Wolford Aktiengesellschaft

EANS-News: Wolford Aktiengesellschaft
Positive operating earnings in 2015/16 financial year

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annual report/annual result

* Revenues, also boosted by currency items, up 3.2%
* Positive operating earnings (EBIT) and earnings before tax
* Earnings after tax negative due to one-off item
* Dividend of EUR 0.20 per share proposed
* Targets for 2016/17: Slight revenue growth and positive earnings

Vienna/Bregenz, July 15, 2016:Wolford AG, which is listed on the Vienna Stock
Exchange, has presented its results for the 2015/16 financial year (May 2015 to
April 2016). The revenues of the Wolford Group, which also benefited from
positive currency items, grew by 3.2% to EUR 162.40 million, while operating
earnings (EBIT) came to EUR 1.55 million, as against EUR 2.17 million in the
2014/15 financial year. However, this figure is not directly comparable with the
previous year, in which EBIT benefited from other operating income of
EUR 12.76 million, and thus more than EUR 10 million higher than in 2015/16.
Despite this factor, the Wolford Group almost matched the previous year's level
of operating earnings. Earnings before tax were also positive (EUR 0.62 million,
as against EUR 1.21 million in the previous year), while earnings after tax were
adversely affected by the reversal of deferred tax assets on loss carryovers. As
a result of this one-off item, the company incurred non-cash-effective income
taxes of EUR 6.81 million (previous year: EUR 0.18 million) and earnings after
tax amounted to EUR -6.19 million, as against EUR 1.03 million one year earlier.
Positive currency items and successful online business

The 3.2% growth in revenues in the past financial year was largely driven by
positive currency items, and particularly by the development in exchange rates
with the US dollar, British pound, and Swiss franc. Excluding this factor,
revenues would have more or less matched the previous year's figure. After a
comparatively strong revenue performance in the first half of the year, the
Christmas business fell short of expectations. Consistent with developments in
large parts of the European fashion retail sector, revenues then declined in
subsequent months. Overall, fourth-quarter revenues fell year-on-year by 7%.
The online business once again posted a highly positive full-year performance (+
52%). Wolford's proprietary locations (boutiques, concession shop-in-shops, and
factory outlets) increased their revenues by 2% overall, with like-for-like
revenue growth (i.e. excluding locations newly opened or closed) also amounting
to 2%. By contrast, the wholesale business (partner-operated boutiques,
department stores, and specialist retailers) reported a 2% decline in revenues.
Marked regional variations in revenue Performance

The company's revenue performance varied widely from region to region in the
2015/16 financial year. Due to positive currency items, Wolford posted
substantial growth in its core markets of the USA (+12%), Switzerland (+10%),
and the UK (+8%). In Austria (-2%) and in Germany (-4%), revenues fell short of
expectations due to the heatwave in the late summer of 2015 and disappointing
Christmas business. Revenues in France suffered above all in the wake of the
terrorist attacks in November 2015 and fell by 3%. Thanks to strong retail
business, the Spanish (+12%) and Italian (+8%) markets reported pleasing growth.
Wolford also boosted its revenues in the Netherlands (+5%), Scandinavia (+3%)
and Belgium (+3%). In Asia, the company even increased its revenues by 16%, with
this growth chiefly being driven by the wholesale business. By contrast,
revenues in Central and Eastern Europe (-4%) were chiefly held back by the
difficult situation on the Russian market.
EBIT and pre-tax earnings positive, dividend payment proposed

The growth in Wolford's proprietary online business and resultant expansion in
stockholdings to ensure product availability led inventories to increase in the
past financial year. This is reflected in an increase in inventories of finished
goods and work in progress, which rose to EUR 4.40 million (previous year:
EUR 1.53 million). Furthermore, the modernization of the product portfolio and
new go-to-market model led to a changed assessment of the usability of finished
goods, a factor that further increased the value of inventories. Personnel
expenses decreased by EUR 1.62 million to EUR 73.86 million (previous year:
EUR 75.48 million), while the average number of employees (full-time
equivalents) fell by three to 1,571.
Given the expansion in the proprietary online business and higher rental
payments in the proprietary retail business, also as a result of exchange rate
movements, other operating expenses rose from EUR 54.97 million to EUR 56.94
million.  Thanks to its positive revenue performance, Wolford nevertheless
managed to increase its EBITDA slightly from EUR 10.94 million to
EUR 11.01 million. EBIT came to EUR 1.55 million, as against EUR 2.17 million in
2014/15, and thus almost matched the previous year's figure - irrespective of
substantially lower other operating income (EUR 2.30 million, as against
EUR 12.76 million in 2014/15). In the previous year, EBIT benefited not only
from the accounting gain on the sale of the property not required for operations
in Bregenz, but also from the sale of two lease options (other operating income
of EUR 6.36 million) and exchange rate gains of EUR 1.64 million. In the past
2015/16 financial year, Wolford only received EUR 1.12 million from the sale of
non-core rental apartments.
Earnings before tax came to EUR 0.62 million, as against EUR 1.21 million in the
previous year. Income tax amounted to
EUR -6.81 million (previous year: EUR -0.18 million). Due to a more conservative
interpretation of IAS 12, deferred tax assets of EUR 6.53 million were reversed
in the 2015/16 financial year. As a result of this one-off item, earnings before
tax totaled EUR -6.19 million (previous year: EUR 1.03 million) and thus fell
significantly short of the previous year's figure, as did the earnings per share
of EUR -1.26 (previous year: EUR 0.21).
"Our bottom-line earnings figures were marked by a one-off item due to the
reversal of deferred tax assets. Our operating earnings offer a far more
meaningful indication of the company's performance. Excluding one-off items in
the previous financial year, we boosted our operating earnings by almost
EUR 5 million," comments Axel Dreher, CFO and COO of Wolford. "We are on the
right track with our operations."
As in the previous year, the Management Board will be proposing a dividend of
EUR 0.20 per share for the past financial year for approval by the Annual
General Meeting.
Balance sheet structure remains solid

The Wolford Group's consolidated equity amounted to EUR 68.15 million at the
balance sheet date on April 30, 2016 and thus fell EUR 6.68 million short of the
equivalent figure in the financial statements for the previous year. This
development was due to negative earnings after tax. The equity ratio amounted to
a solid 49% at the balance sheet date (previous year: 51%). Net debt rose year-
on-year by EUR 3.74 million to EUR 20.86 million.
Roadmap developed to enhance profitability

Wolford has set itself the targets of generating sustainably profitable growth
and achieving an EBIT margin of 10 % by the 2019/20 financial year. To meet
these objectives, the company is consistently pressing ahead with implementing
the measures already introduced in 2014 to boost revenues (revitalize brand,
modernize product portfolio, refocus market communications, and boost
multichannel distribution). Wolford reached some key milestones in this respect
in the past financial year. One example is the development of a new store
concept that is now due to be made gradually available for customers to
experience on location. It will be unveiled for the first time from September
2016 at the key locations in Berlin, Los Angeles (Beverly Hills), and Shanghai.
Since 2015, Wolford has also been implementing a new go-to-market model, one
that is exclusively aligned to end customers' needs and ensures a continuous
stream of new merchandise at the point of sale.
Furthermore, in the past financial year the management examined all of the
company's organizational structures and defined extensive measures to cut its
overall costs. These will be implemented in the next two financial years, and
especially in 2016/17. As a result, in the current financial year the company
will be pressing consistently ahead with the measures already initiated to
optimize its production, logistics, and supply chain, while also systematically
enhancing the profitability of its proprietary sales areas. The company is
currently also restructuring its sales and marketing organization in Europe and
centralizing all indirect support functions in Bregenz and Antwerp. This way, it
will be building a regional platform strategy for its global business, with
three centers for EMEA, the USA, and Asia. An effective global corporate
marketing organization is also being created in Bregenz. This will generate
substantial administrative savings over and above the significant efficiency and
effectiveness gains in the company's sales and marketing activities expected to
result from using a new B2B platform for specialist retailers.
"We made substantial progress in implementing our strategy in the past financial
year. And we still have a way to go in order to achieve an EBIT margin of 10% by
2019/20," emphasizes Ashish Sensarma, CEO of Wolford. "And that is why we have
developed our roadmap to profitability, which sets out clearly defined

Wolford AG set itself and also met the target of generating positive operating
earnings (EBIT) in the 2015/16 financial year. The new 2016/17 financial year
began on a subdued note, with revenues throughout the European fashion retail
sector performing weakly in the months of May and June.
Wolford nevertheless expects to generate slight revenue growth in the financial
year as a whole. Despite foreseeable expenses of around EUR 1.1 million expected
for the implementation of new structures, operating earnings are also expected
to rise slightly. No further items should result from the reversal of deferred
taxes on loss carryovers, as a result of which earnings after tax are also
expected to be positive.
The 2015/16 Annual Report and the 2015/16 Annual Financial Report can be viewed
and downloaded in the Investor Relations section of the company's website at:

Earnings Data

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Balance Sheet Data
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Stock Exchange Data

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About Wolford AG
Wolford AG, which has its headquarters in Bregenz on Lake Constance (Austria),
has 16 subsidiaries and markets its products in more than 60 countries via 262
mono-brand points of sales (company-owned and partner-operated), around 3,000
distribution partners, and online. Listed on the Vienna Stock Exchange since
1995, in the 2015/16 financial year (May 1, 2015 - April 30, 2016) the company
had around 1,570 employees and generated revenues of EUR 162.4 million. Founded

in 1950, Wolford has since grown to become the leading global brand for
luxurious legwear, exclusive lingerie, and high-quality bodywear.

Further inquiry note:
Wolford AG
Maresa Hoffmann
Referentin Investor Relations & Corporate Communications
Tel.: +43 5574 690 1258
investor@wolford.com | company.wolford.com

end of announcement                               euro adhoc 

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

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