Quarterly Report • Aug 20, 2014
Quarterly Report
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"During the second quarter we and our distributors experienced continued tough market conditions, particularly in our larger markets. On the positive side, our operations in Finland and England continue to perform well. At the same time we have good cost control. Now I look forward to working with the team at Björn Borg to set a clear direction and to increase our focus on consumers. Let's go!" says Henrik Bunge, the new CEO of Björn Borg.
| SEK million | April-June 2014 |
April-June 2013 |
Jan-June 2014 |
Jan-June 2013 |
July 2013– June 2014 |
Full-year 2013 |
|---|---|---|---|---|---|---|
| Net sales** | 97.0 | 105.8 | 239.8 | 236.5 | 499.3 | 496.0 |
| Gross profit margin**, % | 52.5 | 52.1 | 52.7 | 51.0 | 52.3 | 51.5 |
| Operating profit | 0.5 | 0.9 | 19.6 | 10.1 | 30.6 | 21.2 |
| Operating margin, % | 0.5 | 0.8 | 8.2 | 4.2 | 6.1 | 4.3 |
| Profit after tax | 2.2 | 3.4 | 17.6 | 9.4 | 25.0 | 13.9 |
| Earnings per share, SEK | 0.15 | 0.23 | 0.76 | 0.52 | 1.21 | 0.86 |
| Brand sales* | 250.0 | 275.4 | 632.0 | 707.2 | 1,446.0 | 1,521.1 |
*Estimated total sales of Björn Borg products at the consumer level, excluding VAT, based on reported sales at the wholesale level.
** As of 2014 the company has changed its income statement format based on type of cost instead of function as done before. As net sales and cost of goods sold are defined with the new format, net sales and the gross profit margin for comparative periods in 2013 may deviate slightly from reported values in 2013.
I took over as CEO of Björn Borg about three weeks ago. From day one I have worked with the team at Björn Borg to refine our offering and the way we work. Though I obviously still have a lot left to learn about the business, I already see several areas where we can and will continue to develop. I will return to this at a later date and now look forward to an intensive fall and winter for Björn Borg.
During the second quarter we and our distributors experienced continued tough market conditions, particularly in our larger markets, which we are seeing the effects of in smaller purchases of both the summer collection and the current fall/winter collection of underwear and sportswear. In the Swedish market we are working close with retailers to
reverse the negative trend, including by supporting them with optimized merchandising and product mixes. On the positive side, our own operations in Finland and England continue to perform well. We are also pleased with e-commerce, which grew steadily in the second quarter as well. Lower quarterly expenses at the same time meant practically an unchanged operating profit compared with the same period in 2013.
For Björn Borg the brand is the basis of everything we do, and we will continue to invest smartly in the appropriate branding activities. Next week Björn Borg is holding its biggest event of the year during this year's even more international Fashion Week in Stockholm. It will be a show beyond the ordinary, choreographed by noted stylist Bea Åkerlund.
Henrik Bunge, CEO
Distributors and licensees continued to report weak sales in most product areas during the second quarter 2014. As a result, brand sales (excluding VAT) decreased by 9 percent to SEK 250 million (275) for the second quarter and by 11 percent to SEK 632 million (707) for the first half-year. Adjusted for currency effects, brand sales were down 12 percent for the quarter and 13 percent for the first half-year.
Brand sales in the underwear product area fell by 12 percent in the first half-year. Underwear accounted for 59 percent (60) of brand sales.
* 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. Other product areas: Sportswear, fragrances, footwear, bags and eyewear.
Sportswear saw a decline in brand sales similar to underwear. Sales also decreased in the eyewear and fragrances product areas, while sales of luggage & bags and footwear were relatively unchanged. In total, sales of licensed products fell by 8 percent during the first half-year.
Among large markets, Belgium and Finland saw good growth, while other large markets – the Netherlands, Sweden, Denmark and Norway – reported declines. Among Björn Borg's smaller markets, England posted good growth numbers.
No new Björn Borg stores were opened during the second quarter. As of June 30, 2014 there were a total of 38 (57) Björn Borg stores, of which 17 (17) are Group-owned. The smaller number of stores year-on-year is due to the previously announced retail reconstruction by the Dutch distributor, which has closed 19 stores since June 30, 2013.
Sales were lower during the second quarter and operating profit was practically unchanged compared with the same period in 2013.
The Group's net sales amounted to SEK 97.0 million (105.8) during the second quarter, a decrease of 8 percent. The decrease excluding currency effects was 10 percent.
The quarterly sales decrease is partly due to lower sales of the summer collection and the current fall/winter collection of underwear and sportswear compared with the previous year. The Swedish wholesale company for underwear saw lower sales, partly as a result of delayed shipments until the third quarter. The British and Finnish wholesaling operations continued to perform positively, while the Swedish wholesale company for footwear had another tough quarter. The Group-owned retail operations reported a decline during the quarter, while e-commerce continued to develop strongly. Total royalties decreased as a result of lower brand sales during the quarter.
The Group's net sales amounted to SEK 239.8 million (236.5) during the first half-year, an increase of 1 percent. Excluding currency effects, sales were unchanged.
Previously announced shipment delays at the turn of the year in the product companies for underwear and sportswear have increased sales for 2014 by about SEK 25 million, while the declines for the summer and fall/winter 2014 collections have contributed negatively to the first half-year's sales. The declines are partly due to the previously announced developments in the Netherlands, but also because Norway and Denmark reduced their preorders for both of these collections. For the first half-year as a whole, revenue in the two product companies still rose compared with the same period in 2013. The British and Finnish wholesaling operations continued to perform positively, while sales for the Swedish wholesale company for footwear decreased during the first half-year. After a stable first quarter for the Swedish wholesale operations, the second quarter outcome, as commented on above, resulted in lower revenue for the first half-year as a whole. Group-owned retail sales saw a slight decline, while e-commerce continued to perform strongly. Royalties decreased as a result of lower brand sales during the period.
The gross profit margin for the second quarter improved slightly to 52.5 percent (52.1). Excluding currency effects, the margin would have been 52.7 percent.
Lower gross profit from a decrease in revenue in the underwear product company and in the Swedish wholesale operations was offset by lower operating expenses during the quarter, as a result of which operating profit only declined marginally to SEK 0.5 million (0.9). The operating margin was 0.5 percent (0.8). Operating expenses were SEK 5.4 million lower year-on-year. The discontinued operations in China contributed to the reduced costs at the same time new stores opened in Sweden, Finland and England, as well as further investments in e-commerce, added expenses.
Net financial items amounted to SEK 3.4 million (3.6). The realized and unrealized return on investments, less interest on the bond loan, positively affected the financial net by SEK 0.8 million (1.1). Profit before tax was SEK 3.9 million (4.5).
The gross profit margin for the first half-year increased to 52.7 percent (51.0). Excluding currency effects, the margin would have still been 52.7 percent.
The improved gross profit margin during the first half-year is the biggest reason why operating profit increased to SEK 19.6 million (10.1). The operating margin was 8.2 percent (4.2). Operating expenses decreased by SEK 5.8 million compared with the same period in 2013. The discontinued operations in China have contributed to the decrease at the same time new stores opened in Sweden, Finland and England, as well as further investments in e-commerce, have added expenses.
Net financial items amounted to SEK 4.1 million (1.5). The realized and unrealized return on investments, less interest on the bond loan, positively affected the Group's financial net by SEK 2.2 million (0.8). Profit before tax increased to SEK 23.7 million (11.6).
| Operating revenue, SEK thousands January–June |
Operating profit, SEK thousands January–June |
Operating margin January–June |
|||||
|---|---|---|---|---|---|---|---|
| Business segment | Revenue source | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 |
| Brand | Royalties | 35,631 | 36,286 | 8,284 | 6,383 | 23% | 18% |
| Product development | Products | 166,076 | 148,925 | 20,725 | 9,993 | 12% | 7% |
| Wholesale | Wholesale revenues | 100,839 | 121,287 | –2,141 | 4,521 | –2% | 4% |
| Retail | Retailers | 37,835 | 33,001 | –7,298 | –10,813 | –19% | –33% |
| Less internal sales | –100,016 | –100,314 | – | – | – | – | |
| Total | 240,365 | 239,185 | 19,570 | 10,084 | 8% | 4% |
The Group consists of a total of 13 companies, nine of which operate under the Björn Borg brand on every level from product development to wholesaling and consumer sales in its own Björn Borg stores.
The Brand segment primarily consists of royalty revenue and expenses associated with the brand.
The business segment's operating revenue amounted to SEK 35.6 million (36.3) during the first half-year. External operating revenue decreased to SEK 16.3 million (17.3) as a result of the quarter's lower brand sales. 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 8.3 million (6.4), an increase of 30 percent for the period. The improved operating result is due to lower net operating expenses for branding 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 sportswear through Björn Borg Sport.
The business segment's operating revenue amounted to SEK 166.1 million (148.9) during the first half-year, an increase of 12 percent. External operating revenue amounted to SEK 104.6 million (96.6). The increase compared with the first half-year 2013 is due to the previously announced shipment delays in both product companies at the turn of the year compared with the same period a year earlier. The reason why the increase is this segment wasn't bigger was the decline in sales of the summer and fall/winter underwear collections during the period.
Operating profit increased to SEK 20.7 million (10.0) due to the higher sales as well as an improved gross profit margin in this segment. Operating expenses in the segment were in line with the first half-year 2013. Currency effects were limited during the period.
The Björn Borg Group is the exclusive wholesaler of underwear and adjacent products in Sweden, Finland and England as well as footwear in Sweden, Finland and the Baltic countries.
The business segment's operating revenue decreased by 17 percent to SEK 100.8 million (121.3) during the first half-year. External sales decreased to SEK 87.4 million (97.7). The British and Finnish operations saw sales growth, while the Group's Swedish underwear and footwear wholesaling had a weaker first half-year compared with the same period in 2013.
The operating loss amounted to SEK 2.1 million, against the year-earlier operating profit of SEK 4.5 million, due to the lower sales. Currency effects were limited during the period.
The Björn Borg Group owns and operates a total of 17 stores and factory outlets in Sweden, Finland and England that sell underwear, adjacent products, sportswear and other licensed products. Björn Borg also sells online through www.bjornborg.com.
As of January 1, 2014 revenue and expenses attributable to the Group-owned stores in Finland and England are also reported in this segment. These items previously were not reported separately from the wholesaling operations above due to the insignificant amounts.
Operating revenue in the Retail segment increased by 15 percent during the first half-year to SEK 37.8 million (33.0). External net sales rose by 16 percent during the first period to SEK 32.0 million (27.5). The increase is due to continued strong performance in e-commerce during the first half-year. Retail revenue declined slightly during the half-year despite the opening of more stores. Sales for outlets and comparable Björn Borg stores in Sweden decreased by 6 percent yearon-year.
The operating loss for the first half-year improved to SEK 7.3 million, against a year-earlier loss of SEK 10.8 million. The result is no longer charged with the operations in China.
Intra-Group sales for the first half-year amounted to SEK 100.0 million (100.3).
The Björn Borg Group is active in an industry with seasonal variations. Sales and earnings vary by quarter. See the figure on quarterly net sales and operating profit on page 4.
The Group's cash flow from operating activities amounted to SEK 4.6 million (-2.5) during the first half-year. An improved operating result year-on-year was accompanied by increased tied-up working capital during the first six months of 2014. An increase in accounts receivable during the first six months of 2014 compared with the first six months of 2013 have been partly offset by an increase in accounts payable during the same period, compared with 2013.
Total investments in tangible and intangible non-current assets amounted to SEK 0.8 million (3.1) for the period.
The Björn Borg Group's cash & cash equivalents and investments amounted to SEK 176.8 million (189.2) at the end of the period. During the half-year cash & cash equivalents and investments decreased by SEK 42.0 million (90.9). The decrease in 2014 is mainly due to the year's distribution of SEK 37.7 million (75.4).
In April 2012 the company issued a bond loan on NASDAQ OMX Stockholm that carries an annual coupon rate corresponding to the 3-month STIBOR rate +3.25 percentage points, maturing in April 2017. After transaction expenses of about SEK 1.6 million for the bond loan and the repurchase of corporate bonds with a nominal value of SEK 10 million, the carrying amount of the bond loan amounted to SEK 188.4 million as of June 30, 2014.
The surplus liquidity from the issuance of the bond loan is placed in interest-bearing financial instruments, highly liquid corporate bonds, within the framework of the financial policy laid down by the Board of Directors. As of June 30 investments had been made in bonds with a book value of SEK 148.8 million, which represents the fair value on the same date, compared with SEK 136.5 million on December 31, 2013. As a rule, bonds in foreign currency are hedged.
As a commitment for the above-mentioned bond loan, the company has pledged to ensure that the ratio between the Group's net debt and operating profit before depreciation and amortization does not exceed 3.00 on the last day of each quarter and that the Group maintains an equity/assets ratio of at least 30 percent at any given time. As of June 30, 2014 the ratio was 0.30 (0.45) and the equity/assets ratio was 44 percent (45). 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, 2013.
The average number of employees in the Group was 144 (165) for the 12-month period ended June 30, 2014, of whom 65 percent (60) are women.
No transactions with related parties have been executed during the period.
In its operations the Björn Borg Group is exposed to risks and uncertainties. Information on the Group's risks and uncertainties can be found on pages 42–43 and in note 3 in the annual report 2013.
Henrik Bunge took over as CEO of Björn Borg on August 1, 2014. There are otherwise no significant events to report following the conclusion of the reporting 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. In addition, the company owns 80 percent of the shares in Björn Borg UK, 51 percent of the shares in Björn Borg Sport BV, 75 percent of the shares in Bjorn Borg (China) Ltd and 75 percent of the shares in Bjorn Borg Finland Oy.
The Parent Company's net sales amounted to SEK 16.4 million (11.9) during the second quarter and SEK 29.7 million (24.6) during the first half-year.
The loss before tax amounted to SEK 2.1 million for the second quarter, against a year-earlier loss of SEK 5.7 million, while the loss before tax for the first half-year was SEK 11.2 million, against a year-earlier loss of SEK 17.6 million. Cash & cash equivalents and investments amounted to SEK 150.5 million (157.0) as of June 30, 2014. For the first six months of the year investments in tangible and intangible non-current assets amounted to SEK 0.1 million (0.5).
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 objectives will be achieved if established markets grow slightly below the average growth target and new markets contribute stronger growth.
The surplus liquidity generated while taking into account the new financial objectives will be distributed gradually during the forecast period.
Operating investments are estimated annually at 2–5 percent of net sales depending on whether any new Björn Borg stores are opened.
The Annual General Meeting held on April 10, 2014 resolved to pay a distribution of SEK 1.50 (3.00) per share to the shareholders for the financial year 2013.
Kerstin Hessius, Fredrik Lövstedt, Mats H Nilsson and Isabelle Ducellier were re-elected to the Board of Directors with Fredrik Lövstedt as Chairman of the Board. Vilhelm Schottenius and Michael Storåkers stepped down as Directors, while Martin Bjäringer, Nathalie Schuterman and Anders Slettengren were elected as new Directors.
This interim report has been prepared in accordance with IAS 34 Interim Financial Reporting. This condensed interim report for the Group has been prepared in accordance with IAS 34 Interim Financial Reporting and applicable provisions of the Annual Accounts Act. The interim report for the Parent Company has been prepared in accordance with chapter 9 of the Annual Accounts Act on interim reporting and RFR 2 Accounting in Legal Entities. The accounting principles applied in the interim report conform to the accounting principles applied in the preparation of the consolidated accounts and annual report for 2013, as described on page 54 in the annual report 2013.
New or amended IFRS and IFRIC interpretations effective as of January 1, 2014 have not had a significant effect on the interim report or consolidated financial statements. For further information, see the annual report 2013.
During the winter and spring 2013-2014, in connection with the implementation of a new enterprise system, Björn Borg conducted a review of its external financial statements. Against this backdrop, management has determined that an income statement format based on type of cost instead of function as done before creates a more relevant and reliable income statement for users of Björn Borg's financial reports. Comparative figures in this interim report have been restated in accordance with the revised classification by cost.
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 Note 2014 |
April–June 2013 |
Jan–June 2014 |
Jan–June 2013 |
July 2013– June 2014 |
Full-year 2013 |
|---|---|---|---|---|---|---|
| Net sales | 96,969 | 105,758 | 239,752 | 236,544 | 499,255 | 496,048 |
| Other operating revenue | 387 | 2,013 | 613 | 2,641 | 1,170 | 3,198 |
| Operating revenue | 97,356 | 107,771 | 240,365 | 239,185 | 500,425 | 499,246 |
| Goods for resale | –46,013 | –50,659 | –113,453 | –115,928 | –238,100 | –240,574 |
| Other external expenses | 1 –23,651 |
–26,564 | –54,095 | –56,285 | –122,191 | –124,381 |
| Staff costs | –25,026 | –24,916 | –48,635 | –48,446 | –100,608 | –100,419 |
| Depreciation/amortization of tangible/ | ||||||
| intangible non-current assets | –1,921 | –1,702 | –3,848 | –3,313 | –7,363 | –6,828 |
| Other operating expenses | –223 | –3,070 | –764 | –5,129 | –1,519 | –5,884 |
| Operating profit | 522 | 860 | 19,570 | 10,084 | 30,644 | 21,160 |
| Net financial items | 3,417 | 3,607 | 4,132 | 1,469 | 9,290 | 3,689 |
| Profit before tax | 3,939 | 4,467 | 23,702 | 11,553 | 39,934 | 24,849 |
| Tax | –1,723 | –1,052 | –6,079 | –2,131 | –14,891 | –10,943 |
| Profit for the period | 2,216 | 3,415 | 17,623 | 9,422 | 25,043 | 13,906 |
| Profit for the period attributable to: | ||||||
| Parent Company's shareholders | 3,777 | 5,726 | 19,172 | 13,178 | 30,543 | 21,613 |
| Non-controlling interests | –1,561 | –2,311 | –1,549 | –3,756 | –5,500 | –7,707 |
| Earnings per share before and after dilution, SEK | 0.15 | 0.23 | 0.76 | 0.52 | 1.21 | 0.86 |
| Number of shares | 25,148,384 | 25,148,384 | 25,148,384 | 25,148,384 | 25,148,384 | 25,148,384 |
| Condensed | ||||||
|---|---|---|---|---|---|---|
| SEK thousands | April–June 2014 |
April–June 2013 |
Jan–June 2014 |
Jan–June 2013 |
July 2013– June 2014 |
Full-year 2013 |
| Net profit for the period | 2,216 | 3,415 | 17,623 | 9,422 | 25,043 | 13,906 |
| OTHER COMPREHENSIVE INCOME | ||||||
| Components that may be reclassified to profit or loss | ||||||
| Translation difference for the period | –2,264 | –1,593 | –2,251 | –985 | –3,289 | –2,035 |
| Accumulated translation difference reclassified to profit or loss for discontinued operations |
– | – | – | – | – | 12 |
| Total other comprehensive income for the period | –2,264 | –1,593 | –2,251 | –985 | –3,289 | –2,023 |
| Total comprehensive income for the period | –48 | 1,822 | 15,372 | 8,437 | 21,754 | 11,883 |
| Total comprehensive income for the period attributable to | ||||||
| Parent Company's shareholders | 2,055 | 4,133 | 17,488 | 12,193 | 27,821 | 19,590 |
| Non-controlling interests | –2,103 | –2,311 | –2,116 | –3,756 | –6,067 | –7,707 |
Condensed
| SEK thousands | Note | June 30 2014 |
June 30 2013 |
Dec 31 2013 |
|---|---|---|---|---|
| Non-current assets | ||||
| Goodwill | 19,097 | 18,570 | 18,966 | |
| Trademarks | 187,532 | 187,532 | 187,532 | |
| Other intangible assets | 3,950 | 4,607 | 4,748 | |
| Tangible non-current assets | 14,495 | 14,471 | 16,519 | |
| Long-term receivable | 2 | 11,600 | – | 13,400 |
| Deferred tax assets | 31,335 | 35,356 | 31,126 | |
| Total non-current assets | 268,009 | 260,536 | 272,291 | |
| Current assets | ||||
| Inventories, etc. | 45,041 | 43,853 | 39,031 | |
| Accounts receivable | 58,446 | 81,454 | 52,321 | |
| Other current receivables | 35,398 | 43,864 | 34,104 | |
| Investments | 2 | 148,752 | 155,467 | 136,519 |
| Cash & cash equivalents | 28,052 | 33,768 | 82,304 | |
| Total current assets | 315,689 | 358,406 | 344,279 | |
| Total assets | 583,698 | 618,942 | 616,570 | |
| Equity and liabilities | ||||
| Equity | 258,298 | 277,215 | 280,650 | |
| Deferred tax liabilities | 40,850 | 44,587 | 39,694 | |
| Other non-current liabilities | 20,616 | 27,455 | 24,115 | |
| Bond loan | 2 | 188,377 | 192,603 | 192,927 |
| Accounts payable | 35,531 | 25,364 | 26,549 | |
| Other current liabilities | 40,026 | 51,718 | 52,635 | |
| Total equity and liabilities | 583,698 | 618,942 | 616,570 |
Condensed
| SEK thousands | Equity attributable to Parent Company's shareholders |
Non- controlling interests |
Total equity |
|---|---|---|---|
| Opening balance, January 1, 2013 | 354,050 | –9,835 | 344,216 |
| Total comprehensive income for the period | 12,193 | –3,756 | 8,437 |
| Distribution for 2012 | –75,444 | – | –75,444 |
| Non-controlling interests that arose through acquisition | – | 6 | 6 |
| Closing balance, June 30, 2013 | 290,799 | –13,585 | 277,215 |
| Opening balance, January 1, 2013 | 354,050 | –9,835 | 344,216 |
| Total comprehensive income for the year | 19,590 | –7,707 | 11,883 |
| Distribution for 2012 | –75,445 | – | –75,445 |
| Non-controlling interests that arose through acquisition | – | 6 | 6 |
| Translation difference | –12 | – | –12 |
| Discontinued business | –4,003 | 4,003 | – |
| Closing balance, December 31, 2013 | 294,180 | –13,533 | 280,650 |
| Opening balance, January 1, 2014 | 294,180 | –13,533 | 280,650 |
| Total comprehensive income for the period | 17,488 | –2,116 | 15,372 |
| Distribution for 2013 | –37,723 | – | –37,723 |
| Closing balance, June 30, 2014 | 273,946 | –15,649 | 258,298 |
| Condensed | ||||||
|---|---|---|---|---|---|---|
| SEK thousands | Note | April–June 2014 |
April–June 2013 |
Jan–June 2014 |
Jan–June 2013 |
Full-year 2013 |
| Cash flow from operating activities | ||||||
| Before changes in working capital | 3,056 | –2,458 | 20,945 | –518 | 13,382 | |
| Changes in working capital | 10,633 | 11,712 | –16,300 | –1,969 | 24,617 | |
| Cash flow from operating activities | 13,689 | 9,254 | 4,645 | –2,487 | 37,999 | |
| Investments in intangible non-current assets | –28 | –119 | –130 | –366 | –1,533 | |
| Investments in tangible non-current assets | –179 | –1,438 | –655 | –2,695 | –8,088 | |
| Business combinations | 2 | – | – | – | –6,547 | –6,547 |
| Disposal of subsidiaries | – | – | – | – | –2,369 | |
| Investments/divestments | 32,145 | 13,910 | –10,890 | 8,357 | 28,886 | |
| Cash flow from investing activities | 31,938 | 12,353 | –11,675 | –1,251 | 10,349 | |
| Distribution | –37,723 | –75,445 | –37,723 | –75,445 | –75,445 | |
| Amortization of loans | –1,961 | –1,140 | –3,760 | –3,211 | –7,207 | |
| Repurchase of bond loan | –4,870 | – | –4,870 | – | – | |
| Cash flow from financing activities | –44,554 | –76,585 | –46,353 | –78,656 | –82,652 | |
| Cash flow for the period | 1,073 | –54,978 | –53,383 | –82,394 | –34,304 | |
| Cash & cash equivalents at beginning of period | 27,836 | 89,171 | 82,304 | 116,195 | 116,195 | |
| Translation difference in cash & cash equivalents | –857 | –425 | –869 | –33 | 413 | |
| Cash & cash equivalents at end of period | 28,052 | 33,768 | 28,052 | 33,768 | 82,304 |
| Group | ||||||
|---|---|---|---|---|---|---|
| SEK thousands | April–June 2014 |
April–June 2013 |
Jan–June 2014 |
Jan–June 2013 |
July 2013– June 2014 |
Full-year 2013 |
| Gross profit margin, % | 52.5 | 52.1 | 52.7 | 51.0 | 52.3 | 51.5 |
| Operating margin, % | 0.5 | 0.8 | 8.2 | 4.3 | 6.1 | 4.3 |
| Profit margin, % | 4.1 | 4.2 | 9.9 | 4.9 | 8.0 | 5.0 |
| Return on capital employed, % | 10.5 | 14.8 | 10.5 | 14.8 | 10.5 | 7.0 |
| Return on average equity, % | 11.4 | 17.6 | 11.4 | 17.6 | 11.4 | 6.9 |
| Profit attributable to Parent Company's shareholders | 3,777 | 5,726 | 19,172 | 13,178 | 30,543 | 21,613 |
| Equity/assets ratio, % | 44.3 | 44.8 | 44.3 | 44.8 | 44.3 | 45.5 |
| Equity per share, SEK | 10.27 | 11.02 | 10.27 | 11.02 | 10.27 | 11.16 |
| Investments in intangible non-current assets | 28 | 119 | 130 | 366 | 1,297 | 1,533 |
| Investments in tangible non-current assets | 179 | 1,438 | 655 | 2,695 | 6,048 | 8,088 |
| Business combinations | – | – | – | 6,547 | – | 6,547 |
| Depreciation, amortization and impairment losses for the period |
–1,921 | –1,702 | –3,848 | –3,313 | –7,363 | –6,828 |
| Average number of employees | – | – | – | – | 144 | 159 |
| Group | ||||||
|---|---|---|---|---|---|---|
| SEK thousands | April–June 2014 |
April–June 2013 |
Jan–June 2014 |
Jan–June 2013 |
July 2013– June 2014 |
Full-year 2013 |
| Operating revenue | ||||||
| Brand | ||||||
| External revenue | 6,633 | 6,434 | 16,282 | 17,346 | 37,307 | 38,371 |
| Internal revenue | 7,179 | 8,079 | 19,349 | 18,940 | 39,537 | 39,128 |
| 13,812 | 14,513 | 35,631 | 36,286 | 76,844 | 77,499 | |
| Product development | ||||||
| External revenue | 41,488 | 46,580 | 104,639 | 96,626 | 195,102 | 187,090 |
| Internal revenue | 26,535 | 28,345 | 61,437 | 52,300 | 116,195 | 107,058 |
| 68,023 | 74,925 | 166,076 | 148,926 | 311,297 | 294,148 | |
| Wholesale | ||||||
| External revenue | 31,601 | 39,732 | 87,446 | 97,710 | 194,123 | 204,386 |
| Internal revenue | 6,920 | 9,755 | 13,393 | 23,577 | 41,816 | 52,000 |
| 38,521 | 49,487 | 100,839 | 121,287 | 235,939 | 256,386 | |
| Retail | ||||||
| External revenue | 17,635 | 15,025 | 31,998 | 27,504 | 73,893 | 69,399 |
| Internal revenue | 3,149 | 3,171 | 5,837 | 5,497 | 11,421 | 11,081 |
| 20,784 | 18,196 | 37,835 | 33,001 | 85,314 | 80,480 | |
| Less internal sales | –43,784 | –49,350 | –100,016 | –100,314 | –208,969 | –209,267 |
| Operating revenue | 97,356 | 107,771 | 240,365 | 239,185 | 500,425 | 499,246 |
| Operating profit | ||||||
| Brand | 3,346 | 1,802 | 8,284 | 6,383 | 16,596 | 14,697 |
| Product development | 5,216 | 4,235 | 20,725 | 9,993 | 14,775 | 4,043 |
| Wholesale | –6,537 | –1,138 | –2,141 | 4,520 | 8,865 | 15,526 |
| Retail | –1,503 | –4,039 | –7,298 | –10,812 | –9,592 | –13,106 |
| Operating profit | 522 | 860 | 19,570 | 10,084 | 30,644 | 21,160 |
The difference between operating profit for segments for which information must be disclosed, SEK 19,570 thousand (10,084), and profit before tax, SEK 23,702 thousand (11,553), is net financial items, SEK 4,132 thousand (1,469).
| Group | ||
|---|---|---|
| Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 |
|---|---|---|---|---|---|---|---|
| 2012 | |||||||
| 96,969 | 142,783 | 99,275 | 160,228 | 105,759 | 130,786 | 138,735 | 165,963 |
| 52.5 | 52.8 | 52.1 | 51.8 | 52.1 | 50.1 | 51.9 | 50.9 |
| 522 | 19,048 | –12,534 | 23,610 | 860 | 9,225 | 15,085 | 35,222 |
| 0.5 | 13.3 | neg | 14.7 | 0.8 | 7.1 | 10.9 | 21.2 |
| 3,939 | 19,987 | –9,399 | 22,695 | 4,467 | 7,086 | 18,948 | 33,368 |
| 4.1 | 14.0 | neg | 14.2 | 4.2 | 5.4 | 13.7 | 20.1 |
| 0.15 | 0.62 | –0.40 | 0.74 | 0.23 | 0.30 | 0.45 | 1.11 |
| 38 | 38 | 38 | 54 | 57 | 57 | 60 | 59 |
| 17 | 17 | 17 | 16 | 17 | 17 | 17 | 13 |
| 249,963 | 382,081 | 331,665 | 482,268 | 275,379 | 431,815 | 376,244 | 484,938 |
| 2014 | 2014 | 2013 | 2013 | 2013 | 2013 | 2012 |
| Condensed | |||||||
|---|---|---|---|---|---|---|---|
| SEK thousands | Note | April–June 2014 |
April–June 2013 |
Jan–June 2014 |
Jan–June 2013 |
July 2013– June 2014 |
Full-year 2013 |
| Net sales | 16,446 | 11,935 | 29,739 | 24,614 | 55,102 | 49,977 | |
| Other operating revenue | –1,218 | 39 | –1,178 | 80 | –1,060 | 198 | |
| Operating revenue | 15,228 | 11,974 | 28,561 | 24,694 | 54,042 | 50,175 | |
| Goods for resale | –43 | –16 | –72 | –118 | –196 | –242 | |
| Other external expenses | 1 | –8,773 | –8,633 | –21,575 | –19,772 | –48,801 | –46,997 |
| Staff costs | –7,518 | –7,899 | –14,999 | –15,565 | –30,859 | –31,425 | |
| Depreciation/amortization of tangible/ intangible non-current assets |
–543 | –571 | –1,107 | –1,146 | –2,064 | –2,103 | |
| Other operating expenses | –3 | –118 | –44 | –367 | –369 | –692 | |
| Operating loss | –1,652 | –5,263 | –9,236 | –12,274 | –28,247 | –31,284 | |
| Result from shares in subsidiaries | – | – | – | – | 50,725 | 50,725 | |
| Group contributions received | – | – | – | – | 43,755 | 43,755 | |
| Net financial items | –445 | –458 | –1,954 | –5,330 | –5,863 | –9,239 | |
| Profit/loss before tax | –2,097 | –5,721 | –11,190 | –17,604 | 60,370 | 53,957 | |
| Appropriations | – | – | – | – | 295 | 295 | |
| Tax | – | – | – | 403 | –108 | 296 | |
| Profit/loss for the period | –2,097 | –5,721 | –11,190 | –17,201 | 60,557 | 54,548 | |
| Other comprehensive income | – | – | – | – | – | – | |
| Total comprehensive income for the period | –2,097 | –5,721 | –11,190 | –17,201 | 60,557 | 54,548 |
| Condensed | ||||
|---|---|---|---|---|
| SEK thousands | Note | June 30 2014 |
June 30 2013 |
Dec 31 2013 |
| Non-current assets | ||||
| Intangible non-current assets | 516 | 520 | 595 | |
| Tangible non-current assets | 3,733 | 5,426 | 4,627 | |
| Long-term receivable | 2 | 11,600 | – | 13,400 |
| Shares in Group companies | 321,243 | 332,439 | 321,243 | |
| Total non-current assets | 337,092 | 338,385 | 339,865 | |
| Current assets | ||||
| Receivables from Group companies | 127,610 | 175,106 | 182,141 | |
| Current receivables | 14,961 | 6,786 | 10,749 | |
| Investments | 2 | 148,752 | 155,467 | 136,519 |
| Cash & cash equivalents | 1,735 | 1,537 | 41,559 | |
| Total current assets | 293,058 | 338,896 | 370,968 | |
| Total assets | 630,150 | 677,281 | 710,833 | |
| Equity and liabilities | ||||
| Equity | 68,974 | 46,138 | 117,887 | |
| Untaxed reserves | 1,888 | 2,183 | 1,888 | |
| Deferred tax | 314 | 609 | 314 | |
| Bond loan | 2 | 188,377 | 192,603 | 192,927 |
| Due to Group companies | 346,967 | 423,757 | 382,447 | |
| Accounts payable | 8,122 | 2,947 | 5,407 | |
| Other current liabilities | 15,508 | 9,044 | 9,963 | |
| Total equity and liabilities | 630,150 | 677,281 | 710,833 |
| Condensed | ||||
|---|---|---|---|---|
| SEK thousands | Jan–June 2014 |
Jan–June 2013 |
Full-year 2013 |
|
| Opening balance | 117,887 | 138,784 | 138,784 | |
| Distribution | –37,723 | –75,445 | –75,445 | |
| Total comprehensive income for the period | –11,190 | –17,201 | 54,548 | |
| Closing balance | 68,974 | 46,138 | 117,887 |
| Group | Parent Company | ||||
|---|---|---|---|---|---|
| Jan–Jun 2014 | Jan–Jun 2013 | Jan–Jun 2014 | Jan–Jun 2013 | ||
| Cost of premises | 13,062 | 11,643 | 4,341 | 4,244 | |
| Selling expenses | 10,883 | 14,273 | 1,540 | 3,931 | |
| Marketing expenses | 15,037 | 12,251 | 7,557 | 4,702 | |
| Administrative expenses | 11,749 | 13,138 | 7,036 | 6,827 | |
| Other | 3,364 | 4,980 | 1,101 | 68 | |
| Total | 54,095 | 56,285 | 21,575 | 19,772 |
Securities held for trading relate to investments in corporate bonds quoted on NASDAQ OMX and have been measured at their quoted prices. Forward exchange contracts are measured according to level 2 based on observable information as of the closing date with respect to exchange rates and market interest rates for the remaining maturities.
Net investments in the company's portfolio of corporate bonds amounted to SEK 10,890 thousand during the first half-year.
| Total assets | 149,718 | –966 | – |
|---|---|---|---|
| Derivatives held for trading | – | –966 | – |
| Securities held for trading | 149,718 | – | – |
| through profit or loss | Level 1 Level 2 Level 3 |
Björn Borg currently has no liabilities measured at fair value. The carrying amount of financial instruments at amortized cost coincides with their fair value as of June 30, 2014, with the exception of the bond loan, whose fair value amounted to SEK 183,350 thousand, compared with a carrying amount of SEK 188,377 thousand.
In 2013 the company granted an interest-bearing, SEK 17 million collateralized loan to the Dutch distributor expiring on March 31, 2017 with quarterly amortizations of SEK 900,000 as of December 31, 2013.
Net sales less cost of goods sold divided by net sales.
Operating profit as a percentage of net sales.
Profit before tax as a percentage of net sales.
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 in relation to the weighted average number of shares during the period and 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 20, 2014
Fredrik Lövstedt Chairman
Martin Bjäringer Board Member
Isabelle Ducellier Board Member
Kerstin Hessius Board Member
Mats H Nilsson Board Member Nathalie Schuterman Board Member
Anders Slettengren Board Member
Henrik Bunge CEO
The interim report January–September 2014 will be released on November 17, 2014. The year-end report for 2014 will be released on February 19, 2015.
For further information, please contact: Henrik Bunge, 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 interim report in accordance with the Securities Market Act. The information was released for publication on August 20, 2014 at 7:30 am (CET).
The Group owns the Björn Borg trademark and its core business is underwear. It also offers sportswear and fragrances as well as footwear, luggage & bags and eyewear through licensees. Björn Borg products are sold in around thirty 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 2013 amounted to around SEK 1.5 billion, excluding VAT, at the consumer level. Group net sales amounted to SEK 496 million in 2013, with an average of 159 employees. The Björn Borg share has been listed on NASDAQ OMX Nordic in Stockholm since 2007.
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