PRESS RELEASE: BasicNet bod approves 2020 Separate Financial Statements and 2020 Consolidated Financial Statements. Business Model’s flexibility offsets impact of pandemic on results.

• Consolidated results presented on February 10 confirmed
• Proposed dividend of Euro 0.06 per share
• Shareholders’ AGM called for April 8 in single call

Turin, March 2, 2021. The Board of Directors of BasicNet S.p.A. has approved the 2020 Consolidated Financial Statements and the 2020 Separate Financial Statements.
Consolidated highlights:

• aggregate sales of Group product licensees by the Global licensee Network of Euro 814.1 million, decreasing 20.6% on record sales of Euro 1,025.3 million in 2019;
• consolidated revenues of Euro 259.7 million (Euro 305.7 million in 2019, -15.0%, -9.6% in the fourth quarter alone), as follows:      
  • royalties from commercial and productive licensees: Euro 46 million (Euro 55.6 million in 2019, -17.2%);
  • direct sales: Euro 213.8 million (Euro 250.1 million in 2019, - 14.5%);

• EBITDA: Euro 19.8 million (Euro 42.5 million in 2019);
   
• EBIT: Euro 7.6 million (Euro 30.6 million in 2019);
• income taxes have a positive balance thanks to the Patent Box effect and the recognition of the tax benefit (with a net effect of Euro 4.4 million), as per Article 110 of Legislative Decree No. 104/2020, permitting the partial re-alignment of the tax value of the Brands in portfolio to the increased amount recognised to the financial statements;
• Net Profit: Euro 8.6 million (Euro 21.1 million in 2019);
• net financial position: contained increase in debt to Euro 82.2 million, from Euro 78.3 million at December 31, 2019, thanks to the operating results and prudent working capital management.  Major investments were rolled out in the year to support the growth of the Brands and the Group’s consolidation: in January, the acquisition of BasicVillage in Milan was finalised for consideration of Euro 10.5 million, while in September the Kappa brand in Japan was reacquired for consideration of Euro 10.9 million and the acquisition of Kappa Europe was completed for consideration of Euro 1.9 million.  The Company also distributed dividends for Euro 6.4 million and acquired treasury shares for Euro 3.4 million.

FINANCIAL STATEMENTS OF THE PARENT COMPANY BASICNET S.p.A.

The Board of Directors also approved the 2020 separate financial statements of BasicNet S.p.A..

• Royalties and sourcing commissions of Euro 31.2 million decreased 17.8% on 2019;

• EBIT of Euro 3.9 million (Euro 12.1 million in 2019);

• Income taxes have a positive balance thanks to the Patent Box effect and the recognition of the tax benefit (with a net effect of Euro 1.4 million), as per Article 110 of Legislative Decree No. 104/2020, permitting the partial re-alignment of the tax value of the K-Way brand to the increased amount recognised to the financial statements;

• Net profit of Euro 4.7 million (Euro 14.5 million in 2019);
• The Shareholders Equity at December 31, 2020 amounted to approx. Euro 90 million (Euro 95.3 million at December 31, 2019).

DIVIDEND PROPOSED

The Board of Directors of BasicNet S.p.A proposes to the Shareholders’ Meeting to distribute a dividend of Euro 0,06 per share in circulation, for a total value of approx. Euro 3.1 million.

The proposed dividend reflects a pay-out ratio of 36.6% (30.3% in 2019) on the consolidated net profit of Euro 8.6 million. 

The dividend will be paid from April 21, 2021, with record date of April 20, 2021 and coupon date (No. 14) of April 19, 2021.

OUTLOOK

On the basis of the backlog and the ongoing investments in developing the Brands and consolidating the Group, a commercial recovery is expected in 2021. Its extent however depends significantly on the duration of the health emergency.

SHAREHOLDERS’ AGM CALL

The Board of Directors called the Shareholders’ AGM for April 8, 2021 in single call to consider the following:

• approval of the 2020 Separate Financial Statements;

• approval of the proposal for the allocation of the net profit;

• resolutions relating to the First Section of the Remuneration Report as per Article 123-ter, paragraph 3-bis, of Legislative Decree No. 58/1998;

• resolutions relating to the Second Section of the Remuneration Report as per Article 123-ter, paragraph 6, of Legislative Decree No. 58/1998;

• proposal to purchase and dispose of treasury shares.

TREASURY SHARES

The proposal to authorise the purchase and disposal of treasury shares seeks to provide the Company with a strategic financial instrument, establishing a securities reserve to tap into any future opportunities to grow the value of the Company.

Shares shall be purchased and disposed of in compliance with the applicable legal provisions. The authorisation is requested for the period until the Shareholders’ AGM called to approve the 2021 Annual Accounts and for a maximum financial commitment of Euro 10 million. Any purchases shall be made on the regulated markets in accordance with the regulations in force.

As part of the treasury share buy-back programme authorised by the Shareholders’ AGM of June 26, 2020, which will conclude with the called Shareholders’ AGM, BasicNet S.p.A. had acquired to date 925,496 shares (equal to 1.517% of the Share Capital) at an average price of Euro 3.675 for a total payment of Euro 3,401,372.

BasicNet today holds a total of 8,588,751 treasury shares (equal to 14.081% of the Share Capital), for an investment of Euro 25 million.

On conclusion of the meeting, the Chairman issued following declaration regarding the dossier Corneliani: “I would like to comment upon Corneliani, given the media coverage of our due diligence, which was similar however to many of the other analyses that we continuously carry out on brands that can fit well with our business model and market offer. We didn't manage to come to an overall solution for the Corneliani Group, but we have no regrets because we gave it our all. The very tight timeframe, the pandemic situation and the extreme complexity of the market, in the middle of an insolvency procedure, were the greatest difficulties also in searching for the industrial and financial partners required for the operation. We have involved all stakeholders with enthusiasm and maximum transparency, but the lack of guarantee of commercial continuity prevented us from taking it any further".

The Shareholders’ AGM documentation, including the illustrative reports of the Board of Directors on matters on the Agenda and the relative proposals, in addition to the Annual Financial Report, together with the related documentation, the Annual Corporate Governance Report and the report on the remuneration policy and the related compensation paid, will be made available at the registered office, on the 1info authorised storage mechanism (www.1info.it) and on the Company's website (www.basicnet.com) according to the legal deadline, i.e. by March 18, 2021.

The Chief Executive Officer Federico Trono will present to the market the 2020 results during a video conference call this afternoon, March 2, 2021, at 5.45PM CET.  To join the video conference call (to be held in English), click on:

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the presentation may be downloaded from the website www.BasicNet.com, from the section: “financial data/other information and presentations” shortly before the video conference, at the following link:

http://www.basicnet.com/contenuti/datifinanziari/informazioniannuali.asp?menuSelectedID=3g

In relation to the “alternative performance indicators”, as defined by the ESMA/2015/1415 guidelines, we provide below a definition of the indicators used in this press release, as well as their reconciliation with the financial statement items:

The Executive Officer for Financial Reporting, Ms. Paola Bruschi, declares in accordance with Article 154-bis, paragraph 2, of the Consolidated Finance Act that the accounting information contained in the present press release corresponds to the underlying accounting documents, records and accounting entries.

The financial statements are attached