DGAP-News: Adler Modemärkte AG

DGAP-News: Adler Modemärkte AG: Positive turnaround in May and June - revenue and earnings stabilised in Q2

DGAP-News: Adler Modemärkte AG / Key word(s): Half Year Results/Forecast Adler Modemärkte AG: Positive turnaround in May and June - revenue and earnings stabilised in Q2

04.08.2016 / 07:30 The issuer is solely responsible for the content of this announcement.

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Forecast for full-year 2016 adjusted

Haibach bei Aschaffenburg, 4 August 2016: Against the backdrop of the negative industry trend, Adler Modemärkte AG recorded a drop in revenue in the first six months of 2016. Initially, ADLER performed weaker than the overall market but a positive turnaround became apparent in May and June. In sum, the revenue of Adler Modemärkte AG was EUR 257.1 million in the six-month period, dropping by 4.2% compared to EUR 268.4 million for the first half of 2015. On a like-for-like basis, the decline was also 4.2% The first half of the year is typically the weaker of the two for ADLER, in particular due to the clearance of winter merchandise. In the reporting period, poor weather conditions also had an adverse effect on revenue, hitting demand for the spring- and summer ranges. ADLER implemented various measures to react to the weak growth in the beginning of financial year 2016; these have already resulted in the first cost savings in 2016.

Gross profit margin slightly down The ADLER Group's cost of materials decreased by 2.7% from EUR 125.3 million to EUR 121.9 million due to the decline in revenue. Gross profit declined from EUR 143.1 million to EUR135.2 million. The gross profit on goods sold fell from 53.3% to 52.6%.

EBITDA declined to EUR 0.7 million from EUR 4.5 million in the first half of 2015. Earnings before interest and taxes (EBIT) fell to EUR -7.5 million from EUR -3.4 million in the first half of 2015. Earnings before taxes (EBT) fell from EUR -5.8 million to EUR -10.0 million in the first six months of 2016. ADLER reported a consolidated net loss of EUR 8.0 million as at 30 June 2016 (H1 2015: consolidated net loss of EUR 5.3 million). Adjusted earnings per share amounted to EUR -0.43. Earnings per share totalled EUR -0.28 in the comparable period.

Cash and cash equivalents declined from EUR 52.1 million as at 31 December 2015 to EUR 28.9 million as at balance sheet day. This was due to seasonal factors attributable to payment of the dividend, as well as the lower level of revenue and the corresponding increase in the consolidated net loss for the period.

Sales growth in May and June ADLER recorded a slight revenue decrease of just 1.0% to EUR 151.8 million in the second quarter of 2016 (Q2 2015: EUR 153.3 million) with a positive turnaround becoming apparent in May and June. In these two months, ADLER managed to grow by 0.2% and 4.3% respectively, whereas the German textile industry recorded a drop of 1% and 2%. Like-for-like revenue was down 1.7% on the figure for the second quarter of 2015.

"After two challenging quarters, we are optimistic that the development has bottomed out", says Lothar Schäfer, CEO of Adler Modemärkte AG. "We have taken different measures to enhance profitability by utilizing saving and optimization potentials. This has already generated some initial positive effects which will continue to grow significantly, particularly as the year draws to a close. Above all, they will lay the foundation for substantial improvements for the 2017 financial year."

Optimisation of store network continued ADLER opened a store in Chur in March 2016, its second in Switzerland. A new store was opened in Neumarkt in der Oberpfalz in April, followed by another in Hard near Bregenz, Austria, in June. No stores were closed in the reporting period. The stores in Georgsmarienhütte, Weiden and Gotha were extensively renovated under the programme to modernise older existing ADLER stores.

Forecast adjusted, but new marketing campaign expected to have positive effect on the operating performance In light of the subdued development of the operating business in the first half of the year and what continues to be a challenging market environment for the German textile retail industry, ADLER is adjusting the forecast for the current year, as given in the 2015 Annual Report. As consolidated revenue in the second half of the year is anticipated to be at no more than the prior-year level, consolidated revenue for full-year 2016 is not expected to reach the previous year's figure of approximately EUR 566 million. The new marketing campaign beginning in September should have a positive effect on the operating performance from the fourth quarter. Developments in the first half of the year and the outlook for the full year will correspondingly impact the development of earnings during the year as a whole. Thus, the Company is forecasting that EBITDA will be between EUR 27 million and EUR 30 million (prior-year: EUR 33.3 million). The forecast again calls for significantly higher after-tax earnings.

Adler Modemärkte AG's full half-year report is now available for inspection or download from the Company's homepage at http://www.adlermode-unternehmen.com/en/investor-relations/reports-and-pub lications/financial-reports/

ADLER Group's key performance indicators

(EUR million) H1 2016 H1 2015 Change Q2 2016 Q2 2015 Change Revenue 257.1 268.4 -4.2% 151.8 153.3 -1.0% Gross profit 135.2 143.1 -5.5% 84.7 86.2 -1.7% Earnings before 0.7 4.5 -84.4% 17.3 17.5 -1.1% interest, taxes, depreciation and amortisation (EBITDA) Earnings before -7.5 -3.4 -120.6% 13.2 13.5 -2.2% interest and taxes (EBIT) Earnings before -10.0 -5.8 -72.4 11.9 12.3 -3.2% taxes (EBT) Earnings per -0.43 -0.28 -53.6% 0.38 0.45 -15.6% share (in EUR)* * Based on 18,510,000 no-par value shares

30 June 2016 31 Dec 2016 Change Total assets (EUR 222.0 243.4 -8.8% million) Equity (EUR million) 87.6 104.9 -16.5% Equity ratio (in %) 39.5 43.1 -3.6pp Debt/equity ratio 1.53 1.32 15.9% Cash and cash equivalents 28.9 52.1 -44.5% (EUR million) Employees 4,114 4,203 -2.1% Total number of stores 180 177 1.7%

About Adler Modemärkte:

Adler Modemärkte AG, headquartered in Haibach near Aschaffenburg, Germany, is one of Germany's largest and most important textile retailers. In 2015, the Group generated revenue of EUR 566.1 million with a workforce of around 4,200, generating EUR 33.3 million in EBITDA. ADLER currently operates 180 stores, 154 of which are located in Germany, 22 in Austria, two in Luxembourg, two in Switzerland, plus an online shop. The Company focuses on large-space concepts offering in excess of 1,400 m2 of retail space. With its many own brands and select external brands, ADLER offers a highly diverse product range. Thanks to more than 60 years of tradition and strong customer loyalty, ADLER considers itself to be the market leader within its target group of affluent customers aged 45 and over.

For more information: www.adlermode-unternehmen.com; www.adlermode.com

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04.08.2016 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: Adler Modemärkte AG Industriestraße Ost 1-7 63808 Haibach Germany Phone: +49 (0) 6021 633 0 Fax: +49 (0) 6021 633 1299 E-mail: info@adler.de Internet: www.adlermode.com ISIN: DE000A1H8MU2 WKN: A1H8MU Listed: Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover, Munich, Stuttgart, Tradegate Exchange End of News DGAP News Service ---------------------------------------------------------------------------

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