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PRESS RELEASE: Powerland AG: Powerland continues on growth path as announced - Luxury segment enjoys dynamic development


27.11.12 07:26
Dow Jones Newswires



PRESS RELEASE: Powerland AG: Powerland continues on growth path as announced - Luxury segment enjoys dynamic development





DGAP-News: Powerland AG / Key word(s): Interim Report/Quarter Results
Powerland AG: Powerland continues on growth path as announced - Luxury
segment enjoys dynamic development

27.11.2012 / 08:25

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Powerland continues on growth path as announced -
Luxury segment enjoys dynamic development

- Revenue for the first nine months up an impressive 29.2% to EUR 141.2
million despite the ongoing macroeconmic slowdown

- Earnings impacted by high level of marketing expenditure for future
profitable growth as planned

- Comparing Q3 2011 to Q3 2012, the distribution network has expanded
from 146 to 160 stores; focus on expansion of self-operated stores

- Dynamic development in the Luxury segment leads to revenue growth of
15-20% (in Renminbi) in 2012; high growth potential expected in the
coming years

Frankfurt/Main, 27 November 2012 - Powerland AG (ISIN DE000PLD5558 / Prime
Standard), the leading Chinese manufacturer of handbags, leather goods and
accessories, has confirmed the preliminary figures for the first nine
months of 2012 that it published on 8 November 2012. The Company remains on
its dynamic growth path as previously announced. This is underlined by
revenue growth of 29.2% to EUR 141.2 million (Q1-Q3 2011: EUR 109.3
million). In the third quarter of 2012, revenue increased by 11.1% to EUR
46.5 million (Q3 2011: EUR 41.8 million). Gross profit for the first nine
months rose to EUR 61.3 million after EUR 48.1 million in the previous year
(+27.3%), while the figure for the third quarter alone increased by 14.6%
to EUR 20.6 million (Q3 2011: EUR 17.9 million).

In order to further improve its brand positioning in the Luxury segment,
Powerland has initiated a range of brand-building measures and a nationwide
marketing campaign. As a result, sales and marketing expenses in the first
nine months of 2012 increased to EUR 26.2 million (Q1-Q3 2011: EUR 12.4
million). In the third quarter of 2012, sales and marketing expenses
amounted to EUR 8.4 million after EUR 5.2 million in the same period of the
previous year (+61.5%).

As expected, earnings performance was impacted by this expenditure, which
is aimed at ensuring future profitable growth. Earnings before interest and
taxes (EBIT) declined slightly to EUR 25.2 million in the first nine months
of 2012 after EUR 25.9 million in the previous year (-2.9 %). EBIT for the
third quarter of 2012 amounted to EUR 8.7 million, down 12.4% on the same
period of the previous year (EUR 9.9 million).

Focus on expansion of self-operated stores
The investments in marketing and sales and the expansion of the
distribution network by 14 stores, from 146 on 30 September 2011 to 160 on
30 September 2012, are already reflected in the encouraging development of
the Luxury segment, where revenue increased by 41.6% to EUR 81.1 million in
the first nine months of 2012 (Q1-Q3 2011: EUR 57.3 million). Revenue in
the Casual segment also increased by 15.6% to EUR 60.0 million in the
period under review (Q1-Q3 2011: EUR 52.0 million); however, the figure for
the third quarter decreased by 13.3% to EUR 17.7 million (Q3 2011: EUR 20.5
million) due to a change in the product mix.

Powerland pressed ahead with the optimisation of its distribution network
in the period under review. In the third quarter, the number of stores
increased by five to 160. The Company is focusing on the expansion of its
particularly self-operated stores, the number of which increased from three
in the previous year to the current figure of 21. In particular, these
stores can be found at extremely good locations such as airports. In order
to leverage further growth potential, Powerland also opened its first
online shop in October 2012 in conjunction with Fifth Avenue Globe Inc.,
the leading Chinese online retail portal for luxury goods.

Extremely solid balance sheet structure and cash flow development
Powerland reported extremely solid balance sheet and cash flow development
as at 30 September 2012. The equity ratio was 72.1%, only slightly down on
the figure of 73.4% at year-end 2011. Despite the significant expansion in
its distribution network and the high level of marketing expenditure,
Powerland had a net cash position of EUR 49.6 million at 30 September 2012
compared with EUR 50.9 million at 31 December 2011. Net cash from operating
activities increased from EUR 6.6 million at the end of the first nine
months of 2011 to EUR 11.0 million.

Dynamic growth potential to continue in the coming years
In its latest forecast, the International Monetary Fund (IMF) further
reduced its growth forecast for China for 2012 to 7.8% (2011: 9.2%).
Despite this slight slowdown in momentum, Powerland remains confident that
it will continue to enjoy significant profitable growth in future. For 2012
as a whole, the Company is forecasting organic growth of between 15% and
20% (in RMB), with the impressive positive development in the Luxury
segment set to continue in the final quarter of the year.

Accordingly, the Company is anticipating significant medium and long-term
growth potential over the coming years on the back of the continued
strategic expansion of the distribution network and the positive effects
that are expected to be generated by the extensive brand-building measures
and the nationwide marketing campaigns that are currently in progress.

The complete report on the third quarter of 2012 and more information about
the Company can be found at: www.powerland.ag

For further information, please contact:

Powerland AG
Jiangbin He
Investor Relations Director
Lyoner Strasse 14
60528 Frankfurt am Main
Germany
Tel.: +49 (0) 69 66 554 - 459
Fax: +49 (0) 69 66 554 -276
E-mail: ir@powerland.ag
Home: http://www.powerland.ag





Key figures Q3 Q3 9M 9M Cha nge
Overview in EUR'000 2011 2012 2011 2012 absolute in %
restated
Revenue 41,840 46,474 109,261 141,187 31,926 29.2%

thereof Luxury segment 21,376 28,729 57,308 81,140 23,832 41.6%

thereof Casual segment 20,464 17,745 51,953 60,047 8,094 15.6%

Gross profit 17,949 20,566 48,136 61,273 13,137 27.3%

EBIT 9,882 8,657 25,938 25,196 -742 -2.9%

Net profit for the period 4,672 6,437 14,835 17,889 3,054 20.6%

Earnings per share in EUR 0.31* 0.43** 1.13* 1.19**

31.12.2011 30.09.2012

Group equity 129,358 145,038

Equity ratio 73.4% 72.1%

Net cash/net debt (-) 50,885 49,559

Employees 1,398 1,737




* Earnings per share is calculated on the basis of the net profit for the
period and the weighted average number of shares outstanding. Taking into
account the 5,000,000 new shares issued in connection with the IPO in April
2011, this results in a weighted average number of 15,000,000 shares for
the third quarter of 2011 and 13,148,148 shares for the first nine months
of 2011.
** Earnings per share for the third quarter and the first nine months of
2012 is calculated on the basis of the net profit for the period and a
total of 15,000,000 shares outstanding.


End of Corporate News

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27.11.2012 Dissemination of a Corporate News, transmitted by DGAP - a
company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.

DGAP's Distribution Services include Regulatory Announcements,
Financial/Corporate News and Press Releases.
Media archive at www.dgap-medientreff.de and www.dgap.de

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Language: English
Company: Powerland AG
Lyoner Straße 14
60528 Frankfurt am Main
Germany
Phone: +49 69 - 66554-459
Fax: +49 69 - 66554-276
E-mail: ir@powerland.ag
Internet: www.powerland.ag
ISIN: DE000PLD5558
WKN: PLD555
Listed: Regulierter Markt in Frankfurt (Prime Standard);
Freiverkehr in Berlin, Düsseldorf, Hamburg, München,
Stuttgart


End of News DGAP News-Service
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194752 27.11.2012



(END) Dow Jones Newswires




November 27, 2012 02:26 ET (07:26 GMT)