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Charles Vögele Group significantly improves results

Clothing retailer Charles Vögele Group has achieved, and in some cases exceeded, its operational objectives for the 2003 financial year. Net debt was cut by CHF 149.8 million to CHF 282.0 million, while at the same time the equity capital base was improved from 32% to 41 %. The scaling down of inventories proceeded as planned. The operating result – EBITDA – of CHF 171.9 million was slightly above expectations. Group earnings more than doubled to CHF 37.5 million (previous year CHF 15.9 million). Owing to the satisfactory overall business performance in 2003, the Board of Directors is proposing to the General Meeting that a dividend of CHF 1.00 be paid on each share.

Slower decline in sales and better results
Improving profitability continued to be Charles Vögele Group’s main priority in the 2003 financial year. The operating result – EBITDA – was CHF 171.9 million (previous year CHF 165.4 million). Earnings before interest and taxes (EBIT) went up to CHF 99.7 million (previous year CHF 97.2 million). Group earnings more than doubled to reach CHF 37.5 million (previous year CHF 15.9 million).

Reflecting market development, net revenue was down 5.6% year-on-year (2002: - 8.1%) to CHF 1’415 million (2002: CHF 1’499 million). This decline was kept in bounds thanks not least to improved sales in all markets in the second half of the year. At CHF 825.7 million, gross profit was slightly lower than in 2002 (CHF 834.0 million). However, thanks to sustained efficiency gains and attractive collections, gross profit margins improved further from 55.7% in 2002 to 58.4% in the year under review.

Cash flow established at a high level, loans repaid early
Concerted efforts to reduce inventories were continued during the year, resulting in a CHF 65.7 million fall in stocks of merchandise from the current and previous seasons, from CHF 314.0 million in 2002 to CHF 248.3 million in 2003. It should also be noted that that inventories at end-2003 already included new items for the 2004 spring-summer collection worth more than CHF 57.1 million, meaning that the stock of new merchandise was 72% higher than the previous year’s CHF 33.2 million.

Thank to this efficient reduction of inventories and the continuing healthy level of operating earnings, cash flow remained at a high level, reaching CHF 190.5 million (previous year CHF 198.9 million). Owing to the focused expansion policy, investment volumes fell to CHF 18.5 million (previous year CHF 30.5 million). As a result, free cash flow rose to CHF 172.0 million (previous year CHF 168.4 million). Net debt was reduced by CHF 149.8 million to CHF 282.0 million. All loan tranches due in the year under review were repaid early. The capital repayments of CHF 75.0 million planned for 2004 have also already been made. The equity ratio rose from 32% in the previous year to 41%.

Profitability of sales organizations increases
Despite declining net revenues in the sales organizations (apart from Austria +1.6%), EBITDA improved at the Group level. While in Switzerland this figure, at CHF 77.1 million, remained below the previous year’s record level (CHF 90.4 million), all the other markets made an improvement on their 2002 results. In Germany, EBITDA improved from CHF 0.1 million to CHF 8.2 million.

Reinhard: “Solid foundations”
Daniel Reinhard, CEO of the Charles Vögele Group, expressed his satisfaction with the results: “Vögele clients have appreciated our fresh image and well thought-out collection, and this in turn has had a positive impact on our overall business performance. Today’s Charles Vögele Group stands on solid foundations.”

Outlook
Charles Vögele Group does not expect to see a marked improvement in consumer sentiment or a revival of consumption levels in the clothing sector during the 2004 financial year. An even better market performance, consistent collections and intensive marketing will help to further reduce the decline in sales. The company should be able to maintain the level of operating earnings (EBITDA) recorded in 2003. Charles Vögele Group will continue to pursue its selective expansion policy this year. In parallel with efforts to strengthen sales, the company is concentrating on the implementation of its Supply Chain Management Project, which is set to generate further improvements in earnings from the 2005 financial year onwards.

9 March 2004

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Vögele to close shops

In an interview with weekly SonntagsZeitung, chief executive Daniel Reinhard of Charles Vögele said that the clothing retailer plans to divest or close some shops in Germany as well as the Netherlands.

The boss of the Swiss company said that in Holland, 10 shops are affected this year, in Germany it's 15 to 18 shops in the longer term.

Last week Vögele, which has 780 shops across Europe, posted a 2002 net profit of 15.9 million Swiss francs (GBP 7.4m) versus 800,000 Swiss francs in the year-ago period.

March 26, 2003
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Vögele optimistic despite falling sales

Swiss apparel retailer Charles Vögele Holding on Tuesday said its net profit for 2002 improved to CHF15.9m (GBP 7.5m) from CHF 0.8m(GBP 0.4m) in 2001, but net sales fell to CHF 1.5bn from CHF 1.63bn. The company has seen widely varying performances across its international operations. It said revenues were flat in Austria and moderately down in Switzerland and Germany, but The Netherlands and Belgium saw lager falls. However, some revenue fall had been expected due to the strategy of maximising profits rather than pursuing sales growth, it said. A three-year loan of CHF577.5m has been arranged, which will give company the time needed to implement its new strategy.

March 19, 2003
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Vögele pulls back from German Stock Exchange

The German Stock Exchange has complied with the application filed by Charles Vögele Holding AG to delist its shares on the Frankfurt Securities Exchange. Trading in Vögele shares will be discontinued after observing a three-month transitional period. The last day of trading will therefore be 22 January 2003. The principal listing on the SWX Swiss Exchange will not be affected by this action and therefore remains unchanged.

The reason for the delisting initiated by Charles Vögele Holding AG can be found in the extremely low trading volume that could be reached on the Frankfurt Exchange compared with the principal listing on the SWX Swiss Exchange in Zurich.

The listing committee specified in its letter of approval that " the protection of the investors does not conflict with the revocation of the listing since trading in the shares on a foreign, organised market, namely on the SWX Swiss Exchange, is assured even after the revocation enters into effect...".

October 24, 2002
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Vögele reconstructs management

The Charles Vögele Group has reorganized its Group management as part of the program to implement its revised corporate strategy. Daniel Reinhard, Chief Executive Officer, and Marcus Arnoczky, Head of IT, Organisation and Logistics, have been joined by new Chief Financial Officer Felix A. Thöni and Head of Buying Serge Brugger.

As part of the executive reorganization CEO Daniel Reinhard will also assume operational responsibility for sales at Group level. Josef Amrein will take over as Head of the Swiss sales organization. In the role of Head of the Benelux sales organizations Markus Läubli, hitherto Head of the Swiss sales organization, will assume responsibility for the Belgian and Dutch markets, with the Heads of the Belgium and Dutch sales organizations reporting to him.

As Chief Financial Officer of the Charles Vögele Group, Felix A. Thöni will head the finance department, the internal controlling department and the treasury.

Head of Buying will be Serge Brugger and coinciding with his appointment Vögele's buying department will undergo a reorganisation. As well as bearing overall responsibility Brugger will head the production and procurement department. Stefan Fleer will manage the collection department; hitherto head of buying at the New Yorker fashion company, and Moreno Papes will be appointed Head Assortment. Claudia Kirschke and Lydia Starke jointly manage the planning and control department.

As Head of Corporate Communications & Investor Relations Renzo Radice is first and foremost the point of contact for the media and finance community, but also has responsibility for the Group's internal communications and Internet activities.

Charles Vögele is an independent European fashion retailer with more than 750 sales outlets in Switzerland, Germany, Austria, Belgium and The Netherlands. Employing more than 8,500 people, the Charles Vögele Group posted consolidated revenues of 1.231 billion euro in the 2001 financial year.

www. voegele-mode.com
09-24-02

Small increase overall profit Vögele

The Charles Vögele Group generated net sales of CHF 751 m (EUR 511 m) in the first half of 2002, 5.6 per cent down on the comparable period of 2001. At the same time, despite increased inventory revaluation, the gross profit margin improved substantially and as a result the gross profit for the semester reached CHF 412 m which is 1 per cent higher than the year-back figure. Vögele claims this is according to the strategic development measures adopted at the beginning of the year.

Vögele has introduced measures to optimise inventory management and holds a tighter control on price reductions in the winter end-of-season sales. Particularly when compared with the previous year these measures resulted in an increase in the gross margin from 51.2 per cent in the first half of 2001 to 54.8 per cent in 2002.

This development contrasts with a subdued sales trend. The beginning of 2002 proved a challenging time for the Vögele Group, as for many businesses engaged in the euro zone. Even cost-conscious Vögele customers were very cautious.
Furthermore, the 4 per cent drop in the parity of the euro against the Swiss franc over the last twelve months led to a currency- related 3.2 per cent reduction in Group sales.

The first effects of the immediate steps taken by the new CEO Daniel Reinhard are apparent. Vögele announces that other measures to further the strategic development by introducing precise rules of conduct for buying, fashion presentation, shop design and marketing are proceeding according to plan and will be completed by the autumn.

www. voegele-mode.com
2-8-2002

Vögele Board of Directors strengthened

The shareholders of Charles Vögele Holding AG approved all items of business proposed at the company’s Annual General Meeting, which was chaired by Carlo Vögele, Chairman of the Board of Directors.
In particular, Bernd Bothe and Daniel Sauter, the two proposed new Members of the Board of Directors, were elected to loud applause. Bernd Bothe has many years of experience in retailing and until the beginning of this year was responsible for cash & carry business at the German company Metro Group.

Until recently Daniel Sauter was Managing Director and Chief Executive Officer of the stock exchange-listed Xstrata Group of Zug, in whose development he played a key role. With these two prominent figures, the Vögele Group’s Board of Directors has added key competences to its existing expertise. Hansueli Loosli, CEO of the Coop Group, did not put himself forward for re-election. In his opening address, Chairman of the Board Carlo Vögele emphasized that the Vögele Group’s task was now to consolidate the rapid growth of recent years and to further improve profitability.