Etam Développement: 2015 Annual Results & 2016 First Quarter Sales

Regulatory News:

Etam Développement (Paris:TAM):

I. 2015 ANNUAL RESULTS

¹ Operating income before depreciation, amortisation and result from asset sales

2015 sales
The Etam Group generated net sales of €1,296.6 million in 2015, up 6.2% vs 2014, including a positive currency impact of €60.7 million relating mainly to the appreciation of the yuan against the euro. Like-for-like and at constant exchange rates, net sales increased by 1.6%.

In Europe, the sales growth of 2.9% like for like and at constant exchange rates was achieved mainly through the Lingerie activities of Etam and Undiz despite difficult market conditions. In China, sales like-for-like and at constant exchange rates declined by 2.5% as the Group has chosen to focus on improving the margin rate versus the volume of activity.

Gross margin
Gross margin of 58.7% decreased by 0.3 percentage point year-on-year, mainly in Europe, due to higher markdowns in sales and the negative impact of a more expensive dollar on costs of goods.

EBITDA¹ & Operating income
In 2015, the Group generated an EBITDA of €95.4 million vs €85.4 million in 2014 and an operating income of €52.4 million vs €51.7 million in 2014.

In Europe, the EBITDA of €85.5 million increased by €3.7 million. The operating income came to €59.8 million vs €58.3 million in 2014. The Group continued to invest in the digital evolution of its three brands Etam, 1.2.3 and UNDIZ, the deployment of their new store concepts and their internationalization.

In China, the EBITDA came to €9.9 million, up €6.3 million. The operating income was a loss of €7.7 million against a loss of €6.6 million in 2014, which benefitted from significant write-back of provisions on off-season stock.

Net income
Consolidated net income came to €23.9 million compared with €23.0 million in 2014. After taking into account non-controlling interests, net income (Group share) was €25.8 million in 2015 compared with €24.1 million in 2014.

At the next shareholders' meeting, the Group will propose to pay a dividend of €0.70 per share for 2015, compared to a dividend of €0.50 per share in 2014.

Cash flow
After change in working capital requirement, cash flow from operations represented a cash surplus of €80.3 million compared with €78.2 million in 2014. After investments, interests and taxes, the Group generated a negative free cash flow of €15.3 million in 2015 compared with a negative amount of €13.2 million in 2014.

After payment of dividends for €5.3 million and other positive changes in cash for €3.7 million, net cash flow is a consumption of €16.9 million against a consumption of €12.4 million in 2014. Net financial debt amounted to €133.5 million at December 31, 2015 against €116.6 million at December 31, 2014.

II. 2016 FIRST QUARTER SALES

¹ like-for-like and at constant exchange rates including e commerce sales
² including export sales
³ including Undiz

The Etam Group generated net sales of €349.2 million in the first quarter of 2016, including a negative currency impact of €3.3 million relating mainly to the depreciation of the yuan against the euro. Compared to 31 March 2015, this represents an increase of 0.9% or 0.3% like-for-like and at constant exchange rates.

In Europe, sales came to €226.9 million, up 5.6% or 1.3% like-for-like and at constant exchange rates compared to the first quarter of 2015. The Group brands all achieved good sales in January and February and disappointing sales performance in March, mainly due to a declining footfall in stores for all brands.

In China, sales were €122.3 million in the first quarter of 2016, down 6.8% including a negative currency impact of €3.2 million. Like-for-like and at constant exchange rates, sales were down 2.0% compared to the first quarter of 2015. The Group has resolutely chosen to focus on improving the margin volumes.

The Group financial position and results at March 31, 2016 do not require other specific comments.

III. NETWORK DEVELOPMENT

At 31 March 2016, the Etam Group had 4,064 sales points of which 950 in Europe, 270 operated by international franchises and 2,844 in China.

As part of a consortium with other retail distributors, the Etam Group was chosen to day by the Commercial Court of Nanterre for the take-over of 11 Bata stores in France.

The Etam Group is an international retailer of women's, lingerie, cosmetics, ready-to-wear clothing and accessories
with 4,064 points of sales at 31.03.2016

Etam Développement will hold its shareholders’ meeting on 27 May 2016
and will release its 2016 half-year net sales on 16 July after the market closes in Paris.

Investors & analysts information
www.etamdeveloppement.fr - Tél. : +33 1 55 90 72 79
Etam Développement - Code ISIN : FR0000035743 / Reuters : TAM.PA / Bloomberg : TAM FP

Etam Développement 10 961 739 euros – R.C.S. PARIS 308 382 035
Siège social : 78, rue de Rivoli - 75004 PARIS

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