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TOM TAILOR GROUP with a solid start into the new fiscal year

DGAP-News: TOM TAILOR Holding SE / Key word(s): Quarter Results TOM TAILOR GROUP with a solid start into the new fiscal year 02.05.2017 / 07:30 The issuer is solely responsible for the content of this announcement. TOM TAILOR GROUP with a solid start into the new fiscal year

- Results show initial effects from strategic redirection

- Consolidated sales matches previous year despite portfolio clean-up

- EBITDA, at EUR 8.7 million, grows year-on-year (EUR 6.3 million)

- Free cash flow rises by EUR 17.5 million to EUR -7.8 million

- Further reductions in net debt and inventories

Hamburg, 02 May 2017. The TOM TAILOR GROUP successfully continued implementing its strategic redirection in the first quarter of 2017. The Company pursued the RESET-initiatives to boost efficiency and quality of earnings and was thus able to achieve further visible cost savings. Despite the various store closures, country withdrawals and business unit portfolio trimmings, the Company's consolidated sales, at EUR 218.9 million, remained at prior year's quarter level. Consolidated gross profits amounted to EUR 116.2 million (previous year: EUR 118,9 million). The gross margin reached 53.1 percent (previous year: 54.3 percent). Reported earnings before interest, taxes, depreciation and amortisation (EBITDA) increased to EUR 8.7 million as compared with EUR 6.3 million in Q1 2016, EBIT amounted to EUR - 1.6 million (previous year: EUR -5.9 million).

"After a solid start to the year, we are on target both in terms of business performance and our realignment," said Dr Heiko Schäfer, the CEO of TOM TAILOR Holding SE. "At the same time, we are working at high pressure on strengthening our brands and preparing ourselves for the time after the RESET program's conclusion. The first quarter's results clearly mirror the RESET's impact. However, we still have a lot of work to do."

Segment overview

Sales for the TOM TAILOR umbrella brand increased slightly to EUR 152.3 million (previous year: EUR 151.1 million). Gross profits reached EUR 74.1 million and were on the previous year's level (2016: EUR 74.0 million). The gross margin amounted to 48.7 percent (previous year: 49.0 percent).

The performance of the TOM TAILOR Wholesale segment remained stable. Sales amounted to EUR 87,5 million (previous year: EUR 87.3 million), gross profit to EUR 40.2 million (previous year: EUR 40.2 million). At 46.0 percent the gross profit margin reached the previous year's level. TOM TAILOR Wholesale generated 40 percent of consolidated sales.

Sales for the TOM TAILOR umbrella brand's retail segment rose by 1.4 percent in the reporting period to EUR 64.8 million (previous year: EUR 63.9 million). This was mainly driven by a positive trend in some foreign markets, while activities in Germany were impacted by the ongoing restructuring. The process of selling off old stock through the TOM TAILOR Outlets was speeded up, which negatively impacted the gross margin slightly. Gross profits, at EUR 33.9 million, were nearly unchanged (previous year: EUR 33.8 million), while the gross margin decreased slightly from 52.9 percent to 52.3 percent. The TOM TAILOR Retail segment accounted for 30 percent of consolidated sales.

For the BONITA brand, the top priority in the first quarter of 2017 was the continued focus on its core business. Due to store closures, sales in this segment decreased as expected from EUR 67.8 million to EUR 66.6 million. Gross profits, at EUR 42.1 million, were also below the previous year level (EUR 44.9 million). Here, the decrease was partly due to the reduction of old inventories as well as the sell-off of the BONITA men inventories, which both progressed well in the reporting period. The gross margin in the segment decreased from 66.2 to 63.1 percent. BONITA contributed around 30 percent of consolidated sales.

Improvement in net debt, cash flow and inventories

Net debt went down further in the reporting period. Compared to the first quarter of 2016 it decreased from EUR 246.4 million to EUR 202.8 million. The equity ratio at 31 March 2017 was 22.3 percent (previous year: 25.6 percent).

Cash flow from operating activities increased by EUR 16.3 million in the first quarter of 2017 to EUR -3.7 million. The free cash flow also improved by EUR 17.5 million to EUR -7.8 million. Contributing factors included the ongoing reduction of inventories, which, at EUR 149.7 million, were 25.3 percent less than in the same quarter a year earlier (EUR 200.3 million).

"We are making very good progress in the implementation of our RESET initiatives, and want to complete the restructuring as quickly as possible," says Thomas Dressendörfer, CFO of TOM TAILOR Holding SE. "We are quite satisfied with the decreasing net debt and the lower inventories. However, 2017 is still a transitional year. In some areas it's simply going to take some time, until improvements become visible."

In April 2017, the TOM TAILOR GROUP signed a licensing agreement with the Kids Fashion Group on the production and distribution of its TOM TAILOR Kids line. Future license revenues from this partnership will be offset by the loss of sales from the previous own distribution of the Kids line. As a result the company now expects that group sales in 2017 will be slightly below the previous year's level. The management board continues to expect a sharp increase in the reported EBITDA for the full year.

KEY FIGURES In EUR million	Q1 2017	Q1 2016	Change in percent
Sales	218.9	218.9	0.0
TOM TAILOR Wholesale	87.5	87.3	0.2
TOM TAILOR Retail	64.8	63.9	1.4
BONITA	66.6	67.8	-1.7
Gross profit	116.2	118.9
Gross margin (in %)	53.1	54.3
EBITDA	8.7	6.3	38.2
EBITDA margin (in %)	4.0	2.9	-
EBIT	-1.6	-5.9	73.4
EBIT margin (in %)	-0.7	-2.7	-
Net result for the period	-6.5	-8.8	26.1
Inventories	149.7	200.3	-25.3
Net debt	202.8	246.4	-17.7
Cash flow from operating activities	-3.7	-20.0	81.5
Cash flow from investments	-1.3	-2.1	37.3

 

	31/03/2017	31/12/2016	30/09/2016
Equity	152.2	162.9	144.2
Equity ratio (in %)	22.3	23.4	19.2
Inventories	149.7	159.1	192.9
Net debt	202.8	194.7	246.7
Employees	6,610	6,789	6,925

 

Points of sale	31/03/2017	31/12/2016	30/09/2016
Retail stores	1,383	1,422	1,454
Franchise stores	195	205	207
Shop-in-shops	2,992	3,106	3,142

 

About TOM TAILOR GROUP

TOM TAILOR GROUP is an international, vertically aligned fashion and lifestyle company that focusses on so called Casual Wear offered in the medium price segment. The product portfolio is complemented by a broad range of fashionable accessories. With its umbrella brands TOM TAILOR and BONITA, the Group addresses various segments of the fashion market.

The TOM TAILOR brand is marketed through the retail and wholesale segments, and thus through single-label stores as well as wholesale partners. At the end of 2016, these comprised 469 TOM TAILOR stores and 195 franchise stores, 2.992 shop-in-shops and around 8,400 multi-label points of sale. The brand is present in more than 35 countries.

BONITA has 914 retail stores as well as 56 shop-in-shop spaces.

The collections of both brands are also available through their respective online shops.

Further information is also available at www.tom-tailor-group.com and www.BONITA.eu

Media and investor contact

Felix Zander

Head of Investor Relations & Corporate Communications

TOM TAILOR GROUP

Phone: [phone]

E-Mail: [e-mail]

Lena Christin Wulfmeyer

Senior Manager Corporate Communications

TOM TAILOR GROUP

Phone: [phone]

Email: [e-mail]

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02.05.2017 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

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Language:	English
Company:	TOM TAILOR Holding SE
	Garstedter Weg 14
	22453 Hamburg
	Germany
Phone:	[phone]
Fax:	[phone]
E-mail:	[e-mail]
Internet:	www.tom-tailor-group.com
ISIN:	DE000A0STST2
WKN:	A0STST
Listed:	Regulated Market in Frankfurt (Prime Standard), Hamburg; Regulated Unofficial Market in Berlin, Dusseldorf, Hanover, Munich, Stuttgart, Tradegate Exchange

End of News	DGAP News Service

569099  02.05.2017