Wolford AG — Earnings Release 2009

Mar 18, 2009

News Details

Ad-hoc | 18 March 2009 08:15

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

Wolford AG / Quarter Results

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The issuer is solely responsible for the content of this announcement.

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Press release

Sales and earnings of the first three quarters of the 2008/09 fiscal year

(May 1, 2008 - January 31, 2009)

Wolford continues to achieve a high level of sales - difficult market
environment negatively impacts earnings

• Sales reach EUR 118.5 million - decrease of 5.2 percent

• Earnings indicators decline following strong previous year's
  performance

• Core markets in Western Europe adjusted for currency effects show
  stable sales development

Bregenz, March 18, 2009

Against the backdrop of an extremely challenging business environment and
in spite of continuing restrained consumer demand, the Wolford Group
achieved sales of EUR 118.5 million in the first nine months of the 2008/09
fiscal year (Q 1-3 2007/08: EUR 125.0 million). 'In these economically
turbulent times, we are focusing on our core business in the Legwear,
Ready-to-wear and Lingerie product groups and relying on our strengths as
an internationally established fashion brand in the premium segment with
high customer loyalty. Furthermore, we are intensifying our efforts to
further exploit cost savings potential and optimize monobrand distribution,
and will determinedly pursue the strategy we have adopted, enabling us to
emerge even stronger from this difficult global economic situation',
comments Holger Dahmen, Chief Executive Officer of Wolford AG.

Sales decline - earnings significantly burdened

On balance, total sales of the Wolford Group in the first three quarters of
the current fiscal year declined by 5.2 percent in a year-on-year
comparison, to EUR 118.5 million. Adjusted for currency effects, the sales
decrease totaled only 3.2 percent. This development is based on a
disproportionately strong performance in the previous fiscal year (Q 1-3
2007/08: EUR 125.0 million), which in turn had raised sales by 15.9 percent
compared to 2006/07. In addition to the ongoing perceptible consumer
restraint, the additional costs relating to newly-opened retail sales
locations during the reporting period and the effects of foreign currency
developments negatively impacted earnings indicators. The operating result
before depreciation, amortization and impairment (EBITDA) amounted to EUR
10.1 million (Q 1-3 2007/08: EUR 15.8 million), which corresponds to an
EBITDA margin of 8.5 percent (Q 1-3 2007/08: 12.7 percent). The operating
profit (EBIT) reached a level of EUR 4.7 million, down from EUR 10.7
million in the previous fiscal year. Accordingly, the EBIT margin in the
reporting period was 4.0 percent (Q 1-3 2007/08: 8.6 percent). The profit
from continuing operations in the first three quarters of the 2008/09
fiscal year amounted to EUR 2.1 million (Q 1-3 2007/08: EUR 9.2 million).

Solid equity base

As at the balance sheet date of January 31, 2009, shareholders' equity of
the Wolford Group totaled EUR 79.5 million, above the comparable figure of
EUR 78.8 million on January 31, 2008. This corresponds to an equity ratio
of 48.6 percent, underlining the Wolford Group's success in maintaining the
high level achieved in previous years. Investments rose to EUR 12.4 million
in the first nine months of the 2008/09 fiscal year. During the reporting
period, Wolford primarily invested in the expansion and optimization of its
distribution activities as well as the implementation of new enterprise
resource planning (ERP) and development systems designed to optimize
processes and capacities and thus sustainably reduce costs.

Varied development in Wolford's core geographic markets

Considering sales development from a regional perspective, the Wolford
Group maintained the high level of sales in most of its core geographic
markets in Western Europe. The markets Belgium (+24.6 percent), Switzerland
(+9.5 percent in the Group currency, +4.2 percent in CHF) and France (+6.3
percent) developed gratifyingly. In Great Britain, sales climbed 13.2
percent in GBP (-3.7 percent in Group currency). The previous year's sales
level could be maintained in Austria, whereas sales dropped in Germany
(-2.5 percent) and the Netherlands (-5.5 percent). Consumer restraint was
even more perceptible in Scandinavia (-8.0 percent) and in Southern Europe,
where sales fell even more significantly, at -9.9 percent in Italy and
-15.7 percent in Spain. The USA, which has been particularly affected by
the current economic crisis, registered a 16.4 percent drop in sales (-14.1
percent in USD). In contrast, the Asia/Oceania region reported a 6.4
percent increase in sales.

Slight sales growth at Wolford's proprietary stores

Wolford's proprietary stores continued to develop positively in the first
nine months of the 2008/09 fiscal year. Wolford-owned boutiques,
shop-in-shops and factory outlets increased sales by 2.7 percent
year-on-year. Sales at Wolford's own boutiques rose 0.7 percent, whereas
Wolford-owned and partner-operated boutiques together saw sales decline by
4.1 percent. Sales generated by department stores and multi-brand retailers
were down 6.7 percent and 5.4 percent respectively from the previous year's
figures.

Outlook

The Executive Board of the Wolford Group expects the difficult economic
conditions to continue in the short to medium term, and to be accompanied
by a further weakening in consumer demand.

However, the Wolford Group is prepared to meet the challenges of the future
based on the persistent adherence to strategic targets as well as the
initiation of process optimization and cost savings measures.

The start-up of the company's own production facility in Slovenia is
planned to take place in the 2010/11 fiscal year. This investment will not
only lay the groundwork for the further expansion of the brand in the
future, but also contribute towards safeguarding the long-term success of
the company.

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

(May 1, 2008 - January 31, 2009)

                                      Q 1-3     Q 1-3     Change
                                      2008/09   2007/08   (absolute/

in EUR '000 % points)
Sales 118,450 124,953 (6,503)
EBITDA 10,093 15,828 (5,735)
EBITDA margin 8.5% 12.7% (4.2)
EBIT (operating profit) 4,693 10,726 (6,033)
EBIT margin 4.0% 8.6% (4.6)
Profit from continuing operations 2,060 9,227 (7,167)
Net profit for the first three quarters 1,184 6,744 (5,560)
Earnings per share in EUR 0.24 1.38 (1.14)
Profit from continuing operations
(before taxes) plus DA&Im*) 7,460 14,330 (6,870)
Net cash from operating activities 2,018 2,532 (514)
Capital investments excluding
financial assets 12,423 6,489 5,934
Shareholders' equity 79,480 78,756 724
Equity-to-assets ratio 48.6% 49.7% (1.1)
Number of full-time equivalents
at period end 1,620 1,715 (95)

*) Profit from continuing operations before taxes plus depreciation,
amortization and impairment

This interim report on the first nine months of the 2008/09 fiscal year can
be downloaded from the Internet at www.wolford.com and then Business World
/ Investor Relations / Financial Reports / Interim Reports.

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

18.03.2009 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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