Quarterly Report • Nov 12, 2008
Quarterly Report
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"Björn Borg continued to develop positively during the quarter. We look to the future with cautious optimism while monitoring factors in the marketplace that might affect consumers. At the same time, we are concentrating on the long-term development and further expansion of the Björn Borg brand and the company," says the new president, Arthur Engel.
| MSEK | July–Sept 2008 |
July–Sept 2007 |
Jan–Sept 2008 |
Jan–Sept 2007 |
Oct 2007– Sept 2008 |
Full-year 2007 |
|---|---|---|---|---|---|---|
| Brand sales* | 704 | 657 1 | ,869 1 | ,584 | 2,523 | 2,237 |
| Net sales | 160.8 1 | 48.6 | 395.3 | 355.1 | 535.1 | 494.9 |
| Gross profit margin, % | 54.1 | 54.6 | 53.7 | 53.4 | 53.8 | 53.6 |
| Operating profit | 49.7 | 49.2 1 | 02.7 | 99.8 1 | 45.0 1 | 42.1 |
| Operating margin, % | 30.9 | 33.1 | 26.0 | 28.1 | 27.1 | 28.7 |
| Profit after tax | 37.6 | 35.2 | 76.4 | 71.8 1 | 06.7 1 | 02.1 |
| Earnings per share, SEK** | 1.50 1 | .42 | 3.05 | 2.96 | 4.27 | 4.18 |
| Earnings per share after dilution, SEK*** | 1.50 1 | .41 | 3.04 | 2.92 | 4.27 | 4.17 |
* Estimated total sales of Björn Borg products at the consumer level, including VAT, based on reported wholesale sales.
** Earnings per share in relation to the weighted average number of shares during the period restated after the split on April 27, 2007.
*** Earnings per share adjusted for any dilution effect after the split on April 27, 2007.
Several of Björn Borg's markets continued to report good growth during the quarter, and the Group increased both its sales and earnings. At the same time weaker consumer spending affected Björn Borg's development in Sweden as well as several of our 15 other markets.
Among new markets, Spain and England stood out with strong sales trends during the quarter – through higher average orders and the addition of new retailers. Several of our established markets also noted fine sales figures. Finland and Belgium grew by nearly 40 percent, though from low levels, and our largest market, the Netherlands, saw a sales increase of 12 percent.
We have left a good platform that my successor as President, Arthur Engel, and our new Sales Director and Vice President, Henrik Fischer, will now take responsibility to manage and develop. They both have the competence and experience to run an international business and expand a strong brand.
Vice Chairman and former President
It is fantastically exciting – and an honor – to have the opportunity to work with one of Sweden's strongest brands. I hope and believe that we – together with Björn Borg's employees and network – will contribute to the further development of the brand and the company. With a very strong position in underwear, long-term owners, a competent organization and ownership of the brand in our own hands, we are in the right position to strengthen Björn Borg's position internationally.
Arthur Engel President
Estimated brand sales, i.e., sales of Björn Borg products at the consumer level, including VAT, based on reported wholesale sales, amounted to SEK 704 million (657) during the third quarter, an increase of 7 percent year-to-year. During the nine-month period brand sales amounted to SEK 1,869 million (1,584). On a rolling 12-month basis, brand sales amounted to SEK 2,523 million.
In the clothing product area, brand sales decreased by 2 percent during the third quarter compared with the same quarter last year, mainly due to lower sales in Denmark, the Netherlands and Norway in the women's underwear segment. Sales in the footwear product area nearly doubled as a result of substantially higher exports primarily to the Netherlands and Denmark. The external product area fragrances also noted strong growth during the quarter, with sales nearly doubling. The product area bags increased by approximately 12 percent, while eyewear decreased by approximately 2 percent during the quarter.
Among established markets, the Netherlands, Belgium and Finland generated the highest growth during the third quarter. The other Nordic markets posted weaker results. Of the new markets, Spain reported the strongest growth during the quarter, with sales increasing several times over and more retailers added. Operations in Germany and France have not developed according to expectations, and an analysis will be made to determine how the brand can be established more quickly in these markets.
* Estimated total sales of Björn Borg products at the consumer level, including VAT, based on reported wholesale sales.
During the third quarter Björn Borg opened a new store in Stockholm specializing in men's clothing. The Dutch franchisee also opened a new store during the quarter. As a result, there were 41 (33) stores at the end of the period, of which 11 (10) are Group-owned. The Dutch franchisee plans to open three new stores during the fourth quarter 2008.
Sales continued to grow during the third quarter with slightly higher operating profit.
Group sales during the third quarter amounted to SEK 160.8 million (148.6), an increase of 8 percent due to continued positive sales trends mainly for the footwear and clothing business segments.
Group sales during the nine-month period amounted to SEK 395.3 million (355.1), an increase of 11 percent.
The gross profit margin decreased to 54.1 percent (54.6) during the third quarter. A weaker U.S. dollar positively affected the gross margin, at the same time that higher export sales in the footwear product area negatively affected the margin.
Operating profit amounted to SEK 49.7 million (49.2) during the quarter, with an operating margin of 30.9 percent (33.1). Profit before tax improved during the period to SEK 52.3 million (48.9).
The lower operating margin is due to cost increases to strengthen the organization and pave the way for further growth, mainly in the Group's newer markets and in product development. This has entailed several new hires in the last year, in addition to startup costs in the U.S. and marketing efforts in other new markets.
The gross profit margin during the nine-month period increased to 53.7 percent (53.4). Operating profit amounted to SEK 102.7 million (99.8) and the operating margin was 26.0 percent (28.1). Profit before tax improved during the period to SEK 106.1 million (99.5). Operating expenses increased as a share of net sales to 27.8 percent, against 25.3 percent in the same period of 2007. The reasons for the change in the gross profit margin and lower operating margin are the same as described for the third quarter.
The number of shares outstanding at the end of the period was 25,041,584. Earnings per share amounted to SEK 3.05 (2.96) for the period January–September 2008. On a fully diluted basis, earnings per share amounted to SEK 3.04 (2.92).
The Group comprises a number of companies that operate under the Björn Borg brand on every level, from product development to distribution and consumer sales in its own concept 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 nine-month period reached SEK 92.3 million (82.0), an increase of 19 percent.
Operating profit amounted to SEK 31.3 million (31.9) for the period. The profit was affected positively by higher sales in the network, but negatively by increased expenses to strengthen the organization.
The Group has global responsibility for development, design and production of clothing and footwear. A licensee for clothing operates in the Benelux market.
The segment's net sales amounted to SEK 248.8 million (214.2) during the nine-month period, an increase of 16 percent. The increase is due to substantially higher footwear exports mainly to the Netherlands and Denmark in the footwear segment and to some extent to clothing.
Operating profit increased to SEK 38.8 million (29.0), as a result of the increased export.
The Björn Borg Group is the exclusive distributor in the clothing and footwear product areas in the Swedish market.
Net sales in the Distribution segment rose to SEK 149.1 million (133.2) during the nine-month period, or by 12 percent. Growth is mainly due to higher clothing sales, but is also a result of the acquisition of Anteros Lagerhantering AB.
Operating profit rose to SEK 29.5 million (29.0), mainly due to higher sales, though also to the lower U.S. dollar.
The Björn Borg Group owns and operates nine stores in the Swedish market that sell clothing, shoes, bags and fragrances. Moreover, Björn Borg operates two factory outlets.
Net sales in the Retail segment amounted to SEK 37.7 million (41.2) during the nine-month period, a decrease of 8 percent. For comparable stores, sales decreased by 16 percent for the nine-month period and 21 percent for the quarter. Operating profit amounted to SEK 3.2 million (9.9). Measures have been taken to improve sales and earnings in Retail, including the appointment of a new management.
Intra-Group sales amounted to SEK 137.6 million (115.6) during 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 32.8 million (46.2) for the period January–September 2008. The changes in working capital are mainly due to increases in accounts receivable and inventories.
Total investments in tangible and intangible non-current assets amounted to SEK 4.9 million (13.8) for the nine-month period, the large part of which is attributable to the reconstruction of concept stores and leasing agreements.
Changes in financing activities are largely due to the dividend. For the period January–September 2008 cash & cash equivalents decreased by SEK 8.3 million, against a year-earlier increase of SEK 75.4 million.
The Björn Borg Group's cash & cash equivalents (net cash balance) amounted to SEK 179.1 million (135.0) at the end of the period. In addition, the Group has unutilized bank overdraft facilities of SEK 122.5 million. The equity/assets ratio was 69.0 percent (65.0).
No changes were made with regard to pledged assets and contingent liabilities compared with December 31, 2007. For further information, see note 24 on page 48 of the annual report 2007.
The average number of employees in the Group for the period was 86 (72), of whom 58 are women. Of the total number of employees, twelve are a result of the acquisition of Anteros Lagerhantering AB on June 30, 2007.
On November 3 Arthur Engel took over as President of Björn Borg and Henrik Fischer as International Sales Director and Vice President. At the same time Nils Vinberg stepped down as President after almost ten years in the Björn Borg management and became Vice Chairman of the company. Arthur Engel and Henrik Fischer both have a broad base of competence and experience in brand development from the international apparel market, including from management positions at Gant.
Nils Vinberg will continue to be available for and support the company's new management. The company will therefore pay a monthly compensation during 12 months, in accordance with Nils Vinberg's previous CEO agreement. This will in its entirety be carried as an expense during the fourth quarter 2008, and amounts to approximately 3 MSEK, including social costs and pension provisions.
An Extraordinary General Meeting will be held on November 13, 2008 at 4:00 pm (CET) at the company's office at Götgatan 78 in Stockholm. The meeting is being called, as previously announced, to approve an incentive program for Björn Borg AB's new President, Arthur Engel, and Vice President and International Sales Director Henrik Fischer. For more information see www.bjornborg.com.
In accordance with the resolution of the Annual General Meeting, Björn Borg's Nomination Committee will be composed of the Chairman of Board and one representative from each of the company's largest shareholders, by votes, as of August 31, 2008. Swedbank Robur funds, one of the three largest shareholders in Björn Borg, has offered its place on the Nomination Committee to the fourth largest shareholder, the Fourth Swedish National Pension Fund. The shareholders have now named their representatives to the Nomination Committee.
In advance of the Annual General Meeting in 2009 Björn Borg's Nomination Committee is composed of the following members: Fredrik Lövstedt, Chairman of Board; Carl Rosvall, representing Martin Bjäringer (through Dirbal B.V.); Stefan Roos, representing SEB Investment Management; and Arne Lööw, representing the Fourth Swedish National Pension Fund.
Björn Borg AB (publ) is primarily engaged in intra-Group activities. In addition, the 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 third quarter amounted to SEK 14.3 million (10.2). During the nine-month period the Parent Company's net sales amounted to SEK 28.0 million (22.1) The loss before tax amounted to SEK –1.3 million (–3.7) for the third quarter and SEK –15.9 million (–16.2) for the nine-month period. Cash & cash equivalents amounted to SEK 112.3 million (12.1). For the nine-month period investments in tangible and intangible noncurrent assets amounted to SEK 0.2 million (6,1).
In its operations, the Björn Borg Group is exposed to risks and uncertainties, which are described in the annual report 2007. For further information, refer to pages 33–34 in the annual report. No additional risk factors have been identified other than those described there.
During the period transactions were executed on market terms with Klockaren Fastighetsförvaltning i Varberg AB. For more detailed information, see note 11 on page 45 of the annual report 2007.
This interim report has been prepared in accordance with the Annual Accounts Act and IAS 34. The accounting principles applied during the period are the same as in 2007, as described on pages 40–42 of the annual report 2007. The interim report is abbreviated and does not contain all the information and disclosures in the annual report 2007. The interim report should therefore be read together with the annual report 2007.
It is not the Company's policy to issue earnings forecasts.
This interim report has been reviewed by the company's auditors. Their review report can be found on page 9.
| SEK thousands | July–Sept 2008 |
July–Sept 2007 |
Jan–Sept 2008 |
Jan–Sept 2007 |
Oct 2007– Sept 2008 |
Full-year 2007 |
|---|---|---|---|---|---|---|
| Net sales | 160,762 | 148,597 | 395,323 | 355,091 | 535,119 | 494,886 |
| Cost of goods sold | –73,793 | –67,522 1 | 82,856 | –165,314 | –247,383 | –229,841 |
| Gross profit | 86,969 | 81,075 | 212,467 | 189,777 | 287,736 | 265,045 |
| Distribution expenses | –25,881 | –21,311 | –74,135 | –58,484 | –97,144 | –81,493 |
| Administrative expenses | –8,501 | –7,813 | –26,819 | –23,329 | –34,109 | –30,619 |
| Development expenses | –2,899 | –2,714 | –8,811 | –8,147 | –11,522 | –10,858 |
| Operating profit | 49,688 | 49,238 | 102,702 | 99,817 | 144,960 | 142,075 |
| Net financial items | 2,589 | –318 | 3,427 | –309 | 3,888 1 | 52 |
| Profit before tax | 52,277 | 48,920 | 106,129 | 99,508 | 148,848 | 142,227 |
| Tax | –14,638 | –13,698 | –29,716 | –27,750 | –42,103 | –40,136 |
| Profit for the period | 37,639 | 35,223 | 76,413 | 71,758 | 106,746 | 102,091 |
| Profit attributable to minority interests | –21 | – | –13 | – | –42 | –29 |
| Profit attributable to Parent Company's shareholders | 37,618 | 35,223 | 76,400 | 71,758 | 106,704 | 102,062 |
| Earnings per share, SEK | 1.50 1 | .42 | 3.05 | 2.96 | 4.27 | 4.18 |
| Earnings per share after dilution, SEK | 1.50 1 | .41 | 3.04 | 2.92 | 4.27 | 4.17 |
| Number of shares | 25,041,584 | 24,743,984 | 25,041,584 | 24,743,984 | 25,041,584 25,036,984 | |
| Weighted average number of shares | 25,041,584 | 24,743,984 | 25,039,028 | 24,261,716 | 24,989,684 | 24,406,699 |
| Effect of dilution* | 25,808 | 309,114 | 52,554 | 300,526 | 0s | 83,461 |
| Weighted average number of shares after full dilution | 25,067,392 | 25,053,098 | 25,091,582 | 24,562,242 | 24,490,160 | 24,490,160 |
* Björn Borg has three outstanding incentive programs based on warrants in Björn Borg AB: option schemes 2006:1, 2006:2 and 2008. For more detailed information, see page 45 of the annual report 2007 and the interim report for the first quarter of 2008.
| SEK thousands | 30 Sept 2008 |
30 Sept 2007 |
31 Dec 2007 |
|---|---|---|---|
| Non-current assets | |||
| Goodwill | 13,944 1 | 3,944 1 | 3,944 |
| Trademarks | 187,532 1 | 87,532 1 | 87,532 |
| Other intangible assets | 2,850 1 | ,004 | 941 |
| Tangible non-current assets | 17,181 1 | 7,169 1 | 7,817 |
| Total non-current assets | 221,507 | 219,649 | 220,234 |
| Current assets | |||
| Inventories | 34,147 | 24,492 | 24,640 |
| Current receivables | 124,923 | 86,843 | 77,093 |
| Cash & cash equivalents | 179,109 1 | 34,974 1 | 87,423 |
| Total current assets | 338,178 | 246,309 | 289,156 |
| Total assets | 559,685 | 465,958 | 509,390 |
| Equity and liabilities | |||
| Equity | 383,110 | 302,903 | 342,943 |
| Deferred tax liabilities | 31,667 | 21,049 | 28,607 |
| Other non-current liabilities | 48,240 | 47,224 | 52,515 |
| Accounts payable | 45,941 | 27,516 | 23,140 |
| Other current liabilities | 50,727 | 67,265 | 62,184 |
| Total equity and liabilities | 559,685 | 465,958 | 509,390 |
The Group in summary
| SEK thousands | Jan–Sept 2008 |
Jan–Sept 2007 |
Full-year 2007 |
|---|---|---|---|
| Opening balance | 342,943 1 | 38,054 1 | 38,054 |
| Incentive programs | 1,242 1 | 2, 737 | 22,480 |
| New share issue | 110 | 98,500 | 98,500 |
| Dividend | –37,555 | –18,241 | –18,241 |
| Minority interest in equity | 13 | 95 | 88 |
| Translation difference | –43 | 0 | 0 |
| Profit for the period | 76,400 | 71,758 1 | 02,062 |
| Closing balance | 383,110 | 302,903 | 342,943 |
| July–Sept | July–Sept | Jan–Sept | Jan–Sept | Full-year | |
|---|---|---|---|---|---|
| SEK thousands | 2008 | 2007 | 2008 | 2007 | 2007 |
| Cash flow from operating activities | |||||
| Before change in working capital | 36,197 | 52,578 | 76,602 | 88,211 1 | 30,311 |
| Change in working capital | –29,646 | –30,267 | –41,813 | –41,974 | –22,610 |
| Cash flow from operating activities | 6,551 | 22,311 | 32,789 | 46,237 | 107,701 |
| Cash flow from investing activities | –3,733 | –6,914 | –4,900 | –13,804 | –15,560 |
| Dividend | – | – | –37,555 | –18,241 | –18,241 |
| Incentive programs/new share issues 1 |
,242 | – 1 | ,352 111 | ,238 1 | 20,980 |
| Change in loans | – | – | – | –50,000 | –67,001 |
| Cash flow from financing activities | 1,242 | – | – | 42,996 | 35,738 |
| Cash flow for the period | 4,060 | 15,397 | –8,314 | 75,430 | 127,879 |
| Cash & cash equivalents at beginning of period 1 |
75,049 11 | 9,577 1 | 87,423 | 59,544 | 59,544 |
| Cash & cash equivalents at end of period | 179,109 | 134,974 | 179,109 | 134,974 | 187,423 |
| Group | ||||||
|---|---|---|---|---|---|---|
| SEK thousands | July–Sept 2008 |
July–Sept 2007 |
Jan–Sept 2008 |
Jan–Sept 2007 |
Oct 2007– Sept 2008 |
Full-year 2007 |
| Gross profit margin, % | 54.1 | 54.6 | 53.7 | 53.4 | 53.8 | 53.6 |
| Operating margin, % | 30.9 | 33.1 | 26.0 | 28.1 | 27.1 | 28.7 |
| Profit margin, % | 32.5 | 32.9 | 26.8 | 28.0 | 27.8 | 28.7 |
| Return on capital employed, % | 11.5 1 | 5.1 | 24.5 | 31.1 | 35.2 | 40.0 |
| Return on average equity, % | 10.4 1 | 6.0 | 21.0 | 65.0 | 31.1 | 42.4 |
| Net profit for the period | 37,619 | 35,223 | 76,400 | 71,758 1 | 06,704 1 | 02,062 |
| Earnings per share, SEK* | 1.50 1 | .42 | 3.05 | 2.96 | 4.27 | 4.18 |
| Earnings per share after dilution, SEK** | 1.50 1 | .41 | 3.04 | 2.92 | 4.27 | 4.17 |
| Number of shares | 25,041,584 | 24,743,984 | 25,041,584 | 24,743,984 | 25,041,584 | 25,036,984 |
| Weighted average number of shares** | 25,041,584 | 24,743,984 | 25,039,028 | 24,261,716 | 24,989,684 | 24,406,699 |
| Effect of dilution | 25,808 | 309, 114 | 52,554 | 300,526 | 0 | 83,461 |
| Weighted average number of shares after dilution | 25,067,392 | 25,053,098 | 25,091,582 | 24,562,242 | 24,989,684 | 24,490,160 |
| Equity/assets ratio, % | 68.5 | 65.0 | 68.5 | 65.0 | 68.5 | 67.3 |
| Equity per share, SEK | 15.30 1 | 2.24 1 | 5.30 1 | 2.24 1 | 7 1 | 3.70 |
| Investments in intangible assets | 2,200 | – | 2,200 | 225 | 2,200 | 225 |
| Investments in tangible assets | 1,533 | 6,914 | 2,700 1 | 3,534 | 4,456 1 | 5,290 |
| Depreciation for the period | –1,389 | –1,262 | –3,741 | –2,790 | –5,072 | –4,121 |
| Average number of employees | 86 | 72 | 86 | 72 | 86 | 76 |
* Earnings per share in relation to the weighted average number of shares during the period restated after the split on April 27, 2007.
** Earnings per share adjusted for any dilution effect after the split on April 27, 2007.
| Group | ||||||
|---|---|---|---|---|---|---|
| SEK thousands | July–Sept 2008 |
July–Sept 2007 |
Jan–Sept 2008 |
Jan–Sept 2007 |
Oct 2007– Sept 2008 |
Full-year 2007 |
| Operating revenue | ||||||
| Brand and other | ||||||
| External sales | 19,241 1 | 4,604 | 44,588 | 37,312 | 58,804 | 51,529 |
| Internal sales | 24,124 1 | 9,671 | 52,713 | 44,703 | 83,123 | 75,113 |
| 43,365 | 34,275 | 97,300 | 82,015 | 141,927 | 126,642 | |
| Product development | ||||||
| External sales | 76,289 | 67,180 1 | 84,242 1 | 63,074 | 246,539 | 225,371 |
| Internal sales | 31,705 1 | 5,726 | 64,542 | 51,125 | 88,709 | 75,291 |
| 107,994 | 82,906 | 248,784 | 214,199 | 335,248 | 300,662 | |
| Distribution | ||||||
| External sales | 49,479 | 47,974 1 | 28,783 11 | 3,498 1 | 73,059 1 | 57, 774 |
| Internal sales | 9,772 | 9,866 | 20,301 1 | 9,736 | 27,441 | 26,877 |
| 59,251 | 57,840 | 149,084 | 133,234 | 200,501 | 184,651 | |
| Retail | ||||||
| External sales | 15,753 1 | 8,839 | 37,710 | 41,206 | 56,716 | 60,212 |
| Internal sales | 6 | – | 6 | – 11 | 6 111 | |
| 15,759 | 18,839 | 37,716 | 41,206 | 56,833 | 60,323 | |
| Eliminations | –65,606 | –45,263 | –137,561 | –115,564 | –199,389 | –177,392 |
| Operating revenue | 160,762 | 148,597 | 395,323 | 355,091 | 535,119 | 494,886 |
| Operating profit | ||||||
| Brand and other | 17,690 1 | 9,750 | 31,255 | 31,869 | 50,531 | 46,145 |
| Product development | 17,095 | 8,103 | 38,763 | 29,017 | 43,117 | 38,371 |
| Distribution | 12,082 1 | 3,671 | 29,489 | 29,033 | 40,081 | 39,626 |
| Retail | 2,820 | 7,715 | 3,196 | 9,898 11 | ,231 1 | 7,933 |
| Operating profit | 49,688 | 49,239 | 102,702 | 99,817 | 144,960 | 142,075 |
| SEK thousands | Q3 2008 |
Q2 2008 |
Q1 2008 |
Q4 2007 |
Q3 2007 |
Q2 2007 |
Q1 2007 |
Q4 2006 |
|---|---|---|---|---|---|---|---|---|
| Brand sales | 703,544 | 476,558 | 688,828 | 650,862 | 656,750 | 414,043 | 513,345 | 483,273 |
| Net sales 1 |
60,762 | 95,813 1 | 38,748 1 | 39,795 1 | 48,597 | 87,844 11 | 8,650 1 | 08,537 |
| Gross profit margin, % | 54.1 | 55.9 | 51.9 | 53.8 | 54.6 | 55.6 | 50.4 | 52.8 |
| Operating profit | 49,688 1 | 6,493 | 36,521 | 42,258 | 49,238 1 | 9,188 | 31,390 | 34,994 |
| Operating margin, % | 30.9 1 | 7.2 | 26.3 | 30.2 | 33.1 | 21.8 | 26.5 | 32.2 |
| Profit after financial items | 52,277 1 | 6,594 | 37,258 | 42,719 | 48,920 1 | 9,139 | 31,448 | 34,147 |
| Profit margin, % | 32.5 1 | 7.3 | 26.9 | 30.6 | 32.9 | 21.8 | 26.5 | 31.5 |
| Earnings per share, SEK 1 |
.50 | 0.48 1 | .07 1 | .22 1 | .42 | 0.57 | 0.96 1 | .06 |
| Earnings per share after dilution, SEK 1 | .50 | 0.48 1 | .07 1 | .22 1 | .41 | 0.56 | 0.94 1 | .04 |
| Number of concept stores at end of period | 41 | 39 | 36 | 36 | 33 | 29 | 26 | 24 |
| of which own concept stores 11 1 |
0 1 | 0 1 | 0 | 10 | 9 | 9 | 8 |
| SEK thousands | July–Sept 2008 |
July–Sept 2007 |
Jan–Sept 2008 |
Jan–Sept 2007 |
Oct 2007– Sept 2008 |
Full-year 2007 |
|---|---|---|---|---|---|---|
| Net sales | 14,333 | 10,200 | 28,032 | 22,073 | 36,855 | 44,595 |
| Cost of goods sold | –1,906 | –1,497 | –3,556 | –3,086 | –3,527 | –4,707 |
| Gross profit | 12,427 | 8,703 | 24,476 | 18,987 | 33,328 | 39,888 |
| Distribution expenses | –9,052 | –8,112 | –26,421 | –22,678 | –15,936 | –29,563 |
| Administrative expenses | –3,482 | –3,120 | –10,162 | –8,722 | –6,129 | –11,370 |
| Development expenses | –1,393 | –1,284 | –4,065 | –3,489 | –2,452 | –4,548 |
| Operating profit | –1,500 | –3,777 | –16,171 | –15,902 | 8,810 | –5,593 |
| Net financial items | 230 | 53 | 318 | –278 | 520 | 12 |
| Profit before tax | –1,270 | –3,724 | –15,853 | –16,180 | 9,330 | –5,581 |
| Tax | 356 1 | ,043 | 4,439 | 4,531 | –3,689 | 486 |
| Profit for the period | –915 | –2,681 | –11,414 | –11,649 | 2,041 | –5,095 |
| SEK thousands | 30 Sept 2008 |
30 Sept 2007 |
31 December 2007 |
|---|---|---|---|
| Non-current assets | |||
| Tangible non-current assets | 5,787 | 6,214 | 6,460 |
| Shares in Group companies | 54,497 | 54,497 | 54,497 |
| Total non-current assets | 60,284 | 60,711 | 60,957 |
| Current assets Current assets | |||
| Receivables from Group companies | 59,411 1 | 36,153 | 39,913 |
| Current receivables | 7,973 | 5,743 | 8,766 |
| Cash & cash equivalents | 11 2,278 1 |
2,062 1 | 80,269 |
| Total current assets | 179,662 | 153,958 | 228,948 |
| Total assets | 239,946 | 214,669 | 289,905 |
| Equity and liabilities | |||
| Equity | 1 30,420 1 |
62,059 1 | 87,477 |
| Untaxed reserves | 7,254 | 5,955 | 7,254 |
| Due to Group companies | 89,197 | 28,256 | 81,807 |
| Accounts payable | 7,689 1 | 0,289 | 5,694 |
| Other current liabilities | 5,386 | 8,110 | 7,673 |
| Total equity and liabilities | 239,946 | 214,669 | 289,905 |
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 over ten markets, of which Sweden and the Netherlands are the largest. Operations are managed through a network of product and distribution companies that 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 in its own concept stores. Total sales of Björn Borg products in 2007 amounted to approximately SEK 2.2 billion at the consumer level. Group net sales amounted to SEK 495 million in 2007, with 79 employees. The Björn Borg share is listed on the OMX Nordic Exchange, 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, including VAT, based on reported wholesale sales.
The Board of Directors and the President certify that the nine-month interim report provides a true and fair view of the operations, financial position and results of the Parent Company and the Group and that it describes the substantial risks and uncertainties faced by the Parent Company and companies in the Group.
Fredrik Lövstedt Nils Vinberg Vilhelm Schottenius Chairman Vice Chairman Board member
Mats H Nilsson Lottie Svedenstedt Michael Storåkers Håkan Roos Board member Board member Board member Board member
Arthur Engel President and CEO
We have reviewed the interim report for Björn Borg AB (publ) for the period January 1-September 30, 2008. The Board of Directors and the President are responsible for the preparation and presentation of this interim 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 Auditors of the Entity." A review consists of making inquiries, primarily to persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review has a different focus and is substantially less in scope than an audit conducted
in accordance with Standards on Auditing in Sweden RS and other generally accepted auditing practices in Sweden. 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 on the basis of a review does not give the same level of assurance as a conclusion expressed on the basis of an audit.
Based on our review, nothing has come to our attention that causes us to believe that the interim report is not, in all material respects, prepared for the Group in accordance with IAS 34 and the Annual Accounts Act, and for the Parent Company in accordance with the Annual Accounts Act.
Stockholm, November 12, 2008 Deloitte AB
Authorized Public Accountant Authorized Public Accountant
Håkan Pettersson Tommy Mårtensson
The year-end report for 2008 will be released on February 18, 2009. The Annual General Meeting will be held on April 23, 2009. The interim report January–March 2009 will be released on May 15, 2009.
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. he information was released for publication on November 12, 2008 at 7:30 a.m. (CET).
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