In 2003 Lotto Sport Italia, despite the negative general market situation as regards consumption, obtained positive results in Lotto brand product sales. This is what emerges from the report accompanying the Lotto Sport Italia SpA turnover project that will be submitted for Board of Directors approval at the end of March and subsequently at the shareholders meeting that will be held in May.
The data reveals that the overall value of Lotto brand products sold in 2003 was 255 million ($312 mm), an amount that shows an increase of 3.2% with respect to 2002. Actually, as Lotto Sport Italia President and CEO Andrea Tomat points out in the report, sales were greater than the data recorded by at least 10 million at constant exchange rates. In terms of volume, the overall result grew 7.3% with respect to the previous year.
The most dynamic situation was predominantly recorded in Europe 182 million ($222.8 mm), which on the whole grew 7.1%. The country that recorded the greatest growth in absolute terms was France, which increased its sales by 22% and reached a turnover of 38.4 million ($47.0 mm), while in percentage terms the most dynamic was Germany (+69%). A very positive contribution came from England, Belgium and Greece, while the Iberian Peninsula, Eastern and Northern Europe had results that were slightly higher than those of 2002.
The Italian market came up short with respect to expectations. Despite the fact that it still represents the leading market with a 76 million ($93.0 mm) turnover, it grew only 1.3%. It is a result in great part due to the dramatic distribution situation: the Giacomelli group crisis Longoni caused a loss of at least 6% of the turnover in the course of the second semester of 2003. Otherwise, the Italian market results would have lined up with the overall growth achieved in Europe.
As for non-European countries – served predominantly through license contracts – 2003 data reveals a slight 5.6% drop to 67 million ($ 82.0mm). In this case at constant exchange rates this would have meant an 8.4% growth, which in any case represents the increase achieved in terms of volume. The turnover for underwear and eyewear licenses, obtained almost exclusively in the Italian market, remained stable at 6 million ($7.3 mm) .
“In June 2003 the closing forecast was given at 275 million” – commented Andrea Tomat later lowered to 266 million following adjustments connected with the decrease in consumption and above all to the Giacomelli case. A more accurate calculation of the exchange effect further reduced turnover estimates as regards non-European markets. Nevertheless I must say that a prudential approach to spending plans and quick action taken with regard to costs enabled us to close the financial year with an overall EBITDA of 7.7 ($9.4 mm)million and 4.5 million ($5.5 mm) before taxes.”
“As for the current year” concluded Tomat “I dont foresee substantial improvement with respect to 2003 in terms of turnover. We have several projects under way focusing on improving our performance, particularly in the footwear line. There are wide growth margins in leisure goods, both for adults and for children. These are areas we havent yet touched, but for which we are preparing important projects with new designers. We will see the first signs of them as of this spring with the launching of the Air Zone Prima project, which will go hand in hand with a massive advertising campaign involving television, the press and billboards. Our focus on football, five-a-side and tennis remains unvaried. In particular, during the European Football Championship in Portugal June and July 2004 we will be extremely active with the launch of a new, quite original-looking shoe that can rely on massive presence on the field and in an extraordinary advertising campaign consisting of mobile ads in Lisbon and Porto.”