Wolford Group: Significant sales and earnings increase

Press information
Sales and earnings in the 2010/11 fiscal year
Wolford Group: Significant sales and earnings increase

  • Sales rose 5.6 percent to EUR 152.2 million
  • Monobrand distribution surpasses 60 percent threshold for the first time
  • Disproportionate improvement in profitability
  • Net profit for the period almost doubled
  • Equity ratio up to 58 percent

Vienna/Bregenz, July 22, 2011
Wolford Aktiengesellschaft, a publicly listed company on the Vienna Stock Exchange, can look
back at a successful 2010/11 fiscal year, characterized by a rise in sales and a disproportionate
improvement in profitability. “After two challenging years we have once again returned to the
growth path, marked by a sales rise of 5.6 percent to EUR 152.2 million and a disproportionately
high increase in profitability”, says Holger Dahmen, Chief Executive Officer of Wolford
Aktiengesellschaft in summarizing the positive track record over the past fiscal year. “The results
achieved in 2010/11 show that we have created the necessary preconditions in recent years to
sustainably position the Wolford brand as an international luxury label and to maintain the
company’s path to success. The sales increase reflects our concentration on the ongoing
expansion of monobrand distribution and the focus on our retail business i.e. our own boutiques,
concession shop-in-shops and factory outlets. We also invested in cost-optimizing planning,
development and steering instruments in a targeted manner at an early stage at the beginning of
the economic crisis. This has considerably enhanced our efficiency and now has a sustainable
effect on profitability”, adds Holger Dahmen in explaining the main factors underlying Wolford’s
Significant sales rise and disproportionate improvement in profitability
For six successive quarters the Wolford Group has increased sales in all important distribution
channels and markets compared to previous periods. On balance, sales of the Austrian luxury
fashion brand rose by 5.6 percent in the past fiscal year (May 1, 2010 to April 30, 2011) to
EUR 152.2 million. This growth was primarily due, amongst other reasons, to the persistent
expansion of Wolford’s proprietary distribution network.
All relevant earnings indicators and thus profitability increased even more than the rise in sales.
Accordingly, EBITDA climbed by 26.0 percent from the prior-year level of EUR 12.5 million to
EUR 15.7 million, and the operating profit (EBIT) improved by 62.7 percent to EUR 7.3 million
(previous year: EUR 4.5 million). As a result, the EBITDA margin was up 1.6 percentage points
to 10.3 percent.
During the year under review, the result from continuing operations (Result before taxes) of the
Wolford Group also improved by 70.8 percent to EUR 5.8 million (previous year: EUR 3.4
million). The net result for the 2010/11 fiscal year even came close to doubling, rising by
97.2 percent to EUR 5.1 million (previous year: EUR 2.6 million). Earnings per share also
improved accordingly to EUR 1.03 (previous year: EUR 0.52).

Very solid asset and capital structure
As at the reporting date of April 30, 2011, shareholders’ equity of the Wolford Group amounted
to EUR 83.9 million, corresponding to a rise of 5.6 percent or EUR 4.5 million from the
comparable level on April 30, 2010. As a consequence, the equity ratio improved in the past
fiscal year to 58.0 percent (previous year: 54.5 percent). In the same period, net debt was
reduced to EUR 12.7 million (previous year: EUR 19.7 million). The gearing ratio as at
April 30, 2011 was 15.1 percent, considerably lower than the prior-year level of 24.8 percent.
Based on the higher amount of financial resources tied up in inventories, the net cash from
operating activities did not match the figure of EUR 23.5 million in the previous fiscal year, but
was still at a satisfactory level of EUR 15.7 million in 2010/11.
Sales growth in all main distribution channels
Considering the sales development of the individual distribution channels in greater detail,
Wolford boutiques showed a very positive development in the past fiscal year. On balance, the
106 Wolford-owned and 103 partner-operated boutiques as at April 30, 2011 increased sales by
10.4 percent. The ongoing dynamic sales development of boutiques in recent years is also
reflected in their growing importance for the total sales of the Wolford Group. Sales with
boutiques, the most important distribution channel, accounted for 48.6 percent of total sales
(previous year: 46.8 percent), a considerable rise in recent years. The Wolford Group also
considerably improved sales with department stores, which were up by 11.6 percent in the
2010/11 fiscal year. In addition to the impressive sales rise of 62.0 percent posted by the
concession shop-in-shops, department store chains in the wholesale business also made a
positive contribution to the overall rise in total Group sales. Sales with factory outlets remained
at the same high level as in the previous year. The Wolford Group achieved significant growth
with its online business, continuing the pronounced upward trend in recent years with sales up
24.8 percent on a like-for-like basis. At the end of the 2010/11 fiscal year, consumers in
14 countries could purchase Wolford products in the exclusive virtual shopping world at
www.wolford.com. These online shops were already complemented by e-factory outlets in six
Growing significance of Wolford’s proprietary outlets
Sales with Wolford’s proprietary stores (own boutiques, shop-in-shops and factory outlets)
showed a positive development during the period under review, featuring a 13.5 percent rise in
sales. Sales were up 6.0 percent on a like-for-like basis. Thus the share of total sales generated
by retail outlets further increased in the past fiscal year, rising to 51.4 percent at the end of
2010/11 from the level of 48.1 percent in 2009/10.
Against this backdrop, in particular Wolford’s own boutiques developed very positively during the
period under review, with sales climbing by 12.0 percent. Accordingly, Wolford-owned boutiques
increased their share of total sales in the course of the 2010/11 fiscal year from 35.4 percent to
37.3 percent.
Monobrand distribution surpasses the 60 percent threshold
Wolford’s strategy of continually improving distribution quality and brand presence at the point of
sale by the company’s controlled distribution showed clearly recognizable success in the
2010/11 fiscal year. The positive development of Wolford-owned and partner-operated
boutiques, factory outlets and concession shop-in-shops was reflected in the sales share of
monobrand distribution. Monobrand distribution accounted for 62.7 percent of total sales,
surpassing the 60 percent threshold for the first time in the company’s history (previous year:
59.5 percent).
Sales growth in almost all of Wolford’s core geographic markets
From a regional perspective, most of Wolford’s core geographic markets generated in part
considerable sales increases during the reporting period. In particular, Wolford expanded its
sales by 36.8 percent in the region Asia/Oceania, as a result of the intensified growth strategy
implemented there. Sales in the USA showed a very good development, rising by 19.3 percent
in the 2010/11 fiscal year. Wolford was also very successful with its product portfolio in its
established European markets, achieving sales growth of 28.3 percent (Spain), 14.5 percent
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(Switzerland), 11.4 percent (CEE), 9.3 percent (Scandinavia) and 9.0 percent (UK). Sales also
rose in Belgium (+ 4.8 percent), Italy (+ 4.6 percent) and Germany (+ 1.6 percent). Whereas
sales in the Netherlands declined by 5.2 percent, the company maintained approximately the
same high sales level in Austria (- 0.5 percent) and France (- 0.6 percent) as in the previous
The Executive Board of the Wolford Group looks ahead optimistically to the 2011/12 fiscal year
based on a slight increase in sales during the first weeks of the new fiscal year as well as a
notable rise in fixed orders for the fall/winter collection 2011/12 compared to the previous year.
Against this backdrop, the management of the Wolford Group expects the company to achieve a
further improvement in sales and earnings in the 2011/12 fiscal year thanks to the planned
market launch of new products, the measures implemented to expand market penetration, the
development of new markets as well as the initiated efficiency enhancement initiatives.
In the future, Wolford will continue its efforts to strengthen its Retail segment, continually expand
the number of monobrand points of sale and further intensify its cooperation with multi-brand
retailers. In addition to systematically focusing on its core geographical markets, Wolford will
also more strongly devote attention to expanding in China over the next few years, in order to
ensure future growth and the broadening of the Wolford brand.


Holger Dahmen (Chief Executive Officer)
Peter Simma (Deputy Chief Executive Officer)
Wolford Aktiengesellschaft, Wolfordstraße 1, A-6901 Bregenz
+43 (0) 5574 690-0

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