Quarterly Report • Nov 16, 2017
Quarterly Report
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BJÖRN BORG AB INTERIM REPORT JANUARY - SEPTEMBER 2017
"During a two-week period in August we created the highest measured PR value generated to date by a single campaign. The Signature tennis collection and fashion show received a lot of attention, including in Vogue magazine. After the campaign, the singer Lady Gaga did a yoga session wearing our Clara High Waist Tights and Björn Borg Solid Triangle Bra, which she immortalized in an Instagram post to her 26 million followers," commented CEO Henrik Bunge.
| SEK millions | July-Sep 2017 |
July-Sep 2016 |
Jan-Sep 2017 |
Jan-Sep 2016 |
Oct 2016- Sep 2017 |
Full-year 2016 |
|---|---|---|---|---|---|---|
| Net sales | 205.7 | 180.0 | 526.2 | 460.2 | 697.6 | 631.6 |
| Gross profit margin, % | 56.3 | 50.4 | 52.6 | 51.1 | 51.5 | 50.3 |
| Operating profit | 32.0 | 28.6 | 38.5 | 42.8 | 59.8 | 64.2 |
| Operating margin, % | 15.6 | 15.9 | 7.3 | 93 | 8.6 | 10.2 |
| Profit/loss after tax | 24.6 | 24.7 | 26.3 | 29.0 | 44.2 | 46.9 |
| Earnings per share before dilution, SEK | 0.98 | 0.95 | 1.04 | 1.14 | 1.78 | 1.88 |
| Earnings per share after dilution, SEK | 0.98 | 0.95 | 1.04 | 1.14 | 1.78 | 1.88 |
| Brand sales* | 474 | 479 | 1,182 | 1.180 | 1.554 | 1,551 |
* Estimated total sales of Björn Borg products at the consumer level, excluding VAT, based on reported sales at the wholesale level.
In the third quarter our sport collection continued to perform well, with brand sales growing by 22 percent. The increase was mainly driven by three collections and products:
Net sales for the third quarter of the year were SEK 205.7 million, the highest sales figure the company has reported in a single quarter. The increase is largely a result of the acquisition of our former Benelux distributor. Aside from Benelux, organic growth (4.4 percent) was driven by continued growth in Finland, our own footwear distribution and growth in Germany. Traffic in our own stores continued to decline and we had a weak quarter with lower sales for comparable stores: Sweden (-9 percent), the Netherlands and Belgium (-7 percent) and Finland (-9 percent). We unfortunately had technical problems with our e-commerce operations during the quarter in connection with an upgrade of the e-commerce platform, resulting in a big sales drop year-on-year.
We had a solid gross profit margin of 56.3 percent, significantly better than the previous year (50.4). Adjusted for currency effects, mainly a weaker US dollar, the margin would have been 54.7 percent. Our expenses are rising, but mainly due to the Benelux acquisition. Higher income, with a higher gross profit margin, meant an increase in our operating profit to SEK 32 million (28.6), despite the higher operating expenses.
My personal focus during the quarter was again on our new Benelux company. This was mainly for two reasons: to monitor the work being done to adjust costs to the lower sales the company is now reporting, and to meet our most important customers and ensure that we quickly increase sales. I am happy to report that we are gradually making progress in one of our most important markets. I have also devoted a great deal of time to our e-commerce business, where we bolstered the team during the quarter by adding a new E-Com Director and invested in a new position, head of customer service, to increase our focus on consumers. E-commerce - our own, through market-
places and by e-tailers - is a high priority going forward.
In summing up the quarter I am very pleased with how we activated the brand and communicated in a way that really reached people. The quarter began in the summer with Borg Open, a tennis match played on the border between the US and Mexico as way to show that we as a sportswear brand believe in an open world where sport has the power to unite people. This was followed up by a fashion show and collection launch in connection with the premiere of the biopic Borg. During a two-week period in August we created the highest measured PR value generated to date by a single campaign. The Signature tennis collection and fashion show received a lot of attention, including in Vogue magazine. After the campaign, the singer Lady Gaga did a yoga session wearing our Clara High Waist Tights and Björn Borg Solid Triangle Bra, which she immortalized in an Instagram post to her 26 million followers.
Lastly, I would add that our performance underwear is really making a difference. Not in a single survey did consumers prefer to go back to exercising in cotton underwear.
Brand sales were slightly lower in the third quarter compared with the previous year. The quarterly decrease was mainly in underwear, while sports apparel and footwear are growing substantially. Bag sales were down somewhat in the quarter, while eyewear had another tough quarter with a year-on-year decline. In total, brand sales decreased by 1 percent to SEK 474 million (479) in the third quarter. Currency effects were marginal in the quarter. For the first nine months of 2017 brand sales were at the same level as the previous year, ending up at SEK 1,182 million (1,180). Excluding currency effects, brand sales fell by 1 percent.
Brand sales in the underwear product area fell by 7 percent in the first nine months of 2017. Underwear accounted for 56 percent (60) of brand sales.
Sportswear grew by 15 percent in the first nine months of 2017 compared with the same period in 2016. Brand sales in the footwear product area increased by 14 percent, while bags and eyewear decreased by 11 and 61 percent, respectively, in the first nine months of the year. The new licensed product area homewear reported sales of SEK 4 million for the quarter and cumulatively for the year. In total, brand sales of licensed products increased by 9 percent in the first nine months.
Among large markets, Finland posted strong growth, while other markets declined year-on-year. The decrease in large markets was mainly driven by a downturn in underwear.
BRAND SALES* OF BJÖRN BORG PRODUCTS JANUARY-SEPTEMBER 2017. TOTAL SEK 1,182 MILLION (1,180)
England and Germany are two smaller markets that are performing well.
Two stores were opened in the Netherlands and one was closed in Sweden in the third quarter. As of September 30, 2017 there were a total of 40 (39) Björn Borg stores, of which 34 (20) are Group-owned. The increase in Groupowned stores is due to the Benelux acquisition, where 13 stores were reclassified as Group-owned as of Q1 2017.
Sales grew well in the third quarter, as they did in the first half of 2017, largely due to the Benelux acquisition, operating profit also increase year-on-year.
The Group's net sales amounted to SEK 205.7 million (180.0) in the third quarter, an increase of 14.3 percent. Currency effects on sales were marginal in the quarter.
The positive sales trend year-on-year is largely a result of the acquisition of the former distributor in Benelux, which is consolidated in the Group as of January 2, 2017. Adjusted for the acquisition, underlying net sales grew by 4.4 percent from the previous year. Growth in underwear and sports apparel was driven by higher sales in the German market and in Finland. The Group's own footwear distribution also grew compared to the previous year. Growth in Finland was largely driven by broader distribution of underwear and sports apparel at the wholesale level as well as an increased number of Group-owned stores. Growth in footwear distribution was largely from the Finnish and Swedish markets.
The Swedish wholesale and retail operations had a weak quarter and declined compared with 2016. The decrease for the wholesale company was driven by slower sell-through by customers, because of which orders for the fall/winter 2017 collection have decreased year-on-year. For the Swedish retail company, the main reason for the year-on-year sales decline was traffic in Group-owned stores, but also because there were two fewer stores than a year earlier. For comparable stores, sales decreased by 9 percent in the quarter and 12 percent in total.
E-commerce sales decreased in the third quarter, mainly due to technical problems with the website in connection with an upgrade, which reduced both conversion and traffic.
Sales by the Benelux company fell compared with the third quarter of 2016. The decrease was at the wholesale level, while retail sales are rising due to the higher number of stores. Comparable Group-owned stores decreased by 7 percent.
The product company's external sales, adjusted for the acquisition, increased year-on-year, driven by the Norwegian market, which is growing, while the Danish market was in line with the previous year. Smaller external markets underperformed year-on-year. External royalties declined since Benelux is now included in the Group, while other licensed sales grew compared with the previous year.
The Group's net sales amounted to SEK 526.2 million (460.2) in the first nine months of 2017, an increase of 14.3 percent. Excluding FX effects, sales rose by 13.3 percent.
The positive sales trend year-on-year is largely a result of the acquisition of the former distributor in Benelux, which is consolidated in the Group as of January 2, 2017. Adjusted for the acquisition, underlying net sales grew by 4.4 percent from the previous year. Growth in the first nine months of 2017 was mainly driven by Finnish, German and English wholesale and retail sales of sports apparel and underwear. The Group's own footwear distribution in the Nordic markets also saw good growth in the first nine months.
The Swedish wholesale and retail operations reported lower sales than the first nine months of 2016. The decrease for the wholesale company was driven by high inventory levels by retail customers, due to which orders in 2017 have generally been lower than in 2016. The Swedish retail company had two fewer stores, though sales also fell by 12 percent for comparable stores and by 18 percent in total for the first nine months.
The e-commerce business area has had a greater focus on profitability than the previous year, which successfully resulted in lower costs for paid traffic and higher operating margins in the first nine months of 2017, despite lower sales. During the third quarter the e-commerce site had technical problems, which further reduced sales. In total, sales were down 23 percent for the first nine months of the year.
Sales by the Benelux company decreased significantly year-on-year. The biggest decline was in the wholesale business, while retail sales increased slightly thanks to the additional stores. Comparable stores were down 4 percent.
The product company's external sales decreased year-on-year, driven by the Benelux acquisition. The Danish market and smaller external markets underperformed year-on-year, while sales to Norway increased. External
| Operating revenue. SEK thousands January-September |
Operating profit, SEK thousands January-September |
Operating margin, % January-September |
||||||
|---|---|---|---|---|---|---|---|---|
| Business segment | Revenue source | 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | |
| Brand | Rovalties | 43,571 | 65.486 | 27,842 | 15,654 | 64 | 24 | |
| Product development | Products | 292.120 | 295.679 | 11,428 | 23,819 | 4 | 8 | |
| Wholesale | Wholesale revenue | 401.229 | 240.717 | 8.201 | 13.896 | $\overline{2}$ | 6 | |
| Retail | Retailers | 155.620 | 100.725 | $-9.008$ | $-10.538$ | $-6$ | $-10$ | |
| Less internal sales | $-360.421$ | $-238.436$ | ||||||
| Total | 532.119 | 464.171 | 38,463 | 42,831 | 9 |
royalties declined since Benelux is now included in the Group, while other licensed sales fell slightly compared with the previous year.
The gross profit margin for the third quarter increased to 56.3 percent (50.4). A weaker USD positively affected margins. Adjusted for currency effects, the gross profit margin would have been 54.7 percent. Aside from the USD exchange rate, the margin was positively affected because earn-out payments are no longer being paid. The timing effect arising due to the Benelux acquisition on the gross profit margin was lower than the previous quarter, but negatively affected the gross profit margin in the third quarter as well.
Operating expenses increased by SEK 20 million compared with the previous year due to the Benelux acquisition. Excluding Benelux, operating expenses rose by SEK 1.9 million or 3 percent.
The higher revenue, together with the higher gross profit margin and increased operating expenses, raised operating profit to SEK 32 million (28.6). The operating margin was 15.6 percent (15.9).
Net financial items amounted to SEK-1.0 million (-0.1). The realized and unrealized return on investments negatively affected the Group's financial net by SEK -0.9 million (-0.2). The remaining year-on-year decrease was mainly attributable to the revaluation of financial assets and liabilities in foreign currency. Profit before tax increased to SEK 31.0 million (28.5).
The gross profit margin for the first nine months of 2017 increased to 52.6 percent (51.1). Currency effects were marginally negative for the first nine months of 2017. Aside from the USD exchange rate, the margin was positively affected by about SEK 17 million because earn-out payments are no longer being paid. At the same time the gross profit margin was negatively affected by the timing effect arising due to the Benelux acquisition. The gross profit margin in the product development segment that was supposed to be realized in the first quarter is now tied up in inventory and negatively affected the margin by about SEK 22 million. Adjusted for the above-mentioned timing effect due to the Benelux acquisition, the gross profit margin was 56.8 percent for the first nine months of 2017.
Operating expenses increased by SEK 48 million compared with the previous year, largely due to the Benelux acquisition. Excluding Benelux, operating expenses fell by SEK 7 million or 4 percent. The decrease was largely due to lower logistical, administrative and product development expenses. Depreciation also decreased year-on-year.
The higher revenue, higher gross profit margin and increased operating expenses reduced operating profit to SEK 38.5 million (42.8). The operating margin was 7.3 percent (9.3).
Net financial items amounted to SEK-2.7 million (-4.8). The realized and unrealized return on investments less interest on the bond loan and bank loans negatively affected the Group's financial net by SEK -1.3 million (-2.9). The remaining year-on-year change was mainly attributable to the revaluation of financial assets and liabilities in foreign currency. Profit before tax was SEK 35.7 million (38.1).
The Group operates through thirteen companies 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 43.6 million (65.5) in the first nine months of 2017. External operating revenue decreased to SEK 15.9 million (26.1), largely because Benelux is now reported as internal brand sales. Excluding Benelux, external brand sales decreased by about SEK 2.0 million. The decrease is a result of lower brand sales by external distributors and licensees. Royalty percentages vary by product category, due to which there is not always a precise correlation between royalties and brand sales.
Operating profit increased to SEK 27.8 million (15.7) for the first nine months of 2017. The improvement was due to the fact that earn-out payments are no longer being paid.
The Björn Borg Group has global responsibility for development, design and production of underwear, sports apparel and adjacent products.
The segment's operating revenue amounted to SEK 292.1 million (295.7) in the first nine months of 2017, a decrease of 1 percent. External operating revenue decreased to SEK 43.6 million (132.7) as Benelux is now consolidated in the Group and classified as internal. Excluding Benelux, external revenue was down about SEK 8 million, mainly due to lower sales to Denmark and smaller distributors.
Operating profit decreased to SEK 11.4 million (23.8) due to lower margins and higher operating expenses in the segment. Product development is the segment affected by the timing effect from the Benelux acquisition.
The Björn Borg Group is the exclusive wholesaler of underwear, sports apparel and adjacent products in Sweden, Finland, the Netherlands, Belgium, England, Germany and Austria as well as footwear in Sweden, Finland, Denmark and the Baltic countries.
The segment's operating revenue rose in the first nine months of 2017 to SEK 401.2 million (240.7). External operating revenue amounted to SEK 341.3 million (217.2). Of the increase of SEK 124 million, Benelux accounted for SEK 86 million. Other growth came from the Finnish, German and English underwear and sports apparel wholesale business as well as the footwear wholesale company. The increase was mainly due to broader underwear distribution in Finland as well as good growth among new and existing footwear customers in Sweden, Denmark and Finland. The Swedish wholesale business for underwear and sports apparel decreased year-on-year.
Operating profit amounted to SEK 8.2 million (13.9). The decrease was mainly due to higher operating expenses as a result of the Benelux acquisition.
The Björn Borg Group owns and operates a total of 34 stores and factory outlets in Sweden, Finland, the Netherlands, Belgium 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 in the first nine months of 2017 to SEK 155.6 million (100.7). External operating revenue rose to SEK 131.4 million (88.1). The increase was because Benelux is now included in the segment and accounted for SEK 55.0 million of external sales. Excluding Benelux, the segment's sales decreased
by SEK 12 million. The year-on-year trend was weakest in e-commerce and the Swedish retail business, while the Finnish retail business is growing thanks to an increased number of stores compared with the previous year. The English store is also performing well. E-commerce sales dropped by 23 percent to SEK 27.0 million (35.3). This was mainly due to lower web traffic, which was partly the result of reduced costs for paid, unprofitable traffic, but also related to technical problems in connection with an upgrade of the e-commerce site in the third quarter. Group-owned stores in Sweden declined in the first nine months of the year with sales for comparable stores down 12 percent. In total, sales fell by 18 percent due to two fewer stores. Sales decreased by 1 percent for comparable Finnish stores. In total, retail sales grew by 19 percent due to more stores. The store in England continues to perform well and grew by 10 percent compared with the previous year.
The operating loss for the first nine months of 2017 was SEK 9.0 million, against a year-earlier loss of SEK 10.5 million. The loss was due to lower gross margins and higher expenses as a result of the Benelux acquisition.
Intra-Group sales for the first nine months of 2017 amounted to SEK 360.4 million (238.4). The increase was due to the Benelux acquisition.
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 34.9 million (12.7) in the first nine months of 2017. The year-on-year improvement mainly came from a better trend in operating capital, where inventory levels were the biggest factor.
Investing activities had a positive flow of SEK 15.3 million (51.4) due to divestments from the bond portfolio in the period. Total investments in tangible and intangible non-current assets amounted to SEK 9.9 million (5.1) for the period.
Financing activities had a negative flow of SEK-49.5 million (-61.1). The negative flow was from the dividend to shareholders of SEK -50.3 million (-50.3) in the period. In addition, cash flow for the financing business was positively affected because the loan raised from Danske Bank is higher than the repayment of the bond loan.
The Group's cash flow for the first nine months was SEK 0.6 million (3.1) and cash & cash equivalents amounted to SEK 46.6 million (54.4) at the end of the period.
The Björn Borg Group's cash & cash equivalents and investments amounted to SEK 47.3 million (77.8) at the end of the period, with interest-bearing liabilities of SEK 150.0 million (143.5).
The bond loan issued by the company in April 2012 expired in April 2017. The remaining debt of SEK 135.5 million was repaid in the second quarter of 2017. The bond loan has been replaced by a three-year revolving credit of SEK 150 million from Danske Bank.
The bond portfolio that the company previously managed due to the surplus liquidity arising from the issuance of the bond loan is now essentially fully divested. As of September 30 the book value of the bonds was SEK 0.8 million (23.4), which represents the fair value on the same date.
In addition to the revolving credit of SEK 150 million, Björn Borg has an overdraft facility of SEK 90 million from Danske Bank.
As a commitment for the overdraft facility and three-year revolving credit, the company has pledged to ensure that the ratio between the Group's net debt and rolling 12-month operating profit before depreciation and amortization does not exceed 3.00 on the last day of each quarter, with the exception of the first three quarters of 2017. In the first and second quarters of 2017 the ratio may not exceed 4.00 and for the third quarter it may not exceed 3.50. Moreover, the Group will maintain an equity/assets ratio of at least 35 percent.
As of September 30, 2017 the ratio was 1.80 (1.29) and the equity/assets ratio was 47.3 percent (50.9).
No changes were otherwise made with regard to pledged assets and contingent liabilities compared with December 31, 2016.
The average number of employees in the Group was 210 (133) for the twelve-month period ending September 30, 2017, of whom 67 percent (71) are women. The increase was due to the Benelux acquisition.
The transactions that the company executed with related parties during the period were done on market terms.
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 58-59 and in note 3 in the annual report 2016.
Björn Borg AB (publ) is primarily engaged in intra-Group activities. As of September 30, 2017 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., Björn Borg Services AB, Björn Borg UK and Baseline BV. In addition, the company owns 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 72.0 million (49.0) for the first nine months of 2017.
The loss before tax amounted to SEK 4.2 million for the first nine months, compared with a year-earlier loss of SEK 24.0 million. Cash & cash equivalents and investments amounted to SEK 1.5 million (29.9) as of September 30, 2017.
There are no significant events to report after the balance sheet date.
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:
The sales target for 2019 corresponds to average annual organic growth of 16 percent. The sales increase, along with the increase in the operating margin, 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, 2017 approved a distribution of SEK 2.00 (2.00) per share to the shareholders for the financial year 2016. The AGM resolved to re-elect the Directors Fredrik Lövstedt, Martin Bjäringer, Lotta de Champs, Christel Kinning, Heiner Olbrich and Mats H Nilsson, meaning that the total number of Directors is six. Petra Stenqvist declined re-election. The Meeting resolved to elect Heiner Olbrich as the new Chairman of the Board of Directors.
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 2016, as described on page 54 in the annual report 2016.
New or amended IFRS and IFRIC interpretations effective as of January 1, 2017 have not had a material effect or impact on the interim report or the consolidated financial statements.
The company has analyzed the new rules in IFRS 15 and IFRS 9 that enter into force on January 1, 2018 and the effects they may have on the company's accounts. Preliminarily, the company is of the view that the new rules will not have a material effect on the accounts, but a final determination will be made in the fourth quarter.
This interim report has been reviewed by the company's auditors. The review report can be found on page 16.
As a policy, the company does not issue earnings forecasts.
| SEK thousands Note |
July-Sep 2017 |
July-Sep 2016 |
Jan-Sep 2017 |
Jan-Sep 2016 |
Oct 2016- Sep 2017 |
Full-year 2016 |
|---|---|---|---|---|---|---|
| Net sales | 205,712 | 179,977 | 526,213 | 460,206 | 697,623 | 631,616 |
| Other operating revenue | 1.155 | 2,429 | 5.906 | 3.965 | 8.895 | 6,954 |
| Operating revenue | 206,867 | 182,406 | 532.119 | 464,171 | 706,518 | 638,570 |
| Goods for resale | $-89,847$ | $-89.236$ | $-249,290$ | $-225.026$ | $-338,401$ | $-314,137$ |
| Other external expenses | $-45,423$ 1 |
$-40,292$ | $-126.572$ | $-111,059$ | $-163.700$ | $-148,187$ |
| Staff costs | $-32,704$ | $-23,558$ | $-103.100$ | $-78.587$ | $-129.703$ | $-105,191$ |
| Depreciation/amortization of tangible/ | ||||||
| intangible non-current assets | $-2,542$ | $-1.817$ | $-7,029$ | $-5,180$ | $-8.646$ | $-6,797$ |
| Other operating expenses | $-4,339$ | 1,133 | $-7,665$ | $-1,488$ | $-6,240$ | $-62$ |
| Operating profit | 32,012 | 28,636 | 38,463 | 42,831 | 59,828 | 64.196 |
| Net financial items | $-984$ | $-143$ | $-2,748$ | $-4,776$ | 1,300 | $-727$ |
| Profit before tax | 31,028 | 28,493 | 35,715 | 38,056 | 61.128 | 63,469 |
| Tax | $-6,381$ | $-3,813$ | $-9,390$ | $-9,044$ | $-16,918$ | $-16,572$ |
| Profit for the period | 24,647 | 24,680 | 26,325 | 29,012 | 44,210 | 46,897 |
| Profit for the period attributable to | ||||||
| Parent Company's shareholders | 24,541 | 23,807 | 26,253 | 28,756 | 44,615 | 47,361 |
| Non-controlling interests | 106 | 872 | 72 | 256 | $-405$ | $-464$ |
| Earnings per share before dilution, SEK | 0.98 | 0.95 | 1.04 | 1.14 | 1.78 | 1.88 |
| Earnings per share after dilution, SEK | 0.98 | 0.95 | 1.04 | 1.14 | 1.78 | 1.88 |
| Number of shares | 25,148,384 | 25,148,384 | 25,148,384 | 25,148,384 | 25,148,384 | 25,148,384 |
| July-Sep | July-Sep | Jan-Sep | Jan-Sep | Oct 2016- | Full-year | |
|---|---|---|---|---|---|---|
| SEK thousands Note |
2017 | 2016 | 2017 | 2016 | Sep 2017 | 2016 |
| Net profit for the period | 24,647 | 24,680 | 26,325 | 29,012 | 44,210 | 46,897 |
| OTHER COMPREHENSIVE INCOME | ||||||
| Components that may be reclassified to profit or loss |
||||||
| Translation difference for the period | $-2,202$ | 1.166 | 1.323 | 3.098 | $-72$ | 1.704 |
| Total other comprehensive income | ||||||
| for the period | $-2,202$ | 1,166 | 1,323 | 3,098 | $-72$ | 1.704 |
| Total comprehensive income | ||||||
| for the period | 22,445 | 25,846 | 27,648 | 32,110 | 44,138 | 48,601 |
| Total comprehensive income attributable to |
||||||
| Parent Company's shareholders | 22,232 | 25,451 | 27,047 | 31,841 | 44,013 | 49,065 |
| Non-controlling interests | 213 | 394 | 601 | 269 | 125 | $-464$ |
| SEK thousands Note |
Sep 30 2017 |
Sep 30 2016 |
Dec 31 2016 |
|---|---|---|---|
| Non-current assets | |||
| 3 Goodwill |
35,842 | 19,327 | 19,292 |
| Trademarks | 187,532 | 187,532 | 187,532 |
| Other intangible assets | 6,228 | 1,876 | 1,668 |
| Tangible non-current assets | 13,278 | 10,523 | 9,277 |
| Long-term receivables | 7.100 | 10,700 | |
| Deferred tax assets | 35,751 | 28,441 | 13,452 |
| Total non-current assets | 278,631 | 254,799 | 241,921 |
| Current assets | |||
| Inventory | 121,179 | 75,942 | 67,477 |
| Accounts receivable | 93.588 | 100.663 | 137,769 |
| Other current receivables | 22,537 | 26,646 | 16,144 |
| $\overline{2}$ Investments |
750 | 23,389 | 26,167 |
| Cash & cash equivalents | 46,581 | 54,416 | 48,948 |
| Total current assets | 284,635 | 281,057 | 296,505 |
| Total assets | 563,266 | 535,855 | 538,426 |
| Equity and liabilities | |||
| Equity | 266,454 | 272,612 | 289,103 |
| Deferred tax liabilities | 56,324 | 43,917 | 35,418 |
| $\overline{c}$ Bond loan |
143,459 | 137,092 | |
| $\overline{2}$ Non-current liabilities credit institutions |
150,000 | $\overline{\phantom{0}}$ | |
| Other non-current liabilities | 17,273 | 21,329 | 17,273 |
| Accounts payable | 21,812 | 11,360 | 13,797 |
| Other current liabilities | 51,403 | 43,178 | 45,743 |
| Total equity and liabilities | 563,266 | 535,855 | 538,426 |
| Equity attributable to | Non- | |||
|---|---|---|---|---|
| Parent Company's | controlling | Total | ||
| SEK thousands | Note | shareholders | interests | equity |
| Opening balance, January 1, 2016 | 297.408 | $-6,733$ | 290,675 | |
| Total comprehensive income for the period | 31,841 | 269 | 32,110 | |
| Distribution for 2015 | $-50,297$ | $-50.297$ | ||
| Issuance of warrants | 68 | 68 | ||
| Issuance of convertible | 55 | 55 | ||
| Non-controlling interest arising through acquisition | $-6,934$ | 6,934 | ||
| Closing balance, September 30, 2016 | 272,141 | 470 | 272,612 | |
| Opening balance, January 1, 2016 | 297,408 | $-6,733$ | 290,675 | |
| Total comprehensive income for the period | 49,065 | $-464$ | 48,601 | |
| Distribution for 2015 | $-50,297$ | $-50,297$ | ||
| Acquisition of non-controlling interest | $-6,925$ | 6,925 | ||
| Issuance of warrants | 68 | 68 | ||
| Warrant premium convertible | 55 | 55 | ||
| Closing balance, December 31, 2016 | 289,375 | $-272$ | 289,103 | |
| Opening balance, January 1, 2017 | 289,375 | $-272$ | 289,103 | |
| Total comprehensive income for the period | 27.047 | 601 | 27,648 | |
| Distribution for 2016 | $-50,297$ | $-50,297$ | ||
| Closing balance, September 30, 2017 | 266,125 | 329 | 266,454 |
CONDENSED
| SEK thousands | July-Sep 2017 |
July-Sep 2016 |
Jan-Sep 2017 |
Jan-Sep 2016 |
Full-year 2016 |
|---|---|---|---|---|---|
| Cash flow from operating activities | |||||
| Before changes in working capital | 35,743 | 34,190 | 42,095 | 45,097 | 69,378 |
| Changes in working capital | $-12,904$ | $-5,033$ | $-7,219$ | $-32,376$ | $-54,066$ |
| Cash flow from operating activities | 22,839 | 29,157 | 34,876 | 12,721 | 15,312 |
| Investments in intangible non-current assets | $-2,070$ | $-4,891$ | |||
| Investments in tangible non-current assets | $-3,012$ | $-3,582$ | $-5,038$ | $-5,103$ | $-5,231$ |
| Sale of non-current assets | |||||
| Investments/sale of investments | 7,068 | 25,220 | 56,549 | 54,962 | |
| Cash flow from investing activities | $-5,082$ | 3,486 | 15,291 | 51,446 | 49,731 |
| Distribution | $-50,297$ | $-50,297$ | $-50,297$ | ||
| Acquisition of minority shares | $-842$ | $-842$ | |||
| Amortization of loans | $-10,492$ | 85 | $-12,256$ | 1,034 | 1,034 |
| Issuance of warrants/convertibles | 125 | 125 | |||
| Newly raised loan | 150,000 | ||||
| Bond loan repurchases/repayment | $-1,422$ | $-136,972$ | $-11,079$ | $-18,480$ | |
| Cash flow from financing activities | $-10,492$ | $-1,337$ | $-49,525$ | $-61,059$ | $-68,460$ |
| Cash flow for the period | 7,265 | 31.306 | 642 | 3.108 | $-3,417$ |
| Cash & cash equivalents at beginning of year | 39,980 | 22,495 | 48,948 | 50,643 | 50,643 |
| Translation difference in cash & cash equivalents | $-664$ | 614 | $-3,009$ | 664 | 1,722 |
| Cash & cash equivalents at end of the period | 46,581 | 54,416 | 46,581 | 54,416 | 48,948 |
| SEK thousands | July-Sep 2017 |
July-Sep 2016 |
Jan-Sep 2017 |
Jan-Sep 2016 |
Oct 2016- Sep 2017 |
Full-year 2016 |
|---|---|---|---|---|---|---|
| Gross profit margin, % | 56.3 | 50.4 | 52.6 | 51.1 | 51.5 | 50.3 |
| Operating margin, % | 15.6 | 15.9 | 7.3 | 9.3 | 8.6 | 10.2 |
| Profit margin, % | 15.1 | 15.8 | 6.8 | 8.3 | 8.8 | 10.0 |
| Return on capital employed, % | 15.9 | 13.8 | 15.9 | 13.8 | 15.9 | 14.3 |
| Return on average equity, % | 15.8 | 13.4 | 15.8 | 13.4 | 15.8 | 16.3 |
| Profit attributable to Parent Company's | ||||||
| shareholders | 24,541 | 23,807 | 26,253 | 28,756 | 44,615 | 47,361 |
| Equity/assets ratio, % | 47.3 | 50.9 | 47.3 | 50.9 | 47.3 | 53.7 |
| Equity per share, SEK | 10.60 | 10.84 | 10.60 | 10.84 | 10.60 | 11.50 |
| Investments in intangible non-current assets | 2,070 | - | 4,891 | 1,965 | ||
| Investments in tangible non-current assets | 3,012 | 3,582 | 5,038 | 5,103 | 7.462 | 5,231 |
| Depreciation, amortization and impairment | ||||||
| losses for the period | $-2.542$ | $-1,817$ | $-7,029$ | $-5,180$ | $-8.646$ | $-6,797$ |
| Average number of employees | 210 | 131 | 210 | 131 | 204 | 133 |
GROUP
| SEK thousands | July-Sep 2017 |
July-Sep 2016 |
Jan-Sep 2017 |
Jan-Sep 2016 |
Oct 2016- Sep 2017 |
Full-year 2016 |
|---|---|---|---|---|---|---|
| Operating revenue | ||||||
| Brand | ||||||
| External revenue | 6,726 | 10,105 | 15,919 | 26,120 | 23,425 | 33 6 26 |
| Internal revenue | 10,543 | 12,720 | 27,652 | 39,366 | 38,108 | 49822 |
| 17,269 | 22,825 | 43,571 | 65,486 | 61,533 | 83,448 | |
| Product development | ||||||
| External revenue | 19,606 | 41,368 | 43,551 | 132,668 | 98,630 | 187,747 |
| Internal revenue | 98 091 | 38,646 | 248,569 | 163,011 | 261,714 | 176,156 |
| 117,697 | 80,014 | 292,120 | 295,679 | 360,344 | 363,903 | |
| Wholesale | ||||||
| External revenue | 131,056 | 93,702 | 341,255 | 217,249 | 413,639 | 289,633 |
| Internal revenue | 15,697 | 8,265 | 59,974 | 23,468 | 67,705 | 31,199 |
| 146,753 | 101,967 | 401,229 | 240,717 | 481,344 | 320,832 | |
| Retail | ||||||
| External revenue | 49,479 | 37,229 | 131,395 | 88,135 | 170,825 | 127,565 |
| Internal revenue | 7,320 | 4,129 | 24,225 | 12,590 | 29,046 | 17,412 |
| 56,799 | 41,358 | 155,620 | 100,725 | 199,871 | 144,977 | |
| Less internal sales | ||||||
| Operating revenue | $-131,651$ | $-63,759$ | $-360,421$ | $-238,436$ | $-396,574$ | $-274,589$ |
| 206,867 | 182,406 | 532,119 | 464,171 | 706,518 | 638,571 | |
| Operating profit | ||||||
| Brand | ||||||
| Product development | 11,953 | 4,280 | 27,842 | 15,654 | 31,690 | 19,500 |
| Wholesale | 9,429 | 8,836 | 11.428 | 23,819 | 21,024 | 33,415 |
| Retail | 12,714 | 14,639 | 8,201 | 13,896 | 11,899 | 17,595 |
| Operating profit | $-2,084$ | 881 | $-9,008$ | $-10,538$ | $-4,785$ | $-6,314$ |
| Rörelseresultat | 32,012 | 28,636 | 38,463 | 42,831 | 59,828 | 64.196 |
The difference in the third quarter between operating profit for segments for which information must be disclosed, SEK 32,012 thousand (28,636), and profit before tax, SEK 31,028 thousand (28,493), is net financial items, SEK -984 thousand (-143). The difference for the first nine months of 2017 between operating profit for segments for which information must be disclosed, SEK 38,463 thousand (42,831), and profit before tax, SEK 35,715 thousand (38,056), is net financial items, SEK -2,748 thousand (-4,776).
| SEK thousands | 03 2017 | Q2 2017 | Q1 2017 | 04 2016 | 03 2016 | 02 2016 | Q1 2016 | Q4 2015 |
|---|---|---|---|---|---|---|---|---|
| Net sales | 205,712 | 134,844 | 185,657 | 171,410 | 179,977 | 122,165 | 158,065 | 152,618 |
| Gross profit margin, % | 56.3 | 52.1 | 48.9 | 48.0 | 50.4 | 53.5 | 50.0 | 518 |
| Operating profit/loss | 32,012 | $-290$ | 6,741 | 21.365 | 28,636 | 305 | 13.891 | 14,554 |
| Operating margin, % | 15.6 | $-0.2$ | 3.6 | 12.5 | 15.9 | 0.2 | 8.8 | 9.5 |
| Profit/loss after financial items | 31,028 | $-2,079$ | 6.765 | 25.413 | 28,493 | $-16$ | 9.579 | 11,855 |
| Profit margin, % | 15.1 | $-1.5$ | 3.6 | 14.8 | 15.8 | 0.0 | 6.1 | 7.8 |
| Earnings per share before dilution, SEK | 0.98 | $-0.11$ | 0.18 | 0.74 | 0.95 | $-0.09$ | 0.28 | 0.34 |
| Earnings per share after dilution, SEK | 0.98 | $-0.11$ | 0.18 | 0.74 | 0.95 | $-0.09$ | 0.28 | 0.29 |
| Number of Björn Borg stores | ||||||||
| at end of period | 40 | 39 | 39 | 40 | 39 | 40 | 40 | 41 |
| of which Group-owned | ||||||||
| Björn Borg stores | 34 | 33 | 33 | 20 | 20 | 21 | 21 | 21 |
| Brand sales | 474.201 | 270.824 | 436.957 | 371.960 | 479.109 | 280.888 | 424.685 | 330.214 |
| SEK thousands | Note | July-Sep 2017 |
July-Sep 2016 |
Jan-Sep 2017 |
Jan-Sep 2016 |
Oct 2016- Sep 2017 |
Full-year 2016 |
|---|---|---|---|---|---|---|---|
| Net sales | 23,916 | 16,205 | 72.015 | 48.996 | 87.924 | 64,905 | |
| Other operating revenue | 122 | 975 | 4,653 | 3,235 | 5,382 | 3,964 | |
| Operating revenue | 24,038 | 17,180 | 76,668 | 52,231 | 93,306 | 68,869 | |
| Goods for resale | $-47$ | $-21$ | $-72$ | $-23$ | $-74$ | ||
| Other external expenses | $-16,204$ | $-15,061$ | $-39,179$ | $-40,363$ | $-54,584$ | $-55,768$ | |
| Staff costs | $-7,909$ | $-7,302$ | $-26,384$ | $-25,747$ | $-35,252$ | $-34,615$ | |
| Depreciation/amortization of tangible/ | |||||||
| intangible non-current assets | $-317$ | $-624$ | $-948$ | $-1.709$ | $-1.473$ | $-2,234$ | |
| Other operating expenses | $-51$ | $-19$ | $-226$ | $-444$ | $-225$ | $-443$ | |
| Operating profit/loss | $-443$ | $-5,873$ | 9,910 | $-16,104$ | 1.749 | $-24.265$ | |
| Result from shares in subsidiaries | $-2,115$ | $-2,115$ | 6,470 | 45,685 | 54,270 | ||
| Net financial items | $-5,398$ | $-4,091$ | $-11,956$ | $-14,356$ | $-13,799$ | $-16,199$ | |
| Profit/loss after financial items | $-7,956$ | $-9,964$ | $-4,161$ | $-23,990$ | 33.635 | 13,806 | |
| Group contributions received | 39,047 | 39,047 | |||||
| Appropriations | 1,014 | 1,014 | |||||
| Profit/loss before tax | $-7,956$ | $-9,964$ | $-4,161$ | $-23,990$ | 73,696 | 53,867 | |
| Tax | $-877$ | $-877$ | |||||
| Profit/loss for the period | $-7,956$ | $-9,964$ | $-4,161$ | $-23,990$ | 72,819 | 52,990 | |
| Other comprehensive income | |||||||
| Total comprehensive income | |||||||
| for the period | $-7,956$ | $-9,964$ | $-4,161$ | $-23.990$ | 72,819 | 52,990 |
| SEK thousands Note |
Sep 30 2017 |
Sep 30 2016 |
Dec 31 2016 |
|
|---|---|---|---|---|
| Non-current assets | ||||
| Intangible assets | 1,441 | 216 | 193 | |
| Tangible non-current assets | 1,688 | 2,746 | 2,306 | |
| Long-term receivables | $\overline{c}$ | 7,100 | 10,700 | |
| Deferred tax | 131 | 1.008 | 131 | |
| Shares in Group companies | 351,067 | 354,724 | 353,181 | |
| Total non-current assets | 354,327 | 365,794 | 366,511 | |
| Current assets | ||||
| Receivables from Group companies | 514,313 | 376,527 | 428,241 | |
| Current receivables | 8,006 | 11,814 | 4,632 | |
| Investments | 2 | 750 | 23,389 | 26,167 |
| Cash & cash equivalents | 761 | 6,480 | 13,330 | |
| Total current assets | 523,830 | 418,210 | 472,370 | |
| Total assets | 878,157 | 784,004 | 838,881 | |
| Equity and liabilities | ||||
| Equity | 96,229 | 73,708 | 150,687 | |
| Untaxed reserves | 1.014 | |||
| Bond loan | $\overline{c}$ | 143,459 | 137,092 | |
| Non-current liabilities credit institutions | $\overline{2}$ | 150,000 | ||
| Other non-current liabilities | 17,273 | 21,329 | 17,273 | |
| Due to Group companies | 594,233 | 529,364 | 516,066 | |
| Bank overdraft facility | ||||
| Accounts payable | 3,196 | 3,406 | 2,777 | |
| Other current liabilities | 17,226 | 11,724 | 14,986 | |
| Total equity and liabilities | 878,157 | 784,004 | 838,881 |
| SEK thousands | Jan-Sep 2017 |
Jan-Sep 2016 |
Full-year 2016 |
|---|---|---|---|
| Opening balance | 150,687 | 147,872 | 147,872 |
| Distribution | $-50.297$ | $-50.297$ | $-50.297$ |
| Issuance of warrants | 68 | 68 | |
| Warrant premium convertible | 55 | 55 | |
| Total comprehensive income for the period | $-4.161$ | $-23.990$ | 52.990 |
| Closing balance | 96,229 | 73,708 | 150,687 |
NOTE 1 OTHER EXTERNAL EXPENSES
| Group | Parent Company | |||
|---|---|---|---|---|
| Jan-Sep | Jan-Sep | Jan-Sep | Jan-Sep | |
| SEK thousands | 2017 | 2016 | 2017 | 2016 |
| Cost of premises | 36,063 | 22,287 | 7,836 | 7.350 |
| Selling expenses | 27,092 | 32,122 | 1,687 | 11,612 |
| Marketing expenses | 33,408 | 28,903 | 18.404 | 12.272 |
| Administrative | ||||
| expenses | 22.236 | 20,001 | 9.247 | 7,327 |
| Other | 7,773 | 7,746 | 2,005 | 1,731 |
| Total | 126,572 | 111.059 | 39,179 | 40.292 |
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 from the company's portfolio of corporate bonds amounted to SEK 25.2 million in the first nine months of 2017.
| SEK thousands | Level 1 | Level 2 | Level 3 |
|---|---|---|---|
| Securities held for trading Derivatives held for trading |
750 | ||
| Net | 750 |
The carrying amount of financial instruments recognized at amortized cost corresponds to fair value as of September 30, 2017.
On December 8, 2016 Björn Borg signed an agreement to acquire all the shares in Baseline BV, the parent company of the distributor of underwear and sportswear in the Netherlands and Belgium. The Baseline Group consists of six legal entities with wholesale operations as well as retail operations through twelve Björn Borg concept stores and outlets.
The acquisition closed on January 2, 2017. Björn Borg paid about SEK 7.2 million for all shares and shareholders' loans after disposing of net assets to the former owners relating to brands other than Björn Borg. The difference between the actual and preliminary acquisition price previously announced as approximately SEK 12 million (EUR 1.25 million) is the value of assets (primarily inventory and accounts receivables) unrelated to the Björn Borg brand, which on December 31, 2016 was higher than preliminarily estimated and was therefore deducted from the acquisition price. A portion of the acquisition price was paid on the closing day and the remainder falls due in the three subsequent financial years. The acquisition is financed with own funds. There are no earn-out payments.
Direct acquisition expenses amounted to about SEK 1.7 million and were charged to other external expenses in the fourth quarter of 2016.
The acquisition of the Benelux operations is an important step in accelerating the vertical integration of Björn Borg's operations and in line with the strategy to get closer to consumers and retailers. Proximity to consumers and retailers is expected to create more opportunities to generate growth for Björn Borg in Benelux in the long term. With respect to efficiencies, future synergies are mainly expected in procurement.
Consolidating Baseline in the Björn Borg Group is estimated to increase annual net sales by SEK 100 million with marginal impact on EBIT, excluding short-term negative effects for 2017. In 2017 the Björn Borg Group's EBIT is expected to decline due to timing effects for revenues from the Benelux market as a consequence of accounting effects as wholesale and consumer sales are managed within the Björn Borg Group instead of by an external distributor. At the same time, from 2017 the earn-out payments to the former owner of the Björn Borg brand have ceased, which is estimated to positively impact EBIT by SEK 21 million, largely compensating for the negative short-term effect from the acquisition of Baseline Group.
Net assets largely consist of inventory, receivables and tangible non-current assets comprising retail and office furniture and fixtures. The financial non-current assets largely consist of tax loss carry forwards. Acquired surplus values are attributable in their entirety to goodwill. Acquired goodwill is not tax deductible.
The table shows a preliminary acquisition analysis. This table has changed since the interim report for the first quarter of 2017, as financial non-current assets have increased in Benelux by SEK 0.8 million, inventories have increased by SEK 0.7 million, other current receivables have increased by SEK 3.6 million, non-current non-interestbearing liabilities have increased by SEK 0.5 million, and current non-interest-bearing liabilities have increased by SEK 2.7 million. As a result, goodwill has declined by a corresponding amount, SEK 0.3 million.
| SEK thousands | Fair value |
|---|---|
| Preliminary acquisition price | 11,980 |
| Adjustment net assets | $-4,829$ |
| Acquisition price | 7,151 |
| Acquired net assets | |
| Intangible and tangible assets | 6,731 |
| Financial non-current assets | 11.081 |
| Inventory | 61.640 |
| Other short-term receivables | 12.333 |
| Long-term interest-bearing liabilities | $-21,072$ |
| Current non-interest-bearing liabilities | $-79.452$ |
| Total acquired assets and liabilities | $-8,739$ |
| Goodwill | 15,890 |
| Total net assets | 7,151 |
| Acquisition payments fall due as follows: | |
| 2017 | 1,764 |
| 2018 | 109 |
| 2019 | 1,688 |
| 2020 | 3,590 |
| Total acquisition payments | 7.151 |
The company presents certain financial measures in this interim report that are not defined according to IFRS. The company considers these measures to be valuable complementary information for investors and the company's management. Since not all companies calculate financial measures in the same way, they are not always comparable with measures used by other companies. Consequently, these measures should not be seen as a substitute for measures defined according to IFRS. For more on the calculation of these key financial ratios, see https://corporate.bjornborg.com/en/section/investors/ interim-reports/
Estimated total sales of Björn Borg products at the consumer level, excluding VAT, based on reported wholesale sales. Purpose: Shows the sales trend measured as retail value excluding VAT.
Total assets less non-interest-bearing liabilities and provisions.
Purpose: Capital employed measures capital use and efficiency.
Profit after tax in relation to the weighted average number of shares during the period.
Purpose: This indicator is used to assess an investment from an owner's perspective.
Earnings per share adjusted for any dilution effect. Purpose: This indicator is used to assess an investment from an owner's perspective.
Equity as a percentage of total assets. Purpose: This indicator shows financial risk, expressed as a share of total restricted equity financed by the owners.
Net sales less cost of goods sold divided by net sales. Purpose: Gross margin is used to measure operating profitability.
Net sales less cost of goods sold divided by net sales. Purpose: Gross profit margin before acquisitions is used to measure operating profitability adjusted for acquisition effects.
Liabilities less investments and cash & cash equivalents. Purpose: Net debt reflects the company's total debt situation.
Liabilities less investments and cash & cash equivalents divided by operating profit before depreciation/amortization. Purpose: This indicator shows the company's ability to pay debts.
Financial income less financial expenses. Purpose: Describes the company's financial activities.
Operating profit as a percentage of net sales. Purpose: The operating margin is used to measure operating profitability.
Profit before tax plus net financial items. Purpose: This indicator facilitates profitability comparisons regardless of the company's tax rate and independent of its financing structure.
Profit before tax as a percentage of net sales. Purpose: Profit margin shows the company's profit in relation to its sales.
Profit before tax (per rolling 12-month period) plus financial expenses as a percentage of average capital employed. Purpose: This indicator is the key measure to quantify the return on the capital used in operations.
Profit for the period/year attributable to the Parent Company's shareholders (for rolling 12 months) 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.
Purpose: This indicator is used to show, from an ownership perspective, the return generated on the owners' invested capital.
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, November 15, 2017
Heiner Olbrich Chairman
Lotta de Champs Board member
Martin Bjäringer Board member
Mats H Nilsson Board member
Fredrik Lövstedt Board member
Christel Kinning Board member
Henrik Bunge CEO
We have reviewed the interim report for Björn Borg AB (publ) for the period January 1 to September 30, 2017. The Board of Directors and the President are responsible for the preparation and presentation of this interim report in accordance with IAS 34 and the Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.
We conducted our review in accordance with the International Standard on Review Engagements (ISRE) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity." A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.
A review is substantially less in scope than an audit conducted in accordance with the International Standards of Auditing (ISA) and other generally accepted auditing practices. The procedures performed in a review do not enable us to obtain a level of assurance that would make us aware of all significant matters that might be identified in an audit. Therefore, the conclusion expressed based on a review does not give the same level of assurance as a conclusion expressed based on an audit.
Based on our review, nothing has come to our attention that causes us to believe that the interim report is not, in all material aspects, prepared in accordance with IAS 34 and the Annual Accounts Act for the Group and in accordance with the Annual Accounts Act for the Parent Company.
Stockholm, November 15, 2017 Deloitte AB
Didrik Roos Authorized Public Accountant
The year-end report for 2017 on February 23, 2018.
The annual report in late April 2018.
The 2017 Annual General Meeting will be held on May 17, 2018.
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
Daniel Grohman, CFO E-mail: [email protected] Tel: +46 8 506 33 700
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 2016 amounted to about SEK 1.6 billion, excluding VAT, at the consumer level. Group net sales amounted to SEK 631.6 million in 2016, with an average of 133 employees. The Björn Borg share has been listed on Nasdaq Stockholm since 2007.
The images in the interim report are from Björn Borg's fall 2017 collection.
Björn Borg AB Tulegatan 11 SE-113 53 Stockholm, Sweden www.bjornborg.com
Biörn Borg is required to make public this information according to the EU's Market Abuse Regulation. The information was released for publication by the above-mentioned contacts on November 16, 2017 at 7:30 am (CET).
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