DGAP-News: Gerry Weber continues its vertical integration

DGAP-News: Gerry Weber International AG / Key word(s): 9-month figures Gerry Weber continues its vertical integration strategy 12.09.2014 / 07:30 --------------------------------------------------------------------- Corporate News GERRY WEBER nine-month results 2013/14 GERRY WEBER continues its vertical integration strategy - Increased revenues and greatly improved gross profit margin lead to higher earnings before interest and taxes - EBITDA margin climbs to 14.1% at the nine-month stage - Earnings before interest and taxes increase from EUR 60.7 million in previous year to EUR 65.5 million (Halle/Westphalia, 12 September 2014) Supported by the dynamic growth of the company's own Retail operations, Group sales revenues increased by 1.2% to EUR 600.0 million at the nine-month stage of the current financial year 2013/14 (9M previous year: EUR 592.8 million). At EUR 293.6 million, the company's own Retail operations contributed 48.9% to the sales revenues of the GERRY WEBER Group. Compared to the prior year period, the Retail segment boosted its revenues by 13.0%, thus fully offsetting the reduction in the Wholesale segment's sales revenues. Due to the takeover of former franchised stores in Belgium and Norway and their transfer to the Retail segment as well as to the challenging market environment, sales revenues in the Wholesale segment declined by 8.0% in the first nine months of 2013/14. In this context, it should be noted that the prior year's revenues still included the revenues of the Belgian and Norwegian Houses of GERRY WEBER in which the GERRY WEBER Group has acquired majority shareholdings. Moreover, the company pursued a selective distribution strategy and deliberately refrained from doing business with customers with poor credit ratings, in most cases customers from Southern Europe, Russia and Ukraine, in order to minimise the risk of default. This again emphasizes the Group's strategy to give priority to higher profitability rather than to sales growth. As in the first two quarters of 2013/14, the Retail segment outperformed the German fashion market as whole also in the third quarter. While sales in Germany were almost balanced in the period from November 2013 to April 2014, the market environment deteriorated markedly between May and July. Having grown by 5.2% in the first half of the current financial year, the GERRY WEBER Retail segment posted stable like-for-like sales in the third quarter, when sales in the market as a whole showed a negative trend. Total like-for-like sales in the first nine months of 2013/14 increased by 3.4%. Besides this like-for-like growth, the positive sales trend of the Retail segment is also due to growing sales revenues generated by the stores opened in the past two years as well as to the takeover of former franchisees. "The dynamic revenue growth of our own Retail segment clearly reflects the consistent implementation of our vertical integration strategy," said Ralf Weber, Board member in charge of the Retail segment of GERRY WEBER International AG. Gross margin Due to the Retail segment's increased share in total Group revenues and optimised inventory management, the gross profit margin was up by 260 basis points on the previous year and reached 56.4% at the nine-month stage of 2013/14. This positive trend is particularly apparent in the third quarter. In spite of a moderate decline in Group sales revenues (-0.9%) but an increase in the Retail segment's share from 49.3% to 56.0%, the gross profit margin improved from 56.8% to 59.4%. Improved profitability In the past twelve months (since 1 August 2013), the number of company-managed stores increased by 119 to 751. The ongoing expansion of the Retail operations has led to higher fixed costs for personnel and rents. Against this background, earnings before interest, taxes, depreciation and amortisation (EBITDA) remained almost constant at EUR 22.7 million in the third quarter 2013/14, compared to the third quarter of the previous year. During the nine-month period, we were able to increase EBITDA at a disproportionately higher rate (11.0%) than Group revenues (+1.2%) to EUR 84.5 million (9M previous year: EUR 76.1 million). Accordingly, the EBITDA margin improved from 12.8% to 14.1%. Against the background of slightly lower Q3 revenues and expansion-related costs of the Retail segment, third-quarter earnings before interest and taxes declined from EUR 17.4 million to EUR 16.0 million. By contrast, EBIT for the full nine-month period increased notably by 7.9% to EUR 65.5 million. Accordingly, the EBIT margin improved from 10.2% to 10.9% in the first nine months of 2013/2014. Taking into account the financial result (EUR -3.8 million) and income taxes (EUR -18.6 million), GERRY WEBER International AG's net income for the nine-month period 2013/14 after taxes amounted to EUR 43.1 million. This is equivalent to earnings per share of 0.94 (9M 2012/13: EUR 0.89 per share). Objectives of the financial year 2013/14 "By introducing an additional collection comprising 29 items (NY-Collection), placing our first TV commercial and developing an autumn/winter collection catering to the needs of our consumers, we have laid the basis for achieving the objectives we have set ourselves for the fourth quarter of 2013/14," said Gerhard Weber, CEO of GERRY WEBER International AG. Key figures of the GERRY WEBER Group for 9M 2013/14 <pre> 9M 9M Q3 2013/ Q3 2013/14 2012/13 14 2012/13 Sales revenues (in EUR million.) 600.0 592.8 187.2 189.0 EBITDA (in EUR million) 84.5 76.1 22.7 22.6 EBITDA margin in % 14.1% 12.8% 12.1% 12.0% EBIT (in EUR million) 65,5 60.7 16.0 17.4 EBIT margin in % 10.9% 10.2% 8.5% 9.2% Net income of the period (in EUR 43.1 40.8 10.4 11.5 million) Earnings per share (in Euro) 0.94 0.89 0.23 0.25 Equity ratio (in %) 67.8 % 77.4% 67.8% 77.4% Headcount (on average) 4,957 4,723 4,957 4,723 </pre> Admitted to the Regulated Market of the Frankfurt Stock Exchange (Prime Standard) ISIN: DE0003304101 WKN: 330410 <pre> Investor Relations Contact GERRY WEBER International AG Neulehenstraße 8 D - 33790 Halle/Westfalen Claudia Kellert Anne Hengelage Tel.: +49 (0) 52 01-185 8422 Tel.: +49 (0) 52 01-185 8522 E-mail: c.kellert@gerryweber.de E-mail: a.hengelage@gerryweber.de </pre> --------------------------------------------------------------------- 12.09.2014 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG. The issuer is solely responsible for the content of this announcement. The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------- Language: English Company: Gerry Weber International AG Neulehenstraße 8 33790 Halle/Westfalen Germany Phone: +49 (0)5201 185-0 Fax: +49 (0)5201 5857 E-mail: c.kellert@gerryweber.de Internet: www.gerryweber-ag.de ISIN: DE0003304101 WKN: 330410 Indices: MDAX Listed: Regulierter Markt in Düsseldorf, Frankfurt (Prime Standard); Freiverkehr in Berlin, Stuttgart End of News DGAP News-Service --------------------------------------------------------------------- 286741 12.09.2014