Annual Report • Feb 11, 2010
Annual Report
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"In the fourth quarter we saw the same cautiousness in the market that we had earlier in the year, at the same time that exchange rate effects are no longer compensating for weaker sales. For 2009 as a whole, we can nevertheless say that the Björn Borg brand stood firm and that the Group is well-prepared for further expansion. The year was distinguished by intense efforts to adapt the entire business to our new vision to be the best in fashion underwear. In 2010 we will see the effects of the measures we have now taken, including in the form of a wider assortment and several new products," said Arthur Engel.
| Oct-Dec | Oct-Dec | Full-year | Full-year | |
|---|---|---|---|---|
| SEK million | 2009 | 2008 | 2009 | 2008 |
| Brand sales* | 422 | 476 | 1,976 | 1,971 |
| Net sales | 102.2 | 131.2 | 519.9 | 526.6 |
| Gross profit margin, % | 55.7 | 54.1 | 51.3 | 53.8 |
| Operating profit | 19.4 | 26.0 | 112.6 | 128.8 |
| Operating margin, % | 19.0 | 19.8 | 21.7 | 24.5 |
| Profit after tax | 13.5 | 22.8 | 80.9 | 99.2 |
| Earnings per share, SEK | 0.54 | 0.91 | 3.22 | 3.96 |
| Earnings per share after dilution, SEK | 0.53 | 0.91 | 3.21 | 3.96 |
* Reported as of Q1 2009 as estimated total sales of Björn Borg products at the consumer level, excluding VAT, based on reported wholesale sales.
Björn Borg has obviously been affected by the turbulence that hit the market with full force during the year, creating uncertainty on the part of both distributors and consumers. But we feel that 2009 was still a good year. Total brand sales of Björn Borg products and the Group's revenues remained at the same levels as previous year, which we feel is totally acceptable.
We were affected in the fourth quarter by the fact that our distributors had ordered holiday merchandise before the summer, when I expect most of them were more cautious in their market assessment than they are today. At the same time we no longer have exchange rate effects to compensate for weaker sales.
In terms of earnings, we lost ground during the year, mainly due to a lower gross margin from a stronger dollar, but also because of higher costs for our efforts in the U.S. Our cost level was lowered during the second half of the year, and with the phase-out of our own operations in the U.S. and good cost controls we look forward to a stable cost level.
In 2009 we conducted a thorough analysis of the Group's operations and the brand's potential, which led to a new strategy. We now have a clear direction for our efforts going forward. The goal is to be the best at fashion underwear, our core business.
To get there we have identified three success factors: innovative and faster product development, creative marketing communications and efficient international distribution. To strengthen these functions, we worked intensely during the year to adapt our routines, competencies and organization.
All distributors and product companies have been reviewed to ensure that we have the right representation for a further expansion with our new focus on underwear. As a result, we have terminated our agreements in France and England, begun cooperating with a strong new distributor in Germany and established new, more uniform distribution agreements. In the U.S. we have decided not to further pursue operations on our own. During the year we also signed agreements in several new, exciting markets where consumer sales have recently been launched: Italy, Greece, Portugal and Chile. E-commerce developed well during the year and we see good opportunities to grow with a new, improved platform that will be launched this spring.
One consequence of our focus on underwear is that we now have decided to license the footwear product area to an international shoe company. With a strong partner with well-established product development and distribution internationally, we believe Björn Borg footwear will have the opportunity to develop better than it would within the Group, where we have other priorities. We truly believe that there is good potential for our footwear that we want to capitalize on in the best way possible. The Group's existing sales organization will continue to handle distribution in Sweden and Finland, which account for nearly half of our footwear sales, and the Group will continue to receive royalties on other sales.
We feel that accelerating the pace of product development and offering a broader, innovative product range is the key to our continued growth in both new and mature markets. Last fall we devoted a great deal of energy to paving the way for this. We will now see the results through a broader range of underwear. Just recently we launched a new spring basics collection of women's underwear in a variety of colors called Love All. Several underwear launches for both men and women will follow, and during the second quarter we are planning a major launch of our new category, Kids.
At the same time we are improving our marketing communications with a new branding platform and increased support for our network. Our more ambitious aims in product development and marketing communications have been positively received by distributors and retailers, which is an important sign that we are focusing on the right areas.
Uncertainty where our market is headed still lingers, and we are carefully following developments. Our feeling is that there is nevertheless cautious optimism looking ahead to 2010 both in our network and the market as a whole.
Regardless of short-term fluctuations, we have our sights set on our long-term goals and expansion plans for the brand. We will continue to work aggressively to grow in both new and established markets. We want to reach even more markets with committed, skilled partners when we see the right opportunities.
Arthur Engel President
Brand sales (excluding VAT) were largely unchanged for the fullyear 2009 at SEK 1,967 million (1,971). During the fourth quarter brand sales amounted to SEK 422 million (476), a decrease of 11 percent compared with the same quarter of 2008.
Brand sales in the underwear product area rose by 2 percent in 2009 compared with the same period in 2008. The same increase was reported for adjacent products – menswear. Overall sales in the footwear product area rose by 2 percent during the period following a major gain during the first quarter and slightly weaker quarters over the remainder of the year. Sales of licensed bags and fragrances were largely unchanged, while fragrance and eyewear sales decreased. Underwear accounted for 63 percent of brand sales during the year.
Brand sales in the smaller markets continued to rise in 2009, though from low levels, and accounted for 13 percent of total brand of sales during the year. Established markets underperformed. The Netherlands noted a slight sales decrease for the year as a whole, mainly in the licensed area of women's underwear. Sweden, Denmark and Norway posted a negative sales trend.
A new franchise store opened in Helsingborg, Sweden, in the fourth quarter of 2009. For the full-year a total of three new stores were opened and one was closed. At the end of the period there were 46 (44) Björn Borg stores, of which 10 (11) are Group-owned.
In February 2010 Björn Borg signed a letter of intent to license out the product development and a portion of sales in the footwear area to Trend Design Group, a well-established production and wholesale company for men's and women's footwear with distribution in large parts of Europe as well as North America and Australia. Distribution of Björn Borg shoes in Sweden and Finland, corresponding to 42 percent of sales in the footwear product area in 2009, remain within the Group and will be managed by the current sales organization, while Trend Design Group will be responsible for sales in other markets.
Licensing of the footwear product area is a consequence of the Group's focus on underwear and adjacent products. At the same time Björn Borg feels that its footwear operations will have a better chance of a broader international expansion by licensing to a partner with experience and an extensive network of contacts in the footwear market.
Licensing is not expected to affect sales in 2010, because of the long lead times, which means it will take time before the change has an impact. In terms of profit, it is expected to have a marginally positive effect in 2010 owing to lower costs for product development and personnel. A slight decrease in revenue is expected in the product development segment as of 2011, at the same time that licensed sales will generate higher royalties for the Group.
Sales and operating profit decreased during the fourth quarter.
Group sales during the third quarter amounted to SEK 102.2 million (131.2), a decrease of 22 percent. Sales were negatively affected by lower export sales in the product development segment. Swedish underwear distribution and Group-owned retail operations also posted lower sales.
Group sales during the year amounted to SEK 519.9 million (526.6), a decrease of 1 percent. Sales were negatively affected during the year by lower volume, at the same time that they were positively affected by the higher dollar exchange rate and higher footwear exports early in the year.
The gross profit margin increased during the fourth quarter to 55.7 percent (54.1), mainly because the distribution and retail segments accounted for a larger share of sales compared with the same period last year. A weaker dollar also had a positive effect.
Operating profit amounted to SEK 19.4 million (26.0) during the quarter with an operating margin of 19.0 percent (19.8). Profit before tax decreased during the period to SEK 19.7 million (28.7).
Operating profit was adversely affected by lower sales, but positively by lower operating costs. Operating costs decreased compared with the fourth quarter of 2008, when SEK 5 million in non-recurring expenses were recognized. Further cost efficiencies in marketing and sales reduced operating expenses compared with the same quarter a year earlier.
The gross profit margin decreased during the year to 51.3 percent (53.8). Operating profit amounted to SEK 112.6 million (128.8) with an operating margin of 21.7 percent (24.5). Profit before tax declined during the period to SEK 111.7 million (134.8). Operating expenses as a share of net sales remained fairly constant at 29.6 percent (29.4). The main reason for the lower gross profit margin was the stronger dollar during much of the year and its impact on the Distribution segment in particular. Compared with the same period of 2008, operating profit was negatively affected by additional expenses for marketing investments in the U.S.
As of December 31, 2009 the company had 25,148,384 shares outstanding. Earnings per share before and after dilution amounted to SEK 3.22 (3.96) and SEK 3.21 (3.96), respectively.
The Group comprises eight companies that operate under the Björn Borg brand on every level from product development to distribution and consumer sales in its own Björn Borg stores.
Sales in the Brand and other segment primarily consist of royalty revenue, sales of services within the Björn Borg network and intra-Group services.
Net sales for the full-year reached SEK 138.3 million (142.3), a decrease of 3 percent, which was mainly due to lower brand sales for the licensed product areas eyewear, fragrances, bags and women's wear.
Operating profit for the full-year amounted to SEK 43.9 million (42.7), an increase of 3 percent. Profit was affected positively by lower selling and marketing expenses.
The Group has global responsibility for development, design and production of underwear, adjacent products and footwear.
The segment's net sales amounted to SEK 339.2 million (337.2)
for the full-year, an increase of 1 percent. The increase was primarily due to substantially higher footwear exports, mainly to the Netherlands, during the first quarter, but also the stronger dollar during the first three quarters.
Operating profit increased to SEK 51.0 million (50.0) as a result of the higher exports and stronger dollar.
The Björn Borg Group is the exclusive distributor of underwear, adjacent products and footwear in Sweden and the U.S.
Net sales in the Distribution segment decreased by 2 percent for the full-year to SEK 193.8 million (197.0). This was mainly due to a decline in Swedish underwear distribution.
Operating profit amounted to SEK 9.6 million (27.5). The decrease was mainly due to marketing investments in the U.S., lower sales in Swedish underwear distribution and the stronger dollar, which affected gross profit negatively.
The Björn Borg Group owns and operates eight stores in the Swedish market that sell underwear, adjacent products, footwear and licensed products. Additionally, Björn Borg operates two factory outlets.
Net sales in the Retail segment amounted to SEK 54.5 million (55.0) during the twelve-month period, a decrease of 1 percent. Same-store sales decreased by 9 percent in the fourth quarter. Sales fluctuated during the quarter but finished weakly. The decline was mainly in women's underwear and was partly due to insufficient of correct merchandise in stores. Operating profit for the full-year decreased to SEK 8.0 million (8.6) due to the lower sales, but also because of a slightly lower gross profit margin.
Intra-Group sales amounted to SEK 205.8 million (204.9) for the year.
The Björn Borg Group is active in an industry with seasonal variations. Sales and earnings vary by quarter. With the current product mix, the second quarter is generally the weakest in terms of profit. See the figure on quarterly net sales and operating profit on page 3.
Cash flow from operating activities in the Group amounted to SEK 94.1 million (87.0) for the full-year 2009. The improvement was mainly due to a reduction in working capital resulting from a lower accounts receivable. The positive effect on working capital was offset, however, by lower accounts payable owing to earlier shipments to a distributor as well as the payment of a tax liability for 2008.
Total investments in tangible and intangible non-current as-
| SEK thousands | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | |
|---|---|---|---|---|---|---|---|
| Operating area | Revenue source | Sales | Sales | Operating profit | Operating profit | Operating margin Operating margin | |
| Brand and other | Royalties and services | 138,277 | 142,292 | 43,942 | 42,656 | 32% | 30% |
| Product development | Products | 339,179 | 337,187 | 50,984 | 50,009 | 15% | 15% |
| Distribution | Wholesale sales | 193,815 | 196,967 | 9,635 | 27,475 | 5% | 14% |
| Retail | Retailers | 54,491 | 55,027 | 8,032 | 8,611 | 15% | 16% |
| Less internal sales | –205,847 | –204,916 | – | – | – | – | |
| Total | 519,915 | 526,556 | 112,594 | 128,751 | 22% | 24% |
sets amounted to SEK 4.5 million (5.1) during the year, the large part of which was attributable to a new enterprise system, reconstruction of premises and a new web platform.
For the full-year 2009, cash & cash equivalents increased by SEK 55.0 million (54.1).
The Björn Borg Group's cash & cash equivalents (net cash position) amounted to SEK 296.5 million (241.5) at the end of the period. The equity/assets ratio was 76.2 percent (69.0). The company has no interest-bearing liabilities.
Net financial items were affected negatively during the year by translation differences of assets for operations in the U.S. and lower interest rates on savings balances compared with the same period last year.
No changes were made with regard to pledged assets and contingent liabilities compared with December 31, 2008, except for the dispute mentioned below. For further information, see note 22 on page 44 of the annual report 2008.
Björn Borg AB is engaged in a dispute with its English distributor regarding shipments that were not delivered. Arbitration proceedings have begun and a settlement is expected in 2010. Because the financial impact of the dispute cannot be reliably determined, the company has not allocated any provisions for the dispute in these accounts. The financial effect is not expected to materially impact the Group.
The average number of employees in the Group for the period January-December was 92 (88), of whom 60 were women.
During the period transactions were executed on market terms with Klockaren Fastighetsförvaltning i Varberg AB. For more detailed information, see note 11 on page 42 of the annual report 2008.
In its operations, the Björn Borg Group is exposed to risks and uncertainties. For further information, refer to pages 29–30 in the annual report 2008.
There are no significant events to report following the conclusion of the report period, except what is mentioned above regarding license of the footwear product area.
Björn Borg AB (publ) is primarily engaged in intra-Group activities. In addition, the Parent Company owns 100 percent of the shares in Björn Borg Brands AB and Björn Borg Footwear Holding AB.
The Parent Company's net sales for the fourth quarter amounted to SEK 16.1 million (22.6). For the full-year 2009 the Parent Company's net sales amounted to SEK 47.6 million (50.6). The profit before tax amounted to SEK 96.9 million for the fourth quarter, against a year-earlier loss of SEK 0.7 million, while the profit for the full-year was SEK 84.4 million, against a year-earlier loss of SEK 16.5 million. Cash & cash equivalents amounted to SEK 287.7 million (220.3). For the full-year investments in tangible and intangible non-current assets amounted to SEK 2.3 million (0.8).
The financial objectives of the Björn Borg Group operations are as follows:
• Long-term cash reserves equivalent to 10–20 percent of annual sales.
The long-term objective will be achieved if established markets grow slightly below the average growth target and new markets provide stronger growth. In 2010 sales growth could fall slightly below the target, since several new markets are being added.
The surplus liquidity generated by meeting the new financial objectives will be distributed gradually during the forecast period, starting in 2010.
Operating investments are expected to fall in the range of 2–5 percent depending on the addition of any new concept stores.
The Board of Directors has decided to recommend a dividend of SEK 5.00 (1.50) per share for the financial year 2009, corresponding to 155 percent (38) of net income. See above regarding financial objectives and dividend.
The annual report for 2009 will be available on the company's website in the week of March 15, 2010.
The Annual General Meeting of Björn Borg AB will be held in Stockholm at 5:00 p.m. on April 15, 2010. The location will be announced in the notice of the meeting.
This interim report has been prepared in accordance with IAS 34 Interim Financial Reporting. The same accounting principles were applied during the period as in 2008, as described on pages 36–38 of the latest annual report, with the exceptions indicated below.
IAS 1 (Revised) Presentation of Financial Statements is effective January 1, 2009. The revised standard has affected the recognition of translation adjustments for foreign operations retroactively to December 31, 2008. These revenues and expenses were previously recognized directly in equity, but are now reported in a separate statement directly after the income statement. Another revision is the new terminology used in the financial reports. As of January 1, 2009 a new standard, IFRS 8 Operating Segments, takes effect. IFRS 8 is a disclosure standard and does not impact the Group's total comprehensive income, financial position, cash flow and changes in equity. The operating segments are unchanged compared with the latest annual report. None of the other new or amended standards and interpretations from IFRIC has had a material effect on the financial position or total comprehensive income of the Group or the Parent Company.
This interim report has been reviewed by the company's auditors. Their review report can be found on page 10.
As a policy, the company does not issue earnings forecasts.
Björn Borg currently has 25,148,384 shares outstanding.
Condensed
| SEK thousands | Oct-Dec 2009 |
Oct-Dec 2008 |
Full-year 2009 |
Full-year 2008 |
|---|---|---|---|---|
| Net sales | 102,247 | 131,233 | 519 915 | 526,556 |
| Cost of goods sold | –45,333 | –60,202 | –253 271 | –243,058 |
| Gross profit | 56,914 | 71,031 | 266 644 | 283,498 |
| Distribution expenses | –24,897 | –31,367 | –102 390 | –105,380 |
| Administrative expenses | –9,210 | –10,115 | –38 463 | –37,133 |
| Development expenses | –3,380 | –3,500 | –13,197 | –12,234 |
| Operating profit | 19,427 | 26,049 | 112,594 | 128,751 |
| Net financial items | 285 | 2,644 | –936 | 6,071 |
| Profit before tax | 19,712 | 28,693 | 111,658 | 134,822 |
| Tax | –6,219 | –5,904 | –30,756 | –35,620 |
| Profit for the period | 13,493 | 22,789 | 80,902 | 99,202 |
| Profit/loss attributable to: | ||||
| Parent Company's shareholders | 13,487 | 22,810 | 80,867 | 99,210 |
| Minority interests | 5 | –21 | 35 | –8 |
| Other comprehensive income | ||||
| Translation adjustments for foreign operations | –99 | –493 | 844 | –536 |
| Total comprehensive income for the period | 13,394 | 22,296 | 81,746 | 98,666 |
| Total comprehensive income for the period attributable to | ||||
| Parent Company's shareholders | 13,389 | 22,317 | 81,711 | 98,674 |
| Minority interests | 5 | –21 | 35 | –8 |
| Earnings per share, SEK | 0.54 | 0.91 | 3.22 | 3.96 |
| Earnings per share after dilution, SEK | 0.53 | 0.91 | 3.21 | 3.96 |
| Number of shares | 25,148,384 | 25,059,184 | 25,148,384 | 25,059,184 |
| Weighted average number of shares | 25,148,384 | 25,047,451 | 25,111,217 | 25,041,134 |
| Effect of dilution* | 257,957 | 7,005 | 118,910 | 34,366 |
| Weighted average number of shares after full dilution | 25,406,341 | 25,054,456 | 25,230,128 | 25,075,500 |
** Björn Borg AB has two outstanding incentive programs based on warrants: 2008:1 and 2008:2. For more detailed information, see page 41 of the annual report 2008.
| SEK thousands | 2009 | December 31 December 31 2008 |
|---|---|---|
| Non-current assets | ||
| Goodwill | 13,944 | 13,944 |
| Trademarks | 187,532 | 187,532 |
| Other intangible assets | 3,437 | 1,696 |
| Tangible non-current assets | 11,150 | 15,366 |
| Total non-current assets | 216,063 | 218,538 |
| Current assets | ||
| Inventories, etc. | 26,455 | 33,752 |
| Current receivables | 65,719 | 106,197 |
| Cash & cash equivalents | 296,484 | 241,498 |
| Total current assets | 388,657 | 381,447 |
| Total assets | 604,720 | 599,985 |
| Equity and liabilities | ||
| Equity | 460,956 | 413,803 |
| Deferred tax liabilities | 40,011 | 32,884 |
| Other non-current liabilities | 40,889 | 46,816 |
| Accounts payable | 15,480 | 45,489 |
| Other current liabilities | 47,385 | 60,993 |
| Total equity and liabilities | 604,720 | 599,985 |
| Condensed | ||
|---|---|---|
| SEK thousands | Full-year 2009 |
Full-year 2008 |
| Opening balance | 413,803 | 342,943 |
| Incentive programs | – | 9,055 |
| New share issues | 2,996 | 694 |
| Dividend | –37,589 | –37,555 |
| Total comprehensive income for the period | 81,746 | 98,666 |
| Closing balance | 460,956 | 413,803 |
| Oct-Dec | Oct-Dec | Full-year | Full-year |
|---|---|---|---|
| 2008 | |||
| –3,846 | 48,611 | 69,246 | 123,214 |
| 40,260 | 5,554 | 24,873 | –36,260 |
| 36,414 | 54,165 | 94,119 | 86,954 |
| –2,058 | –173 | –4,540 | –5,073 |
| – | – | –37,589 | –37,555 |
| 28 | 8,397 | 2,996 | 9,749 |
| 28 | 8,397 | –34,593 | –27,806 |
| 34,384 | 62,389 | 54,986 | 54,075 |
| 262,100 | 179,109 | 241,498 | 187,423 |
| 296,484 | 241,498 | 296,484 | 241,498 |
| 2009 | 2008 | 2009 |
| SEK thousands | Oct-Dec 2009 |
Oct-Dec 2008 |
Full-year 2009 |
Full-year 2008 |
|---|---|---|---|---|
| Gross profit margin, % | 55.7 | 54.1 | 51.3 | 53.8 |
| Operating margin, % | 19.0 | 19.8 | 21.7 | 24.5 |
| Profit margin, % | 19.3 | 21.9 | 21.5 | 25.6 |
| Return on capital employed, % | 3.9 | 6.0 | 20.9 | 28.8 |
| Return on average equity, % | 3.1 | 6.0 | 18.5 | 26.2 |
| Profit attributable to Parent Company's shareholders | 13,487 | 22,810 | 80,867 | 99,210 |
| Earnings per share, SEK* | 0.54 | 0.91 | 3.22 | 3.96 |
| Earnings per share after dilution, SEK | 0.53 | 0.91 | 3.21 | 3.96 |
| Number of shares | 25,148,384 | 25,059,184 | 25,148,384 | 25,059,184 |
| Weighted average number of shares | 25,148,384 | 25,047,451 | 25,111,217 | 25,041,134 |
| Effect of dilution | 257,957 | 7,005 | 118,910 | 34,366 |
| Weighted average number of shares after dilution | 25,406,341 | 25,054,456 | 25,230,128 | 25,075,500 |
| Equity/assets ratio, % | 76.2 | 69.0 | 76.2 | 69.0 |
| Equity per share, SEK | 18.33 | 16.51 | 18.33 | 16.51 |
| Investments in intangible assets | 1,741 | – | 3,160 | 2,200 |
| Investments in tangible assets | 317 | 173 | 1,380 | 2,873 |
| Depreciation and impairment losses for the period | –1,362 | –3,235 | –7,024 | –6,976 |
| Average number of employees | 92 | 88 | 92 | 88 |
| SEK thousands | Oct-Dec 2009 |
Oct-Dec 2008 |
Full-year 2009 |
Full-year 2008 |
|---|---|---|---|---|
| Operating revenue | ||||
| Brand and other | ||||
| External sales | 10,710 | 12,684 | 54,936 | 57,272 |
| Internal sales | 22,791 | 32,307 | 83,341 | 85,020 |
| 33,501 | 44,991 | 138,277 | 142,292 | |
| Product development | ||||
| External sales | 46,048 | 66,366 | 257,391 | 250,608 |
| Internal sales | 15,697 | 22,037 | 81,788 | 86,579 |
| 61,745 | 88,403 | 339,179 | 337,187 | |
| Distribution | ||||
| External sales | 29,759 | 34,872 | 153,102 | 163,655 |
| Internal sales | 16,177 | 13,012 | 40,713 | 33,312 |
| 45,935 | 47,884 | 193,815 | 196,967 | |
| Retail | ||||
| External sales | 15,730 | 17,311 | 54,485 | 55,021 |
| Internal sales | 6 | – | 6 | 6 |
| 15,736 | 17,311 | 54,491 | 55,027 | |
| Less internal sales | –54,670 | –67 356 | –205,847 | –204,916 |
| Operating revenue | 102,247 | 131,233 | 519,915 | 526,556 |
| Operating profit | ||||
| Brand and other | 8,638 | 11,401 | 43,942 | 42,656 |
| Product development | 3,026 | 11,246 | 50,984 | 50,009 |
| Distribution | 2,999 | –2,014 | 9,635 | 27,475 |
| Retail | 4,765 | 5,416 | 8,032 | 8,611 |
| Operating profit | 19,427 | 26,049 | 112,594 | 128,751 |
| Group | ||||||||
|---|---|---|---|---|---|---|---|---|
| SEK thousands | Q4 2009 |
Q3 2009 |
Q2 2009 |
Q1 2009 |
Q4 2008 |
Q3 2008 |
Q2 2008 |
Q1 2008 |
| Brand sales | 422,121 | 566,423 | 385,637 | 602 ,183 | 475,806 | 562,835 | 381,246 | 551,062 |
| Net sales | 102,247 | 155,162 | 97,832 | 164,674 | 131,233 | 160,762 | 95,813 | 138,748 |
| Gross profit margin, % | 55.7 | 50.8 | 50.9 | 49.3 | 54.1 | 54.1 | 55.9 | 51.9 |
| Operating profit | 19,427 | 43,454 | 12,131 | 37,582 | 26,049 | 49,688 | 16,493 | 36,521 |
| Operating margin, % | 19.0 | 28.0 | 12.4 | 22.8 | 19.8 | 30.9 | 17.2 | 26.3 |
| Profit after financial items | 19,712 | 40,830 | 11,871 | 39,245 | 28,693 | 52,277 | 16,594 | 37,258 |
| Profit margin, % | 19.3 | 26.3 | 12.1 | 23.8 | 21.9 | 32.5 | 17.3 | 26.9 |
| Earnings per share, SEK | 0.54 | 1.20 | 0.34 | 1.15 | 0.91 | 1.50 | 0.48 | 1.07 |
| Earnings per share after dilution, SEK | 0.53 | 1.19 | 0.33 | 1.15 | 0.91 | 1.50 | 0.48 | 1.07 |
| Number of Björn Borg stores at end of period | 46 | 45 | 43 | 44 | 44 | 41 | 39 | 36 |
| of which Björn Borg-owned stores | 10 | 10 | 10 | 11 | 11 | 11 | 10 | 10 |
| Condensed | ||||
|---|---|---|---|---|
| SEK million | Oct-Dec 2009 |
Oct-Dec 2008 |
Full-year 2009 |
Full-year 2008 |
| Net sales | 16,076 | 22,598 | 47,608 | 50,630 |
| Cost of goods sold | 5 | –3,418 | –2,407 | –6,975 |
| Gross profit | 16,081 | 19,180 | 45,201 | 43,655 |
| Distribution expenses | –12,814 | –13,814 | –40,826 | –40,235 |
| Administrative expenses | –4,928 | –5,313 | –15,702 | –15,475 |
| Development expenses | –1,971 | –2,125 | –6,281 | –6,190 |
| Operating profit/loss | –3,633 | –2,072 | –17,608 | –18,245 |
| Dividend from subsidiary | 100,000 | – | 100,000 | – |
| Net financial items | 522 | 1,398 | 1,975 | 1,716 |
| Profit/loss before tax | 96,889 | –674 | 84,367 | –16,529 |
| Appropriations | – | –104 | – | –104 |
| Tax | 723 | –15 | 4,017 | 4,424 |
| Profit/loss for the period | 97,612 | –793 | 88,383 | –12,209 |
| Condensed | ||
|---|---|---|
| SEK thousands | December 31 2009 |
December 31 2008 |
| Non-current assets | ||
| Intangible non-current assets | 1,694 | – |
| Tangible non-current assets | 4,238 | 5,543 |
| Shares in Group companies | 54,497 | 54,497 |
| Total non-current assets | 60,428 | 60,040 |
| Current assets | ||
| Receivables from Group companies | 88,903 | 59,551 |
| Current receivables | 5,703 | 6,971 |
| Cash & cash equivalents | 287,657 | 220,348 |
| Total current assets | 382,263 | 286,870 |
| Total assets | 442,691 | 346,910 |
| Equity and liabilities | ||
| Equity | 214,738 | 149,782 |
| Untaxed reserves | 7,359 | 7,359 |
| Due to Group companies | 207,835 | 173,048 |
| Accounts payable | 1,840 | 7,713 |
| Other current liabilities | 10,919 | 9,008 |
| Total equity and liabilities | 442,691 | 346,910 |
The Group owns the Björn Borg trademark and has operations in five product areas: clothing, footwear, bags, eyewear and fragrances. Björn Borg products are sold in fifteen markets, of which Sweden and the Netherlands are the largest. Operations are managed through a network of product and distribution companies which are either part of the Group or are independent companies with licenses for product areas and geographical markets. The Björn Borg Group has operations at every level from branding to consumer sales through its own Björn Borg stores. Total sales of Björn Borg products in 2009 amounted to approximately SEK 2 billion at the consumer level, excluding VAT. Group net sales amounted to SEK 520 million in 2009, with 92 employees at year-end. The Björn Borg share is listed on NASDAQ OMX Nordic, Mid Cap list, since May 7, 2007.
Net sales less cost of goods sold divided by net sales.
Operating margin Operating profit as a percentage of net sales.
Profit margin Profit before tax as a percentage of net sales.
Equity/assets ratio Equity as a percentage of total assets.
Profit after financial items plus financial expenses as a percentage of average capital employed.
Net profit according to the income statement as a percentage of average equity. Average equity is calculated by adding equity at January 1 to equity at December 31 and dividing by two.
Earnings per share in relation to the weighted average number of shares during the period.
Earnings per share adjusted for any dilution effect.
Estimated total sales of Björn Borg products at the consumer level, excluding VAT, based on reported wholesale sales.
The Board of Directors and the President certify that the year-end report provides a true and fair overview of the operations, financial position and results of the Parent Company and the Group and describes the substantial risks and uncertainties faced by the Parent Company and the companies in the Group.
Stockholm, February 11, 2010
Fredrik Lövstedt Chairman
Nils Vinberg Vice Chairman
Monika Elling Board Member Fabian Månsson Board Member
Mats H Nilsson Board Member
Wilhelm Schottenius Board Member
Michael Storåkers Board Member
Arthur Engel President and CEO
We have reviewed the year-end report for Björn Borg AB (publ) for the period January 1, 2009 to December 31, 2009. The Board of Directors and the President are responsible for the preparation and presentation of this year-end report in accordance with IAS 34 and the Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.
We conducted our review in accordance with the Standard on Review Engagements SÖG 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.
A review is substantially less in scope than an audit conducted in accordance with Standards on Auditing in Sweden RS and other generally accepted auditing practices. The procedures performed in a review do not enable us to obtain a level of assurance that would make us aware of all significant matters that might be identified in an audit. Therefore, the conclusion expressed based on a review does not give the same level of assurance as a conclusion expressed based on an audit.
Based on our review, nothing has come to our attention that causes us to believe that the year-end report is not, in all material aspects, prepared in accordance with IAS 34 and the Annual Accounts Act for the Group and in accordance with the Annual Accounts Act for the Parent Company.
Stockholm, February 11, 2010 Deloitte AB
Håkan Pettersson Tommy Mårtensson Authorized Public Accountant Authorized Public Accountant
The Annual General Meeting will be held on April 15, 2010. The interim report January–March 2010 will be released on May 6, 2010. The interim report January–June 2010 will be released on August 19, 2010. The interim report January–September 2010 will be released on November 11, 2010.
For further information, please contact: Arthur Engel, President and CEO, telephone +46 8 506 33 700 Johan Mark, CFO, telephone +46 8 506 33 700
Björn Borg AB Götgatan 78 SE-118 30 Stockholm, Sweden www.bjornborg.com
Björn Borg is required to make public the information in this report in accordance with the Securities Market Act. The information was released for publication on February 11, 2010 at 7:30 a.m. (CET).
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