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Agricultural Development Bank of China
CLASS

Giglio Group plans to become the first made in Italy digital partner in China

March 19, 2019


Abstract : The BoD of the company listed in the STAR segment of Borsa Italiana gives the green light to 2019-2021 industrial plan, aiming to become partner for over 80 brands. Sales tripled compared to 2018, with at least 50 brands integrated in the platform iBox.

The BoD of the company listed in the STAR segment of Borsa Italiana gives the green light to 2019-2021 industrial plan, aiming to become partner for over 80 brands. Sales tripled compared to 2018, with at least 50 brands integrated in the platform iBox. An increase in gross merchandise value at an annual rate of over 20% is also expected.

MILAN, March 18 (Class Editori) - The Giglio Group business plan is based on the expansion in China. The business plan approved by the company listed in the STAR segment of Borsa Italiana welcomes investments for the development of the e-commerce platform in China, to serve the brands sales on the marketplaces integrated with the Italian technological structures developed in China.

An increase in gross merchandise value at an annual rate of over 20% is also expected. It will include both organic growth, in line with the expectations of the reference market of online sales of luxury fashion, and new acquisitions of brands, expected to surge from 2019, based on the range of on-going negotiations.

The 2019-2021 business plan shows a rather conservative overview on the outcomes of the launch of Giglio services in China, despite its building on a sound commercial and technological strategy and the superiority over alternative offers.

According to the company, the strategic objectives of the plan define the guidelines of a leading group in Italy, which covers the made in Italy fashion online segment with over 50 global marketplaces, therefore accounting for a significant share of the market. The group is aiming to become the most important digital and commercial partner for made in Italy luxury in China.

Giglio Group wants to become a partner for over 80 brands - of which at least 50 are integrated into its iBox platform - in view of sales in China at least tripled compared to 2018. These volumes, though, are not incorporating volumes of business that could occur through the partnership with large brands which are still negotiating with the company.

Over the next three years the group intends to double revenues, quickly regaining significant profits (ebitda/ revenues) and maintaining a steady growth in the long term (+12%).

Throughout the three-year period, investments are not planned to be substantial but they will be sufficient to support the technological set up plan of the e-commerce platform in China and distribution activities as well.

The business plan provides a solid improvement of the financial measures which are based on: positive cash flow generation; strong control of working capital to support B2B sales; lower investment requirements compared to previous years; active management of the position in listed shares that the company receives in exchange for the transfer of the activities of the media segment to Vertice 360, following the 12.5 million agreement signed on March 11.

Figures report that Giglio Group closed 2018 with a 8.3 million euro loss, dropping in comparison to 2017 (0 million), due to outcomes of the disposal of media activities, (-7.3 million). The figure does not take into account the 2.8 million capital gains that will be recorded in the 2019 financial statements. As for capital losses, they are already included in the balance sheet of 2018, due to the application of international accounting standards.

Since the entry of Giglio Group into the B2C business, the gross merchandise value grew by 75.7 million euro in 2018 from 51.1 million at the end of 2017, with a 48% growth. Consolidated revenues from continuing operations, amounting to €38.9 million, are up 10% compared to the pro-forma consolidated figures for the same period of the previous year.

EBITDA of continuing operations currently amounts to €1.2 million (€ 2.4 million in December 31, 2017). The decline is attributable to the costs of building and implementing of the Ibox platform - which automatically connects the brands products to 200 marketplaces around the world - and to the structural costs necessary for the reinforcing of the sales force and the expenses connected with the start-up of activities in China supported in 2018.

As reported by Giglio Group, the transfer of the media segment in 2019 will result in a further advantage for the company, recording a significant reduction in the impact of amortization, also given the low level of capital invested in e-commerce activities, with significant positive effects on the EBIT.

The net financial position stands out at 19.2 million, mainly due to a higher net working capital and a greater investment for the development of e-commerce. However, this figure does not include what Giglio Group will collect during 2019 following the media transfer operation.

(Source:Class Editori)

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Keyword: class emerging-industry international-cooperation

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