euro adhoc: ESCADA AG
quarterly or semiannual financial statement
ESCADA records nearly double-digit growth in operative earnings for first half of fiscal year 2005/2006

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Aschheim/Munich, June 29, 2006 - ESCADA AG records positive business performance for first half of fiscal year 2005/2006 (reporting date: October 31) in line with expectations. Group sales for the ladies’ luxury fashion manufacturer were up by 6.2%, increasing from 312.6 million Euro for the same period of last year to 332.1 million Euro. In the second quarter ESCADA raised Group sales by 8.5% to 165.4 million Euro (second quarter 2004/2005: 152.5 million Euro).

At 36.9 million Euro the consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) grew overproportionally to sales and were up by 9.8% against the first half of last year (33.6 million Euro). EBITDA for the ESCADA brand increased by 16.2%, from 22.8 million Euro to 26.5 million Euro. As had been expected, the PRIMERA Group’s EBITDA of 10.4 million Euro remained below the figure for last year’s first half of 12.2 million Euro. This was due to start-up costs for the expansion of the own retail and because of positive extraordinary effects recorded in the first six months of fiscal year 2004/2005. Group EBITDA for the second quarter was up by 25.2% from 13.1 million Euro to 16.4 million Euro, marking a significant and overproportional rise on sales performance.

Over the last months the Board of Management extensively reviewed and assessed the Group, as a result of which the Board considers individual positions in the balance sheet to be in need of correction. This concerns essentially the new valuation of inventories and deferred taxes abroad. The measures relating to inventories create a basis for the announced improvement in working capital management, which is to be executed more rapidly in the future. Of the total sum of 16.3 million Euro, a maximum of 10% could become cash-effective. Posted in the second quarter, these expenses will be reported with 11.5 million Euro as a separate item after EBIDTA in the Group’s Income Statement and with 4.8 million Euro under the taxes on income.

Allowing for one-time expenses, the Group generated earnings before taxes for the first six months of 6.5 million Euro (first six months 2004/2005: 14.5 million Euro). Without one-time expenses, earnings before taxes were up by nearly 28% to 18.5 million Euro.

The Board of Management affirms its sales forecast for the full fiscal year 2005/2006 and concretizes expectations on earnings. The Board of Management estimates sales to grow in the mid single-digit percentage region and reckons EBITDA to increase by around 10%. Group earnings after taxes are expected to record a positive figure.

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ots Originaltext: ESCADA AG
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Further inquiry note:
Viona Brandt
Tel.: +49 (0)89 9944 1336

Branche: Clothing
ISIN:      DE0005692107
WKN:        569210
Index:    SDAX, CDAX, Classic All Share, Prime All Share
Börsen:  Frankfurter Wertpapierbörse / official dealing/prime standard
              Börse Berlin-Bremen / free trade
              Hamburger Wertpapierbörse / free trade
              Baden-Württembergische Wertpapierbörse / free trade
              Börse Düsseldorf / free trade
              Bayerische Börse / official dealing

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