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Business segments

As already described, after a Hungarian subsidiary sold its sports equipment business, the other and unallocated segment was no longer material. This is why the segment information has been reclassified by including the residual amounts from this segment in the apparel segment.

The Group's activities are now divided into two segments in order to provide management with an effective basis for administration and decision-making, and to supply financial investors with representative and meaningful information about company performance.

The business segments are as follows:

  • apparel, represented by the brands of United Colors of Benetton Adult and Children, Undercolors, Sisley, Sisley Young, Playlife and Killer Loop. This segment also includes the results of the Group's real estate companies;
  • textile, consisting of production and sales activities for raw materials (fabrics, yarns and labels), semi-finished products and industrial services.

Segment results for 2008 and 2007are shown below, adopting the classification criteria described above.

Segment results - 2008

(millions of Euro)

Apparel

Textile

Eliminations

Consolidated

Revenues from third parties

2,034

94

-

2,128

Inter-segment revenues

2

136

(138)

-

Total revenues

2,036

230

(138)

2,128

Cost of sales

1,071

211

(136)

1,146

Gross operating profit

965

19

(2)

982

Selling costs

148

8

(1)

155

Contribution margin

817

11

(1)

827

General and operating expenses

565

8

-

573

- of which non-recurring expenses/(income)

1

(2)

-

(1)

Operating profit

252

3

(1)

254

Depreciation and amortization

89

11

-

100

Other non-monetary costs (net impairment/(reversals))

-

-

-

-

EBITDA

341

14

(1)

354

Segment results - 2007 (pro-forma)

(millions of Euro)

Apparel

Textile

Eliminations

Consolidated

Revenues from third parties

1,960

88

-

2,048

Inter-segment revenues

2

137

(139)

-

Total revenues

1,962

225

(139)

2,048

Cost of sales

1,075

203

(138)

1,140

Gross operating profit

887

22

(1)

908

Selling costs

140

8

(2)

146

Contribution margin

747

14

1

762

General and operating expenses

511

8

-

519

- of which non-recurring expenses

3

-

-

3

Operating profit

236

6

1

243

Depreciation and amortization

78

12

-

90

Other non-monetary costs (net impairment)

7

-

-

7

EBITDA

321

18

1

34

Apparel segment results

(millions of Euro)

2008

%

2007 pro-forma

%

Change

%

Revenues from third parties

2,034

 

1,960

 

74

3.8

Inter-segment revenues

2

 

2

 

-

58.9

Total revenues

2,036

100.0

1,962

100.0

74

3.8

Cost of sales

1,071

52.6

1,075

54.8

(4)

(0.3)

Gross operating profit

965

47.4

887

45.2

78

8.8

Selling costs

148

7.3

140

7.1

8

5.8

Contribution margin

817

40.1

747

38.1

70

9.3

General and operating expenses

565

27.7

511

26.1

54

10.7

- of which non-recurring expenses/(income)

1

0.1

3

0.2

(2)

(43.2)

Operating profit

252

12.4

236

12.0

16

6.5

EBITDA

341

16.7

321

16.4

20

5.9

Textile segment results

(millions of Euro)

2008

%

2007

%

Change

%

Revenues from third parties

94

 

88

 

6

6.6

Inter-segment revenues

136

 

137

 

(1)

(0.9)

Total revenues

230

100.0

225

100.0

5

2.0

Cost of sales

211

91.6

203

90.1

8

3.7

Gross operating profit

19

8.4

22

9.9

(3)

(12.8)

Selling costs

8

3.7

8

3.7

-

4.1

Contribution margin

11

4.7

14

6.2

(3)

(22.6)

General and operating expenses

8

3.4

8

3.7

-

(7.8)

- of which non-recurring expenses/(income)

(2)

(1.0)

-

-

(2)

n.s.

Operating profit

3

1.3

6

2.5

(3)

(45.2)

EBITDA

14

6.0

18

7.7

(4)

(20.0)