Arcandor AG
KarstadtQuelle: Restructuring progr. being implemented; sales and earnings…
Ad-hoc-announcement transmitted by DGAP.
The issuer is solely responsible for the content of this announcement.
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KarstadtQuelle AG: Restructuring progr. being implemented; sales and earnings
expectations adjusted
The KarstadtQuelle Management Board will take extensive measures in the third
quarter of 2004 on the basis of the outcomes of a comprehensive corporate
appraisal. Their main thrust will be the clear refocusing of the KarstadtQuelle
Group on its retailing operations. They will mainly include a fast programme to
stabilise sales, stringent cost management, the improvement of the gross margin,
disinvestments, portfolio adjustments and the transformation of the department
store and universal mail order business models. These measures will additionally
and have a one-off impact on earnings in the third quarter of 2004, but, if
achieved as expected, will on balance have no significant effect on the
liquidity position of the group in the 2004 financial year. The aim of the
package of measures is the consistent restructuring and reorientation of the
KarstadtQuelle Group to put it back squarely on the road to growth and
profitability in the coming years.
As announced, the Management Board will present this new strategic orientation
to the public at the end of September of the current year.
KarstadtQuelle Group sales decreased by 6 % to 6.87 bill. EUR in the first half
of 2004 (previous year: 7.31 bill. EUR). In the first six months group operating
(adjusted) EBTA amounted to minus 388.5 mill. EUR (previous year: minus 289.3
mill. EUR). This earnings decrease of 99.2 mill. EUR is less than could have
been expected given the reduction in sales of 438 mill. EUR, due to the
efficiency and effectiveness of our programmes, particularly our cost cutting
programme.
EBTA for the previous year was affected by extra-ordinary income, which makes an
earnings comparison difficult. This income resulted from the reorganisation of
the old-age pension provision and came to 235 mill. EUR. Furthermore, both the
current and the previous year include non-recurring costs of achieving greater
flexibility and portfolio adjustment costs. Taking into account the special
factors mentioned, EBTA for the first half-year stood at minus 439.5 mill. EUR
(previous year: minus 97.3 mill. EUR).
The optimisation of net financial debt and working capital has progressed well
in past weeks and despite the difficult retail environment is already showing
considerable success. Proof of this is that the sluggish progress of business in
the first half year did not negatively affect the net financial debt. This is
due, amongst other things, to the reduction of working capital by 27 % to 2.2
bill. EUR. Still unsatisfactory, on the other hand, is the development of free
cash flow.
Because of the sales and earnings performance in the second quarter of 2004 and
the continuing weak domestic economy the Management Board has lowered its
expectations for the 2004 financial year. Although on the basis of the present
level of knowledge and forecasts we expect a slight improvement in the sales
performance in the second half of the year, nevertheless group sales for the
2004 financial year will be between 4,5 % and 5 % lower than those of the
previous year. On this basis the Management Board anticipates in the 2004
financial year operating earnings (EBTA, not including extraordinary
restructuring costs) of between minus 160 mill. EUR and minus 200 mill. EUR.
Essen, 04.08.04
The Management Board
end of ad-hoc-announcement (c)DGAP 04.08.2004
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WKN: 627500; ISIN: DE0006275001; Index: MDAX
Listed: Amtlicher Markt in Berlin-Bremen, Düsseldorf, Frankfurt (Prime
Standard), Hamburg, Hannover, München und Stuttgart
040800 Aug 04
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