Main Points
- Consolidated turnover increase by 13.91% to euro 118.15 mil. in Q2 2007 from euro 103.72 mil. in Q2 2006.
- Gross Profit Margin increased to 50.56% in Q2 2007 from 49.59% in Q2 2006.
- EBITDA margin increased to 15.66% in Q2 2007 from 15.16% in Q2 2006.
- EPS increase by 13.20% to euro 0.33 in Q2 2007.
- Fragrances & cosmetics demonstrated the highest increase on a yearly basis by 22.95% to euro 51.29 mil.
- All old countries (Poland, Romania, Bulgaria, Serbia, the Czech Republic, FYROM and Hungary) continue to present outstanding growth rates.
Financial Results
In Q2 2007, consolidated turnover amounted to euro 118.15 mil., compared to euro 103.72 mil. in Q2 2006, noting an increase by 13.91%.
It should be noted that during Q2 2007 we observed a satisfactory growth in the two basic sectors of activity, the fragrances & cosmetics and the household products, along with an overall strong activity growth in the Eastern European markets.
Gross Profit increased by 16.16% at euro 59.74 mil. in Q2 2007. Gross profit margin increased to 50.56% from 49.59% in Q2 2006 as a result of the management's strategic decision to alter the product mix towards own products.
The Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) reached euro 18.51 mil. in Q2 2007, leading to an EBITDA margin increase to 15.66% from 15.16% in Q2 2006.
The Earnings before Interest and Tax (EBΙΤ) in Q2 2007 amounted to euro 16.75 mil., increased by 20.41% compared to Q2 2006 that stood at euro 13.91 mil.
The Earnings before Tax for Q2 2007 amounted to euro 16.45 mil. compared to euro 15.24 mil. in Q2 2006, resulting to an increase of 7.94%.
The Earnings after Tax and Minorities (ΕΑΤΑΜ) reached euro 12.61 mil. in Q2 2007, compared to euro 11.14 mil. in Q2 2006, increased by 13.20%. However, it is worth noting that excluding the one-off items that were recorded in the respective period last year from the sale of Multirama (c. euro 0.96 mil.) and the withdrawal from the unprofitable Pet Business (c. euro 1.34 mil.), EATAM growth reaches 42.5%
Business Activity Analysis
Consolidated turnover breakdown per business activity is reported through four categories: fragrances & cosmetics, household products, health & care products and other sales.
In the categories of Fragrances & cosmetics and Household products, "own products" recorded substantial growth rates along with management's strategy.
The significant increase of fragrances and cosmetics (+22.95%) and of household products (+14.84%) is worth mentioning. Specifically, fragrances and cosmetics represent the 43.42% of the total consolidated turnover followed by the household products with 39.74%. Own products increase reached 19.55% for fragrances & cosmetics and 14.74% for household products. Other sales account for 8.57% of total turnover, and health & care products for 8.28%.
With respect to EBIT the largest contribution in Q2 2007 came from the other sales with 33.61% followed by the fragrances & cosmetics with 33.07%. The household products contributed with 24.19% followed by health & care products with 9.14%.
The EBIT breakdown for fragrances & cosmetics and household products between own products and distributed products results to 8.01 mil. euro in Q2 2007 for the own products, compared to 6.48 mil. euro in Q2 2006, an increase of 23.69%.
Geographic market Analysis
Analysing the geographic distribution of Sarantis Group turnover, we observe that Greek market sales accounts for 48.72% of total turnover, while the remaining 51.28% (euro 60.58 mil.), accounts for the Group's turnover in foreign markets. Sarantis Group turnover in the old countries increased by 30.45% vs. the same period last year, whereas turnover in the new countries increased by 21.12%.
Sarantis Group holds a leading "packaging product" position in Greece but also in Bulgaria, Romania, Serbia and Poland. Additionally, it holds a leading position in the male "fragrances & cosmetics" market in Greece, Bulgaria, Romania, & Serbia.
The most important foreign markets in terms of growth remain those of Hungary (317.68%), Bulgaria (35.59%), Serbia (34.94%), the Czech Republic (33.98%), Romania (30.44%), Poland (26.02%) and FYROM (28.64%). It is important to note that Sarantis Group is focused on adjusting the penetration model in the new countries of Turkey and Russia and assigning national distributors to execute the distribution of its products. By doing so, the management aims to offset costs and achieve critical mass. The new penetration model is already in effect in Ukraine.
Analysing the geographical distribution of Sarantis Group EBIT we observe satisfactory results in Greece that reported a significant increase by 8.29% reaching euro 14.39 mil., with the old markets also reporting significant increase by 135.82%.