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Article Excerpt
Original Source: FD (FAIR DISCLOSURE) WIRE
OPERATOR: Ladies and gentlemen, welcome to the Douglas Holdings telephone conference for the first nine months of fiscal 2006, 2007. As a reminder, all participants are in a listen-only mode during the presentation, and the conference will be recorded. After the presentation, there will be ample opportunity to ask questions.
It is now my pleasure to hand you over to Mr. Wolfgang Schulte, Head of Investor Relations.
WOLFGANG SCHULTE, HEAD OF INVESTOR RELATIONS, DOUGLAS HOLDING AG: Good morning ladies and gentlemen. Welcome to our conference call, and thank you for being with us.
Today Douglas Holdings management is represented by Dr. Henning Kreke, our CEO, and Dr. Burkhard Bamberger, our CFO. My name is Wolfgang Schulte. I'm Head of Investor Relations.
First of all, we will hear a statement from Dr. Kreke. The corresponding slides to this statement were sent to you by email this morning. After the statement, you will have the opportunity to ask questions.
I would now like to hand over to Dr. Kreke.
DR. HENNING KREKE, CHAIRMAN AND CEO, DOUGLAS HOLDINGS AG: Good morning ladies and gentlemen, and thank you for joining us today. The Douglas Group continues its solid sales and earnings performance in the third quarter of our current fiscal year. For the first nine months, Group sales were up by 12% to just over EUR2.3 billion. Please note, however, that our sales have been boosted by acquisitions in the perfumeries, books and canning divisions. Adjusted for these acquisitions, the organic growth rate was 7.8%. Like-for-like. we were able to increase sales by 3.5%.
Overall, sales in Germany climbed by a substantial 12.5% to EUR1.6 billion. Like-for-like sales in our home market were up by 2.6%. Preliminary reports from the Federation of German Retailers indicate that the Douglas Group continued to outperform the German retail sector as a whole. Our foreign subsidiaries posted almost equally strong sales growth of 10.9%. Like-for-like, foreign sales increased by a solid 5.3%. As a result of a number of domestic acquisitions and a good sales performance of Germany, the share of foreign group sales decreased slightly to 32.1%.
In the third quarter of our current fiscal year, the Douglas Group increased its net sales by 10.4% to EUR653 million. Like-for-like, this translates into an increase of 1.9%. In Germany, sales between April and June were up 10.2%. Like-for-like sales increased slightly by 0.4%. When reviewing these figures, please remember that this year's Easter business fell largely within the second and -- fell largely into the second quarter of this fiscal year. Last year, our Easter sales had been generated mostly during the third quarter.
I would now like to turn your attention to our sales footage, which grew quite substantially over the last 12 months. As of the end of June, our total sales floor amounted to 527,000 square meters, translating into a growth rate of around 19%. Earnings before taxes in the first nine months of our current fiscal year totaled EUR133.8 million following EUR118.4 million in the same period last year, with the largest contributions coming from the strong performance of our perfumery and jewelry divisions. Thanks to a continuing high gross margin, the EBT margin increased slightly from 5.7% to 5.8%.
Looking at the third quarter alone, EBT for the Group totaled EUR2.7 million following EUR7.9 million in the previous year. Please note, however, that EBT in Q3 was negatively affected by both the shift of this year's Easter business, and the restructuring costs of EUR3.5 million and our menswear specialist Pohland.
Let me now move on to the key figures of our consolidated statement of income. During the months October through June, our Group's gross profit rose by EUR125 million to EUR1,091 million. Boosted by the solid growth of all of our divisions in the Christmas quarter, our gross margin came in at 47.2% after 46.8% in the previous year. Other operating income rose to almost EUR129 million after EUR113 million the year earlier, mainly as the result of high reimbursements of promotional expenses we incurred in our perfumeries division. Higher promotional costs are therefore shown under other operating expenses.
Personal expenses increased slightly from 20.7% to 20.9% of net sales as the result of expansion activities. In absolute terms, personal expenses rose by EUR56 million to around EUR484 million. The number of employees in the Group grew by more than 2,400 to a total of 22,400. Other operating expenses increased by EUR61 million to almost EUR530 million. This increase of 13.5% exceeded sales growth primarily because of higher rental costs.
EBITDA increased by almost EUR24 million to EUR223 million, mainly driven by sales growth. The EBITDA margin in the first nine months remained unchanged at 9.7%. Net financial expenses in the first nine months increased to nearly EUR11 million due to a higher net debt position. Tax expenditures of around EUR45 million were EUR4.5 million lower than last year. Tax expenditures in Q1 were positively impacted by a one-off tax credit of EUR7.4 million from the capitalization of an income tax receivable. As a result our tax ratio declined by some 8 percentage points to 34%.
Based on a reported net income of almost EUR88 million, earnings per share increased to EUR2.24 -- there's a mistake in the handout; it's EUR2.24 -- from EUR1.70 12 months earlier. This notable increase was mainly the result of higher pretax earnings coupled with a lower tax rate and lower minority interests.
Moving on to slide four of the presentation, we invested about...
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