Quarterly Report • Aug 23, 2011
Quarterly Report
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"Sales excluding currency effects rose by 11 percent. Several of our new markets have developed strongly. Operating profit excluding the impact of our investments in Björn Borg Sport and in England was SEK 12.9 million compared with SEK 13.9 million in 2010, which is satisfactory given current market conditions. During the summer a highly publicized campaign, Björn John, was launched as an element in our branding work," said CEO Arthur Engel.
| SEK million | April – June 2011 |
April – June 2010 |
Jan – June 2011 |
Jan – June 2010 |
July 2010 – June 2011 |
Full-year 2010 |
|---|---|---|---|---|---|---|
| Net sales | 101.9 | 100.8 | 253.3 | 249.1 | 540.1 | 536.0 |
| Gross profit margin, % | 53.3 | 55.1 | 51.6 | 53.0 | 52.9 | 53.6 |
| Operating profit | 8.2 | 13.9 | 36.6 | 50.0 | 112.6 | 126.0 |
| Operating margin, % | 8.0 | 13.8 | 14.4 | 20.1 | 20.8 | 23.5 |
| Profit after tax | 6.5 | 10.8 | 27.1 | 36.5 | 81.3 | 90.8 |
| Earnings per share, SEK | 0.33 | 0.43 | 1.22 | 1.45 | 3.39 | 3.61 |
| Earnings per share after dilution, SEK | 0.33 | 0.42 | 1.21 | 1.43 | 3.39 | 3.57 |
| Brand sales* | 315 | 338 | 746 | 798 | 1,681 | 1,733 |
*Estimated total sales of Björn Borg products at the consumer level, excluding VAT, based on reported wholesale sales.
During the second quarter of the year we continued to focus on investments that we feel are essential to our future growth. This applies to the new Björn Borg Sport sportswear business in the Netherlands, our operations in England, e-commerce improvements and branding activities.
Total sales during the second quarter increased by 1 percent compared with 2010. Björn Borg Sport contributed to sales, at the same time that we were impacted again during the quarter by negative currency effects. Excluding currency effects, sales rose by 11 percent. Profit was adversely affected by a lower gross profit margin in Björn Borg Sport and increased costs for growth-oriented investments. Our other costs during the quarter were slightly lower than the same period of 2010.
Development during the quarter in our larger markets has varied, with brand sales higher in Sweden and Belgium, unchanged in Norway, and lower in Denmark and the Netherlands. The majority of newer markets are performing well considering market condi tions. In new markets where we have achieved continuity after working with the same distributor for several seasons, it is gratifying to see brand sales grow strongly. In this group of new markets, which includes Germany, Austria and Portugal, growth was over 150 percent for the first half-year, though from a low level compared with our larger markets.
We will also continue to grow by adding more Björn Borg stores in Sweden and through our distributors abroad. During the quarter a new store was opened in Düsseldorf, Germany, along with our first store in Ljubljana, Slovenia through our Austrian distributor. In Sweden, we at the same time opened two Group-owned stores, in Täby Centrum (Stockholm) and Västra Frölunda (Göteborg).
In June the first collection of Björn Borg Sport sportswear was presented at an event in the Netherlands well attended by distributors and major retailers – an important step in the efforts to establish Björn Borg Sport among current and new partners.
In July we launched one of our biggest PR campaigns through a collaboration between the two tennis greats Björn Borg and John McEnroe. Their personally designed underwear, introduced at a well-attended press conference in connection with the Wimbledon tournament, has been launched in a majority of our markets in recent days. It is great to be able to showcase these two legends, at the same time that it naturally means a lot for our brand, as evidenced by the fantastic response in the media. Through the campaign, we have also contributed to a couple of charitable projects through the Patti and John McEnroe Foundation.
The challenge now facing us is to continue to grow in new markets and establish the Björn Borg brand. Today what we are seeing is that distributors generally have to remain diligent to produce results in a weak and uncertain European retail market and that inventories are rising slightly. In this climate, it is even more important that we work hard and effectively to design the right products and serve our partners, build our brand and invest in areas that will generate growth going forward.
Arthur Engel, Chief Executive Officer
Adjusted for currency effects in the form of a stronger SEK, brand sales (excluding VAT) decreased by 3 percent for the second quarter and by 1 percent for the first half-year. At current exchange rates, sales decreased by 7 percent to SEK 315 million (338) for the quarter and by 7 percent to SEK 746 million (798) for the first half-year.
Brand sales in the underwear product area decreased by 12 percent during the first half-year compared with the same period in 2010. Underwear accounted for 68 percent (72) of brand sales during the period.
Sales in the licensed footwear product area rose by 55 per cent for the half-year as a whole.
Other licensed products reported mixed results, with clothing (women's clothing in the Netherlands, now part of Björn Borg Sport) and eyewear reporting decreases, while bags and fragrances grew slightly. As a whole, licensed product sales rose by 8 percent during the first half-year 2011, mainly due to the increase in the footwear 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, socks and adjacent products. Licensed products: Footwear, bags, fragrances, eyewear and clothing (women's clothing in the Netherlands, now part of Björn Borg Sport).
Smaller markets accounted for 11 percent (9) of total brand sales during the half-year. Among larger markets, Belgium reported strong growth and Sweden also noted an increase. Declines were noted in Norway, Denmark and the Netherlands. The Dutch distributor has begun to delay some shipments to its own stores, which has adversely affected retail sales in the Netherlands. Among smaller markets, Finland developed positively and Germany and Austria both posted strong sales trends.
The collections were sold to the new distributors in Italy and France during the first half-year and will result in brand sales during the second half-year.
During the half-year the Group expanded its own footwear distribution to include the Baltic countries.
A new German store was opened on Königsallee, in Düsseldorf, and an initial store was opened in Ljubljana, Slovenia by the Austrian distributor. A fifth store was opened in Belgium. Two Group-owned stores were opened during the quarter, in Västra Frölunda, in Göteborg, and in Täby Centrum, in Stockholm. One net store was closed in the Netherlands during the quarter. There were a total of 29 Björn Borg stores in the Netherlands as of June 30. On the same date the total number of Björn Borg stores was 54 (46), of which 12 (10) are Group-owned.
Since January 2011 Björn Borg has a subsidiary, Björn Borg Sport, for production of fashionable and functional sportswear together with the Dutch distributor. The creation of a separate, Netherlands-based clothing business is another element in the strategy to focus on the core business – underwear – in Stockholm. The new company builds on the Dutch clothing concept within Björn Borg, where an established business with broad-based experience has successfully managed the women's clothing company on a licensed basis. The clothing collections, both women's and men's, will focus on functional yet distinctly fashionable sportswear. The products will be sold to distributors in Björn Borg's existing markets, with an initial emphasis on larger markets.
Sales increased during the first half-year, but operating profit declined.
Group sales during the second quarter amounted to SEK 101.9 million (100.8), an increase of 1 percent. Björn Borg Sport was the biggest contributor to the increase. Delivery delays have contributed to a decrease in product development. Wholesale operations noted a significant increase and retail sales rose slightly. On the brand side, revenues decreased as a result of slightly lower brand sales during the quarter. Excluding currency effects, net sales increased by 11 percent.
Group sales during the first half-year amounted to SEK 253.3 million (249.1), an increase of 2 percent. Björn Borg Sport was the biggest contributor to the increase, while the Group's footwear sales decreased after the operations were licensed out in 2010. Product development decreased as a result of lower order volumes from individual distributors as well as delivery delays, while wholesale operations noted a significant increase. Group retail sales noted a slight increase, while the brand side posted lower revenues as a result of lower brand sales during the half-year. Excluding currency effects, net sales increased by 8 percent.
The gross profit margin decreased slightly during the second quarter to 53.3 percent (55.1). The margin within Björn Borg Sport is lower than in other operations, which contributed negatively to the Group's total margin. Excluding Björn Borg Sport, the margin instead would have risen slightly compared with the same period last year.
Operating profit decreased during the quarter by 41 percent to SEK 8.2 million (13.9) with an operating margin of 8.0 percent (13.8). Investments in Björn Borg Sport and the British operations reduced operating profit by SEK 3.3 million and SEK 1.4 million, respectively. Hence, operating profit net of these investments was SEK 12.9 million. Profit before tax decreased to SEK 8.9 million (14.6).
The newly started company Björn Borg Sport raised operating expenses by SEK 6.0 million (minority share SEK 3.0 million), of which SEK 2.7 million are one-off expenses in 2011. Excluding Björn Borg Sport and England, the Group's operating expenses decreased slightly compared with the same period of 2010.
The gross profit margin decreased slightly during the first half-year to 51.6 percent (53.0). As mentioned above, Björn Borg Sport contributed negatively to the Group's total margin. Excluding Björn Borg Sport, the margin instead would have risen slightly compared with the same period last year.
Operating profit decreased during the half-year by 27 percent to SEK 36.6 million (50.0) with an operating margin of 14.4 percent (20.1). Investments in Björn Borg Sport and the British operations reduced operating profit by SEK 6.3 million and SEK 2.2 million, respectively. Hence, operating profit net of these investments was SEK 45.1 million. Profit before tax decreased to SEK 36.9 million (50.1).
The newly started company Björn Borg Sport raised operating expenses by SEK 12.5 million (minority share SEK 6.1 million), of which SEK 6.2 million are one-off expenses limited to 2011. Further investments in personnel and the operations in the British market have led to higher operating expenses. Excluding Björn Borg Sport and England, the Group's operating expenses decreased slightly compared with the same period of 2010.
The Group consists of ten 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. As of January 1, 2011 the company has streamlined the
| Sales, SEK thousands January – June |
Operating profit, SEK thousands January – June |
Operating margin January – June |
||||||
|---|---|---|---|---|---|---|---|---|
| Business segment | Revenue source | 2011 | 2010 | 2011 | 2010 | 2011 | 2010 | |
| Brand | Royalties | 37,267 | 41,077 | 6,621 | 8,815 | 18% | 21% | |
| Product development | Products | 186,503 | 183,217 | 18,231 | 28,802 | 10% | 16% | |
| Wholesale operations | Wholesale revenues | 107,965 | 95,128 | 17,828 | 17,023 | 17% | 18% | |
| Retail | Retailers | 23,115 | 22,309 | –6,092 | –4,665 | –26% | –21% | |
| Less internal sales | –101,592 | –92,582 | – | – | – | – | ||
| Total | 253,258 | 249,149 | 36,588 | 49,975 | 14% | 20% |
segment previously called "Brand and other," which also included the Parent Company's sales and expenses. The segment is now called "Brand" and comprises only brandrelated operations, which the company believes provides a clearer description of this segment. The Parent Company's income statement has been divided by segment based on various distribution keys; 2010 figures have been restated in accordance with this new basis of distribution. Moreover, the U.S. operations, which today are limited to e-commerce, have been shifted from Wholesale operations to Retail, similar to the international e-commerce operations that are already part of the Retail segment.
The Brand segment primarily consists of royalty revenue and expenses associated with the brand.
Net sales for the first half-year reached SEK 37.3 million (41.1), a decrease of 9 percent. External sales amounted to SEK 20.9 million (22.4). The decrease was mainly due to lower brand sales, as mentioned earlier in the report.
Operating profit amounted to SEK 6.6 million (8.8), a decrease of 25 percent for the half-year. The operating profit was a consequence of the lower net sales. Operating expenses are otherwise in line with the same period of 2010.
The Björn Borg Group has global responsibility for development, design and production of underwear and adjacent products, as well as functional sportswear through Björn Borg Sport.
The business segment's net sales amounted to SEK 186.5 million (183.2) during the first half-year, an increase of 2 percent. External sales amounted to SEK 127.0 million (132.7), a decrease of 4 percent compared with the first half-year 2010. Björn Borg Sport has contributed positively to sales, while a weaker U.S. dollar had a negative effect.
Operating profit decreased to SEK 18.2 million (28.8) as a result of increased expenses for Björn Borg Sport, among other factors.
The Björn Borg Group is the exclusive wholesaler for underwear and adjacent products in Sweden and England as well as for footwear in Sweden, Finland and the Baltic countries.
Net sales in wholesale operations increased by 13 percent during the half-year to SEK 108.0 million (95.1). External sales amounted to SEK 83.6 million (73.7).
Operating profit amounted to SEK 17.8 million (17.0). A weaker USD has affected gross profit and operating profit positively, while the investment in the British operations has raised operating expenses.
The Björn Borg Group owns and operates ten stores in the Swedish market that sell underwear, adjacent products, footwear and licensed products. Additionally, Björn Borg operates two factory outlets as well as a web shop in the U.S. and one for international sales.
Net sales in Retail amounted to SEK 23.1 million (22.3)
during the half-year, an increase of 4 percent. External sales increased by 7 percent to SEK 21.7 million (20.3). The Björn Borg stores and outlets both reported higher sales. For comparable stores, sales were largely unchanged. E-commerce noted sales growth, but from a low level.
The operating loss for the half-year amounted to SEK 6.1 million, against a year-earlier loss of SEK 4.7 million, which was due to increased operating expenses attributable to the web venture and the opening of two new stores.
Intra-Group sales amounted to SEK 101.6 million (92.6) for 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 2.4 million (14.1) for the first half-year 2011. Large shipments at the end of the period led to an increase in working capital tied up in inventory and accounts receivable as well as a decrease in tied-up capital through increased accounts payable compared with December 31, 2010. The company does not believe that credit risk has risen as a result of the increased accounts receivable as of the closing date. Net tied-up working capital rose by SEK 28.1 million. The increase in inventories compared with June 30, 2010 relates to, among other things, a higher volume of goods en route to customers, returned goods from previous distributors and a larger footwear inventory.
Total investments in tangible and intangible non-current assets amounted to SEK 12.4 million (5.8) for the period, the large part of which relates to the establishment of Björn Borg Sport in the Netherlands and store renovations. During the first half-year cash & cash equivalents and short-term investments decreased by SEK 142.0 million (–126.5). This is mainly due to the distribution to shareholders of SEK 130.8 million (125.7) during the period, which has decreased equity.
The Björn Borg Group's cash & cash equivalents and shortterm investments amounted to SEK 89.5 million (170) at the end of the period. The equity/assets ratio was 68.3 percent (70.7). The company has no interest-bearing liabilities.
No changes were made with regard to pledged assets and contingent liabilities compared with December 31, 2010.
The average number of employees in the Group during the first half-year 2011 was 105 (94), of whom 65 (60) were women.
Board Member Fabian Månsson acquired 4 percent of the shares in the subsidiary Björn Borg Sport during the first half-year 2011. No other 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 2010.
There are no significant events to report following the conclusion of the report period.
Björn Borg AB (publ) is primarily engaged in intra-Group activities. The company also owns 100 percent of the shares in Björn Borg Brands AB, Björn Borg Footwear AB, Björn Borg Inc. and Björn Borg Services AB (dormant). In addition, the company owns 80 percent of the shares in Björn Borg UK and 51 percent of the shares in Björn Borg Sport BV.
The Parent Company's net sales for the second quarter amounted to SEK 6.7 million (6.3). During the first half-year the Parent Company's net sales amounted to SEK 18.2 million (18.3).
The loss before tax amounted to SEK 12.0 million for the second quarter (against a year-earlier loss of SEK 18.7 million) and SEK 19.9 million for the first six months (against a loss of SEK 20.8 million for the first half-year 2010). Cash & cash equivalents and short-term investments amounted to SEK 44.8 million (124.9) on June 30, 2011. Investments in tangible and intangible non-current assets for the period amounted to SEK 1.0 million (0.7).
Björn Borg currently has 25,148,384 shares outstanding.
The financial objectives of Björn Borg's operations for the period 2011 – 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 Björn Borg stores.
This interim report has been prepared in accordance with the Annual Accounts Act, RFR 1 Additional Accounting Regulations for Consolidated Groups (December 2010) and IAS 34 Interim Financial Reporting, and for the Parent Company in accordance with the Annual Accounts Act and RFR 2 Accounting in Legal Entities (December 2010).
The same accounting and valuation principles have been applied during the year as in 2010, as described on page 47 of the annual report 2010, with the exceptions indicated below.
The new and revised IFRS and the interpretations from IFRIC applied by the Group as of January 1, 2011 have not had a significant impact on the Group's results or financial position.
This interim report has not been reviewed by the company's auditors.
As a policy, the company does not issue earnings forecasts.
Condensed
| SEK thousands | April – June 2011 |
April – June 2010 |
Jan – June 2011 |
Jan – June 2010 |
July 2010 – June 2011 |
Full-year 2010 |
|---|---|---|---|---|---|---|
| Net sales | 101,937 | 100,770 | 253,258 | 249,149 | 540,149 | 536,040 |
| Cost of goods sold | –47,556 | –45,230 | –122,582 | –117,033 | –254,394 | –248,844 |
| Gross profit | 54,381 | 55,540 | 130,676 | 132,116 | 285,755 | 287,196 |
| Distribution expenses | –30,627 | –27,659 | –61,887 | –53,451 | –115,079 | –106,643 |
| Administrative expenses | –12,858 | –10,281 | –25,752 | –21,471 | –45,317 | –41,037 |
| Development expenses | –2,706 | –3,661 | –6,449 | –7,219 | –12,742 | –13,511 |
| Operating profit | 8,190 | 13,939 | 36,588 | 49,975 | 112,617 | 126,005 |
| Net financial items | 713 | 705 | 348 | 97 | –1,759 | –2,010 |
| Profit before tax | 8,903 | 14,644 | 36,936 | 50,073 | 110,858 | 123,995 |
| Tax | –2,445 | –3,891 | –9,818 | –13,541 | –29,509 | –33,232 |
| Profit for the period | 6,458 | 10,753 | 27,118 | 36,532 | 81,349 | 90,763 |
| Profit attributable to: | ||||||
| Parent Company's shareholders | 8,413 | 10,750 | 30,779 | 36,533 | 85,143 | 90,897 |
| Minority interests | –1,956 | 3 | –3,660 | –1 | –3,794 | –134 |
| Other comprehensive income | ||||||
| Translation adjustments for foreign operations | –42 | 46 | –61 | –196 | 388 | 253 |
| Total comprehensive income for the period | 6,416 | 10,799 | 27,058 | 36,336 | 81,737 | 91,017 |
| Total comprehensive income for the period attributable to | ||||||
| Parent Company's shareholders | 8,371 | 10,796 | 30,718 | 36,337 | 85,532 | 91,151 |
| Minority interests | –1,956 | 3 | –3,660 | –1 | –3,794 | –134 |
| Earnings per share, SEK | 0.33 | 0.43 | 1.22 | 1.45 | 3.39 | 3.61 |
| Earnings per share after dilution, SEK | 0.33 | 0.42 | 1.21 | 1.43 | 3.39 | 3.57 |
| 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 | 25,148,384 | 25,148,384 | 25,148,384 | 25,148,384 | 25,148,384 |
| Effect of dilution* | 176,751 | 317,239 | 267,609 | 349,165 | – | 321,818 |
| Weighted average number of shares after full dilution 25,325,135 | 25,465,623 | 25,415,993 | 25,497,549 | 25,148,384 | 25,470,202 |
* Björn Borg has an incentive program, 2008:2, based on warrants in Björn Borg. For more detailed information, see page 53 of the annual report 2010.
| Condensed | ||||
|---|---|---|---|---|
| SEK thousands | June 30 2011 |
June 30 2010 |
December 31 2010 |
|---|---|---|---|
| Non-current assets | |||
| Goodwill | 13,944 | 13,944 | 13,944 |
| Trademarks | 187,532 | 187,532 | 187,532 |
| Other intangible assets | 6,291 | 6,840 | 6,858 |
| Tangible non-current assets | 10,541 | 9,811 | 7,808 |
| Deferred tax assets | 6,438 | 9,046 | 6,438 |
| Total non-current assets | 224,746 227,173 36,308 |
222,580 | |
| Current assets | |||
| Inventories, etc. | 25,327 | 26,239 | |
| Current receivables | 123,532 | 103,379 | 85,344 |
| Short-term investments | 37,268 | – | 35,567 |
| Cash & cash equivalents | 52,259 | 169,986 | 194,275 |
| Total current assets | 249,367 | 298,692 | 341,425 |
| Total assets | 474,113 | 525,865 | 564,005 |
| Equity and liabilities | |||
| Equity | 324,001 | 371,549 | 427,276 |
| Deferred tax liabilities | 49,870 | 42,525 | 48,189 |
| Other non-current liabilities | 31,960 | 37,806 | 34,724 |
| Accounts payable | 20,590 | 29,234 | 9,987 |
| Other current liabilities | 47,692 | 44,751 | 43,829 |
| Total equity and liabilities | 474,113 | 525,865 | 564,005 |
Condensed
| SEK thousands | Equity attributable to Parent Company's shareholders |
Non- controlling interests |
Total equity |
|---|---|---|---|
| Opening balance, January 1, 2010 | 460,842 | 114 | 460,956 |
| Total comprehensive income for the period | 36,337 | –1 | 36,336 |
| Dividend for 2009 | –125,742 | – | –125,742 |
| Closing balance, June 30, 2010 | 371,437 | 113 | 371,549 |
| Opening balance, January 1, 2010 | 460,842 | 114 | 460,956 |
| Total comprehensive income for the year | 91,150 | –134 | 91,017 |
| Dividend for 2009 | –125,742 | – | –125,742 |
| Non-controlling interests that arose through formation of subsidiaries | – | 1,046 | 1,046 |
| Closing balance, December 31, 2010 | 426,250 | 1,026 | 427,276 |
| Opening balance, January 1, 2011 | 426,250 | 1,026 | 427,276 |
| Total comprehensive income for the year | 30,718 | –3,660 | 27,058 |
| Distribution 2010 | –130,772 | – | –130,772 |
| Non-controlling interests that arose through formation of subsidiaries | – | 438 | 438 |
| Closing balance, June 30, 2011 | 326,196 | –2,196 | 324,001 |
Condensed
| SEK thousands | April – June 2011 |
April – June 2010 |
Jan – June 2011 |
Jan – June 2010 |
Full-year 2010 |
|---|---|---|---|---|---|
| Cash flow from operating activities | |||||
| Before change in working capital | 4,818 | 1,703 | 30,529 | 30,049 | 99,486 |
| Change in working capital | –25,217 | 15,126 | –28,096 | –15,983 | –26,733 |
| Cash flow from operating activities | –20,399 | 16,829 | 2,433 | 14,066 | 72,753 |
| Investments in intangible non-current assets | –2,932 | –3,289 | --6,725 | –3,861 | –4,878 |
| Investments in tangible non-current assets | –2,430 | –423 | –5,687 | –1,915 | –2,498 |
| Investments in financial non-current assets | – | 50 | – | –9,046 | –9,046 |
| Sale of tangible non-current assets | – | – | 436 | – | 161 |
| Short-term placement | –172 | – | –1,701 | – | –35,567 |
| Reversal of deferred tax assets | – | – | – | – | 2,608 |
| Cash flow from investing activities | –5,534 | –3,662 | –13,677 | –14,822 | –49,220 |
| Dividend/distribution | –130,772 | –125,742 | –130,772 | –125,742 | –125,742 |
| Amortization of loans | – | –125,000 | – | – | -- |
| Cash flow from financing activities | –130,772 | –250,742 | –130,772 | –125,742 | –125,742 |
| Cash flow for the period | –156,705 | –237,575 | –142,016 | –126,498 | –102,209 |
| Cash & cash equivalents at beginning of period | 208,964 | 407,561 | 194,275 | 296,484 | 296,484 |
| Cash & cash equivalents at end of period | 52,259 | 169,986 | 52,259 | 169,986 | 194,275 |
| Group | ||||||
|---|---|---|---|---|---|---|
| SEK thousands | April – June 2011 |
April – June 2010 |
Jan – June 2011 |
Jan – June 2010 |
July 2010 – June 2011 |
Full-year 2010 |
| Gross profit margin, % | 53.3 | 55.1 | 51.6 | 53.0 | 52.9 | 53.6 |
| Operating margin, % | 8.0 | 13.8 | 14.4 | 20.1 | 20.8 | 23.5 |
| Profit margin, % | 8.7 | 14.5 | 14.6 | 20.1 | 20.5 | 23.1 |
| Return on capital employed, % | 29.5 | 24.5 | 29.5 | 24.5 | 29.5 | 26.4 |
| Return on average equity, % | 24.5 | 20.3 | 24.5 | 20.3 | 24.5 | 20.5 |
| Profit attributable to Parent Company's shareholders | 8,413 | 10,750 | 30,779 | 36,533 | 85,143 | 90,897 |
| Equity/assets ratio, % | 68.3 | 70.7 | 68.3 | 70.7 | 68.3 | 75.8 |
| Equity per share, SEK | 12.88 | 14.77 | 12.88 | 14.77 | 12.88 | 16.99 |
| Investments in intangible non-current assets | 2,932 | 3,289 | 6,725 | 3,861 | 7,741 | 4,878 |
| Investments in tangible non-current assets | 2,430 | 423 | 5,687 | 1,915 | 6,270 | 2,498 |
| Investments in financial non-current assets | – | –50 | – | 9,046 | – | 9,046 |
| Depreciation and impairment losses for the period | –4,572 | –1,614 | –9,803 | –3,712 | –13,227 | –7,136 |
| Average number of employees | 105 | 94 | 105 | 94 | 111 | 100 |
| Group | ||||||
|---|---|---|---|---|---|---|
| SEK thousands | April – June 2011 |
April – June 2010 |
Jan – June 2011 |
Jan – June 2010 |
July 2010 – June 2011 |
Full-year 2010 |
| Operating revenue | ||||||
| Brand and other | ||||||
| External revenue | 8,114 | 8,282 | 20,885 | 22,390 | 48,076 | 49,582 |
| Internal revenue | 7,455 | 9,006 | 16,383 | 18,687 | 37,770 | 40,074 |
| 15,569 | 17,288 | 37,267 | 41,077 | 85,846 | 89,655 | |
| Product development | ||||||
| External revenue | 51,293 | 57,029 | 127,005 | 132,712 | 265,429 | 271,135 |
| Internal revenue | 28,647 | 25,716 | 59,498 | 50,505 | 132,854 | 123,861 |
| 79,940 | 82,745 | 186,503 | 183,217 | 398,283 | 394,997 | |
| Wholesale | ||||||
| External revenue | 31,860 | 25,541 | 83,629 | 73,667 | 175,409 | 165,447 |
| Internal revenue | 11,671 | 8,304 | 24,336 | 21,462 | 52,378 | 49,503 |
| 43,531 | 33,845 | 107,965 | 95,128 | 227,787 | 214,950 | |
| Retail | ||||||
| External revenue | 10,669 | 9,918 | 21,740 | 20,380 | 51,235 | 49,876 |
| Internal revenue | 547 | 302 | 1,375 | 1,929 | 3,409 | 3,963 |
| 11,216 | 10,220 | 23,115 | 22,309 | 54,644 | 53,839 | |
| Less internal sales | –48,319 | –43,329 | –101,592 | –92,582 | –226,410 | –217,401 |
| Operating revenue | 101,937 | 100,770 | 253,258 | 249,149 | 540,149 | 536,040 |
| Operating profit | ||||||
| Brand | 2,173 | 3,396 | 6,621 | 8,815 | 20,862 | 23,057 |
| Product development | 4,648 | 8,906 | 18,231 | 28,802 | 56,678 | 67,249 |
| Wholesale | 4,514 | 3,831 | 17,828 | 17,023 | 38,160 | 37,356 |
| Retail | –3,145 | –2,194 | –6,092 | –4,665 | –3,083 | –1,657 |
| Operating profit | 8,190 | 13,939 | 36,588 | 49,975 | 112,617 | 126,005 |
| Group | ||
|---|---|---|
| SEK thousands | Q2 2011 |
Q1 2011 |
Q4 2010 |
Q3 2010 |
Q2 2010 |
Q1 2010 |
Q4 2009 |
Q3 2009 |
|---|---|---|---|---|---|---|---|---|
| Net sales | 101,937 | 151,321 | 115,893 | 170,998 | 100,770 | 148,379 | 102,247 | 155,162 |
| Gross profit margin, % | 53.3 | 50.4 | 56.3 | 52.6 | 55.1 | 51.6 | 55.7 | 50.8 |
| Operating profit | 8,190 | 28,398 | 24,513 | 51,516 | 13,939 | 36,037 | 19,427 | 43,454 |
| Operating margin, % | 8.0 | 18.8 | 21.2 | 30.1 | 13.8 | 24.3 | 19.0 | 28.0 |
| Profit after financial items | 8,903 | 28,033 | 24,150 | 49,772 | 14,644 | 35,429 | 19,712 | 40,830 |
| Profit margin, % | 8.7 | 18.5 | 20.8 | 29.1 | 14.5 | 23.9 | 19.3 | 26.3 |
| Earnings per share, SEK | 0.33 | 0.89 | 0.70 | 1.46 | 0.43 | 1.03 | 0.54 | 1.20 |
| Earnings per share after dilution, SEK | 0.33 | 0.88 | 0.70 | 1.44 | 0.42 | 1.01 | 0.53 | 1.19 |
| Number of Björn Borg stores at end of period | 54 | 50 | 47 | 46 | 46 | 46 | 46 | 45 |
| of which Björn Borg-owned stores | 12 | 10 | 10 | 10 | 10 | 10 | 10 | 10 |
| Brand sales | 314,967 | 431,029 | 428,234 | 506,572 | 338,253 | 460,156 | 410,053 * 501,629 * |
* 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 = SEK 385,637,000, Q3 2009 = SEK 566,423,000, Q4 2009 = SEK 422,121,000.
Condensed
| SEK thousands | April – June 2011 |
April – June 2010 |
Jan – June 2011 |
Jan – June 2010 |
July 2010 – June 2011 |
Full-year 2010 |
|---|---|---|---|---|---|---|
| Net sales | 6,701 | 6,274 | 18,167 | 18,293 | 45,692 | 45,818 |
| Cost of goods sold | –320 | –93 | –369 | –127 | –611 | –368 |
| Gross profit | 6,381 | 6,181 | 17,797 | 18,166 | 45,081 | 45,450 |
| Distribution expenses | –10,258 | –14,829 | –21,029 | –24,366 | –41,405 | –44,742 |
| Administrative expenses | –3,946 | –5,704 | –8,089 | –9,372 | –15,925 | –17,208 |
| Development expenses | –1,578 | –2,281 | –3,235 | –3,749 | –6,370 | –6,883 |
| Operating profit/loss | –9,401 | –16,633 | –14,556 | –19,320 | –18,619 | –23,383 |
| Dividend from subsidiary | – | – | – | – | 100,000 | 100,000 |
| Net financial items | –2,626 | –2,021 | –5,388 | –1,508 | –11,709 | –7,829 |
| Profit before tax | –12,027 | –18,654 | –19,944 | –20,828 | 69,672 | 68,788 |
| Appropriations | 818 | 818 | ||||
| Tax | 5,245 | 4,866 | 5,245 | 5,438 | 7,818 | 8,011 |
| Profit for the period | –6,782 | –13,788 | –14,699 | –15,390 | 78,308 | 77,617 |
| Other comprehensive income | – | – | – | – | – | – |
| Total comprehensive income for the period | –6,782 | –13,788 | –14,699 | –15,390 | 78,308 | 77,617 |
| Condensed | |||
|---|---|---|---|
| SEK thousands | June 30 2011 |
June 30 2010 |
December 31 2010 |
| Non-current assets | |||
| Intangible non-current assets | 1,453 | 1,914 | 1,686 |
| Tangible non-current assets | 2,963 | 3,582 | 2,830 |
| Shares in Group companies | 321,227 | 316,585 | 320,771 |
| Total non-current assets | 325,643 | 322,082 | 325,287 |
| Current assets | |||
| Receivables from Group companies | 78,990 | 85,662 | 47,801 |
| Current receivables | 8,431 | 12,564 | 4,597 |
| Short-term investments | 37,268 | – | 35,567 |
| Cash & cash equivalents | 7,568 | 124,924 | 181,742 |
| Total current assets | 132,256 | 223,150 | 269,707 |
| Total assets | 457,900 | 545,232 | 594,994 |
| Equity and liabilities | |||
| Equity | 38,458 | 73,606 | 189,174 |
| Untaxed reserves | 6,540 | 7,359 | 6,540 |
| Amounts owed to Group companies | 399,392 | 451,196 | 383,256 |
| Accounts payable | 5,395 | 1,440 | 2,913 |
| Other current liabilities | 8,115 | 11,631 | 13,111 |
| Total equity and liabilities | 457,900 | 545,232 | 594,994 |
Condensed
| SEK thousands | Jan – June 2011 |
Jan – June 2010 |
Full-year 2010 |
|---|---|---|---|
| Opening balance | 189,174 | 214,738 | 214,738 |
| Dividend/distribution | –130,772 | –125,742 | –125,742 |
| Group contributions | – | – | 30,611 |
| Tax effect of Group contributions | – | – | –8,050 |
| Total comprehensive income for the period | –19,944 | –15,390 | 77,617 |
| Closing balance | 38,458 | 73,606 | 189,174 |
Net sales less cost of goods sold divided by net sales.
Operating profit as a percentage of net sales.
Profi t 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, which owns the Björn Borg trademark, is focused on underwear. Through licensees it also offers clothing, footwear, bags, eyewear and fragrances. Björn Borg products are sold in around twenty markets, of which Sweden and the Netherlands are the largest. 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 2010 amounted to about SEK 1.7 billion at the consumer level, excluding VAT. Group net sales amounted to SEK 536 million in 2010, with 100 employees. The Björn Borg share is listed on NASDAQ OMX Nordic in Stockholm since 2007.
The interim report January – September 2011 will be released on November 10, 2011. The year-end report for 2011 will be released on February 9, 2012. Annual Report March 2012.
For further information, please contact: Arthur Engel, President and CEO, telephone +46 8 506 33 700 Magnus Teeling, CFO, telephone +46 8 506 33 700
Björn Borg AB Götgatan 78 SE-118 30 Stockholm 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 23, 2011 at 7:30 am (CET).
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