interim report 1 january –30 september 2014

Transcription

FASHION
FORWARD
INTERIM REPORT
1 JANU A RY – 3 0 S E P T E M B E R 2 0 1 4
KEY FIGURES
TOM TAILOR Holding AG
EUR million
Revenue
Q3 2014
Q3 2013
Change
absolute
Change
relative
Q1–Q3 2014
Q1–Q3 2013
Change
absolute
Change
relative
253.8
249.0
4.8
1.9 %
679.1
656.0
23.1
3.5 %
TOM TAILOR Retail
64.7
67.1
– 2.4
– 3.6 %
188.6
174.9
13.7
7.8 %
TOM TAILOR Wholesale
101.7
90.2
11.5
12.7 %
249.3
226.9
22.4
9.9 %
BONITA
87.4
91.7
– 4.3
– 4.7 %
241.2
254.2
– 13.0
– 5.1 %
TOM TAILOR Retail
25.5
26.9
27.8
26.7
TOM TAILOR Wholesale
40.1
36.2
36.7
34.6
BONITA
Share of revenue (in %)
34.4
36.8
35.5
38.8
Cost of materials
117.7
119.2
–1.5
–1.3 %
293.6
297.3
– 3.7
–1.2 %
Gross profit
136.1
129.8
6.3
4.9 %
385.5
358.7
26.8
7.5 %
Gross margin (in %)
53.6
52.1
56.8
54.7
Recurring EBITDA
26.4
21.4
56.9
47.2
9.7
20.6 %
Recurring EBITDA margin (in %)
10.4
8.6
One-off items/special factors
0.9
EBITDA
5.0
23.4 %
8.4
7.2
2.2
–1.3
– 59.1 %
2.0
10.7
– 8.7
– 81.3 %
25.6
19.2
6.4
33.3 %
54.9
36.5
18.4
50.4 %
EBITDA margin (in %)
10.1
7.7
8.1
5.6
Recurring EBIT
15.9
9.4
24.8
12.0
12.8
106.7 %
6.3
3.8
3.7
1.8
– 48.6 %
Recurring EBIT margin (in %)
6.5
69.1 %
3.2
4.4
–1.2
thereof amortisation of TOM TAILOR/BONITA PPA
2.3
2.2
0.1
thereof cost of BONITA integration
0.0
2.1
(net of imputed tax effect)
EBIT
12.7
5.0
EBIT margin (in %)
5.0
2.0
7.7
– 27.3 %
154.0 %
8.9
17.3
– 8.4
6.9
6.6
0.3
0.7
9.2
15.9
– 5.3
2.3
– 0.8
21.2
400.0 %
Recurring net income for the period
9.8
3.6
6.2
172.2 %
9.4
0.2
9.2
4,600.0 %
Recurring earnings per share (in EUR)
0.30
0.05
0.25
500.0 %
0.22
– 0.20
0.42
210.0 %
2.7
3.5
– 0.8
– 22.9 %
7.6
14.1
– 6.5
– 46.1 %
1.6
1.5
0.1
4.8
4.6
0.2
(including imputed tax effect)
thereof TOM TAILOR/BONITA PPA
Net income for the period
7.1
0.0
7.1
1.8
– 13.9
15.7
112.9 %
Earnings per share (in EUR)
0.19
– 0.09
0.28
311.1 %
– 0.08
– 0.78
0.70
89.7 %
40.0
5.9
34.1
578.0 %
46.8
10.4
36.4
350.0 %
6.2
4.7
1.5
31.9 %
13.4
19.0
– 5.6
– 29.5 %
6,364
6,406
– 42
– 0.7 %
6,364
6,406
– 42
– 0.7 %
730
529
201
38.0 %
730
529
201
38.0 %
thereof TOM TAILOR Retail
1,699
1,666
33
2.0 %
1,699
1,666
33
2.0 %
thereof BONITA
3,935
4,211
– 276
– 6.6 %
3,935
4,211
– 276
– 6.6 %
Cash generated from/used in operations
Net cash used in investing activities
Employees as at 30 September (absolute)
thereof TOM TAILOR Wholesale
31/12/2013
30/9/2014
30/9/2013
Total assets
759.6
795.8
768.7
27.1
3.5 %
Equity
221.7
232.7
200.8
31.9
15.9 %
Equity ratio (in %)
29.2
29.2
26.1
Return on equity (in %)
– 7.3
0.8
– 6.9
Cash funds
47.1
36.7
33.4
3.3
9.9 %
Current financial liabilities
265.6
242.5
309.5
– 67.0
– 21.6 %
Net liabilities
218.5
205.8
276.1
– 70.3
– 25.5 %
Gearing (in %)
98.6
88.4
137.5
EUR million
CONTENTS
TOM TAILOR GROUP Brand World
28
INTERIM FINANCIAL STATEMENTS
04
Letter to Shareholders
28
Consolidated Income Statement
06
Highlights in Q3/2014
28
Consolidated Statement of
08
TOM TAILOR on the Capital Market
29
Consolidated Statement of Cash Flows
02
Comprehensive Income
10
INTERIM MANAGEMENT REPORT
30
Consolidated Balance Sheet
10
Fundamental Information about the Group
32
Consolidated Statement of Changes in Equity
12
Report on Economic Position
34
Notes to the Consolidated Interim
22
Employees
Financial Statements
23
Risks and Opportunities
23
Report on Post-Balance Sheet Date Events
44
FINANCIAL CALENDAR AND CONTACT
24
Report on Expected Developments
44
Financial Calendar
44
Contact
45
Forward-Looking Statements
45
Publication Details
T O M TA I L O R G r o u p B r a n d Wo r l d
02
T O M TA I LO R G R O U P
BRAND WORLD
The TOM TAILOR brand offers high-quality, fashionable
BONITA offers fashion for women and men over 40. The basis
clothing and accessories in the mid-range price segment
for its collections are high-quality items of clothing that can
for children and for women and men up to the age of 40.
be mixed and matched over and over to create new outfits.
TOM TAILOR comprises the TOM TAILOR and TOM TAILOR
They feature charming details, a perfect fit and outstanding
Denim brands with twelve collections a year, and TOM TAILOR
colour fidelity. The products are sold exclusively in BONITA’s
POLO TEAM with ten annual collections. The brand’s fash-
own retail stores as part of a highly standardised system
ion world is complemented by a large number of licensed
under the slogan “BONITA gibt es nur bei BONITA” (“You can
products.
only get BONITA at BONITA”). Demographic trends with an
increasing number of people over 40, combined with less
intensive competition in this market segment, offer BONITA
substantial growth opportunities.
The TOM TAILOR brand launched its new brand image in
August 2014. By pushing its core brand in a new direction,
TOM TAILOR is positioning itself as a “new urban player”
in keeping with its new slogan: “Life is a game, play it,
be confident, dress in style”. From now on, the twelve
TOM TAILOR collections each year will be divided into three
high-class lifestyle worlds that reflect the new spirit of the
brand: Authentic Urban Wear, College Sports and Contemporary Urban Style. The TOM TAILOR MEN, and TOM TAILOR
WOMEN as well as TOM TAILOR KIDS, TOM TAILOR MINIS and
TOM TAILOR BABY lines will cater to the target groups from
0 to 40 years.
The premium sportswear brand is targeted at men and
women aged 25 to 40. Its ten collections a year feature
elaborate embroidered appliqués, classic emblems and
coordinating prints for a sporty style.
T O M TA I L O R G r o u p B r a n d Wo r l d
03
TOM TAILOR Denim comprises the TOM TAILOR Denim Male
and TOM TAILOR Denim Female lines. These collections are
aimed at youths and young adults between the ages of 15
and 25. They pick up on current trends from fashion capitals
around the world, marrying the latest styles and colours with
fashionable washes and selected details. TOM TAILOR Denim
embodies a spirited, authentic lifestyle.
BONITA creates fashion for women who want to highlight
their individual style. BONITA looks are authentic and confident, and enhance women’s natural beauty. High colour
fidelity and perfectly coordinating looks provide plenty of
options for creating a sophisticated, timeless style without
sacrificing fashionable details. BONITA men’s multifaceted
outfits complement men’s personalities. Offering an excellent fit, a large selection of different styles and high-quality
materials, BONITA men provides casual fashion that can be
mixed and matched, from sporty to relaxed.
Hamburg, November 2014
Dear Shareholders and Friends of TOM TAILOR,
The TOM TAILOR GROUP made good progress in the first nine months of the year. We
concentrated on raising profitability while pursuing our growth strategy.
Between January and September, we significantly increased our recurring and also reported
EBITDA at Group level by over 20 % and 50 %, respectively. Both of our brands contributed
to this positive development. At the same time, the Group’s gross margin improved from
54.7 % in the prior-year period to 56.8 %. We also made visible progress with our BONITA
brand, which became substantially more profitable. By significantly scaling back sales
campaigns, we increased the quality of revenue, even though this led to a temporary dip in
revenue from BONITA overall. Moreover, we source the vast majority of our goods through
our own purchasing organisation in Asia, which enabled the brand to lift its gross margin by
4.9 percentage points to 67.0 % and more than double its reported EBITDA. The higher share
of consolidated revenue accounted for by Retail sales, our clear focus on revenue quality
and the bundling of our purchasing volumes are also having a positive effect on the bottom
line: after the first nine months of 2014, we have returned to profitability and are reporting
positive net income for the period of EUR 1.8 million.
In addition to improving our earnings power, we still have our growth trajectory firmly in our
sights. Revenue rose by 3.5 % in the nine-month period to EUR 679 million – growth which
can be attributed to our TOM TAILOR brand in particular. Up by 9 %, this brand’s revenue
compensated for the anticipated decrease in revenue from the BONITA brand. However, like
the entire German textile industry, we were hampered by a strong headwind in the third
quarter. The extreme weather conditions led to very erratic demand among clothing retailers,
which closed the quarter down 4 %. While our TOM TAILOR wholesale segment successfully
defended its position in this exceedingly difficult environment, our retail business failed to
fully absorb this high volatility. As a result, we were unable to sustain the strong momentum
of the first half of the year without interruption and now estimate that growth for 2014 as a
whole will fall marginally short of the targets set at the beginning of the year. Accordingly, we
have revised our forecast for 2014 downwards slightly and now expect consolidated revenue
in the range of EUR 925 million to EUR 935 million and a recurring EBITDA margin of 9.2 %
to 9.7 %.
We are optimistic about the remaining weeks of this year: with our two strong brands,
enhanced processes and highly motivated teams, we intend to exploit the forthcoming
Christmas season to the full.
Yours sincerely,
Dieter Holzer
06
HIGHLIGHTS
IN Q3/2014
NEW MAJOR SHAREHOLDER
FOR
T O M TA I L O R H O L D I N G AG
T O M TA I L O R G R O U P ’ S
C A R E E R P O R TA L H A S
A NEW LOOK AND FEEL
JULY 2014
AUGUST 2014
TOM TAILOR Holding AG is continuing its profitable growth
The TOM TAILOR GROUP’s new career portal went live on
course with the support of a new major shareholder.
6 August.
Fidelidade-Companhia de Seguros SA, Portugal’s largest
insurance broker and an indirect subsidiary of Fosun (Fosun
First and foremost, the revamped site gives external job
International Limited, HKEx stock code: 00656, and subsid-
applicants the opportunity to search for vacancies at the
iaries), has acquired an interest in TOM TAILOR Holding AG.
TOM TAILOR GROUP easily. However, the portal also offers
The new investor has acquired the 23.16 % stake from the
a great deal more – a look behind the scenes at work at the
former majority shareholder, Versorgungs- und Förde-
TOM TAILOR GROUP.
rungsstiftung, Vaduz, Liechtenstein, with the participation
of the members of the Management Board of TOM TAILOR
Thanks to the new, modern website, potential applicants can
Holding AG.
primarily see staff – and thus the Company – in action, find
out more about training opportunities or even learn about
Fosun provides strong support for the strategy of achieving
the eleven company values.
profitable growth being pursued by the TOM TAILOR GROUP.
Going forward, Fosun will assist the Company in an advisory
capacity with its in-depth knowledge of the consumer goods
and fashion industries, contributing additional expertise.
MACEDONIA GETS ITS FIRST
T O M TA I L O R S T O R E
SEPTEMBER 2014
The first TOM TAILOR store in Macedonia opened its doors
on 5 September 2014. The new store in Skopje City Mall has
an area of 150 m². At the beginning of October, a second
TOM TAILOR store was opened in Skopje’s Capitol Mall, also
with an area of 150 m². Both stores offer the TOM TAILOR
WOMEN and TOM TAILOR MEN lines.
07
The campaign again received celebrity support from many
famous German stars and starlets who acted as models for
the charity initiative and were photographed wearing the
TOM TAILOR charity jeans for the high-profile campaign by
fashion photographer Joachim Baldauf.
On 25 September 2014, the TRIBUTE TO BAMBI gala was held
at the “Station Berlin”. TOM TAILOR was there with a large
TOM TAILOR charity jeans store. All for a good cause! And
another successful event for TOM TAILOR this year.
The charity jeans have been on sale in stores since the
beginning of October and are also available for purchase at
In recent years, the TOM TAILOR brand has been growing in
South Eastern Europe and is now represented in six countries
(Slovenia, Croatia, Serbia, Bosnia/Herzegovina, Bulgaria and
Romania). By entering the Macedonian market, the Group has
added a seventh country from this region. Since 2010, the
retail network has been expanded from 23 to 82 stores.
T O M TA I L O R S E L L S
CHARITY JEANS FOR
A GOOD CAUSE
SEPTEMBER 2014
In 2014 TOM TAILOR is once again the official fashion partner
in the TRIBUTE TO BAMBI fund-raising campaign for children
in need. It is the sixth time that the Group has developed
a limited denim collection for the charity event. As in past
years, TOM TAILOR will donate the entire net proceeds
from the jeans to charity. This year, for the first time, 2,800
limited-edition denim charity bags will also be sold in stores.
www.tom-tailor.de.
T O M TA I L O R o n t h e C a p i t a l M a r k e t
08
T O M TA I LO R
O N T H E C A P I TA L M A R K E T
SHARES AND INVESTOR RELATIONS
TOM TAILOR’S SHARES
as the year progressed. However, TOM TAILOR was unable
The global financial markets started 2014 on an encourag-
to escape the weak industry data in September and lost
ing note, with the strong economic situation reflecting posi-
some ground once again. At the end of the reporting period
®
tively on share prices. The German DAX index broke through
on 30 September 2014, the share was trading at EUR 13.85,
the 10,000 point barrier for the first time at the beginning
corresponding to a loss of 16 % in the course of the year.
of June, reaching a new all-time high of 10,051 points on
TOM TAILOR’s shares therefore underperformed the bench-
20 June. As the year went on, the crises in Ukraine and the
mark index, the SDAX®, which closed more or less unchanged.
Middle East plus the deteriorating economy and muted
expectations of market participants created uncertainty,
At the end of September 2014, the market capitalisation
leading to greater volatility and considerable price losses.
of TOM TAILOR’s shares amounted to EUR 360.5 million, and
an average of around 54,000 shares were traded daily on all
TOM TAILOR’s shares got off to a positive start in 2014,
German stock exchanges since January 2014.
already recording their high for the year of EUR 16.88 on
3 January. Following an ad hoc disclosure on 18 February
In October, a downturn of the economy in connection with
announcing that the Company had not met its 2013 earnings
weak industry data exerted additional pressure on the share,
targets, the share price plummeted, falling to EUR 12.44 in
which reached its low for the year of EUR 10.70 on 15 October.
the first quarter (14 March 2014). The shares then recovered
Performance of the TOM TAILOR Share from 1 January to 30 September 2014
TOM TAILOR share price in EUR; SDAX indexed as at 30 September 2014
15
10
5
0
–5
–10
–15
TOM TAILOR share
SDAX
–20
®
–25
January
February
March
April
May
June
July
August
September
T O M TA I L O R o n t h e C a p i t a l M a r k e t
09
Key Data on TOM TAILOR shares
Class of shares
No-par-value registered shares
ISIN
DE000A0STST2
WKN (German securities ID number)
A0STST
Ticker symbol
TTI
Index
SDAX® (Prime Standard)
Stock markets
Frankfurt and Hamburg
Most important trading venue
XETRA (electronic trading system)
Designated sponsor
Berenberg Bank AG
Commerzbank AG
INVESTOR RELATIONS
Europe and the United States at road shows and investor
The TOM TAILOR GROUP’s investor relations activities aim
conferences, among other things. These talks centred on
to raise awareness of the Group worldwide and to cement
the new main shareholder Fosun, the corporate strategy
and expand the perception of TOM TAILOR’s shares as an
including the expected development of profitability and the
attractive growth stock. The TOM TAILOR GROUP continu-
performance of the BONITA brand.
ously communicates its operating performance and strategic
orientation in a timely, open manner with the objective of
In the third quarter, the TOM TAILOR GROUP was able to add
strengthening investors’ trust in the shares and achieving
another bank to the group of institutions providing research
a realistic and fair valuation for TOM TAILOR’s shares on the
coverage of TOM TAILOR’s shares. As a result, 14 mostly inter-
capital market.
national investment houses now regularly track the Company’s business development and issue recommendations. As
In the reporting period, the Management Board and the
at the end of September, eight analysts recommended buy-
Investor Relations team continued their active dialogue with
ing and five recommended holding TOM TAILOR shares. One
the capital market and talked with investors from Germany,
investment house recommends selling TOM TAILOR shares.
I n t e r i m M a n a g e m e n t Re p o r t
Fundamental information about the Group
10
INTERIM
MANAGEMENT REPORT
— Sales boosted by 3.5% across the Group in the first
which on the basis of the controlling interest and the exist-
nine months despite a sector-wide difficult third
ing put/call options was already fully consolidated, will now
quarter
be incorporated into the TOM TAILOR GROUP via TOM TAILOR
— EBITDA up by 50.4% and recurring by 20.6%
South Eastern Europe Holding GmbH, Wörgl/Austria, with a
— Gross profit margin for the Group rises to 56.8%
corresponding disclosure of minority interests.
— Operating cash flow goes up to EUR 46.8 million
— For the first time in two years positive net income
for the period after three quarters
— Outlook for the business year 2014 adjusted due
to unfavourable weather conditions
To expand sales activities in the Chinese market, TOM TAILOR
Trading (Shanghai) Company Limited, with headquarters in
Shanghai, was founded on 29 July 2014. TOM TAILOR Asia
Ltd., Hong Kong/China, holds 100 % of this company’s share
capital.
F U N DA M E N TA L I N F O R M AT I O N
ABOUT THE GROUP
With a view to further streamlining the corporate structure,
TOM TAILOR Showroom AG, Glattbrugg/Switzerland, was
merged with TOM TAILOR (Schweiz) AG, Baar/Switzerland
retroactively as at 1 January 2014.
ORGANISATIONAL STRUCTURE AND
BUSINESS OPERATIONS
Aside from these events, there were no significant changes
Group Structure
months of the 2014 financial year. Overall, the consolidated
Effective 27 March 2014, the TOM TAILOR GROUP increased
Group comprises 41 directly and indirectly held subsidiaries.
to TOM TAILOR Holding AG’s Group structure in the first nine
its interest in TOM TAILOR Retail Joint Venture GmbH, which
is domiciled in Bregenz/Austria, and its subsidiaries TT RETAIL
The TOM TAILOR GROUP’s Business Model
GmbH, Lindau/Germany, and TT Franchise AG, Buchs/Switzer-
The TOM TAILOR GROUP does business using two brands,
land, from 51 % to 100 %. These companies were consolidated
TOM TAILOR (TOM TAILOR, TOM TAILOR Denim, TOM TAILOR
without reporting non-controlling interests from the outset
POLO TEAM) and BONITA (BONITA, BONITA men).
due to the existing put/call options. The total purchase price
amounts to EUR 3.9 million. In addition, TOM TAILOR Retail
The TOM TAILOR brands offer casual wear and accessories
Joint Venture GmbH was merged with TOM TAILOR Retail
for children and for women and men up to the age of
Gesellschaft m.b.H., Wörgl/Austria, after the purchase of
40 predominantly in the mid-range price segment under
the shares. Furthermore, the subsidiary TOM TAILOR DOOEL
the slogan “Casual fashion for a casual life”. TOM TAILOR
domiciled in Skopje/Macedonia was formed on 17 June 2014,
releases 14 collections a year (twelve monthly collections
to act as a vehicle for future store expansion in Macedonia.
and two basic collections every six months) for TOM TAILOR
MEN, TOM TAILOR WOMEN and TOM TAILOR Denim, and ten
Effective 1 July 2014, TOM TAILOR South Eastern Europe
collections a year for TOM TAILOR POLO TEAM. The offer-
Holding GmbH, Wörgl/Austria, in which TOM TAILOR Hold-
ing also comprises a large number of licensed products. The
ing AG holds a 75 % stake, acquired a 49 % interest in S.C.
fashion group sells its TOM TAILOR collections via its Retail
TOM TAILOR RETAIL RO S.R.L., Bucharest/Romania, which had
(Company-owned stores and e-commerce) and Wholesale
previously been held by minority shareholders. On account
segments (primarily franchise stores and shop-in-shops).
of the change in the ownership structure, the subsidiary,
I n t e r i m M a n a g e m e nt Re p o r t
11
The TOM TAILOR GROUP sells fashionable clothing for men
The TOM TAILOR GROUP uses this business model to ensure
and women over 40 under the BONITA brand. BONITA’s
sustained growth in an extremely heterogeneous and com-
collections are based around items of clothing that can be
petitive market environment.
mixed and matched repeatedly to create new outfits. The
products are sold exclusively in BONITA’s own stores – and
Strategy and Performance Measurement
in Germany also via its own e-shop since June 2013 – using
The TOM TAILOR GROUP’s strategy is to develop attractive
a highly standardised system under the slogan “BONITA gibt
fashion brands and bring these to a broad group of buyers.
es nur bei BONITA” (“You can only get BONITA at BONITA”).
The focus is on fulfilling customer requirements by rapidly
Unlike the TOM TAILOR brands, the BONITA brand’s collec-
managing fashion trends in an analytical manner. The
tions are not currently sold in the Wholesale segment. The
TOM TAILOR GROUP’s market presence is determined by the
Company sees attractive growth opportunities in this market
two largely complementary brands, TOM TAILOR and BONITA.
segment arising from the demographic trend and the asso-
TOM TAILOR covers the 0- to 40-year-old target group and
ciated increasing number of people over 40. Growth is also
BONITA the over-40 target group. The Group’s strategy is to
being driven by the fact that competition is less pronounced
outperform the industry as a whole in terms of revenue and
compared with the TOM TAILOR target groups.
earnings growth.
The TOM TAILOR GROUP’s business model consciously com-
The TOM TAILOR GROUP aims to achieve this revenue and
bines the emotional added value of its lifestyle brands with
earnings growth primarily by implementing the follow-
the strategic advantages of an integrated system provider.
ing competitive strengths and elements of its corporate
The TOM TAILOR GROUP sees itself primarily as a trend man-
strategy:
ager that understands what its customers need. This means
that, as a basic principle, the TOM TAILOR GROUP does not
set any new trends with its collections and therefore avoids
increased sales risk. Rather, it identifies new and promising
trends, implements them rapidly in its own collections and
– Generating Growth by reproducing the existing successful
business model
– Generating organic growth by further increasing the number of controlled selling spaces and expanding e-commerce
offers these to a broad consumer group (the “mass market”)
– Increasing profitability through economies of scale
in the mid-range price segment. Vertical integration improves
– Controlling the entire value chain, from collection design
the TOM TAILOR GROUP’s access to relevant market informa-
down to marketing at the point of sale
tion. Daily sales analyses for the controlled selling spaces
(“bestseller management”) allow the TOM TAILOR GROUP to
Detailed information about our competitive strengths and
accurately tailor its offering to its customers’ wishes and
corporate strategy can be found on page 18 onward of the
needs, and thus actively manage sales. This ensures that suf-
2013 Annual Report. The statements made there continue to
ficient volumes of the products that customers want are on
apply without modification.
offer in the selling spaces at the right time, increasing space
productivity and reducing the risk of write-downs of unsold
goods.
12
Internal Management System
As a publicly traded entity, TOM TAILOR Holding AG’s financial objective is to sustainably increase the value of the
REPORT ON
ECONOMIC POSITION
TOM TAILOR GROUP. A standardised internal management
system has been set up to provide value-based management
The internal management system used by the TOM TAILOR
MACROECONOMIC AND SECTOR-SPECIFIC
ENVIRONMENT
GROUP goes beyond a pure KPI (key performance indicator)
Global Economy Still Lacking Momentum
system. It offers a comprehensive overview of financial and
According to the Institut für Weltwirtschaft (IfW – Institute
non-financial factors. In addition, leading indicators that
for the World Economy), global economic expansion stalled
could affect the business are monitored and evaluated. The
again in summer 2014. The no more than modest economic
Management Board uses a large number of different tools
growth overall was driven by the established economies,
and indicators to evaluate business developments, enhance
with the US economy in particular gaining momentum. In
its strategy and make investment decisions, and in so doing
contrast, owing to worsened financial conditions, the per-
sustainably increase the value of the TOM TAILOR GROUP.
formance of the emerging market economies failed to meet
for the Group as a whole and for the individual segments.
expectations. China and India expanded at lower rates than
In addition to non-financial key performance indicators
in the past. Output in Brazil, Argentina and Russia stagnated
(e. g. brand studies and customer surveys), the TOM TAILOR
or actually declined. The Ukraine crisis and the conflicts in the
GROUP uses the following financial key performance
Middle East had an increased impact on the global economy.
indicators to increase the Group’s value: revenue growth,
In addition, economic growth in Southern Europe remained
EBITDA growth, recurring EBITDA, net debt and the equity
slow. As a result, the hoped-for recovery in the euro zone
ratio. Ratios derived from these financial key performance
failed to materialise. The Ifo Institute estimates that in the
indicators, such as the recurring EBITDA margin (recurring
third quarter the euro zone grew by a modest 0.8 % year-
EBITDA as a percentage of revenue) and the ratio of net debt
on-year and by just 0.2 % quarter-on-quarter. In light of the
to recurring EBITDA, are also used to manage the Group.
ongoing economic weakness and the low inflation rate, the
Detailed information about our key performance indicators
ECB had cut its key rate in September to a new record low
can be found on page 35 of the 2013 Annual Report.
of 0.05 %.
13
According to figures published by Eurostat, the econo-
Sector-Specific Developments: Marked Downturn
mies of the most important international markets for the
in the Fashion Business in the Third Quarter
TOM TAILOR GROUP have developed as follows in the year
According to the Federal Statistical Office, imports of cloth-
to date. The Swiss economy expanded somewhat faster than
ing and clothing accessories rose by 4.9 % in the first eight
the euro zone. Austria and Belgium recorded growth rates in
months of 2014. Up to the end of September, retail sales
the region of 1 %, while the Netherlands returned to moder-
of textiles, clothing, shoes and leather goods rose by 1.8 %
ate growth after stagnating at the beginning of the year. Of
in nominal terms and by 0.7 % in real terms. The rates of
the South Eastern European markets relevant to the Com-
development varied considerably in the individual months. In
pany, Slovenia stood out with slightly higher-than-average
spite of August being a strong month, the third quarter saw
growth rates. The Bulgarian economy also grew at a moder-
sales dip across the industry, falling substantially in July and
ate pace. Croatia, on the other hand, reported a further drop
especially in September. Online trading, on the other hand,
in economic output.
witnessed dynamic growth.
After a very strong start to the year thanks to the mild win-
The procurement markets relevant to the textile and clothing
ter, the economic rebound in Germany did not continue on
industry experienced significant price erosion in the third
account of growing uncertainty. Leading German research
quarter of 2014. This was due to the relatively good cotton
institutes estimate that the German economy stagnated in
harvest together with muted demand. As a result, stocks
the third quarter. Factors such as the crisis in Ukraine and
remain at a historically high level.1 After rising steadily in
the sanctions against Russia led to continued investment
the first four months of 2014 to 97 US cents per pound with
restraint among companies. In August, industrial production,
slight variations, cotton prices slumped by over a third to
new orders and exports all took a nosedive. The main pillar of
61 US cents between the beginning of May and the end of
economic growth was private consumption, which according
September. This constitutes a fall in prices of more than 25 %
to the IfW was fuelled by the uptrend on the labour market,
over the nine-month period.2
low inflation and the low savings rate. All the same, the
mood among consumers clouded in the third quarter, though
—
remaining at a high level. The GfK consumer confidence index
1
USDA (United States Department of Agriculture) September 2014
retreated further to 8.6 points in September 2014 (July and
2
Market price for cotton (ISIN: XC000A0AEZK8)
August 2014: 8.9 points), but was still appreciably higher
than a year ago (September 2013: 7.0 points). At the end of
the quarter, the deterioration in sentiment was reflected in
declining index values for economic expectations (September
2014: 4.4 points), income expectations (43.4 points) and the
propensity to buy (42.5 points).
14
RESULTS OF OPERATIONS
36.3 % (2013: 34.2 %). In contrast to previous years, growth
Consolidated Revenue up 3.5 %
in revenue outside Germany in the first nine months of the
The TOM TAILOR GROUP’s revenue rose by a total of 3.5 %
2014 financial year was primarily generated outside the core
to EUR 679.1 million in the first nine months of 2014 (2013:
international markets, particularly in South Eastern Europe,
EUR 656.0 million). This is attributable exclusively to the
South Africa and Russia. Revenue in the core international
positive performance of the two TOM TAILOR segments,
markets for the TOM TAILOR GROUP (including BONITA)
whose revenue increased by 9.0 % to EUR 437.9 million
grew by 2.1 % to EUR 162.0 million (2013: EUR 158.6 million).
(2013: EUR 401.8 million). By contrast, the BONITA segment
The TOM TAILOR segments increased their revenue in these
recorded a 5.1 % decline in revenue to EUR 241.2 million
markets by 9.3 % to EUR 99.0 million (2013: EUR 90.6 mil-
(2013: EUR 254.2 million) – the result of a conscious focus
lion). Although BONITA recorded revenue growth in other
on improving profitability. Consolidated revenue in the third
countries, revenue in its core international markets at
quarter rose by 1.9 % to EUR 253.8 million (2013: EUR 249.0
EUR – 5.1 million or – 7.5 % (2013: EUR 68.1 million) remained
million). EUR 166.4 million of this was attributable to the
below the prior-year level. As a result consolidated revenue
TOM TAILOR segments (2013: EUR 157.3 million) and EUR 87.4
in the core international markets only increased by a total
million to BONITA (2013: EUR 91.7 million).
of 2.1 %.
Revenue
Revenue by Region
EUR million
EUR million
International markets
Germany
BONITA
BONITA
27.8
25.4
TOM TAILOR
Q3/2013
656.0
Q3/2014
Q1–Q3/2013
679.1
Q1–Q3/2014
In Germany, the TOM TAILOR GROUP lifted its revenue by
0.3 % in the first nine months of the 2014 financial year
to EUR 432.9 million (2013: EUR 431.7 million). Revenue
growth outside Germany totalled 9.8 %. At EUR 246.2 million (2013: EUR 224.3 million), the TOM TAILOR GROUP lifted
the proportion of revenue generated internationally to
BONITA
69.9
TOM TAILOR
TOM TAILOR
BONITA
BONITA
62.0
BONITA
BONITA
63.9
181.6
171.3
TOM TAILOR
TOM TAILOR
TOM TAILOR
98.8
TOM TAILOR
97.6
250.1
261.6
Q3/2013
Q3/2014
Q1–Q3/2013
Q1–Q3/2014
59.7
253.8
72.6
67.7
TOM TAILOR
249.0
BONITA
151.7
176.3
15
Other Operating Income Rises to EUR 20.3 million
Personnel Expenses up 2.1 % Year-on-Year
Other operating income rose from EUR 16.6 million to
Personnel expenses rose by 2.1 % in the first nine months
EUR 20.3 million in the first nine months of 2014. Royalties
of 2014 to EUR 147.6 million (2013: EUR 144.5 million). This
were a significant component of this, increasing by around
mainly reflects the 2.4 % increase in the average number
28.7 % year-on-year to EUR 4.6 million (2013: EUR 3.6 million).
of staff at the TOM TAILOR GROUP as a result of ongoing
In addition, other operating income includes income of
expansion and the recruitment of new staff for centralised
EUR 2.9 million (2013: EUR 2.5 million) from subletting space
functions. The TOM TAILOR GROUP had 6,364 employees as
leased by the Group.
at 30 September 2014 (previous year: 6,406). At 21.7 %, the
personnel expense to revenue ratio was down slightly on the
Gross Margin up 2.1 Percentage Points
previous year (2013: 22.0 %). However, the upfront personnel
The cost of materials decreased slightly by 1.2 % to EUR 293.6
expenses incurred for further retail store expansion will lead
million in the first nine months of 2014 (2013: EUR 297.3 mil-
to a higher personnel expense to revenue ratio overall.
lion), in spite of the 3.5 % revenue growth. This was primarily due to procurement savings realised at the level of the
Other Operating Expenses Rise Due to Expansion
BONITA segment.
In the reporting period until the end of September 2014,
other operating expenses were up 4.6 % on the prior-year
The gross margin rose by a total of 2.1 percentage points
period at EUR 203.2 million (2013: 194.3 million). The main
in the reporting period to 56.8 % (2013: 54.7 %); this was
reason for this increase was the EUR 5.7 million rise in rental
attributable in particular to the BONITA brand’s positive
expenses due primarily to expansion activities.
performance. The strict reduction of discounts and product improvements in the BONITA segment made the most
Other operating expenses primarily comprised rental
significant contribution here. At the same time, the further
expenses (EUR 94.6 million; 2013: EUR 88.9 million), logis-
expansion of the Group’s own procurement organisation in
tics costs for order picking (EUR 16.7 million; 2013: EUR 15.9
Asia reduced the ratio of cost of materials to revenue.
million) and marketing expenses (EUR 18.8 million; 2013:
EUR 18.7 million).
The number of retail stores rose by 14 as against 31 December 2013 to 1,378 as at the 30 September 2014 reporting date.
Of these, 1,010 stores were attributable to BONITA and 368 to
TOM TAILOR.
16
Recurring Earnings before Interest, Taxes,
Depreciation, Amortisation and Impairment Losses
Depreciation and Amortisation (EBITDA) up 20.6 %
Down 6.7 % Year-on-Year
Recurring EBITDA increased by 20.6 % to EUR 56.9 million in
Overall, depreciation, amortisation and impairment losses in
the first nine months of 2014 (2013: EUR 47.2 million). In the
the first nine months of the 2014 financial year were EUR 2.8
third quarter of 2014, recurring EBITDA rose by an even more
million lower than in the previous year at EUR 39.0 million
significant 23.4 % to EUR 26.4 million (2013: EUR 21.4 million).
(2013: EUR 41.8 million). This figure contrasted with capital
The positive year-on-year trend was the result of a higher
expenditure totalling EUR 13.4 million in the reporting period
gross margin in particular.
(2013: EUR 19.0 million).
Reported EBITDA for the first nine months of 2014 was
The decline in depreciation/amortisation corresponds to the
EUR 54.9 million, a rise of 50.4 % year-on-year (2013:
decrease in capital expenditure. Overall, depreciation/amort-
EUR 36.5 million). Reported EBITDA continued to improve
isation reflects the further expansion of TOM TAILOR’s retail
in the third quarter of the 2014 financial year and was up
business and of the number of its controlled selling spaces
33.3 % on the prior-year figure at EUR 25.6 million (2013:
(shop-in-shops and franchise stores) over the past few years.
EUR 19.2 million). This positive growth was mainly due to the
high special factors and one-off items incurred during the
Financial Result below the Prior-Year Level
integration of BONITA included in the previous year, which
The financial result in the first nine months of 2014 was
had a negative effect on reported EBITDA in 2013. Expenses
EUR – 13.7 million (2013: EUR – 12.5 million). In contrast to
for special factors and one-off items in the first nine months
the prior-year period, the financial result as at 30 September
of 2014 amounted to EUR 2.0 million (2013: EUR 10.7 million).
2014 included expenses of EUR 1.2 million from the fair value
One-off costs rose by EUR 0.9 million in the third quarter
measurement of financial liabilities.
of 2014, mainly due to the deferral of bank fees in connection with exercising an extension option for the bank lines
Income Taxes of EUR 0.5 Million
of credit until June 2016.
The income tax expense amounted to EUR 0.5 million in the
first nine months of the 2014 financial year (2013: tax income
of EUR 3.9 million). The notional tax rate was 20.5 %. This is
Recurring EBITDA
due, among other things, to the recognition of tax expenses
EUR million
in relation to the international subsidiaries and the net income
for the period, which resulted in a tax expense and a correspondingly higher tax rate overall compared with the prioryear period.
26.4
21.4
Q3/2013
56.9
47.2
Q3/2014
Q1–Q3/2013
Q1–Q3/2014
17
Net Income for the Period and Earnings per Share
also improved significantly year-on-year (2013: EUR – 13.9
Significantly Improved
million). Earnings per share were EUR – 0.08 (2013: EUR – 0.78
Recurring net income in the first nine months of the 2014
per share), which is also a substantial improvement compared
financial year was EUR 9.4 million, up significantly compared
with the previous year. The main reasons behind this positive
with the prior-year figure (2013: EUR 0.2 million). The recur-
trend overall were the BONITA segment’s increase in profit-
ring earnings per share (EPS) therefore amounted to EUR 0.22
ability and the significant decline in one-off items and special
(2013: EUR – 0.20). At EUR 1.8 million, reported net income
factors, which had heavily impacted the prior-year result.
Reconciliation to Recurring Net income for the Period
EUR thousand
Q3/2014
Q3/2013
9M/2014
9M/2013
7,103
34
1,798
–13,876
323
476
463
– 3,879
Net income before income tax
7,426
510
2,261
–17,755
Financial result
5,286
4,502
13,654
12,455
Income taxes
of which in depreciation, amortisation and impairment losses:
– Amortisation from TOM TAILOR (PPA) from 2005
1,174
1,174
3,522
3,522
– Amortisation from BONITA (PPA) from 2012
1,120
1,018
3,361
3,054
669
683
1,999
2,840
9,159
thereof:
– Financing costs/BONITA acquisition
of which in EBITDA:
– Cost of BONITA integration
– Borrower’s note loans and refinancing costs
– Other one-off items and special factors
0
2,076
663
881
110
881
873
0
0
500
655
881
2,186
2,044
10,687
3,844
5,061
10,926
20,103
Recurring EBIT
15,887
9,390
24,842
11,963
as % of revenue
6.3 %
3.8 %
3.7 %
1.8 %
Aggregate one-off items and special factors, net of tax effect
Depreciation, amortisation and impairment losses (net of amortisation
from PPA)
10,560
12,022
32,089
35,212
Recurring EBITDA
26,447
21,412
56,931
47,175
10.4 %
8.6 %
8.4 %
7.2 %
as % of revenue
Depreciation, amortisation and impairment losses (net of amortisation
from PPA)
–10,560
–12,022
– 32,089
– 35,212
Financial result (net of one-off items and special factors)
– 4,617
– 3,819
–11,655
– 9,615
Recurring net income before income tax
11,270
5,571
13,187
2,348
– 323
– 476
– 463
3,879
Imputed tax effect (30%) on aggregate one-off items and special factors
–1,153
–1,518
– 3,278
– 6,031
Recurring net income for the period
Income taxes
9,794
3,577
9,446
196
Recurring earnings per share after deduction of minority interests
0.30
0.05
0.22
– 0.20
Earnings per share after deduction of minority interests
0.19
– 0.09
– 0.08
– 0.78
18
Segment Reporting
Retail Segments
Segment reporting in the TOM TAILOR GROUP is divided
Revenue in the two Retail segments in the first three
into the Retail and Wholesale segments. The Retail segment
quarters of the 2014 financial year was nearly unchanged
comprises the retail and outlet stores operated by the
year-on-year at EUR 429.8 million (2013: EUR 429.1 million).
Company and its e-commerce activities. The latter consist
The share of consolidated revenue attributable to the Retail
of the e-shop and e-commerce partnerships with mail-order
segments slipped to 63.3 % (2013: 65.4 %) due to the strong
companies. In the Wholesale segment, the Company distrib-
performance by the Wholesale segment, difficult market
utes TOM TAILOR products to business customers, who sell
conditions, especially in the third quarter, and the conscious
these to end customers via different sales channels. These
decision to accept a revenue decrease at BONITA.
include franchise stores, shop-in-shops and multi-label sales
outlets. Following the acquisition of BONITA in 2012, report-
TOM TAILOR Retail Segment Lifts Revenue
ing in the Retail segment was extended to include it as well,
Thanks to the increase in revenue, the TOM TAILOR Retail
so a distinction is now made between the TOM TAILOR brands
segment remains a key growth driver in the TOM TAILOR
(TOM TAILOR, TOM TAILOR Denim and TOM TAILOR POLO
GROUP. The Group lifted its revenue in this segment by
TEAM) and BONITA (BONITA, BONITA men). There are a total of
7.8 % in the first three quarters of 2014 to EUR 188.6 million
three reportable segments (TOM TAILOR Retail, TOM TAILOR
(2013: EUR 174.9 million). In the third quarter of 2014, which
Wholesale and BONITA).
due to the weather conditions was very difficult, revenue
fell by 3.6 % to EUR 64.7 million (2013: EUR 67.1 million). On a
Revenue by Segment
like-for-like basis (i. e. excluding expansion), revenue growth
Retail
in the TOM TAILOR Retail segment in the first nine months of
Wholesale
EUR million
2014 was marginally positive at 1.2 % (2013: 7.8 %). This figure
is mainly attributable to the 6.2 % drop in revenue on a likefor-like basis in the third quarter of 2014 (2013: 7.8 %). The
BONITA
91.7
BONITA
87.4
BONITA
BONITA
254.2
67.1
TOM TAILOR
64.7
90.2
101.7
Q3/2013
Q3/2014
ated by the TOM TAILOR Retail segment therefore fell slightly
TOM TAILOR
TOM TAILOR
174.9
TOM TAILOR
share of the total revenue of the TOM TAILOR brands generin the first nine months of the 2014 financial year to 43.1 %
TOM TAILOR
TOM TAILOR
241.2
TOM TAILOR
188.6
(2013: 43.5 %). At 368, the number of retail stores rose by 26
since 30 September 2013 and by 14 since 31 December 2013.
TOM TAILOR
226.9
249.3
Q1–Q3/2013
Q1–Q3/2014
Of these, 149 retail stores were in Germany, 110 were in the
core international markets and 109 were in other countries.
Revenue generated by e-commerce activities rose by 3.1 %
to EUR 29.7 million in the first three quarters of 2014 (2013:
EUR 28.8 million) despite the lack of TV broadcasting support and challenging market conditions in the third quarter
of 2014.
19
Recurring EBITDA in the TOM TAILOR Retail segment
In the third quarter of 2014, BONITA’s revenue declined by
increased by EUR 1.9 million or 19.4 % to EUR 11.9 million
4.7 % to EUR 87.4 million (2013: EUR 91.7 million); on a like-
in the first nine months of the 2014 financial year (2013:
for-like-basis, the decline was 9.1 % (2013: 5.3 %). At 1,010,
EUR 9.9 million). The main reasons for this earnings improve-
the number of retail stores has remained largely unchanged
ment were the increase in absolute gross profit, despite a
since 31 December 2013. A total of 720 retail stores were in
virtually unchanged gross margin of 58.2 % (2013: 58.5 %), the
Germany, 285 were in the core international markets and five
improved personnel expense to revenue ratio and the decline
were in other countries.
in the ratio of other operating expenses to revenue.
Recurring EBITDA rose in the first nine months of 2014 to
BONITA Retail Segment Lifts Gross Margin to 67.0 % in the
EUR 14.5 million (2013: EUR 12.7 million), in spite of the
Nine-Month Period
decline in revenue. This was mainly due to the positive devel-
The BONITA brand comprises its own retail stores and, since
opment of the gross margin. Reported EBITDA improved by
mid-2013 has also included e-commerce activities. BONITA
as much as EUR 8.8 million to EUR 13.8 million (2013: EUR 4.9
generated revenue of EUR 241.2 million in the first nine
million). The significant reduction in the integration costs
months of the 2014 financial year. This corresponds to 35.5 %
incurred in the previous year also played a role in this. The
(2013: 38.8 %) of the Group’s revenue and 56.1 % (2013: 59.2 %)
gross margin in the BONITA segment rose by 4.9 percentage
of total revenue in the Retail segment. Revenue declined by
points in the first nine months of the 2014 financial year to
5.1 % year-on-year in this segment (2013: EUR 254.2 million),
67.0 % (2013: 62.1 %).
mainly due to the reduction of sales events. This led to a
decline in revenue, as expected, but also reduced the ratio
The Management Board of the TOM TAILOR GROUP expects
of discounts to revenue. On a like-for-like basis, revenue in
earnings to continue their positive performance in the
the first three quarters of the 2014 financial year fell by 8.8 %
BONITA segment. This trend will be driven by a year-on-year
(2013: – 4.8 %).
increase in the gross margin in particular.
Sustained Dynamic Growth in the TOM TAILOR
Retail Stores
Wholesale Segment
Number
Revenue in the TOM TAILOR Wholesale segment rose by
9.9 % to EUR 249.3 million in the first nine months of the
2014 financial year (2013: EUR 226.9 million). The segment
thus accounted for 56.9 % of the TOM TAILOR brands’ revenue
(2013: 56.5 %). In Germany, the Company lifted its WholeBONITA
BONITA
BONITA
1,004
1,010
1,010
sale revenue by 5.6 % to EUR 156.2 million (2013: EUR 147.9
million). International revenue rose by as much as 17.9 %
to EUR 93.0 million (2013: EUR 78.9 million). Third-quarter
revenue rose by a total of 12.7 % year-on-year to EUR 101.7
TOM TAILOR
TOM TAILOR
TOM TAILOR
342
354
368
30/9/2013
31/12/2013
million (2013: EUR 90.2 million). TOM TAILOR increased the
number of its shop-in-shops by a further 316 to a total of
30/9/2014
2,585, compared with 2,269 as at 31 December 2013. The
number of franchise stores rose by two to 199. Order intake
in the Wholesale segment for the period up to December
2014 was up 10.1 % as against the previous year.
20
Recurring EBITDA in the first three quarters of the current
Net cash used in investing activities amounted to EUR 12.8
financial year amounted to EUR 30.6 million, up as much
million, lower than in the previous year (2013: EUR 18.6 mil-
as 24.4 % on the previous year (2013: EUR 24.6 million). The
lion). Overall, growth attributable to expansion was lower in
recurring EBITDA margin developed particularly encourag-
the first nine months of the 2014 financial year than in 2013,
ingly, improving by 12.3 % as against 10.8 % in the prior-year
with investing activities remaining focused on increasing the
period. This is primarily attributable to an increase in the
number of controlled selling spaces in all three segments.
gross margin of 2.3 percentage points to 45.8 % (2013: 43.5 %).
Net cash used in financing activities amounted to EUR 36.5
million (2013: cash outflow of EUR 4.0 million). The cash
FINANCIAL POSITION
outflow was due to dividend payments to non-controlling
Operating Cash Flow up on the Prior-Year Level
interest shareholders, the repayment of existing bank lines
Net cash provided by operating activities at the level of the
of credit in connection with the Group’s operating activities
TOM TAILOR GROUP amounted to EUR 38.9 million in the
and the repayment of term bank loans in the amount
first three quarters of the 2014 financial year, compared
of EUR 15.0 million.
with EUR 2.6 million in the prior-year period. In particular,
the year-on-year improvement in net income for the period
Overall, liquidity increased by EUR 3.4 million to EUR 36.7
of EUR 15.7 million to EUR 1.8 million had a positive impact
million compared with 30 September 2013.
on cash inflows. The higher net income for the period was
reduced by cash outflows of EUR 37.9 million resulting from
Investing in Profitable Growth
a rise in inventory levels. This rise is attributable to season-
“Act Premium. Sell Volume” – this philosophy is particularly
ally higher inventories of goods from the higher-value
relevant to product quality and store design. Customers
autumn collections, the further increase in the number of
should feel comfortable in TOM TAILOR and BONITA selling
controlled selling spaces, as well as an increase in NOOS
spaces, and this in turn should positively influence purchase
(never out of stock) inventories in the BONITA segment. The
decisions because shoppers are spending more time in-store.
negative effect on cash inflows was offset completely by
EUR 13.4 million (2013: EUR 19.0 million) was invested Group-
the simultaneous rise in liabilities for delivered merchandise,
wide to further expand controlled selling spaces in all three
which meant that net cash provided by operating activities
segments. EUR 3.5 million was invested in the TOM TAILOR
improved overall compared with the previous year.
Retail segment (2013: EUR 6.1 million) and EUR 4.4 million in
the TOM TAILOR Wholesale segment (2013: EUR 5.9 million).
Capital expenditure in the TOM TAILOR Retail segment largely
related to shop fittings and fixtures for the 14 new stores.
Approximately EUR 2.5 million was spent on new selling
spaces in the TOM TAILOR Wholesale segment. The remaining
EUR 1.9 million largely related to the IT/software infrastructure. BONITA invested a total of EUR 5.5 million (2013: EUR 7.0
million) in modernising shop fittings and in new BONITA
stores in the first nine months of the 2014 financial year.
21
NET ASSETS
Asset Structure
Net Assets Increase Slightly
Non-current assets decreased by EUR 21.3 million compared with 31 December 2013. Depreciation, amortisation
and impairment losses on intangible assets and property,
plant and equipment totalling EUR 39.0 million (2013:
Current
assets
33.2 %
Non-current
assets
66.8 %
38.9 %
EUR 41.8 million) were contrasted with capital expenditure of EUR 13.4 million due to further expansion (2013:
EUR 19.0 million). Overall, non-current assets amounted to
EUR 486.0 million (31 December 2013: EUR 507.3 million).
61.1 %
Current assets rose by EUR 57.5 million to EUR 309.8 million
(31 December 2013: EUR 252.3 million). This increase was due
in particular to the EUR 37.9 million expansion in inventory
31/12/2013
30/9/2014
levels to EUR 175.7 million (31 December 2013: EUR 137.8 million). The main reasons for this were the seasonal increase
Equity Ratio of 29.2 %
in goods in transit from the sourcing countries due to the
Equity increased by EUR 11.0 million in the first nine months
higher-value autumn and winter collections, the further
of the 2014 financial year to EUR 232.7 million (31 Decem-
expansion and the opening of new retail stores, as well as
ber 2013: EUR 221.7 million), mainly as a result of the posi-
the further increase in the number of controlled selling
tive trend in the market valuation of the existing US dollar
spaces. As a result of the changes in the collection develop-
hedging transactions. On account of the rise in total assets,
ment process at BONITA initiated in August 2013, BONITA
the equity ratio at 30 September 2014 remained at 29.2 %
stores will now also be supplied with more NOOS (never out
(31 December 2013: 29.2 %).
of stock) merchandise.
At EUR 795.8 million, total assets rose by EUR 36.2 million as
against 31 December 2013 (EUR 759.6 million).
Employees
22
EMPLOYEES
Financial Liabilities Down
On the liabilities side of the balance sheet, the non-current
financial liabilities included in the non-current liabilities item
decreased by approximately EUR 21.7 million to EUR 217.4
Headcount down Slightly
million (31 December 2013: EUR 239.1 million), primarily due
The TOM TAILOR GROUP employed 6,364 people as at 30 Sep-
to repayments of long-term bank lines of credit on schedule.
tember 2014 (excluding the Management Board, vocational
trainees and casual workers; 30 September 2013: 6,406
Within the current liabilities item, trade payables saw a par-
employees). BONITA is the segment with the most employees
ticularly clear increase to EUR 164.3 million (31 December
(3,935) in the TOM TAILOR GROUP. As at 30 September 2014,
2013: EUR 111.8 million). This was primarily due to shifts in the
a total of 1,699 people worked in the TOM TAILOR Retail seg-
amount for reporting date reasons and higher liabilities com-
ment (30 September 2013: 1,666) and 730 in the TOM TAILOR
pared with 31 December of each year as a result of seasonal
Wholesale segment (30 September 2013: 529). This increase
factors.
in staff in the TOM TAILOR Retail segment is due in particular
to recruitment for the new retail stores, while the increase
in the Wholesale segment is attributable to the recruitment
Capital Structure
of additional staff for centralised functions and the further
expansion of design and purchasing teams. In regional
terms, the TOM TAILOR GROUP (including BONITA) has 4,003
employees in Germany (30 September 2013: 4,148) and 2,361
Current
liabilities
27.2 %
31.8 %
Non-current
liabilities
43.6 %
39.0 %
Equity
29.2 %
31/12/2013
employees outside Germany (30 September 2013: 2,258).
Employees by Segment
Retail
Wholesale
29.2 %
30/9/2014
BONITA
4,211
BONITA
3,935
Off-Balance-Sheet Financing Instruments
The Company does not use any off-balance-sheet financing
TOM TAILOR
instruments such as factoring, asset-backed securities, sale
1,666
and leaseback transactions, or contingent liabilities involv-
529
ing special-purpose entities not included in the consolidated
financial statements. The TOM TAILOR GROUP has a small
number of other operating leases, for example for IT equipment and company vehicles. Off-balance-sheet financial
instruments therefore do not have any material effect on the
Group’s net asset position.
30/9/2013
TOM TAILOR
1,699
730
30/9/2014
Risks and Opportunities
Report on Post-Balance Sheet Date Events
23
RISKS AND OPPORTUNITIES
R E P O RT O N P O S T-BA L A N C E
S H E E T DAT E E V E N T S
In the course of its business activities, the TOM TAILOR
GROUP is exposed to a large number of risks and opportunities associated with operating any business. Risks refer to
There were no events with a material effect on the net
events that, if they occur, result in negative deviations from
assets, financial position and results of operations of the
targets planned for the future. If they materialise, these
Group between the end of the reporting period and the pub-
risks can hamper business development for the long term,
lication of this interim report.
dampen earnings growth and endanger the Company’s net
assets and financial position. In contrast, opportunities refer
to circumstances that could have a positive effect on the
TOM TAILOR GROUP’s future performance.
Detailed information about opportunities and risks, as well as
a description of TOM TAILOR’s risk and opportunity management system, can be found starting on page 47 of the 2013
Annual Report. The statements made there continue to apply
without modification. There are currently no risks that, individually or in the aggregate, could endanger the continued
existence of TOM TAILOR Holding AG.
24
REPORT ON EXPECTED
DEVELOPMENTS
The TOM TAILOR GROUP now generates more than one-third
of its revenue outside Germany, mostly in other European
countries. Its core regions are the stable economies of Austria and Switzerland, the Netherlands, Belgium and France.
In 2014 and 2015, Austria, Switzerland and Belgium will grow
OUTLOOK – ECONOMIC ENVIRONMENT
AND SECTOR DEVELOPMENTS
at similar rates to Germany. The Netherlands is returning
The Global Economy will not Gain Momentum until
2015: + 1.4 %). The IMF projects that growth in France will also
2015
remain low in 2015, at 1.0 % (2014: + 0.4 %). Eastern Europe
In light of the weak development of global activity to date
is a region that is gaining importance for the Company,
and the political crises (Ukraine, Middle East), the Inter-
particularly Poland and countries in South Eastern Europe.
national Monetary Fund (IMF) revised its growth forecasts for
These countries will benefit from the progressive recovery
the world economy downwards in October. Real GDP in 2014
in the euro zone and the EU in the medium term. However,
is now expected to increase by 3.3 % instead of 3.4 %, with
they may be impacted to a significant extent by the crisis
no acceleration on the previous year (2013: + 3.3 %). In add-
in Ukraine and the sanctions imposed on Russia or possible
ition, the projection for 2015 has been marked down to 3.8 %,
countermeasures. The outlook is therefore uncertain.
to a moderate expansionary course in 2014 (2014: + 0.6 %,
replacing the IMF’s previous estimate of 4.0 %. What is more,
the development is susceptible to disruptions, especially
The economic environment and, above all, a low unemploy-
if geopolitical tensions rise. Structurally, global economic
ment rate coupled with the propensity of private house-
growth in 2015 will again be driven by the advanced econ-
holds in Germany to consume are very important for the
omies, fuelled in particular by the upswing in the United
TOM TAILOR GROUP. Private consumption is responsible for
States (IMF 2015: + 3.1 %, 2014: + 2.2 %). Nevertheless, growth
around two-thirds of Group revenue. In their Joint Economic
in the euro zone remains weak (IMF 2014: + 0.8 %). According
Forecast for October, the leading German research institutes
to the IMF, euro zone growth in 2015 will again be modest,
now estimate that the expansion of the German economy
at an estimated + 1.3 %. The emerging market economies
will remain weak up until the end of 2014. This is indicated
will benefit from the demand in the established economic
by the deterioration of key leading indicators. The hoped-
regions, but on account of structural deficits and a monetary
for recovery will not materialise. For 2014, the forecast of
policy that is often focused on stabilising exchange rates,
1.9 % has been revised downwards to 1.3 %. In spite of the
the rapid momentum of past years will not be repeated for
low interest rates, the institutes see obstacles to growth
some time. For 2015, the IMF expects that growth in China
for 2015, citing not only the geopolitical risks and the weak
will moderate to 7.1 % (2014: + 7.4 %, 2013: + 7.7 %). Growth in
international economy, but also the pension package and the
the Association of Southeast Asian Nations-5 (ASEAN-5) is
minimum wage. The institutes have substantially down-
projected to rise to 5.4 % (2014: + 4.7 %, 2013: + 5.2 %) and to
graded their growth forecast for 2015 from 2.0 % to 1.2 %.
rebound to 2.2 % in Latin America (2014: + 1.3 %, 2013: + 2.5 %).
Against this background, the upturn on the labour market
seen up to now is hardly likely to continue. The number of
people in gainful employment will increase only negligibly.
According to this forecast, the consumer spending of private
households will increase by 0.8 % in real terms this year, the
same rate as in the previous year. A slight acceleration to
1.4 % in real terms is projected for 2015.
25
Outlook for the Trade with Fashion Wear Cautiously
STRATEGIC OUTLOOK
Positive after Dip
The TOM TAILOR GROUP’s strategy is to develop attractive
The prospects for the German textile and fashion industry
fashion brands and bring these to a broad group of buyers.
have clouded slightly because it will be hardly possible to
The Group had 1,378 retail stores as at 30 September 2014.
recoup the losses from the third quarter by the end of the
Going forward, too, the TOM TAILOR GROUP intends to use its
year. The original hopes of moderate growth in 2014 will
business model to continue its growth path in Germany and
probably not be fulfilled. For this reason, the association
in its core international markets.
of the industry (t+m) now believes that it is more likely that
the industry will reach the break-even point rather than a
EXPECTED BUSINESS DEVELOPMENTS
1.8 % sales increase. The outlook for the Christmas business
The TOM TAILOR GROUP has two strong brands – TOM TAILOR
is nevertheless favourable given the strong labour market
and BONITA. TOM TAILOR comprises the TOM TAILOR,
situation and consumers’ rising income. This is also signalled
TOM TAILOR Denim and TOM TAILOR POLO TEAM brands. At
by the GfK consumer confidence index in October, which
the end of 2013, the Company revamped the TOM TAILOR
at 8.4 points is appreciably higher than the prior-year level
brand profile, giving it a more international focus. The new
(7.1 points). First and foremost, this can be attributed to
collections have been available since August 2014. With
consumers’ positive income expectations. Second, consum-
regard to BONITA, the Company successfully completed
ers’ purchasing appetite increased once again in October.
the modernisation of its branches in the middle of the third
Third, a further slight improvement in the overall index to
quarter of 2014, as planned. In addition, the Company further
8.5 points is expected for November. Providing the crisis
optimised the collections using TOM TAILOR’s proven design
symptoms do not impact more heavily on the real economy,
and development process – something it will continue to do
it can be expected that consumer sentiment will brighten
in order to strengthen the BONITA brand. The new collections
again in 2015 as a result of the high employment level and
created by the BONITA design team, which was formed at
rising wages.
the end of 2013, will also be available from the third quarter of 2014. In addition, the Group completed the transfer
The US Department of Agriculture (USDA) is projecting
of the production of the BONITA collections to Asia and will
worldwide cotton production of 118 million balls for the
continually optimise the bundling of Group-wide purchasing
2014/15 season, somewhat less than in the previous season
activities in Asia at its TOM TAILOR Sourcing Ltd. purchasing
and also the lowest figure in four years. The largest pro-
company.
ducers, India, China and the United States, still account for
approximately 65 % of global cotton production. Moreover,
the forecast assumes that stocks will rise further up to the
end of the 2014/15 season and that the price erosion will
continue. In the middle of the season, a price of 64 US cents
per pound (spread: 58–70 US cents) is expected, around
20 % less than in the 2013/14 season. The International
Cotton Advisory Committee (ICAC), a government-related
consultancy institute of the ten largest cotton-producing
countries, estimates that cotton prices in 2014/15 will fall to
their lowest level in six years.
26
In 2014, the TOM TAILOR GROUP will continue its profitabil-
EXPECTED DEVELOPMENT OF THE GROUP’S POSITION
ity-driven growth path. Going forward, expansion will mainly
The members of the Management Board of TOM TAILOR
take place in the Retail segments by opening new stores,
Holding AG basically view the Group’s business development
primarily for the TOM TAILOR but also for the BONITA brand.
up until the end of 2014 and also the Christmas business with
The Company is focusing even more strongly on profitability
confidence. However, because the third quarter of 2014 was
with these new stores, which means that no new flagship
difficult on the whole and performance in the fourth quarter
stores will be opened in 2014 and unprofitable branches will
has been subdued and so far failed to live up to expectations,
be closed where this makes economic sense. In principle,
the Management Board has revised the forecast it submit-
the TOM TAILOR GROUP is planning to open around up to 35
ted on 25 March 2014 downwards. For the current financial
new stores in the course of the year. In addition, the BONITA
year, the Management Board now expects consolidated
brand’s online shop, which was launched in 2013, is to be
revenue in the range of EUR 925 million to EUR 935 million.
expanded and the number of customer cardholders further
The TOM TAILOR Wholesale and TOM TAILOR Retail segments
increased from the current figure of just over 520,000.
are expected to be the main drivers for the revenue increase.
In addition, due to the strategic focus on the Retail segment,
In the Wholesale segment, the TOM TAILOR GROUP intends
revenue is still anticipated to grow faster there in future than
to continue its growth path during 2014 and to open around
in the Wholesale segment.
100 shop-in-shops and approximately 13 more franchise
stores. In particular, the objective is to further expand busi-
The Management Board of TOM TAILOR Holding AG also an-
ness activities with existing partners.
ticipates a recurring EBITDA margin of between 9.2 % and
9.7 % for the 2014 financial year. The year-on-year increase
in profitability is expected to come mainly from the planned
increase in revenue, an increase in the share of the Group’s
total revenue generated by the Retail business and an overall
improvement in the gross margin. The Management Board
continues to expect significant rise in profitability in the
BONITA segment.
Given this increase in profitability, the Management Board
expects a positive effect on operating cash flow. In light of
the planned investments of around EUR 25 million for 2014,
the Management Board is anticipating a low double-digit
million euro reduction in net debt. The TOM TAILOR GROUP
is also planning to reach its goal of an equity ratio of 30 %
in 2014.
27
OVERALL ASSESSMENT OF EXPECTED DEVELOPMENTS
BY THE MANAGEMENT BOARD
In the opinion of TOM TAILOR Holding AG’s Management
Board, the Group is developing positively, among other
things because the Company basically performed well in the
first nine months of 2014. This development shows that the
measures implemented at BONITA by the Management Board
at the end of 2013 to stabilise business development and
lift profitability are beginning to take effect. The Management Board is not only expecting to put BONITA on track for
profitable growth once more, but also to further increase
TOM TAILOR’s profitability.
The forecast for the remainder of 2014 takes into account
all currently known events that could influence business
developments at the TOM TAILOR GROUP. However, actual
business performance could differ from the forecasts due to
political and economic developments or the impact of the
weather – factors that the Group cannot predict or influence
in any way.
Detailed information about the forecasts for 2014 can be
found from page 61 of the 2013 Annual Report. With the
exception of the revised guidance, the statements made
there continue to apply without modification.
I n t e r i m F i n a n c i a l S t a t e m e nt s
Consolidated Income Statement
Consolidated Statement of Comprehensive Income
28
INTERIM FINANCIAL
S TAT E M E N T S
Consolidated Income Statement of TOM TAILOR Holding AG
for the Period from 1 January to 30 September 2014
Q3/2014
Q3/2013
Q1–Q3/2014
Q1–Q3/2013
253,825
249,033
679,067
656,015
7,518
6,412
20,250
16,611
Cost of materials
–117,731
–119,203
– 293,590
– 297,305
Personnel expenses
– 49,197
– 48,436
–147,605
–144,509
Depreciation, amortisation and impairments
–12,854
–14,214
– 38,972
– 41,788
– 68,849
– 68,580
– 203,235
–194,324
EUR thousand
Revenue
Other operating income
Other operating expenses
Profit from operating activities
Financial result
12,712
5,012
15,915
– 5,300
– 5,286
– 4,502
–13,654
–12,455
–17,755
Result before income taxes
7,426
510
2,261
Income taxes
– 323
– 476
– 463
3,879
7,103
34
1,798
–13,876
thereof:
Shareholders of TOM TAILOR Holding AG
5,022
– 2,230
–1,955
–18,860
Non-controlling interests
2,081
2,264
3,753
4,984
Basic earnings per share (in EUR)
0.19
– 0.09
– 0.08
– 0.78
Diluted earnings per share (in EUR)
0.19
– 0.09
– 0.08
– 0.78
Q3/2014
Q3/2013
Q1–Q3/2014
Q1–Q3/2013
–13,876
Earnings per share
Consolidated Statement of Comprehensive Income of TOM TAILOR
Holding AG for the Period from 1 January to 30 September 2014
EUR thousand
7,103
34
1,798
Exchange differences on translating foreign operations
– 388
196
– 390
6
15,267
– 6,563
21,378
– 2,563
Change in fair value of cash flow hedges
Deferred taxes on change in fair value of cash flow hedges
– 4,671
2,004
– 6,535
809
Items that may be reclassified subsequently to profit or loss
10,208
– 4,363
14,453
–1,748
Other comprehensive income
10,208
– 4,363
14,453
–1,748
17,311
– 4,329
16,251
–15,624
thereof:
Shareholders of TOM TAILOR Holding AG
15,101
– 6,455
12,422
– 20,527
2,210
2,126
3,829
4,903
Total comprehensive income, net of tax
I n t e r i m F i n a n c i a l St a t e m e nt s
Consolidated Statement of Cash Flows
29
Consolidated Statement of Cash Flows of TOM TAILOR Holding AG
EUR thousand
Depreciation, amortisation and impairments
Income taxes
Q1–Q3/2014
Q1–Q3/2013
1,798
–13,876
38,972
41,788
463
– 3,960
Interest income/expense
13,654
12,455
Change in non-current provisions
–1,402
– 2,061
4,542
2,060
Change in current provisions
218
228
Change in inventories
– 37,883
–14,364
Change in receivables and other assets
Proceeds from disposal of intangible assets and items of property, plant and equipment
–17,504
–12,506
Change in liabilities
46,134
3,508
Income taxes paid/refunded
– 2,159
–602
– 78
– 2,260
Other non-cash changes
Cash generated from/used in operations
46,755
10,410
Interest paid
– 7,905
– 7,849
Interest received
Net cash provided by/used in operating activities
Payments to acquire intangible assets and items of property, plant and equipment
Additions due to change in basis of consolidation
Payments from disposal of intangible assets and items of property, plant and equipment
Net cash provided by/used in investing activities
97
66
38,947
2,627
–13,396
– 19,039
0
– 61
548
510
–12,848
– 18,590
Dividend payment to non-controlling interest shareholders
– 5,771
– 1,917
Proceeds from financial liabilities
4,000
93,245
Repayments of financial liabilities
– 34,761
– 95,334
Net cash provided by/used in financing activities
– 36,532
– 4,006
Effect of exchange rate changes on cash and cash equivalents
Net change in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
46
– 41
–10,387
– 20,010
47,129
53,382
36,742
33,372
36,742
33,372
Composition of cash and cash equivalents
Cash funds
30
Consolidated Balance Sheet as at 30 September 2014
of TOM TAILOR Holding AG
EUR thousand
30/9/2014
31/12/2013
Assets
Non-current assets
Intangible assets
Property, plant and equipment
Other assets
323,988
337,276
151,203
159,633
10,831
10,434
486,022
507,343
175,692
137,809
66,788
47,945
Current assets
Inventories
Trade receivables
Income tax receivables
Other assets
Cash and cash equivalents
Total assets
1,748
1,851
28,835
17,526
36,742
47,129
309,805
252,260
795,827
759,603
31
EUR thousand
30/9/2014
31/12/2013
Equity and Liabilities
Equity
26,027
26,027
Capital reserves
298,880
298,378
Consolidated net accumulated losses
–103,555
–101,600
6,925
– 7,452
228,277
215,353
Subscribed capital
Accumulated other comprehensive income
Attributable to shareholders of TOM TAILOR Holding AG
4,377
6,377
232,654
221,730
619
619
Non-current provisions and liabilities
Provisions for pensions
Other provisions
9,480
10,773
Deferred tax liabilities
78,940
76,671
Non-current financial liabilities
217,421
239,146
4,110
4,342
310,570
331,551
Other provisions
33,707
29,165
Income tax payables
12,204
9,737
Current financial liabilities
25,108
26,478
164,290
111,820
Other non-current liabilities
Current provisions and liabilities
Trade payables
Other current liabilities
Total equity and liabilities
17,294
29,122
252,603
206,322
795,827
759,603
32
Consolidated Statement of Changes in Equity of TOM TAILOR Holding AG
EUR thousand, if not stated otherwise
Balance at 1 January 2014
Number of shares
(thousands)
Subscribed
capital
Capital reserves
26,027
26,027
298,378
Changes in ownership interests in subsidiaries without change of control
—
—
58
—
—
—
Dividends paid
—
—
—
Other changes
Balance at 30 September 2014
—
—
444
26,027
26,027
298,880
Number of shares
(thousands)
Subscribed
capital
Capital reserves
Consolidated Statement of Changes in Equity of TOM TAILOR Holding AG
EUR thousand, if not stated otherwise
Balance at 1 January 2013
24,209
24,209
274,486
—
—
—
Dividends paid
—
—
—
Other changes
—
—
135
24,209
24,209
274,621
Balance at 30 September 2013
33
Deferred taxes on fair
Cash flow hedge
value measurement
reserve (IAS 39)
of hedges
Attributable to
share holders of
TOM TAILOR
Holding AG
Non-controlling
interests
Total
221,730
Consolidated net
accumulated losses
Currency translation
differences
–101,600
–1,662
– 8,218
2,428
215,353
6,377
—
—
—
—
58
– 58
—
–1,955
– 466
21,378
– 6,535
12,422
3,829
16,251
—
—
—
—
—
– 5,771
– 5,771
—
—
—
—
444
—
444
–103,555
– 2,128
13,160
– 4,107
228,277
4,377
232,654
Attributable to
share holders of
TOM TAILOR
Holding AG
Non-controlling
interests
Total
Consolidated net
accumulated losses
Currency translation
differences
Cash flow hedge
reserve (IAS 39)
Deferred taxes on fair
value measurement
of hedges
– 80,345
–1,556
– 4,895
1,387
213,286
5,680
218,966
–18,860
87
– 2,563
809
– 20,527
4,903
–15,624
—
—
—
—
—
– 2,643
– 2,643
—
—
—
—
135
—
135
– 99,205
–1,469
– 7,458
2,196
192,894
7,940
200,834
Notes to the Consolidated Interim Financial Statements
34
NOTES TO THE
CO N S O L I DAT E D I N T E R I M
F I N A N C I A L S TAT E M E N T S
With the exception of the stock option programme described
in “(6) BALANCE SHEET DISCLOSURES”, there have been no
material changes in the exercise of management judgement
and the assumptions and estimates applied in the interim
consolidated financial statements for the first nine months
of 2014 compared with the audited consolidated financial
(1.) BASIS OF PREPARATION
statements for financial year 2013.
The consolidated interim financial statements of TOM TAILOR
Holding AG for the first nine months ended 30 September
the EU, including the applicable interpretations issued by the
(2.) INTERPRETATIONS AND STANDARDS
APPLICABLE FOR THE FIRST TIME IN
THE REPORTING PERIOD
International Financial Reporting Interpretations Committee
IFRS 10 Consolidated Financial Statements
(IFRIC).
IFRS 10 introduces a single definition of control for all enti-
2014 were prepared in accordance with the effective International Financial Reporting Standards (IFRSs), as adopted by
ties, creating a standardised basis for determining whether
TOM TAILOR Holding AG has prepared condensed interim
a parent-subsidiary relationship exists and the associated
consolidated financial statements for the first nine months
inclusion in the basis of consolidation. The standard provides
of 2014 in accordance with IAS 34, Interim Financial Report-
comprehensive application guidance on determining whether
ing. These financial statements should therefore be read in
a control relationship exists. The new standard fully replaces
conjunction with the consolidated financial statements for
IAS 27 Consolidated and Separate Financial Statements and
financial year 2013. The condensed financial statements and
SIC-12 Consolidation – Special Purpose Entities.
the interim management report have not been audited or
reviewed by an auditor.
IFRS 11 Joint Arrangements
IFRS 11 applies to circumstances where an entity jointly con-
As a rule, the accounting policies and consolidation methods
trols a joint venture or a joint operation. In future, joint ven-
applied are identical to those adopted for the consolidated
tures must be accounted for using the equity method. The
financial statements for the year ended 31 December 2013,
previously applicable alternative of proportionate consoli-
with the exception of those mentioned under “(2) INTER-
dation is no longer permitted. The new standard replaces
PRETATIONS AND STANDARDS APPLICABLE FOR THE FIRST
IAS 31 Interests in Joint Ventures and SIC-13 Jointly Con-
TIME IN THE REPORTING PERIOD”. A detailed description of
trolled Entities – Non-Monetary Contributions by Venturers.
these policies and methods is contained in the notes to the
consolidated financial statements in the annual report for
IFRS 12 Disclosure of Interests in Other Entities
the year ended 31 December 2013, which has been published
IFRS 12 combines in a single standard all of the disclosure
on the Company’s website.
requirements that an entity with shares or an interest in
other entities must meet; these include interests in subsidiaries, associates, joint arrangements and unconsolidated
structured entities. The new standard replaces the existing
disclosure requirements in IAS 27, IAS 28, IAS 31 and SIC-12.
35
Amendment to IAS 27 Consolidated and Separate Financial
any changes to the contract terms must be limited to those
Statements
areas that are required for the novation; following the nova-
Following the issuance of the new IFRS 10, the amended
tion, the central counterparty must become the new coun-
IAS 27 now only includes requirements applicable to separate
terparty to each of the parties to the derivative.
financial statements prepared in accordance with IFRSs.
The amended IAS 28 specifies how to account for invest-
(3.) BASIS OF CONSOLIDATION/BUSINESS
COMBINATIONS
ments in associates and how to apply the equity method
The basis of consolidation of the TOM TAILOR GROUP com-
when accounting for investments in associates and joint
prises TOM TAILOR Holding AG as the ultimate parent and the
ventures.
subsidiaries listed in the notes to the consolidated financial
Amendment to IAS 28 Investments in Associates
statements for the year ended 31 December 2013.
Amendment to IAS 32 – Offsetting Financial Assets and
Financial Liabilities and IFRS 7:
Changes in the Basis of Consolidation
Financial Instruments: Disclosures – Offsetting Financial
On 27 March 2014, the TOM TAILOR GROUP increased its
Assets and Financial Liabilities
interest in TOM TAILOR Retail Joint Venture GmbH domiciled
The IASB has issued an amendment to the application guid-
Lindau/Germany, and TT Franchise AG, Buchs/Switzerland,
ance contained in IAS 32 Financial Instruments: Presentation
from 51 % to 100 %. These companies were consolidated
to clarify certain requirements regarding the offsetting of
without reporting non-controlling interests from the outset
financial assets and financial liabilities in the balance sheet.
due to the existing put/call options. The total purchase price,
The amendments leave the current offsetting model under
which has already been paid and was financed through bank
IAS 32 in principle unchanged.
loans, amounts to EUR 3.9 million.
Amendment to IAS 39 Novation of Derivatives
To streamline the structure under company law, TOM TAILOR
In response to the new derivatives trading rules under the
Retail Joint Venture GmbH was merged with TOM TAILOR
European Market Infrastructure Regulation (EMIR) intro-
Retail Gesellschaft m.b.H., Wörgl/Austria, following the share
duced due to the tougher regulation of the derivative market
purchase.
in Bregenz/Austria and its subsidiaries TT RETAIL GmbH,
worldwide, the IASB published narrow scope amendments to
IFRS 9 and IAS 39 on the recognition of financial instruments.
In addition, the subsidiary TOM TAILOR DOOEL domiciled in
Previously, novation to a central counterparty required the
Skopje/Macedonia was formed on 17 June 2014 to further
discontinuation of hedging relationships if a derivative was
expand the retail business in South East Europe. TOM TAILOR
the hedging instrument. The amendments provide for the
South Eastern Europe Holding GmbH, Wörgl/Austria, holds
continuation of the original hedging relationship subject to
all shares of the subsidiary. As the parent of the TOM TAILOR
certain conditions and is intended to help avoid ineffective-
GROUP, TOM TAILOR Holding AG thus holds only 75 % of the
ness for cash flow hedges. Novation to a counterparty must
shares of the new subsidiary TOM TAILOR DOOEL, Skopje/
happen as a consequence of laws or regulations. In addition,
Macedonia.
36
Effective 1 July 2014, TOM TAILOR South Eastern Europe
To expand sales activities in the Chinese market, TOM TAILOR
Holding GmbH, Wörgl/Austria, in which TOM TAILOR Hold-
Trading (Shanghai) Company Limited, with headquarters in
ing AG holds a 75 % stake, acquired a 49 % interest in S.C.
Shanghai, was founded on 29 July 2014. TOM TAILOR Asia
TOM TAILOR RETAIL RO S.R.L., Bucharest/Romania, which had
Ltd., Hong Kong/China, holds 100 % of this company’s share
previously been held by minority shareholders. On account
capital.
of the change in the ownership structure, the subsidiary,
which on the basis of the controlling interest and the exist-
With a view to further streamlining the corporate structure,
ing put/call options was already fully consolidated, will now
TOM TAILOR Showroom AG, Glattbrugg/Switzerland, was
be incorporated into the TOM TAILOR GROUP via TOM TAILOR
merged with TOM TAILOR (Schweiz) AG, Baar/Switzerland.
South Eastern Europe Holding GmbH, Wörgl/Austria, with a
corresponding disclosure of minority interests. The purchase
price for the acquisition of the remaining interests comprises
(4.) SEASONAL FACTORS
a fixed purchase price component of EUR 1.0 million and a
The Group’s business activities are exposed to seasonal fac-
variable purchase price component that is contingent on
tors resulting in fluctuations in revenue and profit or loss in
the earnings performance of the acquired company in the
the course of the year. Seasonal factors mean that revenue
2016 financial year (“earn-out” clause). Based on the planning
from the spring/summer collection in the first half of the
assumptions for the period up to 2016, the provisional cost
year is customarily lower than revenue in the second half of
of the acquisition for the variable purchase price compo-
the year, which is dominated by the autumn/winter collec-
nent has been estimated at approximately EUR 0.5 million.
tion and the Christmas business.
Only EUR 0.5 million of the total purchase price, financed
through bank loans, has been recognised as a cash expenditure to date. The provisional variable purchase price liability
is reported at fair value under non-current financial liabilities.
The non-cash portion of the fixed purchase price component of EUR 0.5 million is reported under current financial
liabilities.
37
(5.) SEGMENT REPORTING
Operating Segments
Q3/2014
Wholesale
EUR thousand
Retail
Total Consolidation
Group
TOM TAILOR
TOM TAILOR
BONITA
Third-party revenue
101,726
(90,211)
64,724
(67,098)
87,375
(91,724)
152,099
(158,821)
—
(—)
253,825
(249,033)
Intersegment revenue
60,144
(29,147)
—
(—)
—
(—)
—
(—)
– 60,144
(– 29,147)
—
(—)
161,870
(119,358)
64,724
(67,098)
87,375
(91,724)
152,099
(158,821)
– 60,144
(– 29,147)
253,825
(249,033)
Earnings before interest, taxes, depreciation and amortisation (EBITDA)
17,203
(9,549)
4,510
(4,939)
4,758
(4,343)
9,268
(9,282)
– 905
(394)
25,566
(19,226)
Material non-cash expenses/income
3,167
(4,270)
865
(35)
1,827
(246)
2,692
(281)
—
(—)
5,859
(4,551)
Germany
International
markets
Group
Revenue
161,018
(160,945)
92,807
(88,088)
253,825
(249,033)
Non-current assets
416,156
(447,600)
59,035
(56,417)
475,191
(504,017)
Revenue
Information about Regions
Q3/2014
EUR thousand
38
Operating Segments
Q1–Q3/2014
Wholesale
Retail
EUR thousand
TOM TAILOR
TOM TAILOR
BONITA
Third-party revenue
249,307
(226,890)
188,565
(174,879)
241,195
(254,246)
429,759
(429,125)
—
(—)
679,067
(656,016)
108,917
(69,722)
—
(—)
—
(—)
—
(—)
– 108,917
(– 69,722)
—
(—)
358,224
(296,612)
188,565
(174,879)
241,195
(254,246)
429,759
(429,125)
– 108,917
(– 69,722)
679,067
(656,016)
31,708
(20,818)
11,872
(9,943)
13,790
(4,978)
25,663
(14,921)
– 2,484
(749)
54,887
(36,488)
9,142
(11,913)
2,068
(423)
7,279
(5,438)
9,347
(5,861)
—
(—)
18,489
(17,774)
Germany
International
markets
Group
Revenue
433,079
(430,045)
245,988
(225,970)
679,067
(656,015)
Non-current assets
416,156
(447,600)
59,035
(56,417)
475,191
(504,017)
Intersegment revenue
Revenue
Earnings before interest, taxes, depreciation and amortisation (EBITDA)
Material non-cash expenses/income
Total Consolidation
Group
Information about Regions
Q1–Q3/2014
EUR thousand
The information on revenue by regions shown above is classified by customer location. Non-current assets by region are
composed of intangible assets and items of property, plant
and equipment.
39
(6.) BALANCE SHEET DISCLOSURES
was 1.4 %. The share price on the issue date was EUR 14.25
STOCK OPTION PROGRAMME
and the share price hurdle is therefore EUR 19.23 (+ 35 %). The
During the reporting period, a total of 520,000 of the avail-
pay-out is capped at 400 % for type A stock option rights
able 600,000 stock options were issued under the second
and 420 % for type B stock option rights. On average, it was
tranche of the stock option programme on 11 June 2014.
assumed that the options would be exercised after a period
The remaining 80,000 stock options available for this second
of 5.5 years. A fluctuation of 5 % p.a. was assumed.
tranche were not issued. None of the stock options are
exercisable yet due to the vesting period. The strike price of
During the reporting period, the expense for share-based
the 520,000 stock options granted in the reporting period is
payments to members of the Company’s Management Board,
EUR 14.25 (type A) and EUR 17.10 (type B).
members of the management of affiliated companies and
selected employees below Management Board level of the
The fair value of the stock options was determined using the
Company and below management level of affiliated com-
Black-Scholes method. The fair value per share for the type
panies amounted to EUR 61 thousand for the second tranche.
A and type B stock option rights is EUR 2.00 and EUR 1.51,
respectively. The 250-day historical volatility was 20.6 %, the
DISCLOSURES ABOUT FINANCIAL INSTRUMENTS
expected dividend was 1.57 % and the risk-free interest rate
The following table shows the carrying amounts and fair
values of the financial instruments recognised in the consolidated financial statements:
Fair Value of Financial Instruments
Category
according to
IAS 39
EUR thousand
Carrying amount
30/9/2014
Fair value
31/12/2013
30/9/2014
31/12/2013
Financial assets
Trade receivables and other assets
lar
85,568
71,041
85,568
71,041
Cash and cash equivalents
lar
36,742
47,129
36,742
47,129
n/a
13,045
0
13,045
0
Acquisition loan
flac
152,847
165,847
152,847
165,847
Other liabilities to banks
flac
68,019
72,148
68,019
72,148
Finance lease liabilities
flac
16,716
16,195
16,716
16,195
Liabilities to third parties
flac
4,500
7,000
4,500
7,000
Liabilities to third parties
fvtpl
446
4,434
446
4,434
Derivatives used to hedge interest rate and currency risk that are not part of a
hedging relationship
Derivatives used to hedge interest rate and currency risk that are part of a
Financial liabilities
Liabilities to banks
fvtpl
2,542
2,616
2,542
2,616
Derivatives used to hedge interest rate and currency risk that are part of a
n/a
0
8,334
0
8,334
Trade payables and other liabilities
flac
169,299
114,491
169,299
114,491
flac = financial liabilities measured at amortised cost;
fvtpl = fair value through profit or loss;
lar = loans and receivables
40
The principles and approaches used for determining the fair
The TOM TAILOR GROUP generally determines the fair value
value did not change compared with 31 December 2013. A
of liabilities to banks and other financial liabilities, finance
detailed description of these methods is contained in the
lease liabilities and other non-current financial liabilities
notes to the consolidated financial statements in the pub-
by discounting the expected future cash flows at the rates
lished annual report for the year ended 31 December 2013.
applicable to similar financial liabilities with a comparable
remaining maturity. Interest is paid on the syndicated loan
The fair values of the derivative financial instruments based
granted by the banks at current market rates, as a result
on the notional amounts do not reflect offsetting changes
of which its carrying amount and fair value at the reporting
in the value of hedged items. They are not necessarily the
date are largely the same. The fair value measurement also
amounts the Group will generate or have to pay in the future
takes into account any collateral provided. No changes in the
under current market conditions.
value of collateral are apparent.
With the exception of the derivatives entered into to hedge
The variable purchase price liabilities from the acquisition
interest rate risk, the hedges existing as at 30 September
of the 49 % stake in S.C. TOM TAILOR RETAIL RO S.R.L.,
meet the requirements for hedge accounting under IAS 39.
Bucharest/Romania and the options to acquire shares in
All changes in the fair value of derivatives in an effective
TOM TAILOR E-Commerce GmbH & Co. KG granted to the
hedging relationship are recognised in accumulated other
partner in a cooperation project related to online activities
comprehensive income. Derivatives that are not part of an
were also classified as financial liabilities at fair value through
effective hedging relationship are recognised in the income
profit or loss. These financial liabilities comprise contingent
statement immediately.
purchase price payments, the amount of which will be based
on the current market value of the shares at the relevant date.
The fair values of cash and cash equivalents, trade receivables, other receivables, trade payables, other current
For financial instruments that are measured at fair value and
financial liabilities and revolving credit facilities correspond
for which there are no quoted prices in an active market, fair
to their carrying amounts. This is due primarily to the short
value is determined using valuation techniques, primarily
terms of such instruments.
the discounted cash flow method. This is based on management’s forecasts and assumptions about future revenue and
Trade receivables in particular are measured by the Group
mainly on the basis of the individual customer’s credit
quality. Based on this measurement, valuation allowances
are recognised to account for any losses expected on these
receivables. As at 30 September 2014 the carrying amounts
of these receivables less valuation allowances did not differ
significantly from their assumed fair values.
earnings, investments, growth rates and discount rates.
41
The Group applies the following hierarchy to the valuation
Level 3: techniques that use inputs that have a significant
techniques used to measure and present the fair values of
effect on the recognised fair value and are not based
financial instruments:
on observable market data
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2: techniques where all inputs that have a significant
The following tables show the financial instruments as at
30 September 2014 and 31 December 2013 that are subsequently measured at fair value.
effect on the recognised fair value are observable
either directly or indirectly
EUR thousand
30/9/2014
Level 1
Level 2
Level 3
Financial assets at fair value through profit or loss
Hedging instruments designated as a cash flow hedge (currency forwards)
13,045
0
13,045
0
13,045
0
13,045
0
2,542
0
2,542
0
446
0
0
446
2,988
0
2,542
446
Financial liabilities at fair value through profit or loss
Derivatives used as interest rate hedges (interest rate swap)
Purchase price liabilities from business combinations
31/12/2013
Financial liabilities at fair value through profit or loss
Derivatives used as interest rate hedges (interest rate swap)
2,616
0
2,616
0
Purchase price liabilities from business combinations
4,434
0
0
4,434
8,334
0
8,334
0
15,384
0
10,950
4,434
Hedging instruments designated as a cash flow hedge (currency forwards)
42
The financial liabilities based on a Level 3 fair value meas-
The investments to further increase the number of con-
urement are the contingent purchase price payments
trolled selling spaces in all three segments led to a cash
arising from the acquisition of the majority interests in S.C.
outflow of EUR 12.8 million in the first nine months of 2014
TOM TAILOR RETAIL RO S.R.L., Bucharest/Romania.
(2013: EUR 18.6 million). This decline is primarily due to the
lower rate of expansion compared with the prior-year period.
No reclassifications among the three measurement levels
were made in the reporting period.
Net cash used in financing activities amounted to EUR 36.5
million in the period under review, compared with net cash
used of EUR 4.0 million in the first nine months of 2013. The
(7.) CASH FLOW DISCLOSURES
cash outflow in the reporting period is attributable to divi-
The statement of cash flows shows how the Group’s cash
dend payments to non-controlling interest shareholders, the
and cash equivalents change due to cash inflows and out-
repayment of existing bank lines of credit and the scheduled
flows over the course of the reporting period. IAS 7 State-
repayment of bank loans.
ments of Cash Flows distinguishes between cash flows from
operating, investing and financing activities. Cash flows are
derived using the indirect method, based on the Group’s net
(8.) RELATED PARTY DISCLOSURES
income for the period.
In principle, related parties of the TOM TAILOR GROUP may
be members of the Management Board and the Supervisory
The cash generated by the Group’s operating activities
Board, as well as those companies that are controlled or
amounted to EUR 38.9 million in the first nine months of
influenced by members of governing bodies. Joint ventures
2014 (2013: EUR 2.6 million). The considerable year-on-year
and associates may also be related parties.
improvement in net income for the period to EUR 1.8 million
(2013: EUR – 13.9 million) was partly offset by an increase
a) Management Board
in inventories. The rise in inventories is attributable to sea-
Mr Udo Greiser, TOM TAILOR Holding AG’s former Chief
sonally higher inventories of goods from the higher-value
Product Development and Procurement Officer (CPO), was
autumn collections, the further increase in the number of
appointed as the sole managing director of BONITA GmbH as
controlled selling spaces, as well as an increase in NOOS
of 1 February 2014 to further enhance the product, design
(never out of stock) inventories in the BONITA segment. The
and brand expertise of BONITA and BONITA men. Mr Greiser
negative impact on cash flows was largely balanced out by
stepped down from TOM TAILOR Holding AG’s Management
the simultaneous increase in trade payables.
Board at the end of February 2014. TOM TAILOR Holding AG’s
Supervisory Board appointed Daniel Peterburs to the Management Board as CPO effective 1 March 2014. Mr Peterburs
joined the TOM TAILOR GROUP in 2008 and was most recently
the division head responsible for the TOM TAILOR Denim Male
product line.
43
Members of the Management Board directly held the follow-
Effective 8 August 2014 Dr Andreas Pleßke resigned his posi-
ing shares as at 30 September 2014: Dieter Holzer 270,610
tion as a member of the Supervisory Board of TOM TAILOR
shares, Dr Axel Rebien 20,000 shares.
Holding AG.
b) Supervisory Board
Mr Lei Zhong was elected as the successor to Dr Andreas
Dr Christoph Schug resigned his position as a member of the
Pleßke on 2 September 2014.
Supervisory Board on 5 March 2014. Dr Schug was elected to
the Supervisory Board by the Annual General Meeting held
Mr Lei Zhong is a Senior Managing Director at the Fosun
on 4 March 2010 for the period until the end of the Annual
Group and also a member of a governing body of the follow-
General Meeting responsible for approving the activities
ing companies:
of the members of the Supervisory Board for financial year
2014. In accordance with sections 95, 96 (1) and 101 (1) of
– Alma Lasers Limited/Israel
the Aktiengesetz (AktG – German Stock Corporation Act) and
– St. John Knits International/USA
Article 9 (1) of the Articles of Association, the Supervisory
– Raffaele Caruso S.p.A./Italy
Board is composed of six members elected by the Annual
– Shenyang Yuyuan Mart Real Estate Co., Ltd./China
General Meeting. Dr Andreas Pleßke was elected as the suc-
– NanTong Xinghao Real Estate Development Co., Ltd./China
cessor to Dr Schug at the Annual General Meeting on 27 May
– Harbin Xinghao Real Estate Development Co., Ltd./China
2014.
As at 30 September 2014, Gerhard Wöhrl directly held 16,700
Dr Andreas Pleßke is a restructuring manager and lawyer with
shares and Andreas W. Bauer directly held 5,500 shares.
his own legal practice in Herrsching am Ammersee/Germany.
During his term of office on the Supervisory Board he had no
personal or business relations with TOM TAILOR Holding AG or
(9.) EVENTS AFTER THE REPORTING PERIOD
the Group companies.
There were no events with a material effect on the net
assets, financial position and results of operations of the
Dr Andreas Pleßke is also a member of a governing body of
Group between the end of the third quarter and the publi-
the following companies:
cation of this interim report.
– Chairman of the Supervisory Board of smart One Consulting
AG, Berg/Germany
– Chairman of the Supervisory Board of m.a.x. Informationstechnologie AG, Munich/Germany
Financial Calendar and Contact
44
FINANCIAL CALENDAR
A N D CO N TAC T
Financial Calendar
Date
Current events
February 2015
Publication of the preliminary results for 2014
18 March 2015
Analyst conference and publication of the 2014 Annual Report and results
12 May 2015
Interim Report Q1/2015
3 June 2015
Annual General Meeting
11 August 2015
Half-yearly Report 2015
10 November 2015
Interim Report Q3/2015
Current as at: 6 November 2014 (preliminary)
CONTACT
Garstedter Weg 14
22453 Hamburg
Germany
Phone: + 49 (0) 40 589 560
Fax: + 49 (0) 40 589 56 398
[email protected]
www.tom-tailor-group.com
Investor Relations
Felix Zander
Head of Investor Relations & Corporate Communications
[email protected]
Phone: + 49 (0) 40 589 56 449
Fax: + 49 (0) 40 589 56 199
Erika Kirsten
Manager Investor Relations & Corporate Communications
[email protected]
Phone: + 49 (0) 40 589 56 420
Fax: + 49 (0) 40 589 56 199
Financial Calendar and Contact
45
Forward-Looking Statements
Published by
This document contains forward-looking statements, which
are based on the current estimates and assumptions by the
Garstedter Weg 14
management of TOM TAILOR Holding AG. Forward-looking
22453 Hamburg
statements are characterised by the use of words such as
Germany
expect, intend, plan, predict, assume, believe, estimate,
anticipate and similar formulations. Such statements are
This interim report is also available in German; in addition,
not to be understood as in any way guaranteeing that those
it can be accessed in German and English on the Internet at
expectations will turn out to be accurate. Future perfor-
http://ir.tom-tailor-group.com.
mance and the results actually achieved by TOM TAILOR
The German version of this annual report is legally binding.
Holding AG and its affiliated companies depend on a number
of risks and uncertainties and may therefore differ materially
Date of Publication
from the forward-looking statements. Many of these factors
6 November 2014
are outside TOM TAILOR Holding AG’s control and cannot be
accurately estimated in advance, such as the future eco-
Editorial Office
nomic environment and the actions of competitors and
CAT Consultants GmbH & Co.
others involved in the marketplace. TOM TAILOR Holding AG
www.cat-consultants.de
neither plans nor undertakes to update any forward-looking
statements.
Concept, Design and Production
CAT Consultants GmbH & Co.
www.cat-consultants.de
Photography
The rights to the images are held by TOM TAILOR GmbH.

interim report 1 january –30 september 2014

Transcription

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