AS Silvano Fashion Group

Transcription

1 AS Silvano Fashion Group Consolidated Interim Financial Report for Q2 and 6 months of 2016 (unaudited) (translation of the Estonian original)* Beginning of the reporting period 1 January 2016 End of the reporting period 30 June 2016 Business name AS Silvano Fashion Group Registration number Legal address Tulika 15/17, Tallinn Telephone Fax info@silvanofashion.com Website Core activities Design, manufacturing and distribution of women s lingerie Auditor AS PricewaterhouseCoopers * This version of our report is a translation from the original, which was prepared in Estonian. All possible care has been taken to ensure that the translation is an accurate representation of the original. However, in all matters of interpretation of information, views or opinions, the original language version of our report takes precedence over this translation.

2 Contents Management Report... 3 Declaration of the Management Board Consolidated Statement of Financial Position Consolidated Income Statement Consolidated Statement of Comprehensive Income Consolidated Statement of Cash Flows Consolidated Statement of Changes in Equity Notes to the Interim Report Note 1 Summary of significant accounting policies Note 2 Trade and other receivables Note 3 Inventories Note 4 Property, plant and equipment Note 5 Trade and other payables Note 6 Equity Note 7 Earnings per share Note 8 Revenue Note 9 Transactions with related parties Note 10 Operating segments

3 Management Report General information about AS Silvano Fashion Group AS Silvano Fashion Group (hereinafter the Group ) is a holding company that controls group of enterprises involved in the design, manufacturing and marketing of women s lingerie. The Group s income is generated by sales of Milavitsa, Alisee, Aveline, Lauma Lingerie, Laumelle and Hidalgo branded products through wholesales channel, franchised sales and own retail operated via Milavitsa and Lauma Lingerie retail stores. Key sales markets for the Group are Russia, Belarus, Ukraine, Kazakhstan, other CIS countries and the Baltics. The parent company of the Group is AS Silvano Fashion Group (hereinafter the Parent company ), which is domiciled in Estonia. AS Silvano Fashion Group registered address is Tulika 15/17, Tallinn, Estonia. The shares of AS Silvano Fashion Group are listed on the Tallinn Stock Exchange and on the Warsaw Stock Exchange. As of 30 June 2016 the Group employed people (as of 31 December 2015: people). The Group comprises the following companies: Location Main activity Parent company AS Silvano Fashion Group Estonia Holding Ownership interest Ownership interest Entities belonging to the Silvano Fashion Group ZAO Silvano Fashion Russia Retail and Wholesale 100% 100% OOO Silvano Fashion Belarus Retail and wholesale 100% 100% TOV Silvano Fashion Ukraine Wholesale 100% 100% SIA Silvano Fashion Latvia Retail 100% 100% SP ZAO Milavitsa Belarus Manufacturing and 84.92% 84.91% wholesale OAO Yunona Belarus Manufacturing and 58.33% 58.33% wholesale OOO Gimil Belarus Manufacturing and 100% 100% wholesale AS Lauma Lingerie Latvia Manufacturing and 100% 100% wholesale SARL France Style Lingerie France Holding 100% 100% SARL Alisee Monaco Holding 99% 99% ZAO Stolichnaja Torgovaja Kompanija Russia Holding 100% 100% Milavitsa OOO Baltsped logistik Belarus Logistics 50% 50% 3

4 Business environment and results Group`s results for 6 months of 2016 were defined by continued difficulties in economies of its major sales markets Russia, Belarus, Kazakhstan and Ukraine. The Group didn`t achieve growth rate of sales compared to 6 months of Total sales during 6 months of 2016 amounted to thousand EUR. Previously undermined by devaluations and high inflation rates purchasing power in region`s countries remains low, future expectations are still more on a negative or neutral side. Policy makers in CIS countries tend to delay real economic reforms substituting them by rhetoric and cosmetic changes; therefore it is hard to see some kind of relatively fast recovery in growth rates of economies under discussion. Over the year the Group managed to cut its production, commercial and administrative expenses. Gross profit margin in 6 months of 2016 is up to 56.3% from 45.15% in 6 months of Compared to 6 months of 2015 commercial and administrative expenses diminished respectively by 11.6% and 30.6%. Personnel expenses decreased by 22%; total number of employees compared to the beginning of 2016 diminished by 3%. Russian statistics is somewhat improving compared to 2015, inflation rate is falling and is currently ca 7% in yearly terms, GDP declined by 0.7% during Q2 of Russian economy is starting to adapt to new reality, but purchasing power of population in real terms is still falling. Group`s sales on Russian market totalled thousand EUR, decline is 5.7% compared to 6 months of Group`s Russian subsidiary opened 5 more stores in Q2 of 2016, 2 more stores were opened in July The Group will continue opening own stores. In addition to growing sales and better control of the market this allows further developing of retail concept of Group`s brands to make it more attractive for us and our franchisee retail partners. Belarusian economy at the moment isn`t demonstrating signs of stabilisation, GDP decreased by 2.5% in 6 months of 2016, nominal retail turnover decreased by 1.6%, salaries stand still. International financial institutions predict that in 2016 Belarusian GDP will fall by around 3%, inflation rate will be 12% - 15%. Major factors behind this are believed to be unreformed economy (particularly public sector and state-controlled entities), delayed impact of recession in main trading partner Russia, continued pressure on Belarusian rouble, low demand for consumption, high level of debts in economy. Share of problematic credits in banking sector is continuously growing, according to official statistics it was more that 12% of banking assets as of the end of June Group`s sales in Belarus in 6 months of 2016 were thousand EUR and diminishing by 18.1% compared to 6 months of In Belarus the Group will focus on improving profitability of its retail business, we will also continue to expand our store chain there depending on availability of reasonably priced selling areas. Our partners in Kazakhstan as well are struggling with reduced demand of customers and devaluation of national currency. The process of optimisation in number and quality of stores is an ongoing activity there, total number of franchising stores diminished by 7 during 6 months of Group`s sales to Kazakhstan clients fell by 35.9% during 6 months of 2016 and amounted to thousand EUR. The Group expects stabilisation of Kazakhstan market in the end of Ukraine economy is supposed (particularly IMF projections) to return to positive growth in 2016, supported by improving consumer and investor confidence, gradually rising real incomes, and a gradual easing of credit conditions. Group`s efforts to establish more productive relationships with partners there led to improvement of sales by 17% to the level of 903 thousand EUR, although comparison base is relatively low. Sales structure Sales by markets Group sales in its 3 major markets Russia, Belarus and Ukraine were 89.5% of its total sales. Measured in local currencies sales growth was accordingly 15.1%, 12.4% and 39.6%. 6m m 2015 Change Change, % Russia, th RUR % Belarus, th BYR % Ukraine, th UAH % Group`s sales results by markets measured in EUR are presented below. 6m m 2015 Change, EUR Change, % 6m 2016, % of sales 6m 2015, % of sales in thousands of EUR Russia % 56.6% 53.2% Belarus % 29.9% 32.4% Kazakhstan % 3.5% 4.9% Ukraine % 3.0% 2.2% Moldova % 2.2% 1.7% 4

5 Latvia % 1.7% 1.7% Estonia % 0.7% 0.3% Lithuania % 0.6% 0.6% Other markets % 2.0% 3.1% Total % 100.0% 100.0% The majority of lingerie sales revenue during 6 months of 2016 in the amount of thousand EUR was generated in Russia, accounting for 56.6% of total sales. The second largest market was Belarus, where sales reached thousand EUR, contributing 29.9% of lingerie sales (both retail and wholesale). Volumes in Kazakhstan decreased significantly to thousand EUR, there was a remarkable increase in Ukraine and Moldova accordingly 17.0% and 16.1%. Sales by business segments 6m m 2015 Change, EUR Change, % 6m 2016, % from sales 6m 2015, % from sales in thousands of EUR Wholesale % 76.0% 75.5% Retail % 23.9% 24.5% Other operations % 0.2% 0.0% Total % 100.0% 100.0% During 6 months of 2016 wholesale revenue amounted to thousand EUR, representing 76.0% of the Group s total revenue (6 months of 2015: 75.5%). The main wholesale regions were Russia, Belarus, Kazakhstan and Ukraine. Our retail revenue decreased by 13.6% and amounted to thousand EUR, this represents 23.9% of the Group`s total revenue. The decrease in retail revenue is mainly attributable to Belarusian operations. Own & franchise store locations, geography Own Franchise Total Russia Ukraine Belarus Baltics Kazakhstan Moldova Other regions Total At the end of the reporting period the Group and its franchising partners operated 645 Milavitsa and 49 Lauma Lingerie branded stores, including 76 stores operated directly by the Group. 5

6 Selected Financial Indicators Summarized selected financial indicators of the Group for 6 months of 2016 compared to 6 months of 2015 and compared to were as follows: in thousands of EUR 6m m 2015 Change Revenue % EBITDA % Net profit for the period % Net profit attributable equity holders of the Parent company % Earnings per share (EUR) % Operating cash flow for the period % in thousands of EUR Change Total assets % Total current assets % Total equity attributable to equity holders of the Parent company % Loans and borrowings 0 0 N/A Cash and cash equivalents % Margin analysis, % 6m m 2015 Change Gross profit % EBITDA % Net profit % Net profit attributable equity holders of the Parent company % Financial ratios, % Change ROA % ROE % Price to earnings ratio (P/E) % Current ratio % Quick ratio % Underlying formulas: EBITDA = net profit for the period + depreciation and amortisation + net financial income + income tax expense + gain on net monetary position Gross profit margin = gross profit / revenue EBITDA margin = EBITDA / revenue Net profit margin = net profit / revenue Net profit margin attributable to equity holders of the Parent company = net profit attributable to equity holders of the Parent company / revenue ROA (return on assets) = net profit attributable to owners of the Company for the last 4 quarters/ average total assets ROE (return on equity) = net profit attributable to owners of the Company for the last 4 quarters/ average equity attributable to equity holders of the Company EPS (earnings per share) = net profit attributable to owners of the Company/ weighted average number of ordinary shares Price to earnings ratio = Share price at the end of reporting period/earnings per share, calculated based on the net profit attributable to owners of the Company for the last 4 quarters Current ratio = current assets / current liabilities Quick ratio = (current assets inventories) / current liabilities 6

7 Financial performance The Group`s sales amounted to thousand EUR during 6 months of 2016, representing a 11.3% decrease as compared to the same period of previous year. Overall, wholesales decreased by 10.7% and retail sales decreased by 13.6%, measured in EUR. The Group s reported gross profit margin during 6 months of 2016 continued to improve increasing to 56.3%, reported gross margin was 45.2% in the respective period of previous year. Consolidated operating profit for 6 months of 2016 amounted to thousand EUR, compared to thousand EUR in 6 months of The consolidated operating profit margin was 33.8% for 6 months of 2016 (20.9% in 6 months of 2015). Consolidated EBITDA for 6 months of 2016 was thousand EUR, which is 36.7% in margin terms (8 546 thousand EUR and 24.8% for 6 months of 2015). Reported consolidated net profit attributable to equity holders of the Parent company for 6 months of 2016 amounted to thousand EUR, compared to net profit of thousand EUR in 6 months of 2015, net profit margin attributable to equity holders of the Parent company for 6 months of 2016 was 19.6% against 8.0% in 6 months of Financial position As of 30 June 2016 consolidated assets amounted to thousand EUR representing an increase by 10.4% as compared to the position as of 31 December Trade and other receivables increased by thousand EUR as compared to 31 December 2015 and amounted to thousand EUR as of 30 June Inventory balance decreased by thousand EUR and amounted to thousand EUR as of 30 June Equity attributable to equity holders of the Parent company increased by 415 thousand EUR and amounted to thousand EUR as of 30 June Current liabilities increased by thousand EUR during 6 months of Production, sourcing, purchasing and logistics During 6 months of 2016 the Group s investments into property, plant and equipment totalled 207 thousand EUR. Investments were made mainly into opening and renovating own stores, as well into equipment and facilities to maintain effective production for future periods. Personnel As of 30 June 2016, the Group employed employees including 361 in retail. The rest were employed in production, wholesale, administration and support operations. Total salaries and related taxes during 6 months of 2016 amounted to thousand EUR (7 407 thousand EUR in 6 months of 2015). The remuneration of key management of the Group, including the key executives of all subsidiaries, totalled 511 thousand EUR. Decisions made by governing bodies during 6 months 2016 On June 29, 2016 Silvano Fashion Group held its regular Annual General Meeting of Shareholders. The Meeting adopted following decisions. The Meeting approved the 2015 Annual Report. The Meeting decided to distribute dividends in the amount 0.15 EUR per share (record date , payment completed on ). The Meeting decided to re-appoint AS PricewaterhouseCoopers as the Group`s auditor for financial year The Meeting decided to cancel the own shares acquired within the own share buy-back programme as approved by the shareholders of AS Silvano Fashion Group on 29th of June 2015; The Meeting decided to adopt a share buy-back program in the following: effective period until ; maximum number of shares to be acquired not more than ; maximum share price 2.70 EUR per share. Shares of AS Silvano Fashion Group As of 30 June 2016 registered share capital of AS Silvano Fashion Group amounted to thousand EUR divided into ordinary shares with a nominal value of 0.30 EUR each. The share register is electronic and maintained at the Estonian Central Register of Securities. The Company has been listed on Tallinn Stock Exchange main list (since ) and on Warsaw Stock Exchange (since ). 7

8 As of 30 June 2016 AS Silvano Fashion Group had shareholders (as of 31 December shareholders). As of 30 June 2016 shareholders, whose interest in AS Silvano Fashion Group exceeded 5% included: Name Number of shares Shareholding Major shareholders % CLEARSTREAM BANKING LUXEMBOURG S.A. CLIENTS % AS SEB PANK CLIENTS % UNICREDIT BANK AUSTRIA AG % KRAJOWY DEPOZYT PAPIEROW WARTOŠCIOWYCH S.A % Other shareholders % Total number of shares % As of 31 December 2015 shareholders, whose interest in AS Silvano Fashion Group exceeded 5% included: Name Number of shares Shareholding Major shareholders % CLEARSTREAM BANKING LUXEMBOURG S.A. CLIENTS % AS SEB PANK CLIENTS % KRAJOWY DEPOZYT PAPIEROW WARTOŠCIOWYCH S.A % UNICREDIT BANK AUSTRIA AG % Other shareholders % Total number of shares % Share price development and turnover on the Tallinn Stock Exchange during 6 months of 2016 (EUR) During 6 months of 2016 the highest and lowest prices of the AS Silvano Fashion Group` share on the Tallinn Stock Exchange were 2.06 EUR and 1.21 EUR, respectively. 2,08 1,88 1,68 1,48 1,28 1, Volume SFG1T share price 8

9 160% 150% 140% 130% 120% 110% 100% 90% SFG1T share price OMXBBGI Share price development on the Warsaw Stock Exchange during 6 months of 2016 (PLN) During 6 months of 2016, the highest and lowest prices of the AS Silvano Fashion Group` share on the Warsaw Stock Exchange were 9.14 PLN and 5.17 PLN respectively ,5 8,5 7,5 6,5 5, , Volume SFG share price (WSE) 190% 170% 150% 130% 110% 90% 70% SFG share price (WSE) WIG 20 9

10 Declaration of the Management Board The Management Board of AS Silvano Fashion Group has reviewed and approved Consolidated Interim Financial Report for Q2 and 6 months of 2016 (hereinafter the Interim Report ). Members of the Management Board confirm that according to their best knowledge the Interim Report gives a true and fair view of financial position of the Group, its financial performance and its cash flows in accordance with International Financial Reporting Standards, as adopted by EU, and IAS 34 Interim Financial Reporting. Furthermore, Members of the Management Board confirm that in their opinion the Interim Report provides a fair review of significant developments in the Group's activities that occurred during the reporting period and their impact and describes significant risks and uncertainties that may affect the Group during future reporting periods. The Interim Report has not been audited or otherwise reviewed by the auditors. Aleksei Kadõrko Member of the Management Board July 29, 2016 Jarek Särgava Member of the Management Board July 29,

11 Consolidated Statement of Financial Position in thousands of EUR Note ASSETS Current assets Cash and cash equivalents Current loans granted 6 6 Trade and other receivables Inventories Total current assets Non-current assets Investments in associates 0 1 Available-for-sale investments Deferred tax asset Intangible assets Investment property Property, plant and equipment Total non-current assets TOTAL ASSETS LIABILITIES AND EQUITY Current liabilities Trade and other payables Tax liabilities Total current liabilities Non-current liabilities Deferred tax liability Total non-current liabilities Total liabilities Equity Share capital Share premium Treasury shares Statutory reserve capital Unrealised exchange rate differences Retained earnings Total equity attributable to equity holders of the Parent company Non-controlling interest Total equity TOTAL EQUITY AND LIABILITIES

12 Consolidated Income Statement in thousands of EUR Note 2Q Q m m 2015 Revenue Cost of goods sold Gross Profit Distribution expenses Administrative expenses Other operating income Other operating expenses Operating profit Currency exchange income/(expense) Other finance income/(expenses) Net financial income Profit (loss) from associates using equity method Profit before tax Income tax expense Profit for the period Attributable to : Equity holders of the Parent company Non-controlling interest Earnings per share from profit attributable to equity holders of the Parent company, both basic and diluted (EUR) Consolidated Statement of Comprehensive Income in thousands of EUR Note 2Q Q m m 2015 Profit for the period Exchange rate differences attributable to foreign operations Total comprehensive income for the period Attributable to : Equity holders of the Parent company Non-controlling interest

13 Consolidated Statement of Cash Flows in thousands of EUR 6m m 2015 Cash flow from operating activities Profit for the period Adjustments for: Depreciation and amortization of non-current assets (Gains)/ losses on the sale of PPE and IA Net finance income / costs Provision for impairment losses on trade receivables -5-6 Income tax expense Change in inventories Change in trade and other receivables Change in trade and other payables Income tax paid Net cash from operating activities Cash flow from investing activities Interest received Dividends received 1 2 Proceeds from disposal of property, plant and equipment 12 8 Proceeds from repayments of loans granted Acquisition of property, plant and equipment Acquisition of intangible assets Acquisition of shares of a subsidiary -3 0 Net cash used in/from investing activities Cash flow from financing activities Dividends paid Acquisition of own shares Net cash used in/ from financing activities Increase in cash and cash equivalents Cash and cash equivalents at the beginning of period Effect of exchange rate fluctuations on cash held Cash and cash equivalents at the end of period

14 Consolidated Statement of Changes in Equity in thousands of EUR Share Capital Share Premium Treasury shares Statutory reserve capital Unrealised exchange rate differences Retained earnings Total equity attributable to equity holders of the Parent company Noncontrolling interest Total equity Balance as at 31 December Effect of translation on opening balances Profit for the period Other comprehensive income for the period Total comprehensive income for the period Transactions with owners, recognised directly in equity Dividends paid Dividends declared Change in non-controlling interest Purchase of treasury shares Total transactions with owners, recognised directly in equity Balance as at 30 June Balance as at 31 December Profit for the period Other comprehensive income for the period Total comprehensive income for the period Transactions with owners, recognised directly in equity Dividends declared Purchase of treasury shares Total transactions with owners, recognised directly in equity Balance as at 30 June

15 Notes to the Interim Report Note 1 Summary of significant accounting policies AS Silvano Fashion Group is a company registered in Estonia. This Interim Report of the Group is prepared for the reporting period ended 30 June 2016 and comprises parent company and its subsidiaries. The principal accounting policies applied in the preparation of this Interim Report are set out below. The policies have been consistently applied to all the years presented unless otherwise stated. The Interim Report has not been audited or reviewed by external auditors. Basis for preparation This Interim Report of AS Silvano Fashion Group for Q2 and 6 months of 2016 ended on 30 June 2016 has been prepared in accordance with IAS 34 Interim financial reporting as adopted by the European Union. The Interim Report should be read in conjunction with the Annual Report for the financial year ended on 31 December 2015, which have been prepared in accordance with IFRS as adopted by the European Union. This Interim Report is comprised in thousands of Euros (EUR). The Group s performance is not significantly affected by any seasonal or cyclical factors. Nevertheless revenue during vacation periods and holidays in CIS countries is usually higher compared to other periods. New standards and interpretations In additions to disclosures already made in the Annual Report for the financial year ended on 31 December 2015 there are no new IFRSs or IFRIC interpretations that are effective for the financial year beginning on or after 1 January 2016 and that would be expected to have a material impact on the group. Note 2 Trade and other receivables in thousands of EUR Trade receivables from third parties Trade receivables from related parties Impairment of receivables Tax prepayments Other receivables Total The fair values of trade and other receivables are not materially different from the carrying values based on the expected discounted cash flows. All non-current receivables are due within more than one year from reporting date. Note 3 Inventories in thousands of EUR Raw and other materials Work in progress Finished goods Other inventories Total

16 Note 4 Property, plant and equipment in thousands of EUR Land and buildings Plant and equipment Other equipment and fixtures Assets under construction Total Cost Accumulated depreciation Net book amount Movements during 6m 2015 Additions Disposals Reclassifications Depreciation Unrealised exchange rate differences Closing net book amount Cost Accumulated depreciation Net book amount Cost Accumulated depreciation Net book amount Movements during 6m 2016 Additions Disposals Reclassifications Depreciation Unrealised exchange rate differences Closing net book amount Cost Accumulated depreciation Net book amount The Group didn t have any significant binding commitments to purchase property plant and equipment as of 30 June

17 Note 5 Trade and other payables in thousands of EUR Trade payables Accrued expenses Provisions Other payables Total Fair values of trade and other payables are not materially different from book values due to short maturities. Note 6 Equity Shares As of 30 June 2016 registered share capital of AS Silvano Fashion Group amounted to thousand EUR divided into shares with a nominal value of 0.30 EUR each (as of 31 December 2015, thousand EUR, shares and 0.30 EUR nominal value, respectively). All shares of AS Silvano Fashion Group are ordinary shares and all are registered. Each ordinary share gives a shareholder one vote in General Meeting of Shareholders. No share certificates are issued for registered shares. The share register is electronic and maintained at the Estonian Central Depositary for Securities. All shares have been paid for. As of 30 June 2016 AS Silvano Fashion Group had shareholders (as of 31 December shareholders). Note 7 Earnings per share The calculation of basic earnings per share for 6 months of 2016 (6 months of 2015) is based on profit attributable to owners and a weighted average number of ordinary shares. in thousands of shares 6m m 2015 Number of ordinary shares at the beginning of the period Effect of own shares held at the beginning of the period Number of ordinary shares at the end of the period Effect of own shares held at the end of the period Weighted average number of ordinary shares for the period in thousands of EUR 6m m 2015 Profit for the period attributable to equity holders of the Parent company Basic earnings per share (EUR) Diluted earnings per share (EUR) Diluted earnings per share do not differ from basic earnings per share as the Group has no financial instruments issued that could potentially dilute the earnings per share. Note 8 Revenue in thousands of EUR 6m m 2015 Revenue from wholesale Revenue from retail Subcontracting and services Other sales 2 8 Total

18 Note 9 Transactions with related parties The following parties are considered to be related; a) Shareholders owning, directly or indirectly, a voting power in the parent company or its significant subsidiaries that gives them significant influence over the parent company or its significant subsidiaries and companies under their control. b) Associates - enterprises in which parent company or its subsidiaries have significant influence; c) Members of the Management Board and Supervisory Boards of parent company and its significant subsidiaries and their immediate family members and companies under their control or significant influence. The Group s owners are legal and physical persons and no sole shareholder has control over the Group s activities. According to management s assessment, the prices applied in transactions with related parties did not differ significantly from the market terms. Sales of goods and services in thousands of EUR 6m m 2015 Associates Total Balances with related parties in thousands of EUR Trade receivables from associates Total Benefits to key management of the group in thousands of EUR 6m m 2015 Remunerations and benefits Total Note 10 Operating segments The Group`s operating segments have been determined based on regular reports being monitored and analysed by Management and Supervisory Boards of the parent company on an on-going basis. The Management and Supervisory Board consider the business primarily from the activity perspective, monitoring separately wholesale and retail activities. - The wholesale segment includes purchasing and production of women s lingerie, and distribution to external wholesale customers and the retail segment. The Group s manufacturing facilities are located in Latvia and Belarus. - The retail segment sells the lingerie through own retail network in Latvia, Belarus and Russia. There is a strong integration between wholesale and retail segments. The accounting policies of reportable segments are the same. Management estimates that intersegment transactions have been done on arm-length basis. Primary measures monitored by the Supervisory Board are segment revenues, segment EBITDA (which is defined as profit before depreciation, amortisation, net financial income, income tax expense and gain on net monetary position) and segment net profit. These measures are included in the internal management reports that are reviewed by the Management Board and the Supervisory Board. Segment EBITDA is used to measure performance, as management believes that such information is the most relevant in evaluating the results of certain segment relative to other entities that operate within the industry. Interest income and interest expenses are not core activities of operating segments and are not provided to management and are not evaluated by management as performance assessment criteria of segments performance. Therefore, interest income and interest expenses are presented on net basis. Unallocated revenues include revenues from services, commissions and rental income. Unallocated assets include cash and bank deposits not used in daily operations of either of the segments. 18

19 Operating segments 6m 2016 in thousands of EUR Lingerie retail Lingerie wholesale Total segments Unallocated Eliminations Total Revenue from external customers Intersegment revenues EBITDA Amortization and depreciation Operating income, EBIT Profit from associates using equity method Net financial income Income tax Net profit Investments in associates Other operating segments assets Reportable segments liabilities Capital expenditures Number of employees as of reporting date Operating segments 6m 2015 in thousands of EUR Lingerie retail Lingerie wholesale Total segments Unallocated Eliminations Total Revenue from external customers Intersegment revenues EBITDA Amortization and depreciation Operating income, EBIT Profit from associates using equity method Net financial income Income tax Net profit Investments in associates Other operating segments assets Reportable segments liabilities Capital expenditures Number of employees as of reporting date

20 Revenue and non-current assets breakdown by geographical areas Revenues in the table below are based on the geographical location of customers; segment assets are based on the geographical location of the assets. in thousands of EUR Sales revenue Sales revenue Non-current Non-current 6m m 2015 assets assets Russia Belarus Kazakhstan Ukraine Moldova Latvia Estonia Lithuania Other countries Total