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Adler Modemärkte AG: Significant Impact From Efficiency and Liquidity Optimisation Measures - Seite 2

ADLER reported a seasonally typical after-tax loss of EUR 13.2 million in the first quarter (Q1 2016: loss of EUR 15.0 million). The adjusted earnings per share amounted to EUR -0.71 (based on 18,510,000 no-par value shares) as compared to EUR -0.81 in the same period of the previous year.

Measures target, curb cash outflows in Q1 - Free cash flow only slightly in the red

The measures introduced to optimise cash flows had a clear impact on the cash outflow from operating activities, which amounted to EUR 11.8 million in the first three months of 2017, as compared to EUR 24.9 million in the previous year. In addition to the lower consolidated net loss, this change was attributable first and foremost to the systematic improvement in merchandise management, leading to the sell-off of existing merchandise and a significant reduction in mark-downs. Consequently, the EUR 14.2 million increase in inventories was less pronounced year on year (Q1 2016: EUR 22.7 million). The optimisation of the real estate portfolio also had a positive impact on cash flows. The sale of two buildings in Austria generated net cash inflows of approximately EUR 10 million.

At EUR -4.4 million, free cash flow was significantly higher than the prior-year figure (Q1 2016:

EUR -28.1 million). Excluding the extraordinary effect from the sale of the buildings, free cash flow amounts to approximately EUR -14.9 million, still substantially above the Q1 2016 figure.

Overall, the cash outflow typically seen in the first quarter was reduced significantly year on year: cash and cash equivalents decreased by EUR 7.4 million as compared to the end of 2016 to EUR 35.4 million. In the same quarter of the previous year, that decrease had amounted to EUR 31 million.

Forecast for full year 2017 confirmed

In light of the positive start to the year, ADLER confirms the forecast for the current year, as given in the 2016 Annual Report, despite what continues to be a challenging environment for the textile retail industry. In full year 2017, EBITDA is expected to increase significantly to between EUR 27-30 million (2016: EUR 23.3 million). The measures introduced in 2016 to save costs and increase efficiency are expected to continue to have an impact. This forecast takes into consideration the slight uptick in personnel expenses, due to the increase in wages, salaries and benefits, as well as a slight rise in transport and logistics costs. ADLER expects only minor changes as it pertains to the EUR/USD exchange rate. The same applies to the development of key commodity prices. A slight decline in revenue as compared to the 2016 financial year (EUR 544.6 million) is still expected on account of the challenging industry environment. It is expected that revenue generated by the online shop will once again significantly exceed the 2016 figure.