Wolford AG — Earnings Release 2008

Sep 19, 2008

News Details

Ad-hoc | 19 September 2008 08:00

Wolford AG: Press Release Sales and earnings in the first quarter of the 2008/09 fiscal year

Wolford AG / Quarter Results

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Press release

Sales and earnings in the first quarter of the 2008/09 fiscal year

Wolford continues improving sales and earnings in the first quarter of
2008/09

• Sales up by 4.6 percent

• Further increase in earnings

• Growth in almost all geographic markets and distribution channels

• Dividend rises to EUR 0.43 for the 2007/08 fiscal year

Bregenz, September 19, 2008

The Wolford Group, which is listed on the Vienna Stock Exchange, continued
its positive business development, posting a 4.6 percent rise in sales and
a significant improvement in all relevant earnings indicators in the first
quarter of the 2008/09 fiscal year. The international luxury brand raised
sales to EUR 31.9 million in the first three months of the current fiscal
year, up from EUR 30.5 million in the comparable period of 2007/08. The
fact that the Wolford Group once again achieved sales growth is even more
gratifying considering the 16.9 percent increase in sales it had achieved
in the first quarter of the previous year. Adjusted for currency effects,
total sales of the Wolford Group climbed by 8.1 percent in the period May
1, 2008 – July 31, 2008. 'Despite an increasingly difficult business
environment and noticeably cautious consumer spending, we once again
strengthened our good market position as an international luxury brand and,
at the same time, significantly improved earnings', says Holger Dahmen, CEO
of Wolford AG, in positively reviewing the company’s performance during the
first three months of 2008/09.

Further improvement in profitability

All relevant earnings indicators developed even more favourably than sales.
First quarter figures must generally be put into perspective, due to the
fact that total sales of the Wolford Group are by far the lowest in the
first three months of a given fiscal year, whereas costs are
disproportionately high. As a consequence, Wolford traditionally posts
negative earnings in the first quarter. In the first three months of the
current fiscal year, operating result before depreciation, amortisation and
impairment (EBITDA) increased by 34.9 percent, to EUR -0.9 million,
compared to EUR -1.4 million in the first quarter of 2007/08. As a result,
the EBITDA margin in the first quarter 2008/09 climbed by 1.8 percentage
points. The operating result (EBIT) rose by 14.6 percent, to EUR -2.6
million (Q1 2007/08: EUR -3.1 million), and the result from continuing
operations improved compared to the previous year’s figure, amounting to
EUR -3.3 million (Q1 2007/08: EUR -3.5 million).

A sound equity capital structure as the basis for further growth

At the balance sheet date of July 31, 2008, shareholders‘ equity of the
Wolford Group was EUR 75.7 million, an increase of 5.9 percent compared to
the previous year. This corresponds to an equity ratio of 44.9 percent. The
result from continuing operations before taxes plus depreciation,
amortization and impairment in the first three months of the 2008/09 fiscal
year

improved to EUR -1.6 million, compared to EUR -1.9 million in the
comparable period of 2007/08. Net debt rose to EUR 43.4 million. This
development can be primarily attributed to the pre-financing of inventories
required for the delivery of Wolford’s fall/winter collection 2008/09 in
the months of August and September 2008, the improved supply availability
of basic products, the higher level of customer receivables, and the
increased investment volume related to the expansion of the company’s
retail business activities.

Gratifying sales increase in almost all geographic markets

Sales of the Wolford Group developed gratifyingly in almost all of the
company’s geographic markets, driven by the qualitative improvement in its
distribution activities and the continuation of the worldwide roll-out of
the Wolford store concept. In particular, a markedly positive trend in
sales featuring double-digit growth was achieved in Central and Eastern
Europe (+ 50.4 percent), the Netherlands (+ 17.1 percent), France (+ 12.4
percent), the Scandinavian markets (+ 11.0 percent) and in local currency
in the UK (+ 10.8 percent). Sales also increased significantly in Germany,
Wolford’s traditionally largest market, expanding by 8.4 percent, and rose
slightly in the USA, where sales were up by 1.6 percent (in local
currency). In contrast, sales in Wolford’s domestic market of Austria were
slightly below the previous year’s level, following extremely strong growth
in the first quarter of 2007/08 (+ 23.0 percent).

Sales growth in all distribution channels

In particular, Wolford’s distribution with multi-brand retailers (+ 10.8
percent) and with department stores (+ 6.0 percent) developed in an
extremely positive manner in the first quarter of the 2008/09 fiscal year.
The Wolford boutiques (proprietary and partner-operated) registered a
slight sales increase in the first three months of 2008/09, based on a
disproportionately strong first quarter of the previous 2007/08 fiscal
year, which posted a 30.2 percent rise in sales.

In recent months, Wolford successfully continued the roll-out of its store
concept, so that the Wolford collection could be presented in the new look
as per end of July 2008 at a total of 155 redesigned outlets (65
proprietary, 90 partner-operated). Nine sales locations were newly opened
or redesigned in the first quarter of 2008/09 alone.

EUR 0.43 dividend per ordinary share for 2007/08

The Annual General Meeting of Wolford AG held on September 16, 2008
approved the distribution of a dividend for the 2007/08 fiscal year
amounting to EUR 0.43 for each no par value bearer share (2006/07 fiscal
year: EUR 0.30 per share). This represents a dividend payout ratio of 29.4
percent in relation to the net profit for the year of the Wolford Group.

Outlook

In the upcoming months, Wolford will continue to focus on achieving its
strategic targets, i.e. the systematic enhancement of the Wolford brand,
the sustainable positioning in the luxury segment and the expansion of
monobrand distribution. For example, in the second quarter 2008/09, Wolford
plans to open three boutiques in Paris as well as additional boutiques in
Geneva, Berne, Luxembourg, Macao and Hong Kong.

Despite the more difficult business environment, the Executive Board of the
Wolford Group is optimistic that a positive development of sales and
earnings will be achievable in the 2008/09 fiscal year.

Overview of sales and financial data for the first quarter of the 2008/09
fiscal year

(May 1, 2008 – July 31, 2008)

in EUR ‘000 First First Change Change
quarter quarter
2008/09 2007/08 (absolute / % in %
points)
Sales 31,913 30,517 1,396 4.6%
EBITDA (929) (1,427) 498 34.9%
EBITDA margin (2.9%) (4.7%) 1.8
EBIT (operating profit) (2,617) (3,066) 449 14.6%
EBIT margin (8.2%) (10.1%) 1.9
Result from continuing
operations
(before taxes) (3,311) (3,544) 233 6.6%
Net result for the first (2,900) (2,999) 99 3.3%
quarter
Result from continuous
operations
(before taxes) plus (1,623) (1,905) 282 14.8%
DA&Im¹
Capital investments
excluding
financial assets 5,210 2,665 2,545 95.5%
Shareholders’ equity 75,693 71,449 4,244 5.9%
Average number of
employees
(in full-time 1,704 1,602 102 6.4%
equivalents)

¹ DA&Im = Depreciation, amortization and impairment

More information is available at:

www.wolford.com/investor_relations/business_world/investor_relations/finan
cial_reports

Definitions of financial indicators are contained in the latest annual
report for the 2007/08 fiscal year.

Contacts: Holger Dahmen, Chief Executive Officer
Peter Simma, Deputy Chief Executive Officer
Investor@wolford.com
Wolford AG, Wolfordstraße 1, A-6901 Bregenz
+43 (0) 5574/690-0
www.wolford.com

19.09.2008 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

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