European Lingerie Group AS (ELG) publishes the Annual Report for 2017 which includes the Consolidated Financial Statements Report together with Independent Auditors Report for 2017.
“2017 was a turnaround year for ELG as we created a new platform for lingerie design, production and distribution in Europe with the merger of Lauma Fabrics and Felina International. Formation of such a vertically integrated structure encompassing the full cycle of lingerie production is quite rare in the European lingerie industry,” said CEO of European Lingerie Group Mr. Peter Partma.
Last year the Group also acquired AO Avangard, the main distributor for Lauma Medical, ELG’s brand for medical textiles in Russia. The aim of this purchase was to secure and expand the Group’s business in Russia and CIS.
“The results of 2017 for ELG are encouraging, reflecting a strong financial standing. We have set a guideline to achieve EBITDA margin level of around 16-17% per annum and we are well within this range. The pro forma revenue for 2017 amounted to EUR 72.7 million, compared to EUR 71.7 million a year before. Sales of Lauma Fabrics were better than expected in 2017 and also on the positive side, we can see some growth in market share for Felina,” noted Peter Partma.
“In 2018, the Group will continue with expanding opportunities in existing and new target markets with strong growth potential and accelerating sales. We will keep investing into the international recognition, brand equity and increasing market share of our core brands, in addition to new brands and products. ELG has a good platform for pursuing the goal of becoming the leading vertically integrated lingerie group in Europe,” commented Chairman of ELG, Mr. Indrek Rahumaa.
As a result of restructuring and acquisition steps done by the Group in 2017, described in detail in the Annual Report, pro forma financial information has been prepared for the purpose of giving the stakeholders of ELG a better overview of the financial consequences of the transactions and ensuring better comparability of the performance between the years.
The pro forma financial information has been prepared on the basis of the audited IFRS financial statements of Lauma Fabrics Group, Felina Group and Avangard for the years 2016-2017 and of AS European Lingerie Group, AS European Lingerie Brands and E|L|B GmbH for the year 2017, eliminating intercompany transactions between the companies based on individual company performance during these periods.
The Group’s pro forma sales amounted to EUR 72.7 million in 2017, representing a 1.4% increase as compared to 2016. Pro forma normalized EBITDA in 2017 amounted to EUR 12.0 million and stayed almost flat as compared to 2016. Normalized EBITDA margin in 2017 and 2016 were 16.4% and 16.7% respectively.
Pro forma normalized net profit in 2017 amounted to EUR 5.4 million, compared to EUR 6.9 million in 2016. Normalized net profit margin in 2017 and 2016 were 7.4% and 9.7% respectively. In 2017, the Group managed to successfully control its cost base and to maintain margins.
Core operating markets for European Lingerie Group are Germany, Spain, France, Poland, Benelux countries, Baltic countries and CIS countries. The largest growth in sales in 2017 was in the CIS countries, in which sales increased by 12%. The sales in such markets as Germany and Benelux countries stayed flat in 2017. In Baltic countries, Poland and Spain sales increased by 4%, 5% and 7% respectively.