Interim Report 1 January to 31 March Smart.

Transcription

1 Interim Report 1 January to 31 March 2012 Smart. Casual.

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3 Key Figures EUR million Q Q Absolute changes Relative changes Sales % Retail % Wholesale % Percentage of sales Retail Wholesale Cost of materials % Gross profit % Gross profit (in %) Adjusted EBITDA % Adjusted EBITDA margin (in %) One-off items EBITDA % EBITDA margin (in %) Adjusted EBIT % Adjusted EBIT margin (in %) One-off items % thereof amortisation on the purchase price allocation (PPA) from thereof refinancing costs 3.1 EBIT % EBIT margin (in %) Adjusted net result for the period % Adjusted earnings per share (in EUR) % One-off items including deferred taxes % thereof amortisation on the purchase price allocation (PPA) from Net result for the period % Earnings per share (in EUR) Cash flow from operating activities % Capital expenditures % Employees as of 31 March (absolute) % thereof wholesale % thereof retail % EUR million 31/03/ /12/2011 Absolute changes Relative changes Balance sheet total % Equity % Equity ratio (in %) Return on equity (in %) Cash and cash equivalents % Financial liabilities % Net debt % Gearing (in %)

4 4 Highlights of the First Quarter FEBRUARY 2012 Successful Completion of Refinancing In February, TOM TAILOR adapted its Group financing to the circumstances following the IPO and replaced its existing bank financing with new bank financing that is in line with the market and based on TOM TAILOR s growth. This refinancing means that we can secure the advance financing needed to open new retail stores as part of our growth drive. The financing has a term of three years with a renewal option for a further two years. Brand Partnership with Women s Magazine BRIGITTE TOM TAILOR and BRIGITTE are launching a joint fashion line. In mid-february, TOM TAILOR and Germany s leading women s magazine BRIGITTE entered into a brand partnership agreement which will begin in late summer when exclusive fashion items for the autumn season will be revealed. The fashion line will be sold via the BRIGITTE online shop and the TOM TAILOR e-shop as well as in select retail stores. We aim to expand our market position and widen our customer base as a result. March 2012 New Management Board Member with Responsibility for Product Development, Procurement and Licensing The Supervisory Board appointed Udo Greiser to the Management Board with responsibility for product development, procurement and licensing as of 1 March He succeeded Christoph Rosa, who left the Company at the end of February. Udo Greiser has many years of experience in the fashion industry and brings with him extensive knowledge of men s and women s fashion. TOM TAILOR Launches TV Advertising Campaign In March, we continued our TV advertising campaign from the winter and began regularly broadcasting a new TV advertisement on all channels belonging to ProSiebenSat1 Media AG. The Thrill of the Chase TV commercial plays on fashionistas desires to own the stylish TOM TAILOR looks of the season. The commercial will be broadcast in a variety of versions over the next few months and is designed to boost the brand s image and further increase its awareness ratings. The monthly collections are shown briefly at the end of each commercial. As a 360-degree campaign, there are also tailored adverts for all the various sales channels: the latest collection will be showcased in the TOM TAILOR e-shop, in shop windows and in stores.

5 5 Contents 6 Letter to Shareholders 8 TOM TAILOR World of Brands 10 Share and Investor Relations Interim Management Report 12 Business Model and Corporate Strategy 13 Economic Environment 14 Results of Operations 19 Financial Position 20 Balance Sheet Structure 22 Opportunities and Risks 23 Report on Post-Balance-Sheet Events 23 Outlook Consolidated Financial Statements 25 Consolidated Statement of Profit and Loss 26 Consolidated Statement of Comprehensive Income 27 Consolidated Statement of Cash Flows 28 Consolidated Balance Sheet 30 Consolidated Statement of Changes in Equity 32 Notes to the Consolidated Financial Statements Additional Information 34 Financial Calendar 34 Imprint

6 Letter to Shareholders Hamburg, May 2012 TOM TAILOR made a very good start to 2012 and has successfully continued to further its dynamic growth. We vigorously pursued our strategic measures, invested in strengthening our brands and actively expanded our controlled selling space. A key milestone in the first quarter of 2012 was the launch of our TV campaign. Since March, we have advertised the current collections offered by TOM TAILOR and TOM TAILOR Denim on television. This has enabled us to reach a greater number of target customers while conveying the modern attitude to life that TOM TAILOR represents. We are certain that this investment in the Company will pay off in the long term and along with the expansion of our controlled selling space, will be a critical success factor for our future growth. We are already seeing the positive effects of this: our e-commerce sales in the first quarter jumped by more than 60% to EUR 7.0 million. We also entered into a strategic partnership with Germany s leading women s magazine Brigitte: starting this autumn, we will be launching exclusive collections on the market to be sold in Brigitte s and TOM TAILOR s e-shops as well as in selected retail stores. This partnership is also allowing us to strengthen our market position and widen our customer base. These measures are paying off. In Q1 2012, we boosted our sales year-on-year by 20% to EUR million. The retail segment put in a particularly dynamic performance, recording sales growth of 46.7% at EUR 40.2 million. On a like-for-like basis, the increase was 18.2%. This means that once again we were above average in the industry. By contrast, the German apparel industry grew by just 1% in the first quarter. Also, we are continuing to make very strong progress in the wholesale segment, increasing sales by 7.6% to EUR 63.4 million. Sound financing is another important element of our dynamic growth. Here, too, we have good news to report: in February, we successfully completed our refinancing. With a total amount of EUR 225 million, with improved financial terms and conditions, we have secured our further dynamic growth at TOM TAILOR Holding AG for many years. Adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) were EUR 4.6 million, 15% up on last year. Reported EBITDA totalled EUR 1.2 million, after EUR 4.0 million in the same period last year. This decrease reflects our investment in the future growth of the Company: the marketing expenses for producing and broadcasting the TV advertisement, plus one-off costs related to the refinancing.

7 Despite the continuing economic uncertainty, we are confident about the 2012 financial year. Following our successful performance in the first quarter, we are confirming our targets: we are aiming for sales in excess of EUR 470 million and EBITDA of between EUR 51 and EUR 53 million for the financial year. We will also continue to drive the expansion of our controlled selling spaces in Germany and abroad. Our goal is to open another 60 to 70 retail stores, 200 to 250 shop-in-shop spaces and 20 to 25 franchise stores in 2012 overall. Additionally, we plan to expand our strategic selling activities, paying particular attention to e-commerce. We believe we are in an excellent position to achieve these objectives thanks to our tried and trusted strategy and our dedicated employees. At this stage, I would like to warmly welcome Udo Greiser to TOM TAILOR; and also on behalf of my colleagues. He was appointed to the Management Board as of 1 March this year and since then has been responsible for product development, procurement and licensing. Finally, I would to thank you for your confidence in the TOM TAILOR shares and hope that you find this report interesting and reflective of our dynamic growth. Yours sincerely, Dieter Holzer

8 8 TOM TAILOR World of Brands CASUAL FASHION FOR A CASUAL LIFE With its slogan Casual fashion for a casual life, TOM TAILOR offers trendy, high-quality fashion at attractive prices for women, men and children in the medium price range. TOM TAILOR s monthly changing collections are marketed under the TOM TAILOR CASUAL and TOM TAILOR Denim brands. In 2012, the Company will introduce the TOM TAILOR POLO TEAM brand to the market as its third division. The TOM TAILOR CASUAL brand comprises the product lines MEN, WOMEN, POLO TEAM, KIDS, MINIS and BABY and focuses on the and 0-14 year age groups. The TOM TAILOR Denim brand consists of the product lines Denim Male and Denim Female for young adults aged years. TOM TAILOR s range of high-quality products is rounded off by an extensive collection of fashionable accessories and licensed products. TOM TAILOR MEN Fashion for active men has always been a core part of TOM TAILOR s business. With its TOM TAILOR MEN line, the Company offers an extensive collection of fashionable, casual men s wear. Casual describes the informal and sporty look for independent, fashion-conscious men who attach special importance to high-quality products. TOM TAILOR WOMEN The TOM TAILOR WOMEN collections are aimed at young, modern women. Fashionable highlights, stylish details and high-quality materials epitomise the overall image of the collections for a trendy and natural look that expresses the consumer s individuality. TOM TAILOR KIDS, MINIS AND BABY The KIDS product line consists of the labels TOM TAILOR BOYS and TOM TAILOR GIRLS for 8- to 14-year-olds. TOM TAILOR MINIS includes the labels TOM TAILOR MINI BOYS and TOM TAILOR MINI GIRLS for children aged between 18 months and 7 years and is supplemented by the TOM TAILOR BABY brand. These collections pick up on new fashion trends, while at the same time taking into account the needs of little ones and their parents in terms of functionality, high-quality materials and an optimum fit.

9 Interim Report Q TOM TAILOR World of Brands 9 TOM TAILOR DENIM The TOM TAILOR Denim brand comprises the lines TOM TAILOR Denim Male and TOM TAILOR Denim Female. These collections appeal to young adults between 15 and 25 years. Inspired by the latest trends from the world s fashion capitals, the collections combine hip designs and colours, trendy washes and carefully selected details. TOM TAILOR Denim is an expression of an active and authentic lifestyle. TOM TAILOR POLO TEAM In 2012, the Company will be introducing TOM TAILOR POLO TEAM to the market as its third division. The TOM TAILOR POLO TEAM brand will offer six collections a year for women and men in the medium to upper price range. Bright colours and classic patterns reflect TOM TAILOR s sporty collection. Decorative embroidered appliqués, traditional emblems and appropriate prints provide that certain something. The collections include T-shirts, polo shirts, button-down shirts, blouses as well as sweat jackets and softshell jackets. ACCESSORIES/LICENCES TOM TAILOR s product line is rounded off by a comprehensive range of accessories. TOM TAILOR grants licences for a variety of product groups, including bed linen, glasses, bags, shoes, watches and most recently its own line of women s undergarments and sleepwear under the name TOM TAILOR Bodywear. The granting of licences and the close collaboration with the respective licensees have in recent years become a permanent part of the system and success of TOM TAILOR. The licensees generate gross sales figures at the point of sale of approximately EUR 70 million per year with TOM TAILOR products.

10 10 Share and Investor Relations The Share In the first few weeks of 2012, global stock markets initially benefited from hopes that the debt crisis in Europe would be brought under control. However, concerns about the economy soon began to dominate once more and share prices fell slightly. The TOM TAILOR share price stood at EUR at the time of the editorial deadline (2 May 2012), equivalent to an increase of 14.6%. The TOM TAILOR share price therefore did not perform as well as the SDAX, which rose by 17.2% in the same period. Investor Relations The goal of our investor relations activities is to increase awareness of TOM TAILOR worldwide and establish and expand the perception of TOM TAILOR shares as an attractive growth stock. We communicate the development and the strategic orientation of TOM TAILOR continually, reliably and openly. In this way, we aim to strengthen investor confidence in the share and to attain a realistic and fair valuation of the share in the capital markets. Our investor relations activities in the first quarter of 2012 primarily concerned preparations for the analysts conference for the 2011 financial year. On 21 March 2012, the Management Board gave a comprehensive account of the 2011 financial year, its expectations for the 2012 financial year and the Company s strategic direction to a gathering of around 25 analysts and investors. In addition, the Management Board and the investor relations team engaged in talks with numerous investors in Germany, Europe and the USA. At present, ten investment houses regularly publish analyses on the current development of our Company and issue recommendations. The investment ratings are almost wholly positive: at present, eight analysts recommend buy of TOM TAILOR shares, while two recommend hold. There are no sell recommendations, currently.

11 Interim Report Q Share und Investor Relations 11 Key Data for TOM TAILOR Shares Class of shares No-par-value registered shares ISIN DE000A0STST2 WKN (German securities ID number) A0STST Ticker symbol TTI Index SDAX (Prime Standard) Stock markets Frankfurt and Hamburg Most important exchange Xetra (electronic trading system) First listing 26 March 2010 Issue price EUR Designated sponsor Commerzbank AG, Close Brothers Seydler Bank AG Development of the TOM TAILOR Share Compared to SDAX * 2012 TOM TAILOR SDAX January 1 February 1 March 1 April 2 May * SDAX indexed to the TOM TAILOR share price

12 12 Interim Management Report Sales increase of 20.0% to EUR million Retail segment sales climb by 46.7% to over EUR 40 million Gross profit margin rises by 2.7 percentage points to 47.5% Adjusted EBITDA up 15.0% on last year to EUR 4.6 million Refinancing successfully completed Forecast for the 2012 financial year confirmed BUSINESS MODEL AND CORPORATE STRATEGY Group Structure The Group structure of TOM TAILOR Holding AG was largely unchanged in the first quarter of Wholly owned subsidiaries were set up in Russia and Slovakia as part of the Company s further expansion. Both subsidiaries are expected to commence business activities in the course of the 2012 financial year. Refinancing TOM TAILOR Holding AG has successfully revised its Group financing to lay an important foundation for its ongoing expansion. The financing package worth a total of EUR 225 million was provided by an international consortium of banks led by BNP Paribas, Commerzbank and IKB. This refinancing allows TOM TAILOR to secure its advance financing needs for new TOM TAILOR retail stores for a number of years, which is a result of the Group s strong growth performance. The new financing conditions have a term of three years with a renewal option for a further two years. As a result, TOM TAILOR has robust financing for the next few years and is in an excellent position to continue to pursue its strategy of achieving profitable growth. As part of the refinancing package, collateral was reduced to a minimum, existing restrictions were lifted and the number of financial covenants that have to be complied with was lowered. TOM TAILOR also expects to make savings in relation to its current interest expenses in the next few years, thanks to more favourable interest rates. The TOM TAILOR Business Model TOM TAILOR s business model purposely combines the emotional added value of its lifestyle brands with the strategic advantages of an integrated system provider. TOM TAILOR regards itself as a fashion follower. This means that the Company essentially does not implement new trends through its collections, which is generally associated with a higher merchandising risk. Rather, it identifies new and promising trends and offers them to a broad consumer group ( mass market ) in high quality at an attractive price. With its business model, TOM TAILOR is achieving sustained growth within a very heterogeneous and intensely competitive market environment.

13 Interim Report Q Interim Management Report 13 Company Objectives and Strategy TOM TAILOR is pursuing a strategy of achieving above-average sales and earnings growth compared to the industry as a whole. The continued improvement in profitability should lead to a long-term and sustained increase in the value of TOM TAILOR. The main elements of the strategy are replication of the business model, expansion of controlled selling space, achieving economies of scale, vertical alignment and securing growth financing. ECONOMIC ENVIRONMENT General Economic Situation The outlook for the global economy has stabilised since the end of The Kiel Institute for the World Economy (IfW) considers the likelihood of a major downturn in the global economy to be far lower than a few months ago. Foreign trade has recovered in developing countries and financial market problems have largely been confined to the eurozone. This has boosted global trade somewhat in recent months. In industrialised countries, monetary policy in particular is being used to stimulate the economy, and interest rates are expected to remain very low throughout the forecast period. However, due to a renewed increase in the oil price and the negative effects of this, the Institute has left its December forecast for the global economy unchanged and is continuing to predict growth of 3.4% for 2012, although trending positive. The mood indicators in Germany have been pointing upwards again in recent months and industry manufacturing has also displayed a positive performance. As a result, economic output grew in the first few months of the year. This increase in GDP in Germany is primarily being driven by domestic demand, while exports have a curbing effect. Although the GfK consumer climate index s upward trend came to an end in the first quarter, consumer sentiment continued to be largely stable in the spring. The composite indicator was at 6.0 points in March (previous year: 6.0 points) and dropped only slightly to 5.8 points in April. Economic expectations, on the other hand, improved slightly on the previous month (5.9) and stood at 7.2 points (previous year: 49.5 points). Industry-specific Developments The German apparel industry grew slightly by 1% in Q1 2012, primarily due to the strong performance of 9% in March. There was little demand for new merchandise up until February as a result of the cold weather, and sales recorded a decrease in this period (source: TW Testclub). In contrast, TOM TAILOR achieved like-for-like sales growth of 18.2% in its retail segment (including e-commerce) in the first three months of 2012, setting the Company well apart from the performance of the German retail sector as a whole. The commodities markets that are relevant for the textile and apparel industry remained stable in the first quarter. High cotton prices, which in the same quarter of 2011 were at times estimated at over 200 US cents per pound and thus led to significantly increased pressure for procurement,

14 14 fell significantly in 2011 and have remained largely stable since the end of the year. The price stood at around 93 US cents per pound at the end of Q (Source: Forward Curve Cotton, NYB-ICE Futures US Softs). RESULTS OF OPERATIONS Sales The TOM TAILOR Group increased Group sales by a total of 20.0% in the first three months of With Group sales of EUR million (2011: EUR 86.3 million), the Company continued on its growth course and significantly outperformed the industry as a whole. TOM TAILOR sees this positive development as an affirmation of its strategy of offering its customers high-quality, value-formoney casual wear collections that are rotated on a monthly basis and of systematically expanding both its retail segment and controlled selling spaces in its wholesale segment. TOM TAILOR increased its sales in Germany by 19.3% in the first three months of 2012 to EUR 65.6 million (2010: EUR 55.0 million). This market therefore accounts for 63.3% of the Company s sales. This positive trend in the domestic market was even exceeded by the growth in foreign sales. With sales of EUR 38.0 million (2010: EUR 31.3 million), TOM TAILOR s foreign business grew by 21.4% and now represents 36.7% (2010: 36.3%) of total sales. This increase in sales generated abroad is mainly attributable to the Company s broadened activities in South-Eastern Europe and the active expansion in the core foreign markets of Austria, Switzerland, the Benelux countries and France. TOM TAILOR s sales in the core markets outside of Germany amounted to EUR 24.4 million, in comparison to EUR 20.2 million in the same period last year. This sales growth of 20.8% confirms the Company s strategy of focusing on investment outside the German domestic market. Sales Development Sales Development by Region EUR million EUR million Germany Foreign core markets Other markets Q Q Q Q1 2012

15 Interim Report Q Interim Management Report 15 Sales Development by Segment EUR million Retail Wholesale Q Q Q Q Cost of Materials The cost of materials rose by 14.3% to EUR 54.4 million in the first three months of 2012 (2011: EUR 47.6 million), primarily as a result of the increases in sales. The gross profit margin improved by 2.7 percentage points to 47.5% in the reporting period. This increase on last year is primarily due to the absence of negative effects in the procurement of raw materials, which had put pressure on the gross profit margin in Q In the first quarter of 2012, the procurement markets benefited in particular from lower cotton prices and a return to normal freight costs following an easing of production capacities. TOM TAILOR also achieved economies of scale in purchasing as a result of higher order volumes and this, too, helped boost the gross profit margin. Personnel Costs In the first three months of 2012, personnel costs rose by 17.4% to EUR 17.0 million. This increase corresponds to the 26.4% rise in the average number of employees in the TOM TAILOR Group as a result of expansion in the retail segment and the targeted strengthening of the sales staff in TOM TAILOR retail space. In addition, personnel costs already include costs from the further expansion and restructuring of purchasing activities that will not be offset by income until later in Other Operating Expenses Other operating expenses increased by EUR 11.7 million to EUR 34.7 million (2011: EUR 23.0 million). This increase of 50.8%, which was sharper than the rise in sales, was due to the cost of refinancing the Company and the launch of a TV-based marketing campaign. The refinancing led to one-off costs of EUR 3.1 million. In addition to this, costs also increased compared to the previous year to around EUR 1.6 million due to the production of the TV advertisements and their initial

16 16 broadcast. However, the positive impact of these measures will not be reflected in the net result for the period until subsequent quarters. If these effects are eliminated, other operating expenses developed in line with sales and were dominated by an increase of EUR 1.9 million in rental costs as a result of the Company s expansion drive. The number of retail stores increased by 85 to 258 between 31 March 2011 and the balance sheet date of 31 March The increase in other operating expenses is therefore a reflection of the growth strategy of the TOM TAILOR Group. Earnings before Interest, Taxes, Depreciation and Amortisation (EBITDA) Earnings before interest, taxes, depreciation and amortisation (EBITDA) came in at EUR 1.2 million in the first quarter of 2012 and were thus EUR 2.8 million lower than in the same period in 2011 (EUR 4.0 million). This decrease resulted from the refinancing costs of EUR 3.1 million and marketing costs for a TV campaign of around EUR 1.6 million, neither of which occurred in the prior-year s period. Adjusted for one-off items due in particular to the refinancing, adjusted EBITDA was EUR 4.6 million, which was 15.0% higher than last year (2011: adjusted EBITDA EUR 4.0 million). The lower increase in adjusted EBITDA in comparison with sales growth is entirely attributable to the marketing expenses. Their positive impact on earnings in the form of higher sales will not be felt until subsequent reporting periods. Development Adjusted EBITDA EUR million Q Q1 2012

17 Interim Report Q Interim Management Report 17 Depreciation, amortisation and impairments Depreciation, amortisation and impairments were almost EUR 0.4 million higher in the first three months of 2012 than in the same period last year, totalling approximately EUR 6.5 million (2011: EUR 6.1 million). This figure contrasts with capital expenditure of EUR 4.6 million (2011: EUR 5.2 million) in Q Overall, the increase in depreciation, amortisation and impairments reflects the growth in capital expenditure seen over the last two years. Capital expenditure primarily related to further expansion of the retail business and of the Company s own controlled selling space (shopin-shops). Financial Result The financial result came to EUR 1.6 million at the end of the quarter and was therefore well below last year s figure of EUR 0.1 million. The decrease was due to the fair value interest income from completed interest hedges of EUR 1.4 million included in last year s figures. A similar amount did not occur in Excluding this one-off effect, the financial result was at the same level as last year. Income Taxes The high refinancing costs incurred in Q and increased marketing costs resulted in a tax loss carryforward. This led to income tax earnings of EUR 1.7 million (2011: EUR 0.4 million), which corresponds to the higher negative result before income tax. Net Result for the Period and Earnings per Share The net result for the first three months of 2012 was negative and came to EUR 5.2 million (2011: EUR 1.9 million). Earnings per share therefore amounted to EUR 0.29 (2011: EUR 0.11). This year-on-year drop is entirely due to the costs associated with the refinancing as well as the rise in marketing costs. Overall, for seasonal reasons, the first quarter is the weakest quarter of the year. Due to one-off factors it does not adequately reflect TOM TAILOR s positive developments. Excluding the one-off items resulting from the refinancing, the adjusted net result for the period was EUR 2.0 million (2011: EUR 0.7 million), which is still negative due to the high marketing costs in the first quarter. The start-up costs needed to open new stores in the retail segment were a further expense that reduced earnings. This trend will not continue in subsequent quarters and TOM TAILOR expects earnings to increase steadily as the year progresses.

18 18 Reconciliation of Adjusted Net Result for the Period EUR thousand Q Q Net result for the period 1,895 5,197 Income tax 351 1,699 Earnings before taxes 2,246 6,896 Financial result 121 1,569 One-off items Amortisation on the purchase price allocation (PPA) from ,735 1,174 Refinancing costs 3,102 Set-up sourcing company 296 Total of one-off items not including tax effects 1,735 4,572 Adjusted EBIT in % of sales 0,5 % 0,7% Depreciation (not including amortisation on PPA) 4,401 5,362 Adjusted EBITDA 4,011 4,607 in % of sales 4,6 % 4,4% Depreciation (not including amortisation on PPA) 4,401 5,362 Financial result 121 1,569 Adjusted results before taxes 511 2,324 Income tax 351 1,699 Imputed tax effects (30%) on total one-off items 521 1,372 Adjusted net result for the period 681 1,997 Segment Reporting The TOM TAILOR Group splits its segment reporting into two segments: retail and wholesale. The retail segment comprises the retail and outlet stores run by the Company itself and its e-commerce activities. The Group s e-commerce activities are the TOM TAILOR e-shop and e-commerce partnerships with Neckermann and OTTO Versand. In the wholesale segment, the Company supplies commercial customers with TOM TAILOR products ( Act premium ) to sell to end customers through a variety of distribution channels. These include franchise stores, shop-in-shops and multi-label stores. This makes it possible for large volumes ( Sell volume ) to be distributed via established department stores and apparel chains, and also through mail order companies in Germany and abroad. One of TOM TAILOR s main growth drivers is the active expansion of its business in the retail segment. In the first quarter of 2012, the Company was able to increase its sales in this segment by 46.7% to EUR 40.2 million, up from EUR 27.4 million in the same period in TOM TAILOR has increased the number of retail stores by a further ten to 258 since 31 December of these are in Germany, 45 are in Austria and 107 are in other countries. In comparison to 31 March 2011, the number of retail stores has increased by 85. The retail segment accounted for 38.8% of Group sales in the first quarter of 2012 (2011: 31.7%). The Company s e-commerce activities also developed very positively in Q1 2012, achieving an increase in sales of 60.6% to EUR 7.0 million (2011: EUR 4.4 million) thanks to the TV campaign. On a like-for-like basis (i.e. excluding expansion) sales in the retail segment were up 18.2%.

19 Interim Report Q Interim Management Report 19 Retail Store Development Number of stores /03/ /03/2012 TOM TAILOR s sales in the wholesale segment amounted to EUR 63.4 million in the first three months of 2012, which was 7.6% higher than in the same period last year (2011: EUR 58.9 million). This segment therefore accounted for 61.2% of overall sales (2011: 68.3%). Within the wholesale segment, TOM TAILOR aims to expand its controlled selling spaces, i.e. franchise stores and shopin-shop spaces. Sales increased in this segment by 10.0% in Germany and by 4.1% abroad. Sales abroad are down slightly on previous quarters. This is because expansion abroad is focused on the retail segment and some of the sales in the wholesale segment were shifted to the retail segment as a result of certain stores becoming own retail stores. However, TOM TAILOR benefited overall from the stabilisation of the Eastern European sales markets. The Management Board expects to see a continued positive sales development here in the future. As intended, TOM TAILOR increased the number of shop-in-shops by 81, from 1,786 on 31 December 2011 to 1,867 at the end of the quarter. The number of franchise stores increased slightly by 2 to 157. The order volume recorded in the segment up to the end of March 2012 had risen by 11.3% in comparison to the same period last year. FINANCIAL POSITION Cash Flow In the first three months of 2012, the TOM TAILOR Group reported a much higher year-on-year cash outflow from operating activities of EUR 19.2 million (2010: EUR 10.5 million). This drop was due to the following factors: as a result of the costs associated with the refinancing (EUR 3.1 million) and the increase in marketing expenses (EUR 1.6 million), the net result for the period (EUR 5.2 million) was down on last year (EUR 1.9 million), thus leading to additional cash outflows. In addition to this, payments of tax arrears of EUR 4.4 million (2011: EUR 0.2 million) were made in the first quarter due to the positive results in previous years. Due to the reporting date, there were also payment postponements with regard to trade payables, prompting cash outflows from the change in liabilities to increase year-on-year to EUR 9.9 million (2011: EUR 3.8 million). However, inventories were reduced by EUR 0.3 million despite the further expansion of the Company, and this had a positive impact on cash flow.

20 20 The seasonality of the fashion industry tends to result in a reduced cash flow from operating activities in the first nine months of the year, which means that the predominant trend in the first quarter was not unusual. Including interest paid, the cash flow from current activities came to EUR 20.0 million (2011: EUR 10.9 million). The cash outflow from investing activities amounted to EUR 4.6 million in the reporting period (2011: EUR 5.2 million). Capital expenditure related first and foremost to the expansion of controlled selling spaces in both of the Group s segments. The cash inflow from financing activities came to EUR 24.3 million in the first three months of 2012 and was dominated by the cash changes as part of the refinancing. The previous term loans of EUR 57 million were replaced by new term loans amounting to EUR 40 million and the shortfall was financed by drawing down on the current bank credit lines. The current bank credit lines were also drawn down to finance the negative cash flow from current activities and capital expenditure. Overall, liquid funds were reduced only slightly by EUR 0.3 million to EUR 9.0 million. Capital Expenditure Act premium, sell volume this philosophy applies in particular not only to the Company s products but also in the area of store design. End customers of TOM TAILOR should feel good when they are in the Company s selling space, and by making them linger a little longer this should in turn influence their purchase decisions in a positive way. Accordingly, TOM TAILOR is investing a large amount in the fitting out of its selling spaces and thus providing the basis for further growth in sales. The principal focus of capital expenditure continued to be the expansion of controlled selling spaces in both segments. A total of EUR 2.7 million was invested in the retail segment (2011: EUR 3.2 million) and EUR 1.9 million in the wholesale segment (2011: EUR 2.0 million). Capital expenditure in the retail segment was primarily allocated to fitting out the ten newly opened stores. Approximately EUR 1.0 million was invested in new spaces in the wholesale segment. The remaining EUR 0.9 million primarily related to extension investments in the existing showrooms and in IT/software infrastructure. BALANCE SHEET STRUCTURE Assets On the assets side, the expansion of selling space controlled by TOM TAILOR and the positive development of orders have resulted both in an increase in property, plant and equipment to EUR 52.5 million (31 December 2011: EUR 49.5 million) as a result of capital expenditure and in higher trade receivables of EUR 50.2 million (31 December 2011: EUR 45.5 million). Other current assets were reduced by EUR 5.4 million to EUR 4.0 million compared with 31 December 2011, mainly due to the market valuation of completed forward exchange transactions. The balance sheet total went up slightly to EUR million (31 December 2011: EUR million).

21 Interim Report Q Interim Management Report 21 Asset Structure Capital Structure in % in % Non-current assets Equity Current assets Non-current liabilities Current liabilities /12/ /03/ /12/ /03/2012 Shareholders Equity Shareholders equity fell slightly to EUR million (31 December 2011: EUR million) due to the net result for the period, which was negative as a result of seasonal factors. The equity ratio decreased accordingly to 33.1% (31 December 2011: 35.5%). Liabilities On the liabilities side, non-current financial liabilities in particular rose to EUR million (31 December 2011: EUR 77.5 million) following the drawdown of long-term bank credit lines. Please refer to the notes on the financial position of the Company for details on the increase. The positive earnings situation in the previous years led to the payment of income taxes and a reduction in current income tax liabilities in Q Trade payables also dropped from EUR 58.4 million to EUR 48.4 million as of 31 March 2012 due to the reporting date. Off-balance-sheet Financing The Company does not use any off-balance-sheet financing instruments in terms of the sale of accounts receivable, asset-backed securities, sale and leaseback transactions, or entries into liability relationships with special-purpose entities not included in the consolidated financial statements. TOM TAILOR has minor other operational leasing relationships for IT accessories and company cars, for example. Off-balance-sheet financial instruments therefore have no significant influence on the financial position of the Group.

22 22 EMPLOYEES AND MANAGEMENT TOM TAILOR employed 1,626 people (not including Management Board members, apprentices and temporary staff) as of 31 March 2012 (2011: 1,280). This equates to an increase in the workforce of 346 employees or 27.0% in comparison to the same time last year. As of 31 March 2012, there were 502 employees in the wholesale segment (2011: 458) and 1,124 in the retail segment (2011: 822). The increase in the workforce in the retail segment is mainly attributable to the recruitment of employees for the new TOM TAILOR retail stores and to taking on the employees of the former franchise stores of Sportina and Sagmeister. In terms of geographical spread, TOM TAILOR had 864 employees in Germany (2011: 828) and 762 abroad (2011: 452). With effect from 29 February 2012 the Management Board contract of Mr Christoph Rosa was terminated and with effect from 1 March 2012 Mr Udo Greiser was appointed by the Supervisory Board as the new Chief Product Development, Procurement and Licensing Officer (CPO). TOM TAILOR thus appointed someone new to the position of CPO as soon as Mr Christoph Rosa informed the Company that he would not be renewing his contract when it expired in January Employees According to Segments Number at reporting date Retail Wholesale 1,124 1,400 1,200 1, Q Q Q Q OPPORTUNITIES AND RISKS In the course of its business, TOM TAILOR is exposed to many risks and opportunities that are always associated with entrepreneurial activity. Risks are characterised as events that, should they materialise, have a negative impact on the planned objectives. If these risks become reality, business performance may be permanently impaired, earnings developments may be weakened and the Company s financial position may be jeopardised. In contrast, opportunities are defined as factors that could have a positive influence on the future development of TOM TAILOR.

23 Interim Report Q Interim Management Report 23 A detailed presentation of opportunities and risks and a description of the risk management system can be found on pages 105 ff. of the 2011 Annual Report. The statements made in the Annual Report apply unchanged. There are currently no individual or aggregate risks which could jeopardise TOM TAILOR Holding AG as a going concern. REPORT ON POST-BALANCE-SHEET EVENTS No events with a significant effect on the net assets, financial and earnings position of the Group occurred between the end of the reporting period and publication of this interim report. OUTLOOK Future Economic Development and Sector Developments The Kiel Institute for the World Economy (IfW) has not changed its forecast for 2012 since December The IfW is still predicting global economic growth of 3.4%, although it expects developments to be much more positive. For Germany, the IfW is anticipating GDP growth of 0.7% in 2012 while the eurozone economy is forecast to contract by 0.2%. It believes that worldwide GDP will grow by 3.4%. According to the Institute, this economic growth will be driven in particular by India (+7.0%) and China (+8.0%), where the ongoing booms will also increase German exports. The IfW is also forecasting solid growth in 2012 in Central and Eastern Europe, a region which is becoming increasingly important for TOM TAILOR, and also in Russia. With regard to the consumer climate index, the upward trend has come to a halt, although the overall index remains at a good level, coming in at 6.0 points in March and 5.8 points in April. Economic expectations even managed a slight increase. The price of cotton as a commodity has been easing considerably since summer 2011 and stood at 93 US cents per pound at the end of Q The price is expected to remain stable at around 90 US cents (source: Forward Curve Cotton, NYB-ICE Futures US Softs). However, notwithstanding the significant easing of commodity prices compared with last year, the industry is having to accommodate a continuous rise in wage costs in the Asian production countries, as salary levels there keep track with the general increase in prosperity. This salary trend will be permanent. Outlook for 2012 TOM TAILOR Holding AG will continue with its profitable growth and expansion strategy in The focus of further expansion will primarily be on the retail segment and thus on the opening of further own stores. TOM TAILOR is planning some 60 to 70 new retail stores in TOM TAILOR opened ten new stores in the first quarter of The Company will also invest further in establishing and expanding its online shop. Having changed service providers, TOM TAILOR is planning to establish a Europe-wide online store in 2012.

24 24 The number of controlled shop-in-shop spaces and franchise stores in the wholesale segment is to be increased further. The Management Board is planning a further 200 to 250 shop-in-shop spaces and 20 to 25 franchise stores in The Company opened 81 shop-in-shops and two franchise stores in the first quarter. Expansion will be driven in particular in the German home market and the foreign core markets Austria and Switzerland. Experts are predicting that consumption in these countries will remain stable on the basis of positive labour market data. Between EUR 23 and EUR 25 million in total will be invested in further expansion in As of today, the Management Board of TOM TAILOR Holding AG continues to expect sales of at least EUR 470 million in This represents an increase of at least 14% on the 2011 financial year. The Management Board also believes that EBITDA adjusted for special items will be between EUR 51 and EUR 53 million in the 2012 financial year. EBITDA will be positively affected by the rise in sales and the improved gross profit margin as a result of the fall in cotton prices and the new sourcing set-up in Asia. Operating expenses will increase, mainly due to the further expansion of the Company s own selling spaces. EBITDA will be further impacted by the TV campaign expenses and additional expenses associated with the refinancing completed in February.

25 Interim Report Q Interim Management Report 25 Consolidated Financial Statements as of 31 March 2012 Consolidated Statement of Profit and Loss Consolidated Statement of Profit and Loss for the Period from 1 January to 31 March 2012 EUR thousand Q Q Sales 103,556 86,294 Other operating income 3,777 2,857 Cost of materials 54,355 47,620 Personnel costs 17,035 14,501 Depreciation, amortisation and impairments 6,536 6,137 Other operating expenses 34,734 23,018 Profit from operating activities 5,327 2,125 Financial result 1, Result before income tax 6,896 2,246 Income tax 1, Net result for the period 5,197 1,895 thereof shareholders of TOM TAILOR Holding AG 4,772 1,850 minority shareholders Earnings per share in EUR Basic earnings per share (in EUR) Diluted earnings per share (in EUR)

26 26 Consolidated Statement of Comprehensive Income Consolidated Statement of Comprehensive Income for the Period from 1 January to 31 March 2012 EUR thousand Q Q Net result for the period 5,197 1,895 Currency effects from foreign operations 2 93 Change in cash flow hedging reserve 3,050 2,420 Deferred taxes on hedging mark-to-market changes Other comprehensive result 2,055 1,601 Comprehensive income after tax 7,252 3,496 thereof shareholders of TOM TAILOR Holding AG 6,827 3,451 minority shareholders

27 Interim Report Q Consolidated Financial Statements as of 31 March Consolidated Statement of Cash Flows Consolidated Statement of Cash Flows for the Period from 1 January to 31 March 2012 EUR thousand Q Q Net result for the period 5,197 1,895 Depreciation, amortisation and impairments 6,536 6,137 Income tax expense/income 1, Interest income and expenses 1, Change in non-current provisions 1, Change in current provisions Loss/gain on the disposal of intangible assets and property, plant and equipment 1 17 Change in inventories 329 4,640 Change in receivables and other assets 1,784 3,633 Change in liabilities 9,946 3,849 Income taxes paid/received 4, Other non-cash changes 3,162 2,382 Net cash flow from (used in) operating activities 19,217 10,520 Interest paid Interest received 4 17 Net cash flow from (used in) current activities 20,051 10,943 Capital expenditures on intangible assets and property, plant and equipment 4,598 5,208 Result from disposal of intangible assets and property, plant and equipment 1 17 Net cash flow from (used in) investing activities 4,599 5,225 Raising of financial liabilities 48,183 0 Repayment of financial liabilities 23, Net cash flow from (used in) financing activities 24, Effect of exchange rate changes Change in cash and cash equivalents ,133 Cash and cash equivalents at beginning of period 9,376 22,483 Cash and cash equivalents at end of period 9,061 5,350 Composition of cash and cash equivalents Liquid funds 9,061 5,350

28 28 Consolidated Balance Sheet Consolidated Balance Sheet as of 31 March 2012 ASSETS EUR thousand 31 Mar Dec Non-current assets Intangible assets 137, ,832 Property, plant and equipment 52,552 49,578 Other assets 5,495 4,089 Prepaid expenses and deferred charges 2,334 2, , ,079 Current assets Inventories 57,253 57,582 Trade receivables 50,229 45,512 Income tax receivables 60 1,181 Other assets 3,976 9,397 Cash and cash equivalents 9,061 9,376 Prepaid expenses and deferred charges 3,691 2, , , , ,490

29 Interim Report Q Consolidated Financial Statements as of 31 March Consolidated Balance Sheet Consolidated Balance Sheet as of 31 March 2012 LIABILITIES AND SHAREHOLDERS EQUITY EUR thousand 31 Mar Dec Shareholders equity Subscribed capital 16,528 16,528 Capital reserve 187, ,856 Accumulated deficit 100,565 95,793 Accumulated other comprehensive result 95 2,150 Shareholders of TOM TAILOR Holding AG 103, ,741 Minority shareholdings 2,600 3, , ,742 Non-current liabilities Pension provisions Other provisions 736 1,882 Deferred income tax 24,029 26,889 Financial liabilities 106,344 77,503 Other liabilities 2,960 3,082 Unearned income 1,097 1, , ,083 Current liabilities Other provisions 14,361 13,826 Current income tax liabilities 4,718 10,123 Financial liabilities 5,537 6,477 Trade payables 48,383 58,338 Other liabilities 5,935 5,584 Deferred income 1,348 1,317 80,282 95, , ,490

30 30 Consolidated Statement of Changes in Equity Consolidated Statement of Changes in Equity for the Period from 1 January 2012 to 31 March 2012 Number of shares in thousand Subscribed capital in EUR thousand Capital reserve in EUR thousand Accumulated deficit in EUR thousand 1 January ,528 16, ,856 95,793 Changes in group of consolidated companies Comprehensive income after tax 4,772 Personnel costs due to share-based remuneration March ,528 16, , ,565 Consolidated Statement of Changes in Equity Consolidated Statement of Changes in Equity for the Period from 1 January 2011 to 31 March 2011 Number of shares in thousand Subscribed capital in EUR thousand Capital reserve in EUR thousand Accumulated deficit in EUR thousand 1 January ,528 16, , ,215 Changes in group of consolidated companies Comprehensive income after tax 1,850 Personnel costs due to share-based remuneration March ,528 16, , ,065

31 Interim Report Q Consolidated Financial Statements as of 31 March Currency-related changes in EUR thousand Accumulated other comprehensive result Cash flow hedging reserve (IAS 39) in EUR thousand Deferred taxes on hedging mark-tomarket changes in EUR thousand Shareholders of TOM TAILOR Holding AG in EUR thousand Minorities in EUR thousand Total in EUR thousand 816 4,354 1, ,741 3, , , , , , ,978 2, ,578 Currency-related changes in EUR thousand Accumulated other comprehensive result Cash flow hedging reserve (IAS 39) in EUR thousand Deferred taxes on hedging mark-tomarket changes in EUR thousand Shareholders of TOM TAILOR Holding AG in EUR thousand Minorities in EUR thousand Total in EUR thousand ,492 2, , , , , , ,136 2,704 96,840