Annual Report • Feb 19, 2015
Annual Report
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"2014 finished strongly with very good growth in our e-commerce," said Henrik Bunge, CEO of Björn Borg.
| MSEK | Oct–Dec 2014 |
Oct–Dec 2013 |
Full-year 2014 |
Full-year 2013 |
|---|---|---|---|---|
| Net sales** | 135.3 | 99.3 | 538.8 | 496.0 |
| Gross profit margin**, % | 54.1 | 52.2 | 52.9 | 51.5 |
| Operating profit | 3.6 | –12.5 | 56.0 | 21.2 |
| Operating margin, % | 2.6 | neg | 10.4 | 4.3 |
| Profit after tax | 5.9 | –11.0 | 47.6 | 13.9 |
| Earnings per share, SEK | 0.18 | –0.40 | 1.94 | 0.86 |
| Brand sales* | 343 | 332 | 1,431 | 1,521 |
*Estimated total sales of Björn Borg products at the consumer level, excluding VAT, based on reported sales at the wholesale level.
** As of 2014 the company has changed its income statement format, which is now based on type of cost rather than function, as was done before. As net sales and cost of goods sold are defined with the new format, net sales and the gross profit margin for comparative periods in 2013 may deviate slightly from reported values in 2013.
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The year finished strongly with net sales rising by 36% in Q4 compared with 2013. The result was driven by solid growth in e-commerce and strong re-order sales in our own markets, Sweden and Finland.
The quarterly sales increase was partly due to a weak comparable quarter, Q4 2013, when a large part of shipments was delayed until Q1 2014, but also because of increased sales volumes and positive currency effects driven by a strong dollar.
Operating profit for the quarter is significantly better than the same quarter in 2013, but is still low in relation to sales, since about SEK 9 million was allocated for part of the restructurings we initiated in 2014, mainly of the Group's sports apparel operations.
In Q4 Björn Borg finalized a new business plan, Northern Star, which centers on three areas: an increased focus on sports fashion, our own e-commerce and a stronger geographical presence in North Europe. The emphasis has been on creating a performance culture where the business plan has been broken down to an individual level and individual measurable goals for 2015 have been created for everyone in the organization.
Björn Borg is maintaining its focus on underwear, innovative communication and takes an active stand for more love in the world. The business plan also establishes new financial objectives for the period through 2019, which are communicated in this report.
In summing up 2014, Björn Borg improved all its key indicators, with increased sales and gross margin and more than double the operating profit of the previous year, despite the above-mentioned provision of about SEK 9 million in Q4. For the full-year, part of the positive result is due to the shipment delays in early 2014 and positive currency effects.
Together we created a clear business plan during the second half of the year and made progress in establishing a performance culture that will help us reach our future goals and celebrate the victories we achieve.
Head coach Henrik Bunge
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Sales by distributors and licensees in the product areas underwear, sportswear and bags improved in the fourth quarter. Footwear and the smaller product areas fragrances and eyewear reported declines during the quarter. Total brand sales (excluding VAT) rose by 3 percent to SEK 343 million (332) for the fourth quarter, but decreased by 6 percent to SEK 1,431 million (1,521) for the full-year. Adjusted for currency effects, brand sales were unchanged for the quarter and down 9 percent for the full-year.
Brand sales in the underwear product area fell by 4 percent for the full-year. Underwear accounted for 61 percent (60) of brand sales.
Brand sales of sportswear declined by 12 percent. Sales also decreased in footwear, bags, eyewear and fragrances. In total, sales of licensed products fell by 9 percent for the full-year.
Among large markets, Belgium and Finland saw good growth during the year, while the Netherlands, Sweden, Norway and Denmark reported declines. Among Björn Borg's smaller markets, England posted good growth numbers.
During the fourth quarter a third store was opened in Helsinki, Finland. The Norwegian distributor opened two new stores in Oslo. As of December 31, 2014 there were a total of 41 (38) Björn Borg stores, of which 18 (17) are Group-owned.
* Estimated total sales of Björn Borg products at the consumer level, excluding VAT, based on reported sales at the wholesale level.
** Underwear: Men's and women's underwear, swimwear, socks and adjacent products. Other product areas: Sportswear, fragrances, footwear, bags and eyewear.
Sales were higher during the fourth quarter with an improved operating profit compared with the same period in 2013.
The Group's net sales amounted to SEK 135.3 million (99.3) during the fourth quarter, up 36 percent. Excluding currency effects, the increase was 29 percent. The main reason for the sales increase is that the underwear product company shipped out a larger share of its spring/summer collection compared with the same quarter in 2013, which was affected by significant shipment delays. In addition, the collection was larger in 2014 in comparison with the same collection the previous year. The product company for sportswear also shipped out a larger share of its spring/summer collection compared with the same quarter in 2013. The Swedish wholesale company for underwear had a good quarter and saw increased sales, while the wholesale company for footwear declined slightly. The British and Finnish wholesaling operations performed positively. The Group-owned retail operations reported a slight decline during the quarter, while e-commerce developed very strongly. Total royalties increased slightly as a result of higher brand sales during the quarter.
The Group's net sales amounted to SEK 538.8 million (496.0) during the full-year 2014, an increase of 9 percent. Excluding currency effects, sales rose by 6 percent.
Previously announced shipment delays at the turn of 2014 in the underwear and sportswear product companies raised sales for 2014 by about SEK 25 million. Stronger foreign currencies also contributed to higher sales during the year, by about SEK 15 million. For the year as a whole, revenue in the two product companies including currency effects explain a significant share of the increase. The British and Finnish
wholesaling operations developed positively during the year. Sales for the Swedish wholesale companies for underwear and footwear decreased during the year, with tough market conditions leading to declining collections primarily in fall 2014. Group-owned retail sales declined, while e-commerce continued to perform strongly. Royalties decreased as a result of lower brand sales during the year.
The gross profit margin for the fourth quarter improved to 54.1 percent (52.2), partly due to higher margins in the sportswear product company and the Swedish underwear wholesaling company. Excluding currency effects, the margin would have been 55.1 percent.
Despite higher operating expenses during the quarter, a higher gross profit led to an increase in operating profit to SEK 3.6 million (–12.5). The operating margin was 2.6 percent (–12.6). Operating expenses excluding goods for resale were SEK 6.5 million higher year-on-year. Restructuring expenses of about SEK 9 million mainly related to the relocation of the sportswear operations to Sweden were charged against operating profit for the quarter. An expansion of the Parent Company's organization has led to higher staff costs. At the same time growth in e-commerce led to an increase in volume-related expenses within these operations.
Net financial items amounted to SEK 2.1 million (3.1). The positive net is mainly due to exchange rate fluctuations on receivables in foreign currency. The realized and unrealized return on investments, less interest on the bond loan, negatively affected the Group's net financial items by SEK 4.9 million (+0.8). Profit before tax was SEK 5.6 million (–9.4).
The gross profit margin for the full-year increased to 52.9 percent (51.5). Excluding currency effects, the margin would have been 53.2 percent.
The sales increase and improved gross profit margin during the year, coupled with slightly lower operating expenses, explains the improvement in operating profit, which rose to SEK 56.0 million (21.2). The operating margin was 10.4 percent (4.3). Operating expenses excluding goods for resale decreased by SEK 2.5 million during the year despite a restructuring reserve of about SEK 9 million mainly related to the ongoing relocation of the sportswear operations to Sweden. The discontinued operations in China reduced expenses by about SEK 9.4 million compared with 2013. At the same time growth in e-commerce led to an increase in volume-related expenses within these operations, while more Group-owned stores also added to expenses.
Net financial items amounted to SEK 7.2 million (3.7). The increase is mainly due to exchange rate fluctuations on receivables in foreign currency. The realized and unrealized return on investments, less interest on the bond loan, negatively affected the Group's net financial items by SEK 3.4 million (+2.1). Profit before tax increased to SEK 63.1 million (24.8).
| Operating revenue, SEK thousands |
Operating profit, SEK thousands |
Operating margin | |||||
|---|---|---|---|---|---|---|---|
| Business segment | Revenue source | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 |
| Brand | Royalties | 78,481 | 77,499 | 19,569 | 14,697 | 25% | 19% |
| Product development | Products | 356,818 | 294,148 | 34,825 | 4,043 | 10% | 1% |
| Wholesale | Wholesale revenues | 220,018 | 256,386 | 6,282 | 15,526 | 3% | 6% |
| Retail | Retailers | 92,195 | 80,480 | –4,726 | –13,106 | –5% | –16% |
| Less internal sales | –203,015 | –209,267 | – | – | – | – | |
| Total | 544,497 | 499,246 | 55,950 | 21,160 | 10% | 4% |
The Group consists of a total of thirteen companies, nine of which operate under the Björn Borg brand on every level from product development to wholesaling and consumer sales in its own Björn Borg stores.
The Brand segment primarily consists of royalty revenue and expenses associated with the brand.
The business segment's operating revenue amounted to SEK 78.5 million (77.5) in 2014. External operating revenue decreased to SEK 37.5 million (38.3) as a result of the year's lower brand sales. It should be noted that the royalties Björn Borg Sport receives from its customers are also reported in the Brand segment.
The additional purchase price paid annually to the former brand owner amounted to about SEK 28 million (30) in 2014. The annual additional purchase price is payable through December 31, 2016.
Operating profit amounted to SEK 19.6 million (14.7), an increase of 33 percent for the year. The improved operating result is due to lower net operating expenses for branding activities during the year.
The Björn Borg Group has global responsibility for development, design and production of underwear and adjacent products as well as sportswear through Björn Borg Sport.
The business segment's operating revenue amounted to SEK 356.8 million (294.1) in 2014, an increase of 21 percent. External operating revenue amounted to SEK 233.8 million (187.1). The increase compared with 2013 is mainly due to the previously announced shipment delays in both product companies at the turn of 2014. The decrease in sales of mainly the large fall/winter underwear collection was partly compensated by a stronger spring/winter 2015 collection, revenues from which were recognized in the last quarter of 2014.
Operating profit increased to SEK 34.8 million (4.0) thanks to the higher sales as well as an improved gross profit margin in this segment, not least in sportswear. The previously announced shipment delays also positively affected profit for the year. A stronger USD had a positive effect on sales and operating profit as well. Operating expenses in the segment were in line with 2013.
The Björn Borg Group is the exclusive wholesaler of underwear and adjacent products in Sweden, Finland and England as well as footwear in Sweden, Finland and the Baltic countries.
The segment's operating revenue decreased by 14 percent in 2014 to SEK 220.0 million (256.4). External operating revenue decreased to SEK 192.6 million (204.2). The British and Finnish operations saw sales growth, while the Swedish wholesaling operations for underwear and footwear had a weaker result compared with 2013.
Operating profit amounted to SEK 6.3 million (15.5) as a result of lower sales and higher operating expenses in the Finnish and British operations. A slightly positive currency effect was mainly due to a stronger EUR and GBP during the year.
The Björn Borg Group owns and operates a total of 18 stores and factory outlets in Sweden, Finland and England that sell underwear, adjacent products, sportswear and other licensed products. Björn Borg also sells online through www.bjornborg.com.
As of January 1, 2014 revenue and expenses attributable to the Group-owned stores in Finland and England are also reported in this segment. Previously these items were not reported separately from the wholesaling operations due to limited sales.
Operating revenue in the Retail segment increased by 15 percent in 2014 to SEK 92.2 million (80.5). External net sales rose by 16 percent during the year to SEK 80.6 million (69.2). The increase is due to a continued strong performance in e-commerce, where sales grew by 79 percent to SEK 22.2 million (12.4). Swedish retail revenue declined during the year. Sales for outlets and comparable Björn Borg stores in Sweden were down 7 percent year-on-year.
The operating loss for 2014 improved to SEK 4.7 million, against a year-earlier loss of SEK 13.1 million. The result is no longer charged with the operations in China.
Intra-Group sales for the full-year 2014 amounted to SEK 203.0 million (209.3).
The Björn Borg Group is active in an industry with seasonal variations. Sales and earnings vary by quarter. See the figure on quarterly net sales and operating profit on page 4.
The Group's cash flow from operating activities amounted to SEK 54.7 million (38.0) in 2014. A significant improvement in the operating result year-on-year was accompanied by increased tied-up working capital during the year. Previously announced shipment delays at the turn of 2014 resulted in unusually low accounts receivable as of December 31, 2013, due to which tied-up capital was higher than in 2013.
Total investments in tangible and intangible non-current assets amounted to SEK 2.8 million (9.6) for the year.
The Björn Borg Group's cash & cash equivalents and investments amounted to SEK 218.2 million (218.8) and interestbearing liabilities (the bond loan) amounted to SEK 187.7 million (192.9) at year-end. The year's distribution of SEK 37.7 million (75.4) was offset by positive cash flows from operating activities in 2014.
In April 2012 the company issued a bond loan on NASDAQ OMX Stockholm that carries an annual coupon rate corresponding to the 3-month STIBOR rate +3.25 percentage points, maturing in April 2017. After transaction expenses of about SEK 1.3 million for the bond loan and repurchase of corporate bonds with a nominal value of SEK 11 million, the carrying amount of the bond loan amounted to SEK 187.7 million as of December 31, 2014.
The surplus liquidity from the issuance of the bond loan is placed in interest-bearing financial instruments, highly liquid corporate bonds, within the framework of the financial policy laid down by the Board of Directors. As of December 31, 2014 investments had been made in bonds with a book value of SEK 133.1 million, which represents the fair value on the same date, compared with SEK 136.5 million on December 31, 2013. As a rule, bonds in foreign currency are hedged.
As a commitment for the above-mentioned bond loan, the company has pledged to ensure that the ratio between the Group's net debt and operating profit before depreciation and amortization does not exceed 3.00 on the last day of each quarter and that the Group maintains an equity/assets ratio of at least 30 percent at any given time. As of December 31,
2014 the ratio was –0.47 (–0.93), i.e., a positive net cash balance, and the equity/assets ratio was 46.7 percent (45.5). A complete description of commitments and conditions of the bond loan is provided in the prospectus, which is available on the company's website and from the Swedish Financial Supervisory Authority.
No changes were otherwise made with regard to pledged assets and contingent liabilities compared with December 31, 2013.
The average number of employees in the Group was 129 (159) for the full-year 2014, of whom 66 percent (59) are women. The decrease is due to the discontinued operations in China and the inventory management company Anteros, which was divested in 2013.
There were no transactions with related parties during the year.
In its operations the Björn Borg Group is exposed to risks and uncertainties. Information on the Group's risks and uncertainties can be found on pages 42-43 and in note 3 in the annual report 2013. The company's assessment of these risks and uncertainties has not changed since the assessment made in connection with the publication of the annual report for 2013.
There are no significant events to report following the conclusion of the calendar year.
Björn Borg AB (publ) is primarily engaged in intra-Group activities. The company also owns 100 percent of the shares in Björn Borg Brands AB, Björn Borg Footwear AB, Björn Borg Sport BV, Björn Borg Inc. and Björn Borg Services AB. It also owns 80 percent of the shares in Björn Borg UK, 75 percent of the shares in Bjorn Borg (China) Ltd and 75 percent of the shares in Bjorn Borg Finland Oy.
The Parent Company's net sales amounted to SEK 14.3 million (12.7) during the fourth quarter and SEK 59.7 million (49.9) during the full-year.
Profit before tax amounted to SEK 82.2 million (99.0) for the fourth quarter and SEK 62.7 million (54.3) for the fullyear. Cash & cash equivalents and investments amounted to SEK 181.2 million (178.1) as of December 31, 2014. For the full-year investments in intangible and tangible non-current assets amounted to SEK 1.3 million (0.9).
As announced in the press release on December 8, 2014, the Parent Company acquired the remaining shares in Björn Borg Sport BV from the minority owners in December.
Björn Borg currently has 25,148,384 shares outstanding.
The Board of Directors of Björn Borg has established a business plan for the period 2015-2019 with the following long-term financial objectives for operations:
The sales objective for 2019 corresponds to average annual organic growth of 13 percent. The sales increase is expected to come from new product groups in sports fashion as well as expanded geographical distribution within all the product groups.
The Board of Directors has decided to propose to the Annual General Meeting 2015 a distribution of SEK 1.50 (1.50) per share for the financial year 2014, corresponding to 77 percent of net income. As proposed, the distribution would be paid through an automatic redemption, where every share is divided into a common share and a redemption share. The redemption share will then automatically be redeemed for SEK 1.50 per share. Payment for the redemption share, contingent on the approval of the AGM, is expected to be made around June 12, 2015.
The Board of Directors' proposal corresponds to a transfer to shareholders of SEK 37.7 million (37.7). For 2013 a distribution of SEK 1.50 was paid per share, corresponding to 175 percent of net income.
The annual report for 2014 will be available on the company's website by April 20, 2015.
The Annual General Meeting for the financial year 2014 will be held in Stockholm at 6 pm on May 11, 2015.
This condensed interim report for the Group has been prepared in accordance with IAS 34 Interim Financial Reporting and applicable provisions of the Annual Accounts Act. The interim report for the Parent Company has been prepared in accordance with chapter 9 of the Annual Accounts Act on interim reporting and RFR 2 Accounting in Legal Entities. The accounting principles applied in the interim report conform to the accounting principles applied in the preparation of the consolidated accounts and annual report for 2013, as described on page 54 in the annual report 2013, with the exceptions detailed below.
New or amended IFRS and IFRIC interpretations effective as of January 1, 2014 have not had a significant effect on the interim report or consolidated financial statements. For further information, see the annual report 2013.
During the winter and spring 2013-2014, in connection with the implementation of a new enterprise system, Björn Borg conducted a review of its external financial statements. Against this backdrop, management has determined that an income statement format based on type of cost rather than function, as was done before, provides a more relevant and reliable income statement for users of Björn Borg's financial reports. Comparative figures in this year-end report have been restated in accordance with the revised classification by cost.
This year-end report has not been reviewed by the company's auditors.
As a policy, the company does not issue earnings forecasts.
| Condensed | |||||
|---|---|---|---|---|---|
| SEK thousands | Note | Oct–Dec 2014 |
Oct–Dec 2013 |
Full-year 2014 |
Full-year 2013 |
| Net sales | 135,278 | 99,276 | 538,753 | 496,048 | |
| Other operating revenue | 2,348 | 993 | 5,744 | 3,198 | |
| Operating revenue | 137,626 | 100,269 | 544,497 | 499,246 | |
| Goods for resale | –62,142 | –47,416 | –253,560 | –240,574 | |
| Other external expenses | 1 | –36,821 | –33,928 | –122,732 | –124,381 |
| Staff costs | –31,816 | –29,316 | –102,617 | –100,419 | |
| Depreciation/amortization of tangible/intangible non-current assets |
–3,159 | –1,666 | –8,877 | –6,828 | |
| Other operating expenses | –129 | –478 | –761 | –5,884 | |
| Operating profit | 3,559 | –12,534 | 55,950 | 21,160 | |
| Net financial items | 2,053 | 3,135 | 7,198 | 3,689 | |
| Profit before tax | 5,612 | –9,399 | 63,148 | 24,849 | |
| Tax | 292 | –1,644 | –15,577 | –10,943 | |
| Profit for the period | 5,906 | –11,043 | 47,572 | 13,906 | |
| Profit for the period attributable to: | |||||
| Parent Company's shareholders | 4,473 | –10,088 | 48,835 | 21,613 | |
| Non-controlling interests | 1,433 | –955 | –1,263 | –7,707 | |
| Earnings per share before and after dilution, SEK | 0.18 | –0.40 | 1.94 | 0.86 | |
| Number of shares | 25,148,384 | 25,148,384 | 25,148,384 | 25,148,384 |
| Condensed | ||||
|---|---|---|---|---|
| SEK thousands | Oct–Dec 2014 |
Oct–Dec 2013 |
Full-year 2014 |
Full-year 2013 |
| Net profit for the period | 5,906 | –11,043 | 47,572 | 13,906 |
| OTHER COMPREHENSIVE INCOME | ||||
| Components that may be reclassified to profit or loss | ||||
| Translation difference for the period | –3,131 | –1,288 | –7,052 | –2,035 |
| Accumulated translation difference reclassified | ||||
| to profit or loss for discontinued operations | 12 | |||
| Total other comprehensive income for the period | –3,131 | –1,288 | –7,052 | –2,023 |
| Total comprehensive income for the period | 2,775 | –12,331 | 40,520 | 11,883 |
| Total comprehensive income for the period attributable to | ||||
| Parent Company's shareholders | 1,999 | –11,376 | 43,717 | 19,590 |
| Non-controlling interests | 776 | –955 | –3,197 | –7,707 |
Condensed
| SEK thousands | Note | Dec 31 2014 |
Dec 31 2013 |
|---|---|---|---|
| Non-current assets | |||
| Goodwill | 19,265 | 18,966 | |
| Trademarks | 187,532 | 187,532 | |
| Other intangible assets | 4,390 | 4,748 | |
| Tangible non-current assets | 12,334 | 16,519 | |
| Long-term receivable | 2 | 9,800 | 13,400 |
| Deferred tax assets | 31,713 | 31,126 | |
| Total non-current assets | 265,034 | 272,291 | |
| Current assets | |||
| Inventories, etc. | 40,381 | 39,031 | |
| Accounts receivable | 68,232 | 52,321 | |
| Other current receivables | 19,573 | 34,104 | |
| Investments | 2 | 133,147 | 136,519 |
| Cash & cash equivalents | 85,080 | 82,304 | |
| Total current assets | 346,414 | 344,279 | |
| Total assets | 611,447 | 616,570 | |
| Equity and liabilities | |||
| Equity | 285,708 | 280,650 | |
| Deferred tax liabilities | 38,350 | 39,694 | |
| Other non-current liabilities | 13,292 | 24,115 | |
| Bond loan | 2 | 187,738 | 192,927 |
| Accounts payable | 25,064 | 26,549 | |
| Other current liabilities | 61,295 | 52,635 | |
| Total equity and liabilities | 611,447 | 616,570 |
| Condensed | |||
|---|---|---|---|
| Equity attributable to | Non- | ||
| Parent Company's | controlling | Total | |
| SEK thousands | shareholders | interests | equity |
| Opening balance, January 1, 2013 | 354,051 | –9,835 | 344,216 |
| Total comprehensive income for the year | 19,590 | –7,707 | 11,883 |
| Distribution for 2012 | –75,445 | – | –75,445 |
| Non-controlling interests that arose through acquisition | – | 6 | 6 |
| Translation difference | –12 | – | –12 |
| Discontinued business | –4,003 | 4,003 | – |
| Closing balance, December 31, 2013 | 294,181 | –13,533 | 280,650 |
| Opening balance, January 1, 2014 | 294,181 | –13,533 | 280,650 |
| Total comprehensive income for the period | 43,717 | –3,197 | 40,520 |
| Distribution for 2013 | –37,723 | – | –37,723 |
| Offset issue in subsidiary | – | 9,466 | 9,466 |
| Acquisition of minority shares | –9,822 | 2,619 | –7,203 |
| Closing balance, December 31, 2014 | 290,353 | –4,645 | 285,708 |
| Condensed | ||||
|---|---|---|---|---|
| SEK thousands | Oct–Dec 2014 |
Oct–Dec 2013 |
Full year 2014 |
Full year 2013 |
| Cash flow from operating activities | ||||
| Before changes in working capital | 10,080 | –4,320 | 63,363 | 13,382 |
| Changes in working capital | 48,626 | 41,317 | –8,629 | 24,617 |
| Cash flow from operating activities | 58,706 | 36,997 | 54,734 | 37,999 |
| Investments in intangible non-current assets | –1,294 | –839 | –1,428 | –1,533 |
| Investments in tangible non-current assets | –561 | –4,013 | –1,353 | –8,088 |
| Disposal of subsidiaries | – | –2,369 | – | –2,369 |
| Investments/divestments | 1,404 | 10,354 | –106 | 28,886 |
| Cash flow from investing activities | –451 | 3,133 | –2,887 | 16,895 |
| Distribution | – | – | –37,723 | –75,445 |
| Acquisition of minority shares | –1,410 | – | –1,410 | –6,547 |
| Amortization of loans | –1,861 | –2,206 | –7,434 | –7,207 |
| Repurchase of bond loan | –963 | – | –5,833 | – |
| Cash flow from financing activities | –4,234 | –2,206 | –52,400 | –89,199 |
| Cash flow for the period | 54,021 | 37,924 | –553 | –34,304 |
| Cash & cash equivalents at beginning of period | 29,383 | 44,481 | 82,304 | 116,195 |
| Translation difference in cash & cash equivalents | 1,676 | –101 | 3,329 | 413 |
| Cash & cash equivalents at end of period | 85,080 | 82,304 | 85,080 | 82,304 |
Group
| Oct–Dec | Oct–Dec | Full year | Full year | ||
|---|---|---|---|---|---|
| SEK thousands | 2014 | 2013 | 2014 | 2013 | |
| Gross profit margin, % | 54.1 | 52.2 | 52.9 | 51.5 | |
| Operating margin, % | 2.6 | neg | 10.4 | 4.3 | |
| Profit margin, % | 4.1 | neg | 11.7 | 5.0 | |
| Return on capital employed, % | 14.8 | 7.0 | 14.8 | 7.0 | |
| Return on average equity, % | 17.2 | 6.9 | 17.2 | 6.9 | |
| Profit attributable to Parent Company's shareholders | 4,473 | –10,088 | 48,835 | 21,613 | |
| Equity/assets ratio, % | 46.7 | 45.5 | 46.7 | 45.5 | |
| Equity per share, SEK | 11.36 | 11.16 | 11.36 | 11.16 | |
| Investments in intangible non-current assets | 1,294 | 839 | 1,428 | 1,533 | |
| Investments in tangible non-current assets | 561 | 4,013 | 1,353 | 8,088 | |
| Business combinations | 1,410 | – | 1,410 | 6,547 | |
| Depreciation, amortization and impairment losses for the period | –3,159 | –1,666 | –8,877 | –6,828 | |
| Average number of employees | – | – | 129 | 159 |
| Group | ||||
|---|---|---|---|---|
| SEK thousands | Oct–Dec 2014 |
Oct–Dec 2013 |
Full year 2014 |
Full year 2013 |
| Operating revenue | ||||
| Brand | ||||
| External revenue | 8,851 | 8,132 | 37,484 | 38,323 |
| Internal revenue | 8,773 | 7,337 | 40,997 | 39,176 |
| 17,624 | 15,469 | 78,481 | 77,499 | |
| Product development | ||||
| External revenue | 61,137 | 26,417 | 233,755 | 187,090 |
| Internal revenue | 25,012 | 17,728 | 123,063 | 107,058 |
| 86,149 | 44,145 | 356,818 | 294,148 | |
| Wholesale | ||||
| External revenue | 40,770 | 43,249 | 192,649 | 204,150 |
| Internal revenue | 6,634 | 10,856 | 27,369 | 52,236 |
| 47,404 | 54,105 | 220,018 | 256,386 | |
| Retail | ||||
| External revenue | 26,868 | 22,422 | 80,609 | 69,243 |
| Internal revenue | 2,738 | 2,762 | 11,586 | 11,237 |
| 29,606 | 25,184 | 92,195 | 80,480 | |
| Less internal sales | –43,157 | –38,634 | –203,015 | –209,267 |
| Operating revenue | 137,626 | 100,269 | 544,497 | 499,246 |
| Operating profit | ||||
| Brand | 3,861 | 1,318 | 19,569 | 14,697 |
| Product development | –637 | –11,467 | 34,825 | 4,043 |
| Wholesale | –966 | –1,887 | 6,282 | 15,526 |
| Retail | 1,301 | –498 | –4,726 | –13,106 |
| Operating profit | 3,559 | –12,534 | 55,950 | 21,160 |
The difference between operating profit for reported segments, SEK 55 950 thousand (21 160), and profit before tax, SEK 63 148 thousand (24 849), is net financial items, SEK 7 198 thousand (3 689).
| Group | ||||||||
|---|---|---|---|---|---|---|---|---|
| SEK thousands | Q4 2014 |
Q3 2014 |
Q2 2014 |
Q1 2014 |
Q4 2013 |
Q3 2013 |
Q2 2013 |
Q1 2013 |
| Net sales | 135,278 | 163,723 | 96,969 | 142,783 | 99,275 | 160,228 | 105,759 | 130,786 |
| Gross profit margin, % | 54.1 | 52.4 | 52.5 | 52.8 | 52.2 | 51.8 | 52.1 | 50.1 |
| Operating profit/loss | 3.559 | 32,821 | 522 | 19,048 | –12,534 | 23,610 | 860 | 9,225 |
| Operating margin, % | 2.6 | 20.0 | 0.5 | 13.3 | neg | 14.7 | 0.8 | 7.1 |
| Profit/loss after financial items | 5,612 | 33,834 | 3,939 | 19,987 | –9,399 | 22,695 | 4,467 | 7,086 |
| Profit margin, % | 4.1 | 20.7 | 4.1 | 14.0 | neg | 14.2 | 4.2 | 5.4 |
| Earnings per share before/after dilution, SEK |
0.18 | 1.00 | 0.15 | 0.62 | –0.40 | 0.74 | 0.23 | 0.30 |
| Number of Björn Borg stores at end of period | 41 | 38 | 38 | 38 | 38 | 54 | 57 | 57 |
| of which Group-owned Björn Borg stores | 18 | 17 | 17 | 17 | 17 | 16 | 17 | 17 |
| Brand sales | 342,904 | 452,422 | 253,976 | 382,081 | 331,665 | 482,268 | 275,379 | 431,815 |
| Condensed | |||||
|---|---|---|---|---|---|
| SEK thousands | Note | Oct–Dec 2014 |
Oct–Dec 2013 |
Full year 2014 |
Full year 2013 |
| Net sales | 14,347 | 12,711 | 59,677 | 49,855 | |
| Other operating revenue | 422 | 230 | 639 | 320 | |
| Operating revenue | 14,769 | 12,941 | 60,316 | 50,175 | |
| Goods for resale | –109 | –63 | –2,147 | –242 | |
| Other external expenses | 1 | –13,766 | –12,807 | –47,687 | –46,997 |
| Staff costs | –9,921 | –7,774 | –31,683 | –31,425 | |
| Depreciation/amortization of tangible/intangible non-current assets | –504 | –568 | –2,125 | –2,103 | |
| Other operating expenses | 15 | –189 | –819 | –692 | |
| Operating loss | –9,516 | –8,460 | –24,145 | –31,284 | |
| Result from shares in subsidiaries | 67,395 | 50,725 | 67,395 | 50,725 | |
| Net financial items | –6,763 | 12,664 | –11,666 | –9,239 | |
| Profit after financial items | 51,116 | 54,929 | 31,584 | 10,202 | |
| Group contributions received | 30,246 | 43,755 | 30,246 | 43,755 | |
| Appropriations | 874 | 295 | 874 | 295 | |
| Profit before tax | 82,236 | 98,979 | 62,704 | 54,252 | |
| Tax | 1,275 | –107 | 1,275 | 296 | |
| Profit for the period | 83,511 | 98,872 | 63,979 | 54,548 | |
| Other comprehensive income | – | – | – | – | |
| Total comprehensive income for the period | 83,511 | 98,872 | 63,979 | 54,548 |
| Condensed | Dec 31 | Dec 31 | |
|---|---|---|---|
| SEK thousands | Note | 2014 | 2013 |
| Non-current assets | |||
| Intangible non-current assets | 393 | 595 | |
| Tangible non-current assets | 2,849 | 4,627 | |
| Long-term receivable | 2 | 9,800 | 13,400 |
| Deferred tax | 961 | – | |
| Shares in Group companies | 335,331 | 321,243 | |
| Total non-current assets | 349,334 | 339,865 | |
| Current assets | |||
| Receivables from Group companies | 392,513 | 182,141 | |
| Current receivables | 14,143 | 10,749 | |
| Investments | 2 | 133,147 | 136,519 |
| Cash & cash equivalents | 48,081 | 41,559 | |
| Total current assets | 587,884 | 370,968 | |
| Total assets | 937,218 | 710,833 | |
| Equity and liabilities | |||
| Equity | 144,143 | 117,887 | |
| Untaxed reserves | 1,014 | 1,888 | |
| Deferred tax | – | 314 | |
| Bond loan | 2 | 187,738 | 192,927 |
| Other non-current liabilities | 5,792 | – | |
| Due to Group companies | 573,668 | 382,447 | |
| Accounts payable | 4,725 | 5,407 | |
| Other current liabilities | 20,138 | 9,963 | |
| Total equity and liabilities | 937,218 | 710,833 |
| Condensed | Full year | Full year | |
|---|---|---|---|
| SEK thousands | 2014 | 2013 | |
| Opening balance | 117,887 | 138,784 | |
| Distribution | –37,723 | –75,444 | |
| Total comprehensive income for the period | 63,979 | 54,548 | |
| Closing balance | 144,143 | 117,887 | |
| Group | Parent Company | |||
|---|---|---|---|---|
| Full-year 2014 |
Full-year 2013 |
Full-year 2014 |
Full-year 2013 |
|
| Cost of premises | 28,735 | 26,294 | 9,322 | 8,385 |
| Selling expenses | 23,439 | 28,108 | 3,147 | 5,926 |
| Marketing expenses | 35,876 | 32,949 | 19,940 | 16,853 |
| Administrative expenses | 22,338 | 30,743 | 13,217 | 14,926 |
| Other | 12,344 | 6,287 | 2,061 | 907 |
| Total | 122,732 | 124,381 | 47,687 | 46,997 |
Securities held for trading relate to investments in corporate bonds quoted on NASDAQ OMX and have been measured at their quoted prices. Forward exchange contracts are measured according to level 2 based on observable information as of the closing date with respect to exchange rates and market interest rates for the remaining maturities.
Net investments in the company's portfolio of corporate bonds amounted to SEK 106 thousand for the full-year 2014.
| through profit or loss | Level 1 Level 2 Level 3 | ||
|---|---|---|---|
| Securities held for trading | 133,306 | – | – |
| Derivatives held for trading | – | –159 | – |
| Total assets | 133,306 | –159 | – |
Björn Borg has recorded a liability for the additional purchase price to the seller of the minority interest in Björn Borg Sport at fair value. As of December 31, 2014, the carrying amount was SEK 5,792 thousand (0) and is included in Level 3. The carrying amount of financial instruments at amortized cost coincides with their fair value as of December 31, 2014, with the exception of the bond loan, whose fair value amounted to SEK 181,440 thousand, compared with a carrying amount of SEK 187,738 thousand.
In 2013 the company granted an interest-bearing, SEK 17 million collateralized loan to the Dutch distributor expiring on March 31, 2017 with quarterly amortizations of SEK 900,000 as of December 31, 2013.
Net sales less cost of goods sold divided by net sales.
Operating profit as a percentage of net sales.
Profit before tax as a percentage of net sales.
Earnings in relation to the weighted average number of shares during the period and earnings per share adjusted for any dilution effect.
Profit after financial items (over a rolling 12-month period) plus financial expenses as a percentage of average capital employed.
Net profit (over a rolling 12-month period) 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.
Equity as a percentage of total assets.
Refers to operating expenses excluding goods for resale, i.e., other external expenses, staff costs, depreciation/amortization and other operating expenses.
Estimated total sales of Björn Borg products at the consumer level, excluding VAT, based on reported sales at the wholesale level.
The Board of Directors and the CEO 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 material risks and uncertainties faced by the Parent Company and the companies in the Group.
Stockholm, February 19, 2015
Fredrik Lövstedt Chairman
Martin Bjäringer Board Member
Isabelle Ducellier Board Member
Kerstin Hessius Board Member
Mats H Nilsson Board Member
Nathalie Schuterman Board Member
Anders Slettengren Board Member
Henrik Bunge President and CEO
Annual report in April 2015 Annual General Meeting 2014 held on May 11, 2015 at 18:00 (CET) Interim report January–March 2015 released on May 11, 2015 at 18:00 (CET) Interim report January–June 2015 released on August 12, 2015 Interim report January–September 2015 released on November 6, 2015
Henrik Bunge, CEO, telephone +46 8 506 33 700 Magnus Teeling, CFO, telephone +46 8 506 33 700
Björn Borg AB Tulegatan 11 SE-113 53 Stockholm, Sweden www.bjornborg.com
Björn Borg is required to make public the information in this year-end report in accordance with the Securities Market Act. The information was released for publication on February 19, 2015 at 7:30 am (CET).
The Group owns the Björn Borg trademark and its core business is underwear and sportswear. It also offers footwear, luggage & bags and eyewear through licensees. Björn Borg products are sold in around thirty markets, of which Sweden and the Netherlands are the largest. The Björn Borg Group has operations at every level from branding to consumer sales in its own Björn Borg stores. Total sales of Björn Borg products in 2014 amounted to about SEK 1.4 billion, excluding VAT, at the consumer level. Group net sales amounted to SEK 539 million in 2014, with an average of 129 employees. The Björn Borg share has been listed on NASDAQ Stockholm since 2007.
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