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DGAP-News: VanCamel AG: VanCamel AG posts strong operating cash flow in the first three months of 2014

May 30, 2014

DGAP-News: VanCamel AG / Key word(s): Quarter Results/Interim Report VanCamel AG: VanCamel AG posts strong operating cash flow in the first three months of 2014 30.05.2014 / 12:27 --------------------------------------------------------------------- VanCamel AG posts strong operating cash flow in the first three months of 2014 - Group revenue of EUR 43.5 million (3M 2013: EUR 43.6 million) - Gross profit of EUR 13.5 million (3M 2013: EUR 14.4 million) - Marketing expenses significantly increased - Earnings before taxes (EBT) amounted to EUR 11.0 million (3M 2013: EUR 12.4 million) - Operating cash flow increased to 18.6 million (3M 2013: EUR 14.1 million) - Outlook confirmed Hamburg, 30 May 2014 - VanCamel AG (Prime Standard, ISIN DE000A1RFMM9, VC8) today published the interim report for the first three months of 2014. The VanCamel Group's revenue slipped 0.2% to EUR 43.5 million in the first three months of 2014 (3M 2013: EUR 43.6 million). This slight decline was mainly due to higher discounts and the devaluation of the renminbi versus the euro. Excluding sales rebates, revenue in RMB rose by 5.9%. "Thanks to the clear brand strategy and high-quality products, VanCamel has established itself on the Chinese fashion market as a fashion label. We continued to set new trends in the first quarter of 2014 and created a steady stream of new products, styles and designs within our brand philosophy. Since we meet the desire for greater individuality, we benefit from the fact fashion trends and brand awareness are playing a more important role in Chinese consumers' purchasing decisions", reports Xiaming Ke, CEO of VanCamel AG. Sales and earnings In the first three months of 2014, sales revenues decreased by 0.2% year-on-year to EUR 43.5 million (3M 2013: EUR 43.6 million). In the reporting period, the average exchange rate of the renminbi (RMB) versus the euro declined by 2.8% year-on-year. In view of this, revenue in RMB increased by 2.6% in the reporting period. While revenue from apparel declined 0.7% to EUR 30.4 million in the reporting period (3M 2013: EUR 30.6 million), revenue from shoes increased 1.2% to EUR 13.1 million (3M 2013: EUR 13.0 million). The company's gross profit was EUR 13.5 million at the end of the first quarter of 2014 (3M 2013: EUR 14.4 million), giving a gross profit margin of 31.0% (3M 2013: 32.9%). Analogously to revenue, the gross profit margin declined slightly as a result of higher rebates. Costs rose considerably in the first quarter of 2014: marketing expenses increased to EUR 1.4 million in the reporting period, up from EUR 0.9 million in the first three months of 2013. Total selling and distribution expenses therefore rose from EUR 1.6 million to EUR 2.0 million. Expenditures to increase the number of flagship stores and advertising aimed at the target groups should raise customer awareness of the VanCamel brand and correlates with the corporate strategy. The operating result (EBIT) was EUR 11.0 million in the reporting period (3M 2013: EUR 12.4 million). As in the comparable prior-year period, VanCamel did not have any interest expense; interest income amounted to EUR 61 thousand (3M 2013: EUR 36 thousand). EBT was EUR 11.0 million (3M 2013: EUR 12.4 million). Tax expense increased from EUR 3.3 million in the first three months of 2013 to EUR 3.8 million in the reporting period. The profit for the first quarter was therefore EUR 7.2 million (3M 2013: EUR 9.2 million). This corresponds to earnings per share of EUR 0.48 (3M 2013: EUR 0.61 (adjusted)). The net cash flow from operating activities was EUR 18.6 million in the first quarter of 2014 (3M 2013: EUR 14.1 million). The net rise in cash and cash equivalents in the reporting period was EUR 18.7 million (3M 2013: reduction of EUR 2.4 million). Cash and cash equivalents therefore increased to EUR 82.8 million as of 31 March 2014 (31 March 2013: EUR 45.6 million). VanCamel has neither current nor non-current liabilities to banks. The carrying amount of equity was EUR 86.5 million as of 31 March 2014 (31 December 2013: EUR 81.6 million). The equity ratio improved to 79.4% in the reporting period (31 December 2013: 77.1%). Outlook Building on the successful nationwide introduction of the VanCamel brand, the Management Board intends to further increase store density in fiscal 2014. Therefore, in collaboration with distributors, the aim is to open about 120 new shops in various locations. To accompany this, spending on marketing is to be increased to 2.8% of revenue to raise visibility of the brand among consumers still further. The marketing strategy focuses on opening more flagship stores and advertising aimed at the target group, using billboards, printed media and the internet. In addition, VanCamel is continuing to invest in its in-house design and development team and is currently exploring the possibility of collaboration with fashion and design schools and universities to gain constant access to new talent and ideas in the fashion sector. The first quarter results were in line with management expectations, so the management is confirming its guidance for the full year. Assuming that China's domestic market continues to grow, the target group's fashion affinity increases further, and the number of authorized retail outlets increases as planned, the company expects volume sales to increase steadily in the coming years. Based on the present order situation, the Management Board still assumes that on a euro basis (excluding currency effects), the Group will grow revenue by around 4.0% in 2014. The full interim report for the first three months of FY 2014 is available at Investor Relations/Downloads on the company's website at www.vancamel.de/en. Notes on comparisons with 2013 figures The following effect should be borne in mind when comparing the revenue and earnings figures for the present year and the prior year: Before the transition to IFRS, VanCamel made shop fittings available to its distributors free of charge, capitalized the associated costs and depreciated the shop fittings over three years. Because of problems with the evidence and the evaluation all shop fittings have been recognised retrospectively in profit and loss in the year of investment. Since 2012, the shop fittings are no longer provided by VanCamel. To continue to support distributors in the ongoing modernization of their stores, VanCamel has introduced sales rebates. The rebate is 7.5% from 2014 with preceding stepwise increases. The rebate was 1.2% in 2012 and increased to 4.5% in 2013. Sales revenue decreases by the same amount as the increase, but the impact on operating income is lower because depreciation is no longer recognized for shop fittings. About VanCamelVanCamel AG is the German holding company of an established Chinese fashion label, which employs more than 200 workers in the design, marketing and distribution of own branded apparel, footwear and accessories. VanCamel products address the young, well-funded urban middle-class, particularly targeting male consumers aged between 25 and 40 primarily residing in tier 2 and tier 3 cities, aspiring after upper middle class fashion styles. The prizewinning design of VanCamel's apparel is made in-house whereas the design of the footwear is outsourced based on the conceptual ideas of VanCamel. The production of both apparel and footwear is completely outsourced to local contract manufacturers. VanCamel is an established national brand with a PRC-wide reach. More than 40 regional distributors supply VanCamel's products to more than 2,300 authorized retail outlets in 26 provinces throughout China. For further information about the company visit: www.vancamel.de/en For enquiries: VanCamel AG Lester Eng Ann Soh Member of the Management Board and CFO E-Mail: ir@vancamel.de Phone: +86 155 5911 7996 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 VanCamel 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. End of Corporate News --------------------------------------------------------------------- 30.05.2014 Dissemination of a Corporate News, transmitted by DGAP - a company of EQS Group AG. The issuer is solely responsible for the content of this announcement. DGAP's Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------- Language: English Company: VanCamel AG Ferdinandstraße 25 20095 Hamburg Germany Phone: 040 689999-0 Fax: 040 689999-10 E-mail: ir@vancamel.de Internet: www.vancamel.de ISIN: DE000A1RFMM9 WKN: A1RFMM Listed: Regulierter Markt in Frankfurt (Prime Standard) End of News DGAP News-Service --------------------------------------------------------------------- 271368 30.05.2014


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