Bijou Brigitte modische Accessoires : Half-year financial report as of 30 June 2022 (PDF / 929 KB)

Overview

Sales: EUR 131.3 million

(previous year: EUR 63.4 million)

EBT: EUR 11.7 million

(previous year: EUR -27.2 million)

Store network: 905 stores (31 December 2021: 926)

Updated forecast for the 2022 financial year

INTERIM GROUP MANAGEMENT REPORT

FUNDAMENTALS OF THE GROUP

The Group's fundamentals have not materially changed compared to the Group management report as of 31 December 2021.

ECONOMIC REPORT

Overall economic conditions

Global economic growth has ground to a halt as a result of the current negative events. The Russian war of aggression on Ukraine has increased inflation around the world, causing real wages in many countries to fall and putting the brakes on private consumption. Supply shortages have increased again. The outlook for the global economy has weakened considerably.1

The economic recovery from the coronavirus pandemic is also being dampened by high inflation in Europe; prices for energy and food are particularly affected. Its heavy dependence on fossil fuels from

1 Kiel Institute for the World Economy (IfW): Kiel Institute Economic Outlook No. 91, 15.6.2022

2 European Commission: Summer 2022 Economic Forecast,14.7.2022

3 ifo Institute: ifo Economic Forecast Summer 2022, 15.6.2022

4 German Trade Association (HDE): HDE Consumption Barometer, August 2022

Russia makes the European economy particularly vulnerable to developments on the energy markets.2

Although the German economy recovered from the effects of the coronavirus pandemic in the first half of the current year,3 persistently high inflation as well as the increased level of uncertainty regarding the supply and cost development of energy had a noticeable impact on consumer sentiment in Germany.4

In the period from January to June 2022, the German retail industry recorded actual overall growth of 0.7 per cent compared with the same period of the

previous year; nevertheless, the textiles/apparel/footwear and leather goods sector recorded a 69.1% increase in sales.5 The stationary fashion retail business as a whole was able to increase sales by an average of 118.0% in the first half of 2022. However, these high growth rates are mainly attributable to the months-long closure of shops in the same period last year due to the coronavirus pandemic. Stationary fashion retail remains 15.0% lower than in 2019.6 The e-commerce sector was also unable to escape the widespread disruption to the consumer climate, recording a 1.3% decline in overall sales in the first half of the current year compared with the same period of the previous year. However, online sales were 32.9% higher than in the first half of 2019.7

Business trend and position

Business development of the Group as a whole

Due to the gradual lifting of coronavirus-related restrictions on the stationary retail business, pent-up demand in private households became apparent in the first six months of this year, which contributed to the normalisation of consumer behaviour. As a result, sales in Bijou Brigitte stores gathered

5 German Federal Statistical Office: Press release no. 323, 1.8.2022

6 Textilwirtschaft: TW-Testclub, 12.7.2022

7 Bundesverband E-Commerce und Versandhandel Deutschland e.V. (bevh): Press release of 6.7.2022

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momentum again in the first half of 2022. Group sales increased by 107.1% in the reporting period, from EUR 63.4 million in the same period last year to EUR 131.3 million.

Business trend by segment

The Group's segments developed positively in the first half of 2022 due to the lifting of pandemic- related restrictions. In the German segment, sales rose 188.0%, from EUR 22.4 million to EUR 64.7 million. In the Spanish segment, sales increased by 42.0%, from EUR 11.7 million to EUR 16.6 million. In Italy, the Group achieved a sales volume of EUR 12.9 million (previous year: EUR 8.8 million; +47.2%). Portugal reported sales of EUR 3.8 million, up by 128.5% on the prior-year figure of EUR 1.7 million. In the French segment, sales rose by 51.7% year-on-year, from EUR 7.6 million to EUR 11.5 million. The "Other countries" segment recorded sales of EUR 21.8 million (previous year: EUR 11.2 million; +93.6 %).

Changes to the store network

As of 30 June 2022, the Bijou Brigitte Group's store network consisted of 905 stores (31 December 2021: 926). Seven stores were opened in the first six months of the year, while 28 were closed. As part of the streamlining of the store network, most of the store closures took place in Spain, followed by Germany and France. Overall, 16 branches were renovated and/or optimised. One store was relocated to a new site.

As of 30 June 2022, the store network comprised 523 concessions (31 December 2021: 512).

Earnings position

The positive development of the Bijou Brigitte Group's sales and profit in the first half of 2022 was significantly influenced by the discontinuation of government-mandated coronavirus protective measures. The Group recorded a profit before

income taxes of EUR 11.7 million (previous year: loss of EUR 27.2 million).

Other operating income declined from EUR 4.1 million to EUR 3.1 million, mainly due to the discontinuation of government coronavirus subsidies.

The cost of materials was equivalent to 20.1% of sales in the first half of 2022 (previous year: 21.2%). The slight decrease is primarily due to higher write- downs in the previous year and a lower volume of price-reduced items.

In the reporting period, personnel costs rose by 25.1%, from EUR 30.4 million to EUR 38.0 million. This is mainly explained by the end of the short-time work that had been ordered by the Group - and thus the end of short-time allowance payments - as well as by the lifting of pandemic-related store closures. As a result of store closures, the number of full-time equivalent employees of the Bijou Brigitte Group fell to 2,209 as of 30 June 2022 (31 December 2021: 2,256).

Impairment of intangible assets, depreciation of property, plant and equipment and amortisation of rights of use amounted to EUR 23.5 million in the first half of 2022, compared to EUR 24.9 million in the previous year. The decline is primarily due to the reduction of the store network as well as the strong reduction in investments over the last two years.

The item "Other operating expenses" increased by 39.5% in the first six months of 2022 from EUR 23.6 million (H1 2021) to EUR 32.9 million. This trend is mainly attributable to the resumption of store operations and the associated increase in sales commissions.

The financial result showed a slight improvement from EUR -2.3 million in the previous year to EUR -

2.0 million. Group earnings after income taxes in the first half of 2022 amounted to EUR 8.3 million

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Financial position

Cash flow from operating activities developed in the reporting period as of the end of June to EUR 25.3 million (30 June 2021: EUR -8.7 million). This development is due in particular to the positive Group earnings.

Cash flow from investing activities came to EUR -2.2 million compared with EUR -0.8 million on 30 June 2021, mainly due to investments in store renovations and new openings.

In the first half of 2022, cash flow from financing activities amounted to EUR -19.9 million (previous year: EUR -20.4 million). This change mainly results from the reduction of the store network.

The Group has no loans with banks or other credit institutions. Available overdraft facilities remained the same as in the previous year and were not utilised in the first half of 2022.

Net assets

Non-current assets decreased to EUR 141.3 million in the reporting period (31 December 2021: EUR 147.0 million), due in particular to the reduction in the network of stores.

Inventories rose slightly from EUR 58.6 million (31 December 2021) to EUR 65.8 million, mainly due to the higher volume of orders to mitigate delivery delays.

Current assets (excluding cash) grew by EUR 5.9 million, from EUR 68.5 million on 31 December 2021 to EUR 74.4 million. This is primarily attributable to the higher inventories.

Cash and cash equivalents increased by 3.6%, from EUR 139.5 million (31 December 2021) to EUR 144.4 million at the end of the reporting period. The main

reason for this development is the positive earnings trend.

Total assets climbed by EUR 5.2 million to EUR 360.2 million on the reporting date of 30 June 2022 from EUR 355.0 million (31 December 2021). On 30 June 2022, Group equity amounted to EUR 222.1 million compared to EUR 213.0 million on 31 December 2021. The ratio of equity in relation to total assets was therefore 61.7% (31 December 2021: 60.0%).

Non-current liabilities declined by EUR 2.4 million to EUR 74.6 million (30 June 2022) from EUR 77.0 million (31 December 2021), mainly due to the lower lease liabilities resulting from the reduction in the network of stores and ongoing repayments.

Overall statement of the Management Board on the economic situation of the Bijou Brigitte Group

For the Bijou Brigitte Group, the first half of 2022 was marked by the lifting of coronavirus restrictions in the stationary retail business and increasingly improved consumer sentiment. The clear signs of recovery from the coronavirus crisis had a positive effect on the net assets, financial position and results of operations of Bijou Brigitte. At EUR 131.3 million, the Group reported a 107.1% increase in sales overall compared with the same period of the previous year (30 June 2021: EUR 63.4 million). An upward trend could be observed in all of the Group's segments during the first six months of 2022.

The focus of the Bijou Brigitte Group in the second half of 2022 will be on minimising the indirect impact of the Russian war of aggression on its business. Supply and price developments on the energy market, as well as potential shortages of raw materials, are being continually monitored. Appropriate measures are being taken to contain or offset cost increases to the extent possible, for example by adjusting prices. The growing shortage of skilled workers is also a major challenge for the

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Group. The second half of the year will continue to be marked by digitalisation. This includes expanding social media activities to address customers on all relevant channels. However, consumer sentiment is dependent on inflation and remains highly uncertain. Should the coronavirus pandemic flare up again, it could once again lead to economic disruption.

The Management Board of Bijou Brigitte considers the Group's situation to still be stable, and does not expect to see any threat to its ability to continue as a going concern. Depending on the further development of the energy market, inflation, and the consumer climate, it is still difficult to arrive at an overall assessment.

OPPORTUNITIES AND RISK REPORT

Bijou Brigitte presented the fundamental risk management methods applied on pages 39 et seq. of the 2021 Annual Report.

Overall statement of the Management Board

In the 2022 financial year, the Bijou Brigitte Group continues to monitor the macroeconomic environment, developments in the retail sector, and its in-house processes in order to identify risks and opportunities early on. Structured systematic risk management processes have ensured the efficient management of overall risks in the Group. The entire Group is permanently focused on risk monitoring, due in particular to the coronavirus pandemic and the Russian war of aggression against Ukraine, with its associated risks and uncertainties.

After assessment of all current risks and interdependencies, from today's perspective the company finds no risks that could jeopardise its existence. The company has sufficient levels of equity and liquidity to ensure its risk-bearing capacity. There is no threat to business activities.

New material risks in the 2022 financial year

Newly included in the risk assessment are indirect risks stemming from the Russian war of aggression, such as changes in the social and economic framework conditions for procurement and the economy. These include inflation risks, changes on the financial markets, changes in consumer behaviour, and high procurement costs for energy and raw materials. IT risks pertaining to hardware and software as well as cybercrime were also reassessed. With regard to warehouse logistics, materials management risks were identified and assessed for the first time. Social media was also newly included in the risk analysis.

The opportunities and risks that were recorded or assessed for the first time are explained in detail below.

Pandemic

The potential risks posed by governmental measures to contain infection rates during a pandemic can have huge effects on the entire Bijou Brigitte Group. In particular, potential shop closures during lockdowns and far-reaching access restrictions in the stores can lead to massive declines in sales while costs continue. The impact of the coronavirus pandemic continued to affect the global economy negatively in 2022, particularly by causing disruptions in supply chains. Possible new virus variants and a resulting new wave of infections could make it necessary for state governments to renew restrictions and safety measures in the autumn and winter of 2022/23, thereby creating massive uncertainty. Bijou Brigitte is continuously monitoring the current political and economic development in the European countries and takes measures at an early stage to mitigate the risk to the extent possible. This includes the consolidation of the entire store network, especially the closure of unprofitable stores, the securing of liquidity and the permanent implementation of cost-saving measures. Investments that are not absolutely necessary are largely put on hold and online retailing is

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