EANS-News: Wolford AG: Detailed Figures Announced for the First Half-Year 2019/20 CNE

12/13/2019, 8:20 AM (Source: euro adhoc)
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Mid Year Results

Bregenz -

* New Management Board is developing a plan to reposition the company
* Revenue down 3% - Operating loss of EUR 9.4 million
* Medium-term forecast remains unchanged

Bregenz, December 13, 2019: Wolford AG, which is listed on the Vienna Stock
Exchange, generated revenue of EUR 60.49 million in the first six months of the
current financial year (May 2019 to April 2020), comprising a decrease of 3.0%
from the comparable prior-year figure of EUR 62.37 million. Similar to fashion
retailers across the globe, Wolford is suffering the consequences of a far-
reaching structural transformation along with declining customer frequencies in
the Western European fashion markets. Operating earnings (EBIT) in the first
half-year amounted to EUR -9.38 million, compared to EUR -5.92 million in the
previous year. This development is primarily related to the drop in revenue.
Interest payments roses substantially by EUR 1.60 million, which is mainly due
to the first-time application of the new accounting standards IFRS 16.
Accordingly, earnings before tax equaled EUR -12.03 million, down from EUR -6.61
million in the prior-year period. Earnings after tax totaled EUR -11.86 million
compared to EUR -7.33 million in the first half of the previous financial year.

New accounting standard IFRS 16 leads to shifts in the income statement and
balance sheet

Within the context of further reduction of administrative staff in Bregenz in
the 2018/19 financial year, the average number of employees (FTE) in the first
six months was down by 68 to the current total of 1,282 employees (previous
year's average: 1,350 employees (FTE)). Accordingly, personnel expenses fell by
EUR 0.89 million compared to the first half of 2018/19 to EUR 30.27 million.
Depreciation and amortization in the first half of the current financial year
climbed from EUR 3.63 million to EUR 9.22 million as a result of the initial
application of IFRS 16.

As a result of the losses generated in the current and previous financial years,
equity of the Wolford Group fell to EUR 30.96 million as at October 31, 2019
(October 31, 2018: EUR 48.16 million). In light of the shareholder loan of EUR
10 million granted by Fosun Fashion Investment Holdings (HK) Limited, net debt
rose from EUR 25.21 million to EUR 33.51 million as at October 31, 2019. The
equity ratio fell to 18% (October 31, 2018: 39%) whereas gearing deteriorated to
108% from 52% in the prior-year period. Both developments must be considered
against the backdrop of the initial application of IFRS 16 and the increase in
the balance sheet total.

Plan to reposition Wolford currently under development: Program for revenue
growth, improved efficiency and cost reductions

The new Management Board team consisting of Silvia Azzali and Andrew Thorndike,
which has only been in office for a few weeks, is currently working with company
executives to precisely analyze the situation and on this basis develop a master
plan for Wolford consisting of short-, medium- and long-term measures. The
target is to achieve a sustainable repositioning of Wolford as a profitable
company with strong product lines and a clear customer orientation. At the same
time, the goal is to adjust costs in line with revenue development.

It goes without saying that the company is examining the viability of some
individual boutique locations. On the other hand, Wolford's presence should be
expanded in markets where there is a demonstrable growth potential,
predominantly with the help of wholesale partners. For example, Wolford is now
represented on the Japanese market again for the first time after an absence of
several years. There were further important openings of partner boutiques in the
EMEA region i.e. in Istanbul, Prague and Belgrade. In the Chinese growth market,
Wolford opened three new partner boutiques on the Chinese mainland during the
first half of the current financial year. Furthermore, Wolford is making
targeted investments in omni-channel sales. Accordingly, Wolford recently began
to cooperate with the luxury fashion platform Farfetch, one of the world's most
important online shippers of luxury fashion. The first pilot project with the
Wolford boutique in Milan led to a revenue increase of about 30% within a three-
week period, including many orders from countries in which Wolford has hardly
been active up until now, for example Saudi Arabia and Hungary.

The management has identified considerable cost-saving potential along the value
chain, including purchasing. Wolford centralized its purchasing process within a
single management structure over the last few weeks and has developed specific
cost-reduction measures in cooperation with the new Head of Purchasing and his
team which are already being implemented.

Outlook

On the basis of the current analysis of all relevant areas in the company, the
new Management Board team will develop a plan to reposition Wolford AG
encompassing short-, medium- and long-term measures. On the basis of the latest
findings, the management confirms its previous plans to return Wolford to
profitability in the 2020/21 financial year.

The report for the first half-year 2019/20 can be downloaded under
company.wolford.com, Investor Relations.

Earnings                    05 - 10/19    05 - 10/18     Chg. in %       2018/19
Data
Revenues     in EUR mill.        60,49         62,37            -3        137,22
EBIT         in EUR mill.        -9,38         -5,92           -58         -8,98
Earnings     in EUR mill.       -12,03         -6,61           -82        -10,11
before tax
Earnings     in EUR mill.       -11,86         -7,33           -62        -11,10
after tax
Capital      in EUR mill.         0,93          1,84           -49          5,16
expenditure
Free cash    in EUR mill.        -6,04        -16,41            63        -10,88
flow
Employees             FTE        1.282         1.350            -5         1.347
(on average)


Balance Sheet                 31.10.2019   31.10.2018    Chg. in %    30.04.2019
Data
Equity         in EUR mill.        30,96        48,16          -36         42,72
Net debt       in EUR mill.        33,51        25,21           33         19,62
Working        in EUR mill.        33,26        43,29          -23         31,07
capital
Balance sheet  in EUR mill.       174,88       123,68           41        117,99
total
Equity ratio           in %           18           39          -54            36
Gearing                in %          108           52         <100            46


Stock Exchange                05 - 10/19   05 - 10/18    Chg. in %       2018/19
Data
Earnings per         in EUR        -1,79        -1,10          -63         -1,76
share
Share price          in EUR        11,80        17,70          -33         17,70
high
Share price          in EUR         5,50        12,30          -55         10,60
low
Share price at       in EUR         6,40        12,30          -48         11,40
end of period
Shares
outstanding        in 1,000        6.320        6.631           -5         6.320
(weighted)
Market
capitalization in EUR mill.        43,00        82,65          -48         75,59
(ultimo)


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

end of announcement                         euro adhoc
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issuer:       Wolford Aktiengesellschaft
              Wolfordstrasse 1
              A-6900 Bregenz
phone:        +43(0) 5574 690-1258
FAX:          +43(0) 5574 690-1410
mail:         investor@wolford.com
WWW:          http://company.wolford.com
ISIN:         AT0000834007
indexes:      ATX GP
stockmarkets: New York, Frankfurt, Wien
language:     English

EAX0004    2019-12-13/08:20

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