Wolford AG: Press Release sales and earnings in the first three quarters of the 2009/10 fiscal year

Wolford AG / Quarter Results

19.03.2010 07:45

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Press information

Sales and earnings in the first three quarters of the 2009/10 fiscal year

(May 1, 2009 - January 31, 2010)

Wolford achieves significant earnings improvement in the first three
quarters

  - Net result for the period more than tripled in the first nine months

  - Increased third-quarter sales (+5.7 percent)

  - Proprietary stores as the growth driver

  - Positive earnings outlook for the 2009/10 fiscal year as a whole 

Bregenz, March 19, 2010

Despite an ongoing challenging market environment, the Wolford Group
succeeded in achieving a significant improvement in key earnings indicators
for the first nine months of the 2009/10 fiscal year (May 1, 2009 - January
31, 2010). The international fashion brand also increased third-quarter
sales compared to the prior-year quarter, as already announced, driven by
the performance of its proprietary stores. 'The positive earnings
development in the course of the 2009/10 fiscal year shows that the
measures initiated by Wolford have had a positive impact. We were aware of
and responded to the difficult economic conditions at an early stage. We
are well prepared for further growth, based on the consistent
implementation of cost reduction and efficiency-enhancing measures as well
as a clear focus on our core competencies and markets', says Holger Dahmen,
Chief Executive Officer of Wolford Aktiengesellschaft, commenting on the
positive earnings development.

Upward sales trend 

Whereas the Wolford Group was faced with a decline in sales during the
first two quarters of the 2009/10 fiscal year, sales picked up again in the
third quarter compared to the previous year's quarter. The sales increase
of 5.7 percent in the third quarter was not extensive enough to completely
compensate for the 10.7 percent drop in sales in the first half of 2009/10,
but marked the start of Wolford's return to the growth path. On balance,
total sales of the Wolford Group fell by 4.9 percent in the first nine
months, to EUR 112.6 million. The positive development in the third quarter
is also the result of intensive training measures targeting employees at
the point of sale, which were implemented in order to further improve
service quality.

From a regional perspective, almost all of Wolford's core geographic
markets increased sales in the third quarter of the 2009/10 fiscal year.
The luxury brand particularly succeeded in generating gratifying sales
growth in Spain (+17.8 percent), USA (+16.7 percent in USD, +3.6 percent in
Group currency), Great Britain (+9.8 percent in GBP, +4.8 percent in Group
currency) as well as in the regions CEE (+16.3 percent) and Asia/Oceania
(+12.8 percent). Sales also rose between 4 and 7 percent in Germany,
Scandinavia, Italy and Switzerland. Whereas sales in Belgium and Austria
were maintained at a stable high level, France and the Netherlands were the
only markets facing a downswing.

Further sales growth of proprietary stores

Wolford's proprietary stores showed a positive sales development in the
first nine months of the 2009/10 fiscal year. Accordingly, Wolford-owned
boutiques, shop-in-shops and factory outlets increased sales by 7.4 percent
during the period under review. This improvement was primarily due to the
strategic expansion of Wolford's own distribution network. In the first
nine months of the current fiscal year, Wolford opened or took over from
existing partner-operated outlets a total of four boutiques, eight
concession shop-in-shops and three factory outlets. As a result, the Retail
segment increased its share of total Group sales to a record level of 47.4
percent. In turn, this resulted in a rise of the share attributable to
controlled distribution (via Wolford-owned and partner-operated boutiques,
factory outlets and concession shop-in-shops) to 59.1 percent.

Considering the sales development of the individual distribution channels,
the largest distribution channel consisting of Wolford-owned and
partner-operated boutiques further increased its share of total sales to
46.6 percent. Whereas third-quarter sales with boutiques climbed by 4.1
percent, cumulative sales with boutiques in the first three quarters of
2009/10 were down 2.3 percent overall. This development is due to the
declining business generated with partner-operated boutiques. Department
stores and multi-brand retailers continued to post a drop in sales over the
first nine months.

Earnings clearly above the previous year's level

During the period under review, the Wolford Group achieved a significant
improvement in key earnings indicators. Accordingly, EBITDA of the Wolford
Group totaled EUR 12.1 million in the first nine months of 2009/10,
corresponding to a 20.1 percent rise year-on-year (Q1-3 2008/09: EUR 10.1
million). The related EBITDA margin was at a level of 10.8 percent in the
first nine months, up from 8.5 percent in the comparable period of the
previous year. At the same time, operating profit (EBIT) improved by 32.7
percent, to EUR 6.2 million (Q1-3 2008/09: EUR 4.7 million). The result
from continuing operations rose to EUR 4.6 million (Q1-3 2008/09: EUR 2.1
million) in the first three quarters of the current fiscal year, whereas
the financial results climbed by EUR 1.0 million. As a consequence, the net
result for the period amounted to EUR 3.8 million, more than triple the
previous year's level (Q1-3 2008/09: EUR 1.2 million). Thus the earnings
per share in the first nine months of 2009/10 were EUR 0.77, up from EUR
0.24 in the prior-year period.

Solid capital structure - further improvement in net debt and cash flow

The consistent implementation of inventory optimization measures as well as
the low level of investment contributed towards reducing net debt to EUR
24.7 million at the balance sheet date of January 31, 2010, a year-on-year
decrease of 30.4 percent. The gearing ratio improved by 13.9 percentage
points compared to the previous year, to EUR 30.7 percent. In the same
period, shareholders' equity of the Wolford Group rose form EUR 79.5
million to EUR 80.5 million, corresponding to a solid equity ratio of 52.5
percent (January 31, 2009: 48.6 percent). The net cash from operating
activities amounted to EUR 16.5 million, an increase of EUR 14.5 million.

Outlook

Although there were initial signs of a recovery in the second and third
quarters of the 2009/10 fiscal year and order volume for the fall/winter
collection 2010/11 indicates a slight upturn in demand, the Executive Board
of Wolford Aktiengesellschaft expects the market environment to remain
challenging. From today's perspective, the Executive Board anticipates
positive earnings for the 2009/10 fiscal year as a whole.

 

Overview of sales and financial data for the first three quarters of
2009/10

(May 1, 2009 - January 31, 2010)


in EUR '000                       Q1-3      Q1-3      Change   Change
                                  2009/10   2008/09   in %     in % points
Sales                             112,641   118,450    -4.9%
EBITDA                             12,123    10,093    20.1%
EBITDA margin                       10.8%      8.5%                   2.3
Operating profit (EBIT)             6,227     4,693    32.7%
EBIT margin                          5.5%      4.0%                   1.5
Result from continuing              4,630     2,060   124.8%
operations
Net result for the period           3,753     1,184   216.9%
Earnings per share in EUR            0.77      0.24   216.9%
Net cash from operating            16,524     2,018   718.8%
activities
Result from continuing
operations
before taxes, plus depreciation,
amortization and impairment        10,526     7,460    41.1%
Capital investments excluding
financial assets                    7,154    12,423   -42.4%
Shareholders' equity               80,533    79,480     1.3%
Equity ratio based on total         52.5%     48.6%                   3.9
assets
Net debt                           24,700    35,481    30.4%
Debt/equity ratio                   30.7%     44.6%                  13.9
Number o full-time equivalents
at
period end                          1,466     1,620    -9.5%




The interim report for the first nine months of the 2009/10 fiscal year is
available at the Investor Relations pages of the corporate site
www.wolford.com.


Contacts:    Holger Dahmen (Chief Executive Officer)
             Peter Simma (Deputy Chief Executive Officer)
             investor@wolford.com
             Wolford Aktiengesellschaft, Wolfordstraße 1, A-6901 Bregenz
             +43 (0) 5574 690-0
             www.wolford.com





19.03.2010 Ad hoc announcement, Financial News and Media Release
distributed by DGAP.
Media archive at www.dgap-medientreff.de and www.dgap.de

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Language:     English
Company:      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
 
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