Targetti news - FINANCE - Targetti Group: the Board of Directors approved the draft financial statements for 2006

The Board of Directors of Targetti Sankey S.p.A. met today in Florence to approve the draft financial statement for the year and the consolidated financial statement as at 31 December 2006.

In 2006 Targetti’s consolidated turnover was 176.9 million euros, a 12.4% increase over 2005 (157.4 million euros), due to 10.6% organic growth and growth through acquisitions for 1.8%.

Growth was led by the architectural lighting sector, the Group's core business, which registered a 9.9% increase, and the public outdoor lighting sector, which reported a 7.9% increase for the year. The light source sector’s turnover decreased by 11.6%, while the telecommunications sector confirmed a strong increase in revenues (153.8%).

Moreover, the growth is spread over all the main reference markets, especially Italy (+18.3%), the other EU countries (+10.5%), the U.S. (+7.1%), while a 0.3% increase was seen in the other countries.

The consolidated gross operating margin (EBITDA) stood at 19.9 million euros, up 3.4% compared to 19.2 million euros in 2005, while the consolidated operating result (EBIT) reached 14.0 million euros compared to 14.4 million euros in 2005.

EBIT was affected by an around 1.0 million euro increase in depreciation, amortisation and write downs, due mainly to an increase in investment, especially for the implementation of the Group's new management system.

The Group’s share of consolidated net profit totalled 4.9 million euros, compared to 6.1 million euros in 2005, and was impacted by the 0.8 million euro increase in net financial charges compared to 2005, mainly due to the financial commitment related to the investments of the period.

Net financial position as at 31 December 2006 stood at 40.2 million euros, compared to 34.3 million euros at 2005 year end. The increase (5.8 million euros) is due to the larger investments made during the year such as the purchase of the plot of land where the Group’s new registered office will be located.

The Shareholders’ Meeting, called to approve the 2006 financial statements and the allocation of profits, is scheduled to be held in first call on April 27, 11:30 AM, in Florence.

“2006 was a satisfying year for our Group,” stated Lorenzo Targetti, Managing Director of Targetti Sankey S.p.A., “and the first two months of 2007 confirmed last year’s progress in terms of both sales and outstanding orders.”

“Our estimates for this year are quite positive,” Targetti continued. “This is also shown by the BOD’s decision to propose a dividend of 0.14 euros, which is the same as last year, but now corresponds to a significantly higher pay-out of 53.9%.”

The Targetti Group is one of the European leaders in the sector of interior and exterior lighting. A network of nine highly specialised companies, it draws its strength from its long history and from its natural talent for research. Thanks to its perfect blend of technology and design, Targetti equipment lights universal masterpieces of art such as Michelangelo's David, Leonardo's Last Supper, and the Notre Dame Cathedral, and is used in a wide range of environments: the Singapore Opera House, Madrid, Canton, and Paris airports, the Bulgari, Benetton, Celine, Diesel showrooms, the Formula 1 McLaren boxes, corporations such as Peugeot, Citröen, and Alfa Romeo, the world's most prestigious hotel chains, and over 4000 large and small urban environments, all places where light...means Targetti.

€/000	2006	2005

Net turnover	176,888	157,382

Other revenues	1,550	2,024
Consumption and other operating costs	(122,506)	(108,326)
Added value	55,932	51,080

Personnel costs	(36,031)	(31,842)
Gross operating margin	19,901	19,238

Amortisation, depreciation and provisions	(5,932)	(4,884)
Operating result	13,969	14,354

Net financial income (expenses)	(2,745)	(1,974)
Pre-tax result	11,224	12,380

Tax on income for the period	(6,152)	(6,294)
Net results of continuing operations	5,072	6,086

Net result of discontinued operations[1]	545	758

Net result for the period	5,617	6,844

Minority interest for the period	(753)	(750)
Group result for the period	4,864	6,094

Group per share result for the period	0.27	0.34

€/000	As at 31.12.2006	As at 31.12.2005

Tangible assets	38,140	28,196
Intangible assets	13,405	10,982
Non current financial assets	1,182	124
Other non current assets	3,361	3,591
Fixed assets A	56,088	42,893

Inventories	45,310	41,091
Trade receivables	59,151	56,151
Financial assets and other current assets	9,648	4,830
Short term operating assets B	114,109	102,072
Trade payables	(39,081)	(30,780)
Financial liabilities and other current liabilities	(18,350)	(14,083)
Short term operating liabilities C	(57,431)	(44,863)
Net working capital D=B+C	56,678	57,209

Severance indemnity provision E	(5,191)	(4,514)
Financial Liabilities and other non current liabilities F	(3,433)	(3,540)
Total G=E+F	(8,624)	(8,054)

Net asset held for sale H	-	3,237

Net invested capital A+D+G+H	104,142	95,285

Group net equity I	60,677	55,944
Minority net equity L	3,300	5,013
Total net equity M=I+L	63,977	60,957

Medium and long-term borrowing N	10,507	18,208
Short term borrowing	36,754	24,042
Current financial assets	(10)	(18)
Financial assets held for trading	87	(21)
Cash and equivalents	(7,173)	(7,883)
Net short-term borrowing O	29,658	16,120
Total net borrowing P=N+O	40,165	34,328
Own funds and borrowed funds M+P	104,142	95,285

[1] The “Net results of discontinued operations” includes the economic results of Duralamp International S.p.A. until June 30, 2006. On this date Dura Lamp S.p.A. (controlled by Targetti Sankey S.p.A. at 51%) ceded 2% of Duralamp International S.p.A.. Consequently, Duralamp International S.p.A. has been 49% owned since June 30 2006, and from this time is valued according to the net equity method.