Leading knitted fabrics and garments manufacturer Nextil, has posted a net operating profit (EBIT) of almost EUR 1 million (0.918 million) in 2021, compared with an EUR 22 million loss in 2020.

EBITDA was EUR 4.7 million compared with negative EBITDA of EUR 8.9 million recorded in 2020, representing growth of EUR 13.7 million. This improvement was possible despite the exponential rise in raw material, energy and transport prices, which had a negative impact of nearly EUR 1 million. In fact, discounting non-recurring costs, EBITDA would have reached EUR 5.4 million, the Barcelona headquartered company says.

The measures implemented at the company during the last year, both operational and strategic, and the focus on higher value-added segments, have enabled a substantial recovery in profitability. Thus, the EBITDA/sales margin was 7.4%, a figure that already exceeds pre-pandemic levels (3.2% in fiscal 2019) and well above the negative percentage of 2020 (-15.3%).

Turnover reached EUR 63.4 million, 8% higher than in the previous fiscal year despite continued disruptions in the supply chain. In fact, sales should have been higher in the Fabrics division, as the order backlog increased by 180% compared to 2019. However, continuous disruptions in the yarn supply chain in Europe and the Americas forced intermittent plant closures, making it impossible to meet demand.

The growth in sales, as well as price increases in raw materials and energy, increased funding requirements by EUR 4.3 million compared to 2020. Thus, net financial debt increased by EUR 10.6 million to EUR 60.1 million as of December 2021.

The Garment Unit consolidated its positive performance with an EBITDA of EUR 6.7 million, more than double the previous year, and sales growth of 23% to EUR 38.6 million.  

The Fabrics Unit was particularly affected by disruptions in the supply chain due to yarn shortages in the market, which made it difficult to meet the order backlog, even though it had recovered substantially with respect to 2020. Thus, sales in this unit fell by 8% to EUR 24.8 million, and EBITDA was EUR -2 million, although, discounting non-recurring costs, it would have been in line with the result of EUR -0.5 million in the previous year.

Measures to consolidate growth

During 2021, Nextil reorganized its commercial activity into five divisions: Luxury, Technical Sport, Intimate/Shapewear, Swimwear and Medical.

“Due to the particularities of each segment, it is necessary to adapt the group's global offer to each category. This reorganization will enable us to promote cross-selling of products, fabrics, seamless and garments, thus increasing our penetration in existing customers,” the company said in its statement.

“In addition, at the end of October, other necessary organizational and commercial measures were implemented to pass on the impact of the increase in raw materials and energy costs to customers. We expect to mitigate this impact on the company's results during the first quarter of 2022.”

Founded in 1954 in El Masnou (Barcelona), Nextil Group has four factories in Spain, Portugal and the United States. With a commercial presence on five continents, Nextil manufactures fabrics and garments for the world's leading fashion companies in the fashion, swimwear, athleisure and lingerie sectors.

www.nextil.com