Ludwig Beck am Rathauseck-Textilhaus Feldmeier AG

Earnings Release • Mar 17, 2005

News Details

Corporate | 17 March 2005 17:31

Ludwig Beck am Rathauseck: Significant earnings growth in 2004

Corporate-news announcement sent by DGAP. The sender is solely responsible for the contents of this announcement. —————————————————————————— Ludwig Beck: Significant earnings growth in 2004 – Anticipated return to the profit zone as from 2005. Presentation of the consolidated financial statement for fiscal 2004 (in line with IFRS/IAS) Munich, March 17th 2005. In the course of the past fiscal year the LUDWIG BECK Group (ISIN DE0005199905) significantly improved both its sales as well as earnings. At EUR 100.5 million, gross sales at Group level were 8% up on the previous year’s figure of EUR 93.1 million. This equated to an increase of 2.4% after adjustment for floor area. This means that LUDWIG BECK is successfully continuing to buck the general trend in the textile and clothing market where, with a 3% drop in sales, the development was once again negative. Given the trend across the economy as a whole in fiscal 2004, this performance is all the more pleasing. The situation in Germany has been characterized by a general economic trend that fell well short of expectations and by the concomitant increase in unemployment, the reform activities in the healthcare sector and by sharply rising energy prices, and all these factors have had a highly negative impact on the population’s propensity to consume. As already seen in the preceding year, the savings-to-income ratio rose slightly again, this time from 10.7% to 10%. The liberalization of opening hours largely failed to generate positive effects across the German retail sector as a whole. The Christmas season business – which is of particular importance for the trade – generated insufficient stimulus for the overall annual balance sheet in terms of sales and earnings, and post-Christmas business slumped drastically in some cases. LUDWIG BECK’s portfolio of branch operations was expanded in spring 2004 by the opening of 3 new ones. Within the framework of branch brand portfolio optimization the two Gerry Weber branches were transferred to Gerry Weber Retail GmbH. The leather goods and accessories department in the Group’s flagship store at its prime Marienplatz location in Munich was remodelled and expanded as part of the rigorously continued trading-up process, resulting in sales growth of over 40%. Since its launch the exclusive “Hautnah” wellness and beauty department has generated double-digit growth, and in 2004 too registered a sales increase of almost 20%. The past fiscal year saw the ratio of gross earnings to sales revenue rise by 0.5 percentage points to 46.4% as against the previous year’s figure of 45.9%. In conjunction with the positive sales trend the Group’s gross turnover less VAT and material costs rose by 9.0% from EUR 36.9 million to EUR 40.2 million. At 42.6%, the cost-income ratio (costs balanced against the corresponding income) improved as well, dropping by 1.0% from the previous year’s level of 43.5%. Overall, the LUDWIG BECK Group achieved an operating result (EBIT) of EUR 3.3 million as against the previous year’s figure of EUR 1.9 million. The consolidated result (before minority interests) improved from EUR -0.9 million to EUR -0.2 million. The capital-to-assets ratio is 36.6% as against 37.6% the previous year. The German textile trade will have to face a tough challenge in 2005 as well. The strong euro, continuingly high crude oil prices and record unemployment figures were contributory factors that made it necessary to make several downward adjustments of the economic forecasts formulated last autumn. However, there is a glimmer of hope: consumer surveys indicate a continuous improvement in terms of propensity to purchase and consumer sentiment over the past few months. Against this background, experts from the GfK market research institute are reckoning with a growth rate of between 0.5 and 0.8% for 2005. This means that the biggest task from the retail trade’s point of view will be to place unambiguous emphasis on profiling unique strengths and qualities, offer an inviting and attractive shopping experience and find the way back to a realistic development of prices. The growth strategy pursued by LUDWIG BECK is based on 2 pillars. The first of these involves expanding the traditional core business in the up-market segment and extending the associated trading-up process at the flagship store at the Marienplatz location. The second of the two pillars involves the attainment of additional sales and revenue growth from the branch operation concept with its three levels of activity, namely the LUDWIG BECK fashion stores, the mono-label branches and ex-stock sales. The unique orientation concept under the motto “Emporium of the senses” at the Marienplatz flagship store has put LUDWIG BECK in a sound position, and the traditional strengths such as product range and brand diversity, high product quality, competent and friendly advice and superior service are ensuring that the high expectations on the part of the customers are being optimally met. Emotionally presented themed campaigns – but also targeted value-for-money campaigns – are aimed at arousing fascination and the desire to buy among store visitors. A unique, unambiguous and credible corporate positioning pays off in times of a problematic trading environment and provides a sound basis for strengthening the customers’ trust and ensuring their long-term loyalty. Outlook: In 2005 the LUDWIG BECK Group will continue to trust in its own successful trading and is confident of a pronounced return the profit zone against a background of rising sales revenue. Contact: Barbara Gruber (Press Relations) Tel. +49 89 23691-669, Fax +49 89 23691-606 Jens Schott (Investor Relations) Tel. +49 89 23691-798, Fax +49 89 23691-600 Key figures in EUR million – IFRS/IAS 2004 2003 Sales, gross 100,5 93,1 Sales, net 86,7 80,3 EBIT 3,3 1,9 Net loss -0,2 -0,9 persons 587 539 Sales area m2 as at 31.12. 21.520 19.910 end of message, (c)DGAP 17.03.2005 —————————————————————————— WKN: 519990; ISIN: DE0005199905; Index: Listed: Amtlicher Markt in Frankfurt (Prime Standard) und München; Freiverkehr in Berlin-Bremen, Düsseldorf, Hamburg und Stuttgart 171731 Mär 05