The Industrial Margin during the last quarter of 2012 was equal to 31.6% on total net sales, down from 33.3% reported for the fourth quarter of 2011. The industrial margin was negatively affected by the different sales mix, with consumers preferring lower-priced products, as well as the labor cost that has increased in the foreign plants in particular. Such effects were partially offset by a more efficient manufacturing process.

During the fourth quarter of 2012, the incidence of selling expenses (transportation, commissions to agents and advertising) on total net sales passed from 18.6% reported one year ago to 18.1% in the last quarter of 2012. More specifically, the incidence of transportation costs on net sales passed from 9.9% in the fourth quarter of 2011 to 10.8% in fourth quarter of 2012, due to relatively more shipments towards North America and more sales of medium/low-end products (Private Label); the incidence of commissions to agents passed from 2.2% to 1.7% in fourth quarter 2012. The percentage of advertising costs on total net sales decreased by 100 basis points, passing from 6.6% in 2011 fourth quarter to 5.6% in the last quarter of 2012.

Other Selling, General & Administrative expenses decreased over 2011 fourth quarter both as percentage on total net sales (from 22.6% in fourth quarter 2011 to 19.0% in the last quarter of 2012) and in Euro terms (a €5.2 million decrease, from €29.3 million reported one year ago to €24.1 million in the last quarter of 2012) thanks in particular to the rationalization measures implemented at the Group level.

For the reasons highlighted above, during the fourth quarter of 2012 the Group reported a negative EBITDA of €2.9 million, as compared to a negative EBITDA of €6.2 million for the same comparable period of 2011, and an operating loss of €7.0 million, versus a negative EBIT of €10.3 million reported one year ago.

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