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GERRY WEBER confirms preliminary results for the financial year 2016/17 and launches performance programme to improve profitability
- Group revenues (EUR 880.9 million) and EBIT (EUR 10.3 million) in line with
- Extraordinary effects of EUR 9.6 million from the realignment programme
FIT4GROWTH weigh on the Group’s EBIT
- FIT4GROWTH provides good basis for a subsequent performance programme
- Earnings projections for FY 2017/18 at prior year level
The preliminary figures for the past financial year 2016/17 published by GERRY WEBER International AG at the end of January 2018 were
confirmed at today’s annual accounts press conference. For FY 2016/17 (1 November 2016 to 31 October 2017), GERRY WEBER International AG posted sales revenues of EUR 880.9 million (previous year: EUR 900.8 million) and earnings before interest and taxes (EBIT reported) of EUR 10.3 million (previous year: EUR 13.8 million). This means that GERRY WEBER International AG reached the revenue and earnings targets defined in January 2017 for the fiscal year 2016/17.
Sales performance in 2016/17
Although another 68 stores were closed (previous year: 75 store closures), consolidated revenues of the GERRY WEBER Group declined only by a moderate 2.2% to EUR 880.9 million.
The GERRY WEBER Core brands (GERRY WEBER, TAIFUN, SAMOON and talkabout)
contributed EUR 686.6 million (previous year: EUR 717.6 million) to the Group’s revenues.
The 4.4% decline is primarily attributable to the drop in revenues of the GERRY WEBER Core
Retail segment, which was due to both the above-mentioned store closures and the 1.9%
decline in like-for-like revenues to EUR 392.6 million (previous year: EUR 419.2 million). The
reduction in like-for-like revenues is thus in line with the market average. Like-for-like
revenues of the German fashion retail sector were down by approx. 2% on the prior year
period in GERRY WEBER’s fiscal year. Accounting for 63.3% of total revenues, Germany is
the most important output market of the GERRY WEBER Group.
The GERRY WEBER Core Wholesale segment contributed EUR 294.0 million (previous year:
EUR 298.4 million) to the Group’s total revenues. CEO Ralf Weber comments: “The moderate
decline by only 1.5% compared to the previous year clearly reflects the success of the
measures implemented in the context of the FIT4GROWTH programme as well as the
increasing attractiveness of our new collections.”
In the past fiscal year, sales revenues were again driven by HALLHUBER, the Munich-based
subsidiary, whose revenues increased by 6.1% to EUR 194.3 million (previous year: EUR
183.2 million) as a result of the expansion.
The online activities of all brands of the GERRY WEBER Group showed a positive trend.
While online revenues of the Core brands (GERRY WEBER, TAIFUN, SAMOON and
talkabout) increased by 12.9% to EUR 31.5 million, HALLHUBER boosted its revenues by as
much as 14.2% to EUR 20.1 million in the past fiscal year.
Earnings performance in 2016/17
Lower revenues of the GERRY WEBER Core Retail segment and investments in the
collections of our Core brands, GERRY WEBER, TAIFUN and SAMOON, temporarily
weighed on the Group’s gross profit margin, which dropped from 60.4% in the previous year
to 58.6% in 2016/17. The cost savings achieved as a result of the implementation of the
FIT4GROWTH realignment programme failed to offset the decline in gross profit.
Launched in early 2016 and completed with effect from 31 October 2017, the programme
resulted in cost savings of roughly EUR 30 million with regard to personnel and operating
expenses. Personnel expenses declined from EUR 202.7 million to EUR 192.0 million and
other operating expenses even dropped from EUR 308.7 million to EUR 279.3 million in the
fiscal year 2016/17. This means that we exceeded our cost savings target of EUR 20 million
to EUR 25 million set in the context of the FIT4GROWTH programme.
After deduction of operating expenses, the Group’s earnings before interest, taxes,
depreciation and amortisation (Group EBITDA reported) amounted to EUR 58.2 million
(previous year: EUR 77.3 million). Adjusted for the extraordinary effects of EUR 6.2 million
resulting from the FIT4GROWTH programme, the Group’s EBITDA stood at EUR 64.4 million
(previous year: EUR 71.6 million).
The decline in Core revenues, the still low profitability of HALLHUBER’s revenues and, most
importantly, the extraordinary charges arising from the FIT4GROWTH programme had an
adverse impact on the profitability of the GERRY WEBER Group. After deduction of
depreciation/amortisation of EUR 47.9 million, consolidated earnings before interest and
taxes (EBIT reported) amounted to EUR 10.3 million (previous year: EUR 13.8 million).
Adjusted for the extraordinary effects and extraordinary write-downs relating to the FIT4GROWTH programme, consolidated EBIT stood at EUR 19.9 million (previous year:
EUR 23.1 million).
Extraordinary charges resulting from FIT4GROWTH totalled EUR 9.6 million in FY 2016/17;
this amount includes cash expenses of EUR 6.2 million as well as extraordinary write-downs
in conjunction with the store closures of EUR 3.4 million.
After deduction of taxes, the GERRY WEBER Group posted a consolidated net loss of EUR
0.8 million for the fiscal year 2016/17 (previous year: net profit of EUR 0.5 million).
Accordingly, earnings per share declined to EUR -0.02 (previous year: EUR 0.01). Against
the background of the planned investments, especially in the digitalisation of the business
model, and the potential burdens resulting from the performance programme aimed at
improving the company’s profitability the Managing Board and the Supervisory Board have
decided to propose to the Annual General Meeting to carry the full accumulated profits
forward to new account.
Performance programme and outlook on the fiscal year 2017/18
The FIT4GROWTH realignment programme announced in February 2016 was completed at
the end of the fiscal year 2016/17. Nearly all targets and objectives set for the fiscal year were
reached. Apart from the financial targets, these primarily comprise the optimisation of the
Retail operations and the related 143 store closures, the cost savings achieved and the
strengthening of the relationships with our Wholesale partners. The young talkabout brand
and the newly introduced partnership schemes have met with great customer acceptance. In
addition, HALLHUBER continued its controlled growth and opened 55 new points of sale.
Although diverse measures were implemented and considerable cost savings were achieved,
the GERRY WEBER Group has been unable to improve its profitability. Against this
background, the Managing Board and the Supervisory Board decided to initiate further
measures aimed at achieving a sustainable improvement in profitability.
The forward-looking measures planned by the company will primarily be implemented in the
areas of procurement, product development and product range design; besides this, the
company will continue to implement the measures aimed at modernising the brands with great
determination. The measures, whose details yet need to be defined, will result in further
extraordinary effects in FY 2017/18, which will weigh on the GERRY WEBER Group’s EBIT.
In addition, we will continue to invest in the digitalisation of our value chain and the
optimisation of our distribution channels.
In spite of the continued difficult and constantly changing market environment and the
declining sales revenues generated by physical fashion stores, the Managing Board of
GERRY WEBER International AG expects to generate almost stable Group revenues of EUR
870 million to EUR 890 million in the fiscal year 2017/18. The extraordinary charges expected
to result from the performance programme yet to be defined and the investments in the
digitalisation of our business model will weigh on the Group’s bottom line. Consequently, the
Managing Board projects consolidated EBIT (reported) of between EUR 10.0 million and EUR
20.0 million for the fiscal year 2017/18.
CEO Ralf Weber explains: “Thanks to our strong brands, the company’s innovation capacity
and financial strength, and its ability to adapt to changing requirements, we will lead GERRY
WEBER back to sustainable profitable growth and vigorously implement all measures that
are necessary to achieve this goal. We will effectively seize the opportunities that arise in the
context of the digitalisation drive and our proven capacity to establish new, innovative brands
and will continue the GERRY WEBER success story, which already spans more than 40
Key figures of the GERRY WEBER Group:
Forecast of the GERRY WEBER Group for the finial year 2017/18:
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