Ad-hoc-Announcement Final Results Wolford AG: Sales and earnings for the 2007/08 fiscal year Ad hoc announcement transmitted by DGAP - a company of EquityStory AG. The issuer is solely responsible for the content of this announcement. ------------------------------------------------------------------------------ Press release Sales and earnings for the 2007/08 fiscal year Wolford posts record sales and significant improvement in earnings - Sales up 11.3 percent to the record level of EUR 157.7 million - Disproportionately high earnings increase (EBIT) of 47.5 percent, to EUR 11.3 million - Sales growth in all major product groups, markets and strategic distribution channels - Wolford boutiques boost sales by 15.9 percent Vienna/Bregenz, July 25, 2008 'With record sales of EUR 157.7 million and a disproportionately high EBIT increase, we have once again successfully continued our growth path in the past fiscal year', says Holger Dahmen, CEO of Wolford AG in positively reviewing the company’s performance in 2007/08. 'Thus we have achieved an ongoing improvement in profitability while posting average annual sales growth of 10.7 percent over the last three fiscal years. This success is the result of a series of measures, in particular the optimization of the product portfolio and our visual brand identity, as well as the extension of monobrand distribution', Dahmen adds in explaining the factors underlying Wolford’s success. Record sales accompanied by improved profitability In the 2007/08 fiscal year (May 1, 2007 – April 30, 2008), the Wolford Group increased sales in all major distribution channels and strategically important markets, with total sales rising 11.3 percent to EUR 157.7 million, the highest level in the company’s history. Accordingly, the company generated an average annual sales growth of 10.7 percent during the last three fiscal years. All relevant earnings indicators and thus the profitability of the Austrian luxury brand Wolford developed even more impressively. EBITDA rose by 31.2 percent to EUR 18.2 million, up from EUR 13.8 million, whereas the operating profit (EBIT) even climbed by 47.5 percent, to EUR 11.3 million (previous year: EUR 7.7 million) in the same period. Accordingly, the EBITDA margin improved by 1.7 percentage points in the 2007/08 fiscal year, to 11.5 percent, and the EBIT margin amounted to 7.2 percent of total sales, an increase of 1.8 percentage points compared to the previous fiscal year. The Wolford Group also significantly improved its profit from continuing operations during the past fiscal year, which could be increased by 52.7 percent, to EUR 9.3 million (previous year: EUR 6.1 million). The net profit for the year improved to EUR 7.2 million. Sound equity capital base At the balance sheet date of April 30, 2008, shareholders’ equity of the Wolford Group was EUR 79.0 million. This corresponds to an increase of 6.1 percent, or EUR 4.6 million, compared to the previous year’s reporting date of April 30, 2007. This brought the equity ratio to an impressive level of 50.9 percent of total assets. Net debt rose from EUR 17.5 million to EUR 22.6 million, which is chiefly related to the financial resources tied up in the increased inventories of finished goods and merchandise. On the balance sheet date, gearing was 28.6 percent, above the previous year’s level of 23.5 percent. Significant sales growth in all major product groups In the 2007/08 fiscal year, the Wolford Group generated higher sales with its five product segments - Legwear, Ready-to-wear, Lingerie, Swimwear and Accessories - achieving significant increases in most cases. This particularly applies to the Ready-to-wear product group (women’s outerwear), whose brand sales rose 14.8 percent. 'This product group made the largest contribution to sales growth in absolute terms, and emerged as a growth driver, as expected', said CEO Holger Dahmen, commenting on the positive development of this product segment. Legwear, which has served as Wolford’s core business for close to 60 years, expanded once again, surpassing the very good results achieved in the previous fiscal year. The Lingerie and Accessories product lines also posted significant sales growth. On balance, Legwear generated 48.8 percent of brand sales, the largest proportion in the Wolford Group, followed by Ready-to-wear, accounting for 38.7 percent, Lingerie with 9.9 percent, Swimwear with 1.4 percent, and the Accessories product group, which contributed 1.2 percent of total brand sales. Expansion of monobrand distribution In the period under review, the Wolford Group successfully implemented its strategy of focusing on a qualitative improvement of its distribution activities. In the 2007/08 fiscal year, Wolford generated 39.3 percent of total sales through its own retail locations, compared to only 27.9 percent three years earlier. On balance, Wolford’s proprietary stores – boutiques, shop-in-shops and factory outlets – achieved a 16.8 percent expansion of sales compared to the previous year, or an improvement of 6.4 percent on a like-for-like basis. Growth was once again driven by boutiques. In particular, Wolford-owned boutiques developed extremely positively in the reporting period, registering sales growth of 17.1 percent. Wolford’s sales with partner-operated boutiques also developed favorably, showing growth of 13.5 percent. In the 2007/08 fiscal year, sales by the Wolford Group’s controlled distribution, i.e. all Wolford-owned stores and partner-operated boutiques, already accounted for 55.2 percent of total sales. Boutiques made the largest contribution to Group sales among all distribution channels, with a share of 46.3 percent, whereas department stores generated 21.2 percent of sales and multi-brand retailers 23.2 percent. Factory outlets contributed 6.6 percent of sales and private label had a 2.7 percent share. 146 Wolford outlets already display new look In the 2007/08 fiscal year, Wolford pressed ahead quickly with the roll-out of its new store concept. 54 sales locations were newly opened or redesigned in 2007/08 alone. As per April 30, 2008, a total of 146 outlets had already been redesigned to reflect the updated, attractive and distinctive design. The new store concept featuring an appealing shopping atmosphere has made a considerable contribution to the extremely good development of the monobrand business. Significant growth in all geographic markets As a consequence of its intensified and controlled growth strategy, the Wolford Group succeeded in increasing sales in all main geographic markets during the 2007/08 fiscal year. Wolford’s traditionally largest three markets once again surpassed the very high sales level posted in 2006/07, with sales up 8.6 percent in Austria, 4.1 percent in Germany and 3.5 percent in the USA (14.3 percent in the local currency). In particular, the newer markets for Wolford products registered notably dynamic sales growth. Sales in the Central and Eastern European markets were up 32.8 percent, whereas the company even enjoyed sales growth of 39.2 percent in Asia and Oceania. The Wolford brand and its product portfolio performed well in the established European markets, achieving growth rates of 21.9 percent in the Netherlands, 19.8 percent in the UK (25.4 percent in the local currency), 17.8 percent in the Scandinavian markets, 11.3 percent in Italy, 9.7 percent in Spain, 8.9 percent in France, and 5.2 percent in Switzerland (8.4 percent in the local currency). Outlook 'We will continue to focus on achieving our strategic targets in the future, i.e. the optimization of our product portfolio and the qualitative expansion of our controlled distribution, and thus the systematic enhancement of the Wolford brand and its sustainable positioning in the luxury segment', CEO Dahmen concluded in elaborating on Wolford’s plans for the present fiscal year. Against this backdrop, the management of the Wolford Group is optimistic that the positive development of sales and earnings will continue in the 2008/09 fiscal year. Overview of sales and financial data for the 2007/08 fiscal year in EUR ‘000 2007/ 2006/ Change Change 08 07 (absolute in % / in % points) Sales 157,6 141,6 15,970 11.3% 53 83 EBITDA 18,159 13,844 4,315 31.2% EBITDA margin 11.5% 9.8% 1.7 EBIT (operating profit) 11,339 7,686 3,653 47.5% EBIT margin 7.2% 5.4% 1.8 Profit from continuing operations before 9,265 6,067 3,198 52.7% taxes Net profit for the year 7,173 6,442 731 11.3% Profit from continuing operations before 16,085 12,225 3,860 31.6% taxes and DA&Im¹ Net cash from operating activities 3,812 6,978 (3,166) -45.4% Net debt 22,593 17,492 5,101 29.2% Debt/equity ratio 28.6% 23.5% 5.1 Shareholders’ equity 79,018 74,442 4,576 6.1% Equity-to-assets ratio 50.9% 53.0% (2.1) Earnings per share in EUR 1.46 1.34 0.12 9.0% ¹ DA&Im = Depreciation, amortization and impairment The Annual Report 2007/08 is also available on the Internet at www.wolford.com under Investor Relations. Contacts: Holger Dahmen, Chief Executive Officer Peter Simma, Deputy Chief Executive Officer Investor@wolford.com Wolford AG, Wolfordstraße 1, A-6901 Bregenz +43 (0) 5574 690-0 www.wolford.com (c)DGAP 25.07.2008 --------------------------------------------------------------------------- Language: English Issuer: Wolford AG Wolfordstraße 1 6901 Bregenz Österreich Phone: +43/5574/6907434 Fax: +43/5574/6907440 E-mail: investor@wolford.com Internet: www.wolford.com ISIN: AT0000834007 WKN: 83400 Indices: ATX Listed: Freiverkehr in Berlin, München, Stuttgart; Open Market in Frankfurt; Foreign Exchange(s) Wien End of News DGAP News-Service ---------------------------------------------------------------------------