DGAP-News: Ultrasonic AG: Urban footwear to lead strong growth in sales and earnings
(firmenpresse) - DGAP-News: Ultrasonic AG / Key word(s): Half Year Results/Quarter
Results
Ultrasonic AG: Urban footwear to lead strong growth in sales and
earnings
28.08.2012 / 07:44
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Ultrasonic AG: Urban footwear to lead strong growth in sales and earnings
- Group sales increased 20.3% year-on-year, totaling EUR 65.4 million (H1
2011: EUR 54.4 million)
- Group profit before income tax (EBT) rose by 18.8% to EUR 18.4 million
(H1 2011: EUR 15.5 million)
- EBT margin was 28.1% (H1 2011: 28.5%)
- Urban footwear (incl. accessories) posts strongest growth (+34.2% to
EUR 24.0 million)
- Three additional new distributors joined distributor network
- Over the year, EBT margin still expected to be at 25-30%
Cologne, 28 August 2012 - Ultrasonic AG (Prime Standard, ISIN DE000A1KREX3,
US5), the German holding of an established Chinese manufacturer and
provider of high quality branded urban footwear products, achieved the
anticipated strong year-on-year rise in both sales and earnings in the
second quarter, following a modest performance in the first quarter for
seasonal reasons. Sales exceeded EUR 65 million in the first six months, an
increase of more than 20% compared with the first half of 2011. After-tax
profit rose nearly 19% to EUR 13.7 million.
'We are very satisfied with the development of our margins. The EBT margin
was 28.1% - just above the mid-point of our target range of 25-30% and only
slightly below the previous year's level. We are confident that we can
retain these growth rates and earnings margins in the remainder of the year
because the third quarter is normally the strongest in terms of sales and
earnings', commented Qingyong Wu, the company's CEO and chairman of the
Management Board.
Earnings position
Group sales increased 20.3% year-on-year, from EUR 54.4 million in the
first half of 2011 to EUR 65.4 million in the first six months of 2012. It
should be noted that for seasonal reasons sales are generally lowest in the
first quarter of the fiscal year and a higher proportion of total annual
sales is normally generated in the second half of the year. In addition to
currency appreciation (in the present reporting period, the renminbi
appreciated by an average of about 11% against the euro), the rise in Group
sales was attributable to an increase in selling prices and, above all,
higher volume sales in the Urban footwear segment.
All segments except accessories grew sales as a result of higher prices or,
as in the case of Sandals and slippers, were largely able to offset the
drop in volume sales by raising prices. The highest sales growth in the
reporting period was posted by Urban footwear (including accessories),
which lifted revenues by about 34.2% year-on-year and contributed EUR 24.0
million (36.7%) of Group sales. For the first time in the company's history
its fastest growing segment thus became the main sales generator in the
reporting period. Within this segment, sales of the ULTRASONIC brand rose
by around 33.0% year-on-year from EUR 9.4 million to EUR 12.5 million and
accounted for 52.1% of segment sales (H1 2011: 52.6%) and 19.1% of total
sales (H1 2011: 17.3%). This segment's OEM sales grew 35.6% from EUR 8.5
million in H1 2011 to EUR 11.5 million in H1 2012. In the Shoe soles
segment sales were 16.7% higher than in the prior-year period at EUR 21.4
million (H1 2011: EUR 18.3 million). In the Sandals and slippers segment,
which has a higher proportion of exports as it sells to Chinese trading
companies, sales revenues rose 10.2% to EUR 20.0 million (H1 2011: EUR 18.2
million).
The Group's gross profit increased by EUR 3.4 million (20.4%) in the first
six months to EUR 20.2 million (H1 2011: EUR 16.8 million). It thus grew
slightly faster than sales. Higher raw material and personnel expenses in
the reporting period were largely passed on to customers through price
rises. The gross profit margin was 30.9%, a slight improvement on the
year-back figure of 30.8%.
In the Urban footwear segment (including accessories), gross profit rose
36.5%, considerably faster than sales, which were up 34.2%. This was
attributable to higher selling prices. Scope to raise prices was limited in
the Sandals and slippers segment, so the increase in the gross profit
margin was only slightly above sales growth. In the Shoe soles segment,
gross profit rose more slowly than sales as a consequence of price erosion
on many products. ULTRASONIC is building new production facilities to
counter this trend because new production technologies will enable it to
produce higher priced shoe sole products that generate higher margins.
The decrease in the gross profit margin in the Shoe soles segment from
31.1% in the first six months of 2011 to 30.6% in the first half of 2012
was offset by an increase in the gross profit margin in the Urban footwear
segment (including accessories) from 30.5% in the first six months of 2011
to 31.0% and the increase in the Sandals and slippers segment from 30.8% in
the first six months of 2011 to 31.0% in the first half of 2012. The gross
profit margin of the Urban footwear segment (including accessories)
generated with the 'ULTRASONIC' brand slightly increased to 30.6% (H1 2011:
30.5%), while the gross profit margin generated by the segment's OEM
products increased to 31.4% (H1 2011: 30.5%).
While distribution and selling expenses only increased slightly
year-on-year to EUR 0.7 million (H1 2011: EUR 0.6 million), administrative
expenses rose from EUR 0.7 million in H1 2011 to EUR 1.1 million in the
first six months of 2012. This was mainly due to the new corporate
structure and expenses for Ultrasonic AG. As in H1 2011, the Group's
financial result was essentially balanced.
In the first six months of 2012, EBITDA increased 18.8% year-on-year from
EUR 16.1 million to EUR 19.1 million. Group EBIT also increased in the
first six months of 2012 to EUR 18.4 million (H1 2011: EUR 15.4 million).
As a result the EBIT margin was around 28.2% (H1 2011: 28.4%). Profit
before income taxes (EBT) was EUR 18.4 million in the reporting period, a
rise of 18.8% from the year-back figure of EUR 15.5 million. The EBT margin
was around 28.1% (H1 2011: 28.5%). Group net profit for the reporting
period therefore increased by 18.8% to EUR 13.7 million (H1 2011: EUR 11.5
million). That equates to basic and diluted earnings per share in the
reporting period of EUR 1.29 (H1 2011: EUR 1.15 per share).
Outlook
The Group is continuing to invest in new production facilities and
machinery to step up production of higher margin products such as dual
colour shoe soles produced in a single moulding operation. In the reporting
period, it purchased further EVA injection moulding machines that can
manufacture up to 2.5 million pairs a year. It also drove forward expansion
of the distributor network. Demand from distributors for the ULTRASONIC
brand of products is increasing and many potential new distributors are
showing great interest in ULTRASONIC's business model and its high-quality
products. Thus, at the end of July and at the beginning of August, three
new distributors for south-eastern Guangzhou region (around 10 million
citizens) and Fujian (south-eastern China, ca. 37 million citizens) and
Xinjiang (north-western China, ca. 22 million citizens) provinces joined
ULTRASONIC's distribution network. Nevertheless, as a result of the
economic downturn, over the past few months many distributors have become
more cautious with regard their expansion plans and new store space in
order not to jeopardise profitability and the quality of growth. The
Management Board has therefore revised its original target from 150
ULTRASONIC brand shops at year-end to 110-120 (June 30, 2012: 92 shops).
The monetary stimulus measures recently introduced as part of the Bank of
China's monetary policy are designed to increase lending to companies and
consumers and thus broaden economic activity. In the opinion of the
Management Board, these measures increase the likelihood that China's
economic growth can be stabilised at the present level following the recent
decrease and could pick up slightly in the future. This should be
favourable for volume sales of ULTRASONIC products in China.
Despite the present decline in economic activity in other parts of the
world, ULTRASONIC is still experiencing high and rising demand via Chinese
trading companies, through which foreign orders are channelled (OEM
business). Even in what currently seems the unlikely event of a marked drop
in these orders, rising domestic demand for the ULTRASONIC brand of
products and products marketed by the other segments should offset any
shortfall in OEM business.
The Management Board anticipates that the ULTRASONIC Group will report
rising sales revenues and an improvement in net income this year. For
seasonal reasons, the third quarter and - to a lesser extent - the fourth
quarter, tend to be the strongest quarters in terms of both sales and
earnings.
Accordingly, the Management Board is reiterating the guidance it gave at
the start of the year: Group sales are expected to grow by 15-20%, and it
is still assuming average appreciation of the renminbi versus the euro of
just 5% year-on-year. It will only be possible to judge whether this
forecast will be achieved after the end of the third quarter. Over the
year, the pre-tax margin (pre-tax earnings relative to sales) is still
expected to be around the year-back level at 25-30%.
The full interim report for the first six months of fiscal 2012 is
available at Investor Relations/Publications on the company's website at
www.ultrasonic-ag.de.
* The figures for the six months ended 30 June 2011 (H1 2011) concern the
Consolidated Interim Statements of China Ultrasonic Outdoorwear Holdings
Limited, Hong Kong, a 100% subsidiary of Ultrasonic AG, and are shown for
comparison purposes. The average exchange rate for H1 2012 was EUR 1 = CNY
8.1957
About Ultrasonic
The Cologne-based company Ultrasonic AG is the German holding company of
the Chinese Ultrasonic Group, an established manufacturer and supplier of
high-quality branded urban footwear. With around 1,400 employees the Group
operates in three market segments, each of which contributes about a third
to the Group's revenue. Ultrasonic produces sandals and slippers for the
upper price segment and is a long-term supplier of shoe soles for leading
manufacturers in the booming Chinese sport shoe industry, for example Anta,
Xtep and Unisuper. Moreover, the company has successfully established its
own 'Urban Footwear' collection which is marketed under the ULTRASONIC
brand and is specifically designed to meet the needs and taste of China's
growing urban middle class. Ultrasonic's branded urban footwear collection
is currently marketed in more than 90 Ultrasonic mono-label shops, which
achieve selling prices in a range from RMB 400 to RMB 1,200 per pair,
equivalent to approx. EUR 50 to EUR 140. Within the last three years
Ultrasonic's business had a compound annual growth rate of more than 34.4
percent. In FY 2011, the company generated total revenues of EUR 119.4
million and achieved a net profit of EUR 24.9 million.
For further information about the company visit: www.ultrasonic-ag.de
Disclaimer:
This document is no offer for the purchase of securities in the United
States of America. Securities may only be sold or offered for sale with the
previous registration under the U.S. Securities Act of 1933 in the actual
valid version or without previous registration only pursuant to an
exemption. The shares of Ultrasonic AG (the 'Shares') have not been
registered under the U.S. Securities Act of 1933 in the actual valid
version and may not be sold or offered in the United States.
This document is only being distributed to and is only directed at (i)
persons who are outside the United Kingdom or (ii) to investment
professionals falling within Article 19(5) of the Financial Services and
Markets Act 2000 (Financial Promotion) Order 2005 (the 'Order') or (iii)
high net worth entities, and other persons to whom it may lawfully be
communicated, falling within Article 49(2)(a) to (d) of the Order (all such
persons together being referred to as 'relevant persons'). The Shares,
which are referred to, are only available to relevant persons and any
invitation, offer or agreement to subscribe, purchase or otherwise acquire
such securities will be engaged in only with, relevant persons. Any person
who is not a relevant person should not act or rely on this document or any
of its contents.
For Enquiries:
Ultrasonic AG
Chi Kwong Clifford Chan
Member of the Management Board and CFO
Email: clifford.chan(at)suoli.cc
Phone +86 1525 947 9902 (China)
Phone +852 966 227 40 (Hong Kong)
End of Corporate News
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28.08.2012 Dissemination of a Corporate News, transmitted by DGAP - a
company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.
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Language: English
Company: Ultrasonic AG
c/o BPG Beratungsund Prüfungsgesellschaft mbH,
Graf-Adolf-Platz 12
40213 Düsseldorf
Germany
Phone: +49 (0)211 172 980; +86 1525 947 9902 (China); +852 966
227 40 (Hong Kong)
Fax: +49 (0)211 172 9829
E-mail: clifford.chan(at)suoli.cc
Internet: www.ultrasonic-ag.de
ISIN: DE000A1KREX3
WKN: A1KREX
Indices: CDAX, Classic All Share, DAXsector All Consumer, DAXsector
Consumer, DAXsubsector All Clothing&Footwear,
DAXsubsector Clothing&Footwear, Prime All Share
Listed: Regulierter Markt in Frankfurt (Prime Standard);
Freiverkehr in Berlin, Düsseldorf, Stuttgart
End of News DGAP News-Service
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