REVIEW OF THE FIRST THREE MONTHS OF 2014/15ir.gerryweber.com/download/companies/gerryweber... · REVIEW OF THE FIRST THREE MONTHS OF 2014/15. Outperformance of the German textile

REVIEW OF THE FIRST THREE MONTHS OF 2014/15

Outperformance of the German textile

retail sector

Having seen its sales volumes contract by 9% and 4% in November and December 2014, respectively, the German fashion retail sector started the new year with another year-on-year decline in sales as well. According to TW Testclub, an independent panel of trade magazine “Textilwirtschaft”, adverse weather conditions and low footfall had a negative effect also in January and February 2015, when sales in the German fashion retail sector were down by 4% and 3% on the previous year, respectively.

With like-for-like sales in Q1 2014/15 (1 November 2014 – 31 January 2015) down by 2.3%, GERRY WEBER International AG performed much better than the German fashion market but failed to achieve its like-for-like sales targets to their full extent.

GERRY WEBER International AG Interim Report Q1 2014/15

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Stable sales revenues in Q1 2014/15

Compared to the prior year quarter, consolidated sales revenues of the GERRY WEBER Group (excl. HALLHUBER) increased by 1.1% in Q1 2014/15 to EUR 192.4 million. This growth is primarily due to the 8.5% increase in Retail revenues to EUR 106.0 million (Q1 2013/14: EUR 97.7 million). By contrast, Wholesale revenues declined by 6.8% to EUR 86.4 million (Q1 2013/14: EUR 92.7 million).

Earnings performance

Against the background of the increased Retail share in total Group revenues from

51.3% to 55.1%, the gross margin for Q1 2014/15 improved to 56.5% (Q1 2013/14: 53.9%). At EUR 24.2 million, EBITDA (earnings before interest, taxes, depreciation and amortisation) remained almost constant compared to the prior year period (Q1 2013/14: EUR 24.3 million) in spite of higher personnel and rental expenses resulting from the Retail expansion.

After depreciation/amortisation, earnings before interest and taxes (EBIT) amounted to EUR 17.4 million in Q1 2014/15, compared to EUR 18.3 million in the prior year quarter.

Q1 2014/15 Q1 2013/14

in EUR million 01.11.14 - 31.01.15 01.11.13 - 31.01.14

Sales 192.4 190.4

Wholesale 86.4 92.7

Retail 106.0 97.7

Earnings key figures

EBITDA 24.2 24.3

EBITDA margin 12.6% 12.8%

EBIT 17.4 18.3

EBIT margin 9.1% 9.6%

EBT 16.3 16.9

EBT margin 8.5% 8.9%

Net income of the period 10.5 11.6


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OUTLOOK 2014/15 – THE GERRY WEBER GROWTH STRATEGY

In spite of the challenging environment, the GERRY WEBER Group was able to further expand its market position in the past fiscal year 2013/14. We not only outperformed the German fashion market by far but even posted the highest EBITDA (earnings before interest, taxes, depreciation and amortisation) in the history of the company, at EUR 134.2 million. We also continued to push ahead our Retail expansion strategy by acquiring Munich-based fashion company HALLHUBER.

Building on this, we will continue to consistently pursue our objectives in the current financial year and seize market opportunities as they arise in order to secure the GERRY WEBER Group’s profitable growth as we move forward.


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Expansion of own Retail operations

We were able to increase the Retail segment’s share in total Group revenues

from 42.7% to 47.5% already in the past fiscal year. The company-managed sales space was expanded by approx. 14,000 square metres to 138,400 square metres. We intend to increase the company-managed Retail space (excl. HALLHUBER) by approx. 10% also in the current financial year.

Regional focus of the expansion

Besides our established markets in Central Europe, the Retail expansion will focus primarily on Eastern Europe and Scandinavia. New stores will be opened especially in Norway and Sweden in order to tap the available market potential even more effectively.

Retail market entries

The first of House of GERRY WEBER in the Yorkdale Shopping Center in Toronto, Canada, will be opened before the end of March 2015. Another seven stores in Greater Toronto will follow in the course of the year, including in such famous shopping centres as Eaton Center, Square One Shopping Center, Upper Canada Mall and Shopping Center Promenade. In the financial year 2015/16, the expansion in Canada will focus on the Greater Vancouver, Calgary and Edmonton regions in Western Canada.

Besides the expansion in Canada, the market entry in the USA represents another strategic milestone in the internationalisation of the GERRY WEBER Group. Here, too, we will initially focus on the East Coast, targeting cities such as New York, Boston or

Philadelphia. The first US House of GERRY WEBER is scheduled to be opened at the beginning of the financial year 2015/16.

For many years, we have had a presence in France through local Wholesale partners. Today, our brands are available in 19 Houses of GERRY WEBER in France. In view of the high acceptance of our brands in this market, we are looking at opening own Retail stores in France as well.

Increased vertical integration

Against the background of changing distribution structures in the fashion industry, we will push ahead the vertical integration of the GERRY WEBER Group. One objective is to have the products in stores more quickly and match store inventory even more effectively to actual requirements. In-season management plays an important role in this context. The development and production cycles are streamlined for greater responsiveness to weather-related changes in demand for specific types of merchandise and other factors.

Another objective of vertical integration is to have better control over the presentation of our products and brands in the shops and stores.

Construction of new logistic centre

Our new multi-channel logistic centre is expected to make the first deliveries already before the end of 2015. After a six-month start-up phase, during which the inventories of the five existing warehouses will be transferred to the new logistic centre among other things, the new centre is expected to be fully operational as of mid-2016. Accordingly, the potential cost savings


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resulting from the construction of the new logistic centre are expected to be realised as of the financial year 2016/17.

Use of modern communication media to

support the brand positioning

In autumn 2014, we launched our first TV commercial to support our brand statement. Shot in New York to the sound of Bryan Adams‘ “Summer of 69”, the commercial met

with great acceptance among existing and new customer groups. The current fiscal year will see us launch a new marketing campaign to support sales of our collections as well as our brand positioning. The new spot will underline the modernity of our brands and make the collections more attractive for existing and new customer groups.

Needless to say, this also includes a presence in, and communication via, various social media channels such as Facebook or Instagram to present GERRY WEBER as an international lifestyle brand..

New store concept

To enhance the experience and sharpen the profile of the GERRY WEBER brands, a new store concept was developed in the past financial year. The new store shows a strong emotionalisation of the individual brands and skilfully presents the collections – from modern, elegant and cosmopolitan to urbane and cool. The lifestyle worlds of the individual brands are clearly distinguished by the use of different materials and technologies. The new store concept will gradually be implemented in existing stores in the context of the planned ongoing renovations.


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HALLHUBER TODAY AND TOMORROW

Following approval by the antitrust authorities in Germany and Austria, Munich-based fashion company HALLHUBER is fully included in the GERRY WEBER Group’s

consolidated financial statements with effect from February 2015. We therefore use this quarterly report to provide a brief overview of the HALLHUBER business model, the performance during the past months and the outlook for the coming financial year.

HALLHUBER brands

HALLHUBER is a fully vertically integrated fashion company operating some 220 exclusively company-managed sales spaces (as at December 2014). HALLHUBER fashion presents the latest trends as well as timeless styles. The HALLHUBER branded product line is primarily targeted at a younger market between 20 and 35 years. The HALLHUBER customer is urbane and fashion-conscious and familiar with the latest trends. “HALLHUBER DONNA” is a bit more

elegant and exclusive and targeted at customers between 30 and 45.

HALLHUBER sales up by a projected 25%

in 2014

With 2013 sales revenues amounting to EUR 109.2 million, the HALLHUBER management expects revenues to increase by approx. 25% in the financial year 2014 (based on preliminary figures). This growth is attributable not only to the newly opened sales spaces (+38 in 2014) but also to the existing stores. Accordingly, like-for-like sales increased by approx.. 7% in the financial year 2014. This means that HALLHUBER clearly outperformed the German fashion retail sector as a whole, which reported a 3% decline in sales for 2014 according to the Testclub panel of German trade magazine “Textilwirtschaft”.


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Like-for-like growth of 3% clearly better

than the German fashion market as a

whole

In spite of the difficult market environment, HALLHUBER was able to generate like-for-like growth of approx. 3.0% in the winter months from November 2014 to January 2015. The German fashion market as whole reported a decline in sales revenues of approx. 5.0% for the same period.

HALLHUBER’s total sales revenues,

including those of the newly opened stores, were up by approx. 18% on the previous year to approx. EUR 40.0 million in the

period from November 2014 to January 2015 (according to preliminary figures).

HALLHUBER outlook on 2015

Management expects sales revenues for HALLHUBER’s full financial year 2015 to

increase by between 16% and 20%, which would be equivalent to revenues of between EUR 158 million and EUR 163 million for the period from January to December 2015.

Based on the originally planned expansion, HALLHUBER would make a sales contribution of between EUR 110 million and EUR 120 million during the period from


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February to October 2015, the time of initial consolidation.

While HALLHUBER will retain its independent fashion statement and continue to develop its own collections, the company will, as far as possible, be integrated into the processes and procedures of the GERRY WEBER Group. The aim is to jointly leverage synergies in order to install more effective processes and realise cost savings. HALLHUBER will be enabled to take advantage of the direct procurement capacities of the GERRY WEBER Group to achieve cost advantages in procurement. Going forward, it is planned to introduce RFID technology for the HALLHUBER products and to integrate the HALLHUBER merchandise flows into the new logistic centre.

Moreover, it will be possible to achieve potential short-term cost savings in the area of contract management and transport and freight costs.

Both companies expect the synergies to result in improved profitability.

Accelerated expansion of HALLHUBER

A key focus of the cooperation between GERRY WEBER and HALLHUBER will be on expanding the HALLHUBER distribution channels. The GERRY WEBER Group already operates its own Retail spaces in nearly all European countries. GERRY WEBER will support HALLHUBER in building up its own Retail spaces, especially outside Germany, by making available its expertise and existing structures.

In the past financial year 2014, HALLHUBER already increased the number of company-managed sales spaces by 38 to 220. The HALLHUBER management expects some 37 new sales spaces to be added in the financial year 2015. This original plan also served as the basis for the company’s sales

projections for the financial year 2015.

The originally planned number of 37 new stores is to be increased to 50 to 60 with the help of the GERRY WEBER Retail experts. Most of these new stores will be opened in the second half of the year. The regional focus will be in Spain, UK as well as in Scandinavia.


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The GERRY WEBER SHARE

Compared to the Xetra closing price at the end of the financial year 2013/14, the GERRY WEBER share gained 6.9% during the first quarter of the financial year 2014/15. The Xetra closing price at the end of the first quarter was EUR 34.26, compared to 32.06 at the beginning of the financial year 2014/15. The GERRY WEBER share thus underperformed the MDAX, which gained approx. 15.1% during the same period.

After the update of the short-term forecast, the price of the GERRY WEBER share dropped sharply to EUR 28.44 at the beginning of the reporting period (Q1 2014/15). Positive news regarding the performance of the Retail segment and the HALLHUBER acquisition in December 2014 contributed to a clearly positive share price performance in the course of the first quarter of 2014/15. At EUR 35.69, the price of the GERRY WEBER share reached the highest level of the first quarter of 2014/15 on 21 January 2015.

As in the previous year, US investors’

continued strong interest in GERRY WEBER International AG allowed us to present our company at one of the largest capital market conferences for German DAX and MDAX companies. At the Commerzbank Investment Seminar in New York, we informed existing as well as potential new investors about the business model of GERRY WEBER

International AG and the future growth strategy. We also attended Kepler Cheuvreux’s German Corporate Conference

in Frankfurt and used this opportunity to report on the market environment and the business trend.

At the annual accounts press conference on 26 February 2015, the Managing Board and the Supervisory Board announced that they would propose a dividend of EUR 0.75 per share to the upcoming Annual General Meeting on 16 April 2015. Based on the assumption that this proposal is approved by the Annual General Meeting, the payout ratio would amount to approx. 48% and would thus again be at the upper end of the company’s defined payout ratio of 40% to 50%.


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Share price of the GERRY WEBER share in Q1 2014/15

Share price performance compared to the DAX and the MDAX in Q1 2014/15

GERRY WEBER Share

versus DAX and MDAX in Q1 2014/15


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INTERIM GROUP MANAGEMENT REPORT on the first quarter of 2014/15 from 1 November 2014 to 31 January 2015

Sales performance

Consolidated sales revenues of the GERRY WEBER Group in Q1 2014/15 were up by 1.1% on the previous year to EUR 192.4 million (Q1 2013/14: EUR 190.4 million).

Retail revenues climb 8.5%

The increase in the Retail segment’s

revenues is primarily attributable to the expansion of the sales space in the previous years. In the past financial year 2013/14, the company-managed Retail spaces increased by 11.6% to 138,400 square metres. In spite of a 2.3% decline in like-for-like Retail sales, the segment’s total revenues rose by 8.5% to EUR 106.0 million (Q1 2013/14: EUR 97.7 million). Accordingly, the Retail segment’s

share in total Group revenues climbed from 51.3% in the first quarter of the previous year to 55.1%.

Like-for-like Retail revenues dropped by 2.3% in Q1 2013/14. A look at the German market as a whole shows that it shrank by approx. 5%, which means that the GERRY WEBER Group again was a positive exception to the general market trend in Germany in the first quarter of 2014/15.

The company-managed Houses of GERRY WEBER and mono-label stores contributed 75.2% to the Retail segment’s sales

revenues in the first three months of the current financial year. During this period, the number of company-managed stores increased by 4 Houses of GERRY WEBER (net) to 782 as of 31 January 2015.

In the context of the ongoing vertical integration of our distribution channels, the concession stores are playing an increasingly important role. In contrast to the shop-in-shops, which form part of the Wholesale segment, the concession stores are rented from our partners, which gives us full control over the goods that are available in these stores. At present, we operate 118 concession stores exclusively in European countries outside Germany.

Wholesale 44.9 %

Retail55.1 %

Sales split by segments Q1 2014/15


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The chart below shows a breakdown of Retail revenues by distribution channels.

Wholesale revenues of EUR 86.4 million

Against the background of the challenging marketing environment of the past months, sales to our retail partners declined by 6.8% to EUR 86.4 million in the first quarter of 2014/15 (Q1 2013/14: EUR 92.7 million). Both higher inventories at existing customers and the reduced liquidity of smaller retail partners led to declining order volumes.

The depreciation of the rouble and the resulting increase in consumer prices in Russia also had an adverse impact on the Wholesale segment’s revenues. In the past

financial year 2013/14, Russian retail partners accounted for approx. EUR 32.0 million of total Group revenues. For the above reasons, the GERRY WEBER Group expects sales revenues with our Russian retail partners to decline temporarily in the current financial year.

The Wholesale segment’s share in total

Group revenues declined from 48.7% to 44.9% on a quarterly basis.

Performance of the distribution

channels

One focus of the GERRY WEBER growth strategy lies on the consistent expansion of our own Retail spaces. The aim of the vertical integration strategy is to assume control over merchandise management in more and more stores and to get the collections to the point of sale even more quickly.

Profitable and sustainable growth of the GERRY WEBER Group is the primary objective of the company. The profitability of the individual Retail spaces is therefore reviewed on a regular basis. Stores that fail to meet our strict profitability criteria are closed or, where this makes sense, transferred to other brand concepts of the GERRY WEBER Group.

At the end of the reporting period (31 January 2015), there were 493 company-managed Houses of GERRY WEBER and 140 mono-label stores in Germany and abroad. The Retail segment also comprises the 118 concession stores as well as the 31 outlet stores. As of 31 January 2015, the company managed a total of 782 sales spaces, thereof 316 outside Germany.

This means that the number of company-managed sales spaces increased moderately in the course of the first quarter of 2014/15, namely from 778 at the end of the financial year 2013/14 to 782 on 31 January 2015.

HoGWs 75.2%

Concession5.3%

Outlets14.1%

Online Shops5.4%

Sales split Retail Q1 2014/15


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The chart below shows a detailed breakdown of the individual distribution channels.

Our online business also forms part of the Retail segment. In the first quarter of 2014/15, this distribution channel achieved a 22.2% increase in sales revenues to EUR 5.8 million, which represents approx. 5.4% of total Retail revenues.

The number of franchised stores declined from 282 at the end of the financial year 2013/14 to 275. Stores were closed, for instance, in Finland and the Czech Republic, i.e. in countries where we increasingly have

a presence through our own company- managed stores.

The shop-in-shops are another important distribution channel of the Wholesale segment. Their number slightly declined from 2,808 at the end of the financial year (31 October 2013) to 2,785. This decline is primarily attributable to the fact that smaller shop-in-shops were merged into larger, more visible shops as well as to portfolio adjustments.

Q1 2014/15 2013/14

31.01.2015 31.10.2014

RETAIL

Houses of GERRY WEBER 493 485

Monolabel Stores 140 144

Concession Flächen 118 119

Factory Outlets 31 30

782 778

WHOLESALE

Houses of GERRY WEBER 275 282

Shop-in-Shops 2.785 2.808


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Brand sales performance and regional performance Accounting for 62.1%, Germany remained the core market of the GERRY WEBER Group in the first three months of the current financial year 2014/15.

Compared to the first quarter of the previous year, the relative share of domestic revenues in total Group revenues remained stable. The foreign markets contributed 37.9% to total Group revenues.

Accounting for 76.7% of total revenues, the GERRY WEBER brand family, which also includes the GERRY WEBER EDITION and G.W. sublabels, again made the biggest contribution to the GERRY WEBER Group’s

sales revenues.

The chart below shows the shares of the three brand families – GERRY WEBER, TAIFUN and SAMOON – in the first three months of 2014/15 on the basis of sales to consumers and to Wholesale customers.

Germany 62.1%

Non-EU9.3%

EU (excl. Germany)

28,6%

GERRY WEBER 76.7 %

TAIFUN17.9 %

SAMOON5.6%


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EARNINGS POSITION IN Q1 2014/15

Gross margin climbs 260 basis points to 56.5%

As the Retail segment’s share in our

business model continues to increase, the gross result again improved notably in the first quarter of 2014/15 compared to the prior year quarter. At EUR 108.8 million, the gross result was up by 6.0%.

Based on almost unchanged cost of materials of EUR 102.0 million, inventory

increases of EUR 18.4 million and sales revenues of EUR 192.4 million, the gross margin improved from 53.9% to 56.5%. The gross margin is calculated as the cost of materials, adjusted for changes in inventories, in relation to sales.

EBITDA on par with the previous year at EUR 24.2 million

Due to the ongoing expansion of the Retail segment and the related opening of new sales spaces, the headcount increased from

Q1 2014/15 Q1 2013/14 Changes

in KEUR 01.11.2014 - 31.01.2015 01.11.2013 - 31.01.2014 in %

Sales 192.4 190.4 1.1%

Other operating income 5.1 4.6 11.6%

Changes in inventories 18.4 13.9 32.6%

Cost of materials -102.0 -101.6 0.4%

Personnel expenses -39.3 -36.1 8.8%

Depreciation/Amortisation -6,8 -6.0 12.6%

Other operating expenses -50.1 -46.6 7.6%

Other taxes -0.3 -0.3 0.0%

EBITDA 24.2 24.3 -0.4%

OPERATING RESULT (EBIT) 17.4 18.3 -4.5%

Financial result -1.1 -1.4 -16.8

RESULTS FROM ORDINARY ACTIVITIES 16.3 16.9 -3.6%

Taxes on income -5.8 -5.3 8.5%

NET INCOME OF THE REPORTING PERIOD 10.5 11.6 -9.1%


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4,857 to 5.384 as of 31 January 2015. Accordingly, personnel expenses rose by 8.8% to EUR 39.3 million (Q1 2013/14: EUR 36.1 million).

As a result of the expansion of the company-managed sales space (+11.6 % in 2013/14), space costs were up by 15.2% on the prior year quarter to EUR 23.1 million (Q1 2013/14: EUR 20.1 million). Accordingly, other operating expenses climbed from EUR 46.6 million to EUR 50.1 million in Q1 2014/15.

With sales revenues almost on a par with the prior year quarter but higher fixed costs resulting from the Retail expansion, earnings before interest, taxes, depreciation and amortisation (EBITDA), at EUR 24.2 million, were almost unchanged from the previous year in the first quarter of 2014/15 (Q1 2013/14: EUR 24.3 million).

Retail expansion leads to increased depreciation/amortisation

Due to the opening of new Retail spaces and the store takeovers, depreciation/ amortisation increased by 12.6% (EUR 0.8 million) to EUR 6.8 million in the first quarter of 2014/15. As EBITDA remained almost unchanged and depreciation/amortisation increased, earnings before interest and taxes (EBIT) were down by a moderate 4.5% (EUR 0.8 million) on the prior year period to EUR 17.4 million. Accordingly, the EBIT margin dropped from 9.6 % to 9.1%.

Taking into account the financial result of EUR -1.1 million (Q1 2013/14: EUR -1.4 million) and increased income tax of EUR 5.8 million (Q1 2013/14: EUR 5.3 million), net income for the period dropped from EUR 11.6 million in the prior year period to EUR

10.5 million. The decline consequently resulted in slightly lower earnings per share of EUR 0.23 in Q1 2014/15, compared to EUR 0.25.

NET WORTH POSITION

At approx. EUR 701.9 million, total assets of GERRY WEBER International AG increased by EUR 16.7 million or 2.4% compared to the end of the financial year 2013/14.

On the assets side of the balance sheet, non-current assets were primarily influenced by an increase in property, plant and equipment, which rose by EUR 13.3 million (+6.8%) to EUR 208.4 million. This is primarily attributable to an increase in “advance payments for construction work”. These primarily include the advance payments made for our new logistic centre. The other asset items remained almost unchanged, which translates into an increase from EUR 319.4 million to EUR 331.9 million (+EUR 12.5 million).

Compared to the end of the financial year on 31 October, 2014, inventories increased by 11.3% or EUR 16.0 million to EUR 156.6 million in the first three months of 2014/15. This rise is not only due to the expansion of the company-managed Retail spaces but also to the seasonal increase in inventories, as part of the spring/summer collections is ready for delivery in the warehouses as of the end of the first quarter.

As of the reporting date, trade receivables declined from EUR 70.8 million to EUR 59.6


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million, whereas other short-term assets increased from EUR 39.2 million to EUR 81.5 million as of the end of the reporting period. This item includes, among other things, the increased carrying amounts of the financial derivatives, which correspond to the fair values.

Based on our production and delivery cycles, liquid funds declined by 43.6% from EUR 104.3 million to EUR 58.8 million. Due to seasonal factors, the first quarter of our financial year is typically influenced by cash outflows to advance finance a major part of the spring/summer collections, which are shipped to our customers and our own stores in the ensuing weeks.

On the liabilities side, equity increased from EUR 455.3 million to EUR 488.7 million. Accordingly, the equity ratio climbed from 66.4% at the end of the financial year to 69.6% on 31 January 2015.

Equity includes, among other items, accumulated other comprehensive income/loss pursuant to IAS 39. This item comprises the positive fair values of financial instruments qualifying for hedge accounting (currency forwards). Against the background of the Euro/USD exchange rate trend, accumulated other comprehensive income/ loss pursuant to IAS 39 rose from EUR 18.3 million to EUR 41.3 million.

Non-current liabilities climbed from EUR 142.5 million to EUR 150.3 million in the reporting period, which is attributable to the

fact that deferred tax liabilities increased by EUR 9.9 million to EUR 32.3 million.

Current liabilities declined from EUR 87.5 million to EUR 62.9 million in the first three months of 2014/15. This is due, among other things, to the lowering of personnel provisions of EUR 6.6 million compared to the end of the financial year as well as the reduction in trade liabilities by EUR 10.3 million to EUR 27.0 million as of the reporting date.

FINANCIAL ASSETS AND

INVESTMENTS

The outflow of cash from operating activities amounted to EUR 22.1 million in Q1 2014/15 (Q1 2013/14: EUR 9.3 million). The increase is attributable, among other things, to the reduction in trade liabilities as of the reporting date.

Accordingly, the cash outflow from current operations increased from EUR 10.3 million to EUR 22.7 million as of 31 January 2015.

Cash outflow from investing activities in the first three months of 2014/15 was primarily influenced by investments in property, plant and equipment of EUR 19.6 million (Q1 2013/14: EUR 6.5 million). This is also reflected in the balance sheet item “advance payments for construction work”. These primarily include the advance payments for our new logistic centre.

The cash inflow from financing activities of EUR 73.4 million in the first quarter of the


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previous year was primarily due to the issue of the EUR 75.0 million note loan. The cash outflow from financing activities in the first three months of the reporting period amounted to EUR 3.2 million and is based on the repayment of loans.

Against the background of the above cash outflows, cash and cash equivalents declined by EUR 45.4 million compared to the past financial year to EUR 58.8 million at the end of Q1 2014/15 (31 October 2014: EUR 104.3 million).

SEGMENT REPORT

GERRY WEBER International AG modified its segment reporting practice as of 1 November 2014. In the past, a distinction was made between two main segments, “Production and Wholesale" and “Retail", as

well as “Other segments”. The Wholesale

segment comprised all distribution structures with external customers as well as all development and production processes of our goods including transport and logistics. The “Retail“ segment, being almost exclusively a distribution segment, comprised all Retail distribution structures with end customers.

In view of the growing importance of the Retail segment and the ongoing vertical integration of the GERRY WEBER business model, the segment reporting practice was changed with effect from 1 November 2014. With initial effect from Q1 2014/15, GERRY WEBER International AG distinguishes between two distribution segments, “Wholesale” and “Retail”. Contrary to the past practice, all development and

production processes of the goods including transport and logistic are not exclusively counted towards the “Production and Wholesale” segment but are allocated proportionately to the two distribution segments. Accordingly, all income and expenses as well as assets and liabilities which can be assigned to product development and procurement are proportionally allocated to the “Retail”

segment and the “Wholesale” segment.

The “other segments” remained unchanged and primarily comprise the income and expenses as well as the assets and liabilities of the Hall 30 investment property. Income and expenses as well as assets and liabilities of the holding company are also allocated proportionately to the individual segments.

The segment reporting of the previous year period (Q1 2013/14) has been adjusted in order to ensure comparability.

Parallel to the 8.5% year-on-year increase in Retail revenues in Q1 2014/15 to EUR 106.0 million, earnings before interest, taxes, depreciation and amortisation (EBITDA) of this segment also climbed from EUR 13.4 million to EUR 14.5 million. Accordingly, the EBITDA margin of 13.7% remained almost unchanged % on a quarterly basis.

Against the background of the expansion of the company-managed Retail spaces and the takeover of existing stores in Norway and the resulting increase in fixed assets, depreciation and amortisation rose from EUR 4.2 million to EUR 4.9 million on a quarterly basis.

After increased depreciation/amortisation, the Retail segment’s earnings before interest

and taxes (EBIT) amounted to EUR 9.6


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million in the first three months of 2014/15 (Q1 2013/14: EUR 9.3 million), which represents an increase by 4.0%. The EBIT margin decreased slightly from 9.5% to 9.1%.

Based on the Retail expansion and the resulting increase in fixed assets in the past financial year 2013/14, the Retail segment’s

assets climbed from EUR 319.5 million in the prior year quarter to EUR 387.8 million on 31 January 2015. Consequently, the Retail segment’s assets increased by 3.4% to EUR

151.7 million. Investments in non-current assets totalled EUR 11.5 million in Q1 2014/15.

GERRY WEBER’s own sales spaces are run

by the Group’s own staff, which is why the

Retail segment’s headcount increased from 4,120 to 4,673.

As a result of the decline in Wholesale revenues from EUR 92.7 million to EUR 86.4 million in the first quarter, the segment’s

earnings before interest, taxes, depreciation and amortisation (EBITDA) dropped from EUR 9.6 million to EUR 8.5 million. Accordingly, the EBITDA margin fell from 10.4% in the first quarter of the previous year to 9.9% in the reporting period.

With depreciation/amortisation almost unchanged at EUR 1.8 million, earnings before interest and taxes (EBIT) of the Wholesale segment amounted to EUR 6.7 million (Q1 2013/14: EUR 7.9 million). The EBIT margin declined from 8.5% to 7.8% on a quarterly basis.

The Wholesale segment’s assets totalled

EUR 289.6 million as of 31 January 2015, compared to EUR 258.6 million at the end of the prior year quarter. Investments in non-

current assets rose sharply from EUR 2.4 million EUR 8.1 million at the end of the reporting period. The Wholesale segment’s

liabilities climbed from EUR 52.8 million to EUR 66.3 million.

At the end of Q1 2014/15, 275 Houses of GERRY WEBER were run by franchisees, including 211 outside Germany. The Wholesale segment’s annual average headcount declined from 736 to 710.

OPPORTUNITY AND RISK REPORT

Being part of a complex, global business world, GERRY WEBER International AG is exposed to diverse opportunities and risks which may have positive and negative effects on the net worth, financial and earnings position in the short or long term. A changing national and international environment, climate and demographic change or internal factors may cause opportunities but also risks for our business model. To identify opportunities at an early stage and reduce risks to a minimum, GERRY WEBER has introduced an opportunity and risk management system. It is closely integrated with our corporate strategies and forms the basis for active opportunity and risk management. The internal control system for the accounting process is an integral element of our risk management system. Key objectives of the opportunity and risk management system are:

• Integration into current operational business processes,

• Identification and monitoring of risks by the specialist and functional departments,


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• Subsequent assessment and control together with the Risk Management Team,

• Reduction of existing risks to an acceptable minimum by launching appropriate counter-measures as well as

• Active involvement and integration of all employees.

The GERRY WEBER Group operates in a constantly changing environment. Positive future developments need to be identified as early as possible and the resulting opportunities must be exploited to the benefit of the company. Opportunities may arise both internally and externally. In the context of our opportunity management system, we analyse market and competitor data, observe demographic developments in different regions and monitor different fashion trends.

Economic or geopolitical conditions may have a material influence on our success in business. Stagnation or an economic slowdown in a region or political events may lead to price increases and/or to lower real incomes and, hence, to reduced consumer spending. In particular, the depreciation of the Russian rouble and the resulting increase in prices could have an adverse impact on sales and earnings of the GERRY WEBER Group in the short term. We counter the economic and geopolitical risks by relying on regionally diversified distribution structures.

For a detailed description of our risk management system, the control systems for the accounting processes and the opportunities and risks in the GERRY WEBER Group, please refer to page 57 et seq. of the risk report in the 2013/14 Annual

Report. The statements made in this risk report remain valid.

Since the beginning of the fiscal year 2014/15, no material changes have occurred regarding the risks to our company’s future.

Based on current knowledge, there are no risks that could jeopardise the existence of the GERRY WEBER Group.

POST-BALANCE SHEET EVENTS

On 22 December 2014, GERRY WEBER International AG announced the acquisition of 100% of the shares in HALLHUBER GmbH, Munich, subject to the approval of the German Federal Cartel Office and the Austrian antitrust authorities. With this approval having been granted in the meantime, fashion company HALLHUBER will be initially consolidated by the GERRY WEBER Group with effect from February 2015.

FORECAST REPORT

Forward-looking statements

The present forecast report of GERRY WEBER International AG reflects management’s expectations regarding the

future geopolitical, macroeconomic, sector-specific and company-specific developments which many influence the company’s

business activities. It is based on management’s knowledge at the time of the

preparation of the report.


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Economic outlook

The macroeconomic trend in the core markets of the GERRY WEBER Group, the economic expectations in these markets and, in particular, private households’ consumption propensity play an important role for the company’s sales and earnings. In

the past financial year 2013/14, the GERRY WEBER Group generated about 60% of its total sales revenues in Germany. This means that the economic trend in Germany and the spending propensity of German consumers remain key factors influencing the net worth, financial and earnings position of GERRY WEBER International AG.

After a weak summer 2014, which remained clearly below economic experts‘

expectations, the economic environment in Germany improved towards the end of 2014, i.e. in the first quarter of our financial year 2014/15.

In Q4 2014, Germany’s gross domestic

product (GDP) was up by 0.7% on the third quarter of 2014 (adjusted for prices, seasonal factors and working days). This represents an acceleration from the +0.1% increase in the previous quarter. In year-on-year terms, Q4 GDP was up by 1.6%.

Fuelled by the slump in energy prices, this is also reflected in Germany’s GfK consumer

climate index. In January 2015, economic expectations climbed 8 index points to 22.5 points, as Germans expect the local economy to pick up again. For February 2015, the GfK consumer climate index projects 9.3 points (overall indicator), compared to 9.0 points in January. This is the highest level since November 2001.

Neither the generally positive economic data nor German consumers’ high spending

propensity were reflected in the fashion retail sector during the past months. Between November 2014 and January 2015, the situation in the fashion retail sector was characterised by negative total sales. The -9% month-on-month decline in November 2014 sales was followed by -4% in December 2014 and by -3% in January 2015, according to TW Testclub, a panel of German trade magazine “Textilwirtschaft”. It

seems as if Germans are not spending their money on clothing and fashion but – also in view of the low interest rates – on long-term investments such as real estate.

Declining by 2.3%, domestic like-for-like sales of the GERRY WEBER Group exceeded those of the German sector as a whole, which recorded a reduction by approx. 5.0% compared to the previous year.

A look at the situation in Europe shows quite a mixed picture. Some countries are still characterised by exceptionally positive economic expectations in conjunction with growing income expectations as well as high consumption propensity (e.g. Germany and Poland). Other European economies have not yet bottomed out (e.g. France). However, the first positive signs became visible in these countries towards the end of 2014. Economic expectations have increased sharply primarily in crisis-hit countries such as Spain and Portugal. In December 2014, the EU 28 consumer climate index stood at 5.5 points, up from 4.3 points in Q3 2014.

We assume that the consumption propensity of private households in Germany and Europe will continue to stabilise. It remains to


21

be seen, however, whether consumers will rather spend their money on longer-term investments.

The environment for the European fashion industry as a whole remained challenging in the winter months of 2014/15. Unfavourable weather conditions in Central Europe and, above all, low footfall in the city centres and stores had an adverse impact on sales in the clothing industry. The management of GERRY WEBER International AG does not expect the external environment to improve markedly in the coming months.

Strategic outlook

The GERRY WEBER Group will continue to pursue its growth strategy in the coming months. Long-term oriented and profitable growth is the main objective of the company. In the coming months, the strategic positioning of the GERRY WEBER Group and of our operating activities will primarily focus on the following:

Aggressive continuation of the Retail expansion through an increase in company-managed stores. The regional focus will be on neighbouring European countries and North America. The first eight company-managed Houses of GERRY WEBER will be opened in Canada before the end of the current fiscal year 2014/15,

Effective implementation of our vertical integration strategy and, in this context, increased control over the full value chain from procurement to transport and logistics to the point of sale,

Optimised inventory management thanks to more effective in-season management, e.g. with the help of so-called “speed

programmes”, to get the products to the

stores even more quickly,

Consistent optimisation of existing processes and implementation of the logistic centre construction project according to plan,

Integration of fashion company HALLHUBER into GERRY WEBER Group and realisation of the targeted synergy effects.

For a detailed description of the outlook for the coming months, please refer to the chapter entitled “Outlook 2014/15 – the GERRY WEBER growth strategy” on pages

4 to x6 of the present interim report.


22

Overall statement on the projected performance

In spite of the challenging conditions prevailing in the first few months of our current financial year, the GERRY WEBER management continues to project a positive sales and earnings performance for 2014/15. In view of the excellent market positioning of our brands, our international growth opportunities, especially as a result of the ongoing expansion of our Retail operations, our operational strengths as well as the integration of HALLHUBER, we are confident that we will achieve the growth targets we have set ourselves.

Together with HALLHUBER, we are targeting consolidated sales revenues of between EUR 970 million and EUR 1,000 million for the financial year 2014/15.

The previous GERRY WEBER Group, with the GERRY WEBER, TAIFUN and SAMOON brands, is expected to contribute between EUR 860 million and EUR 880 million to this amount.

As we continue to reduce our inventories, the first and the second quarter of the former GERRY WEBER Group will be characterised by higher discounts, which may have an adverse impact on the gross margin. Considering these effects as well as potential one-time costs arising from the HALLHUBER acquisition, the GERRY WEBER management projects EBITDA between EUR 138 million and EUR 143 million plus a moderately positive effect of between EUR 10 million and EUR 14 million from the integration of HALLHUBER.


23

Taking into account increased depreciation/amortisation resulting from the Retail expansion, the previous GERRY WEBER Group expects earnings before interest and taxes (EBIT) to come in at between EUR 110 million and EUR 115 million. The GERRY WEBER management expects the HALLHUBER integration to lead to a moderate 5 - 10% increase in EBIT. For the GERRY WEBER Group as a whole, including HALLHUBER’s profit contribution, management projects EBIT of between EUR 118 million and EUR 126 million.

The consistent implementation of our expansion and vertical integration strategy

and the acquisition of HALLHUBER show that we are all set to grow profitably also in future. However, the fiscal year 2014/15 will also be marked by the ongoing process of change from a wholesale-oriented fashion supplier to an increasingly vertically integrated lifestyle company as well as by the integration of HALLHUBER into the GERRY WEBER Group. The management of GERRY WEBER regards the fiscal year 2014/15 as a year of consolidation before making the next major growth move.


24

Q1 2014/15 Q1 2013/14

in KEUR 01.11.2014 - 31.01.2015 01.11.2013 - 31.01.2014

Sales 192,418.1 190,379.1

Other operating income 5,156.4 4,619.7

Changes in inventories 18,381.1 13,865.0

Cost of materials -102,002.8 -101,601.7

Personnel expenses -39,276.9 -36,103.8

Depreciation/Amortisation -6,801.5 -6,041.8

Other operating expenses -50,124.7 -46,588.4

Other taxes -322.6 -272.9

OPERATING RESULT 17,427.1 18,255.2

Financial result

Income from long-term loans 0.4 1.1

Interest income 12.2 36.1

Writedowns on financial assets 0.0 0.0

Incidential bank charges -220.9 -271.5

Interest expenses -916.0 -1,117.3

-1,124.3 -1,351.6

RESULTS FROM ORDINARY ACTIVITIES 16,302.8 16,903.6

Taxes on income

Taxes of the reporting period -5,348.9 -5,194.8

Deferred taxes -417.0 -118.4

-5,765.9 -5,313.2

NET INCOME OF THE REPORTING PERIOD 10,536.9 11,590.4

Earnings per share ( basic) 0.23 0.25

for the First Quarter 2014/15 (1 November 2014 - 31 January 2015)

CONSOLIDATED INSOME STATEMENT (IFRS) in EUR'000


25

CONSOLIDATED BALANCE SHEET (IFRS) in EUR'000

ASSETS

Q1 2014/15 2013/14

in KEUR 31. Jan. 2015 31. Okt. 2014

NON-CURRENT ASSETS

Fixed Assets

Intangible assets 94,219.8 94,895.8

Property, plant and equipment 208,447.3 195,125.5

Investment properties 26,707.2 26,828.0

Financial assets 2,543.6 2,559.3

Other non-current assets

Trade receivables 400.0 480.1

Other assets 134.2 148.4

Income tax claims 1,132.5 1,132.5

Deferred tax assets 5,587.3 6,089.5

339,171.9 327,259.1

CURRENT ASSETS

Inventories 156,631.9 140,671.5

Receivables and other assets

Trade receivables 59,582.3 70,844.4

Other assets 81,547.6 39,210.6

Income tax claims 6,104.3 2,930.7

Cash and cash equivalents 58,848.2 104,295.5

362,714.3 357,952.7

TOTAL ASSETS 701,886.2 685,211.8

as of 31 January 2015


26

CONSOLIDATED BALANCE SHEET (IFRS) in EUR'000

EQUITY AND LIABILITIES

Q1 2014/15 2013/14

in KEUR 31. Jan. 2015 31. Okt. 2014

EQUITY

Share capital 45,906.0 45,906.0

Capital reserve 102,386.9 102,386.9

Retained earnings 230,380.6 230,380.6

Accumulated other comprehensive income/loss acc. to IAS 39 41,306.1 18,321.8

Exchange differences -406.4 -312.4

Accumulated profits 69,117.1 58,580.2

488,690.3 455,263.1

NON-CURRENT LIABILITIES

Provisions for personnel 0.0 0.0

Other provisions 6,282.2 6,124.7

Financial liabilities 76,428.6 77,142.8

Other liabilities 35,331.0 36,857.1

Deferred tax liabilities 32,261.7 22,373.8

150,303.5 142,498.4

CURRENT LIABILITIES

Provisions

Tax liabilities 2,645.9 2,680.2

Provisions for personnel 7,314.6 13,943.5

Other provisions 7,694.8 8,429.4

LIABILITIES

Financial liabilities 4,553.1 7,016.4

Trade payables 26,984.7 37,309.2

Other liabilities 13,699.3 18,071.6

62,892.4 87,450.3

TOTAL EQUITY AND LIABILITIES 701,886.2 685,211.8

as of 31 January 2015


27

Capital Capital Retained Accumulated Exchange Accumulated Equitystock reserves earnings other comprehensive differences profits

in KEUR income/loss

As of 1 November 2013 45,906.0 102,386.9 230,380.6 18,321.8 -312.4 58,580.2 455,263.1

Allocation of retained earnings 0.0

Adjustments of exchange differences -94.0 -94.0

Changes in equity acc. to IAS 39 22,984.3 22,984.3

Net income of the reporting period 10,536.9 10,536.9

As of 31 January 2014 45,906.0 102,386.9 230,380.6 41,306.1 -406.4 69,117.1 488,690.3

Capital stock Capital Retained Accumulated Exchange Accumulated Equityreserves earnings other comprehensive differences profits

in KEUR income/loss

As of 1 November 2013 45,906.0 102,387.0 195,341.7 -4,223.9 -225.6 56,581.5 395,766.7

Allocation of retained earnings 0.0

Adjustments of exchange differences -263.2 -263.2

Changes in equity acc. to IAS 39 2,242.2 2,242.2

Net income of the reporting period 11,590.4 11,590.4

As of 31 January 2014 45,906.0 102,387.0 195,341.7 -1,981.7 -488.8 68,171.9 409,336.1

STATEMENT OF CHANGES IN GROUP EQUITY (IFRS) in EUR'000for the First Quarter 2014/15 (1 November 2014 - 31 January 2015)


28

CONSOLIDATED CASH FLOW STATEMENT (IFRS) in EUR'000

Q1 2014/15 Q1 2013/14

in KEUR 01.11.2014 - 31.01.2015 01.11.2013 - 31.01.2014

Operating result 17,427.1 18,255.2

Depreciation / amortisation 6,801.5 6,041.8

Profit / loss from the disposal of fixed assets 262.0 2.9

Increase / decrease in inventories -15,960.5 -15,532.5

Increase / decrease in trade receivables 11,342.2 13,407.1

Increase / decrease in other assets that do not fall under investing or financing activities

-9,498.7 -4,647.1

Increase / decrease in provisions -7,083.4 -6,345.5

Increase / decrease in trade payables -10,324.6 -4,740.1

Increase / decrease in other liabilities that do not fall under investing or financing activities

-6,552.6 -7,410.7

Income tax payments -8,556.8 -8,357.7

Other non-cash effective income/expenses 0.0 0.0

CASH OUTFLOWS FROM OPERATING ACTIVITIES -22,143.8 -9,326.6

Income from loans 0.4 1.1

Interest income 12.2 36.1

Incidential bank charges -220.8 -271.6

Interest expenses -345.1 -704.3

CASH OUTFLOWS FROM CURRENT OPERATING ACTIVITIES -22,697.1 -10,265.3

Proceeds from the disposal of properties, plant, equipment and intangible assets

18.0 67.0

Cash outflows for investments in property, plant, equipment and intangible assets

-19,606.5 -6,505.1

Cash outflows for the acquisition of fully consolidated companies and other business units less cash and cash equivalents acquired

0.0 0.0

Cash outflows for investments in investment properties 0.0 -29.2

Proceeds from the disposal of financial assets 15.8 0.0

Cash outflows for investments in financial assets 0.0 -507.5

CASH OUTFLOWS FROM INVESTING ACTIVITIES -19,572.7 -6,974.8

Raising / repayment of financial liabilities -3,177.5 73,449.6

CASH OUTFLOWS FROM FINANCING ACTIVITIES -3,177.5 73,449.6

Changes in cash and cash equivalents -45,447.3 56,209.6

Cash and cash equivalents at the beginning of the fiscal year 104,295.5 65,592.0

CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD 58,848.2 121,801.6

for the First Quarter 2014/15 (1 November 2014 - 31 January 2015)


29

Explanatory notes

on the interim consolidated financial statements of GERRY WEBER International AG for the period ended 31 January 2015

General information and accounting basis

GERRY WEBER International AG is a listed joint stock company headquartered in Neulehenstraße 8, D – 33790 Halle (Westphalia/Germany). The present abridged consolidated financial statements of GERRY WEBER International AG and its subsidiaries cover the period from 1 November 2014 to 31 January 2015.

The present abridged consolidated financial statements were prepared pursuant to section 37x para. 3 WpHG and in accordance with the International Financial Reporting Standards (IFRS) and the related interpretations by the International Accounting Standards Board (IASB) for interim financial reporting such as they have been adopted by the European Union. Accordingly, these financial statements do not contain all information and notes that are required for year-end consolidated financial statements pursuant to IFRS.

The interim consolidated financial statements for the first three months (1 November 2014 – 31 January 2015) were prepared in accordance with IAS 34 “Interim Financial Reporting“ and

were not reviewed by the auditors. The accounting and valuation methods and the principles of consolidation have basically remained unchanged compared to the latest consolidated financial statements for the year ended 31 October 2014. The interim consolidated financial statements for the first three months of 2014/15 were prepared in euros.

The Managing Board is of the opinion that the present unaudited interim consolidated financial statements contain all necessary information to give a true and fair view of the business performance and the earnings position in the reporting period. The results achieved in the first three months of the financial year 2014/15 do not necessarily provide an indication as to the future results.

Pursuant to IAS 34 “Interim Financial Reporting“, the Managing Board must make

discretionary decisions, estimates and assumptions in the preparation of the interim consolidated financial statements. These may influence the application of accounting standards and the recognition of assets and liabilities as well as income and expenses. The actual results may differ from these estimates in individual cases.

The present interim consolidated financial statements comprise the interim financial statements of GERRY WEBER International AG and all its subsidiaries for the period ended 31 January 2015. The basis of consolidation comprises 38 subsidiaries in Germany and abroad. The company holds 51.0% stakes in six of its foreign subsidiaries and in one German subsidiary; the other subsidiaries are wholly owned. All subsidiaries have been integrated into the consolidated financial statements according to the rules for full consolidation.


30

Currency translation

The Group currency of GERRY WEBER International AG is the euro. Foreign currency transactions in the separate financial statements of GERRY WEBER International AG and its subsidiaries are translated at the exchange rates prevailing at the time of the transaction. As of the balance sheet date, monetary items in foreign currency are shown at the closing rate. Exchange differences are recognised in profit or loss.

The financial statements of the consolidated foreign companies are prepared in the local currency according to the concept of the functional currency and translated into euros as at the balance sheet date. Assets and liabilities with the exception of equity capital are translated at the closing rate. Effects from the currency translation of the equity capital are shown in equity. The items of the income statement are translated at average annual exchange rates. Exchange differences resulting from different translation rates in the balance sheet and the income statement are recognised in equity.

Intangible assets

Goodwill is recognised in accordance with IFRS 3 and tested for impairment on an annual basis and whenever there are indications of impairment.

Purchased intangible assets are recognised at cost, taking ancillary costs and cost reductions into account and amortised using the straight-line method. Furthermore, the item includes exclusive rights of supply to Houses of GERRY WEBER operated by third parties as well as advantageous lease agreements resulting from acquired stores. The rents stipulated in the lease agreements taken over in the context of the business combinations of the past three fiscal years are clearly below the market level. These advantages were capitalised at the present value. The advantageous lease agreements recognised as depreciable intangible assets are written off over the remaining term of the leases using the straight-line method. The resulting expenses are recognised in the income statement under “Depreciation/Amortisation”..

Intangible assets also include customer relationships that were identified in the context of the business combinations of the past three fiscal years. They were capitalised at the present value. The present value was determined based on an assumed useful life of five to eight years using a duration-specific discount rate. The customer relationships recognised as depreciable intangible assets are written off using the straight-line method. The resulting expenses are recognised in the income statement under “Depreciation/Amortisation”.

In the context of the takeover of T. Angen Kapesenteret AS, the “CHANTAL” brand name was

acquired and shown under intangible assets valued at KEUR 711. The brand, which is recognised as a depreciable intangible asset, is written off over a period of ten years using the straight-line method. The resulting expenses are recognised in the income statement under “Depreciation/Amortisation”.


31

Against the background of the majority shareholdings acquired in the past three years, intangible assets totalled EUR 94.2 million as of the reporting date on 31 January 2015.

Other assets

Other assets (current) include the carrying amounts of the financial derivatives, which correspond to the fair values. A difference is made between derivatives qualifying for hedge accounting pursuant to IAS and derivatives not qualifying for hedge accounting. Against the background of the Euro/USD exchange rate trend and the resulting positive fair values of the financial derivatives, other current assets increased from EUR 39.2 million on 31 October 2014 to EUR 89.4 million on 31 January 2015.

Accumulated other comprehensive income / loss

The GERRY WEBER International AG Group holds derivative financial instruments only to hedge currency risks arising from operations. According to IAS 39, all derivative financial instruments must be recognised at their fair value. If the financial instruments used are effective hedges in the context of a hedging relationship as defined in IAS 39 (cash flow hedges), fluctuations in the fair value have no effect on profit or loss during the term of the derivative. Fluctuations in the fair value are recognised in the respective equity item. The effects of the remeasurement of financial instruments accounted after taxes. As at 31 January 2015 positive fair values of financial instruments were recognised after deferred taxes in the respectively equity item in an amount of EUR 41.3 million (31 October 2014: EUR 18.3 million).

Financial liabilities (non-current)

Non-current financial liabilities in the amount of EUR 76.4 million (31 October 2014: EUR 77.1 million) include a EUR 75 million note loan, which was issued in November 2013. The note loan services to finance the planned logistic centre as well as general working capital requirements. Investors could choose between terms of three, five and seven years as well as fixed and variable interest rates. The average fixed interest rate is 2.3%. Across all tranches the interest rate in the first three month of the fiscal year was below 2 %.

Other liabilities (non-current)

Other liabilities (non-current) primarily comprise the remaining purchase price payments related to the acquisition of a 51% interest in our Belgian and Dutch franchisees and the 25 stores in Norway. At EUR 35.3 million, other non-current liabilities were almost unchanged as of the balance sheet date (31 October 2014: EUR 36.9 million).


32

Earnings per share

Earnings per share are determined on the basis of the net income for the period after taxes that is attributable to the shareholders of GERRY WEBER International AG and the average number of shares outstanding in the reporting period.

The average number of shares outstanding is determined on a pro-rata temporis basis as shown below.

Earnings per share for the first three months of 2014/15 (1 November 2014 – 31 January 2015) amounted to EUR 0.23 (Q1 2013/14: EUR 0.25).

Segment report

GERRY WEBER International AG modified its segment reporting practice as of 1 November 2014. In the past, a distinction was made between two main segments, “Production and

Wholesale" and “Retail", as well as “Other segments”. The Wholesale segment comprised all

distribution structures with external customers as well as all development and production processes of our goods including transport and logistics. The “Retail“ segment, being almost exclusively a distribution segment, comprised all Retail distribution structures with end customers.

In view of the growing importance of the Retail segment and the ongoing vertical integration of the GERRY WEBER business model, the segment reporting practice was changed with effect from 1 November 2014. With initial effect from Q1 2014/15, GERRY WEBER International AG distinguishes between two distribution segments, “Wholesale” and “Retail”. Contrary to the

past practice, all development and production processes of the goods including transport and logistic are not exclusively counted towards the “Production and Wholesale” segment but are

allocated proportionately to the two distribution segments. Accordingly, all income and expenses as well as assets and liabilities which can be assigned to product development and procurement are allocated proportionately to the “Retail” segment and the “Wholesale”

segment.

Q1 2014/15 Q1 2013/14

1.11.2014-31.1.2015 1.11.2013-31.1.2014

November 2014 45.905.960 x 1/12 45.905.960 x 1/12

December 2014 45.905.960 x 1/12 45.905.960 x 1/12

January 2015 45.905.960 x 1/12 45.905.960 x 1/12

= 45.905.960 units = 45.905.960 units


33

The other segments remained unchanged and primarily comprise the income and expenses as well as the assets and liabilities of the Hall 30 investment property. Income and expenses as well as assets and liabilities of the holding company are also allocated proportionately to the individual segments.

For a detailed presentation of the segment report, please refer to the management report contained in this interim report.

1st quarter 2014/15

Wholesale Retail Other Consolidated Total

in KEUR Segments entries

Sales by segment 86.379 106.039 0 0 192.418

EBITDA 8.512 14.508 575 634 24.229

Depreciation of property, plant and equipment 1.774 4.879 149 0 6.801

EBIT (Earnings Before Interest and Tax) 6.739 9.629 425 634 17.427

Assets 289.643 387.768 29.514 -5.039 701.886

Liabilities 66.314 151.744 0 -4.862 213.196

Investments in non-current assets 8.129 11.478 0 0 19.607

Number of employees (average) 710 4.673 1 0 5.384

1st quarter 2013/14

Wholesale Retail Other Consolidated Total

in KEUR Segments entries

Sales by segment 92.650 97.729 0 0 190.379

EBITDA 9.642 13.424 471 760 24.297

Depreciation of property, plant and equipment 1.728 4.165 148 0 6.042

EBIT (Earnings Before Interest and Tax) 7.914 9.259 322 760 18.255

Assets 258.566 319.463 30.088 -11.922 596.196

Liabilities 52.768 146.712 0 -12.620 186.860

Investments in non-current assets 2.401 5.128 29 0 7.558

Number of employees (average) 736 4.120 1 0 4.857


34

FINANCIAL CALENDAR

Investor Relations contact:

GERRY WEBER International AG Neulehenstraße 8 33790 Halle / Westfalen www.gerryweber.com Claudia Kellert Anne Hengelage Head of Investor Relations Manager Investor Relations Phone: +49 (0) 5201 185 0 Phone: +49 (0) 5201 185 0 E-mail: [email protected] E-mail: [email protected]

Disclaimer

This interim report contains forward-looking statements that are based on assumptions and/or

estimates by the management of GERRY WEBER International AG. While it is assumed that

these forward-looking statements are realistic, no guarantee can be given that these

expectations will actually materialise. Rounding differences may occur in the percentages and

figures stated in this interim report.

Publication of the First Quarter Report 2014/15 16 March 2015

Annual General Meeting 16 April 2015

German MidCap Investment Conference New York 20/21 May 201

Publication of the First Half Year Report 2014/15 12 June 2015

Deutsche Bank German, Swiss & Austrian Conference 17 June 2015

Publication of the Nine Month Report 2014/15 11 September 2015

End of the fiscal year 2014/15 31 October 2015


35

mailto:[email protected]

mailto:[email protected]

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