Corporate | 8 April 2003 15:19

Ludwig Beck am Rathauseck english

Consumer buying restraint leading to a drop in turnover and operating results Corporate-news announcement sent by DGAP. The sender is solely responsible for the contents of this announcement. ——————————————————————————– Consumer buying restraint and negative economic environment affect Ludwig Beck as well, leading to a drop in turnover and operating results. Presentation of the annual results and consolidated financial statement for fiscal year 2002. Munich, 8 April 2003. The LUDWIG BECK Group (ISIN DE 0005199905) saw its turnover and operating results drop in the course of the most crisis-ridden year yet experienced by German’s retail sector in the post-war period, achieving a gross consolidated turnover of EUR 95.1 million as opposed to the 2001 figure of EUR 98 million. In spite of cost adjustment measures already implemented in the first half-year in response to the lack of any economic upswing, the result from ordinary activities fell to EUR 0.4 million from the previous year’s figure of EUR 3.8 million. The decline in earnings means that for the fiscal year 2002 there was no net profit and there will be no dividend payout (previous year: EUR 0.87 per individual share certificate). Fiscal year 2002 was marked by an unprecedented economic environment: the German economy in effect remained in a state of stagnation, and private consumer spending has hit a critically low level. Private households spent 0.5 per cent less on consumer goods. The principal factors behind the economic crisis lie in the consumer buying restraint that has prevailed for two years now, and in the increased propensity to save. With sales 3.5 per cent down on the those of the previous year, the German retail sector experienced its worst year of crisis in the post-war period, and the textile trade saw sales drop by no less than 8 per cent. The Ludwig Beck Group’s turnover was 3 per cent down on the previous year’s figure, and virtually all product areas were negatively affected. An exception in this respect was the restructured in-trend Hautnah wellness and beauty department which, after the reopening, increased its sales significantly. Besides the generally prevailing economic slump, additional turnover losses were incurred as result of renovation and extension activities at LUDWIG BECK’s flagship store at the Marienplatz location in Munich, necessitating the temporary closure of up to five per cent of floor space there over a period of six months. In contrast, the branch operations at the PEP Perlacher Shopping Centre and in the City Galerie in Augsburg showed a positive trend. The consolidated turnover includes for the first time the figures achieved by Ludwig Beck Vertriebs GmbH, which commenced operative business in late February 2002, with EUR 4.6 million (2001: EUR 0.0), and for the last time the gross turnover achieved by ludwigbeck-online GmbH with EUR 0.3 million (2001: 0.4 million). The online subsidiary’s operations were closed down on 30 September 2002 and the company liquidated in view of its unsatisfactory development. At Group level an operating result (EBIT) of EUR 2.5 million was achieved as against the previous year’s figure of EUR 5.2 million. The consolidated surplus comes to EUR 0.4 million (previous year: EUR 3.8 million). Ludwig Beck AG already responded to the unsatisfactory income situation in the first quarter by undertaking cost adjustment measures, with particular focus on the area of personnel. These activities involved non-recurring expenditure totalling EUR 1 million, and the number of employees was cut from the 2001 figure of 626 to the level of 563 in 2002. In particular the personnel adjustments will not have an effective impact until fiscal year 2003. At Group level 38 per cent as compared with the previous year’s 41.6 per cent, Ludwig Beck’s equity ratio remains at a high level. This year is again seeing Germany’s textile retail sector facing difficult challenges. The economic environment has not yet shown any signs of brightening up, the unemployment rate remains extremely high, and the mood among consumers has reached a new low point. The economic research institutes are adjusting their forecasts further downwards, and the retail sector is attempting to turn the tide by way of price campaigns and discount battles. Ludwig Beck will certainly not be joining this trend, and instead will continue to focus on the customers’ core needs and requirements, namely a pleasant shopping experience, high product quality, better service, and expert and friendly advice. The success of the new Hautnah concept is proof of these strengths to be found at Ludwig Beck. With its excellent location in the city centre, Ludwig Beck will benefit hugely from the extended Saturday business hours currently being striven for, and the ongoing examination of strategic orientation and an even more well-devised focussing on the relevant target groups will ensure the further strengthening of the Group. Against the background of what is without a doubt a tough situation in the retail sector, Ludwig Beck’s own solid economic situation will ensure a stable turnover trend, with continued orientation of the cost structure to continuingly difficult economic framework conditions. Contact: Lothar Fiss (Investor Relations) Tel. +49(0)89 23691-663, Fax +49(0)89 23691-600 Key Figures Ludwig Beck Group 2002 2001 EUR million Sales gross 95,1 98,0 Sales 82,0 84,5 EBIT 2,5 5,2 Result from ordinary activity 0,4 3,8 Consolidated net income 0,4 3,8 DVFA/SG-result p. share EUR 0,06 0,78 end of message, (c)DGAP 08.04.2003 ——————————————————————————– WKN: 519990; ISIN: DE0005199905; Index: Listed: Amtlicher Markt in Frankfurt (Prime Standard) und München; Freiverkehr in Berlin-Bremen, Düsseldorf, Hamburg und Stuttgart 081519 Apr 03