GERRY WEBER International AG Report on the first nine months of 2005/2006 Report on the nine-month period ended July 31, 2006 WKN: 330 410 ISIN: DE0003304101
The GERRY WEBER share An approximately 18 percent advance in the share price of GERRY WEBER International AG during the first nine months of the current fiscal year means that the share clearly outperformed the DAX 30, MDAX and SDAX indexes which added only between 13.8 percent and 16.0 percent during the same period. The company s share price rose from EUR 13.83 to EUR 16.35 between November 1, 2005 and the July 31, 2006 reporting date. This means that GERRY WEBER International AG s total market capitalisation amounted to EUR 383.3 million on the reporting date. According to the German Stock Exchange s definition, the capitalisation of the freefloat was EUR 213.5 million. During the nine-month period the share price peaked at EUR 20.20 on May 11, 2006. The third quarter saw a consolidation in the share price which declined by -14.8 percent. This compares with declines by between -5.5 and -12.3 percent in the DAX, MDAX and SDAX during the same period. The trading volume showed a positive development throughout the first nine months. The average daily number of shares traded on XETRA and on the Frankfurt floor was 29,000, translating into an average daily volume of around EUR 475,000. The largest daily volume was recorded on March 24 when shares worth EUR 2.1 million were traded. GERRY WEBER International AG paid out the EUR 0.40 dividend per share for the previous fiscal year 2004/2005 in the third quarter of 2005. The total dividend volume was EUR 9.2 million. The combined return from share price performance plus dividend yield came to more than 70 percent, counted backwards from the day the dividend was paid out. Figures of the first nine months of 2005/2006 (to HGB; in EUR million, unless stated otherwise) 2005/2006 2004/2005 Sales revenues 305.8 275.3 EBITDA 26.5 23.0 EBITDA margin 8.6 8.3 % EBIT 21.418.6 EBIT margin 7.0 % 6.75 % Net profit 12.1 9.3 DVFA result per share in EUR 0.52 0.44 Gross cash flow 24.4 20.9 Capital expenditure 11.5 6.8 Extraordinary expenses - 1.7 Headcount on July 31 1,816 1,680 The development in the first nine months The German clothing industry posted moderate growth in the first half of 2006. GermanFashion Modeverband Deutschland e.v. reported 3.1 percent growth for the ladieswear segment and 3.7 percent growth for the total clothing industry. The trend was led by the menswear segment which grew at a rate of 4.2 percent. Exports once again provided the strongest stimulation, with more than 60 percent of all clothing manufacturers reporting an upturn in export sales. According to the Federal Statistical Office, the German retail sector, too, posted slight growth in the first half of 2006, expanding by 0.7 percent in real terms. Against this background, GERRY WEBER International AG was once again able to detach itself from the general market trend, posting approximately 11 percent sales growth both at the nine-month stage and in the third quarter. Sales for the first nine months of the fiscal year totalled EUR 305.8 million. GERRY WEBER International AG s earnings trend was clearly disproportionate to the sales trend both
based on the nine-month figures and on the third quarter figures. The operating result (EBIT) was up by 15.1 percent at the nine-month stage. Net profit even advanced at a rate of 29.3 percent. When looking at the year-on-year development, one needs to take into account EUR 1.7 million in extraordinary expenses recognised in the previous year s accounts; this item was non-recurrent in 2005/2006. The development in the third quarter was quite similar, although the growth rates were even more substantial. While EBIT improved by 30 percent, net profit doubled, even though this was partly attributable to the extraordinary effect described above. The main reason for the good earnings growth was the moderate increase in the cost of materials relative to sales growth. As GERRY WEBER International AG continued to strengthen its human resources during the period, personnel expenses advanced by 20.7 percent, growing slightly ahead of sales. Between July 31, 2005 and July 31, 2006, the number of employees rose from 1,680 to 1,816. Most of the new positions were created in the retail operations. Brand sales in the first nine months (in EUR million) 2005/2006 2004/2005 GERRY WEBER 101,110211111189.4169.7 TAIFUN 39,6 66.464.5 SAMOON 14,319.6 19.5 Retail (excl. shops) 30.421.6 All of GERRY WEBER International AG s brands contributed to the sales growth. The trend was once again led by the GERRY WEBER brand and its GERRY WEBER EDITION and G.W. sublabels which posted aggregate growth of 11.6 percent. TAIFUN sales grew by 2.9 percent. SAMOON posted 0.5 percent growth at the nine-month stage, owing to a first-quarter decline in sales which needed to be compensated in the ensuing quarters. Sales growth also continued unabated at the HOUSES OF GERRY WEBER retail outlets operated by the company. The company-managed stores in Germany posted an increase of approximately 40 percent to EUR 30.4 million. In the past nine months the number of HOUSES OF GERRY WEBER has risen from 102 to 127, of which 48 are managed by the company itself. Another 79 are run by franchisees. The most recent openings occurred in Ingolstadt, Landshut and Innsbruck. The rest of the year 2006 will see additional openings in Cairo, Oslo, Enschede, Krakow and Dresden. The opening of the first of meanwhile three independent SAMOON stores reflects GERRY WEBER International AG s continued strategy to align its brand offering with local conditions and available retail space, which also includes the creation of mono-brand outlets. The SAMOON store in Bielefeld is the first own store of the group offering young and casual fashion coordinates in plus sizes. Comparable mono-brand concepts have already been created for the TAIFUN-Collection and for GERRY WEBER EDITION. GERRY WEBER Men has been off to a promising start as well. To date, 200 domestic and international retailers have signed up to sell this menswear collection. Since the beginning of September 2006 three company-managed HOUSES OF GERRY WEBER in Berlin, Hamburg and Oberhausen have already set aside dedicated showroom space for the new collection. In addition, four international GERRY WEBER Men stores have so far been opened in Riga, Zagreb and Kaunas. The first German mono-brand store is planned to be opened in Weimar in October.
Incoming orders for spring/summer 2007 (in EUR million) F/S 2007 F/S 2006 GERRY WEBER 101,110211111136.0 118.5 TAIFUN 46.0 45.4 SAMOON 14,314.0 13.9 Incoming orders for the Spring/Summer 2007 collection once again showed a very positive trend, with aggregate increases for all brands amounting to 10.5 percent. As in the previous quarters, the growth trend was led by the best-selling brand, GERRY WEBER, which recorded a 14.7 percent advance to EUR 136.0 million. This development was highlighted by the orders received for the GERRY WEBER EDITION sublabel, which were up by approximately 40 percent. The other main brands, TAIFUN and SAMOON, also continued to expand, albeit at lower rates. Outlook The German clothing industry expects the second half of 2006 to bring an even slightly better development than the first six months of the year. The GermanFashion Modeverband e.v. forecasts sales in the ladieswear segment, the menswear segment and the total clothing industry to grow by 5.7, 4.7 and 5.3 percent, respectively. In contrast, GERRY WEBER International AG is working towards more than 11 percent growth for the total year, targeting revenues of EUR 440 million. Additional efficiency gains and profitability improvements are planned on the earnings side. The EBIT margin is to rise by one percentage point to approximately 10.5 percent. Targets for 2006/2007 include revenues of EUR 500 million and a consolidation or improvement of the clearly double-digit earnings. The company is resolved to achieve these goals despite the 3 percentage point increase in VAT on January 1, 2007. GERRY WEBER International AG seeks to ensure that the tax increases will not result in higher retail prices. Starting from the Spring/Summer 2007 collection, the mark-up formula for the company s retail partners will also be improved in order to compensate for the tax effects. An impact on the company s own profitability is to be prevented by way of internal efficiency gains as well as improved inventory management. This strategy has already been vindicated by the incoming orders for the Spring/Summer 2007 collection which once again showed a clear upward trend, already providing a strong underpinning for the company s 2006/2007 sales and earnings targets. Calendar of financial events End of fiscal year October 31, 2006 Publication of preliminary figures Mid-December 2006 Accounts press conference Late February 2007 Annual General Meeting Early June 2007 Contact GERRY WEBER International AG Neulehenstraße 8 33790 Halle/Westphalia Tel. + 49 (0) 52 01 185-0 Fax + 49 (0) 52 01 58 57 www.gerryweber-ag.de Investor Relations contact Hans-Dieter Kley Tel. + 49 (0) 52 01 185-0 Fax + 49 (0) 52 01 58 57 Email: b.uhlenbusch@gerryweber.de
Consolidated balance sheet to HGB in EUR 000 Assets July 31, 2006 Oct. 31, 2005 A. Fixed assets Intangible assets 7,073 6,146 Tangible assets 75,525 68,738 Financial assets 790 1,138 83,388 76,022 B. Current assets Inventories 67,493 43,490 Receivables and other assets 87,380 76,567 Cash on hand, cash in banking accounts and cheques 6,310 7,248 161,183 127,305 C. Prepayments and accrued income 3,268 3,330 247,839 206,657 Liabilities July 31, 2006 Oct. 31, 2005 A. Capital stock Subscribed capital 23,443 23,443 Capital reserves 33,668 33,668 Reserve for own shares 6,016 2,833 Revenue reserves 27,86431,047 Net profit for the year 30,648 27,702 121,639 118,693 B. Provisions Provisions for taxation 1,871 1,859 Other provisions 10,473 11,852 12,344 13,711 C. Accounts payable Due to banks 94,849 51,438 Trade accounts payable 12,297 19,271 Other accounts payable 6,710 3,529 113,856 74,238 D. Deferred income 0 15 247,839 206,657 Consolidated income statement to HGB in EUR 000 Q3 Q3 9 months 9 months 2005/2006 2004/2005 2005/2006 2004/2005 Sales revenues 95,441 85,977 305,846 275,288 Changes in finished goods inventories and work in progress +25,661 +25,262 +22,105 +20,523 Other operating income 887 643 4,014 3,092 Cost of materials -73,951-70,208-192,364-179,543 Personnel expenses -16,774-13,064-45,270-37,505 Depreciation of intangible fixed assets and tangible assets -2,115-1,513-5,102-4,391 Other operating expenses -25,593-24,362-67,845-58,871 Operating result 3,556 2,735 21,38418,593 Net interest income -644-531 -2,034-2,027 Results from ordinary activities 2,912 2,20419,350 16,566 Extraordinary expenses - -762-1,726 Taxes on income -971-519 -6,972-5,290 Other taxes -156-13 -249-168 Profit 1,785 910 12,129 9,382 Earnings per share in EUR 0.52 0.44 Number of shares 23,443,200 23,443,200 23,433,200 23,443,200
Equity capital movements to HGB in EUR 000 Nov. 1, 2004 July 31, 2005 Nov. 1, 2005 July 31, 2006 Subscribed capital 23.443 23,443 23,443 23,443 Capital reserves 33.668 33,668 33,668 33,668 Reserve for own shares 540 540 2,833 6,016 Revenue reserves 28.340 28,340 31,047 27,864 Consolidated net profit 24.195 25,372 27,702 30,648 Shareholders equity 110.186 111,363 118,693 121,639 Consolidated cash flow statement to HGB in EUR 000 9 months 9 months 2005/2006 2004/2005 Net profit + 12,129 + 9,382 Fixed asset depreciation + 5,102 + 4,391 Increase/decrease in provisions - 1,367-1,407 Increase/decrease in inventories - 24,003-21,252 Increase/decrease in trade receivables - 2,777-8,052 Increase/decrease in other assets - 8,972-5,476 Increase/decrease in trade accounts payable - 6,974-1,573 Increase/decrease in other liabilities + 3,164+ 1,976 Inflow/outflow of funds from ordinary business activities - 23,698-22,011 Disbursement for fixed asset investments - 11,468-6,854 Outflow of funds from capital spending - 11,468-6,854 Dividend distributed to shareholders - 9,183-8,205 Disbursements/receipts from the raising/repayment of loans + 43,411 + 36,063 Inflow/outflow of funds from financing activities + 34,228 + 27,858 Cash changes in financial resources - 938-1,007 Financial resources at the beginning of the period + 7,248 + 8,812 Financial resources on July 31 + 6,310 + 7,805 Explanatory notes The present interim report was prepared applying the same accounting and valuation methods as in the last consolidated financial statements and the interim report for the same period of the previous year. Explanatory information is provided in the notes to the financial statements and the consolidated financial statements for FY 2004/2005. This interim report was prepared in accordance with DRS 6. Similar to the consolidated financial statements, the present interim report contains no segment report given that no meaningful segments can be defined in the divisions or under production and distribution terms. GERRY WEBER International AG Neulehenstraße 8 D-33790 Halle/Westphalia www.gerryweber-ag.de