- Prachi Singh |
Total sales at OVS grew by 57 million euros (67 million dollars) to 697.1 million euros (828 million dollars), a rise of 8.9 percent, with a 4.1 percent positive contribution from network development and the initial effects of the commercial agreement with Charles Voegele, up 4.8 percent. The company however said that like-for-like sales registered a flat performance, reflecting a particularly unfavourable market in July, which saw sales decline by 2.8 percent. EBITDA was 82.1 million euros (97 million dollars), up by 7 million euros (8.3 million dollars) or 9.4 percent and with margin improvement of around 10bps, compared with the same period of 2016.
Commenting on the company’s results, the company’s Chief Executive Officer, Stefano Beraldo said in a press release: “We believe that our strategy will result in further consolidation and market share gains in the Italian market, which continues to reward players that are versatile and able to benefit from economies of scale. At the same time, expansion in foreign markets will bring tangible benefits for OVS, mainly thanks to the roll-out of the commercial agreement with Charles Vögele, whose effects start becoming material in the second half of the current year.”
Sales improve across brand segment
OVS brand registered an increase in sales of 3.4 percent, 18.2 million euros (21 million dollars), driven by the steady expansion of the direct network. The company added that sales were temporarily negatively affected by changes to customs procedures that led to delays in goods imports. UPIM registered strong sales growth of 8.1 percent or 8.2 million euros (9.7 million dollars), benefiting from the positive development of the full-format Upim network and Blukids franchising.
The company’s both brands made positive contributions to the EBITDA performance. The EBITDA of the OVS brand increased by 3.5 million euros (4.1 million dollars) or 5.2 percent year on year, while the EBITDA of the UPIM brand grew by 3.6 million euros (4.2 million dollars) or 44.5 percent.
Normalised net profit was 38.4 million euros (45.6 million dollars), up by 7.6 million euros (9.03 million dollars) compared with the first half of 2016 and with a slightly lower tax rate compared to last year.
OVS opens doors to 13 new stores in H1
During the period, 13 directly operated stores and 32 stores in franchising were opened in Italy. International expansion also continued, with the opening of 19 stores, including four DOS and 15 franchised, mainly kids stores. In particular, the Spanish expansion continued to generate positive results with four new openings, including one full-format store in Madrid.
The company added that Charles Vögele restructuring plan has begun and the first two phases of cutting central costs have been completed, resulting in more than 40 million Swiss franc (41 million dollars) in cost savings on an annual run rate basis, and the whole of the Slovenian network of 11 stores has been converted to the OVS. The process of converting the Swiss stores has begun, with 75 stores converted since the second half of July to date.
Network expansion continued in the first part of the second half of the year, with another 17 stores added to date, including one full format DOS.