Wolford AG — Earnings Release 2005

May 11, 2005

News Details

Ad-hoc | 11 May 2005 08:30

Wolford AG: SALES IN FISCAL 2004/05 DOWN SLIGHTLY

Ad hoc announcement Wolford AG: SALES IN FISCAL 2004/05 DOWN SLIGHTLY Ad hoc announcement transmitted by DGAP. The issuer is solely responsible for the content of this announcement. —————————————————————————— – Sales eased by 2.4% (or 1.6% excluding currency effects) – Main reasons for decrease were poor sales in Far East and Switzerland, decline in private-label business and dollar”s depreciation – Positive tendency in the core markets Bregenz, Austria, May 11, 2005 In the 2004/05 fiscal year as a whole the Wolford Group’s sales dipped from EUR 119.2 million (FY 2003/04) to EUR 116.3 million, or by 2.4 percent. Compared to the prior year”s sales decline of 7.4 percent, the downward trend thus clearly slowed. The main drivers of the sales reduction were the weak U.S. dollar (responsible for about one-third of the decrease) and the significant fall in revenues from private-label business (off EUR 1.4 million or 24 percent compared to the previous year). By contrast, sales of brand products (accounting for 96 percent of total revenues) decreased at a milder rate of 1.4 percent (or 0.5 percent on a currency-adjusted basis) and thus trended somewhat better. Amid a sweeping restructuring of the distribution organization and the associated closures of branch offices and points of sale, revenues in the Far Eastern markets (Japan, Hong Kong, Korea and Australia) fell by one-half. The decrease in Switzerland measured 18 percent. A better trend was experienced in the main markets, Germany and the United States. Although sales in Germany, after several years of double-digit declines, still retreated marginally for the full year 2004/05, the third and fourth fiscal quarter each brought a year-over-year increase in sales. The decrease of 6 percent in the U.S. was caused solely by the dollar’s depreciation against the Group’s accounting currency, the euro. Excluding currency effects, a small sales increase was achieved in the U.S. The business trend remained positive in the following markets: Scandinavia (at growth of 16 percent), CEE (14 percent), UK: (7 percent), Austria (6 percent), the Netherlands (6 percent), Italy (2 percent) and France (2 percent). At the end of the 2004/05 fiscal year (April 30, 2005) the Wolford Group had 227 boutiques, compared to 226 one year earlier. Outlook As a result of the disappointing sales performance in March and April 2005, of higher expenses for the company’s strategic realignment and of one-time effects in the fiscal year completed (for example, a reduction in deferred tax assets caused by the corporate tax rate cut from 34 to 25 percent), the Management Board of Wolford AG expects to report a net loss for the year. The year 2004/05 was dominated by the refocusing of the Wolford Group. As this process has already reached an advanced stage, positive effects are likely for the new fiscal year begun May 1. Encouraging signs in this direction are high market acceptance of the styles presented for advance orders for the fall/winter 2005/06 collection, intensified boutique expansion in strategic growth markets and the new designer collaborations being assembled. The sales results reported here are preliminary in nature. The final sales data and the full financial results for the fiscal year 2004/05 will be published on July 21, 2005. Contacts: Holger Dahmen, Chief Executive Officer Peter Simma, Chief Financial Officer investor@wolford.com Wolford AG, Wolfordstraße 1, A-6901 Bregenz, Austria +43 (0) 5574/690 0 http://www.wolford.com Wolford AG Wolfordstraße 1 6901 Bregenz Austria ISIN: AT0000834007 WKN: 083400 Listed: Amtlicher Handel in Wien; Freiverkehr in Berlin-Bremen, Frankfurt, Hamburg, München und Stuttgart End of ad hoc announcement (c)DGAP 11.05.2005 110830 Mai 05