Create successful ePaper yourself
Turn your PDF publications into a flip-book with our unique Google optimized e-Paper software.
Income taxes<br />
In 2004, we incurred a consolidated income tax charge of €13.8 million, compared with net income tax benefits of<br />
€21.7 million recorded in 2003, as we recorded income before taxes on a consolidated basis in 2004, compared<br />
with a loss before taxes in 2003 (a year in which we also benefited from a €25.9 million tax credit on dividends<br />
paid to <strong>IT</strong> <strong>Holding</strong> S.p.A. from Ittierre S.p.A.).<br />
Net income (loss)<br />
For the reasons set forth above, our consolidated net result improved by €50.1 million, as our consolidated net loss<br />
declined to €12.6 million for 2004 compared with a consolidated net loss of €62.7 million for 2003.<br />
Year Ended December 31, 2003 Compared to Year Ended December 31, 2002<br />
The following table shows certain items from our consolidated results of operations and EB<strong>IT</strong>DA for the periods<br />
indicated. It also shows each of these items as a percentage of net revenues:<br />
41<br />
Year Ended December 31,<br />
2002 2003<br />
(€ in millions, except percentages)<br />
Net revenues ................................................................................................................................ €659.8 100.0% € 669.8 100.0%<br />
Cost of materials .......................................................................................................................... (199.7) 30.3 (196.9) 29.4<br />
Outside services ........................................................................................................................... (257.9) 39.1 (292.0) 43.6<br />
Personnel expenses ...................................................................................................................... (85.5) 13.0 (86.8) 13.0<br />
Other operating expenses............................................................................................................. (35.2) 5.3 (35.8) 5.3<br />
EB<strong>IT</strong>DA................................................................................................................................ 108.0 16.4 96.7 14.4<br />
Depreciation and amortization................................................................................................ (83.4) 12.6 (146.7) (1) 21.9 (1)<br />
Operating income.........................................................................................................................24.6 3.7 (50.0) (1) 7.5 (1)<br />
Income taxes ................................................................................................................................ 1.9 0.3 21.7 3.2<br />
Net income (loss) for the year................................................................................................ 0.04 0.0 (62.7) 9.4<br />
(1) Includes the effect of the non-cash write-downs of the Romeo Gigli trademarks and other intangible and tangible assets during this period<br />
for a total amount of €56.5 million.<br />
Net revenues<br />
Consolidated net revenues increased by €10.0 million, or 1.5%, to €669.8 million for 2003 from €659.8 million for<br />
2002. This was primarily due to increases in sales of Gianfranco Ferré brand apparel and accessories offset by a<br />
decline in net revenues for our apparel and accessories business related to our Romeo Gigli and Husky brands<br />
following our granting of sub-licenses for these brands to a third-party. Following this sub-licensing, net revenues<br />
for our apparel and accessories business related to our Romeo Gigli and Husky brands consisted only of royalty<br />
payments paid to us by the sub-licensees of these brands. This increase was offset by a decrease in net revenues for<br />
our eyewear business due primarily to the cancellation of a large order to produce eyewear for a former customer.<br />
Excluding the effect of exchange rate movements, consolidated net revenues would have increased by<br />
approximately €28.7 million to approximately €688.5 million for 2003.<br />
Cost of materials<br />
Consolidated cost of materials decreased by €2.8 million, or 1.4%, to €196.9 million for 2003 from €199.7 million<br />
for 2002. This decrease was primarily due to a decrease in eyewear production due to the contract cancellation<br />
discussed above.<br />
Outside services<br />
Consolidated outside services costs increased by €34.1 million, or 13.2%, to €292.0 million for 2003 from €257.9<br />
million for 2002. This increase was primarily due to increased royalty and advertising costs for our apparel and
Change language