On 15th September 2003, the Supervisory Board of DAMARTEX examined the annual accounts of the company and of its subsidiaries (Financial year 1st July – 30th June).

Activity

Consolidated revenue, excluding V.A.T., amounts to 488.1 million euros, being an increase of 6 % over prior year. On a like for like exchange rate and activity basis, this represents an increase of 9.2 %.
Sales during the 2002 Autumn/Winter season were in line with targets. Those of the Spring/Summer season exceeded forecasts, with an increase of 15.8 % on a like for like exchange rate and activity basis.

In France, the increase recorded on the Spring/Summer season (+ 21.8 %) reflects our female clients being more receptive to our extended, attractive collection integrating innovative DAMART wellbeing products.

Belgium and Switzerland, achieving increases of 15 % and 41 % respectively over the financial year, have confirmed, during the Spring/Summer season, the encouraging performance achieved during the Autumn/Winter season.

Great Britain and Japan are penalised by changes in the value of the euro.
Annual growth on a like for like exchange rate basis is 2.9 % in Great Britain and 3% in Japan.

Profits

Operating profit / (loss) from ordinary activities has increased from a loss of – 0.1 to a profit of + 12.2 million euros, representing 2.5 % of revenue, thanks to better sales effectiveness and productivity gains.
Growth has been strongest in France and in Switzerland. Losses in Japan are greatly reduced and Great Britain is at break-even thanks to refound profitability during the Spring/summer season.

Net profit / (loss) before tax, less net financial expenses amounts to a profit of 10.4 million euros versus a loss of 3.2 million euros for the prior year.
Net profit / (loss) amounts to a profit of 2.2 million euros versus a loss of 2.8 million euros for the prior financial year (pro forma). This includes increased taxes and exceptional charges such as those committed for restructuring the British stores network.

Financial structure

The reduction in working capital requirements, notably for stocks, added to free cash flow, have provided for an improvement in the financial situation, translating into a net cash surplus of 2.5 million euros.

Outlook

The past financial year has been characterised by a confirmation of growth and a return to profitability in line with expectations.
For the current financial year, DAMARTEX intends using the achieved improvements as a basis for ensuring ongoing increases in revenue and profits.

16th September 2003

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