Etam: 2015 First Half Results

Regulatory News:

* Consolidated income statement published in the June 30, 2014 was restated to reflect the application of IFRIC 21- Taxes
** Operating Income before depreciation, provisions and result from asset sales and disposal

SALES AND GROSS MARGIN

The Etam Group (Paris:TAM) generated net sales of €645.4 million during the first half of 2015, including a positive currency effect of €38.8 million mainly due to the appreciation of the yuan against the euro. This represents an increase of 7.9% compared to the first half of 2014 or 2.3% like-for-like and at constant exchange rates.

The Group gross margin of 57.2% decreased by 1.5 point. In Europe, markdowns increased significantly, due to the poor performance of 1.2.3 collections, the consequences of a drop in activity in Russia and a more promotional competitive context. In China, off season sales had a negative impact on the gross margin. Furthermore, the costs of import of goods were affected by negative currency effects related to the rise of the US dollar against the euro.

RESULTS

In the first half of 2015, the Group generated a nearly stable EBITDA, at € 27.0 million compared to €27.4 million in the first half of 2014. The operating income, affected by changes in depreciation, decreased by €4.8 million to €16.5 million.

• In Europe, in a declining market, Etam and Undiz brands confirmed their strong sales performance while 1.2.3 brand suffered from the lack of attractiveness of its spring / summer 2015 collections. The operating income came to €21.1 million against €22.2 million at 30 June 2014.
• In China, despite the improvements realized over the second quarter, the operating income of the first half of 2015 amounted to -€4.6 million against -€0.9 million at 30 June 2014. This result at 30 June 2014 benefitted from a significant reversal on stock provisions. Excluding the impact of off-season sales, the result has improved compared to the first half of 2014.

Net financial charges for the first half of 2015 totalled €3.9 million compared to €4.6 million in the first half of 2014. In particular, the cost of debt decreased by €1.1 million due to the reduction in interest rates.

Consolidated net income Group share was €8.4 million against €10.2 million at June 30, 2014, after taking into account minority interests of -€0.6 million against -€0.2 million in the first half of 2014.

FINANCIAL STRUCTURE

After favourable changes in working capital requirements for 6.8 M€ compared to the same period of 2014, the operating cash flow represented a cash inflow of €1.6 million, against a cash consumption of €1.7 million in the first half of 2014.

Net investments were €43.2 million in the first half of 2015 against €33.5 million in the first half of 2014.

After interests and taxes paid, the Group's free cash flow was negative at €47.7 million at 30 June 2015, against a negative amount of €49.2 million at 30 June 2014.

The net financial debt amounted to €159.7 million at June 30, 2015 against €154.0 million at 30 June 2014.

International retailer of lingerie, cosmetics, women’s ready-to-wear clothing and accessories
4,023 stores at 30.06.2015

Etam Développement will report its third-quarter sales on 22 October 2015 (after market close)

2015 Half-Year Results presentation is available on the website www.etamdeveloppement.com

Etam Développement: ISIN code: FR0000035743 / Reuters: TAM.PA / Bloomberg: TAM FP

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