POWERLAND AG Group revenue increased by 12.8% to EUR 137.1 million after nine months;
EBIT after nine months grew by 16.4% to EUR 13.0 million;
Quarterly EBIT (EUR 1.6 million) and net profit (EUR 0.7 million) turned positive;
Share-buyback continued;
Further optimization of store network and strengthened focus on online activities;
Launch of online stores in China's biggest B2C platforms;
Outlook for FY 2014 confirmed
Frankfurt/Main, 28 November 2014 - Group revenues of Powerland (ISIN DE000PLD5558 / Prime Standard), the leading Chinese manufacturer of handbags, leather goods and accessories, have been further increasing in the third quarter 2014 mainly driven by strong growth in the luxury segment. After an already powerful rebound in the second quarter of 2014, third quarter revenues rose by 36.6% to EUR 42.7 million (Q3 2013: EUR 31.2 million). Revenues in the first nine months of 2014 increased by
12.8% to EUR 137.1 million (Q1-Q3 2013: EUR 121.6 million).
Revenues in the Luxury segment increased by 26.9% to EUR 91.2 million in the first nine months of 2014 (Q1-Q3 2013: EUR 71.9 million) and by 62.5% to EUR 25.5 million in the third quarter of 2014 (Q3 2013: EUR 15.7 million). The high growth rates are mainly due to a relatively low comparative basis in 2013. Revenues in the Casual segment showed a decline of 7.5% to EUR 45.9 million in the first nine months of 2014 (Q1-Q3
2013: EUR 49.7 million) due to the restructuring of Powerland's Putian factory in the first half of 2014 and rose by 10.5% to EUR 17.2 million in the third quarter of 2014 (Q3
2013: EUR 15.5 million). According to the communicated strategy, sales contributions from the Luxury segment continued to increase and now contribute 66.5% to Group revenue, up from 59.1% in the first nine months of 2013.
The higher revenue and a more effective allocation of marketing expenses lead to an increase in earnings before interest and taxes (EBIT) by 16.4% to EUR 13.0 million in
the first nine months of 2014 (Q1-Q3 2014: EUR 11.2 million). This development
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underlines Powerland's success in its strategic focus on the Luxury segment for future profitable growth. In line with this positive development, net profit was up 25.9% to EUR
8.8 million in the first nine months of 2014 (Q1-Q3 2013: EUR 7.0 million). Both EBIT and net profit turned from negative (EUR -0.9 million; EUR -1.6 million) in the third quarter 2013 to a positive figure of EUR 1.6 million and EUR 0.7 million respectively in
the third quarter 2014.
in EUR million | Q3 2014 | Q3 2013 | Change | 9M 2014 | 9M 2013 | Change |
Revenue | 42.7 | 31.2 | 36.6% | 137.1 | 121.6 | 12.8% |
Luxury | 25.5 | 15.7 | 62.5% | 91.2 | 71.9 | 26.9% |
Casual | 17.2 | 15.5 | 10.5% | 45.9 | 49.7 | -7.5% |
Luxury % | 59.8 | 50.2 | 66.5 | 59.1 | ||
Casual % | 40.2 | 49.8 | 33.5 | 40.9 | ||
Gross profit | 13.5 | 9.8 | 37.4% | 46.5 | 44.4 | 4.7% |
Luxury | 10.7 | 7.0 | 54.1% | 38.9 | 33.8 | 15.2% |
Casual | 2.7 | 2.8 | -4.0% | 7.5 | 10.6 | -28.7% |
EBIT | 1.6 | -0.9 | 276.8% | 13.0 | 11.2 | 16.4% |
Luxury | 0.9 | -1.5 | 155.7% | 11.1 | 6.7 | 64.9% |
Casual | 0.8 | 0.6 | 22.2% | 2.0 | 4.5 | -56.1% |
EBIT margin | 3.8% | -2.9% | 9.6% | 9.2% | ||
Luxury | 3.4% | -9.8% | 12.1% | 9.3% | ||
Casual | 4.5% | 4.0% | 4.3% | 9.0% | ||
Net profit | 0.7 | -1.6 | 144.6% | 8.8 | 7.0 | 25.9% |
Net cash flow from operating activities has changed from negative EUR 63.4 million in the first nine months 2013 to EUR 5.1 million in the first nine months 2014. This increase was mainly due to a more effective management of working capital in the course of
2014. Net debt slightly increased from EUR 44.3 million to EUR 46.9 million. Cash and cash equivalents increased from EUR 15.4 million as at 31 December 2013 to EUR 15.6 million at the end of the reporting period.
In the first nine months of 2014, 227,540 shares were repurchased by Powerland and
EUR 532,236 was returned back to the shareholders.
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164) stores are distributor operated stores and 43 (30 September 2013: 38) self- operated stores.
In the third quarter 2014 Powerland also rolled out its Lifestyle Store, which offers a full spectrum of Powerland products, as another attempt to testify the company's multi- product strategy. In addition, Powerland has extensively strengthened its VIP services and now provides a wide range of bespoke services for high-end consumers. Along with the extensive digital marketing campaign in high-traffic hubs such as airports, Powerland is strengthening its focus on online activities. In the third quarter 2014, Powerland launched its online stores in tmall.com and jd.com, China's two biggest B2C platforms, to address the massive e-commerce consumer group. Meanwhile, Powerland is now collaborating with VIP.com, China's leading special sales platform, to hold regular sales events. In addition, as part of the constant efforts to build up the brand images in the targeted consumer group, Powerland recently implemented covert advertising in Shanshan Comes to Eat, one of the most high-profile TV dramas that were broadcasted during the summer vacation.
The Management Board confirms its already communicated cautiously optimistic outlook for 2014. Powerland expects to outperform what has been achieved in 2013.
In the rest of 2014, Powerland will continue to optimize its distribution network and adjust underperforming stores. Apart from on-going distribution management, Powerland will implement its multi-product strategy to more sales terminals to stabilize the single-store performance. Regarding the casual segment, Powerland is still working on the restructuring on the Putian factory and contributions from the casual segment are
expected to flatten in the near term. Financial wise, in the face of the challenging
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environment, Powerland will strengthen its cash flow management and adopt necessary measures to control the working capital level.
The full report on the third quarter 2014 is published on the Company's website
(www.powerland.ag).
For more information, please contact:
c/o GFD - Gesellschaft für Finanzkommunikation mbH Fellnerstrasse 7-9
60322 Frankfurt am Main
Germany
Phone: +49 (0) 69 66 554 - 459
Fax: +49 (0) 69 66 554 - 276
E-mail: ir@powerland.ag
Home: http://www.powerland.ag
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