EANS-News: Wolford AG Turnaround in 2014/15 financial year
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Corporate news transmitted by euro adhoc. The issuer/originator is solely
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annual result
- Revenues rise by approx. 1%
- Positive operating results and net earnings for the first time after two
years
- Special dividend of EUR 0.20 per share proposed
- Transformation process continues
- Goal for 2015/16: further revenue growth and positive operating results
Vienna/Bregenz, July 17, 2015:Wolford AG, which is listed on the Vienna Stock
Exchange, closed the 2014/15 financial year (May 2014 to April 2015), as
expected, with positive results. Revenues recorded by the Wolford Group rose by
roughly 1% to EUR 157.35 million, recently also supported by positive foreign
exchange effects. In addition, the company recorded a profit for the first time
after two loss-making years: EBITDA, adjusted for non-recurring income and
expenses, rose from EUR 7.11 million to EUR 10.33 million and adjusted EBIT
improved from EUR -0.97 million to EUR 1.56 million. Including non-recurring
items, EBIT increased by EUR 6.89 million to EUR 2.17 million (2013/14: EUR -
4.72 million). Earnings after tax were also positive at EUR 1.03 million,
compared with a loss of EUR 2.81 million in the previous year.
"Wolford's transformation process is continuing, but our strategy to refocus on
the company's core expertise and the systematic optimization of our own points
of sale have brought the first positive results", indicated Ashish Sensarma,
Chief Executive Officer since January 2015. "During the past financial year
Wolford has created an important foundation for sustainable and profitable
growth", added Sensarma.
Slight growth in retail, successful online business, decline in wholesale
The slight 1% increase in revenues was generated in spite of the EUR 6.14
million negative effect caused by the closing of 20 unprofitable points of sale
during 2013/14 and 2014/15. Declines during the first half-year (May to October
2014) due to difficult market conditions were followed by the stabilization of
revenues at the prior year level in the third quarter. The fourth quarter
(February to April 2015) brought a sound 12% increase in revenues, which was
also supported by positive foreign exchange effects from the devaluation of the
euro and by an increased focus on the optimization of company-owned points of
sale and the online business.
Wolford's own retail locations (own boutiques, concession shop-in-shops and
factory outlets) recorded revenue growth of 1% in total and on a like-for-like
basis. The online business continued its successful development with an increase
of 24% in revenues. The wholesale business (partner-operated boutiques,
department stores and multi-brand retailers) declined by 2%, among others due to
problems with individual trading partners and the Ukraine crisis. However, this
sales channel also stabilized during the fourth quarter after recording a minus
of 8% for the first half-year.
Substantially different developments in the regional Business
The regional analysis of revenues for the reporting year shows very different
developments. The USA, currently the largest single market for the Wolford
Group, generated revenue growth of 5% despite the closing of various retail
locations. Revenues were lower than the previous year in Germany (-2%) and
France (-3%) due to weakness in the wholesale business. Business in Austria (-
7%) was negatively influenced by the closing of points of sale. In Switzerland,
the revaluation of the Swiss franc led to a decline of 9% in revenues. In
contrast, Wolford recorded sound top-line growth in Great Britain (+7%), Spain
(+11%) and Italy (+9%) which was supported, above all, by the Wolford-owned
points of sale. Revenues in Central and Eastern Europe fell by 14%, in
particular due to the Ukraine crisis. In Asia, Wolford recorded a sound 20%
increase in revenues.
Positive earnings, special dividend planned
The refocusing of the collection led to an increase of EUR 4.72 million in the
cost of materials to EUR 30.33 million in 2014/15. Personnel expenses were EUR
2.06 million higher at EUR 74.15 million (2013/14: EUR 72.09 million), primarily
due to wage and salary increases resulting from collective agreementsand
voluntary raises. Other operating expenses rose from EUR 50.57 million to EUR
54.63 million due to additional rental costs for the opening of new boutiques
and index adjustments (+ EUR 1.04 million) as well as higher marketing expenses
of approx. EUR 3 million to strengthen the Wolford brand. However, an increase
in other operating income from the sale of lease options supported an
improvement in adjusted EBITDA from EUR 7.11 million to EUR 10.33 million.
Adjusted EBIT turned positive from EUR -0.97 million to EUR +1.56 million.
Including non-recurring items (expenses of EUR 2.76 million and income of EUR
3.37 million), EBIT improved by EUR 6.89 million to EUR 2.17 million (2013/14:
EUR -4.72 million). Earnings after tax were positive for the first time since
the business year 2011/12 at EUR 1.03 million (2013/14: EUR -2.81 million) as
were earnings per share at EUR 0.21 (2013/14: EUR -0.57).
"The sale of land during 2014/15 was followed by the sale of company-owned
apartments at the beginning of May, in other words during the 2015/16 financial
year. That marked the end of our program to sell non-operating assets, which
generated in total approx. EUR 8 million", explained outgoing Chief Financial
Officer Thomas Melzer. "During the past financial year we spent additional EUR 3
million of the proceeds to strengthen the brand and we financed part of the
refocusing strategy", continued Melzer. The Management Board also wants
shareholders to participate in this extraordinary income and will recommend that
the annual general meeting approve a special dividend of EUR 0.20 per share for
the 2014/15 financial year.
Continued solid balance sheet structure
The Wolford Group had Group equity of EUR 74.83 million as of April 30, 2015
(2013/14: EUR 74.38 million). The positive effects from earnings and foreign
exchange differences were substantially reduced by actuarial losses: the
interest rate used to calculate the provisions for long-term employee benefits
fell sharply further from 3.1% to 1.6% due to the sovereign debt crisis and the
flight to benchmark corporate bonds. However, Wolford's equity ratio equaled a
solid 51% as of April 30, 2015 (April 30, 2014: 54%). Net debt remained at the
prior year level of EUR 17.12 million as did gearing (the ratio of net debt to
equity) with 23%.
Revised corporate strategy
With the appointment of Ashish Sensarma as Chief Executive Officer, the strategy
to refocus on the company's core expertise and the status of its implementation
were reevaluated and the major elements were confirmed. However, over the medium
term further steps will be required to meet the targeted EBIT margin of 10% and
to pay appropriate dividends.
The activities undertaken to revitalize the brand, adjust the product line,
refocus market communications and optimize controlled distribution will
continue. This also includes the implementation of a new Go-to-Market model: in
order to better utilize the strengths of its Monobrand points of sale, Wolford
is focusing its business model on the requirements of retail. All processes in
the Go-to-Market model - starting with the initial product idea - will be
closely integrated based on the management of retail space. "Product development
will take place in substantially shorter cycles, which will allow us to react
faster to specific developments and current demand. This will also help to
optimize capacity utilization and inventories - with positive effects on
manufacturing costs and cash flow", explained Axel Dreher, Deputy CEO.
Outlook
Wolford started the new financial year on a promising note: the retail business
recorded double-digit growth during the first two months (May to June 2015). In
particular, the online business remains on a success course with high double-
digit growth rates. Management has therefore set a goal to further increase
revenues and again record positive operating results in 2015/16. The company is
targeting an EBIT margin of 10% over the medium-term. The strategic refocusing
is still in progress and will also require Wolford's undivided attention during
the current year. Wolford can finance the measures planned as part of the
revised corporate strategy from cash flow and available credit lines.
The annual report 2014/15 and the annual financial report 2014/15 are available
in the Internet under company.wolford.com/Investor Relations.
http://company.wolford.com/wp-content/uploads/2014/07/Wolford_Annual-
Report_2014_15.pdf
http://company.wolford.com/wp-content/uploads/2015/07/Wolford-Annual-financial-
report_14_15.pdf
For additional information contact:
Axel Dreher (Management Board)
Regine Petzsch (Interim Head of Corporate Communications)
Tel.: +43 5574 690 1359 | investor@wolford.com | company.wolford.com
Wolford Group Key Data
Earnings Data
2014/15 2013/14 Chg. in %
Revenues in EUR mill. 157.35 155.87 +0.9
EBITDA adjusted in EUR mill. 10.33 7.11 +45
EBIT adjusted in EUR mill. 1.56 -0.97 >100
EBIT in EUR mill. 2.17 -4.72 >100
Earnings before tax in EUR mill. 1.21 -5.89 >100
Earnings after tax in EUR mill. 1.03 -2.81 >100
Capital expenditure in EUR mill. 10.97 7.87 +39
Free cash flow in EUR mill. -0.54 -0.97 +43
Employees (on average) FTE 1574 1562 +1
Balance Sheet Data
30.04.2015 30.04.2014 Chg. in %
Equity in EUR mill. 74.83 74.38 +1
Net debt in EUR mill. 17.12 17.04 +1
Working capital in EUR mill. 38.14 33.72 +13
Balance sheet total in EUR mill. 147.04 138.12 +7
Equity ratio in % 51 54 -
Gearing in % 23 23 -
Stock Exchange Data
2014/15 2013/14 Chg. in %
Earnings per share in EUR 0,21 -0.57 >100
Share price high in EUR 24.12 22.77 +6
Share price low in EUR 18.75 16.81 +12
Share price at end of period in EUR 24.00 19.10 +26
Shares outstanding (weighted) in 1,000 4900 4900 -
Market capitalization (ultimo) in EUR mill. 120.00 95.48 +26
On Wolford AG
Wolford AG, which is headquarters in Bregenz on Lake Constance (Austria) has 16
subsidiaries and markets its products in more than 60 countries through 270
Monobrand points of sale (company-owned and partner-operated), approx. 3,000
distribution partners and online. The company, which has been listed on the
Vienna Stock Exchange since 1995, generated revenues of EUR 157.4 million in the
2014/15 financial year (May 1, 2014 - April 30, 2015) with roughly 1,570
employees. Since its founding in 1950, Wolford has grown to become the leading
global brand for luxurious legwear, exclusive lingerie and high-quality
bodywear.
Further inquiry note:
Wolford AG
Regine Petzsch
Tel.: +43 5574 690 1359
mailto:investor@wolford.com
Web: company.wolford.com
end of announcement euro adhoc
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company: Wolford Aktiengesellschaft
Wolfordstrasse 1
A-6900 Bregenz
phone: +43 (0) 5574 690-1268
FAX: +43 (0) 5574 690-1219
mail: investor@wolford.com
WWW: company.wolford.com
sector: Textiles & Clothing
ISIN: AT0000834007
indexes: ATX Prime, ATX Global Players
stockmarkets: free trade: Frankfurt, regulated dealing: Wien, ADR: New York
language: English
