six monThs reporT 2011/12 - GERRY WEBERir.gerryweber.com/download/companies/gerryweber/Quarterly... · for the first six months of 2011/12 from 1 November 2011 to 30 April 2012 In

Inter Im report to the fIrst half year 2011/12

six monThs reporT 2011/12

REVIEW OF THE FIRST HALF 2011/12

Following a 7.6% increase in sales revenues in

the first quarter of the financial year 2011/12,

GERRY WEBER International AG boosted its

revenues by an impressive 12.8% in the second

quarter compared to the previous year. The

GERRY WEBER Group’s sales revenues rose

from EUR 187.0 million in the prior year quarter to

EUR 211.0 million in the second quarter of

2011/2012 (1 Feb. - 30 April 2012).

Group sales revenues for the first half of the

current financial year (1 Nov. 2011 - 30 April

2012) totalled EUR 376.0 million, which

represents a year-on-year increase of 10.5%.

The Retail segment accounted for 35.0% of total

Group revenues, up from 29.6% in the first half of

the previous year. The sell-off of the WISSMACH

merchandise taken over with effect from 15 March

2012 contributed about EUR 6.1 million to the

Retail revenues. Although the Wholesale segment

increased its revenues from EUR 236.4 million to

EUR 238.9 million in H1 2011/2012, the

segment’s contribution to total Group revenues

declined from 69.5% to 63.5%.

In spite of one-time start-up and transformation

expenses related to the takeover of the former

WISSMACH stores, we were able to achieve a

significant improvement in earnings before

interest and taxes (EBIT). The EBIT margin

climbed from 13.4% in the second quarter of FY

2010/11 to 13.9% in Q2 2011/12, when earnings

before interest and taxes (EBIT) totalled EUR

29.3 million.

The GERRY WEBER Group’s EBIT for the first

six months of 2011/12 amounted to EUR 47.0

million, with the EBIT margin reaching 12.5%

(previous year: 11.9%).

Net income for the first half of 2011/12 increased

by 24.1% from EUR 25.5 million in the previous

year to EUR 31.6 million. Accordingly, earnings

per share climbed from EUR 0.57 to EUR 0.69.

H1 2011/12 H1 2010/11

in EUR million 1.11.11 - 30.04.12 1.11.10 - 30.04.11

Total assets 450.1 391.7

Equity 346.6 291.1

Total liabilities 103.5 100.6

Equity ratio 77.0% 74.3%

Key figures GERRY WEBER share

High H1 2011/12 (in Euro) 32.45 22.30

Low H1 2011/12 (in Euro) 20.44 16.30

Earnings per share (in Euro) 0.69 0.57

Investments 38.0 18.2

Number of employees (30 April 2012) 4,209 2,861

GERRY WEBER International AG Interims Report H1 2011/12

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Q2 2011/12 Q2 2010/11 H1 2011/12 H1 2010/11

in EUR million 1.2.12 - 30.04.12 1.2.11 - 30.04.11 1.11.11 - 30.04.12 1.11.10 - 30.04.11

Sales 211.0 187.0 376.0 340.4

Wholesale 137.8 133.3 238.9 236.4

Retail 68.9 51.3 131.8 100.7

Earnings figures

EBITDA 33.5 27.9 55.1 46.4

EBITDA margin 15.9% 14.9% 14.6% 13.6%

EBIT 29.3 25.1 47.0 40.6

EBIT margin 13.9% 13.4% 12.5% 11.9%

EBT 28.8 24.4 46.0 39.2

EBT margin 13.7% 13.1% 12.2% 11.5%

Net profit of the reporting period 20.2 15.7 31.6 25.5


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NEWS FROM THE COMPANY

Another important strategic goal of the GERRY

WEBER Group is the internationalisation of the

business model and the entry into new markets.

Today, GERRY WEBER is a global corporation

which has distribution structures in over 60

countries of the world. Our global distribution

structures extend from Europe to Russia and the

Middle East to Asia and Australia. Local partners

sell our stylish, high-quality fashion also in South

Africa and North America.

Building on our franchised Houses of GERRY

WEBER in Canada, we started selling the

GERRY WEBER collection in the United States of

America at the end of January 2012. In keeping

with our conservative strategy of entering into new

markets, we started with two shop-in-shops in

department stores of our partner, Bloomingdale’s.

Operating a total of 46 stores, Bloomingdale’s is

certainly one of the best known department store

chains in the USA. The GERRY WEBER

collection is now also sold in a number of stores

of the Dillard’s department store chain. Dillard’s

has a store network in over 200 US locations.

Today, a few weeks after the sales start of our

GERRY WEBER collection, we can state that our

market entry in the USA has been a great

success. The two Bloomingdale’s stores in

Lennox (Atlanta) and Boca Raton (Florida) feature

EDI connections and report the revenues and

sales of our products on a daily basis.

Our fashion products are very much appreciated

by US consumers even without a large-scale

advertising campaign and a huge advertising

budget. This confirms our belief that our fashion is

the best advertising medium.

Due to the big success of our brand, our

collections are meanwhile available at eleven

Dillard’s stores and further stores will follow.

Moreover, we are currently working on our future

expansion strategy in the USA together with

Bloomingdale’s. While we currently have a

presence in the USA through our GERRY

WEBER core brand, we also see huge potential in

the US market for our two other brands, TAIFUN

and SAMOON.


3

THE GERRY WEBER SHARE The GERRY WEBER share showed a very good

performance in the first half of the financial year

2011/12 and outperformed the MDAX benchmark

index.

Since the end of the financial year on 31 October

2011, the GERRY WEBER share has gained

42.6%. The XETRA closing price on 30 April 2012

was EUR 32.08. By comparison, the MDAX,

which includes the GERRY WEBER share,

climbed 19.3% to 10,828.25 points on 30 April

2012.

Shareholders participated not only in the good

performance of the share but also benefited from

a dividend increase from EUR 0.55 to EUR 0.65

per share. This represents an 18.2% increase on

the previous year’s dividend. Over the past five

years, the dividend has risen by approx. 225%.

The ordinary Annual General Meeting of GERRY

WEBER International AG was held after the

reporting period, on 5 June 2012, in Halle

(Westphalia). A vast majority of the roughly 1,100

attending shareholders approved the items on the

agenda. Among the most important resolutions

was the above-mentioned dividend increase to

EUR 0.65 per share. The company will thus

distribute a total amount of EUR 29.8 million. The

remaining profit of EUR 18.4 million will be carried

forward to new account. Moreover the

shareholders approved the actions of the

Managing Board and the Supervisory Board

during the financial year 2010/11.

MDAX

GERRY WEBER share


4

INTERIM GROUP MANAGEMENT REPORT for the first six months of 2011/12

from 1 November 2011 to 30 April 2012

In the second quarter of 2011/12, we once again

demonstrated that we continue our growth

strategy with great determination. The acquisition

of 200 former WISSMACH stores in Germany with

effect from 15 March 2012 and the opening of 21

new company-managed Houses of GERRY

WEBER only in Q2 2011/12, of which four were

opened outside Germany, mean that we once

more accelerated the expansion of the Retail

segment. In the Wholesale segment, we opened

in Q2 19 Houses of GERRY WEBER as well as

148 new shop-in-shops together with our

franchising and distribution partners.

Sales performance

Following a 7.6% increase in sales revenues in

the first quarter of the financial year 2011/12,

GERRY WEBER International AG boosted its

revenues by an impressive 12.8% in the second

quarter compared to the previous year. The

GERRY WEBER Group’s sales revenues rose

from EUR 187.0 million in the prior year quarter to

EUR 211.0 million in the second quarter of

2011/2012 (1 Feb. - 30 April 2012).

Group sales revenues for the first half of the

current financial year (1 Nov. 2011 - 30 April

2012) totalled EUR 376.0 million, which

represents a year-on-year increase of 10.5%.

Just like in Q1 2011/12 reported, we postponed

delivery dates of part of our collections. The aim

of these shifts is to get the delivery date closer to

the actual time of sale of the products in the

stores and shops. We are constantly striving to

improve our merchandising processes and to

optimise them for the benefit of our company and

our distribution partners.

The Retail segment generated sales revenues of

EUR 68.9 million, which represented approx.

32.7% of the Group’s second-quarter revenues.

The Retail segment’s contribution in the full first

half of 2011/12 amounted to as much as EUR

131.8 million or 35.0%, compared to 31.0% at the

end of the past financial year.

The company-managed Houses of GERRY

WEBER contributed almost three quarters, i.e.

74.4%, to the Retail segment’s first-half revenues.

Our three online shops also showed a good

performance and contributed 5.9% to our Retail

revenues. The medium-term target for the online

shops is a contribution of roughly 10%.

Sales split Retail H1 2011/12

Online Shops; 5.9%

Concession3.9%

Outlets15.8%

HoGWs 74.4%


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The Wholesale segment generated sales

revenues of EUR 137.8 million in the second

quarter 2011/12, compared to EUR 101.1 million

in the previous quarter. Accordingly, the

segment’s contribution to total Group revenues

increased from 61.3% to 65.3%. Wholesale

revenues in the full first half of 2011/12 rose from

EUR 236.4 million to EUR 238.9 million. The

segment’s contribution to Group sales in the first

six months of the current financial year amounted

to roughly 63.5 %.

At the end of the reporting period, 285 Houses of

GERRY WEBER were managed by franchisees,

which means that 25 new franchised Houses of

GERRY WEBER were opened in H1 2011/12,

thereof 20 abroad. The number of shop-in-shops

rose by 203 to 2,495 as of the end of the first half

of 2011/12.

43 company-managed Houses of GERRY

WEBER were opened in the first six months of

2011/12, thereof 20 outside Germany. Moreover,

we opened three new concession shops in the

department stores of our Spanish distribution

partner, El Corte Inglès.

The non-consolidated domestic revenues

generated by the GERRY WEBER, GERRY

WEBER EDITION, G.W. as well as TAIFUN and

SAMOON brands totalled EUR 313.5 million in H1

2011/12, up 10.9% on the same period of the

previous year (EUR 282.7 million). Domestic

brand revenues comprise the revenues generated

by our brand companies through sales to the

GERRY WEBER Retail segment and our

wholesale customers.

Split sales by segments H1 2011/12

Retail35,0%

Others1,5%

Wholesale 63,5%

H1 2011/12 2010/11

1.11.11 - 30.04.12 1.11.10 - 31.10.11

RETAIL

Houses of GERRY WEBER 278 235

Concession Flächen 48 45

Factory Outlets 13 13

WHOLESALE

Houses of GERRY WEBER 285 260

Shop-in-Shops 2,495 2,292


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Our second largest brand, TAIFUN, showed a

particularly positive performance, boosting its

contribution to total brand revenues from 15.7% in

the first quarter to 17.4%. In the first half of the

current financial year, the TAIFUN brand

generated sales revenues of EUR 54.5 million

(previous year: EUR 47.3 million). This positive

performance confirms our belief that the TAIFUN

brand has great potential. To live up to this

positive market estimate and the growing

demand, we will convert some 120 of the

WISSMACH stores acquired in March 2012 into

TAIFUN mono-label stores. As the conversion has

already started, we were able to open the first

TAIFUN mono-label stores in May 2012.

The GERRY WEBER core brand and its two

sublabels, GERRY WEBER EDITION and G.W.,

accounted for approx. 77.6% of the total brand

revenues in the first six months of the current

financial year (H1 2010/11: 78.1%). The GERRY

WEBER brands including GERRY WEBER

EDITION and G.W. contributed an amount of

EUR 243.5 million.

Our brand portfolio is complemented by the

SAMOON brand, which accounted for about 5.0%

of the total brand revenues in H1 2011/12. The

brand for plus sizes generated revenues of EUR

15.5 million, up 6.2% on the previous year.

A breakdown of the consolidated first-half

revenues by regions shows that Germany

accounted for EUR 243.8 million or 64.8%. The

international markets contributed EUR 132.2

million to total Group revenues. The fact that

domestic Group sales increased from 59.9% at

the end of FY 2010/11 to 64.8% is due, among

other factors, to the acquisition of some 200

former WISSMACH stores as well as the opening

of company-managed Houses of GERRY WEBER

in Germany.

Earnings position

We were able to increase our Group revenues by

12.8% to EUR 211.0 million in the second quarter

of 2011/12. Our earnings position improved

disproportionately. Earnings before interest and

taxes in Q2 2011/12 were up by 16.8% on the

prior year quarter to EUR 29.3 million (previous

year: EUR 25.1 million). Accordingly, the EBIT

margin improved from 13.4% to 13.9% in Q2

2011/12.

On a six-month basis, earnings before interest

and taxes rose from EUR 40.6 million to EUR

47.0 million, which represents an increase of

15.8%. The EBIT margin climbed from 11.9% in

H1 2010/11 to 12.5% in H1 2011/12. The growth

rates show that we are well on track to reach our

profitability targets for the financial year 2011/12.

We expect the EBIT margin to improve by 30 to

40 basis points on the previous year to 14.5% -

14.6%.

Due to the seasonality of our business model and

the postponement of the delivery dates, our

inventories increased in the first quarter of

Sales split by brands H1 2011/12

TAIFUN17.4%

SAMOON5.0%

GERRY WEBER 77.6%


7

2011/12 (+EUR 24.4 million), which was offset in

the following quarter, when inventories were

reduced by EUR 22.4 million. A look at the first six

months of 2011/12 shows that inventories slightly

increased by EUR 2.1 million.

Although sales revenues were up by 10.5% on

the first half of the previous year, the cost of

materials only rose slightly by 7.0% to EUR 187.0

million. Accordingly, the cost of materials as a

percentage of sales improved markedly from

52.1% to 49.5% in H1 2011/12. Besides lower

commodity prices, this is primarily attributable to

better purchasing terms. The improvement in

purchasing terms clearly reflects the success of

our flexible sourcing system for the selection of

our manufacturing partners. The trend in the cost

of materials ratio also reflects the increasing

importance of our Retail business.

Compared to the first three months of the current

financial year (EUR 27.3 million), personnel

expenses rose to EUR 30.3 million in the second

quarter. The increase is mainly attributable to the

expansion of our Retail activities, as a result of

which new jobs were created at the newly opened

Houses of GERRY WEBER. Also, the personnel

expenses for the second quarter of 2011/12 for

the first time included the personnel costs for the

WISSMACH employees taken over with effect

from 15 March 2012. The integration of some 850

former WISSMACH employees led to a

disproportionate increase in personnel expenses

in Q2 2011/12.

The same applies to other operating expenses,

which were up by 28.6% on the first quarter to

EUR 47.6 million in Q2 2011/12. Compared to the

full first half of the previous year, other operating

expenses increased by 20.2% to EUR 84.5 million

(previous year: EUR 70.4 million). With regard to

the rise in fixed costs, it should be noted that 83

new Houses of GERRY WEBER were opened in

the past nine months alone, which entailed a

significant increase in rental expenses. The latter

were up by EUR 8.3 million on the second half of

the previous year. Compared to the established

Houses of GERRY WEBER, these new HOGWs

are still making below-average contributions to

sales revenues and earnings.

Taking into account increased

depreciation/amortisation in the amount of EUR

8.1 million (H1 2010/11: EUR 5.8 million), which

relates, among other things, to the shop fittings of

our Houses of GERRY WEBER, earnings before

interest and taxes (EBIT) in the first six months of

2011/12 were up by an impressive 15.8% on the

same period of the previous year to EUR 47.0

million. Reflecting the improvement in EBIT, the

EBIT margin climbed from 11.9% to 12.5%

Due to the scheduled repayment of long-term

loans, the financial result improved from EUR -1.4

million to EUR -1.0 million in the first half of the

financial year.

Earnings before interest and taxes improved from

EUR 24.4 million in Q2 2010/11 to EUR 28.8

million in the second quarter of 2011/12. The

same applies to six-month EBIT, which climbed

from EUR 39.2 million in H1 2010/11 to EUR 46.0

million in the first six months of the current

financial year.

After income taxes of EUR -8.7 million, the

GERRY WEBER Group’s net income for Q2

2011/12 climbed to EUR 20.2 million (previous

year: EUR 15.7 million). Net income for the first

six months amounted to EUR 31.6 million, which

represents an increase of 24.1% on the same

period of the previous year.


8

Accordingly, earnings per share improved from

EUR 0.57 to EUR 0.69.

Net worth position

On the assets side of the balance sheet for the

period ended 30 April 2012, total assets were up

by 8.5% to EUR 450.1 million compared to the

end of the financial year 2010/11 (31 October

2011). This is primarily attributable to an increase

in fixed assets and current other assets.

Property, plant and equipment include the shop

fittings of the company-managed Houses of

GERRY WEBER. Due to the opening of new

company-managed Houses of GERRY WEBER,

property, plant and equipment increased by EUR

10.3 million from the end of the financial year

2010/11 to EUR 127.9 million at the end of H1

2011/12. Intangible assets climbed by EUR 11.2

million to EUR 30.4 million, primarily due to the

acquired rights to take over the existing leases on

conjunction with the DON GIL and WISSMACH

transaction.

Investment properties comprise the carrying

amount of Hall 30 in Düsseldorf. The building

provides exhibition space for various fashion

companies and is fully let to external tenants.

Construction measures carried out in the first six

months of 2011/12 increased the carrying amount

of this building from EUR 21.2 million to EUR 25.8

million.

Against the background of the expansion of the

Retail activities and the takeover of inventories in

the context of the WISSMACH transaction,

inventories increased by a moderate EUR 3.5

million to EUR 92.0 million.

Other current assets rose from EUR 11.9 million

to EUR 23.5 million at the end of the first half of

2011/12. This is primarily attributable to higher

VAT tax refund claims.

Liquid funds declined from EUR 90.6 million at the

end of the financial year 2010/11 to EUR 85.9

million on the reporting date on 30 April 2012,

which is primarily attributable to the takeover of

DON GIL and former WISSMACH stores as well

as to increased investments in the expansion of

our own Retail activities.

On the liabilities side of the balance sheet, equity

capital rose by another EUR 19.2 million to EUR

346.6 million, having increased by EUR 13.5

million in Q1 2011/12. Accordingly, the equity ratio

stood at 77.0% (31 October 2011: 75.7%).

Current and non-current financial liabilities were

reduced by EUR 2.9 million (-13.7%) to EUR 18.4

million as of the end of H1 2011/12 due to

scheduled repayments. By contrast, current and

non-current provisions rose by EUR 5.1 million to

EUR 31.7 million, which is primarily attributable to

an increase in other provisions.

An equity ratio of 77.0% and liquid funds of EUR

85.9 million, which contrast with financial liabilities

of EUR 18.4 million and provisions of EUR 31.7

million, mean that the GERRY WEBER Group has

a very sound balance sheet structure.


9

Financial assets and investments

Due to investments in the expansion of our Retail

activities, especially the opening of 43 new

company-managed Houses of GERRY WEBER,

and the price paid for the acquisitions of the DON

GIL and WISSMACH stores and their inventories,

liquid funds declined by EUR 4.6 million as of the

end of the reporting period (30 April 2012)

compared to the end of the previous financial year

(31 October 2011).

Compared to the first half of the previous year,

cash flow from operating activities climbed from

EUR 21.9 million to EUR 37.1 million. The strong

increase is mainly due to the company’s

operational sales growth.

As a result of the expansion of our business

activity, cash outflow from investing activities also

increased markedly from EUR 17.5 million in H1

2010/11 to EUR 37.8 million. Reasons for the

increased cash outflow include higher

investments in fixed and intangible assets, which

rose from EUR 10.4 million to EUR 19.0 million.

Extensive investments were required primarily in

conjunction with the opening of 43 new company-

managed Houses of GERRY WEBER. The

purchase price for the former DON GIL and

WISSMACH stores also contributed to the higher

cash outflow from investing activities in an amount

of EUR 14.1 million.

Cash outflows from financing activities totalled

EUR 2.9 million in the first six months of 2011/12

and included the scheduled repayment of financial

loans. The first half of the previous year was

influenced by the sale of own shares, which

resulted in an inflow of cash of EUR 48.0 million.

As a result, cash and cash equivalents declined

by EUR 4.6 million to EUR 85.9 million as of the

reporting date on 30 April 2012.

Segment report

GERRY WEBER International AG defines its

segments in accordance with its internal

organisational and reporting structures. A

distinction is thus made between “Production and

Wholesale of Ladieswear”, “Retail of Ladieswear”

and “Other Segments”. The “Production and

Wholesale“ segment comprises all collection

development activities, procurement, transport

and logistics as well as wholesale distribution.

As described above, we began to postpone the

dates of deliveries to our customers in the first

quarter of 2011/12. The aim of these shifts is to

move the delivery date closer to the actual time of

sale of the products in the stores and shops. We

are constantly striving to improve our

merchandising processes and to optimise them

for the benefit of our company and our distribution

partners

Due to the postponement of delivery dates,

wholesale revenues in Q1 2011/12 were down by

EUR 2.1 million on the same period of the

previous year. In the second quarter of 2011/12,

the Wholesale segment’s revenues increased by

EUR 4.6 million to EUR 137.8 million, thus

offsetting part of the postponement. A complete

compensation will be realised up to the end of the

fiscal year 2011/12. In Q2 2010/11, the Wholesale

segment contributed about 65.3% to the GERRY

WEBER Group’s consolidated sales revenues.


10

Even though the Wholesale segment’s share

declined from 69.5% in H1 2010/11 to 63.5% in

H1 2011/12, the segment makes the biggest

contribution to the company’s revenues. In the

first six months of the financial year, the

Wholesale segment generated sales revenues of

EUR 238.9 million (previous year: EUR 236.4

million).

Due to the improvement in the cost of materials

as a percentage of sales and strict cost

management, the Wholesale segment’s earnings

before taxes (EBT) improved from EUR 30.1

million to EUR 36.9 million in the first half of

2011/12 (+22.7%). At 813, the average number of

employees was slightly higher than in the first half

of the previous year (794).

25 franchised Houses of GERRY WEBER were

opened in the first half of 2011/12, thereof 20

outside Germany. We see further growth potential

in our existing foreign markets and will make

entries into new markets - such as in the USA at

the beginning of the financial year - together with

distribution partners.

We were able to further accelerate the expansion

of our own Retail activities in the second quarter

of 2011/12. The takeover of 200 WISSMACH

stores in Germany with effect from 15 March 2012

will add roughly 17,000 square metres to our own

sales space in Germany till the end of fiscal year

2011/12.

Some 170 of the former WISSMACH stores will

be converted into GERRY WEBER brand stores,

including approx. 120 TAIFUN and roughly 30

SAMOON mono-label stores. Every month, some

40 WISSMACH stores will be closed and

converted, which means that the whole

conversion exercise should be completed by the

end of October 2012. Up to this date, the

WISSMACH merchandise taken over by our

company will be sold in the WISSMACH stores

that have not yet been closed or converted. The

anticipated investments in the conversion into

GERRY WEBER mono-label stores amount to

between EUR 16 and 17 million, which will be fully

financed internally.

Returning to the performance of the Retail

segment in the current financial year, our own

Retail activities remained our main growth driver

in the second quarter of 2011/12. 22 new

company-managed Houses of GERRY WEBER in

the first quarter were followed by another 21 new

stores in Q2, thereof 20 outside Germany.

Total sales in the Retail segment increased from

EUR 51.3 million in Q2 2010/11 to EUR 68.9

million in the second quarter of 2011/12. This was

due to the new stores opened in the previous

months but also to a 4.3% rise in like-for-like

sales (full H1 2011/12) and represented an

increase of 34.4% compared to the prior year

quarter. The WISSMACH merchandise sold by

our company contributed approx. EUR 6.1 million

to the above amount.

A look at the full first half of 2011/12 shows that

the Retail segment’s sales revenues increased by

30.9% from EUR 100.7 million to EUR 131.8

million.


11

In spite of the one-time start-up expenses for the

opening of new company-managed Houses of

GERRY WEBER and the increase in personnel

and other operating expenses resulting from the

expansion of the Retail activities the Retail

segment’s EBT climbed from EUR 5.5 million to

EUR 6.2 million in H1 2011/12. In this context, it

should be noted that recently opened Houses of

GERRY WEBER make a lower contribution to

sales and earnings than established HoGWs.

In accordance with the comprehensive

investments in the expansion of the Retail

operations, the segment’s assets increased from

EUR 85.8 million in the first half of the previous

year to auf EUR 145.5 million. At the same time,

liabilities rose from EUR 100.4 million to EUR

164.3 million.

The average headcount of the Retail segment

grew from 1,529 in the first six months of the

previous year to 2,445. The 59.9% increase in the

average headcount reflects not only the Retail

segment’s operational growth but also the

takeover of some 850 employees in the context of

the WISSMACH acquisition.

The other segments contributed EUR 5.3 million

(H1 2010/11: EUR 3.3 million) or 1.5% to total

Group sales. The increase is due, among other

things, to the rental income from Hall 29 and 30.

An average of 550 people were employed in this

segment (H1 2010/11: 544 people).

OPPORTUNITY AND RISK REPORT

Just like any business model, the business activity

of GERRY WEBER International AG is exposed

to risks and opportunities. The Managing Board of

GERRY WEBER International AG has installed

appropriate risk management processes and

control systems in the Group to avoid risks as well

as to manage existing risks and initiate

appropriate counter-measures. Through ongoing

analyses and market observations, opportunities

are identified early on with a view to developing

strategies and measures for exploiting them at an

early stage.

For a detailed description of our risk management

system, the control systems for the accounting

processes and the opportunities and risks in the

GERRY WEBER Group, please refer to the risk

report in the 2010/11 Annual Report. The

statements made in this risk report remain valid.

Since the beginning of the fiscal year 2011/12, no

material changes have occurred regarding the

risks to our company’s future. Based on current

knowledge, there are no risks that could

jeopardise the continued existence of the GERRY

WEBER Group.

Retail sales by quarter

61.955.4

51.349.4

68.962.9

Q1 2010/11 Q2 2010/11 Q3 2010/11 Q4 2010/11 Q1 2011/12 Q2 2011/12


12

POST-BALANCE SHEET EVENTS

No material events influencing the course of

business have occurred since the end of the

reporting period (1 November 2011 – 30 April

2012).

FORECAST REPORT

The economic situation in Europe continues to be

influenced materially by the sovereign debt crisis

in several European countries. The GERRY

WEBER Group generates EUR 243.8 million or

64.8 of its sales revenues in Germany. Round

about 30% of the export sales of EUR 132.2

million were generated in the European Union.

However, the Group generates less than 3% in

the countries that have been hit hardest by the

crisis such as Greece, Spain or Italy. Especially in

our biggest market, Germany, the consumer

climate has improved somewhat in the past

months, according to the GfK consumer climate

index, which indicates a stable tendency also for

the summer months. So far, the elections in

France and Greece have not had any negative

impact on the economic expectations of the

survey respondents. Right on the contrary,

economic expectations even picked up

moderately in May 2012, all the more so as

inflation fears have declined. Against the

background of stable labour market figures and

the low jobless rate in Germany, disposable

incomes are expected to increase moderately,

also in view of the latest wage agreements.

Due to our regional diversification inside and

outside Europe, the high percentage of revenues

generated in Germany and the good business

performance in the first six months of 2011/12, we

expect our business trend to remain positive. At

present, we see no signs of declining demand in

our markets, which supports our sales and

earnings forecast for FY 2011/12. The current

financial year will clearly be a year of growth both

in our Retail segment and in our Wholesale

segment.

We reported on the takeover of some 200 stores

from WISSMACH Modefilialen GmbH in the

management report of the present interim

financial statements. Some 170 of these stores

are to be converted into TAIFUN and SAMOON

mono-label stores and Houses of GERRY

WEBER. In view of the WISSMACH takeover on

15 March 2012, we have raised our sales forecast

for the current financial year from EUR 775 million

to EUR 795 million.

The investments required for the conversion into

TAIFUN and SAMOON mono-label stores and

Houses of GERRY WEBER and the one-time

start-up expenses will weigh on our bottom line. In

spite of these extraordinary charges, we expect

the EBIT margin to climb from the previous year’s

14.2% to 14.5% or 14.6%.

We assume that the converted WISSMACH

stores will contribute between EUR 45 million and

50 million to sales revenues and make a positive

earnings contribution already in the financial year

2012/13. This means that the WISSMACH

takeover will have paid off after only one year.

Besides the conversion of the former WISSMACH

stores, some 75 company-managed Houses of

GERRY WEBER will be opened in the financial

year 2011/12. As many as 43 stores were opened

in the first half of 2011/12, thereof 20 Houses of

GERRY WEBER abroad


13

Our Wholesale segment will also continue to

grow. New Houses of GERRY WEBER and shop-

in-shops will be opened together with our

franchising and distribution partners primarily

abroad, e.g. in Russia, the Middle East and the

Benelux countries. In February 2012, the first two

shop-in-shops were opened in department stores

of our distribution partner Bloomingdale’s in the

USA. Sales of our GERRY WEBER collection had

an excellent start in these shops as well as in the

11 Dillard’s department stores in the USA. We are

currently negotiating further new shop openings

and other possibilities of extended cooperation in

the USA with both partners. In the short and

medium term, we see further sales potential in the

USA for the GERRY WEBER brand as well as for

the TAIFUN and SAMOON brands.

Against the background of the growth

opportunities both in our German home market

and in international markets, we continue to

project strong sales growth as well as an

improvement in earnings in line with the above

targets. We will continue to push ahead with our

growth strategy in the coming months.


14

Q2 2011/12 Q2 2011/12 H1 2011/12 H1 2010/11

in KEUR 1.02.2012 - 30.04.2012 1.02.2011 - 30.04.2011 1.11.2011 - 30.04.2012 1.11.2010 - 30.04.2011

Sales 210,984.5 186,987.2 376,037.3 340,439.7

Other operating income 4,214.6 4,474.0 6,649.6 6,272.8

Changes in inventories -22,387.4 -29,271.5 2,055.3 -5,141.4

Cost of materials -81,310.5 -70,000.4 -187,024.1 -174,769.7

Personnel expenses -30,300.7 -25,436.6 -57,616.8 -49,381.0

Depreciation/Amortisation -4,195.4 -2,836.2 -8,087.9 -5,831.3

Other operating expenses -47,562.9 -38,455.8 -84,535.0 -70,351.6

Other taxes -136.9 -379.6 -505.4 -664.8

OPERATING RESULT 29,305.3 25,081.1 46,973.0 40,572.7

Financial result

Income from long-term loans -74.5 0.0 0.0 0.0

Interest income 116.1 33.0 227.9 87.4

Writedowns on financial assets 0.0 0.0 0.0 0.0

Incidential bank charges -187.8 -203.6 -383.0 -386.4

Interest expenses -330.2 -467.3 -863.7 -1,076.9

-476.4 -637.9 -1,018.8 -1,375.9

RESULTS FROM ORDINARY ACTIVITIES 28,828.9 24,443.2 45,954.2 39,196.8

Taxes on income

Taxes of the reporting period -9,395.8 -8,359.2 -14,961.5 -13,405.3

Deferred taxes 734.0 -418.3 640.8 -304.2

-8,661.8 -8,777.5 -14,320.7 -13,709.5

NET INCOME OF THE REPORTING PERIOD 20,167.1 15,665.7 31,633.5 25,487.2

Earnings per share (basic) 0.44 0.34 0.69 0.57

First Half 2011/12 (1 November 2011 - 30 April 2012)

CONSOLIDATED INCOME STATEMENT (IFRS) in EUR'000

2. Quarter 2011/12 (1 February - 30 April 2012)


15

ASSETS

H1 2011/12 2010/11

in KEUR 30. April 2012 31. Oct. 2011

NON-CURRENT ASSETS

Fixed Assets

Intangible assets 30,427.1 19,270.7

Property, plant and equipment 127,876.9 117,596.5

Investment properties 25,803.3 21,246.4

Financial assets 2,069.5 2,052.5

Other non-current assets

Trade receivables 46.7 107.2

Other assets 330.3 753.1

Income tax claims 2,661.5 2,661.5

Deferred tax assets 3,791.0 2,910.2

193,006.3 166,598.1

CURRENT ASSETS

Inventories 92,001.1 88,526.7

Receivables and other assets

Trade receivables 55,224.0 56,829.5

Other assets 23,452.4 11,925.6

Income tax claims 493.1 493.1

Cash and cash equivalents 85,936.6 90,584.7

257,107.2 248,359.6

TOTAL ASSETS 450,113.5 414,957.7

as of 30 April 2012

CONSOLIDATED BALANCE SHEET TO IFRS in EUR'000


16

EQUITY AND LIABILITIES

H1 2011/12 2010/11

in KEUR 30. April 2012 31. Oct. 2011

EQUITY

Share capital 45,906.0 45,906.0

Capital reserve 102,386.9 102,386.9

Retained earnings 105,341.7 105,341.7

Accumulated other comprehensive income/loss acc. to IAS 39 595.0 -646.4

Exchange differences -254.4 -62.1

Accumulated profits 92,624.5 60,991.0

346,599.7 313,917.2

NON-CURRENT LIABILITIES

Provisions for personnel 408.2 396.2

Other provisions 5,671.1 3,105.4

Financial liabilities 12,291.2 15,214.3

Deferred tax liabilities 5,411.2 4,639.2

23,781.7 23,355.1

CURRENT LIABILITIES

Provisions

Tax liabilities 2,525.3 2,514.4

Provisions for personnel 12,329.9 12,388.7

Other provisions 10,782.7 8,223.6

LIABILITIES

Financial liabilities 6,129.5 6,132.1

Trade payables 28,211.4 34,566.8

Other liabilities 19,753.3 13,859.9

79,732.1 77,685.5

TOTAL EQUITY AND LIABILITIES 450,113.5 414,957.7

as of 30 April 2012

CONSOLIDATED BALANCE SHEET TO IFRS in EUR'000


17

Capital stock Capital Retained Accumulated Exchange Accumulated Equityreserves earnings other comprehensdifferences profits

in KEUR income/loss

As of 1 November 2011 45,906.0 102,386.9 105,341.7 -646.4 -62.1 60,991.0 313,917.1

Sale of own shares 0.0

Allocation of retained earnings of the AG from the net income of the reporting period

0.0

Adjustments of exchange differences -192.3 -192.3

Forward exchange contracts not affecting income

1,241.4 1,241.4

Net income of the reporting period 31,633.5 31,633.5

As of 30 April 2012 45,906.0 102,386.9 105,341.7 595.0 -254.4 92,624.5 346,599.7

Capital stock Capital Retained Accumulated Exchange Accumulated Equityreserves earnings other comprehensdifferences profits

in KEUR income/loss

As of 1 November 2011 21,317 45,039 98,295 -3,345 17 49,201 210,524

Sale of own shares 1,636 57,348 58,984

Allocation of retained earnings of the AG from the net income of the reporting period

0

Adjustments of exchange differences 145 145

Forward exchange contracts not affecting income

-4,073 -4,073

Net income of the reporting period 25,488 25,488

As of 30 April 2012 22,953 102,387 98,295 -7,418 162 74,689 291,068

STATEMENT OF CHANGES IN GROUP EQUITY (IFRS) IN EUR'000

1. Half 2011/12 (01 November 2011 - 30 April 2012)


18

Q2 2011/12 Ladiesware Ladiesware Consolidated Totalproduction and Retail entries and

in KEUR wholesale other segments

Sales by segment 137,838 68,891 4,256 210,985

EBT (Earnings Before Tax) 23,495 3,254 2,080 28,829

Depreciation of property, plant and equipment 765 1,611 1,820 4,196

Interest income 13 1 102 116

Interest expenses 592 150 -411 331

Assets 172,527 145,469 132,118 450,114

Liabilities 108,138 164,258 -169,112 103,284

Investments in non-current assets 1,370 5,270 14,762 21,402

Number of employees (average) 813 2,445 550 3,808

Q2 2010/11 Ladiesware Ladiesware Consolidated Totalproduction and Retail entries and


Sales by segment 133,273 51,256 2,459 186,988


Depreciation of property, plant and equipment 598 1,087 1,151 2,836


Interest expenses 381 56 30 467

Assets 143,284 85,831 162,631 391,746

Liabilities 106,467 100,411 -106,200 100,678



2. Quarter 2011/12 (1 February 2011 - 30 April 2012)

SEGMENT REPORTING BY DIVISIONS (IFRS) in EUR'000


19

First Half 2011/12 Ladiesware Ladiesware Consolidated Totalproduction and Retail entries and


Sales by segment 238,944 131,794 5,299 376,037


Depreciation of property, plant and equipment 1,469 2,978 3,641 8,088


Interest expenses 1,240 263 -639 864

Assets 172,527 145,469 132,118 450,114

Liabilities 108,138 164,258 -169,112 103,284



First Half 2010/11 Ladiesware Ladiesware Consolidated Totalproduction and Retail entries and


Sales by segment 236,450 100,658 3,332 340,440


Depreciation of property, plant and equipment 1,159 2,160 2,512 5,831


Interest expenses 841 122 113 1,076

Assets 143,284 85,831 162,631 391,746

Liabilities 106,467 100,411 -106,199 100,679




SEGMENT REPORTING BY DIVISIONS (IFRS) in EUR'000


20

H1 2011/12 H1 2010/11

in KEUR 1.11.2011 - 30.04.2012 1.11.2010 - 30.04.2011

Operating result 46,973.0 40,572.7

Depreciation / amortisation 8,087.9 5,831.3

Profit / loss from the disposal of fixed assets -1.1 55.8

Increase / decrease in inventories 258.6 613.8

Increase / decrease in trade receivables 1,665.9 1,983.2

Increase / decrease in other assets that do not fall under investing or financing activities

-9,301.8 -464.3

Increase / decrease in provisions 5,077.9 2,248.1

Increase / decrease in trade payales -6,355.4 -10,121.0

Increase / decrease in other liabilities that do not fall under investing or financing activities

5,672.4 -3,080.3

Income tax payments -14,950.6 -13,677.9

Other non-cash effective income/expenses 0.0 -2,050.0

CASH OUTFLOWS FROM OPERATING ACTIVITIES 37,126.8 21,911.5

Income from investments 0.1 0.0

Interest income 227.9 87.4

Incidential bank charges -383.1 -386.5

Interest expenses -863.7 -1,076.9

CASH OUTFLOWS FROM CURRENT OPERATING ACTIVITIES 36,108.0 20,535.5

Proceeds from the disposal of properties, plant, equipment and intangible assets 1.0 231.4

Cash outflows for investments in property, plant, equipment and intangible assets -18,991.9 -10,407.2

Cash outflows for the acquisition of fully consolidated companies and other business units less cash and cash equivalents acquired

-14,098.0 -950.0

Cash outflows for investments in investment properties -4,724.6 -4,770.0

Proceeds from the disposal of financial assets 123.0 174.5

Cash outflows for investments in financial assets -140.0 -1,752.5

CASH OUTFLOWS FROM INVESTING ACTIVITIES -37,830.5 -17,473.8

Proceeds of the sale of own shares 0.0 58,983.7

Raising / repayment of financial liabilities -2,925.7 -11,022.4

CASH OUTFLOWS / INFLOWS FROM FINANCING ACTIVITIES -2,925.7 47,961.3

Changes in cash and cash equivalents -4,648.1 51,023.0

Cash and cash equivalents at the beginning of the reporting period 90,584.7 45,917.3

CASH AND CASH EQUIVALENTS AT THE END OF THE REPORTING PERIOD 85,936.6 96,940.3

CONSOLIDATED CASH FLOW STATEMENT (IFRS) in EUR'000



21

Explanatory notes on the interim consolidated financial statements of GERRY WEBER International AG for the

period ended 30 April 2012

General information and accounting basis

GERRY WEBER International AG is a listed joint stock company headquartered in

Neulehenstraße 8, D – 33790 Halle (Westphalia/Germany).

The present abridged consolidated financial statements were prepared pursuant to section 37x

para. 3 WpHG in conjunction with section 37w para. 2 WpHG and in accordance with the

International Financial Reporting Standards (IFRS) and the related interpretations by the

International Accounting Standards Board (IASB) for interim financial reporting such as they

have been adopted by the European Union. Accordingly, these financial statements do not

contain all information and notes that are required for year-end consolidated financial

statements pursuant to IFRS.

The interim consolidated financial statements for the first six months of 2011/12 (1 November

2011 – 30 April 2012) were prepared in accordance with IAS 34 “Interim Financial Reporting“

and were not reviewed by the auditors. The accounting and valuation methods and the

principles of consolidation have basically remained unchanged compared to the latest

consolidated financial statements for the year ended 31 October 2011. The interim

consolidated financial statements for the first three months of 2011/12 were prepared in Euros.

The Managing Board is of the opinion that the present unaudited interim consolidated financial

statements contain all necessary information to give a true and fair view of the business

performance and the earnings position in the reporting period. The results achieved in the first

six months of the financial year 2011/12 do not necessarily provide an indication as to the

future results.

Pursuant to IAS 34 “Interim Financial Reporting“, the Managing Board must make

discretionary decisions, estimates and assumptions in the preparation of the interim

consolidated financial statements. These may influence the application of accounting

standards and the recognition of assets and liabilities as well as income and expenses. The

actual results may differ from these estimates in individual cases.

The present interim consolidated financial statements comprise the interim financial

statements of GERRY WEBER International AG and all its subsidiaries for the period ended

30 April 2012. The subsidiaries are fully consolidated. As of the reporting date, the basis of

consolidation comprises 20 subsidiaries.


22

On 16 November 2011, the GERRY WEBER Group acquired the right to take over all

trademark and intellectual property rights from the liquidator of bankrupt “DON GIL“

Textilhandel GmbH, Vienna (Austria). These include, in particular, leases, inventories and

trademark rights. The purchase price of EUR 6.1 million was paid from GERRY WEBER

International AG’s own financial resources.

The acquired stores contributed approx. EUR -1.0 million to earnings after income taxes in the

first half of 2011/12 and generated sales revenues of EUR 2.6 million in the first six months of

2011/12. The following assets and liabilities (no financial liabilities) were taken over:

1 Trademark rights as well as the right to take over all existing rental contracts

2 The determination of the fair value of the assets and liabilities has not been completed yet. Pursuant to IFRS 3.45

provisional values have therefore been recognised.

With effect from 15 March 2012, the GERRY WEBER Group acquired the right to take over

the existing leases as well as the inventories and shop fittings of WISSMACH Modefilialen

GmbH in Germany. The purchase price of EUR 8.7 million was paid from GERRY WEBER

International AG’s own financial resources.

The acquired stores contributed approx. EUR 0.1 million to earnings after income taxes in the

first half of 2011/12 and generated sales revenues of EUR 6.1 million in the first six months of

2011/12. The following assets and liabilities (no financial liabilities) were taken over:

Carrying amount Recognised upon

in EUR mill ions in acc. IFRS acquisition

Intangible Assets1 0.0 5.4

Property, plant and equipment 0.3 0.3

Current assets 0.7 0.7

TOTAL ASSETS 1.0 6.4

Non-current liabilities 0.3 0.3

Current liabilities 0.0 0.0

TOTAL LIABILITIES 0.3 0.3

Net assets2 0.7 6.1

Acquisition costs 6,1

Goodwill 0.0


23

1 Software licenses as well as the right to take over all existing rental contracts

2 The determination of the fair value of the assets and liabilities has not been completed yet. Pursuant to IFRS 3.45

provisional values have therefore been recognised.

Currency translation

The functional currency of GERRY WEBER International AG is the euro. The financial

statements of the consolidated Group companies prepared in foreign currencies are translated

according to the concept of the functional currency in compliance with IAS 21 "The Effects of

Changes in Foreign Exchange Rates". Given that the consolidated Group companies primarily

do business in the economic environment of their respective country, the functional currency is

always identical with each company's local currency. Accordingly, assets and liabilities are

translated at the closing rate, while income and expenses are translated at the average

exchange rate.

Investment properties

Investment properties are accounted for pursuant to IAS 40. They are recognised at cost and

written off using the straight-line method over a useful live of 50 years. This balance sheet item

comprises one building in Düsseldorf (“Hall 30”), which is fully let to external fashion

companies. The property was not used by the company itself in the reporting period. Following

Carrying amount Recognised upon

in EUR mill ion in acc. IFRS acquisition

Intangible assets1 0.0 4.3

Property, plant and equipment 3.4 3.4

Current assets 3.7 3.7

TOTAL ASSETS 7.1 11.4

Non-current liabilities 2.7 2.7

Current liabilities 0.0 0.0

TOTAL LIABILITIES 2.7 2.7

Net assets2 4.4 8.7

Acquisition costs 8.7

Goodwill 0.0


24

construction work carried out on the building in the first six months of the current financial year,

the carrying amount of the investment property increased from EUR 21.2 million at the end of

the financial year 2010/11 (31 October 2011) to EUR 25.8 million at the end of the first half of

2011/12.

Earnings per share

Earnings per share are determined on the basis of the net income for the period after taxes

that is attributable to the shareholders of GERRY WEBER International AG and the average

number of shares outstanding in the reporting period.

The average number of shares outstanding is determined on a pro-rata temporis basis as

shown below. To facilitate comparison, the figures for first half 2010/11 were adjusted to reflect

the issue of free shares.

Accordingly, earnings per share amounted to EUR 0.69 in the first half of 2011/12 (1HJ

2010/11: EUR 0.57)

Segment reporting

The segmentation of the GERRY WEBER Group results from the internal organisational and

reporting structure and is based on the production units Ladieswear and Wholesale, Retail of

Ladieswear and Other Segments. Secondary segment reporting is based on geographical

segments.

For purposes of segment reporting by business segments, the Production and Wholesale

segment comprises the GERRY WEBER brand and its two sublabels, GERRY WEBER

EDITION and G.W., and the TAIFUN brand as well as the SAMOON brand. The Retail

segment comprises the domestic and international HOUSES OF GERRY WEBER, the factory

outlets as well as the online shops.

1. Hj. 2011/12 1. Hj. 2010/11

1.11.2011-30.4.2012 1.11.2010-30.4.2011

November 2011 45.905.960 x 1/12 42.634.484 x 1/12

December 2011 45.905.960 x 1/12 43.212.292 x 1/12

January 2012 45.905.960 x 1/12 44.416.018 x 1/12

February 2012 45.905.960 x 1/12 44.766.618 x 1/12

March 2012 45.905.960 x 1/12 45.905.960 x 1/12

April 2012 45.905.960 x 1/12 45.905.960 x 1/12

= 45.905.960 shares = 44.473.555 shares


25

Post-balance sheet events

No transactions or events occurred after the end of the reporting period with significant

consequences for the course of the business.

Responsibility statement

“To the best of our knowledge, and in accordance with the applicable reporting principles for

interim financial reporting, we declare that the interim consolidated financial statements give a

true and fair view of the assets, liabilities, financial position and profit or loss of the Group and

that the interim management report of the Group includes a fair review of the performance of

the development and performance of the business and the position of the Group, together with

a description of the principal opportunities and risks associated with the expected development

of the Group for the remaining months of the financial year.”

Halle/Westphalia, 12 June 2012

GERRY WEBER International AG

- The Managing Board -

Gerhard Weber Doris Strätker Dr. David Frink


26

Calendar of financial events

Investor Relations contact:

GERRY WEBER International AG

Investor Relations Department

Claudia Kellert

Neulehenstraße 8

D – 33790 Halle / Westphalia

Germany

Phone: +49 5201 185 0

Email: [email protected]

Internet: www.gerryweber.com

Disclaimer

This interim report contains forward-looking statements that are based on assumptions and/or

estimates by the management of GERRY WEBER International AG. While it is assumed that

these forward-looking statements are realistic, no guarantee can be given that these

expectations will actually materialise.

Publication of the First Half Year Reporting 2011/12 14 June 2012

Analyst Conference 14 June 2012

Publication of the Nine Month Reporting 2011/12 14 September 2012

End of fiscal year 2011/12 31 October 2012


27

Documents

six monThs reporT 2011/12 - GERRY WEBERir.gerryweber.com/download/companies/gerryweber/Quarterly... · for the first six months of 2011/12 from 1 November 2011 to 30 April 2012 In