Softline AG

euro adhoc: Softline AG
Quarterly or Semiannual Financial Statements
Softline's cost savings measures beginning to bite (E)

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Operating expenses even lower - Weak markets hamper sales development - Strategy package announced

Offenburg, 16 May. Operating in a continued weak market environment, the Softline Group recorded continued improvements in gross margin and cost structure in the third quarter (Q3) of the current financial year 2001/02 (30 June). With sales totaling 68.1 (previous year: 64.2) million Euro in the first nine months and 21.7 million Euro in Q3, gross revenue margins rose to 23.5 percent (Q2: 23.2 percent, Q1: 21.9 percent). Operating expenses in Q3 were reduced further to 6.0 million Euro (Q2: 6.4m Euro; Q1: 6.5m Euro), allowing the group to limit the negative EBIT in Q3 to minus 0.75 million Euro (Q2: minus 5.7m Euro incl. extraordinary depreciations; Q1: minus 2.0m Euro). With assumed Q3 sales at previous year's level of 26.8 million Euro, the Q3 result would have shown a moderately positive tendency. The EBIT of the first nine months was characterised by extraordinary depreciations of 3.3 million Euro made in the preceding quarter and stood at minus 6.5 million Euro (previous year: minus 0.8m Euro). In spite of the continuing slump in economic activity, showing no sign of improving in the IT and software industry, sales approximating 88 (85.6) million Euro with a negative result of about 8m (7,3m) Euro are achievable.

The tight cost structure initiated by management is beginning to show effects, particularly on the expenses side: Compared with Q1 which was similar in sales levels, the cost rate including depreciations was lowered further from 30.5 to 27.7%. With a cost rate excluding depreciations of 25.3% in the first nine months, the expenditure rate targeted at the beginning of the financial year of below 25% for the entire financial year 01/02 is within reach. With continually rising gross revenues, the preconditions for a positive EBIT in the coming financial year have thus been created.

To follow up the offensive approach to the cost side with an equally rigorous tackling of the sales side, Softline's board is currently preparing an extensive catalogue of measures designed to ensure the return to profitability in the coming 2002/03 financial year, even in the face of a continued market weakness. Details on this program will be published in early June.

Contact: Erik Parkner, Phone: 0049-781-9293 151; e-mail: eparkner@softline.de

end of announcement            euro adhoc 16.05.2002
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Further inquiry note: Herr Erik Parkner

Branche:        Economy, Business & Finance
ISIN:            DE0007206005
WKN:              720600
Börsen:         Deutsche Börse AG Frankfurt, Baden-Württembergische
Wertpapierbörse, Bayerische Börse, Börse Düsseldorf, Hamburger
Wertpapierbörse, Handelsüberwachung der Berliner Wertpapierbörse,
Niedersächsische Börse zu Hannover



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