Wolford AG — Earnings Release 2011

Jul 20, 2012

Ad hoc announcement

Wolford AG / Keyword(s): Final Results/Weiteres Schlagwort

Wolford AG: Sales and earnings in the fiscal year 2011/12

Ad hoc announcement transmitted by DGAP - a company of EquityStory AG. The
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Press Information
Sales and earnings in the 2011/12 fiscal year

Wolford Group: Sales Increase in the 2011/12 Fiscal Year

• Sales up 1.3 percent to EUR 154.1 million

• Monobrand distribution almost at 65 percent threshold

• EBITDA and EBIT slightly below prior-year level

• Consistently solid capital structure

• Dividend proposal: EUR 0.40 per share

• Further growth expected in 2012/13

Vienna/Bregenz, July 20, 2012. Wolford Aktiengesellschaft, a publicly
listed company on the Vienna Stock Exchange, succeeded in increasing sales
slightly by 1.3 percent to EUR 154.1 million in the 2011/12 fiscal year
(May 1, 2011 - April 30, 2012) from the prior-year level of EUR 152.2
million in spite of the difficult economic environment. EBITDA amounted to
EUR 15.3 million, slightly below the comparable level of EUR 15.7 million
in 2010/11, whereas EBIT totaled EUR 7.0 million (previous year: EUR 7.3
million). Earnings were impacted by the intensification of future-oriented
measures around the world, such as the expansion of Wolford-owned points of
sales and the corresponding initial costs as well as preparations for
expanding distribution in China and the effects of a tax audit. 'Although
we were confronted with generally difficult economic conditions in the past
fiscal year, along with unusually warm autumn weather and the resulting
buying restraint on the part of consumers and the retail sector, we still
managed to achieve gratifying sales growth on balance. I generally consider
the development of our operating earnings indicators to be closely linked
to our targeted, future-oriented activities designed to strengthen the
global presence of the brand. Thus we often take advantage of short-term
opportunities to expand distribution in the current volatile market
environment and we have opened numerous new sales locations in the past
fiscal year in order to increase the density of our sales network', says
Holger Dahmen, Chief Executive Officer of Wolford Aktiengesellschaft.

Moderate sales growth as a result of a gratifying second half-year
The 2011/12 fiscal year was shaped by the European sovereign debt and bank
crisis. Moreover, the unusually warm weather conditions prevailing in many
areas of Europe in the period September to October 2011 had a negative
impact on the consumer climate in the fashion industry in several core
European markets. This environment also affected the sales and earnings
development of the Wolford Group, which nevertheless managed to maintain
first half-year sales at about the same level as in the comparable
prior-year period. Demand for Wolford products perceptibly increased in the
course of the fiscal year, so that the Austrian luxury brand succeeded in
raising sales by 1.3 percent to EUR 154.1 million (previous year: EUR 152.2
million) for the entire 2011/12 fiscal year as a consequence of a
gratifying second half-year. Earnings affected by investment activity and
special effects
Initial costs related to the expansion of the company's distribution
channels as well as the weather-related buying restraint on the part of
consumers and the retail sector in the second quarter of 2011/12 had a
dampening effect on the development of earnings indicators. As a
consequence, EBITDA in the past fiscal year declined slightly to EUR 15.3
million (previous year: EUR 15.7 million), and EBIT reached a level of EUR
7.0 million (previous year: EUR 7.3 million). Accordingly, the EBITDA
margin of the Wolford Group was 9.9 percent. In the same period, the result
from continuing operations (result before taxes) decreased to EUR 5.2
million (previous year: EUR 5.8 million).

An external tax audit was carried out at Wolford Aktiengesellschaft for an
audit period of seven years (2003/04 to 2009/10). It is likely that a
subsequent tax expense of EUR 0.4 million will be incurred. In addition,
reported tax loss carry-forwards and current value depreciations on
investments in affiliated companies amounting to EUR 2.5 million were not
recognized. On balance, the total additional expense resulting from the tax
audit was approximately EUR 2.9 million. Due to these special effects, the
net result for the 2011/12 fiscal year was EUR 1.4 million (previous year:
EUR 5.1 million). Adjusted for special effects arising from the tax audit,
the net result for the 2011/12 fiscal year totaled EUR 4.3 million.

Solid equity capital base
As at the reporting date of April 30, 2012, shareholders' equity of the
Wolford Group amounted to EUR 83.6 million (April 30, 2011: EUR 83.9
million). The equity ratio was thus at 57.5 percent and could be maintained
at the high level of the previous year (April 30, 2011: 58.0 percent).
Capital investments in the past fiscal year rose by 24.1 percent to EUR 7.9
million (previous year: EUR 6.4 million), which can be attributed to the
targeted expansion of Wolford-owned points of sale. Net debt reached a
level of EUR 15.4 million (April 30, 2011: EUR 12.7 million), corresponding
to a dept/equit ratio of 18.4 percent (April 30, 2011: 15.1 percent).

Dividend proposal: EUR 0.40 per share
The Executive Board will propose to the Supervisory Board and the Annual
General Meeting that the company distribute a dividend of EUR 0.40 for the
past 2011/12 fiscal year for each share entitled to a dividend. A dividend
of EUR 0.40 for the 2010/11 fiscal year was already paid for each no par
value bearer share.

Balanced product portfolio
For more than 60 years, the Wolford Group has served as a trendsetter
setting major milestones in the fashion industry. The company has evolved
from an exclusive supplier of legwear to a globally present luxury brand
with five product groups (Legwear, Ready-to-wear, Lingerie, Swimwear and
Accessories). In the 2011/12 fiscal year the Legwear product group made the
largest contribution to the Group's brand sales with a share of 55 percent.
The Ready-to-wear segment generated 31 percent of total brand sales,
followed by the Lingerie product group with a 10 percent share. The
Accessories segment posted a strong rise in sales, almost doubling its
moderate brand sales share compared to the 2010/11 fiscal year. The
Swimwear product group accounted for about one percent of the Wolford
Group's brand sales.

Monobrand distribution almost at 65 percent threshold
As in past fiscal years, those points of sale which exclusively offer
Wolford products showed a particularly good development during the
reporting period. Sales via Wolford-controlled distribution channels - own
and partner-operated boutiques, factory outlets, concession shop-in-shops
and e-commerce - climbed by 5.3 percent. Thus the share of total sales
generated by Wolford's monobrand stores has increased significantly over
the last five years, from 53.6 percent in the 2006/07 fiscal year to the
current level of 64.6 percent (2010/11: 62.7 percent).

Continued expansion of proprietary stores
Within the context of its concentration on monobrand distribution, the
Wolford Group is focusing in particular on the expansion of its retail
business via Wolford-owned points of sale. Supported by a strategic
customer loyalty program launched in 2010/11, complementary activities in
the field of social media and the increasing importance of online business,
Wolford's proprietary stores (own boutiques, shop-in-shops, factory outlets
and e-commerce) posted a sales increase of 8.4 percent in the 2011/12
fiscal year. Accordingly, the share of total sales generated by retail
stores rose to 54.9 percent by the end of the 2011/12 fiscal year (2010/11:
51.4 percent). This growth in the past fiscal year was partially due to the
expansion of Wolford's own distribution network. However, a gratifying
sales growth of 3.3 percent was also achieved on a like-for-like basis.

Positive development in most core geographic markets
From a regional perspective, a positive picture generally emerged from
Wolford's core geographic markets. In particular, Spain showed a very good
development, with sales up 18.5 percent due to adaptations made to
distribution structures. Wolford also succeeded in generating significant
sales increases, with sales up in Belgium (+ 12.2 percent), UK (+ 8.5
percent in Group currency, + 10.6 percent in the local currency), Germany
(+ 4.8 percent), USA (+ 3.6 percent in Group currency, + 7.1 percent in the
local currency) and Austria (+ 1.7 percent). In contrast, sales fell
slightly in France (- 0.5 percent) and Scandinavia (- 1.4 percent). The
sales decline was more pronounced in CEE (- 3.7 percent), the Netherlands
(- 4.4 percent) and Italy (- 5.4 percent). In Switzerland Wolford was faced
with a sales drop of 12.6 percent in Group currency (- 20.4 percent in the
local currency) as a consequence of the strong Swiss franc and the related
outflow of purchasing power to neighboring countries. Sales in the
Asia/Oceania region fell slightly (- 1.0 percent) and thus almost matched
the comparable level in the 2010/11 fiscal year, which was characterized by
strong sales growth.

Outlook
Wolford will continue to increase the density of its global network of
monobrand stores. The opening of new Wolford-owned and partner-operated
boutiques to strengthen the company's controlled distribution is planned
along with the targeted continuation of its cooperation with trade
partners. In addition, the online business activities of the Wolford Group
will be expanded in order to intensify existing customer relationships and
attract new customer groups. All in all the objective is to further develop
and strengthen the international presence of the Wolford brand. In addition
to concentrating on its core European markets as well as North America, the
Wolford Group plans to extend its involvement in Greater China in order to
steadily grow the business there in the future.

In the first weeks of the new fiscal year, the company succeeded in
achieving a considerable sales increase compared to the previous year. On
the basis of the measures which are being implemented, the Executive Board
of the Wolford Group is optimistic to generate further growth in the
2012/13 fiscal year via higher market penetration in existing markets,
entering new markets and the continuation of the efficiency-enhancement
measures which have already been initiated.

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

investor@wolford.com
Wolford Aktiengesellschaft, Wolfordstrasse 1, A-6901 Bregenz
+43 (0) 5574 690-1477
www.wolford.com

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About Wolford
Wolford Aktiengesellschaft headquartered in Bregenz on Lake Constance
operates 15 subsidiaries and markets its own products in the Legwear,
Ready-to-wear, Lingerie, Swimwear and Accessories segments in 68 countries
via more than 260 monobrand stores (own and partner-operated), about 3,000
trading partners and online. The Austrian company, which has been publicly
listed on the Vienna Stock Exchange since 1995, generated sales of EUR
154.1 million in the 2011/12 fiscal year (May 1, 2011 - April 30, 2012),
and has about 1,600 employees. Since its founding in the year 1950, Wolford
has evolved from a local producer of hosiery to a global luxury fashion
brand.
www.wolford.com

Overview of sales and financial data for the 2011/12 fiscal year
(May 1, 2011 to April 30, 2012)

in TEUR 2011/12 2010/11 Change Change
absolute in %
Sales 154,064 152,151 1,913 1.3%
EBITDA 15,318 15,740 (422) -2.7%
EBITDA margin 9.9% 10.3% (0.4)
EBIT 6,996 7,327 (331) -4.5%
Result from continuing operations 5,173 5,811 (638) -11.0%
(Result before taxes)
Net result for the year 1,361 5,050 (3,689) -73.1%
Net result for the year,
adjusted for special effects* 4,318 5,531 (1.213) -21.9%

Net debt 15,383 12,693 2,690 21.2%
Debt / equity ratio (gearing) 18.4% 15.1% 3.3
Shareholders' equity 83,607 83,853 (246) -0.3%
Equity-to-assets ratio 57.5% 58.0% (0.5)
Capital investments
excluding financial assets 7,942 6,397 1,545 24.1%
Depreciation, amortization, impairment 8,322 8,413 (91) -1.1%
and reversal of impairment
Number of employees at year-end 1,630 1,649 (19) -1.1%
(in full-time equivalents
incl. apprentices)

*Special effects: external tax audit in Austria (2011/12) and Germany
(2010/11)

The Annual Report 2011/12 is available on the Internet at www.wolford.com
under Investor Relations.

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Language: English
Company: Wolford AG
Wolfordstraße 1
6901 Bregenz
Austria
Phone: +43/5574/6901268
Fax: +43/5574/6901219
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; Wien (Amtlicher Handel / Official Market)

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