Regulatory News:

Etam (Paris:TAM)

in € million   H1 2009   H1 2008   % change
Net sales 499.6 469.1+6.5%
Like-for-like and at constant exchange rates (1.5%)
Gross profit 287.9 268.3 +7.3%
Gross margin57.6%57.2%+0.4 pt
EBITDA* 29.0 35.6 (18.4%)
Ordinary operating income 7.1 10.0(-29.6%)
Net income, Group share 2.2 (3.3)+€5.5m
Net debt 113.9 146.1(€32.2m)
Gearing 31.4% 42.4% (11.0pts)

*Earnings before interest, taxes, depreciation and amortisation

ACTIVITY AND GROSS MARGIN

During the first half of 2009, the Etam Group posted sales of €499.6 million, up 6.5% compared with the first half of 2008. Like-for-like and at constant exchange rates, sales decreased by 1.5%.

The Group's gross margin improved to 57.6% of sales, up 0.4 point compared with the first half of 2008.

RESULTS

The Etam group posted ordinary operating income of €7.1 million in the first half of 2009, down 29.6% compared with the year-earlier period, owing principally to the Group's performance in Europe.

In Europe, ordinary operating income was heavily affected by the contraction in the gross profit and gross margin. It came to €2.5 million (down from €17.8 million in the first half of 2008) despite tight control of operating expenses on a like-for-like basis.

In China, business expansion and the gross margin increase more than offset the rise in costs linked to growth in the network. Ordinary operating income, which came to €4.6 million (compared with a loss of €7.8 million in the first half of 2008), provides evidence of the Group's return to profitability in China.

Taking into account the following items, net income, Group share showed a profit of €2.2 million compared with a loss of €3.3 million in the first half of 2008:

  • an improvement in net financial expense to €3.3 million, compared with €4.8 million in the first half of 2008, thanks to a reduction in net debt and lower interest rates,
  • a €1.9 million tax credit, compared with €7.5 million in tax expense during the first half of 2008,
  • a loss from discontinued operations and those held for sale of €0.6 million, compared with a loss of €4.9 million in the first half of 2008. Most of the asset disposals were completed by 30 June 2009,
  • a negative contribution of €0.3 million from associated companies and positive €2.2 million minority interests, compared to negative figures of €0.3 million and €4.1 million respectively in the first half of 2008.

FINANCIAL STRUCTURE

Net debt at 30 June 2009 improved at €113.9 million, down from €136.2 million at 31 December 2008 and €146.1 million at 30 June 2008. This reduction is mainly due to lower capital expenditure and a tax repayment.

The net debt/equity ratio stood at 31.4% at 30 June 2009, compared with 42.4% at 30 June 2008.

POST-CLOSING EVENTS

On July 8, 2009, the Etam Group has signed a Club Deal of €245 million with a 3 year maturity extendable to 5 years, which refinances the €152 million Syndicated Credit Facility signed on December 21, 2005 as well as part of the bilateral facilities existing on June 30, 2009.

Following a decision made by the Managing Partners on July 25, 2009, Etam Développement has cancelled its 1,159,495 own shares in line with the objectives of its own shares repurchasing programme authorised by the extraordinary shareholders' meeting of June 19, 2009. Share capital is therefore now €16,416,415 divided into 10,768,463 shares, all subscribed and liberated.

RECENT TRENDS

Before the start of the autumn/winter sales in September, the Etam Group activity was difficult in Europe in July and August, and strong in China.

The Etam Group is an international retailer of women's ready-to-wear clothing, lingerie and accessories.

It had 3,557 sales outlets at 30 June 2009.

Etam Développement is due to report its third-quarter sales on 14 October 2009

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

Etam Développement Share capital of €16,416,415 – RCS PARIS 308 382 035

Registered office: 67/73, rue de Rivoli, 75001 Paris – France

Etam
Analyst and investor information
www.etamdeveloppement.fr
Tel.: 01 55 90 72 79