Quarterly Report • Aug 12, 2015
Quarterly Report
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"The underlying performance of Björn Borg is in line with the objectives announced in our previous interim report, despite a somewhat weaker second quarter operating result," said CEO Henrik Bunge.
| SEK million | April-June 2015 |
April-June 2014 |
Jan-June 2015 |
Jan-June 2014 |
July 2014- June 2015 |
Full-year 2014 |
|---|---|---|---|---|---|---|
| Net sales | 99.2 | 97.0 | 230.3 | 239.8 | 529.3 | 538.8 |
| Gross profit margin, % | 53.0 | 52.5 | 53.4 | 52.7 | 53.2 | 52.9 |
| Operating profit/loss | –1.7 | 0.5 | 11.2 | 19.6 | 47.5 | 56.0 |
| Operating margin, % | neg | 0.5 | 4.8 | 8.2 | 9.0 | 10.4 |
| Profit/loss after tax | –2.3 | 2.2 | 12.6 | 17.6 | 42.5 | 47.6 |
| Earnings per share before and | ||||||
| after dilution, SEK | –0.04 | 0.15 | 0.57 | 0.76 | 1.75 | 1.94 |
| Brand sales* | 246 | 254 | 640 | 636 | 1,436 | 1,431 |
* Estimated total sales of Björn Borg products at the consumer level, excluding VAT, based on reported sales at the wholesale level.
The second quarter of the year met our expectations and results were in line with the company's business plan. Revenue increased slightly with good growth for the sports apparel collection and footwear. We are seeing positive development in our Nordic markets, but I am not satisfied with our development in the UK, which in Q2 lost ground compared with the same quarter in 2014. The performance of our stores is good, as previously reported, with sales for comparable units rising over 10 percent compared with Q2 2014. Our e-commerce business continues to generate good growth in line with our expectations.
Revenue and the gross profit margin both increased during the quarter. Key recruitments, increased marketing efforts and investments in e-commerce have raised operating expenses as planned by SEK 7.4 million. These actions feel well balanced and are absolutely necessary to develop the business as planned. As a whole, this produced an operating loss of SEK 1.7 million (+0.5) for the second quarter, which has always been the weakest quarter of the year.
My personal focus during the quarter was on the UK, where we now have a new plan in place, and on building up our sports apparel organization and ensuring growth in our retail business. We do many things well, but we have to be better at doing a few things exceptionally well.
Our team is currently working on a spectacular fashion show that will take place on the August 24 during Fashion Week in Stockholm. This is a way for us to present all product groups as one strong brand and present the Spring Summer 16 collection directly to targeted sports and fashion media and consumers.
Lastly, I would like to underscore that our performance during the first half-year strengthens my confidence that the company will reach the financial objectives announced in our last quarterly report.
Head coach Henrik Bunge
Distributors and licensees reported slightly lower sales during the second quarter, mainly in underwear and bags. Brand sales (excluding VAT) decreased by 3 percent to SEK 246 million (254) for the second quarter, but increased by 1 percent to SEK 640 million (636) for the first half-year. Adjusted for currency effects, brand sales were down 5 percent for the quarter and 2 percent for the first half-year.
Brand sales in the underwear product area fell by 2 percent in the first half-year. Underwear accounted for 57 percent (59) of brand sales.
Sports apparel saw a slight increase in brand sales. In the bags and eyewear product areas sales were essentially unchanged, while sales in the footwear product area rose. In total, sales of licensed products rose by 4 percent in the first half-year.
Among large markets, Sweden and Norway saw good growth, while Belgium retreated. Finland, Denmark and the Netherlands reported slightly smaller changes than the previous year. Among smaller markets, it was a tough first half-year for England, which lost ground compared with the previous year.
The Björn Borg store in Linköping was closed during the second quarter. The distributor-operated store in Slovenia was closed as well. As of June 30, 2015 there were a total of 38 (38) Björn Borg stores, of which 17 (17) are Group-owned.
Net sales were higher during the second quarter, but operating profit decreased compared with the same period in 2014.
The Group's net sales amounted to SEK 99.2 million (97.0) during the second quarter, an increase of 2 percent. Excluding currency effects, net sales fell by 5 percent.
The fall/winter collection for the sports apparel product company contributed positively to the sales increase. The corresponding underwear collection also grew year-on-year. A slightly higher share of shipments after mid-year meant lower revenue for the underwear product company in the second quarter. As in the first quarter, there was a significant positive currency effect. Swedish underwear wholesaling had a strong quarter (party due to delayed Q1 shipments). The footwear wholesale company reported lower sales, and the British and Finnish operations also fell slightly during the quarter. Group-owned retail and e-commerce operations had another positive quarter with higher sales. Royalties fell slightly as a result of lower brand sales during the quarter.
The Group's net sales amounted to SEK 230.3 million (239.8) during the first half-year, a decrease of 4 percent. Excluding currency effects, sales declined by 11 percent.
The biggest single reason for the sales decrease, as announced in earlier reports, is that shipments of about SEK 25 million from both product companies were delayed at the end of 2013 until the first quarter 2014. Consequently, 2014 is not totally comparable with the first half-year 2015 in terms of sales or operating profit. Adjusted for the delayed shipments and currency effects, sales are practically unchanged compared with the first half-year 2014. The underlying fall/winter collections in the product companies for underwear and sports apparel reported sales increases, part of which will not be evident until the third quarter. For the first half-year there was a significant positive currency component. Sweden had a good first half-year with increases in underwear wholesaling as well as e-commerce and the Group-owned retail operations, while footwear wholesaling saw a decline. The British and Finnish wholesaling operations also retreated during the first half-year. Royalties increased marginally during the first half-year.
The gross profit margin for the second quarter increased to 53.0 percent (52.5). Excluding currency effects, the margin would have been over 54 percent.
Despite higher sales and an improved gross profit margin during the quarter, higher operating expenses led to an operating loss of SEK 1.7 million, against year-earlier profit of SEK 0.5 million. A stronger organization compared with 2014 (including a new CEO and Sales Director), increased marketing efforts and higher sales expenses from a strongly growing e-commerce business are the biggest reasons for the increased operating expenses during the quarter.
Net financial items amounted to SEK 0.1 million (3.4). The realized and unrealized return on investments, less interest on the bond loan, positively affected the Group's financial net by SEK 1.9 million (0.8). The year-on-year decrease is mainly due to the revaluation of financial assets and liabilities in foreign currency. The loss before tax was SEK 1.6 million, compared with year-earlier profit of SEK 3.9 million.
| Operating revenue, SEK thousands January-June |
Operating profit, SEK thousands January-June |
Operating margin, % January-June |
||||||
|---|---|---|---|---|---|---|---|---|
| Business segment | Revenue source | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | |
| Brand | Royalties | 35,944 | 35,631 | 7,900 | 8,284 | 22% | 23% | |
| Product development | Products | 168,118 | 166,076 | 12,456 | 20,725 | 7% | 12% | |
| Wholesale | Wholesale revenues | 96,604 | 100,839 | –4,027 | –2,141 | –4% | –2% | |
| Retail | Retailers | 45,080 | 37,835 | –5,163 | –7,298 | –11% | –19% | |
| Less internal sales | –108,533 | –100,016 | ||||||
| Total | 237,213 | 240,365 | 11,166 | 19,570 | 5% | 8% |
The gross profit margin for the first half-year increased to 53.4 percent (52.7). Excluding currency effects, the margin would have still been 54 percent.
Despite an improved gross profit margin, lower sales and increased operating expenses during the first half-year reduced operating profit to SEK 11.2 million (19.6). A stronger organization compared with 2014 (including a new CEO and a Sales Director in place in the first half-year 2015), increased marketing efforts and higher sales expenses from a strongly growing e-commerce business are the biggest reasons for the increased operating expenses during the first half-year.
Net financial items amounted to SEK 5.0 million (4.1). The realized and unrealized return on investments, less interest on the bond loan, positively affected the Group's financial net by SEK 3.0 million (2.2). The remaining year-on-year increase is mainly due to the revaluation of financial assets and liabilities in foreign currency. Profit before tax decreased to SEK 16.2 million (23.7).
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 35.9 million (35.6) during the first half-year 2015. External operating revenue increased to SEK 18.2 million (16.3) despite slightly lower brand sales. Royalties as a percentage vary between product categories, because of which there isn't always an exact correlation between royalties and brand sales. It should be noted that the royalties Björn Borg Sport receives from its customers are also reported in the Brand segment.
Increased operating expenses reduced operating profit to SEK 7.9 million (8.3) for the half-year.
The Björn Borg Group has global responsibility for development, design and production of underwear and adjacent products as well as sports apparel through Björn Borg Sport.
The business segment's operating revenue amounted to SEK 168.1 million (166.1) during the first half-year 2015, an increase of 1 percent. External operating revenue amounted to SEK 96.5 million (104.6). The decrease of 8 percent compared with the first half-year 2014 is due to the extra revenue of about SEK 25 million in the comparable period in 2014 from the shipment delays in 2013. The reason why the year-on-year decrease wasn't bigger was a significant positive currency effect, but also because the 2015 underwear collections have grown in total compared with the 2014 collections.
Operating profit decreased to SEK 12.5 million (20.7) due to the lower sales and slightly higher operating expenses.
The Björn Borg Group is the exclusive wholesaler of underwear, sports apparel 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 4 percent to SEK 96.6 million (100.8) during the first half-year 2015. External operating revenue amounted to SEK 82.8 million (87.4). The British and Finnish operations and footwear wholesaling saw lower sales year-on-year. Swedish underwear wholesaling instead reported higher sales during the half-year.
The operating loss amounted to SEK 4.0 million, against a year-earlier loss of SEK 2.1 million, due to the lower sales, but also to increased sourcing costs in a more expensive USD, among other currencies.
The Björn Borg Group owns and operates a total of 17 stores and factory outlets in Sweden, Finland and England that sell underwear, sports apparel, adjacent products and other licensed products. Björn Borg also sells online through www.bjornborg.com.
Operating revenue in the Retail segment increased by 19 percent during the first half-year 2015 to SEK 45.1 million (37.8). External net sales rose by 24 percent during the period to SEK 39.6 million (32.0). The increase is mainly due to continued strong performance in e-commerce during the half-year, but also because the Group-owned Swedish stores developed positively during the period. Sales for outlets and comparable Björn Borg stores in Sweden rose by 10 percent year-on-year.
The operating loss for the first half-year 2015 amounted to SEK 5.2 million, against a year-earlier loss of SEK 7.3 million. The improved result is due to higher revenue during the period, despite that operating expenses increased slightly.
Intra-Group sales for the first half-year 2015 amounted to SEK 108.5 million (100.0).
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 -12.1 million (4.6) during the first half-year 2015, mainly due to lower earnings during the period. The inventory buildup in the first half-year 2015 was higher than the same period in 2014, which contributed to increased tied-up working capital. This is a temporary effect, however, resulting from a higher share of goods in transit at midyear 2015.
Total investments in tangible and intangible non-current assets amounted to SEK 0.8 million (0.8) for the period.
The Björn Borg Group's cash & cash equivalents and investments amounted to SEK 156.8 million (176.8) at the end of the period, while interest-bearing liabilities (the bond loan) amounted to SEK 176.8 million (188.4).
In April 2012 the company issued a bond loan on Nasdaq 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 1.1 million for the bond loan and bond repurchases with a book value of SEK 22.1 million as of June 30, 2015, the carrying amount of the bond loan was SEK176.8 million as of June 30, 2015.
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 111.1 million, which represents the fair value on the same date, compared with SEK 133.1 million on December 31, 2014. The amount excludes repurchased bonds. 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, 2015 the ratio was 0.36 (0.30) and the equity/assets ratio was 46.2 percent (44.3). 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, 2014.
The average number of employees in the Group was 130 (144) for the 12-month period ended June 30, 2015, of whom 66 percent (65) are women. The decrease is attributable to the discontinued operations in China and the divestment of the inventory management company Anteros.
With the exception of the purchase of warrants by senior management, there have not been any transactions with related parties 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 74-75 and in note 3 in the annual report 2014.
Following the conclusion of the reporting period the parent company raised a convertible debenture loan for employees in Swedish Group companies. There are no other 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 Sport BV, Björn Borg Inc. and Björn Borg Services AB. In addition, the company owns 80 percent of the shares in Björn Borg UK, 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 13.0 million (16.4) during the second quarter and SEK 26.2 million (29.7) for the first half-year.
The loss before tax amounted to SEK 9.0 million for the second quarter, against a year-earlier loss of SEK 2.1 million, while the loss before tax for the first half-year was SEK 19.6 million, against a year-earlier loss of SEK 11.2 million. Cash & cash equivalents and investments amounted to SEK 114.1 million (150.5) as of June 30, 2015. For the first six months of the year investments in tangible and intangible non-current assets amounted to SEK 0.3 million (0.1).
Björn Borg currently has 25,148,384 shares outstanding.
The Board of Directors of Björn Borg has established a business plan for the period 2015-2019 with the following long-term financial objectives for operations:
The sales objective for 2019 corresponds to average annual organic growth of 13 percent with 2014 as the starting year. The sales increase is expected to come from new product groups in sports fashion as well as expanded geographical distribution within all the product groups.
The Annual General Meeting held on May 11, 2015 resolved to pay a distribution of SEK 1.50 (1.50) per share to shareholders for the financial year 2014.
Directors Kerstin Hessius, Fredrik Lövstedt, Mats H Nilsson, Martin Bjäringer, Isabelle Ducellier and Nathalie Schuterman were reelected, with Fredrik Lövstedt as Chairman of the Board. Anders Slettengren stepped down as a Director. Heiner Olbrich was elected as a new Director.
The Meeting adopted the Board of Directors' proposal for a long-term incentive plan involving the issuance and transfer of convertible debentures and warrants. The incentive plan encompasses a convertible debenture plan for all employees in Swedish Group companies and a warrant plan for senior management. According to the convertible debenture plan, Björn Borg will raise a convertible debenture loan in a nominal amount of up to SEK 34,800,000, corresponding to up to 580,000 convertible debentures, which upon conversion can be converted into up to 580,000 shares in the company.
All members of senior management who received the offer chose to participate in both the warrant plan and the convertible debenture plan.
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 2014, as described on page 91 in the annual report 2014.
New or amended IFRS and IFRIC interpretations effective as of January 1, 2015 have not had a material effect or impact on the interim report or consolidated financial statements.
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 | Note | April-June 2015 |
April-June 2014 |
Jan-June 2015 |
Jan-June 2014 |
July 2014- June 2015 |
Full-year 2014 |
|---|---|---|---|---|---|---|---|
| Net sales | 99,199 | 96,969 | 230,280 | 239,752 | 529,281 | 538,753 | |
| Other operating revenue | 3,954 | 387 | 6,933 | 613 | 12,063 | 5,744 | |
| Operating revenue | 103,153 | 97,356 | 237,213 | 240,365 | 541,345 | 544,497 | |
| Goods for resale | –46,603 | –46,013 | –107,372 | –113,453 | –247,479 | –253,560 | |
| Other external expenses | 1 | –30,262 | –23,651 | –61,703 | –54,095 | –130,340 | –122,732 |
| Staff costs | –25,016 | –25,026 | –51,163 | –48,635 | –105,145 | –102,617 | |
| Depreciation/amortization of tangible/ | |||||||
| intangible non-current assets | –1,706 | –1,921 | –3,567 | –3,848 | –8,596 | –8,877 | |
| Other operating expenses | –1,228 | –223 | –2,242 | –764 | –2,239 | –761 | |
| Operating profit Net financial items |
–1,662 77 |
522 3,417 |
11,166 5,030 |
19,570 4,132 |
47,546 8,097 |
55,950 7,198 |
|
| Profit before tax Tax |
–1,585 –689 |
3,939 –1,723 |
16,196 –3,605 |
23,702 –6,076 |
55,642 –13,103 |
63,148 –15,577 |
|
| Profit for the period | –2,274 | 2,216 | 12,591 | 17,623 | 42,539 | 47,572 | |
| Profit for the period attributable to: Parent Company's shareholders |
–1,033 | 3,777 | 14,419 | 19,172 | 44,081 | 48,835 | |
| Non-controlling interests | –1,241 | –1,561 | –1,828 | –1,549 | –1,542 | –1,263 | |
| Earnings per share before and | |||||||
| after dilution, SEK | –0.04 | 0.15 | 0.57 | 0.76 | 1.75 | 1.94 |
| SEK thousands Note |
April-June 2015 |
April-June 2014 |
Jan-June 2015 |
Jan-June 2014 |
July 2014- June 2015 |
Full-year 2014 |
|---|---|---|---|---|---|---|
| Net profit for the period | –2,274 | 2,216 | 12,591 | 17,623 | 42,539 | 47,572 |
| OTHER COMPREHENSIVE INCOME | ||||||
| Components that may be reclassified to profit or loss |
||||||
| Translation difference for the period | 1,002 | –2,264 | –2,975 | –2,251 | –7,776 | –7,052 |
| Total other comprehensive income for the period |
1,002 | –2,264 | –2,975 | –2,251 | –7,776 | –7,052 |
| Total comprehensive income for the period |
–1,272 | –48 | 9,616 | 15,372 | 34,763 | 40,520 |
| Total comprehensive income for the period attributable to |
||||||
| Parent Company's shareholders Non-controlling interests |
–182 –1,090 |
2,055 –2,103 |
12,028 –2,412 |
17,488 –2,116 |
38,256 –3,493 |
43,717 –3,197 |
CONDENSED
| June 30 | June 30 | Dec 31 | |
|---|---|---|---|
| SEK thousands Note |
2015 | 2014 | 2014 |
| Non-current assets | |||
| Goodwill | 19,108 | 19,097 | 19,265 |
| Trademarks | 187,532 | 187,532 | 187,532 |
| Other intangible assets | 3,373 | 3,950 | 4,390 |
| Tangible non-current assets | 9,303 | 14,495 | 12,334 |
| Long-term receivable 2 |
8,900 | 11,600 | 9,800 |
| Deferred tax assets | 31,398 | 31,335 | 31,713 |
| Total non-current assets | 259,614 | 268,009 | 265,034 |
| Current assets | |||
| Inventories | 55,845 | 45,041 | 40,381 |
| Accounts receivable | 62,387 | 58,446 | 68,232 |
| Other current receivables | 25,837 | 35,398 | 19,573 |
| Investments 2 |
111,061 | 148,752 | 133,147 |
| Cash & cash equivalents | 45,722 | 28,052 | 85,080 |
| Total current assets | 300,852 | 315,689 | 346,414 |
| Total assets | 560,466 | 583,698 | 611,447 |
| Equity and liabilities | |||
| Equity | 258,902 | 258,298 | 285,708 |
| Deferred tax liabilities | 39,000 | 40,850 | 38,350 |
| Other non-current liabilities | 9,443 | 20,616 | 13,292 |
| Bond loan 2 |
176,780 | 188,377 | 187,738 |
| Accounts payable | 31,664 | 35,531 | 25,064 |
| Other current liabilities | 44,677 | 40,026 | 61,295 |
| Total equity and liabilities | 560,466 | 583,698 | 611 447 |
| Equity attributable to | |||
|---|---|---|---|
| SEK thousands | Parent Company's shareholders |
Non-controlling interests |
Total equity |
| 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 |
| Opening balance, January 1, 2014 | 294,180 | –13,533 | 280,650 |
| Total comprehensive income for the year | 43,717 | –3,197 | 40,520 |
| Distribution for 2013 | –37,723 | – | –37,723 |
| Offset issue in subsidiary | – | 9,466 | 9,466 |
| Acquisition of minority shares | –9,822 | 2,619 | –7,203 |
| Closing balance, December 31, 2014 | 290,353 | –4,645 | 285,708 |
| Opening balance, January 1, 2015 | 290,353 | –4,645 | 285,708 |
| Total comprehensive income for the period | 12,028 | –2,412 | 9,616 |
| Distribution for 2014 | –37,723 | – | –37,723 |
| Issuance of warrants | 1,300 | – | 1,300 |
| Closing balance, June 30, 2015 | 265,959 | –7,057 | 258,902 |
CONDENSED
| SEK thousands | April-June 2015 |
April-June 2014 |
Jan-June 2015 |
Jan-June 2014 |
Full-year 2014 |
|---|---|---|---|---|---|
| Cash flow from operating activities | |||||
| Before changes in working capital | –4,544 | 3,056 | 11,296 | 20,945 | 63,363 |
| Changes in working capital | –7,087 | 10,633 | –23,417 | –16,300 | –8,629 |
| Cash flow from operating activities | –11,630 | 13,689 | –12,120 | 4,645 | 54,734 |
| Investments in intangible non-current assets | – | –28 | –136 | –130 | –1,428 |
| Investments in tangible non-current assets | –427 | –179 | –619 | –655 | –1,353 |
| Divestments of non-current assets | – | – | 74 | – | – |
| Investments/divestments | 23,929 | 32,145 | 23,844 | –10,890 | –106 |
| Cash flow from investing activities | 23,502 | 31,938 | 23,163 | –11,675 | –2,887 |
| Distribution | –37,723 | –37,723 | –37,723 | –37,723 | –37,723 |
| Acquisition of minority shares | – | – | – | – | –1,410 |
| Amortization of loans | –1,875 | –1,961 | –3,750 | –3,760 | –7,434 |
| Issuance of warrants | 1,200 | – | 1,200 | – | – |
| Repurchase of bond loan | –8,376 | –4,870 | –11,278 | –4,870 | –5,833 |
| Cash flow from financing activities | –46,774 | –44,554 | –51,551 | –46,353 | –52,400 |
| Cash flow for the period | –34,902 | 1,073 | –40,508 | –53,383 | –553 |
| Cash & cash equivalents at beginning of period | 81,615 | 27,836 | 85,080 | 82,304 | 82,304 |
| Translation difference in cash & cash equivalents | –991 | –857 | 1,150 | –869 | 3,329 |
| Cash & cash equivalents at end of period | 45,722 | 28,052 | 45,722 | 28,052 | 85,080 |
GROUP
| April-June | April-June | Jan-June | Jan-June | July 2014- | Full-year | |
|---|---|---|---|---|---|---|
| SEK thousands | 2015 | 2014 | 2015 | 2014 | June 2015 | 2014 |
| Gross profit margin, % | 53.0 | 52.5 | 53.4 | 52.7 | 53.2 | 52.9 |
| Operating margin, % | –1.7 | 0.5 | 4.8 | 8,2 | 9.0 | 10.4 |
| Profit margin, % | –1.6 | 4.1 | 7.0 | 9.9 | 10.5 | 11.7 |
| Return on capital employed, % | 14.8 | 10.5 | 14.8 | 10.5 | 14.8 | 14.8 |
| Return on average equity, % | 17.0 | 11.4 | 17.0 | 11.4 | 17.0 | 17.2 |
| Profit attributable to Parent Company's | ||||||
| shareholders | –1,033 | 3,777 | 14,419 | 19,172 | 44,081 | 48,835 |
| Equity/assets ratio, % | 46.2 | 44.3 | 46.2 | 44.3 | 46.2 | 46.7 |
| Equity per share, SEK | 10.29 | 10.27 | 10.29 | 10.27 | 10.29 | 11.36 |
| Investments in intangible non-current assets | – | 28 | 136 | 130 | 1,434 | 1,428 |
| Investments in tangible non-current assets | 427 | 179 | 619 | 655 | 1,317 | 1,353 |
| Business combinations | – | – | – | – | 1,410 | 1,410 |
| Depreciation, amortization and impairment | ||||||
| losses for the period | –1,706 | –1,921 | –3,567 | –3,848 | –8,596 | –,877 |
| Average number of employees | – | – | – | – | 130 | 129 |
GROUP
| April-June | April-June | Jan-June | Jan-June | July 2014- | Full-year | |
|---|---|---|---|---|---|---|
| SEK thousands | 2015 | 2014 | 2015 | 2014 | June 2015 | 2014 |
| Operating revenue | ||||||
| Brand | ||||||
| External revenue | 6,727 | 6,633 | 18,222 | 16,282 | 39,423 | 37,484 |
| Internal revenue | 6,934 | 7,179 | 17,722 | 19,349 | 39,370 | 40,997 |
| 13,661 | 13,812 | 35,944 | 35,631 | 78,793 | 78,481 | |
| Product development | ||||||
| External revenue | 43,647 | 41,488 | 96,506 | 104,639 | 225,622 | 233,755 |
| Internal revenue | 27,663 | 26,535 | 71,612 | 61,437 | 133,238 | 123,063 |
| 71,310 | 68,023 | 168,118 | 166,076 | 358,860 | 356,818 | |
| Wholesale | ||||||
| External revenue | 31,150 | 31,601 | 82,844 | 87,446 | 188,046 | 192,649 |
| Internal revenue | 6,911 | 6,920 | 13,760 | 13,393 | 27,736 | 27,369 |
| 38,062 | 38,521 | 96,604 | 100,839 | 215,783 | 220,018 | |
| Retail | ||||||
| External revenue | 21,629 | 17,635 | 39,641 | 31,998 | 88,253 | 80,609 |
| Internal revenue | 2,909 | 3,149 | 5,438 | 5,837 | 11,187 | 11,586 |
| 24,538 | 20,784 | 45,080 | 37,835 | 99,440 | 92,195 | |
| Less internal sales | –44,417 | –43,784 | –108,533 | –100,016 | –211,532 | –203,015 |
| Operating revenue | 103,153 | 97,356 | 237,213 | 240,365 | 541,344 | 544,497 |
| Operating profit | ||||||
| Brand | 1,468 | 3,346 | 7,900 | 8,284 | 19,185 | 19,569 |
| Product development | 3,174 | 5,216 | 12,456 | 20,725 | 26,557 | 34,825 |
| Wholesale | –5,713 | –6,537 | –4,027 | –2,141 | 4,395 | 6,282 |
| Retail | –591 | –1,503 | –5,163 | –7,298 | –2,591 | –4,726 |
| Operating profit | –1,662 | 522 | 11,166 | 19,570 | 47,546 | 55,950 |
The difference between operating profit for segments for which information must be disclosed, SEK 11,166 thousand (19,570), and profit before tax, SEK 16,218 thousand (23,702), is net financial items, SEK 5,053 thousand (4,132).
| SEK thousands | Q2 2015 | Q1 2015 | Q4 2014 | Q3 2014 | Q2 2014 | Q1 2014 | Q4 2013 | Q3 2013 |
|---|---|---|---|---|---|---|---|---|
| Net sales | 99,199 | 131,081 | 135,278 | 163,723 | 96,969 | 142,783 | 100,269 | 159,791 |
| Gross profit margin, % | 53.0 | 53.6 | 54.1 | 52.4 | 52.5 | 52.8 | 52.5 | 51.7 |
| Operating profit/loss | –1,662 | 12,828 | 3,559 | 32,821 | 522 | 19,048 | –12,534 | 23,610 |
| Operating margin, % | neg | 9.8 | 2.6 | 20.0 | 0.5 | 13.3 | neg | 14.8 |
| Profit/loss after financial items | –1,585 | 17,781 | 5,612 | 33,834 | 3,939 | 19,987 | –9,399 | 22,695 |
| Profit margin, % | neg | 13.6 | 4.1 | 20.7 | 4.1 | 14.0 | neg | 14.2 |
| Earnings per share before/after dilution, SEK |
–0.04 | 0.61 | 0.18 | 1.00 | 0.15 | 0.62 | –0.40 | 0.74 |
| Number of Björn Borg stores at end of period |
38 | 40 | 41 | 38 | 38 | 38 | 38 | 54 |
| of which Group-owned Björn Borg stores Brand sales |
17 249,063 |
18 394,206 |
18 342,904 |
17 452,422 |
17 253,976 |
17 382,081 |
17 331,665 |
16 482,268 |
CONDENSED
| SEK thousands | Note | April-June 2015 |
April-June 2014 |
Jan-June 2015 |
Jan-June 2014 |
July 2014- June 2015 |
Full-year 2014 |
|---|---|---|---|---|---|---|---|
| Net sales | 12,995 | 16,446 | 26,168 | 29,739 | 56,106 | 59,677 | |
| Other operating revenue | 2,148 | –1,218 | 2,269 | –1,178 | 4,086 | 639 | |
| Operating revenue | 15,143 | 15,228 | 28,437 | 28,561 | 60,192 | 60,316 | |
| Goods for resale | – | –43 | – | –72 | –2,075 | –2,147 | |
| Other external expenses | 1 | –12,412 | –8,773 | –22,987 | –21,575 | –49,099 | –47,687 |
| Staff costs | –10,039 | –7,518 | –20,792 | –14,999 | –37,476 | –31,683 | |
| Depreciation/amortization of tangible/ | |||||||
| intangible non-current assets | –458 | –543 | –931 | –1,107 | –1,949 | –2,125 | |
| Other operating expenses | –62 | –3 | –131 | –44 | –906 | –819 | |
| Operating loss | –7,828 | –1,652 | –16,404 | –9,236 | –31,313 | –24,145 | |
| Result from shares in subsidiaries | – | – | – | – | 67,395 | 67,395 | |
| Net financial items | –1,133 | –445 | –3,243 | –1,954 | –12,955 | –11,666 | |
| Profit/loss after financial items | –8,961 | –2,097 | –19,647 | –11,190 | 23,127 | 31,584 | |
| Group contributions received | – | – | – | – | 30,246 | 30,246 | |
| Appropriations | – | – | – | – | 874 | 874 | |
| Profit/loss before tax | –8,961 | –2,097 | –19,647 | –11,190 | 54,247 | 62,704 | |
| Tax | – | – | – | – | 1,275 | 1,275 | |
| Profit/loss for the period | –8,961 | –2,097 | –19,647 | –11,190 | 55,522 | 63,979 | |
| Other comprehensive income | – | – | – | – | – | – | |
| Total comprehensive income for the period |
–8,961 | –2,097 | –19,647 | –11,190 | 55,522 | 63,979 |
| June 30 | June 30 | Dec 31 | |
|---|---|---|---|
| SEK thousands Note |
2015 | 2014 | 2014 |
| Non-current assets | |||
| Intangible non-current assets | 329 | 516 | 393 |
| Tangible non-current assets | 2,289 | 3,733 | 2,849 |
| Long-term receivable 2 |
8,900 | 11,600 | 9,800 |
| Deferred tax | 961 | – | 961 |
| Shares in Group companies | 335,331 | 321,243 | 335,331 |
| Total non-current assets | 347,810 | 337,092 | 349,334 |
| Current assets | |||
| Receivables from Group companies | 398,770 | 127,610 | 392,513 |
| Current receivables | 15,412 | 14,961 | 14,143 |
| Investments 2 |
111,061 | 148,752 | 133,147 |
| Cash & cash equivalents | 3,027 | 1,735 | 48,081 |
| Total current assets | 528,270 | 293,058 | 587,884 |
| Total assets | 876,080 | 630,150 | 937,218 |
| Equity and liabilities | |||
| Equity | 88,073 | 68,974 | 144,143 |
| Untaxed reserves | 1,014 | 1,888 | 1,014 |
| Deferred tax | – | 314 | – |
| Bond loan 2 |
176,780 | 188,377 | 187,738 |
| Other long-term liabilities 2 |
5,792 | – | 5,792 |
| Due to Group companies | 582,375 | 346,967 | 573,668 |
| Accounts payable | 3,025 | 8,122 | 4,725 |
| Other current liabilities | 19,021 | 15,508 | 20,138 |
| Total equity and liabilities | 876,080 | 630,150 | 937,218 |
| SEK thousands | Jan-June 2015 |
Jan-June 2014 |
Full-year 2014 |
|---|---|---|---|
| Opening balance | 144,143 | 117,887 | 117,887 |
| Distribution | –37,723 | –37,723 | –37,723 |
| Issuance of warrants | 1,300 | – | – |
| Total comprehensive income for the period | –19,647 | –11,190 | 63,979 |
| Closing balance | 88,073 | 68,974 | 144,143 |
| Group | Parent Company | ||||
|---|---|---|---|---|---|
| Jan-June | Jan-June | Jan-June | Jan-June | ||
| SEK thousands | 2015 | 2014 | 2015 | 2014 | |
| Cost of premises | 14,343 | 13,062 | 5,684 | 4,341 | |
| Selling expenses | 13,973 | 10,883 | 2,464 | 1,540 | |
| Marketing expenses | 18,367 | 15,037 | 8,487 | 7,557 | |
| Administrative | |||||
| expenses | 11,751 | 11,749 | 5,128 | 7,036 | |
| Other | 3,269 | 3,364 | 1,224 | 1,101 | |
| Total | 61,703 | 54,095 | 22,987 | 21,575 |
Securities held for trading relate to investments in corporate bonds quoted on Nasdaq Stockholm 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 divestments in the company's portfolio of corporate bonds amounted to SEK 22,445 thousand during the first half-year.
| SEK thousands | Level 1 | Level 2 | Level 3 |
|---|---|---|---|
| Securities held for trading | 110,861 | ||
| Derivatives held for trading | 200 | ||
| Contingent consideration (liability) | –5,792 | ||
| Net | 110,861 | 200 | –5,792 |
Björn Borg has recognized a liability for the contingent consideration to the sellers of the minority interest in Björn Borg Sport BV at fair value. The amount as of June 30, 2015 was SEK 5,792 thousand (0) and is included in level 3. The carrying amount of financial instruments recognized at amortized cost corresponds to the fair value as of June 30, 2015, with the exception of the bond loan, the fair value of which amounted to SEK 173,950 thousand, compared with a carrying amount of SEK 176,780 thousand.
In 2013 the company granted the Dutch distributor an interest-bearing loan of SEK 17 million maturing on March 31, 2017 with quarterly amortizations of SEK 900,000 beginning on December 31, 2013. The loan is temporarily (since December 31, 2014) paying interest only as part of the agreement to acquire the minority interest in Björn Borg Sport BV.
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 12, 2015
Fredrik Lövstedt Martin Bjäringer
Chairman Board member
Isabelle Ducellier Kerstin Hessius Mats H Nilsson Board member Board member Board member
Heiner Olbrich Nathalie Schuterman Board member Board member
Henrik Bunge CEO
Net sales less cost of goods sold divided by net sales.
Operating profit as a percentage of net sales.
EQUITY/ASSETS RATIO Equity as a percentage of total assets.
Profit after financial items (per rolling 12-month period) plus financial expenses as a percentage of average capital employed.
Net profit (per 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 AFTER DILUTION
Estimated total sales of Björn Borg products at the consumer level, excluding VAT, based on reported wholesale sales.
Interim report, January-September 2015 November 6, 2015 Year-end report for 2015 February 19, 2016
Financial reports can be downloaded from the company's website, www.bjornborg.com or ordered by telephone +46 8 506 33 700 or by e-mail [email protected].
Henrik Bunge, CEO E-mail: [email protected] Tel: +46 8 506 33 700 Mobile: +46 702 34 76 20
Daniel Grohman, CFO E-mail: [email protected] Tel: +46 8 506 33 700 Mobile: +46 728 57 82 75
The Group owns the Björn Borg trademark and its core business is sports apparel and underwear. It also offers footwear, 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 2014 amounted to about SEK 1.4 billion, excluding VAT, at the consumer level. Group net sales amounted to SEK 539 million in 2014, with an average of 129 employees. The Björn Borg share has been listed on Nasdaq Stockholm since 2007.
Björn Borg AB Tulegatan 11 SE-113 53 Stockholm, Sweden www.bjornborg.com
Björn Borg is required to make public the information in this year-end report in accordance with the Securities Market Act. The information was released for publication on August 12, 2015 at 07:30 am (CET).
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