EANS-News: Wolford Aktiengesellschaft / Detailed Business Results Presented for the First Quarter of 2016/17

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quarterly report

o Decline in revenues
o Operating earnings (EBIT) clearly below the prior-year level
o New guidance already announced for the 2016/17 financial year
o Medium-term business targets confirmed

Vienna/Bregenz, September 9, 2016: Wolford AG, which is listed on the
Vienna Stock Exchange, reported a revenue decline of 18% to EUR 27.74
million in the first quarter of the current financial year (May 2016
to July 2016). The drop in revenue equaled 16.9% when adjusted for
currency effects, in particular the decrease in value of the British
pound. Operating earnings (EBIT of EUR -8.28 million vs. EUR -3.04
million in Q1 2015/16) and earnings after tax (EUR -8.22 million vs.
EUR -2.55 million in Q1 2015/16) were also considerably below the
prior-year quarter and management's expectations. Against this
backdrop and in the light of the ongoing market weakness in August,
the company already revised its forecast for the entire financial
year on August 31, 2016, but reaffirms its medium-term business
targets.

Difficult market environment

The weak first-quarter revenue development can be mainly attributed
to the difficult market environment. Negative events in important
core markets (e.g. political uncertainty before elections in the USA,
fear of terrorism in France and Germany, the BREXIT decision)
resulted in clearly lower customer frequency in central shopping
locations. In particular, this impacted Wolford's high margin retail
business, where revenue fell by 9% compared to the previous year.

A good half of the revenue decrease of EUR 6.2 million in the first
quarter was due to the new delivery timing in the wholesale business.
The new scheduling calls for a large part of the fall/winter
collection to be delivered first in September. Accordingly, the
first-quarter figures did not include revenues from so-called
pre-season orders totaling EUR 3.19 million which are now shifted to
subsequent quarters. On balance, revenue of the wholesale segment
fell by 32% in the first quarter of 2016/17. Wolford's own online
business matched the same strong level of the previous year.

Weak customer frequency in core markets

The company suffered from a double-digit revenue decrease in its core
markets i.e. in the USA, Great Britain, Germany, France, Switzerland
and Italy. A single-digit drop in revenue was reported for Belgium,
Austria and the Netherlands. Revenue also fell in Central and Eastern
Europe, not least as a consequence of the difficult situation on the
Russian market.

Clearly negative EBIT and earnings for tax

The revenue decline was also reflected in the operating earnings of
Wolford AG. Moreover, the company was faced with negative currency
effects as a result of the drop in value of the British pound. This
was accompanied by general salary increases which largely offset the
effect of a moderate reduction in the number of employees. The
Wolford Group employed an average of 1,557 employees (FTE) in the
first quarter of 2016/17, compared to 1,583 in the prior-year period.

Wolford's operating earnings (EBIT) totaled EUR -8.28 million in the
first three months of the current financial year, compared to EUR
-3.04 million in the first quarter of the previous year. EBIT in the
prior-year period benefited from the sale of non-core rental
apartments (other operating income to the amount of EUR 1.09
million). Adjusted for this special effect, EBIT in the first quarter
of 2016/17 was EUR 4.14 million below the previous year.

First-quarter earnings before tax amounted to EUR -8.44 million,
compared to the prior-year level of EUR -3.33 million. The income tax
expense totaled EUR 0.22 million (previous year: EUR 0.77 million),
whereby deferred taxes assets in the first quarter of the current
financial year were EUR 0.89 million lower than in the prior-year
period. Accordingly, earnings after tax amounted to EUR -8.22 million
(previous year: EUR -2.55 million). Earnings per share equaled EUR -
1.67, down from EUR -0.52 in the first quarter of 2015/16.

Equity ratio of 41%

Equity of the Wolford Group at the balance sheet date amounted to EUR
59.94 million, comprising a drop of EUR 12.53 million from the
first quarter of the previous financial year. The equity ratio was
41% at the reporting date (previous year: 48%), and net debt totaled
EUR 35.59 million (previous year: EUR 25.98 million). The higher
level of debt was primarily due to the build-up of inventories as a
result of the later delivery timing for the fall/winter collection.

Stronger foundation for medium-term revenue growth

Notwithstanding the weak business results generated in the first
quarter, Wolford has continued over the past months to resolutely
implement its planned measures designed to enhance profitability,
strengthening the foundation for systematically increasing revenues
in the future. Most recently, the sales organization for the EMEA
region was completely restructured and a new B2B platform for EMEA
went live. The company not only expects these measures to generate
substantial efficiency gains in its sales activities but also higher
revenues in the wholesale segment.

On September 7, 2016, Wolford presented its new shop concept on time
at the Berlin store, which met with a very positive response. Wolford
will also be showcasing a new look in the most important department
stores in the German capital. A new wholesale furniture concept will
be rolled out throughout the entire EMEA region in November of this
year. The launch of the new B2C platform will take place at the end
of September as scheduled. In the light of the company's business
development over the last few months, Wolford will also accelerate
selected measures to improve earnings. For this reason, restructuring
costs are expected to be somewhat higher than originally forecast.

"In order to achieve our medium-term margin targets, the speedier
implementation of the approved measures will take precedence over the
short-term objective of generating positive operating results at the
end of this financial year", explains Wolford CEO Ashish Sensarma.

Outlook

Against the backdrop its first-quarter results and the ongoing market
weakness, Wolford already revised its outlook for the current 2016/17
financial year.

The Wolford Group now anticipates stagnating or slightly lower
revenue for the 2016/17 financial year compared to the prior-year
performance, and negative operating earnings in the lower single
digit million euro range. Implementation of the package of measures
aimed at sustainably increasing revenue and profitability and the
creative realignment of the company are proceeding on schedule. In
addition, the cost-cutting drive is being further accelerated, which
should have a perceptible impact on earnings starting in the upcoming
2017/18 financial year. For this reason, the company reaffirms its
medium-term planning targets.

The Report on the First Quarter of 2016/17 can be viewed and
downloaded in the Investor Relations section of the company's website
at company.wolford.com: http://company.wolford.com/wp-content/uploads
/2016/09/Wolford_Q1-Report_2016_17_EN.pdf

Earnings Data 05 - 07/16 05 - 07/15 Chg. in % 2015/16
Revenues in EUR mill. 27.74 33.98 -18 162.40
EBIT in EUR mill. -8.28 -3.04 >100 1.55
Earnings before tax
in EUR mill. -8.44 -3.33 >100 0.62
Earnings after tax
in EUR mill. -8.22 -2.55 >100 -6.19
Capital expenditure
in EUR mill. 2.69 1.99 +35 7.30
Free cash flow
in EUR mill. -14.65 -8.76 +67 -2.35
Employees
(on average) FTE 1,557 1,583 -2 1,571

Balance Sheet Data 31.07.2016 31.07.2015 Chg. in % 30.04.2016
Equity in EUR mill. 59.94 72.47 -17 68.15
Net debt
in EUR mill. 35.59 25.98 +37 20.86
Working capital
in EUR mill. 48.72 39.76 +23 43.15
Balance sheet total
in EUR mill. 145.86 150.58 -3 139.25
Equity ratio in % 41 48 -15 49
Gearing in % 59 36 +64 31

Stock Exchange Data 05 - 07/16 05 - 07/15 Chg. in % 2015/16
Earnings per share in EUR -1.67 -0.52 >100 0.21
Share price high in EUR 25.70 23.98 +7 24.12
Share price low in EUR 24.49 22.05 +11 18.75
Share price at end of period
in EUR 25.60 22.37 +14 24.00
Shares outstanding (weighted)
in 1,000 4,912 4,900 +1 4,900
Market capitalization (ultimo)
in EUR mill. 128.00 111.85 +14 120.00

About Wolford AG Wolford AG, which has its headquarters in Bregenz on
Lake Constance (Austria), has 16 subsidiaries and markets its
products in more than 60 countries via 262 mono-brand points of sales
(company-owned and partner-operated), around 3,000 distribution
partners, and online. Listed on the Vienna Stock Exchange since 1995,
in the 2015/16 financial year (May 1, 2015 - April 30, 2016) the
company had around 1,570 employees and generated revenues of EUR
162.4 million. Founded in 1950, Wolford has since grown to become the
leading global brand for luxurious legwear, exclusive lingerie, and
high-quality bodywear.

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

end of announcement euro adhoc
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company: Wolford Aktiengesellschaft
Wolfordstrasse 1
A-6900 Bregenz
phone: +43 (0) 5574 690-1268
FAX: +43 (0) 5574 690-1219
mail: investor@wolford.com
WWW: company.wolford.com
sector: Textiles & Clothing
ISIN: AT0000834007
indexes: ATX Prime, ATX Global Players
stockmarkets: free trade: Frankfurt, regulated dealing: Wien, ADR: New York
language: English