Press Release from Adler Modemärkte AG
Confidence for Remaining Course of the Year - Sights Set on Growth Targets for 2020:
Full-year Outlook Confirmed Despite Muted Start to the Year
Positive Effects from Marketing Measures Expected, Particularly Beginning in Second Half of the Year
Haibach, 8 May 2018: As expected, Adler Modemärkte AG started financial year 2018 with declining revenue and earnings. Against the backdrop of a persistently weak industry environment, revenue amounted to €102.7 million, thus down year on year by 5.5% (Q1 2017: €108.7 million). The like-for-like revenue decrease amounted to 6.2%.
Gross profit fell by 5.0% from €52.7 million to €50.1 million. By contrast, the gross profit on goods sold rose slightly to 48.8% (previous year: 48.5%).
Despite the continuing high level of cost discipline, ADLER's earnings were not fully able to stem the decline in revenue. Earnings before interest, tax, depreciation and amortisation (EBITDA) consequently fell from €-12.5 million in the first quarter of 2017 to €-17.8 million in the first three months of 2018. The increase in personnel expenses resulting from collective bargaining pay rises, costs for implementing the new logistics service providers and increased consulting fees in connection with the new strategic direction reduced EBITDA by approximately €1.9 million in total. Marketing expenses were also up year on year by €0.9 million due to promotions related to the Company's 70-year anniversary.
ADLER thus reported a consolidated net loss of €17.3 million in the first three months of 2018 (Q1 2017: consolidated net loss of €13.2 million). This resulted in earnings per share of €-0.93 (as compared to €-0.71 in Q1 2017).
Typical decrease in cash for the season
In particular due to the procurement of new spring and summer merchandise, Adler Modemärkte's cash declined in the first quarter of 2018. At the reporting date, it amounted to €38.7 million as compared to €63.3 million at the end of 2017.
Systematically optimising cash flow management made it possible to reduce working capital from €46.7 million as at 31 December 2017 to €45.1 million as at 31 March 2018. At 31 March 2017, this figure had amounted to €48.8 million.
The equity ratio declined to a still solid 35.8% as a result of the consolidated net loss.
Full-year outlook confirmed - confidence in particular for the second half of the year
Although ADLER got off to a muted start in financial year 2018, the management confirms the outlook for the operating business in the 2017 annual report. Accordingly, ADLER's Executive Board expects the environment in the textile retail industry to remain challenging in 2018 and therefore continues to expect revenue to remain approximately level with the prior-year figure (€525.8 million). EBITDA is expected to significantly exceed the adjusted 2017 figure (€25.4 million) and amount to between €26
million and €29 million. This expectation is based in particular on the anticipation that the scaled-up marketing measures will start to show their effect in the second half of the year. The new ADLER 2020 Strategy and the already announced switch in logistics service providers will begin to have a positive effect for the first time in financial year 2019. ADLER continues to aim to raise revenue by at least 5% over the 2017 figure by the 2020 financial year. Significantly above-average EBITDA growth of at least 50% is projected.
The full report on the first quarter of 2018 is available online atwww.adlermode-unternehmen.com
ADLER Group's key performance indicators
(€ million) | Q1 2018 | Q1 2017 | Change |
Revenue | 102.7 | 108.7 | -5.5% |
Gross profit | 50.1 | 52.7 | -5.0% |
Earnings before interest, taxes, depreciation and amortisation (EBITDA) | -17.8 | -12.5 | -42.4% |
Earnings before interest and taxes (EBIT) | -21.9 | -16.7 | -31.1% |
Consolidated net loss | -17.3 | -13.2 | -31.1% |
Earnings per share (in €)* | -0.93 | -0.71 | -31.0% |
*Based on 18,510,000 no-par value shares
31 Mar. 2018 | 31 Dec. 2017 | Change | |
Total assets (€ million) | 231.3 | 241.1 | -4.1% |
Equity (€ million) | 82.7 | 100.0 | -17.3% |
Equity ratio | 35.8% | 41.5% | -5.7pp |
Debt/equity ratio | 1.80 | 1.41 | |
Cash and cash equivalents (€ million) | 38.7 | 63.3 | -39.9% |
Employees | 3,777 | 3,814 | -1.0% |
Total number of stores | 181 | 183 | -1.1% |
About Adler Modemärkte AG:
Adler Modemärkte AG, headquartered in Haibach near Aschaffenburg, Germany, is one of Germany's largest and most important textile retailers. In 2017, the Group earned €525.8 million in revenue and generated €32.0 million in EBITDA (adjusted: €25.4 million). As at 31 December 2017, ADLER has approximately 3,800 employees and currently operates 182 stores, 155 of which are located in Germany, 22 in Austria, three in Luxembourg, two in Switzerland, plus an online shop. The Company focuses on large-space concepts offering in excess of 1,400 m2of retail space. With its many own brands and select external brands, ADLER offers a highly diverse product range. Thanks to 70 years of tradition and strong customer loyalty, ADLER considers itself to be the market leader within its target group of affluent customers aged 55 and over.
For more information:www.adlermode-unternehmen.com;www.adlermode.com
Press enquiries Adler Modemärkte AG:
Katrin Schreyer
Investor Relations
Tel.: +49 6021 633 1828
E-mail:investorrelations@adler.de
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Adler Modemärkte AG published this content on 08 May 2018 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 08 May 2018 05:44:02 UTC