0,33 |
Consolidated Statement of Comprehensive Income
| in thousands of EUR | Note | 3Q 2023 | 3Q 2022 | 09m 2023 | 09m 2022 |
|---|---|---|---|---|---|
| Unaudited Unaudited Unaudited Unaudited | |||||
| Profit for the period | 3 420 | 2 689 | 8 842 | 12 516 | |
| Other comprehensive income (loss) that will be reclassified to profit or loss in subsequent periods: |
|||||
| Exchange differences on translation of foreign operations | -672 | 2 894 | -2 055 | 2 175 | |
| Total other comprehensive income for the period | -672 | 2 894 | -2 055 | 2 175 | |
| Total comprehensive income (loss) for the period Attributable to : |
2 748 | 5 583 | 6 787 | 14 691 | |
| Equity holders of the Parent company | 2 612 | 5 489 | 5 224 | 13 945 | |
| Non-controlling interest | 136 | 94 | 1 563 | 746 |
Consolidated Statement of Cash Flows
| in thousands of EUR | Note | 09m 2023 | 09m 2022 |
|---|---|---|---|
| Unaudited | Unaudited | ||
| Cash flow from operating activities | |||
| Profit for the period | 8 842 | 12 516 | |
| Adjustments for: | |||
| Depreciation and amortization of non-current assets | 2 363 | 2 569 | |
| Share of profit of equity accounted investees | -19 | 1 | |
| Gains/Losses on the sale of property, plant and equipment | -3 | 9 | |
| Net finance income / costs | 3 768 | -522 | |
| Provision for impairment losses on trade receivables | -3 | 0 | |
| Provision for inventories | 3 | 5 | |
| Income tax expense | 3 676 | 3 027 | |
| Change in inventories | 1 387 | -3 022 | |
| Change in trade and other receivables | -507 | -266 | |
| Change in trade and other payables | -1 067 | -91 | |
| Income tax paid | -3 071 | -1 733 | |
| Net cash flow from operating activities | 15 369 | 12 493 | |
| Cash flow from investing activities | |||
| Interest received | 331 | 29 | |
| Dividends received | 11 | 3 | |
| Proceeds from disposal of property, plant and equipment | 9 | 31 | |
| Loans granted | -23 | -11 | |
| Acquisition of property, plant and equipment | -896 | -228 | |
| Acquisition of intangible assets | -123 | -74 | |
| Net cash flow from investing activities | -691 | -250 | |
| Cash flow from financing activities | |||
| Payment of principal portion of lease liabilities | -1 689 | -1 879 | |
| Interest paid on lease liabilities | -521 | -356 | |
| Dividends paid | -707 | -670 | |
| Net cash flow from financing activities | -2 917 | -2 905 | |
| Net increase in cash and cash equivalents | 11 761 | 9 338 | |
| Cash and cash equivalents at the beginning of period | 25 909 | 17 098 | |
| Effect of translation to presentation currency | -4 891 | 0 | |
| Effect of exchange rate fluctuations on cash held | 510 | -173 | |
| Cash and cash equivalents at the end of period | 33 289 | 26 263 |
Consolidated Statement of Changes in Equity
| in ho ds f E U R t usa n o |
S ha re Ca ita l p |
S ha re Pr ium em |
Sta tut ory res erv e ita l cap |
Un l ise d rea ha ex c ng e rat e i f fer d en ces |
Re ine d ta ing ea rn s |
To l e ity ta q u ibu b le att ta to r ity ho lde f eq u rs o t he Pa t ren co mp an y |
No n ll ing ntr co o int st ere |
To l ta ity eq u |
|---|---|---|---|---|---|---|---|---|
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3 6 0 0 |
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| f it for he io d Pro t p er |
0 | 0 | 0 | 0 | 1 1 8 3 5 |
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| he hen ive inc for he io d Ot t r c om p re s om e p er |
0 | 0 | 0 | 2 1 1 0 |
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0 | 0 | 0 | 2 1 1 0 |
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| Tr ion it h o ise d d ire ly in ity t ct an sac s w wn ers , r eco g n eq u |
||||||||
| iv i den ds de lar d D c e |
0 | 0 | 0 | 0 | 0 | 0 | -6 0 7 |
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| To l tr ion it h o ise d d ire ly in ta t ct an sac s w wn ers , r eco g n ity eq u |
0 | 0 | 0 | 0 | 0 | 0 | -6 7 0 |
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| Ba lan 3 0 Se be 2 0 2 2 ( Un d ite d ) at tem ce as p r au |
3 6 0 0 |
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0 | 0 | 0 | -2 6 8 8 |
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| ive inc for io To ta l c he t he d om p re ns om e p er |
0 | 0 | 0 | -2 6 8 8 |
9 1 2 7 |
2 2 4 5 |
1 5 6 3 |
6 7 8 7 |
| Tr ion it h o ise d d ire ly in ity t ct an sac s w wn ers , r eco g n eq u |
||||||||
| D iv i den ds de lar d c e |
0 | 0 | 0 | 0 | 0 | 0 | -7 0 7 |
0 -7 7 |
| ion it ise ire in To ta l tr t h o d d ct ly an sac s w wn ers , r eco g n |
||||||||
| ity eq u |
0 | 0 | 0 | 0 | 0 | 0 | -7 0 7 |
-7 0 7 |
| Ba lan 3 0 Se be 2 0 2 3 ( Un d ite d ) at tem ce as p r au |
3 6 0 0 |
4 9 6 7 |
1 3 0 6 |
-2 2 0 9 7 |
6 2 2 3 4 |
5 0 0 1 0 |
5 0 3 8 |
5 5 0 4 8 |
Notes to the Interim Report
Note 1 Summary of significant accounting policies
AS Silvano Fashion Group is a company registered in Estonia. This Interim Report of the Group is prepared for the reporting period ended 30 September 2023 and comprises parent company and its subsidiaries.
The principal accounting policies applied in the preparation of this Interim Report are set out below. The policies have been consistently applied to all the years presented unless otherwise stated.
The Interim Report has not been audited or reviewed by external auditors.
Basis for preparation
This Interim Report of AS Silvano Fashion Group for 9 months of 2023 ended on 30 September 2023 has been prepared in accordance with IAS 34 "Interim financial reporting" as adopted by the European Union. The Interim Report should be read in conjunction with the Annual Report for the financial year ended on 31 December 2022, which have been prepared in accordance with IFRS as adopted by the European Union.
This Interim Report is comprised in thousands of Euros (EUR).
The Group's performance is not significantly affected by any seasonal or cyclical factors. Nevertheless, revenue during vacation periods and holidays in CIS countries is usually higher compared to other periods.
New standards and interpretations
In additions to disclosures already made in the Annual Report for the financial year ended on 31 December 2022 there are no new IFRSs or IFRIC interpretations that are effective for the financial year beginning on or after 1 January 2023 and that would be expected to have a material impact on the Group.
Note 2 Cash and cash equivalents
| in thousands of EUR | 30.09.23 | 31.12.22 | |
|---|---|---|---|
| Cash on hand | 60 | 171 | |
| Current bank accounts in EUR | 3 923 | 2 956 | |
| Current bank accounts in other currencies than EUR | 333 | 300 | |
| Short-term bank deposits in EUR | 28 700 | 22 000 | |
| Short-term bank deposits in other currencies than EUR |
190 | 191 | |
| Short-term guarantee deposits | 0 | 7 | |
| Cash in transit | 83 | 284 | |
| Total | 33 289 | 25 909 | |
| in thousands of EUR | 30.09.23 | 31.12.22 | |
| Estonia | 29 194 | 22 329 | |
| Latvia | 71 | 122 | |
| Russia | 1 505 | 1 785 | |
| Belarus | 1 979 | 1 266 | |
| Ukraine | 164 | 195 | |
| Others | 376 | 212 | |
| Total | 33 289 | 25 909 |
| in thousands of EUR | 30.09.23 | 31.12.22 |
|---|---|---|
| Trade receivables from third parties | 1 379 | 939 |
| Trade receivables from related parties | 0 | 0 |
| Receivables on services rendered | 34 | 30 |
| Other receivables | 130 | 134 |
| Total gross trade and other receivables | 1 543 | 1 103 |
| Allowance for expected credit losses | -50 | -59 |
| Total net trade and other receivables | 1 493 | 1 044 |
Note 3 Trade receivables and other assets
| in thousands of EUR | 30.09.23 | 31.12.22 |
|---|---|---|
| Prepayments and other tax receivables | ||
| Prepayments issued to suppliers | 422 | 450 |
| VAT recoverable | 632 | 520 |
| Other tax prepayments | 1 | 1 |
| Total prepayments and other tax | ||
| receivables | 1055 | 971 |
The fair values of trade and other receivables are not materially different from the carrying values based on the expected discounted cash flows.
Note 4 Inventories
| in thousands of EUR | 30.09.23 | 31.12.22 |
|---|---|---|
| Raw and other materials | 4 747 | 6 042 |
| Work in progress | 1 255 | 1 079 |
| Finished goods | 12 483 | 14 143 |
| Other inventories | 2 392 | 1 000 |
| Total | 20 877 | 22 264 |
Note 5 Property, plant and equipment
| in thousands of EUR | Other | |||||
|---|---|---|---|---|---|---|
| Land | equipment | Right | Assets | |||
| and | Plant and | and | of-use | under | ||
| buildings | equipment | fixtures | asset | construction | Total | |
| 31.12.2021 | ||||||
| Cost | 4 065 | 14 992 | 4 625 | 12 499 | 64 | 36 245 |
| Accumulated depreciation | -2 209 | -13 325 | -4 118 | -6 622 | 0 | -26 274 |
| Net book amount | 1 856 | 1 667 | 507 | 5 877 | 64 | 9 971 |
| Movements during 09m 2022 | ||||||
| Additions | 0 | 13 | 173 | 1 615 | 42 | 1 843 |
| Disposals | 0 | 0 | -22 | -57 | 0 | -79 |
| Reclassifications | 0 | 47 | 35 | 0 | -82 | 0 |
| Depreciation | -74 | -372 | -313 | -1 771 | 0 | -2 530 |
| Unrealised exchange rate differences | 477 | 279 | 683 | 1 911 | 15 | 3 365 |
| Closing net book amount | 2 259 | 1 634 | 1 063 | 7 575 | 39 | 12 570 |
| 30.09.2022 | ||||||
| Cost | 4 869 | 17 758 | 5 644 | 18 085 | 39 | 46 395 |
| Accumulated depreciation | -2 610 | -16 124 | -4 581 | -10 510 | 0 | -33 825 |
| Net book amount | 2 259 | 1 634 | 1 063 | 7 575 | 39 | 12 570 |
| 31.12.2022 | ||||||
| Cost | 4 020 | 14 838 | 4 688 | 14 350 | 33 | 37 929 |
| Accumulated depreciation | -2 280 | -13 560 | -4 127 | -8 714 | 0 | -28 681 |
| Net book amount | 1 740 | 1 278 | 561 | 5 636 | 33 | 9 248 |
| Movements during 09m 2023 | ||||||
| Additions | 0 | 15 | 376 | 748 | 505 | 1 644 |
| Modifications | 0 | 0 | 0 | 760 | 0 | 760 |
| Disposals | 0 | 0 | -12 | -50 | 0 | -62 |
| Transfers to Investment property | -75 | 0 | 0 | 0 | 0 | -75 |
| Reclassifications | 0 | 323 | 167 | 0 | -490 | 0 |
| Depreciation | -55 | -297 | -233 | -1 722 | 0 | -2 307 |
| Unrealised exchange rate differences | -265 | -199 | -164 | -1 074 | -7 | -1 709 |
| Closing net book amount | 1 345 | 1 120 | 695 | 4 298 | 41 | 7 499 |
| 30.09.2023 | ||||||
| Cost | 3 307 | 12 923 | 4 370 | 12 265 | 41 | 32 906 |
| Accumulated depreciation | -1 962 | -11 803 | -3 675 | -7 967 | 0 | -25 407 |
| Net book amount | 1 345 | 1 120 | 695 | 4 298 | 41 | 7 499 |
The Group didn't have any significant binding commitments to purchase property plant and equipment as of 30 September 2023.
| 31.12.22 | |
|---|---|
| 3 102 | 4 055 |
| 431 | 690 |
| 408 | 505 |
| 512 | 429 |
| 221 | 158 |
| 4 674 | 5 837 |
| 30.09.23 |
Note 6 Trade and other payables
Fair values of trade and other payables are not materially different from book values due to short maturities.
Note 7 Equity
Shares
As of 30 September 2023 registered share capital of AS Silvano Fashion Group amounted to 3 600 thousand EUR divided into 36 000 000 shares with a nominal value of 0.10 EUR each (as of 31 December 2022, 3 600 thousand EUR 36 000 000 shares and 0.10 EUR nominal value, respectively). All shares of AS Silvano Fashion Group are ordinary shares and all are registered. Each ordinary share gives a shareholder one vote in General Meeting of Shareholders. No share certificates are issued for registered shares. The share register is electronic and maintained at the Estonian Central Depositary for Securities. All shares are fully paid shares.
As of 30 September 2023 AS Silvano Fashion Group had 3 434 shareholders (as of 31 December 2022: 3 585 shareholders).
Note 8 Earnings per share
The calculation of basic earnings per share for 9 months of 2023 (9 months of 2022) is based on profit attributable to owners and a weighted average number of ordinary shares.
| in thousands of shares | 09m 2023 | 09m 2022 |
|---|---|---|
| Number of ordinary shares at the beginning of the period | 36 000 | 36 000 |
| Effect of own shares held at the beginning of the period | 0 | 0 |
| Number of ordinary shares at the end of the period | 36 000 | 36 000 |
| Effect of own shares held at the end of the period | 0 | 0 |
| Weighted average number of ordinary shares for the Period |
36 000 | 36 000 |
| in thousands of EUR | 09m 2023 | 09m 2022 |
| Profit (loss)for the period attributable to equity holders of the Parent company |
7 912 | 11 835 |
| Basic earnings per share (EUR) | 0.22 | 0.33 |
| Diluted earnings per share (EUR) | 0.22 | 0.33 |
Diluted earnings per share do not differ from basic earnings per share as the Group has no financial instruments issued that could potentially dilute the earnings per share.
Note 9 Revenue from contracts with customers
| in thousands of EUR | 09m 2023 | 09m 2022 |
|---|---|---|
| Revenue from wholesale | 29 903 | 27 864 |
| Revenue from retail | 16 810 | 16 085 |
| Subcontracting and services | 26 | 19 |
| Other sales | 0 | 6 |
| Total | 46 739 | 43 974 |
Note 10 Transactions with related parties
The following parties are considered to be related;
- a) Shareholders owning, directly or indirectly, a voting power in the parent company or its significant subsidiaries that gives them significant influence over the parent company or its significant subsidiaries and companies under their control.
- b) Associates enterprises in which parent company or its subsidiaries have significant influence;
- c) Members of the Management Board and Supervisory Boards of parent company and its significant subsidiaries and their immediate family members and companies under their control or significant influence.
The Group's owners are legal and physical persons and no sole shareholder has control over the Group's activities. According to management's assessment, the prices applied in transactions with related parties did not differ significantly from the market terms.
| Sales of goods and services | ||
|---|---|---|
| in thousands of EUR | 09m 2023 | 09m 2022 |
| Associates | 478 | 473 |
| Total | 478 | 473 |
| Balances with related parties | ||
| in thousands of EUR | 30.09.2023 31.12.2022 | |
| Trade receivables from associates | 0 | 0 |
| Total | 0 | 0 |
| Benefits to key management of the group | ||
| in thousands of EUR | 09m 2023 | 09m 2022 |
| Remunerations and benefits | 423 | 497 |
Total 423 497
Note 11 Operating segments
The Group`s operating segments have been determined based on regular reports being monitored and analysed by Management and Supervisory Boards of the parent company on an on-going basis.
The Management and Supervisory Board consider the business primarily from the activity perspective, monitoring separately wholesale and retail activities.
- The wholesale segment includes purchasing and production of women's lingerie, and distribution to external wholesale customers and the retail segment. The Group's manufacturing facilities are located in Latvia and Belarus.
- The retail segment sells the lingerie through own retail network in Latvia, Belarus and Russia.
There is a strong integration between wholesale and retail segments. The accounting policies of reportable segments are the same. Management estimates that intersegment transactions have been done on arm's length basis.
Primary measures monitored by the Supervisory Board are segment revenues, segment EBITDA (which is defined as profit before depreciation, amortisation, net financial income, income tax expense and gain on net monetary position) and segment net profit. These measures are included in the internal management reports that are reviewed by the Management Board and the Supervisory Board. Segment EBITDA is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain segment relative to other entities that operate within the industry.
Interest income and interest expenses are not core activities of operating segments and are not provided to management and are not evaluated by management as performance assessment criteria of segments' performance. Therefore, interest income and interest expenses are presented on net basis.
Unallocated revenues include revenues from services, commissions and rental income. Unallocated assets include cash and bank deposits not used in daily operations of either of the segments.
| Operating segments | 09m 2023 and as of 30.09.2023 | |||||
|---|---|---|---|---|---|---|
| in thousands of EUR | Lingerie retail |
Lingerie wholesale |
Total | segments Unallocated | Eliminations | Total |
| Revenue from external customers | 16 810 | 29 903 | 46 713 | 26 | 46 739 | |
| Intersegment revenues | 0 | 26 222 | 26 222 | 2 375 | -28 597 | 0 |
| EBITDA | 7 783 | 10 863 | 18 646 | -16 | 18 630 | |
| Amortization and depreciation | -1 415 | -587 | -2 002 | -361 | -2 363 | |
| Operating income, EBIT Profit from associates using equity |
6 368 | 10 276 | 16 644 | -377 | 0 | 16 267 |
| method | 0 | 19 | 19 | 0 | 19 | |
| Net financial income | -353 | -339 | -692 | -3 076 | -3 768 | |
| Income tax | -811 | -2 319 | -3 130 | -546 | -3 676 | |
| Net profit | 5 204 | 7 637 | 12 841 | -3 999 | 0 | 8 842 |
| Investments in associates | 0 | 79 | 79 | 0 | 79 | |
| Other operating segments assets | 4 198 | 32 204 | 36 402 | 31 857 | 68 259 | |
| Reportable segments liabilities | 2 117 | 8 909 | 11 026 | 2 264 | 13 290 | |
| Capital expenditures Number of employees as of reporting |
1 129 | 601 | 1 730 | 37 | 1 767 | |
| date | 509 | 1 028 | 1 537 | 106 | 1 643 | |
| Operating segments in thousands of EUR |
09m 2022 and as of 30.09.2022 | |||||
| Lingerie retail |
Lingerie wholesale |
Total | segments Unallocated | Eliminations | Total |
| retail | wholesale | segments Unallocated | Eliminations | Total | ||
|---|---|---|---|---|---|---|
| Revenue from external customers | 16 085 | 27 864 | 43 949 | 25 | 43 974 | |
| Intersegment revenues | 0 | 23 508 | 23 508 | 2 177 | -25 685 | 0 |
| EBITDA | 7 863 | 5 150 | 13 013 | 167 | 13 180 | |
| Amortization and depreciation | -1 199 | -903 | -2 102 | -467 | -2 569 | |
| Operating income, EBIT | 6 664 | 4 247 | 10 911 | -300 | 0 | 10 611 |
| Profit from associates using equity | ||||||
| method | 0 | -1 | -1 | 0 | -1 | |
| Net financial income | 180 | -749 | -569 | 5 502 | 4 933 | |
| Income tax | -908 | -1 093 | -2 001 | -1 026 | -3 027 | |
| Net profit | 5 936 | 2 404 | 8 340 | 4 176 | 0 | 12 516 |
| Investments in associates | 0 | 111 | 111 | 0 | 111 | |
| Other operating segments assets | 6 016 | 38 623 | 44 639 | 24 981 | 69 620 | |
| Reportable segments liabilities | 3 583 | 10 662 | 14 245 | 3 604 | 17 849 | |
| Capital expenditures | 1 716 | 199 | 1 915 | 2 | 1 917 | |
| Number of employees as of reporting date |
501 | 999 | 1 500 | 101 | 1 601 |
Revenue and non-current assets breakdown by geographical areas
Revenues in the table below are based on the geographical location of customers; segment assets are based on the geographical location of the assets.
Geographical segments
| in thousands of EUR | Revenue 09m 2023 |
Revenue 09m 2022 |
Non-current assets 30.09.2023 |
Non-current assets 31.12.2022 |
|---|---|---|---|---|
| Russia | 27 800 | 26 851 | 2 650 | 3 316 |
| Belarus | 11 846 | 11 193 | 8 560 | 10 023 |
| Ukraine | 121 | 221 | 0 | 0 |
| Baltics | 1 129 | 1 388 | 271 | 318 |
| Other countries | 5 843 | 4 321 | 25 | 25 |
| Total | 46 739 | 43 974 | 11 506 | 13 682 |