Wolford AG — Earnings Release 2007

Sep 28, 2007

Press Release Financial results for the first quarter of 2007/08

Wolford sustains its growth trajectory in Q1 2007/08

• Sales up by 16.9 percent
• Profit reduced by seasonality and by capacity expansion
• Wolford boutiques are key growth drivers
• Dividend of EUR 0.30 per common share for 2006/07 fiscal year
• Forecast for full year: sales of at least EUR 150 million and earnings growth in excess of sales growth

Bregenz, Austria, September 21, 2007

The Wolford Group remained on its growth path in the first three months of this fiscal year with a sales increase of 16.9 percent to EUR 30.52 million, pushing up revenues at doubledigit rates in almost all markets and strategic distribution channels.

With EBIT of EUR -3.07 million (Q1 2006/07: EUR -1.21 million) and a result from continuing operations (before taxes) of EUR -3.54 million (Q1 2006/07: EUR -1.65 million), it was not possible for the Austrian luxury label to match the exceptionally strong first quarter of the prior year. To place the profitability data for the Wolford Group's first quarter into perspective, it is important to note that the period from May to July traditionally represents the quarter with by far the lowest sales of the year, coinciding with disproportionately high expenses. This pattern is normal and has always resulted in a negative first-quarter earnings contribution.

"The expansion of our range by Ready-to-Wear products and the clear focus on the improvement and expansion of our monobrand store network are bearing fruit in the form of the powerful sales growth now underway for nine quarters. We are very pleased with the order situation and early sales results for the fall/winter 2007/08 collection, which is being welcomed with great enthusiasm by retailers and consumers worldwide. Even if the increased costs from capacity expansion on the production side and investment in distribution have led to poorer profitability in the first quarter of this year than in the yearearlier quarter, we continue to expect profit for the year as a whole to rise more rapidly than sales and predict that sales will reach at least EUR 150 million by the end of the fiscal year," says Wolford CEO Holger Dahmen regarding the results of the Wolford Group in the first quarter of 2007/08.

Sound equity base

At the reporting date of July 31, 2007, shareholders' equity was EUR 71.45 million, or 14.4 percent higher than the prior-year amount. This brought the equity ratio to 47.1 percent. Net debt in the reporting period was at the year-earlier level.

Double-digit sales growth in nearly all markets and distribution channels

The purposeful optimization of the product range, the quality improvement in the monobrand distribution network and the continued roll-out of the new store concept resulted in substantial revenue growth. Sales in the first quarter rose by 16.9 percent, from EUR 26.11 million in the prior year's first quarter to EUR 30.52 million. The largest contribution to total sales again came from the Wolford boutiques, which collectively increased their sales by 30.2 percent and attained revenue growth in the double digits in almost every market. However, the sales expansion is also partly attributable to the strategic positioning of the Wolford brand in the luxury segment. As Holger Dahmen says in commenting on the Wolford Group's sales growth, "the Wolford brand is entrenched as a luxury label in the upper premium segment of the international fashion markets." He adds: "Our five product groups – Legwear, Ready-to-Wear, Lingerie, Swimwear and Accessories – complement one another perfectly and are the basis for our ability to focus our competencies in the luxury segment even more efficiently on meeting customers' needs to the highest possible degree."

Dividend of EUR 0.30 per common share for fiscal year 2006/07

The Annual Shareholder Meeting on September 14, 2007 approved the payment of a dividend of EUR 0.30 per share.

Outlook
Wolford will continue to concentrate on	the strategic	goals of	systematically developing	the
brand and permanently positioning it in	the luxury	goods segment	of the fashion	market.
Besides the optimization of the product	portfolio	expanded by the	Ready-to-Wear	lines,
Wolford will also maintain the emphasis on improving distribution, particularly on the
expansion and quality enhancement of	the network	of monobrand	locations through	the
ongoing consistent implementation of the	new store	concept.
Thanks to the very encouraging order	situation for the	fall/winter	2007/08 collection,	which
will also include the first co-branded	styles with	Italian couture	house Valentino,	the
Executive Board of Wolford AG expects	continuing sales	growth for	this fiscal year to	a total
of at least EUR 150 million and believes	full-year earnings	will rise at	a pace exceeding	the
rate of sales growth.
Key financials for the first quarter of 2007/08 (May 1 to July 31, 2007)
	First quarter	ended July 31
Amounts in EUR million	2007/08	2006/07	Change in
			EUR million
Sales	30.52	26.11	4.41
EBITDA	(1.43)	0.31	(1.74)
EBIT	(3.07)	(1.21)	(1.86)
Net financial items	(0.48)	(0.44)	(0.04)
Result from continuing operations	(3.54)	(1.65)	(1.89)
before taxes
Result for Q1	(3.00)	(1.31)	(1.69)
Shareholders'equity	71.45	62.48	8.97
Equity ratio based on total assets	47.1%	45.4%	1.7%-points
Gross liquidity	9.49	9.13	0.36
Bank debt and other borrowings	40.30	39.68	0.62
Net debt	30.82	30.55	0.27
Debt/equity ratio	43.1%	48.9%	5.8%-points
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

Key financials for the first quarter of 2007/08 (May 1 to July 31, 2007)

	1. Quarter acc. 31.07.2007	1. Quarter acc. 31.07.2006	Last B.Y. / Period 30.04.2007
	TEUR	TEUR	TEUR
ASSETS
Non-current assets
Property, plant and equipment	61.846	60.971	61.898
Goodwill	706	679	646
Intangible assets excluding goodwill	5.671	5.012	4.659
Financial assets	8.643	8.726	8.685
Non-current receivables	1.152	972	1.151
	78.018	76.360	77.039
Deferred tax assets	6.431	5.106	5.782
Current assets
Inventories	41.882	31.751	34.338
Current receivables and other assets	17.351	18.507	18.576
Prepaid expenses	3.739	3.467	1.346
Current securities and other financial investments	36	0	36
Cash and cash equivalents	4.276	2.568	3.434
	67.284	56.293	57.730
TOTAL ASSETS	151.733	137.759	140.551
SHAREHOLDERS' EQUITY AND LIABILITIES
Shareholders' Equity
Share capital and capital reserves	38.168	38.167	38.167
Other reserves	24.461	24.135	24.871
Result of the year	13.484	9.922	16.067
Treasury stock	-4.664	-9.748	-4.663
	71.449	62.476	74.442
Deferred tax liabilities	451	144	152
Non-current liabilities Non-current financial liabilities	7.842	8.572	10.922
Provisions for employee benefits	14.632	13.516	14.488
Other non-current liabilities	174	165	166
	22.648	22.253	25.576
Current liabilities
Bank loans and overdraft and non-current financial liabilities Current provisions	32.460 6.180	31.112 5.974	15.226 5.507
Trade payables	5.303	3.896	5.901
Payments received on account	841	777	893
Other current liabilities	12.401	11.127	12.854
	57.185	52.886	40.381
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES	151.733	137.759	140.551

	1. Quarter acc. 31.07.2007 TEUR	1. Quarter acc. 31.07.2006 TEUR
PROFIT AND LOSS ACCOUNT
Sales Other operating income Change in inventories of finished goods and work-in-process Own work capitalized	30.517 729 5.979 40	26.111 1.197 4.528 21
OPERATING OUTPUT	37.265	31.857
Cost of material and services Staff costs Depreciation, amortization and impairment losses on property, plant and equipment and intangible assets excluding goodwill Goodwill impairment Other operating expenses	-11.349 -18.740 -1.639 0 -8.603	-8.441 -15.953 -1.518 0 -7.156
OPERATING RESULT	-3.066	-1.211
Net interest cost Net investment securities income Interest cost of employee benefit liabilities	-302 26 -202	-277 23 -185
RESULT FROM CONTINUING OPERATIONS	-3.544	-1.650
Income taxes	545	345
NET LOSS FOR THE PERIOD	-2.999	-1.305
Earnings per share in EUR Earnings per sharerepresent both basic and diluted earnings, as there was no dilution effect.	-0,61	-0,27
Weighted average shares outstanding in Tpcs.	4.900	4.750

	1. Quarter acc. 31.07.2007 TEUR	1. Quarter acc. 31.07.2006 TEUR
CASH FLOW - STATEMENT
NET CASH FROM OPERATING ACTIVITIES	-10.364	-8.474
NET CASH USED IN INVESTMENT ACTIVITIES	-2.950	-1.845
NET CASH USED IN FINANCING ACTIVITIES	14.154	10.564
Net increase in cash and cash equivalents	840	245
Cash and cash equivalents at beginning of period	3.434	2.321
Effect of exchange rate fluctuations on cash and cash equivalents
at beginning of period	2	2
CASH AND CASH EQUIVALENTS AT END OF PERIOD	4.276	2.568

$\sqrt{\frac{1}{2}}$

	1. Quarter acc. 31.07.2007 TEUR	1. Quarter acc. 31.07.2006 TEUR
SHAREHOLDERS' EQUITY
Equity at the beginning of business year	74.442	63.972
Net loss of the period	-2.999	-1.305
Translation component	-412	-147
Other changes	418	-44
Equity at the end of period	71.449	62.476