• Slightly revenue increase
  • Sustainable reduction in fixed costs
  • Operating losses were halved
  • Planned capital increase


Vienna/Bregenz, March 16, 2018: Wolford AG, which is listed on the Vienna Stock Exchange, slightly increased revenue in the first nine months of the current financial year and significantly reduced its losses. In the period May 2017 to January 2018, revenue rose 0.2% to € 119.36 million (previous year: € 119.05 million) or 1.8% excluding negative currency effects.  Negative currency effects were particularly felt in the third quarter, with revenue down 4.3% to € 49.21 million. Fixed costs were sustainably reduced thanks to progress made in the restructuring process, so that operating earnings (EBIT) improved to € -1.36 million in the first three quarters of 2017/18 from € -4.14 million in the prior-year period. Losses were cut in half, with earnings after tax amounting to € -2.57 million compared to € -5.08 million in the previous year.

Ongoing double-digit revenue growth in the online business

Wolford’s own retail business generated a revenue increase of 1.7% or € 1.29 million in the first nine months compared to the previous year. On a like-for-like basis, the increase actually equaled 3.7%. In contrast, Wolford’s wholesale business reported a revenue decrease of 4.4% or € 1.93 million, comprising a 2.7% decline when adjusted for currency effects. Revenue of Wolford’s own online business was up significantly once again by 20.6% year-on-year, comprising a rise of € 2.09 million.

Revenue development in the regions showed a very mixed picture in the first nine months of the 2017/18 financial year. Wolford succeeded in clearly increasing revenue in Austria (+4.8%), Italy (+2.1%), Spain (+5%), the Netherlands (+4.9%) and Belgium (+3.3%), mainly as a result of the growing retail business. Wolford’s business in Eastern Europe performed particularly well, expanding by 37.3%, which is primarily attributable to the recovery of the Russian market and the expansion of the commercial relationship with the most important Russian wholesale partner. In contrast, revenue declined in the USA (-1.7%) and Great Britain (-8.7%), above all due to the decline in value of the British pound and the US dollar. The retail business could not compensate for the reduction in wholesale revenue in Germany (-2.2%), Switzerland (-6.7%) and France (-3.0%).

Sustainable cost savings

The success of measures implemented within the context of the restructuring program is also reflected in personnel expenses, which showed a sustainable drop of € 5.12 million to € 51.13 million. The reduction of administrative positions in the European sales region and in Bregenz resulted in a decrease in the average number of employees (full-time equivalents) by 99 people to the current level of 1,456 employees (average in the previous year: 1,555).  Wolford is also profiting from sustainable cost savings. This is also shown by the decline in other operating expenses, which could be significantly reduced from the prior-year level. In contrast, one-off legal and consulting costs in connection with restructuring and refinancing were up € 1.57 million to € 4.30 million.



“Over the past months our focus has clearly been on making Wolford profitable again on its own and on the basis of our current revenue level. In the meantime, we have concluded the most important measures implemented within the context of the restructuring program. Now we are concentrating on expanding our promising online business and redesigning our market appearance,” explains Axel Dreher, Chief Executive Officer of Wolford AG.

Losses cut in half

Operating earnings (EBIT) improved in the first nine months of the current financial year by € 2.78 million to € -1.36 million compared to € -4.14 million in the previous year. This development was the consequence of the systematic reduction of ongoing expenses. The financial result of € -1.61 million was considerably below the prior-year figure of € -0.61 million, especially due to interest paid, deposit and registration fees related to the refinancing. Earnings before tax in the first nine months of 2017/18 were € -2.97 million, compared to € -4.75 million in the previous year. Earnings after tax were cut in half and equaled € -2.57 million, compared to € -5.08 million in the first three quarters of 2016/17. Similarly, earnings per share amounted to € -0.52, following € -1.04 in the previous year.

“The results of the restructuring measures will naturally first become perceptible in the upcoming financial year when the sustainable savings in personnel expenses are fully felt and most consulting costs as well as expenses in connection with refinancing are eliminated”, explains Brigitte Kurz, Chief Financial Officer of Wolford AG.

Substantial increase in the operating cash flow

Thanks to systematic production planning, inventories were substantially reduced during the first three quarters of 2017/18, declining by € 10.10 million from the prior-year level to € 40.73 million. Against this backdrop as well as the improved earnings before tax, the net cash flow from operating activities (operating cash flow) in the first nine months of the current financial year rose substantially by € 7.82 million to € 3.24 million. The cash flow from investing activities amounted to € -0.81 million in the reporting period, a substantial drop of € 5.07 million below the prior-year figure. In the first three quarters, Wolford primarily invested in its merchandise management system and expanding its online sales platform. Against this backdrop, the free cash flow (cash flow from operating activities less the cash flow from investing activities) improved from € -10.47 million to € 2.43 million. The cash flow from financing activities decreased significantly by € 16.02 million to € 0.32 million. This decline can be mainly attributable to the correspondingly less frequent need to draw upon the lines of credit granted by banks. Cash and cash equivalents totaled € 12.92 million at the end of the reporting period, compared to € 9.66 million in the previous year.

Reduction in net debt

Equity of the Wolford Group fell to € 42.90 million at the balance sheet date from € 57.90 million as at January 31, 2017 due to the losses recorded during the last two financial years. As a result, the equity ratio equaled 33% (January 31, 2017: 38%). Net debt as at January 31, 2018 fell from € 32.46 million to € 28.97 million thanks to the repayment in October 2017 of the bridge loan amounting to € 5 million which had been granted in July 2017.

Planned capital increase of € 22 million

As at March 1, 2018, a share purchase agreement for a majority shareholding in Wolford AG was concluded between the main shareholder group of Wolford (WMP private family foundation, Sesam private foundation and their subsidiary M. Erthal & Co. Beteiligungsgesellschaft m.b.H. as well as related parties) and Fosun Industrial Holdings Limited.  The closing of the share purchase agreement is subject to the fulfillment of certain conditions precedent including, in particular, the required regulatory approval.  At the same time, Wolford AG and Fosun concluded an agreement for the subscription to shares, in which case Fosun is obliged to subscribe to a capital increase of Wolford AG of close to € 12.5 million based on the issuing of 1,718,750 new shares at an issue price of € 12.80 per share, inasmuch as shareholders of Wolford AG do not exercise their subscription rights. Accordingly, the maximum cash contribution by Fosun amounts to € 22 million, which will decline to the extent to which shareholders exercise their subscription rights.


The outlook published on August 24, 2017 within the context of presenting the annual results for 2016/17 has been adjusted., The expected slight increase in operating revenue will be offset by negative currency effects. For this reason, the management expects a slightly downward revenue development. The predicted negative operating earnings is confirmed. Starting in the 2018/19 financial year, Wolford expects positive operating earnings once again in its earnings before interest and taxes (EBIT).


The report for the first three quarters of the 2017/18 financial year can be downloaded under company.wolford.com, Investor Relations.


Earnings Data   05/17 ?01/18 05/16 ?01/17 Chg. in % 2016/17
Revenues in € mill. 119.36 119.05 +1 154.28
EBIT* in € mill. ?1.36 ?4.14 +67 ?15.72
Earnings before tax* in € mill. ?2.97 ?4.75 +38 ?16.57
Earnings after tax* in € mill. ?2.57 ?5.08 +49 ?17.88
Capital expenditure in € mill. 1.17 6.10 ?81 6.72
Free cash flow* in € mill. 2.43 ?10.47 >100 ?9.45
Employees (on average) FTE 1,456 1,555 ?6 1,544


Balance Sheet Data   31.01.2018 31.01.2017 Chg. in % 30.04.2017
Equity* in € mill. 42.90 57.90 ?26 44.88
Net debt in € mill. 28.97 32.46 ?11 31.27
Working capital in € mill. 42.77 53.11 ?20 45.73
Balance sheet total* in € mill. 128.97 152.56 ?16 138.39
Equity ratio* in % 33 38 32
Gearing* in % 68 56 70


Stock Exchange Data   05/17 ?01/18 05/16 ?01/17 Chg. in % 2016/17
Earnings per share* in € ?0.52 ?1.04 +50 ?3.64
Share price high in € 21.71 26.01 ?17 26.01
Share price low in € 10.03 19.83 ?49 19.10
Share price at end of period in € 13.90 21.00 ?34 19.28
Shares outstanding (weighted) in 1,000 4,912 4,912 4,912
Market capitalization (ultimo) in € mill. 69.50 105.00 ?30 96.38