Belgium : Van de Velde records higher turnover growth

February 25, 2008

Turnover rose by 7.3 million euros from 123.0 million euros at the end of 2006 to 130.3 million euros at the end of 2007, an increase of 5.9%. PrimaDonna again posted the strongest growth (+7.9%) and now accounts for 45% of total turnover.

Turnover outside the euro zone grew 21.8%. The euro zone does however continue to be the strongest market, accounting for 76% of total turnover. Operational cash flow (EBITDA) was 44.6 million euros (+8.5%), a rise due to a better gross margin and good cost management.

The gross margin rose slightly due to an improved write-down of stocks against turnover. Those write-downs had increased sharply in recent years as a consequence of a broader collection and a conscious increase in stock positions. Investments to improve demand forecasting have reversed this trend.

Sales costs rose less strongly than turnover. The sales-support services continued to be rolled out in 2007. Extra resources were channelled to the PrimaDonna Styling and Marie Jo Styling programme in particular, which was introduced among more than 400 customers in our core markets. The aim of the programme is to increase the competitiveness of specialist stores by emphasising the effect lingerie has on a woman’s body.

Lastly, the sales costs of retail activities fell in 2007 due to the closure of two less profitable stores. The rise in operational profit (EBIT) (+7.4%) was slightly lower than the EBITDA growth, as a consequence of the reversal of a provision for a claim filed by a former Italian distributor.

Van de Velde NV