TOM TAILOR Holding SE
TOM TAILOR GROUP expecting realignment to have positive impact in 2017
DGAP-News: TOM TAILOR Holding AG / Key word(s): Final Results/Forecast TOM TAILOR GROUP expecting realignment to have positive impact in 2017
Hamburg, 28 March 2017. At today’s presentation of the annual financial statements, the TOM TAILOR GROUP confirms the preliminary figures published on 21 February 2017 and presents the forecast and strategic priorities for the current fiscal year. In the 2017 fiscal year the Company remains committed to the strong focus on its healthy core business. The main priority will be on implementing the measures from the RESET cost and process optimization program, which, in addition to store closures and the departure from some markets, includes the ongoing optimization of internal structures and processes. The Executive Board expects the full impact of RESET to take effect from the fourth quarter of 2017 onward. The Company is responding to the rapid changes in the textile industry with a strong, customer-focused push to digitalize the business. “After setting a new course in 2016, we are now fully concentrating on our healthy core business. With our reconstituted executive team we have launched important initiatives to improve efficiency and earning power. TOM TAILOR GROUP is already an entirely different company than it was a year ago,” says Dr Heiko Schäfer, the CEO of TOM TAILOR Holding AG. “The initial successes demonstrate that we are on the right track. At the same time we are aware that we still have quite a way to go. We have to continue to set a strong pace in the transitional year 2017.” The resources released by the RESET program will be used in 2017 mainly to update the brand profiles and push ahead with the digitalization campaign. By sharpening the profiles of its brands, the Company aims to enhance the appeal of the products. At the same time the Group’s brand communications are going to become more daring, provocative and emotional. With trend-setting e-commerce activities, a future-ready omni-channel platform and high-demand shop locations, the Company plans to continue improving its position in core markets and establish a solid foundation for future profitable growth.
Slight growth expected for 2017 For the 2017 fiscal year the Executive Board of the TOM TAILOR GROUP is expecting a slight year-on-year rise in Group sales, mainly thanks to the TOM TAILOR umbrella brand. As the non-recurrent and mostly non-cash expenses resulting from the RESET program were mainly absorbed in the fiscal year under review, the positive effects of the realignment should become clearly visible over the course of this year. Against this backdrop, the Executive Board expects a sharp rise in reported EBITDA in the 2017 fiscal year. The implemented RESET measures will be largely completed by the end of the year. Goals for the 2016 fiscal year achieved As reported, in the previous fiscal year the TOM TAILOR GROUP increased its Group sales by 1.3 percent to EUR 968.5 million (previous year: EUR 955.9 million). Group EBITDA amounted to EUR 10.3 million (previous year: EUR 67.6 million). As a result, the Group achieved its adjusted targets from October 2016. Due to RESET, the gross profit margin, at 54.5 percent, was slightly lower than the previous year’s level. As expected, due to the non-recurrent effects amounting to EUR 80.9 million associated with RESET, the net result for the period amounted to EUR -73.0 million (previous year: EUR 0.1 million). Good performance of TOM TAILOR umbrella brand Sales for the TOM TAILOR umbrella brand rose by 5.6 percent to EUR 665.5 million (previous year: EUR 630.1 million). The TOM TAILOR wholesale business achieved a 3.2 percent increase in sales in 2016 to EUR 351.9 million (previous year: EUR 341.0 million). As a result, this segment contributed around 36 percent of consolidated sales. The reported EBITDA of the segment was down slightly by EUR 4.5 million to EUR 24.7 million (previous year: EUR 29.2 million). To a limited extent this also related to the impact of special expenses in connection with the realignment of the Company. The gross profit margin showed improvement, increasing from 45.0 percent to 46.4 percent, mainly due to improved pricing and fewer price promotions. The brand’s retail segment experienced an increase of 8.5 percent in sales to EUR 313.6 million as a result of expansion (previous year: EUR 289.1 million). Reported EBITDA in this segment for the past fiscal year amounted to EUR 8.2 million (previous year: EUR 20.3 million). The year-on-year decline was primarily due to the non-recurring expenses resulting from the RESET program. In the past fiscal year the segment sales of the BONITA brand decreased by 7.0 percent from EUR 325.8 million to EUR 303.0 million. As a result, BONITA contributed 31 percent of consolidated sales. The brand made good progress in pruning the store portfolio. The number of BONITA stores decreased by 76 over the course of the year to 950 locations. The reported EBITDA of the segment decreased to EUR -22.6 million (previous year: EUR 18.0 million). As in the other two segments, this was substantially impacted by non-recurring expenses resulting from RESET. The adjusted gross margin of 67.9 percent was higher than in the previous year. This was mainly due to a decrease in price promotions and improved product pricing.
Free cash flow higher, net debt reduced Cash flow from operating activities was up slightly, by 2.2 percent, in the year under review to EUR 50.3 million (previous year: EUR 49.3 million). During the same period, the TOM TAILOR GROUP increased its free cash flow significantly by EUR 6.9 million to EUR 20.0 million. As at the reporting date of 31 December 2016, the Company reduced its net debt by EUR 22.7 million to EUR 194.7 million (31 December 2015: EUR 217.4 million). The equity ratio at year-end, at 23.4 percent (31 December 2015: 27.4 percent) was below the long-term target of 30 percent. Thomas Dressendörfer, CFO of TOM TAILOR Holding AG: “The first successes of our stabilization program are already evident. We have increased our free cash flow by over 50 percent and also reduced our net debt by about 10 percent. We remain fully committed to our course of financial consolidation and are confident that this will enable us to achieve our medium and long-term goals. For 2018 we expect sales to reduce by the divestment of our unprofitable brands, which will however partly be offset by our profitable growth initiatives. We expect that the reported EBITDA will improve in 2018 by 30 to 40 million Euro with an EBITDA margin above 10 percent. As before, however, our top priority is to substantially scale back our debt. In this respect we aim at a net debt/EBITDA of below 2.0 in the medium-term.”
About TOM TAILOR GROUP TOM TAILOR GROUP is an international, vertically aligned fashion and lifestyle company that focusses on so called Casual Wear offered in the medium price segment. The product portfolio is complemented by a broad range of fashionable accessories. With its umbrella brands TOM TAILOR and BONITA, the Group addresses various segments of the fashion market. The TOM TAILOR brand is marketed through the retail and wholesale segments, and thus through single-label stores as well as wholesale partners. At the end of 2016, these comprised 472 TOM TAILOR stores and 205 franchise stores, 3,050 shop-in-shops and around 8,400 multi-label points of sale. The brand is present in more than 35 countries. BONITA has 950 retail stores as well as 56 shop-in-shop spaces. The collections of both brands are also available through their respective online shops. Further information is also available at www.tom-tailor-group.com and www.BONITA.eu
Felix Zander Lena Christin Wulfmeyer
28.03.2017 Dissemination of a Corporate News, transmitted by DGAP – a service of EQS Group AG. |
Language: | English |
Company: | TOM TAILOR Holding AG |
Garstedter Weg 14 | |
22453 Hamburg | |
Germany | |
Phone: | +49 (0) 40 589 56 0 |
Fax: | +49 (0) 40 589 56 398 |
E-mail: | info@tom-tailor.com |
Internet: | www.tom-tailor-group.com |
ISIN: | DE000A0STST2 |
WKN: | A0STST |
Listed: | Regulated Market in Frankfurt (Prime Standard), Hamburg; Regulated Unofficial Market in Berlin, Dusseldorf, Hanover, Munich, Stuttgart, Tradegate Exchange |
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