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Wolford Aktiengesellschaft / Presentation of results for the first

Published: March 17, 2017; 07:50 · (FriedlNews)

Wolford AG, which is listed on the Vienna Stock Exchange, generated revenue of EUR 119.05 million in the first nine months of the current financial year (May 2016 - January 2017), comprising a year-on-year decline of 7.5%. The revenue drop equalled 6.2% when adjusted for currency effects, in particular the decrease in value of the British pound.


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9-month report

* Revenue decline of 7.5% despite catch-up effects in the third quarter
* As expected, positive Q3 results are not sufficient to compensate for
accumulated losses
* Medium-term planning is being revised

Vienna/Bregenz, March 17, 2017:Wolford AG, which is listed on the Vienna Stock
Exchange, generated revenue of EUR 119.05 million in the first nine months of
the current financial year (May 2016 - January 2017), comprising a year-on-year
decline of 7.5%. The revenue drop equalled 6.2% when adjusted for currency
effects, in particular the decrease in value of the British pound.

The decline in revenue is mainly due to the weak first half-year, which was
characterized by a difficult market environment as well as internal problems
relating to demand and sales planning. Wolford was no longer able to compensate
for the revenue shortfall in the third quarter despite the 4.0% third-quarter
year-on-year revenue increase. Revenue in Q3 2016/17 rose due to delayed
delivery dates, a stable Christmas business and a slight upward revenue trend
in January 2017.

Accordingly, operating results (EBIT) in the third quarter rose to EUR 3.53
million, up from the figure of EUR 2.44 million in the prior-year quarter.
However, this was not sufficient to compensate for the considerable losses
posted in the first half-year. EBIT in the first nine months of the current
financial year totaled EUR -4.72 million compared to EUR +2.16 million in the
previous year.

Weak market environment and internal mistakes

Wolford-owned retail stores reported a 6.6% drop in revenue in the first nine
months, accompanied by a revenue decrease equaling 7.3% in its wholesale
business. On balance, Wolford's own online business expanded by 4.4% from the
prior-year level.

In addition to a weak market environment, the revenue decrease was also due to
internal mistakes in reorganizing goods management for the retail sector, which
in turn led to flawed demand planning and management of sales space in the
first half-year. Together with delayed delivery dates for the fall/winter
collection, this resulted in a considerable decline in revenue as well as
costly post- production and significantly higher inventories. Moreover, in the
meantime, the company has drawn appropriate organizational consequences and
completely adjusted its system of delivering merchandise. Starting in June 2017
Wolford will supply products to its own retail stores as well as wholesale
customers on a monthly basis, except for the months of May and December.

Negative EBIT and earnings before tax

Operating earnings (EBIT) totaled EUR -4.72 million in the first nine months of
the current financial year, compared to a positive EBIT of EUR 2.16 million in
the previous year. EBIT was shaped by the weak revenue development and one-off
restructuring expenses to the amount of EUR 1.00 million for the reorganization
of sales operations and the bundling of administrative tasks. In the meantime,
the setting up of a centralized EMEA sales platform in Bregenz and Antwerp has
been completed, and initial positive cost effects are already perceptible. As a
result, personnel expenses remained stable in the first nine months despite
severance payments related to the elimination of administrative positions in
the European sales regions. The Wolford Group had an average of 1,555 employees
(FTE) in the first nine months of 2016/17, compared to 1,574 people in the
prior-year period.

However, additional special effects had a negative impact. As a result of
provisions allocated for a legal conflict with a former partner in Switzerland
and a risk provision for disputed claims against American customs authorities,
operating expenses climbed from EUR 3.18 million to EUR 4.73 million.

Catch-up effects in the third quarter

Revenue in the third quarter of 2016/17 rose by EUR 1.96 million to EUR 51.43
million. The year-on-year revenue increase of 4.0% can be attributed to
delivery dates changed from Q2 to Q3, a stable Christmas business and a slight
upturn in revenue in January 2017. Accordingly, operating results (EBIT) also
climbed in the third quarter to EUR 3.53 million from the prior-year level of
EUR 2.44 million.

Equity ratio of 40%

Equity of the Wolford Group at the balance sheet date amounted to EUR 61.65
million (January 31, 2016: EUR 75.21 million). As a consequence, the equity
ratio was 40% (January 31, 2016: 52%). Net debt as at January 31, 2017 rose to
EUR 32.46 million compared to the prior-year level of EUR 17.37 million, which
corresponds to a gearing ratio of 53% (January 31, 2016: 23%). This increase is
mainly attributable to the development of operating earnings as well as higher
financial liabilities, in particular to finance inventories.


The fundamental strategy pursued by Wolford to increase revenue and enhance
profitability is still valid. The reasons for the revenue and earnings decline
in the first half-year were analyzed and the underlying problems were rectified
to a large extent. In addition, Wolford initiated numerous measures to
sustainably reduce costs while focusing simultaneously on sales initiatives
designed to increase revenue.

Nevertheless, in this financial year the company will not be able to compensate
for the losses generated during the first half-year. As already announced,
Wolford anticipates an operating loss between EUR -8.0 million and EUR -10.0
million excluding potential valuation effects which could arise within the
context of preparing the consolidated year end financial statements.

At present the management is revising its medium-term planning, primarily
focusing on creating the pre-requisites enabling the company to be profitable
once again. At the same time, Wolford is working on a sustainable financing
structure based on a corresponding long-term financing of assets. The company
will announce details on this as soon as possible.

The report for the first three quarters of the 2016/17 financial year can be
downloaded under, Investor Relations.

Earnings 05/16-01/17
Data 05/15 - 01/16 Chg. in % 2015/16
Revenues in EUR mill. 119.05 128.71 -8 162.40
EBIT in EUR mill. -4.72 2.16 >100 1.55
before tax in EUR mill. -5.33 1.39 >100 0.62
after tax in EUR mill. -5.67 0.70 >100 -6.19
expenditure in EUR mill. 6.10 5.24 16 7.30
Free cash
flow in EUR mill. -10.33 1.10 >100 -2.35
(on average) FTE 1,555 1,574 -1 1,571

Sheet Data 31.01.2017 31.01.2016 Chg. in % 30.04.2016
Equity in EUR mill. 61.65 75.21 -18 68.15
Net debt in EUR mill. 32.46 17.37 87 20.86
capital in EUR mill. 53.11 38.97 36 43.15
sheet total in EUR mill. 154.16 145.91 6 139.25
Equity ratio in % 40 52 -23 49
Gearing in % 53 23 >100 31

Stock Exchange 05/16-01/17 05/15-01/16
Data Chg. in % 2015/16
Earnings per
share in EUR -1.15 0.14 >100 -1.26
Share price
high in EUR 26.01 25.48 2 25.48
Share price
low in EUR 19.83 21.35 -7 21.35
Share price at
end of period in EUR 21.00 25.05 -16 24.67
(weighted) in 1,000 4,912 4,912 0 4,912
(ultimo) in EUR mill. 105.00 125.23 -16 123.35

Über die Wolford AG: Founded in 1950, Wolford AG is headquartered in Bregenz,
on lake Constance. It operates 16 subsidiaries and markets its products in
about 60 countries via around 262 monobrand boutiques (owned and partner
operated) and through 16 online stores. Listed on the Vienna Stock Exchange
since 1995, it generated 162,4 million Euro in sales in FY 2015/2016; with
about 1.570 employees Wolford is a leading global fashion brand for high
quality sustainable legwear, lingerie and bodywear. Wolford designs and
manufactures its products exclusively in Europe (Austria and Slovenia) meeting
the highest environmental standards in the textile industry as underscored by
the on going partnership with bluesign Technologies AG.

Further inquiry note:
Wolford AG
Maresa Hoffmann

Referentin Investor Relations & Corporate Communications Tel.: +43 5574 690
1258 | 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
sector: Textiles & Clothing
ISIN: AT0000834007
indexes: ATX Prime, ATX GP

stockmarkets: free trade: Frankfurt, regulated dealing: Wien, ADR: New York
language: English

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