EANS-News: Wolford announces results for the first quarter of 2014/15

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quarterly report

Wolford announces results for the first quarter of 2014/15

- Substantial earnings improvement and return to profitability
- Revenues slightly below prior year
- Very solid balance sheet structure
- First results of strategic refocusing visible on the market
- Primary goal for FY 2014/15: operating turnaround

Vienna/Bregenz, September 12, 2014. Wolford AG, which is listed on
the Vienna Stock Exchange, returned to profitability in the first
quarter of the 2014/15 financial year (May to July 2014). Revenues
declined by a slight 1.1%, or EUR 0.37 million, to EUR 31.91 million,
but the development of earnings was sound. EBIT improved from EUR
-5.18 million to EUR +3.02 million and EBIT, adjusted for
non-recurring income and expenses, improved from EUR -5.18 million to
EUR -0.17 million. The company also recorded positive net profit of
EUR 1.49 million for the first time in the seasonally weak
three-month period from May to July (Q1 2013/14: EUR -4.35 million).
The slight decline in revenues resulted primarily from the closing of
unprofitable locations and the expected reserved market acceptance of
the spring-summer 2014 Trend collection. The substantial earnings
improvement resulted from the steady implementation of optimization
measures and special effects. Wolford's primary goal for the 2014/15
financial year is to complete the operating turnaround with positive
EBIT. "Wolford's growth must be sustainably profitable. Our
refocusing measures are based on this objective and, as our first
quarter results show, we are making good progress", explained Axel
Dreher, Speaker of the Wolford Management Board.

Further growth in the retail business, but different regional
developments

Wolford's retail business continued its positive development with a
year-on-year increase of 1% in revenues for the first quarter. Sound
development was recorded, above all, in the online business with
revenue growth of 29%. However, wholesale revenues were 4% lower, but
the downward trend from the previous quarters could be further
reduced. A regional analysis of first quarter revenues shows
different developments that were influenced by the closing of points
of sale. Wolford recorded lower revenues in the USA, Austria,
Switzerland, Belgium and Central and Eastern Europe, and slight
growth in Germany and the Netherlands. Great Britain and Scandinavia
reported overall revenue declines, but Wolford's own retail business
grew on a like-for-like basis also in these countries. Revenues were
stable in France, and growth was strong in Italy and Spain. In the
growth market of Asia the company saw a further double-digit increase
in revenues, above all due to the opening of new locations and the
expansion of the partner business.

Significant operating earnings improvement and first-time net profit
in Q1

Wolford recorded a positive net result for the first time in the
seasonally weak months from May to July and generated a strong
increase in operating earnings. "The substantial improvement in
adjusted EBIT from EUR -5.18 million to EUR -0.17 million was based
on the sale of a lease option for a location in Switzerland, but was
also supported by further savings in operating areas, above all in
personnel costs", explained Chief Financial Officer Thomas Melzer.
The sale of non-core land resulted in proceeds of EUR 6.71 million as
well as a book gain of EUR 3.37 million. This led to a significant
improvement in EBIT from EUR -5.18 million to EUR +3.02 million and
in earnings after tax from EUR -4.35 million to EUR +1.49 million.

Very solid balance sheet structure

The asset and capital structure of Wolford AG was further optimized
up to the balance sheet date on July 31, 2014 and remains very solid.
The Wolford Group's equity amounted to EUR 75.99 million (31.07.13:
EUR 73.72 million). The equity ratio equaled 53% (July 31, 2013: 50%)
and gearing equaled 24% (July 31, 2013: 39%).

First results of strategic refocusing visible on the market

After the first quarter of 2014/15, Wolford can demonstrate progress
in all key areas of the strategic refocusing. "The fall-winter
2015/16 collection, which is the first to follow our new orientation,
will be launched in January 2015, and we are optimistic that it will
be well received by our business partners and customers all over the
world", indicated Axel Dreher. Internal processes and structures were
further optimized to make even better use of the company's strong
innovation potential, which is demonstrated by innovative and newly
introduced products like PURE 50 Tights and the Sheer Touch Lingerie
series. Marketing activities are being intensified at the same time
and, since July, the "Unforgettable Touch of Wolford" can also be
experienced at Wolford's points of sale in the new, emotional
imagery. "Many well-known personalities are fans of the Wolford brand
- and we want to communicate this more actively in the future", added
Axel Dreher.

Further new openings planned, integration of sales channels

Wolford will continue to establish company-owned boutiques in key
strategic cities and top locations, as is illustrated by the recent
openings in Barcelona und New York. The company is also strengthening
the integration of individual sales channels in order to utilize the
momentum and growth potential of the online business. Activities to
strengthen the wholesale business will continue, and the share of
floor space with trading partners but under Wolford's direct
operation shall be further expanded.

Primary goal for FY 2014/15: operating turnaround

Based on the measures initiated and implemented to date, the
Management Board of Wolford AG has defined the operating turnaround
as the primary goal for 2014/15. Substantial progress was made in
generating positive EBIT during the past months. The arrival of the
fall-winter collection 14/15 and the first successful results of the
improved marketing activities have turned the revenue curve upward.
If this trend continues, Wolford can look forward to a successful
financial year with growth not only in earnings but also in revenues.

The report on the first quarter of 2014/15 is available under
company.wolford.com / Investor Relations.
http://company.wolford.com/wp-content/uploads/2014/09/Wolford_Q1-
Report_2014_15.pdf

For additional information contact:
Axel Dreher (Speaker of the Management Board)
Thomas Melzer (Chief Financial Officer)
+43 (0) 5574 690-1268 (IR)
investor@wolford.com | company.wolford.com

Wolford Group Key Data

Earnings Data
1st Quarter 1st Quarter
05 - 07/14 05 - 07/13 Chg. in % 2013/14
Revenues in EUR mill. 31.91 32.28 -1 155.87
EBITDA adjusted 1) in EUR mill. 1.94 -3.19 >100 7.11
EBIT adjusted 1) in EUR mill. -0.17 -5.18 +97 -0.97
EBIT in EUR mill. 3.02 -5.18 >100 -4.72
Earnings before tax in EUR mill. 2.79 -5.49 >100 -5.89
Earnings after tax in EUR mill. 1.49 -4.35 >100 -2.81
Capital expenditure in EUR mill. 2.07 1.40 +48 7.87
Free cash flow in EUR mill. -1.03 -12.82 +92 -0.97
Employees (on average) FTE 1555 1564 -1 1562

Balance Sheet Data

31.07.2014 31.07.2013 Chg.in % 30.04.2014
Equity in EUR mill. 75.99 73.72 +3 74.38
Net debt in EUR mill. 17.95 28.80 -38 17.04
Working capital in EUR mill. 38.11 43.26 -12 33.72
Balance sheet total in EUR mill. 142.54 147.96 -4 138.12
Equity ratio in % 53 50 - 54
Gearing in % 24 39 - 23

1) Adjusted for non-recurring income of EUR 3.37 million and
non-recurring expenses of EUR 0.19 million in Q1 2014/15

About Wolford AG Wolford AG, which is headquartered in Bregenz on
Lake Constance (Austria), operates 16 subsidiaries and markets its
products in roughly 60 countries through 270 monobrand stores (own
and partner-operated), approximately 3,000 trading partners and
online. The company, which has been listed on the Vienna Stock
Exchange since 1995, generated revenues of EUR155.87 million in the
2013/ 14 financial year (May 1, 2013 - April 30, 2014) and has about
1,560 employees. Since its founding in 1950, Wolford has become a
leading global manufacturer's brand in the segment of luxury tights,
exclusive lingerie and high quality bodywear.

Further inquiry note:
Wolford AG
Thomas Melzer (CFO)
Tel.: +43 5574 690 1268
mailto:investor@wolford.com
Web: www.wolford.com

end of announcement euro adhoc
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company: Wolford Aktiengesellschaft
Wolfordstrasse 1
A-6900 Bregenz
phone: +43 (0) 5574 690-1268
FAX: +43 (0) 5574 690-1219
mail: investor@wolford.com
WWW: company.wolford.com
sector: Textiles & Clothing
ISIN: AT0000834007
indexes: ATX Prime, ATX Global Players
stockmarkets: free trade: Frankfurt, regulated dealing: Wien, ADR: New York
language: English