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GERRY WEBER publishes Annual Report for stub financial year 2019

April 09, 2020

• Consolidated sales of EUR 330.5 million in line with latest forecast
• Controlling relevant normalised EBITDA at EUR -6.2 million
• Positive consolidated net income of EUR 119.3 million benefited from restructuring income from the derecognition of insolvency liabilities
• Impact of corona pandemic threatening the very existence
• In the event of an early resumption of business, revenues for 2020 are expected in the range of EUR 260 million - EUR 280 million

Halle/Westphalia, 9 April 2020 – GERRY WEBER International AG today published its consolidated financial statements for the stub financial year 2019. The stub financial year is the period from 1 April 2019 to 31 December 2019 and thus is exactly the period in which the company was in insolvency proceedings under self-administration. The Annual Report for the stub financial year 2019 is available online at:

https://ir.gerryweber.com/websites/gerryweber/English/4100/annual-reports.html

GERRY WEBER International AG generated consolidated sales of EUR 330.5 million in the stub financial year 2019, which was in line with the latest revenue forecast for this reporting period of approx. EUR 330 million. Comparisons with the previous year are only possible to a limited extent, as the stub financial year 2019 represents a period of nine months, while the period of the previous year 2018/19 covers only five months. In addition, the reporting period does not take into account the financial figures of the former HALLHUBER segment, which was sold in July 2019 and is already reported as discontinued operations in the previous period.

Consolidated earnings before interest, taxes, depreciation and amortization (Group EBITDA reported) were significantly positive in the 2019 stub financial year, mainly due to the restructuring income from the pro rata derecognition of insolvency liabilities. It amounted to EUR 176.7 million after EUR 7.6 million in the stub financial year 2018/19. Overall, EBITDA benefited from income to be normalised netted with corresponding expenses of EUR 145.0 million. Adjusted for these extraordinary factors, normalised EBITDA for the stub financial year 2019 amounted to EUR 31.7 million, including EUR 37.9 million in earnings-reducing effects resulting from the first-time adoption of lease accounting in accordance with IFRS 16. Adjusted for all effects, normalised EBITDA, which are the relevant controlling indicator, amounted to EUR -6.2 million. The previous year’s normalised EBITDA excluding extraordinary charges had amounted to EUR 2.2 million. The normalised EBITDA margin (adjusted consolidated EBITDA) excluding the IFRS 16 effects stood at -1.9% in the stub financial year 2019 (previous year: 1.0%).

Depreciation mainly due to new IFRS rule only

The Group’s depreciation/amortisation amounted to EUR 46.8 million in the stub financial year 2019, compared to EUR 137.7 million in the stub financial year 2018/19. While depreciation/amortisation as at 31 March 2019 was greatly influenced by extensive impairment losses on property, plant and equipment, in particular Ravenna Park, and amortisation of goodwill and intangible assets, the first-time adoption of IFRS 16 resulted in depreciation/amortisation totalling EUR 30.8 million in the stub financial year 2019. Write-downs for impairment in conjunction with the restructuring of the Group were no longer required in the stub financial year 2019.

Taking into account depreciation/amortisation, the Group’s reported EBIT for the stub financial year 2019 amounted to EUR 130.0 million (previous year: EUR -130.1 million) and the EBIT margin (reported) stood at 39.3% (previous year: -60.4%). Total non-operating income and expenses amounted to a positive EUR 145.0 million in the stub financial year 2019 (previous year: negative amount of EUR 118.0 million). Adjusted for these extraordinary effects and the earnings-reducing effects from the first-time adoption of lease accounting to IFRS 16 in the amount of EUR 7.1 million, the Group’s normalised EBIT for the stub financial year 2019 amounted to EUR -22.2 million (previous year: EUR -12.1 million), while the adjusted EBIT margin stood at -6.7% (previous year: -5.6%). Taking into account taxes on income and income, consolidated net income for the stub financial year 2019 amounted to EUR 119.3 million, mainly benefited by restructuring income from the derecognition of insolvency liabilities. In the previous year, the Group posted a net loss for the year of EUR 244.5 million.

624 self-managed stores and point of sale worldwide

As part of the repositioning and restructuring of GERRY WEBER, which has been ongoing since autumn 2018, the company closed 174 (net) of its self-managed stores and point of sales worldwide in the stub financial year 2019. Previously, GERRY WEBER International AG operated 798 retail spaces globally as of 31 March 2019. At the end of December 2019, there were 624. In Wholesale, the number of GERRY WEBER franchise stores and shop-in-shops fell in the period from 31 March 2019 to 31 December 2019 from 2,437 to 2,279. In the stub financial year 2019, GERRY WEBER International AG employs an average of 3,360 people. "Until mid-March 2020, we had been well on track to further improve our performance and our positioning in the market. All levers had and have been identified," commented Florian Frank, Member of the Managing Board of GERRY WEBER International AG and Chief Restructuring Officer (CRO). "Then we were hit with full force by the outbreak of the corona crisis and its far-reaching economic and social consequences. These have presented us – just like the industry as a whole – with unforeseeable and unprecedented challenges. While we have immediately taken a number of measures to secure our operations and the Group’s liquidity, we cannot help but realise that the implications of the coronavirus pandemic are threatening the very existence of our company, especially if the negotiations that have begun regarding the financing measures do not come to a positive conclusion and we cannot obtain additional funding of a low double-digit million amount from it," Florian Frank added.

Measures taken to protect the company

Immediately since the beginning of the corona crisis, the Managing Board of GERRY WEBER International AG, in close coordination with the company's Supervisory Board, has been implementing all possible measures to protect the company. For the majority of employees, short-time work was requested and put into effect. GERRY WEBER is in talks with all landlords in order to obtain relief for the rents to pay. Where appropriate, the company also makes use of legal aid in this respect. Wherever possible, it has negotiated and partly already agreed price reductions and cancellations with its suppliers. In order to secure liquidity, the Managing Board immediately entered into intensive negotiations with all financing partners. The negotiations are still ongoing. In addition, management has once again drafted a far-reaching corporate and financing plan that has been adapted to the current situation and aims to achieve substantial cost reductions in all areas of the company. At this point in time, the Managing Board is convinced that this new concept for the future will secure GERRY WEBER’s business activities until into 2021.

Opening of stores from May 2020 as a basis for further planning

GERRY WEBER currently expects that it will be able to reopen stores in its German core market in early May 2020 and its retail partners will also be able to resume operations. However, it is assumed that sales will recover gradually only. Against the background of the coronavirus crisis and based on the assumptions described above, the company has significantly reduced the range of revenues expected for 2020 to between EUR 260 million and EUR 280 million. It had previously assumed that consolidated revenues would amount to between EUR 370 million and EUR 390 million. Moreover, the company expects the Group’s normalised EBITDA (excl. the effects resulting from the amended lease accounting to IFRS 16 applicable as of April 2019) to come in at a negative medium double-digit million amount. It had originally projected balanced to slightly negative normalised EBITDA (excl. the effects resulting from the amended lease accounting to IFRS 16 applicable as of April 2019) for the calendar year 2020.

"GERRY WEBER's core business model is intact"

"As much as we are currently affected by the coronavirus pandemic, this does not change the fundamentals underlying our long-term confidence for the post-crisis era: GERRY WEBER has strong brands, a highly competent and motivated team and an attractive target group," sums up Alexander Gedat, Chief Executive Officer (CEO) of GERRY WEBER International AG. "The fashion-conscious, self-confident and consumption-oriented customer is out there – she just needs to be even better served by us. The core business model of GERRY WEBER is intact. We will work at full speed to fully exploit the potential of this business model."

About GERRY WEBER Group
GERRY WEBER International AG, headquartered in Halle / Westphalia represents with roughly 3.400 employees one of the largest Fashion- and Lifestyle companies in Europe. The organization distributes premium womenswear in over 60 countries. GERRY WEBER Group consists of the eponymous brand GERRY WEBER, the young brand TAIFUN and the plus-size brand SAMOON. For further Information, visit our website: www.gerryweber.com

Press Contact:
Kristina Schütze
Head of Corporate Communications / Pressesprecherin
Phone: +49 (0)5201 185 320
Mobile: +49 (0)172 577 54 36
Mail: kristina.schuetze@gerryweber.com

Investor Relations Contact:
Lucia Mathée / Gundolf Moritz
MATHEE GmbH / Mirnock Consulting GmbH
Tel: +49 6227 732772
Mail: gmoritz@mirnock-consulting.de