Wolford : Half Year Report 2023

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Half-year Financial

Report 2023

(JANUARY 2023 - JUNE 2023)

Wolford Group

IN FIGURES

CONTENTS

KEY EARNINGS FIGURES

Sales	in EUR million
EBIT	in EUR million
Profit before tax	in EUR million
Profit after tax	in EUR million
Investments	in EUR million
Free cash flow	in EUR million
Employees (average)	FTE

JAN.-JUN. 2023	JAN.-JUN. 2022	CHANGE IN %
58.80	54.26		8.37
-12.05	-16.92		-28.81
-16.08	-19.60		-17.97
-16.11	-19.32		-16.62
6.22	7.74		-16.40
-11.12	-6.89		-61.39
1,041	1,093		-4.76

Foreword by the Management Board
	02
Group Management Report
06
Business Development in the First Half of 2023		08
Opportunities and Risks		14
Outlook	15

KEY BALANCE SHEET FIGURES

Net assets	in EUR million
Net debt (without leasing)	in EUR million
Working capital (without leasing)	in EUR million
Balance sheet total	in EUR million
Equity ratio	in %

JUNE 30, 2023	DEC. 31, 2022	CHANGE IN %
-17.13	-19.05		10.08
34.08	31.06		9.73
25.09	20.97	19.66
129.65	128.52		0.88
-13.21	-14.83		-10.93

Interim Consolidated Financial Statements (IFRS)
16
Consolidated Statement of Comprehensive Income	18
Consolidated Cash Flow Statement	19
Consolidated Balance Sheet	20
Consolidated Statement of Changes in Equity	21
Segment Reporting	22

STOCK MARKET HIGHLIGHTS

Earnings per share*	in EUR
Annual high	in EUR
Annual low	in EUR
Share price at end of period*	in EUR
Weighted number of shares	in thousands
Market capitalization at year-end	in EUR million

JAN.-JUN. 2023	JAN.-JUN. 2022		CHANGE IN %
-1.68	-2.91		42.20
7.10	7.60		-6.57
4.32	5.50		-21.45
4.78	5.60		-14.64
9,653	6,631		44.26
45.72	37.13		23.13

Notes to the Half-Yearly Financial Statements	23
Further Information
36
The Wolford Group at a Glance	38
Financial Calendar	40
Contact & Imprint	41

* Taking into account the change in the number of shares due to the capital increase

SALES BY MARKET, in percent	SALES BY DISTRIBUTION CHANNEL, in percent
North America 24%		Private	Boutiques 46%
				labels 2%
				Outlet 7%
		Greater China 7%
	Other Asia 1%
				Multibrands 13%
EMEA 68%		Department	Online Business 17%
	stores 15%

01	02	3	04
Company	Interim Management Report	Interim Financial Statements	Further Information

01

Foreword by the

MANAGEMENT BOARD

Dear stakeholders,

Our latest success stories such as our collaboration initiatives with Grace Jones our trend designer capsules as well as Wolford's new focused and elevated product proposition of iconic styles and smart seasonal assortments proof the effectiveness of our brand vision. The brand continues to demonstrate its ability to respond to changing customer needs in our key markets, proving that consumers see Wolford as a leader in high quality products and exceptional materials. The

latest­ half year results have also shown our ability to grow globally, thus sales of ­Wolford have grown by high single percentage in the first six months of 2023, another growth over three consecutive years.

On operational cost Wolford demonstrates to successfully fight against person nel cost increases, which are driven by collective bargain agreements. While solely in Austria the latest agreements have negatively affected personnel cost by 2.0 mEUR per year, the company was still able to reduce its operational cost and significantly improve its Ebit in the first half year of 2023.

In the second quarter of 2023 we have accelerated our cost reduction program, which will fully materialize in 2024 with additional annual cost savings of more than 5 million Euros. To secure liquidity and further investments in our brand, the company has access to loans from the majority shareholder. In addition, we are in close contact with banks for further financing.

01	02	03	04
Company	Interim Management Report	Interim Financial Statements	Further Information

Silvia Azzali,	Ralf Polito,
Chief Executive Officer (CEO)	Chief Operating Officer (COO)

Management changes

In 2023 management board changes were made to support stable growth of the company. In April 2023, Ralf Polito has been appointed by the supervisory board as new Chief Operating Officer. In July 2023, the supervisory board has further announced the appointment of­ Silvia Azzali, who was successfully leading the commercial team as CCO since November 2019, as CEO. The new team remains focused on driving top line growth and strengthening operational controls across the business and has already driven very tangible improvement on bottom line within recent months.

To further improve top line, we keep on strengthening our global brand presence. During 2023 Milan Fashion Week, Wolford hosted a very ­successful event to present the new SS23 Collection and Wolford's new Creative director Nao Takekoshi. His new developments for the fall winter collections have already strongly influenced Wolford's brand positioning resulting in wholesale order intake increases of 35% vs. the mirror period of the recent year.

02

03

01	02	03	04
Company	Interim Management Report	Interim Financial Statements	Further Information

Also, The W Lab is progressing successfully. In May we had our N21 collaboration which was perceived extremely well, thanks to the creative vision of Alessandro Dell'Acqua's 'lingerie dresses'. The next collaboration was just launched with Johnathan Simkai, a young, well-known American designer - who is pretty hot also in Europe. He owns the contemporary floor of US department stores.

The growth of the first half is mainly organic, so very healthy, but let us mention two openings of which we are proud of: a pop up in the heart of East Hamptons, where visibility is great during the American summer and the re-opening of the IFC store in HKG, which used to be one of our best store in the world.

We also continue to promote our Athleteisure collection (The W Club). We launched The W Club events around the world and we were the sponsors of Yoga day on 21st June - the day of the equinox - with an online session in Asia, the US and Europe.

Last, with the introduction of our Tik Tok Channel we are further enlarging our strong social media presence.

Outlook: We are continuing on our strategic path!

Following our sales growth of 8,4 percent in the first half of 2023 to 58,8 mEUR, we are confident that we will be able to continue this trend in the second half. Despite the fact, that market conditions are challenging due to the war between Ukraine and Russia and rising interest rates and inflation Wolford is well on track to reach further turnover growth even in 2024.

Thanks to the implementation of our brand strategy Wolford is back on a sustainable path for the future. Having started a serious reorganization program by the end of 2022 we will operationally concretize within the current and next year. We are proving our success as an iconic brand focused on timeless luxury skincare.

04

01	02	03	04
Company	Interim Management Report	Interim Financial Statements	Further Information

We continue to focus on further improvement in our operational pro- cesses. By investing into short supply chains with a very reactive production setup in Europe we shorten time-to-market and therefore foster reactivity to unpredictable market conditions in markets which are getting faster and faster.

Dear shareholders, we proof, that our path to grow is pointing into right direction, even in a difficult environment. On the earnings side, the results presented for the first half of 2023 show, that our measures already shown positive effect. While top line has increased by 8.4% vs. last year, our bottom line has improved by even 29%. We are confident that Ebit improvement is even accelerating in the last two quarters of 2023 and the earnings side will positively develop in the future. As a management team, we see ourselves strengthened in our course. We are pleased that you are accompanying us on this journey.

Thanks a lot for your trust.

Bregenz, September 22, 2023

Your Board Members

Silvia Azzali

Ralf Polito

Summary of Key KPIs

Increase of sales across all channels; growth outpaces market trend with a turnover of €58.8 million for the reporting period January to June 2023, we record an improvement of €4,5 million (8,4%) compared to the first half of 2022.

The growth in turnover is distributed across almost all geographical regions and distribution channels. USA developed with a plus of 10,3%, while Asia even gained 46,7% vs. last year

In EMEA, sales grew only by 4,6% driven by the difficult market con­ ditions. Wholesale saw double-digit growth at 38,9%, which indicates our strong brand positioning in this channel. The online business also continues to develop positively with a growth of 27,6%. Retail could gain 5,1% vs last year.

05

02
1	Interim Management Report	03	04
Company	Interim Financial Statements	Further Information

Group Management

REPORT

Business Development in the First Half of 2023
08
Opportunities and Risks
14
Outlook
15