Wolford AG — Earnings Release 2006

Dec 15, 2006

News Details

Ad-hoc | 15 December 2006 08:30

Wolford AG: Financial results for the first half of the 2006/07 financial year

Ad hoc announcement transmitted by DGAP – a company of EquityStory AG. The issuer is solely responsible for the content of this announcement. —————————————————————————— Wolford achieves significant earnings growth in first half of 2006/07 · EBIT tripled, with fivefold increase in result from continuing operations (RCO) · EBITDA margin pushed up to 10.4 percent · Sales up by 13.1 percent · Continued successful roll-out of store concept Bregenz, Austria – December 15, 2006 –’The earnings in the first six months of this financial year clearly show Wolford to be on the right track,’ comments Wolford Chief Executive Holger Dahmen on the positive trend in the first half of the year that saw substantial growth not only in the Wolford Group’s sales, but also in its earnings results. ‘With our tightly focused investments at the point of sale and the expansion of the ready-to-wear product portfolio, we generated a healthy improvement in profitability as well,’ adds Dahmen. Earnings grow faster than sales Thus, the Austrian luxury label succeeded in nearly tripling operating profit (EBIT) from EUR 1.2 million in the first half of 2005/06 to EUR 3.6 million in the first six months of financial year 2006/07. In the same period, EBITDA grew by 62.6 percent from EUR 4.1 million to EUR 6.7 million, increasing the EBITDA margin to 10.4 percent. Still more favorable was the rate of growth in result from continuing operations, which rose to EUR 2.6 million, a more than fivefold increase. The good performance of the Wolford Group in the first half of 2006/07 was also reflected in earnings per share, which more than quadrupled from EUR 0.13 to EUR 0.54. Sound equity capital base At the reporting date of October 31, 2006, equity was EUR 66.4 million, up 8.3 percent from one year earlier, while net debt was up 13.4 percent from EUR 24.7 million to EUR 28.0 million due to the greater investment activity and a growth-induced increase in the amount of capital tied up in current assets. Earnings before tax plus amortisation and depreciation increased by EUR 2.4 million to EUR 5.7 million. Significant sales growth Boosted by three years’ consistent focus on the strategic realignment of the Wolford product range, as well as by intensified brand communication, sales of the Wolford Group grew 13.1 percent. Regarding the geographic distribution of revenues, in the first six months of this financial year the Wolford Group achieved double-digit growth rates in most markets. Thus, in the highly competitive U.S. market, the company’s sales grew by 35 percent. Similarly, Wolford pushed up sales revenues substantially in the U.K. (by 22 percent), Central and Eastern Europe (also 22 percent), the Netherlands (19 percent), Germany (16 percent) and Italy (11 percent). With an increase of 8 percent in the Scandinavian countries, 5 percent in the Austrian home market, 4 percent in France and 1 percent in Spain, sales in the other European markets too were on the rise. In Switzerland a trend reversal that began to emerge in the second quarter created a small sales increase for the period under review. The key drivers of sales in the reporting period were once again the Wolford-owned outlets (own boutiques, shop-in-shops and factory outlets), which together generated sales growth of 31.0 percent compared to the first six months of the prior financial year. Even on a like-for-like basis, Wolford recorded a considerable expansion of 12.5 percent in sales in this segment. With a rise of 30.7 percent in sales, the Wolford-owned boutiques in particular made a critical contribution to revenue growth. The Wolford Group’s sales with the partner-operated boutiques as well were up by 13.6 percent. All Wolford boutiques combined (both the Group’s own and partner-operated ones) registered revenue growth of 23.6 percent, thanks not least to the exceedingly successful launch of the new store concept. Legwear and ready-to-wear deliver double-digit sales growth Looking at sales by product group, legwear and (comprising all outerwear) ready-to-wear performed impressively, with revenue growth in the double digits. Thus, brand sales in the ready-to-wear lines rose by 25 percent, legwear grew at a two-figure rate thanks to the current fashion trend, and lingerie was stable at the prior-year level. Wolford’s high-end sweaters, knit ensembles, pants, skirts and textile accessories were very well received by retailers. Accordingly, advance orders for the spring/summer 2007 collection are showing a very strong trend and the new ready-to-wear products as well as trendy seasonal legwear are proving highly popular. Outlook Wolford will continue to roll out the new store concept, with plans both to add new outlets and redesign existing ones. Under its strategy of controlled growth, Wolford intends to pursue a cautious regional expansion, for which it has already taken the first successful steps in Asia. As a result of the good order situation, the management expects sales for this financial year to grow to at least EUR 130 million and profitability to improve at a rate exceeding the pace of sales growth. Earnings data for first half of 2006/07 (May 1 to October 31, 2006) in thousands of Euros First six months Change 2006/07 2005/06 in % Sales 64,737 57,257 13.1 % EBITDA 6,704 4,122 62.6 % EBITDA margin in % of sales 10.4 % 7.2 % – EBIT 3,562 1,222 191.4 % EBIT margin in % of sales 5.5 % 2.1 % – RCO 2,605 456 471.4 % Net result for the period 2,543 634 300.8 % Earnings per share in EUR 0.54 0.13 300.8 % Earnings before tax plus amortisation and depreciation 5,746 3,356 71.3 % Contacts: Holger Dahmen, Chief Executive Officer Peter Simma, Deputy Chief Executive Officer investor@wolford.com Wolford AG, Wolfordstraße 1, A-6901 Bregenz, Austria +43 (0) 5574/690-0 www.wolford.com (c)DGAP 15.12.2006 ————————————————————————— Language: English Issuer: Wolford AG Wolfordstraße 1 6901 Bregenz Österreich Phone: +43/5574/6907434 Fax: +43/5574/6907440 E-mail: investor@wolford.com WWW: www.wolford.com ISIN: AT0000834007 WKN: 83400 Indices: ATX Listed: Amtlicher Markt in Wien; Freiverkehr in Berlin-Bremen, Stuttgart, München; Open Market in Frankfurt End of News DGAP News-Service —————————————————————————