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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Month of September 2024
Commission File Number: 001-41569
LANVIN GROUP HOLDINGS LIMITED
4F, 168 Jiujiang Road,
Carlowitz & Co, Huangpu District
Shanghai, 200001, China
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒ |
Form 40-F ☐ |
INCORPORATION BY REFERENCE
The Report attached hereto as Exhibit 99.1 is hereby incorporated by reference into the registration statement on Form F-3 (No. 333-276476), the post-effective amendment No. 4 to Form F-1 on Form F-3 (No. 333-269150) and the registration statement on Form F-3 (No. 333-280891) of Lanvin Group Holdings Limited and shall be a part thereof from the date on which this Report is furnished, to the extent not superseded by documents or reports subsequently filed or furnished.
EXHIBIT INDEX
Exhibit |
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Description |
99.1 |
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Lanvin Group Semi-Annual Report as of and for the Six Months ended June 30, 2024 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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LANVIN GROUP HOLDINGS LIMITED |
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By: |
/s/ Zhen Huang |
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Name: Zhen Huang |
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Title: Chairman |
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Date: September 16, 2024
Exhibit 99.1
Lanvin Group Holdings Limited
Semi-Annual Report
As of and for the six months ended June 30, 2024
TABLE OF CONTENTS
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
4 |
Lanvin Group Holdings Limited
Interim condensed consolidated financial statements (unaudited)
At and for the six months ended June 30, 2024 and 2023
Table of Contents |
Page(s) |
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F-1 |
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Interim condensed consolidated statements of comprehensive loss |
F-2 |
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Interim condensed consolidated statements of financial position |
F-3 |
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F-4 |
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Interim condensed consolidated statements of changes in equity |
F-5 |
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Notes to interim condensed consolidated financial statements |
F-6 – F-20 |
CERTAIN DEFINED TERMS
In this report (the “Semi-Annual Report”), unless otherwise specified, the terms “we,” “us,” “our,” “Lanvin Group,” “the Company” and “our Company” refer to Fosun Fashion Group (Cayman) Limited, or FFG, and its consolidated subsidiaries, prior to the consummation of the Business Combination (as defined below) and to Lanvin Group Holdings Limited, or LGHL, and its consolidated subsidiaries following the Business Combination, as the context requires. The term “PCAC” refers to Primavera Capital Acquisition Corporation prior to the consummation of the Business Combination.
INTRODUCTION
The interim condensed consolidated financial statements as of and for the six months ended June 30, 2024 (the “Semi-Annual Condensed Consolidated Financial Statements”) included in this Semi-Annual Report have been prepared in compliance with IAS 34 — Interim Financial Reporting as issued by the International Accounting Standards Board and as endorsed by the European Union. The accounting principles applied are consistent with those used for the preparation of the annual consolidated financial statements as of December 31, 2023 and December 31, 2022 and for each of the three years in the period ended December 31, 2023 (the “Annual Consolidated Financial Statements”), except as otherwise stated in Note 3 in the notes to the Semi-Annual Condensed Consolidated Financial Statements.
The Group’s financial information in this Semi-Annual Report is presented in Euro except that, in some instances, information is presented in U.S. dollar. All references in this report to “Euro,” “EUR” and “€” refer to the currency introduced at the start of the third stage of European Economic and Monetary Union pursuant to the Treaty on the Functioning of the European Union, as amended, and all references to “U.S. dollar,” “USD” and “$” refer to the currency of the United States of America (the “U.S.”).
Certain totals in the tables included in this Semi-Annual Report may not add up due to rounding.
This Semi-Annual Report is unaudited.
NOTE ON PRESENTATION
On March 23, 2022, we entered into the Business Combination Agreement (the “Business Combination Agreement”) by and among LGHL, PCAC, FFG, Lanvin Group Heritage I Limited (“Merger Sub 1”) and Lanvin Group Heritage II Limited (“Merger Sub 2”), which was subsequently amended on October 17, 2022, October 20, 2022, October 28, 2022 and December 2, 2022. Pursuant to the Business Combination Agreement, (i) PCAC merged with and into Merger Sub 1, with Merger Sub 1 surviving and remaining as a wholly-owned subsidiary of LGHL, (ii) following the Initial Merger, Merger Sub 2 merged with and into FFG, with FFG being the surviving entity and becoming a wholly-owned subsidiary of LGHL, and (iii) subsequently, Merger Sub 1 as the surviving company of the Initial Merger merged with and into FFG as the surviving company of the Second Merger, with FFG surviving such merger (the “Business Combination”). For more information relating to the Business Combination, including a description of the transactions undertaken to complete the Business Combination, reference should be made to Note 1— General information to the Annual Consolidated Financial Statements in the Annual Consolidated Financial Statements.
Following the completion of the Business Combination, on December 14, 2022, our ordinary shares and public warrants began trading on the New York Stock Exchange (“NYSE”) under the symbols “LANV” and “LANV-WT”, respectively.
1
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Semi-Annual Report contains forward-looking statements. Forward-looking statements include all statements that are not historical statements of fact and statements regarding, but not limited to, our expectations, hopes, beliefs, intention or strategies of regarding the future. You can identify these statements by forward-looking words such as “may,” “expect,” “predict,” “potential,” “anticipate,” “contemplate,” “believe,” “estimate,” “intend,” “plan,” “future,” “outlook,” “project,” “will,” “would” and “continue” or similar words. You should read statements that contain these words carefully because they:
| ● | discuss future expectations; |
| ● | contain projections of future results of operations or financial condition; or |
| ● | state other “forward-looking” information. |
We believe it is important to communicate our expectations to our security holders. However, there may be events in the future that we are not able to predict accurately or over which we have no control. The risk factors and cautionary language discussed in this Semi-Annual Report provide examples of risks, uncertainties and events that may cause actual results to differ materially from the expectations described by us in such forward-looking statements, including among other things:
| ● | changes adversely affecting the business in which we are engaged; |
| ● | our projected financial information, anticipated growth rate, profitability and market opportunity may not be an indication of our actual results or our future results; |
| ● | management of growth; |
| ● | the impact of health epidemics, pandemics and similar outbreaks, including the COVID-19 pandemic on our business; |
| ● | our ability to safeguard the value, recognition and reputation of our brands and to identify and respond to new and changing customer preferences; |
| ● | the ability and desire of consumers to shop; |
| ● | our ability to successfully implement our business strategies and plans; |
| ● | our ability to effectively manage our advertising and marketing expenses and achieve the desired impact; |
| ● | our ability to accurately forecast consumer demand; high levels of competition in the personal luxury products market; |
| ● | disruptions to our distribution facilities or our distribution partners; |
2
| ● | our ability to negotiate, maintain or renew our license agreements; |
| ● | our ability to protect our intellectual property rights; |
| ● | our ability to attract and retain qualified employees and preserve craftmanship skills; |
| ● | our ability to develop and maintain effective internal controls; |
| ● | general economic conditions; |
| ● | the result of future financing efforts; and |
| ● | other factors discussed elsewhere in this Semi-Annual Report. |
In addition, statements that “we believe” and other similar statements reflect our belief and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Semi-Annual Report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherent uncertain and investors are cautioned not to unduly rely upon these statements.
The foregoing factors should not be construed as exhaustive and should be read together with the other cautionary statements included in this Semi-Annual Report. All forward-looking statements included herein are expressly qualified in their entirety by the cautionary statements contained or referred to in this section as well as any other cautionary statements contained herein. Except to the extent required by applicable laws and regulations, we undertake no obligations to update these forward-looking statements to reflect events or circumstances after the date of this Semi-Annual Report or to reflect the occurrence of unanticipated events. In light of these risks and uncertainties, you should keep in mind that any event described in a forward-looking statement made in this Semi-Annual Report or elsewhere might not occur.
3
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
We are a global luxury fashion group with five portfolio brands, namely Lanvin, Wolford, Sergio Rossi, St. John and Caruso. Founded in 1889, Lanvin is one of the oldest French couture houses still in operation, offering products ranging from apparel to leather goods, footwear, and accessories. Wolford, founded in 1950, is one of the largest luxury skinwear brands in the world, offering luxury legwear and bodywear, with a recent successful diversification into leisurewear and athleisure. Sergio Rossi is a highly recognized Italian shoemaker brand and has been a household name for luxury shoes since 1951. St. John is a classic, timeless and sophisticated American luxury womenswear house founded in 1962 and Caruso has been a premier menswear manufacturer in Europe since 1958. In addition to our current five portfolio brands, we are also actively looking at potential add-on acquisitions as part of our growth strategy.
Our goal is to build a leading global luxury group with unparalleled access to Asia and to provide customers with excellent products that reflect our brands’ tradition of fine craftsmanship with exclusive design content and a style that preserves the exceptional manufacturing quality for which those brands are known. This is consistently achieved through the sourcing of superior raw materials, the careful finish of each piece, and the way the products are manufactured and delivered to our customers. For the six months ended June 30, 2024 and 2023, we recorded revenues of €171.0 million and €214.5 million, respectively, net loss of €69.4 million and €72.2 million, respectively and Adjusted EBITDA of €(42.1) million and €(40.9) million, respectively.
We operate a combination of direct-to-consumer, or DTC, and wholesale channels worldwide through our extensive network of around 1,100 points of sale, including approximately 266 directly-operated retail stores (across our five portfolio brands) as of June 30, 2024. We distribute our products worldwide via retail and outlet stores, wholesale customers and e-commerce platforms. Taking into account the DTC (including both directly-operated stores and e-commerce sites) and wholesale channels, we are present in more than 80 countries.
Key Factors Affecting Our Financial Condition and Results of Operations
Fluctuations in exchange rates
A significant portion of our operations are in international markets outside the Eurozone, where we record revenues and expenses in various currencies other than the Euro, mainly the Chinese Renminbi and U.S. dollar, as well as other currencies.
The table below shows the exchange rates of the main foreign currencies used to prepare the Semi-Annual Condensed Consolidated Financial Statements compared to the Euro.
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1H2023 |
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1H2024 |
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Exchange |
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Average |
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Exchange |
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Average |
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rate at June |
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exchange |
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rate at June |
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exchange |
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30, 2023 |
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rate |
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30, 2024 |
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rate |
U.S. Dollar |
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1.0901 |
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1.0809 |
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1.0751 |
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1.0854 |
Chinese Renminbi |
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7.8771 |
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7.4848 |
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7.6617 |
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7.7120 |
Hong Kong Dollar |
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8.5435 |
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8.4723 |
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8.3945 |
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8.4869 |
British Pound |
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0.8615 |
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0.8763 |
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0.8473 |
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0.8545 |
Japanese Yen |
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157.2589 |
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145.3643 |
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171.2494 |
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163.9456 |
4
The following table shows the sensitivity at the end of the reporting period to a reasonably possible change in the main foreign currencies against the Euro, with all other variables held constant, of our profit before tax due to differences arising on settlement or translation of monetary assets and liabilities and our equity excluding the impact of retained earnings due to the changes of exchange fluctuation reserve of certain overseas subsidiaries of which the functional currencies are currencies other than the Euro.
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As of June 30, 2024 |
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Increase / |
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Increase / |
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(decrease) in |
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(decrease) in |
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loss before |
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loss before |
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tax if Euro |
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tax if Euro |
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strengthens |
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weakens |
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by 5% |
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by 5% |
U.S. Dollar |
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(13,004) |
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13,004 |
Chinese Renminbi |
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(96) |
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96 |
Hong Kong Dollar |
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112 |
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(112) |
British Pound |
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44 |
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(44) |
Japanese Yen |
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(824) |
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824 |
Total |
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(13,768) |
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13,768 |
Results of Operations
Six months ended June 30, 2024 compared with six months ended June 30, 2023
The following is a discussion of our results of operations for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023.
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For the six months ended June 30, |
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Percentage |
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Percentage |
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of |
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of |
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(Euro thousands, except percentages) |
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2024 |
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revenues |
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2023 |
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revenues |
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Revenues |
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170,976 |
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100.0 |
% |
214,537 |
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100.0 |
% |
Cost of sales |
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(72,598) |
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(42.5) |
% |
(89,083) |
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(41.5) |
% |
Gross profit |
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98,378 |
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57.5 |
% |
125,454 |
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58.5 |
% |
Marketing and selling expenses |
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(105,591) |
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(61.8) |
% |
(110,600) |
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(51.6) |
% |
General and administrative expenses |
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(58,065) |
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(34.0) |
% |
(76,544) |
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(35.7) |
% |
Other operating income and expenses |
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5,457 |
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3.2 |
% |
(7,960) |
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(3.7) |
% |
Loss from operations before non-underlying items |
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(59,821) |
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(35.0) |
% |
(69,650) |
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(32.5) |
% |
Non-underlying items |
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3,143 |
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1.8 |
% |
9,666 |
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4.5 |
% |
Operating Loss/Profit |
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(56,678) |
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(33.1) |
% |
(59,984) |
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(28.0) |
% |
Financial costs — net |
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(13,187) |
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(7.7) |
% |
(11,970) |
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(5.6) |
% |
Loss before taxes |
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(69,865) |
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(40.9) |
% |
(71,954) |
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(33.5) |
% |
Income tax benefits / (expenses) |
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489 |
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0.3 |
% |
(271) |
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(0.1) |
% |
(Loss)/Profit for the period |
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(69,376) |
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(40.6) |
% |
(72,225) |
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(33.7) |
% |
Non-IFRS Financial Measures(1): |
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Contribution profit |
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(7,213) |
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(4.2) |
% |
14,854 |
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6.9 |
% |
Adjusted EBIT |
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(58,994) |
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(34.5) |
% |
(67,679) |
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(31.5) |
% |
Adjusted EBITDA |
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(42,111) |
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(24.6) |
% |
(40,916) |
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(19.1) |
% |
(1) |
See “— Non-IFRS Financial Measures.” |
Revenues
We generate revenue primarily through our five brands: Lanvin, Wolford, St. John, Sergio Rossi and Caruso, whose revenues are generated from the sale of their products, manufacturing and services for private labels and other luxury brands, as well as from royalties received from third parties and licensees. Revenue is measured at the transaction price which is based on the amount of consideration that we expect to receive in exchange for transferring the promised goods or services to the customer. For each period presented, revenue is exclusive of sales incentives, rebates and sales discounts. As such, the percentage contribution of these sales incentives, rebates and sales discount is zero.
5
Revenues for the six months ended June 30, 2024 amounted to €171.0 million, a decrease of €43.6 million or (20.3) %, compared to €214.5 million in the same period in 2023.
The following table sets forth a breakdown of revenues by portfolio brand for the six months ended June 30, 2024 and 2023.
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For the six months ended |
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Increase / |
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June 30, |
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(Decrease) |
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2024 vs |
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(Euro thousands, except percentages) |
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2024 |
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2023 |
|
2023 |
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% |
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Lanvin |
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48,272 |
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57,052 |
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(8,780) |
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(15.4) |
% |
Wolford |
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42,594 |
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58,802 |
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(16,208) |
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(27.6) |
% |
St. John |
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39,981 |
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46,663 |
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(6,682) |
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(14.3) |
% |
Sergio Rossi |
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20,404 |
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33,019 |
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(12,615) |
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(38.2) |
% |
Caruso |
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19,734 |
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19,926 |
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(192) |
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(1.0) |
% |
Other and holding companies |
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4,366 |
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3,990 |
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376 |
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9.4 |
% |
Eliminations and unallocated |
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(4,375) |
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(4,915) |
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540 |
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(11.0) |
% |
Total |
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170,976 |
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214,537 |
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(43,561) |
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(20.3) |
% |
The following table sets forth a breakdown of revenues by sales channel for the six months ended June 30, 2024 and 2023.
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For the six months ended |
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Increase / |
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June 30, |
|
(Decrease) |
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||||
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2024 vs |
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(Euro thousands, except percentages) |
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2024 |
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2023 |
|
2023 |
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% |
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DTC |
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104,574 |
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121,041 |
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(16,467) |
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(13.6) |
% |
Wholesale |
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59,589 |
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85,446 |
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(25,857) |
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(30.3) |
% |
Other(1) |
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6,813 |
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8,050 |
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(1,237) |
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(15.4) |
% |
Total Revenues |
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170,976 |
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214,537 |
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(43,561) |
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(20.3) |
% |
(1) |
Royalties received from third parties and licensees, and clearance income. |
The following table sets forth a breakdown of revenues by geographical area for the six months ended June 30, 2024 and 2023.
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For the six months ended |
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Increase / |
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||||
|
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June 30, |
|
(Decrease) |
|
||||
|
|
|
|
|
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2024 vs |
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(Euro thousands, except percentages) |
|
2024 |
|
2023 |
|
2023 |
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% |
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EMEA(1) |
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75,704 |
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103,905 |
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(28,201) |
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(27.1) |
% |
North America(2) |
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64,324 |
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72,487 |
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(8,163) |
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(11.3) |
% |
Greater China(3) |
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19,761 |
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26,063 |
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(6,302) |
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(24.2) |
% |
Other Asia(4) |
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11,187 |
|
12,082 |
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(895) |
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(7.4) |
% |
Total |
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170,976 |
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214,537 |
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(43,561) |
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(20.3) |
% |
(1) |
EMEA includes EU countries, the United Kingdom, Switzerland, the countries of the Balkan Peninsula, Eastern Europe, Scandinavian, Azerbaijan, Kazakhstan and the Middle East. |
(2) |
North America includes the United States of America and Canada. |
(3) |
Greater China includes mainland China, Hong Kong Special Administrative Region, Macao Special Administrative Region and Taiwan. |
(4) |
Other Asia includes Japan, South Korea, Thailand, Malaysia, Vietnam, Indonesia, Philippines, Australia, New Zealand, India and other Southeast Asian countries. |
6
By segment
By segment, the decrease in revenues was driven by (i) a decrease of €16.2 million (or (27.6)%) in sales from Wolford segment, which was mainly due to market headwinds and shipping disruptions caused by a transition to a new logistics supplier, (ii) a decrease of €12.6 million in sales (or (38.2)%) from Sergio Rossi segment, which was attributed to its decline in the wholesale channel, (iii) a decrease of €8.8 million (or (15.4)%) from Lanvin segment, which was mainly due to market headwinds and Lanvin’s transition of artistic director, (iv) a decrease of €6.7 million (or (14.3)%) from St.John segment, which was mainly due to global market softness, and (v) a decrease of €0.2 million (or (1.0)%) from Caruso segment due to global market softness, particularly in the wholesale channel.
By sales channel
By sales channel, the decrease in revenues was mainly related to a decrease of €25.9 million (or (30.3)%) in the wholesale channel, a decrease of €16.5 million (or (13.6)%) in the DTC channel, and a decrease of €1.2 million (or (15.4)%) in the other channel.
The decrease in wholesale revenues was mainly due to the decrease of Wolford, Sergio Rossi and Lanvin’s wholesale business, which was mainly impacted by the softening demand for luxury goods. Sales to our five largest customers were 7.8% and 8.7% of our revenues for the six months ended June 30, 2024 and 2023, respectively. No single customer accounted for more than 5% of our consolidated revenues for the six months ended June 30, 2024 and 2023.The decrease in the DTC channel was primarily due to reduced retail traffic.
Other channel decrease was mainly due to the decrease of Lanvin’s clearance income.
The following table sets forth a breakdown of store count at the end of the six months ended June 30, 2024 and 2023:
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As of June 30, |
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|
|
2024 |
|
2023 |
Lanvin |
|
37 |
|
32 |
Wolford |
|
140 |
|
156 |
St. John |
|
42 |
|
44 |
Sergio Rossi |
|
47 |
|
50 |
Caruso |
|
— |
|
— |
Total |
|
266 |
|
282 |
By geography
By geographical region, the decrease in revenues was mainly due to (i) a decrease of €28.2 million (or (27.1) %) in EMEA, (ii) a decrease of €8.2 million (or (11.3)%) in North America, (iii) a decrease of €6.3 million (or (24.2)%) in Greater China, and (iv) a decrease of €0.9 million (or (7.4)%) in other Asia.
The decrease in EMEA was due to the decrease of Wolford, Sergio Rossi, Lanvin and St.John, which was partially offset by the increase of Caruso. Wolford’s EMEA business decreased €13.6 million (or (34.0)%) year-over-year to €26.5 million in the six months ended June 30, 2024, mainly attributed to the impact of shift to new logistic supplier. Sergio Rossi’s EMEA business decreased €9.0 million (or (48.5)%) year-over-year to €9.5 million in the six months ended June 30, 2024, mainly attributable to its reduction in wholesale channels (including third-party production), and in part due to Sergio Rossi’s strategic adjustment on third-party production. Lanvin’s EMEA business decreased €6.3 million (or (21.4)%) year-over-year to €23.2 million in the six months ended June 30, 2024. St. John’s EMEA business decreased €0.4 million (or (59.1)%) year-over-year to €0.3 million in the six months ended June 30, 2024. Caruso’s EMEA business increased €0.5 million or 3.3% year-over-year to €16.8 million in the six months ended June 30, 2024.
The decrease in North America was mainly due to the decrease of St.John, Wolford and Lanvin. St. John’s North America business decreased €4.3 million (or (10.3)%) year-over-year to €37.3 million in the six months ended June 30, 2024. Wolford’s North America business decreased €1.5 million (or (10.4)%) year-over-year to €12.7 million in the six months ended June 30, 2024. Lanvin’s North America business decreased €1.2 million (or (9.2)%) year-over-year to €12.0 million in the six months ended June 30, 2024.
7
The decrease in Greater China was mainly due to the decrease of Sergio Rossi, St.John, Lanvin and Wolford. In the six months ended June 30, 2024, Sergio Rossi’s revenue decreased by (34.3)% to €4.2 million, St. John decreased by (47.1)% to €2.2 million, Lanvin decreased by (14.1)% to €9.5 million and Wolford decreased by (20.3)% to €3.3 million.
The decrease in other Asia was mainly due to the decrease of Sergio Rossi and Wolford, which was partially offset by the increase of Lanvin. Sergio Rossi’s other Asia business decreased €0.9 million (or (12.2)%) year-over-year to €6.4 million in the six months ended June 30, 2024, which was mainly due to the decrease in wholesale channel while its DTC channel was flat. Wolford’s other Asia business decreased €0.3 million (or (69.1)%) year-over-year to €0.1 million in the six months ended June 30, 2024, which was mainly impacted by the transition to its new logistics supplier.
The decrease across all regions was primarily attributed to the globally softening demand for luxury fashion goods.
Cost of sales
Cost of sales includes the raw material cost, production labor, assembly overhead including depreciation expense, procurement of the merchandise, and inventory valuation adjustments. In addition, cost of sales also includes customs duties, product packaging cost, royalty cost associated with sales of licensed products, and freight charges.
The following table sets forth a breakdown of cost of sales by nature for the six months ended June 30, 2024 and 2023.
|
|
For the six months |
|
Increase / |
|
||||
|
|
ended June 30, |
|
(Decrease) |
|
||||
|
|
|
|
|
|
2024 vs |
|
|
|
(Euro thousands, except percentages) |
|
2024 |
|
2023 |
|
2023 |
|
% |
|
Purchases of raw materials, finished goods and manufacturing services |
|
50,419 |
|
63,632 |
|
(13,213) |
|
(20.8) |
% |
Change in inventories |
|
4,276 |
|
2,882 |
|
1,394 |
|
48.4 |
% |
Labor cost |
|
12,601 |
|
17,358 |
|
(4,757) |
|
(27.4) |
% |
Logistics costs, duties and insurance |
|
7,523 |
|
6,662 |
|
861 |
|
12.9 |
% |
Depreciation and amortization |
|
452 |
|
871 |
|
(419) |
|
(48.1) |
% |
Others |
|
(2,673) |
|
(2,322) |
|
(351) |
|
15.1 |
% |
Total cost of sales by nature |
|
72,598 |
|
89,083 |
|
(16,485) |
|
(18.5) |
% |
The following table sets forth a breakdown of cost of sales by portfolio brand for the six months ended June 30, 2024 and 2023.
|
|
For the six months |
|
|
|
|
|
||
|
|
ended |
|
Increase / |
|
||||
|
|
June 30, |
|
(Decrease) |
|
||||
|
|
|
|
|
|
2024 vs |
|
|
|
(Euro thousands, except percentages) |
|
2024 |
|
2023 |
|
2023 |
|
% |
|
Lanvin |
|
20,268 |
|
25,093 |
|
(4,825) |
|
(19.2) |
% |
Wolford |
|
15,799 |
|
16,740 |
|
(941) |
|
(5.6) |
% |
St. John |
|
12,285 |
|
17,639 |
|
(5,354) |
|
(30.4) |
% |
Sergio Rossi |
|
10,186 |
|
15,884 |
|
(5,698) |
|
(35.9) |
% |
Caruso |
|
14,011 |
|
14,693 |
|
(682) |
|
(4.6) |
% |
Other and holding companies |
|
717 |
|
200 |
|
517 |
|
258.5 |
% |
Eliminations and unallocated |
|
(668) |
|
(1,166) |
|
498 |
|
(42.7) |
% |
Total |
|
72,598 |
|
89,083 |
|
(16,485) |
|
(18.5) |
% |
Cost of sales for the six months ended June 30, 2024 amounted to €72.6 million, a decrease of €16.5 million or (18.5)%, compared to €89.1 million in the same period in 2023.
By segment, the decrease in cost of sales was mainly related to the decrease in scale and sales for all of our brands.
8
Cost of sales as a percentage of revenues slightly increased to 42.5% for the six months ended June 30, 2024, compared to 41.5% in the same period in 2023. The increase was primarily due to the gross margin decrease of Wolford. Inventory impairment costs improved in the six months ended June 30, 2024 was €3.3 million gain (or 1.9% as a percentage of revenue), compared to €2.9 million gain (or 1.4% as a percentage of revenue) in the same period in 2023.
Gross profit
The following table sets forth a breakdown of gross profit by portfolio brand for the six months ended June 30, 2024 and 2023.
|
|
For the six months |
|
|
|
|
|
||
|
|
ended |
|
Increase / |
|
||||
|
|
June 30, |
|
(Decrease) |
|
||||
|
|
|
|
|
|
2024 vs |
|
|
|
(Euro thousands, except percentages) |
|
2024 |
|
2023 |
|
2023 |
|
% |
|
Lanvin |
|
28,004 |
|
31,959 |
|
(3,955) |
|
(12.4) |
% |
Wolford |
|
26,795 |
|
42,062 |
|
(15,267) |
|
(36.3) |
% |
St. John |
|
27,696 |
|
29,024 |
|
1,328 |
|
4.6 |
% |
Sergio Rossi |
|
10,218 |
|
17,135 |
|
(6,917) |
|
(40.4) |
% |
Caruso |
|
5,723 |
|
5,233 |
|
490 |
|
9.4 |
% |
Other and holding companies |
|
3,649 |
|
3,790 |
|
(141) |
|
(3.7) |
% |
Eliminations and unallocated |
|
(3,707) |
|
(3,749) |
|
42 |
|
(1.1) |
% |
Total |
|
98,378 |
|
125,454 |
|
(27,076) |
|
(21.6) |
% |
Gross profit for the six months ended June 30, 2024 amounted to 98.4 million, a decrease of €27.1 million or (21.6)%, compared to €125.5 million in the same period in 2023.
The decrease in gross profit was mainly related to the double digit decrease in revenue. Gross profit margin declined to 57.5% for the six months ended June 30, 2024 from 58.5% in the same period in 2023, which was mainly due to the gross profit margin decrease in Wolford despite all other brands improved.
Marketing and selling expenses
Marketing and selling expenses include store employee compensation, occupancy costs, depreciation, supply costs for store equipment, wholesale and retail account administration compensation globally, as well as depreciation and amortization which includes depreciation of right-of-use assets under IFRS 16. These expenses are affected by the number of stores that are open during any fiscal period and store performance, as compensation and rent expenses can vary with sales. Marketing and selling expenses also include advertising and marketing expenses, which consist of media space and production costs, advertising agency fees, public relations and market research expenses. In addition, marketing and selling expenses include distribution and customer service expenses which consist of warehousing, order fulfillment, shipping and handling, customer service, employee compensation and bag repair costs.
The following table sets forth a breakdown of marketing and selling expenses by portfolio brand for the six months ended June 30, 2024 and 2023.
|
|
For the six months ended |
|
Increase / |
|
||||
|
|
June 30, |
|
(Decrease) |
|
||||
|
|
|
|
|
|
2024 vs |
|
|
|
(Euro thousands, except percentages) |
|
2024 |
|
2023 |
|
2023 |
|
% |
|
Lanvin |
|
(37,389) |
|
(36,793) |
|
(596) |
|
1.6 |
% |
Wolford |
|
(34,916) |
|
(38,128) |
|
3,212 |
|
(8.4) |
% |
St. John |
|
(23,036) |
|
(23,719) |
|
683 |
|
(2.9) |
% |
Sergio Rossi |
|
(9,490) |
|
(11,355) |
|
1,865 |
|
(16.4) |
% |
Caruso |
|
(936) |
|
(842) |
|
(94) |
|
11.2 |
% |
Other and holding companies |
|
(2,004) |
|
(1,995) |
|
(9) |
|
0.5 |
|
Eliminations and unallocated |
|
2,180 |
|
2,232 |
|
(52) |
|
(2.3) |
% |
Total |
|
(105,591) |
|
(110,600) |
|
5,009 |
|
(4.5) |
% |
9
Marketing and selling expenses for the six months ended June 30, 2024 amounted to €105.6 million, a decrease of €5.0 million (or (4.5)%), compared to €110.6 million in the same period in 2023.
By segment, the decrease in marketing and selling expenses was mainly related to (i) a decrease of €3.2 million (or (8.4)%) from Wolford, (ii) a decrease of €1.9 million (or (16.4)%) from Sergio Rossi, (iii) a decrease of €0.7 million (or (2.9)%) from St.John, which was offset by (iv) an increase of €0.6 million (or 1.6%) from Lanvin, and (v) an increase of €0.1 million (or 11.2%) from Caruso.
Marketing and selling expenses increased as a percentage of revenue due to higher store related costs and expense deleverage on lower revenue.
Contribution profit
Contribution profit is defined as net revenues less the cost of sales and selling and marketing expenses, which constitutes the majority of our variable costs. Contribution profit is a non-IFRS financial measure. See “—Non-IFRS Financial Measures.”
Our consolidated contribution profit decreased by €22.1 million (or (148.6)%) to €7.2 million loss for the six months ended June 30, 2024 from €14.8 million gain in the same period in 2023. The decrease was mainly related to (i) a decrease of €12.1 million from Wolford, (ii) a decrease of €5.1 million from Sergio Rossi, (iii) a decrease of €4.6 million from Lanvin, (iv) a decrease of €(0.6) million from St.John, which was offset by an increase of €0.4 million from Caruso.
General and administrative expenses
General and administrative expenses include administrative and management staff costs, product creation and sample costs, rent, depreciation, and amortization expenses for our administrative staff, as well as IT system development and maintenance expenses.
General and administrative expenses decreased to €58.1 million or by (24.1)% for the six months ended June 30, 2024, from €76.5 million in the same period in 2023. General and administrative expenses also declined as a percentage of revenues to 34.0% for the six months ended June 30, 2024 from 35.7% in the same period in 2023, due to continuous cost optimization.
We expect general and administrative expenses to continue to decline as a percentage of revenues as we continue to leverage synergies across the group.
Other operating income and expenses
Other operating income and expenses include foreign exchange gains or losses and impairment losses.
Other operating income and expenses increased to €5.5 million gain for the six months ended June 30, 2024 from €8.0 million loss in the same period in 2023, mainly due to a foreign exchange gain compared to loss in the same period in 2023.
Loss from operations before non-underlying items
Loss from operations before non-underlying items for the six months ended June 30, 2024 decreased by €9.8 million (or (14.1)%) to €59.8 million, compared to €69.7 million in the same period in 2023. The decrease in loss from operations before non-underlying items was mainly due to decrease in expenses, partially offset by the decrease of gross profit.
Adjusted EBITDA
Adjusted EBITDA, which is a non-IFRS financial measure, for the six months ended June 30, 2024 decreased to €(42.1) million from €(40.9) million in the same period in 2023. This decrease was mainly due to the decrease in gross profit and partially offset by the decrease of expenses. Adjusted EBITDA as a percentage of total revenues decreased to (24.6)% in the six months ended June 30, 2024 from (19.1)% in the same period in 2023. See “—Non-IFRS Financial Measures.”
10
Non-underlying items
Non-underlying items comprise net gains on disposals, negative goodwill from acquisition of a subsidiary, gain on debt restructuring, government grants and others.
The non-underlying items was €3.1 million gain, or 1.8% of revenues for the six months ended June 30, 2024, compared to €9.7 million gain or 4.5% of revenues in the same period in 2023. The decrease in the non-underlying items by €6.5 million was mainly due to the decrease in government grants from €8.2 million in the six months ended June 30, 2023 to €15 thousand in the same period in 2024.
Operating loss
Operating loss for the six months ended June 30, 2024 amounted to €56.7 million, a decrease of €3.3 million or (5.5)%, compared to €60.0 million in the same period in 2023. The improvement in operating loss resulted from a decrease in loss from operations before non-underlying items and partially offset by a decrease of non-underlying items.
Finance cost—(net)
Finance costs (net) primarily include income and expenses relating to our interest income and expenses on financial assets and liabilities, including interest expense resulting from IFRS 16 lease liability.
Finance costs for the six months ended June 30, 2024 amounted to €13.2 million, an increase of €1.2 million or 10.2%, compared to finance costs of €12.0 million in the same period in 2023. The increase was primarily attributable to an increase of €4.2 million of interest expense on borrowings and partially offset by a decrease of €3.5 million in foreign exchange loss.
Loss before income tax
Loss before income tax for the six months ended June 30, 2024 amounted to €69.9 million, an decrease of €2.1 million or (2.9)%, compared to €72.0 million in the same period in 2023.
Income tax benefits / (expenses)
Income taxes include the current taxes on the results of our operations and any changes in deferred income taxes.
Income tax expenses for the six months ended June 30, 2024 amounted to €0.5 million gain, decreased by €0.8 million, compared to €0.3 million loss in the same period in 2023. The decrease was primarily due to €0.6 million deferred income taxes gain for the six months ended June 30, 2024, compared to €0.2 million gain in the same period in 2023, and €0.1 million current taxes loss for the six months ended June 30, 2024, compared to €0.5 million loss in the same period in 2023.
Loss for the period
Loss for the six months ended June 30, 2024 amounted to €69.4 million, a decrease of €2.8 million or (3.9)%, compared to €72.2 million in the same period in 2023.
Results by Segment
Six months ended June 30, 2024 compared with six months ended June 30, 2023
The following is a discussion of revenues, gross profit and contribution profit for each segment for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023.
11
Lanvin Segment
The following table sets forth revenues and gross profit for the Lanvin segment for the six months ended June 30, 2024 and 2023:
|
|
For the six months ended |
|
Increase / |
|
||||
|
|
June 30, |
|
(Decrease) |
|
||||
|
|
|
|
|
|
2024 vs |
|
|
|
(Euro thousands, except percentages) |
|
2024 |
|
2023 |
|
2023 |
|
% |
|
Revenues |
|
48,272 |
|
57,052 |
|
(8,780) |
|
(15.4) |
% |
Gross profit |
|
28,004 |
|
31,959 |
|
(3,955) |
|
(12.4) |
% |
Gross profit margin |
|
58.0 |
% |
56.0 |
% |
2.0 |
% |
— |
|
Marketing and selling expenses |
|
(37,389) |
|
(36,793) |
|
(596) |
|
1.6 |
% |
Contribution profit/(loss)(1)(3) |
|
(9,385) |
|
(4,834) |
|
(4,551) |
|
94.2 |
% |
Contribution profit margin(2)(3) |
|
(19.4) |
% |
(8.5) |
% |
(11.0) |
% |
— |
|
(1) |
Contribution profit equals gross profit less marketing and selling expenses. |
(2) |
Contribution profit margin equals contribution profit divided by revenue. |
(3) |
Contribution profit and contribution profit margin are non-IFRS financial measures. |
Revenues
Revenues for the six months ended June 30, 2024 was €48.3 million, a decrease of €8.8 million or (15.4)% compared to €57.1 million in the same period in 2023.
The decrease is attributable to global market softness and it’s the brand’s creative transition during the period.
DTC revenues decreased by 10.1% from €26.8 million for the six months ended June 30, 2023, to €24.1 million for the six months ended June 30, 2024. The drop in DTC channels was mainly due to lower sales from softer market in Great China and EMEA. Great China DTC revenues decreased by €1.7 million (or (16.3)% year-over-year) to €8.8 million in the six months ended June 30, 2024. EMEA DTC revenues decreased by €0.7 million (or (9.7)% year-over-year) to €6.7 million in the six months ended June 30, 2024.
Wholesale revenues decreased by 23.4% from €23.0 million for the six months ended June 30, 2023, to €17.6 million for the six months ended June 30, 2024, mainly due to the softness in global luxury market as well as general challenges in the wholesale market. The wholesale revenues as percentage of Lanvin’s total revenues decreased from 40.4% for the six months ended June 30, 2023 to 36.5% for the six months ended June 30, 2024 as company’s more focusing on higher margin channel.
Gross profit
Gross profit for the six months ended June 30, 2024 decreased to €28.0 million, a decrease of €4.0 million or (12.4)% compared to €32.0 million in the same period in 2023.
The decrease in gross profit was primarily attributable to the decrease in revenue. While gross margin increased to 58.0% compared to 56.0% in the same period in 2023, which was mainly driven by its optimization of channel mix as well as the improvement in inventory management.
Contribution profit/(loss)
Contribution loss for the six months ended June 30, 2024 was €9.4 million, a decrease of €4.6 million from the €4.8 million loss in the same period in 2023.
The increase in contribution loss was mainly due to the loss in gross margin and expense deleverage on lower revenue.
12
Wolford Segment
The following table sets forth revenues and gross profit for the Wolford segment for the six months ended June 30, 2024 and 2023:
|
|
For the six months ended |
|
Increase / |
|
||||
|
|
June 30, |
|
(Decrease) |
|
||||
|
|
|
|
|
|
2024 vs |
|
|
|
(Euro thousands, except percentages) |
|
2024 |
|
2023 |
|
2023 |
|
% |
|
Revenues |
|
42,594 |
|
58,802 |
|
(16,208) |
|
(27.6) |
% |
Gross profit |
|
26,795 |
|
42,062 |
|
(15,267) |
|
(36.3) |
% |
Gross profit margin |
|
62.9 |
% |
71.5 |
% |
(8.6) |
% |
— |
|
Marketing and selling expenses |
|
(34,916) |
|
(38,128) |
|
3,212 |
|
(8.4) |
% |
Contribution profit/(loss)(1)(3) |
|
(8,121) |
|
3,934 |
|
(12,055) |
|
(306.4) |
% |
Contribution profit margin(2)(3) |
|
(19.1) |
% |
6.7 |
% |
(25.8) |
% |
— |
|
(1) |
Contribution profit equals gross profit less marketing and selling expenses. |
(2) |
Contribution profit margin equals contribution profit divided by revenue. |
(3) |
Contribution profit and contribution profit margin are non-IFRS financial measures. |
Revenues
Revenues for the six months ended June 30, 2024 decreased to €42.6 million, a decrease of €16.2 million or (27.6)% compared to €58.8 million for the six months ended June 30, 2023.
The decrease in all regions was led by the wholesale channels, which decreased by €9.9 million or (53.3)% from the six months ended June 30, 2023 to €8.7 million in the six months ended June 30, 2024. The decline in the EMEA region accounted for most of the decrease, EMEA revenue was lower by 34.0% year-over-year to €26.5 million for the six months ended June 30, 2024.
Gross profit
Gross profit decreased by €15.3 million to €26.8 million for the six months ended June 30, 2024, compared to €42.1 million in the same period in 2023. Gross profit margin decreased to 62.9% for the six months ended June 30, 2024 from 71.5% in the same period in 2023.
The decrease in gross profit margin was primarily attributable to the delays from integration with new logistic provider that resulted in an inability to absorb fixed production costs as well as the digestion of excess stock for purposes of inventory management.
Contribution profit/(loss)
Contribution loss for the six months ended June 30, 2024 was €8.1 million (or (19.1)% of revenue), compared to a profit of €3.9 million (or 6.7% of revenue) in the same period in 2023, driven by the decrease in revenue and expense deleverage on lower revenues. Marketing and selling expenses declined to €34.9 million (or 82.0% of revenues) for the six months ended June 30, 2024 from €38.1 million (or 64.8% of revenues) in the same period in 2023.
13
St. John Segment
The following table sets forth revenues and gross profit for the St. John segment for the six months ended June 30, 2024 and 2023:
|
|
For the six months ended |
|
Increase / |
|
||||
|
|
June 30, |
|
(Decrease) |
|
||||
|
|
|
|
|
|
2024 vs |
|
|
|
(Euro thousands, except percentages) |
|
2024 |
|
2023 |
|
2023 |
|
% |
|
Revenues |
|
39,981 |
|
46,663 |
|
(6,682) |
|
(14.3) |
% |
Gross profit |
|
27,696 |
|
29,024 |
|
(1,328) |
|
(4.6) |
% |
Gross profit margin |
|
69.3 |
% |
62.2 |
% |
7.1 |
% |
— |
|
Marketing and selling expenses |
|
(23,036) |
|
(23,719) |
|
683 |
|
(2.9) |
% |
Contribution profit/(loss)(1)(3) |
|
4,660 |
|
5,305 |
|
(645) |
|
(12.2) |
% |
Contribution profit margin(2)(3) |
|
11.7 |
% |
11.4 |
% |
0.3 |
% |
— |
|
(1) |
Contribution profit equals gross profit less marketing and selling expenses. |
(2) |
Contribution profit margin equals contribution profit divided by revenue. |
(3) |
Contribution profit and contribution profit margin are non-IFRS financial measures. |
Revenues
Revenues for the six months ended June 30, 2024 amounted to €40.0 million, a decrease of €6.7 million compared to €46.7 million in the same period in 2023.
St. John decrease its revenues by (14.3)% year-over-year, due to both sales weakness in DTC and wholesales channels, as a result of slowing luxury market in the North America. DTC sales decreased by €5.6 million (or (14.8)% to €32.2 million, and wholesales decreased by €1.1 million (or (12.7)% to €7.7 million for the six months ended June 30, 2024.
Gross profit
Gross profit for the six months ended June 30, 2024 was €27.7 million, a decrease of €1.3 million compared to €29.0 million in the same period in 2023. However gross profit margin improved to 69.3% in the six months ended June 30, 2024, compared to 62.2% in the same period in 2023. The improvement in gross margin was primarily driven by the improvement of full-price sell-through and better channel mix.
Contribution profit
Contribution profit for the six months ended June 30, 2024 was €4.7 million (or 11.7% of revenue), compared to €5.3 million (or 11.4% of revenue) in the same period in 2023.
14
Sergio Rossi Segment
The following table sets forth revenues and gross profit for the Sergio Rossi segment for the six months ended June 30, 2024 and 2023:
|
|
For the six months ended |
|
Increase / |
|
||||
|
|
June 30, |
|
(Decrease) |
|
||||
|
|
|
|
|
|
2024 vs |
|
|
|
(Euro thousands, except percentages) |
|
2024 |
|
2023 |
|
2023 |
|
% |
|
Revenues |
|
20,404 |
|
33,019 |
|
(12,615) |
|
(38.2) |
% |
Gross profit |
|
10,218 |
|
17,135 |
|
(6,917) |
|
(40.4) |
% |
Gross profit margin |
|
50.1 |
% |
51.9 |
% |
(1.8) |
% |
— |
|
Marketing and selling expenses |
|
(9,490) |
|
(11,355) |
|
1,865 |
|
(16.4) |
% |
Contribution profit/(loss)(1)(3) |
|
728 |
|
5,780 |
|
(5,052) |
|
(87.4) |
|
Contribution profit margin(2)(3) |
|
3.6 |
% |
17.5 |
% |
(13.9) |
% |
— |
|
(1) |
Contribution profit equals gross profit less marketing and selling expenses. |
(2) |
Contribution profit margin equals contribution profit divided by revenue. |
(3) |
Contribution profit and contribution profit margin are non-IFRS financial measures. |
Revenues
Revenues for the six months ended June 30, 2024 amounted to €20.4 million, a decrease of €12.6 million compared to €33.0 million in the same period in 2023. The decrease was primarily due to sales decrease in wholesale channel, including third-party production business.
Revenues through our DTC channels decreased by 17.0% from €16.8 million for the six months ended June 30, 2023, to €14.0 million for the six months ended June 30, 2024. The decrease in DTC channels was mainly attributable to weakness in EMEA outlets and APAC retail stores.
Wholesale revenues decreased by 60.3% from €16.2 million for the six months ended June 30, 2023, to €6.4 million for the six months ended June 30, 2024. Third-party production contributed to €1.7 million of wholesale revenues for the six months ended June 30, 2024 compared to €7.6 million in the same period in 2023.
Gross profit
Gross profit for the six months ended June 30, 2024 was €10.2 million, a decrease of €6.9 million compared to €17.1 million in the same period in 2023. Gross profit margin decreased to 50.1% in the six months ended June 30, 2024, compared to 51.9% in the same period in 2023. The decrease in gross profit margin was primarily due to fixed production costs on lower revenues.
Contribution profit
Contribution profit for the six months ended June 30, 2024 was €0.7 million (or 3.6% of revenue), compared to €5.8 million (or 17.5% of revenue) in the same period in 2023, caused by higher store related costs and fixed expense deleverage on lower revenue. Marketing and selling expenses decreased to €9.5 million (but increase to 46.5% of revenue) in the six months ended June 30, 2024 from €11.4 million (or 34.4% of revenue) in the same period in 2023, which was due to cost control and implementation of efficiency improvement measures.
15
Caruso Segment
The following table sets forth revenues and gross profit for the Caruso segment for the six months ended June 30, 2024 and 2023:
|
|
For the six months ended |
|
Increase / |
|
||||
|
|
June 30, |
|
(Decrease) |
|
||||
|
|
|
|
|
|
2024 vs |
|
|
|
(Euro thousands, except percentages) |
|
2024 |
|
2023 |
|
2023 |
|
% |
|
Revenues |
|
19,734 |
|
19,926 |
|
(192) |
|
(1.0) |
% |
Gross profit |
|
5,723 |
|
5,233 |
|
490 |
|
9.4 |
% |
Gross profit margin |
|
29.0 |
% |
26.3 |
% |
2.7 |
% |
— |
|
Marketing and selling expenses |
|
(936) |
|
(842) |
|
(94) |
|
11.2 |
% |
Contribution profit/(loss)(1)(3) |
|
4,787 |
|
4,391 |
|
396 |
|
9.0 |
% |
Contribution profit margin(2)(3) |
|
24.3 |
% |
22.0 |
% |
2.3 |
% |
— |
|
(1) |
Contribution profit equals gross profit less marketing and selling expenses. |
(2) |
Contribution profit margin equals contribution profit divided by revenue. |
(3) |
Contribution profit and contribution profit margin are non-IFRS financial measures. |
Revenues
Revenues for the six months ended June 30, 2024 was €19.7 million, a decrease of €0.2 million or (1.0)% compared to €19.9 million in the same period in 2023.
Gross profit
Gross profit for the six months ended June 30, 2024 was €5.7 million, an increase of €0.5 million compared to €5.2 million in the same period in 2023. Gross profit margin increased to 29.0% for the six months ended June 30, 2024 from 26.3% for the six months ended June 30, 2023 due to better management of labor costs.
Contribution profit
Contribution profit for the six months ended June 30, 2024 was €4.8 million (or 24.3% of revenue), compared to €4.4 million (or 22.0% of revenue) in the same period in 2023. The improvement in contribution profit was driven by the improvement in gross profit.
Liquidity and Capital Resources
Overview
We and our portfolio brands’ principal sources of liquidity have been through issuance of shares, loans from our shareholder Fosun International (including its subsidiaries and joint ventures), and bank borrowings. As of June 30, 2024, we had cash and cash equivalents of €17.9 million.
Additionally, we have relied on liquidity provided by revenues generated from our operating activities. We require liquidity in order to meet our obligations and fund our business. Short-term liquidity is required to fund ongoing cash requirements, including to purchase inventory and to fund costs for services and other expenses. In addition to our general working capital and operational needs, our main use of cash is now focused on maintaining and optimizing existing store operations, investing in digital transformation initiatives, and enhancing our supply chain capabilities.
16
Cash flows
Six months ended June 30, 2024 compared to the six months ended June 30, 2023
The following table summarizes the cash flows provided by/used in operating, investing and financing activities for each of the six months ended June 30, 2024 and 2023. Refer to the consolidated cash flows statement and accompanying notes included elsewhere in this Semi-Annual Report for additional information.
|
|
For the six months ended |
|
Increase / |
|
||||
|
|
June 30, |
|
(Decrease) |
|
||||
|
|
|
|
|
|
2024 vs |
|
|
|
(Euro thousands, except percentages) |
|
2024 |
|
2023 |
|
2023 |
|
% |
|
Net cash used in operating activities |
|
(33,483) |
|
(58,118) |
|
(24,635) |
|
(42.4) |
% |
Net cash used in investing activities |
|
(3,780) |
|
(28,531) |
|
24,751 |
|
(86.8) |
% |
Net cash generated from financing activities |
|
26,646 |
|
26,396 |
|
(250) |
|
(0.9) |
% |
Net change in cash and cash equivalents |
|
(10,617) |
|
(60,253) |
|
49,636 |
|
(82.4) |
% |
Cash and cash equivalents less bank overdrafts at the beginning of the period |
|
27,850 |
|
91,749 |
|
(63,899) |
|
(69.4) |
% |
Effect of foreign exchange differences on cash and cash equivalents |
|
646 |
|
(649) |
|
1,295 |
|
(199.5) |
% |
Cash and cash equivalents less bank overdrafts at the end of the period |
|
17,879 |
|
30,847 |
|
(12,968) |
|
(42.0) |
% |
Net cash used in operating activities
Net cash used in operating activities decreased by €24.6 million from €(58.1) million for the six months ended June 30, 2023 to €(33.5) million for the six months ended June 30, 2024. The decrease was primarily attributable to (i) a decrease in trade receivables of €10.2 million (or (22.4)%) to €35.4 million, and (ii) a decrease in trade payables of €2.5 million (or (3.2)%) to €81.1 million at the end of June 30, 2024.
Net cash used in investing activities
Net cash used in investing activities decreased by €24.8 million from €(28.5) million for the six months ended June 30, 2023 to €(3.8) million net cash used for the six months ended June 30, 2024. The decrease was primarily attributable to (i) the decrease of payment for the purchase of long-term assets from €29.3 million in the six months ended June 30, 2023 to €5.6 million in the same period in 2024, and (ii) the increase in proceeds from disposal of long-term assets from €0.8 million in six months ended June 30, 2023 to €1.8 million in the same period in 2024.
Net cash flows generated from financing activities
Net cash flows generated from financing activities increased by €0.3 million from €26.4 million for the six months ended June 30, 2023 to €26.6 million for the six months ended June 30, 2024. The increase in cash flows from financing activities was primarily attributable to (i) increased proceeds from borrowings of € 114.8 million, (ii) lower repayments of borrowings of €(55.5) million, (iii) lower payment of borrowings interest of €(3.3) million, and partially offset by (iv) lack of proceeds from financing fund compared to €22.8 million in 2023, (v) increase repurchase of ordinary shares of €(9.4) million, (vi) lower capital contribution from noncontrolling interests of €5 thousands compared to €5.6 million in 2023, (vi) higher payment of lease liabilities of €(16.2) million and higher payment of lease liabilities interest of €(3.6) million.
Borrowings
We enter into and manage debt facilities centrally in order to satisfy the short and medium-term needs of each of our subsidiaries based on criteria of efficiency and cost-effectiveness. Our portfolio brands have historically entered into and maintained with a diversified pool of lenders a total amount of committed credit lines that is considered consistent with their needs and suitable to ensure at any time the liquidity needed to satisfy and comply with all of their financial commitments, as well as guaranteeing an adequate level of operational flexibility for any expansion programs.
As of June 30, 2024, borrowings amounted to €8.3 million were guaranteed by a third-party SACE S.p.A., and borrowings amounted to €28.9 million were secured by pledges of our assets including property, plant and equipment, inventories and trade receivables.
17
Our unsecured borrowings are principally used for operations. As of June 30, 2024, the borrowings are at rates ranging from 4.55% to 17.11% per annum.
For additional information, see Note 18-Borrowings in the Semi-Annual Condensed Consolidated Financial Statements.
We are subject to certain covenants, including financial and otherwise, under our financing agreements. As of June 30, 2024, we were in material compliance with all covenants.
Contractual obligations and commitments
The following table summarizes our contractual obligations and commitments as of June 30, 2024:
|
|
Payments Due by Period |
||||||||
(Euro thousands, except percentages) |
|
On demand |
|
Less than 1 year |
|
1 to 3 years |
|
Over 3 years |
|
Total |
Trade payables |
|
18,301 |
|
62,751 |
|
— |
|
— |
|
81,052 |
Other current liabilities |
|
8,312 |
|
78,694 |
|
— |
|
— |
|
87,006 |
Lease liabilities |
|
— |
|
39.476 |
|
62,540 |
|
73,971 |
|
175,987 |
Bank overdrafts |
|
429 |
|
— |
|
— |
|
— |
|
429 |
Borrowings |
|
— |
|
98,219 |
|
17,301 |
|
10,769 |
|
126,289 |
Total contractual obligations |
|
27,042 |
|
279,140 |
|
79,841 |
|
84,740 |
|
470,763 |
Cash and cash equivalents
The table below sets forth the breakdown of our cash and cash equivalents as of the dates indicated.
|
|
|
|
As of |
|
Increase / |
|
||
|
|
As of June 30, |
|
December 31, |
|
(Decrease) |
|
||
|
|
|
|
|
|
June 30, 2024 |
|
|
|
|
|
|
|
|
|
vs December |
|
|
|
(Euro thousands, except percentages) |
|
2024 |
|
2023 |
|
31, 2023 |
|
% |
|
Cash on hand |
|
491 |
|
710 |
|
(219) |
|
(30.8) |
% |
Bank balances |
|
17,817 |
|
27,420 |
|
(9,603) |
|
(35.0) |
% |
Cash and cash equivalents |
|
18,308 |
|
28,130 |
|
(9,822) |
|
(34.9) |
% |
Restricted cash |
|
— |
|
— |
|
— |
|
— |
|
Cash and bank balances |
|
18,308 |
|
28,130 |
|
(9,822) |
|
(34.9) |
% |
As of June 30, 2024, the cash and cash equivalents are held with reputable commercial banks at various jurisdictions including Greater China, France, Italy and U.S. Certain jurisdictions may not have official deposit insurance program or agency similar to the Federal Deposit Insurance Corporation (FDIC) in the U.S. The Group does not foresee substantial credit risk with respect to cash and cash equivalents held at commercial banks in such jurisdictions.
We may be subject to restrictions which limit our ability to use cash. In particular, our cash held at banks in China is subject to certain repatriation restrictions and may only be repatriated as dividends. We do not believe that such transfer restrictions have any adverse impacts on our ability to meet liquidity requirements. There was no restricted cash as of June 30, 2024.
18
Other current assets
The table below sets forth the breakdown of our other current assets as of the dates indicated.
|
|
|
|
As of |
|
Increase / |
|
||
|
|
As of June 30, |
|
December 31, |
|
(Decrease) |
|
||
|
|
|
|
|
|
June 30, 2024 |
|
|
|
|
|
|
|
|
|
vs December |
|
|
|
(Euro thousands, except percentages) |
|
2024 |
|
2023 |
|
31, 2023 |
|
% |
|
Tax recoverable |
|
6,713 |
|
7,078 |
|
(365) |
|
(5.2) |
% |
Prepaid expenses |
|
6,685 |
|
5,374 |
|
1,311 |
|
24.4 |
% |
Other receivables of royalties |
|
4,555 |
|
4,147 |
|
408 |
|
9.8 |
% |
Advances and payments on account to vendors |
|
3,793 |
|
4,486 |
|
(693) |
|
(15.4) |
% |
Deposits of rental, utility and other |
|
1,945 |
|
1,859 |
|
86 |
|
4.6 |
% |
Others |
|
1,796 |
|
2,706 |
|
(910) |
|
(33.6) |
% |
Total other current assets |
|
25,487 |
|
25,650 |
|
(163) |
|
(0.6) |
% |
Off-Balance Sheet Arrangements
We did not have during the periods presented, and we do not currently have, any off-balance sheet financing arrangements or any relationships with unconsolidated entities or financial partnerships, including entities sometimes referred to as structured finance or special purpose entities, that were established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.
Recent Developments
Ordinary Shares repurchase
We entered into a side letter with Meritz on April 30, 2024, which modified the Amended and Restated Relationship Agreement (the “Meritz Side Letter”). Pursuant to the Meritz Side Letter, we agreed to repurchase from Meritz 5,245,648 Ordinary Shares in aggregate for a total purchase price of US$20.0 million under the prescribed schedule therein. As of the date of this filing, we made repurchases of (i) 1,328,704 Ordinary Shares on April 30, 2024 for US$5.0 million, (ii) 1,318,129 Ordinary Shares on June 28, 2024 for US$5.0 million, and (iii) 1,305,220 Ordinary Shares on July 31, 2024 for US$5.0 million.
Shareholder loans
We received certain unsecured shareholder loans for working capital purposes from our shareholder Fosun International and its subsidiaries, being FPI (US) 1 LLC, Shanghai Fosun High Technology (Group) Co., Ltd. and Shanghai Fosun High Technology Group Finance Co., Ltd. Most of such shareholder loans have interest rates ranging from 6% to 10% per annum. For the six months ended June 30, 2024, we received proceeds of shareholder loans €61.5 million from Fosun International and its subsidiaries and repaid €1.1 million to Fosun International and its subsidiaries. As of June 30, 2024, we had amounts due to Fosun International and its subsidiaries (excluding accrued interest) of €87.6 million.
See Note 24 — Subsequent events to the Semi-Annual Condensed Consolidated Financial Statements included elsewhere in this Semi-Annual Report.
Non-IFRS Financial Measures
Our management monitors and evaluates operating and financial performance using several non-IFRS financial measures including: contribution profit, contribution profit margin, adjusted earnings before interest and taxes (“Adjusted EBIT”), adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”). Our management believes that these non-IFRS financial measures provide useful and relevant information regarding our performance and improve their ability to assess financial performance and financial position. They also provide comparable measures that facilitate management’s ability to identify operational trends, as well as make decisions regarding future spending, resource allocations and other operational decisions. While similar measures are widely used in the industry in which we operate, the financial measures that we use may not be comparable to other similarly named measures used by other companies nor are they intended to be substitutes for measures of financial performance or financial position as prepared in accordance with IFRS.
19
Contribution profit and contribution profit margin
Contribution profit is defined as revenues less the cost of sales and selling and marketing expenses. Contribution profit margin is defined as contribution profit divided by revenue.
Contribution profit subtracts the main variable expenses of selling and marketing expenses from gross profit, and our management believes this measure is an important indicator of profitability at the marginal level.
Below contribution profit, the main expenses are general administrative expenses and other operating expenses (which include foreign exchange gains or losses and impairment losses). As we continue to improve the management of our portfolio brands, we believe we can achieve greater economy of scale across the different brands by maintaining the fixed expenses at a lower level as a proportion of revenue. We therefore use contribution profit margin as a key indicator of profitability at the group level as well as the portfolio brand level.
The table below reconciles revenues to contribution profit for the periods indicated.
|
|
For the six months ended June 30, |
||
|
|
2024 |
|
2023 |
Revenues |
|
170,976 |
|
214,537 |
Cost of Sales |
|
(72,598) |
|
(89,083) |
Gross profit |
|
98,378 |
|
125,454 |
Marketing and selling expenses |
|
(105,591) |
|
(110,600) |
Contribution profit |
|
(7,213) |
|
14,854 |
Adjusted EBIT
Adjusted EBIT is defined as profit or loss before income taxes, net finance cost, share based compensation, adjusted for income and costs which are significant in nature and that management considers not reflective of underlying operational activities, mainly including net gains on disposal of long-term assets and government grants.
The table below reconciles loss for the year to adjusted EBIT for the periods indicated.
|
|
For the six months ended June 30, |
||
(Euro thousands) |
|
2024 |
|
2023 |
Loss for the period |
|
(69,376) |
|
(72,225) |
Add / (Deduct) the impact of: |
|
|
|
|
Income tax expenses |
|
(489) |
|
271 |
Finance cost - net |
|
13,187 |
|
11,970 |
Non-underlying items |
|
(3,143) |
|
(9,666) |
Loss from operations before non-underlying items |
|
(59,821) |
|
(69,650) |
Add / (Deduct) the impact of: |
|
|
|
|
Share based compensation |
|
827 |
|
1,971 |
Adjusted EBIT |
|
(58,994) |
|
(67,679) |
Adjusted EBITDA is defined as profit or loss before income taxes, net finance cost, exchange gains/(losses), depreciation, amortization, share based compensation and provisions and impairment losses adjusted for income and costs which are significant in nature and that management considers not reflective of underlying operational activities, mainly including net gains on disposal of long-term assets and government grants.
20
The table below reconciles loss for the year to adjusted EBITDA for the periods indicated.
|
|
For the six months ended June 30, |
||
|
|
2024 |
|
2023 |
Loss for the period |
|
(69,376) |
|
(72,225) |
Add / (Deduct) the impact of: |
|
|
|
|
Income tax expenses |
|
(489) |
|
271 |
Finance cost - net |
|
13,187 |
|
11,970 |
Non-underlying items |
|
(3,143) |
|
(9,666) |
Loss from operations before non-underlying items |
|
(59,821) |
|
(69,650) |
Add / (Deduct) the impact of: |
|
|
|
|
Share based compensation |
|
827 |
|
1,971 |
Provisions and impairment losses |
|
(2,220) |
|
(3,241) |
Net foreign exchange (gains) / losses |
|
(3,353) |
|
8,486 |
Depreciation / Amortization |
|
22,456 |
|
21,518 |
Adjusted EBITDA |
|
(42,111) |
|
(40,916) |
Qualitative and Quantitative Information on Financial Risks
We are exposed to market risks in the ordinary course of our business. These risks primarily include foreign exchange risk, interest rate risk, credit risk and liquidity risk. See Note 4.3—Financial risk factors to the Semi-Annual Condensed Consolidated Financial Statements included elsewhere in this Semi-Annual Report and Note 4.3—Financial risk factors to the Annual Consolidated Financial Statements for further details.
Our overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on our financial performance. We did not use any derivative financial instruments to hedge certain risk exposures.
Foreign exchange risk
We have a vast international presence, and therefore is exposed to the risk that changes in currency exchange rates could adversely impact revenue, expenses, margins and profit. Our management manages our foreign exchange risk by performing regular review.
Interest rate risk
We do not have any significant interest bearing financial assets or liabilities except for cash and cash equivalents and borrowings, details of which are disclosed in Notes 17 and 18 to the Semi-Annual Condensed Consolidated Financial Statements included elsewhere in this Semi-Annual Report and Notes 23 and 24 to Lanvin Group’s consolidated financial statements, respectively.
Our exposure to the risk of changes in market interest rates relates primarily to our borrowings with floating interest rates. Our policy is to manage our interest cost using a mix of fixed and variable rate debts. As of June 30, 2024, approximately 81% of our interest-bearing borrowings bore interest at fixed rates.
Credit risk
Credit risk is defined as the risk of financial loss caused by the failure of a counterparty to repay amounts owed or meet its contractual obligations. The maximum risk to which an entity is exposed is represented by all the financial assets recognized in the financial statements. Management considers our credit risk to relate primarily to trade receivables generated from the wholesale channel and mitigates the related effects through specific commercial and financial strategies.
With regards to trade receivables, credit risk management is carried out by monitoring the reliability and solvency of customers.
21
Liquidity risk
Liquidity risk refers to the difficulty we could have in meeting our financial obligations.
According to management, the funds and credit lines currently available, in addition to those that will be generated by operating and financing activities, will enable us to meet our financial requirement arising from investing activities, working capital management and punctual loan repayment as planned.
As of June 30, 2024, we had undrawn cash credit lines of up to $15.11 million available at banks.
22
Lanvin Group Holdings Limited
Interim condensed consolidated statements of profit or loss
For the six months ended June 30, 2024 and 2023
(Unaudited)
|
|
|
|
For the six months ended June 30, |
||
(Euro thousands except for loss per share) |
|
Notes |
|
2024 |
|
2023 |
Revenue |
|
6 |
|
170,976 |
|
214,537 |
Cost of sales |
|
7 |
|
(72,598) |
|
(89,083) |
Gross profit |
|
|
|
98,378 |
|
125,454 |
Marketing and selling expenses |
|
7 |
|
(105,591) |
|
(110,600) |
General and administrative expenses |
|
7 |
|
(58,065) |
|
(76,544) |
Other operating income and expenses |
|
7 |
|
5,457 |
|
(7,960) |
Loss from operations before non-underlying items |
|
|
|
(59,821) |
|
(69,650) |
Non-underlying items |
|
8 |
|
3,143 |
|
9,666 |
Loss from operations |
|
|
|
(56,678) |
|
(59,984) |
Finance cost – net |
|
9 |
|
(13,187) |
|
(11,970) |
Loss before income tax |
|
|
|
(69,865) |
|
(71,954) |
Income tax benefits/(expenses) |
|
10 |
|
489 |
|
(271) |
Loss for the period |
|
|
|
(69,376) |
|
(72,225) |
Attributable to: |
|
|
|
|
|
|
- Owners of the Company |
|
|
|
(57,317) |
|
(63,002) |
- Non-controlling interests |
|
|
|
(12,059) |
|
(9,223) |
Loss per share in Euro |
|
|
|
|
|
|
- Basic and diluted (in Euro per share) |
|
11 |
|
(0.49) |
|
(0.48) |
The accompanying notes are an integral part of these Interim Condensed Consolidated Financial Statements.
F-1
Lanvin Group Holdings Limited
Interim condensed consolidated statements of comprehensive loss
For the six months ended June 30, 2024 and 2023
(Unaudited)
|
|
For the six months ended June 30, |
||
(Euro thousands) |
|
2024 |
|
2023 |
Loss for the period |
|
(69,376) |
|
(72,225) |
Other comprehensive loss: |
|
|
|
|
Items that may be subsequently reclassified to profit or loss |
|
|
|
|
- Currency translation differences, net of tax |
|
(2,798) |
|
7,531 |
Items that will not be subsequently reclassified to profit or loss |
|
|
|
|
- Employee benefit obligations: change in value resulting from actuarial reserve, net of tax |
|
45 |
|
9 |
Total comprehensive loss for the period |
|
(72,129) |
|
(64,685) |
Attributable to: |
|
|
|
|
- Owners of the Company |
|
(59,810) |
|
(56,139) |
- Non-controlling interests |
|
(12,319) |
|
(8,546) |
The accompanying notes are an integral part of these Interim Condensed Consolidated Financial Statements.
F-2
Lanvin Group Holdings Limited
Interim condensed consolidated statements of financial position
At June 30, 2024 and December 31, 2023
(Unaudited)
|
|
|
|
At June 30, |
|
At December 31, |
(Euro thousands) |
|
Notes |
|
2024 |
|
2023 |
Assets |
|
|
|
|
|
|
Non-current assets |
|
|
|
|
|
|
Intangible assets |
|
|
|
211,818 |
|
210,439 |
Goodwill |
|
|
|
69,323 |
|
69,323 |
Property, plant and equipment |
|
|
|
42,972 |
|
43,731 |
Right-of-use assets |
|
12 |
|
139,126 |
|
128,853 |
Deferred income tax assets |
|
|
|
12,905 |
|
13,427 |
Other non-current assets |
|
13 |
|
15,383 |
|
15,540 |
|
|
|
|
491,527 |
|
481,313 |
Current assets |
|
|
|
|
|
|
Inventories |
|
14 |
|
106,809 |
|
107,184 |
Trade receivables |
|
15 |
|
35,436 |
|
45,657 |
Other current assets |
|
16 |
|
25,487 |
|
25,650 |
Cash and bank balances |
|
17 |
|
18,308 |
|
28,130 |
|
|
|
|
186,040 |
|
206,621 |
Total assets |
|
|
|
677,567 |
|
687,934 |
Liabilities |
|
|
|
|
|
|
Non-current liabilities |
|
|
|
|
|
|
Non-current borrowings |
|
18 |
|
28,070 |
|
32,381 |
Non-current lease liabilities |
|
19 |
|
120,250 |
|
112,898 |
Non-current provisions |
|
|
|
3,932 |
|
3,174 |
Employee benefits |
|
|
|
17,320 |
|
17,972 |
Deferred income tax liabilities |
|
|
|
51,623 |
|
52,804 |
Other non-current liabilities |
|
|
|
15,021 |
|
14,733 |
|
|
|
|
236,216 |
|
233,962 |
Current liabilities |
|
|
|
|
|
|
Trade payables |
|
|
|
81,052 |
|
78,576 |
Bank overdrafts |
|
17 |
|
429 |
|
280 |
Current borrowings |
|
18 |
|
98,219 |
|
35,720 |
Current lease liabilities |
|
19 |
|
35,649 |
|
32,871 |
Current provisions |
|
|
|
5,273 |
|
6,270 |
Other current liabilities |
|
20 |
|
128,005 |
|
134,627 |
|
|
|
|
348,627 |
|
288,344 |
Total liabilities |
|
|
|
584,843 |
|
522,306 |
Net assets |
|
|
|
92,724 |
|
165,628 |
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
Equity attributable to owners of the Company |
|
|
|
|
|
|
Share capital |
|
21 |
|
* |
|
* |
Treasury shares |
|
21 |
|
(55,991) |
|
(65,405) |
Other reserves |
|
22 |
|
793,990 |
|
806,677 |
Accumulated losses |
|
|
|
(629,248) |
|
(571,931) |
|
|
|
|
108,751 |
|
169,341 |
Non-controlling interests |
|
|
|
(16,027) |
|
(3,713) |
Total equity |
|
|
|
92,724 |
|
165,628 |
*Amounts less than €1,000.
The accompanying notes are an integral part of these Interim Condensed Consolidated Financial Statements.
F-3
Lanvin Group Holdings Limited
Interim condensed consolidated statements of cash flows
For the six months ended June 30, 2024 and 2023
(Unaudited)
|
|
For the six months ended June 30, |
||
(Euro thousands) |
|
2024 |
|
2023 |
Operating activities |
|
|
|
|
Loss for the period |
|
(69,376) |
|
(72,225) |
Adjustments for: |
|
|
|
|
Income tax expenses |
|
(489) |
|
271 |
Depreciation and amortization |
|
22,456 |
|
21,518 |
Provisions and impairment losses |
|
(2,220) |
|
(3,241) |
Employee share-based compensation |
|
827 |
|
1,971 |
Net gains on disposals |
|
(1,970) |
|
(1,513) |
Finance costs |
|
13,278 |
|
11,999 |
Costs in respect of disputes |
|
(1,158) |
|
— |
Fair value movement in warrants |
|
(2,851) |
|
972 |
Government grants |
|
— |
|
(7,247) |
Change in inventories |
|
3,066 |
|
(2,639) |
Change in trade receivables |
|
9,063 |
|
(1,638) |
Change in trade payables |
|
2,476 |
|
2,375 |
Change in other operating assets and liabilities |
|
(6,471) |
|
(8,224) |
Income tax paid |
|
(114) |
|
(497) |
Net cash used in operating activities |
|
(33,483) |
|
(58,118) |
Investing activities |
|
|
|
|
Payment for the purchase of property, plant and equipment, intangible assets and other long-term assets |
|
(5,586) |
|
(29,336) |
Proceeds from disposal of property, plant and equipment, intangible assets and other long-term assets |
|
1,806 |
|
805 |
Net cash used in investing activities |
|
(3,780) |
|
(28,531) |
Financing activities |
|
|
|
|
Repurchase of ordinary shares |
|
(9,414) |
|
— |
Proceeds from financing fund |
|
— |
|
22,756 |
Proceeds from borrowings |
|
114,768 |
|
80,034 |
Repayments of borrowings |
|
(55,519) |
|
(59,803) |
Repayments of lease liabilities |
|
(16,227) |
|
(15,238) |
Payment of borrowings interest |
|
(3,320) |
|
(3,698) |
Payment of lease liabilities interest |
|
(3,647) |
|
(3,300) |
Capital contribution from non-controlling interests |
|
5 |
|
5,645 |
Net cash generated from financing activities |
|
26,646 |
|
26,396 |
Net change in cash and cash equivalents |
|
(10,617) |
|
(60,253) |
Cash and cash equivalents less bank overdrafts at the beginning of the period |
|
27,850 |
|
91,749 |
Effect of foreign exchange differences on cash and cash equivalents |
|
646 |
|
(649) |
Cash and cash equivalents less bank overdrafts at the end of the period |
|
17,879 |
|
30,847 |
The accompanying notes are an integral part of these Interim Condensed Consolidated Financial Statements.
F-4
Lanvin Group Holdings Limited
Interim condensed consolidated statements of changes in equity
For the six months ended June 30, 2024 and 2023
(Unaudited)
|
|
Attributable to owners of the Company |
|
|
|
|
||||||||
|
|
Issued |
|
Treasury |
|
Other |
|
Accumulated |
|
|
|
Non-controlling |
|
|
(Euro thousands) |
|
capital |
|
shares |
|
Reserves |
|
losses |
|
Total |
|
interests |
|
Total equity |
Balance at December 31, 2023 |
|
* |
|
(65,405) |
|
806,677 |
|
(571,931) |
|
169,341 |
|
(3,713) |
|
165,628 |
Comprehensive loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss for the period |
|
— |
|
— |
|
— |
|
(57,317) |
|
(57,317) |
|
(12,059) |
|
(69,376) |
Currency translation difference |
|
— |
|
— |
|
(2,538) |
|
— |
|
(2,538) |
|
(260) |
|
(2,798) |
Net actuarial reserve from defined benefit plans |
|
— |
|
— |
|
45 |
|
— |
|
45 |
|
— |
|
45 |
Total comprehensive loss |
|
— |
|
— |
|
(2,493) |
|
(57,317) |
|
(59,810) |
|
(12,319) |
|
(72,129) |
Transactions with owners |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Repurchase of ordinary shares |
|
— |
|
9,414 |
|
(9,414) |
|
— |
|
— |
|
— |
|
— |
Employee share-based compensation |
|
— |
|
— |
|
827 |
|
— |
|
827 |
|
— |
|
827 |
Capital contribution from non-controlling interests |
|
— |
|
— |
|
— |
|
— |
|
— |
|
5 |
|
5 |
Other |
|
— |
|
— |
|
(1,607) |
|
— |
|
(1,607) |
|
— |
|
(1,607) |
Total transactions with owners |
|
— |
|
9,414 |
|
(10,194) |
|
— |
|
(780) |
|
5 |
|
(775) |
Balance at June 30, 2024 |
|
* |
|
(55,991) |
|
793,990 |
|
(629,248) |
|
108,751 |
|
(16,027) |
|
92,724 |
Balance at December 31, 2022 |
|
* |
|
(25,023) |
|
762,961 |
|
(442,618) |
|
295,320 |
|
5,486 |
|
300,806 |
Comprehensive loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss for the period |
|
— |
|
— |
|
— |
|
(63,002) |
|
(63,002) |
|
(9,223) |
|
(72,225) |
Currency translation difference |
|
— |
|
— |
|
6,854 |
|
— |
|
6,854 |
|
677 |
|
7,531 |
Net actuarial reserve from defined benefit plans |
|
— |
|
— |
|
9 |
|
— |
|
9 |
|
— |
|
9 |
Total comprehensive loss |
|
— |
|
— |
|
6,863 |
|
(63,002) |
|
(56,139) |
|
(8,546) |
|
(64,685) |
Transactions with owners |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee share-based compensation |
|
— |
|
— |
|
1,971 |
|
— |
|
1,971 |
|
— |
|
1,971 |
Capital contribution from non-controlling interests |
|
— |
|
— |
|
2,775 |
|
— |
|
2,775 |
|
2,870 |
|
5,645 |
Changes in ownership interest in subsidiaries without change of control |
|
— |
|
— |
|
(4,672) |
|
— |
|
(4,672) |
|
4,672 |
|
— |
Total transactions with owners |
|
— |
|
— |
|
74 |
|
— |
|
74 |
|
7,542 |
|
7,616 |
Balance at June 30, 2023 |
|
* |
|
(25,023) |
|
769,898 |
|
(505,620) |
|
239,255 |
|
4,482 |
|
243,737 |
*Amounts less than €1,000.
The accompanying notes are an integral part of these Interim Condensed Consolidated Financial Statements.
F-5
Lanvin Group Holdings Limited
Notes to the Interim Condensed Consolidated Financial Statements
At and for the six months ended June 30, 2024 and 2023
(Unaudited)
1.General information
Lanvin Group Holdings Limited (formerly known as Fosun Fashion Group Limited, and hereinafter referred to as “LGHL” or the “Company” and together with its consolidated subsidiaries, or any one or more of them, as the context may require, the “Lanvin Group” or the “Group”) is the holding company of the Lanvin Group and domiciled in Cayman Islands, the incorporation number of the Company is 382280 and the registered office is at PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands.
The Group is the leading global luxury fashion group, managing iconic brands worldwide including French couture house Lanvin, Italian luxury shoemaker Sergio Rossi, Austrian skinwear specialist Wolford, American womenswear brand St. John, and high-end Italian menswear maker Caruso. The Group’s brand portfolio covers a wide variety of fashion categories and leverages a combination of e-commerce, offline retail and wholesale channels, providing both growth opportunities as well as stability and resilience throughout the fashion cycle.
2.Basis of preparation
Statement of compliance with IFRS
These unaudited interim condensed consolidated financial statements of the Group (the “Interim Condensed Consolidated Financial Statements”) have been prepared in compliance with IAS 34 - Interim Financial Reporting (“IAS 34”). The Interim Condensed Consolidated Financial Statements should be read in conjunction with the Group’s consolidated financial statements at and for the year ended December 31, 2023 (the “Annual Consolidated Financial Statements”), which have been prepared in compliance with the International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). The accounting policies adopted are consistent with those applied in the Consolidated Financial Statements, except for the adoption of new and amended standards as disclosed in Note 3.
Contents and structure of the Interim Condensed Consolidated Financial Statements
The Interim Condensed Consolidated Financial Statements include the interim condensed consolidated statements of profit or loss, interim condensed consolidated statements of comprehensive loss, interim condensed consolidated statements of financial position, interim condensed consolidated statements of cash flows, interim condensed consolidated statements of changes in equity and the accompanying notes.
The Interim Condensed Consolidated Financial Statements are presented in Euro, which is the functional and presentation currency of the Company, and amounts are stated in thousands of Euros, unless otherwise indicated.
Going concern
For the six months ended June 30, 2024, the Group has incurred operating losses of €56.68 million, and net losses of €69.38 million. The Group had net current liabilities of €162.59 million and an accumulated losses of €629.25 million as of June 30, 2024.
Management closely monitors the Group’s financial performance and liquidity position. Historically, the Group has been able to obtain debt and equity financing. The Group has funded operations primarily with issuances of preferred shares, long-term debt and net proceeds from revenues.
The Interim Condensed Consolidated Financial Statements have been prepared on a going concern basis because one of the Company’s shareholders, Fosun International Limited, has committed to continue to provide adequate support for the Company to meet its obligations as they become due for at least 24 months from the issuance date of these financial statements.
F-6
Use of estimates
The preparation of the Interim Condensed Consolidated Financial Statements requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities as well as the disclosure of contingent liabilities. If in the future such estimates and assumptions, which are based on management’s best judgment at the date of these Interim Condensed Consolidated Financial Statements, deviate from the actual circumstances, the original estimates and assumptions will be modified as appropriate in the period in which the circumstances change. Reference should be made to the section “Use of estimates” in the Consolidated Financial Statements for a detailed description of the more significant valuation procedures used by the Group in preparing its consolidated financial statements. Moreover, in accordance with IAS 34, certain valuation procedures, in particular those of a more complex nature regarding matters such as any impairment of non-current assets, are only carried out in full during the preparation of the annual consolidated financial statements, other than in the event that there are indications of impairment, in which case an immediate assessment is performed. Similarly, the actuarial valuations that are required for the determination of employee benefit provisions are also usually carried out during the preparation of the annual consolidated financial statements, except in the event of significant market fluctuations, or significant plan amendments, curtailments or settlements.
3.Summary of significant accounting policies
Changes in accounting policies
New Standards and Amendments issued by the IASB and applicable to the Group from January 1, 2024
New IFRS Standards and Amendments to existing standards |
|
Effective date |
IAS 1 Non - current Liabilities with Covenants (Amendments to IAS 1) |
|
January 1, 2024 |
IAS 1 Classification of Liabilities as Current or Non-current (Amendments to IAS 1) |
|
January 1, 2024 |
IFRS 16 Lease Liability in a Sale and Leaseback (Amendments to IFRS 16) |
|
January 1, 2024 |
IAS 7 and IFRS 7 Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7) |
|
January 1, 2024 |
There are no accounting pronouncements which have become effective from 1 January 2024 that have a significant impact on the Interim Condensed Consolidated Financial Statements. The accounting policies applied in these Interim Condensed Consolidated Financial Statements are the same as those applied in the Group’s Annual Consolidated Financial Statements as at and for the year ended December 31, 2023.
New standards, amendments and interpretations not yet effective
At the date of authorization of these Interim Condensed Consolidated Financial Statements, a new, but not yet effective, amendment to existing Standard, has been published by the IASB. No amendment has been adopted early by the Group.
New IFRS Standards and Amendments to existing standards |
|
Effective date |
IAS 21 Lack of Exchangeability (Amendments to IAS 21) |
|
January 1, 2025 |
Management anticipates that all relevant pronouncements will be adopted for the first period beginning on or after the effective date of the pronouncement. New Standards, amendments and Interpretations not adopted in the current year have not been disclosed as they are not expected to have a material impact on the Group’s Interim Condensed Consolidated Financial Statements.
4.Financial risk management
4.1 Capital management
The Group continuously optimizes its capital structure to maximize shareholder value while keeping the financial flexibility to execute the strategic projects. The Group’s capital structure policy and framework aim to optimize shareholder value through cash flow distribution to the Group from its subsidiaries, while maintaining an investment-grade rating and minimizing investments with returns below the Group’s weighted average cost of capital.
Cash net of debt is defined as cash and cash equivalents minus non-current and current interest-bearing loans and borrowings and bank overdrafts. Cash net of debt is a financial performance indicator that is used by the Group’s management to highlight changes in the Group’s overall liquidity position.
F-7
The following table provides a reconciliation of the Group’s cash net of debt:
|
|
At June 30, |
|
At December 31, |
(Euro thousands) |
|
2024 |
|
2023 |
Cash and cash equivalents |
|
18,308 |
|
28,130 |
Non-current borrowings |
|
(28,070) |
|
(32,381) |
Current borrowings |
|
(98,219) |
|
(35,720) |
Borrowings |
|
(126,289) |
|
(68,101) |
Bank overdrafts |
|
(429) |
|
(280) |
Cash net of debt |
|
(108,410) |
|
(40,251) |
The ratio of cash net of debt to total consolidated equity was as follows:
|
|
At June 30, |
|
At December 31, |
|
(Euro thousands) |
|
2024 |
|
2023 |
|
Cash net of debt |
|
108,410 |
|
40,251 |
|
Total equity |
|
92,724 |
|
165,628 |
|
Total capital |
|
201,134 |
|
205,879 |
|
Gearing ratio |
|
53.9 |
% |
20 |
% |
4.2 Fair value estimation
The following table presents the Group’s assets and liabilities that are measured at fair value at June 30, 2024 and December 31, 2023.
|
|
At June 30, |
|
At December 31, |
(Euro thousands) |
|
2024 |
|
2023 |
Assets |
|
|
|
|
Other non-current assets |
|
|
|
|
- Financial assets at fair value through profit or loss |
|
|
|
|
Level 1 |
|
1,075 |
|
1,075 |
Level 3 |
|
1,627 |
|
1,585 |
|
|
2,702 |
|
2,660 |
|
|
|
|
|
Liabilities |
|
|
|
|
Other current liabilities |
|
|
|
|
- Warrant liabilities |
|
|
|
|
Level 1 |
|
770 |
|
2,612 |
Level 3 |
|
420 |
|
1,429 |
|
|
1,190 |
|
4,041 |
At June 30, 2024 and December 31, 2023, there are no transfers among levels of the fair value hierarchy used in measuring the fair value of financial instruments, and also no changes in the classification of financial assets as a result of a change in the purpose or use of those assets. For more information relating to fair value estimation, reference should be made to Note 4 — Financial risk management to the Annual Consolidated Financial Statements.
4.3 Financial risk factors
The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk and interest rate risk), credit risk and liquidity risk. The Interim Condensed Consolidated Financial Statements do not include all the financial risk management information and disclosures required in the full annual financial statements and should be read in conjunction with the consolidated financial statements of the Company as at and for the year ended December 31, 2023. There have been no changes in the risk management policies during the six months ended June 30, 2024.
F-8
(a)Market risk
Foreign exchange risk
The Group has a vast international presence, and therefore is exposed to the risk that changes in currency exchange rates could adversely impact revenue, expenses, margins and profit. The Group’s management assesses its foreign exchange risk by performing a regular review.
The following table demonstrates the sensitivity at the end of the reporting period to a reasonably possible change in the main foreign currencies against the Euro, with all other variables held constant, of the Group’s loss before tax due to differences arising on settlement or translation of monetary assets and liabilities and the Group’s equity excluding the impact of accumulated losses due to the changes of exchange fluctuation reserve of certain overseas subsidiaries of which the functional currencies are currencies other than Euro.
|
|
At June 30, 2024 |
|
At December 31, 2023 |
||||
|
|
Increase / (decrease) in |
|
Increase / (decrease) |
|
Increase / (decrease) in |
|
Increase / (decrease) in |
|
|
loss before tax if Euro |
|
in loss before tax if |
|
loss before tax if Euro |
|
loss before tax if Euro |
(Euro thousands) |
|
strengthens by 5% |
|
Euro weakens by 5% |
|
strengthens by 5% |
|
weakens by 5% |
USD |
|
(13,004) |
|
13,004 |
|
(12,046) |
|
12,046 |
CNY |
|
(96) |
|
96 |
|
72 |
|
(72) |
HKD |
|
112 |
|
(112) |
|
(256) |
|
256 |
GBP |
|
44 |
|
(44) |
|
136 |
|
(136) |
JPY |
|
(824) |
|
824 |
|
(1,094) |
|
1,094 |
Total |
|
(13,768) |
|
13,768 |
|
(13,188) |
|
13,188 |
(b)Credit risk
Credit risk is defined as the risk of financial loss caused by the failure of a counterparty to repay amounts owed or meet its contractual obligations. The maximum risk to which an entity is exposed is represented by all the financial assets recognized in the financial statements. Management considers its credit risk to relate primarily to trade receivables generated from the wholesale channel and mitigates the related effects through specific commercial and financial strategies.
With regards to trade receivables, credit risk management is carried out by monitoring the reliability and solvency of customers.
The following table provides the aging of trade receivables:
|
|
|
|
0-90 days |
|
90-180 days |
|
>180 days |
|
|
(Euro thousands) |
|
Not yet due |
|
overdue |
|
overdue |
|
overdue |
|
Total |
Trade receivables, gross |
|
20,361 |
|
7,600 |
|
4,271 |
|
10,462 |
|
42,694 |
Loss allowance |
|
— |
|
(320) |
|
(829) |
|
(6,109) |
|
(7,258) |
Total trade receivables at June 30, 2024 |
|
20,361 |
|
7,280 |
|
3,442 |
|
4,353 |
|
35,436 |
Trade receivables, gross |
|
30,738 |
|
8,602 |
|
4,552 |
|
7,948 |
|
51,840 |
Loss allowance |
|
— |
|
(199) |
|
(536) |
|
(5,448) |
|
(6,183) |
Total trade receivables at December 31, 2023 |
|
30,738 |
|
8,403 |
|
4,016 |
|
2,500 |
|
45,657 |
(c)Liquidity risk
Liquidity risk refers to the difficulty the Group could have in meeting its financial obligations.
According to management, the funds and credit lines currently available, in addition to those that will be generated by operating and financing activities, will enable the Group to meet its financial requirement arising from investing activities, working capital management and punctual loan repayment as planned.
As of June 30, 2023, the Group has up to $15.11 million in undrawn cash lines of credit with banks (December 31, 2023:$13.00 million).
F-9
The table below analysis the Group’s financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.
|
|
As at June 30, 2024 |
||||||||
|
|
On demand |
|
Less than 1 year |
|
1 to 3 years |
|
Over 3 years |
|
Total |
Trade payables |
|
18,301 |
|
62,751 |
|
— |
|
— |
|
81,052 |
Other current liabilities |
|
8,312 |
|
78,694 |
|
— |
|
— |
|
87,006 |
Lease liabilities |
|
— |
|
39,476 |
|
62,540 |
|
73,971 |
|
175,987 |
Bank overdrafts |
|
429 |
|
— |
|
— |
|
— |
|
429 |
Borrowings |
|
— |
|
98,219 |
|
17,301 |
|
10,769 |
|
126,289 |
|
|
27,042 |
|
279,140 |
|
79,841 |
|
84,740 |
|
470,763 |
|
|
As at December 31, 2023 |
||||||||
|
|
On demand |
|
Less than 1 year |
|
1 to 3 years |
|
Over 3 years |
|
Total |
Trade payables |
|
20,907 |
|
57,669 |
|
— |
|
— |
|
78,576 |
Other current liabilities |
|
8,758 |
|
88,527 |
|
— |
|
— |
|
97,285 |
Lease liabilities |
|
— |
|
37,824 |
|
58,685 |
|
70,867 |
|
167,376 |
Bank overdrafts |
|
280 |
|
— |
|
— |
|
— |
|
280 |
Borrowings |
|
— |
|
35,720 |
|
21,794 |
|
10,587 |
|
68,101 |
|
|
29,945 |
|
219,740 |
|
80,479 |
|
81,454 |
|
411,618 |
5.Segment reporting
The following tables summarize selected financial information by segment for the six months ended June 30, 2024 and 2023:
|
|
For the six months ended June 30, 2024 |
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Other and holding |
|
Eliminations and |
|
Group |
(Euro thousands) |
|
Lanvin |
|
Wolford |
|
Caruso |
|
St. John |
|
Sergio Rossi |
|
companies |
|
Unallocated |
|
Consolidated |
Segment results |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales outside the Group |
|
48,243 |
|
42,594 |
|
19,444 |
|
39,981 |
|
20,123 |
|
591 |
|
— |
|
170,976 |
Intra-Group sales |
|
29 |
|
— |
|
290 |
|
— |
|
281 |
|
3,775 |
|
(4,375) |
|
— |
Total revenue |
|
48,272 |
|
42,594 |
|
19,734 |
|
39,981 |
|
20,404 |
|
4,366 |
|
(4,375) |
|
170,976 |
Cost of sales |
|
(20,268) |
|
(15,799) |
|
(14,010) |
|
(12,285) |
|
(10,186) |
|
(717) |
|
667 |
|
(72,598) |
Gross profit |
|
28,004 |
|
26,795 |
|
5,724 |
|
27,696 |
|
10,218 |
|
3,649 |
|
(3,708) |
|
98,378 |
Other segment information |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
8,437 |
|
6,229 |
|
563 |
|
4,799 |
|
2,393 |
|
35 |
|
— |
|
22,456 |
Of which: Right-of-use assets |
|
5,739 |
|
5,470 |
|
329 |
|
3,756 |
|
1,435 |
|
— |
|
— |
|
16,729 |
Other |
|
2,698 |
|
759 |
|
234 |
|
1,043 |
|
958 |
|
35 |
|
— |
|
5,727 |
Provisions and impairment losses |
|
(727) |
|
510 |
|
529 |
|
(1,170) |
|
(1,362) |
|
— |
|
— |
|
(2,220) |
|
|
For the six months ended June 30, 2023 |
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Other and holding |
|
Eliminations and |
|
Group |
(Euro thousands) |
|
Lanvin |
|
Wolford |
|
Caruso |
|
St. John |
|
Sergio Rossi |
|
companies |
|
Unallocated |
|
Consolidated |
Segment results |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales outside the Group |
|
55,011 |
|
58,802 |
|
19,311 |
|
46,663 |
|
32,468 |
|
2,282 |
|
— |
|
214,537 |
Intra-Group sales |
|
2,041 |
|
— |
|
615 |
|
— |
|
551 |
|
1,708 |
|
(4,915) |
|
— |
Total revenue |
|
57,052 |
|
58,802 |
|
19,926 |
|
46,663 |
|
33,019 |
|
3,990 |
|
(4,915) |
|
214,537 |
Cost of sales |
|
(25,093) |
|
(16,740) |
|
(14,693) |
|
(17,639) |
|
(15,884) |
|
(200) |
|
1,166 |
|
(89,083) |
Gross profit |
|
31,959 |
|
42,062 |
|
5,233 |
|
29,024 |
|
17,135 |
|
3,790 |
|
(3,749) |
|
125,454 |
Other segment information |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
6,726 |
|
6,748 |
|
534 |
|
4,962 |
|
2,443 |
|
105 |
|
— |
|
21,518 |
Of which: Right-of-use assets |
|
4,163 |
|
5,593 |
|
330 |
|
3,595 |
|
1,448 |
|
— |
|
— |
|
15,129 |
Other |
|
2,563 |
|
1,155 |
|
204 |
|
1,367 |
|
995 |
|
105 |
|
— |
|
6,389 |
Provisions and impairment losses |
|
(3,610) |
|
1,824 |
|
584 |
|
1,060 |
|
(3,099) |
|
— |
|
— |
|
(3,241) |
F-10
The following table summarizes non-current assets by geography at June 30, 2024 and December 31, 2023.
|
|
At June 30, |
|
At December 31, |
|
|
2024 |
|
2023 |
EMEA (1) |
|
296,821 |
|
303,768 |
North America (2) |
|
116,124 |
|
99,232 |
Greater China (3) |
|
56,057 |
|
53,337 |
Other Asia (4) |
|
9,620 |
|
11,549 |
Total non-current assets (other than deferred tax assets) |
|
478,622 |
|
467,886 |
| (1) | EMEA includes EU countries, the United Kingdom, Switzerland, the countries of the Balkan Peninsula, Eastern Europe, Scandinavian, Azerbaijan, Kazakhstan and the Middle East. |
| (2) | North America includes the United States of America and Canada. |
| (3) | Greater China includes Mainland China, Hong Kong, Macao and Taiwan. |
| (4) | Other Asia includes Japan, South Korea, Thailand, Malaysia, Vietnam, Indonesia, Philippines, Australia, New Zealand, India and other Southeast Asian countries. |
6.Revenue
The Group generates revenue primarily from the sale of its products (net of returns and discounts), and from fees for royalties and licenses received from third parties.
Breakdown of revenue by sales channel:
|
|
For the six months ended June 30, |
||
(Euro thousands) |
|
2024 |
|
2023 |
Direct To Consumer (DTC) |
|
104,574 |
|
121,041 |
Wholesale |
|
59,589 |
|
85,446 |
Other (1) |
|
6,813 |
|
8,050 |
Total revenue by sales channel |
|
170,976 |
|
214,537 |
(1) |
Other revenues mainly include royalties and certain sales of old season products. |
Breakdown of revenue by geographic area:
|
|
For the six months ended June 30, |
||
(Euro thousands) |
|
2024 |
|
2023 |
EMEA |
|
75,704 |
|
103,905 |
North America |
|
64,324 |
|
72,487 |
Greater China |
|
19,761 |
|
26,063 |
Other Asia |
|
11,187 |
|
12,082 |
Total revenue by geographic area |
|
170,976 |
|
214,537 |
F-11
7.Expenses by nature
|
|
For the six months ended June 30, |
||
(Euro thousands) |
|
2024 |
|
2023 |
Personnel costs |
|
80,688 |
|
91,602 |
Raw materials, consumables and finished goods used |
|
50,419 |
|
63,632 |
Changes in inventories of finished goods and work in progress |
|
4,276 |
|
2,882 |
Depreciation and amortization |
|
22,456 |
|
21,518 |
Freight and selling expenses |
|
21,446 |
|
21,362 |
Professional service fees |
|
17,292 |
|
25,704 |
Advertising and marketing expenses |
|
14,326 |
|
17,100 |
Lease expenses |
|
12,549 |
|
13,824 |
Office expenses |
|
3,010 |
|
2,977 |
Taxes and surcharges |
|
2,601 |
|
1,796 |
Studies and research expenses |
|
2,388 |
|
3,789 |
Travel expenses |
|
1,651 |
|
2,631 |
Reversal of provisions and impairment |
|
(2,220) |
|
(3,241) |
Fair value changes on warrants |
|
(2,851) |
|
972 |
Net foreign exchange (gains) / losses |
|
(3,353) |
|
8,486 |
Other |
|
6,119 |
|
9,153 |
Total expenses |
|
230,797 |
|
284,187 |
8.Non-underlying items
The non-underlying items included in the consolidated income statement are as follows:
|
|
For the six months ended June 30, |
||
(Euro thousands) |
|
2024 |
|
2023 |
Net gains on disposals |
|
1,970 |
|
1,513 |
Costs in respect of disputes |
|
1,158 |
|
— |
Government grants |
|
15 |
|
8,153 |
Total non-underlying items |
|
3,143 |
|
9,666 |
Non-underlying items included the net gains on disposals primarily related to disposal of long-term assets.
The non - underlying cost in respect of disputes primarily related to the claims and legal proceedings the Group was involved that arise in certain non - operating transactions.
Non-underlying items included government grants primarily related to various grants and incentives given by local governments, based on the Group’s operations and developments in those regions.
F-12
9.Finance costs
Breakdown for finance income, finance expenses and net foreign exchange gains or losses:
|
|
For the six months ended June 30, |
||
(Euro thousands) |
|
2024 |
|
2023 |
Finance income |
|
|
|
|
- Net foreign exchange gains |
|
120 |
|
— |
- Interest income |
|
31 |
|
161 |
Total finance income |
|
151 |
|
161 |
Finance expenses |
|
|
|
|
- Interest expense on lease liabilities |
|
(3,647) |
|
(3,300) |
- Interest expense on borrowings |
|
(9,492) |
|
(5,244) |
- Net foreign exchange losses |
|
— |
|
(3,455) |
- Other |
|
(199) |
|
(132) |
Total finance expenses |
|
(13,338) |
|
(12,131) |
Total finance costs - net |
|
(13,187) |
|
(11,970) |
10.Income tax expenses
|
|
For the six months ended June 30, |
||
(Euro thousands) |
|
2024 |
|
2023 |
Current taxes |
|
(114) |
|
(497) |
Deferred taxes |
|
603 |
|
226 |
Income taxes |
|
489 |
|
(271) |
Breakdown of difference between statutory and effective tax rates:
The effective tax rate is as follows:
|
|
For the six months ended June 30, |
|
||
(Euro thousands) |
|
2024 |
|
2023 |
|
Loss before tax |
|
(69,865) |
|
(71,954) |
|
Total income tax benefits / (expenses) |
|
489 |
|
(271) |
|
Effective tax rate |
|
0.70 |
% |
(0.38) |
% |
11.Loss per share
Basic and diluted loss per share were calculated as the ratio of net profit or (loss) attributable to the shareholders of the Company by the weighted average number of outstanding shares (basic and diluted) of the Company.
Basic and diluted net loss per share attributable to ordinary shares for the six months ended June 30, 2024 and 2023 are calculated as follows (in thousands, except share and per share amounts):
|
|
For the six months ended June 30, |
||
(Euro thousands) |
|
2024 |
|
2023 |
Net loss attributable to ordinary shares |
|
(57,317) |
|
(63,002) |
Weighted-average shares outstanding-basic and diluted (thousand shares) |
|
117,320 |
|
130,971 |
Net loss per share: |
|
|
|
|
Basic and diluted (in Euro) |
|
(0.49) |
|
(0.48) |
As the Group incurred net losses for the six months ended June 30, 2024 and 2023, basic loss per share was the same as diluted loss per share.
In the calculation of diluted earnings per shares, the warrants have been excluded as the average market price of ordinary shares during the period was lower than the exercise price of the warrants.
F-13
The following potentially dilutive outstanding securities were excluded from the computation of diluted loss per ordinary share because their effects would have been antidilutive for the six months ended June 30, 2024 or issuance of such shares is contingent upon the satisfaction of certain conditions which were not satisfied by the end of the period:
|
|
At June 30, |
|
At June 30, |
(Thousand shares) |
|
2024 |
|
2023 |
Treasury shares |
|
65,405 |
|
25,023 |
Warrants |
|
31,980 |
|
31,980 |
Convertible preference shares |
|
— |
|
15,000 |
Total outstanding shares of potentially dilutive securities |
|
97,385 |
|
72,003 |
12.Right-of-use assets
|
|
|
|
|
|
Total net |
(Euro thousands) |
|
Real estate |
|
Other |
|
carrying amount |
At December 31, 2023 |
|
128,196 |
|
657 |
|
128,853 |
Additions |
|
22,048 |
|
145 |
|
22,193 |
Disposals |
|
— |
|
(10) |
|
(10) |
Depreciation |
|
(16,529) |
|
(200) |
|
(16,729) |
Contract modifications |
|
3,486 |
|
— |
|
3,486 |
Net foreign exchange differences |
|
1,331 |
|
2 |
|
1,333 |
At June 30, 2024 |
|
138,532 |
|
594 |
|
139,126 |
13.Other non-current assets
|
|
At June 30, |
|
At December 31, |
(Euro thousands) |
|
2024 |
|
2023 |
Deposits of rental, utility and other |
|
10,933 |
|
11,494 |
Equity investments designated at fair value through profit or loss |
|
2,702 |
|
2,660 |
Other |
|
1,748 |
|
1,386 |
Total other non-current assets |
|
15,383 |
|
15,540 |
Other non-current assets include equity investments recognized at fair value through profit or loss in accordance with IFRS 9, with changes in value recognized in profit or loss. The losses in fair value recognized through profit or loss amounted to €42 thousand for the six months ended June 30, 2024 (For the six months ended June 30, 2023: €59 thousand gain).
14.Inventories
|
|
At June 30, |
|
At December 31, |
(Euro thousands) |
|
2024 |
|
2023 |
Raw materials, ancillary materials and consumables |
|
15,222 |
|
16,527 |
Work-in-progress and semi-finished products |
|
11,053 |
|
9,425 |
Finished goods |
|
80,534 |
|
81,223 |
Other |
|
— |
|
9 |
Total inventories |
|
106,809 |
|
107,184 |
The cost of inventories recognized as an expense in cost of sales amounted to €72,598 thousand and €89,083 thousand for the six months ended June 30, 2024 and 2023 respectively.
For the six months ended June 30, 2024, the net amount of €3,269 thousand inventory impairment loss was reversed as the goods were sold at an amount in excess of the written-down value (June 30, 2023: €2,917 thousand). The amount reversed or recognized was within cost of sales.
F-14
15.Trade receivables
|
|
At June 30, |
|
At December 31, |
(Euro thousands) |
|
2024 |
|
2023 |
Trade receivables |
|
42,694 |
|
51,840 |
Loss allowance |
|
(7,258) |
|
(6,183) |
Total trade receivables |
|
35,436 |
|
45,657 |
The trade receivables are comprised essentially of receivables from wholesalers or agents, who are limited in number and with whom the Group maintains long-term relationships.
For each of the periods presented, no single customer accounted for more than 5% of the Group’s consolidated revenue. The present value of trade receivables is identical to its carrying amount.
16.Other current assets
|
|
At June 30, |
|
At December 31, |
(Euro thousands) |
|
2024 |
|
2023 |
Tax recoverable |
|
6,713 |
|
7,078 |
Prepaid expenses |
|
6,685 |
|
5,374 |
Other receivable of royalties |
|
4,555 |
|
4,147 |
Advances and payments on account to vendors |
|
3,793 |
|
4,486 |
Deposits of rental, utility and other |
|
1,945 |
|
1,859 |
Other |
|
1,796 |
|
2,706 |
Total other current assets |
|
25,487 |
|
25,650 |
17.Cash and bank balances
|
|
At June 30, |
|
At December 31, |
(Euro thousands) |
|
2024 |
|
2023 |
Cash on hand |
|
491 |
|
710 |
Bank balances |
|
17,817 |
|
27,420 |
Total cash and bank balances |
|
18,308 |
|
28,130 |
Cash and cash equivalents include cash on hand and bank balances.
The following table provides a reconciliation of cash and cash equivalents per cash flow statement:
|
|
At June 30, |
|
At December 31, |
|
(Euro thousands) |
|
2024 |
|
2023 |
|
Total cash and cash equivalents |
|
18,308 |
|
28,130 |
|
Bank overdrafts |
|
(429) |
|
(280) |
|
Net cash and cash equivalents per cash flow statement |
|
17,879 |
|
27,850 |
|
F-15
18.Borrowings
The following table provides a breakdown for non-current and current borrowings:
(Euro thousands) |
|
Guaranteed |
|
Secured |
|
Unsecured |
|
Total borrowings |
At December 31, 2023 |
|
8,580 |
|
29,895 |
|
29,626 |
|
68,101 |
Repayments |
|
(427) |
|
(49,959) |
|
(5,133) |
|
(55,519) |
Proceeds |
|
119 |
|
50,509 |
|
64,140 |
|
114,768 |
Net foreign exchange difference |
|
— |
|
(1,566) |
|
505 |
|
(1,061) |
At June 30, 2024 |
|
8,272 |
|
28,879 |
|
89,138 |
|
126,289 |
Repayable: |
|
|
|
|
|
|
|
|
- Within one year |
|
4,191 |
|
14,929 |
|
79,099 |
|
98,219 |
- In the second year |
|
2,726 |
|
13,950 |
|
— |
|
16,676 |
- In the third year |
|
625 |
|
— |
|
— |
|
625 |
- Over three years |
|
730 |
|
— |
|
10,039 |
|
10,769 |
|
|
8,272 |
|
28,879 |
|
89,138 |
|
126,289 |
Portion classified as current liabilities |
|
(4,191) |
|
(14,929) |
|
(79,099) |
|
(98,219) |
Non-current portion |
|
4,081 |
|
13,950 |
|
10,039 |
|
28,070 |
As at June 30, 2024, borrowings amounted to €8,272 thousand (December 31, 2023: €8,580 thousand) were guaranteed by a third party, SACE S.p.A., the Italian export credit agency.
As at June 30, 2024, the secured borrowings amounted to €17,820 thousand (December 31, 2023: €21,612 thousand ) were owed to Meritz Securities Co., Ltd. (“Meritz”) (excluding accrued interest). On March 30, 2023, Jeanne Lanvin S.A. (“JLSA”) as the borrower, LGHL as the guarantor and our shareholder Meritz as the lender entered into a facility agreement, pursuant to which Meritz made available to JLSA a facility in the sum of JPY3,714.4 million (as novated, amended and restated by the novation, amendment and restatement agreement dated August 14, 2023 between Lanvin Hong Kong Limited as the new borrower, JLSA as the original borrower and new guarantor, LGHL as guarantor and Meritz as the lender, the “Facility”). JLSA used the Facility to buy back the Lanvin trademarks owned by ITOCHU Corporation (“Itochu”) according to the buy-back agreement entered into by and between JLSA and Itochu on May 21, 2021. The Facility has a term of three years and bears a fixed interest of 9.10% per annum. The Facility is mainly secured by royalties to be paid by Itochu for selling Lanvin-branded licensed products in Japan. Lanvin Hong Kong Limited holds the right to receive such royalties, and its shares were also charged in favor of Meritz.
As at June 30, 2024, borrowings amounted to €11,059 thousand (December 31, 2023: €8,283 thousand) were secured by the pledge of assets with carrying values at the end of each reporting period as follows:
|
|
At June 30, |
|
At December 31, |
(Euro thousands) |
|
2024 |
|
2023 |
Pledge of assets: |
|
|
|
|
- Inventories |
|
23,581 |
|
15,938 |
- Property, plant and equipment |
|
8,669 |
|
7,852 |
- Trade receivables |
|
1,549 |
|
1,993 |
- Other current assets |
|
2,052 |
|
1,168 |
Total pledge of assets |
|
35,851 |
|
26,951 |
Apart from the above, certain borrowings are guaranteed by two subsidiaries, namely St. John Knits, Inc. and St. John Canada Corporation as at June 30, 2024.
The unsecured borrowings are principally used for operation of the Group.
The borrowings at rates ranging from 4.55% to 17.11% per annum.
F-16
19.Lease liabilities
(Euro thousands) |
|
Lease liabilities |
At December 31, 2023 |
|
145,769 |
Additions due to new leases and store renewals |
|
22,204 |
Interest expense |
|
3,647 |
Repayment of lease liabilities (including interest expense) |
|
(19,874) |
Contract modifications |
|
2,675 |
Disposals |
|
(10) |
Net foreign exchange differences |
|
1,488 |
At June 30, 2024 |
|
155,899 |
Of which: |
|
|
Non-current |
|
120,250 |
Current |
|
35,649 |
In certain countries, leases for stores entail the payment of both minimum amounts and variable amounts, especially for stores with lease payments indexed to revenue. As required by IFRS 16, only the minimum fixed lease payments are capitalized.
The following table summarizes the undiscounted contractual cash flows of lease liabilities by maturity date:
|
|
Total contractual |
|
|
|
|
|
|
|
|
|
|
cash flows of |
|
|
|
|
|
|
|
|
(Euro thousands) |
|
lease liabilities |
|
Year 1 |
|
Year 2 |
|
Year 3 |
|
Beyond |
At June 30, 2024 |
|
175,987 |
|
39,476 |
|
35,801 |
|
26,739 |
|
73,971 |
At December 31, 2023 |
|
167,376 |
|
37,824 |
|
32,651 |
|
26,034 |
|
70,867 |
20.Other current liabilities
|
|
At June 30, |
|
At December 31, |
(Euro thousands) |
|
2024 |
|
2023 |
Financing fund |
|
58,649 |
|
63,320 |
Payroll and employee benefits payables |
|
23,861 |
|
20,750 |
Accrued expenses |
|
16,183 |
|
18,544 |
Tax payables |
|
10,417 |
|
10,285 |
Due to related companies |
|
8,743 |
|
7,115 |
Customer advances |
|
6,721 |
|
6,307 |
Warrant liabilities |
|
1,190 |
|
4,041 |
Rental payable |
|
137 |
|
238 |
Other |
|
2,104 |
|
4,027 |
Total other current liabilities |
|
128,005 |
|
134,627 |
Financing fund
Financing fund is the investment to be made by Meritz Securities Co., Ltd., a Korean incorporated investment fund in the Company. For more information relating to financing fund, reference should be made to Note 28 — Other current liabilities and Note 35 — Subsequent events to the Annual Consolidated Financial Statements.
Warrant liabilities
Breakdown for warrant liabilities:
|
|
At June 30, |
|
At December 31, |
(Euro thousands) |
|
2024 |
|
2023 |
Public Warrant |
|
770 |
|
2,612 |
Private Placement Warrant |
|
420 |
|
1,429 |
Total warrant liabilities |
|
1,190 |
|
4,041 |
F-17
At June 30, 2024 and December 31, 2023, all of the public warrants and private placement warrants were outstanding and recognized as liabilities at fair value. For the six months ended June 30, 2024, the Group recorded warrant liabilities of €1,190 thousand which resulted in a gain on revaluation of €2,851 thousand.
For more information relating to warrant liabilities, reference should be made to Note 28—Other current liabilities to the Annual Consolidated Financial Statements.
21.Share capital
As of June 30, 2024, the share capital amounted to €134 (December 31, 2023: €137), comprising 117,319,824 fully paid-up ordinary shares with a par value of $0.000001. Excluding the 27,701,628 treasury shares, there were 117,319,824 shares issued and outstanding June 30, 2024 and December 31, 2023.
Ordinary share
LGHL ordinary shares have a par value of $0.000001 and are ranked equally with regard to the LGHL’s residual assets. Amounts received above the par value are recorded as share premium. Each holder of LGHL ordinary shares will be entitled to one vote per share. LGHL ordinary shares are listed on NYSE under the trading symbol “LANV”.
22.Other reserve
|
|
|
|
Other comprehensive income reserve |
|
|
|
|
||
|
|
|
|
Cumulative |
|
Re-measurement |
|
|
|
|
|
|
Share |
|
translation |
|
of defined |
|
Other |
|
|
(Euro thousands) |
|
premium |
|
adjustment |
|
benefit plans |
|
reserves |
|
Total |
Balance at December 31, 2023 |
|
783,883 |
|
2,617 |
|
(86) |
|
20,263 |
|
806,677 |
Repurchase of ordinary shares |
|
— |
|
— |
|
— |
|
(9,414) |
|
(9,414) |
Employee share-based compensation |
|
— |
|
— |
|
— |
|
827 |
|
827 |
Currency translation differences |
|
— |
|
(2,538) |
|
— |
|
— |
|
(2,538) |
Actuarial reserve relating to employee benefit |
|
— |
|
— |
|
45 |
|
— |
|
45 |
Other |
|
— |
|
— |
|
— |
|
(1,607) |
|
(1,607) |
Balance at June 30, 2024 |
|
783,883 |
|
79 |
|
(41) |
|
10,069 |
|
793,990 |
Balance at December 31, 2022 |
|
743,501 |
|
(716) |
|
675 |
|
19,501 |
|
762,961 |
Employee share-based compensation |
|
— |
|
— |
|
— |
|
1,971 |
|
1,971 |
Changes in ownership interest in a subsidiary without change of control |
|
— |
|
— |
|
— |
|
(4,672) |
|
(4,672) |
Capital contribution from non-controlling interests |
|
— |
|
— |
|
— |
|
2,775 |
|
2,775 |
Currency translation differences |
|
— |
|
6,854 |
|
— |
|
— |
|
6,854 |
Actuarial reserve relating to employee benefit |
|
— |
|
— |
|
9 |
|
— |
|
9 |
Balance at June 30, 2023 |
|
743,501 |
|
6,138 |
|
684 |
|
19,575 |
|
769,898 |
Other comprehensive income reserve includes the following:
| ● | a translation reserve for the translation differences arising from the consolidation of subsidiaries with a functional currency different from the Euro; |
| ● | gains and losses on the re-measurement of defined benefit plans for actuarial gains and losses arising during the period which are offset against the related net defined benefit liabilities; |
F-18
23. |
Related party transactions |
Transactions with related parties
In addition to the transactions and balances detailed elsewhere in these financial statements, the Group had the following material transactions with related parties during the periods:
|
|
For the six months ended June 30, |
||
(Euro thousands) |
|
2024 |
|
2023 |
(i) Sales of goods |
|
|
|
|
Handsome Corporation (1) |
|
730 |
|
871 |
Itochu Corporation (1) |
|
— |
|
617 |
Total sales of goods |
|
730 |
|
1,488 |
(ii) Rental expenses |
|
|
|
|
Shanghai Fosun Bund Property Co., Ltd. (3) |
|
162 |
|
603 |
(iii) Other service expenses |
|
|
|
|
Baozun Hong Kong Investment Limited (1) |
|
723 |
|
772 |
(iv) Interest expenses |
|
|
|
|
Meritz Securities Co., Ltd. (1) |
|
5,224 |
|
2,209 |
Fosun International Limited (1) |
|
1,869 |
|
— |
Shanghai Fosun High Technology (Group) Co., Ltd. (2) |
|
504 |
|
517 |
FPI (US) 1 LLC (2) |
|
110 |
|
— |
Fosun JoyGo (HK) Technology Limited (2) |
|
2 |
|
— |
Shanghai Fosun High Technology Group Finance Co., Ltd. (2) |
|
— |
|
101 |
Total interest expenses |
|
7,709 |
|
2,827 |
|
|
For the six months ended June 30, |
||
(Euro thousands) |
|
2024 |
|
2023 |
(v) Proceeds of related-party loan |
|
|
|
|
Fosun International Limited |
|
58,127 |
|
— |
FPI (US) 1 LLC |
|
2,790 |
|
— |
Shanghai Fosun High Technology Group Finance Co., Ltd. |
|
576 |
|
— |
Meritz Securities Co., Ltd. |
|
— |
|
46,538 |
Total proceeds of related-party loan |
|
61,493 |
|
46,538 |
(vi) Repayments of related-party loan |
|
|
|
|
Meritz Securities Co., Ltd. |
|
11,090 |
|
— |
Fosun JoyGo (HK) Technology Limited |
|
1,107 |
|
— |
Shanghai Fosun High Technology Group Finance Co., Ltd. |
|
— |
|
2,007 |
Total repayments of related-party loan |
|
12,197 |
|
2,007 |
(vii) Purchase of trademarks |
|
|
|
|
Itochu Corporation |
|
— |
|
26,672 |
(viii)Royalty received in advance |
|
|
|
|
Itochu Corporation |
|
— |
|
4,731 |
(ix) Royalty |
|
|
|
|
Itochu Corporation |
|
1,876 |
|
70 |
Handsome Corporation |
|
1,503 |
|
1,550 |
Total royalty |
|
3,379 |
|
1,620 |
F-19
Balances with related parties
|
|
At June 30, |
|
At December 31, |
(Euro thousands) |
|
2024 |
|
2023 |
(i) Borrowings |
|
|
|
|
Fosun International Limited |
|
73,372 |
|
15,245 |
Meritz Securities Co., Ltd. |
|
17,820 |
|
21,612 |
Shanghai Fosun High Technology (Group) Co., Ltd. |
|
10,040 |
|
9,787 |
FPI (US) 1 LLC |
|
2,790 |
|
— |
Shanghai Fosun High Technology Group Finance Co., Ltd. |
|
1,429 |
|
829 |
Fosun JoyGo (HK) Technology Limited |
|
— |
|
1,081 |
Total borrowings |
|
105,451 |
|
48,554 |
(ii) Other current liabilities |
|
|
|
|
Meritz Securities Co., Ltd. |
|
58,649 |
|
63,320 |
Fosun International Limited |
|
2,290 |
|
420 |
Shanghai Fosun Bund Property Co., Ltd. |
|
2,050 |
|
1,837 |
Shanghai Yu Garden Group and its subsidiaries |
|
1,358 |
|
1,358 |
Baozun Hong Kong Investment Limited |
|
1,264 |
|
1,851 |
Shanghai Fosun Industry Investment Co., Ltd. |
|
992 |
|
987 |
Shanghai Fosun High Technology (Group) Co., Ltd. |
|
396 |
|
384 |
Fosun Holdings Limited |
|
280 |
|
271 |
FPI (US) 1 LLC |
|
110 |
|
— |
Shanghai Fosun High Technology Group Finance Co., Ltd. |
|
3 |
|
2 |
Fosun JoyGo (HK) Technology Limited |
|
— |
|
5 |
Total other current liabilities |
|
67,392 |
|
70,435 |
(iii) Other current assets |
|
|
|
|
Fosun International Limited |
|
260 |
|
252 |
(iv) Other non-current liabilities |
|
|
|
|
Itochu Corporation |
|
4,345 |
|
4,753 |
Shanghai Fosun High Technology (Group) Co., Ltd. |
|
2,307 |
|
1,757 |
Total other non-current liabilities |
|
6,652 |
|
6,510 |
(v) Trade receivable |
|
|
|
|
Itochu Corporation |
|
1,749 |
|
84 |
Handsome Corporation |
|
8 |
|
66 |
Total trade receivable |
|
1,757 |
|
150 |
Notes：
| (1) | One of the shareholders of the Group. |
| (2) | Subsidiaries of Fosun International Limited. |
| (3) | Joint venture of Fosun International Limited. |
24.Subsequent events
The Group has evaluated subsequent events through August 26, 2024 which is the date the Consolidated Financial Statements were authorized for issuance, and identified the following events, all of which are non-adjusting as defined in IAS 10:
Ordinary Shares repurchase
The Company entered into a side letter with Meritz on April 30, 2024, which modified the Amended and Restated Relationship Agreement (the “Meritz Side Letter”). Pursuant to the Meritz Side Letter, the Company agreed to repurchase from Meritz 5,245,648 Ordinary Shares in aggregate for a total purchase price of $20.0 million under the prescribed schedule therein. As the date of this Interim Condensed Consolidated Financial Statements issuance date, the Company made the repurchases of (i) 1,328,704 Ordinary Shares on April 30, 2024 for $5.0 million, (ii) 1,318,129 Ordinary Shares on June 28, 2024 for $5.0 million, and (iii) 1,305,220 Ordinary Shares on July 31, 2024 for $5.0 million.
F-20