Sales € 286 million (+ 2.6%), EBIT approx. € 16 million (approx. + 6%)

Strong cash flow thanks to further optimisation of working capital

Market share gained

Hamburg, 26 January 2005. The wine trading group Hawesko Holding AG (HAW, HAWG.DE, DE0006042708) published preliminary results today for the recently concluded fiscal year (1 January - 31 December 2004). Group sales for 2004 rose to € 286 million (up from € 279 million in the previous year). With this increase of 2.6% compared with the previous year, the Hawesko Group posted yet again sustained growth, while the wine market overall fell by 3.4% in the same period according to the Gesellschaft für Konsumforschung (GfK). The operating result (EBIT) also improved and is expected to be approximately € 16.0 million (compared to € 15.1 million in the previous year). Increased non-cash expenses in the financial result (fair value assessments in accordance with IAS 39) compared to the previous year will affect pre-tax earnings to a greater extent than in the previous year. Therefore, the full impact of the increase in the operating result is not expected to be seen in the consolidated net earnings (which will not be established until the tax calculation is completed) and, as a result, earnings per share should be at the level of the previous year (€ 1.37) or slightly higher. After continued progress in working capital management, the company currently estimates its free cash flow (from ongoing business activity minus payments for interest and investments) for 2004 to be between € 10 million and € 12 million, surpassing its own previous expectations. The executive board sees this as a basis for a dividend at least as high as that of the previous year (€ 1.10 per share).

In the fourth quarter of the recently concluded fiscal year (1 October -31 December 2004), sales were € 103 million, exceeding the amount of the same quarter in the previous year by 8%. Group operating profit (EBIT) passed the 12-million-euro level in the fourth quarter of 2004 (previous year: € 11 million). Stationary retail (Jacques' Wein-Depot) posted a sales increase of 6% to € 33 million in this quarter, (like-for-like: 6.5%). At 31 December 2004, there were 256 outlets compared to 252 in the previous year. In addition, by the end of 2004 there were three further locations leased but not yet opened (previous year: six). Sales declined by 2% in the mail order segment to € 34 million, in part due to the end of business for the Austrian mail order subsidiary Wine Company, which in the meantime has been merged with the Wein-Wolf Austria subsidiary. The wholesale segment increased its sales in the quarter under review by 22% to € 35 million, boosted among other things by its exclusively distributed wines from Philippe de Rothschild.

Chief Executive Officer Alexander Margaritoff said that the Hawesko Group has remained strong. An improvement of the current economic situation would be welcome, but it is not part of the basis for the Group's planning. "In this difficult consumer environment, which has persisted for more than two years now, we are able to grow, to gain market share, to make a profit and to offer attractive dividends. Our business model is proving itself - and will increase in profitability even more once the mood of consumers returns to normal," said Mr Margaritoff.

 

 

 

According to Chief Financial Officer Sven Ohlzen, the current fiscal year 2005 will see some changes in accounting that are relevant to profits. Among other things, in accordance with IFRS, goodwill amortisation will no longer apply, resulting in an increase of about € 0.5 million in EBIT for Hawesko. Mr Ohlzen stated specifically, however, that the management board expects an increase in the operational results in excess of this amount over the next several years. The streamlining of the organisation in Austria is expected to make the Hawesko Group's operations even more profitable and further optimise its tax situation, so that the tax rate for the group will drop from the current level of 50% to a normal level of around 40%.

Hawesko Holding AG is the leading supplier of premium wines and champagnes in Germany. In fiscal year 2004, the Group achieved sales of € 286 million and employed 550 people in the company's three sales channels: specialty wine-shop retail (Jacques' Wein-Depot), wholesale (Wein Wolf and CWD Champagner- and Wein-Distributionsgesellschaft) and mail order (especially Hanseatisches Wein- and Sekt-Kontor).

Preliminary key data for the Hawesko Group

(in million euros, unaudited)

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(in million euros, unaudited)

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Published by:

 

Hawesko Holding AG

Postfach 20 15 52

20205 Hamburg, Germany

Internet:

http://www.hawesko.com (company information)

http://www.hawesko.de (online shop)

http://www.jacques.de (locations and information for Jacques' Wein-Depot)