DGAP-Adhoc: GERRY WEBER confirms international growth

Gerry Weber International AG / Key word(s): Final Results 26.02.2015 11:10 Dissemination of an Ad hoc announcement according to § 15 WpHG, transmitted by DGAP - a service of EQS Group AG. The issuer is solely responsible for the content of this announcement. --------------------------------------------------------------------------- Ad-hoc announcement pursuant to § 15 WpHG GERRY WEBER confirms international growth strategy - Although sales revenues remain almost unchanged, the GERRY WEBER Group's profitability increases in the financial year 2013/14 - Proposal to pay out a stable dividend of EUR 0.75 per share - Revenue and earnings growth projected for the current financial year 2014/15 - Earnings per share to increase as Hallhuber is to be integrated as of 1 February 2015 (Halle/Westphalia, 26 February 2015) At today's annual accounts press conference, GERRY WEBER International AG confirmed the preliminary figures for the past financial year 2013/14 published at the end of January 2015. The Managing Board and the Supervisory Board will propose to the upcoming Annual General Meeting to keep the dividend unchanged at EUR 0.75 per share. Management also explained the forecast for the GERRY WEBER Group including Hallhuber for the current financial year 2014/15. Sales performance in 2013/14 In spite of difficult framework conditions, GERRY WEBER International AG was able to keep its sales revenues more or less unchanged at EUR 852.1 million in the financial year 2013/14. Atypical seasonal weather conditions, low footfall in the city centres and the difficult economic environment in some parts of Europe had an equally adverse effect on sales of the whole fashion industry as the uncertainty among consumers caused by the geopolitical crises. Against this background, the 11.3% increase in the Retail segment's sales revenues to EUR 404.9 million is all the more positive. Both the international expansion of the Retail segment and the existing stores contributed to the increase in Retail revenues. The number of company-managed Retail spaces rose from 701 at the end of the previous year to 778 stores, while the sales space increased approx. 14,400 square metres to 138,400 square metres at the end of the financial year 2013/14. As much as 49 sales spaces were opened outside Germany. Like-for-like sales were up by 1.7% on the previous year, in Germany by as much as 1.9%. This is a much better performance than that of the German fashion market, which reported a 3.0% drop in sales revenues for the year 2014. The Wholesale segment generated sales revenues of EUR 447.2 million in the financial year 2013/14 (previous year: EUR 488.3 million). The decline is due, among other things, to the reclassification of franchised stores to the Retail segment. Moreover, some retailers refrained from placing re-orders in view of the difficult market environment. Earnings performance 2013/14 Although sales revenues remained almost unchanged in 2013/14, the GERRY WEBER Group was able to improve its profitability. The gross profit margin climbed from 53.7% in the previous year to 57.4%. This is primarily attributable to the fact that the Retail segment accounted for an increased share of 47.5% in total Group revenues (previous year: 42.7 %). Against the background of the expansion of the Retail business, the headcount increased to approx. 5,400 at the end of the financial year. Accordingly, personnel expenses rose by 8.1% to EUR 154.9 million (previous year: EUR 143.3 million). Other operating expenses, which also include the rents of the company-managed stores, climbed 5.2% to EUR 214.2 million (previous year: EUR 203.7 million). Taking into account all operating expenses, earnings before interest, taxes, depreciation and amortisation (EBITDA) amounted to EUR 134.2 million (previous year: EUR 127.5 million). Consequently, the EBITDA margin rose from 15.0% to 15.7%. Although depreciation/amortisation increased, partly due to the expansion of the Retail segment, earnings before interest and taxes (EBIT) improved by 2.9% to EUR 108.9 million. The EBIT margin thus stood at 12.8%, compared to 12.4% in the previous year. Net income after taxes amounted to EUR 71.4 million in the financial year 2013/14 (previous year: EUR 71.0 million). Accordingly, earnings per share remained almost unchanged at EUR 1.56 (previous year: EUR 1.55). Capital expenditures Capital expenditures of the GERRY WEBER Group increased sharply from EUR 37.9 million to EUR 65.0 million in the financial year 2013/14, which is due, among other things, to the expansion of the Retail segment and the acquisition of 25 Norwegian stores. An amount of EUR 27.1 million was invested in the construction of the new logistic centre. Outlook on 2014/15 In the current financial year 2014/15, growth will again be driven by our Retail segment. The company-managed Retail spaces are to be expanded by roughly 10% p.a. The expansion of the Retail segment will focus on neighbouring European markets and North America. The first eight Houses of GERRY WEBER in Canada will be opened before the end of the year. Fashion company Hallhuber will be fully consolidated by the GERRY WEBER Group with effect from 1 February 2015. Although the Hallhuber brand will continue to operate in the market as an independent brand, the year 2015 will be marked by the integration of Hallhuber into the processes and workflows of the GERRY WEBER Group. Potential synergies are expected to be leveraged in the medium term especially in procurement and logistics and in the expansion of Hallhuber's sales space in Europe. Both companies expect the exploitation of synergies to lead to improved profitability. The overall environment for the European fashion industry as a whole will remain challenging in 2015. Low customer footfall, increasing vertical integration, combined with a reduction in the number of Wholesale spaces, and the crisis in Russia will continue to influence our business. Together with Hallhuber, we project consolidated sales revenues of between EUR 970 million and EUR 1,000 million for the financial year 2014/15. We expect GERRY WEBER International AG excluding Hallhuber to contribute between EUR 860 million and EUR 880 million to this total. As existing stocks continue to be sold, the first and second quarter 2014/15 will be influenced by higher discounts, which will have an adverse effect on the gross margin. Taking into account these effects as well as potential one-time expenses related to the acquisition of Hallhuber, the GERRY WEBER management projects EBITDA of between EUR 138 million and EUR 143 million plus a moderate positive effect from the Hallhuber consolidation of between EUR 10 million and EUR 14 million. After increased depreciation/amortisation in conjunction with the Retail expansion, the present GERRY WEBER Group projects earnings before interest and taxes (EBIT) of between EUR 110 million and EUR 115 million. The GERRY WEBER management expects the consolidation of Hallhuber to increase EBIT moderately by between 5% and 10%. Management thus projects EBIT of between EUR 118 million and EUR 126 million for the GERRY WEBER Group as a whole including Hallhuber. The consistent implementation of our expansion and vertical integration strategy and the acquisition of Hallhuber show that we are all set to grow profitably also in future. However, the fiscal year 2014/15 will also be marked by the ongoing process of change from a wholesale-oriented fashion supplier to an increasingly vertically integrated lifestyle company as well as by the integration of Hallhuber into the GERRY WEBER Group. The management of GERRY WEBER regards the fiscal year 2014/15 as a year of consolidation before making the next major growth move. Key figures of the old GERRY WEBER Group (excluding Hallhuber): <pre> 2013/14 2012/13 Change in % Sales revenues (in EUR millions) 852.1 852.0 0.0 EBITDA (in EUR millions) 134.2 127.5 5.3 EBIT (in EUR millions) 108.9 105.8 2.9 EBIT margin (in %) 12.8 % 12.4 % Net income for the year (in EUR millions) 71.4 71.0 0.6 Earnings per share (in Euro) 1.56 1.55 0.6 Dividend per share (in Euro) 0.751 0.75 0.0 Headcount (annual average) 5,202 4,700 10.7 </pre> 1 to be proposed to next AGM Forecast for the GERRY WEBER Group incl. Hallhuber: <pre> GERRY HALLHUBER GERRY WEBER Group WEBER (9 months) (NEW) (OLD) Sales revenues (in EUR millions) 860 - 880 110 - 120 970 - 1,000 EBITDA (in EUR millions) 138 - 143 10 - 14 148 - 157 EBIT (in EUR millions) 110 - 115 8 - 11 118 - 126 </pre> Admitted to the Regulated Market of the Frankfurt Stock Exchange (Prime Standard) ISIN: DE0003304101 WKN: 330410 <pre> Investor Relations Contact Corporate Communications Contact GERRY WEBER International AG GERRY WEBER International AG Claudia Kellert Catharina Berndt Phone.: +49 (0) 52 01-185 8422 Phone.: +49 (0) 52 01-185 320 Email: c.kellert@gerryweber.de Email: c.berndt@gerryweber.com </pre> 26.02.2015 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: Regulated Market in Dusseldorf, Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Stuttgart End of Announcement DGAP News-Service ---------------------------------------------------------------------------