Quarterly Report • May 6, 2010
Quarterly Report
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"The first quarter of the year shared similarities with the end of 2009, with declining brand sales and consolidated revenue, but at the same time we are seeing positive signs. We have continued to improve in areas that we consider crucial to reaching our goal to be the best in the world in fashion underwear, including an increased number of new products, impactful campaigns and a new distributor in France", said Arthur Engel.
| SEK million | 2010 | January-March January-March 2009 |
April 2009- March 2010 |
Full-year 2009 |
|---|---|---|---|---|
| Net sales | 148.4 | 164.7 | 503.6 | 519.9 |
| Gross profit margin, % | 51.6 | 49.3 | 52.0 | 51.3 |
| Operating profit | 36.0 | 37.6 | 111.1 | 112.6 |
| Operating margin, % | 24.3 | 22.8 | 22.1 | 21.7 |
| Profit after tax | 25.8 | 28.9 | 77.1 | 80.9 |
| Earnings per share, SEK | 1.03 | 1.15 | 3.07 | 3.22 |
| Earnings per share after dilution, SEK | 1.01 | 1.15 | 3.07 | 3.21 |
| Brand sales* | 461 | 602 | 1,835 | 1,976 |
* Estimated total sales of Björn Borg products at the consumer level, excluding VAT, based on reported wholesale sales.
In 2009 we settled on a vision for the brand and our direction going forward: we want to be the best in the world in fashion underwear. Björn Borg has begun the new year with a high level of activity in every part of the business that we consider important to reaching this vision and to our long-term expansion: innovative product development, efficient marketing and broader distribution.
In product development, several new underwear products reached stores during the first quarter, not least of all in Kids, which is now available for both boys and girls and has received a positive response. In February we launched on a widespread basis our first major new product of the year, the Love All underwear line for women, at the same time that a sports-oriented menswear collection went on sale. This fall more new products for both women and men will reach consumers.
In an effort to streamline marketing communications, we developed improved support for distributors during the spring in the form various marketing tools. The idea is to make it easier for our partners to strengthen the brand in their markets and increase opportunities for sustainable growth. At the same time we have launched the first campaigns with Björn Borg's new brand platform and the theme Swedish Underwear Liberation, with a great deal of energy and much of Björn Borg's soul, but with the emphasis on the product.
After an analysis last year of the representatives in our various markets, we have been trying to find a new distributor in France. We have now found a solution with an experienced partner, which we think is right for this important market. As announced earlier, footwear will be licensed out during the year, an important step to strengthen the prospects of a broader expansion in this product area. The Björn Borg store on Sergelgatan in Stockholm opened in March after renovations to fit our new retail concept, which we developed to bolster our stores and shop-inshops internationally. And we are always keeping our eyes out for interesting new markets with the right partners.
The first quarter of the year shared similarities with the end of 2009, with declining brand sales and consolidated revenue, but at the same time we are seeing positive signs. Adjusted for negative exchange rate effects and unusually high footwear sales in the first quarter of last year, we posted a slight increase in revenue compared with 2009. The growth was in underwear sales at the end of the period. At the same time lower expenses, primarily from reduced operations in the U.S., contributed to an increase in operating margin during the quarter to a strong 24.3 percent.
Arthur Engel President
Brand sales (excluding VAT) for the first quarter 2010 decreased by 24 percent to SEK 461 million (602). The decrease is the result of lower underwear orders from distributors in early fall 2009 and lower footwear sales in the Netherlands, which had reported a very strong increase in the same quarter of 2009. Brand sales were also adversely affected to a slight degree by a stronger krona against the euro during the period.
Brand sales in the underwear product area decreased by 22 percent during the quarter compared with the previous year. Declines were noted in all major markets. Among smaller markets, Belgium and Finland reported continued positive sales trends. Underwear accounted for 69 percent (67) of brand sales during the quarter.
In the smaller product area, adjacent products – menswear – brand sales doubled compared with the same quarter of the previous year, though from a low level.
Sales in the footwear product area fell by 43 percent after a substantial rise during the first quarter of the previous year. By licensing footwear operations to an established international player, as planned in 2010, growth prospects will improve in the product area.
* 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.
In licensed products, sales decreased for bags and the licensed women's collection in the Netherlands. Fragrances and eyewear both reported growth.
Brand sales in smaller markets accounted for 13 percent (15) of total brand of sales during the first quarter. Among major markets, Sweden reported an increase in brand sales of 3 percent, while the Netherlands, Denmark and Norway posted negative sales trends. Among smaller markets, Belgium continued to grow strongly and now accounts for 5 percent of total brand sales.
No new Björn Borg stores were opened during the first quarter of 2010. At the end of the period there were 46 (44) Björn Borg stores, of which 10 (11) are Group-owned. During the quarter the store at Sergelgatan in Stockholm was renovated to fit the new retail concept.
March 25, 2010 Björn Borg acquired 100 percent of the capital and votes in FSSIT Services AB, the name of which has since been changed to Björn Borgs Services AB. The purchase price amounted to approximately SEK 9 million, excluding FFSIT's cash reserves, while transaction expenses amounted to approximately SEK 1.3 million. The transaction expenses are recognized as an operating expense.
During the two years preceding the acquisition FSSIT Services AB did not conduct any operations, and with the exception of its cash reserves the company essentially had no assets or liabilities. In its previous business as a service company in the IT sector, FSSIT Services AB had generated losses that gave it tax loss carryforwards totaling approximately SEK 182 million, for which deferred tax assets of SEK 9 million have been recognized in the acquisition balance sheet. The tax loss carryforwards are expected to be utilized beginning in the 2016 financial year. The acquisition has an effect on the Group's cash position of SEK –9 million, which corresponds to the difference between the purchase price paid and FSSIT Services AB's liquid assets at the time of acquisition. The effect on the Group's results and position is not material either before or after the acquisition date.
Sales and operating profit decreased during the first quarter.
Group sales during the first quarter amounted to SEK 148.4 million (164.7), a decrease of 10 percent. Sales were negatively affected by lower exports to the Netherlands in the footwear product area, at the same time that they were positively affected by higher sales in the underwear product area. Sales in Swedish underwear wholesale opeartions and Group-owned retail operations decreased slightly. The US dollar weakened compared with the same period of 2009, due to which sales decreased by about SEK 13 million.
The gross profit margin increased during the first quarter to 51.6 percent (49.3), which is attributable to a weaker dollar, but also a decreased share of export sales in footwear operations.
Operating profit amounted to SEK 36.0 million (37.6) during the quarter with an operating margin of 24.3 percent (22.8). Profit before tax decreased during the period to SEK 35.4 million (39.2).
Operating profit was adversely affected by lower sales and a lower dollar exchange rate, which was compensated by lower operating expenses. Further cost efficiencies and lower investments in the U.S. contributed to lower operating expenses, which include acquisition-related expenses of SEK 1.3 million attributable to FFSIT AB.
As of March 31, 2010 the company had 25,148,384 shares outstanding. Earnings per share before and after dilution amounted to SEK 1.03 (1.15) and SEK 1.01 (1.15), respectively.
The Group comprises eight companies that operate under the Björn Borg brand on every level from product development to distribution and consumer sales in its own Björn Borg stores.
Brand and other consist primarily of royalty revenue, sales of services within the Björn Borg network and intra-Group services.
Net sales during the period reached SEK 35.8 million (43.8), a decrease of 18 percent. The external net sales amounted to SEK 15.1 million (19.7). 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 12.7 million (17.3), a decrease of 26 percent for the period. Profit was affected by lower sales.
The Group has global responsibility for development, design and production of underwear, adjacent products and footwear.
The segment's net sales amounted to SEK 91,5 million (109,9) for the period, a decrease of 17 percent. The external net sales amounted to SEK 75.0 million (81.7). The decrease was primarily due to lower footwear exports to the Netherlands, but also a weaker dollar.
Operating profit decreased to SEK 17.6 million (18.7) as a result of the decline in sales. Good cost controls offset part of the sales decrease.
The Björn Borg Group is the exclusive wholesaler for the underwear, adjacent product and footwear product areas in Sweden and the U.S.
Net sales in wholesale operations increased by 1 percent during the period to SEK 60.1 million (59.4). The external net sales amounted to SEK 48.1 million (51.4). The decrease in the external net sales was mainly attributable to both the footwear and underwear product areas.
Operating profit amounted to SEK 7.8 million (2.5). The increase was due to the weaker dollar, which affected gross profit positively, as well as lower investments in the U.S.
| Sales, SEK thousands January-March |
Operating profit, SEK thousands January-March |
Operating margin January-March |
|||||
|---|---|---|---|---|---|---|---|
| Business segment | Revenue source | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 |
| Brand and other | Royalties and services | 35,808 | 43,776 | 12,710 | 17,275 | 35% | 39% |
| Product development | Products | 91,457 | 109,942 | 17,628 | 18,719 | 19% | 17% |
| Wholesale operations | Wholesale sales | 60,140 | 59,421 | 7,809 | 2,461 | 13% | 4% |
| Retail | Retailers | 10,227 | 11,887 | –2,110 | –873 | –21% | –7% |
| Less internal sales | –49,253 | –60,352 | – | – | – | – | |
| Total | 148,379 | 164,674 | 36,037 | 37,582 | 24% | 23% |
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.
Retail sales amounted to SEK 10.2 million (11.9) during the period, a decrease of 14 percent. The decrease was mainly due to lower sales at the two outlets, but also the renovation of a store in Stockholm. Same-store sales decreased by 13 percent.
The operating loss for the period amounted to SEK 2.1 million, against a year-earlier loss of SEK 0.9 million, and resulted from lower sales and depreciation from the store renovation.
Intra-Group sales amounted to SEK 49,3 million (60,4) 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 –2.8 million (12.8) for the first quarter 2010. The decrease was mainly due to higher working capital caused by an increase in accounts receivable from delayed invoicing, but at the same time offset somewhat by increased accounts payable, however.
Total investments in tangible and intangible non-current assets amounted to SEK 2.1 million (1.5) during the period, the large part of which was attributable to the store renovation, though also a new enterprise system and web platform. During the first quarter a company acquisition was also made amounting SEK 9,1 million.
For the first quarter 2010 cash & cash equivalents increased by SEK 111.1 million (11.3).
The Björn Borg Group's cash & cash equivalents (net cash position) amounted to SEK 407.6 million (252.8) at the end of the period. The equity/assets ratio was 63.2 percent (70.0).
In connection with the acquisition of FSSIT AB, a short-term credit of SEK 125 million was obtained. The credit has a twomonth maturity.
Net financial items were affected negatively during the first quarter 2010 by a weaker dollar 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. As mentioned before, there is a dispute between Björn Borg AB and its English distributor regarding shipments that were not delivered. Arbitration proceedings have begun and a settlement is expected in 2010. Because the financial impact of the dispute cannot be reliably determined, the company has not allocated any provisions for the dispute in these accounts. The financial effect is not expected to materially impact the Group. For further information, see note 22 on page 56 of the annual report 2009.
The average number of employees in the Group for the period was 91 (91), of whom 58 (57) 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.
After the conclusion of the report period a letter of intent was signed with a new distributor in France.
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 first quarter amounted to SEK 12.0 million (14.0). The loss before tax amounted to SEK 2.2 million, against a year-earlier loss of SEK 4.1 million. Cash & cash equivalents amounted to SEK 125.5 million (176.8) on March 31, 2010. For the period investments in tangible and intangible non-current assets amounted to SEK 0.4 million (0.9).
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.
The Annual General Meeting of Björn Borg AB, which was held in Stockholm at 5:00 p.m. on April 15, 2010, resolved to pay a dividend of SEK 5.00 (1.50) per share to the shareholders for the year 2009. The Directors Monica Elling, Fredrik Lövstedt, Fabian Månsson, Mats H Nilsson, Vilhelm Schottenius, Michael Storåkers and Nils Vinberg were re-elected, with Fredrik Lövstedt as Chairman of the Board. Kerstin Hessius was elected a new Director.
In accordance to the Board of Directors' proposal, the Annual General Meeting, authorized the Board, until the next Annual General Meeting, to resolve with respect to new issues of shares, warrants or convertibles on one or several occasions, with or without deviating from the shareholders' preferential rights. The number of shares could increase in total by not more than 1,250,000.
The Board of Directors was authorized, until the next Annual General Meeting, to resolve to acquire the company's own shares, on one or several occasions, to the extent that the holding of treasury shares subsequently does not exceed ten percent of all the shares in the company. Further, the Meeting authorized the Board, until the next Annual General Meeting, to resolve to transfer treasury shares to third parties on one or several occasions. Transfers are limited to the total number of treasury shares that the company holds at any given time.
The Meeting adopted the Board of Directors' proposal regarding remuneration guidelines for the executive management, comprising the President and other members of the executive management.
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.
| SEK thousands | January-March 2010 |
January-March 2009 |
April 2009- March 2010 |
Full-year 2009 |
|---|---|---|---|---|
| Net sales | 148,379 | 164,674 | 503,620 | 519,915 |
| Cost of goods sold | –71,803 | –83,526 | –241,548 | –253,271 |
| Gross profit | 76,576 | 81,148 | 262,072 | 266,644 |
| Distribution expenses | –25,792 | –29,047 | –99,134 | –102,390 |
| Administrative expenses | –11,190 | –10,882 | –38,771 | –38,463 |
| Development expenses | –3,557 | –3,636 | –13,118 | –13,197 |
| Operating profit | 36,037 | 37,582 | 111,048 | 112,594 |
| Net financial items | –608 | 1,663 | –3,207 | –936 |
| Profit before tax | 35,429 | 39,245 | 107,841 | 111,658 |
| Tax | –9,650 | –10,322 | –30,756 | –30,756 |
| Profit for the period | 25,779 | 28,924 | 77,085 | 80,902 |
| Profit for the period attributable to: | ||||
| Parent Company's shareholders | 25,782 | 28,897 | 77,080 | 80,867 |
| Minority interests | –3 | 27 | 5 | 35 |
| Other comprehensive income | ||||
| Translation adjustments for foreign operations | –242 | 231 | 371 | 844 |
| Total comprehensive income for the period | 25,537 | 29,155 | 77,456 | 81,746 |
| Total comprehensive income for the period attributable to | ||||
| Parent Company's shareholders | 25,540 | 29,128 | 77,451 | 81,711 |
| Minority interests | –3 | 27 | 5 | 35 |
| Earnings per share, SEK | 1.03 | 1.15 | 3.07 | 3.22 |
| Earnings per share after dilution, SEK | 1.01 | 1.15 | 3.07 | 3.21 |
| Number of shares | 25,148,384 | 25,059,184 | 25,148,384 | 25,148,384 |
| Weighted average number of shares | 25,148,384 | 25,059,184 | 25,133,517 | 25,111,217 |
| Effect of dilution* | 377,505 | 19,470 | – | 118,910 |
| Weighted average number of shares after full dilution | 25,525,889 | 25,078,654 | 25,133,517 | 25,230,128 |
* Björn Borg AB 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 | March 31 2010 |
March 31 2009 |
December 31 2009 |
| Non-current assets | |||
| Goodwill | 13,944 | 13,944 | 13,944 |
| Trademarks | 187,532 | 187,532 | 187,532 |
| Other intangible assets | 3,826 | 2,033 | 3,437 |
| Tangible non-current assets | 10,728 | 14,611 | 11,150 |
| Deferred tax assets | 9,096 | – | – |
| Total non-current assets | 225,126 | 218,120 | 216,063 |
| Current assets | |||
| Inventories, etc. | 23,584 | 37,141 | 26,455 |
| Current receivables | 113,961 | 124,653 | 65,719 |
| Cash & cash equivalents | 407,561 | 252,827 | 296,484 |
| Total current assets | 545,106 | 414,622 | 388,657 |
| Total assets | 770,232 | 632,742 | 604,720 |
| Equity and liabilities | |||
| Equity | 486,493 | 442,958 | 460,956 |
| Deferred tax liabilities | 41,634 | 34,247 | 40,011 |
| Other non-current liabilities | 39,405 | 45,334 | 40,889 |
| Due to credit institutions | 125,000 | – | – |
| Accounts payable | 28,696 | 37,634 | 15,480 |
| Other current liabilities | 49,004 | 72,569 | 47,385 |
| Total equity and liabilities | 770,232 | 632,742 | 604,720 |
CONDENSED
| SEK thousands | January-March 2010 |
January-March 2009 |
Full-year 2009 |
|---|---|---|---|
| Opening balance | 460,956 | 413,803 | 413,803 |
| New share issues | – | – | 2,996 |
| Dividend | – | – | –37,589 |
| Total comprehensive income for the period | 25,537 | 29,155 | 81,746 |
| Closing balance | 486,493 | 442,958 | 460,956 |
| CONDENSED | |
|---|---|
| SEK thousands | January-March 2010 |
January-March 2009 |
Full-year 2009 |
|---|---|---|---|
| Cash flow from operating activities | |||
| Before change in working capital | 28,347 | 34,667 | 69,246 |
| Change in working capital | –31,109 | –21,837 | 24,873 |
| Cash flow from operating activities | –2,762 | 12,830 | 94,119 |
| Investments in intangible non-current assets | –572 | – | –3,160 |
| Investments in tangible non-current assets | –1,492 | –1,501 | –1,380 |
| Company acquisition | –9,096 | – | – |
| Cash flow from investing activities | –11,160 | –1,501 | –4,540 |
| Dividend | – | – | –37,589 |
| Incentive programs/new share issues | – | – | 2,996 |
| Change in loans | 125,000 | – | – |
| Cash flow from financing activities | 125,000 | – | –34,593 |
| Cash flow for the period | 111,077 | 11,329 | 54,986 |
| Cash & cash equivalents at beginning of period | 296,484 | 241,498 | 241,498 |
| Cash & cash equivalents at end of period | 407,561 | 252,827 | 296,484 |
| GROUP | ||
|---|---|---|
| SEK thousands | January-March 2010 |
January-March 2009 |
April 2009- March 2010 |
Full-year 2009 |
|---|---|---|---|---|
| Gross profit margin, % | 51.6 | 49.3 | 52.0 | 51.3 |
| Operating margin, % | 24.3 | 22.8 | 22.1 | 21.7 |
| Profit margin, % | 23.9 | 23.8 | 21.4 | 21.5 |
| Return on capital employed, % | 18.3 | 29.1 | 18.3 | 20.9 |
| Return on average equity, % | 16.6 | 24.9 | 16.6 | 18.5 |
| Profit attributable to Parent Company's shareholders | 25,782 | 28,897 | 77,080 | 80,867 |
| Earnings per share, SEK | 1.03 | 1.15 | 3.07 | 3.22 |
| Earnings per share after dilution, SEK | 1.01 | 1.15 | 3.07 | 3.21 |
| Number of shares | 25,148,384 | 25,059,184 | 25,148,384 | 25,148,384 |
| Weighted average number of shares | 25,148,384 | 25,059,184 | 25,133,517 | 25,111,217 |
| Effect of dilution | 377,505 | 19,470 | – | 118,910 |
| Weighted average number of shares after dilution | 25,525,889 | 25,078,654 | 25,133,517 | 25,230,128 |
| Equity/assets ratio, % | 63.2 | 70.0 | 63.9 | 76.2 |
| Equity per share, SEK | 19.34 | 17.68 | 19.36 | 18.33 |
| Investments in intangible non-current assets | 572 | – | 3 732 | 3 160 |
| Investments in tangible non-current assets | 1,492 | 1,501 | 1,371 | 1,380 |
| Investments in financial non-current assets | 9,096 | – | 9,096 | – |
| Depreciation and impairment losses for the period | –2,098 | –1,975 | –7,147 | –7,024 |
| Average number of employees | 91 | 91 | 92 | 92 |
| GROUP | ||||
|---|---|---|---|---|
| SEK thousands | January-March 2010 |
January-March 2009 |
April 2009- March 2010 |
Full-year 2009 |
| Operating revenue | ||||
| Brand and other | ||||
| External sales | 15,081 | 19,689 | 50,330 | 54,936 |
| Internal sales | 20,727 | 24,087 | 79,979 | 83,341 |
| 35,808 | 43,776 | 130,309 | 138,277 | |
| Product development | ||||
| External sales | 74,953 | 81,712 | 250,631 | 257,391 |
| Internal sales | 16,504 | 28,230 | 70,063 | 81,788 |
| 91,457 | 109,942 | 320,694 | 339,179 | |
| Wholesale | ||||
| External sales | 48,117 | 51,386 | 149,834 | 153,102 |
| Internal sales | 12,023 | 8,035 | 44,701 | 40,713 |
| 60,140 | 59,421 | 194,535 | 193,815 | |
| Retail | ||||
| External sales | 10,227 | 11,887 | 52,825 | 54,485 |
| Internal sales | – | – | 6 | 6 |
| 10,227 | 11,887 | 52,831 | 54,491 | |
| Less internal sales | –49,253 | –60,352 | –194,749 | –205,847 |
| Operating revenue | 148,379 | 164,674 | 503,620 | 519,915 |
| Operating profit | ||||
| Brand and other | 12,710 | 17,275 | 39,378 | 43,942 |
| Product development | 17,628 | 18,719 | 49,893 | 50,984 |
| Wholesale | 7,809 | 2,461 | 14,983 | 9,635 |
| Retail | –2,110 | –873 | 6,794 | 8,032 |
| Operating profit | 36,037 | 37,582 | 111,048 | 112,594 |
GROUP
| SEK thousands | Q1 2010 |
Q4 2009 |
Q3 2009 |
Q2 2009 |
Q1 2009 |
Q4 2008 |
Q3 2008 |
Q2 2008 |
|---|---|---|---|---|---|---|---|---|
| Net sales | 148,379 | 102,247 | 155,162 | 97,832 | 164,674 | 131,233 | 160,762 | 95,813 |
| Gross profit margin, % | 51.6 | 55.7 | 50.8 | 50.9 | 49.3 | 54.1 | 54.1 | 55.9 |
| Operating profit | 36,037 | 19,427 | 43,454 | 12,131 | 37,582 | 26,049 | 49,688 | 16,493 |
| Operating margin, % | 24.3 | 19.0 | 28.0 | 12.4 | 22.8 | 19.8 | 30.9 | 17.2 |
| Profit after financial items | 35,429 | 19,712 | 40,830 | 11,871 | 39,245 | 28,693 | 52,277 | 16,594 |
| Profit margin, % | 23.9 | 19.3 | 26.3 | 12.1 | 23.8 | 21.9 | 32.5 | 17.3 |
| Earnings per share, SEK | 1.03 | 0.54 | 1.20 | 0.34 | 1.15 | 0.91 | 1.50 | 0.48 |
| Earnings per share after dilution, SEK | 1.01 | 0.53 | 1.19 | 0.33 | 1.15 | 0.91 | 1.50 | 0.48 |
| Number of Björn Borg stores at end of period | 46 | 46 | 45 | 43 | 44 | 44 | 41 | 39 |
| of which Björn Borg-owned stores | 10 | 10 | 10 | 10 | 11 | 11 | 11 | 10 |
| Brand sales | 460,456 | 422,121 | 566,423 | 385,637 | 602,,183 | 475,806 | 562,835 | 381,246 |
| SEK thousands | January-March 2010 |
January-March 2009 |
April 2009- March 2010 |
Full-year 2009 |
|---|---|---|---|---|
| Net sales | 12,019 | 13,976 | 45,651 | 47,608 |
| Cost of goods sold | –34 | –1,405 | –1,036 | –2,407 |
| Gross profit | 11,985 | 12,571 | 44,615 | 45,201 |
| Distribution expenses | –9,537 | –10,810 | –39,553 | –40,826 |
| Administrative expenses | –3,668 | –4,158 | –15,213 | –15,702 |
| Development expenses | –1,467 | –1,663 | –6,085 | –6,281 |
| Operating profit/loss | –2,687 | –4,060 | –16,236 | –17,608 |
| Dividend from subsidiary | – | – | – | 100,000 |
| Net financial items | 513 | –44 | 2,532 | 1,975 |
| Profit/loss before tax | –2,174 | –4,104 | –13,704 | 84,367 |
| Tax | 572 | 1,080 | 3,508 | 4,017 |
| Profit/loss for the period | –1,602 | –3,024 | –10,196 | 88,383 |
| Other comprehensive income | – | – | – | – |
| Total comprehensive income for the period | –1,602 | –3,024 | –10,196 | 88,383 |
| CONDENSED | |||
|---|---|---|---|
| SEK thousands | March 31 2010 |
March 31 2009 |
December 31 2009 |
| Non-current assets | |||
| Intangible non-current assets | 1,784 | – | 1,694 |
| Tangible non-current assets | 4,071 | 5,981 | 4,238 |
| Shares in Group companies | 316,635 | 54,497 | 54,497 |
| Total non-current assets | 322,490 | 60,478 | 60,428 |
| Current assets | |||
| Receivables from Group companies | 83,782 | 31,949 | 88,903 |
| Current receivables | 7,658 | 8,654 | 5,703 |
| Cash & cash equivalents | 125,481 | 176,777 | 287,657 |
| Total current assets | 216,921 | 217,380 | 382,263 |
| Total assets | 539,411 | 277,858 | 442,691 |
| Equity and liabilities | |||
| Equity | 213,136 | 146,757 | 214,738 |
| Untaxed reserves | 7,359 | 7,359 | 7,359 |
| Due to credit institutions | 125,000 | – | – |
| Due to Group companies | 179,320 | 102,027 | 207,835 |
| Accounts payable | 4,298 | 8,030 | 1,840 |
| Other current liabilities | 10,298 | 13,685 | 10,919 |
| Total equity and liabilities | 539,411 | 277,858 | 442,691 |
| SEK thousands | January-March 2010 |
January-March 2009 |
Full-year 2009 |
|---|---|---|---|
| Opening balance | 214,738 | 149,782 | 149,782 |
| New share issues | – | – | 2,966 |
| Dividend | – | – | –37,589 |
| Group contributions | – | – | 15,191 |
| Tax effect of Group contributions | – | – | –3,995 |
| Total comprehensive income for the period | –1,602 | –3,024 | 88,383 |
| Closing balance | 213,126 | 146,758 | 214,738 |
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 (on a rolling 12-month period) plus financial expenses as a percentage of average capital employed.
Net profit according to the income statement (on a rolling 12-month period) 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 amounted to approximately SEK 2 billion at the consumer level, excluding VAT. Group net sales amounted to SEK 520 million in 2009, with 92 employees at year-end. The Björn Borg share is listed on NASDAQ OMX Nordic, Mid Cap list, since May 7, 2007.
The interim report January–June 2010 will be released on August 19, 2010. The interim report January–September 2010 will be released on November 11, 2010. The year-end report for 2010 will be released on February 10, 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 May 6, 2010 at 7:30 a.m. (CET).
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