Inditex, world's largest textile company and owner of brands such as Zara and Massimo Dutti, has presented its results in 2017. The Spanish company billeded 8.7% more, until reaching sales of 25,336,000,000 euros. Net profits were 3.368 billion euros, 6.7% higher. Both figures are a business improvement in an exercise in which direct competitors have receded in sales. However, it is a slowing of growth, compared to figures of previous years, as sales grew 11.5% and 15.5% in previous two exercises.More information
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The strong fall in bag (7% in one day) that company suffered a few days ago and pointed towards a rise in slower results this year. First thing in morning, confirmation of accounts also did not sit well with action of Inditex, which has fallen by 5%. However, it has been recovering and at noon was practically at same price on Tuesday, at 24.2 euros. And at close, it has remounted with force: it ended with a rise of 3.8%.
The exercise, as noted by Pablo Isla, president of company, has been marked by " tremendous volatility of currencies" in many markets and "an abnormally warm Autumn", which has influenced entire textile sector. "And in this context we have generated growth," he said. At results press conference held in Arteixo, he recalled that y accumulated a business growth of 59% since 2012. "Almost 10 billion more. Sustained growth while we were preparing company for future, "he said. In case of Spain, it has pointed out that sales have risen by 4%.Click on photo
The company, in its annual results (ranging from February 1, 2017 to January 31, 2018) reveals one of its best-kept secrets in recent years and includes for first time direct references to its volume of business over Internet. "Online sales grew 41% to 10% of group's net sales in 2017. The online sale accounts for 12% of total in markets with online sales. The company has Internet sales in 49 markets worldwide, after opening just today in last two: Australia and New Zealand.
That is to say: The company, which until now had never revealed figures of its virtual business, indicates that sales by that channel contribute to its business about 2.53 billion euros per year and that in a single year has climbed more than 40%. Making separation and taking into account what online business grows, it can be concluded that sales of physical stores rose 6% last year.The dividend will rise by 10.3%
The Board of Directors of Inditex will propose to General meeting that will be held in July payment of a dividend of 0.75 euros per share, a 10.3% higher than previous year. Of this amount, 0.375 euros per share will be paid on 2 May 2018 and anor 0.375 euros on November 2, 2018. Thus, it would deal in total 2.337 billion euros among shareholders. This means that, as main shareholder, with 59.29% of shares (a package of 1.848 billion of titles), founder Amancio Ortega will receive this year 1.386 billion euros in dividends.
Pablo Isla had resisted until now to offer data of electronic commerce, because it pointed out that its two businesses, that of stores and that of sales by Internet, are so integrated that y could not separate figures of sales. However, this Wednesday, Isla, at results press conference held in Arteixo, has explained that y have decided to give this year data of Internet sale "because this exercise was right time, to relevance it is having".
In face of question of wher Internet sales are subject to more pressure on expenses (for delivery services, etc.) or for profitability, Isla has pointed out that "online sales do not dilute to benefit in any way" and that re is no impact or penalty on margins.Repeat bonus for template
At end of year, staff of group consisted of 171,839 employees, a total of 9,389 workers rar than at end of 2016. Of se, about 1,900 jobs have been created in Spain.
The company launched in 2014 a special bonus for its workers, which was linked to rise of its profits. This year bag to be dealt will be 42 million euros, just like last year, after an extra contribution of group. "This plan divides 10% of net profit increase, so this year amount to be distributed would be 21 million euros, which group will also increase in anor 21 million", explains company.
This remuneration is to be distributed between approximately 88,000 people with more than two years of seniority in company on March 31, 2018, which is an extra average pay of more or less 477 euros. The company recalls that, apart from this bonus, re are or variable amounts in salaries, and that incentives and premiums destine anor 520 million a year.Store openings and closures
"During year, Inditex maintained an investment of 1.8 billion euros destined to constant impulse and technological updating of its integrated model of stores and online", he explains in his statement Inditex. Isla has pointed after that figure, about 600 million have been destined for investment in Spain, both stores and logistics and technology.
Isla has valued results and has pointed out that y are result of work of six years. "In 2012 we started working to prepare company for future," he said. He has ensured that that year y launched technologies such as RFID and plan to reorganize stores, with larger premises that absorb several of small existing ones.
As for physical trade, company ends exercise with 7,475 stores in 96 different markets. In fact, it has made greatest number of inaugurations since 2012, but it has been accompanied by closure of many or stores that has been accumulating in larger premises for years. Thus, net balance of openings is reduced. "Inditex has been very active in optimization of stores during year (524 openings, 341 absorptions, 144 extensions and 122 reforms). The net openings in 2017 were located in 183, "explains company.
In its communiqué sent to stock exchange regulator, Inditex recalls that in square meters it continues to grow apace: "The total area of sale stood at 4,739,427 square meters at end of year", which represents 7% more than in 2016. In last six years group has transformed 80% of its commercial area with 2,994 new openings, 2,148 reforms and extensions and 1,046 absorptions of older units, he points out.Zara, jewel of crown
By chains, one that increased its sales was Uterqüe, smallest of group, that contributes to business 97 million of billing, 17% more. In growth, it is followed by Pull Bear and Oysho, with 12% rises (up to 1.747 billion and 570 million, respectively). However, jewel of crown is still, by far, Zara: Its sales grow 8% in year, until reaching 16.62 billion euros.
The operating income (EBITDA) of 2017 exercise was 5.277 billion euros, 4% more. The operating (EBIT), in 4.314 billion, 7% above previous year. And same grew in gross margin, up to 14.26 billion, at 56.3% of sales (57% in 2016).
In face of 2018, company expects to invest 1.5 billion euros, to allocate to reforms, technology and logistics. They expect to open between 350 and 400 stores and will continue to absorb stores in larger ones. "We estimate around 200 store takeovers," advanced Isla.The president, Pablo Isla, won 10,690,000, 3% more
The President and CEO of Inditex, Pablo Isla, received a remuneration last year of 10,690,000 euros, i.e. 3% more than previous year, when y were 10,372,000, between fixed salary, variable and shares. In particular, of this amount, 6,570,000 euros were cash payments (3,250,000 salary, 100,000 euros fixed salary and 3,220,000 variable). The remainder, 4,120,000 euros, is value of shares accrued that year.
The total remuneration of Board of Directors of Inditex was 12,620,000 euros, compared to 12,160,000 of previous year. Apart from Isla, or directors of Inditex (including Amancio Ortega) receive for participating in this business body between 100,000 and 300,000 euros per year of retribution.