SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of May, 2004
Benetton Group S.p.A.
Via Villa Minelli, 1 - 31050 Ponzano Veneto, Treviso - ITALY
(Indicate by check mark whether the Registrant files or will file annual reports under cover of Form 20-F or Form 40-F)
Form 20-FX Form 40-F______
(Indicate by check mark whether the Registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934).
Yes ______ NoX
TABLE OF CONTENTS
Benetton Group SpA's First Quaterly Report 2004
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Benetton Group S.p.A.
By: /s/ Luciano Benetton
______________________
Name: Luciano Benetton
Title: Chairman
May 20, 2004
Benetton Group
2004 first quarter report
Benetton Group S.p.A.
Villa Minelli
Ponzano Veneto (Treviso) - Italy
Share Capital: Euro 236,026,454.30 fully paid-in
Tax ID/Treviso Company register: 00193320264
Index | THE BENETTON GROUP | ||
3 | Directors and other officers | ||
4 | Financial highlights | ||
5 | Directors' report | ||
Results for the first quarter of 2004 | |||
Significant events during the quarter | |||
Outlook for the full year | |||
6 | Consolidated financial statements and relevant comments | ||
Explanatory notes | |||
7 | Group consolidated results | ||
- Consolidated statements of income reclassified to cost of sales | |||
11 | - Consolidated balance sheet reclassified according to financial criteria | ||
13 | - Financial situation highlights | ||
15 | - Summary statement of cash flows |
Directors and other officers | Board of Directors | |
Luciano Benetton | Chairman | |
Carlo Benetton | Deputy Chairman | |
Silvano Cassano | Managing Director | |
Giuliana Benetton | Directors | |
Gilberto Benetton | ||
Alessandro Benetton | ||
Reginald Bartholomew | ||
Luigi Arturo Bianchi | ||
Sergio De Simoi | ||
Gianni Mion | ||
Ulrich Weiss | ||
Pierluigi Bortolussi | Secretary to the Board | |
Board of Statutory auditors | ||
Angelo Casò | Chairman | |
Filippo Duodo | Auditors | |
Dino Sesani | ||
Antonio Cortellazzo | Alternate Auditors | |
Marco Leotta | ||
Independent auditors | ||
Deloitte & Touche S.p.A. |
Financial highlights
1st quarter | 1st quarter | Year | ||||||||||||||||
Key operating data (millions of euro) | 2004 | % | 2003 | % | Change | % | 2003 | % | ||||||||||
Revenues | 381 | 100.0 | 444 | 100.0 | (63) | (14.1) | 1,859 | 100.0 | ||||||||||
Cost of sales | 210 | 55.1 | 252 | 56.8 | 42 | (16.6) | 1,049 | 56.4 | ||||||||||
Gross operating income | 171 | 44.9 | 192 | 43.2 | (21) | (10.9) | 810 | 43.6 | ||||||||||
Income from operations | 45 | 11.9 | 54 | 12.1 | (9) | (15.9) | 232 | 12.5 | ||||||||||
Ordinary income | 40 | 10.4 | 49 | 11.1 | (9) | (19.8) | 210 | 11.3 | ||||||||||
Net income | 28 | 7.3 | 25 | 5.5 | 3 | 12.8 | 108 | 5.8 |
Key financial data (millions of euro) | 03.31.2004 | 12.31.2003 | 03.31.2003 | ||
Working capital | 820 | 729 | 908 | ||
Assets due to be sold | 8 | 8 | 73 | ||
Net capital employed | 1,707 | 1,655 | 1,882 | ||
Net financial position | 497 | 468 | 709 | ||
Shareholders' equity | 1,204 | 1,174 | 1,158 | ||
Self-financing | 68 | 327 | 76 | ||
Capital expenditures in tangible | |||||
and intangible fixed assets | 21 | 151 | 66 | ||
Purchase of equity investments | 15 | 19 | 15 |
Share and market data | 03.31.2004 | 12.31.2003 | 03.31.2003 | ||
Shareholders' equity per share (euro) | 6.63 | 6.47 | 6.4 | ||
Period end share price (euro) | 8.65 | 9.11 | 6.5 | ||
Screen-based market: high (euro) | 9.37 | 11.30 | 9.0 | ||
Screen-based market: low (euro) | 8.33 | 5.90 | 5.9 | ||
Market capitalization (thousands of euro) | 1,570,484 | 1,654,001 | 1,180,132 | ||
Average no. of shares outstanding (*) | 181,558,811 | 181,558,811 | 181,558,811 | ||
Number of shares outstanding | 181,558,811 | 181,558,811 | 181,558,811 | ||
(*)Net of treasury shares held during the period. |
Employees | 03.31.2004 | 12.31.2003 | 03.31.2003 | ||
Total number | 6,922 | 6,949 | 7,061 |
Directors' report Results for the first quarter of 2004
- Net sales for the first quarter of 2004 came to 381 million euro, down on 444 million euro for the same period in 2003. This result reflects above all the disposal of the sports equipment sector. Sales in the casual segment amounted to 339 million euro (340 million in the same quarter of 2003). Sales in the sports segment came to 20 million euro.
- Gross operating income represents 44.9% of sales, up from 43.2% in the same period of 2003.
- As a percentage of sales, income from operations, 45 million euro, came in at 11.9% compared with 12.1% in the same period of 2003.
- Net income for the period amounts to 28 million euro, compared with 25 million euro in the first quarter of 2003, an increase of 12.8%.
- Self-financing generated in the period totaled 68 million euro (76 million euro in the first three months of 2003).
- The Group invested some 21 million euro in tangible and intangible fixed assets during the first three months of the year, compared with 66 million euro in the first quarter of 2003. A substantial part of these investments (around 6 million euro) has been devoted to the purchase, modernization and restructuring of buildings that will be used for commercial activities. Production-related investments amounted to 11 million euro and mainly concerned plant and machinery at some of the Italian factories.
- Net financial position comes to 497 million euro, compared with 709 million euro as of March 31, 2003 and 468 million euro at the end of December 2003. The difference compared with the end of last year was mainly due to normal cyclical trends in working capital, while the decrease compared with the end of first quarter 2003 benefits from the disposal of the sports equipment business and a lower level of capital expenditure.
Significant events during the quarter
On February 17, 2004 Benfin S.p.A. bought the remaining 15% of Olimpias S.p.A. from third parties for 15 million euro, so that it now owns the entire company. Olimpias S.p.A. is the company that produces textiles (fabrics, knitted fabrics, yarn, woven and printed fabrics, as well as acting as a dyehouse and laundry) mainly on behalf of Group companies.
Outlook for the full year
Even though consumers are still cautious, not helped by unfavorable weather conditions in certain key Group markets, the results for the quarter are in line with budget. Given this situation and based on the information currently available, the outlook for 2004 is of industrial and operating margins substantially in line with those of 2003, on Group sales that no longer include sports equipment so they should come to around 1,800 million euro; net income should be around 7% of sales. Revenues in the casual clothing segment are expected to see moderate growth, with a target of around 1,580 million euro.
Self-financing by the end of 2004 is expected to be in line with what it was at the end of 2003, and the same for debt, despite having to pay the substitute tax on the corporate reorganization; investments should come in at around 100 million euro, focused mainly on expansion of the sales network.
Consolidated financial statements and relevant comments
Explanatory notes
The quarterly report has been prepared in accordance with art. 82 of the Regulation approved by Consob 11971 of May 14, 1999 in application of Legislative Decree 58 of February 24, 1998 concerning issuers.
The accounting policies and consolidation principles adopted are consistent with those used to prepare the annual consolidated financial statements.
The consolidated statements of income and balance sheet as of March 31, 2004, are shown in the same format as those presented in the 2003 Directors' report.
The scope of consolidation has remained substantially unchanged with respect to December 31, 2003; bear in mind that the Nordica, Prince and Rollerblade businesses were all sold off during the first half of 2003.
Group consolidated results | Consolidated statements of income reclassified to cost of sales adopted for internal reporting purposes | |||||||
(thousands of euro) | ||||||||
1st quarter | 1st quarter | |||||||
2004 | % | 2003 | % | Change | % | |||
Revenues | 381,199 | 100.0 | 443,952 | 100.0 | (62,753) | (14.1) | ||
Cost of sales | ||||||||
Material and net change in inventories | 91,106 | 23.9 | 126,087 | 28.4 | (34,981) | (27.7) | ||
Payroll and related costs | 23,966 | 6.3 | 24,688 | 5.6 | (722) | (2.9) | ||
Subcontract work | 78,859 | 20.7 | 83,070 | 18.7 | (4,211) | (5.1) | ||
Industrial depreciation | 5,687 | 1.5 | 6,822 | 1.5 | (1,135) | (16.6) | ||
Other manufacturing costs | 10,567 | 2.7 | 11,349 | 2.6 | (782) | (6.9) | ||
210,185 | 55.1 | 252,016 | 56.8 | (41,831) | (16.6) | |||
Gross operating income | 171,014 | 44.9 | 191,936 | 43.2 | (20,922) | (10.9) | ||
Selling, general and administrative expenses | ||||||||
Payroll and related cost | 28,700 | 7.5 | 32,402 | 7.3 | (3,702) | (11.4) | ||
Distribution and transport | 6,725 | 1.8 | 7,769 | 1.8 | (1,044) | (13.4) | ||
Sales commissions | 18,222 | 4.8 | 19,681 | 4.4 | (1,459) | (7.4) | ||
Advertising and promotion | 13,842 | 3.6 | 24,792 | 5.6 | (10,950) | (44.2) | ||
Depreciation and amortization | 18,842 | 5.0 | 19,492 | 4.4 | (650) | (3.3) | ||
Other expenses | 39,370 | 10.3 | 33,907 | 7.6 | 5,463 | 16.1 | ||
125,701 | 33.0 | 138,043 | 31.1 | (12,342) | (8.9) | |||
Income from operations | 45,313 | 11.9 | 53,893 | 12.1 | (8,580) | (15.9) | ||
Other income/(expenses) | ||||||||
Foreign currency gain/(loss), net | 133 | 0.0 | 4,535 | 1.0 | (4,402) | (97.1) | ||
Interest income | 5,869 | 1.5 | 8,475 | 1.9 | (2,606) | (30.7) | ||
Interest expenses | (11,599) | (3.0) | (17,397) | (3.9) | 5,798 | (33.3) | ||
Other income /(expenses), net | (753) | (0.2) | (302) | 0.0 | (451) | 149.3 | ||
(6,350) | (1.7) | (4,689) | (1.0) | (1,661) | 35.4 | |||
Income before taxes and minority interests | 38,963 | 10.2 | 49,204 | 11.1 | (10,241) | (20.8) | ||
Income taxes | 11,397 | 3.0 | 24,261 | 5.5 | (12,864) | (53.0) | ||
Income before minority interests | 27,566 | 7.2 | 24,943 | 5.6 | 2,623 | 10.5 | ||
Minority interests income/(loss) | 198 | 0.1 | (338) | (0.1) | 536 | (158.6) | ||
Net income | 27,764 | 7.3 | 24,605 | 5.5 | 3,159 | 12.8 |
Group results for the first quarter of 2004
First quarter net sales amounted to 381 million euro. It is impossible to make a straight comparison with the same period in 2003; for comparison purposes, two key factors have to be borne in mind as together they had a significant influence on the sales trend: the sale of the sports equipment business in the first six months of 2003 and the persistently unfavourable trend in certain currencies during the first quarter of the 2004. The decrease in sales due to the disposal of the business amounts to 60 million euro, while the exchange rate effect on sales for the period comes to more than 8 million euro (2.2%). Without these two factors, Group revenues would have increased by 1.4% on the same period of 2003.
Sales by the casual segment are up slightly on first quarter 2003, with an increase net of the exchange effect of 2.1%; the number of garments sold rose by 4.4%.
In the sports segment, the net decrease amounts to 57 million euro and derives essentially from the impact explained above, as well as the trend in sportswear, which rose by 3 million euro.
Sales in the manufacturing sector fell by 19.1% (5 million euro), reflecting the general state of the market.
Consolidated cost of sales decreased in absolute terms by 42 million euro, above all because of the elimination of the sports equipment costs.
The Group's gross operating income comes to 171 million euro, which is 44.9% of sales, compared with 43.2% in the first quarter of 2003; it shows a decrease of 21 million euro which is attributable almost entirely to the sports equipment business. The casual segment has had a positive impact on this percentage trend, while in absolute terms it is substantially in line with first quarter 2003, despite the exchange effect which penalized it by 5 million euro. The "other segments" have declined both in absolute terms and as a percentage of sales.
Selling and general expenses, at 126 million euro, 33% of sales, are down by 8.9%. Commission expense is down by 1.5 million euro, mainly as a result of selling the sports equipment business. Advertising and sponsorships fell from 5.6% to 3.6% of sales thanks to careful management of these costs and the elimination of certain commitments related to the sports equipment sector.
The ratio of payroll costs to sales went from 7.3% in first quarter 2003 to 7.5%; in absolute terms, the decrease is due to the disposal of the sports equipment business. Depreciation and amortization are substantially in line in absolute terms, though as a percentage of sales they rose from 4.4% to 5%.
Operating costs have gone up, mainly because of the higher rents that the commercial network has to pay.
Income from operations comes to 11.9% of sales compared with 12.1% in first quarter 2003, an absolute change of around 9 million euro, attributable to the casualwear segment for 4 million euro and to the sports segment for 5 million euro; the exchange effect was negative for around 2 million euro.
The net effect of foreign exchange management is more or less neutral because of a slight recovery in exchange rates during the period, while the overall exposure in foreign currency was reduced by the sale of the sports equipment sector.
Net financial charges came down as a percentage of sales, reflecting lower interest rates and a lower level of average net financial position.
Net income comes to 28 million euro (7.3% of sales), compared with 25 million euro (5.5% of sales) in first quarter 2003.
Information by geographic area and business segment
The | Other | 1st quarter | 1st quarter | Change | ||||||||||||||||
(millions of euro) | Europe | % | Americas | % | Asia | % | areas | % | 2004 | 2003 | % | |||||||||
Casualwear | 278 | 87.9 | 21 | 100.0 | 39 | 93.3 | 1 | 39.5 | 339 | 340 | 0.3 | |||||||||
Sportswear and | ||||||||||||||||||||
equipment | 19 | 5.9 | - | - | 1 | 2.3 | - | - | 20 | 77 | 74.0 | |||||||||
Manufacturing and others | 19 | 6.2 | - | - | 2 | 4.4 | 1 | 60.5 | 22 | 27 | 19.1 | |||||||||
Total 1st quarter 2004 | 316 | 100.0 | 21 | 100.0 | 42 | 100.0 | 2 | 100.0 | 381 | 444 | 14.1 | |||||||||
Total 1st quarter 2003 | 350 | 39 | 53 | 2 | 444 |
From this period, the geographical breakdown has been revised, replacing the "Euro area" with "Europe".
The decline in revenues, as commented previously, is principally due to the disposal of the sports equipment sector and the impact of exchange rates on sales in foreign (non-euro) countries.
Performance by activity. The Group's activities are traditionally divided into three segments to provide a basis for effective administration and adequate decision-making by corporate management, and to provide accurate and relevant information about the company performance to financial investors.
These business segments are:
- casualwear, representing the Benetton labels (United Colors of Benetton, Undercolors and Sisley), which includes the results of all retail activities, as well as complementary products, such as accessories and footwear;
- sportswear, which includes the Playlife and Killer Loop labels; it also includes sales of equipment to the extent that this involves production by one Group company on behalf of third parties. The figures for the comparative period in 2003 still include the sales of sports equipment under the Nordica, Rollerblade and Prince labels.
- the manufacturing division and other sectors, including sales of raw materials, semi-finished products, industrial services and revenues and expenses from property-related activities.
Results of the Casualwear sector
1st quarter | 1st quarter | ||||||
(millions of euro) | 2004 | % | 2003 | % | Change | % | |
Sector total revenues | 339 | 100.0 | 340 | 100.0 | (1) | (0.3) | |
Cost of sales | (179) | (52.7) | (181) | (53.1) | 2 | (1.1) | |
Gross operating income | 160 | 47.3 | 159 | 46.9 | 1 | 0.7 | |
Selling, general and | |||||||
administrative expenses | (117) | (34.6) | (112) | (33.1) | (5) | 4.5 | |
Income from operations | 43 | 12.7 | 47 | 13.8 | (4) | (8.3) |
Sales in the casualwear segment were broadly in line with the corresponding period of 2003, with a slight reduction of 0.3%. While sales volumes increased considerably (+4.4%), the trend in the dollar and yen had an adverse effect on the overall figure, penalizing sales by around 8 million euro. Without this, sales would have grown by 2.1%. Cost of sales decreased by 1.1% due to even more effective rationalization of the manufacturing process.
The gross margin has improved to 160 million euro, rising as a percentage of sale from 46.9% to 47.3%, despite the 5 million euro lost due to the exchange effect.
Selling, general and administrative expenses have increased compared with the first quarter of 2003; in particular, there has been an increase in rents and consulting services.
Income from operations fell from 13.8% of sales to 12.7%.
Results of the Sportswear and equipment sector
1st quarter | 1st quarter | ||||||
(millions of euro) | 2004 | % | 2003 | % | Change | % | |
Sector total revenues | 20 | 100.0 | 77 | 100.0 | (57) | (74.0) | |
Cost of sales | (13) | (64.9) | (49) | (64.1) | 36 | (73.7) | |
Gross operating income | 7 | 35.1 | 28 | 35.9 | (21) | (74.6) | |
Selling, general and | |||||||
administrative expenses | (5) | (23.7) | (21) | (27.0) | 16 | (77.1) | |
Income from operations | 2 | 11.4 | 7 | 8.9 | (5) | (66.6) |
The first quarter 2003 figures for the sports segment still include sales of equipment, which explains the decrease of 60 million euro. Sales of sportswear come to 16 million euro, a net increase of 3 million euro.
There has been a slight increase in cost of sales as a percentage of sales. Gross operating income, 7 million euro, has fallen slightly to 35.1% of net revenues, down from 35.9%.
The net margin on sales, in percentage terms, benefited above all from the elimination of the costs involved in the business that was disposed of, coming in at 11.4% compared with 8.9% of sales in first quarter 2003 (especially lower advertising and payroll costs).
Results of the Manufacturing and others sector
1st quarter | 1st quarter | ||||||
(millions of euro) | 2004 | % | 2003 | % | Change | % | |
Sector total revenues | 22 | 100.0 | 27 | 100.0 | (5) | (19.1) | |
Cost of sales | (18) | (83.9) | (22) | (81.3) | 4 | (16.5) | |
Gross operating income | 4 | 16.1 | 5 | 18.7 | (1) | (30.5) | |
Selling, general and | |||||||
administrative expenses | (4) | (15.9) | (5) | (17.9) | 1 | (28.5) | |
Income from operations | 0 | 0.2 | 0 | 0.8 | 0 | n.s. |
Sales by the manufacturing segment to third parties declined from 27 million to 22 million euro, down by 5 million euro. This trend derived from a contraction in the market for fabrics and yarns. Gross operating income went from 5 million to 4 million euro, though there was also a decrease in selling, general and administrative expenses. Income from operations came in close to breakeven, as in first quarter 2003.
Consolidated balance sheet reclassified according to financial criteria | |||||
(thousands of euro) | |||||
Assets | 03.31.2004 | 12.31.2003 | 03.31.2003 | ||
Current assets | |||||
Cash and banks | 283,386 | 324,835 | 146,287 | ||
Marketable securities | 27,539 | 27,289 | 26,591 | ||
Differentials on forward transactions | 9,834 | 10,000 | 2,132 | ||
Financial receivables | 16,302 | 7,298 | 29,745 | ||
337,061 | 369,422 | 204,755 | |||
Accounts receivable | |||||
Trade receivables | 859,351 | 848,508 | 950,561 | ||
Other receivables | 276,136 | 297,220 | 114,434 | ||
less - Allowance for doubtful accounts | (99,412) | (95,870) | (73,565) | ||
1,036,075 | 1,049,858 | 991,430 | |||
Assets due to be sold | 8,356 | 8,088 | 72,707 | ||
Inventories | 263,682 | 233,736 | 288,088 | ||
Accrued income and prepaid expenses | 14,875 | 15,842 | 20,678 | ||
286,913 | 257,666 | 381,473 | |||
Total current assets | 1,660,049 | 1,676,946 | 1,577,658 | ||
Investments and other non-current assets | |||||
Equity investments | 17,880 | 20,514 | 17,061 | ||
Securities held as fixed assets | 9 | 9 | 10 | ||
Guarantee deposits | 16,337 | 15,832 | 15,475 | ||
Financial receivables | 30,292 | 30,615 | 36,130 | ||
Other non-current receivables | 8,069 | 8,662 | 9,005 | ||
Total investments and other non-current assets | 72,587 | 75,632 | 77,681 | ||
Tangible fixed assets | |||||
Real estate | 646,310 | 641,966 | 642,179 | ||
Plant, machinery and equipment | 339,964 | 327,409 | 352,552 | ||
Office furniture, furnishings and electronic equipment | 101,300 | 100,269 | 103,403 | ||
Vehicles and aircraft | 22,838 | 22,817 | 37,247 | ||
Construction in progress and advances for tangible fixed assets | 15,772 | 17,019 | 15,696 | ||
Finance leases | 17,627 | 13,913 | 15,027 | ||
less - Accumulated depreciation | (421,898) | (409,553) | (424,691) | ||
Total tangible fixed assets | 721,913 | 713,840 | 741,413 | ||
Intangible fixed assets | |||||
Licenses, trademarks and industrial patents | 26,960 | 28,225 | 26,781 | ||
Deferred charges | 192,759 | 202,800 | 223,739 | ||
Total intangible fixed assets | 219,719 | 231,025 | 250,520 | ||
TOTAL ASSETS | 2,674,268 | 2,697,443 | 2,647,272 |
(thousands of euro) | |||||
Liabilities and Shareholders' equity | 03.31.2004 | 12.31.2003 | 03.31.2003 | ||
Current liabilities | |||||
Bank loans | 24,429 | 33,879 | 63,360 | ||
Short-term loans | 7,902 | 1,339 | 1,414 | ||
Current portion of long-term loans | 1,320 | 1,567 | 52,817 | ||
Current portion of lease financing | 6,243 | 4,977 | 4,656 | ||
Accounts payable | 291,474 | 331,563 | 302,517 | ||
Other payables, accrued expenses and deferred income | 77,946 | 91,364 | 92,901 | ||
Reserve for income taxes | 130,517 | 126,514 | 18,631 | ||
Total current liabilities | 539,831 | 591,203 | 536,296 | ||
Long-term liabilities | |||||
Bonds | 300,000 | 300,000 | 300,000 | ||
Long-term loans, | |||||
net of current portion | 501,765 | 502,269 | 503,244 | ||
Other long-term liabilities | 8,135 | 3,330 | 5,837 | ||
Lease financing | 22,753 | 21,834 | 24,097 | ||
Reserve for employee termination indemnities | 49,296 | 49,774 | 50,423 | ||
Other reserves | 42,267 | 42,373 | 54,538 | ||
Total long-term liabilities | 924,216 | 919,580 | 938,139 | ||
Minority interests in consolidated subsidiaries | 5,677 | 12,799 | 14,540 | ||
Shareholders' equity | |||||
Share Capital | 236,026 | 236,026 | 236,026 | ||
Additional paid-in capital | 56,574 | 56,574 | 56,574 | ||
Surplus from monetary revaluation of assets | 22,058 | 22,058 | 22,058 | ||
Other reserves and retained earnings | 859,205 | 762,986 | 826,533 | ||
Translation differences | 2,917 | (11,657) | (7,499) | ||
Net income for the period | 27,764 | 107,874 | 24,605 | ||
Total Shareholders' equity | 1,204,544 | 1,173,861 | 1,158,297 | ||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 2,674,268 | 2,697,443 | 2,647,272 |
Financial situation - highlights deduced from internal reporting
(millions of euro) | 03.31.2004 | 12.31.2003 | Change | 03.31.2003 | |
Working capital | 820 | 729 | 91 | 908 | |
Assets due to be sold | 8 | 8 | - | 73 | |
Total capital employed | 1,707 | 1,655 | 52 | 1,882 | |
Net financial position | 497 | 468 | 29 | 709 | |
Shareholders' equity | 1,204 | 1,174 | 30 | 1,158 | |
Minority interests | 6 | 13 | (7) | 15 |
As in previous periods, the effect of restructuring the sports sector, namely 8 million euro which is the residual amount of assets still to be sold off at their realizable value, is shown separately from working capital; in particular, the balance at March 31, 2004 represents the amount agreed for the sale of a building owned by a foreign subsidiary. The contract should be finalized in the second quarter of this year.
Working capital is higher than at the end of December 2003 due to the cyclical nature of the various businesses.
The change compared with March 31, 2003 amounts to 88 million euro, reflecting decreases in net trade receivables of 116 million euro, in current payables of 4 million euro and in inventories for 24 million euro; other current receivables and payables have increased by 48 million euro.
Compared with December 31, 2003 total invested capital has gone up by 52 million euro for the following reasons:
- increase in working capital of 91 million euro;
- additions to tangible and intangible fixed assets of 21 million euro;
- decreases due to disposals of 5 million euro;
- depreciation and amortization of 25 million euro;
- decrease in financial fixed assets of 29 million euro;
- other changes of 1 million euro.
Changes in the financial position with comparative figures for last year are summarized below:
(millions of euro) | 03.31.2004 | 12.31.2003 | 03.31.2003 | ||
Current financial assets: | |||||
- Italian government securities and monetary and bond funds | 28 | 27 | 27 | ||
- bank deposits | 181 | 207 | 55 | ||
- cash and ordinary current accounts | 102 | 118 | 91 | ||
- other short-term financial receivables | 26 | 17 | 32 | ||
Total current financial assets | 337 | 369 | 205 | ||
Medium-term financial receivables | 30 | 31 | 36 | ||
Total financial assets | 367 | 400 | 241 | ||
Current financial liabilities: | |||||
- short-term financial payables | (33) | (35) | (64) | ||
- current portion of medium-term debt | (1) | (2) | (53) | ||
- current portion of amounts due to leasing companies | (6) | (5) | (5) | ||
Total current financial liabilities | (40) | (42) | (122) | ||
Medium-term financial payables: | |||||
- bond loan | (300) | (300) | (300) | ||
- syndicated loan | (500) | (500) | (500) | ||
- other medium-term loans | (2) | (4) | (4) | ||
- due to leasing companies | (22) | (22) | (24) | ||
Total medium-term financial payables | (824) | (826) | (828) | ||
Total financial liabilities | (864) | (868) | (950) | ||
Net financial position | (497) | (468) | (709) | ||
Net short-term financial position | 297 | 327 | 83 | ||
Net medium-term financial position | (794) | (795) | (792) | ||
Net financial position | (497) | (468) | (709) |
Group net financial position at the end of the period amounts to 497 million euro; this figure is usually higher than at the end of the year for cyclical reasons. Compared with first quarter 2003, financial payables show a decrease in short-term loans. The improvements in current financial assets derives from the cash generated by disposal of the sports equipment business and a lower level of capital expenditure.
Summary statement of cash flows
1st quarter | 1st quarter | Year | |||
(millions of euro) | 2004 | 2003 | 2003 | ||
Self-financing | 68 | 76 | 327 | ||
Change in working capital | (86) | (135) | (4) | ||
Net operating investments | (15) | (60) | (126) | ||
Disposal of the sports equipment sector | 27 | 25 | 81 | ||
Purchase and sale of financial fixed assets, net | (15) | - | (4) | ||
Payment of dividends | - | - | (64) | ||
Payment of taxes | (3) | (5) | (71) | ||
Net financial (requirements)/surplus | (24) | (99) | 139 |
The free cash flow generated by the Group amounted to 68 million euro, compared with 76 million euro in first quarter 2003. Compared with first quarter 2003, there has been a reduction in the financing requirement thanks to lower capital investments during the quarter and to the change in working capital.
Corporate information | Headquarters |
Benetton Group S.p.A. | |
Villa Minelli | |
31050 Ponzano Veneto (Treviso) - Italy | |
Tel. +39 0422 519111 | |
Legal data | |
Share Capital: Euro 236,026,454.30 fully paid-in | |
R.E.A. (register of commerce) no. 84146 | |
Tax ID/Treviso company register: 00193320264 | |
Media & communication department | |
E-mail: press@benetton.it | |
Tel. +39 0422 519036 | |
Fax +39 0422 519930 | |
Investor relations | |
E-mail: investor@benetton.it | |
Tel. +39 0422 519412 | |
Fax +39 0422 519740 | |
TV Conference +39 0422 510623/24/25 | |
www.benetton.com |