KORRES / Q1 2011 FINANCIAL RESULTS
-POSITIVE TREND IN SALES IN GREECE
-MAINTENANCE OF OPERATING PROFITABILITY
Q1 2011 for Korres Group closed with positive trend in sales in the Greek market and the maintenance of significant operating profitability. In particular sales in Greece, presented an increase of 0,6%, despite the aggravating circumstances, in the pharmacy channel effected by the strikes that happen in the first two months of the year. As far as the operating profitability, earnings before interest, tax, depreciation and amortization (EBITDA) reached 2,2m euro.
Analytically, the Group on a consolidated basis achieved sales of 10,3m euro in Q1 2011. For the correct comparison of sales with the corresponding period of 2010, we should mention the change in the consolidation way of the Group?s activity in the US, as a result of the end of the transition period in accordance with the agreement with Johnson & Johnson and the start of the official period of the Korres brand use in the particular market by Johnson & Johnson in Q2 2011 as it has been initially estimated. Thus, if we exclude the effect of the transition period concerning the US market from the turnover of Q1 2010, in order to be comparable to the Q1 2011, the decrease in consolidated sales is reduced to 4,7% (if we do not take under consideration this factor, the comparison with the corresponding previous period-total sales €12,2m euro-will not be accurate)
At the level of operating profitability, earnings before interest, tax, depreciation and amortization (EBITDA) amounted to 2,2m euro in Q1 2011 from 2,9m euro in the corresponding period of 2010, due to the initial revenue of 0,9m euro, recognized by Korres Group in Q1 2010 related to the transfer of the KORRES brand use, to the subsidiaries of Johnson & Johnson for the sale and distribution of its products in South America. In the line of this particular agreement, royalties will be paid and incorporated in Group?s earnings from Q2 2011 that the activity of Johnson & Johnson will start.
Earnings after taxes and minority rights, reached 0,5m euro in Q1 2011 from 1,5m euro in the corresponding period of 2010, as a result of the above mentioned impact, recognized in Q1 2010, the increased depreciation due to the capital expenditures, realized by the Group in the previous years, as well as the enhanced financial expenses.
In Q1 2011, despite the significant pressures that affected the pharmacies-major distribution channel of the Group?s products, the Group succeeded a development in the particular market, through the following actions:
Maintenance of the advertising (TV & press) focused on the strategic categories of face and hair colorants.
-Addition of new stands, renewing further the brand image in the particular pharmacy channel.
-Significant promo actions in the pharmacy (the major distribution channel).
-Launch of new codes in the existing categories, such as the new colors in the range of nail colorants.
-Position of the new completed range of sun care protection.
Assuming that corresponding facts will not be repeated in Q2 2011, Group?s management estimates that the positive effect of the above actions will be more obvious in Q2 2011, influencing the first six months of 2011.
In US, the Group in the line with the agreement that has signed with Johnson &Johnson for the offer of the license to distribute its products (North and South America), completed successfully the transition period including the efforts to support the brand in the existing distribution channels in North America and the smooth transition of knowledge in both regions. Thus in Q2 2011, the distribution will be realized by the subsidiaries of Johnson and Johnson in the particular markets. In Europe, Group, focusing its interest in the strategic markets such as Germany and Spain, continued to enhance its presence in the semi selective point of sales and in pharmacies.
For further info: Athina Lagou, Head of Investor Relations & Shareholder Services, T: 213 018 8905, E-mail: athina.lagou@korres.com.