Quarterly Report • Nov 19, 2021
Quarterly Report
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BJÖRN BORG AB INTERIM REPORT JANUARY-SEPTEMBER 2021
"Björn Borg has never had higher profitability in a single quarter, nor have sales been higher in a single quarter and the profitability is now above SEK 100 million on rolling 12 months," commented CEO Henrik Bunge.
| SEK million | Jul-Sep 2021 |
Jul-Sep 2020 |
Jan-Sep 2021 |
Jan-Sep 2020 |
Oct 2020- Sep 2021 |
Full-year 2020 |
|---|---|---|---|---|---|---|
| Net sales | 240.1 | 224.9 | 587.6 | 544.8 | 748.0 | 705.2 |
| Gross profit margin, % | 54.4 | 50.4 | 54.6 | 51.2 | 55.0 | 52.5 |
| Operating profit | 52.4 | 33.4 | 94.1 | 27.2 | 100.5 | 33.7 |
| Operating margin, % | 21.8 | 14.9 | 16.0 | 5.0 | 13.4 | 4.8 |
| Profit after tax | 40.1 | 25.8 | 75.0 | 17.6 | 76.2 | 18.8 |
| Earnings per share before dilution, SEK | 1.59 | 1.02 | 2.98 | 0.70 | 3.03 | 0.75 |
| Earnings per share after dilution, SEK | 1.59 | 1.02 | 2.98 | 0.70 | 3.03 | 0.75 |
Another record quarter has just concluded. Björn Borg has never had higher profitability in a single quarter, nor have sales been higher in a single quarter and the profitability is now above SEK 100 million on rolling 12 months. Our biggest victory is still that our brand has never been stronger and that our team has never been more engaged. People build brands, and strong brands drive growth.
Our digital focus creates profitability, growth and a strong brand. The plan has been clear for some time, and we continued during the quarter to transition our business and communication online with good results. In the quarter more than 50 percent of our sales was generated online through our own e-commerce, marketplaces, e-tailers and online sales from our retailers' e-commerce sites. Our brand also continued to strengthen and in the quarter we increased our recognition within sports apparel by 43 percent compared with the third quarter 2020. At the same time, we maintained our market-leading position in men's underwear.
Net sales in the quarter were SEK 240.1 million (224.9), an increase of 6.8 percent year-over-year. We continue to grow online, where our own e-commerce and e-tailers grew by 23 percent in the quarter. Moreover, we are also continuing according to plan to shrink our retail footprint and have now closed another unprofitable concept store in the Netherlands.
We are seeing a recovery in our own stores, however, where comparable stores grew by 2 percent compared with the same quarter in 2020. As a country, the Netherlands had a very strong quarter and sales at the wholesale level increased by 29 percent year-over-year.
Our gross profit margin continued to rise to 54.4 percent (50.4). The majority of the increase is a result of our profitability focus with fewer discounts in all channels as well as the increased share of our own e-commerce with high gross profit margins. In addition, our operating expenses continued to decrease and in the quarter were SEK 5.2 million lower than the previous year. In summary, the increased sales with a higher gross profit margin, coupled with lower operating expenses, led to a very strong operating profit of SEK 52.3 million (33.4), which produces an operating margin of 21.8 percent (14.9).
Another record quarter is in the books, and yet it feels like our journey has just begun. I am extremely proud of what we as a team have created, and perhaps most of all the high scores we received in our annual anonymous employee survey. Never have we been more engaged and motivated.
Now let's go!
Head coach Henrik Bunge
The third quarter saw an increase in total revenue, including other income, of 5 percent to SEK 243.9 million (232.1). Adjusted for currency effects, operating revenue increased by 6 percent in the quarter.
Sales in the underwear product area increased by 5 percent in the third quarter 2021, while sports apparel decreased by 7 percent.
Footwear sales decreased by 13 percent compared with the third quarter 2020, while sales for other product areas increased by 52 percent, with bags improving the most.
The two largest markets, Sweden and the Netherlands, increased in the third quarter by 7 percent and 20 percent, respectively. At the same time, Finland and Belgium fell by 14 percent and 2 percent, respectively, related to delayed shipments. Germany reported the same level as last year, while other smaller markets decreased by a combined 4 percent.
The largest channel, wholesale, saw an increase of 12 percent in the third quarter 2021, of which e-tailers within the wholesale business grew by 28 percent. Own stores fell from the previous year by 19 percent related to fewer pop-up stores this year. Own e-commerce generated continued
SEK 232 million Growth 5% SEK 244 million
SEK 232 million Growth 5% SEK 244 million
growth and increased by 10 percent. External distributors continued to report significant growth, increasing by 33 percent, while royalties decreased slightly.
SEK 232 million Growth 5% SEK 244 million
QUARTERLY NET SALES AND OPERATING PROFIT, 2018-2021
The Group's net sales amounted to SEK 240.1 million (224.9) in the third quarter, an increase of 6.8 percent. Currencies negatively affected sales in the quarter. Adjusted for currency effects, sales increased by 7.8 percent.
The positive sales trend compared with the third quarter of 2020 is largely due to a positive trend and strong growth online, both for our own e-commerce and e-tailers within the wholesale business, which together accounted for 36 percent of net sales in the third quarter.
The Swedish wholesale business increased by 20 percent in the quarter, while retail operations in Sweden reported higher store traffic than the previous year with sales rising 16 percent.
The Benelux operations increased by 14 percent from the previous year. On a currency neutral basis, the increase was 16 percent. It was mainly the wholesale business that grew, up 31 percent in the quarter compared with a year earlier. The retail operations in the Netherlands and Belgium decreased by 10 percent.
The German wholesale business, which largely consists of e-tailers, continued its strong performance even though the third quarter was in line with the previous year.
For the company as a whole, e-commerce increased by 10 percent in the quarter, with website traffic and conversion in particular improving from the previous year.
Income from external distributors increased by 33 percent year-over-year, mainly because the UK operations are managed this year by an external distributor, which was not the case in 2020. The increase is also attributable to growth in the Norwegian market.
External royalties decreased slightly.
The Group's net sales amounted to SEK 587.6 million (544.8) in the first nine months of 2021, an increase of 7.9 percent. Currencies negatively affected sales. Adjusted for currency effects, sales increased by 11.1 percent.
The positive sales trend compared with the first nine months of 2020, just like for the quarter, is largely due to strong online growth, both our own e-commerce and e-tailers within the wholesale business, which together accounted for 39 percent of net sales in the first nine months of the year.
In the wholesale business it is mainly the German market, which largely consists of e-tailers, that reported strong growth, up 82 percent year-over year. The two largest markets, Sweden and the Netherlands, grew by 7 percent each within the wholesale business, while the footwear business dropped 18 percent.
For the company as a whole, retail sales for own stores decreased by 14 percent compared with the first nine months of 2020, when the operations in the Netherlands and Finland were largely shut down at the beginning of the year due to the pandemic. Sales for comparable stores fell by 4 percent. E-commerce grew in the first nine months by 20 percent, with website traffic and conversion in particular improving from the previous year.
Income from external distributors rose by 71 percent year-over-year, mainly because the UK operations are managed this year by an external distributor, which was not the case in 2020. The increase is also attributable to growth in the Norwegian market.
External royalties decreased slightly.
The gross profit margin for the third quarter increased to 54.4 percent (50.4). A weaker USD against SEK positively affected margins, while a weaker EUR against SEK had the opposite effect. Adjusted for currency effects, the gross profit margin would have been 54.0 percent. The increase in the gross profit margin is mainly due to a greater profitability focus in the wholesale business and because our own e-commerce, which has higher profitability, accounted for a larger share of the total.
Other operating revenue amounted to SEK 3.8 million (7.2) and mainly refers to unrealized gains on accounts receivable in foreign currency.
Operating expenses decreased by SEK 5.2 million compared with the previous year mainly through lower expenses for customer losses. Rental expenses also decreased after the headquarters was moved to a smaller, less expensive location.
Increased sales with a higher gross profit margin, as well as lower operating expenses compared with the previous year, increased operating profit to SEK 52.4 million (33.4). The operating margin was 21.8 percent (14.9).
Net financial items amounted to SEK –1.4 million (–0.5). The decrease compared with 2020 is mainly due to the revaluation of financial assets and liabilities in foreign currency.
Profit after tax for the period increased to SEK 40.1 million (25.8).
The gross profit margin for the first nine months of 2021 increased to 54.6 percent (51.2). A weaker USD against SEK positively affected margins, while a weaker EUR against SEK had the opposite effect. Adjusted for currency effects, the gross profit margin would have been 52.6 percent. The increase in the gross profit margin is mainly due to a stronger profitability focus in the wholesale business and because our own e-commerce, which has higher profitability, accounted for a larger share of the total.
Other operating revenue amounted to SEK 18.6 million (23.5) and mainly refers to unrealized gains on accounts receivable in foreign currency.
Operating expenses decreased by SEK 30.3 million compared with the previous year mainly through lower customer losses, logistics and travel. Rental expenses also decreased after the headquarters was moved to a smaller, less expensive location.
Increased sales with a higher gross profit margin, as well as lower operating expenses compared with the previous year, increased operating profit to SEK 94.1 million (27.2). The operating margin was 16.0 percent (5.0).
Net financial items amounted to SEK 0.8 million (–3.9). The improvement compared with 2020 is mainly due to the revaluation of financial assets and liabilities in foreign currency.
Profit after tax for the period increased to SEK 75.0 million (17.6).
Björn Borg's segment reporting consists of the company's primary revenue sources, which are divided into: Wholesale, Consumer Direct, Distributors and Licensing, which is also how the business is monitored internally in the Group.
The segment consists of revenue and expenses associated with the Björn Borg Group's wholesale operations. The Group has wholesale businesses in Sweden, Germany, Finland, the Netherlands, Belgium and Denmark for apparel and underwear as well as in Sweden, Finland and the Baltic countries for footwear.
The segment's external operating revenue amounted to SEK 394.4 million (371.8), an increase of 6 percent. One reason for the increase is that the company is seeing increased demand through e-tailers, which primarily sell online, especially in the German market. The Finnish market and the footwear business, on the other hand, reported decreases due to the negative impact of Covid-19. Sales to e-tailers rose a combined 40 percent in the first nine months to SEK 160.4 million (114.7). All markets with the exception of footwear e-tailers reported growth, with Germany, the Netherlands and Sweden seeing strong growth.
Operating profit amounted to SEK 68.6 million (15.2) compared with the previous year, an increase of SEK 53.4 million. The improvement is primarily due to higher sales combined with better gross profit margins and lower operating expenses.
The segment consists of revenue and expenses associated with the Björn Borg Group's direct sales to consumers. The Björn Borg Group owns and operates a total of 24 stores and factory outlets in Sweden, Finland, the Netherlands and Belgium with sales of underwear, sports apparel, adjacent products and other licensed products. In addition, Björn Borg sells online through www.bjornborg.com.
External operating revenue in the Consumer Direct segment decreased in the first nine months of 2021 to SEK 152.9 million (154.5), or by 1 percent. The decrease is mainly due to lower sales in own stores, but was offset by own e-commerce, which grew by 20 percent in the period. For the company as a whole, retail sales for own stores decreased by 14 percent compared with the first nine months of 2020, when the operations in the Netherlands and Finland were largely shut down due to the pandemic. Sales for comparable stores fell by 4 percent. The Group's own stores in Sweden increased year-over-year, however, growing in total by 4 percent, while comparable stores rose by 6 percent. The Benelux stores were closed for a large part of the period and therefore decreased compared with the first nine months of 2020, down 7 percent in total and 4 percent for comparable stores. The Finnish stores have also been impacted by the coronavirus, with closed stores and sales down in total by 25 percent year-over-year. Comparable stores were down 13 percent.
Operating profit for the first nine months of 2021 was SEK 4.6 million, against a year-earlier loss of SEK 4.2 million. The increase in the operating result, from loss to profit, is mainly due to increased gross profit margins and lower operating expenses compared with the previous year, and because our own e-commerce, which is generating very strong profitability, is growing and accounting for a larger share of the total.
The Distributors segment mainly consists of revenue and expenses associated with sales to external distributors of product groups developed by the company.
The segment's external operating revenue increased in the first nine months of 2021 to SEK 49.9 million (29.2), up 71 percent from the previous year. The main reason was a year-over-year sales increase to both major distributor markets, Norway and the UK, mainly driven by the UK, which as of January 2021 is a new distributor for the company.
Operating profit increased to SEK 12.9 million (4.7) due to the higher external sales in the segment.
| Operating revenue, SEK thousands January-September |
SEK thousands January-September |
Operating profit, | Operating margin, % January-September |
|||||
|---|---|---|---|---|---|---|---|---|
| Segment | Revenue source | 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | |
| Wholesale | Products | 394,431 | 371,753 | 68,598 | 15,167 | 17 | 4 | |
| Consumer Direct | Products | 152,882 | 154,480 | 4,563 | –4,221 | 3 | –3 | |
| of which stores | 82,764 | 95,689 | –8,118 | –8,893 | –10 | –9 | ||
| of which e-commerce | 70,118 | 58,791 | 12,681 | 4,672 | 18 | 8 | ||
| Distributors | Products | 49,866 | 29,212 | 12,908 | 4,717 | 3 | 1 | |
| Licensing | Royalties | 9,014 | 12,853 | 7,999 | 11,578 | 12 | 17 | |
| Total | 606,193 | 568,298 | 94,068 | 27,240 | 16 | 5 |
The Licensing segment mainly consists of royalty revenue from licensees and expenses for the Group associated with the licensing operations.
The segment's external operating revenue decreased in the first nine months of 2021 to SEK 9.0 million (12.9). The decrease is a result of lower brand sales of licensed products, with footwear accounting for most of that, and because the bag category was absorbed as an integral part of the wholesale business.
Operating profit decreased to SEK 8.0 million (11.6) in the first nine months of 2021. The decline is due to the lower external sales in the segment.
Intra-Group sales for the first nine months of 2021 amounted to SEK 411.1 million (381.2).
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 35.8 million (69.9) in the first nine months of 2021. The decrease from the previous year primarily comes from higher capital tied up in inventory due to higher revenue from own e-commerce.
Cash flow from investing activities was negative at SEK –8.4 million (–4.2). The largest investments were to update the e-commerce platform as well as a new store in Sweden and the Danish office.
Cash flow from financing activities amounted to SEK –52.3 million (–33.8). The negative flow mainly comes from the company's distribution of SEK 37.7 million (0).
The Björn Borg Group's cash & cash equivalents amounted to SEK 45.8 million (60.4) at the end of the period, plus unutilized overdraft facilities of SEK 141.0 million (90.0). Interest-bearing net liabilities, excluding lease liabilities, amounted to SEK 53.2 million (89.6). The company has strong liquidity, and the lower net debt at the end of the quarter is mainly due to lower long-term liabilities. Total interest-bearing liabilities amounted to SEK 163.2 million (210.0), where total lease liabilities amounted to SEK 64.2 million (60.0), of which SEK 41.6 million represents the long-term share and SEK 22.7 million the short-term share.
The lease on the new headquarters took effect on January 1, 2021 and the lease liability and right-of-use asset amount to SEK 20.6 million.
The Björn Borg Group has SEK 240 million in bank facilities, whereof SEK 99 million was utilized as of September 30, 2021. The fair value of financial instruments essentially coincides with book value.
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 EBITDA will not exceed 3.00 on the last day of each quarter. Moreover, the Group will maintain an equity/assets ratio of at least 35 percent.
As of September 30, 2021 the ratio was 0.48 (2.43) and the equity/assets ratio was 53.1 percent (47.8).
No significant changes have been made with regard to pledged assets and contingent liabilities compared with December 31, 2020.
The average number of employees in the Group was 169 (191) for the twelve-month period ending September 30, 2021, of whom 68 percent (72) are women.
Other than customary remuneration (salary, fees and other benefits) to the CEO, senior executives and the Board of Directors, as well as intra-Group sales, there were no 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 page 61 in the annual report for 2020.
The company has stated that the coronavirus outbreak has greatly impacted the market and is negatively affecting the Björn Borg Group. The extent of this is difficult to assess, but the outbreak has had, and will continue to have, a material financial effect on the Group's operations. We are currently seeing a significant financial impact on our own stores, with fewer visitors and a large drop-off in sales. In particular, the company is seeing that overall development and/or regulatory decisions in the countries where it operates are leading to, or may lead to, reduced retail demand, potential disruptions to the supply chain, unfavorable currency impacts, payment difficulties by customers and closed stores with reduced sales as a result. Such effects were already evident in spring 2020, and in parts of 2020 our stores were closed in the Netherlands, Belgium, Finland and England. We saw the same situation in the Netherlands, Belgium and Finland in the first quarter of 2021, after which they reopened in the second quarter. The stores in Sweden have been open. Despite the difficult situation, the company has a very good financial position with adequate liquidity. The measures taken to mitigate the financial effects of Covid-19 include renegotiated lease payments for own stores and operating cost cuts.
Björn Borg AB (publ) is primarily engaged in intra-Group activities. As of September 30, 2021 the company owns 100 percent of the shares in Björn Borg Brands AB, Björn Borg Footwear AB, Björn Borg Inc., Björn Borg Services AB, Björn Borg UK, Baseline, Bjorn Borg Finland Oy and Björn Borg Denmark Aps. In addition, the company owns 75 percent of the shares in Bjorn Borg (China) Ltd.
The Parent Company's net sales for the first nine months of 2021 amounted to SEK 74.9 million (76.7). The result from shares in subsidiaries was negatively affected by SEK 33.8 million for write-downs of shares and receivables from subsidiaries.
The pre-tax loss amounted to SEK 16.5 million for the first nine months of 2021, compared with a profit of SEK 6.6 million a year earlier. Cash & cash equivalents amounted to SEK 25.6 million (37.3) as of September 30, 2021.
There are no significant events to report after the reporting period.
Björn Borg has 25,148,384 shares outstanding.
Björn Borg's long-term financial goals, which were last updated in 2019, are as follows:
The company is maintaining the above goals despite the financial impact of the coronavirus.
Comments to the financial objectives: Sales growth is expected to mainly come from sports apparel, although other product groups are also expected to grow.
The Annual General Meeting held on May 18, 2021 approved a distribution of SEK 1.50 (0) per share to the shareholders for the financial year 2020. Directors Fredrik Lövstedt, Mats H Nilsson, Heiner Olbrich, Alessandra Cama and Anette Klintfält were re-elected. Jens Högsted was elected as a new member of the Board. The total number of members is six. The Meeting resolved to elect Heiner Olbrich as Chairman of the Board. Further, the Meeting resolved to replace the auditor with BDO Mälardalen.
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 2020 (see page 56 in the annual report 2020). New and revised standards and new interpretations that
apply as of January 1, 2021 have not had a material impact on the Group's financial reports. Revisions to RFR 2 applicable as of January 1, 2021 have not had a material impact on the Parent Company's financial reports.
During the period, the Group recognized grants received from the government related to Covid-19. The support is recognized in the income statement when there is reasonable certainty that the conditions associated with the support will be met and the support will be received. No material support was received in the third quarter 2021, while SEK 2.2 million (4.5) was recognized cumulatively for the year in the income statement. A reconciliation of all government support has not yet been finalized.
The preparation of the interim report requires management to make estimates and assumptions that affect the application of the Group's (and Parent Company's) accounting principles as well as recognized amounts for assets, liabilities, revenue and expenses. The financial impact of Covid-19 has been taken into account. The results of these estimates and assumptions are then used to measure the carrying amounts of assets and liabilities that otherwise are not clearly indicated by other sources. The estimates for accounting purposes that result will, by definition, not always correspond to actual results. The outcome of the above estimate has not had a significant impact on the Group's financial reports. Important assumptions and estimates are set out in the annual report for 2020. No material revisions have been made to the assumptions or estimates compared with the annual report 2020.
This interim report has been reviewed by the company's auditors. The review report can be found on page 15.
As a policy, the company does not issue earnings forecasts.
CONDENSED
| SEK thousands Note |
Jul-Sep 2021 |
Jul-Sep 2020 |
Jan-Sep 2021 |
Jan-Sep 2020 |
Oct 2020- Sep 2021 |
Full-year 2020 |
|---|---|---|---|---|---|---|
| Net sales | 1 240,141 |
224,909 | 587,627 | 544,848 | 747,991 | 705,211 |
| Other operating revenue | 3,799 | 7,204 | 18,565 | 23,450 | 23,911 | 28,796 |
| Operating revenue | 243,940 | 232,113 | 606,193 | 568,298 | 771,902 | 734,007 |
| Goods for resale | –109,579 | –111,484 | –267,046 | –265,639 | –336,635 | –335,228 |
| Other external expenses | 2 –37,321 |
–38,485 | –108,066 | –123,492 | –143,159 | –158,585 |
| Staff costs | –32,636 | –32,750 | –94,485 | –94,036 | –129,977 | –129,528 |
| Depreciation/amortization of tangible/ | ||||||
| intangible non-current assets | –9,451 | –8,695 | –26,689 | –32,667 | –34,868 | –40,846 |
| Other operating expenses | –2,596 | –7,296 | –15,839 | –25,224 | –26,741 | –36,126 |
| Operating profit | 52,357 | 33,403 | 94,068 | 27,240 | 100,522 | 33,694 |
| Net financial items | –1,420 | –452 | 772 | –3,916 | –11,427 | –16,115 |
| Profit before tax | 50,938 | 32,951 | 94,840 | 23,324 | 89,095 | 17,579 |
| Tax | –10,836 | –7,190 | –19,885 | –5,749 | –12,882 | 1,254 |
| Profit for the period | 40,102 | 25,761 | 74,955 | 17,575 | 76,213 | 18,833 |
| Profit for the period attributable to Parent Company's shareholders |
40,102 | 25,761 | 74,955 | 17,575 | 76,213 | 18,833 |
| Non-controlling interests | – | – | – | – | – | – |
| Earnings per share before dilution, SEK | 1.59 | 1.02 | 2.98 | 0.70 | 3.03 | 0.75 |
| Earnings per share after dilution, SEK | 1.59 | 1.02 | 2.98 | 0.70 | 3.03 | 0.75 |
| Number of shares | 25,148,384 | 25,148,384 | 25,148,384 | 25,148,384 | 25,148,384 | 25,148,384 |
| SEK thousands Note |
Jul-Sep 2021 |
Jul-Sep 2020 |
Jan-Sep 2021 |
Jan-Sep 2020 |
Oct 2020- Sep 2021 |
Full-year 2020 |
|---|---|---|---|---|---|---|
| Profit/loss for the period | 40,102 | 25,761 | 74,955 | 17,575 | 76,213 | 18,833 |
| OTHER COMPREHENSIVE INCOME | ||||||
| Components that may be reclassified to profit or loss |
||||||
| Translation difference for the period | 1,050 | 301 | –3,326 | 3,470 | 500 | 7,296 |
| Total other comprehensive income for the period |
1,050 | 301 | –3,326 | 3,470 | 500 | 7,296 |
| Total comprehensive income for the period |
41,152 | 26,062 | 71,629 | 21,045 | 76,713 | 26,129 |
| Total comprehensive income attributable to |
||||||
| Parent Company's shareholders | 41,152 | 26,062 | 71,629 | 21,045 | 76,713 | 26,129 |
| Non-controlling interests | – | – | – | – | – | – |
CONDENSED
| SEK thousands Note |
Sep 30, 2021 |
Sep 30, 2020 |
Dec 31, 2020 |
|---|---|---|---|
| Non-current assets | |||
| Goodwill | 34,633 | 35,312 | 34,306 |
| Trademarks | 187,532 | 187,532 | 187,532 |
| Other intangible assets | 11,930 | 9,315 | 10,255 |
| Tangible non-current assets | 16,058 | 15,306 | 16,580 |
| Deferred tax assets | 10,702 | 13,270 | 15,761 |
| Right-of-use assets | 64,385 | 58,150 | 57,481 |
| Total non-current assets | 325,240 | 318,885 | 321,915 |
| Current assets Inventory |
134,869 | 114,755 | 123,357 |
| Accounts receivable | 145,226 | 151,681 | 83,627 |
| Other current receivables | 24,995 | 13,376 | 19,884 |
| Cash & cash equivalents | 45,795 | 60,409 | 70,235 |
| Total current assets | 350,886 | 340,221 | 297,103 |
| Total assets | 676,127 | 659,106 | 619,018 |
| Equity and liabilities | |||
| Equity | 324,919 | 285,929 | 291,013 |
| Deferred tax liabilities | 39,279 | 40,356 | 39,289 |
| Non-current liabilities credit institutions | 99,000 | 150,000 | 99,000 |
| Other non-current liabilities | 1,753 | – | – |
| Long-term lease liability | 41,554 | 35,462 | 35,701 |
| Accounts payable | 62,355 | 40,507 | 77,245 |
| Short-term lease liability | 22,690 | 24,509 | 21,383 |
| Other current liabilities | 84,577 | 82,343 | 55,387 |
| Total equity and liabilities | 676,127 | 659,106 | 619,018 |
| SEK thousands | Note | Equity attributable to Parent Company's shareholders |
Non-controlling interests |
Total equity |
|---|---|---|---|---|
| Opening balance, January 1, 2020 | 270,774 | –5,890 | 264,884 | |
| Total comprehensive income for the period | 20,896 | 149 | 21,045 | |
| Closing balance, September 30, 2020 | 291,670 | –5,741 | 285,929 | |
| Opening balance, January 1, 2020 | 270,774 | –5,890 | 264,884 | |
| Total comprehensive income for the period | 25,534 | 595 | 26,129 | |
| Closing balance, December 31, 2020 | 296,308 | –5,295 | 291,013 | |
| Opening balance, January 1, 2021 | 296,308 | –5,295 | 291,013 | |
| Total comprehensive income for the period | 72,018 | –389 | 71,629 | |
| Distribution for 2020 | –37,723 | – | –37,723 | |
| Closing balance, September 30, 2021 | 330,603 | –5,684 | 324,919 |
CONDENSED
| SEK thousands | Jul-Sep 2021 |
Jul-Sep 2020 |
Jan-Sep 2021 |
Jan-Sep 2020 |
Full-year 2020 |
|---|---|---|---|---|---|
| Cash flow from operating activities | |||||
| Before changes in working capital | 63,057 | 43,042 | 117,360 | 43,280 | 53,358 |
| Changes in working capital | –42,412 | –38,036 | –81,515 | 26,605 | 89,222 |
| Cash flow from operating activities | 20,645 | 5,006 | 35,845 | 69,885 | 142,580 |
| Investments in intangible non-current assets | –1,259 | –154 | –4,135 | –2,176 | –3,474 |
| Investments in tangible non-current assets | –631 | –350 | –4,272 | –2,036 | –5,490 |
| Cash flow from investing activities | –1,890 | –504 | –8,407 | –4,212 | –8,964 |
| Distribution | – | – | –37,723 | – | – |
| Amortization of loans | – | –40,000 | – | –43,890 | –94,890 |
| Amortization of lease liability | –6,008 | –11,319 | –16,330 | –22,656 | –28,183 |
| Loan proceeds | – | – | – | 40,000 | 40,000 |
| Overdraft facility | – | – | – | –7,242 | –7,242 |
| Cash flow from financing activities | –6,008 | –51,319 | –54,053 | –33,788 | –90,315 |
| Cash flow for the period | 12,747 | –46,817 | –26,615 | 31,885 | 43,301 |
| Cash & cash equivalents at beginning of the period | 30,760 | 105,171 | 70,235 | 29,002 | 29,002 |
| Translation difference in cash & cash equivalents | 2,288 | 2,055 | 2,175 | –478 | –2,068 |
| Cash & cash equivalents at end of the period | 45,795 | 60,409 | 45,795 | 60,409 | 70,235 |
| GROUP | |
|---|---|
| SEK thousands | Jul-Sep 2021 |
Jul-Sep 2020 |
Jan-Sep 2021 |
Jan-Sep 2020 |
Oct 2020- Sep 2021 |
Full-year 2020 |
|---|---|---|---|---|---|---|
| Gross profit margin, % * | 54.4 | 50.4 | 54.6 | 51.2 | 55.0 | 52.5 |
| Operating margin, % | 21.8 | 14.9 | 16.0 | 5.0 | 13.4 | 4.8 |
| Profit margin, % | 21.2 | 14.7 | 16.1 | 4.3 | 11.9 | 2.5 |
| Return on capital employed, % | 21.2 | 5.3 | 21.2 | 5.3 | 21.2 | 4.8 |
| Return on average equity, % | 25.0 | 5.4 | 25.0 | 5.4 | 25.0 | 6.8 |
| Profit attributable to Parent Company's | ||||||
| shareholders | 40,101 | 25,761 | 74,955 | 17,575 | 76,213 | 18,833 |
| Equity/assets ratio, % * | 53.1 | 47.8 | 53.1 | 47.8 | 53.1 | 51.8 |
| Equity per share, SEK | 12.92 | 11.37 | 12.92 | 11.37 | 12.92 | 11.57 |
| Investments in intangible non-current assets | 1,259 | 154 | 4,135 | 2,176 | 5,433 | 3,474 |
| Investments in tangible non-current assets | 631 | 350 | 4,272 | 2,036 | 7,726 | 5,490 |
| Depreciation, amortization and impairment | ||||||
| losses for the period | –9,451 | –8,695 | –26,689 | –32,667 | –34,868 | –40,846 |
| Average number of employees | 164 | 176 | 164 | 176 | 169 | 192 |
* The figure is an alternative performance measure (APM) and not IFRS. It is described under definitions and explained on page 14.
GROUP
| SEK thousands | Jul-Sep 2021 |
Jul-Sep 2020 |
Jan-Sep 2021 |
Jan-Sep 2020 |
Oct 2020- Sep 2021 |
Full-year 2020 |
|---|---|---|---|---|---|---|
| Operating revenue | ||||||
| Wholesale | ||||||
| External revenue | 156,000 | 139,684 | 394,431 | 371,753 | 487,072 | 464,394 |
| Internal revenue | 873 | 227 | 1,126 | 1,842 | 1,527 | 2,244 |
| 156,873 | 139,911 | 395,557 | 373,595 | 488,599 | 466,638 | |
| Consumer Direct | ||||||
| Brick-and-mortar | ||||||
| External revenue | 43,537 | 53,665 | 82,764 | 95,689 | 114,411 | 127,336 |
| Internal revenue | 2 | 43 | 2 | 89 | 2 | 89 |
| E-commerce | ||||||
| External revenue | 22,947 | 20,859 | 70,118 | 58,791 | 94,977 | 83,650 |
| Internal revenue | – | – | – | – | – | – |
| 66,486 | 74,567 | 152,884 | 154,569 | 209,390 | 211,075 | |
| Distributors | ||||||
| External revenue | 18,523 | 13,906 | 49,866 | 29,212 | 65,320 | 44,667 |
| Internal revenue | 139,928 | 123,820 | 352,868 | 324,707 | 438,371 | 410,210 |
| 158,451 | 137,726 | 402,733 | 353,919 | 503,691 | 454,877 | |
| Licensing | ||||||
| External revenue | 2,933 | 3,999 | 9,014 | 12,853 | 10,122 | 13,960 |
| Internal revenue | 24,525 | 21,879 | 57,056 | 54,586 | 71,255 | 68,785 |
| 27,458 | 25,878 | 66,070 | 67,439 | 81,377 | 82,745 | |
| Less internal sales | –165,328 | –145,969 | –411,051 | –381,224 | –511,155 | –481,328 |
| Operating revenue | 243,941 | 232,113 | 606,193 | 568,298 | 771,902 | 734,007 |
| Operating profit | ||||||
| Wholesale | 34,604 | 21,438 | 68,598 | 15,167 | 70,335 | 16,904 |
| Consumer Direct, brick-and-mortar | 3,348 | 3,002 | –8,118 | –8,893 | –12,119 | –12,893 |
| Consumer Direct, e-commerce | 3,444 | 2,375 | 12,681 | 4,672 | 18,216 | 10,207 |
| Distributors | 8,252 | 2,719 | 12,908 | 4,717 | 15,147 | 6,955 |
| Licensing | 2,709 | 3,866 | 7,999 | 11,578 | 8,942 | 12,521 |
| Operating profit | 52,357 | 33,403 | 94,067 | 27,240 | 100,521 | 33,694 |
The difference between operating profit for segments for which information must be disclosed, SEK 52,357 thousand (33,403), and the result before tax, SEK 50,937 thousand (32,951), is net financial items, SEK –1,420 thousand (–452).
| GROUP | ||||||||
|---|---|---|---|---|---|---|---|---|
| SEK thousands | Q3 2021 | Q2 2021 | Q1 2021 | Q4 2020 | Q3 2020 | Q2 2020 | Q1 2020 | Q4 2019 |
| Net sales | 240,141 | 162,836 | 184,651 | 160,364 | 224,909 | 147,966 | 171,973 | 196,407 |
| Gross profit margin, % | 54.4 | 56.3 | 53.3 | 56.6 | 50.4 | 49.1 | 54.1 | 50.8 |
| Operating profit (loss) | 52,357 | 19,277 | 22,434 | 6,455 | 33,403 | –13,410 | 7,246 | 1,432 |
| Operating margin, % | 21.8 | 11.8 | 12.1 | 4.0 | 14.9 | –9.1 | 4.2 | 0.7 |
| Profit (loss) after financial items | 50,937 | 18,015 | 25,888 | –5,744 | 32,951 | –22,846 | 13,218 | –2,566 |
| Profit margin, % | 21.2 | 11.1 | 14.0 | –3.6 | 14.7 | –15.4 | 7.7 | –1.3 |
| Earnings per share before dilution, SEK | 1.59 | 0.54 | 0.85 | 0.05 | 1.02 | –0.75 | 0.42 | –0.11 |
| Earnings per share after dilution, SEK | 1.59 | 0.54 | 0.85 | 0.05 | 1.02 | –0.75 | 0.42 | –0.11 |
| Number of Björn Borg stores | ||||||||
| at end of period | 27 | 28 | 31 | 32 | 33 | 33 | 33 | 33 |
| of which Group-owned | ||||||||
| Björn Borg stores | 24 | 25 | 28 | 29 | 30 | 30 | 30 | 30 |
CONDENSED
| SEK thousands | Note | Jul-Sep 2021 |
Jul-Sep 2020 |
Jan-Sep 2021 |
Jan-Sep 2020 |
Oct 2020- Sep 2021 |
Full-year 2020 |
|---|---|---|---|---|---|---|---|
| Net sales | 25,058 | 25,445 | 74,891 | 76,698 | 100,337 | 102,144 | |
| Other operating revenue | 257 | 241 | 1,486 | 851 | 1,694 | 1,059 | |
| Operating revenue | 25,315 | 25,686 | 76,377 | 77,549 | 102,031 | 103,203 | |
| Goods for resale | – | –3 | – | –3 | –1 | –4 | |
| Other external expenses | 2 | –10,562 | –6,255 | –31,443 | –35,687 | –39,446 | –43,690 |
| Staff costs | –9,251 | –7,583 | –30,441 | –25,712 | –40,661 | –35,932 | |
| Depreciation/amortization of tangible/ | |||||||
| intangible non-current assets | –582 | –602 | –1,735 | –1,769 | –2,213 | –2,247 | |
| Other operating expenses | –296 | –188 | –628 | –1,419 | –1,172 | –1,963 | |
| Operating profit | 4,624 | 11,055 | 12,130 | 12,959 | 18,538 | 19,367 | |
| Result from shares in subsidiaries | 294 | – | –33,755 | – | –41,586 | –7,831 | |
| Net financial items | 3,312 | –1,799 | 5,129 | –6,345 | –5,652 | –17,126 | |
| Profit/loss after financial items | 8,230 | 9,256 | –16,496 | 6,614 | –28,700 | –5,590 | |
| Group contributions received/paid | – | – | – | – | –9,610 | –9,610 | |
| Appropriations | – | – | – | – | – | – | |
| Profit/loss before tax | 8,230 | 9,256 | –16,496 | 6,614 | –38,310 | –15,200 | |
| Tax | – | – | – | – | –26 | –26 | |
| Profit/loss for the period | 8,230 | 9,256 | –16,496 | 6,614 | –38,336 | –15,226 | |
| Other comprehensive income | – | – | – | – | – | – | |
| Total comprehensive income | |||||||
| for the period | 8,230 | 9,256 | –16,496 | 6,614 | –38,336 | –15,226 |
| SEK thousands Note |
Sep 30, 2021 |
Sep 30, 2020 |
Dec 31, 2020 |
|---|---|---|---|
| Non-current assets | |||
| Intangible assets | 3,894 | 5,037 | 4,741 |
| Tangible non-current assets | 2,252 | 859 | 1,764 |
| Deferred tax | 8 | 11 | 8 |
| Shares in Group companies | 277,676 | 346,606 | 306,185 |
| Total non-current assets | 283,830 | 352,513 | 312,698 |
| Current assets | |||
| Receivables from Group companies | 940,380 | 827,649 | 831,000 |
| Current receivables | 8,709 | 1,659 | 5,483 |
| Cash & cash equivalents | 25,624 | 37,314 | 55,450 |
| Total current assets | 974,713 | 866,622 | 891,933 |
| Total assets | 1,258,543 | 1,219,135 | 1,204,631 |
| Equity and liabilities | |||
| Equity | 124,568 | 200,626 | 178,787 |
| Untaxed reserves | 1,038 | 1,038 | 1,038 |
| Non-current liabilities credit institutions | 99,000 | 150,000 | 99,000 |
| Other non-current liabilities | 1,753 | – | – |
| Due to Group companies | 1,017,923 | 853,070 | 913,229 |
| Accounts payable | 2,688 | 3,498 | 5,104 |
| Other current liabilities | 11,573 | 10,903 | 7,473 |
| Total equity and liabilities | 1,258,543 | 1,219,135 | 1,204,631 |
| SEK thousands | Jan-Sep 2021 |
Jan-Sep 2020 |
Full-year 2020 |
|---|---|---|---|
| Opening balance | 178,787 | 194,012 | 194,012 |
| Distribution | –37,723 | – | – |
| Total comprehensive income for the period | –16,496 | 6,614 | –15,227 |
| Closing balance | 124,568 | 200,626 | 178,787 |
The Group's net sales consist of sales of products and royalties for usage of the company's brand. Transfers of goods/royalties are made at fixed points in time.
| Group | Parent Company | |||
|---|---|---|---|---|
| Jan-Sep | Jan-Sep | Jan-Sep | Jan-Sep | |
| SEK thousands | 2021 | 2020 | 2021 | 2020 |
| Cost of premises | 7,287 | 8,450 | 4,006 | 9,039 |
| Selling expenses | 37,782 | 42,790 | 1,844 | 2,139 |
| Marketing expenses | 35,632 | 31,942 | 17,232 | 13,027 |
| Administrative | ||||
| expenses | 24,368 | 35,042 | 8,005 | 10,396 |
| Other | 2,997 | 5,268 | 356 | 1,086 |
| 108,066 | 123,492 | 31,443 | 35,687 |
NOTE 2 OTHER EXTERNAL EXPENSES
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/
https://corporate.bjornborg.com/en/financial-definitions/ https://corporate.bjornborg.com/en/financial-data/
Total assets less non-interest-bearing liabilities and provisions.
Purpose: Capital employed measures capital use and efficiency.
Sales for own stores that were also open in the previous period.
Purpose: To obtain comparable sales between periods for own stores.
Profit after tax in relation to the weighted average number of shares during the period.
Purpose: This measure is used to assess an investment from an owner's perspective.
(DEFINED ACCORDING TO IFRS) Earnings per share adjusted for any dilution effect. Purpose: This measure is used to assess an investment from an owner's perspective.
Equity as a percentage of total assets adjusted for lease liabilities.
Purpose: This measure 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.
Gross profit margin calculated using year-earlier exchange rates.
Purpose: To obtain a currency neutral gross profit margin.
Net sales calculated using year-earlier exchange rates. Purpose: To obtain comparable and currency neutral net sales.
Interest-bearing liabilities excluding lease liabilities less investments and cash & cash equivalents. Purpose: Net debt reflects the company's total debt situation.
Interest-bearing liabilities excluding lease liabilities less investments and cash & cash equivalents divided by operating profit before depreciation/amortization. Purpose: This measure 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: Operating margin is used to measure operating profitability.
Profit before tax plus net financial items. Purpose: This measure facilitates profitability comparisons regardless of the company's tax rate and independent of its funding structure.
Profit before tax as a percentage of net sales. Purpose: Profit margin shows the company's profit in relation to sales.
Profit before tax (per rolling 12-month period) plus financial expenses as a percentage of average capital employed. Average capital employed is calculated as capital employed at end of the period plus capital employed at the same point in time in the preceding year, divided by two. Purpose: This 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 as shareholders' equity at the end of the period plus shareholders' equity during the corresponding period in the preceding year divided by two. Purpose: This measure 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 19, 2021
Heiner Olbrich Chairman
Alessandra Cama Jens Högsted Board member Board member
Anette Klintfeldt Board member
Fredrik Lövstedt Mats H Nilsson Board member Board member
Henrik Bunge CEO
We have reviewed the interim report for Björn Borg AB (publ) for the period January 1 to September 30, 2021. 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 19, 2021 BDO Mälardalen AB
Authorized Public Accountant Authorized Public Accountant Responsible auditor
Johan Pharmanson Carl-Johan Kjellman
Year-end report for 2021 will be released at 7:30 am (CET) on February 25, 2022.
Annual report 2021 in late April 2022.
Annual General Meeting 2022 will be held on May 19, 2022.
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
Jens Nyström, 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, underwear and bags. It also offers footwear and eyewear through licensees. Björn Borg products are sold in around twenty markets, the largest of which are Sweden and the Netherlands. The Björn Borg Group has operations at every level from branding to consumer sales in its own Björn Borg stores. Total Group net sales amounted to SEK 705.2 million in 2020, with an average of 192 employees. The Björn Borg share has been listed on Nasdaq Stockholm since 2007.
The images used in the interim report are taken from Björn Borg's fall/winter 2021 collection.
Björn Borg AB Frösundaviks allé 1 SE-169 70 Solna, Sweden www.bjornborg.com
Björn 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 19, 2021 at 7:30 am (CET).
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