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The Group’s performance at March 31st, 2013
The persistent recessionary environment and the further weakening of the macroeconomic situation in Europe impacted the Amplifon Group’s performance, which was also influenced by the changes affecting insurance coverage in The Netherlands and Switzerland, and only partially offset by the brilliant results achieved in North America.
Revenue from sales and services at March 31st, 2013 amounted to Euro 189.7 million, a drop of 3.3% with respect to the Euro 196.2 million posted at March 31st, 2012, explained for -0.5% by the unfavourable trend in exchange rates. The decrease in consolidated revenue is the result of a decline in revenue in Europe (-6.8%) which was only partially offset by the brilliant growth posted in North America (+11.6% in USD), while revenue in the Asia-Pacific region was largely unchanged in local currency (-0.2% in AUD).
More in detail, turnover in Europe reached Euro 125.1 million versus Euro 134.2 million at March 31st, 2012 due to the particularly weak economic environment, as well as the two fewer working days and the adverse weather conditions in many countries in the region with heavy snowstorms and extremely cold temperatures that impact significantly on the Group’s target clientele.
All the main European countries posted a drop in sales compared to the same period of the prior year with the exception of Belgium and Luxembourg (+6.9%) and Turkey (+39.6%).
In The Netherlands (-8.5%) and Switzerland (-8.9%) the regulatory changes relating to insurance coverage continued to negatively impact revenue. The decrease posted in Switzerland is closely tied to the regulatory changes, even if the number of units sold is expected to rise beginning already in second quarter 2013. It could be, however, that sales on the Dutch market continue to fall for all of 2013 due primarily to the significant drop in the average sales price as a result of the new regulatory framework for insurance refunds introduced effective January 2013.
We remind that beginning January 1st, 2013 the UK results are included in the results for Europe.
North America contributed revenue of Euro 34.4 million to the Group’s sales, an increase of 10.6% with respect to the Euro 31.1 million reported at March 31st, 2012 confirming, despite the unfavourable trend in exchange rates (-0.9%), the strong growth that characterized the entire previous year.
Sales in the Asia-Pacific region amounted to Euro 29.5 million and were negatively impacted by the unfavourable change in exchange rates while coming in basically unchanged in local currency (-0.2% in AUD) with respect to first quarter 2012. More in detail, the performance in Australia was affected by the fewer number of working days, as the points of sale are operating at a level of productivity that is close to the saturation point, and an extremely challenging comparison with the prior year when organic growth reached 17.2%. The continuous growth in sales in India (+349.2%) helped to offset the weak performance recorded in New Zealand (-5.3%) which is still in a phase of stabilization.
Consolidated EBITDA at March 31st, 2013 amounted to Euro 17.9 million, a decrease of 28.2% with respect to the Euro 24.9 million posted in first quarter 2012, with the EBITDA margin dropping by 3.3%. This decline was mainly affected by the drop in sales in Europe given the rigidity of the cost structure and was further penalized by restructuring costs of Euro 1.3 million. Furthermore, the weakness of the market in New Zealand and the Indian business, which is still in a start-up phase, contributed to a decrease in profitability in the Asia-Pacific region as well (-476 bps), while EBITDA improved significantly in North America (+569 bps).
EBIT amounted to Euro 6.2 million, -54.0% with respect to the Euro 13.5 million posted at March 31st, 2012.
The Group’s net loss amounted to Euro 2.1 million, compared to a net profit of Euro 3.1 million in first quarter 2012.
Net equity at March 31st, 2013 amounted to Euro 442.3 million, compared to Euro 430.2 million at December 31st, 2012.
Net debt amounted to Euro 318.9 million at March 31st, 2013, an increase of Euro 13.1 million with respect to the Euro 305.8 million recorded at December 31st, 2012. This increase is explained primarily by the seasonality of the working capital in the first quarter, which is historically the weakest of the year in terms of cash flow generation.
Free Cash Flow at March 31st, 2013 reached a negative Euro 12.9 million, compared to a positive Euro 11.8 million at March 31st, 2012.