Press Release
Interim Report H1 – 2009/10 (October 1, 2009 – March 31, 2010)
DOUGLAS Group is well on track
- Sales up 2.8 percent by the end of April (including Easter sales) over prior year
- Solid sales performance during first half of 2009/10 fiscal year (October 1, 2009 to March 31, 2010)
- Sales climb by 3.2 percent to 1.8 billion EUR
- Earnings before taxes (EBT) at 136.3 million EUR
- Annual forecast for fiscal year 2009/10 specified:
- Sales growth to hit upper end of target range of 0 to 2 percent
- Earnings before taxes (EBT) at upper end of target range of 120 to 130 million EUR
Hagen, May 11, 2010 – The DOUGLAS Group has asserted itself in upholding its position even in the face of tough economic times and is well on track. After the first seven months of the 2009/10 fiscal year (October 1, 2009 to April 30, 2010) – this period of review neutralizes the shift in the Easter business – net sales climbed by 2.8 percent to 2.1 billion EUR. Like-for-like sales were at the prior year's level.
In Germany, net sales at the end of April rose by 3.4 percent to 1.4 billion EUR. Gratifyingly, sales in Germany and on a like-for-like basis increased by 1.2 percent. Foreign sales improved by 1.6 percent to nearly 720 million EUR; like-for-like sales outside of Germany, however, registered a minus of 2.4 percent.
"We are quite pleased with our performance in the first seven months, in particular, in our all-important home market in Germany. Even though rough waters lie ahead in some foreign markets, we remain confident that we will reach the targets set for this fiscal year," said Dr. Henning Kreke, President and CEO, when today's figures were presented for DOUGLAS HOLDING AG.
Forecast
So far, sales growth was projected to lie between 0 and 2 percent and earnings before taxes at between 120 and 130 million EUR. On the basis of the quite respectable sales and earnings performance delivered during the first seven months, the Executive Board now predicts that the upper ends of both the sales and earnings target ranges will be reached.
Performance in the first half year 2009/10 (October 1, 2009 to March 31, 2010)
The DOUGLAS Group's net sales rose by 3.2 percent to 1.8 billion EUR in the first half of the 2009/10 fiscal year (October 1, 2009 - March 31, 2010). This solid performance benefited from this year's Easter business falling almost entirely in the second reporting quarter, whereas the previous year's Easter sales fell predominantly in the third reporting quarter. In addition, it should be taken into consideration that the sales generated by the online book retailer, buch.de internetstores AG, were fully consolidated after having acquired a majority shareholding since December 1, 2009. But also on a like-for-like basis – which only reflects those locations operating during the current and previous year's reporting quarters – sales increased by a pleasing 0.5 percent. Even here, the weak demand posted in some foreign markets could be offset by the solid sales performance delivered in Germany.
Dr. Henning Kreke comments: "As previously demonstrated in 2009, it has once again been proven how important and right it was to never have lost sight of our key home market despite all the euphoria for foreign business."
In Germany, sales jumped by 3.9 percent during the first half of the year. With 1.9 percent, like-for-like sales were happily a good measure ahead of the previous year's figure. Sales outside of Germany advanced by a total of 2.0 percent. On a like-for-like basis however, the ongoing tough economic situation in several foreign markets led to a sales decline abroad of 2.0 percent.
Earnings before taxes (EBT) totaled 136.3 million EUR in the first half year following 111.1 million EUR in the same period last year. Besides the shift in the Easter business, the one-off valuation effect arising from the revaluation of shares previously held in buch.de in the amount of 6.1 million EUR also contributed to this increase. Moreover, the prior year's figure was impacted by the planned store network streamlining in the amount of 12 million EUR and by costs incurred in connection with the closure of the AppelrathCüpper fashion store in Berlin. Adjusted for the special effects, the EBT stood at 130.2 million EUR after 123.1 million EUR a year earlier.
Earnings before interest, taxes, depreciation and amortization (EBITDA) of the DOUGLAS Group improved from 178.1 million EUR to 202.2 million EUR largely from the shift in Easter sales and the one-off effect for the accounting prescribed revaluation of the shares previously held in buch.de.
The first six-month period of the 2009/10 fiscal year closed with Group net income of 91.4 million EUR following 74.8 million EUR in the same period last year. Correspondingly, earnings per share improved to 2.32 EUR after 1.90 EUR in the previous year.
The capital expenditure volume at the end of the reporting period came in at 45.5 million EUR versus 67.4 million EUR one year ago. All in all, investments comprised of 49 new openings in the first six months (prior year: 68) as well as the expansion and modernization of existing locations. In the largest division – Perfumeries – Douglas opened 31 new stores in the reporting period (prior year: 55), including 26 outside of Germany (prior year: 48).
Sales performance in the Group's divisions
The 1,207 Douglas Perfumeries increased their sales by 1.5 percent to over 1 billion EUR in the first half year. On a like-for-like basis, the respectable performance given in Germany offset the weak sales performance delivered abroad only in part, so that the prior year's sales fell short by just 0.6 percent.
Benefiting from the earlier Easter business, the 446 German Perfumeries posted a satisfying sales performance. They generated sales of 518.5 million EUR. This translates into a sales gain of 2.8 percent, with a like-for-like sales gain of 1.8 percent. On an industry comparative basis, this favorable performance allowed Douglas to further expand its leading market position in Germany. The 761 Douglas Perfumeries outside of Germany reached sales of 516.4 million EUR for a sales gain of 0.3 percent. Given the ongoing adverse consumption climate in many foreign markets, like-for-like sales dropped by 3.1 percent over the previous year. Sales growth registered by the Douglas Perfumeries in Poland, Italy and France could not offset the lower turnover posted in the Baltic States, Spain, Hungary and Portugal.
In the Books division, the Thalia Group generated a sales increase of 9.3 percent to nearly 500 million EUR (like-for-like: 2.0 percent). This figure contains the sales of buch.de, which have been fully consolidated since December 1, 2009. The 288 Thalia bookstores boosted their sales by 1.0 percent. On a like-for-like basis, the prior year's level was matched. Thalia succeeded in maintaining a solid position in light of the difficult market conditions, mostly because the company implemented its multichannel strategy early on to keep up with the growing shift of business towards online retailing.
In Germany, Thalia (incl. buch.de) attained a sales jump of 8.9 percent to over 380 million EUR (like-for-like: 1.8 percent). The 232 bookstores in Germany posted a sales increase of 0.3 percent (like-for-like: -0.7 percent). Foreign sales (incl. buch.ch) rose by 10.5 percent to 116 million EUR (like-for-like: 2.6 percent). Sales at the 56 Thalia bookstores in Austria and Switzerland soared by 3.4 percent (like-for-like: 2.2 percent). This positive trend is largely due to the favorable sales performance delivered in Austria.
The 203 Christ jewelry stores increased their sales by 2.9 percent to about 174 million EUR. Pleasingly, Christ surpassed the prior year's like-for-like sales by a substantial 3.9 percent. Accordingly, Christ continued with its solid performance thanks to its successful exclusive and trend brands strategy.
In a persistently tough market environment, the 14 AppelrathCüpper fashion stores registered a like-for-like sales decline of 1.8 percent. The total sales drop of 9.3 percent to 64.6 million EUR is predominantly due to the store closure in Berlin, which included sales until the end of January last year.
Despite numerous closures undertaken as part of the store network streamlining, the 260 Hussel confectionery shops achieved sales of 62.1 million EUR for a sales gain of 1.8 percent – thanks to the respectable Easter sales. Like-for-like sales were also up by 2.3 percent.
Outlook
The DOUGLAS Group is well-positioned and possesses a solid net assets, financial position and result of operations. It will continue to pursue its current strategic direction. The aim is to grow further in a profitable manner and to secure and expand its status as a leading European lifestyle group in the retail sector. New markets are not expected to be entered in the current fiscal year. Rather, the firm market positions of Douglas, Thalia, Christ, AppelrathCüpper and Hussel will be further expanded with respect to service, quality and ambiance. To this end, a total investment volume of up to 120 million EUR has been set aside for the 2009/10 fiscal year.
The lion's share of capital expenditure will focus on the further value-oriented growth of the Douglas Perfumeries. All in all, approximately 40 new stores are scheduled to open their doors throughout Europe, whereby the expansion focus will be placed on Italy and Poland. Furthermore, the Douglas Perfumeries in Germany intend to profit from activities surrounding the 100th anniversary celebration of the very first perfumery in the Neuen Wall section in Hamburg scheduled to commence at the end of May. In the product-mix area, priorities will be set on expanding the exclusive and private labels.
The Thalia Group will secure its leading market position in German-speaking Europe through the opening of five to ten bookstores, numerous modernization programs and the consequent implementation of the multichannel strategy. It is important to be optimally positioned in the tight balancing between printed books and the trend towards digitization. Another successful example of the stationary introduction of this multichannel strategy is the opening of the new Thalia bookstore along the Dortmunder Westenhellweg early in May. This location will interlink elements of stationary and online bookselling in a customer-oriented manner: classic bookshelves and reading tables on one hand with touchscreens, audio headphones and internet access on the other.
In the Jewelry division, Christ will aim to grow profitably on its own and to further expand its leading market position in Germany. To this end, up to ten new openings and various remodeling work will be undertaken. Moreover, the service expertise and the successful mix of exclusive and private labels will be expanded.
At AppelrathCüpper, the alterations introduced for improved service, more modern product lines and modern merchandising are largely completed. The challenge now lies in advertising the new directions undertaken correctly and quickly. All in all, AppelrathCüpper is well underway and should disproportionately profit from the widely hoped-for recovery of the textile industry.
Hussel aims to fascinate its customers even more with quality in its product-mix and with extra service. Hussel is taking new paths in shop design. A new concept is being introduced in all new openings and in upcoming modernization work, which will express more chocolate-looking brown tones and underscore even more the high quality of Hussel's confectionery products.
