Wolford AG — Interim / Quarterly Report 2012

Sep 14, 2012

Interim financial report on the first quarter of the 2012/13 fiscal year

(May 1, 2012 – July 31, 2012)

Contents

Key figures for the Wolford Group	4
Management Report	5
Sales development	5
Development of earnings	7
Outlook	9
Interim Consolidated Financial Statements	10
Consolidated balance sheet	10
Consolidated income statement	11
Consolidated statement of comprehensive income	12
Consolidated cash flow statement	13
Consolidated statement of changes in equity	14
Segment reporting	15
Notes on the Interim Financial Report	16
General information	16
Change in the scope of consolidation	16
Acquisition and disposal of property, plant and equipment and intangible assets	16
Seasonality of business operations	17
Contingent liabilities	17
Related party transactions	17
Significant events after the reporting date	17
Report on the auditor's review	17
Statement of all legal representatives
according to para. 87 sect. 1 (3) Austrian Stock Exchange Act	18
Wolford Share	19
Financial Calendar	20
About this Report	21

Key Figures for the Wolford Group

May 1, 2012 – July 31, 2012

	Q1	Q1	Change
in TEUR	July 31, 2012	July 31, 2011	absolute
Sales	33,074	31,777	1,297
EBITDA	(1,292)	649	(1,941)
EBIT	(3,320)	(1,298)	(2,022)
Result from continuing operations (Result before taxes)	(3,621)	(1,740)	(1,881)
Net result for the period	(3,242)	(1,753)	(1,489)
Capital investments excluding financial assets	1,301	2,033	(732)
Investments / sales ratio	3.9%	6.4%	(2.5)
Depreciation, amortization, impairment and reversal of impairment	2,027	1,946	81
Number of employees at period-end (in full-time equivalents incl. apprentices)	1,618	1,677	(59)
Total assets	152,698	153,190	(492)
Liabilities to banks and other financial liabilities	31,583	30,531	1,052
Net debt	26,594	25,576	1,018
Debt / equity ratio (gearing)	32.9%	31.4%	1.5
Shareholders´ equity	80,878	81,573	(695)
Equity-to-assets ratio	53.0%	53.2%	(0.2)

May 1, 2012 – July 31, 2012

Sales development

Wolford Aktiengesellschaft, a publicly listed company on the Vienna Stock Exchange, seamlessly continued its positive sales development in the third and fourth quarters of the previous year during the first quarter of the current fiscal year. The Austrian luxury brand succeeded in increasing sales in the first three months of the 2012/13 fiscal year (May 1 - July 31, 2012) by 4.1 percent from the comparable prior-year period to EUR 33.1 million. This development can be attributed to the targeted expansion of Wolford's international distribution network, amongst other factors. The first quarter is traditionally the weakest of all quarterly sales periods due to the seasonality of business development and simultaneously involves disproportionally high costs in relation to sales. The first quarter is traditionally the weakest of all quarterly sales periods due to the seasonality of business development and simultaneously involves disproportionally high costs in relation to sales. For this reason, Wolford's first-quarter earnings indicators are generally negative, also in growth years. This applies as well to the first quarter of the 2012/13 fiscal year, in which earnings were also impacted by costs relating to the opening of new locations.

From a regional perspective, a positive picture generally emerged from Wolford's core geographic markets. The good sales development could be continued compared to the prior-year period, with the USA, France, Belgium and UK showing a particularly dynamic development characterized by significant growth in the double-digit percentage range.

May 1, 2012 – July 31, 2012

As in previous quarters, Wolford's proprietary stores also showed a particularly good development in the reporting period. Accordingly, the Wolford Group achieved a sales increase of 13.3 percent with its own boutiques, shop-in-shops, factory outlets and e-commerce. Thus the share of total sales generated by retail in the first quarter of 2012/13 climbed to 54.7 percent (Q1 2011/12: 50.9 percent). This rise was partly due to the expansion of Wolford's own distribution network. However, the Wolford Group also achieved a gratifying sales growth of 7.4 percent with its own points of sale on a like-for-like basis. The online business also made an important contribution to this strong rise in sales, generating a significant sales increase compared to the prior-year period.

On balance, Wolford-controlled distribution channels i.e. those points of sale which exclusively offer Wolford products (own and partner-operated boutiques, factory outlets, concession shop-in-shops and e-commerce) accounted for 66.6 percent of total sales in the first quarter of 2012/13 (Q1 2011/12: 62.4 percent).

In the first quarter of 2012/13 the wholesale business developed satisfactorily, particularly with partner boutiques and department stores. Multi-brand retailers comprised the only distribution channel where sales fell compared to the prior-year period.

May 1, 2012 – July 31, 2012

Development of earnings

The Wolford Group achieved a further rise in sales of 4.1 percent in the first three months of the current fiscal year to EUR 33.1 million (Q1 2011/12: EUR 31.8 million) based on a strong performance in the first quarter of the previous 2011/12 fiscal year, which was characterized by sales growth of 6.5 percent in a quarterly comparison. Wolford's first-quarter earnings indicators were always negative up until now due to the traditionally disproportionally high costs in relation to sales, which in turn is related to the seasonality of first-quarter business development. The opening of new boutiques in the second half of the 2011/12 fiscal year featuring correspondingly necessary start-up periods intensified this effect in the first quarter of 2012/13. As a consequence, EBITDA reported by the Wolford Group amounted to EUR -1.3 million in the first quarter of 2012/13 (Q1 2011/12: EUR 0.6 million), and EBIT totaled EUR -3.3 million (Q1 2011/12: EUR -1.3 million). The net result for the period was EUR -3.2 million (Q1 2011/12: EUR -1.8 million).

May 1, 2012 – July 31, 2012

As at the reporting date of July 31, 2012, shareholders' equity of the Wolford Group amounted to EUR 80.9 million, slightly below the comparable figure of the previous year (July 31, 2011: EUR 81.6 million). The equity-to-asset ratio at the reporting date was 53.0 percent, thus maintaining the high prior-year level (July 31, 2011: 53.2 percent).

Net debt in the first three months of 2012/13 totaled EUR 26.6 million (July 31, 2011: EUR 25.6 million), corresponding to a debt/equity ratio (gearing) of 32.9 percent (July 31, 2011: 31.4 percent).

May 1, 2012 – July 31, 2012

At the Annual General Meeting held on September 11, 2012, shareholders of Wolford Aktiengesellschaft resolved to distribute a dividend of EUR 0.40 for the past 2011/12 fiscal year for each share entitled to a dividend, the same amount as in the previous year. The dividend payment date was set for September 27, 2012.

Outlook

In the future Wolford will continue to expand its global monobrand distribution network, both via its own as well as partner-operated points of sale, in order to further strengthen the international presence of the Wolford brand. In this regard, the Wolford Group will not only concentrate on its core markets in Europe and Northern America but increasingly on the Greater China region. From today's perspective the Executive Board of the Wolford Group expects to generate further growth in the 2012/13 fiscal year.

May 1, 2012 – July 31, 2012

Consolidated balance sheet at July 31, 2012

ASSETS	Jul 31, 2012	Apr 30, 2012	Jul 31, 2011	SHAREHOLDERS´ EQUITY & LIABILITIES	Jul 31, 2012	Apr 30, 2012	Jul 31, 2011
in TEUR				in TEUR
				Shareholders' equity
				Share capital and capital reserves	38,167	38,167	38,167
Non-current assets				Other reserves	33,551	33,608	33,343
Property, plant and equipment	61,996	62,414	62,353	Currency translation differences	(2,312)	(2,882)	(3,353)
Goodwill	1,233	1,193	1,156	Retained earnings	16,135	19,377	18,079
Intangible assets	9,886	9,955	10,521	Treasury stock	(4,663)	(4,663)	(4,663)
Non-current available-for-sale financial assets	1,538	1,488	2,286		80,878	83,607	81,573
Non-current receivables and assets	1,112	1,068	1,094
	75,765	76,118	77,410	Non-current liabilities
				Long-term debt	4,455	18,052	4,715
				Provisions for employee benefits	14,068	13,940	14,797
				Other non-current liabilities	2,353	2,371	1,387
Deferred tax assets	5,791	5,208	6,112		20,876	34,363	20,899
				Deferred tax liabilities	191	203	264
Current assets				Current liabilities
Inventories	48,312	44,170	46,775	Current portion of long-term debt	633	1,089	1,169
Current receivables and other assets	13,542	12,161	14,738	Bank loans and overdrafts	26,495	1,750	24,647
Prepaid expenses	4,566	2,555	4,228	Current provisions	6,495	7,889	6,099
Current available-for-sale financial assets	46	46	45	Trade payables	4,121	4,858	5,118
Cash and cash equivalents	4,676	5,246	3,882	Other current liabilities	13,009	11,745	13,421
	71,142	64,178	69,668		50,753	27,331	50,454
Total assets	152,698	145,504	153,190	Total shareholders´ equity & liabilities	152,698	145,504	153,190

May 1, 2012 – July 31, 2012

Consolidated income statement

	Q1	Q1	Change
in TEUR	July 31, 2012	July 31, 2011	absolute
Sales	33,074	31,777	1,297
Other operating income	735	673	62
Changes in inventories of finished goods and work-in-process	3,706	5,316	(1,610)
Own work capitalized	12	34	(22)
Operating output	37,527	37,800	(273)
Cost of materials and purchased services	(9,426)	(8,475)	(951)
Staff costs	(19,030)	(19,290)	260
Depreciation, amortization and impairment losses on property, plant and equipment and intangible assets excluding goodwill	(2,027)	(1,946)	(81)
Other operating expenses	(10,364)	(9,387)	(977)
Operating profit (EBIT)	(3,320)	(1,298)	(2,022)
Net interest cost	(156)	(175)	19
Net investment securities income	0	(68)	68
Interest cost of employee benefit liabilities	(145)	(199)	54
Financial result	(301)	(442)	141
Result from continuing operations (Result before taxes)	(3,621)	(1,740)	(1,881)
Income tax	379	(13)	392
NET RESULT FOR THE PERIOD	(3,242)	(1,753)	(1,489)
Earnings per share in EUR (diluted=undiluted) Weighted average number of shares outstanding in '000	(0.66) 4,900	(0.36) 4,900

May 1, 2012 – July 31, 2012

Consolidated statement of comprehensive income

	Q1	Q1	Change
in TEUR	July 31, 2012	July 31, 2011	absolute
NET RESULT FOR THE PERIOD	(3,242)	(1,753)	(1,489)
Other comprehensive income
Currency translation differences of foreign business operations	570	(282)	852
Net (loss)/gain from cash flow hedges Tax effects	(126) 32	(407) 102	281 (70)
Net (loss)/gain from available-for-sale financial assets Tax effects	50 (13)	80 (20)	(30) 7
Other comprehensive income after taxes	513	(527)	1,040
TOTAL COMPREHENSIVE INCOME	(2,729)	(2,280)	(449)
Attributable to:
Equity holders of the parent company	(2,729)	(2,280)	(449)
Minority interest	0	0	0

May 1, 2012 – July 31, 2012

Consolidated cash flow statement

	Q1	Q1
in TEUR		July 31, 2012 July 31, 2011
Gross cash flow *	(1,084)	482
Net cash from operating activities	(10,034)	(10,869)
Net cash from investing activities	(1,379)	(1,604)
Net cash from financing activities	10,693	11,909
Net increase (decrease) in cash and cash equivalents	(720)	(564)
Effects of exchange rate fluctuations on cash and cash equivalents Cash and cash equivalents at beginning of period	145 4,911	75 4,043
Cash and cash equivalents at end of period	4,336	3,554

* Gross cash flow = Net result for the period

+/- Depreciaton, amortization, impairment losses/reversals of

• impairment losses on intangible assets and property, plant and equipment
• -/+ Gains/losses on the disposal of property, plant and equipment
• +/- Change in non-current provisions
• = Gross cash flow

May 1, 2012 – July 31, 2012

Consolidated statement of changes in equity at July 31, 2012

				Transactions with shareholders of the parent company
in TEUR	Share capital	Capital reserves	Fair value reserve for available for-sale financial assets	Cash flow hedging reserve	Other reserves	Currency translation differences	Treasury stock	Total equity
At April 30, 2012	36,350	1,817	0	(9)	52,994	(2,882)	(4,663)	83,607
Dividends 2011/12	0	0	0	0	0	0	0	0
Total comprehensive income	0	0	37	(94)	(3,242)	570	0	(2,729)
At July 31, 2012	36,350	1,817	37	(103)	49,752	(2,312)	(4,663)	80,878
At April 30, 2011	36,350	1,817	(406)	233	53,593	(3,071)	(4,663)	83,853
Dividends 2010/11	0	0	0	0	0	0	0	0
Total comprehensive income	0	0	60	(305)	(1,753)	(282)	0	(2,280)
At July 31, 2011	36,350	1,817	(346)	(72)	51,840	(3,353)	(4,663)	81,573

May 1, 2012 – July 31, 2012

Segment reporting

in TEUR				Q1 2012/13				Q1 2011/12
	Austria	Rest of Europe	North America	Asia	Consoli dations	Group	Austria	Rest of Europe	North America	Asia	Consoli dations	Group
Sales	23,394	20,629	5,764	595	(17,308)	33,074	21,613	19,898	4,529	634	(14,897)	31,777
thereof intersegment	16,109	1,199	0	0	(17,308)	0	13,842	1,055	0	0	(14,897)	0
External sales	7,285	19,430	5,764	595	0	33,074	7,771	18,843	4,529	634	0	31,777
Result from continuing operations (before taxes)	128	(1,389)	(832)	(51)	(1,477)	(3,621)	(111)	(1,078)	(603)	(34)	86	(1,740)
Segment assets	164,661	43,504	15,737	2,050	(73,254)	152,698	161,984	41,044	11,506	1,443	(62,787)	153,190
Segment liabilities	58,998	32,554	8,696	480	(28,908)	71,820	58,109	29,037	4,958	301	(20,787)	71,618

The basis for segment reporting and the valuation of segment profit has remained unchanged since the consolidated financial statements for the 2011/12 fiscal year.

Notes on the Interim Financial Report

at July 31, 2012

General information

The consolidated interim financial statements of the Wolford Group for the first three months of the 2012/13 fiscal year were prepared under the responsibility of the Executive Board in compliance with the International Financial Reporting Standards (IFRS) on the basis of IAS 34 (Interim Financial Reporting).

The accounting and valuation policies applied to the consolidated financial statements of the Wolford Group for the 2011/12 fiscal year remained unchanged.

The consolidated interim financial statements do not include all information and explanatory notes which are required in relation to the consolidated financial statements for the fiscal year as a whole. For this reason, this interim report should be read together with the Annual Report 2011/12 of the Wolford Group applying to the balance sheet date of April 30, 2012.

In all financial reporting of the Wolford Group, amounts are reported in thousands of euros (TEUR). Rounding differences may occur due to the use of automated aids.

Change in the scope of consolidation

The number of companies included in the scope of consolidation has not changed since the last reporting date April 30, 2012.

Acquisition and disposal of property, plant and equipment and intangible assets

In the first three months of the 2012/13 fiscal year, the Wolford Group acquired property, plant and equipment and intangible assets amounting to TEUR 1,301 (previous year: TEUR 2,033). In the same period, no property, plant and equipment and intangible assets were divested (previous year: TEUR 1).

Notes on the Interim Financial Report

at July 31, 2012

Seasonality of business operations

Generally, the seasonality of business development means that the first quarter of the fiscal year is traditionally the weakest for the Wolford Group and also usually involves disproportionately high costs in relation to sales. As a result, the relevant earnings indicators are generally negative in this period, even in growth years. This was also the case in the first quarter (May 1 – July 31) of the 2012/13 fiscal year.

Contingent liabilities

There have been no material changes in contingent liabilities since the last reporting date of April 30, 2012.

Related party transactions

There are immaterial business relationships with related companies and individuals. All transactions are conducted at normal market prices, terms and conditions.

Significant events after the reporting date

There were no significant events requiring disclosure between the balance sheet date on July 31, 2012 and the publication of this interim financial report.

Report on the auditor's review

The consolidated interim financial statements were neither subject to a comprehensive audit nor to an auditor's review.

Statement of all legal representatives

according to para. 87 sect. 1 (3) Austrian Stock Exchange Act

The members of the Executive Board of Wolford Aktiengesellschaft confirm to the best of their knowledge that the condensed interim financial statements give a true and fair view of the assets, liabilities, financial position and profit and loss of the group as required by the applicable accounting standards. The interim report of the Wolford Group for the first quarter of the 2012/13 fiscal year gives a true and fair view of important events that have occurred during the first three months of the financial year and their impact on the condensed interim financial statements, of the principal risks and uncertainties for the remaining nine months of the financial year, and of the major related party transactions to be disclosed.

Bregenz, September 2012

The Executive Board signed:

Holger Dahmen Chairman of the Executive Board

Management responsibility for Marketing, Sales, Production and Technology

Peter Simma Deputy Chairman of the Executive Board

Management responsibility for Finance/Controlling, Legal, Human Resources, IT and Procurement

Wolford Share

Share data in EUR	Q1 31.07.2012	Q1 31.07.2011	Change absolute
Earnings per share	(0.66)	(0.36)	(0.30)
Share price at end of first quarter	27.48	24.67	2.81
Share price high for first quarter	28.80	27.48	1.32
Share price low for first quarter	24.07	22.75	1.32

Share performance May 1st – July 31st , 2012

General information on the Wolford share

ISIN Code	AT0000834007
Listing exchange	Vienna Stock Exchange (Prime Market segment)
	Frankfurt (OTC segment)
	New York (ADR program, Level 1)
Date of initial listing	February 14, 1995
Stock type	No par value bearer shares
Total number of shares	5,000,000
thereof entitled to dividends	4,900,000
Authorized capital	EUR 36,350,000
Indices	ATX Prime
Ticker symbols	Reuters: WLFD.VI, Bloomberg: WOL AV

Ownership structure

In the first three months of the 2012/13 fiscal year the WMP family private trust held more than 25 percent. Ralph Bartel held 20 percent of shares, the Sesam private trust more than 15 percent. Wolford Aktiengesellschaft held another two percent as treasury stock. The remaining shares were in free float and were mainly held by national and international institutional investors as well as private shareholders.

Dividend

At the Annual General Meeting held on September 11, 2012, the shareholders of Wolford Aktiengesellschaft resolved to distribute a dividend amounting to EUR 0.40 per share for the 2011/12 fiscal year. The dividend payment date was scheduled for September 27, 2012.

Financial Calendar

Friday,	Sept. 14, 2012	Results Q1 2012/13
Monday,	Sept. 17, 2012	Ex-dividend date
Thursday,	Sept. 27, 2012	Dividend payment date
Friday,	Dec. 14, 2012	1st Half-year results 2012/13
Friday,	March 15, 2013	Results Q3 2012/13
Friday,	July 19, 2013	Press conference on 2012/13 annual results, 9:30 am in Vienna
Friday,	Sept. 13, 2013	Results Q1 2013/14
Tuesday,	Sept. 17, 2013	Annual General Meeting of Shareholders, 2:00 pm in Bregenz

Updates are available at www.wolford.com

Wolford Interim Report QQ112012 2012//13 13 PaPaggee2020

About this report

For further information

WOLFORD AKTIENGESELLSCHAFT

+43 (0) 5574/690-1268
+43 (0) 5574/690-1219
investor@wolford.com
www.wolford.com

This interim report is available in German and English on the internet at www.wolford.com.

Definitions of financial indicators are contained in the latest annual report for the 2011/12 fiscal year.

© WOLFORD AKTIENGESELLSCHAFT

To ensure good readability statements referring to people are considered to be neutral and are equally valid for both women and men.

Disclaimer

This interim financial report of the Wolford Group has been put together with the greatest possible care. All data has been carefully checked. Nevertheless, rounding off, typesetting or printing errors cannot be excluded.

This report has also been prepared in English. However, only the German version is definite.

This annual report contains forward-looking statements which reflect the opinions and expectations of the Executive Board, and include risks and uncertainties which could have a significant impact on actual circumstances and thus actual results. For this reason, readers are cautioned not to place undue reliance upon any forward-looking statements. Wolford Aktiengesellschaft is not obliged to publish any update or revision of the forward-looking statements contained in this report, unless otherwise required by law.