income statement - cmvmvista alegre arrives to mexico through a partnership with pineda-covalin,...

08 Fall

Income

Statement

2018

Results Report – 2018 15th March 2019

Vista Alegre Atlantis, SGPS, S.A. * Public company * Head office: Lugar da Vista Alegre, Ílhavo * Registered

with the Commercial Registry of Ílhavo * Taxpayer no 500 978 654 * Share capital 121,927,316.80 Euros

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Income Statement 2018

Highlights

>> Turnover of 99 million euro, an increase of 17% compared to the same period in 2017; >>Adjusted EBITDA1 of 18.4 million euro, 36% higher than during the same period in 2017; >> Adjusted operating result2 increases 56% reaching to 12 million euro; >> Adjusted Income before taxes3 reaches 9.4 million euro, 103% higher than during the same period in 2017; >> Foreign markets represent 67% of turnover; >> Acquisition of Bordalo Pinheiro and Cerutil in August 2018 reinforced Vista Alegre’s positioning in the ceramics sector and aimed to achieve a greater scale and diversity in its business segments, as well as taking maximum benefit from the long-standing brand “Bordallo Pinheiro”; >> Pro-forma Turnover4 in the period of 2018 was 106 million euro and the Pro-forma adjusted EBITDA5, in the same period, reached 20.5 million euro.

1 EBITDA + costs with the Offering (578,000€)

2 Operating result + costs with the Offering (578,000€)

3 Income before taxes + costs with the Offering (578,000€)

4 If the acquisitions of Cerutil and Bordalo Pinheiro had occurred with reference to the 1st

January 2018 5 Adjusted EBITDA, if the acquisitions of Cerutil and Bordalo Pinheiro had occurred with reference to the 1

st

January 2018 + costs with the Offering (578,000€)




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Activity

In the period of 2018 it is worth to note a better performance of Vista Alegre in the last

years, with an adjusted net profit6 of 6.5 million euro, carrying on with the good results

reached in the last year.

The external market continues to be a great promoter of this good performance, with 66.5

million euro in sales, currently representing 67% of Vista Alegre’s turnover. This growth is

justified by increasing business in new markets, namely in Europe and Asia. In Europe,

France and Spain stood out with the greatest increases.

In the internal market a growth of 7% compared to the previous year was observed,

reaching a turnover of 32.5 million euro. A relevant factor of this growth was Vista Alegre’s

consolidation in commercial strategy in Portugal, making a stronger investment in its

outlets. Also standing out are good performance at the level of national stores, better

communication of the brand in terms of the internal market and a greater proximity to the

tastes and needs of the client, enhanced by the presence and organization of several events.

The integrated refurbishment project of the Vista Alegre Museum was the winner of the

“public’s choice” for the RegioStars Awards, an initiative of the European Commission. On

9th October 2018, the winning projects in 5 categories were announced in Brussels, with

Vista Alegre collecting the award as chosen by the public.

Associated with the Vista Alegre Museum, the Vista Alegre Complex, located in Ílhavo, was

honoured on 24th September 2018 with a silver medal, as part of the awarding of Tourist

Merit Medals, an initiative by the State Secretary of Tourism and the Minister of Economy.

The presence at the Maison & Objet fair in Paris stands out, where the brand presented new

collections developed in collaboration with leaders in modern design, among them Christian

Lacroix and Marcel Wanders.

6 Net profit + costs with the Offering (578,000€)




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Vista Alegre was once again recognised and internationally awarded, this time by the

“European Product Design Awards”, for the collections “Cannaregio”, “Hryb”, “Maya” and

“Bicos Bicolor” glasses. The innovative design as well as the excellence of this long-standing

brand in porcelain, glass and crystal caught the jury’s interest of the international contest

once again, won over by these pieces of great quality and distinction.

Vista Alegre arrives to Mexico through a partnership with Pineda-Covalin, considered to be

one of the leading luxury brands in Latin America. To mark this connection with and

expansion to Mexico, a collection of Vista Alegre pieces was launched paying homage to one

of the symbols of the country – the dreamcatcher. “Atrapasueños” is the name of this

tableware and giftware collection.

Results

Grupo Vista Alegre’s Consolidated income statements 2018 has shown a good performance

compared to the same period in 2017, having the turnover increased 17%, to 99 million

euro and adjusted EBITDA1 with a 36%,growth, amounting to 18.4 million euros at the end

of the year.

Grupo Vista Alegre recorded an adjusted operating result2 of 12 million euro, 56%higher

than during the same period in 2017, and the adjusted net profit6 of the period had a 54%

growth rate, during the same period as well, amounting to 6.5 million euro.

T €

Value % Turnover 99,022 84,981 14,041 17%

EBITDA 17,842 13,586 4,255 31%

Adjusted EBITDA 1 18,420 13,586 4,833 36% Adjusted EBITDA margin 1 18.0% 16.0%

Adjusted Operating Result 2 11,982 7,701 4,281 56%

Adjusted Operating Margin 2 12.1% 9.1%

Adjusted income before taxes 3 9,448 4,645 4,802 103%

Corporate Income Tax -2,968 -428 -2,541 594%

Adjusted Net Profit 6 6,479 4,218 2,262 54%

Consolidated Income

Items 31-12-2018 31-12-2017 Variation




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The continuous improvement of the industrial procedures, innovative production, as well as

investigation and development of new products, and the growing commercial presence in

the world have been the main factors for the good operating performances of Vista Alegre.

Vista Alegre acquired the companies Cerutil and Faianças Artísticas Bordalo Pinheiro on 31st

August 2018. These acquisitions aim to strengthen the position within the context of the

sector and competing companies, granting the Vista Alegre Group greater scale and

diversity as well as giving it the opportunity to market the long-standing brand “Bordallo

Pinheiro”.

In the event these acquisitions are dated 1 January 2018 (Pro-forma), the total of the

turnover and Pro-forma adjusted EBITDA5 of Grupo Vista Alegre in the period of 2018,

would rise to 106 million euros and 20.5 million euro, respectively.

Investments

During the period of 2018 the investments to the amount of 29.5 million euro, were mainly

in the stone tableware (extension of the Ria Stone factory) and crystal / glass (CristalLux

project).

In 2019 Ria Stone will have its production capacity increased by 60%, a production entirely

destined for and absorbed by the client IKEA. Bordalo Pinheiro will finalize investment to

increase production capacity by 50% at the beginning of the year and so it will be able to

respond to the increasing level of demand for its products.




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Prospects

Vista Alegre’s growth strategy, aiming to be one of the leading brands in its segments, at an

international level, is based on the main vectors:

- Developing new products and entering new market segments, adding value and

differentiation;

- Enhancing the positioning of the brand Vista Alegre as a premium brand and

launching Casa Alegre and Cook & Serve as secondary brands;

- Positioning Vista Alegre in the midpoints of creation of international trends, through

the establishment of partnerships with prestigious brands and collaboration with

designers, plastic artists, architects, illustrators, filmmakers, sculptors and

internationally renowned writers;

- Updating and constantly modernizing its sales points, adjusting them to global retail

trends;

- Exploring new sales channels and continuing investment in internationalization;

- Reinforcing sales teams in the main markets and channels;

- Establishing Customer Relationship Management policies focused on customer

loyalty;

- Communicating via collaboration with opinion makers and presence in social

networks;

- Investing in constant innovation and research to create highly differentiating and

value-added products;

- Modernizing the production process, maintaining a balance between classical and

manufacturing methods with new production methods.

Internationalization continues to be the focus of Vista Alegre, so, it is expected that

implementing several investment projects will allow for an increase in sales at the

international level, improving productivity and operational efficiency, enabling it to achieve

high levels of profitability, and consequently, better results.




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Consolidated Financial Statements

On 31th December 2018 and 2017

T €

Items 31-12-2018 31-12-2017

Sales and services provided 99,022 84,981 Cost of sold goods and consumed material -31,154 -26,068 Production variation 39 -447 Gross margin 67,907 58,466 Works for the company itself 2,555 1,148 Supplies and external services -21,902 -17,292 Personnel costs -33,505 -28,995 Amortizations -6,460 -6,414 Impairments 64 -163 Provisions of the financial year -20 372 Other costs and operational losses -1,415 -1,908 Impairment of non-amortizable assets -25 -54 Increases / (reductions) of fair value 4 375 Others revenue and operating income 4,202 2,168 Operating result 11,404 7,701 Interest and similar expenses -2,542 -3,078 Interest and similar income 8 22 Financial result -2,535 -3,056 Income before taxes 8,870 4,645 Income tax -2,968 -428 Consolidated result for the period 5,901 4,218 Attributable: Shareholders 5,941 4,258 Non-controlling interests -40 -40 Basic earnings per share (€) 0.0387 0.0036 Diluted earnings per share (€) 0.0387 0.0036




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