European Lingerie Group AB (“ELG” or the “Group“) publishes unaudited Second Quarter and First Half of 2021 Report (1 January – 30 June 2021), including condensed interim consolidated financial statements.
The second quarter of 2021 showed positive progress for the Group. As European governments have announced gradual release of the lockdown restrictions, including re-opening of stores, this helped in recovering the turnover and moving closer to pre-COVID level of business. Irrespective of the COVID-19 imposed challenges, the Company has shown sufficient financial stability throughout the reporting quarter and continues to deliver good results.
Like for like revenue of the Group from traditional products (excluding the effect of face masks and respirators business in 2020) was 12.3% higher than in the six months 2020. Both textile and lingerie segment performed better than previous year earning positive EBITDA and net profit. In respect of costs and profitability, the Group is still in the process of implementing various cost saving initiatives and improvements in the processes, functions and digitalisation. Therefore, all measures which have already been done and the ones which are on the way, helped the Group to minimize losses and maintain stable liquidity throughout the reporting period.
As announced on the website, in April 2021 the Group and its major shareholders signed an agreement with the Bondholder Committee (representing approximately 64 per cent of the Total Nominal Amount of the Bonds), AS Rietumu Banka as the lender and its affiliated company RB ELG SIA as equity investor on a restructuring of ELG and its Bonds, under which the Bonds to be repaid with EUR 21 million in cash and the remaining nominal amount of EUR 19 million of the Bonds plus accrued and unpaid interest to be written down to zero. The restructuring was also approved by the holders of the Bonds through a written procedure in accordance with the Terms and Conditions in May 2021. The first closing of the Restructuring was completed on 29 June 2021. The second closing, including repayment to the holders of the Bonds according to the above, occurred on 7 July 2021.
The Group’s sales amounted to EUR 29,674 thousand in 6 months 2021 (Q2 2021: EUR 16,308 thousand), representing a 9.1% decrease as compared to sales of 6 months 2020 (3.9% increase to Q2 2020). Excluding the impact of face masks and respirators business in 2020, like for like sales increased by 12.3% in 6 months and by 74.0% in Q2 compared to the previous year.
Profitability margins in 6 months 2021 were above previous year which is mainly explained by income from state subsidies, including COVID-19 related. Excluding that income, margins were lower for 6 months while much higher for Q2. 6 months 2021 margins were negatively impacted by Q1 when markets still suffered from COVID-19 impact, lock-downs and shortfall in revenue which made it difficult to cover part of the fixed costs.
Normalised EBITDA in 6 months 2021 amounted to EUR 3,237 thousand (Q2 2021: EUR 3,568 thousand) and increased by 61.9% compared to 6 months 2020 (135.2% increase to Q2 2020). Normalised EBITDA margin in 6 months 2021 and 6 months 2020 was 10.9% and 6.1% respectively (Q2 2021 and Q2 2020: 21.9% and 9.7% respectively).
Normalised net profit in 6 months 2021 amounted to a loss of EUR 1,330 thousand (Q2 2021: profit of EUR 988 thousand) compared to a net loss of EUR 1,726 thousand in 6 months 2020 (Q2 2020: net loss of EUR 859 thousand). Increase in net profit is as well explained by the reasons described above. Normalised net profit margin in 6 months 2021 and 6 months 2020 was -4.5% and -5.3% respectively (6.1% and -5.5% in Q2 2021 and Q2 2020 respectively).
European Lingerie Group AB Second Quarter Report of 2021 is available here.
The information was submitted for publication, through the agency of the contact person set out below, at 17:50 CET on 31 August 2021.
For more information, please contact:
Head of Strategy, M&A and IR
European Lingerie Group AB
+371 2839 1256