European Lingerie Group AB (ELG) has published unaudited First Quarter 2021 Report (1 January – 31 March 2021), including condensed interim consolidated financial statements.

“The first quarter of 2021 continued to be a challenging quarter for the Company. Most of our main markets were still hit by COVID-19 lockdowns and traditional shopping was restricted throughout the whole Europe. We are pleased to acknowledge that the management of the group companies is responding quickly to the new reality and keeps managing the situation accordingly. Irrespective of the COVID-19 imposed challenges, the Company has shown sufficient financial stability throughout the reporting quarter and continues to deliver good results,” commented Mr. Indrek Rahumaa, ELG’s principal shareholder and member of the Board of Directors.

As a result of the global continuing pandemic, revenue in the first quarter 2021 for ELG was 21.2% lower than in the first quarter 2020. The textile segment performed almost at the level of previous year, but the lingerie segment still suffered due to continuous severe restrictions in most of the countries, which directly affected ELG’s customers – retailers.

Despite the difficult quarter for the lingerie segment, European governments have recently announced gradual release of the lockdown restrictions, including re-opening of stores, which will inevitably lead to the recovering of the turnover in the coming months and moving closer to pre-COVID level of business. 

The group’s sales amounted to EUR 13,366 thousand in Q1 2021. In Q1 2021, the decrease in sales was mainly a result of COVID-19 outbreak and continued closure of stores in majority of the group’s main markets. In addition, due to imposed restrictions on travel and shopping, the group made the decision not to introduce Felina swimwear collection in 2021 as well as reduced its lingerie collection for Spring/Summer 2021. As a result, revenue in Q1 2021 was lower as well than in the same period last year. These were temporary decisions in order to focus on the best-selling products and save on working capital in the short-term.

The swimwear collection will be reinstated in 2022 and the lingerie collection enlarged again. In the reporting quarter, the textiles segment was able to achieve almost the same level of revenue as in Q1 2020 due to much lower or no lockdown restrictions imposed in the main sales markets of the segment.

Profitability margins in Q1 2021 were below previous year which is explained by COVID-19 outbreak and shortfall in revenue which made it difficult to cover part of the fixed costs. The drop in profitability though was partly outweigh by state subsidies received for the down-time payments to employees and working capital needs and strict cost control during the lock-down periods. 

Normalised EBITDA in Q1 2021 amounted to a loss of EUR 331 thousand and decreased by 168.7% compared to Q1 2020. Normalised EBITDA margin in Q1 2021 and Q1 2020 was -2.5% and 2.8% respectively. Normalised net profit in Q1 2021 amounted to a loss of EUR 2,318 thousand compared to a loss of EUR 1,364 thousand in Q1 2020. Decrease in net profit is as well explained by the reasons described above. Normalised net profit margin in Q1 2021 and Q1 2020 was -17.3% and -8.0% respectively.

European Lingerie Group AB First Quarter Report of 2021 is available here.