DGAP-News: Powerland AG continues strong operating growth for the first nine months 2011


DGAP-News: Powerland AG / Key word(s): Quarter Results/Interim Report
Powerland AG continues strong operating growth for the first nine
months 2011

17.11.2011 / 07:00

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Powerland continues its trend of strong operating growth for the first nine
months of 2011

  - During the first nine months of 2011, Group revenues in EUR grew by
    28.4% year-on-year

  - Above-average growth in the Luxury segment:Revenue increase of 45.9% to
    EUR 57.3 million

  - EBIT increased by 36.3% to EUR 28.3 million; EBIT margin improved to
    25.9%

  - Consistent expansion of the sales network in China:23 new stores were
    opened in Q3

  - Successful launch of the Spring/Summer 2012 collection 

Frankfurt / Main, 17.11.2011 - Powerland AG (Prime Standard / ISIN
DE000PLD5558), the leading Chinese manufacturer of exclusive luxury
handbags and leather goods, listed on the Frankfurt Stock Exchange since
April 2011, presented today its results for the first nine months of 2011.

Year-on-year, Powerland Group revenue increased by 28.4% from EUR 85.1
million to EUR 109.3 million. Year-on-year, gross profit increased by 42.9%
to EUR 48.1 million. EBIT for the first nine months of 2011 also increased
from EUR 20.7 million to EUR 28.3 million. Net income before taxes amounted
to EUR 23.9 million, representing an increase of EUR 3.8 million
year-on-year.
In particular, the third quarter of this fiscal year showed strong
progression. The increase in EBIT growth of 39.2% exceeded the increase in
revenues of 33.8%, compared to the prior year's third quarter.

'Strong revenue growth, in particular during the third quarter, is proof of
the success of our strategy. During the past nine months, we have been able
to optimise the portfolio and the price mix in both of our segments. The
demand for products in the Luxury segment has increased markedly as a
result of our successful sales strategy, the expansion of our store network
to more than 146 stores and our new marketing and advertising concept at
Chinese airports' stated Shunyuan Guo, CEO of Powerland AG, referring to
the Company's positive perfomance.

For the first nine months of the year, revenue growth in the Luxury segment
amounted to EUR 18.0 million. This represented year-on-year growth of 45.9%
to EUR 57.3 million. Accordingly, the Luxury segment constituted 52.4% of
gross revenue. Strong growth in this segment is the result of the expansion
of the store network and the successful introduction of price increases.
Twenty-three new stores were opened in Q3. These included a flagship store
in Shanghai and two exclusive stores in Beijing and Shenyang which are
operated by Powerland itself. For Q3, EBIT for the Luxury segment amounted
to EUR 4.4 million, almost double the EBIT of Q3 2010.

Year-on-year revenue in the Casual segment increased by 13.4% to EUR 52.0
million for the first nine months of the year. Likewise in this segment,
revenue growth was the most dynamic during Q3 2011, amounting to a 17%
increase year-on-year. EBIT for the segment amounted to EUR 15.0 million
for the nine-month period, representing an increase of 12% year-on-year.
Higher export sales of synthetic leather products, as well as increased
margins, drove the positive results for Powerland's 'Sotto' brand.

For the first nine months of 2011, gross profit for the Powerland Group
increased to EUR 48.1 million compared to EUR 33.7 million for the same
period in 2010. This represents growth of 42.9%. This improvement is due to
price increases for the products which exceeded cost increases in raw
materials, labour and administrative expenses as well as an improved
product portfolio.

For the first nine months of 2011, net financing costs rose to EUR 4.4
million. This increase is largely due to conversion of a substantial
majority of the IPO proceeds from EUR into RMB which led to foreign
exchange losses of EUR 2.7 million in Q3 2011 due to currency fluctuations
during required conversion process. Earnings before tax amounted to EUR
23.9 million, representing an increase of EUR 3.8 million year-on-year.
Income taxes for the Group rose to EUR 6.7 million compared to EUR 2.7
million for the same period in 2010. At EUR 1.31, earnings per share were
below those of the prior year, EUR 1.74, as a result of the dilution effect
caused by the capital increase in connection with the company's IPO. As at
30 September 2011, equity amounted to EUR 118.9 million. The equity ratio
as of end of September amounted to 72.8% compared with 37.5% on 31 December
2010.

For the first nine months of 2011, revenue and margin trends developed
according to plan. Powerland is confident that it can meet the targets
contained in the 2011 financial projections and that it can achieve
year-on-year organic growth of more than 25% (in RMB) in comparison to
2010. Despite marginally lower growth rates in the Chinese economy,
Powerland is confident that, with an EBIT margin of at least 25%, it can
exceed 2010 figures; provided that it does not experience significant
increases in raw materials costs and overhead during the remainder of the
year.

'We will continue to optimise Company net profits by means of efficient
working capital and cash flow management as well as the implementation of
improved cost controls. Further development of the product portfolio for
the Casual segment which has already begun, as well as the creation of
innovative products in the Luxury segment - including the expansion of our
sales network - give us reason to be confident that the Company's key
financial figures as well as profitability will continue to benefit from
strong increases in operating growth, the improved product portfolio and
the strength of the Powerland brand,' stated Guo describing the outlook for
the Group.

 
|[![CDATA[|[pre|]]]|]

Group
key figures          Q3     Q3       9 months    9 months      Change    
Change
                                                (Q1-Q3)      (Q1-Q3)       

Overview            2010  2011      2010          2011           absolute  
in %
EUR ('000)                                        
Revenue          31,274   41,840  85,111      109,261        24,150   28.4%
thereof 
Luxury             13,787   21,376  39,287        57,308        18,021  
45.9%
Segment              
Casual             17,487   20,464  45,824         51,953         6,129  
13.4%
Segment             
Gross profit     12,109   17,949  33,684         48,136        14,452  
42.9%
EBIT                   7,101     9,882  20,744         28,273         
7,529   36.3%
EBT                    6,824     6,850  20,083         23,911         
3,828   19.1%
Net profit           5,867     4,672  17,360         17,170          - 190 
-1.1%
for the period
EPS in EUR            0.59*      0.31**  1.74*            1.31**      
-0.43  -24.7%


|[![CDATA[|[/pre|]]]|]

* The computation of basic earnings per share for Q3 and Q1-Q3 2010 was
based on profit of the period and the 10 million shares issued during the
reorganisation. They were issued on 1 January 2010.
** Based on the profit of the period and average weighted shares. The
calculation has been computed on the basis of an average of 15,000,000
shares for Q3 2011 and 13,148,148 shares for Q1 - Q3 2011 after taking into
account the 5 million new shares issued during the IPO in April 2011.

For additional information, please contact:

Powerland AG

Investor Relations Tel: + 49 (0) 172 - 674 97 92
Jörg Peters         Fax: + 49 (0) 6196 - 777 99 66
Hauptstrasse 129 E-Mail: ir@powerland.ag
65760 Eschborn Internet: http://www.powerland.ag
 

Public Relations         Tel: + 49 (0) 6196 - 776 41 10
Karl-Friedrich Brenner Fax: + 49 (0) 6196 - 776 41 22
Hauptstrasse 129         E-Mail: pr@powerland.ag
65760 Eschborn         Internet: http://www.powerland.ag 


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Language:    English                                               
Company:     Powerland AG                                          
             Lyoner Straße 14                                      
             60528 Frankfurt am Main                               
             Germany                                               
Phone:       +49 172 - 67 49 792                                   
Fax:         +49 6196 - 777 99 66                                  
E-mail:      info@powerland.ag                                     
Internet:    www.powerland.ag                                      
ISIN:        DE000PLD5558                                          
WKN:         PLD555                                                
Listed:      Regulierter Markt in Frankfurt (Prime Standard);      
             Freiverkehr in Berlin, Düsseldorf, Hamburg, München,  
             Stuttgart                                             
 
 
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146692 17.11.2011