Firstextile AG aims steady growth in H2 2015

(PresseBox) ( Frankfurt am Main, )
- Weaker business development in Q2 2014 burdening overall revenue in H1 2015; revenue level with EUR 86.6 mn below the previous year
- Earnings before interest and tax (EBIT) at EUR 13.7 mn in H1 2015; EBIT margin at 15.8%
- New production facility as a basis for further growth in coming years
- Management confirms guidance for the full financial year 2015

Today Firstextile AG (FT8) has published its financial figures for the first six months and the second quarter of 2015, reporting a dropped business development in the second quarter of 2015. Overall the strong start into the current fiscal year could not fully compensate the revenue decline in Q2 2015. Nevertheless, Firstextile expects its further business development in line with the 2015 guidance.  

During the second quarter of 2015, Firstextile achieved revenue totalling EUR 39.6 million after EUR 59.6 million in the same period of 2014. This year-on-year development was due to a strong revenue decline in the Uniforms segment and Branded Products segment in the second quarter of 2015. Fred Yang, founder and CEO of Firstextile, comments the results: "After the positive start into the financial year 2015, reflecting the continuing high demand for our high-end fabrics, business development dropped in the second quarter of 2015 mainly due to the revenue slump in the Uniforms segment. But this is nothing to worry about: Since revenues in the Uniforms segment generally depend on relatively few large orders, a fluctuation in revenues quarter-to-quarter in this segment is not exceptional. Besides, we are as of today a pre-approved supplier for 25 government institutions and large state-owned enterprises. We are convinced that this will contribute to a sustainable and profitable business development in the coming years."

Overall revenue in the first half year of 2015 was at EUR 86.6 million (H1 2014: EUR 92.5 million). The company's gross profit amounted to EUR 24.5 million compared to EUR 28.6 million in the previous year's period with a gross profit margin remaining at a strong level of 28.3% (H1 2014: 30.9%). Firstextile's earnings before interest and tax (EBIT) amounted to EUR 13.7 million representing a decline of 21.4% year-on-year (H1 2014: EUR 17.4) and corresponding to an EBIT margin of 15.8% (H1 2014: 18.8%). Net profit decreased by 31.1% from EUR 13.6 million in the first six months of 2014 to EUR 9.4 million in the same period of 2015. For the full financial year 2015 the however, the management confirms its guidance of total revenues between EUR 213 million and EUR 237 million and an EBIT margin of between 16% and 18%. 

Furthermore, operations in the new production site have started in the third quarter of 2015. Fred Yang adds: "Firstextile is well equipped for the ongoing demand for high-end fabrics in the overall very attractive Chinese market. To exploit the huge opportunities in the domestic market, we almost completed the expansion of our production capacities. We are already able to increase weaving capacities by 50% due to installed weaving machines being ready for production."

Firstextile's revenue in the Fabrics segment amounted to EUR 38.4 million in Q2 2015 and thus increased by 9.5% compared to the previous year (Q2 2014: EUR 35.1 million). After a strong first quarter the segment revenue in the full reporting period of 2015 has shown a yoy increase of 17.3%, reflecting the sustained high market demand on high-end fabrics in China. Gross profit also increased to EUR 21.5 million (H1 2014: EUR 16.4 million), reflecting a gross profit margin of 29.5% in the first half year of 2015 (H1 2014: 26.5%).

After a strong first quarter of 2015 in the Uniforms segment, which was due to new bulk orders in that period, in the second quarter of 2015 revenue decreased by 96.4% yoy to EUR 0.7 million (Q2 2014: EUR 19.9 million). However, due to strong revenue development in the first three months of 2015, total revenue in the Uniforms segment in H1 2015 amounted to EUR 13.1 million after EUR 20.3 million in the first half of 2014. In light of the revenue decrease, the segmental gross profit decreased by 58.6% to EUR 2.5 million in the first half of 2015 compared to EUR 6.0 million in the same reporting period of the previous year, reflecting a gross profit margin of 18.9% in the first six months of 2015 (H1 2014: 29.4%).

In the Branded Products segment, revenue in the first half year of 2015 amounted to EUR 0.9 million (H1 2014: EUR 10.2 million) and therefore was below the revenue in the previous year's reporting period. The development is due to the unfavourable economic environment for the corporate gift business as an important part of this segment. Gross profit in this segment amounted to EUR 0.6 million in the first six months of 2015 (H1 2014: EUR 6.2 million); the gross profit margin still remained on a very high level of 68.6% in the first half year of 2015 (H1 2014: 60.3%).      

As of today, the complete 2015 half year report can be downloaded from the company's website at www.firstextile.de, within the "Investor Relations" area.
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