DGAP-News: Powerland AG: Powerland continues sustainable recovery with strong third quarter results


DGAP-News: Powerland AG / Key word(s): 9-month figures
Powerland AG: Powerland continues sustainable recovery with strong
third quarter results

28.11.2014 / 07:28

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Powerland continues sustainable recovery with strong third quarter results

  - Group revenue increased by 12.8% to EUR 137.1 million after nine
    months;

  - EBIT after nine months grew by 16.4% to EUR 13.0 million;

  - Quarterly EBIT (EUR 1.6 million) and net profit (EUR 0.7 million)
    turned positive;

  - Share-buyback continued;

  - Further optimization of store network and strengthened focus on online
    activities;

  - Launch of online stores in China's biggest B2C platforms; 

  - Outlook for FY 2014 confirmed

Frankfurt/Main, 28 November 2014 - Group revenues of Powerland (ISIN
DE000PLD5558 / Prime Standard), the leading Chinese manufacturer of
handbags, leather goods and accessories, have been further increasing in
the third quarter 2014 mainly driven by strong growth in the luxury
segment. After an already powerful rebound in the second quarter of 2014,
third quarter revenues rose by 36.6% to EUR 42.7 million (Q3 2013: EUR 31.2
million). Revenues in the first nine months of 2014 increased by 12.8% to
EUR 137.1 million (Q1-Q3 2013: EUR 121.6 million).

Revenues in the Luxury segment increased by 26.9% to EUR 91.2 million in
the first nine months of 2014 (Q1-Q3 2013: EUR 71.9 million) and by 62.5%
to EUR 25.5 million in the third quarter of 2014 (Q3 2013: EUR 15.7
million). The high growth rates are mainly due to a relatively low
comparative basis in 2013. Revenues in the Casual segment showed a decline
of 7.5% to EUR 45.9 million in the first nine months of 2014 (Q1-Q3 2013:
EUR 49.7 million) due to the restructuring of Powerland's Putian factory in
the first half of 2014 and rose by 10.5% to EUR 17.2 million in the third
quarter of 2014 (Q3 2013: EUR 15.5 million). According to the communicated
strategy, sales contributions from the Luxury segment continued to increase
and now contribute 66.5% to Group revenue, up from 59.1% in the first nine
months of 2013.

The higher revenue and a more effective allocation of marketing expenses
lead to an increase in earnings before interest and taxes (EBIT) by 16.4%
to EUR 13.0 million in the first nine months of 2014 (Q1-Q3 2014: EUR 11.2
million). This development underlines Powerland's success in its strategic
focus on the Luxury segment for future profitable growth. In line with this
positive development, net profit was up 25.9% to EUR 8.8 million in the
first nine months of 2014 (Q1-Q3 2013: EUR 7.0 million). Both EBIT and net
profit turned from negative (EUR -0.9 million; EUR -1.6 million) in the
third quarter 2013 to a positive figure of EUR 1.6 million and EUR 0.7
million respectively in the third quarter 2014.

<pre>

in EUR million  Q3 2014  Q3 2013  Change     9M 2014  9M 2013  Change

Revenue         42.7     31.2     36.6%      137.1    121.6    12.8%
Luxury          25.5     15.7     62.5%      91.2     71.9     26.9%
Casual          17.2     15.5     10.5%      45.9     49.7     -7.5%
Luxury %        59.8     50.2                66.5     59.1
Casual %        40.2     49.8                33.5     40.9
Gross profit    13.5     9.8      37.4%      46.5     44.4     4.7%
Luxury          10.7     7.0      54.1%      38.9     33.8     15.2%
Casual          2.7      2.8      -4.0%      7.5      10.6     -28.7%
EBIT            1.6      -0.9     276.8%     13.0     11.2     16.4%
Luxury          0.9      -1.5     155.7%     11.1     6.7      64.9%
Casual          0.8      0.6      22.2%      2.0      4.5      -56.1%
EBIT margin     3.8%     -2.9%               9.6%     9.2%
Luxury          3.4%     -9.8%               12.1%    9.3%
Casual          4.5%     4.0%                4.3%     9.0%
Net profit      0.7      -1.6     144.6%     8.8      7.0      25.9%


</pre>

Net cash flow from operating activities has changed from negative EUR 63.4
million in the first nine months 2013 to EUR 5.1 million in the first nine
months 2014. This increase was mainly due to a more effective management of
working capital in the course of 2014. Net debt slightly increased from EUR
44.3 million to EUR 46.9 million. Cash and cash equivalents increased from
EUR 15.4 million as at 31 December 2013 to EUR 15.6 million at the end of
the reporting period.

In the first nine months of 2014, 227,540 shares were repurchased by
Powerland and EUR 532,236 was returned back to the shareholders.

 
Further optimization of store network and strengthened focus on online
activities
To further strengthen Powerland's competitiveness in the luxury segment,
Powerland continued to actively optimize its distribution network in Q3
2014. In Q3 2014, Powerland closed down 19 underperforming stores and added
7 new stores to its distribution network. Accordingly, the number of
Powerland stores reached 209 as at the end of September 2014 (202 as at end
of September 2013). Thereof 166 (30 September 2013: 164) stores are
distributor operated stores and 43 (30 September 2013: 38) self-operated
stores.

In the third quarter 2014 Powerland also rolled out its Lifestyle Store,
which offers a full spectrum of Powerland products, as another attempt to
testify the company's multi-product strategy. In addition, Powerland has
extensively strengthened its VIP services and now provides a wide range of
bespoke services for high-end consumers. Along with the extensive digital
marketing campaign in high-traffic hubs such as airports, Powerland is
strengthening its focus on online activities. In the third quarter 2014,
Powerland launched its online stores in tmall.com and jd.com, China's two
biggest B2C platforms, to address the massive e-commerce consumer group.
Meanwhile, Powerland is now collaborating with VIP.com, China's leading
special sales platform, to hold regular sales events. In addition, as part
of the constant efforts to build up the brand images in the targeted
consumer group, Powerland recently implemented covert advertising in
Shanshan Comes to Eat, one of the most high-profile TV dramas that were
broadcasted during the summer vacation.

Outlook for 2014 confirmed
The Management Board confirms its already communicated cautiously
optimistic outlook for 2014. Powerland expects to outperform what has been
achieved in 2013.

In the rest of 2014, Powerland will continue to optimize its distribution
network and adjust underperforming stores. Apart from on-going distribution
management, Powerland will implement its multi-product strategy to more
sales terminals to stabilize the single-store performance. Regarding the
casual segment, Powerland is still working on the restructuring on the
Putian factory and contributions from the casual segment are expected to
flatten in the near term. Financial wise, in the face of the challenging
environment, Powerland will strengthen its cash flow management and adopt
necessary measures to control the working capital level.

The full report on the third quarter 2014 is published on the Company's
website (www.powerland.ag).

For more information, please contact:

Powerland AG
c/o GFD - Gesellschaft für Finanzkommunikation mbH
Fellnerstrasse 7-9
60322 Frankfurt am Main
Germany
Phone: +49 (0) 69 66 554 - 459 
Fax: +49 (0) 69 66 554 - 276 
E-mail: ir@powerland.ag
Home: http://www.powerland.ag



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Language:    English                                               
Company:     Powerland AG                                          
             c/o GFD mbH, Fellnerstr. 7-9                          
             60322 Frankfurt am Main                               
             Germany                                               
Phone:       +49 69 - 66554-459                                    
Fax:         +49 69 - 66554-276                                    
E-mail:      ir@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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