silvano fashion group 4q 2008 highlights www.silvanofashion.com

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Silvano Fashion Group 4Q 2008 Highlights www.silvanofashion.com Slide 2 2 Highlights Vertically integrated fashion group (design, manufacturing, retail) focusing on lingerie womenswear in Baltics, Russia and CIS with a strong focus on development of own retail capacity Operating top lingerie brands in Russia, Ukraine and Belarus, including Milavitsa one of the most recognized brands in this region In-house design supported by experienced foreign designers Own production facilities in the region allowing for cost efficient and flexible production supply Quickly growing retail capacity benefiting from accelerating retail space development in Russia and Ukraine Favourable trends in consumption habits in major target markets shift from open-air shopping to branded stores, strong GDP and disposable income growth Large potential customer base 252 million population in target markets IMPLEMENTATION OF PROVED BUSINESS MODEL OF INTEGRATED FASHION GROUP Slide 3 3 Competitive Advantages Well-recognized and reputable trademarks - the trademarks of Milavitsa and Lauma Lingerie are among the best-known lingerie brands in Russia and CIS countries. The PTA trademark products are highly regarded in the Baltic States and Scandinavia. Flexible and vertically integrated Group structure with quickly growing retail capacity - the vertical integration of the Group allows it to capture the overwhelming share of value from product development to retail. Strong management team - the combined management of the Group is comprised of highly qualified and professional executives having long-term experience in womens apparel and lingerie industry in different markets. Flexibility in manufacturing and logistics - the proximity of the Groups manufacturing capacity to the target markets serves as a material competitive advantage as compared to many competitors. Access to affordable labour resources - a large share of the output of the Group is manufactured in Belarusian regions. Outsourcing is organized and controlled by Milavitsa. Committed principal shareholder - the Principal Shareholder is actively involved in the management of the Company and contributes its investment and management expertise towards the successful fulfilment of the strategic objectives of the Group. Slide 4 4 Apparel Business model existing structure KT Oy Finland Prekyba Lithuania Vision Latvia PTA Ukraine Klementi Estonia PTA Grupp Estonia Lingerie Linret Russia Splendo Poland Lauma Lingerie Latvia TK Milavitsa Belarus STK Milavitsa Russia Gimil Belarus Milavitsa Belarus Linret LT Lithuania ProductionRetail Wholesale PTA Ukraine Linret Russia Junona Belarus FSL France Holding Slide 5 Markets & Brands Slide 6 6 Revenue Breakdown Data as of 31.12.2008 Please note that the wholesales/retail split includes only direct retail sales of Oblicie, PTA, Splendo, Lauma, Amadea and Milavitsa stores Lingerie 83,7% Wholesales 66,5% of sales in 2008 (79,3% of lingerie) Retail 17,3% of sales in 2008 (20,7% of lingerie) Wholesales 1,0% of sales in 2008 (9,0% of clothing) Retail 10,8% of sales in 2008 (91,0% of clothing) 4,4% of sales in 2008 Milavitsa 33 Stores Oblicie 37 Stores PTA 37 Stores Branded retail outlets Apparel 11,9%Subcontracting 4,4% Lauma, Amadea 20 Stores Top Wholesales Distributors: STK Milavitsa (Russia) TK Milavitsa (Belarus) TK Milavitsa (Ukraine) 150+ Milavitsa stores owned and operated by independent distributors Top Wholesales Distributors: Anttila (Finland) Apranga (Lithuania) Tallinna Kaubamaja (Estonia) Splendo 7 Stores 98,4% in wholesale in 2008 1,6% in wholesale in 2008 Slide 7 777 Wholesales Distribution Lingerie 98,4% in wholesales in 2008 Apparel 1,6% in wholesales in 2008 3 Top Wholesales Distributors in 2008: STK Milavitsa (Russia) TK Milavitsa (Belarus) TK Milavitsa (Ukraine) 3 Top Wholesales Distributors in 2008: Anttila (Finland) Apranga (Lithuania) Tallinna Kaubamaja (Estonia) Major Markets Slide 8 8 Sales by regions 20082007 Slide 9 9 Sales by Regions (Apparel vs Lingerie) Slide 10 10 Product Brand Portfolio Milavitsa Belarus Lauma Lingerie Latvia PTA Estonia Linret Russia/Lithuania Splendo Poland Slide 11 11 Lingerie Sales by Brands 20082007 Slide 12 Operations Slide 13 13 Retail Network as of 31.12.2008 Poland Belarus Baltics Russia 28 shops 7 shops 13 shops 34 shops 4 shops 150+ MILAVITSA BRANDED OUTLETS OWNED AND OPERATED BY DISTRIBUTORS FRANCHISE PROGRAM IS BEING LAUNCHED WITH QUICKLY GROWING OUTLET NETWORK THE IMPORTANCE OF RETAIL CHANNEL WILL GROW 60 shopes opened/acquired in 2007 36 new stores opened in 2008 17 shops closed in 2008 134 shops in operations Delays in Shopping Center openings Retail development put on hold in Q4 5 directly operated Milavitsa stores in Russia (new and rebranded) 6 shops 1 shop Ukraine 1 shop 16 shops 18 shops 1 shop 5 shops Slide 14 14 Retail Brand Portfolio TK Milavitsa Belarus Lauma Lingerie Latvia PTA Baltics/Ukraine Linret Russia/Lithuania Splendo Poland Slide 15 15 Production Model OWN PRODUCTION FACILITIES ALLOW FOR FASTER RESPONSE TO CHANGING CUSTOMER DEMAND Apparel factory in Tallin, Estonia Lingerie factory in Liepaja, Latvia Lingerie factory in Minsk, Belarus 16 sourcing partners LINGERIE APPAREL WHILE MAINTAINING OWN PRODUCTION FACILITIES SHARE OF OUTSOURCING WILL BE INCREASING Outsourced 69% Own production 31% Outsourced 66% Own production 34% 2 sourcing partners in Ukraine Slide 16 16 Personnel 20082007 Slide 17 Financials & Business Development Slide 18 18 2008 Key Performance Indicators 2008 BUSINESS OVERVIEW 2008*2007Change SalesEUR mill.108,398,69,9% EBITDAEUR mill.11,417,3-34,2% EBITDA margin%10,5%17,5% - EBITEUR mill.8,314,8-44,3% EBIT margin%7,6%15,0% - EBTEUR mill.4,515,8-71,5% EBT margin%4,2%16,0% - Net profitEUR mill.-1,19,9-111,1% Net margin%-1,0%10,0% - Non-current assetsEUR mill.22,119,612,8% Current assetsEUR mill.55,150,010,2% EquityEUR mill.50,155,6-9,9% Non-current liabilitiesEUR mill.1,20,3300,0% Current liabilitiesEUR mill.25,913,789,1% Total assetsEUR mill.77,269,610,9% Free cash flowEUR mill.-12,0-10,415,4% Capital expenditureEUR mill.6,09,6-37,5% Employees 3 9013 5818,9% Number of stores 13411516,5% Number of stores lingerie 978514,1% Number of stores apparel 373023,3% Sales space1,000 m 2 14,512,516,0% Sales space lingerie 7,76,714,9% Sales space apparel 6,85,817,2% * Normalized results by the adjustments described on slide 21 Slide 19 19 Q4 and 2008 Financial Performance `000 Q4 2008Q4 2007change %2008*2007change % Sales revenue18,67323,348-20,0%108,31598,580+9,9% COGS9,32712,494-25,3%60,77855,653+9,2% Gross profit9,34610,854-13,9%47,53742,927+10,7% Gross profit margin50,1%46,5%+3,6 p.p.43,9%43,5%+0,4 p.p. Distribution costs6,2334,705+32,5%21,57713,674+57,8% Administrative expenses3,8212,892+32,1%14,05910,900+29,0% Other operating income1,2921,425-9,3%2,2101,046+111,3% Other operating expenses2,4561,425+72,4%5,8454,563+28,1% EBITDA-9333,903-123,9%11,37917,288-34,2% EBITDA margin-5,0%16,7%-21,7 p.p.10,5%17,5%-7,0 p.p. EBIT-1,8723,257-157.5%8,26614,836-44,3% EBIT margin-10,0%13,9%-23,9 p.p.7,6%15,0%-7,4 p.p. Corporate income tax8421,314-35,9%5,6105,940-5,6% Net profit-6,0492,351-357,3%-1,0959,880-111,1% Net profit margin-32,4%10,1%-42,5 p.p.-1,0%10,0%-11,0 p.p. Consolidated P&L * Normalized results by the adjustments described on slide 21 Slide 20 20 2008 Financial Performance EUR 108.3 million consolidated net sales, 9.8% increase compared to 2007 Significant growth of retail sales to reach 28.1% from total sales, compared to 18.1% in 2007 11.9% apparel sales proportion in total sales up from 10.1% in 2007 Gross margin improved from 43.5% in 2007 to 43.9% in 2008 The margin improvement was mainly driven by the growth in retail sales One-off write-offs in Q4 2008 amounted to EUR 5.3 million. Normalized EBITDA EUR 11.4 million excluding one-offs EUR 3.9 million net loss from foreign exchange (EUR 0.3 million gain in 2007) partially generated by intercompany trading and borrowing balances within the Group denominated in EUR currency Average BYR/EUR rate in 2008 was 3134,80 as compared to 2937,06 in 2007 Average RUR/EUR rate in 2008 was 36,45 as compared to 35,03 in 2007 EUR 7.6 million total net loss of the Group 163.6% decline compared to 2007 net margin equalled -7.0% (12.1% in 2007) Negative 17.3% ROE Down from 31.5% in 2007 ROA was -10.4% Down from 19.7% in 2007 Deterioration of ROA partially caused by increase in working capital, mainly increase in inventories and trade accounts receivable Slide 21 One-off expenses in 2008 Russian retail restructuring In Q4 2008 it management decided that all PTA stores in Russia and selected Oblicie stores should be closed in 1H 2009 based on performance up to date and due to deteriorating market situation. A loss related to Russian retail operations restructuring was estimated in the approximate amount of EUR 2.1 million and was recognized in other operating expenses in the amount of EUR 1.9 million and EUR 0.2 million in COGS Splendo disposal In Q4 the Group negotiated a share purchase agreement for the sale of all its shares (90% of the share capital) in Splendo Polska Sp. z o.o., a Polish retail subsidiary. Transaction was expected to generate a loss of approximately EUR 1.2 million taking into account the Groups total investment in Splendo. The amount was fully provided as other operating expenses in 2008 Goodwill impaired Goodwill in the amount of EUR 2.1 million was assessed to be impairied and write-off recorded in other operating expenses 21 Slide 22 22 Balance Sheet EUR 77.2 million consolidated assets at 31 December 2008 Up from EUR 69.6 million at 31 December 2007 EUR 0.6 million increase in trade receivables in 2008. EUR 6.2 million increase in inventory to reach EUR 27.8 million at 31/12/2008 The growth in inventory was driven primarily by slowdown in customer consumption 4Q 2008 and also due to the expansion of the retail network Property, plant and intang