Wolford AG — Earnings Release 2004

Mar 12, 2004

News Details

Ad-hoc | 12 March 2004 08:30

Wolford materially exceeds prior-year earnings

Ad-hoc-announcement transmitted by DGAP. The issuer is solely responsible for the content of this announcement. ——————————————————————————– Wolford materially exceeds prior-year earnings Positive sales momentum subdued in January Earnings before tax (EBT) up 50 percent Financials improved from previous year First three quarters Change In millions of euros 2003/04 2002/03 in % except per- share data Sales 90.55 98.84 – 8.4% EBITDA 7.76 8.43 – 8.0% EBITDA margin 8.6 % 8.5 % EBIT 2.74 2.57 + 7.0% EBIT margin 3.0 % 2.6 % Financial result (1.14) (1.50) + 24.1% EBT 1.61 1.07 + 50.7% Net profit for the period 1.71 0.65 + 163.1% Cashflow from operating activities 10.59 10.30 + 2.8% Earnings per share in euros 0.36 0.14 + 163.1% From May 2003 to January 2004, despite a decrease in revenues, Wolford increased earnings before taxes (EBT) by 50 percent. As well, nine months into the current fiscal year, the company passed the corresponding 2002/03 results in the other key financial figures. Until into the Christmas shopping season the Wolford Group registered positive sales momentum that further cushioned the significant decreases witnessed earlier in the fiscal year. However, this trend gave way to a subdued pattern in January. The fall/winter end-of-season sales did not meet expectations and the until then significant positive impetus from prompt orders was absent in January. On balance, revenues in the first three quarters of fiscal 2003/04 were EUR 90.6 million compared to EUR 98.8 million in the year-earlier period, a reduction of 8.4 percent as measured in the Group’s reporting currency. Almost half (4.0 percentage points) of the sales contraction was attributable to exchange rate movements and about one-quarter (2.2 percentage points) represented the sales of unprofitable Wolford-owned outlets that were closed down. Meanwhile, new store openings included, among others, four new locations operated by the new distribution partner in the Far East and one boutique each in Kiev and St. Petersburg. Earnings The trend in the specific financials proves that Wolford extended the positive earnings trend of the first two quarters and has reliably restored its financial strength. The third quarter brought net profit for the fiscal year to date to EUR 1.7 million. This figure was reached despite a EUR 8 million reduction in sales, and was more than EUR 1 million higher than the earnings of the year- earlier period. The result corresponds to earnings per share of EUR 0.36 for the first three quarters, compared to EUR 0.14 per share in the first nine months of fiscal 2002/03. Operating profit (EBIT) was pushed up by 7.0 percent to EUR 2.7 million. Earnings before tax improved by 50.7 percent to EUR 1.6 million. The upward jump in earnings, which began in the first half of the year, resulted from the further optimization of the cost structure. Staff costs fell by EUR 3.3 million compared to the first nine months of the previous year. This and the further reduction in other operating expenses (down EUR 1.7 million) led to an improvement in operating profit. Cash flow from operating activities rose by EUR 0.3 million to EUR 10.6 million, corresponding to an increase of 11.7 percent in the cash flow to sales ratio. The financial result improved further by EUR 0.4 million to EUR – 1.1 million. Net debt fell from EUR 40.2 million to EUR 25.7 million and the debt-equity gearing improved from 64.6 percent twelve months earlier to 38.8 percent. Wolford is thus approaching its medium-term target of reducing the gearing to 30 percent. The equity ratio rose from 41.7 percent to 47.9 percent. Business outlook The share of the prompt-order business (short-term orders for immediate delivery) in total revenues continues to grow steadily. This coupled with the uncertainty of future exchange rate movements (especially in the U.S. dollar) makes it difficult to arrive at exact sales forecasts for the full year. In all of the company’s activities, the management’s top priority is to expand business volume and partly offset the first three quarters’ sales decline by the end of the fiscal year. Contact: Peter Simma, Chief Financial Officer, Tel. +43 (0) 5574 690 Ext. 1213, investor@wolford.com, http://www.wolford.com Current photographs of the Executive Board can be downloaded from http://www.wolford.com/download_board end of ad-hoc-announcement (c)DGAP 12.03.2004 ——————————————————————————– WKN: 083400; ISIN: AT0000834007; Index: ATX Listed: Amtlicher Handel in Wien; Freiverkehr in Berlin-Bremen, Frankfurt, Hamburg, München und Stuttgart 120830 Mär 04