GROWTH SLIGHTLY HIGHER IN 2011 THAN IN 2010 (12.1% VS. 11.7%) ACCORDING TO THE "FASHION AND LUXURY INSIGHT", THE ANNUAL REPORT BY SDA BOCCONI AND ALTAGAMMA PRESENTED THIS MORNING IN MILAN

Fiscal year 2011 confirmed the good health of the fashion and luxury industry, showing a growth in sales slightly higher than the previous year (12.1% vs. 11.7%), according to the “Fashion and Luxury Insight”, the annual report by SDA Bocconi and Altagamma monitoring balance sheets of listed international companies with sales in excess of € 200 million.

The industry profitability is stabilizing, the report, which this year has analyzed a sample of 77 companies, highlights: the average ROI is 13%, only slightly lower than 2010’s 13.4%, even ifbelow the pre-crisis levels, EBITDA margin is 14.1% (14.3% in 2010) and the ratio of working capital on sales is 18.8% (18.4% in 2010). The most conspicuous change is in ROE, which raises to a record 27.7% (18.6% in 2010), exceeding even the pre-crisis levels, as a consequence of a large increase in financial leverage, with gearing passing from 0.47 in 2010 to 0.76 in 2011.

“The preliminary 2012 financial data cast a shadow on the picture”, SDA Bocconi’s Paola Varacca Capello, co-author of the report, says. “We have data for 53 out of 77 companies and they are not very good: growth markedly slows from 12.1% to 7.8% and profitability suffers, as shown by the EBIT margin, which passes from 10.1% to 9.6%”.

“Company size remains a crucial driver of profitability”, Emilia Merlotti from SDA Bocconi, co-author of the report, says. “The largest companies, with sales above € 5 billion, outperform the rest both in terms of ROI and EBIT margin. On the other end, they record the lowest growth rates”.

As a whole, Jewels and watches and Apparel emerge as the best performing clusters of the year, with both growth rates and ROI above average.

“High-end is by far the most thriving segment”, Armando Branchini, secretary general of Fondazione Altagamma and co-author of the report, says. “In Apparel, for instance, companies have a 27.7% sales growth rate and a 19.8% ROI, against 11.9% and 14.7% in the medium segment and 16.6% and 10.5% in the mass market”.