Quarterly Report • Aug 19, 2010
Quarterly Report
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"A continued focus on our main area, underwear, stood out during the second quarter, which included the successful launch of our Kids collections for boys and girls and several successful product promotions. The trend has improved compared with the first quarter, and we were able to increase our sales and gross margin, while at the same time strengthening earnings. A solution is now in place for our British operations, where we are taking over ourselves to further develop this market. At the same time we are starting cooperations in Estonia, Latvia, Lithuania and Poland," says Arthur Engel.
| SEK million | April-June 2010 |
April-June 2009 |
Jan-June 2010 |
Jan-June 2009 |
July 2009- June 2010 |
Full-year 2009 |
|---|---|---|---|---|---|---|
| Net sales | 100.8 | 97.8 | 249.1 | 262.5 | 506.6 | 519.9 |
| Gross profit margin, % | 55.1 | 50.9 | 53.0 | 49.9 | 52.9 | 51.3 |
| Operating profit | 13.9 | 12.1 | 50.0 | 49.7 | 112.9 | 112.6 |
| Operating margin, % | 13.8 | 12.4 | 20.1 | 18.9 | 22.3 | 21.7 |
| Profit after tax | 10.8 | 8.4 | 36.5 | 37.3 | 80.1 | 80.9 |
| Earnings per share, SEK | 0.43 | 0.34 | 1.45 | 1.49 | 3.19 | 3.22 |
| Earnings per share after dilution, SEK | 0.42 | 0.33 | 1.43 | 1.49 | 3.19 | 3.21 |
| Brand sales* | 347 | 358 | 807 | 960 | 1,719 | 1,872 |
* Estimated total sales of Björn Borg products at the consumer level, excluding VAT, based on reported wholesale sales.
During the first half of 2010 we continued to work conscientiously to achieve a clearly stated vision – to be the best in the world in designer underwear. This means that we are concentrating on further developing our underwear collection, increasing the pace of product development and broadening our product range to new categories. It also includes continuously creating the best opportunities for our distributors to increase sales in their markets.
The new products launched during the spring have done well. The Kids collections for boys and girls have generated great interest, and we see good opportunities for growth in this segment. Our first new product as part of a renewed focus on women, Love all, has performed well, and we had several successful product promotions during the quarter. When the stores now fill up with fall merchandise, constructed bras will be among the products we offer. Another new item is a new version of our classic boxers – and more are on the way. A steady flow of new products is one of the most important factors in attracting distributors and retailers as well as consumers.
In recent years we have strengthened Björn Borg's presence in important markets in western and northern Europe as well as in North America. We are now taking our first steps eastward through distribution in Estonia, Latvia, Lithuania and Poland. These are expansive markets which we believe can develop well in time. In France, we are continuing the process to find a new partner after the collaboration announced in the last interim report could not be finalized.
We have reached an agreement with the previous distributor in England and have decided to take over and further develop the British operations on our own. The brand is still in a buildup stage in the country, and long-term efforts are needed to go further. We have every opportunity to do so, and it will provide us with valuable input for our continued international expansion. With a country manager now joining us as a minority owner of the British subsidiary, we have dedicated leadership to help us drive the business forward. The takeover in England is an exception, and our business model which focuses on outside distributors otherwise remains firm.
During the second quarter the company's development was stable, as we had hoped. We are pleased to have been able to increase our sales and gross margin, at the same time that we are strengthening our earnings compared with the previous year. We can see a recovery in underwear sales in major markets, and in both Sweden and Denmark sales rose strongly compared with the previous year. We continue to work on new markets knowing that it takes time to create a strong position and that the competition is tough. Two smaller markets where Björn Borg has gained a solid foothold are Belgium and Finland.
On the whole, we believe that Björn Borg has good prospects to develop positively going forward –- fully aware of the tough competition and economic uncertainty in Europe.
Arthur Engel, President
In the first quarter of 2009 the company transitioned from reporting brand sales including VAT to excluding VAT. In connection with this transition, inaccuracies arose regarding the second, third and fourth quarters of 2009. This has been corrected in this report. Previously reported figures can be found in the note to the quarterly data table on page 9.
Brand sales (excluding VAT) for the second quarter 2010 decreased by 3 percent to SEK 347 million (358). For the first half-year 2010 as a whole, brand sales decreased by 16 percent to SEK 807 million (960). The decline is the result of lower underwear orders from distributors in early fall 2009. Brand sales were also slightly affected negatively by a stronger Swedish krona against the euro during the period.
Brand sales in the underwear product area decreased by 13 percent in the first half-year as a whole, compared with the same period in 2009, after recovering during the second quarter compared with the first. Among larger markets, Sweden and Denmark posted increases during the quarter. Among smaller markets, Belgium and Finland continue to note strong sales trends. Underwear accounted for 72 percent (70) of brand sales during the quarter.
In the smaller product area, adjacent products – menswear – brand sales rose substantially during the first halfyear compared with the same period of 2009, but from a low level.
* Estimated total sales of Björn Borg products at the consumer level, excluding VAT, based on reported wholesale sales.
** Underwear: Men's and women's underwear, swimwear and socks. Adjacent products: Men's clothing. Licensees: Bags, fragrances, eyewear and women's clothing in the Netherlands.
Sales in the footwear product area increased substantially during the second quarter, but for the half-year as a whole decreased by 32 percent.
In licensed products, sales decreased for bags, eyewear and the licensed women's collection in the Netherlands, while fragrances reported growth. As a whole, licensed product sales fell by 16 percent during the first half-year.
Among larger markets, Sweden reported an increase in total brand sales of 8 percent, while the Netherlands, Denmark and Norway posted negative sales trends for the half-year as a whole. Among smaller markets, Belgium and Finland continued to grow strongly. Brand sales in smaller markets, including Belgium, accounted for 13 percent (16) of total brand sales during the first half-year.
No new Björn Borg stores were opened during the first half of 2010. At the end of the period there were 46 (43) Björn Borg stores, of which 10 (10) are Group-owned.
Björn Borg has decided to take over and further develop the operations in England after an agreement with the previous distributor was terminated in August 2009.
A new country manager has been appointed in England, and he intends to become a minority owner of the newly formed subsidiary. He has a background from senior positions at Speedo and Pringle in the British market.
Björn Borg will gradually take over the operations in England and be fully in control in the second quarter 2011. The takeover is expected to lead to a marginal increase in operating expenses during the second half of 2010.
An agreement has been signed with a distributor for the Polish market, at the same time that a declaration of intent has been reached with a distributor for Estonia, Latvia and Lithuania. Sales to retailers in these markets have begun.
The process to restore distribution in France is continuing after the cooperation announced in the previous report could not be finalized.
Sales and operating profit increased during the second quarter.
Group sales during the second quarter amounted to SEK 100.8 million (97.8), an increase of 3 percent. Sales were positively affected mainly by higher sales in the Swedish underwear wholesale operations, but also by a slight increase in footwear sales. Sales for Group-owned retail operations and the brand and other segment decreased slightly. Adjusted for exchange rate effects, net sales increased by 6 percent from SEK 97.8 million to SEK 104.0 million. The negative exchange rate effect amounted totally SEK 3.2 million.
Group sales during the first half-year amounted to SEK 249.1 million (262.5), a decrease of 5 percent. Sales were negatively affected by lower export sales to the Netherlands in the footwear product area during the first quarter, although this was offset somewhat by higher export in wholesale sales in the underwear product area. Sales for Group-owned retail operations decreased slightly. Adjusted for exchange rate effects, net sales increased by 6 percent from SEK 262.5 million to SEK 265.7 million. The negative exchange rate effect amounted totally SEK 16.6 million.
The gross profit margin increased during the second quarter to 55.1 percent (50.9), which was largely due to a weaker USD, but also to some extent to increased sales of highermargin products.
Operating profit amounted to SEK 13.9 million (12.1) during the quarter with an operating margin of 13.8 percent (12.4). Profit before tax increased during the period to SEK 14.6 million (11.9).
Operating profit was positively affected by increased sales and higher gross profit, at the same time that increased operating expenses contributed to the lower profit. Operating expenses increased the quarter due to an agreement reached with the current distributor in England, whereby Björn Borg will take over operations in the British market to further develop them on its own. Operating expenses for the quarter excluding expenses related to England were in line with the previous year.
The gross profit margin increased during the nine-month period to 53.0 percent (49.9). Operating profit amounted to SEK 50.0 million (49.7) with an operating margin of 20.1 percent (18.9). Profit before tax declined during the period to SEK 50.1 million (51.1). Operating expenses as a share of net sales amounted to 33.0 percent (31.0).
The main reason for the lower gross profit margin was the weaker USD compared with the same period of 2009. Increased operating expenses are attributable to the abovementioned agreement with the British distributor. Further cost efficiencies, together with lower investments in the U.S., have compensated positively.
As of June 30, 2010 the company had 25,148,384 shares outstanding. Earnings per share before and after dilution amounted to SEK 1.45 (1.49) and SEK 1.43 (1.49), respectively.
The Group consists of eight companies that operate under the Björn Borg brand on every level from product development to wholesaling 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 period January-June reached SEK 59.4 million (68.3), a decrease of 13 percent. External sales amounted to SEK 23.6 million (30.4). The decrease was mainly due to lower brand sales in the underwear product area as well as the licensed product areas for bags and women's apparel.
Operating profit amounted to SEK 8.1 million (18.9), a decrease of 57 percent for the period. Profit was affected by the lower sales, but also by expenses attributable to the takeover of the British operations.
| Sales, SEK thousands | Operating profit, SEK thousands | Operating margin | |||||
|---|---|---|---|---|---|---|---|
| Business segment | Revenue source | Jan-June 2010 |
Jan-June 2009 |
Jan-June 2010 |
Jan-June 2009 |
Jan-June 2010 |
Jan-June 2009 |
| Brand and other | Royalties and services | 59,370 | 68,343 | 8,115 | 18,936 | 14% | 28% |
| Product development | Products | 169,497 | 178,654 | 33,833 | 32,492 | 20% | 18% |
| Wholesale operations | Wholesale sales | 92,840 | 86,743 | 11,169 | –2,269 | 12% | –3% |
| Retail | Retailers | 20,024 | 22,472 | –3,141 | 554 | –16% | 2% |
| Less internal sales | –92,582 | –93,706 | – | – | – | – | |
| Total | 249,149 | 262,506 | 49,975 | 49,713 | 20% | 19% |
The Group has global responsibility for development, design and production of underwear, adjacent products and footwear.
The business segment's net sales amounted to SEK 169.5 million (178.7) during the period January-June, a decrease of 5 percent. External sales amounted to SEK 131.8 million (136.0). The decrease was mainly due to lower footwear exports to the Netherlands, but also to a large extent to a lower USD, at the same time that sales were positively affected by an underlying volume increase in the underwear product area.
Operating profit increased to SEK 33.8 million (32.5) as a result of the improved gross profit margin.
The Björn Borg Group is the exclusive wholesaler for the underwear, adjacent products and footwear product areas in Sweden and the U.S.
Net sales in wholesale operations increased by 7 percent during the period January-June to SEK 92.8 million (86.7). External sales were unchanged at SEK 73.7 million (73.7).
Operating profit amounted to SEK 11.2 million (–2.3). The increase was due to a lower USD, which affected gross profit positively, and lower investments in the U.S.
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 and a web shop.
Comparable net sales in the Retail business segment amounted to SEK 20.0 million (22.5) during the period January–June, a decrease of 11 percent. For the period April– June sales amounted to SEK 9.8 million (10.6), a decrease of 7 percent. Continued weakness in several large stores affected sales negatively. The outlets reported stronger development than during the first quarter.
The operating loss for the period January–June amounted to SEK 3.1 million, against a year-earlier profit of SEK 0.6 million, attributable to the lower sales and renovation of a store in Stockholm.
Intra-Group sales amounted to SEK 92.6 million (93.7) 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 4.
Cash flow from operating activities in the Group amounted to SEK 14.1 million (35.3) for the period January-June 2010. The decrease is mainly due to higher working capital caused by an increase in accounts receivable from delayed invoicing, but at the same time was offset to some extent by increased accounts payable.
Total investments in tangible and intangible non-current assets amounted to SEK 5.8 million (2.2) for the first halfyear, the large part of which was attributable to a new web
platform, but also a store renovation and a new enterprise system. During the first half-year Björn Borg Services AB was acquired. The acquisition amounted to SEK 9.0 million, excluding Björn Borg Services' cash and transaction expenses.
For the first half-year 2010 cash & cash equivalents decreased by SEK 126.5 million (–1.5), which was mainly due to an increased dividend to the shareholders. In 2010, SEK 125.7 million was distributed to the shareholders, compared with SEK 37.6 million in 2009.
The Björn Borg Group's cash & cash equivalents (net cash position) amounted to SEK 170.0 million (240.0) at the end of the period. The equity/assets ratio was 70.7 percent (71.6). The company has no interest-bearing liabilities.
The credit of SEK 125 million that was obtained in the first quarter in connection with the acquisition of Björn Borg Services AB was repaid during the second quarter.
Net financial items were affected negatively during the first half-year 2010 by a weaker USD compared with the same period of 2009, which resulted in negative exchange rate differences.
No changes were made with regard to pledged assets and contingent liabilities compared with December 31, 2009. An agreement has been reached on the previously reported dispute with the English distributor regarding undelivered shipments, which affected profit for the period April-June 2010. For further information, see note 22 on page 56 of the annual report 2009.
The average number of employees in the Group for the first half-year was 94 (93), of whom 60 (58) were women.
No transactions were executed with related parties.
In its operations, the Björn Borg Group is exposed to risks and uncertainties. For further information, refer to pages 37-38 in the annual report 2009.
There are no material events to report the following the conclusion of the report period.
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 second quarter amounted to SEK 6.3 million (6.5). During the first half-year net sales amounted to SEK 18.3 million (20.4). The loss before tax amounted to SEK 18.7 million for the second quarter, against a year-earlier loss of SEK 7.5 million, and SEK 20.8 million for the first six months, against a yearearlier loss of SEK 11.6 million. Cash & cash equivalents amounted to SEK 124.9 million (177.5) on June 30, 2010. For the period investments in tangible and intangible noncurrent assets amounted to SEK 0.7 million (1.4).
Björn Borg currently has 25,148,384 shares outstanding.
The financial objectives of Björn Borg's operations for the period 2010–2014 are as follows:
The long-term objective will be achieved if established markets grow slightly below the average growth target and new markets provide stronger growth. At the start of the period sales growth could fall below the target, since several new markets are being added.
Surplus liquidity generated by meeting the new financial objectives will be distributed gradually over the forecast period, starting in 2010.
Operating investments are expected to fall in the range of 2–5 percent of net sales depending on the addition of any new concept stores.
This interim report has been prepared in accordance with the Annual Accounts Act and IAS 34 Interim Financial Reporting, and for the Parent Company in accordance with the Annual Accounts Act and the Swedish Financial Reporting Board's recommendation RFR 2.3 Accounting in Legal Entities.
The same accounting principles were applied during the period as in 2009, as described on page 47 of the annual report 2009, with the exceptions indicated below.
The new and revised IFRS and the interpretations from IFRIC applied by the Group as of January 1, 2010 have not had a significant impact on the Group's results or financial position, with the exception of IFRS 3 Business Combinations, according to which the transaction expenses in connection with acquisitions are not included in acquisition value and instead are treated as overhead and recognized through profit or loss. According to RFR 2.3, some of the changes which were introduced in IAS 1 2009 and applied in the consolidated financial statements shall also be applied in the Parent Company. Due to these changes, a separate statement of total comprehensive income and a statement of changes in equity are presented for the Parent Company in this interim report.
This interim report has been reviewed by the company's auditors.
As a policy, the company does not issue earnings forecasts.
Condensed
| SEK thousands | April-June 2010 |
April-June 2009 |
Jan-June 2010 |
Jan-June 2009 |
July 2009- June 2010 |
Full-year 2009 |
|---|---|---|---|---|---|---|
| Net sales | 100,770 | 97,832 | 249,149 | 262,506 | 506,558 | 519,915 |
| Cost of goods sold | –45,230 | –48,008 | –117,033 | –131,534 | –238,769 | –253,271 |
| Gross profit | 55,540 | 49,824 | 132,116 | 130,972 | 267,789 | 266,644 |
| Distribution expenses | –27,659 | –25,203 | –53,451 | –54,392 | –101,449 | –102,390 |
| Administrative expenses | –10,281 | –9,620 | –21,471 | –20,301 | –39,634 | –38,463 |
| Development expenses | –3,661 | –2,870 | –7,219 | –6,567 | –13,849 | –13,197 |
| Operating profit | 13,939 | 12,131 | 49,975 | 49,713 | 112,857 | 112,594 |
| Net financial items | 705 | –260 | 97 | 1,403 | –2,242 | –936 |
| Profit before tax | 14,644 | 11,871 | 50,073 | 51,116 | 110,615 | 111,658 |
| Tax | –3,891 | –3,469 | –13,541 | –13,791 | –30,503 | –30,756 |
| Profit for the period | 10,753 | 8,402 | 36,532 | 37,325 | 80,109 | 80,902 |
| Profit/loss attributable to: | ||||||
| Parent Company's shareholders | 10,750 | 8,405 | 36,533 | 37,302 | 80,051 | 80,867 |
| Minority interests | 3 | –3 | –1 | –23 | 58 | 35 |
| Other comprehensive income | ||||||
| Translation adjustments for foreign operations | 46 | 245 | –196 | 476 | 172 | 844 |
| Total comprehensive income for the period | 10,799 | 8,647 | 36,336 | 37,801 | 80,281 | 81,746 |
| Total comprehensive income for the period attributable to | ||||||
| Parent Company's shareholders | 10,796 | 8,650 | 36,337 | 37,778 | 80,223 | 81,711 |
| Minority interests | 3 | –3 | –1 | –23 | 58 | 35 |
| Earnings per share, SEK | 0.43 | 0.34 | 1.45 | 1.49 | 3.19 | 3.22 |
| Earnings per share after dilution, SEK | 0.42 | 0.33 | 1.43 | 1.49 | 3.19 | 3.21 |
| Number of shares | 25,148,384 | 25,148,384 | 25,148,384 | 25,148,384 | 25,148,384 | 25,148,384 |
| Weighted average number of shares | 25,148,384 | 25,088,917 | 25,148,384 | 25,074,051 | 25,133,517 | 25,111,217 |
| Effect of dilution* | 317,239 | 114,010 | 349,165 | – | – | 118,910 |
| Weighted average number of shares after full dilution | 25,465,623 | 25,202,927 | 25,467,549 | 25,074,051 | 25,133,517 | 25,230,128 |
* Björn Borg has two outstanding incentive programs based on warrants: 2008:1 and 2008:2.
For more detailed information, see page 53 of the annual report 2009.
| Condensed | |||
|---|---|---|---|
| SEK thousands | June 30 2010 |
June 30 2009 |
December 31 2009 |
| Non-current assets | |||
| Goodwill | 13,944 | 13,944 | 13,944 |
| Trademarks | 187,532 | 187,532 | 187,532 |
| Other intangible assets | 6,840 | 1,815 | 3,437 |
| Tangible non-current assets | 9,811 | 13,578 | 11,150 |
| Deferred tax assets | 9,046 | – | – |
| Total non-current assets | 227,173 | 216,869 | 216,063 |
| Current assets | |||
| Inventories, etc. | 25,327 | 36,523 | 26,455 |
| Current receivables | 103,379 | 89,219 | 65,719 |
| Cash & cash equivalents | 169,986 | 239,957 | 296,484 |
| Total current assets | 298,692 | 365,699 | 388,657 |
| Total assets | 525,865 | 582,569 | 604,720 |
| Equity and liabilities | |||
| Equity | 371,549 | 416,982 | 460,956 |
| Deferred tax liabilities | 42,525 | 35,354 | 40,011 |
| Other non-current liabilities | 37,806 | 43,852 | 40,889 |
| Accounts payable | 29,234 | 30,168 | 15,480 |
| Other current liabilities | 44,751 | 56,213 | 47,385 |
| Total equity and liabilities | 525,865 | 582,569 | 604,720 |
Condensed
| SEK thousands | Jan-June 2010 |
Jan-June 2009 |
Full-year 2009 |
|---|---|---|---|
| Opening balance | 460,956 | 413,803 | 413,803 |
| New share issues | – | 2,966 | 2,996 |
| Dividend | –125,742 | –37,589 | –37,589 |
| Total comprehensive income for the period | 36,336 | 37,801 | 81,746 |
| Total comprehensive income for the period | 371,549 | 416,982 | 460,956 |
Condensed
| SEK thousands | April-June 2010 |
April-June 2009 |
Jan-June 2010 |
Jan-June 2009 |
Full-year 2009 |
|---|---|---|---|---|---|
| Cash flow from operating activities | |||||
| Before change in working capital | 1,703 | 4,339 | 30,049 | 39,006 | 69,246 |
| Change in working capital | 15,126 | 18,162 | –15,983 | –3,675 | 24,873 |
| Cash flow from operating activities | 16,829 | 22,500 | 14,066 | 35,330 | 94,119 |
| Investments in intangible non-current assets | –3,289 | –364 | –3,861 | –1,262 | –3,160 |
| Investments tangible non-current assets | –423 | –383 | –1,915 | –985 | –1,380 |
| Company acquisition | 50 | – | –9,046 | – | – |
| Cash flow from investing activities | –3,662 | –747 | –14,822 | –2,248 | –4,540 |
| Dividend | –125,742 | –37,589 | –125,742 | –37,589 | –37,589 |
| Incentive programs/new share issues | – | 2,966 | – | 2,966 | 2,996 |
| Change in loans | –125,000 | – | – | – | – |
| Cash flow from financing activities | –250,742 | –34,623 | –125,742 | –34,623 | –34,593 |
| Cash flow for the period | –237,575 | –12,870 | –126,498 | –1,541 | 54,986 |
| Cash & cash equivalents at beginning of period | 407,561 | 252,827 | 296,484 | 241,498 | 241,498 |
| Cash & cash equivalents at end of period | 169,986 | 239,957 | 169,986 | 239,957 | 296,484 |
Group
| SEK thousands | April-June 2010 |
April-June 2009 |
Jan-June 2010 |
Jan-June 2009 |
July 2009- June 2010 |
Full-year 2009 |
|---|---|---|---|---|---|---|
| Gross profit margin, % | 55.1 | 50.9 | 53.0 | 49.9 | 52.9 | 51.3 |
| Operating margin, % | 13.8 | 12.4 | 20.1 | 18.9 | 22.3 | 21.7 |
| Profit margin, % | 14.5 | 12.1 | 20.1 | 19.5 | 21.8 | 21.5 |
| Return on capital employed, % | 24.5 | 29.8 | 24.5 | 29.8 | 24.5 | 20.9 |
| Return on average equity, % | 20,3 | 25.7 | 20,3 | 25.7 | 20.3 | 18.5 |
| Profit attributable to Parent Company's shareholders | 10,750 | 8,405 | 36,533 | 37,302 | 81,051 | 80 867 |
| Earnings per share, SEK | 0.43 | 0.34 | 1.45 | 1.49 | 3.19 | 3.22 |
| Earnings per share after dilution, SEK | 0.42 | 0.33 | 1.43 | 1.49 | 3.19 | 3.21 |
| Number of shares | 25,148,384 | 25,148,384 | 25,148,384 | 25,148,384 | 25,148,384 | 25,148,384 |
| Weighted average number of shares | 25,148,384 | 25,088,917 | 25,148,384 | 25,074,051 | 25,133,517 | 25,111,217 |
| Effect of dilution | 317,239 | 114,010 | 349,165 | – | – | 118,910 |
| Weighted average number of shares after dilution | 25,465,623 | 25,202,927 | 25,497,549 | 25,074,051 | 25,133,517 | 25,230,128 |
| Equity/assets ratio, % | 70.7 | 71.6 | 70.7 | 71.6 | 70.7 | 76.2 |
| Equity per share, SEK | 14.77 | 16.58 | 14.77 | 16.62 | 14.77 | 18.33 |
| Investments in intangible non-current assets | 3,289 | 364 | 3 861 | 1,262 | 5,759 | 3,160 |
| Investments in tangible non-current assets | 423 | 383 | 1,915 | 985 | 2,310 | 1,380 |
| Investments in financial non-current assets | –50 | – | 9,046 | – | – | – |
| Depreciation and impairment losses for the period | –1,614 | –1,984 | –3,712 | –3,959 | –6,777 | –7,024 |
| Average number of employees | 94 | 93 | 94 | 93 | 93 | 92 |
| Group | ||||||
|---|---|---|---|---|---|---|
| SEK thousands | April-June 2010 |
April-June 2009 |
Jan-June 2010 |
Jan-June 2009 |
July 2009- june 2010 |
Full-year 2009 |
| Operating revenue | ||||||
| Brand and other | ||||||
| External sales | 8,511 | 10,681 | 23,593 | 30,370 | 48,159 | 54,936 |
| Internal sales | 15,051 | 13,886 | 35,778 | 37,973 | 81,146 | 83,341 |
| 23,563 | 24,567 | 59,370 | 68,343 | 129,305 | 138,277 | |
| Product development | ||||||
| External sales | 56,857 | 54,296 | 131,810 | 136,009 | 253,192 | 257,391 |
| Internal sales | 21,182 | 14,416 | 37,687 | 42,646 | 76,829 | 81,788 |
| 78,039 | 68,712 | 169,497 | 178,654 | 330,021 | 339,179 | |
| Wholesale | ||||||
| External sales | 25,605 | 22,269 | 73,722 | 73,655 | 153,169 | 153,102 |
| Internal sales | 7,095 | 5,052 | 19,118 | 13,087 | 46,744 | 40,713 |
| 32,700 | 27,322 | 92,840 | 86,742 | 199,913 | 193,815 | |
| Retail | ||||||
| External sales | 9,796 | 10,585 | 20,024 | 22,472 | 52,037 | 54,485 |
| Internal sales | – | – | – | – | 6 | 6 |
| 9,796 | 10,585 | 20,024 | 22,472 | 52,043 | 54,491 | |
| Less internal sales | –43,329 | –33,354 | –92,582 | –93,706 | –204,724 | –205,847 |
| Operating revenue | 100,770 | 97,832 | 249,149 | 262,506 | 506,558 | 519,915 |
| Operating profit | ||||||
| Brand and other | –4,595 | 1,662 | 8,115 | 18,936 | 33,120 | 43,942 |
| Product development | 16,204 | 13,772 | 33,833 | 32,492 | 52,327 | 50,984 |
| Wholesale | 3,360 | –4,730 | 11,169 | –2,269 | 23,073 | 9,635 |
| Retail | –1,030 | 1,427 | –3,141 | 554 | 4,337 | 8,032 |
| Operating profit | 13,939 | 12,131 | 49,975 | 49,713 | 112,857 | 112,594 |
| Group | ||||||||
|---|---|---|---|---|---|---|---|---|
| Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | |
| SEK thousands | 2010 | 2010 | 2009 | 2009 | 2009 | 2009 | 2008 | 2008 |
| Net sales | 100,770 | 148,379 | 102,247 | 155,162 | 97,832 | 164,674 | 131,233 | 160,762 |
| Gross profit margin, % | 55.1 | 51.6 | 55.7 | 50.8 | 50.9 | 49.3 | 54.1 | 54.1 |
| Operating profit | 13,939 | 36,037 | 19,427 | 43,454 | 12,131 | 37,582 | 26,049 | 49,688 |
| Operating margin, % | 13.8 | 24.3 | 19.0 | 28.0 | 12.4 | 22.8 | 19.8 | 30.9 |
| Profit after financial items | 14,644 | 35,429 | 19,712 | 40,830 | 11,871 | 39,245 | 28,693 | 52,277 |
| Profit margin, % | 14.5 | 23.9 | 19.3 | 26.3 | 12.1 | 23.8 | 21.9 | 32.5 |
| Earnings per share, SEK | 0.43 | 1.03 | 0.54 | 1.20 | 0.34 | 1.15 | 0.91 | 1.50 |
| Earnings per share after dilution, SEK | 0.42 | 1.01 | 0.53 | 1.19 | 0.33 | 1.15 | 0.91 | 1.50 |
| Number of Björn Borg stores at end of period | 46 | 46 | 46 | 45 | 43 | 44 | 44 | 41 |
| of which Björn Borg-owned stores | 10 | 10 | 10 | 10 | 10 | 11 | 11 | 11 |
| Brand sales | 347,300 | 460,156 | 410,053* | 501,629* | 358,037* | 602,183 | 475,806 | 562,835 |
* Because brand sales for the full-year 2009 have been changed to correct the previously reported figures, quarterly brand sales for 2009 have been updated. Previously reported figures: Q2 2009 = 385,637, Q3 2009 = 566,423, Q4 2009 = 422,121
Condensed
| SEK thousands | April-June 2010 |
April-June 2009 |
Jan-June 2010 |
Jan-June 2009 |
July 2009- June 2010 |
Full-year 2009 |
|---|---|---|---|---|---|---|
| Net sales | 6,274 | 6,464 | 18,293 | 20,440 | 45,462 | 47,608 |
| Cost of goods sold | –93 | –1,001 | –127 | –2,406 | –128 | –2,407 |
| Gross profit | 6,181 | 5,463 | 18,166 | 18,034 | 45,334 | 45,201 |
| Distribution expenses | –14,829 | –9,267 | –24,366 | –20,078 | –45,114 | –40,826 |
| Administrative expenses | –5,704 | –3,564 | –9,372 | –7,722 | –17,352 | –15,702 |
| Development expenses | –2,281 | –1,426 | –3,749 | –3,089 | –6,941 | –6,281 |
| Operating profit/loss | –16,633 | –8,794 | –19,320 | –12,855 | –24,073 | –17,608 |
| Dividend from subsidiary | – | – | – | – | – | 100,000 |
| Net financial items | –2,021 | 1,295 | –1,508 | 1,250 | –784 | 1,975 |
| Profit/loss before tax | –18,654 | –7,500 | –20,828 | –11,605 | –24,856 | 84,367 |
| Tax | 4,866 | 1,972 | 5,438 | 3,073 | 6,381 | 4,017 |
| Profit/loss for the period | –13,788 | –5,527 | –15,390 | –8,531 | –18,475 | 88,383 |
| Other comprehensive income | – | – | – | – | – | – |
| Total comprehensive income for the period | –13,788 | –5,527 | –15,390 | –8,531 | –18,475 | 88,383 |
Condensed
| SEK thousands | Jan-June 2010 |
Jan-June 2009 |
Full-year 2009 |
|---|---|---|---|
| Non-current assets | |||
| Intangible non-current assets | 1,914 | 1,241 | 1,694 |
| Tangible non-current assets | 3,582 | 4,700 | 4,238 |
| Shares in Group companies | 316,585 | 54,497 | 54,497 |
| Total non-current assets | 322,082 | 60,438 | 60,428 |
| Current assets | |||
| Receivables from Group companies | 85,662 | 33,238 | 88,903 |
| Current receivables | 12,564 | 11,976 | 5,703 |
| Cash & cash equivalents | 124,924 | 177,485 | 287,657 |
| Total current assets | 223,150 | 222,699 | 382,263 |
| Total assets | 545,232 | 283,137 | 442,691 |
| Equity and liabilities | |||
| Equity | 73,606 | 106,628 | 214,738 |
| Untaxed reserves | 7,359 | 7,359 | 7,359 |
| Due to Group companies | 451,196 | 157,783 | 207,835 |
| Accounts payable | 1,440 | 3,391 | 1,840 |
| Other current liabilities | 11,631 | 7,976 | 10,919 |
| Total equity and liabilities | 545,232 | 283,137 | 442,691 |
Condensed
| SEK thousands | Jan-June 2010 |
Jan-June 2009 |
Full-year 2009 |
|---|---|---|---|
| Opening balance | 214,738 | 149,782 | 149,782 |
| New share issues | – | 2,966 | 2,966 |
| Dividend | –125,742 | –37,589 | –37,589 |
| Group contributions | – | – | 15,191 |
| Tax effect of Group contributions | – | – | –3,995 |
| Total comprehensive income for the period | –15,390 | –8,531 | 88,383 |
| Closing balance | 73,606 | 106,628 | 214,738 |
Net sales less cost of goods sold divided by net sales.
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 (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.
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 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.
Fredrik Lövstedt Chairman
Nils Vinberg Vice Chairman
Monika Elling Board Member Kerstin Hessius Board Member
Fabian Månsson Board Member
Mats H Nilsson Board Member
Vilhelm Schottenius Board Member
Michael Storåkers Board Member
Arthur Engel President and CEO
The Group owns the Björn Borg trademark and has operations in five product areas: clothing, footwear, bags, eyewear and fragrances. Björn Borg products are sold in fifteen markets, of which Sweden and the Netherlands are the largest. Operations are managed through a network of product and distribution companies which are either part of the Group or are independent companies with licenses for product areas and geographical markets. The Björn Borg Group has operations at every level from branding to consumer sales through its own Björn Borg stores. Total sales of Björn Borg products in 2009 are estimated SEK 1.9 billion at the consumer level, excluding VAT. Group net sales amounted to SEK 520 million in 2009, with 92 employees at year-end. The Björn Borg share is listed on NASDAQ OMX Nordic, Mid Cap list, since May 7, 2007.
The interim report January–September 2010 will be released on November 11, 2010. The year-end report for 2010 will be released on February 10, 2011. Annual Report March 2011.
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 August 19, 2010 at 7:30 a.m. (CET).
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