DGAP-News: Firstextile AG / Key word(s): Miscellaneous Firstextile AG sells 'VARPUM' and strengthens the operational focus on its core business 22.12.2014 / 15:19 --------------------------------------------------------------------- Firstextile AG sells "VARPUM" and strengthens the operational focus on its core business - Management Board and Supervisory Board decided on the sale of the "VARPUM" brand by year-end 2014 - Spin-off without significant impact: "VARPUM" contributing less than 1% to total revenue - Operational focus on the Uniforms and Fabrics segments as well as the wholesale business in the Branded Products segment Jiangyin (China) / Frankfurt (Germany), 22 December 2014 - Firstextile AG (ISIN: DE000A1PG8V8) will spin-off its retail brand "VARPUM" by the end of 2014. This was jointly decided by the Management Board and the Supervisory Board since the business development in the retail business stayed far below the Management's expectations. The company will concentrate on its core competence as one of the leading manufacturers of high-end yarn-dyed fabrics in the Chinese market. As part of the spin-off, Firstextile and Fred Yang, CEO and founder of the company, agreed that Jiangsu Fanbai Men's Apparel Co., Ltd., which is the subsidiary fully owned by Jiangyin Firstextile Co., Ltd and operates retail stores under "VARPUM" brand, will be sold to Fred Yang at a fair market price amounting to RMB 11.9 mn (approx. EUR 1.6 mn). The valuation of the purchase price was carried out by an independent and certified appraisal firm in China. Dr. Yann Samson, Chairman of the Supervisory Board of Firstextile AG, comments: "We observed the development in the retail business very closely and had several discussions with the Management Board during the year. Finally we came to the conclusion that Firstextile should focus on its core competence. Here we see very good chances to grow further the business sustainably." Richard Cao, CFO of Firstextile AG, adds: "Establishing a retail brand is a time and cash intensive project. With less than 1% revenue share to the group and even operating loss in 2014, spinning-off the 'VARPUM' brand will not have a relevant impact on our revenue and earnings situation - neither in 2014, nor in the future. Quite the contrary: we are convinced that focusing on our roots is the right path. We can use the free resources in our other business and thereby further push the Uniforms and Fabrics segments as well as the wholesale business in the Branded Products segment." For 2014 the company expected total revenues between EUR 190 million and EUR 210 million and an EBIT margin of between 16% and 18%. Preliminary figures 2014 will be published on 26 February 2015; the complete annual report 2014 will be available on 29 April 2015. Company profile Firstextile is the leading manufacturer of high-end yarn-dyed fabric in the Chinese market with a market share of approx. 9% in terms of volume in 2011. It also markets fabric and shirts specifically designed for uniforms used by Chinese government institutions and enterprises, as well as its own branded men's shirts with the brand "Firstextile" for the wholesale business. 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. As the company already operates almost at its maximum capacity it plans to use the net proceeds from the successful completion of the IPO in November 2012 and further cash flows to double the current after-finishing capacity of 36 million meters to 72 million meters in order to meet future demand. At the same time, weaving capacity is intended to be expanded from short of 11 million meters to 27 million meters and dyeing capacity from 7,900 tons to 15,800 tons. --------------------------------------------------------------------- 22.12.2014 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG. The issuer is solely responsible for the content of this announcement. The DGAP 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: Firstextile AG Lyoner Str. 14 60528 Frankfurt am Main Germany Phone: +49 (0) 69 6655 4416 Fax: +49 (0) 69 6655 4418 E-mail: [email protected] Internet: www.firstextile.de ISIN: DE000A1PG8V8 WKN: A1PG8V Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin, Düsseldorf, Stuttgart End of News DGAP News-Service --------------------------------------------------------------------- 308279 22.12.2014