SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 6-K

 

Report of Foreign Issuer

Pursuant to Rule 13a-16 or 15d-16 of

the Securities Exchange Act of 1934

 

For the month of November, 2003

 

Benetton Group S.p.A.

Via Villa Minelli, 1 - 31050 Ponzano Veneto, Treviso - ITALY

 

(Indicate by check mark whether the Registrant files or will file annual reports under cover of Form 20-F or Form 40-F)

Form 20-F X Form 40-F ______

 

(Indicate by check mark whether the Registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934).

 

Yes ______ No X

TABLE OF CONTENTS

 

Benetton Group SpA's Quarterly Report July-September 2003

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

Benetton Group S.p.A.

By: /s/ Luciano Benetton

______________________

Name: Luciano Benetton

Title: Chairman

 

 

Dated: November 24, 2003

 

 

 

 

 

 

 

 

 

 

Benetton Group

Results at September 30, 2003

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Benetton Group S.p.A.

Villa Minelli

Ponzano Veneto (Treviso) - Italy

Share Capital: Euro 236,026,454.30 fully paid-in

Tax ID/Treviso Company register: 00193320264

 

 

Index

The Benetton Group

3

Directors and other officers

4

Financial highlights

5

Directors' Report

The new approach

Results for the first nine months of 2003

6

Principal organizational and corporate changes

Outlook for the full year

7

Consolidated financial statements and relevant comments

Explanatory notes

8

Group consolidated results

- Consolidated statements of income reclassified to cost of sales

15

- Consolidated balance sheet reclassified according to financial criteria

17

- Financial situation - highlights

18

- Summary statement of cash flows

Directors and other officers

Board of Directors

Luciano Benetton (1)

Chairman

Carlo Benetton

Deputy Chairman

Silvano Cassano (2)

Managing Director

Giuliana Benetton

Directors

Gilberto Benetton

Alessandro Benetton

Reginald Bartholomew

Luigi Arturo Bianchi

Sergio De Simoi

Gianni Mion

Ulrich Weiss

Pierluigi Bortolussi

Secrety to the Board

Board of Statutory Auditors

Angelo Casò

Chairman

Filippo Duodo

Auditors

Dino Sesani

Antonio Cortellazzo

Alternate Auditors

Marco Leotta

Independent Auditors

Deloitte & Touche S.p.A.

Powers granted

(1) Company representation and power to carry out any action that is consistent with the Company's purposes, except for those expressly reserved by law to the Board of Directors and to the Shareholders' Meeting, with limitation for some categories of action.

(2) Power to carry out any action that is consistent with the ordinary administration of the Company, with limitation for some categories of action.

Financial highlights

Nine months

Nine months

Year

Key operating data (millions of euro)

2003

%

2002

%

Change

%

2002

%

Revenues

1,382

100.0

1,461

100.0

(79)

(5.4)

1,992

100.0

Cost of sales

785

56.8

813

55.7

(28)

(3.5)

1,124

56.4

Gross operating income

597

43.2

648

44.3

(51)

(7.8)

868

43.6

Income from operations

175

12.7

183

12.5

(8)

(4.3)

243

12.2

Ordinary income

160

11.6

161

11.0

(1)

(0.6)

211

10.6

Net income/(loss)

77

5.5

84

5.7

(7)

(8.5)

(10)

(0.5)

 

Key financial data (millions of euro)

09.30.2003

12.31.2002

09.30.2002

Working capital

908

798

996

Assets due to be sold

9

114

-

Net capital employed

1,818

1,768

2,063

Net indebtedness

659

613

810

Shareholders' equity

1,144

1,141

1,239

Self-financing

232

349

264

Capital expenditures in

tangible and intangible fixed assets

112

169

118

Purchase of equity investments

15

1

-

Sale of equity investments

4

-

2

 

Share and market data

09.30.2003

12.31.2002

09.30.2002

Shareholders' equity per share (euro)

6.30

6.29

6.83

Period end share price (euro)

9.04

8.50

9.37

Screen-based market: high (euro)

9.91

15.90

15.90

Screen-based market: low (euro)

5.90

8.50

9.37

Market capitalization (thousands of euro)

1,641,292

1,543,068

1,701,569

Average no. of shares outstanding (1)

181,558,811

181,341,018

181,283,249

Number of shares outstanding

181,558,811

181,558,811

181,558,811

(1) Net of treasury shares held during the period

 

Employees

09.30.2003

12.31.2002

09.30.2002
 

Total number

6,875

7,284

7,256

The new approach

Having completed the disposal of the sports brands, the arrival in May 2003 of the new management team lead by Silvano Cassano, managing director, represents the first step in refocusing the Benetton Group on its core business of clothing, honing its competitive edge and continuing the dynamic expansion of activities.

Results for the first nine months of 2003

 

Principal organizational and corporate changes

In January 2003 the Benetton Group reached an agreement with the Tecnica group for the sale of the business relating to the Nordica brand. The sale took effect from February 1, 2003. The overall price for the transaction was determined from a valuation of all the components comprising the business. The value of intellectual property alone, including the Nordica trademark, was fixed at 38 million euro. Collection will take place in six-monthly installments over 5 years, starting in 2004. Under this agreement, Benetton Group S.p.A. has acquired 10% of Tecnica S.p.A.'s share capital with a guaranteed put (sale) option exercisable from February 1, 2008, as well as a call (repurchase) option exercisable by Tecnica S.p.A. between February 1, 2006 and January 31, 2008. This acquisition is valued at 15 million euro.

At the end of March, the Group also formalized the sale of the Prince and Ektelon brands to Lincolnshire Management Inc., a U.S. private equity fund. The consideration for the sale of these brands and the associated intangible fixed assets amounts to 36.5 million euro, of which 10 million euro was received on April 30, the sale's completion date; the remaining 26.5 million euro will be received in January 2004.

Again during March 2003, the Benetton Group signed a binding preliminary agreement for the sale of the Rollerblade trademark to Prime Newco, a company within the Tecnica Group. This transaction was formalized at the end of June with the receipt, collected in full on the contract date, of 20 million euro just for the Rollerblade trademark. Other components of the business and the entire interest in the Swiss subsidiary, Benetton Sportsystem Schweiz A.G., subject to separate valuations, were also transferred at the same time. As additional consideration for the transfer of know-how, the Group will also receive 1.5% of Rollerblade's sales for the next five years, with a minimum guaranteed payment of 5 million euro; the results of operations during the first six months of 2003 have been attributed to the Group.

With regard to manufacturing activities, a new company has been formed in Tunisia under the name of Benetton Manufacturing Tunisia S.à. r.l., as part of the project to delocalize production.

The liquidation of Benest Ltd., a dormant company previously based in Moscow, was completed during the period.

 

Outlook for the full year

During the second half of 2003 a corporate reorganization has been planned in order to devolve operating activities to dedicated legal entities that are closer to the market, and to adjust the corporate and operating structure in line with the Group's new strategic guidelines. These steps will enhance the competitiveness and efficiency of the individual operating activities.

Results for the full year and net sales, in particular, will be influenced by two main factors: our price containment policy, together with the enrichment of the product and the higher volume of sales. Revenues are expected to be in line with those for 2002, taking into consideration the exchange rate effect and the disposal of the sports equipment business. On a consolidated basis, normalized net income for the year is expected to match, at least, the normalized results for 2002 (128 million euro).

Capital expenditure in 2003, principally focused on the project to develop the commercial network, is expected to be in line with the prior year.

Net indebtedness is expected to fall significantly as a consequence of the cash flow generated in the current year, partly from the various disposals in the sports sector.

Explanatory notes

The quarterly report has been prepared in accordance with art. 82 of the Regulation approved by Consob resolution 11971 of May 14, 1999 in application of Legislative Decree 58 of February 24, 1998 concerning issuers.

The accounting policies and consolidation principles adopted are consistent with those used to prepare the annual consolidated financial statements.

The consolidated statements of income for the third quarter and for the first nine months, and the consolidated balance sheet as of September 30, 2003 are shown in the same format as those presented in the 2002 Directors' report.

The consolidation area has remained substantially unchanged with respect to September 30, 2002 and December 31, 2002.

 

 

 

Group consolidated results

Consolidated statements of income reclassified to cost of sales

(thousands of euro)

Nine months

Nine months

2003

%

2002

%

Change

%

Revenues

1,382,037

100.0

1,461,345

100.0

(79,308)

(5.4)

Cost of sales

Material and net change in inventories

409,462

29.7

435,730

29.8

(26,268)

(6.0)

Payroll and related costs

69,404

5.0

74,733

5.1

(5,329)

(7.1)

Subcontract work

255,877

18.5

245,358

16.8

10,519

4.3

Industrial depreciation

18,079

1.3

25,262

1.8

(7,183)

(28.4)

Other manufacturing costs

32,121

2.3

32,465

2.2

(344)

(1.1)

784,943

56.8

813,548

55.7

(28,605)

(3.5)

Gross operating income

597,094

43.2

647,797

44.3

(50,703)

(7.8)

Selling, general and administrative expenses

Payroll and related costs

89,821

6.5

107,439

7.4

(17,618)

(16.4)

Distribution and transport

23,398

1.7

23,212

1.6

186

0.8

Sales commissions

61,257

4.4

68,974

4.7

(7,717)

(11.2)

Advertising and promotion

56,152

4.1

82,102

5.6

(25,950)

(31.6)

Depreciation and amortization

57,018

4.1

74,421

5.1

(17,403)

(23.4)

Other expenses

134,540

9.7

108,801

7.4

25,739

23.7

422,186

30.5

464,949

31.8

(42,763)

(9.2)

Income from operations

174,908

12.7

182,848

12.5

(7,940)

(4.3)

Other income/(expenses)

Foreign currency gain/(loss), net

9,579

0.7

7,716

0.5

1,863

24.1

Interest income

23,177

1.7

23,263

1.6

(86)

(0.4)

Interest expenses

(48,027)

(3.5)

(53,296)

(3.6)

5,269

(9.9)

Other income /(expenses), net

(30,577)

(2.3)

(12,829)

(0.9)

(17,748)

138.3

(45,848)

(3.4)

(35,146)

(2.4)

(10,702)

30.5

Income before taxes and minority interests

129,060

9.3

147,702

10.1

(18,642)

(12.6)

Income taxes

51,560

3.7

63,380

4.3

(11,820)

(18.6)

Income before minority interests

77,500

5.6

84,322

5.8

(6,822)

(8.1)

Minority interests income

(865)

(0.1)

(573)

(0.1)

(292)

51.0

Net income

76,635

5.5

83,749

5.7

(7,114)

(8.5)

 

 

Consolidated statements of income reclassified to cost of sales

(thousands of euro)

3rd quarter

3rd quarter

2003

%

2002

%

Change

%

Revenues

412,847

100.0

459,628

100.0

(46,781)

(10.2)

Cost of sales

Material and net change in inventories

132,054

32.0

154,294

33.6

(22,240)

(14.4)

Payroll and related costs

20,233

4.9

22,329

4.8

(2,096)

(9.4)

Subcontract work

63,997

15.5

71,261

15.5

(7,264)

(10.2)

Industrial depreciation

5,448

1.3

7,560

1.6

(2,112)

(27.9)

Other manufacturing costs

9,275

2.3

9,460

2.1

(185)

(2.0)

231,007

56.0

264,904

57.6

(33,897)

(12.8)

Gross operating income

181,840

44.0

194,724

42.4

(12,884)

(6.6)

Selling, general and administrative expenses

Payroll and related costs

26,366

6.4

32,454

7.0

(6,088)

(18.8)

Distribution and transport

8,310

2.0

8,595

1.9

(285)

(3.3)

Sales commissions

18,346

4.4

22,003

4.8

(3,657)

(16.6)

Advertising and promotion

13,226

3.2

25,675

5.6

(12,449)

(48.5)

Depreciation and amortization

17,982

4.3

25,247

5.5

(7,265)

(28.8)

Other expenses

52,353

12.7

32,712

7.1

19,641

60.0

136,583

33.0

146,686

31.9

(10,103)

(6.9)

Income from operations

45,257

11.0

48,038

10.5

(2,781)

(5.8)

Other income/(expenses)

Foreign currency gain/(loss), net

(407)

(0.1)

7,340

1.6

(7,747)

(105.5)

Interest income

6,819

1.6

8,035

1.7

(1,216)

(15.1)

Interest expenses

(14,528)

(3.5)

(18,710)

(4.1)

4,182

(22.4)

Other income /(expenses), net

(3,482)

(0.8)

(4,802)

(1.0)

1,320

(27.5)

(11,598)

(2.8)

(8,137)

(1.8)

(3,461)

42.5

Income before taxes and minority interests

33,659

8.2

39,901

8.7

(6,242)

(15.6)

Income taxes

7,278

1.8

15,735

3.4

(8,457)

(53.7)

Income before minority interests

26,381

6.4

24,166

5.3

2,215

9.2

Minority interests income

(234)

(0.1)

(106)

(0.1)

(128)

120.8

Net income

26,147

6.3

24,060

5.2

2,087

8.7

Group results for the first nine months of 2003

Revenues for the first nine months of 2003 were about 79 million euro lower than in the corresponding period in 2002.

This fall was heavily affected by exchange rate movements, particularly with regard to the dollar and the yen, with an impact of more than 43 million euro. The sale of the sports equipment business also entails a 47 million euro reduction in sales due to lower volumes. Excluding these effects, consolidated sales would have been in line with those for the comparative period in 2002.

The Group's gross operating income came to 43.2% of sales, one point percent lower than the margin reported in the first nine months of 2002; this effect was caused by the exchange rate impact and by a different product-mix in the casual wear collections.

Variable selling costs totaled 85 million euro or 6.1% of sales. This improvement was also due to lower costs in the casual sector.

General and administrative expenses decreased by around 36 million euro (-9.5%) with respect to the comparative period of last year. Accordingly, they have improved from 25.5% to 24.4% of net sales. Lower costs mainly reflect the disposal of the sports equipment business, with consequent benefits regarding depreciation, payroll costs and the other general expenses of that sector.

Income from operations represented 12.7% of sales, staying broadly unchanged on the prior year figure of 12.5%.

The net result of foreign exchange management improved significantly thanks to more favorable trends in exchange rates over the period.

Net financial charges, 25 million euro, are down on the first nine months of 2002; this is mainly due to the reduction in average indebtedness, as there have been no major changes in interest rates.

Ordinary income increased as a percentage of net sales by 0.6 points, also because of the financial management.

Other charges reflect extraordinary events that took place in the period, such as acceptance of the tax amnesty by Italian companies and the adjustment to current values of certain assets connected with the management of the sales network; these events had a marked effect on net income for the period which amounted to about 77 million euro, or 5.5% of sales, compared with 84 million euro in the first nine months of 2002. Normalized net income, after eliminating the effect of extraordinary charges, amounted to 100 million euro or 7.2% of net sales.

Information by geographic area and business category - First nine months of 2003

Nine

Nine

Euro

The

Other

months

months

Change

(millions of euro)

Area

%

Americas

%

Asia

%

areas

%

2003

2002

%

Casual

844

84.7

61

62.7

105

87.4

136

80.6

1,146

1,170

(2.1)

Sportswear

and equipment

81

8.1

36

36.7

12

10.1

16

9.6

145

202

(28.2)

Manufacturing and others

72

7.2

0

0.6

3

2.5

16

9.8

91

89

2.4

Total nine months 2003

997

100.0

97

100.0

120

100.0

168

100.0

1,382

1,461

(5.4)

Total nine months 2002

994

152

132

183

1,461

Sales by geographic area reflect the adverse impact on the foreign markets of exchange rate movements. In particular, the dollar area has penalized the results for the period.

Sales in the euro area, on the other hand, make a higher contribution to Group revenues, rising from 68.1% to 72.1%.

Performance by activity. The Group's activities are traditionally divided into three sectors to provide the basis for effective administration and adequate decision-making by company management, and to supply accurate and relevant information about company performance to financial investors.

The business sectors are as follows:

- the casual sector, representing the Benetton brands (United Colors of Benetton, Undercolors and Sisley), which also incorporates complementary products, such as accessories and footwear, as well as figures for the retail business;

- the sportswear and equipment sector, with the Playlife, Nordica, Prince, Rollerblade and Killer Loop brands; the contribution made in this area by the various brands was not consistent during period, since Nordica, Prince and Rollerblade contributed for one, four and six months, respectively, to the Group's results;

- the manufacturing and others sector, including sales of raw materials, semi-finished products, industrial services and revenues and expenses from real estate activity.

Information regarding the "casual" and "manufacturing and others" sectors for 2002 has been appropriately reclassified to eliminate intercompany effects, in order to reflect the real contribution made by each sector to the consolidated results.

 

Results of the Casual sector - First nine months of 2003

Nine months

Nine months

(millions of euro)

2003

%

2002

%

Change

%

Sector total revenues

1,146

100.0

1,170

100.0

(24)

(2.1)

Cost of sales

(613)

(53.5)

(608)

(52.0)

(5)

0.8

Gross operating income

533

46.5

562

48.0

(29)

(5.2)

Selling, general and administrative expenses

(363)

(31.7)

(359)

(30.7)

(4)

1.1

Income from operations

170

14.8

203

17.3

(33)

(16.3)

Sector revenues decreased by 2.1%. Excluding the adverse impact of exchange rate movements, the revenues of the casual sector would have increased by 0.6% and, accordingly, would have been in line with the prior year.

Cost of sales has increased as a percentage of net revenues due to both the higher volume of production and increased costs connected with the enrichment of the product. Gross operating income has eased from 48% to 46.5% of sales.

Income from operations, about 170 million euro, represents 14.8% of net sales.

 

Results of the Sportswear and equipment sector - First nine months of 2003

Nine months

Nine months

(millions of euro)

2003

%

2002

%

Change

%

Sector total revenues

145

100.0

202

100.0

(57)

(28.2)

Cost of sales

(98)

(67.6)

(132)

(65.3)

34

(25.7)

Gross operating income

47

32.4

70

34.7

(23)

(33.0)

Selling, general and administrative expenses

(46)

(31.7)

(94)

(46.4)

48

(50.9)

Income from operations

1

0.7

(24)

(11.7)

25

(104.3)

The sports sector was significantly influenced by the disposal of the sports equipment business. Given that various contracts were terminated during the first half of the year, the period under review reflects this discontinuity in sales. Revenues in this segment have also been hit by the negative trend in exchange rates.

Gross operating income, 47 million euro, represents 32.4% of net sales.

Income from operations benefited from the absence of depreciation and other selling, general and administrative expenses associated with the business disposals.

 

Results of the Manufacturing and others sector - First nine months of 2003

Nine months

Nine months

(millions of euro)

2003

%

2002

%

Change

%

Sector total revenues

91

100.0

89

100.0

2

2.4

Cost of sales

(73)

(80.5)

(73)

(82.0)

0

0.6

Gross operating income

18

19.5

16

18.0

2

10.9

Selling, general and administrative expenses

(14)

(14.7)

(12)

(13.7)

(2)

9.6

Income from operations

4

4.8

4

4.3

0

14.9

The sales of the manufacturing sector were slightly better than in the prior period. Gross operating income represents 19.5% of total sales, compared with 18% in the same period of 2002.

Group results for the third quarter of 2003

At 413 million euro, third-quarter sales were almost 47 million lower than in the same quarter of 2002.

The decrease is mainly due to selling the sports equipment business, which has an impact of around 40 million, as well as the trend in exchange rates.

Gross operating income, 44% of sales, increased with respect to the same period of 2002.

Total selling, general and administrative costs improved as a percentage by 6.9% on the third quarter of 2002, falling to 137 million euro.

As a percentage of sales, income from operations was slightly higher at 11% compared with the third quarter of 2002 (10.5%).

Net financial charges fell by about 2 million euro in absolute terms thanks to the reduction in average indebtedness.

At 27 million euro, net income for the quarter was higher than in the same period of 2002.

 

Information by geographic area and business category - Third quarter 2003

Third

Third

Euro

The

Other

quarter

quarter

Change

(millions of euro)

Area

%

Americas

%

Asia

%

areas

%

2003

2002

%

Casual

260

86.6

23

101.4

38

93.5

42

84.5

363

370

(1.9)

Sportswear

and equipment

21

7.1

(0)

(2.2)

2

4.5

2

5.8

25

66

(61.4)

Manufacturing and others

19

6.3

0

0.8

1

2.0

5

9.7

25

24

3.1

Total third quarter 2003

300

100.0

23

100.0

41

100.0

49

100.0

413

460

(10.2)

Total third quarter 2002

293

57

51

59

460

Third quarter sales were 10.2% lower mainly due to foreign markets and also to US dollars and yen trend.

Results of the Casual sector - Third quarter 2003

Third quarter

Third quarter

(millions of euro)

2003

%

2002

%

Change

%

Sector total revenues

363

100.0

369

100.0

(6)

(1.9)

Cost of sales

(193)

(53.1)

(200)

(54.1)

7

(3.8)

Gross operating income

170

46.9

169

45.9

1

0.4

Selling, general and administrative expenses

(126)

(34.7)

(115)

(31.1)

(11)

9.5

Income from operations

44

12.2

54

14.8

(10)

(18.8)

Sales in the casual wear segment are down 1.9%. Sales volumes are increasing, while the exchange rate effect is continuing to have a negative influence, above all the performance of the dollar.

Gross operating income increased in absolute terms by almost 1 million euro compared with the same period in 2002, also improving as a percentage of sales from 45.9% to 46.9%.

Income from operations fell from 14.8% of sales to 12.2%.

 

Results of the Sportswear and equipment sector - Third quarter 2003

Third quarter

Third quarter

(millions of euro)

2003

%

2002

%

Change

%

Sector total revenues

26

100.0

66

100.0

(40)

(61.4)

Cost of sales

(19)

(72.2)

(45)

(68.4)

26

(59.2)

Gross operating income

7

27.8

21

31.6

(14)

(66.0)

Selling, general and administrative expenses

(8)

(30.8)

(29)

(43.1)

21

(72.3)

Income from operations

(1)

(3.0)

(8)

(11.5)

7

(90.0)

With regard to the third-quarter results of the Sportswear and equipment sector, reference should be made to the previous comments on the first nine months of the year.

 

Results of the Manufacturing and others sector - Third quarter 2003

Third quarter

Third quarter

(millions of euro)

2003

%

2002

%

Change

%

Sector total revenues

25

100.0

24

100.0

1

3.4

Cost of sales

(20)

(81.5)

(19)

(81.6)

(1)

3.2

Gross operating income

5

18.5

5

18.4

0

4.1

Selling, general and administrative expenses

(3)

(11.4)

(4)

(13.9)

1

(14.3)

Income from operations

2

7.1

1

4.5

1

58.2

With regard to the third-quarter results of the manufacturing division and others sector, reference should be made to the previous comments on the first nine months of the year.

 

 

Consolidated balance sheet reclassified according to financial criteria

(thousands of euro)

Assets

09.30.2003

12.31.2002

09.30.2002

Current Assets

Cash and banks

123,799

190,728

173,733

Marketable securities

27,084

26,291

25,361

Differentials on forward transactions

10,497

8,740

9,342

Financial receivables

10,708

71,213

12,612

172,088

296,972

221,048

Accounts receivable

Trade receivables

974,043

866,803

1,009,726

Other receivables

170,591

125,012

84,219

less - Allowance for doubtful accounts

(91,828)

(72,474)

(68,476)

1,052,806

919,341

1,025,469

Assets due to be sold

8,722

113,886

-

Inventories

258,968

284,425

319,145

Accrued income and prepaid expenses

23,347

22,009

35,634

291,037

420,320

354,779

Total current assets

1,515,931

1,636,633

1,601,296

Investments and other non current assets

Equity investments

16,996

2,095

2,113

Securities held as fixed assets

10

10

15,114

Guarantee deposits

16,436

16,233

16,128

Financial receivables

34,338

16,497

13,682

Other non-current receivables

6,919

10,740

9,105

Total investments and other non-current assets

74,699

45,575

56,142

Tangible fixed assets

Real estate

633,362

594,941

596,934

Plant, machinery and equipment

331,443

352,907

383,844

Office furniture, furnishings and electronic equipment

97,902

104,105

103,204

Vehicles and aircraft

36,287

37,605

37,845

Construction in progress and advances for tangible fixed assets

13,818

17,033

13,265

Finance leases

14,344

15,057

15,189

less - Accumulated depreciation

(411,978)

(415,708)

(439,106)

Total tangible fixed assets

715,178

705,940

711,175

Intangible fixed assets

Licenses, trademarks and industrial patents

26,592

28,897

186,541

Deferred charges

210,855

226,099

254,882

Total intangible fixed assets

237,447

254,996

441,423

TOTAL ASSETS

2,543,255

2,643,144

2,810,036

 

(thousands of euro)

Liabilities and Shareholders' equity

09.30.2003

12.31.2002

09.30.2002

Current liabilities

Bank loans

20,363

32,322

164,060

Short-term loans

13,056

4,668

4,669

Current portion of long-term loans

1,567

55,718

55,717

Current portion of lease financing

4,934

4,608

4,544

Accounts payable

295,811

339,804

313,286

Other payables, accrued expenses and deferred income

104,049

96,643

79,198

Reserve for income taxes

21,574

12,248

33,438

Total current liabilities

461,354

546,011

654,912

Long-term liabilities

Bonds

300,000

300,000

300,000

Long-term loans,

net of current portion

502,287

503,992

504,060

Other long-term liabilities

7,725

2,217

727

Lease financing

23,102

25,274

26,453

Reserve for employee termination indemnities

49,919

53,430

53,377

Other reserves

40,006

56,867

17,609

Total long-term liabilities

923,039

941,780

902,226

Minority interests in consolidated subsidiaries

14,744

14,780

13,719

Shareholders' equity

Share Capital

236,026

236,026

236,026

Additional paid-in capital

56,574

56,574

56,574

Surplus from monetary revaluation of assets

22,058

22,058

22,058

Other reserves and retained earnings

762,985

836,393

836,393

Translation differences

(10,160)

(617)

4,379

Net income/(loss) for the period

76,635

(9,861)

83,749

Total Shareholders' equity

1,144,118

1,140,573

1,239,179

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

2,543,255

2,643,144

2,810,036

 

Financial situation - highlights

(millions of euro)

09.30.2003

12.31.2002

Change

09.30.2002

Working capital

908

798

110

996

Asset due to be sold

9

114

(105)

-

Total capital employed

1,818

1,768

50

2,063

Net indebtedness

659

613

46

810

Shareholders' equity

1,144

1,141

3

1,239

Minority interests

15

14

1

14

Consistent with the prior periods, the effect of the sports equipment sector disposal, representing the total realizable value of the assets to be sold, has been shown separately from working capital. The decrease since December represents the value of the businesses already sold regarding the Nordica, Prince and Rollerblade trademarks, following implementation of the related sale contracts in the first half of 2003.

Compared with December 31, working capital reflects the normal cycle of receipts and payments, while the variance compared with September 30, 2002 is mainly due to the sale of the sports equipment business.

The increase in total invested capital compared with December 31, 2002 is due to the combined effect of various different factors, such as the additions made to tangible and financial fixed assets.

Changes in the financial position with comparative figures for last year are summarized below:

(millions of euro)

09.30.2003

12.31.2002

09.30.2002

Financial liabilities:

- within 12 months

40

97

229

- beyond 12 months

825

831

831

Securities held as financial fixed assets

-

-

(15)

Treasury shares

-

-

(1)

Other securities

(27)

(27)

(24)

Other financial fixed assets:

- within 12 months

(145)

(271)

(196)

- beyond 12 months

(34)

(17)

(14)

Net indebtedness

659

613

810

Compared with September 30, 2002, there has been a decrease in current liabilities and in short-term financial assets. There has been a substantial reduction in financial indebtedness compared with September 2002, in part due to the disposal of the sports equipment business, though structurally it tends to be higher at December. Average indebtedness in 2003 is a good deal lower than in 2002.

 

Summary statement of cash flows

Nine months

Nine months

Year

(millions of euro)

2003

2002

2002

Self-financing

232

264

349

Change in working capital

(163)

(199)

8

Net operating investments

(91)

(113)

(156)

Disposal of the sports equipment sector

119

-

-

Purchase and sale of financial fixed assets, net

(39)

(4)

(4)

Payment of dividends

(64)

(75)

(75)

Payment of taxes

(42)

(53)

(112)

Net financial (requirements)/surplus

(48)

(180)

10

The self-financing generated by the Group amounted to 232 million euro, compared with 264 million euro in the same period of 2002.

The sale of the sports equipment business was a significant element of total disposals during the period.