MILAN — A new joint venture in Turkey, coupled with a well-received fall-winter 2005 collection, helped boost Benetton’s net profits and revenues last year.
Net profits for the 12 months ended Dec. 31 grew 6.3 percent to 112 million euros, or $139.4 million, from 109 million euros, or $135.5 million, in 2004, the Italian fashion company said Thursday. All figures are converted at average exchange rates for the period to which they refer.
Consolidated sales climbed 3.6 percent to 1.77 billion euros, or $2.2 billion, in line with preliminary results released earlier this month.
Benetton said it expected consolidated revenues this year to be “at least equal” to the 2005 figure. It also forecast 2006 net profits at 6.5 percent of revenues.
Earnings before interest and taxes in 2005 fell less than 1 percent to 157 million euros, or $195.5 million, due to 48 million euros in non-recurring expenses, including restructuring costs at the company’s textile division.
Last year EBIT represented about 8.9 percent of revenues. Benetton said it expected 2006 EBIT to rise to between 9.5 to 10 percent of sales.
Benetton said its margins would benefit from the firm’s continued strategy to pursue advantageous manufacturing opportunities.
The company shaved off 20 percent of its net financial debt, which fell to 351 million euros, or $437 million, last year.
In a statement Benetton said growth in various markets, including South Korea and India, as well as its expanding network of directly operated stores contributed to the positive results, and the company forecast similar growth this year based on orders thus far.
The statement went on to say that Benetton expects accessories, outerwear and men’s wear, particularly tailored clothing, to propel volume this year. It was equally bullish on growth potential in emerging markets such as China and India, as well as Eastern Europe and countries in the Mediterranean basin.
Over the past year Benetton has moved to better position itself in international markets. Last spring the company inked a joint venture with its historic Turkish licensee, the Boyner Group, for the development and management of Benetton brands in Turkey and the immediate region. Prior to that, Benetton bought ownership of its activities in India.