Quarterly Report • Aug 22, 2012
Quarterly Report
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"We are pleased to report stable sales in a continued weak market during the second quarter. The investments we have made in our future growth in recent years are beginning to contribute more to revenues, although earnings are still being adversely affected by the costs. In late August we are opening our first sales location in China and our operations in England are developing well. We remain confident about our development during the rest of the year," said CEO Arthur Engel.
| SEK million | April-June 2012 |
April-June 2011 |
Jan–June 2012 |
Jan–June 2011 |
July 2011– June 2012 |
Full-year 2011 |
|---|---|---|---|---|---|---|
| Net sales | 105.5 | 101.9 | 246.0 | 253.3 | 529.3 | 536.5 |
| Gross profit margin, % | 52.1 | 53.3 | 49.8 | 51.6 | 50.6 | 51.5 |
| Operating profit | 4.8 | 8.2 | 19.5 | 36.6 | 66.6 | 83.7 |
| Operating margin, % | 4.6 | 8.0 | 7.9 | 14.4 | 12.6 | 15.6 |
| Profit after tax | 1.0 | 6.5 | 10.3 | 27.1 | 83.3 | 100.2 |
| Earnings per share, SEK | 0.10 | 0.33 | 0.55 | 1.22 | 3.52 | 4.19 |
| Earnings per share after dilution, SEK | 0.10 | 0.33 | 0.55 | 1.21 | 3.52 | 4.19 |
| Pro forma earnings per share excluding deferred tax assets, SEK |
– | – | – | – | 1.99 | 2.66 |
| Brand sales* | 288 | 315 | 736 | 746 | 1,671 | 1,681 |
*Estimated total sales of Björn Borg products at the consumer level, excluding VAT, based on reported sales at the wholesale level.
We are pleased to report a stable second quarter given the weak market conditions. Björn Borg's total brand sales turned lower during the quarter, but for the first half-year are in line with 2011. The share of brand sales from smaller and newer markets continued to grow, with sales in these countries rising by 25 percent during the quarter, while the larger markets had a tougher time and saw sales decline.
Reported sales increased during the quarter. We had expected a higher sales figure, but some deliveries of the fall collection scheduled for June were delayed from the supplier and will be reported in the third quarter. Efforts to reduce inventory levels have resulted in significantly lower inventories year-on-year.
Because of the deferred deliveries, we saw a decline in earnings compared with 2011. Quarterly earnings were again affected by planned investments in future growth, primarily the new ventures in China and England, the sportswear operations and e-commerce, at the same time that these operations are increasingly contributing to the Group's sales.
We are launching sales in China at the end of August, when we open our own retail space in the Sogo department store in Shanghai with a wide range of underwear, sportswear, bags and footwear. How many more sales locations will be added depends largely on the retail space we can find, which is an important success factor here as well. While we hope and are confident in a positive start for the brand in this important and expansive market, this is a long-term investment and it will take time before we fully see the results.
Our operations in England are developing positively with strong sales by major customers and a growing number of merchants. Among other things, we opened a shop-in-shop in Harrods department store in London during the quarter.
During the quarter Björn Borg took over responsibility for the fragrance product area from the previous licensee and will continue to work directly with an established player in fragrances, giving us better control over this small but important product category. A new launch is planned in the fourth quarter of 2012.
Comparable sales in our own stores declined, but overall revenues rose by 12 percent. We saw a positive performance by the newly opened stores and in e-commerce, which continued to report good growth during the quarter. To strengthen our retail sales, we have hired a new retail manager, who will be taking a more coordinated approach to the development of our own stores, franchised stores and e-commerce.
It is hard to predict what the fall will look like. We think it could take a while before the European retail market stabilizes. Björn Borg is affected by the weak market, but we feel strongly that the brand will remain competitive. We have a good mix of established and growing new markets and see opportunities to strengthen the brand in the future. We remain confident looking forward to the rest of the year.
Arthur Engel, Chief Executive Officer
Brand sales (excluding VAT) decreased by 8 percent to SEK 288 million (315) in the second quarter and by 1 percent to SEK 736 million in the first half-year. Adjusted for currency effects, the decreases were the same.
Brand sales in the underwear product area decreased by 10 percent in the first half-year, in line with orders previously received for our spring and summer collections. Underwear accounted for 62 percent (68) of brand sales during the period.
In our licensed product areas, sportswear reported a good increase during the first half-year and footwear also continued to develop positively. Sales of bags and eyewear were nearly unchanged, while the fragrance product area saw a larger decline. In total, sales of licensed products rose by 16 percent during the first half-year, mainly due to the increase in sportswear.
During the second quarter Björn Borg took over responsibility for the fragrance product area from the previous licensee.
Brand sales in smaller markets increased during the first half-year to 17 percent (11) of total brand sales. Among
* Estimated total sales of Björn Borg products at the consumer level, excluding VAT, based on reported sales at the wholesale level.
** Underwear: Men's and women's underwear, swimwear, socks and adjacent products. Licensed products: Footwear, bags, fragrances, eyewear and sportswear.
larger markets, Norway and Belgium reported slight increases, while Sweden and Denmark declined. The Netherlands saw a slight decrease. Among smaller markets, Finland, Germany and Austria continued to post positive growth figures. The Group-owned operations in England are performing well.
During the quarter two new German stores were opened in Dortmund and Essen. The Group-owned store in the Arkaden shopping mall in Gothenburg, Sweden was closed. As of June 30, 2012 there were a total of 57 (54) Björn Borg stores, of which 13 (12) are Group-owned.
As announced in December 2011, Björn Borg has decided to launch the brand in China. The business is being established together with an experienced local partner through a new company with Björn Borg as principal owner (75%). The plan is to establish Björn Borg stores and shop-in-shops in large department stores as well as e-commerce, offering underwear, sportswear, footwear and bags. The first retail space, in a Shanghai department store, opens at the end of August. The venture is expected to result in a charge against the Group's operating profit in 2012 of not more than SEK 10 million with a marginal impact on sales.
Sales increased during the second quarter, but operating profit decreased year-on-year.
Group sales during the second quarter amounted to SEK 105.5 million (101.9), an increase of 3 percent. Excluding currency effects, sales were unchanged. Due to deferred deliveries from suppliers, revenues of about SEK 13 million were recognized during the third quarter. Both product companies (the Swedish product company for underwear and Björn Borg Sport) contributed to the sales increase, while the Swedish wholesale operations declined in a continued weak Swedish retail market. The British wholesale operations developed positively, however. The retail operations reported sales increases in line with the previous quarter, mainly as a result of continued strong growth in e-commerce as well as a couple of newly opened stores compared with 2011. Brand revenues declined slightly in line with lower brand sales during the quarter.
Group sales during the first half-year amounted to SEK 246.0 million (253.3), a decrease of 3 percent. Due to deferred deliveries from suppliers, as mentioned above, revenues of about SEK 13 million were recognized after June 30. Björn Borg Sport and the Group's own retail operations, including e-commerce, contributed to the increase, while sales for the underwear product company fell mainly as a result of lower orders for the summer 2012 collection, as mentioned in the previous interim report. The Swedish wholesale operations also saw a sales decline, in line with the weak Swedish retail market. The Group's British wholesale operations developed positively during the period. External brand revenues declined as a result of slightly lower brand sales during the first half-year. Excluding currency effects, net sales decreased by 5 percent.
The gross profit margin for the second quarter decreased to 52.1 percent (53.3). Excluding currency effects (mainly more expensive product costs in USD for the Swedish wholesaler), the margin was 53.1 percent.
Operating profit decreased during the quarter by 41 percent to SEK 4.8 million (8.2) with an operating margin of 4.6 percent (8.0). Absent the above-mentioned deferred deliveries, operating profit would have been about SEK 6 million higher, corresponding to a quarterly increase of 32 percent. Quarterly gross profit in SEK million was higher year-on-year. The decrease in operating profit is the result of higher scheduled expenses for, among other things, marketing as well as increased expenses for retail personnel and premises due to the additional stores. The investments in Björn Borg Sport, China and the British operations reduced operating profit by SEK 5.7 million (4.7). Profit after tax decreased to SEK 3.8 million (8.9).
The gross profit margin for the first half-year decreased to 49.8 percent (51.6). Besides a slightly negative currency effect of 0.5 percent, the decrease is largely due to one-time effects mainly during the first quarter in the form of temporarily higher discounts, inventory write-offs and discounted sales to customers by the Swedish wholesale company.
Operating profit decreased by 47 percent to SEK 19.5 million (36.6) during the first half-year with an operating margin of 7.9 percent (14.4). Absent the above-mentioned deferred deliveries, the decrease in profit would have been 30 percent. Lower first-quarter sales by the Group's product company as well as lower sales and gross profit margin in the Swedish wholesale company during the first half-year contributed to the Group's lower operating profit. In addition, higher scheduled expenses for marketing, personnel and premises for the new operations of Björn Borg Sport, the British wholesale operations and the Group's stores in Sweden also contributed to higher operating expenses during the first half-year. The investments in Björn Borg Sport, China and the British operations reduced operating profit by SEK 10.7 million (8.5). Profit after tax decreased to SEK 16.6 million (36.9).
| Sales, SEK thousands January–June |
Operating profit, SEK thousands January–June |
Operating margin January–June |
|||||
|---|---|---|---|---|---|---|---|
| Business segment | Revenue source | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 |
| Brand | Royalties | 39,451 | 37,267 | 10,127 | 6,621 | 26% | 18% |
| Product development | Products | 171,389 | 186,503 | 17,689 | 18,231 | 10% | 10% |
| Wholesale | Wholesale revenues | 100,558 | 107,965 | –1,140 | 17,828 | –1% | 17% |
| Retail | Retailers | 30,163 | 23,115 | –7,197 | –6,092 | –24% | –26% |
| Less internal sales | –95,545 | –101,592 | – | – | – | – | |
| Total | 246,016 | 253,258 | 19,479 | 36,588 | 8% | 14% |
The Group consists of ten companies that operate under the Björn Borg brand on every level from product development to wholesale operations and consumer sales in its own Björn Borg stores.
The Brand segment primarily consists of royalty revenue and expenses associated with the brand.
Net sales in the first half-year 2012 reached SEK 39.5 million (37.3), an increase of 6 percent. External sales amounted to SEK 20.4 million (20.9), which is reasonable given relatively unchanged brand sales during the first half-year. It should be noted that the royalties Björn Borg Sport receives from its customers are also reported in the Brand segment.
Operating profit amounted to SEK 10.1 million (6.6), an increase of 53 percent for the period. The improvement is due to lower expenses for brand-related activities during the first half-year.
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 171.4 million (186.5) during the first half-year 2012, a decrease of 8 percent. External sales amounted to SEK 122.8 million (127.0), a decrease of 3 percent compared with the same period in 2011. Weak sales of the summer collection through the Group's product company during the first quarter was the biggest reason for the lower sales. Sales by Björn Borg Sport were essentially unchanged year-on-year.
Operating profit decreased to SEK 17.7 million (18.2) due to lower sales, at the same time that operating expenses were lower than the same period in 2011.
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 the wholesale operations decreased by 7 percent in the first half-year 2012 to SEK 100.6 million (108.0). External sales amounted to SEK 77.1 million (83.6). The British operations reported good growth, while the Swedish wholesale operations had a weak first half-year in a tough retail climate. The Group's wholesale footwear operations performed in line with 2011.
The operating loss was SEK 1.1 million, against a yearearlier profit of SEK 17.8 million. The loss is due to lower sales and a lower gross profit margin in the Swedish wholesale operations as well as higher expenses stemming from investments in the Group's British operations. A stronger USD reduced gross profit and operating profit by SEK 1.7 million in this segment.
The Björn Borg Group owns and operates eleven stores in the Swedish market that sell underwear, adjacent products and licensed products. Additionally, Björn Borg operates two factory outlets as well as a web shop in the U.S. and one for international e-commerce.
External net sales in the Retail segment rose by 18 percent during the first half-year to SEK 25.7 million (21.7). The increase is due to the stores opened after June 30, 2011 as well as the continued strong performance of the e-commerce operations. For outlets and comparable Björn Borg stores, sales fell by 13 percent, however. This is partly due
to shorter scheduled discount periods, which had a positive effect on gross profit margins.
The operating loss for the first half-year amounted to SEK 7.2 million, against a year-earlier loss of SEK 6.1 million, partly due to increased operating expenses from the additional stores as well as further investments in the web shop.
Intra-Group sales amounted to SEK 95.5 million (101.6) for the first half-year.
The Björn Borg Group is active in an industry with seasonal variations. Sales and earnings vary by quarter. With the current product mix, the second quarter is generally the weakest in terms of profit. See the figure on quarterly net sales and operating profit on page 4.
Cash flow from operating activities in the Group amounted to SEK 9.8 million (4.6) during the first half-year 2012. The comparative period in 2011 included a higher operating profit, but also significantly higher tied-up working capital than the first half-year 2012. Accounts receivable are slightly lower and accounts payable are higher year-on-year. Inventories are SEK 6.6 million lower than at the same time in 2011, despite the new operations in Björn Borg Sport and England as well as the opening of new Group-owned stores. The measures taken by the company to reduce tied-up capital have resulted in lower inventory volumes for comparable operations.
Total investments in tangible and intangible non-current assets amounted to SEK 2.6 million (12.4) for the period, with the higher investments in 2011 largely due to the establishment of Björn Borg Sport in the Netherlands and store renovations.
The Björn Borg Group's cash & cash equivalents and investments amounted to SEK 253.3 million (89.5) at the end of the period. During the first half-year cash & cash equivalents increased by SEK 95.3 million, compared with a yearearlier decrease of SEK 142.0 million. The change is mainly due to the annual distribution to shareholders of SEK 100.6 million (130.8) and a bond loan issued with a nominal value of SEK 200 million. The equity/assets ratio was 46.9 percent (68.3).
The bond loan was listed on NASDAQ OMX Stockholm in early May and carries an annual coupon rate corresponding to the 3-month STIBOR rate + 3.25 percentage points, maturing in April 2017. During the quarter the company repurchased corporate bonds with a nominal value of SEK 5 million, due to which the book value of the bond loan after the repurchase and transaction expenses of about SEK 3 million amounts to SEK 192.0 million as of June 30.
The surplus liquidity from the issuance of the bond loan was placed in interest-bearing financial instruments, according to the financial rules laid down by the Board of Directors. As of June 30 investments had been made in bonds with a book value of SEK 139.7 million. As a rule, bonds in foreign currency are hedged.
As a commitment for the above-mentioned bond loan, the company has pledged to, among other things, ensure that the ratio between the Group's net debt and operating profit before depreciation and amortization on the last date of each quarter does not exceed 3.00 and that the Group at any given time maintains an equity/assets ratio of at least 30 percent. A complete description of commitments and
conditions of the bond loan is provided in the prospectus, which is available on the company's website and from the Swedish Financial Supervisory Authority.
No changes were otherwise made with regard to pledged assets and contingent liabilities compared with December 31, 2011.
The average number of employees in the Group in the first half-year 2012 was 131 (105), of whom 78 (65) are women. The increase in the number of employees is mainly due to the new operations in Björn Borg Sport and England
No transactions with related parties have been executed during the year.
In its operations, the Björn Borg Group is exposed to risks and uncertainties. The Group's interest risk has increased since December 31 2011 from the issued bond loan of SEK 200 million, and there is an increased currency exposure resulting from the establishment of a new subsidiary in the Netherlands in 2011. All other information on the Group's risks and uncertainties can be found on pages 41-42 and in note 3 in the annual report 2011.
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, 51 percent of the shares in Björn Borg Sport BV and 75 percent of the shares in Bjorn Borg (China) Ltd.
The Parent Company's net sales for the second quarter amounted to SEK 12.7 million (6.7). During the first halfyear the Parent Company's net sales amounted to SEK 24.8 million (18.2).
The loss before tax amounted to SEK 11.0 million (12.0) for the second quarter and SEK 23.7 million (19.9) for the first six months of the year. Cash & cash equivalents and investments amounted to SEK 202.5 million (44.8) on June 30, 2012. Investments in tangible and intangible non-current assets for the first half-year amounted to SEK 0.9 million (1.0).
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 contribute 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 annually fall in the range of 2-5 percent of net sales depending on the addition of any new Björn Borg stores.
The Annual General Meeting (AGM) held on May 3, 2012 resolved to pay shareholders a distribution of SEK 4.00 per share for the financial year 2011. Directors Kerstin Hessius, Fredrik Lövstedt, Fabian Månsson, Mats H Nilsson, Vilhelm Schottenius and Michael Storåkers were re-elected to the Board of Directors, with Fredrik Lövstedt as Chairman of the Board.
The interim report has been prepared in accordance with IAS 34 Interim Financial Reporting and the Annual Accounts Act. The interim report for the Parent Company has been prepared in accordance with the Annual Accounts Act and RFR 2 Accounting in Legal Entities. The same accounting principles and calculation methods have been applied as in 2011, which are described on page 51 in the 2011 annual report. The new and revised IFRS and the interpretations from IFRS IC applied as of January 1, 2012 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
| April–June | April–June | Jan–June | Jan–June | July 2011– | Full-year | |
|---|---|---|---|---|---|---|
| SEK thousands | 2012 | 2011 | 2012 | 2011 | June 2012 | 2011 |
| Net sales | 105,478 | 101,937 | 246,016 | 253,258 | 529,266 | 536,509 |
| Cost of goods sold | –50,536 | –47,556 | –123,570 | –122,582 | –261,282 | –260,295 |
| Gross profit | 54,942 | 54,381 | 122,446 | 130,676 | 267,984 | 276,214 |
| Distribution expenses | –35,297 | –30,627 | –71,934 | –61,887 | –134,820 | –124,773 |
| Administrative expenses | –12,185 | –12,858 | –25,442 | –25,752 | –54,213 | –54,524 |
| Development expenses | –2,612 | –2,706 | –5,591 | –6,449 | –12,353 | –13,211 |
| Operating profit | 4,848 | 8,190 | 19,479 | 36,588 | 66,598 | 83,706 |
| Net financial items | –1,018 | 713 | –2,919 | 348 | –2,348 | 920 |
| Profit before tax | 3,830 | 8,903 | 16,560 | 36,936 | 64,250 | 84,626 |
| Tax | –2,846 | –2,445 | –6,272 | –9,818 | 19,070 | 15,524 |
| Profit for the period | 984 | 6,458 | 10,288 | 27,118 | 83,320 | 100,150 |
| Profit for the period attributable to: | ||||||
| Parent Company's shareholders | 2,629 | 8,413 | 13,748 | 30,779 | 88,437 | 105,468 |
| Non-controlling interests | –1,645 | –1,956 | –3,460 | –3,660 | –5,117 | –5,318 |
| Other comprehensive income | ||||||
| Currency effect on translation of foreign operations | –159 | –42 | 134 | –61 | 64 | –131 |
| Total comprehensive income for the period | 825 | 6,416 | 10,422 | 27,058 | 83,384 | 100,019 |
| Total comprehensive income for the period attributable to | ||||||
| Parent Company's shareholders | 2,470 | 8,371 | 13,882 | 30,718 | 88,501 | 105,337 |
| Non-controlling interests | –1,645 | –1,956 | –3,460 | –3,660 | –5,117 | –5,318 |
| Earnings per share, SEK | 0.10 | 0.33 | 0.55 | 1.22 | 3.52 | 4.19 |
| Earnings per share after dilution, SEK | 0.10 | 0.33 | 0.55 | 1.21 | 3.52 | 4.19 |
| Pro forma earnings per share excl. deferred tax assets posted Dec. 31, 2011, SEK |
– | – | – | – | 1.99 | 2.66 |
| 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 | – | 267,609 | – | 32,190 |
| Weighted average number of shares after full dilution | 25,148,384 | 25,325,135 | 25,148,384 | 25,415,993 | 25,148,384 | 25,180,574 |
* Björn Borg has an incentive program, 2008:2, based on warrants in Björn Borg AB. For more detailed information, see page 57 of the annual report 2011.
| Condensed | |||
|---|---|---|---|
| TSEK | June 30 2012 |
June 30 2011 |
Dec 31 2011 |
| Non-current assets | |||
| Goodwill | 13,944 | 13,944 | 13,944 |
| Trademarks | 187,532 | 187,532 | 187,532 |
| Other intangible assets | 5,975 | 6,291 | 6,311 |
| Tangible non-current assets | 13,791 | 10,541 | 14,741 |
| Deferred tax assets | 43,147 | 6,438 | 43,194 |
| Total non-current assets | 264,389 | 224,746 | 265,722 |
| Current assets | |||
| Inventories, etc. | 29,687 | 36,308 | 34,559 |
| Accounts receivable | 71,233 | 73,261 | 57,843 |
| Other current receivables | 34,739 | 50,271 | 34,134 |
| Investments | 139,693 | 37,268 | – |
| Cash & cash equivalents | 113,619 | 52,259 | 158,042 |
| Total current assets | 388,971 | 249,367 | 284,578 |
| Total assets | 653,360 | 474,113 | 550,300 |
| Equity and liabilities | |||
| Equity | 306,519 | 324,001 | 396,962 |
| Deferred tax liabilities | 50,267 | 49,870 | 47,539 |
| Other non-current liabilities | 25,421 | 31,960 | 28,754 |
| Bond loan | 191,959 | – | – |
| Accounts payable | 27,603 | 20,590 | 25,703 |
| Other current liabilities | 51,591 | 47,692 | 51,342 |
| Total equity and liabilities | 653,360 | 474,113 | 550,300 |
Condensed
| SEK thousands | Equity attributable to Parent Company's shareholders |
Non- controlling interests |
Total equity |
|---|---|---|---|
| Opening balance, January 1, 2011 | 426,250 | 1,026 | 427,276 |
| Total comprehensive income for the year | 30,718 | –3,660 | 27,058 |
| Distribution for 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 |
| Opening balance, January 1, 2011 | 426,250 | 1,026 | 427,276 |
| Total comprehensive income for the year | 105,337 | –5,318 | 100,019 |
| Distribution for 2010 | –130,772 | – | –130,772 |
| Non-controlling interests that arose through formation of subsidiaries | – | 438 | 438 |
| Closing balance, December 31, 2011 | 400,815 | –3,854 | 396,962 |
| Opening balance, January 1, 2012 | 400,815 | –3,854 | 396,962 |
| Total comprehensive income for the period | 13,882 | –3,460 | 10,422 |
| Distribution for 2011 | –100,594 | – | –100,594 |
| Acquisition of minority shares | –26 | –79 | –105 |
| Dividend to non-controlling interests | – | –168 | –168 |
| Non-controlling interests that arose through formation of subsidiaries | – | 2 | 2 |
| Closing balance, June 30, 2012 | 314,077 | –7,559 | 306,519 |
| Condensed | |||||
|---|---|---|---|---|---|
| SEK thousands | April–June 2012 |
April–June 2011 |
Jan–June 2012 |
Jan–June 2011 |
Full-year 2011 |
| Cash flow from operating activities | |||||
| Before changes in working capital | 548 | 4,837 | 15,836 | 29,970 | 85,705 |
| Changes in working capital | 11,414 | –23,615 | –6,035 | –25,332 | 5,517 |
| Cash flow from operating activities | 11,992 | –18,778 | 9,801 | 4,638 | 91,223 |
| Investments in intangible non-current assets | –965 | –2,932 | –1,054 | --6,725 | –12,110 |
| Investments in tangible non-current assets | –647 | –2,430 | –1,539 | –5,687 | –13,325 |
| Sale of tangible non-current assets | – | – | – | – | – |
| Investments | –139,693 | – | –139,693 | 436 | – |
| Sale of investments | – | –172 | – | –1,701 | 35,567 |
| Cash flow from investing activities | –141,305 | –5,534 | –142,286 | –13,677 | 10,132 |
| Dividend/distribution | –100,594 | –130,772 | –100,594 | –130,772 | –130,772 |
| Amortization of loans | –1,667 | –1,602 | –3,334 | –2,764 | –6,411 |
| Change in long-term liabilities | – | – | – | – | 441 |
| Issuance of bond loan | 196,909 | – | 196,909 | – | – |
| Repurchase of bond loan | –4,950 | – | –4,950 | – | – |
| Cash flow from financing activities | 89,698 | –132,374 | 88,031 | –133,536 | –136,742 |
| Cash flow for the period | –39,645 | –156,686 | –44,454 | –142,575 | –35,387 |
| Cash & cash equivalents at beginning of period | 154,031 | 208,964 | 158,042 | 194,275 | 194,275 |
| Translation difference in cash & cash equivalents | –767 | –19 | 31 | 559 | –846 |
| Cash & cash equivalents at end of period | 113,619 | 52,259 | 113,619 | 52,259 | 158,042 |
| Group | ||||||
|---|---|---|---|---|---|---|
| SEK thousands | April–June 2012 |
April–June 2011 |
Jan–June 2012 |
Jan–June 2011 |
July 2011– June 2012 |
Full-year 2011 |
| Gross profit margin, % | 52.1 | 53.3 | 49.8 | 51.6 | 50.6 | 51.5 |
| Operating margin, % | 4.6 | 8.0 | 7.9 | 14.4 | 12.6 | 15.6 |
| Profit margin, % | 3.6 | 8.7 | 6.7 | 14.6 | 12.1 | 15.8 |
| Return on capital employed, % | 15.6 | 29.5 | 15.6 | 29.5 | 15.6 | 19.5 |
| Return on average equity, % | 28.1 | 24.5 | 28.1 | 24.5 | 28.1 | 25.6 |
| Profit attributable to Parent Company's shareholders | 2,629 | 8,413 | 13,748 | 30,779 | 88,436 | 105,468 |
| Equity/assets ratio, % | 46.9 | 68.3 | 46.9 | 68.3 | 46.9 | 72.1 |
| Equity per share, SEK | 12.19 | 12.88 | 12.19 | 12.88 | 12.19 | 15.78 |
| Investments in intangible non-current assets | 965 | 2,932 | 1,054 | 6,725 | 6,439 | 12,110 |
| Investments in tangible non-current assets | 647 | 2,430 | 1,539 | 5,687 | 9,177 | 13,325 |
| Depreciation, amortization and impairment losses for the period |
–1,583 | –4,572 | –3,359 | –9,803 | –10,721 | –17,165 |
| Average number of employees | 131 | 105 | 131 | 105 | 126 | 131 |
| Group | ||||||
|---|---|---|---|---|---|---|
| SEK thousands | April–June 2012 |
April–June 2011 |
Jan–June 2012 |
Jan–June 2011 |
July 2011– June 2012 |
Full-year 2011 |
| Operating revenue | ||||||
| Brand | ||||||
| External revenue | 7,846 | 8,114 | 20,427 | 20,885 | 46,977 | 47,435 |
| Internal revenue | 8,169 | 7,455 | 19,024 | 16,383 | 35,524 | 32,882 |
| 16,015 | 15,569 | 39,451 | 37,267 | 82,501 | 80,317 | |
| Product development | ||||||
| External revenue | 57,445 | 51,293 | 122,763 | 127,005 | 247,035 | 251,277 |
| Internal revenue | 23,995 | 28,647 | 48,626 | 59,498 | 115,300 | 126,171 |
| 81,440 | 79,940 | 171,389 | 186,503 | 362,335 | 377,448 | |
| Wholesale | ||||||
| External revenue | 27,337 | 31,860 | 77,092 | 83,629 | 172,803 | 179,341 |
| Internal revenue | 9,684 | 11,671 | 23,466 | 24,336 | 50,567 | 51,437 |
| 37,021 | 43,531 | 100,558 | 107,965 | 223,370 | 230,778 | |
| Retail | ||||||
| External revenue | 12,850 | 10,669 | 25,734 | 21,740 | 62,451 | 58,456 |
| Internal revenue | 2,103 | 547 | 4,429 | 1,375 | 6,788 | 3,735 |
| 14,953 | 11,216 | 30,163 | 23,115 | 69,239 | 62,191 | |
| Less internal sales | –43,951 | –48,319 | –95,545 | –101,592 | –208,179 | –214,225 |
| Operating revenue | 105,478 | 101,937 | 246,016 | 253,258 | 529,266 | 536,509 |
| Operating profit | ||||||
| Brand | 4,338 | 2,173 | 10,127 | 6,621 | 20,119 | 16,613 |
| Product development | 8,976 | 4,648 | 17,689 | 18,231 | 35,373 | 35,915 |
| Wholesale | –4,493 | 4,514 | –1,140 | 17,828 | 18,042 | 37,010 |
| Retail | –3,973 | –3,145 | –7,197 | –6,092 | –6,936 | –5,832 |
| Operating profit | 4,848 | 8,190 | 19,479 | 36,588 | 66,598 | 83,706 |
| Group | ||
|---|---|---|
| SEK thousands | Q2 2012 |
Q1 2012 |
Q4 2011 |
Q3 2011 |
Q2 2011 |
Q1 2011 |
Q4 2010 |
Q3 2010 |
|---|---|---|---|---|---|---|---|---|
| Net sales | 105,478 | 140,538 | 123,100 | 160,150 | 101,937 | 151,321 | 115,893 | 170,998 |
| Gross profit margin, % | 52.1 | 48.0 | 52.4 | 50.6 | 53.3 | 50.4 | 56.3 | 52.6 |
| Operating profit | 4,848 | 14,631 | 14,143 | 32,976 | 8,190 | 28,398 | 24,513 | 51,516 |
| Operating margin, % | 4.6 | 10.4 | 11.5 | 20.6 | 8.0 | 18.8 | 21.2 | 30.1 |
| Profit after financial items | 3,830 | 12,730 | 15,026 | 32,664 | 8,903 | 28,033 | 24,150 | 49,772 |
| Profit margin, % | 3.6 | 9.1 | 12.2 | 20.4 | 8.7 | 18.5 | 20.8 | 29.1 |
| Earnings per share, SEK | 0.10 | 0.44 | 1.92 | 1.05 | 0.33 | 0.89 | 0.70 | 1.46 |
| Earnings per share after dilution, SEK | 0,10 | 0.44 | 1.92 | 1.05 | 0.33 | 0.88 | 0.70 | 1.44 |
| Number of Björn Borg stores at end of period | 57 | 56 | 56 | 54 | 54 | 50 | 47 | 46 |
| of which Björn Borg-owned stores | 13 | 14 | 15 | 13 | 12 | 10 | 10 | 10 |
| Brand sales | 288,360 | 447,640 | 384,133 | 551,267 | 314,967 | 431,029 | 428,234 | 506,572 |
Condensed
| SEK thousands | April–June 2012 |
April–June 2011 |
Jan–June 2012 |
Jan–June 2011 |
July 2011– June 2012 |
Full-year 2011 |
|---|---|---|---|---|---|---|
| Net sales | 12,733 | 6,701 | 24,797 | 18,167 | 52,839 | 46,208 |
| Cost of goods sold | –105 | –320 | –538 | –369 | –720 | –550 |
| Gross profit | 12,628 | 6,381 | 24,259 | 17,797 | 52,119 | 45,658 |
| Distribution expenses | –11,810 | –10,258 | –25,234 | –21,029 | –47,280 | –43,076 |
| Administrative expenses | –4,543 | –3,946 | –9,706 | –8,089 | –18,185 | –16,568 |
| Development expenses | –1,817 | –1,578 | –3,882 | –3,235 | –7,274 | –6,627 |
| Operating profit/loss | –5,542 | –9,401 | –14,563 | –14,556 | –20,620 | –20,613 |
| Dividend from subsidiary | – | – | – | – | 135,235 | 100,000 |
| Group contributions received | – | – | – | – | – | 35,235 |
| Net financial items | –5,439 | –2,626 | –9,147 | –5,388 | –16,483 | –12,724 |
| Profit before tax | –10,981 | –12,027 | –23,710 | –19,944 | 98,132 | 101,898 |
| Appropriations | – | – | – | – | 4,002 | 4,002 |
| Tax | –1,598 | 5,245 | –1,598 | 5,245 | 3,647 | – |
| Profit for the period | –12,579 | –6,782 | –25,308 | –14,699 | 105,781 | 105,900 |
| Other comprehensive income | – | – | – | – | – | – |
| Total comprehensive income for the period | –12,579 | –6,782 | –25,308 | –14,699 | 105,781 | 105,900 |
Condensed
| SEK thousands | June 30 2012 |
June 30 2011 |
Dec 31 2011 |
|---|---|---|---|
| Non-current assets | |||
| Intangible non-current assets | 986 | 1,453 | 1,220 |
| Tangible non-current assets | 6,585 | 2,963 | 6,617 |
| Shares in Group companies | 323,845 | 321,227 | 321,227 |
| Total non-current assets | 331,416 | 325,643 | 329,064 |
| Current assets | |||
| Receivables from Group companies | 216,589 | 78,990 | 201,914 |
| Current receivables | 7,306 | 8,431 | 6,737 |
| Investments | 144,643 | 37,268 | – |
| Cash & cash equivalents | 57,849 | 7,568 | 122,271 |
| Total current assets | 426,387 | 132,256 | 330,922 |
| Total assets | 757,803 | 457,900 | 659,986 |
| Equity and liabilities | |||
| Equity | 38,400 | 38,458 | 164,302 |
| Untaxed reserves | 2,538 | 6,540 | 2,538 |
| Bond loan | 196,909 | – | – |
| Due to Group companies | 506,208 | 399,392 | 476,120 |
| Accounts payable | 4,801 | 5,395 | 7,200 |
| Other current liabilities | 8,947 | 8,115 | 9,826 |
| Total equity and liabilities | 757,803 | 457,900 | 659,986 |
| Condensed | |||
|---|---|---|---|
| TSEK | Jan–June 2012 |
Jan–June 2011 |
Full-year 2011 |
| Opening balance | 164,302 | 189,174 | 189,174 |
| Dividend/distribution | –105,594 | –130,772 | –130,772 |
| Total comprehensive income for the period | –25,308 | –19,944 | 105,900 |
| Closing balance | 38,400 | 38,458 | 164,302 |
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 sales at the wholesale level.
The Board of Directors and the CEO 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.
Stockholm, August 22, 2012
Fredrik Lövstedt Chairman
Kerstin Hessius Board Member
Vilhelm Schottenius Board Member
Fabian Månsson Board Member
Mats H Nilsson Board Member
Michael Storåkers Board Member
Arthur Engel President and CEO
The Group owns the Björn Borg trademark and its core business is underwear. It also offers sportswear, footwear, bags, eyewear and fragrances through licensees. 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 in its own Björn Borg stores. Total sales of Björn Borg products in 2011 amounted to around SEK 1.7 billion, excluding VAT, at the consumer level. Group net sales amounted to SEK 537 million as per December 31, 2011, with 131 employees. The Björn Borg share has been listed on NASDAQ OMX Nordic in Stockholm since 2007.
The interim report for January–September 2012 will be released on November 9, 2012. The year-end report for 2012 will be released on February 14, 2013. Annual report in March 2013.
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 Tulegatan 11 SE-113 53 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 22, 2012 at 7:30 am (CET).
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