DGAP-News: Ultrasonic AG / Key word(s): Final Results Ultrasonic AG: ULTRASONIC publishes the annual report for FY 2013 - Sales under the ULTRASONIC brand drive growth 29.04.2014 / 19:12 --------------------------------------------------------------------- Corporate News ULTRASONIC publishes the annual report for FY 2013 - Sales under the ULTRASONIC brand drive growth - Preliminary figures confirmed - Group revenue grew 9.9% to EUR 163.8 million (2012: EUR 149.0 million) - Higher revenue in all segments - Profits developed disproportionately positive - Net profit amounted to EUR 35.0 million (2012: EUR 30.8 million) - Positive outlook for FY 2014 - Sales growth of around 10% to 15% at an EBT margin of approx. 24% to 27% expected Cologne, April 29, 2014 - Ultrasonic AG, quoted in the Prime Standard of the Frankfurt Stock Exchange (Prime Standard, ISIN DE000A1KREX3, US5), today published the annual report for FY 2013. Supported by sales of own branded products within the Urban Footwear segment, which continued the dynamic growth of previous years, the German holding company of an established Chinese manufacturer and supplier of high-quality branded urban footwear products, was able to post a further increase in sales and earnings, confirming the previously announced preliminary figures. Sales grew 9.9% to EUR 163.8 million and pre-tax earnings rose even faster, by 13.6%. The EBT-margin therefore improved to 29.0%. The operating cash flow was over EUR 37 million and the equity ratio climbed to 86.2%. "The results confirm that our focus on high-quality, high-margin products is increasingly paying off. Chinese consumers are becoming more aware of quality, and fashion trends and brand-awareness are becoming increasingly important factors in purchase decisions. We recognized this very early on. By successfully establishing and expanding the ULTRASONIC brand, we now have an attractive brand in the fast-growing market for high-quality casual shoes. As well as expanding production capacity further and raising online sales, we will thus be stepping up our marketing activities to improve brand awareness, especially in the internet. Furthermore, we are assessing currently different options to increase the attractiveness of the ULTRASONIC stock, for example a share buy-back", reports Qingyong Wu, the company's founder and CEO. Sales and earnings The sales revenue of the group grew by 9.9% from EUR 149.0 million in 2012 to EUR 163.8 million in 2013. Since the average exchange rate for the RMB versus the euro decreased in 2013, growth in RMB was even 11.2%. Looking at the segments, Urban Footwear (incl. Accessories), where revenue grew 15.6% to EUR 63.4 million (2012: EUR 54.9 million) remained the main growth driver in the reporting period. Particularly, sales revenue generated by the ULTRASONIC brand within the Urban footwear segment, increased by 27.9% year-on-year to EUR 37.6 million (2012: EUR 29.4 million). Online retailing of ULTRASONIC products, which only started in early August, contributed revenue of EUR 2.5 million to this development. Overall, revenues generated by the ULTRASONIC brand now account for 59.3% of segment revenue and 22.9% of total revenue. The subsegment therefore strengthened its position as the main driver of business. However, the other segments posted growth as well: Revenue rose 9.2% to EUR 50.9 million in the Sandals and Slippers segment (2012: EUR 46.6 million), and 4.2% to EUR 49.5 million in the Shoe Soles segment (2012: EUR 47.5 million). The gross profit increased 11.8% year-on-year from EUR 46.1 million to EUR 51.5 million. It therefore rose slightly faster than revenue. This pushed the gross profit margin up to 31.4% in 2013 (2012: 30.9%). Compared with the previous year, ULTRASONIC lifted EBITDA from EUR 43.2 million to EUR 48.9 million in 2013. The EBITDA margin improved to 29.8% (2012: 29.0%), despite higher material and wage costs. This was mainly due to an increase in sales volumes as well as a better control of production overhead costs and administrative expenses. This improvement is reflected in all earnings indicators: The Group's EBIT margin increased to 29.0% (2012: 28.0%) and the EBT margin rose to 29.0% (2012: 28.1%). The Group's after-tax profit improved to EUR 35.0 million (2012: EUR 30.8 million). That corresponds to earnings per share (basic and diluted) of EUR 2.82 (2012: EUR 2.55 (restated)). At 86.2%, the equity ratio remained at a high level (2012: 81.8%) and the operating cash flow increased to EUR 37.1 million in FY 2013 (2012: EUR 18.6 million (restated)). This strong operating cash flow not only provides a buffer against the credit squeeze, but also gives ULTRASONIC the necessary entrepreneurial room for further expansion. Investments In 2012, ULTRASONIC acquired Fujian Junhui Sports Co., Ltd., a property with a completely new factory complex, including several production and logistics buildings and staff housing. There is also scope for further expansion at this site. Construction work continued in 2013 and the first production lines for urban footwear were purchased and installed. There have been some delays in the start of production at this location, initially due to prolonged heavy rainfall that delayed the local government's construction of the new four-lane access road. Another factor that delayed start-up was replanning staff accommodation. The cut of the apartments has been altered to make them more attractive: it is becoming more difficult to find qualified workers in China who are prepared to live and work in newly developed industrial areas because the leisure offering is perceived to be less attractive than in industrial areas closer to cities. However, production is scheduled to start in May or at the latest June 2014. Completion of further buildings and the installation of machinery will take place successively, so production capacity will be ramped up this year and next. In 2014, ULTRASONIC intends to invest a further EUR 1.0-1.5 million to expand production. Plans include purchasing two new production lines for urban footwear and one or -two sets of new injection moulding machines to produce shoe soles, sandals and slippers. Further, in 2014 the company will be investing EUR 5.3 - 5.9 million to expand infrastructure (fencing, access road, buildings) at the new site. Total investment geared to full utilisation of the site by 2017 will come to around EUR 50 million. Further, ULTRASONIC is planning to step up marketing to strengthen the ULTRASONIC brand and raise brand awareness, especially on the internet. For this, it has earmarked a budget of EUR 2-3 million on promotion expenses for 2014. Outlook For FY 2014, the Management Board expects the positive trend to continue. Assuming a further rise in consumer spending in China and at least stable export demand, together with an unchanged number of distributors and a slight rise in the number of ULTRASONIC shops, the company expects to report further growth on a euro basis of around 10-15% in 2014 (excluding currency effects). Production start-up costs and expenses for gaining access to the new distribution channels will probably result in a slightly lower margin. Accordingly, the Management Board still expects to report a pre-tax margin (EBT) of 24-27% in 2014. As in the previous year, the Management Board expects the first quarter to be the weakest of the year for seasonal reasons. The audited consolidated financial statements for FY 2013 are available at Investor Relations/Publications on the company's website at www.ultrasonic-ag.de. About Ultrasonic The Cologne-based company Ultrasonic AG is the German holding company of the Chinese ULTRASONIC Group, an established manufacturer and supplier of high-quality branded urban footwear. The Group has more than 1,400 employees and operates in three main market segments, each of which currently contributes about a third of revenue. ULTRASONIC produces sandals and slippers for the upper price segment for the local and international market. It is also a long-term supplier of shoe soles to leading manufacturers in the established Chinese sport shoe industry such as Anta, Xtep and Unisuper. Moreover, the company has developed its own very successful high-quality urban footwear collection which is marketed under the ULTRASONIC brand and targets China's young, fashion-conscious urban middle class, which has high purchasing power and expects high quality. The ULTRASONIC product line is currently marketed via more than 110 mono-label shops. For further information about the company visit: www.ultrasonic-ag.de For enquiries: Ultrasonic AG Chi Kwong Clifford Chan Member of the Management Board and CFO E-Mail: [email protected] Tel.: +86 1525 947 9902 (China), +852 966 227 40 (Hong Kong) Disclaimer: This document is no offer for the purchase of securities in the United States of America. Securities may only be sold or offered for sale with the previous registration under the U.S. Securities Act of 1933 in the actual valid version or without previous registration only pursuant to an exemption. The shares of Ultrasonic AG (the 'Shares') have not been registered under the U.S. Securities Act of 1933 in the actual valid version and may not be sold or offered in the United States. This document is only being distributed to and is only directed at (i) persons who are outside the United Kingdom or (ii) to investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the 'Order') or (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as 'relevant persons'). The Shares, which are referred to, are only available to relevant persons and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such securities will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents. End of Corporate News --------------------------------------------------------------------- 29.04.2014 Dissemination of a Corporate News, transmitted by DGAP - a company of EQS Group AG. The issuer is solely responsible for the content of this announcement. DGAP's Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------- Language: English Company: Ultrasonic AG c/o BPG mbH, Graf-Adolf-Platz 12 40213 Düsseldorf Germany Phone: +86 1525 947 9902 (China); +852 966 227 40 (Hong Kong) Fax: +49 (0)211 172 9829 E-mail: [email protected] Internet: www.ultrasonic-ag.de ISIN: DE000A1KREX3 WKN: A1KREX Indices: CDAX, Classic All Share, DAXsector All Consumer, DAXsector Consumer, DAXsubsector All Clothing & Footwear, DAXsubsector Clothing & Footwear, Prime All Share Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin, Düsseldorf, Stuttgart End of News DGAP News-Service --------------------------------------------------------------------- 265373 29.04.2014