Ad-hoc | 19 September 2008 08:00
Wolford AG / Quarter Results Release of an 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 in the first quarter of the 2008/09 fiscal year Wolford continues improving sales and earnings in the first quarter of 2008/09 - Sales up by 4.6 percent - Further increase in earnings - Growth in almost all geographic markets and distribution channels - Dividend rises to EUR 0.43 for the 2007/08 fiscal year Bregenz, September 19, 2008 The Wolford Group, which is listed on the Vienna Stock Exchange, continued its positive business development, posting a 4.6 percent rise in sales and a significant improvement in all relevant earnings indicators in the first quarter of the 2008/09 fiscal year. The international luxury brand raised sales to EUR 31.9 million in the first three months of the current fiscal year, up from EUR 30.5 million in the comparable period of 2007/08. The fact that the Wolford Group once again achieved sales growth is even more gratifying considering the 16.9 percent increase in sales it had achieved in the first quarter of the previous year. Adjusted for currency effects, total sales of the Wolford Group climbed by 8.1 percent in the period May 1, 2008 – July 31, 2008. 'Despite an increasingly difficult business environment and noticeably cautious consumer spending, we once again strengthened our good market position as an international luxury brand and, at the same time, significantly improved earnings', says Holger Dahmen, CEO of Wolford AG, in positively reviewing the company’s performance during the first three months of 2008/09. Further improvement in profitability All relevant earnings indicators developed even more favourably than sales. First quarter figures must generally be put into perspective, due to the fact that total sales of the Wolford Group are by far the lowest in the first three months of a given fiscal year, whereas costs are disproportionately high. As a consequence, Wolford traditionally posts negative earnings in the first quarter. In the first three months of the current fiscal year, operating result before depreciation, amortisation and impairment (EBITDA) increased by 34.9 percent, to EUR -0.9 million, compared to EUR -1.4 million in the first quarter of 2007/08. As a result, the EBITDA margin in the first quarter 2008/09 climbed by 1.8 percentage points. The operating result (EBIT) rose by 14.6 percent, to EUR -2.6 million (Q1 2007/08: EUR -3.1 million), and the result from continuing operations improved compared to the previous year’s figure, amounting to EUR -3.3 million (Q1 2007/08: EUR -3.5 million). A sound equity capital structure as the basis for further growth At the balance sheet date of July 31, 2008, shareholders‘ equity of the Wolford Group was EUR 75.7 million, an increase of 5.9 percent compared to the previous year. This corresponds to an equity ratio of 44.9 percent. The result from continuing operations before taxes plus depreciation, amortization and impairment in the first three months of the 2008/09 fiscal year improved to EUR -1.6 million, compared to EUR -1.9 million in the comparable period of 2007/08. Net debt rose to EUR 43.4 million. This development can be primarily attributed to the pre-financing of inventories required for the delivery of Wolford’s fall/winter collection 2008/09 in the months of August and September 2008, the improved supply availability of basic products, the higher level of customer receivables, and the increased investment volume related to the expansion of the company’s retail business activities. Gratifying sales increase in almost all geographic markets Sales of the Wolford Group developed gratifyingly in almost all of the company’s geographic markets, driven by the qualitative improvement in its distribution activities and the continuation of the worldwide roll-out of the Wolford store concept. In particular, a markedly positive trend in sales featuring double-digit growth was achieved in Central and Eastern Europe (+ 50.4 percent), the Netherlands (+ 17.1 percent), France (+ 12.4 percent), the Scandinavian markets (+ 11.0 percent) and in local currency in the UK (+ 10.8 percent). Sales also increased significantly in Germany, Wolford’s traditionally largest market, expanding by 8.4 percent, and rose slightly in the USA, where sales were up by 1.6 percent (in local currency). In contrast, sales in Wolford’s domestic market of Austria were slightly below the previous year’s level, following extremely strong growth in the first quarter of 2007/08 (+ 23.0 percent). Sales growth in all distribution channels In particular, Wolford’s distribution with multi-brand retailers (+ 10.8 percent) and with department stores (+ 6.0 percent) developed in an extremely positive manner in the first quarter of the 2008/09 fiscal year. The Wolford boutiques (proprietary and partner-operated) registered a slight sales increase in the first three months of 2008/09, based on a disproportionately strong first quarter of the previous 2007/08 fiscal year, which posted a 30.2 percent rise in sales. In recent months, Wolford successfully continued the roll-out of its store concept, so that the Wolford collection could be presented in the new look as per end of July 2008 at a total of 155 redesigned outlets (65 proprietary, 90 partner-operated). Nine sales locations were newly opened or redesigned in the first quarter of 2008/09 alone. EUR 0.43 dividend per ordinary share for 2007/08 The Annual General Meeting of Wolford AG held on September 16, 2008 approved the distribution of a dividend for the 2007/08 fiscal year amounting to EUR 0.43 for each no par value bearer share (2006/07 fiscal year: EUR 0.30 per share). This represents a dividend payout ratio of 29.4 percent in relation to the net profit for the year of the Wolford Group. Outlook In the upcoming months, Wolford will continue to focus on achieving its strategic targets, i.e. the systematic enhancement of the Wolford brand, the sustainable positioning in the luxury segment and the expansion of monobrand distribution. For example, in the second quarter 2008/09, Wolford plans to open three boutiques in Paris as well as additional boutiques in Geneva, Berne, Luxembourg, Macao and Hong Kong. Despite the more difficult business environment, the Executive Board of the Wolford Group is optimistic that a positive development of sales and earnings will be achievable in the 2008/09 fiscal year. Overview of sales and financial data for the first quarter of the 2008/09 fiscal year (May 1, 2008 – July 31, 2008)in EUR ‘000 First First Change Change quarter quarter 2008/09 2007/08 (absolute / % in % points) Sales 31,913 30,517 1,396 4.6% EBITDA (929) (1,427) 498 34.9% EBITDA margin (2.9%) (4.7%) 1.8 EBIT (operating profit) (2,617) (3,066) 449 14.6% EBIT margin (8.2%) (10.1%) 1.9 Result from continuing operations (before taxes) (3,311) (3,544) 233 6.6% Net result for the first (2,900) (2,999) 99 3.3% quarter Result from continuous operations (before taxes) plus (1,623) (1,905) 282 14.8% DA&Im¹ Capital investments excluding financial assets 5,210 2,665 2,545 95.5% Shareholders’ equity 75,693 71,449 4,244 5.9% Average number of employees (in full-time 1,704 1,602 102 6.4% equivalents)¹ DA&Im = Depreciation, amortization and impairmentMore information is available at: www.wolford.com/investor_relations/business_world/investor_relations/finan cial_reports Definitions of financial indicators are contained in the latest annual report for the 2007/08 fiscal year.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.com19.09.2008 Financial News transmitted by DGAP ---------------------------------------------------------------------- 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 ---------------------------------------------------------------------------