EANS-News: Wolford announces positive results for the first half-year 2014/15

Geschrieben am 12-12-2014

Corporate news transmitted by euro adhoc. The issuer/originator is solely
responsible for the content of this announcement.

quarterly report

- Sound earnings growth and positive net earnings
- Revenue slightly below previous year
- Further optimization of solid balance sheet structure
- Substantial strengthening of marketing activities
- Goals for full-year confirmed

Vienna/Bregenz, December 12, 2014. Wolford AG, which is listed on the
Vienna Stock Exchange, generated clearly positive net earnings in the
first half-year (May to October 2014) for the first time since
2011/12. Despite a slight decline of 2.9%, or EUR 2.18 million, in
revenues to EUR 72.63 million, EBIT rose by more than EUR 5 million
from EUR -2.30 million to EUR 3.17 million. After an adjustment for
non-recurring income and expenses, adjusted EBIT turned from EUR
-2.30 million to EUR 0.04 million. Earnings after tax improved
significantly from EUR -1.96 million to EUR 1.38 million. The revenue
decline resulted from two factors: the closing of unprofitable points
of sale and a sudden downturn in the fashion and retail branch in
Europe and the USA since September. The sound earnings improvement
was supported by the steady implementation of optimization measures
and special effects. Management confirms the goal to complete the
operating turnaround in this financial year with positive EBIT.
"2014/15 is a year of transition, when we create the basis for future
profitable growth", emphasizes Axel Dreher, Speaker of the Wolford
Management Board.

Sudden downturn in the fashion and retail trade since September

Wolford has been confronted with increasingly difficult market
conditions since September. Revenues in fashion and retail trade in
the most important European and North American markets fell week for
week, in part at double-digit rates - following a general decline in
consumer confidence as a reaction to global crises and the unusually
warm autumn weather across large parts of Europe. Positive
development in August was followed by a sharp drop in revenues for
the German fashion trade that reached 9% in September and 10% in
October. Similar declines were recorded on the markets in France and
Great Britain, and retail sales in the USA have been on a downturn
since this past spring.

Wolford performed comparatively well in this difficult environment
during the first half of the 2014/15 financial year - despite the EUR
2.4 million reduction in revenues from the closing of points of sale.
Revenues in the retail business rose slightly by 1% during the first
six months. Wolford's online business remained on a sound course with
growth of 24%. In contrast, the wholesale business declined by 8%
because of a substantial decline in orders by partners in reaction to
the weakness in consumer spending and lower customer frequency.

Different regional developments

The development of revenues in the first half-year differed
substantially by region, in part due to the closing of individual
points of sale. Stronger declines were recorded in Wolford's key
markets of Germany (-5%) and the USA (- 7%). France also reported a
decline (-6%), but revenues were substantially higher in Italy (+11%)
and Spain (+15%). Revenues in Great Britain were at the previous
year's level. Lower revenues were recorded in Scandinavia, but here
the Wolford-owned retail business grew clearly on a like-for-like
basis (excluding the effects from the opening or closing of
locations). Revenues in Central and Eastern Europe fell significantly
(-19%) due to the Ukraine crisis. These markets have only been
responsible for 4% of Wolford's revenues to date, but the absence of
Russian tourists due to the devaluation of the Rubel has had a
negative effect on business in the major West European cities. In
Asia, Wolford increased revenues by 10% based on the opening of new
own and partner-operated locations and a like-for-like increase in
its own retail business. Asia currently generates 5% of Group

Substantial improvement in operative results

Earnings showed sound development during the first half-year with an
improvement in adjusted EBIT from EUR -2.30 million to EUR 0.04
million. "This positive adjusted EBIT resulted from the sale of a
lease option in Switzerland and from the steady implementation of
optimization measures. We were able to realize further savings of EUR
1.29 million from the reorganization of our product development,
production and logistics processes", explaines Chief Financial
Officer Thomas Melzer. "At the same time we spent EUR 0.83 million
more on marketing to sustainably strengthen our brand and create the
basis for future growth", adds Melzer. The sale of non-core land
generated a book gain of EUR 3.37 million, and supported an
improvement of more than EUR 5 million in EBIT from EUR -2.30 million
to EUR 3.17 million. Earnings after tax turned positive and totaled
EUR 1.38 million, compared with EUR -1.96 million in the previous

Solid balance sheet structure

The asset and capital structure of the Wolford Group remains very
solid. Equity totaled EUR 76.22 million as of October 31, 2014
(October 31, 2013: EUR 75.90 million). Net debt was reduced from EUR
25.64 million in the previous year to EUR 20.66 million as a result
of the sale proceeds. The equity ratio equaled 51%, compared with 50%
as of October 31, 2013, and gearing declined to 27% (October 31,
2013: 34%).

Significant progress on strategic refocussing

Wolford has made substantial progress with the implementation of its
strategic refocussing during the past months. The closing of points
of sale was contrasted by a number of new openings to eliminate
further "blank spots" on the company's map. Seven new own locations
were opened in the first half-year alone, in key strategic cities
like Barcelona, Florence and Frankfurt. These locations are
complemented by ten new boutiques operated by partners - for example
in the Chinese city of Zhengzhou, in Riga and Ulan Bator - as well as
new shop-in- shops, among others, in Taipei, Hong Kong and Beijing.

The marketing campaign that started this spring has also gained
speed. Wolford further strengthened its media presence in core
markets like the USA, France and Italy and, during the weeks before
and after Christmas, is prominently pictured on New York's Times
Square. The company is also continuing to expand its online
marketing, among others with the support of innovative campaigns with
an art and culture focus. "Wolford as a brand has regained visibility
- both online and offline", emphasizes Axel Dreher. "It's no
coincidence that our company already has more than 140,000 Facebook
fans as well as a large number of followers in other relevant social
media channels", adds Dreher. At the beginning of November Wolford
filled the position of creative director with Grit Seymour, a
well-known international designer. This position was created as part
of the strategic refocussing and plays a key role in the sustainable
strengthening of the brand - both with a view to future collections
and the way Wolford is presented to end customers.

Goal for 2014/15 financial year confirmed

The operating turnaround remains the primary goal for the current
financial year and is confirmed by the Management Board. "We are on a
good course to generate positive EBIT in the current financial year.
Our progress would have been much more evident also in terms of
revenues without headwinds from the market", underscores Thomas
Melzer. In order to stabilize revenues, Wolford took active steps and
introduced a number of sales promotion measures. "We also
substantially strengthened our visual merchandising in the shops with
the start of the Christmas shopping season. In January, we plan to
introduce the next growth impulse with the presentation of our
reshaped fall-winter 2015/16 collection", adds Axel Dreher. The
report on the first half-year 2014/15 is available under
company.wolford.com / Investor Relations.

Wolford Group Key Data

1st half-year 1st half-year
Earnings Data 05 - 10/14 05 - 10/13 Chg. in % 2013/14
Revenues in EUR mill. 72.63 74.81 -3 155.87
EBITDA adjusted 1) in EUR mill. 4.23 1.64 >100 7.11
EBIT adjusted 1) in EUR mill. 0.04 -2.30 >100 -0.97
EBIT in EUR mill. 3.17 -2.30 >100 -4.72
Earnings before tax in EUR mill. 2.72 -2.90 >100 -5.89
Earnings after tax in EUR mill. 1.38 -1.96 >100 -2.81
Capital expenditure in EUR mill. 5.44 4.42 +23 7.87
Free cash flow in EUR mill. -3.87 -9.64 +60 -0.97
Employees (on
average) FTE 1,567 1,562 0 1,562

Balance Sheet Data 31.10.2014 31.10.2013 Chg. in % 30.04.2014
Equity in EUR mill. 76.22 75.90 0 74.38
Net debt in EUR mill. 20.66 25.64 -19 17.04
Working capital in EUR mill. 39.97 43.00 -7 33.72
Balance sheet total in EUR mill. 148.14 150.91 -2 138.12
Equity ratio in % 51 50 - 54
Gearing in % 27 34 - 23

1) Adjusted for non-recurring income of EUR 3.37 million and
non-recurring expenses of EUR 0.25 million in the 1st half-year

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 EUR 155.87 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 legwear,
exclusive lingerie and high quality bodywear.

Further inquiry note:
Wolford AG
Regine Petzsch
Tel.: +43 5574 690 1359
Web: company.wolford.com

end of announcement euro adhoc

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


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