Annual Report 2009/10 Excellence in Retailing - Douglas Holding

38 Management Report
Key results
Business activities and operating environment
Net assets, financial position and result of operations
DOUGLAS HOLDING AG
Subsequent events
Control system and success factors
Opportunities and risks situation
Statutory disclosures
Forecast and overall assessment
Fig. 5
Adjusted for the costs incurred for the store network streamlining, the prior year’s figure
stood at 127.6 million EUR. Hence, despite the weak sales increase, like-for-like earnings
slightly improved. Similar to the preceding year, the return on sales – the ratio of EBT to
sales – came in at 4.0 percent.
Following the majority acquisition of buch.de, a revaluation of shares already held
was performed in conformity with IFRS 3. The one-off income amount of 6.1 million EUR
positively impacted the earnings for the year under review. This one-off effect however
was offset by additional costs incurred, because goodwill impairments for the reporting
period were 10,8 million EUR more than in the preceding year.
Consequent implementation of the store network streamlining
In the preceding year, the DOUGLAS Group resolved a store network streamlining program,
in which all stores generating a negative cash flow with no expectation of a sustainable
improvement in earnings on the medium term were to be closed. A decisive factor
was the cash-effect of costs associated with a store closure. As far as the cash costs of a
store closure were estimated to be lower in the next one to two years than the anticipated
negative cash flows from continuing operations, it was decided to close the store. In total,
closing costs amounting to 23.7 million EUR were recognized in the previous year. These
costs related to the divisions Perfumeries (19.2 million EUR), Fashion (3.8 million EUR)
and Confectionery (0.7 million EUR). As of September 30, 2010 the planned store network
streamlining program was largely completed.
Operating earnings contribution by the divisions
The Perfumeries’ earnings before taxes (EBT) reached 87.9 million EUR following 87.7
million EUR before closing costs in the same period last year. Correspondingly, the return
on sales (EBT margin) remained unchanged at 4.7 percent. While the earnings contribution
of the domestic perfumeries significantly exceeded the prior year’s level due to the
respectable sales performance, the EBT of the perfumeries outside of Germany declined
further. This was caused by the ongoing challenging macroeconomic conditions in several
countries, which led to lower sales and higher goodwill write-downs in some foreign
subsidiaries.
Fig. 4 · EBITDA and EBITDA margins
EBITDA
(in EUR m)
Change
(in %)
EBITDA margin
(in %)
2009/10 2008/09 2009/10 2008/09
Perfumeries 186.3 181.0 2.9 9.9 9.8
Books 60.0 57.9 3.6 6.6 7.1
Jewelry 30.9 24.4 26.6 10.0 8.3
Fashion 7.4 7.3 1.4 6.0 5.6
Confectionery 5.8 6.4 −9.4 5.8 6.3
Services −3.5 −8.6 59.3 − −
DOUGLAS Group
before closing costs
286.9 268.4 6.9 8.6 8.4
Closing costs 0.0 −13.4
DOUGLAS Group 286.9 255.0 12.5 8.6 8.0