DGAP-News: Adler Modemärkte AG: Full-year Outlook Confirmed Despite Muted Start to the Year

Confidence for Remaining Course of the Year - Sights Set on Growth Targets for 2020:
Full-year Outlook Confirmed Despite Muted Start to the Year
Positive Effects from Marketing Measures Expected, Particularly Beginning in Second Half of the Year

Haibach, 8 May 2018: As expected, Adler Modemärkte AG started financial year 2018 with declining revenue and earnings. Against the backdrop of a persistently weak industry environment, revenue amounted to EUR 102.7 million, thus down year on year by 5.5% (Q1 2017: EUR 108.7 million). The like-for-like revenue decrease amounted to 6.2%.

Gross profit fell by 5.0% from EUR 52.7 million to EUR 50.1 million. By contrast, the gross profit on goods sold rose slightly to 48.8% (previous year: 48.5%).

Despite the continuing high level of cost discipline, ADLER's earnings were not fully able to stem the decline in revenue. Earnings before interest, tax, depreciation and amortisation (EBITDA) consequently fell from EUR -12.5 million in the first quarter of 2017 to EUR -17.8 million in the first three months of 2018. The increase in personnel expenses resulting from collective bargaining pay rises, costs for implementing the new logistics service providers and increased consulting fees in connection with the new strategic direction reduced EBITDA by approximately EUR 1.9 million in total. Marketing expenses were also up year on year by EUR 0.9 million due to promotions related to the Company's 70-year anniversary.

ADLER thus reported a consolidated net loss of EUR 17.3 million in the first three months of 2018 (Q1 2017: consolidated net loss of EUR 13.2 million). This resulted in earnings per share of EUR -0.93 (as compared to EUR -0.71 in Q1 2017).

Typical decrease in cash for the season
In particular due to the procurement of new spring and summer merchandise, Adler Modemärkte's cash declined in the first quarter of 2018. At the reporting date, it amounted to EUR 38.7 million as compared to EUR 63.3 million at the end of 2017.

Systematically optimising cash flow management made it possible to reduce working capital from EUR 46.7 million as at 31 December 2017 to EUR 45.1 million as at 31 March 2018. At 31 March 2017, this figure had amounted to EUR 48.8 million.
The equity ratio declined to a still solid 35.8% as a result of the consolidated net loss.

Full-year outlook confirmed - confidence in particular for the second half of the year
Although ADLER got off to a muted start in financial year 2018, the management confirms the outlook for the operating business in the 2017 annual report. Accordingly, ADLER's Executive Board expects the environment in the textile retail industry to remain challenging in 2018 and therefore continues to expect revenue to remain approximately level with the prior-year figure (EUR 525.8 million). EBITDA is expected to significantly exceed the adjusted 2017 figure (EUR 25.4 million) and amount to between EUR 26 million and EUR 29 million. This expectation is based in particular on the anticipation that the scaled-up marketing measures will start to show their effect in the second half of the year. The new ADLER 2020 Strategy and the already announced switch in logistics service providers will begin to have a positive effect for the first time in financial year 2019. ADLER continues to aim to raise revenue by at least 5% over the 2017 figure by the 2020 financial year. Significantly above-average EBITDA growth of at least 50% is projected.

The full report on the first quarter of 2018 is available online at www.adlermode-unternehmen.com

ADLER Group's key performance indicators

(EUR million)	Q1 2018	Q1 2017	Change
Revenue	102.7	108.7	-5.5%
Gross profit	50.1	52.7	-5.0%
Earnings before interest, taxes, depreciation and amortisation (EBITDA)	-17.8	-12.5	-42.4%
Earnings before interest and taxes (EBIT)	-21.9	-16.7	-31.1%
Consolidated net loss	-17.3	-13.2	-31.1%
Earnings per share (in EUR)*	-0.93	-0.71	-31.0%

^* Based on 18,510,000 no-par value shares

	31 Mar. 2018	31 Dec. 2017	Change
Total assets (EUR million)	231.3	241.1	-4.1%
Equity (EUR million)	82.7	100.0	-17.3%
Equity ratio	35.8%	41.5%	-5.7pp
Debt/equity ratio	1.80	1.41
Cash and cash equivalents (EUR million)	38.7	63.3	-39.9%
Employees	3,777	3,814	-1.0%
Total number of stores	181	183	-1.1%

About Adler Modemärkte AG:
Adler Modemärkte AG, headquartered in Haibach near Aschaffenburg, Germany, is one of Germany's largest and most important textile retailers. In 2017, the Group earned EUR 525.8 million in revenue and generated EUR 32.0 million in EBITDA (adjusted: EUR 25.4 million). As at 31 December 2017, ADLER has approximately 3,800 employees and currently operates 182 stores, 155 of which are located in Germany, 22 in Austria, three 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 70 years of tradition and strong customer loyalty, ADLER considers itself to be the market leader within its target group of affluent customers aged 55 and over.

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

Contact:
Adler Modemärkte AG
Investor Relations
Katrin Schreyer
Tel.: +49 6021 633 1828
Email: investorrelations@adler.de