Douglas Holding AG: Balance Sheet Press Conference

Dr. Henning Kreke, President and CEO of DOUGLAS HOLDING AG
Dr. Henning Kreke, President and CEO of DOUGLAS HOLDING AG

Hagen, January 11, 2012 – “The DOUGLAS Group performed well in the 2010/11 fiscal year. The Group’s consolidated sales revenue rose by 1.7 percent to EUR 3.4 billion. Our goal had been to achieve an increase in sales revenue of 2 to 4 percent. At EUR 138 million, earnings before taxes (EBT) reached our operating result target of about EUR 140 million, and our EBT margin rose to 4.1 percent from 4.0 percent in the previous year,” said Dr. Henning Kreke, President and CEO of DOUGLAS HOLDING AG, summarizing the past fiscal year at today’s annual press conference in Düsseldorf.

According to Kreke, the reasons for the slight underperformance compared to the revenue target can be found in the weak economic environment in some foreign markets but primarily in the book sector. “This sector is currently undergoing major structural changes worldwide, and this is making itself felt in the sales trend that is being experienced by Thalia. As a result, the figures for our books division fell significantly short of the budgeted figures,” Kreke continued.

He indicated his satisfaction with the performance of the DOUGLAS Group in Germany. “We are pleased to have achieved a boost in sales of 4 percent in our most important market, our home market of Germany,” he stated. “Here, our German Douglas perfumeries and Christ jewelry stores registered a sharp upswing and were successful in gaining market share.”

The DOUGLAS Group’s foreign sales were 2.5 percent lower than in the previous year. This decline is due in particular to Douglas’s exits from the Russian, US, and Danish markets. Adjusted for the effects of these exits, foreign sales rose by 1.9 percent, an early indication that the DOUGLAS Group seems to be on the right track in the international markets as well.

An important financial key figure for the DOUGLAS Group also showed a satisfactory trend. Free cash flow, the total of cash inflows and outflows from current operating and investment activities, was EUR 127 million compared to EUR 128 million in the previous year.

At EUR 117 million, capital expenditures in the 2010/11 fiscal year approximately equaled those made in the previous year. The Group invested in the opening of a total of 64 new branch stores, the expansion and remodeling of the existing store network, and the development of e-commerce activities. Due to the sale of the 32 perfumeries in Russia and the closure of 72 branch stores, however, the total number of stores in Germany and abroad decreased slightly from 1,973 to 1,928.

“All in all, the DOUGLAS Group again performed well in the 2010/11 fiscal year,” Dr. Henning Kreke summarized, continuing: “It was our more than 24,000 employees who played the most important role in this strong performance. With their friendliness, their professional competence, and their willingness to always provide a high level of service, they have once again created a convenient and pleasant shopping experience for our customers—both in our attractive specialty stores and in our online shops. I would like to express my heartfelt thanks—on behalf of my colleagues on the Executive Board as well—to each and every employee for their outstanding commitment and dedication.”

The situation in the individual divisions – perfumeries

In the 2010/11 fiscal year, the Douglas perfumeries maintained their leading market position in Europe. Although the number of perfumeries declined from 1,205 to 1,168, primarily as a result of the sale of the 32 Russian perfumeries, sales revenue remained at the previous year’s level at EUR 1.9 billion.

In the key home market of Germany, the 446 Douglas perfumeries expanded their market leadership with sales revenue growing by 4.6 percent to more than EUR 990 million.
The sales trend in the various foreign markets, on the other hand, varied widely. While Douglas experienced growth in the Netherlands, Austria, and Turkey, the perfumeries in Spain, Portugal, and Croatia were not able to escape the effects of the international economic and financial crisis. Overall, at just around EUR 890 million, the revenue of the 722 Douglas perfumeries abroad was 4.7 percent below the previous year’s figure. Based on the current country portfolio, however—in other words, adjusted for the exits from the Russian, US, and Danish markets—foreign sales rose by 0.7 percent.

EBT in the perfumery division rose to EUR 108 million compared to EUR 88 million in the same period of the previous year, with the major part still achieved by the German perfumeries. The increase is due to the non-recurring proceeds from the sale of the perfumeries in Russia. As in the previous year, high impairment losses were recorded in the reporting period. Thereof, in fiscal year 2010/11, just about EUR 23 million related to goodwill write-downs in France.

[Text: Douglas/Photo: epcnews]

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