Quarter Report 2014 ESSANELLE HAIR GROUP AG

Transcription

1 Quarter Report 2014 ESSANELLE HAIR GROUP AG Q1

2 2 Q1/2014 ESSANELLE HAIR GROUP KEY FIGURES for 1 January to 31 March 2014/2013 (IFRS) million Change* Consolidated sales % essanelle Ihr Friseur % Super Cut % HairExpress % beautyhairshop % EBITDA % EBIT % EBT % Consolidated net income % EPS 0.12 Euro 0.08 Euro *including rounding effects Financial Calendar Annual General Meeting 27 June 2014 Half-Year Report August 2014

3 Q1/2014 ESSANELLE HAIR GROUP 3 CONTENT BUSINESS TRENDS THE SHARE OUTLOOK CONSOLIDATED ABRIDGED NOTES TO THE INTERIM FINANCIAL STATEMENTS CONSOLIDATED BALANCE SHEET CONSOLIDATED INCOME STATEMENT CONSOLIDATED CASHFLOW STATEMENT SCHEDULE OF CHANGES IN GROUP EQUITY CONSOLIDATED ABRIDGED NOTES CONTACT, IMPRINT 18

4 4 Q1/2014 ESSANELLE HAIR GROUP ECONOMIC DEVELOPMENT In the first quarter, a GDP growth of about 0.8% is predicted for Germany, compared to the previous quarter. This is primarily driven by investment demand and private consumption. According to data from the Federal Statistical Office, the German retail sector developed altogether slightly positively in the first quarter of the current year of 2014 with an increase in gross of 1.2% nominal and 0.2% real compared to the same period in the previous year. In the first quarter of 2014, sales for Essanelle Hair Group were significantly above the previous year s level and with an increase by 4.7% achieved EUR 32.3 million this quarter after EUR 30.8 million in the previous year. The number of salons increased from 680 salons to 692 salons compared to the same quarter in the previous year. As of 31 December, 2013, Essanelle owned 689 salons. The closing of five salons was countered by the opening of eight new salons in the first quarter of The earnings situation of Essanelle Hair Group developed positively in the first three months of the year, due to significant sales increases and despite increased personnel expenses caused by the statutory minimum wage it thereby remains within the range of our planning. The EBT achieved EUR 0.9 million in the first three months after EUR 0.6 million in the previous year. For the full year, the company expects sales revenue 3 5% above the previous year s level and an EBT of between EUR 4.5 million and EUR 5.5 million (previous year: EUR 5.6 million). Regarding the individual salon concepts, the HairExpress concept was again able to generate an increase in sales revenue. Here, sales revenue increased by 11.5% from EUR 10.2 million to EUR 11.4 million. The number of salons increased from 260 to 275 salons in the first quarter. The Super Cut brand obtained a growth of 5.4%, with sales revenue increasing from EUR 5.6 million to EUR 5.9 million. Here, the number of salons increased by four salons to 115. Despite a reduction by nine salons (264 compared to 273 salons), essanelle Ihr Friseur, the concept that provides a broad range of services that cover all customer bases, generated sales of EUR 13.0 million in the first three months of 2014, thus remaining almost on the previous year s level of EUR 13.1 million (-0.6%). The beautyhairshop concept, which specialises purely in the sale of exclusive hair care products, had an increase in sales from EUR 1.8 million to EUR 1.9 million. Here, the number of shops increased from 36 to 38. The professional advice offered in the beautyhairshops is a significant element contributing to the success of this concept. With the turnover divided into service and sales, the following picture emerges: The revenue portion of services increased to EUR 27.9 million in the first quarter after the previous year s figure of EUR 26.6 million. This corresponds to about 86.3% of the total revenue (previous year: 86.2%). The sale of exclusive hair care products in the salons and beautyhairshops also increased from EUR 4.2 million to EUR 4.4 million and thus to 13.7% of the total revenue (previous year: EUR 4.2 million; 13.8%).

5 Q1/2014 ESSANELLE HAIR GROUP 5 Concepts Salons Employees Sales revenues Concepts 1st Quarter st Quarter 2013 Number of Employees 1 Sales Number of Employees 1 Salons million Salons Sales million essanelle Ihr Friseur 264 1, , Super Cut HairExpress 275 1, , beautyhairshop Total 692 3, , without Overhead

6 6 Q1/2014 ESSANELLE HAIR GROUP EARNINGS PERFORMANCE The income statement of Essanelle Hair Group shows that sales increased to EUR 32.3 million in the first quarter (previous year: EUR 30.8 million) with a generally improved profit situation. Compared to the same quarter in the previous year, other operational earnings increased from EUR 0.1 million to EUR 0.2 million. The expenditure for material and supplies remained rounded off on the previous year s level of EUR 2.5 million. Because of the sales growth, the ratio of expenditure for material and supplies in relation to sales decreased to 7.6% after 8.2% at the end of the same quarter in the previous year. Personnel expenditure on the other hand, increased as expected from EUR 17.7 million to EUR 18.6 million (+5.1%). The personnel expenditure ratio thereby also increased from 57.5% to 57.7%. Compared to the previous year s level, rent and utility costs increased slightly from EUR 6.3 million to EUR 6.4 million (+2.8%). Other operational expenditures increased by 7.2% from EUR 2.7 million to EUR 2.9 million. Overall, Essanelle Hair Group AG generated an EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortisation) of EUR 2.0 million in the first quarter of 2014 after EUR 1.7 million in the previous year, which corresponds to an increase of 15.3%. Depreciation and amortisations remained exactly on the previous year s level at EUR 1.1 million. Correspondingly, EBIT (Earnings Before Interest and Taxes) increased by 41.0% from EUR 0.6 million to EUR 0.9 million. The financial result amounted to EUR 0.04 million in the first quarter after EUR 0.05 in the previous year. Essanelle Hair Group thereby achieved an increase in EBT by 47.2% at EUR 0.9 million after EUR 0.6 million in the first quarter of The company tax expenditure increased from EUR 0.2 million in the first quarter of 2013 to EUR 0.3 million now. Thus, the quarter surplus for the first three months of the current financial year of 2014 ranges at EUR 0.6 million after EUR 0.3 million, which corresponds to an increase of 64.0%. The earnings per share increased correspondingly to EUR 0.12 after EUR 0.08 in the same quarter last year. 35 Mio. 1st Quarter st Quarter , GROUP SALES EBITDA EBIT EBT REVENUE

7 Q1/2014 ESSANELLE HAIR GROUP 7 BALANCE SHEET, INVESTMENTS AND LIQUIDITY At EUR 39.1 million, the balance sheet of Essanelle Hair Group AG as of 31 March, 2014 showed no significant changes on the asset side of long-term net assets, compared to EUR 39.4 million as of 31 December, Current assets on the other hand decreased from EUR 18.1 million as of balance sheet date 2013 to EUR 15.7 million as of the end of the first quarter. Here, other assets increased from EUR 0.5 million to EUR 1.0 million. As in previous years, this can be traced back, in particular, to increased pre-payments for salon openings in the amount of EUR 0.2 million and clearing items of EUR 0.3 million. At the same time, however, cash on hand decreased in the first quarter from EUR 9.8 million as of 31 December, 2013 to EUR 6.7 million as of the end of the first quarter of On the liabilities side, the equity ratio increased to 68.1% as of 31 March, 2014 after 64.0% as of the previous year s balance sheet date. Apart from an increase of equity from EUR 36.8 million to EUR 37.3 million, this was also achieved by a reduction of liabilities. While only slight changes were recorded regarding long-term liabilities (EUR 9.6 million compared to EUR 9.8 million as of balance sheet date 2013), short-term liabilities decreased from EUR 10.9 million as of 31 December, 2013 to EUR 7.9 million as of 31 March, Here, in particular, accounts payable decreased from EUR 3.2 million to EUR 1.1 million. Total liabilities thus amounted to EUR 17.5 million after EUR 20.7 million as of 31 December, The balance sheet total as of 31 March 2014 finally showed EUR 54.8 million after EUR 57.5 million as of balance sheet date of The investment volume of Essanelle Hair Group AG in the first three months of 2014 amounted to approximately EUR 0.8 million compared to EUR 0.5 million in the same period of the previous year. This reflects the continued growth strategy with a total of eight new openings in the first quarter. A total of EUR 0.5 million was invested in the new salons plus EUR 0.3 million in pre-payments another EUR 0.3 million also went into the renovation of existing salons. The cashflow calculation of Essanelle Hair Group shows the traditional net cash outflow from current business activities in the first quarter. In the first three months of this year, it amounted to 2.0 after EUR 1.5 million in the previous year. The net cash outflow from investment activity in the first quarter of 2014 ranged at EUR 0.8 million after EUR 0.4 million in the same quarter last year. A major position here remains the purchase of tangible assets. At EUR -0.2 million, cashflow in the sector of financing activity remained on the previous year s level after new repayments of financial liabilities. The total decrease in cash thereby amounts to EUR 3.1 million compared to EUR 2.1 million in the first quarter of the previous year. This results in cash and cash equivalents in the amount of EUR 6.7 million as of 31 March, 2014 after EUR 5.8 million at the end of the same quarter last year.

8 8 Q1/2014 ESSANELLE HAIR GROUP DEVELOPMENT OF COSTS AND PRICES Costs of Essanelle Hair Group AG have not exhibited any unexpected fluctuations over the course of the year to date. The prices charged by the company will be adjusted within the framework of medium term cost development. EMPLOYEES The number of employees reached 4,058 at the end of the quarter and, as such, ranged above the level at the end of the same quarter in the previous year by 13 employees, at a total of 4,045 employees. Presently, 41.2% are employed on a part-time basis (previous year: 40.8%). At 8.4% (339 trainees), the trainee ratio ranges significantly above the previous year s value of 7.9% (318 trainees) thereby confirming the deliberate expansion of the company s training activities. RISK REPORT The detailed risk report of Essanelle Hair Group AG can be found in the Annual Report 2013 on Pages 51 to 55. In this report, possible risks which could damage the company are described, as are the necessary counter-measures within the risk management system.

9 Q1/2014 ESSANELLE HAIR GROUP 9 THE SHARE In the first quarter of 2014, the German stock index (DAX) continued to be volatile, but at the end of the three-month period, was virtually unchanged on the level at the beginning of the year. Starting from the 9,552 points on 30 December, 2013, the Dax first reached its annual high of 9,743 points (17 January, 2014) and marked a low of 9,018 points on 13 March The end of day trading of the first quarter on 31 March, 2014 was again at 9,556 points. The share of Essanelle has generally performed positively since the beginning of the year and increased to its present high of EUR 13 after the ad-hoc on 10 February, with the announcement of the merger law squeeze-out by the HairGroup AG. Subsequently, a sideways movement followed with a price of EUR at the end of the quarter. At a price of EUR at the beginning of the year, this means a performance of approximately 23.7% in the first quarter. Within Investor Relations, the first quarter of the current financial year was marked by the creation and publishing of the Annual Report containing detailed information about the 2013 financial year and the central theme regarding the work of distribution managers at Essanelle Hair Group. The various activities and tasks during the daily routine of a sales manager were shown as an example in an image and text reportage. After submission of the annual results, the analysts of Close Brothers Seydler classified the share of Essanelle Hair Group with Sell in reference to the special situation of a possible squeeze-out. performaxx Research classified the stock as a hold due to the strong performance in the first quarter. SHAREHOLDER STRUCTURE (DATE: 31 MARCH, 2014) HairGroup AG 89.78% (HairGroup AG: of the share capital and shares of Essanelle Hair Group AG, taking into account treasury shares of Essanelle Hair Group AG) (91.2%) Freefloat according to German Stock Exchange 10.22% DATA FOR THE SHARE IN THE 1ST QUARTER 2014 Maximum price Xetra EUR 13 Lowest price Xetra EUR Performance 01 January 31 March, % Share price as of 31 March, 2014 Xetra EUR Authorised capital EUR 4,595,044 Market capitalisation as of 31 March, 2014 EUR 59.7 million

10 10 Q1/2014 ESSANELLE HAIR GROUP OUTLOOK The outlook for the current financial year remains cautiously optimistic. Overall, the sales performance in the existing concepts as well as the earnings performance in the first quarter of the current financial year ranged within the scope of our own expectations. A good performance by the salons of all existing concepts contributed to this. Furthermore, rising personnel expenses due to the statutory minimum wage could largely be offset with corresponding price increases. Approximately 30 new salons in the existing concepts are to be opened in The rather weak department store environment continues to be a factor of uncertainty for the described sales development. Regarding earnings performance, the second stage of the statutory minimum wage, starting in August of the current year is a particularly important factor. It is unforeseeable how customers will take another price increase and to what degree sales will increase and the further increasing personnel expenses can be offset. In the opinion of the Management Board, the overall positive experience from the previous year cannot be transferred one-to-one. For the whole of 2014, the Management Board sticks to its projection of sales revenue of 3-5% above the previous year s value. The goal of an EBT of EUR million also remains in place. Because of the good overall performance in the first quarter, the Management Board believes that a solid foundation has been created for achieving the objectives set for the financial year of 2014.

11 11 Q1/2014 ESSANELLE HAIR GROUP CONSOLIDATED BALANCE SHEET (IFRS) as of 31 March 2014 ASSETS ASSETS Long-term assets Property, plant and equipment 19,271, ,548, Goodwill 19,558, ,558, Other intangible assets 96, , Interests 4, , Other loans 165, , ,097, ,371, Short-term assets Other loans 50, , Inventories 7,850, ,619, Accounts receivable 38, , Other assets 1,042, , Cash and cash equivalents 6,683, ,800, ,665, ,100, Total assets 54,763, ,471,639.00

12 Q1/2014 ESSANELLE HAIR GROUP 12 SHAREHOLDERS EQUITY AND LIABILITIES SHAREHOLDERS EQUITY Capital and reserves allocable to the shareholders in the parent company Share capital 4,522, ,522, Capital reserve 15,717, ,717, Revenue reserves 17,069, ,537, ,310, ,777, DEBT Long-term debt Financial debt 799, ,043, Deferred tax liabilities 5,899, ,933, Pension provisions 1,290, ,250, Other provisions 1,579, ,589, ,569, ,816, Short-term debt Financial debt 980, , Accounts payable 1,141, ,166, Current income tax liabilities 31, , Other liabilities 2,282, ,775, Other provisions 3,446, ,919, ,882, ,877, Total debt 17,452, ,693, Total shareholders equity and liabilities 54,763, ,471,639.00

13 13 Q1/2014 ESSANELLE HAIR GROUP CONSOLIDATED INCOME STATEMENT (IFRS) for the period from 1 January 2014 to 31 March Sales 32,269, ,816, Other operating income 158, , Cost of materials -2,465, ,511, Personnel expenses -18,634, ,727, Depreciation and amortisation -1,100, ,095, Rental and ancillary rental expenses -6,429, ,252, Other operating expenses -2,903, ,707, Operating earnings 894, , Financial income 11, , Financial expenses -51, , Financial result -39, , Earnings before taxes 855, , Tax expenses -290, , Consolidated earnings 565, , Other gains or losses: Items that are not subsequently reclassified to profit or loss Revaluation of liabilities from employee benefits after termination of employment -32, Consolidated net income 532, , Earnings per share basic diluted

14 Q1/2014 ESSANELLE HAIR GROUP 14 CONSOLIDATED CASHFLOW STATEMENT (IFRS) for the period from 1 January 2014 to 31 March 2014 k CASHFLOW FROM OPERATING ACTIVITIES Cash generated by ongoing business activities -1, Interest paid Taxes on income paid Net outflow of funds for operating activities -2,040-1, CASHFLOW FROM INVESTMENT ACTIVITIES Acquisition of property, plant and equipment Acquisition of intangible assets Loans repaid 7 9 Interest received 2 2 Net outflow of funds for investment activities CASHFLOW FROM FINANCE ACTIVITIES Repayment of financial debt Net outflow of funds for financing acivities Net decrease in cash and cash equivalents -3,117-2,134 Cash and cash equivalents at the beginning of the year 9,800 7,933 Cash and cash equivalents at 31 March 6,683 5,799

15 15 Q1/2014 ESSANELLE HAIR GROUP SCHEDULE OF CHANGES IN GROUP EQUITY (IFRS) as of 31 March 2014 Share capital Capital reserve Revenue Total reserves equity Balance at 1 Jan ,522, ,717, ,325, ,565, Dividend payout -2,261, ,261, Consolidated earnings 3,390, ,390, Other result 82, , Consolidated net income 3,473, ,473, Balance at 31 Dec ,522, ,717, ,537, ,777, Balance at 1 Jan ,522, ,717, ,537, ,777, Dividend payout Consolidated earnings 565, , Other result -32, , Consolidated net income 532, , Balance at 31 March ,522, ,717, ,069, ,310,365.40

16 Q1/2014 ESSANELLE HAIR GROUP 16 COMPANY SHORT NOTES ACCOUNTING STANDARDS This Quarter Report has been prepared in accordance with the current accounting regulations of the International Financial Reporting Standards (IFRS). The balancing and assessment standards correspond to those of the last Annual Report as of the end of financial year Consequently, the Interim Report has to be viewed in context of the audited Annual Report as of 31 December, 2013 and its notes. The consolidated interim financial statements have not been audited. Various information and notes, which normally belong to a consolidated financial statement set up according to IFRS, have been presented in shortened form or left out altogether. CONSOLIDATED COMPANIES No changes were made in the first three months of 2014 regarding the consolidated companies. SEGMENT REPORTING The requirements for segment reporting have neither been met in regional nor in factual or organisational respect. Further information regarding this can be found on Page 85 in the notes of the Annual Report EARNINGS PER SHARE The undiluted and diluted earnings per share in the first three months of the current financial year amount to EUR 0.12 after EUR 0.08 in the same quarter last year.

17 17 Q1/2014 ESSANELLE HAIR GROUP POST BALANCE SHEET DATE EVENTS With a letter to the ESSANELLE HAIR GROUP AG dated 5 May, 2014, the HairGroup AG confirmed their request for transfer, first demanded on 10 February, 2014, pursuant to 327a Section 1 Sentence 1 AktG in conjunction with 62 Section 1 and 5 Transformation Act and in the context of merger law squeeze-out set the adequate cash compensation to be granted to the excluded minority shareholders pursuant to 327a Section 1 Sentence 1 AktG in conjunction with 62 Section 5 Transformation Act at EUR per share of ESSANELLE HAIR GROUP AG. The company has confirmed its intention to enter into a merger agreement in which the ESSANELLE HAIR GROUP AG will merge with HairGroup AG and in which context the minority shareholders shall be excluded. Taking into account ESSANELLE HAIR GROUP AG s own shares, the HairGroup AG continues to hold more than 90% of the share capital of ESSANELLE HAIR GROUP AG. The Management Board of ESSANELLE HAIR GROUP AG and the Management Board of HairGroup AG have already drafted a merger agreement between the ESSANELLE HAIR GROUP AG as the transferring company and the HairGroup AG as the acquiring company, which allows the merger law squeeze-out to take place. The Management Board of ESSANELLE HAIR GROUP AG intends to enter into this Merger Agreement with the HairGroup AG on 15 May, At the Annual General Meeting of ESSANELLE HAIR GROUP AG, which is expected to take place on 27 June, 2014, among other things it is proposed that the transfer decision for the merger law squeeze-out be made. BUSINESS TRANSACTIONS WITH CLOSELY RELATED COMPANIES AND INDIVIDUALS Business transactions with closely related companies and individuals can be found on page 117 of the Annual Report No further changes have been made in the current financial year.

18 Q1/2014 ESSANELLE HAIR GROUP 18 CONTACT Investor Relations, Business press Stockheim Media GmbH Michael Müller Fon +49 (0)2156/ Fax +49 (0)221/ IMPRINT Published by Essanelle Hair Group AG Himmelgeister Straße Düsseldorf Fon +49(0)211/ Fax +49(0)211/ Concept, text and design Stockheim Media GmbH visuphil, Düsseldorf Photography: Andreas Bretz, Düsseldorf

19 Essanelle Hair Group AG Himmelgeister Straße Düsseldorf Fon +49(0)211/ Fax +49(0)211/