DGAP-News: Adler Modemärkte AG: Q2 EBITDA Hits EUR17.9 Million, Up Significantly Year on Year

Press Release
from Adler Modemärkte AG

ADLER Bucks Trend in Difficult Market Environment - Targets for 2018 Confirmed:
Q2 EBITDA Hits EUR17.9 Million, Up Significantly Year on Year
Revenue Growth Expected for the Second Half of the Year Due to Marketing Measures

Haibach, 18 July 2018: Adler Modemärkte AG has achieved its projected earnings turnaround in the second quarter of the 2018 financial year. Preliminary figures show that the Company will be reporting EUR17.9 million in EBITDA. That figure includes the non-recurring negative effect totalling EUR0.8 million for consulting activities in the context of establishing the new ADLER 2020 corporate strategy and for the change in the logistics service provider coming up at the end of the year. In the same period of the previous year, this figure had amounted to EUR16.6 million. The EUR22.7 million actually reported in the previous year included non-recurring positive effects from the sale of real estate amounting to EUR7.5 million and restructuring costs amounting to EUR1.4 million. This means that ADLER has successfully bucked the continued negative earnings trend in the textile retail industry. For instance, quarterly revenue in the months of April through June amounted to EUR140.4 million, down 3% year on year (Q2 2017: EUR145.3 million). ADLER thus reported cumulative consolidated revenue for the first half of 2018 amounting to EUR243.1 million (H1 2017: EUR254.0 million) and cumulative EBITDA of EUR0.03 million (H1 2017: EUR10.3 million; comparable: EUR4.0 million). The gross profit margin, which very clearly reflects the operational improvements and efficiency enhancements achieved by the Company, rose from 52.9% to 54.3% in six months.

During the quarter under review, the Company very significantly improved its free cash flow and balance sheet ratios. For instance, the free cash flow in the second quarter was up substantially on the prior year's figure of EUR12.4 million. With respect to liquidity, ADLER reported a figure as at 30 June 2018 that was only insignificantly below the EUR63.3 million at the end of 2017 and more than 40% above the EUR40.7 million reported for the same period of the previous year (details on this will be made public on 2 August 2018).

Full-year outlook confirmed - confidence due to rising revenue in the second half of the year
In light of this, the management confirms the outlook for the full year it issued in March 2018. According to that outlook, ADLER's Executive Board expects the industry environment to remain difficult in the textiles retail sector, and it expects full-year revenue to remain roughly at the same level as in the previous year (EUR525.8 million). EBITDA is expected to exceed the adjusted 2017 figure (EUR25.4 million) and amount to between EUR26 million and EUR29 million. This expectation is based on the anticipation that the scaled-up marketing measures due primarily to the wide range of activities connected with the ADLER Group's 70th anniversary will result in increased revenue in the second half of the year. As predicted, the ADLER 2020 Strategy and the already announced switch in the logistics service provider will begin to have a positive effect for the first time in financial year 2019.

The report on the first half of 2018 will be published as announced on 2 August 2018. You can find more information on the Company online at www.adlermode-unternehmen.com
About Adler Modemärkte AG:
Adler Modemärkte AG, headquartered in Haibach near Aschaffenburg, Germany, is one of Germany's largest and most important textile retailers. In 2017, the Group earned EUR525.8 million in revenue and generated EUR32.0 million in EBITDA. As at 31 December 2017, ADLER has approximately 3,800 employees and currently operates 180 stores, 153 of which are located in Germany, 22 in Austria, three in Luxembourg, two in Switzerland, plus an online shop. The Company focuses on large-space concepts offering in excess of 1,400 m² of retail space. With its many own brands and select external brands, ADLER offers a highly diverse product range. Thanks to 70 years of tradition and strong customer loyalty, ADLER considers itself to be the market leader within its target group of affluent customers aged 55 and over.
For more information: www.adlermode-unternehmen.com; www.adlermode.com

Press enquiries Adler Modemärkte AG:

Peter Dietz
Investor Relations
Tel.: +49 6021 633 1828
E-mail: investorrelations@adler.de