DGAP-News: Adler Modemärkte AG: 2015 Quarterly Results

DGAP-News: Adler Modemärkte AG / Key word(s): Quarter Results Adler Modemärkte AG: 2015 Quarterly Results Highlight ADLER's Growth 12.05.2015 / 07:29 --------------------------------------------------------------------- Press Release from Adler Modemärkte AG Expansion Measures Successfully Implemented 2015 Quarterly Results Highlight ADLER's Growth Executive Board Stands By Forecast for the Overall Year Haibach (near Aschaffenburg), 12 May 2015. Adler Modemärkte AG - one of Germany's largest textile retailers - continued to build on its growth at the beginning of financial year 2015. As was the case in previous quarters, ADLER again achieved this feat by bucking the negative industry trend. Revenue increased by 1.7% from EUR113.2 million to EUR115.1 million. In a like-for-like comparison - i.e., a comparison of sales on existing floor space - ADLER's revenue decreased by 4.1%, whereas bricks-and-mortar retailers in Germany recorded an average decline in revenue of 5.0%. In the first quarter, ADLER successfully implemented various expansion measures, further expanding its network of stores: On the one hand, eight stores were added to ADLER's store network from the Kressner acquisition and have since been integrated under the new ADLER Orange logo and brand concept. The former Kressner store in Dillenburg was sold to Steilmann-Boecker Fashion Point GmbH & Co. KG, and the Kredenbach store is slated to be closed in late 2015. In addition, the Company acquired the successful and established "hefa Moden" fashion retail stores in Mömlingen and in Lollar, and has since reopened the Mömlingen store as an ADLER store. The Lollar store will not be transferred to ADLER until 1 July 2015. ADLER closed one store (in Gösting, Graz, Austria) in Q1 2015. In the first three months of 2015, the total number of stores in the network increased to 178. In addition, six stores were completely modernised during this period. "We once again demonstrated our growth potential in impressive fashion during the first quarter. ADLER showed that we can quickly and successfully realise and integrate acquisitions", said ADLER CEO Lothar Schäfer, commenting on the quarterly results. "In light of the environment facing the industry, we're extremely pleased with our performance in the first quarter. Our task now is to continue building on our future growth and profitability." Kressner acquisition influences earnings For reasons of seasonality, the first quarter is traditionally ADLER's weakest quarter of the financial year. This is due to winter merchandise being sold off and the changeover to the new spring and summer collections in March. As expected, this leads to negative earnings indicators in the first quarter, which in turn are balanced out during the course of the year due to seasonality. In addition to the year-on-year decrease in revenue, earnings indicators during the past quarter were also weighed down by the effects of the Kressner acquisition. For instance, the cost of materials increased from EUR54.9 million to EUR58.2 million, due in particular to the increased cost of goods sold at the newly acquired stores. Consequently, and due to the clearance sale of the Kressner inventory, the gross profit margin decreased slightly from 51.5% to 49.5%. ADLER considers this to be a temporary effect that can be offset to some degree in the near future. Furthermore, personnel expenses increased from EUR24.2 million to EUR27.4 million. This was attributable to the integration of Kressner employees, normal wage increases at the ADLER Group and non-recurring expenses in the amount of EUR1.1 million (primarily for severances payments and/or provisions in connection with staff cuts following the Kressner acquisition). Consequently, EBITDA declined in Q1 2015 from EUR-5.6 million to EUR-13.0 million. Earnings before interest and taxes (EBIT) decreased to EUR-17.0 million (previous year: EUR-9.2 million). Earnings before taxes (EBT) fell to EUR-18.2 million (previous year: EUR-10.5 million). After factoring in EUR4.6 million in deferred taxes (previous year: EUR2.6 million), the consolidated net loss for the year amounted to EUR-13.5 million (previous year: EUR-8.2 million). Adjusted earnings per share amounted to EUR-0.73 (previous year: EUR-0.45). Strong balance sheet The strength of the balance sheet will allow ADLER to continue growing and to rapidly and flexibly leverage opportunities on the market. As at 31 March 2015, the equity ratio amounted to 37.3% (31 December 2014: 43.3%). Cash and cash equivalents decreased to EUR40.9 million (31 December 2014: EUR69.7 million), which was attributable mainly to the costs of acquiring Kressner and hefa, but also due to seasonality. Due primarily to the increase in inventories and the consolidated loss for the period, ADLER reported a cash outflow from operating activities of EUR17.0 million as at the end of Q1 2015 (previous year: EUR5.4 million outflow). Cash outflows from investing activities amounted to EUR9.0 million (previous year: EUR3.7 million outflow). This was due primarily to the Kressner and hefa acquisitions in the amount of approximately EUR4.5 million. Free cash flow amounted to EUR-26.0 million (previous year: EUR-9.1 million). Cash outflows from financing activities in Q1 amounted to EUR2.7 million (previous year: cash inflow of EUR6.5 million due to the sale of treasury shares in the amount of EUR8.9 million in January 2014). Cash and cash equivalents decreased accordingly by EUR28.8 million in the reporting period (previous year: EUR2.6 million decrease). Forecast confirmed: further profitable growth expected Based on the development of revenue in the first three months of 2015, ADLER continues to consider revenue growth in the mid-single-digit percentage range possible for financial year 2015. This is also indicated by the fact that overall ADLER's performance slightly outpaced that of its competitors during the reporting period. ADLER's comments on EBITDA remain unchanged: Due to prepayments and expenses for integrating the Kressner stores acquired, we expect EBITDA to stagnate at best at the already high level, and to possibly decline slightly. In the medium term, however, the Executive Board expects the expansion measures currently being undertaken to strengthen ADLER and to lead to renewed profitable growth. Adler Modemärkte AG's full quarterly report is now available for inspection or download from the Company's homepage at https://www.adlermode-unternehmen.com/en/inve...rts-and-pu blications/financial-reports/. ADLER Group's key performance indicators <pre> (EUR million) Q1 2015 Q1 2014 Change Revenue 115.1 113.2 +1.7% Gross profit 56.9 58.3 -2.3% Earnings before interest, taxes, depreciation -13.0 -5.6 -132.1% and amortisation (EBITDA) Earnings before interest and taxes (EBIT) -17.0 -9.2 -84.8% Earnings before taxes -18.2 -10.5 -73.3% Earnings per share (in EUR) -0.73*) -0.45**) </pre> *) Based on 18,510,000 no-par value shares **) Based on 18,381,617 no-par value shares <pre> 31 March 2015 31 Dec. 2014 Change Total assets (EUR million) 246.7 244.3 +1.0% Equity (EUR million) 92.0 105.6 -12.9% Equity ratio (in %) 37.3 43.3 -6.0 pp Debt/equity ratio (in %) 1.68 1.31 +0.37 pp Cash and cash equivalents (EUR million) 40.9 69.7 -41.3% Employees 4,311 4,154 +3.8% Total number of stores 178 170 +4.7% </pre> Adler Modemärkte AG, headquartered in Haibach near Aschaffenburg, Germany, is one of Germany's largest and most important textile retailers. In 2014, the Group generated revenue of EUR535.3 million with a workforce of around 4,150, generating EUR41.5 million in EBITDA. ADLER currently operates 178 stores, 153 of which are located in Germany, 22 in Austria, two in Luxembourg, one in Switzerland, plus an online shop. The Company focuses on large-space concepts offering in excess of 1,400 m2 of retail space. With its many own brands and select external brands, ADLER offers a highly diverse product range. Thanks to more than 60 years of tradition and strong customer loyalty, ADLER considers itself to be the market leader within its target group of affluent customers aged 45 and over. For more information: www.adlermode-unternehmen.com; www.adlermode.com Press enquiries: Jasmin Dentz GFD Finanzkommunikation Telephone: +49 (0) 69 971 247 31 Mobile: +49 (0) 151 67204247 E-mail: dentz@gfd-finanzkommunikation.de --------------------------------------------------------------------- 12.05.2015 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: Adler Modemärkte AG Industriestraße Ost 1-7 63808 Haibach Germany Phone: +49 (0) 6021 633 0 Fax: +49 (0) 6021 633 1299 E-mail: info@adler.de Internet: www.adlermode.com ISIN: DE000A1H8MU2 WKN: A1H8MU Listed: Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover, Munich, Stuttgart End of News DGAP News-Service --------------------------------------------------------------------- 356087 12.05.2015