AI Terminal
Fenix Outdoor International AG
Quarterly Report • Jul 22, 2024
8649_ir_2024-07-22_26ec2939-64ed-4205-9252-deda8c6d3e0f.pdf
Quarterly Report
Open in ViewerOpens in native device viewer
FENIX OUTDOOR INTERNATIONAL AG
Interim condensed consolidated financial statements for the period ended 30 June 2024
Second quarter 2024-04-01 – 2024-06-30
- •
- •
- •
- •
- •
- •
- •
Period 2024-01-01 – 2024-06-30
- •
- •
- •
- •
- •
- •
Events after period closing
Holding of own shares
Financial information
Contact person
COMMENTS BY THE EXECUTIVE CHAIRMAN
A disappointing quarter.
The second quarter did not come in as expected and proved very challenging. The retailer market still faced a situation with higher-than-normal inventory, as well as a volatile trading because of weather. There are also indications that a number of retailers are facing some liquidity/financial problems limiting their ability to serve the market. On the positive side I want to point out that the group has made great stride forward in getting the inventory down and thereby the liquidity up. Our net cash position in the end of Q2 shows an improvement of 67 MEUR vs last year, making us able to continue to invest if needed. Given that situation and the general economy there is still a definitive price pressure in the market. We do not know yet, but we might also see a paradigm shift in consumer behavior during strained times, meaning a shift into less expensive products. However, there is also a possibility that the covid behavior gave the industry such a large boost that it is still adjusting.
Our US and Globetrotter operations were mostly hit during this quarter. Both from a sales and financial perspective. In terms of Brands and Global sales business, in the rest of the world, we did see an improvement of the direct orders, but not as large as we had hoped for. However last year numbers included some customers that instead of ordering direct wanted early delivery of fall orders that we due to early deliveries last year then was able to fulfill. We need to keep in mind that the 2nd quarter historically is our most sales sensitive quarter of the year.
Our direct-to-consumer business, a part of the Brands segment, grew with 1.0%, predominantly Fjällräven sales. Another interesting observation is that the sales of our internal brands, except Tierra, outperformed other brands within the period. In the Friluftsgroup, particular Hanwag did so with a growth of 5%. We also saw a strengthening of this during the later weeks of the quarter.
Net sales for the quarter ended at 149.6 MEUR vs last year 156.2 MEUR, a decrease of 4.2%. Primarily driven by the high inventory in the retail sector and lower reorders in Europe. In terms of the split of consumer sales between digital and brick and mortar the changes are relatively small. No conclusions can be drawn, but it seems that some kind of equilibrium between digital and brick and mortar sales might have occurred.
As I stated earlier the second quarter is historically our most sensitive one from a profitability due to us being dependent upon reorders and the retail business of Frilufts. This means that we are very sensitive for volume. Lacking contribution from decreasing volume in general, and lower gross margin in all three segments as well as decrease in Kånken sales could not be made up through by savings program. All summarizing to a disappointing operative result of -6.5 MEUR (0.1) MEUR for the quarter. We also had higher costs in logistics due to the migration of inventory from Almere to Ludwigslust.
Our inventory is down to 246.7 MEUR from 302.7 MEUR last year, a decrease of 56.0 MEUR. Our net cash position is up from -41.7 MEUR to +25.2 MEUR.
Brands
The Brands segment shows decreased sales of 8.2 %. The decrease was driven by a lack of reorders in predominantly Europe. The direct-to-consumer business shows continued growth, but the ecom sales decreased somewhat. The growth in direct to consumer is driven by Fjällräven.
Global Sales
Overall Global Sales was stable in net sales 32.4 MEUR vs 32.1 MEUR last year. The European part of Global Sales showed increased sales of 7%. Asia was hit by slowdowns in South Korea and Taiwan, both countries decreased in local currency as well as Euro.
Frilufts
Sales in the Frilufts operation showed a decrease of 4.3%, from 85.8 MEUR to 82.1 MEUR. This was driven by decreases in predominantly Germany and Sweden. The warm weather situation also created a very volatile situation. In terms of result, this meant a substantial impact on profitability. The Norwegian business is still showing reasonable improvement, but still has a way to go.
North America
The North American did show a slight decrease in sales direct to consumer as well as wholesale, but was also hit by lower Kånken sales, decreasing the marginal contribution.
Digital/Channel development from a Group perspective
Our brick-and-mortar sales decreased from 76.5 MEUR to 74.1 MEUR, -3.1 %. Our digital sales decreased from 33.8 MEUR to 32.0 MEUR, -5.6 %. As we also lost sales in wholesale the proportion of our net sales was stable compared to last year. And knowing that most of our brands outperformed external brands in Frilufts we believe there is a good chance that our brands are doing better than the market in general.
Q3 sales
In terms of our expectations for Q3, it looks reasonable. There is a solid order book in Brands and Global sales. However, given what we just experienced during Q2 as well as last year's weather and the economy, I once again refrain from making any predictions.
Going forward
There are challenges. We are back in another supply chain and transport problematic, given new and slower routing predominantly for Europe. Given the Middle east unrest we are facing higher risk in our purchasing as well as higher costs. Internally we have some minor delays scaling up our operations in Ludwigslust, due to that we are also implementing a new ERP system. We still have to become generally more cost aware. We are also implementing further savings and efficiency programs and we have already seen improvements.
On another note, I am happy to share that we have already started a journey towards more production closer to our markets through our investment in the factories of Viomoda. This will help to further improve our CO2 profile and make us more flexible on one part of our production, decreasing transport-related emissions and help improving our margin over time with less discounting in the end due to a more flexible set-up of production. We also see a great opportunity through this to improve our time to market as well as improve hit rate of new products.
All the best
Martin Nordin, Chairman of the Board
P.S.
A note on the green deal
We have always had pride in the quality of our products, the remarkable cost control and our intrinsic care about nature, which has become part of our DNA at a time when hardly anyone spoke about sustainability and the term "CSR" was not even invented. And it all has served us well.
We have faced a number of problems from the markets, and we have already chosen our way forward in terms of tightened cost control and efficiency enhancement which all is already work in progress.
There are number of further worries, one being the growing legislative framing of CSR and the green change. We embrace the changes and evolution and the green change and have always done so. It is and was an intrinsic process – we wanted to stand for and behind every step we take and every word we speak to it. And with the EU Green Deal the hopes are high that a level playing field emerges and that non-sustainable and cheap free-riding practices come to an end – for the sake of our planet.
" "
| MEUR | Apr-Mar 2024 |
Apr-Jun 2023 |
Jan-Jun 2024 |
Jan-Jun 2023 |
Jul/Jun 2023/2024 |
Jan-Dec 2023 |
|---|---|---|---|---|---|---|
| Net sales | 149.6 | 156.2 | 313.5 | 336.2 | 716.7 | 739.4 |
| EBITDA | 7.2 | 13.5 | 34.4 | 44.7 | 103.3 | 113.7 |
| Operating result | -6.5 | 0.1 | 6.3 | 17.2 | 44.0 | 55.0 |
| Profit margin, % | -4.4% | 0.1% | 2.0% | 5.1% | 6.1% | 7.4% |
| Result before tax | -7.4 | 2.6 | 4.0 | 18.9 | 32.7 | 47.6 |
| Net result for the period | -7.5 | 0.6 | -0.6 | 11.0 | 20.3 | 32.0 |
| Earnings per B-share, EUR *) | -0.56 | 0.05 | -0.05 | 0.83 | 1.42 | 2.37 |
| Solvency rate, % *) | 58.5% | 57.2% | 56.1% |
*) Earnings per share are calculated on outstanding shares. Solvency rate are calculated as Equity as a percent of total assets.
Net sales, MEUR
Operating result, MEUR
THE OPERATION
- ä ä
- ü
- •
Second quarter 2024-04-01 – 2024-06-30
| Brands | Frilufts | Global sales | Common | Group | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Apr-Jun | Apr-Jun Apr-Jun |
Apr-Jun | Apr-Jun | Apr-Jun | Apr-Jun | Apr-Jun | Apr-Jun | Apr-Jun | ||
| 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | |
| External sales, MEUR | ||||||||||
| EBITDA, MEUR | ||||||||||
| Operating result, MEUR |
| Brands | Frilufts | Global sales | Common | Total | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| External sales per market, MEUR |
Apr-Jun 2024 |
Apr-Jun 2023 |
Apr-Jun 2024 |
Apr-Jun 2023 |
Apr-Jun 2024 |
Apr-Jun 2023 |
Apr-Jun 2024 |
Apr-Jun 2023 |
Apr-Jun 2024 |
Apr-Jun 2023 |
| Switzerland | ||||||||||
| Sweden | ||||||||||
| Other Nordic countries | ||||||||||
| Germany | ||||||||||
| Benelux | ||||||||||
| Other Europe | ||||||||||
| Americas | ||||||||||
| Other World | ||||||||||
| Total |
Period 2024-01-01 – 2024-06-30
| Brands | Frilufts | Global sales | Common | Group | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Jan-Jun | Jan-Jun | Jan-Jun | Jan-Jun | Jan-Jun | Jan-Jun | Jan-Jun | Jan-Jun | Jan-Jun | Jan-Jun | ||
| 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | ||
| External sales, MEUR | |||||||||||
| EBITDA, MEUR | |||||||||||
| Operating result, MEUR | |||||||||||
| Number of Stores | |||||||||||
| of which are franchise | |||||||||||
| Non-current assets | |||||||||||
| Cap. Expenditures |
| Brands | Frilufts | Global sales | Common | Total | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| External sales per market, MEUR |
Jan-Jun 2024 |
Jan-Jun 2023 |
Jan-Jun 2024 |
Jan-Jun 2023 |
Jan-Jun 2024 |
Jan-Jun 2023 |
Jan-Jun 2024 |
Jan-Jun 2023 |
Jan-Jun 2024 |
Jan-Jun 2023 |
| Switzerland | ||||||||||
| Sweden | ||||||||||
| Other Nordic countries | ||||||||||
| Germany | ||||||||||
| Benelux | ||||||||||
| Other Europe | ||||||||||
| Americas | ||||||||||
| Other World | ||||||||||
| Total |
THE OPERATION
Brands
Frilufts
Global sales
Common, Liquidity and financial standing
THE OPERATION
Net sales and operating result per segment
| 3 months | 6 months | 12 months | ||
|---|---|---|---|---|
| CONSOLIDATED INCOME STATEMENT | ||||
| MEUR | ||||
| Total income | ||||
| Operating expenses | ||||
| Operating result | ||||
| Result before tax | ||||
| Net result for the period | ||||
| Consolidated Statement of | 3 months | 12 months | 12 months | ||
|---|---|---|---|---|---|
| Comprehensive Income | |||||
| MEUR | |||||
| Net result for the period | |||||
| Total other comprehensive income for the period |
|||||
| Total comprehensive income for the period | |||||
| CONSOLIDATED STATEMENT OF | ||
|---|---|---|
| FINANCIAL POSITION, MEUR | ||
| Assets | ||
| Non-current assets | ||
| Total non-current assets | ||
| Current assets | ||
| Total current assets | ||
| Total assets | ||
| Equity and liabilities | ||
| Total equity | ||
| Liabilities | ||
| Total non-current liabilities | ||
| Total current liabilities | ||
| Total Liabilities | ||
| Total equity and liabilities |
Consolidated statement of changes in equity
| Foreign | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Other | Cash flow | currency | Non- | ||||||
| Statement of changes in Equity MEUR | Share | contributed | hedge | translation | Treasury | Retained | controlling | Total | |
| 0 1 7 | capital | capital | reserve | reserve | shares *) | earnings | Total | interests | Equity |
| 01-01-2023 | 12.4 | 39.8 | 0.6 | -11.6 | -11.2 | 375.0 | 405.0 | 0.0 | 405.0 |
| Net Result for the period | 11.0 | 11.0 | 0.1 | 11.0 | |||||
| Other comprehensive income for the period | -0.2 | -10.1 | -10.2 | -0.1 | -10.3 | ||||
| Total comprehensive income for the period | 0.0 | 0.0 | -0.2 | -10.1 | 0.0 | 11.0 | 0.8 | -0.1 | 0.7 |
| Transactions with non-controlling interests | -0.2 | -0.2 | 0.1 | -0.1 | |||||
| Share based payments**) | 0.0 | 0.0 | |||||||
| Dividends resolved at Annual General Meeting | -17.9 | -17.9 | -17.9 | ||||||
| Transfer of cash flow hedge reserve to inventories | -0.2 | -0.2 | -0.2 | ||||||
| 30-06-2023 | 12.4 | 39.8 | 0.3 | -21.7 | -11.2 | 368.0 | 387.6 | 0.0 | 387.6 |
| Statement of changes in Equity MEUR | Share capital |
Other contributed capital |
Cash flow hedge reserve |
Foreign currency translation reserve |
Treasury shares *) |
Retained earnings | Total | Non- controlling interests |
Total Equity |
|---|---|---|---|---|---|---|---|---|---|
| 01-01-2024 | 12.4 | 39.8 | -0.2 | -12.6 | -11.2 | 389.1 | 417.2 | 0.0 | 417.2 |
| Net Result for the period | -0.6 | -0.6 | 0.1 | -0.6 | |||||
| Other comprehensive income for the period | 0.7 | -2.2 | -1.5 | -1.5 | |||||
| Total comprehensive income for the period | 0.0 | 0.0 | 0.7 | -2.2 | 0.0 | -0.6 | -2.1 | 0.1 | -2.1 |
| Transactions with non-controlling interests | 0.1 | 0.1 | -0.1 | 0.0 | |||||
| Share based payments**) | 0.0 | 0.0 | |||||||
| Dividends resolved at Annual General Meeting | -17.1 | -17.1 | -17.1 | ||||||
| Transfer of cash flow hedge reserve to inventories | 0.1 | 0.1 | 0.1 | ||||||
| 30-06-2024 | 12.4 | 39.8 | 0.5 | -14.7 | -11.2 | 371.4 | 398.1 | 0.0 | 398.1 |
| Consolidated statement of cash flows | |||
|---|---|---|---|
| MEUR | |||
| OPERATING ACTIVITIES | |||
| Cash flow from operating activities before changes in working capital | |||
| Cash flow from operating activities | |||
| INVESTING ACTIVITIES | |||
| Cash flow from investing activities | |||
| FINANCING ACTIVITIES | |||
| Cash flow from financing activities | |||
Notes to the financial report
Note 1 Accounting principles
Note 2 Right of use assets
| 30.06.2024, MEUR | Brands | Frilufts | Global sales |
Common | Total | 31.12.2023, MEUR | Brands | Frilufts | Global sales |
Common | Total |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Right-of use assets | 26.7 | 97.0 | 1.4 | 3.9 | 129.0 | Right-of-use assets | 30.3 | 84.9 | 1.4 | 0.6 | 117.2 |
| Lease liabillities | -28.7 | -98.9 | -1.5 | -4.7 | -133.8 | ||||||
| Lease liabilities | -32.6 | -86.3 | -1.3 | -0.5 | -120.7 |
| Global | Global | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Brands | Frilufts | sales | Common | Total | Brands | Frilufts | sales | Common | Total | ||
| Depreciation | -4.5 | -11.9 | -0.5 | -0.6 | -17.4 | Depreciation | -9.0 | -23.2 | -1.2 | -0.8 | -34.2 |
| Interest cost | -0.4 | -1.0 | -1.5 | Interest cost | -0.8 | -1.5 | -2.3 |
Note 3 Exchange rates
| Average rate | Balance sheet closing rate | |||||||
|---|---|---|---|---|---|---|---|---|
| Jan-June 2024 |
Jan-June 2023 |
Jan-Dec 2023 |
2024-06-30 | 2023-06-30 | 2023-12-31 | |||
| EUR/SEK | 11.4236 | 11.4152 | 11.4842 | 11.3595 | 11.8055 | 11.0960 | ||
| EUR/CHF | 0.9647 | 0.9880 | 0.9712 | 0.9634 | 0.9788 | 0.9260 | ||
| EUR/USD | 1.0791 | 1.0809 | 1.0826 | 1.0705 | 1.0866 | 1.1050 | ||
| CHF/SEK | 11.8418 | 11.5536 | 11.8253 | 11.7911 | 12.0612 | 11.9827 |
Note 4 Risks
Note 5 Hedge accounting
| Market value, TEUR | ||
|---|---|---|
| FX Forwards | ||
Note 6 Segment reporting – sales and operating result
| Brands | Frilufts | Global sales | Common | Group | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Apr-Jun | Apr-Jun | Apr-Jun | Apr-Jun | Apr-Jun | Apr-Jun | Apr-Jun | Apr-Jun | Apr-Jun | Apr-Jun | |
| 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | |
| External sales, MEUR | ||||||||||
| EBITDA, MEUR | ||||||||||
| Operating profit, MEUR |
| Brands | Frilufts | Global sales | Common | Group | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Jan-Jun | Jan-Jun | Jan-Jun | Jan-Jun | Jan-Jun | Jan-Jun | Jan-Jun | Jan-Jun | Jan-Jun | Jan-Jun | |
| 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | |
| External sales, MEUR | ||||||||||
| EBITDA, MEUR | ||||||||||
| Operating profit, MEUR | ||||||||||
| Number of Stores | ||||||||||
| of which are franchise | ||||||||||
| Non-current assets | ||||||||||
| Cap. Expenditures |
| Brands | Frilufts | Global sales | Common | Total | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| External sales per market, MEUR |
Jan-Jun 2024 |
Jan-Jun 2023 |
Jan-Jun 2024 |
Jan-Jun 2023 |
Jan-Jun 2024 |
Jan-Jun 2023 |
Jan-Jun 2024 |
Jan-Jun 2023 |
Jan-Jun 2024 |
Jan-Jun 2023 |
| Switzerland | ||||||||||
| Sweden | ||||||||||
| Other Nordic countries | ||||||||||
| Germany | ||||||||||
| Benelux | ||||||||||
| Other Europe | ||||||||||
| Americas | ||||||||||
| Other World | ||||||||||
| Total |
Note 7 Outstanding options from acquisitions
Note 8 Acquisitions, Partnership and Sale of business
Viomoda
Fenix Outdoor has entered into a partnership with the German outdoor brand Maloja to operate apparel production at their existing production facility, Viomoda, in Plovdiv, Bulgaria. This is the first step toward establishing apparel production in Europe at Fenix Outdoor. Fenix Outdoor has the option to acquire up to 49% of Viomoda, the production subsidiary of Maloja. The option has not had any and is not expected to have any significant financial effect in Fenix Outdoor's consolidated accounts.
2023
Primus
In December 2022 Fenix Outdoor signed an agreement to divest Primus AB and its subsidiary Primus Eesti Ou to Silva Sweden AB. The divestment of Primus AB and its subsidiary Primus Eesti Ou that was signed in December 2022 had no significant effect on Fenix Outdoor's consolidated income statements. The closing was during quarter two 2023 calculated to be to a salesprice of MEUR 7.1 with a loss of MEUR -0.4. During quarter four 2023 the salesprice were adjusted to MEUR 6.9 and the loss were adjusted in quarter four 2023. In this interim report the loss of MEUR -0.4 is included in Loss recognized in Financial result P/L.
Exist Norway
In June 2023 Naturkompaniet AS, a subsidiary within the Fenix Outdoor group acquired the Norwegian ecommerce site Exist Internet AS and its two subsidiaries Fjellshop AS and Fjellshop Tromso AS, including two stores, one in Lillehammer and one in Tromso. The consideration amounted to MEUR 2.0 and net cash acquired of MEUR 0.3 resulted in a cash outflow of MEUR 1.7. The provisional acquisition resulted in a preliminary goodwill position of MEUR 1.1 and is not expected to be tax deductible. The acquisition had a limited effect on the total financial figures of the Group.
Note 9 Transactions with related parties
There have been no major changes in relations to transactions with related parties compared to 2023.
| Note 10 | Events after period closing | |||
|---|---|---|---|---|
| Alexander Koska | Martin Nordin | Susanne Nordin | Mats Olsson |
|---|---|---|---|
| Ulf Gustafsson | Rolf Schmid | Sebastian von Wallwitz |
Calendarium
