HIGHLIGHTS FROM 2014 Business performance The controlled growth strategy instituted three years ago, which has focused on operational performance, was helpful in balancing the challenges in 2014. At a static volume, revenue in 2014 grew by 4.6%, measured at constant exchange rates (3.4% including exchange rate effects). 3URÀWEHIRUHWD[LQFUHDVHGE\WR(85P The net result for the year is EUR 114.4m, compared with EUR 106.4m in 2013, an increase of 7.5%. 3URÀWDELOLW\PHDVXUHGDVSURÀWEHIRUHWD[DVDSHUFHQWDJH of net sales, exceeded 15%, ECCO’s strategic target. In 2014, the key objectives were the launching of the new strategy taking ECCO towards 2020, whilst keeping a steady hand on operations and taking steps to offset the effects of the market situations in Russia and Ukraine. Important measures were taken to ensure ECCO delivers even stronger collections to the markets, and there was a complete overhaul of the product development organisation and processes. Key strategic markets continue to develop positively. In particular, China, Japan, and the US were highlights. ECCO achieved its highest growth in the accessories product category, which increased sales by 10.4%. The Men’s and Golf collections also performed well, further strengthening their positions in China and the US. External sales in our leather business had a very successful year. The strategy of selling premium leathers produced impressive results, with total sales exceeding EUR 100m, an increase of 28.4%. Increased investments in our distribution channels were completed, ensuring progressively better product presentation and service to our customers. By the end of 2014, there were 1,215 ECCO shops and 1,845 shop-in-shops across the world. During 2014, more than 200 ECCO shops were opened by ECCO and its partners, and an additional 141 shops were refurbished. The significant investment in the production unit in Portugal was completed, and today ECCO Portugal is one of the most modern shoe factories in the world. Russia and Ukraine Through good partnerships and a strong brand position built up over the past 25 years, ECCO is well positioned to handle the highly uncertain market conditions. This was shown in the results achieved in both markets despite the problems. Financial performance Net revenue was EUR 1,169.2m, an increase of EUR 38.3m, equivalent to 3.4%. 3URÀWEHIRUHWD[ZDV(85PDQLQFUHDVHRI RYHU7KLVSURGXFHGDSURÀWUDWLRRIDJDLQVW 14.6% in 2013. The year’s company tax is calculated at EUR 40.5m, against EUR 40.3m in 2013. The total assets increased from EUR 772.5m to EUR 924.7m, and the equity increased from EUR 461.6m to EUR 532.2m. The ECCO Group’s solvency at year-end was 57.6%, against 59.8% last year. The return on equity was 23%. Outlook ECCO expects 2015 to be a year of high uncertainty in a number of markets. The retail market situation in Russia and Ukraine has yet to stabilise. In addition, the Northern and Central European markets have just come out of one of the worst autumn/ winter seasons on record, causing high inventories in the market. After 3 years of controlled growth, ECCO is changing to a more expansive strategy. This includes strengthening ECCO’s Ladies’ collection and investing heavily in distribution channels. For 2015, a result on par with 2014 is expected. ECCO Annual Report 2014 3
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