Firstextile AG topped the EUR 200 mn revenue mark in 2013
- Record revenue level at EUR 200.3 m based on preliminary figures in 2013
- Increased gross profit of EUR 64.8 m lifting the gross profit margin to 32.3%
- High profitability: EBIT margin remains strong at 20.8%
- Measures for further sustainable business growth successfully initiated
Based on preliminary figures for the full financial year of 2013, Firstextile AG (FT8) achieved an increase of 11.6% in revenue resulting in the highest revenue level in its history. The company's improved gross profit margin and its strong EBIT margin of 20.8% underline the high profitability of its business model.
In the financial year of 2013, Firstextile's revenue amounted to EUR 200.3 million compared to EUR 179.5 million in the previous year. This increase was due to higher revenue in the two segments Fabrics and Branded Products that over-compensated the decrease in the Uniforms segment resulting from the delay of few large bulk orders in the second half year. As a result and despite an unfavourable exchange rate of RMB against EUR used in the translation of financial figures, overall revenue for the full financial year of 2013 was only slightly below the management guidance providing for a a minimum revenue of EUR 204 million. Gross profit in the financial year of 2013 amounted to EUR 64.8 million (2012: EUR 56.4 million). With a year-on-year growth rate of 14.8%, Firstextile's gross profit rose even faster than revenue, lifting the company's gross profit margin to 32.3% (2012: 31.4%). Earnings before interest and tax (EBIT) increased by 3.9% to EUR 41.6 million (2012: EUR 40.1 million), corresponding to an EBIT margin of 20.8% (2012: 22.3%) and in line with 2013 EBIT guidance. The drop in margin is due to an increase in distribution and selling expenses as well as doubled spendings on research and development (R&D) underlining the great importance of R&D for Firstextile's business.
"We are very proud of our successful business development during the financial year of 2013. At a record revenue level, we remained very profitable with an EBIT margin of almost 21%," Fred Yang, founder and CEO of Firstextile, comments. "In addition, we initiated several measures for a sustainable growth of our company in the future. We started the construction of our new plant in April 2013 to exploit the huge additional opportunities in the fabrics market in China. Besides, we successfully managed the re-launch of our premium brand "VARPUM" and opened our first Image Store in order to further strengthen our highly profitable Branded Products segment. "
In the company's core business, the Fabrics segment revenue increased by 20.5% to EUR 136.6 million (2012price and the number of units sold. The Fabrics segment is still the largest contributor to overall revenue with a share of 68.2%. Gross profit also developed nicely and grew by 21.4% to EUR 38.0 million compared to EUR 31.3 million in the previous year of 2012. The segmental gross profit margin was at 27.9% and therefore slightly above the previous year's margin of 27.6%.
With revenue of EUR 33.4 million, revenue in the Uniforms segment dropped by 28.4% yoy (2012: EUR 46.7 million). The segment's revenue contribution amounted to 16.7%. Generally fluctuations in this business segment are typical since revenue strongly depends on few large bulk orders from state-owned enterprises and institutions. During the second half year of 2013, order income was weaker than expected resulting in relatively low annual revenue. However, Firstextile managed to almost fully utilise its production capacities through its two other segments, which could sustainably improve their contribution to total revenue and thereby compensate the development in the Uniforms segment. Gross profit in the Uniforms segment also decreased by 27.9% to EUR 7.0 million compared to EUR 9.7 million in 2012; this corresponds to an improved gross profit margin of 21.0% (2012: 20.8%).
The Branded products segment showed significant revenue growth and clearly remained the company's most profitable segment. Segmental revenue increased by 55.2% to EUR 30.3 Million (2012: EUR 19.5 million). Contribution to total revenue was at 15.1% in 2013, after 10.9% in the previous year. Gross profit in 2013 increased by 28.1% to EUR 19.7 million compared to EUR 15.4 million in 2012, resulting in a very high gross profit margin of 65.0% (2012: 78.7%). The decrease in the margin is due to the different product mix in this segment. Since 2013, Firstextile also offers traded products which carry much lower margins than the company's premium shirts sold under its own brands VARPUM and Firstextile.
The guidance for the current financial year 2014 will be published together with the annual report. The full annual report for the financial year 2013 will be available at the company's Website (www.firstextile.de), within the "Investor Relations" area, starting from 29 April 2014.
Firstextile is one of the leading manufacturers of high-end yarn-dyed fabrics in the Chinese market. It also markets fabrics and shirts specifically designed for uniforms used by Chinese government institutions and enterprises, as well as its own branded men's wear for the Chinese premium market segment. The company operates modern production facilities in Jiangyin near Shanghai, China, which is one of the main centres of the Chinese textile industry, and it focuses particularly on high product-quality. Net proceeds from the successful completion of the IPO in November 2012, will primarily be used to double annual production capacity from the current 36 million metres to 72 million metres by the end of 2014.