1 GERRY WEBER International AG Report on the first nine months of 2003/2004 Report on the nine-month period ended July 31, 2004 WKN: ISIN: DE
2 The GERRY WEBER share: While the stock market in general suffered from the weak economy in July and August, the GERRY WEBER share was also affected by press reports on the poor situation in the retail trade and the department store crisis. The current retail crisis led to a strong decline in sales, especially at department stores. In response to the disappointing halfyear figures presented by the KarstadtQuelle Group, the share price plunged, taking in its wake most other retail and consumer goods shares. The GERRY WEBER share quickly recovered from the August losses, though. Now that the optimisation phase has been completed successfully, GERRY WEBER is again poised for growth, giving its share quite some upside potential Figures of the first nine months of 2003/2004 (to HGB; in EUR m, unless stated otherwise) 2003/ /2003 Sales revenues EBITDA EBITDA margin 7.7 % 7.8 % EBIT EBIT margin 6.0 % 5.8 % Net profit DVFA result per share in EUR Gross cash flow Capital expenditure Headcount on July 31 1,597 1,666 The development in the first nine months Contrary to what had been expected, demand in the clothing industry failed to pick up again from its low level in the first half of While June and July sales were somewhat better than in the previous year, the industry claims it is too early to speak of a sustainable turnaround. By contrast, GERRY WEBER was able to slow down the decline in sales and achieve an increase in all earnings figures - with the exception of EBITDA.
3 The traditionally weak third quarter saw GERRY WEBER s sales on the same level as the period of the previous year. Overall, sales revenues decreased by 1.2% in the first nine months of the fiscal year. It should be noted that the COURT ONE and YOMANIS brands, which have been discontinued in the meantime, still contributed some EUR 10 million to the previous year s sales. Thanks to the reduction in the cost of materials and personnel expenses achieved in the third quarter, earnings before interest and taxes (EBIT) were up 2.8% and 2.0%, respectively, on the third quarter and the nine-month period of the previous year. Results from ordinary activities increased by 4.6% and net profit by 6.6% in the first nine months of the fiscal year. Brand sales in the first nine months (in EUR m) 2003/ /2003 GERRY WEBER 101, TAIFUN 39, SAMOON 14, COURT ONE 6, YOMANIS 2,4 2.6 Retail (excl. shop-in-shops) 11, Other 1, The increase in sales achieved by the GERRY WEBER and TAIFUN brands did not yet fully offset the sales losses resulting from the discontinuation of the COURT ONE and YOMANIS brands. Sales of SAMOON declined slightly in the traditionally weak third quarter, while own retail sales pointed upwards. Thanks to the programmes of the sublabels, GERRY WEBER EDITION and G.W., the retail productivity of the GERRY WEBER brand has increased noticeably, which is not least reflected in the higher inventory turnover rates. The aggressively priced G.W. line boasts an inventory turnover rate of eight to ten, which means it sells almost as fast as the programmes of the vertical suppliers. G.W. s contribution to GERRY WEBER s sales continued to increase and meanwhile stands at approx. 20% in the HOUSES OF GERRY WEBER. Incoming orders for spring/summer 2005 (in EUR m) S/S 2005 S/S 2004 GERRY WEBER 101, TAIFUN 39, SAMOON 14, The strong increase in incoming orders for the spring/summer 2005 collections reflects the excellent sales outlook for the fourth quarter and the next fiscal year. This means that the company s strong business trend makes it relatively independent of the market development. The results of the modernisation and rejuvenation of the programmes completed in recent months are primarily reflected in the increased orders received for the GERRY WEBER brand. While the combination fashion of the core brand supplies the standard items, the G.W., GERRY WEBER SPORT and GERRY WEBER EDITION sublabels complement the sales of individual items. This collection system meets customers wishes and ensures high sell-through rates for retailers.
4 Outlook The development in the first nine months, which was in line with the company s plans, and the positive order numbers underpin the projections made at the beginning of the year. We therefore expect moderate sales growth and an EBIT margin of 8% for the full year. Incoming orders already indicate the good growth prospects for the next fiscal year. An expected double-digit increase in sales will take the GERRY WEBER Group back on the growth track. This trend will be further accelerated by the expansion of the shop and store numbers, the activities in foreign markets and the licensing business. Another 12 own stores are planned to be added to the existing 70 HOUSES OF GERRY WEBER (HOGW) in Germany by the end of the year. Another 3 stores will be opened in neighbouring countries by the end of February In the coming years, GERRY WEBER plans to increase the number of HOGW to 300 to 400, a large number of them abroad. Plans for the German market provide for one HOUSE OF GERRY WEBER to be opened in every city with a population of over 80,000. Due to the fundamental structural change currently occurring in the retail sector, it will be possible to rent store space at affordable prices. Flagship stores at prime locations in London, Paris and Hong Kong will pave the way towards a successful positioning of the brand in these countries. Two shops have already opened in the growing chinese market, with another two shops and one store at the planing stage. The company intends to step up its international activities primarily in France, Spain, Greece, Eastern Europe, Canada and Asia. Growth potential for the GERRY WEBER brands also exists in the UK, the Netherlands, Switzerland and Austria. In the Netherlands alone, the company plans to open another 15 to 20 HOGW in addition to the flagship store in Amsterdam. Licensing activities are expected to pick up in September as a result of the market launch of the GERRY WEBER fragrance and body care line and the sales start of the new jewellery and watch collection. The new watch and jewellery licensee has designed a jewellery collection of about 40 pieces as well as six to eight watch models, which will be available in the shops from September. Calendar of financial events: Publication of preliminary figures In the middle of December 2004 Accounts press conference February 24, 2005 Annual General Meeting June 2, 2005 Contact GERRY WEBER International AG Neulehenstraße Halle/ Westphalia Tel (0) Fax + 49 (0) Investor Relations contact Hans-Dieter Kley Tel (0) Fax + 49 (0)
5 Consolidated balance sheet to HGB in EUR 000 Assets July 31, 2004 October 31, 2003 A. Fixed assets Intangible assets 5,767 6,237 Tangible assets 62,678 62,901 Financial assets ,772 69,853 B. Current assets Inventories 47,921 37,655 Receivables and other assets 95,168 84,881 Cash on hand, cash in banking accounts and cheques 7,512 7, , ,429 C. Prepayments and accrued income 1,138 1, , ,460 Liabilities July 31, 2004 October 31, 2003 A. Capital stock Subscribed capital 23,443 23,443 Capital reserves 33,668 33,668 Revenue reserves 23,760 23,760 Net profit for the year 24,479 24, , ,564 B. Provisions Provisions for taxation 1,820 3,035 Other provisions 7,667 7,598 9,487 10,633 C. Accounts payable Due to banks 78,735 59,051 Trade accounts payable 16,682 18,787 Other accounts payable 10,232 7, ,649 85,237 D. Deferred income , ,460 Consolidated income statement to HGB in EUR 000 Q3Q3Nine months Nine months 2003/ / / /2003 Sales revenues 72,396 72, , ,200 Inventory changes +11, , ,266 +7,600 Other operating income 1,145 1,900 4,052 3,800 Cost of materials 53,420 58, , ,100 Personnel expenses 11,597 12,200 35,273 38,500 Depreciation of intangible fixed assets and tangible assets 1,274 1,700 4,153 5,000 Other operating expenses 17,163 15,600 48,266 49,500 Operating result 1,645 1,600 14,790 14,500 Net interest income ,241 2,500 Results from ordinary activities 1,400 1,200 12,549 12,000 Taxes on income ,450 4,100 Other taxes Profit ,991 7,500 Earnings per share in EUR Number of shares 23,443,200 23,443,200 23,433,200 23,443,200
6 Equity capital movements to HGB in EUR 000 Nov. 1, 2002 July 31, 2003 Nov. 1, 2003 July 31, 2004 Subscribed capital 23,443 23,443 23,443 23,443 Capital reserves 33,668 33,668 33,668 33,668 Revenue reserves 23,465 23,465 23,760 23,760 Consolidated net profit 23,571 22,900 24,693 24,479 Shareholders equity 104, , , ,350 Consolidated cash flow statement to HGB in EUR 000 Nine months Nine months 2003/ /2003 Net profit + 7, ,500 Fixed asset depreciation + 4, ,000 Increase/decrease in provisions - 1,146-6,300 Increase/decrease in inventories - 10,266-7,600 Increase/decrease in trade receivables - 8, ,500 Increase/decrease in other assets - 1,525-11,500 Increase/decrease in trade accounts payable - 2,105-3,100 Increase/decrease in other liabilities + 2,832-1,200 Inflow/outflow of funds from ordinary business activities - 8,400-15,700 Disbursement for fixed asset investments - 3,460-11,400 Outflow of funds from capital spending - 3,460-11,400 Dividend distributed to shareholders - 8,205-8,200 Disbursements/receipts from the raising/repayment of loans + 19, ,200 Contributions by shareholders 0 0 Inflow/outflow of funds from financing activities + 11, ,000 Cash changes in financial resources ,100 Financial resources at the beginning of the period + 7, ,298 Financial resources on July , ,198 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 2002/2003. 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 Halle/Westphalia