Central European distributor Sarantis hit by economic downturn

By Simon Pitman

- Last updated on GMT

Related tags Estée lauder

Leading Central European cosmetics and fragrance distuributor Sarantis has seen its sales for the first nine months of the year fall nearly 17 per cent as tough economic conditions bite hard.

The Greece-based company, which counts Estee Lauder amongst its customers, said sales for the nine month period fell from €190.70m to €158.50m, representing a decline of 16.89 per cent.

The company said that the reduction in sales was attributable to reduced consumer spending in the markets it represents, while the continued macroeconomic conditions and negative currency translations had further exacerbated the situation.

The company, which distributes fragrances, cosmetics and household products in Greece, Romania, Bulgaria and Moldavia said that profits were hit by the sales downturn, with EBITDA falling by 35.9 per cent to €29.34m.

Own brands prop up results

Profitability was largely hit by the negative currency translations, but the company did point out that this was partly offset by the fact that its own brands portfolio fared better.

Likewise, the performance of its own brands portfolio was further boosted by the fact that the price of raw materials have largely declined during the nine months period.

Solid cash flow was also achieved through cost savings initiatives, which the company said had already been implemented in the previous financial year.

Breaking the sales figure down into the company’s two respective business divisions – household and beauty – the results for the beauty operations were hardest hit by the economic conditions.

Beauty hardest hit

During the nine month period sales for fragrances and beauty fell by 17.87 per cent to €68.03m, compared to €82.56m in the previous period last year. In comparison sales for the household division fell by 14.54 per cent during the period.

Sales of own brand products, which cover both beauty and household products, fell by 15.3 per cent during the nine month period to €115.91m, but the company pointed out that this represented an increase from 71.76 per cent to 73.13 per cent of total turnover.

Looking ahead to the full year 2009, the company believes that the tough economic conditions will persist in the fourth quarter, but that the weakness will be less than that experienced in the first nine months of the year.

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