report

Financial coMMentaRY
2011 was a turbulent
and demanding year for the
Charles Vögele Group.
The highest priority now is to
achieve a breakeven result.
2011 was a turbulent and demanding year for the Charles Vögele Group, which faced
a series of internal and external challenges. The negative effects of a very warm
autumn and difficulties within the company with product design and the supply chain
were compounded by further depreciation of the euro and a generally subdued
retail environment at the start of the second half of the year. Following a balanced
first half of the year, net sales for the full year after currency adjustment were sig-
nificantly below the previous year’s. This weaker turnover was reflected in a substantial
increase in inventory at the group level. A positive trend on the costs side was
not enough to prevent a fall in gross profit, and with an additional CHF 36 million
goodwill impairment at the half-year stage, Charles Vögele Group was left with a
triple-digit negative consolidated net result at the end of the year.
Charles Vögele’s finances have been secured till mid-2015 thanks to a CHF 255 million
syndicated facility arranged at the start of 2012.
> Group result
Net sales fell by approximately 15 %, or CHF 182 million, in 2011. Nearly half of this
decline, or CHF 80 million, is attributable to the sharp depreciation of the euro.
2011 saw a slight reduction in floorspace across the store portfolio; after adjusting
for exchange rates and floorspace, the fall was 7.9 %.
Rising procurement costs in Asia, especially in the second half of the year, led to an
appreciable reduction in the gross profit margin. The weakness of the euro against
the US dollar (the key procurement currency) placed a further strain on the margin,
which fell from 66.8 % in the previous year to 61.5 %.
Helped by the weaker euro and a rigorous cost management the operating expenses
of CHF 646 million (previous year CHF 691 million) remain on a low level. However,
there was no positive result at EBITDA level. EBITDA came in at CHF –21 million.
Owing to a further CHF 36 million increase in depreciation caused by impairment of
goodwill positions booked in the Eurozone, EBIT was also negative at CHF –114 million,
and the net loss came to CHF –119 million.
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Financial commentary | income Statement and Balance Sheet | cash Flow and changes in equity | notes | Statutory auditors