MONNALISA®
PRESS RELEASE
H1 2024 RESULTS APPROVED
REVENUES OF EURO 19 MILLION
NEW BUSINESS STRATEGY LAUNCHED BY MANAGEMENT
- Consolidated revenues of Euro 19 million (Euro 21.9 million in H1 2023)
- Growth of direct-to-consumer channel share which, considering only the direct physical stores and the direct e-commerce channel, now accounts for 49% of total Group revenues
- EBITDA margin up on H1 2023, despite the revenue contraction
- Adjusted EBITDA of Euro 1.8 million (Euro 2 million in the comparative period in 2023), 9.5% of revenues
- EBIT was a loss of Euro 1.7 million, a 16% improvement over the first half of 2023 (Adjusted EBIT was in line with the comparative period)
- Shareholders' equity of Euro 14.2 million
- The net financial debt including the effects of IFRS 16 was Euro 26.6 million (Euro 28.5 million at the end of the comparative period); adjusted net financial debt1 of Euro 13.4 million
- Major directional shift set out in the guidelines of new Group Business Plan following entry of new management in May 2024
Arezzo (AR), September 27, 2024
The Board of Directors of Monnalisa S.p.A., the operative holding company of the Monnalisa Group, the high- end childrenswear sector leader and listed on the Euronext Growth Milan market organised and managed by Borsa Italiana, has approved the 2024 Half-Year Financial Report, drawn up as per the Euronext Growth Milan Issuers' Regulation.
Matteo Tugliani, Chief Executive Officer of Monnalisa, stated "We are whole-heartedlyand confidently pursuing our new project launched in May 2024: Monnalisa as a production, commercial distribution and editorial platform for own brands and brands under license within the adult luxury fashion market. The Group's objectives and general focus centres on profitability, margins and positive cash flows rather than revenues. We look with confidence to the medium/long-term,adopting in each area a prudent approach based on the far-reachinganalysis carried out by management and the advisors appointed for the restructuring and relaunch of the Monnalisa Group".
1 Net of the effects of applying IFRS 16.
MONNALISA S.p.A.
Via Madame Curie, 7 - 52100 Arezzo - Italy VAT No. 01163300518
www.monnalisa.com - e-mailinfo@monnalisa.eu- ph. +39 0575 9850.1 - fax +39 0575 9850.20
MONNALISA®
Financial highlights at June 30, 2024
In the first half of 2024, the Company recorded consolidated revenues of 19 million euros, with a decrease of 13.3% at current exchange rates (11.5% at constant exchange rates) compared to 21.9 million euros as of June 30, 2023.
The retail channel contracted 6% at current exchange rates, 3% at constant exchange rates compared to values as of June 30, 2023 with revenues of Euro 7.7 million (Euro 8.2 million in the comparative period).
The contraction stems mainly from the closures on the Chinese market, with the group managing ten sales points at June 30, 2023, compared to six at June 30, 2024. Excluding the impact from the Chinese market contraction, the retail channel grew 2% on the comparative half-year.
The wholesale channel was significantly impacted, contracting 20% at current exchange rates, 19% at constant exchange rates. The channel's results continue to be significantly impacted by the international geopolitical uncertainty, the ongoing conflict between Russia and Ukraine, with consequences for the markets to which the Group is significantly exposed in terms of customers, and the significant inflation which has hit consumer confidence, in addition to a more cautious and conservative approach among multi-brand wholesale customers, and particularly the newer brands. Channel revenues totalled Euro 10 million, compared to Euro 12.4 million in H1 2023.
A significant portion of the reduction in the wholesale channel's revenues is due to the drop in revenues from brands other than Monnalisa.
Direct e-commerce channel revenues of the parent company alone increased 1% in the period compared to the same period of 2023.
The direct online channel continues to account for 7% of total revenues (substantially in line with the previous year).
June 30 at current exchange rates
Euro thousands | 2024 | % | 2023 | % | Change | Change % | |
Retail | 7,730 | 41% | 8,222 | 38% | (492) | -6% | |
Wholesale | 9,958 | 52% | 12,400 | 57% | (2,442) | -20% | |
Direct B2C | 1,310 | 7% | 1,290 | 6% | 19 | 1% | |
Total | 18,998 | 100% | 21,913 | 100% | (2,915) | -13% |
Revenues by region highlight the contraction in Italy and Europe (-16%) and in the Rest of the World (-12%).
The percentage distribution of revenues by zone is in line with the comparative half-year:
June 30 at current exchange rates
Euro thousands | 2024 | % | 2023 | % | Change | Change % | |
Italy | 6,822 | 36% | 8,167 | 37% | (1,345) | -16% | |
Europe | 4,797 | 25% | 5,337 | 24% | (540) | -10% | |
Rest of the World | 7,380 | 39% | 8,409 | 38% | (1,029) | -12% | |
TOTAL | 18,998 | 100% | 21,913 | 100% | (2,915) | -13% |
Adjusted EBITDA was Euro 1.8 million (Euro 2 million in H1 2023). The adjustments are related to extraordinary costs incurred in the first half of the year due to non-recurring events, specifically related to the closure of directly operated stores, which were deemed underperforming in a medium to long-term perspective,
MONNALISA S.p.A.
Via Madame Curie, 7 - 52100 Arezzo - Italy VAT No. 01163300518
www.monnalisa.com - e-mailinfo@monnalisa.eu- ph. +39 0575 9850.1 - fax +39 0575 9850.20
MONNALISA®
carried out in the first six months of 2024. This is in line with the outlined strategic plan, which aims to rationalize existing retail locations, with subsequent positive effects on overall margins.
EBITDA reported was Euro 1.55 million, 8,2% of total revenues, compared to Euro 1.48 million in H1 2023, 6.8% of total revenues.
After amortisation and depreciation of Euro 3.3 million (Euro 3.6 million in H1 2023), EBIT reported a loss of Euro 1.7 million (loss of Euro 2.1 million in H1 2023).
A Net Loss of Euro 2.9 million was reported (loss of Euro 3.6 million in H1 2023).
The period results, which did not meet expectations, were again impacted by the outside factors indicated above. These concern the inflationary environment - which affected consumer confidence and therefore wholesale customer orders - which had already been a weak link in the chain, the consumer slowdown on a number of key group markets such as the United States and China, but also Europe, and the radical change in the competitive high-end childrenswear fashion market, affected by the wave of men's and womenswear brands which over recent years have launched children's ranges.
Balance sheet highlights at June 30, 2024
The Group reports Shareholders' Equity of Euro 14.2 million.
The net financial debt (Net Financial Position), including the effects from applying IFRS 16, was Euro 26.6 million (Euro 28.5 million at December 31, 2023). The adjusted financial debt, calculated by excluding current and non-current liabilities regarding leasing contracts, totalled Euro 13.4 million (Euro 12.2 million at December 31, 2023). The improvement in net financial debt is also impacted by the closure of directly operated stores, which were deemed underperforming in a medium to long-term perspective, carried out during the semester in line with the defined strategic plan.
in Euro thousands | 30.06.2024 | 31.12.2023 | |
A. Cash | 1,214 | 4,401 | |
B. Cash equivalents | - | - | |
C. Other current financial assets | 55 | 251 |
D. Liquidity A+B+C | 1,269 | 4,652 | ||
E. Current financial payables | 9,824 | 11,766 | ||
F. Current portion of non-current financial payables | 2,733 | 2,590 | ||
G. Current financial debt (E+F) | 12,557 | 14,356 | ||
H. Net current financial debt (G-D) | 11,288 | 9,704 | ||
I. Non-current financial payables | 15,301 | 18,795 | ||
J. Debt instruments | - | - | ||
K. Trade and other current payables | - | - | ||
L. Non-current debt (I+J+K) | 15,301 | 18,795 | ||
M. Net financial debt (H+L) | 26,589 | 28,499 | ||
Current lease liabilities | 3,810 | 4,067 | ||
Non-current lease liabilities | 9,429 | 12,196 | ||
Adjusted net financial debt | 13,350 | 12,236 | ||
MONNALISA S.p.A.
Via Madame Curie, 7 - 52100 Arezzo - Italy VAT No. 01163300518
www.monnalisa.com - e-mailinfo@monnalisa.eu- ph. +39 0575 9850.1 - fax +39 0575 9850.20
MONNALISA®
2024 - 2030 Business Plan
As is well known, the Group's results, which have been negative for several years, have been and continue to be impacted by negative exogenous factors such as: i) inflationary dynamics, which have reduced consumer confidence and, consequently, wholesale customer orders; ii) the slowdown in consumption in key markets for the Group, such as the United States and China; iii) increased competition due to the entry of luxury brands, previously focused solely on the adult market, into the high-end children's segment.
In light of all this, the new Management, since taking office, has identified actions and initiatives aimed at reversing the company's results and achieving a return to economic and financial stability within a reasonable timeframe. Based on the needs already identified and communicated on July 26, Management has conducted in-depth analysis across all strategic areas of the Company's business model, with the support of external advisors, and has developed a restructuring and relaunch plan, the guidelines of which were approved by the Board of Directors on September 25 2024. This restructuring and relaunch plan involves changes to the business model as well as measures designed to restore the Group to financial stability by fiscal year 2025.
The main guidelines underpinning the plan are as follows:
- consolidating Wholesale channel revenues, also through new sales from licenses already contracted, with the initial revenues emerging from FY 2025;
- continuation of the strategy of seeking new licensing or production agreements with adult fashion brands, not only to increase volumes - but also the Group's profitability - creating new revenue streams and higher earnings;
- restructuring of the retail channel through the optimised management of existing sales points and the reduction of Chinese market initiatives (whose relaunch is currently experiencing extreme difficulties), and the gradual closure of the six residual sales points managed by the Chinese subsidiary by Q1 2025;
- the launch of new proprietary brands leveraging the industrial creative and distributional expertise of the Group, with a separate target pricing and occasions for use from the Monnalisa brand.
In terms of containing and reducing operating costs:
- reduction of general costs through an ad hoc savings plan;
- the closure of under-performing stores (particularly in China), which the Group expects to fully exit;
- the bringing in-house of a number of marketing/branding activities, previously outsourced, with significant cost savings.
These guidelines have already been initially implemented in the current semester with an overall reduction in operating costs greater than the decrease in turnover. Over the next quarter, further action lines approved by the Board of Directors will be executed; timely communication of the results of this execution will be provided to the market.
The Board has approved and communicated to the market the unaudited consolidated results. As soon as the auditing firm has completed the appropriate checks and issued the relevant report, it will be promptly made available to the public via a press release.
MONNALISA S.p.A.
Via Madame Curie, 7 - 52100 Arezzo - Italy VAT No. 01163300518
www.monnalisa.com - e-mailinfo@monnalisa.eu- ph. +39 0575 9850.1 - fax +39 0575 9850.20
MONNALISA®
The following Group financial statements are annexed to this press release:
Annex 1. - Consolidated Income Statement
Annex 2. - Consolidated Comprehensive Income Statement
Annex 3. - Consolidated Balance Sheet
Annex 4. - Statement of changes in consolidated shareholders' equity
Annex 5. - Consolidated Cash flow Statement
The consolidated half-year report at June 30, 2024 shall be made available to the public according to the terms and means established by the Euronext Growth Milan Issuers' Regulation, and also on the website of Monnalisa S.p.A. https://www.monnalisa.com/in the "Investor Relations" section.
***
Monnalisa S.p.A. (Ticker MNL), listed on the Euronext Growth Milan market since July 12, 2018 and engaged in the high-end childrenswear segment for fifty years, was founded in Arezzo in 1968. It distributes in over 50 countries, both through direct flagship stores and at the world's best-known Department Stores and over 400 multibrand sales points. Focusing on high-quality and made in Italy style, its research and development investment is matched by a commitment to sustainability. The company complies with the SA8000 regulation and environmental certification ISO 14001.
MONNALISA S.p.A.
Via Madame Curie, 7 - 52100 Arezzo - Italy VAT No. 01163300518
www.monnalisa.com - e-mailinfo@monnalisa.eu- ph. +39 0575 9850.1 - fax +39 0575 9850.20
MONNALISA®
Annex 1. - Consolidated Income Statement
of which | of which | |||||||||
with | ||||||||||
(Euro) | Notes | 30.06.2024 | 30.06.2023 | with related | ||||||
related | ||||||||||
parties | parties | |||||||||
Revenues from contracts with customers | 5 | 18,998,271 | 78,159 | 21,912,800 | 25,206 | |||||
Other income and revenues | 6 | 409,138 | 388,354 | |||||||
Revenues | 19,407,409 | 22,301,154 | ||||||||
Changes in inventories of work in progress, semi-finished goods and | 7 | 411,443 | 1,078,424 | |||||||
finished products | ||||||||||
Raw materials, finished products and consumables used | 7 | (5,224,789) | (6,614,517) | |||||||
Costs for services | 8 | (7,059,543) | (255,916) | (8,868,231) | (366,557) | |||||
Personnel costs | 9 | (5,771,152) | (120,778) | (6,165,250) | (74,400) | |||||
Amortization, depreciation and write-downs | 10 | (3,320,998) | (3,602,203) | |||||||
Other operating costs | (213,650) | (246,614) | ||||||||
Operating profit/(loss) | (1,771,280) | (2,117,237) | ||||||||
Financial charges | 11 | (923,539) | (820,311) | |||||||
Financial income | 11 | 69,685 | 18,281 | |||||||
Gains/(losses) on exchange rate differences | 11 | 246,037 | (769,171) | |||||||
Profit before taxes | (2,379,097) | (3,688,438) | ||||||||
Income Taxes | 12 | (525,740) | 43,901 | |||||||
Net profit/(loss) for the period | (2,904,838) | (3,644,538) | ||||||||
Net profit/(loss) - Group | (2,904,838) | (3,644,616) | ||||||||
Net profit/(loss) - minority interests | 0 | 77 | ||||||||
(Euro) | 30.06.2024 | 30.06.2023 | ||||||||
Net profit/(loss) - Group | (2,904,838) | (3,644,616) | ||||||||
# shares | 5,236,300 | 5,236,300 | ||||||||
Basic earnings/(loss) per share | (0.60) | (0.70) | ||||||||
Diluted earnings/(loss) per share | (0.60) | (0.70) |
MONNALISA S.p.A.
Via Madame Curie, 7 - 52100 Arezzo - Italy VAT No. 01163300518
www.monnalisa.com - e-mailinfo@monnalisa.eu- ph. +39 0575 9850.1 - fax +39 0575 9850.20
MONNALISA®
Annex 2. - Consolidated Comprehensive Income Statement
(Euro) | Notes | 30.06.2024 | 30.06.2023 |
Net profit/(loss) for the period | (2,904,838) | (3,644,538) | |
Net gain/(Loss) from hedging derivatives | 25 | (20,891) | (25,166) |
Currency translation differences of foreign operations | 25 | (166,402) | 109,583 |
Total other gains/(losses) that will be subsequently reclassified to net profit/(loss) for the period, net of taxes | (187,293) | 84,417 | |
Net gain/(loss) from recognition of defined-benefit plans for employees | 25 | 76,148 | (38,113) |
Total other gains/(losses) that will not be subsequently reclassified to net profit/(loss) for the period, net of taxes | 76,148 | (38,113) | |
Total other gains/(losses) net of taxes | (111,145) | 46,304 | |
Total comprehensive income for the period, net of taxes | (3,015,983) | (3,598,234) | |
Group | (3,015,983) | (3,598,637) | |
Minority Interest | 0 | 403 | |
MONNALISA S.p.A.
Via Madame Curie, 7 - 52100 Arezzo - Italy VAT No. 01163300518
www.monnalisa.com - e-mailinfo@monnalisa.eu- ph. +39 0575 9850.1 - fax +39 0575 9850.20
MONNALISA®
Annex 3. - Consolidated Balance Sheet
of which with | of which | |||||||||||
(Euro) | Notes | 30.06.2024 | 31.12.2023 | with related | ||||||||
related parties | ||||||||||||
parties | ||||||||||||
NON CURRENT ASSETS | ||||||||||||
Property, plant and equipment | 13 | 14,651,442 | 15,105,276 | |||||||||
Right of use assets | 15 | 12,887,298 | 15,924,133 | |||||||||
Intangible assets with a finite useful life | 16 | 308,378 | 470,727 | |||||||||
Other non current financial assets | 17 | 742,794 | 767,022 | |||||||||
Deferred tax assets | 12-18 | 3,600,283 | 4,125,372 | |||||||||
TOTAL NON CURRENT ASSETS | 32,190,195 | 0 | 36,392,529 | 0 | ||||||||
CURRENT ASSETS | ||||||||||||
Inventories | 19 | 15,695,870 | 15,669,809 | |||||||||
Trade Receivables | 20 | 6,999,406 | 189,503 | 6,530,355 | 202,589 | |||||||
Tax Receivables | 21 | 0 | 319,202 | |||||||||
Other current assets | 22 | 1,940,716 | 2,084,395 | 180,000 | ||||||||
Other current financial assets | 23 | 170,245 | 390,006 | |||||||||
Cash and cash equivalents | 24 | 1,214,288 | 4,401,271 | |||||||||
TOTAL CURRENT ASSETS | 26,020,525 | 189,503 | 29,395,038 | 382,589 | ||||||||
TOTAL ASSETS | 58,210,720 | 189,503 | 65,787,567 | 382,589 | ||||||||
SHAREHOLDERS' EQUITY | ||||||||||||
GROUP SHAREHOLDERS' EQUITY | ||||||||||||
Share capital | 10,000,000 | 10,000,000 | ||||||||||
Reserves | 7,127,648 | 13,947,765 | ||||||||||
Net profit/(loss) - Group | (2,904,838) | (6,706,313) | ||||||||||
TOTAL GROUP SHAREHOLDERS' EQUITY | 14,222,810 | 17,241,452 | ||||||||||
Share capital and reserves - minority interests | 633 | 633 | ||||||||||
TOTAL SHAREHOLDERS' EQUITY | 25 | 14,223,443 | 0 | 17,242,084 | 0 | |||||||
NON CURRENT LIABILITIES | ||||||||||||
Non current financial liabilities | 31 | 5,872,420 | 6,599,463 | |||||||||
Provisions for risk and charges | 26 | 660,741 | 752,946 | |||||||||
Employee benefit liabilities | 27 | 2,175,410 | 9,068 | 2,324,070 | ||||||||
Other non current liabilities | 28 | 87,804 | 107,304 | |||||||||
Non current lease liabilities | 29 | 9,428,848 | 12,195,551 | |||||||||
Deferred tax liabilities | 12-18 | 271,426 | 276,193 | |||||||||
TOTAL NON CURRENT LIABILITIES | 18,496,648 | 9,068 | 22,255,527 | 0 | ||||||||
CURRENT LIABILITIES | ||||||||||||
Trade payables | 30 | 10,211,256 | 683,127 | 9,430,568 | 432,002 | |||||||
Current financial liabilities | 31 | 8,756,417 | 10,289,475 | |||||||||
Tax payables | 30 | 422,139 | 477,109 | |||||||||
Other current liabilities | 30 | 2,290,860 | 2,025,428 | |||||||||
Current lease liabilities | 29 | 3,809,959 | 4,067,377 | |||||||||
TOTAL CURRENT LIABILITIES | 25,490,630 | 683,127 | 26,289,956 | 432,002 | ||||||||
TOTAL LIABILITIES | 43,987,278 | 48,545,483 | ||||||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 58,210,720 | 65,787,567 | ||||||||||
MONNALISA S.p.A.
Via Madame Curie, 7 - 52100 Arezzo - Italy VAT No. 01163300518
www.monnalisa.com - e-mailinfo@monnalisa.eu- ph. +39 0575 9850.1 - fax +39 0575 9850.20
MONNALISA®
Annex 4. - Statement of changes in consolidated shareholders' equity
Share | Legal | Revaluation | Cash Flow hedge | Effect IAS 19 | Retained | Net | Group | Minority | Total | |||||||
(Euro) | Other reserves | profit/(loss) | shareholders' | shareholders' | ||||||||||||
capital | reserve | reserve | reserve | Equity | earnings | for the period | equity | interest | equity | |||||||
As at 01.01.2024 | 10,000,000 | 1,143,206 | 4,006,874 | 105,317 | 6,785,245 | 155,698 | 1,751,425 | (6,706,313) | 17,241,452 | 633 | 17,242,084 | |||||
Allocation of results | (6,706,313) | 6,706,313 | 0 | 0 | ||||||||||||
Other movements IAS 29 | (2,685) | (2,685) | (2,685) | |||||||||||||
Net profit/(loss) for the period | (2,904,838) | (2,904,838) | 0 | (2,904,838) | ||||||||||||
Other comprehensive income/(loss) | (20,891) | (166,375) | 76,148 | (111,118) | (111,118) | |||||||||||
As at 30.06.2024 | 10,000,000 | 1,143,206 | 4,004,189 | 84,426 | 6,618,870 | 231,846 | (4,954,888) | (2,904,838) | 14,222,810 | 633 | 14,223,443 |
MONNALISA S.p.A.
Via Madame Curie, 7 - 52100 Arezzo - Italy VAT No. 01163300518
www.monnalisa.com - e-mailinfo@monnalisa.eu- ph. +39 0575 9850.1 - fax +39 0575 9850.20
MONNALISA®
Annex 5. - Consolidated Cash Flow Statement
Consolidated Cash Flow Statement
(Euro) | of which | of which | |||
Notes | 30.06.2024 | with related | 30.06.2023 | with related | |
parties | parties | ||||
Net Profit/(loss) for the period | (2,904,838) | (3,644,538) | |||
Adjustments to reconcile net profit (loss) to net cash from (used in) operating activities: | |||||
Amortization, depreciation and write-downs of tangible and intangible assets, | |||||
investment property and right-of-use assets | 3,300,971 | 3,601,355 | |||
Income taxes | 523,000 | (43,901) | |||
Provision for employee benefit plans | 124,316 | 143,438 | |||
Allocation to/(use of) the provision for obsolete inventory | - | - | |||
Losses and provision for bad debt | - | - | |||
Losses/(gains) on disposal of tangible/intangible assets | - | - | |||
Interest expense and interest expense on lease liabilities | 940,288 | 820,311 | |||
Interest income | - | - | |||
Other non-monetary items | (214,064) | 208,406 | |||
Changes in operating assets and liabilities | - | - | |||
Inventories | (26,061) | (515,581) | |||
Trade receivables | (469,051) | 12,200 | 958,867 | 182.067 | |
Trade payables | 780,688 | 251,125 | (36,104) | (8.312) | |
Other receivables and tax payables | 421,555 | 161,732 | |||
Other assets and liabilities | - | 24,922 | |||
Employee benefits payments | (203,906) | (90,350) | |||
Income taxes paid | - | (34,058) | |||
Interest expense and interest expense on lease liabilities paid | (615,973) | (425,733) | |||
Interest income received | - | - | |||
NET CASH FROM (USED IN) OPERATING ACTIVITIES | 1,656,925 | 263,325 | 1,128,765 | 173,755 | |
Cash flow from investing activities | |||||
Purchase of tangible assets | (146,350) | (1,332,520) | |||
Purchase of intangible assets | 9,245 | (287,061) | |||
Proceeds from the sale of tangible and intangible assets | - | - | |||
NET CAS FROM (USED IN) INVESTING ACTIVITIES | (137,105) | 0 | (1,619,581) | 0 | |
Cash flow from financing activities | |||||
Net change in financial receivables | 220,100 | 180,000 | - | ||
Net change in financial payables | (2,260,101) | 5,331,678 | |||
Repayment of lease liabilities | (2,666,803) | (2,723,840) | |||
NET CASH FROM (USED IN) FINANCING ACTIVITIES | (4,706,804) | 180,000 | 2,607,838 | 0 | |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (3,186,984) | 443,325 | 2,117,022 | 173,755 | |
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR | 4,401,271 | 3,408,163 | |||
Increase /(decrease) in cash and cash equivalents | (3,186,984) | 2,117,022 | |||
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD | 1,214,288 | 5,525,185 | |||
MONNALISA S.p.A.
Via Madame Curie, 7 - 52100 Arezzo - Italy VAT No. 01163300518
www.monnalisa.com - e-mailinfo@monnalisa.eu- ph. +39 0575 9850.1 - fax +39 0575 9850.20