Takko - Good and lucky too

All,

The bonds already moved up earlier this month, but they will likely do so again.

Takko needed such a quarter and thanks to a well received collection - they got it.

In June Takko booked an 'outrageous' +31% LfL sales. June was a strong month for all of German apparel monolabels, making up for -10% in the previous year, but +31% take biblical proportions.

Sales:

- Germany LfLs are up 5.4% and Group LfLs 7.4%.

Gross Margin:

- GM % was slightly below our initial expectations, but in total E10m above model (which essentially continued a trend of marginally negative LfLs per quarter at slightly stronger margins than we are now seeing).

Cost control:

- Cost control was very strong. The high LfL sales were achieved with the for the quarter typically low marketing expenses. By contrast, following the slow first quarter, we expected higher expenses to shift the stock. Rent expense (pre IFRS16) was also E3m lower than prior year, despite the roll-out.

Frugal other CF:

- The company avoided the usual summer quarter cash drag on various other CF items, something we believe may be only temporary.

Cash:

- But overall, net cashflow was some E20m better than model.

Result:

- The high adjusted EBITDA print gives the company sufficient covenant headroom.

- Liquidity has also significantly strengthened.

Wolfgang