DGAP-News

Adler Modemärkte AG: Focus on Improved Profitability and Free Cash Flow in 2017

DGAP-News: Adler Modemärkte AG / Key word(s): Final Results Adler Modemärkte AG: Focus on Improved Profitability and Free Cash Flow in 2017 16.03.2017 / 07:30 The issuer is solely responsible for the content of this announcement. Free Cash Flow Increases Significantly to EUR11.4 million in 2016 Focus on Improved Profitability and Free Cash Flow in 2017 EBITDA Expected to Increase to EUR 27-30 Million Despite Difficult Environment

Haibach (near Aschaffenburg), 16 March 2017: Despite a 1.3% improvement in revenue, which amounted to EUR 169.6 million in Q4, Adler Modemärkte AG did not manage to realise prior-year revenue figures in 2016 overall. Given the highly difficult environment for the textile retail industry in general, the Company posted a 3.8% drop in revenue (-4.6% like-for-like) to EUR 544.6 million in the year under review (2015: EUR 566.1 million). However, the Company did succeed in improving online revenue as projected, by 34% to EUR 8.9 million. This corresponds to a 1.6% share of consolidated revenue. The aim is to increase that share to at least 10% over the coming five years.

Final quarter of the year sees substantial year-on-year earnings improvement

The ADLER Group's cost of materials decreased less markedly than did revenue, by 1.7% to EUR 256.5 million. Accordingly, gross profit declined from EUR 304.9 million to EUR 288.1 million and the gross profit on goods sold fell as expected from 53.9% to 52.9%. Since the cost efficiency measures introduced in 2016 had an increasingly noticeable positive effect, the margin rose from 56.6% to 57.0% in the final quarter of the year, however. Although EBITDA fell from EUR 33.3 million to EUR 23.3 million over the year as a whole, thanks to the solid development in the fourth quarter, this figure was significantly higher than the target corridor of EUR 14-17 million that had been defined on 20 October 2016. Earnings before interest and taxes (EBIT) fell from EUR 17.0 million to EUR 6.5 million, and earnings before taxes fell from EUR 12.1 million to EUR 1.7 million. After taxes, ADLER reported only a slight profit of EUR 0.4 million (2015: EUR 7.9 million); however, taking into consideration that a loss of EUR 18.3 million had been reported at the end of the first nine months of the year, the very clear improvement in the closing quarter of the year is evident. Earnings per share was also slightly positive at EUR 0.02 (previous year: EUR 0.43).