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 March, 2006
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
Press Release dated March 30, 2006
2005 full-year results approved by Benetton Group Board
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
Dated: March 30, 2006
2005 full-year results approved by Benetton Group Board
CONSOLIDATED REVENUES INCREASE TO 1,765 MILLION EURO, NET INCOME TO 112 MILLION EURO
Proposed dividend of 0.34 euro per share
Ponzano, 30 March 2006. Consolidated revenues of 1,765 million euro (1,704 million in 2004), net income up to 112 million euro (109 million in 2004), net financial position improving to 351 million euro (441 million in 2004): these are the key figures of 2005 fiscal year, approved today by the Board of Directors. A dividend payment of 0.34 euro per share, equal to 62 million euro in total and payable from 18 May, will be proposed at the Shareholders' Meeting (convened for 9 May).
FINANCIAL PERFORMANCE
Consolidated revenues for 2005 amounted to 1,765 million euro, compared with 1,704 million in 2004, with an increase of 3.6%; this growth benefited from the good reception by the market of the 2005 Fall/Winter collections. Among the most significant elements contributing to the increase in revenues, were also the supplementary contribution deriving from the consolidation of the Turkish market and the growth of the South Korean and Indian markets, in addition to the growth in the network of directly operated stores.
Contribution margin was 643 million euro and 36.4% of revenues, compared with 38.4% in 2004, influenced in particular by the previously mentioned sales network development and offset by benefits associated with the search for specific skills and international manufacturing locations where our know-how can be introduced in order to guarantee the quality of our products and satisfaction of final customers.
Ordinary operating result for 2005 was 205 million euro and 11.6% of revenues, against 225 million in 2004 (13.2%).
EBIT was 157 million euro, compared with 158 million in 2004, and was 8.9% of revenues (9.3% in the previous year). This was influenced bynet non-recurring expenses of 48 million euro, associated with the costs of reorganization and adjustments to the values of some activities in the sales network, the write-down of somenon-corebusinesses, and expenses connected with the reorganization of the textile segment.
Net incomefor the period was 112 million euro, compared with 109 million in 2004, and was 6.3% of revenues, compared with 6.4% in 2004 financial year.
Thenet financial position was down to 351 million euro from 441 million at the end of 2004,shareholders' equity (at 31 December 2005) was 1,275 million euro and the total dividend is 62 million euro, equivalent to 0.34 euro per share.Free cash flow, before dividends, was 167(a) million euro, compared with 182(b) million euro in 2004.
FUTURE OUTLOOK
Orders collected for 2006 indicate a positive response from partners in the various markets to new product offerings and to new commercial initiatives introduced. In addition, in line with results in the second half of 2005, performance of directly operated stores is expected to improve further.
The significant increase in volumes and a product mix targeting increases in accessories and collection segments with high unit values, such as tailored garments and men's clothing, lead to expectations of an increase in 2006 consolidated revenues at least equal to that in 2005.
In 2006, significant growth is also forecast for markets in the Mediterranean basin, Eastern Europe, South Korea, China and India.
The company will also continue to focus on the search for specific skills and international manufacturing districts where it can introduce its know-how, in order to guarantee the long-established standards of quality of its products. The continued attention to production and commercial efficiency makes it possible to forecast an EBIT of around 9.5-10% of consolidated revenues and net income in the region of 6.5%.
PARENT COMPANY FINANCIAL STATEMENTS
The Parent Company, Benetton Group S.p.A., closed the 2005 financial year, using Italian accounting principles, with net income of 58.3 million euro against 39.1 million in 2004. The Board resolved to propose a dividend of 0.34 euro per share (equal to the previous year) at the shareholders' meeting, with a coupon detachment date of 15 May 2006. For payment of the dividend of around 62 million euro, about 58 million euro will be drawn from 2005 income and around 4 million from the extraordinary reserve. As from the 2006 financial year, the Benetton Group S.p.A. financial statements will also be prepared on the basis of IFRS.
Finally, the Board of Directors approved the new procedure for related party transactions and for significant transactions, which also implements provisions of the new Italian Corporate Governance Code (Codice di Autodisciplina) for listed companies. The new "internal dealing" regulation was also approved which governs, in compliance with the new laws, communications with CONSOB (Italian Exchange Commission) and the public about transactions in Benetton shares by persons identified as "relevant".
(a) Does not include the disposal of short-term financial assets of 118 million euro.
(b)Does not include payment of substitute tax, residual effects of the sale of the sports equipment segment, and purchase of financial assets, amounting to 125, 49 and 90 million euro respectively.
This press release contains forward looking statements which reflect Management's current views and estimates. The forward looking statements involve certain risks and uncertainties that could cause actual results to differ materially from those contained in the forward looking statements. Potential risks and uncertainties include such factors as general economic conditions, foreign exchange fluctuations, competitive product and pricing pressures and regulatory developments.
For further information and contacts:
Media
0039 0422519036
www.benettongroup.com/press
Investor Relations
0039 0422519412
www.benettongroup.com/investors
Benetton Group consolidated results | ||||||
Consolidated income statement | ||||||
(millions of euro) | 2005 | % | 2004 | % | Change | % |
Revenues | 1,765 | 100.0 | 1,704 | 100.0 | 61 | 3.6 |
Cost of sales | 995 | 56.4 | 929 | 54.5 | 66 | 7.1 |
Gross operating income | 770 | 43.6 | 775 | 45.5 | (5) | (0.6) |
Selling costs | 127 | 7.2 | 121 | 7.1 | 6 | 4.7 |
Contribution margin | 643 | 36.4 | 654 | 38.4 | (11) | (1.6) |
General and operating expenses | 438 | 24.8 | 429 | 25.2 | 9 | 2.2 |
Ordinary operating result | 205 | 11.6 | 225 | 13.2 | (20) | (8.7) |
Non-recurring expenses/(income) | 48 | 2.7 | 67 | 3.9 | (19) | (28.3) |
EBIT | 157 | 8.9 | 158 | 9.3 | (1) | (0.4) |
Financial (expenses)/income | (23) | (1.3) | (22) | (1.3) | (1) | 5.3 |
Income before taxes | 134 | 7.6 | 136 | 8.0 | (2) | (1.2) |
Income taxes | 20 | 1.1 | 28 | 1.6 | (8) | (26.7) |
Net income/(loss) for the year | 114 | 6.5 | 108 | 6.4 | 6 | 5.3 |
attributable to: | ||||||
- Shareholders of the Parent Company | 112 | 6.3 | 109 | 6.4 | 3 | 2.8 |
- minority Shareholders | 2 | 0.2 | (1) | - | 3 | n.s. |
Balance sheet and financial position highlights | ||||||
(millions of euro) | 12.31.2005 | 12.31.2004 | Change | |||
Working capital | 688 |
| 711 |
| (23) | |
Asset held for sale | 8 |
| 8 |
| - | |
Property, plant and equipment and intangible assets | 895 | 910 | (15) | |||
Non-current financial assets | 25 |
| 22 |
| 3 | |
Other assets/(liabilities) | 10 |
| 3 |
| 7 | |
Capital employed | 1,626 | 1,654 | (28) | |||
|
|
|
|
|
| |
Net financial position | 351 |
| 441 |
| (90) | |
Total Shareolders' equity | 1,275 |
| 1,213 |
| 62 | |
Consolidated cash flow statement | ||||||
(millions of euro) | 2005 | 2004 | ||||
Cash flow provided/(used) by operating activities | 285 |
| 141 | (B) | ||
Cash flow provided/(used) by investing activities | (1) | (A) | (125) | (C) | ||
Free cash flow | 284 |
| 16 |
| ||
Cash flow provided/(used) by financing activities: |
|
|
|
| ||
- dividends paid | (62) | (69) | ||||
- net change in sources of finance | (288) | (11) | ||||
- net change in cash and cash equivalents | 66 |
| 64 |
| ||
Cash flow provided/(used) by financing activities | (284) |
| (16) |
| ||
(A)includes 118 million euro in proceeds from the sale of financial assets | ||||||
(B)includes 124.5 million euro in flat-rate tax payments | ||||||
(C) includes 49 million euro in amounts relating to the sale of the sports segment and 90 million euro to the purchase of financial assets | ||||||
Benetton Group S.p.A. results | |||
Statements of income reclassified | |||
(millions of euro) | 2005 | 2004 | Change |
Financial income and expenses: | |||
- income from equity investments | 100 | 80 | 20 |
- net financial income and expenses | (13) | (26) | 13 |
Total financial income and expenses | 87 | 54 | 33 |
Changes in value of financial assets | (3) | (13) | 9 |
Other operating income | 42 | 53 | (11) |
Other operating costs | (78) | (75) | (2) |
Extraordinary income and expenses | - | 6 | (6) |
Results before income taxes | 48 | 25 | 23 |
Income taxes | 10 | 14 | (4) |
Net income | 58 | 39 | 19 |
Financial situation | |||
(millions of euro) | 12.31.2005 | 12.31.2004 | |
Working capital | 85 | 93 | |
Total capital employed | 1,239 | 1,267 | |
Net financial position | 294 | 319 | |
Shareholders' equity | 945 | 948 | |
Cash flow statement | |||
(millions of euro) | 2005 | ||
Self-financing | 79 | ||
Taxes reimbursement | 14 | ||
Change in working capital | 1 | ||
Cash flow from net investing activities | (3) | ||
Capitalization of equity investments |
| ||
and changes in other financial assets | (4) | ||
Payment of dividends | (62) | ||
Net financial surplus | 25 | ||