Wolford AG — Earnings Release 2007

Dec 14, 2007

News Details

Ad-hoc | 14 December 2007 08:30

Wolford AG:Sales and earnings for the first half of 2007/08

Wolford AG / Half Year Results

Release of an Ad hoc announcement, transmitted by DGAP - a company of
EquityStory AG.
The issuer is solely responsible for the content of this announcement.

---

Wolford completes first six months with significant sales growth that is
topped by earnings expansion
· Sales up by 18 percent
· Double-digit sales advances in all major markets and strategic
distribution channels
· EBITDA and EBIT respectively improve by 26 and 43 percent
· Sales target raised to about EUR 155 million
In the first six months of this fiscal year, the Wolford Group's dynamic
growth continued unabated, with a substantial rise in sales and
disproportionately higher growth rates in profits.

Double-digit sales expansion in all major markets and strategic
distribution channels

The Group’s sales in the first half of the fiscal year rose by 18.2 percent
from EUR 64.7 million in the prior-year period to EUR 76.5 million. In the
process, Wolford delivered double-digit growth rates in all key markets and
strategic distribution channels. 'We again beat the year-earlier sales
figure, with the highest year-over-year growth of 19.1 percent coming in
the seasonally strong fiscal second quarter. We see this convincing sales
performance as clear proof that our consistent realignment of Wolford’s
product portfolio – especially in the Ready-to-Wear lines – and the sharply
focused investment in points of sale were the right strategic choices,'
says a pleased Holger Dahmen, CEO of Wolford AG, in reviewing the first
half of the fiscal year.

Vigorous earnings growth outpaces rate of sales expansion

Even steeper than the sales trend in the first six months of the fiscal
year was Wolford’s growth in earnings. In the second quarter, which along
with the third quarter is traditionally one of the strongest periods of the
year, the Austrian luxury fashion house was able to grow its earnings even
more swiftly than sales. Thus, in the second quarter alone, EBITDA jumped
53.9 percent to EUR 9.8 million (Q2 2006/07: EUR 6.4 million) and operating
profit (EBIT) expanded even more powerfully, by 71.0 percent to EUR 8.2
million (Q2 2006/07: EUR 4.8 million). For the EBITDA margin this
translated to an increase of almost 5 percentage points to 21.4 percent; at
17.8 percent the EBIT margin as well was considerably higher than one year
earlier (Q2 2006/07: 12.4 percent).

The compelling second quarter made itself felt in the earnings results for
the first half of the business year. In total over the first six months of
the fiscal year, Wolford’s EBITDA climbed 25.5 percent from EUR 6.7 million
to EUR 8.4 million and EBIT rose by 43.1 percent to EUR 5.1 million (H1
2006/07: EUR 3.6 million). There was also a marked improvement in pre-tax
profit from continuing operations, which grew to EUR 4.0 million, up 53.8
percent (H1 2006/07: EUR 2.6 million). Profit from continuing
operations before taxes, depreciation, amortization and impairment was
boosted by EUR 1.6 million to EUR 7.3 million. At the reporting date of
October 31, 2007, shareholders’ equity was EUR 76.2 million, or
14.8 percent above the year-earlier level of EUR 66.4 million.

Earnings per share rose by a significant 37.8 percent from EUR 0.54 to EUR
0.74.

Substantial growth in all major product groups

In the first half of 2007/08, Wolford achieved a tangible increase in brand
sales in every important product group. Particularly Legwear and
Ready-to-Wear showed very satisfactory growth of, respectively, 16 and 19
percent. Brand sales in the Lingerie and Accessories product groups
likewise grew at double-digit rates.

Sales growth in the two figures in all main geographic markets

As to market regions, in the first six months of the fiscal year the
Wolford Group achieved double-digit growth rates in all major markets. In
the long-established markets such as the Netherlands (up 34.3 percent), the
United Kingdom (up 32.6 percent in Group currency; 33.1 percent in
British pounds) and Scandinavia (up 23.6 percent), the international luxury
goods label from Austria made excellent headway over the six-month
reporting period. Wolford also achieved considerable growth in the Austrian
domestic market (up 18.6 percent), in France (up
16.3 percent), Switzerland (up 13.6 percent in Group currency; 19.1 percent
in Swiss francs) and Spain (up 13.0 percent). Similarly, double-digit
growth continued in Germany (up 10.9 percent) and Italy (up 10.3 percent)
as well as the USA (up 10.3 percent in Group currency; 18.9 percent in US
dollars). In the Central and Eastern European countries and Asia/Oceania,
Wolford further expanded sales thanks to the strategy of intensified,
controlled growth implemented in these regions.

Wolford boutiques drive sales

With a sales expansion of 26.7 percent (or 13.3 percent on a like-for-like
basis), Wolford’s proprietary stores – boutiques, shop-in-shops and factory
outlets – accounted for much of the growth. In the first half of 2007/08
the prime movers of revenue remained the Wolford boutiques. Sales with
partner-operated boutiques increased by 21.5 percent and the Wolford-owned
boutiques saw even higher sales growth of 28.7 percent. Overall the
boutiques registered revenue growth of 25.9 percent in the six-month
reporting period compared to the first half of the prior year.

New look distinguishes 121 locations worldwide

Growth remained especially good at those Wolford boutiques and department
store shop-in-shops which already sport the updated, bright and modern
ambience. From the launch of the new concept’s rollout in August 2005 to
the quarterly reporting date at the end of October 2007, the concept had
already been executed at 121 locations (47 Wolford-owned and 74
partner-operated ones), including 20 stores in the second quarter of this
year alone. The progressive, distinctive Wolford premium look thus now also
graces stores such as the Wolford boutique in New York’s trendy Soho
district, Wolford’s shop-in-shop at London’s luxury department store,
Harrods, and the Wolford boutiques in Oslo and on Rue St. Honoré in Paris.

Outlook for full year 2007/08: Sales growth to approximately EUR 155
million

In the second half of the year Wolford will continue to focus on the twin
strategic goals of systematic brand development and the permanent
positioning as a luxury fashion brand. Alongside the ongoing optimization
of the product portfolio in women’s outer garments (Ready-to-Wear) and
Lingerie, Wolford will continue to emphasize the steady expansion of
controlled distribution, primarily in the form of monobrand stores.

For the current 2007/08 fiscal year as a whole, the Executive Board expects
the good business performance to continue, with an increase in sales to
about EUR 155 million and earnings that grow more rapidly than sales.

Sales and earnings data for the first half of 2007/08 (May 1 to October 31,
2007)

FIRST QUARTER SECOND QUARTER SIX MONTHS
Amounts in EUR ‘000 except per-share data EndedJuly 31, 2007 EndedOct. 31,
2007 EndedOct. 31, 2007 EndedOct. 31, 2006 Change in %
Sales 30,517 45,990 76,507 64,737 18.18%
EBITDA (1,427) 9,842 8,415 6,704 25.53%
EBITDA margin based on sales -4.68% 21.40% 11.00% 10.36%
EBIT (operating profit) (3,066) 8,162 5,096 3,562 43.07%
EBIT margin based on sales -10.05% 17.75% 6.66% 5.50%
Profit from continuing operations before taxes (3,544) 7,551 4,007 2,605
53,84%
Net profit for the period (2,999) 6,613 3,614 2,543 42.13%
Earnings per share in EUR (0.61) 1.35 0.74 0.54 37.78%
Profit from continuing operations before taxes and DA&Im* (1,905) 9,231
7,326 5,746 27.48%
* DA&Im represents depreciation, amortization and impairment

Contacts: Holger Dahmen (Chief Executive Officer)
Peter Simma (Deputy Chief Executive Officer)

Investor@wolford.com
Wolford AG, Wolfordstraße 1, 6901 Bregenz, Austria
+43 (0) 5574/690-0
www.wolford.com
14.12.2007 Financial News transmitted by DGAP

---

Language: English
Issuer: Wolford AG
Wolfordstraße 1
6901 Bregenz
Österreich
Phone: +43/5574/6907434
Fax: +43/5574/6907440
E-mail: investor@wolford.com
Internet: www.wolford.com
ISIN: AT0000834007
WKN: 83400
Indices: ATX
Listed: Freiverkehr in Berlin, München, Stuttgart; Open Market in
Frankfurt; Foreign Exchange(s) Wien

End of News DGAP News-Service

---