EANS-News: Wolford Aktiengesellschaft / Presentation of results for the first nine months of 2016/17

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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.

Outlook

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 company.wolford.com, Investor Relations.

http://company.wolford.com/wp-content/uploads/2017/03/Wolford_Q3-Repo
rt_2016_17.pdf

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
Earnings
before tax in EUR mill. -5.33 1.39 >100 0.62
Earnings
after tax in EUR mill. -5.67 0.70 >100 -6.19
Capital
expenditure in EUR mill. 6.10 5.24 16 7.30
Free cash
flow in EUR mill. -10.33 1.10 >100 -2.35
Employees
(on average) FTE 1,555 1,574 -1 1,571

Balance
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
Working
capital in EUR mill. 53.11 38.97 36 43.15
Balance
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
Shares

outstanding (weighted) in 1,000 4,912 4,912
0 4,912 Market capitalization

(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
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: http://company.wolford.com
sector: Textiles & Clothing
ISIN: AT0000834007
indexes: ATX Prime, ATX GP
stockmarkets: free trade: Frankfurt, regulated dealing: Wien, ADR: New York
language: English

Original-Content von: Wolford Aktiengesellschaft, übermittelt durch news aktuell