DGAP-News: TOM TAILOR Holding AG

DGAP-News: TOM TAILOR GROUP sets course for increasing profitability

DGAP-News: TOM TAILOR Holding AG / Key word(s): 9-month figures/Change in Forecast TOM TAILOR GROUP sets course for increasing profitability

10.11.2016 / 07:31 The issuer is solely responsible for the content of this announcement.

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TOM TAILOR GROUP sets course for increasing profitability

- Group sales up 0.8 percent to EUR 695.1 million in first nine months of 2016

- Gross profit (before one-off expenses) increased by 0.6 percent to EUR 388.4 million

- Reported Group EBITDA (before one-off expenses) at EUR 31.7 million (previous year: EUR 36.5 million)

- One-off, primarily non-cash-effective expenses for cost and process optimization program amounted to approx. EUR 75 million in the third quarter

- Full-year forecast for 2016 adjusted - Group aims to achieve reported EBITDA of EUR 10-20 million

- Capital increase of at least EUR 10 million planned with anchor investor Fosun International Limited

Hamburg, 10 November 2016. TOM TAILOR GROUP proved itself in a challenging market environment and increased Group sales in the first nine months by 0.8 percent to EUR 695.1 million (previous year: EUR 689.6 million). Once again, the Company benefited from a strong performance by the umbrella brand TOM TAILOR. Gross profit (before one-off expenses) also increased slightly by 0.6 percent to EUR 388.4 million (previous year: EUR 385.9 million). Furthermore, adjusted EBITDA came in at EUR 31.7 million and was thus 13.1 percent lower than in the prior-year period (previous year: EUR 36.5 million). Moreover, the new Executive Board of TOM TAILOR GROUP announced in October a comprehensive cost and process optimization program. First positive effects from the program are expected to be evident in the fourth quarter. The measures related to this program lead to one-off expenses that negatively impacted third-quarter earnings. With the presentation of the nine month figures, the Executive Board has therefore adjusted the full-year forecast for 2016. The TOM TAILOR GROUP now expects a moderate year-on-year sales increase in the low single digit range. The reported EBITDA for 2016 is expected in the range between EUR 10-20 million.

"TOM TAILOR GROUP has continued to perform well in a challenging market environment," said Dr Heiko Schäfer, COO and interim CEO of TOM TAILOR Holding AG. "Our TOM TAILOR brand in particular has recorded a strong growth in sales both in the wholesale and retail business. We are convinced that we took the right steps for a long-term improvement in the profitability of the TOM TAILOR GROUP. We are expecting the first visible successes already in the current quarter."



TOM TAILOR umbrella brand posts sales growth

TOM TAILOR Retail achieved an 8.4 percent increase in sales in the first nine months to EUR 211.3 million (previous year: EUR 195.0 million). TOM TAILOR Retail accounted for 30.4 percent of Group sales (previous year: 28.3 percent). Growth was driven by the expansion of sales space in 2015. Since the end of 2015, the number of stores declined by two to 458. In the third quarter, TOM TAILOR Retail also posted a sales increase of 6.7 percent (previous year: 6.4 percent). On a like-for-like basis, sales in the first nine months of the year were slightly down by 1.7 percent (previous year: -0.3 percent) due to the continuing difficult market conditions.

TOM TAILOR Wholesale increased sales by 4.5 percent to EUR 262.9 million (previous year: EUR 251.5 million). The segment benefited from a strong surge in the third quarter, with a sales increase of 8.0 percent to EUR 102.8 million (previous year: EUR 95.2 million). Since 31 December 2015, the number of shop-in-shop spaces has increased by 135 to 3,091, while the number of franchise stores rose by four to 207. Thus, TOM TAILOR Wholesale accounted for 37.8 percent (previous year: 36.5 percent) of Group sales.

"I am pleased to see that the Wholesale segment benefited from our longstanding experience," said Uwe Schröder, Member of the Executive Board. "This highlights the strong brand recognition of our TOM TAILOR brand and its potential."

In the first nine months, the BONITA brand generated sales of EUR 220.8 million (previous year: EUR 243.0 million). After a modest first half-year, the market remained challenging in the third quarter due to the lack of momentum in September. As a result, BONITA's sales were down 19.7 percent in that period to EUR 67.4 million (previous year: EUR 84.0 million). In the process of a strong push to optimize its operations, BONITA has reduced its store network by 41 to 982 locations since the end of 2015. BONITA contributed 31.8 percent of Group sales in the period under review (previous year: 35.2 percent).

Course set for sustainable profitability and guidance adjusted

For some time now the apparel industry is facing a profound structural change. In order to address the challenges posed, the TOM TAILOR GROUP has launched a comprehensive action program on 20 October. It is intended to reduce complexity and focus the activities of the TOM TAILOR GROUP on its strong core business with the TOM TAILOR and BONITA brands. The TOM TAILOR GROUP will also continue to expand its digital sales infrastructure through targeted investments in e-commerce. At the same time, decisive steps will be taken to close down loss-making activities. This includes unprofitable business areas, foreign affiliates, sub lines, stores and historical legacies. The aim is to provide a lasting boost in earning power and improve profitability in the long term.

"No additional financing is needed for the program. The lending banks have approved the related initiatives in full, subject to the anchor investor Fosun retaining its stake in course of the planned capital increase," stated Thomas Dressendörfer, CFO of TOM TAILOR Holding AG.

Against the background of the cost and process optimization program and the related EUR 75 million one-off expenses in the third quarter of 2016, the TOM TAILOR GROUP has adjusted its guidance for the fiscal year 2016. For the fiscal year 2016, TOM TAILOR GROUP anticipates moderate growth in sales in the low single-digit percentage range (previous guidance: adjusted EBITDA at prior-year level of EUR 76 million). The Group expects a reported EBITDA between EUR 10 and 20 million. Furthermore, the Executive Board estimates a considerably lower net result.

Capital increase of at least EUR 10 million planned with back stop by anchor investor Fosun

The Executive Board plans to carry out a capital increase of at least EUR 10 million with the participation of anchor investor Fosun. The capital increase will partially utilize the approved capital, and will exclude shareholders' pre-emptive rights.

"We consider Fosun's engagement to be a strong commitment to the TOM TAILOR GROUP," concluded Thomas Dressendörfer.

In the context of the capital increase, TOM TAILOR Holding AG and Fosun have agreed on a back-stop clause authorizing Fosun to participate in the capital increase up to the amount of its current stake of 29.47 percent of the share capital of TOM TAILOR Holding AG. At the same time, Fosun will undertake to purchase all unsubscribed new shares to the extent that the required purchase price by Fosun will not exceed EUR 10 million. The possible purchase of shares by Fosun is subject to various conditions, including a waiver of the requirement pursuant to Section 37 of the German Securities Acquisition and Takeover Act (WpÜG) to submit a mandatory offer to all shareholders in case it gains a controlling interest through the capital increase. The Executive Board expects these conditions to be met. Moreover, the Company's Executive Board and Supervisory Board must pass resolutions approving the purchase.

The proceeds of the capital increase are not a prerequisite for implementing the cost and process optimization program. However, these funds are to be used to cover the costs related to the Company's planned operational restructuring measures.



KEY FIGURES FOR Q3 2016 Q3 2015 Change in 9M 2016 9M Change in THE GROUP % 2015 % in EUR million

Sales 243.7 248.1 -1.8 695.1 689.6 0.8 TOM TAILOR 73.5 68.9 6.7 211.3 195.0 8.4 Retail BONITA 67.4 84.0 -19.7 220.8 243.0 -9.1 TOM TAILOR 102.8 95.2 8.0 262.9 251.5 4.5 Wholesale

Gross profit 116.5 133.4 -12.6 372.8 385.9 -3.4 Gross profit 47.8 53.8 53.6 56.0 margin in %

Recurring EBITDA 16.0 21.0 -24.0 39.5 47.3 -16.6 Recurring EBITDA 6.6 8.5 5.7 6.9 margin in % Adjusted for 52.2 8.6 >100 56.8 10.8 >100 non-recurring effect EBITDA -36.2 12.5 >-100 -17.3 36.5 >-100 EBITDA margin in -14.8 5.0 -2.5 5.3 %

Recurring net 0.5 5.7 -91.3 -3.4 3.3 >-100 result for the period Adjusted -0.04 0.15 >-100 -0.25 -0.01 >-100 earnings per share (in EUR) One-off items 56.5 7.8 >100 63.3 13.6 >100 including deferred taxes Net result for -56.0 -2.0 >-100 -66.7 -10.3 >-100 the period Earnings per -2.21 -0.15 >-100 -2.68 -0.54 >-100 share (in EUR)

Cash flow from 6.1 12.7 -52.4 0.1 18.4 -99.7 operating activities Cash flow from -4.2 -3.7 -13.1 -11.5 -18.4 37.6 investments





30/09/2016 30/09/2015 Change in % Total assets 750.9 839.0 -10.5 Equity 144.2 214.3 -32.7 Equity ratio (in %) 19.2 25.5 Cash and cash equivalents 37.5 57.0 -34.2 Net debt 246.7 235.8 4.7





Points of sale 30/09/2016 30/12/2015 Absolute change Retail stores 458 460 -2 Franchise stores 207 203 4 Shop-in-shops 3,091 2,956 135





About TOM TAILOR GROUP

TOM TAILOR GROUP is an international fashion and lifestyle company offering stylish apparel and accessories in the medium price range through its umbrella brands TOM TAILOR and BONITA. The TOM TAILOR umbrella brand comprises the brands TOM TAILOR, TOM TAILOR Denim, and TOM TAILOR Contemporary. These high-quality collections are aimed at customers between 0 and 40. BONITA, one of Germany's leading fashion brand producers and retailers, has been a part of the TOM TAILOR GROUP since August 2012. BONITA sells menswear and womenswear collections for the over-40 age group.

The TOM TAILOR brand is marketed through the retail and wholesale segments, and thus through single-label stores as well as wholesale partners. At the end of September 2016, these comprised 458 TOM TAILOR stores and 207 franchise stores, 3,091 shop-in-shops and around 8,900 multi-label points of sale. The brand is present in more than 40 countries.

BONITA has 982 retail stores as well as 50 shop-in-shop spaces.

The collections of both brands are also available through their respective online shops.

Further information is also available at www.tom-tailor-group.com and www.BONITA.eu

Media and investor contact

Felix Zander Head of Investor Relations & Corporate Communications TOM TAILOR GROUP Phone: +49 (0) 40 58956-449 E-Mail: felix.zander@tom-tailor.com

Lena C. Wulfmeyer Senior Manager Corporate Communications TOM TAILOR GROUP Phone: +49 (0) 40 58956-420 Email: lena.wulfmeyer@tom-tailor.com

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10.11.2016 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: TOM TAILOR Holding AG Garstedter Weg 14 22453 Hamburg Germany Phone: +49 (0) 40 589 56 0 Fax: +49 (0) 40 589 56 398 E-mail: info@tom-tailor.com Internet: www.tom-tailor-group.com ISIN: DE000A0STST2 WKN: A0STST Listed: Regulated Market in Frankfurt (Prime Standard), Hamburg; Regulated Unofficial Market in Berlin, Dusseldorf, Hanover, Munich, Stuttgart, Tradegate Exchange End of News DGAP News Service ---------------------------------------------------------------------------

519159 10.11.2016