DGAP-News: Powerland AG / Key word(s): Final Results
Powerland AG: Powerland reports revenue growth and publishes audited
Annual Report for full year 2014
29.05.2015 / 11:35
---------------------------------------------------------------------
Powerland reports revenue growth and publishes audited Annual Report for
full year 2014
- Full year 2014 revenue grew by 4.8% to EUR 175.1 million; EBIT down
13.4% to EUR 10.7 million
- Product mix continues to improve: Luxury segment contributes 68.9% to
Group revenue in full year 2014 (FY 2013: 62.4%)
- Further optimization of distribution network
- Increased equity ratio of 78.5% as at 31 December 2014 (68.2% as at 31
December 2013)
- Conservative outlook for 2015
Frankfurt/Main, 29 May 2015 - Powerland AG (ISIN DE000PLD5558 / Prime
Standard), Powerland AG (ISIN DE000PLD5558 / Prime Standard), the leading
Chinese company of premium handbags, leather goods and accessories, today
presents the Annual Report for the financial year 2014, with an unqualified
audit opinion and adoption by the Supervisory Board.
2014 remained a challenging year for Powerland. Although China is gradually
migrating to a consumption-driven economy, the general economic slow-down
had an adverse impact on the consumer market. In particular, China's luxury
goods market had unprecedentedly contracted by one per cent on a
year-on-year basis. In this difficult environment, Powerland achieved
revenues of EUR 175.1 million in full year 2014, up 4.8% from EUR 167.1
million in 2013. This plus was driven by an increase in sales of products
from the Luxury segment of approximately 15.8%. Over the course of 2014,
Powerland successfully continued its strategy to migrate towards its
high-profit-margin segment: The Luxury segment now contributes 68.9% of
revenues to the Company, in contrast to 62.4% for 2013. In addition, the
Luxury segment proves to be highly profitable: During the fourth quarter
2014, segment EBIT significantly increased from EUR 0.3 million in Q4 2013
to EUR 3.4 million in Q4 2014.
<pre>
in EUR million 2013 2014 Change (%)
Revenue 167.1 175.1 4.8%
Luxury 104.2 120.7 15.8%
Casual 62.9 54.4 -13.5%
Luxury % 62% 69%
Casual % 38% 31%
Gross profit 60.8 60.6 -0.4%
EBIT1 12.3 10.7 -13.4%
Net profit 5.4 3.8 -30.3%
Earnings per share in EUR2 0.36 0.25 -30.6%
</pre>
1 EBIT represents earnings before net finance cost and tax
2 The computation of earnings per share is based on net profit and 15
million shares.
Continued focus on quality of Powerland's distribution network
In 2014, Powerland continued the review of the sales and brand performance
of its existing stores and as a consequence downsized the distribution
network by underperforming stores. In the meantime, some store locations
were adjusted from higher to lower floors to enhance the brand visibility
and boost single-store performance in return. In addition, Powerland has
implemented more stringent criteria for new store openings as the brand
name is getting more recognized and customer appeal has increased. In line
with this strategy, Powerland opened the first store outside mainland China
at Hong Kong airport, as well as its first lifestyle store in Putian and
the first three online stores at jingdong.com, tmall.com and vip.com. In
total, the number of Powerland stores decreased from 214 as at 1 January
2014 to 200 as at 31 December 2014. 36 stores were newly opened in 2014
while 50 stores were closed during the same period. Out of the 200 existing
stores, 163 are distributor-operated stores, 34 self-operated stores and 3
online stores.
Earnings situation
Despite the increased revenue, gross profit of the Company decreased
slightly from EUR 60.8 million (FY 2013) to EUR 60.6 million (FY 2014)
mainly due to the gross profit decrease of 29.1% in the Casual segment. Due
to a more efficient management of distributors and a more efficient
allocation of the marketing budget, full year SG&A expenses decreased from
EUR 33.8 million by 13.2%, to EUR 29.3 million. Meanwhile, Powerland's
administrative and other expenses increased from EUR 15.0 million in 2013
by 40.3%, to EUR 21.0 million in 2014 mainly due to increased provisions
for trade receivables. As a result, full year operating earnings before
interest and taxes (EBIT) decreased from EUR 12.3 million by 13.4%, to EUR
10.7 million and EBIT margin decreased from 7.4% in 2013 to 6.1% in 2014.
Due to higher financial expenses, profit before tax fell from EUR 9.6
million in 2013 by 19.8% to EUR 7.7 million in 2014.
Increased equity ratio
Equity increased from EUR 151.3 million as at 31 December 2013 by 12.8% to
EUR 170.6 million as at 31 December 2014 mainly resulting from the profit
generated in 2014. The equity ratio increased from 68.2% as at 31 December
2013 to 78.5% as at 31 December 2014. Prior-year figures have been adjusted
in accordance with IAS 8 (please refer to note 4 in the Annual Report).
Conservative outlook for 2015
During China's annual parliamentary meeting in March 2015, an economic
growth target at "around 7 per cent" was announced for 2015. This signifies
the slowest expansion rate since 25 years. It was also admitted that China
faced greater economic headwinds this year than in 2014.
In this context, the Company holds a conservative outlook about 2015. Group
revenue is expected to decline to approximately EUR 112 million in 2015 due
to weakening demand from both the domestic and the overseas market. In
response, Powerland plans to deepen the restructuring of its nationwide
distribution network and contract self-operated stores to further reduce
store maintenance cost. Furthermore, sales & distribution channels of the
Luxury segment will be further diversified to offset the impact from the
decelerating retail market, but the effect of the strategic transition is
yet to be testified. In addition, the Company will continue to pursue
austerity in the management of operating expenses. However, due to the
adverse market conditions faced by our distribution partners, the trade
receivable position is subject to higher provision adjustment. As a result,
the Company predicts that Group EBIT of 2015 will decline to approximately
EUR 6 million and Group net profit is exposed to risk of net loss. To
improve liquidity, the Company has no major capital expenditure plan in
2015 and will have exhaustive efforts to reduce the level of working
capital.
For the annual report for full year 2014 and further information about the
Company please refer to: www.powerland.ag
For further 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
---------------------------------------------------------------------
29.05.2015 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.
The DGAP Distribution Services include Regulatory Announcements,
Financial/Corporate News and Press Releases.
Media archive at www.dgap-medientreff.de and www.dgap.de
---------------------------------------------------------------------
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: Regulated Market in Frankfurt (Prime Standard); Regulated
Unofficial Market in Berlin, Dusseldorf, Hamburg, Munich,
Stuttgart
End of News DGAP News-Service
---------------------------------------------------------------------
363191 29.05.2015
DGAP-News: Powerland AG: Powerland reports revenue growth and publishes audited Annual Report for full year 2014
| Source: EQS Group AG