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Wolford AG — Earnings Release 2013
Jul 19, 2013
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Earnings Release
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Corporate | 19 July 2013 07:59
Wolford AG: Sales and earnings in 2012/13 financial year
Wolford AG / Key word(s): Final Results
19.07.2013 / 07:59
Press Information
Sales and earnings in the 2012/13 financial year
Wolford Announces Final Results for the 2012/13 Financial Year
– Preliminary results published on June 14, 2013 confirmed
– Sales up 1.6% to EUR 156.47 million
– EBITDA and EBIT significantly below the prior-year level
– Clearly positive cash flow and consistently sound capital structure
– Continuation of international expansion, own retail stores generate sales increase
– Sales growth and positive operating results targeted for 2013/14
Vienna/Bregenz, July 19, 2013 . Wolford AG, a publicly listed company on the Vienna Stock Exchange, announced its final results for the 2012/13 financial year today, confirming the preliminary figures published on June 14, 2013. In the past financial year (May 1, 2012 – April 30, 2013), the company succeeded in increasing sales by 1.6% or EUR 2.40 million to EUR 156.47 million. EBITDA at EUR 7.90 million was significantly below the comparable prior-year level (2011/12: EUR 15.18 million), whereas EBIT totaled EUR -0.91 million (2011/12: EUR 6.86 million). In spite of this earnings decline, Wolford generated a positive operating cash flow of EUR 6.31 million and raised its free cash flow to EUR 0.48 million, and continues to boast a consistently sound balance sheet structure featuring an equity ratio of 55%. The company is striving to achieve sales growth as well as positive operating results again in the current 2013/14 financial year.
Growth in Wolford’s own retail business, decline with trading partners
While Wolford’s own retail stores generated considerable sales growth of 6%, its wholesale business with trading partners reported a decline of 5%. Accordingly, the overall rise in sales could not fully compensate for the increased costs, including the expenses incurred by the expansion of international distribution. Due to the earnings development, the Management Board will propose to the Annual General Meeting scheduled for September 17, 2013 that the dividend payment will be suspended for the 2012/13 financial year in order to use the financial resources for investments in growth areas. ‘We managed to achieve satisfying sales increases in our own retail business against the backdrop of a challenging business environment. This shows that our long-term strategy focusing on our network of monobrand stores including the expansion of international distribution is right. We opened up a series of new boutiques both in our core markets as well as in growth markets. In addition, we have already begun to strengthen our wholesale business with new types of sales concepts’, says Holger Dahmen, Chief Executive Officer of Wolford AG, in commenting on the company’s business development.
Continuation of international expansion – controlled distribution generates sales growth
As in past financial years, those points of sale which exclusively offer Wolford products showed a particularly good development during the period under review. Wolford-controlled distribution channels, i.e. own and partner-operated boutiques, concession shop-in-shops, e-commerce and factory outlets, succeeded in increasing sales by 5% overall, raising their share of total Group sales to 67% (2011/12: 65%).
Wolford’s own retail stores (own boutiques, concession shop-in-shops, e-commerce and factory outlets) registered a 6% rise in sales in the 2012/13 financial year. In particular, the online business developed very well, posting sales growth of 47%. Accordingly, the share of total sales generated by the retail business rose to 58% (2011/12: 55%). In part, this growth was due to the expansion of Wolford’s own distribution network in the past financial year. However, a satisfying sales growth of 2% was also achieved on a like-for-like basis.
Sales growth in economically challenging core markets
The 2012/13 financial year in most of Wolford’s core markets was characterized by a weak economic situation and ongoing uncertainty on the part of consumers. In Wolford’s core European market (share of Group sales in 2012/13 excl. Russia: 76%), the reluctance to purchase on the part of consumers had a considerable impact on sales, especially in Southern Europe. In addition, the unusually long and tough winter in 2013 also adversely influenced demand in the entire industry, which was particularly perceptible in the fourth quarter of the financial year. These factors combined to have a dampening effect on the sales and earnings development of the Wolford Group.
EBITDA and EBIT below the prior-year level
EBITDA at EUR 7.90 million in the past financial year was significantly below the comparable prior-year performance (2011/12: EUR 15.18 million), and EBIT totaled EUR -0.91 million (2011/12: EUR 6.86 million). In spite of the improved financial result and a lower income tax burden, the consolidated financial statements for 2012/13 show earnings after tax of EUR -2.76 million (2011/12: EUR 1.26 million).
‘ In the short term we were simply not able to generate the level of sales growth required in order to compensate for the higher costs ‘, says Thomas Melzer, Chief Financial Officer of Wolford AG in commenting on the business results presented today. ‘ In particular, the start-up costs to prepare Wolford’s market entry in Greater China, increased rental costs for the company’s own retail stores, higher advertising expenditures to strengthen the brand as well as inventory write-downs and consulting fees focusing on the reorientation of the wholesale business were responsible for the decline in earnings ‘, he adds. Moreover, the evaluation of last year’s audit also reduced earnings. Furthermore, it was decided to close loss-making stores in Europe and the USA, shut down external storage facilities and dispose of old merchandise, resulting in non-recurring expenses of EUR 1.52 million.
Clearly positive operating cash flow and consistently sound capital structure
The optimization of working capital, especially inventories, enabled Wolford to generate a clearly positive operating cash flow of EUR 6.31 million in the 2012/13 financial year (2011/12: EUR 7.27 million) and to generate a free cash flow of EUR 0.48 million, an improvement from the previous year (2011/12: EUR 0.37 million). Total equity of the Wolford Group at the balance sheet date of April 30, 2013 amounted to EUR 78.15 million (April 30, 2012: EUR 83.77 million). This comprises an extremely solid equity ratio of 55% (April 30, 2012: 58%). The gearing ratio reached a level of 20% (April 30, 2012: 17%). ‘ From today’s perspective, Wolford has the necessary financial resources to be able to implement the planned steps in product development, to further strengthen our brand and expand our international distribution ‘, Thomas Melzer affirms.
Outlook
Wolford will also further expand its global store network in the future. The opening of new Wolford-owned and partner-operated boutiques to strengthen the company’s controlled distribution is planned along with the intensified cooperation with trade partners. Required investments should promote growth in the retail segment, and new concepts are designed to lead to increased sales also in the wholesale business. In addition, special attention will be paid to the online business activities of the Wolford Group. All in all, the objective is to further 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 store network in the future especially in growth markets, mainly in Greater China and the Gulf Region. ‘ Although the external business environment is not ideal in many European markets at the present time, I am convinced that in the long term we will be able to successfully continue the path we have chosen to pursue. Wolford is a strong brand with potential. As the management we have the responsibility and the goal to generate sustainably profitable growth, and to achieve sales growth and positive operating results again in the current financial year ‘, concludes CEO Holger Dahmen.
The Annual Report 2012/13 and Annual Financial Report 2012/13 are available on the Internet at www.wolford.com under Investor Relations.
Contact:
Holger Dahmen (Chairman of the Executive Board)
Thomas Melzer (Member of the Executive Board)
Wolford AG, Wolfordstrasse 1, A 6900 Bregenz
+43 (0) 5574 690-1477
www.wolford.com
About Wolford AG
Wolford AG headquartered in Bregenz on Lake Constance (Austria) operates 16 subsidiaries and markets its Legwear, Ready-to-wear, Lingerie, Swimwear, Accessories and Trading Goods product segments in about 70 countries via more than 260 monobrand stores (own and partner-operated), approximately 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 156.47 million in the 2012/13 financial year (May 1, 2012 – April 30, 2013), and has about 1,600 employees. Since its founding in the year 1950, Wolford has evolved from a local producer of pantyhose to a global fashion brand in the segment of affordable luxury products.
Wolford Group Key Data
| Earnings data | 2012/13 | adjusted 1) 2012/13 | Chg. % | |||
| Revenues | in EUR mill. | 156.47 | 154.06 | +1.6 | ||
| EBITDA | in EUR mill. | 7.90 | 15.18 | -48 | ||
| EBIT | in EUR mill. | -0.91 | 6.86 | >100 | ||
| Earnings before tax | in EUR mill. | -2.25 | 5.04 | >100 | ||
| Earnings after tax | in EUR mill. | -2.76 | 1.26 | >100 | ||
| Capital expediture | in EUR mill. | 6.03 | 7.94 | -24 | ||
| Operating cash flow | In EUR mill. | 6.31 | 7.27 | -13 | ||
| Free cash flow | in EUR mill. | 0.48 | 0.37 | +30 | ||
| Employees on average | FTE | 1,606 | 1,665 | -4 | ||
| Balance sheet data | 30.04.13 | Angepasst 1) 30.04.12 | Vdg. % | |||
| Equity | in EUR mill. | 78.15 | 83.77 | -7 | ||
| Net dept | in EUR mill. | 15.73 | 14.15 | +11 | ||
| Working capital | in EUR mill. | 38.26 | 39.77 | -4 | ||
| Balance sheet total | In EUR mill. | 142.32 | 145.46 | -2 | ||
| Equity ratio | in % | 55 | 58 | – | ||
| Gearing | in % | 20 | 17 | – |
Adjustment due to early application of IAS 19 revised (Employee Benefits)
End of Corporate News
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| Language: | English |
| Company: | Wolford AG |
| Wolfordstrasse 1 | |
| 6900 Bregenz | |
| Austria | |
| Phone: | +43/5574/6901268 |
| Fax: | +43/5574/6901219 |
| E-mail: | [email protected] |
| Internet: | www.wolford.com |
| ISIN: | AT0000834007 |
| WKN: | 83400 |
| Indices: | ATX |
| Listed: | Freiverkehr in Berlin, München, Stuttgart; Frankfurt in Open Market ; Wien (Amtlicher Handel / Official Market) |
| End of News | DGAP News-Service |
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