Ahlers expects restructuring measures to boost earnings in 2020

In the fiscal year 2018/19, Ahlers Ag said that the group’s revenues were influenced by two major factors - discontinuation of sales of Jupiter jackets as well as Pierre Cardin and Pioneer ladies’ trousers, which resulted in sales revenues falling 6 million euros. Moreover, the company added, declining sales of suits, blazers and outdoor jackets and other operations’ inability to defy the declining market trend sent group sales revenues in the fiscal year 2018/19 falling by 16.1 million euros or 7.2 percent to 207 million euros (227.7 million dollars). The company has projected higher consolidated earnings for 2019/20, with EBIT expected to be positive before and after one-time effects.

“The completed set of earnings and efficiency increasing measures should lead to a noticeable reduction in personnel expenses, and the balance of other operating expenses and income is also expected to decline. As a result, operating expenses should drop sharply,” said the company’s CFO Dr. Karsten Kölsch in a statement.

Ahlers’ restructuring strategy boosts earnings

The company reported stable denim sales at Baldessarini, Pierre Cardin and Pioneer with a marginal drop of 0.4 percent. The company’s ecommerce revenues increased by 12.7 percent and growing by 14.8 percent, revenues generated on marketplaces made a particularly strong contribution. Sales revenues of the group’s own physical retail shops increased by 3 percent, mainly due to the full year consolidation of the Russian subsidiary, Ahlers RUS. As a result, company-owned retail revenues as a percentage of total revenues rose from 14 percent to 15.4 percent.

The company added that programme of earnings and efficiency increasing measures increasingly took effect in the course of the fiscal year. EBIT before one-time effects, at negative 2.4 million euros, was more or less on a par with the previous year’s negative 2 million euros. Since one-time effects in 2019 were zero, as extraordinary expenses and extraordinary income balanced eachother out, there was a 63 percent improvement in EBIT after one-time effects to negative 2.4 million euros compared to negative 6.4 million euros in the previous year.

Consolidated earnings before taxes rose by 4.1 million euros or 57.7 percent to negative 3 million euros compared to negative 7.1 million euros in 2018, while consolidated earnings after income taxes increased by 3.3 million euros or 47.1 percent to negative 3.7 million euros.

The company expects revenues from continuing activities should increase at a low single-digit percentage rate and largely offset the expected decline in revenues from discontinued operations over the full fiscal year. Accordingly, the management board expects group sales revenues to remain stable, but more likely to decline slightly in the fiscal year 2019/20 driven by the premium segment, which comprises the Baldessarini, Pierre Cardin and Otto Kern brands. The management board expects to return to profit in terms of EBIT before and after one-time effects and hence to conclude the transformation phase of the previous year.

Picture:Facebook/Pierre Cardin