DGAP-News: KINGHERO AG: Trading-up strategy boosts revenues in 9 months 2012
(firmenpresse) - DGAP-News: KINGHERO AG / Key word(s): Quarter Results
KINGHERO AG: Trading-up strategy boosts revenues in 9 months 2012
12.11.2012 / 08:10
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Results 9 months 2012
KINGHERO AG: Trading-up strategy boosts revenues in 9 months 2012
* Revenues add up to EUR 88.6 million
* EBIT margin of 22.9%
* Net profit increases by 20.4% to EUR 15.0 million
* Average unit prices climbed up by 32%
* Sales and margin development in line with the company's expectations
Munich, 12 November 2012. KINGHERO AG, the German holding company of a
fast-growing Chinese fashion company, announced its full results for the
first nine months 2012 today.
In the third quarter 2012 KINGHERO AG continued its growth path. Due to the
company's trading-up strategy, which includes continuous brand development
and increased advertisement, KINGHERO was able to augment the average unit
selling prices. This led, together with the higher demand for KINGHERO
products in China, to a revenue growth of 40.5% to EUR 88.6 million in the
first nine months 2012.
Despite higher raw material prices, gross profit rose by approximately
41.1% to EUR 34.4 million mainly driven by the higher average unit selling
prices, which rose by 32.0% to EUR 18.30 compared to EUR 13.80 in the same
period last year. The gross profit margin remained almost stable at 38.8%
compared to the first nine months 2011.
In the first three quarters, EBIT increased to EUR 20.3 million,
representing a plus of 24.6% compared to the same period in 2011. However,
EBIT margin decreased to 22.9% (9M 2011: 25.9%), mainly due to rising
distribution and selling expenses caused by higher promotion costs and
rental expenses for the increased number of KINGHERO-owned stores.
The net profit grew in line with the operating profit by 20.4% to EUR
15.0 million. The net profit margin decreased by 2.9 percentage points to
16.9% compared to 19.8% in the nine months period last year. Nevertheless
this is still a very satisfying result compared to the profitability of
most KINGHERO's domestic and international competitors.
Revised distribution strategy
This positive business development shows that KINGHERO's growth strategy
pays off. Within the last year the company was able to expand its sales
network by enhancing its number of distributors from 39 (as of September
2011) to currently 48 which are operating a total of 370 KINGHERO stores.
Additionally, over the period of the last two years KINGHERO has enhanced
its distribution strategy by opening own flagship stores. As of 30
September 2012, the number of flagship stores amounted to 62, which account
for 13.5 percent of the total revenues in the first nine months 2012.
After focusing on growth of this new distribution channel during the past
two years, the company is currently evaluating the flagship store network
on a store by store basis especially in terms of sales and profitably.
Underperforming stores were and will be relocated or closed. This led to a
slightly lower number of flagship stores at the end of September 2012
compared to the number as of 30 June 2012. Nevertheless, the flagship
stores strengthen the connection to KINGHERO's end customers and also
accelerate and improve the feedback from the target group. The company will
continue to set up flagship stores in the future but not meet the
previously stated guidance of 100 flagship stores in 2012.
Besides the flagship store strategy, the company is planning to set up
department store counters to complement the existing retail channels.
Compared to the flagship stores, this channel has lower fixed costs since
there are no rental fees.
Expectations achieved
Pursuant to its growth strategy, KINGHERO seeks to develop its existing
merchandise categories and increase sales, both via distributors as well as
its own flagship stores. The overall sales and margin development in the
first nine months of 2012 is in line with company's expectations. Based on
these results, KINGHERO expects overall sales of approximately EUR 125
million and sustainable margins at previous year's level for the full year
2012. Given that there are no material negative effects in the fourth
quarter of 2012, the Management Board considers proposing a payment of a
dividend about 10 to 15% of the 2012 net profit.
For more information on KINGHERO's business and financial development in
the first nine months of 2012 please see the interim statement for the
first 9 months 2012 published on the company's website www.kinghero.de.
About KINGHERO AG
KINGHERO AG is the German holding company of the KINGHERO Group of
companies, mainly active in the Peoples Republic of China (PRC). The Group
is a strongly growing apparel manufacturer and designer, featuring a
leading Chinese fashion brand for the strongly growing urban middle class
in China. The key to the company's success is a high fashion degree with a
European 'touch and feel' as well as an upscale quality. The high speed of
the design and marketing of new collections ensures a fit to the changing
demands of the growing urban middle class in China. Being in this business
for more than 25 years, the group and its more than 1,000 employees produce
attire for all seasons under the KINGHERO brand. The product portfolio
includes suits, jackets, shirts, pants and sweaters for men and women and
is divided into a business casual range and a general casual range.
For further information please contact:
Kirchhoff Consult AG
Dr. Kay Baden
Phone: +49 (0)40 60 91 86 0
baden(at)kirchhoff.de
KINGHERO AG
Gustav-Heinemann-Ring 44
D-81739 Munich
Phone: +49(0)89 6734 6884
Fax: +49(0)89 6734 6887
Disclaimer concerning prognoses
This communication contains forward-looking statements. Forward-looking
statements are statements that are not historical facts instead they
reflect KINGHERO's current views and expectations and the assumptions
underlying them about future events. Forward-looking statements are subject
to many risks and uncertainties. If any of such risks and uncertainties
materialise or if the assumptions underlying any of KINGHERO's
forward-looking statements are proving to be incorrect, KINGHERO's actual
results may be materially different from those expressed or implied by such
forward-looking statements. KINGHERO does not intend or assume any
obligation to update these forward-looking statements. Any forward-looking
statement speaks only as of the date on which it is made.
End of Corporate News
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12.11.2012 Dissemination of a Corporate News, transmitted by DGAP - a
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Language: English
Company: KINGHERO AG
Gustav-Heinemann-Ring 44
81739 München
Germany
Phone: 089 - 6734 6884
Fax: 089 - 6734 6887
E-mail: contact(at)kinghero.de
Internet: www.kinghero.de
ISIN: DE000A0XFMW8
WKN: A0XFMW
Listed: Freiverkehr in Berlin, Düsseldorf, Hamburg, Stuttgart;
Open Market (Entry Standard) in Frankfurt
End of News DGAP News-Service
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