Ahlers AG

Interim / Quarterly Report • Jul 14, 2015

AHLERS AG

Herford Half Year Report 2014/15

AHLERS AG

HALF YEAR REPORT 2014/15

(December 1, 2014 to May 31, 2015)

BUSINESS PERFORMANCE IN THE FIRST SIX MONTHS OF FISCAL 2014/15

• Sales revenues down by 4.7 percent due to much lower sales in Russia and reduced sales with the last remaining private label customer
• Sales revenues in Germany remain stable in spite of downward overall trend in retail trade. Continued solid trend in Western Europe and Poland
• Growing sales revenues in own retail segment
• Sharp drop in EBIT due to lower sales revenues
• Management Board decides to discontinue Gin Tonic as of the 2016 autumn season
• Earnings projects for full year 2014/15 downgraded

1. BUSINESS AND GENERAL CONDITIONS

Most economic institutes continue to project a moderate recovery in the eurozone compared to the previous year, with GDP (gross domestic product) expected to grow by 1.2 percent (previous year: 0.9 percent; all forecasts: Commerzbank Research June 2015). While this means that the European economy has picked up somewhat, it is still not very dynamic. Growth rates of over 2 percent are projected for most Eastern European countries but also for Spain and the UK. Economic growth in France and Italy remains positive but was below the eurozone average. The Russian economy is experiencing a sharp contraction reflecting the country's dependence on oil and gas exports in a low oil price environment as well as the sanctions imposed by the West because of the Ukraine conflict. Although the German economy fell short of expectations in the first quarter of 2015, when it was up by only 0.3 percent on the previous quarter, a robust 1.8 percent increase in GDP is projected for 2015 (previous year: 1.6 percent). In spite of the support provided by the weak euro, foreign trade will move sideways at best due to the structural damper put on world trade (Deutsche Bank Research, June 5, 2015).

Domestic demand is currently the main growth driver in Germany. The economy and, in particular, consumer spending, are being supported by the good labour market situation, the low oil price and the resulting increase in disposable incomes. In June 2015, the GfK consumer climate index thus climbed to the highest level since October 2001. Due to the persistently low interest rates and the resulting favourable credit conditions, however, consumers primarily focus on more expensive goods such as furniture, cars and travel (Creditplus Verbraucherindex spring 2015).

By contrast, the fashion industry has failed to benefit from the good consumer sentiment and growing private spending. Right on the contrary, sales revenues in the German clothing retail sector have declined sharply. For the period ending May 2015, the fashion retail sector reported a disappointing 4 percent contraction in sales compared to the prior year period (Textilwirtschaft 23_2015). Besides consumer behaviour, lower footfall in city centres is cited as one of the main reason for the reduction in sales in the stationary retail sector. The growing online sales of fashion products have not been sufficient to make up for the shortfall. The clothing retail sectors in more dynamically growing countries such as Poland and Spain have seen sales revenues on the rise. In the other eurozone countries, clothing retailers' sales have probably remained stable or declined slightly. Fashion sales in Russia contracted sharply due to a lack of purchasing power.

2. EARNINGS, FINANCIAL AND NET WORTH POSITION

Sharply declining sales in Russia

Ahlers' sales revenues were influenced by three major factors in 2014/15. Sales in Russia and Ukraine declined by EUR 5.1 million. In addition, the last remaining large private label customer cut its purchases in the financial year 2014/15, which reduced sales revenues by EUR 2.3 million in the first half of 2014/15. By contrast, the additional Pierre Cardin licensing rights increased sales in France, Belgium and Spain by EUR 1.8 million in spite of a difficult market environment. At EUR 118.1 million, total revenues in the first half of 2014/15 were down by EUR 5.8 million or 4.7 percent on the previous year (EUR 123.9 million).

Save for the above-mentioned effect, the fashion company gained market share in Germany where its sales revenues remained almost stable in a declining clothing market. The good sales trend in Western European continued, with strong growth also reported in the Netherlands and Italy. Pleasant growth was generated also in the important Eastern European markets of Poland and the Baltic states.

Own Retail segment and e-commerce continue to grow

Sales revenues in the company's own Retail segment increased by 4.9 percent in the first half of 2014/15, defying the market trend.

The segment now accounts for 11.8 percent of total sales revenues (previous year: 10.7 percent). Like-for-like sales were up by 2.5 percent on the previous year. The positive trend in the e-commerce segment continued, with sales rising by an impressive 26.5 percent.

Growing sales in the Premium segment except for Russia

Sales revenues of the Premium segment declined by 2.9 percent to EUR 76.8 million in the first half of 2014/15 (previous year: EUR 79.1 million). This is mainly attributable to the decline in sales of Pierre Cardin and Baldessarini in Russia and Ukraine. Due to their strong position in these markets, the two brands have been hit especially hard by the Russian crisis, which is the only reason for the decline. In the other markets, the two brands bucked the downward trend and increased their sales revenues by 2.5 percent in the first half of the year. As of the reporting date, the Premium segment accounted for 65 percent of total sales revenues, which represents a moderate rise compared to the previous year's 64 percent.

Declining private label business the main reason for lower sales in the Jeans & Workwear segment

Sales revenues in the Jeans & Workwear segment amounted to EUR 32.1 million in the reporting period (previous year: EUR 34.8 million). The 7.8 percent decline was primarily due to the reduced sales revenues with the last remaining large private label customer (EUR -2.3 million). But the Russian crisis also had an adverse impact on the Jeans segment. Adjusted for these effects, the Pioneer/Pionier Jeans brands defied the general market trend and grew by 1.0 percent. The Jeans & Workwear segment's share in total sales revenues declined moderately from 28 to 27 percent in the first half of 2014/15.

Jupiter generates growing revenues in Men´s & Sportswear segment

Jupiter reported a high single-digit increase in sales revenues in the first half of 2014/15, primarily driven by growth in Western Europe and Poland. Due to the closure of further Gin Tonic stores, however, total sales revenues of the Men´s & Sportswear segment declined by 8.0 percent to EUR 9.2 million in the current financial year (previous year: EUR 10.0 million). The segment's share in total sales revenues remained unchanged from the prior year period at 8 percent.

Sales by segments

EUR million	H1 2014/15	H1 2013/14	Change in %
Premium Brands*	76.8	79.1	-2.9
Jeans & Workwear	32.1	34.8	-7.8
Men's & Sportswear	9.2	10.0	-8.0
Total	118.1	123.9	-4.7

* incl. "miscellaneous" EUR 0.1 million (previous year: EUR 0.1 million)

EARNINGS POSITION

In the second quarter of 2015, Ahlers' sales revenues and earnings were largely stable as a result of which the earnings trends seen in the first quarter remained almost unchanged for the half-year period. At 49.1 percent, the gross profit margin was on par with the prior year figure, meaning that the EUR 5.8 million decline in sales revenues reduced the gross profit by EUR 2.8 million (2014/15: EUR 58.0 million; previous year: EUR 60.8 million).

Personnel expenses, other operating expenses and depreciation/amortisation before special effects were reduced by a moderate EUR 0.3 million from EUR 57.6 million in the previous year to EUR 57.3 million in the reporting period. Increased costs for the expansion of the distribution activities in France, Spain and Belgium and the savings resulting from the restructuring of Gin Tonic more or less offset each other. In the second quarter of 2015, works of art were sold with a return of EUR 0.5 million.The moderately lower operating expenses slightly mitigated the translation of the reduced gross profit on the lower sales into EBIT before special effects; earnings fell by EUR 2.4 million to EUR 0.7 million (previous year: EUR 3.1 million).

Special expenses for compensation payments to employees and sales agents had only a moderate impact on the bottom line and were slightly lower, at EUR 0.2 million, than the previous year's EUR 0.4 million. Taxes and financial expenses were not influenced by special effects in either year. Earnings before income taxes thus declined from EUR 2.3 million to EUR 0.1 million, while consolidated net income diminished from EUR 1.7 million to break-even level.

Earnings Position

EUR million	H1 2014/15	H1 2013/14	Change in %
Sales	118.1	123.9	-4.7
Gross profit	58.0	60.8	-4.6
in % of sales	49.1	49.1
Personnel expenses*	-27.0	-26.5	-1.9
Balance of other expenses/income*	-27.6	-28.6	3.5
EBITDA*	3.4	5.7	-40.4
Depreciation and amortisation	-2.7	-2.6	-3.8
EBIT*	0.7	3.1	-77.4
Special effects	-0.2	-0.4
Financial result	-0.4	-0.4	0.0
Pre-tax profit	0.1	2.3	-95.7
Income taxes	-0.1	-0.6	83.3
Net income	0.0	1.7	-100.0

* before special effects

SEGMENT RESULTS

The earnings trend in the Premium segment was primarily due to much lower sales in Russia. The segment's results were additionally reduced by increased costs for the expansion of the distribution activities in France, Spain and Belgium. The result of the Jeans & Workwear segment was influenced by the lower sales revenues alone. Thanks to cost savings at Gin Tonic and increased sales revenues at Jupiter, results of the Men´s & Sportswear segment improved by EUR 0.5 million to EUR -1.9 million (previous year: EUR -2.4 million).

EBIT before special effects by segments

EUR million	H1 2014/15	H1 2013/14	Change in %
Premium Brands*	0.7	2.7	-74.1
Jeans & Workwear	1.9	2.8	-32.1
Men's & Sportswear	-1.9	-2.4	20.8
Total	0.7	3.1	-77.4

* incl. "miscellaneous" EUR 0.5 million (previous year: EUR 0.0 million)

FINANCIAL AND NET WORTH POSITION

Equity ratio at a solid 58 percent with little changes in the balance sheet structure

The half-year balance sheet changed only little compared to the previous year. Equity remained almost stable at EUR 104.7 million (previous year: EUR 105.0 million). The equity ratio declined moderately from 60 percent to a still very solid 58 percent. This is attributable to the fact that total assets climbed from EUR 176.3 million to EUR 181.7 million (3.1 percent) because of higher receivables, especially trade receivables in France, Spain and Poland. Due to investments in the new ERP system on the one hand and the repayment of non-current receivables on the other hand, non-current assets remained more or less stable at EUR 61.1 million (previous year: EUR 61.4 million).

As a result of increased receivables, stable inventories and slightly higher trade payables, net working capital rose by a moderate 1.0 percent from EUR 90.8 million in the previous year to EUR 91.7 million.

Key management and financial indicators

		H1 2014/15	H1 2013/14
Sales	EUR million	118.1	123.9
Gross margin	in %	49.1	49.1
EBITDA*	EUR million	3.4	5.7
EBIT*	EUR million	0.7	3.1
EBIT margin*	in %	0.6	2.5
Net income	EUR million	0.0	1.7
Profit margin before taxes	in %	0.1	1.9
Profit margin after taxes	in %	0.0	1.4
Earnings per share
common shares	in EUR	-0.03	0.09
preferred shares	in EUR	0.02	0.14
Net Working Capital**	EUR million	91.7	90.8
Equity ratio	in %	57.6	59.5
Employees		2,141	2,235

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* before special effects

** inventories, trade receivables and trade payables

3. POST BALANCE SHEET EVENTS

After the end of the first six months, it was decided to discontinue the Gin Tonic distribution activities as of the end of 2015. This will result in restructuring expenses not exceeding a maximum amount of EUR 2 million, which will affect the earnings in the second half of 2015.

No further events of special significance for the Ahlers Group occurred prior to the publication of the present half-year report.

4. RISK REPORT

No changes with respect to risks related to future developments have occurred since the start of the new fiscal year. The statements made in the risk report of the 2013/14 consolidated financial statements remain valid.

5. EMPLOYEES

On 31 May 2015, Ahlers employed 2,141 people, 94 less than one year ago (previous year: 2,235). The decline is primarily attributable to the capacity-related reduction of 103 jobs at the company's own production plant in Sri Lanka. In Germany, 648 people worked for the Ahlers Group on the reporting date, 6 more than in the previous year (642). This is due to the fact that the expansion of the company's own Retail operations more than offset the staff reductions at Gin Tonic in the first half of the year. The expansion of the Retail segment also led to an increase by 7 people in the company's headcount outside Germany as stores were opened or taken over in Eastern Europe and two outlet stores were acquired in France.

6. PERFORMANCE OF THE AHLERS SHARES

On May 29, 2015, Ahlers shares traded at EUR 10.61 (common share) and EUR 10.42 (preferred share), down 0.4 percent and 4.1 percent, respectively, on the share price quoted on May 30, 2014. Including the dividend paid out in May 2015, the share prices were up by 3.4 percent and 0.1 percent, respectively, on the previous year.

Since the end of the last financial year on November 30, 2014, the common shares including the dividend lost a moderate 2.1 percent and the preferred shares a moderate 2.6 percent.

7. FORECAST

Difficult conditions for the fashion industry Most economic institutes expect the moderate growth in the eurozone economy to continue in the second half of 2015. The macroeconomic situation is thus unlikely to change much, and consumer sentiment should remain positive, too.

In spite of the positive economic influences, sales revenues of the German clothing retail sector have declined continuously by a total of about 5 percent since June 2014. It will therefore be important for the fashion industry to see whether this slump in sales will continue or come to a standstill in the second half of 2015. After the difficult previous months, June 2015 was a month of growth for fashion retailers including Ahlers and has fuelled hopes of stabilisation.

The further developments in the conflict between Russia and Ukraine will also play an important role for the fashion industry. An escalation of the armed conflict and a declining rouble exchange rate will additionally weigh on consumers' spending mood, whereas mutual rapprochement and a higher

external value of the currency are likely to drive retail sales quickly. While most economists believe that the consequences of a Grexit will be limited, its impact on private consumption is difficult to project.

Decline in sales revenues expected to continue in second half of the year

Based on actual first-half sales, the order backlog for the second half of 2015 and the assumption that retail sales will stabilise at a low level, the Management Board expects sales revenues for the financial year 2014/15 to decline by at least 5 percent. Ahlers' sales revenues in Russia are likely to be halved also in the second half of the year. Pre-sales for the autumn/winter season 2015 are clearly below the prior year level, as retailers have reduced their orders. Stock sales, which declined strongly in the previous year, are therefore expected to pick up as the year progresses.

Gin Tonic to be discontinued as of winter 2015

The Ahlers Management Board has immediately initiated measures aimed at increasing the company's profitability. The distribution activity of the Gin Tonic brand will be discontinued as of the end of 2015. All employees of Gin Tonic Special Mode GmbH and some employees of Ahlers' central divisions will gradually be made redundant in the course of the second half of 2015. Deliveries for the Gin Tonic 2016 summer season will be made as planned.

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Results for FY 2014/15 expected to decline sharply

Due to special charges resulting from the discontinuation of Gin Tonic and the impact of sales on the profit contribution, Ahlers' results will decline more strongly than originally expected in 2014/15. The Management Board had so far projected a stable to slightly lower result (2013/14 Group result: EUR 6.0 million). In spite of the declining results for the financial year 2014/15, cash flow is nevertheless expected to be positive and should permit payment of a satisfactory dividend.

Consolidated balance sheet as of May 31, 2015

A S S E T S

KEUR	May 31, 2015	May 31, 2014	Nov. 30, 2014
A. Non-current assets
I. Property, plant and equipment
1. Land, land rights and buildings	15,218	15,497	15,424
2. Technical equipment and machines	1,494	1,172	1,231
3. Other equipment, plant and office equipment	10,461	10,625	10,747
4. Payments on account and plant under construction	11	74	26
	27,184	27,368	27,428
II. Intangible assets
1. Industrial property rights and similar rights and assets	11,919	11,564	11,966
2. Payments on account	1,566	-	749
	13,485	11,564	12,715
III. At-equity investments	311	211	311
IV. Other non-current assets
1. Other financial assets	557	1,030	1,028
2. Other assets	17,793	19,925	17,826
	18,350	20,955	18,854
V. Deferred tax assets	1,759	1,319	1,395
Total non-current assets	61,089	61,417	60,703
B. Current assets
I. Inventories
1. Raw materials and consumables	23,284	26,668	24,165
2. Work in progress	314	403	388
3. Finished goods and merchandise	49,580	46,151	54,883
	73,178	73,222	79,436
II. Trade receivables	31,847	29,424	36,548
III. Other current assets
1. Other financial assets	1,695	253	1,980
2. Receivables from affiliates	669	0	0
3. Current income tax claims	1,316	1,237	624
4. Other assets	3,829	3,211	4,803
	7,509	4,701	7,407
IV. Cash and cash equivalents	8,050	7,507	6,308
Total current assets	120,584	114,854	129,699
Total assets	181,673	176,271	190,402

E Q U I T Y A N D L I A B I L I T I E S

KEUR	May 31, 2015	May 31, 2014	Nov. 30, 2014
A. Equity
I. Subscribed capital	43,200	43,200	43,200
II. Capital reserve	15,024	15,024	15,024
III. Retained earnings	43,498	45,492	49,409
IV. Currency translation adjustments	584	-1,032	300
Equity attributable to shareholders of Ahlers AG	102,306	102,684	107,933
V. Non-controlling interest	2,407	2,275	2,339
Total equity	104,713	104,959	110,272
B. Non-current liabilities
I. Pension provisions	4,724	4,529	4,890
II. Other provisions	470	326	468
III. Financial liabilities
1. Other financial liabilities	21,137	22,343	22,963
2. Non-controlling interests in partnerships	1,314	1,305	1,235
	22,451	23,648	24,198
IV. Other liabilities	24	25	23
V. Deferred tax liabilities	3,159	2,571	3,198
Total non-current liabilities	30,828	31,099	32,777
C. Current liabilities
I. Current income tax liabilities	859	309	644
II. Other provisions	2,832	2,933	3,780
III. Financial liabilities	19,938	14,711	8,946
IV. Trade payables	13,331	11,889	20,478
V. Other liabilites
1. Liabilities to affiliates	93	229	2,492
2. Other liabilities	9,079	10,142	11,013
	9,172	10,371	13,505
Total current liabilities	46,132	40,213	47,353
Total liabilities	76,960	71,312	80,130
Total equity and liabilities	181,673	176,271	190,402

Consolidated income statement for the first half year 2014/15

KEUR	H1 2014/15	H1 2013/14
1. Sales	118,065	123,921
2. Change in inventories of finished goods and work in progress	-5,518	-4,504
3. Other operating income	2,486	1,507
4. Cost of materials	-54,553	-58,665
5. Personnel expenses	-27,203	-26,775
6. Other operating expenses	-30,049	-30,187
7. Depreciation, amortisation, and impairment losses on property, plant,
and equipment, intangible assets and other non-current assets	-2,717	-2,513
8. Interest and similar income	47	54
9. Interest and similar expenses	-417	-499
10. Pre-tax profit	141	2,339
11. Income taxes	-106	-653
12. Consolidated net income for the period	35	1,686
13. of which attributable to:
- Shareholders of Ahlers AG	-93	1,523
- Non-controlling interest	128	163
Earnings per share (EUR)
- common shares	-0.03	0.09
- preferred shares	0.02	0.14

Consolidated statement of comprehensive income for the first half year 2014/15

KEUR	H1 2014/15	H1 2013/14
12. Consolidated net income for the period	35	1,686
Not to be reclassified to profit and loss
14. Actuarial gains/losses on defined benefit pension plans	-	-
To be reclassified to profit and loss
15. Net result from cash flow hedges	-419	358
16. Currency translation differences	703	215
17. Other changes	-60	-138
18. Other comprehensive income after taxes	224	435
19. Comprehensive income	259	2,121
20. of which attributable to:
- Shareholders of Ahlers AG	191	2,096
- Non-controlling interest	68	25

Consolidated income statement for Q2 of 2014/15

KEUR - Shareholders of Ahlers AG - Non-controlling interest - common shares	Q2 2014/15	Q2 2013/14
1. Sales	50,328	50,953
2. Change in inventories of finished goods and work in progress	-5,311	-3,881
3. Other operating income	1,886	969
4. Cost of materials	-22,427	-24,127
5. Personnel expenses	-13,493	-13,279
6. Other operating expenses	-14,216	-13,816
7. Depreciation, amortisation, and impairment losses on property, plant,
and equipment, intangible assets and other non-current assets	-1,381	-1,248
8. Interest and similar income	21	34
9. Interest and similar expenses	-226	-244
10. Pre-tax profit	-4,819	-4,639
11. Income taxes	1,391	1,432
12. Consolidated net income for the period	-3,428	-3,207
13. of which attributable to:
	-3,503	-3,301
	75	94
Earnings per share (EUR)
	-0.26	-0.24
- preferred shares	-0.26	-0.24

Consolidated statement of comprehensive income for Q2 of 2014/15

KEUR	Q2 2014/15	Q2 2013/14
12. Consolidated net income for the period	-3,428	-3,207
Not to be reclassified to profit and loss
14. Actuarial gains/losses on defined benefit pension plans	-	-
To be reclassified to profit and loss
15. Net result from cash flow hedges	-900	479
16. Currency translation differences	148	124
17. Other changes	-38	-79
18. Other comprehensive income after taxes	-790	524
19. Comprehensive income	-4,218	-2,683
20. of which attributable to:
- Shareholders of Ahlers AG	-4,254	-2,697
- Non-controlling interest	36	14

Consolidated cash flow statement

for the first half year 2014/15

KEUR	H1 2014/15	H1 2013/14
Consolidated net income for the period	35	1,686
Income taxes	105	653
Interest income / Interest expenses	370	445
Depreciation and amortisation	2,717	2,513
Gains / losses from the disposals of non-current assets (net)	-862	-17
Increase / decrease in inventories and
other current and non-current assets	11,732	8,196
Change in non-current provisions	-163	-149
Change in non-controlling interests in partnerships
and other non-current liabilities	79	76
Change in current provisions	-948	32
Change in other current liabilities	-11,418	-8,502
Interest paid	-422	-403
Interest received	47	54
Income taxes paid	-838	-1,318
Income taxes received	221	2,294
Cash flow from operating activities	655	5,560
Cash receipts from disposals of items of property, plant, and equipment	684	60
Cash receipts from disposals of other non-current assets	500	-
Payments for investment in property, plant, and equipment	-2,201	-1,974
Payments for investment in intangible assets	-1,019	-76
Payments for investment in other non-current assets	-	-317
Cash flow from investing activities	-2,036	-2,307
Dividend payments	-5,818	-6,502
Repayment of non-current financial liabilities	-2,077	-2,078
Cash flow from financing activities	-7,895	-8,580
Net change in liquid funds	-9,276	-5,327
Effects of changes in the scope of exchange rates	97	38
Liquid funds as of December 1	1,631	2,669
Liquid funds as of May 31	-7,548	-2,620

Consolidated statement of changes in equity

as of May 31, 2015 (previous year as of May 31, 2014)

				Equity attributable to shareholders of Ahlers AG				Non-controlling interest
	Subscribed capital
					Equity			Accumulated	Total
					diff. from	Total		other com	non
	Common	Preferred	Capital	Retained	currency	Group		prehensive	controlling	Total
KEUR	shares	shares	reserve	earnings	translation	holdings	Capital	income	interest	equity
Balance as of
Dec. 1, 2013	24,000	19,200	15,024	50,472	-1,605	107,091	1,454	795	2,249	109,340
Total net income
for the period				1,522	573	2,095		26	26	2,121
Dividends paid				-6,502		-6,502				-6,502
Balance as of
May 31, 2014	24,000	19,200	15,024	45,492	-1,032	102,684	1,454	821	2,275	104,959
Balance as of
Dec. 1, 2014	24,000	19,200	15,024	49,409	300	107,933	1,454	884	2,338	110,271
Total net income
for the period				-93	284	191		69	69	260
Dividends paid				-5,818		-5,818				-5,818
Balance as of
May 31, 2015	24,000	19,200	15,024	43,498	584	102,306	1,454	953	2,407	104,713

Group segment informations

as of May 31, 2015 (previous year as of May 31, 2014)

by business

segment		Premium Brands		Jeans & Workwear		Men´s & Sportswear		Others	Total
KEUR	2014/15	2013/14	2014/15	2013/14	2014/15	2013/14	2014/15	2013/14	2014/15	2013/14
Sales	76,666	78,919	32,041	34,838	9,220	10,010	138	154	118,065	123,921
Intersegment sales	-	-	-	-	-	-	-	-	-	-
Segment result	-99	2,234	1,719	2,514	-1,944	-2,407	465	-2	141	2,339
thereof
Depreciation and
amortisation	1,687	1,521	744	675	276	307	10	10	2,717	2,513
Other non-cash
items	425	1,874	597	826	59	191	-	-	1,081	2,891
Interest income	31	39	12	12	4	3	-	-	47	54
Interest expense	277	326	110	136	30	37	0	0	417	499
Net assets	115,733	108,684	30,998	30,171	13,122	14,340	18,745	20,520	178,598	173,715
Capital
expenditure	2,084	1,473	876	475	260	102	-	317	3,220	2,367
Liabilities	47,378	43,756	18,948	17,870	6,299	6,231	9	6	72,634	67,863

by

							Total
2014/15	2013/14	2014/15	2013/14	2014/15	2013/14	2014/15	2013/14	2014/15	2013/14
37,633	37,180	23,452	25,648	4,038	4,911	138	154	65,261	67,893
86,266	81,581	18,459	17,996	9,190	10,298	18,729	20,507	132,644	130,382
21,680	20,526	6,365	6,569	3,744	3,657	-	-	31,789	30,752
9,586	7,453	8,144	7,992	2,835	3,173	-	-	20,565	18,618
17,353	21,213	2,224	2,621	1,438	1,442	-	-	21,015	25,276
19,881	19,650	4,395	4,183	1,097	869	16	13	25,389	24,715
		Premium Brands		Jeans & Workwear		Men´s & Sportswear		Others

8. NOTES TO THE FINANCIAL STATEMENTS

Accounting and valuation principles

The interim financial statements for the first six months of fiscal 2014/15 have been prepared in accordance with the International Financial Reporting Standards (IFRS) of the International Accounting Standards Board (IASB) and the International Financial Reporting Interpretation Committee's interpretations of the IFRS (IFRIC). They comply in particular with the provisions of IAS 34 - Interim financial reporting.

The accounting and valuation principles and principles of consolidation are consistent with those applied in the preparation of the consolidated financial statements as of November 30, 2014. A detailed explanation of these principles has been published in the notes to the consolidated financial statements of the 2013/14 Annual Report.

The interim report is prepared in euros and all figures are given in thousands of euros (KEUR). Due to the fact that the report is prepared in EUR thousands, rounding differences can arise, since computations of individual items are based on figures in euros.

Earnings per share

Earnings per share are defined as net income (attributable to the shareholders of the Ahlers AG) divided by the weighted average number of shares outstanding during the reporting period. No shares existed either as of May 31, 2015, or May 31, 2014 that would have a diluting effect on earnings per share.

Contingent liabilities

Contingent liabilities have not changed materially since the last balance sheet date on November 30, 2014.

Segment reporting

The Ahlers Group defines its reporting segments by the type of products. This primarily reflects the internal reporting system as well as the internal decision-making processes.

The Group's reporting segments are Premium Brands, Jeans & Workwear and Men's & Sportswear. Expenses for central functions are charged to the segments with due consideration to the arm's length principle and based on actual usage. Due to the different positionings of the segments, no inter-segment revenues are generated. Where a clear allocation of assets and liabilities is not possible, these are allocated using appropriate distribution ratios. The segment result is the result before taxes, as income taxes are not segmented due to the central management. For the same reason, assets and liabilities do not include deferred or current tax assets and liabilities. This means that the total assets stated in the balance sheet (EUR 181,673 thousand) result from the assets as derived from the segment information (EUR 178,598 thousand) plus deferred tax assets and current income tax assets (EUR 3,075 thousand). Accordingly, the liabilities stated in the balance sheet (EUR 76,960 thousand) result from the liabilities as derived from the segment information (EUR 72,634 thousand) plus deferred tax liabilities and current income tax liabilities (EUR 4,018 thousand) as well as leasing liabilities (EUR 308 thousand).

The Group segment information by geographic regions reflects the main output markets of the Ahlers Group.

The valuation principles for the segment report are the same as for the consolidated financial statements.

9. OTHER INFORMATION

Responsibility statement

To the best of our knowledge, and in accordance with the applicable reporting principles for interim financial reporting, the interim consolidated financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the group in accordance with German accepted accounting principles, and the interim management report of the group includes a fair review of the development and performance of the business and the position of the group, together with a description of the principal opportunities and risks associated with the expected development of the group for the remaining months of the financial year.

Herford, July 2015 The Management Board

Review pursuant to section 37w para. 5 of the German Securities Trading Act (WpHG)

The abridged financial statements and the interim report have neither been reviewed by an auditor nor been audited in accordance with section 317 of the German Commercial Code (HBG).

Forward-looking statements

This report contains forward-looking statements, which are subject to a number of uncertainties that could cause actual results to differ materially from expectations of future developments should one or more of these uncertainties, whether specified or not, materialise or if the assumptions underlying the statements above prove to be incorrect.

Financial calendar

Dates

Interim report H1 2014/15	July 14, 2015
Interim report Q3 2014/15	October 14, 2015
Analysts' conference in Frankfurt am Main	October 21, 2015
German Equity Forum in Frankfurt am Main	November 25, 2015
Annual Shareholders' Meeting in Düsseldorf	May 3, 2016

Ahlers AG

• was established by Adolf Ahlers in 1919 and listed as a joint stock corporation in 1987
• is family-run in the third generation by Dr. Stella A. Ahlers
• is one of the biggest listed European manufacturers of menswear
• produces fashion under eight brands, tailored to its respective target groups
• generates approx. 65 percent of its sales revenues from premium brands
• produces 8,000,000 fashion items per year
• manufactures one third of the production volume in its own factories
• employs some 2,200 people

The brands

AHLERS AG

Investor Relations Elverdisser Str. 313 D-32052 Herford

investor.relations@ahlers-ag.com www.ahlers-ag.com

Phone +49 5221 979-211 Fax +49 5221 72538

ISIN DE0005009708 and DE0005009732