Quarterly Report • Nov 12, 2009
Quarterly Report
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"Sales during the third quarter reflect the continued tough market climate, but our profit shows that we have good control over costs. Within the company we are working intensely to further improve and strengthen Björn Borg's product development and distribution," says Arthur Engel.
| July–Sept | July–Sept | Jan–Sept | Jan–Sept | Oct 2008– | Full-year | |
|---|---|---|---|---|---|---|
| SEK million | 2009 | 2008 | 2009 | 2008 | Sept 2009 | 2008 |
| Brand sales* | 566 | 563 | 1,554 | 1,495 | 2,030 | 1,971 |
| Net sales | 155.2 | 160.8 | 417.7 | 395.3 | 548.9 | 526.6 |
| Gross profit margin, % | 50.8 | 54.1 | 50.2 | 53.7 | 51.1 | 53.8 |
| Operating profit | 43.5 | 49.7 | 93.2 | 102.7 | 119.2 | 128.8 |
| Operating margin, % | 28.0 | 30.9 | 22.3 | 26.0 | 21.7 | 24.5 |
| Profit after tax | 30.1 | 37.6 | 67.4 | 76.4 | 90.2 | 99.2 |
| Earnings per share, SEK | 1.20 | 1.50 | 2.68 | 3.05 | 3.60 | 3.96 |
| Earnings per share after dilution, SEK | 1.19 | 1.50 | 2.68 | 3.04 | 3.60 | 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.
After a year as president of Björn Borg, I feel that our operations are transparent and that the organization which will develop the brand and operations is largely in place. At the same time we have evaluated all our distributors and partners to create the right conditions for a strong, long-term growth. As a result, several new distribution agreements have been signed at the same time that several others have been terminated.
Third-quarter results remained stable, partially helped by currency changes. We have good control over costs, despite the aggressive investments we are making.
During the year Björn Borg signed new distribution agreements in Greece, Italy, Germany and, during the third quarter, Portugal and Chile. I would again stress that it takes time to reach a significant volume in new markets, but we are very pleased with the cooperations we have now established.
Björn Borg wants to develop in the US, but we won't do it on our own. We are therefore reducing our operations in the US, but will continue to supply the key customers we already have as well as sell through our web shop. We are now holdings discussions with various American parties to see if we can find a longterm solution. We believe that Björn Borg, with an established external partner, has greater prospects of sustainable growth and profitability in the US market, with limited risk.
Although we expect the market climate to remain challenging, the product launches we are preparing for next year have received a positive response from Björn Borg's partners. It is still too early, however, to draw any conclusions what it could mean in terms of sales. Underwear for kids is a new product group Björn Borg will be adding going forward. Pre-orders are being taken right now for the market launch in the second quarter of 2010, with a sneak preview planned just before the Christmas holiday this year.
In summary, I would say that sales to date reflect the market climate. Nevertheless, we are pleased with the third quarter's results, not least the initiatives that are under way to create a Björn Borg that is the "champion in fashion underwear."
Arthur Engel President
Brand sales (excluding VAT) amounted to SEK 566 million (563) during the third quarter, an increase of 1 percent compared with the same quarter of 2008. During the first nine months of the year brand sales amounted to SEK 1,544 million (1,493), an increase of 4 percent.
Brand sales in the underwear product area rose by 2 percent during the first nine months compared with the same period in 2008. The same increase was reported for adjacent products. Sales in the footwear product area increased as a whole by 26 percent during the period following a major gain during the first quarter and slightly weaker second and third quarters. Sales of licensed bags and fragrances were largely unchanged, while licensed eyewear sales decreased. Underwear accounted for 59 percent of brand sales during the first nine months of the year.
Brand sales in new markets continued to rise during the first nine months of the year, though from low levels. Established markets underperformed. The Netherlands noted a slight sales increase during the first nine months, mainly in the underwear product area. The Nordic markets as a whole posted a negative sales trend for the period, with a recovery in Sweden and Denmark during the third quarter.
Two new Björn Borg stores were opened in Belgium. At the end of the period there were 45 (41) Björn Borg stores, of which 10 (11) are Group-owned. During the fourth quarter a franchise store will be opening in Helsingborg, Sweden.
Sales and operating profit decreased somewhat during the third quarter.
Quarterly net sales and operating profit
Group sales during the third quarter amounted to SEK 155,2 million (160,8), a decrease of 3 percent. The volume decreased during the quarter, which was compensated by a higher U.S dollar rate.
Group sales during the nine-month period amounted to SEK 417.7 million (395.3), an increase of 6 percent mainly due to the positive effect of the higher dollar exchange rate and higher footwear exports.
The gross profit margin decreased during the third quarter to 50.8 percent (54.1) due to the higher dollar exchange rate and a slight decrease in Swedish distribution.
Operating profit amounted to SEK 43.5 million (49.7) during the quarter with an operating margin of 28.0 percent (30.9). Profit before tax decreased during the period to SEK 40.8 million (52.3).
Operating profit was adversely affected by both lower sales and a lower gross profit in distribution operations. The higher dollar exchange rate as a whole had a slightly positive effect on operating profit. Investments in the US market were in line with the same quarter of 2008. Due to a cost efficient marketing and selling approach, operating expenses were lower than the same quarter a year earlier.
The gross profit margin decreased during the nine-month period to 50.2 percent (53.7). Operating profit amounted to SEK 93.2 million (102.7) with an operating margin of 22.3 percent (26.0). Profit before tax declined during the period to SEK 91.9 million (106.1). Operating expenses as a share of net sales remained fairly constant at 27.9 percent (27.8). The main reason for the lower gross profit margin was the stronger dollar 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 US.
As of September 30, 2009 the company had 25,148,384 shares outstanding. Earnings per share before and after dilution amounted to SEK 2.68 (3.05) and SEK 2.68 (3.04), respectively.
The Group comprises of 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 during the nine-month period reached SEK 104.8 million (97.3), an increase of 8 percent, which was mainly due to higher internal sales, though also to a lesser degree to increased brand sales.
Operating profit amounted to SEK 35.3 million (31.3) for the period, an increase by 13 percent. Profit was affected positively by higher sales in the network.
The Group has global responsibility for development, design and production of underwear, adjacent products and footwear.
The segment's net sales amounted to SEK 277.4 million (248.8) during the nine-month period, an increase of 12 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 entire period January–September 2009.
Operating profit increased to SEK 48.0 million (38.8) as a result of the increased exports and stronger dollar.
| SEK thousands | Jan–Sept 2009 | Jan–Sept 2008 | Jan–Sept 2009 | Jan–Sept 2008 | Jan–Sept 2009 | Jan–Sept 2008 | |
|---|---|---|---|---|---|---|---|
| Operating area | Revenue source | Sales | Sales | Operating profit | Operating profit | Operating margin Operating margin | |
| Brand and other | Royalties and services | 104,776 | 97,300 | 35,304 | 31,255 | 34% | 32% |
| Product development | Products | 277,434 | 248,784 | 47,959 | 38,763 | 17% | 16% |
| Distribution | Wholesale sales | 147,880 | 149,084 | 6,636 | 29,489 | 4% | 20% |
| Retail | Retailers | 38,756 | 37,716 | 3,267 | 3,196 | 8% | 8% |
| Less internal sales | –151,178 | –137,561 | – | – | – | – | |
| Total | 417,668 | 395,323 | 93,166 | 102,702 | 22% | 26% |
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 1 percent during the period to SEK 147.9 million (149.1). This was mainly due to a decline in Swedish underwear distribution.
Operating profit amounted to SEK 6.6 million (29.5). The decrease was mainly due to marketing investments in the US, 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 38.8 million (37.7) during the nine-month period, an increase of 3 percent. Sales also rose by 3 percent for the quarter for comparable stores. Operating profit increased to SEK 3.3 million (3.2) due to the higher sales, but with a slightly lower gross profit margin.
Intra-Group sales amounted to SEK 151.2 million (137.6) during the period.
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 57.7 million (32.8) for the period January–September 2009. The positive effect on working capital was offset, however, by reduced accounts payable owing to earlier shipments to a distributor.
Total investments in tangible and intangible non-current assets amounted to SEK 2.5 million (4.9) for the period January-September 2009, the large part of which was attributable to a new enterprise system.
For the period January–September 2009, cash & cash equivalents increased by SEK 20.6 million (–8.3).
The Björn Borg Group's cash & cash equivalents (net cash position) amounted to SEK 262.1 million (179.1) at the end of the period. The equity/assets ratio was 75.7 percent (68.5). The company has no interest-bearing liabilities.
During the period January–September 2009 net financial items were affected negatively by translation differences for operations in the U.S. and lower interest rates on savings balances compared with the same period last year.
The Board of Directors of Björn Borg has established new financial objectives for operations, which will apply during the period 2010–2014. Björn Borg will generate:
The long-term objective will be achieved if established markets grow slightly below the average growth target and new markets provide stronger growth. During the beginning of the period, sales growth could fall 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 annually expected to fall in the range of 2–5 percent of net sales depending on the addition of any new concept stores.
No changes were made with regard to pledged assets and contingent liabilities compared with December 31, 2008. For further information, see note 22 on page 44 of the annual report 2008.
The average number of employees in the Group for the period January–September was 93 (86), of whom 58 were women.
There are no significant events to report following the conclusion of the report period.
Björn Borg currently has 25,148,384 shares outstanding.
In accordance with the resolution of the Annual General Meeting, Björn Borg's Nomination Committee shall consist of the Chairman of the Board and one representative from each of the company's three largest shareholders measured in terms of voting rights as of August 31, 2009. Björn Borg's Nomination Committee for the Annual General Meeting 2010 is as follows: Fredrik Lövstedt, Chairman of the Board
Martin Bjäringer, who represents himself as a shareholder Åsa Nisell, who represents the Swedbank Robur funds
Stefan Roos, who represents the SEB funds
Martin Bjäringer has been appointed the Chairman of the Nomination Committee.
The Annual General Meeting for the financial year 2009 will be held in Stockholm on April 15, 2010.
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 third quarter amounted to SEK 11.1 million (14.3). During the period January–September the Parent Company's net sales amounted to SEK 31.5 million (28.0). The loss before tax amounted to SEK 0.9 million for the third quarter, against a year-earlier loss of SEK 1.3 million. For the period January–September the Parent Company reported a loss before tax of SEK 12.5 million, compared with a year-earlier loss of SEK 15.9 million. Cash & cash equivalents amounted to SEK 174.8 million (112.3) on September 30. For the period January– September investments in tangible and intangible non-current assets amounted to SEK 1.5 million (0.6).
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.
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.
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 statement of 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 significant impact on the financial position or results of the Group or the Parent Company.
As a policy, the company does not issue earnings forecasts.
This interim report has been reviewed by the company's auditors. Their review report can be found on page 10.
| SEK thousands | July–Sept 2009 |
July–Sept 2008 |
Jan–Sept 2009 |
Jan–Sept 2008 |
Oct 2008– Sept 2009 |
Full-year 2008 |
|---|---|---|---|---|---|---|
| Net sales | 155,162 | 160,762 | 417,668 | 395,323 | 548,901 | 526,556 |
| Cost of goods sold | –76,403 | –73,793 | –207,937 | –182,856 | –268,139 | –243,058 |
| Gross profit | 78,759 | 86,969 | 209,730 | 212,467 | 280,761 | 283,498 |
| Distribution expenses | –23,243 | –25,881 | –77,634 | –74,135 | –109,001 | –105,380 |
| Administrative expenses | –8,752 | –8,501 | –29,052 | –26,819 | –39,167 | –37,133 |
| Development expenses | –3,311 | –2,899 | –9,877 | –8,811 | –13,377 | –12,234 |
| Operating profits | 43,454 | 49,688 | 93,166 | 102,702 | 119,215 | 128,751 |
| Net financial items | –2,624 | 2,589 | –1,220 | 3,427 | 1,424 | 6,071 |
| Profit before tax | 40,830 | 52,277 | 91,946 | 106,129 | 120,639 | 134,822 |
| Tax | –10,747 | –14,638 | –24,538 | –29,716 | –30,442 | –35,620 |
| Profit for the period | 30,083 | 37,639 | 67,408 | 76,413 | 90,197 | 99,202 |
| Profit/loss attributable to | ||||||
| Parent Company's shareholders | 30,078 | 37,618 | 67,380 | 76,400 | 90,190 | 99,210 |
| Minority interests | 5 | 21 | 28 | 13 | 7 | –8 |
| Other comprehensive income | ||||||
| Translation adjustments for foreign operations | 467 | – | 943 | –43 | – | –536 |
| Total comprehensive income for the period | 30,550 | 37,639 | 68,351 | 76,370 | 90,197 | 98,666 |
| Total comprehensive income for the period attributable to | ||||||
| Parent Company's shareholders | 30,545 | 37,618 | 68,323 | 76,357 | 90,190 | 98,674 |
| Minority interests | 5 | 21 | 28 | 13 | 7 | –8 |
| Earnings per share, SEK | 1.20 | 1.50 | 2.68 | 3.05 | 3.60 | 3.96 |
| Earnings per share after dilution, SEK | 1.19 | 1.50 | 2.68 | 3.04 | 3.60 | 3.96 |
| Number of shares | 25,148,384 | 25,041,584 | 25,148,384 25,041,584 | 25,148,384 | 25,059,184 | |
| Weighted average number of shares | 25,148,384 | 25,041,584 25,098,828 25,039,028 | 25,059,284 | 25,041,134 | ||
| Effect of dilution* | 192,163 | 25,808 | 63,166 | 52,554 | – | 34,366 |
| Weighted average number of shares after full dilution | 25,340,547 | 25,067,392 | 25,161,994 25,091,582 | 25,059,284 | 25,075,500 |
* Björn Borg has two outstanding incentive programs based on warrants in Björn Borg AB: option schemes 2008:1 and 2008:2.
| SEK thousands | Sept 30 2009 |
Sept 30 2008 |
Dec 31 2008 |
|---|---|---|---|
| Non-current assets | |||
| Goodwill | 13,944 | 13,944 | 13,944 |
| Trademarks | 187,532 | 187,532 | 187,532 |
| Other intangible assets | 1,843 | 2,850 | 1,696 |
| Tangible non-current assets | 12,061 | 17,181 | 15,366 |
| Total non-current assets | 215,379 | 221,507 | 218,538 |
| Current assets | |||
| Inventories, etc. | 31,654 | 34,147 | 33,752 |
| Current receivables | 81,704 | 124,923 | 106,197 |
| Cash & cash equivalents | 262,100 | 179,109 | 241,498 |
| Total current assets | 375,458 | 338,178 | 381,447 |
| Total assets | 590,837 | 559,685 | 599,985 |
| Equity and liabilities | |||
| Equity | 447,533 | 383,110 | 413,803 |
| Deferred tax liabilities | 36,720 | 31,667 | 32,884 |
| Other non-current liabilities | 42,371 | 48,240 | 46,816 |
| Accounts payable | 9,116 | 45,941 | 45,489 |
| Other current liabilities | 55,097 | 50,727 | 60,993 |
| Total equity and liabilities | 590,837 | 559,685 | 599,985 |
| Condensed | |||
|---|---|---|---|
| SEK thousands | Jan–Sept 2009 |
Jan–Sept 2008 |
Full-year 2008 |
| Opening balance | 413,803 | 342,943 | 342,943 |
| Incentive programs | – | 1,242 | 9,055 |
| New share issues | 2,968 | 110 | 694 |
| Dividend | –37,589 | –37,555 | –37,555 |
| Total comprehensive income for the period | 68,351 | 76,370 | 98,666 |
| Closing balance | 447,533 | 383,110 | 413,803 |
| Condensed | |||||
|---|---|---|---|---|---|
| July–Sept | July–Sept | Jan–Sept | Jan–Sept | Full-year | |
| SEK thousands | 2009 | 2008 | 2009 | 2008 | 2008 |
| Cash flow from operating activities | |||||
| Before change in working capital | 34,090 | 36,197 | 73,093 | 74,603 | 123,214 |
| Change in working capital | –11,711 | –29,646 | –15,387 | –41,814 | –36,260 |
| Cash flow from operating activities | 22,379 | 6,551 | 57,706 | 32,789 | 86,954 |
| Cash flow from investing activities | –236 | –3,733 | –2,482 | –4,900 | –5,073 |
| Dividend | – | – | –37,589 | –37,555 | –37,555 |
| Incentive programs/new share issues | – | 1,242 | 2,968 | 1,352 | 9,749 |
| Cash flow from financing activities | – | 1,242 | –34,621 | –36,203 | –27,806 |
| Cash flow for the period | 22,143 | 4,060 | 20,602 | –8,314 | 54,075 |
| Cash & cash equivalents at beginning of period | 239,957 | 175,049 | 241,498 | 187,423 | 187,423 |
| Cash & cash equivalents at end of period | 262,100 | 179,109 | 262,100 | 179,109 | 241,498 |
| July–Sept | July–Sept | Jan–Sept | Jan–Sept | Oct 2008– | Full-year | |
|---|---|---|---|---|---|---|
| SEK thousands | 2009 | 2008 | 2009 | 2008 | Sept 2009 | 2008 |
| Gross profit margin, % | 50.8 | 54.1 | 50.2 | 53.7 | 51.1 | 53.8 |
| Operating margin, % | 28.0 | 30.9 | 22.3 | 26.0 | 21.7 | 24.5 |
| Profit margin, % | 26.3 | 32.5 | 22.0 | 26.8 | 22.0 | 25.6 |
| Return on capital employed, % | 8.4 | 11.5 | 17.9 | 24.5 | 26.0 | 28.8 |
| Return on average equity, % | 7.6 | 10.4 | 17.0 | 21.0 | 21.7 | 26.2 |
| Profit attributable to Parent Company's shareholders | 30,078 | 37,619 | 67,380 | 76,400 | 90,190 | 99,210 |
| Earnings per share, SEK* | 1.20 | 1.50 | 2.68 | 3.05 | 3.60 | 3.96 |
| Earnings per share after dilution, SEK | 1.19 | 1.50 | 2.68 | 3.04 | 3.60 | 3.96 |
| Number of shares | 25,148,384 | 25,041,584 | 25,148,384 | 25,041,584 | 25,148,384 | 25,059,184 |
| Weighted average number of shares | 25,148,384 | 25,041,584 | 25,098,828 | 25,039,028 | 25,059,284 | 25,041,134 |
| Effect of dilution | 192,163 | 25,808 | 63,166 | 52,554 | – | 34,366 |
| Weighted average number of shares after dilution | 25,340,547 | 25,067,392 | 25,161,994 | 25,091,582 | 25,059,284 | 25,075,500 |
| Equity/assets ratio, % | 75.7 | 68.5 | 75.7 | 68.5 | 75.7 | 69.0 |
| Equity per share, SEK | 17.80 | 15.30 | 17.80 | 15.30 | 17.80 | 16.51 |
| Investments in intangible assets | 158 | 2,200 | 1,419 | 2,200 | 1,419 | 2,200 |
| Investments in tangible assets | 78 | 1,533 | 1,063 | 2,700 | 1,236 | 2,873 |
| Depreciation and impairment losses for the period | –1,703 | –1,389 | –5,662 | –3,741 | –8,897 | –6,976 |
| Average number of employees | 93 | 86 | 93 | 86 | 95 | 88 |
| Group | ||||||
|---|---|---|---|---|---|---|
| SEK thousands | July–Sept 2009 |
July–Sept 2008 |
Jan–Sept 2009 |
Jan–Sept 2008 |
Oct 2008– Sept 2009 |
Full-year 2008 |
| Operating revenue | ||||||
| Brand and other | ||||||
| External sales | 13,856 | 19,241 | 44,226 | 44,588 | 56,910 | 57,272 |
| Internal sales | 22,577 | 24,124 | 60,550 | 52,713 | 92,857 | 85,020 |
| 36,433 | 43,365 | 104,776 | 97,300 | 149,767 | 142,292 | |
| Product development | ||||||
| External sales | 75,334 | 76,289 | 211,343 | 184,242 | 277,708 | 250,608 |
| Internal sales | 23,445 | 31,705 | 66,091 | 64,542 | 88,128 | 86,579 |
| 98,779 | 107,994 | 277,434 | 248,784 | 365,836 | 337,187 | |
| Distribution | ||||||
| External sales | 49,689 | 49,479 | 123,344 | 128,783 | 158,215 | 163,655 |
| Internal sales | 11,449 | 9,772 | 24,536 | 20,301 | 37,548 | 33,312 |
| 61,138 | 59,251 | 147,880 | 149,084 | 195,763 | 196,967 | |
| Retail | ||||||
| External sales | 16,283 | 15,753 | 38,756 | 37,710 | 56,067 | 55,021 |
| Internal sales | – | 6 | – | 6 | – | 6 |
| 16,283 | 15,759 | 38,756 | 37,716 | 56,067 | 55,027 | |
| Less internal sales | –57,472 | –65,606 | –151,178 | –137,561 | –218,533 | –204,916 |
| Operating revenue | 155,162 | 160,762 | 417,668 | 395,323 | 548,900 | 526,556 |
| Operating profit | ||||||
| Brand and other | 16,367 | 17,690 | 35,304 | 31,255 | 46,705 | 42,656 |
| Product development | 15,467 | 17,095 | 47,959 | 38,763 | 59,205 | 50,009 |
| Distribution | 8,905 | 12,082 | 6,636 | 29,489 | 4,622 | 27,475 |
| Retail | 2,713 | 2,820 | 3,267 | 3,196 | 8,683 | 8,611 |
| Operating profit | 43,453 | 49,688 | 93,166 | 102,702 | 119,214 | 128,751 |
Group Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 SEK thousands 2009 2009 2009 2008 2008 2008 2008 2007 Brand sales 566,423 385,637 602,183 475,378 562,835 381,246 551,062 520,690 Net sales 155,162 97,832 164,674 131,233 160,762 95,813 138,748 139,795 Gross profit margin, % 50.8 50.9 49.3 54.1 54.1 55.9 51.9 53.8 Operating profit 43,454 12,131 37,582 26,049 49,688 16,493 36,521 42,258 Operating margin, % 28.0 12.4 22.8 19.8 30.9 17.2 26.3 30.2 Profit after financial items 40,830 11,871 39,245 28,693 52,277 16,594 37,258 42,719 Profit margin, % 26.3 12.1 23.8 21.9 32.5 17.3 26.9 30.6 Earnings per share, SEK 1.20 0.34 1.15 0.91 1.50 0.48 1.07 1.22 Earnings per share after dilution, SEK 1.19 0.33 1.15 0.91 1.50 0.48 1.07 1.22 Number of Björn Borg stores at end of period 45 43 44 44 41 39 36 36 of which Björn Borg-owned stores 10 10 11 11 11 10 10 10
| Condensed | ||||||
|---|---|---|---|---|---|---|
| SEK thousands | July–Sept 2009 |
July–Sept 2008 |
Jan–Sept 2009 |
Jan–Sept 2008 |
Oct 2008– Sept 2009 |
Full-year 2008 |
| Net sales | 11,093 | 14,333 | 31,533 | 28,032 | 54,130 | 50,630 |
| Cost of goods sold | –7 | –1,906 | –2,413 | –3,556 | –5,831 | –6,975 |
| Gross profit | 11,087 | 12,427 | 29,120 | 24,476 | 48,299 | 43,655 |
| Distribution expenses | –7,934 | –9,052 | –28,012 | –26,421 | –41,826 | –40,235 |
| Administrative expenses | –3,052 | –3,482 | –10,774 | –10,162 | –16,087 | –15,475 |
| Development expenses | –1,221 | –1,393 | –4,310 | –4,065 | –6,435 | –6,190 |
| Operating profit/loss | –1,120 | –1,500 | –13,975 | –16,171 | –16,049 | –18,245 |
| Net financial items | 202 | 230 | 1,452 | 318 | 2,850 | 1,716 |
| Profit/loss before tax | –918 | –1,270 | –12,522 | –15,853 | –13,198 | –16,529 |
| Appropriations | – | – | – | – | – 104 | –104 |
| Tax | 241 | 356 | 3,293 | 4,439 | 3,499 | 4,424 |
| Profit/loss for the period | –676 | –915 | –9,229 | –11,414 | –9,804 | –12,209 |
| Sept 30 | Sept 30 | Dec 31 | |
|---|---|---|---|
| SEK thousands | 2009 | 2008 | 2008 |
| Non-current assets | |||
| Intangible non-current assets | 1,330 | – | – |
| Tangible non-current assets | 4,390 | 5,787 | 5,543 |
| Shares in Group companies | 54,497 | 54,497 | 54,497 |
| Total non-current assets | 60,217 | 60,284 | 60,040 |
| Current assets | |||
| Receivables from Group companies | 34,027 | 59,411 | 59,551 |
| Current receivables | 11,070 | 12,412 | 11,394 |
| Cash & cash equivalents | 174,766 | 112,278 | 220,348 |
| Total current assets | 219,863 | 184,101 | 291,292 |
| Total assets | 280,080 | 244,385 | 351,333 |
| Equity and liabilities | |||
| Equity | 105,952 | 139,859 | 154,206 |
| Untaxed reserves | 7,359 | 7,254 | 7,359 |
| Due to Group companies | 156,098 | 84,197 | 173,048 |
| Accounts payable | 3,458 | 7,689 | 7,713 |
| Other current liabilities | 7,213 | 5,386 | 9,008 |
| Total equity and liabilities | 280,080 | 244,385 | 351,333 |
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 2008 amounted to approximately SEK 2 billion at the consumer level. Group net sales amounted to SEK 527 million in 2008, with 88 employees at year-end. The Björn Borg share is listed on NASDAQ OMX Nordic, Mid Cap list, since May 7, 2007.
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 interim report for the nine-month period 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, November 12, 2009
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 interim report for Björn Borg AB (publ) for the period January 1, 2009 to September 30, 2009. 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 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 interim 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, November 12, 2009 Deloitte AB
Authorized Public Accountant Authorized Public Accountant
Håkan Pettersson Tommy Mårtensson
The year-end report for 2009 will be released on February 11, 2010. The Annual General Meeting will be held on April 15, 2010. The interim report January–March 2010 will be released on May 6, 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 November 12, 2009 at 7:30 a.m. (CET).
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