Nextil reduced losses by 39.3% in the first half of the year
Nextil, one of the largest groups in the European textile industry, owner of brands such as Treiss, EFA, Ritex, SICI93, Playvest, Anna Llop or Dogi, obtained in the first half of the year an EBITDA of 2.9 million euros, 4.9 million more than in the same period last year, reflecting the upward trend in profitability. The positive evolution of the business has allowed losses to be reduced by 39.3%, recording a profit before tax (BAI) of -2.6 million euros, compared to a profit of -4.3 million in the same period in 2018, representing an improvement of 1.7 million euros; all this despite the impact of the amortization of intangible assets amounting to 1.2 million euros.
Therefore, all business variables improved due to cost rationalisation measures, the divestment of the stock service line in 2018, the incorporation of SICI93 in the perimeter and the commercial strategy aimed at proposing the value of the fabric up to the garment.
Concerning net financial debt, it grew by 11 million euros, up to 51.6 million, due to bank loans to support the group's latest acquisitions.
Results by business units
The fabric business unit recorded a turnover of 25.5 million euros, 12.6% less than in the first half of 2018. The turnover in fabric was reduced fundamentally by the fall in sales in the United States due to a temporary drop in consumption, added to the sudden rise in raw material prices in that country, which has yet to be passed on to customers.
On the other hand, to alleviate this situation, the company has signed a supply agreement with the main North American yarn manufacturer to keep its tariffs stable in 2020.
These measures, together with the optimisation and margin selection plans being carried out at EFA (Elastic Fabrics of America) will allow the results to be recovered.
The prospects for the future in this business unit are very positive: on the one hand, the incorporation of fullpackage into the business, which allows us to offer integrated solutions from the fabric to the garment and, at the same time, optimise the production chain; and, on the other, the growth of the ecological production segment through the exclusive Greendyes technique.
With respect to the garment business unit, turnover grew by 279% to 26.7 million. Revenues increased by 28.6% in TREISS, 23% in SICI93 and 26.6% in Playvest compared to the first half of 2018, reflecting sustained growth in all companies.
The annual EBITDA figure was positive by 4.5 million euros, which represents an improvement of 4.8 million over the figure for the previous year in the same period.
The new projects in the fullpackage sector, as well as the expansion of the global offer in the activewear sector and the advance in the eco-sustainable trend will allow good results in turnover and profitability to be maintained in this business unit in 2019.
The acquisition strategy is enabling the creation of a large textile group, with a more diversified business and a fullpackage service that allows the market to offer integrated solutions with greater added value, from the fabric to the garment. This new market commitment, together with the advances in the ecological segment through the exclusive Greendyes technique, augurs important growth in terms of turnover and margin.
Moreover, after the end of the semester, Nextil has announced that it will grant licenses for the use of the Greendyes technique to international brands in Europe, the United States and Asia, to which it will provide with the consumables necessary to develop this process.
Likewise, the company has announced that it is negotiating exclusively the acquisition of a textile company in the US with a turnover of 68 million dollars and an EBITDA of 7.1 million.
In addition, the group will issue convertible bonds, for a nominal amount of 1.49 million euros, which will be fully subscribed by two funds managed by Inveready Asset Management.
About Nextil Group
Nextil Group is the first textile industrial group in Europe. Founded in 1954 in El Masnou (Barcelona), it 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, athletics and lingerie sectors.