Annual Report 2009/10 Excellence in Retailing - Douglas Holding

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2 DOUGLAS HOLDING AG Mission Statement Letter to the Shareholders Executive Board Corporate Governance Report of the Supervisory Board DOUGLAS Share Impressions Human Resources Dear Shareholders and Friends of the DOUGLAS Group, The DOUGLAS Group once again achieved the goals we set for the 2009/10 financial year. Despite the financial crisis, consolidated sales were up 3.7 percent to over EUR 3.3 billion, slightly surpassing our target of a 2 percent increase. At EUR 131.2 million, earnings before taxes (EBT) were just above our target range of EUR 120 to 130 million. Once again this year we owe our success first and foremost to our more than 24,000 employees. With their warmth, professionalism and dedication, they reminded our customers time and time again how rewarding shopping in the DOUGLAS Group’s specialty stores can be. I would therefore like to express my heartfelt thanks to each and every valued member of the DOUGLAS Group’s team for their tremendous contribution! Our solid performance was achieved by the fact that we once again remained true to our corporate principles – most importantly to our focus on superior customer service. We have persevered with our philosophy and offered customers outstanding service, an attractive shopping atmosphere and first-class merchandise in our stores while maintaining fair prices. The sales trends were particularly encouraging in our key home market. Sales in Germany’s DOUGLAS Group stores rose by 4.7 percent, producing a like-for-like increase of 2 percent. Most notably, the Douglas perfumeries and Christ jewelry stores augmented their market share. Sales abroad were up by 2.1 percent. However, like-for-like sales outside of Germany declined by 2.7 percent. This downturn was partially caused by the financial crisis hitting consumer spending abroad harder than in our home market. Despite the generally disappointing trends abroad, the DOUGLAS Group posted improvements in its key indicators. DOUGLAS Value Added (DVA) was up by some EUR 3 million to almost EUR 24 million. At EUR 88 million, Free Cash Flow was slightly higher than in the previous year, while our Return On Capital Employed (ROCE) climbed from 7.9 percent to 8.2 percent after taxes. Investments were also marginally higher at just under EUR 118 million. In total, we opened 72 new stores during 2009/10 and closed 104 unprofitable venues, a consequence of the network optimization program launched in 2008/09. At the very beginning of the economic crisis, we conducted a full review of our entire store network, and decided to close all the locations whose profitability had proved unsustainable. Today the DOUGLAS Group store network is in a very healthy position, once again offering a platform from which we can improve sales and increase investment. An investment budget of some EUR 125 million has been set aside for the 2010/11 fiscal year. These funds will go toward opening new stores and upgrading existing locations, both at home and abroad. Some 50 to 60 stores are due to open their doors across Europe in the Perfumeries division alone. Expansion activities will focus on countries in which the Douglas perfumeries already lead the market or can expect Dr. Henning Kreke President and CEO
to within the foreseeable future. At Thalia, openings of at least ten new multi-channel bookstores will claim the bulk of the investments. In addition Christ and Hussel will also be cementing their market leading positions by opening new locations and modernizing existing venues. While AppelrathCüpper has no plans for expansion, it will continue to invest in upgrading its existing locations. Beyond attracting customers into our many store locations, we now want to motivate them even more to use our online shops. The future, after all, will belong to retailers who can forge lasting bonds with customers both personally – at fixed-location stores in city centers and malls – and “virtually” with their shops on the Internet. The DOUGLAS Group definitely has a clear edge over vendors who operate exclusively online. In addition to ultra-modern online shops, we can offer almost 2,000 first-class specialty stores where customers can browse at their leisure and draw on expert advice from professionals. As a result, our customers can obtain information on their favorite products at their local store or on the Internet, and buy them either directly in our stores or online for convenient delivery to their doorsteps. Despite the euphoria about online shopping, there can be no “either – or.” We want to offer the best of both worlds: an ideal combination of in-store shopping and online retailing. We are determined to take advantage of the opportunity that we have to boost the image of our brands Douglas, Thalia, Christ, AppelrathCüpper and Hussel both in our stores as well as through our websites. The employees at our stores will therefore be making renewed, more proactive efforts to convince their customers of the benefits of our online shops. Conversely, we will be drawing the attention of all of our online customers to the unique services they will only find inside the DOUGLAS Group’s specialty stores. By integrating our online and stationary services, we aim to tap the huge growth potential opening up for multi-channel retailers. Regardless of location, the customer and his or her utmost satisfaction will always be the focus of our strategy. Our highly capable employees once again demonstrated this successfully during the 2010 holiday season. In the first quarter of our new financial year – from October DOUGLAS HOLDING AG through December 2010 – sales in the DOUGLAS Group were up by approximately 4 percent. Like for like, this represents an increase of nearly 2 percent. As a result, we have already laid solid foundations for the remainder of the 2010/11 financial year. Consequently, the prospects for the DOUGLAS Group are positive across the board. That applies particularly to our key home market, where we generate some 65 percent of consolidated sales. Unemployment in Germany is now as low as it was 20 years ago, and rising wages combined with relatively stable prices should also drive domestic consumption. At the same time consumers’ “piggy banks” are reasonably full, and if the mood of optimism prevails, they will feel they can afford to spend more again. With its lifestyle strategy tailored to deliver outstanding customer service, first-class merchandise and a stimulating shopping ambiance, the DOUGLAS Group should be well positioned to benefit from this renewed customer optimism more than others. Given this encouraging outlook and the Group’s respectable performance in 2009/10, the DOUGLAS HOLDING AG Executive and Supervisory Boards will propose that the Shareholders’ Meeting of March 23, 2011 approve a dividend of EUR 1.10 per dividend-bearing share. This distribution ratio of 57 percent of the Group’s net earnings is yet again somewhat higher than our long-term target of about 50 percent. We are delighted that this recommendation will allow you – our esteemed shareholders – to participate in the DOUGLAS Group’s solid performance. Hagen, January 2011 Sincerely, Mission Statement Letter to the Shareholders Executive Board Corporate Governance Report of the Supervisory Board DOUGLAS Share Impressions Human Resources 3
Page 1 and 2: Annual Report 2009/10 Excellence in
Page 3 and 4: U3 DOUGLAS HOLDING AG 1 DOUGLAS HOL
Page 5: MISSION STATEMENT DOUGLAS HOLDING A
Page 9 and 10: CORPORATE GOVERNANCE DOUGLAS HOLDIN
Page 11 and 12: 167 168 component of the Chief Huma
Page 13 and 14: Dr. Dr. h.c. Jörn Kreke, Chairman
Page 15 and 16: Fig. 3 Fig. 2 · Maximum and minimu
Page 17 and 18: from Executive Board speeches as we
Page 19 and 20: IMPRESSIONS October 2009 With Dougl
Page 21 and 22: June 2010 Hussel pilots a “new wo
Page 23 and 24: DOUGLAS HOLDING AG 19 Mission State
Page 25 and 26: Valued for their reading tips: Mari
Page 27 and 28: seminar at the Zeppelin University
Page 29 and 30: DOUGLAS HOLDING AG Mission Statemen
Page 31 and 32: MANAGEMENT REPORT CONTENTS Manageme
Page 33 and 34: KEY RESULTS IN THE 2009/10 FISCAL Y
Page 35 and 36: All five retailing divisions combin
Page 37 and 38: Fig. 1 · Targets and results Targe
Page 39 and 40: ahead at the positive economic outl
Page 41 and 42: In the fiscal year, Douglas opened
Page 43 and 44: The operating earnings in the Books
Page 45 and 46: Fig. 6 · Development of capital ex
Page 47 and 48: lining, which had a liquidity effec
Page 49 and 50: DOUGLAS HOLDING AG The DOUGLAS HOLD
Page 51 and 52: INTERNAL CONTROL SYSTEM AND KEY SUC
Page 53 and 54: DVA calculation Based on the premis
Page 55 and 56: Fig. 14 · Employees by division Ch
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development of highly qualified emp
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Corporate responsibility is also an
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“La Margerita” in organic quali
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Information technology opportunitie
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The data transferred is then automa
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The existing risks both as individu
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in most industrial countries, the s
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cialty retail stores forms a solid
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By relaunching its online presentat
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DIVISIONS CONTENTS 72 Perfumeries 8
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THE WORLD OF BEAUTY First, the good
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Nowy Sa˛ cz, Poland, October 2009
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Natalia Wörner and Michael Michals
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showpiece: “Hilfiger Woman” - a
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Stress-free shopping: Douglas - her
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Established the first-ever Douglas
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Austria’s first multi-channel boo
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Divisions Thalia · Books 87 Tradit
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Thalia in Figures employees, who su
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Capturing the imaginations of Dortm
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Pear shape Round brilliant shape Pr
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Nadia Iram Christ, Frankfurt (Zeil)
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Christ: more than ever before. Empl
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FASHIONS, TOP BRANDS, MULTI-CHANNEL
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Whether her style is casual or clas
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merchandising program, enabling App
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During the 2009/10 financial year H
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Impeccably showcased products: the
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Hussel in Figures Aschaffenburg is
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FINANCIAL STATEMENTS CONTENTS 112 F
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CONSOLIDATED INCOME STATEMENT for t
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STATEMENT OF CHANGES IN GROUP EQUIT
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Financial statements Facts & figure
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NOTES TO THE CONSOLIDATED FINANCIAL
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IAS 23 “Borrowing Costs” In Mar
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public sector have been expanded. T
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Group of Consolidated Companies Ger
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At-equity consolidation 09/30/2010
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5. Accounting and valuation princip
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Financial assets denominated in a f
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issued for speculative purposes. De
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NOTES TO THE INCOME STATEMENT 6. Sa
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11. Investment result In the previo
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15. Income taxes Income taxes 2009/
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Intangible assets - Fiscal year 200
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Property, plant and equipment - Fis
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Finance leases As of the balance sh
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Carrying amounts of goodwill and in
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accounts. The write-downs on trade
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23. Assets and liabilities held for
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of the fiscal year, which are then
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essary information, this plan is qu
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Statement of changes in current pro
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Cash and cash equivalents are compr
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31. Fair Values of financial instru
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All financial liabilities existing
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Financial liabilities In the 2006/0
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There were no receivables from rela
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Expenses for auditor’s fees In ac
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Significant shareholdings No. Name
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Prof. Dr. Mark Wössner Entrepreneu
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FURTHER INFORMATION CONTENTS 176 Ov
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Overview of the past several years
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Fair Value Amount at which an asset
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www.douglas.de www.thalia.de · www
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