Wolford AG — Earnings Release 2006

Sep 21, 2006

News Details

Ad-hoc | 21 September 2006 08:30

Wolford AG: Results for first quarter 2006/07

Ad hoc announcement transmitted by DGAP – a company of EquityStory AG. The issuer is solely responsible for the content of this announcement. —————————————————————————— Wolford: continued earnings improvement in first quarter 2006/07 · Sales up 6.2 percent · EBITDA (earnings before depreciation and amortization) up 133.6 percent · EBIT 48.3 percent higher than for the same period last year · Profit from continuing operations increased by 39.8 percent Wolford Group began the new financial year not only by posting a sales increase of 6.2 percent for first quarter 2006/07, but also with a significant improvement in earnings trends compared with the same period last year. The Group achieved a considerable increase in EBITDA (earnings before depreciation and amortization) for the first quarter of the current year: EBITDA climbed 133.6 percent, from EUR –0.91m in first quarter 2005/06 to EUR 0.31m, as a result of improved recovery of fixed costs through higher sales. EBIT (earnings before interest and tax) improved by 48.3 percent, from EUR –2.34m to EUR –1.21m. The profit from continuing operations in the first three months increased by 39.8 percent, from EUR –2.74m in 2005/06 to EUR –1.65m in 2006/07. Holger Dahmen, Wolford Chief Executive Officer, comments: “We are pleased to have been successful in following up the positive achievements of 2005/06 with improvements in all earnings measures in the first quarter of the new financial year. However, it should also be noted that the results for these three months are not entirely representative, in that the May to July period is traditionally by far the weakest quarter for Wolford sales, while costs are disproportionately high.” Cash flow before working capital changes improved from EUR –1.31m to EUR -0.13m. Cash flow from continuing operations compared with first quarter 2005/06 decreased by EUR 1.92m to EUR –8.47m, which was principally the result of more funds being tied up in working capital. First quarter earnings per share improved by 21.9 percent, from EUR –0.35 in 2005/06 to EUR –0.27 in 2006/07. Equity at the end of the quarter, at EUR 62.48m, was 5.7 percent up on last year’s figure, while net debt rose by 22.5 percent, from EUR 24.95m to EUR 30.55m. Sales As reported at the beginning of August, Wolford Group posted total sales for the first quarter of EUR 26.1m, a more than 6 percent increase on the EUR 24.6m achieved in the comparable period last year. The Austrian luxury label recorded double-digit growth in many of its most important markets. Holger Dahmen, Wolford CEO, attributes the increase to the decision to clearly position the brand in the luxury segment of the market: “The strategic decision to gradually add ready-to-wear outerwear to the Wolford portfolio was extremely well received by customers, and the majority of growth was accounted for by this new departure. At the same time, we have successfully relaunched the Wolford brand appearance, starting from our core markets. The new store design, which has already been introduced in numerous points of sales, conveys the revised brand message visually.” The fast-paced growth of Wolford boutiques continued into the first quarter of 2006/07. Together with the points of sales in department stores, which increased sales by 16.1 percent, they were the growth drivers in the first quarter. The Wolford boutiques (both Wolford’s own and partner-operated stores) increased sales by 18.4 percent, and continued to make the largest contribution to overall sales revenues, with double-digit growth in most markets. The performance of the multibrand retail business in the first three months remained muted, and sales by this distribution channel were down on the same period last year. With growth rates in double figures in the majority of markets the Wolford Group’s performance with its own stores was highly successful. Wolford-operated stores, shop-in-shops and factory outlets recorded a combined increase in sales of 25.3 percent compared with the first three months of the previous year. Comparing like with like (i.e., factoring out new stores), first quarter sales were up 8.4 percent. Outlook Wolford will continue to implement the new store concept in the second quarter, hence is planning to open a number of new stores and to refit existing ones. In the light of the strong start to business year 2006/07, the double-digit increase in pre-orders for the autumn/winter collection and positive early feedback on the spring/summer collection – the first designed by new creative director Antonio Berardi – the Executive Board forecasts an increase in sales for the whole financial year to at least EUR 128m. Summary sales and financial indicators first quarter 2006/07 (May 1–July 31, 2006) Quarter 1 EUR m 2006/07 2005/06 Change % Sales 26.11 24.59 6.2% EBITDA 0.31 -0.91 133.6% EBITDA margin 1.18 -3.71 – EBIT -1.21 -2.34 48.3% EBIT margin -4.64 -9.53 – Profit from continuing operations -1.65 -2.74 39.8% Result for quarter -1.31 -1.67 21.9% Cash flow before working capital changes -0.13 -1.3 90.0% Cash flow from operating activities -8.47 -6.55 -29.4% Earnings per share (EUR) er -0.27 -0.35 21.9% Contact: 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 www.wolford.com (c)DGAP 21.09.2006 ————————————————————————— 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 —————————————————————————