Nelly Group — Interim / Quarterly Report 2011

Oct 17, 2011

Interim report, 1 January – 30 September 2011

61% YEAR ON YEAR SALES GROWTH IN THE THIRD QUARTER

CDON Group AB (publ.) ("CDON Group" or "the Group") (NASDAQ OMX Stockholm's Mid Cap market: CDON) today announced its financial results for the third quarter and nine months ended 30 September 2011.

Third Quarter Highlights

• Net sales up 61% year on year to SEK 826.4 (513.7) million with an organic growth of 33% (29%)*
• Gross profit of SEK 136.5 (93.0) million with a gross margin of 16.5% when excluding non-recurring items
• Operating profit of SEK 33.7 (30.8) million and operating margin of 4.1% when excluding non-recurring items
• Net income of SEK 11.5 (19.3) million
• Basic earnings per share of SEK 0.18 (4.05)

Nine Months Highlights

• Net sales up 45% to SEK 2,087.3 (1,441.1) million with an organic growth of 31% (27%)*
• Gross profit of SEK 372.8 (281.2) million with a gross margin of 17.9% when excluding non-recurring items
• Operating profit of SEK 77.6 (96.5) million and operating margin of 3.7% when excluding non-recurring costs
• Net income of SEK 34.6 (64.2) million
• Basic earnings per share of SEK 0.53 (32.76)
• Acquisition of white goods and household appliances e-retailer Tretti AB for SEK 346 million in June

* Excluding Tretti AB and Rum21 AB

Mikael Olander, President and CEO of CDON Group, commented: "I am very pleased to report another record quarter for CDON Group. While we undertake substantial investments in geographical expansion and in new businesses, we deliver our strongest third quarter ever, in terms of both revenue and profit, adjusting for oneoff costs."

"All our four business segments continue to grow fast and contribute to the Group's profitability. The record sales growth shows our ability to develop our operations, acquire and launch new online stores and to expand into new markets, while maintaining profitability. During this year we have acquired two businesses. In the third quarter we also launched a new business, the shopping-club Members.com."

"We continue to invest heavily in the development of all our existing companies. The ongoing expansion of the Sports & Health segment in Denmark, Norway and Finland contributes to the segment's continued high growth and the ongoing shift from media products towards consumer electronics in the Entertainment segment also strengthened the Group's revenues during the third quarter. Both the Fashion and the Home & Garden segments continue their geographic expansion with the Nordic roll-out of Tretti.se and the launch of Nelly.com on 20 new markets in the European Union, which is a first step towards a global launch of Nelly.com. We have also during September and October rolled out the online furniture and interior decoration retailer Rum21 in all Nordic countries."

"We still expect to deliver a slight year on year increase in the underlying Group operating margin for the full year 2011, when adjusted for acquisitions, launches, expansions and the costs of being an independent listed company. However, a continued faster than expected growth of consumer electronic products within the Entertainment segment could render a revision."

"We are on track regarding sales, gross margins and EBIT levels and look forward with confidence to Q4 historically CDON Group's strongest quarter of the year."

Significant events during and after the end of the third quarter

Management changes

The Group's President and CEO Mikael Olander tendered his resignation to the Board on 15 August 2011. Mikael Olander has a notice period of twelve months and will continue in his current role until a replacement has been appointed and his responsibilities have been handed over.

Launch of Members.com

CDON Group launched the shopping-club Members.com throughout the Nordic region in September 2011. Members.com is a new and exclusive e-shopping club that daily presents new and unique offerings in fashion, beauty and lifestyle for selected members. Members.com's core offerings are fashion apparel and accessories as well as goods and services related to lifestyle and design.

Geographical expansion of Nelly.com

CDON Group launched the fashion retailer Nelly.com across the entire EU on 29 September 2011, thus increasing its geographic reach into 20 new markets. In conjunction with the European launch, CDON Group also announced an upcoming global launch. The e-commerce store is now available in English, German, Swedish, Danish, Norwegian, Finnish and Dutch language versions.

Recognition of one-off costs

CDON Group announced on 10 October 2011 that it would recognise SEK 15 million of one-off costs in the results for the third quarter and nine months ended 30 September 2011. These costs reflect a restatement of Norwegian customs duties and VAT over the past three years, which had, due to an incorrect setting in a new ERP-system, historically been inaccurately reported to Norwegian authorities by Nelly.com and Gymgrossisten.com. The recognition will not affect the Group's underlying business, profitability or revenue growth. The costs have been accounted for in a separate line in the Group's income statement and are included in "Group central operations" in the segment reporting.

Geographic expansion of Rum21

CDON Group expanded the online furniture and interior decoration retailer Rum21 pan-Nordic following launches of Room21.dk in Denmark and Room21.fi in Finland during September 2011, and the launch of Room21.no in Norway during October 2011. Rum21.se was acquired by CDON Group on 1 February 2011.

Financial summary

(SEK Thousand)	2011 Jul-Sep	2010 Jul-Sep	Change(%)	2011 Jan-Sep	2010 Jan-Sep	Change (%)
Net sales	826,399	513,741	60.9%	2,087,331	1,441,101	44.8%
Gross profit excl non-recurring items	136,508	93,030	46.7%	372.820	281,186	32.6%
Gross margin (%)	16.5%	18.1%		17.9%	19.5%
Gross profit incl	121,508	93,030	30.6%	357,820	281,186	27.3%
non-recurring items* Gross margin (%)	14.7%	18,1%		17.1%	19.5%
Operating profit excl
non-recurring items	33,678	30,780	9.4%	77,661	96,545	-19.6%
Operating margin (%)	4.1%	6,0%		3.7%	6.7%
Operating profit incl non-recurring items*	18,678	30,780	-39.3%	57,921	96,545	-40.0%
Operating margin (%)	2.3%	6,0%		2.8%	6.7%
Net interest & other financial items	-5,377	-5,517		-12,777	-14,152
Income before tax	13,301	25,263		45,144	82,393
Net income	11,537	19,251		34,607	64,232
Basic earnings per share (SEK)**	0.18	4.05		0.53	32.76
Diluted earnings per share (SEK)**	0.16	4.05		0.48	32.76
Total assets	1,346,785	729,863	84.5%	1,346,785	729,863	84.5%

* Including one-off costs of SEK 15.0 million, related to a restatement of Norwegian customs duties and VAT three years back. The operating profit for Jan-Sept 2011 also includes one-off costs of SEK 4.7 million related to the acquisition of Tretti AB.

** Earnings per share for Jul-Sept 2010 and Jan-Sept 2010 are based on the average number of issued shares for these periods which are 4,774,682 and 1,940,552 respectively. The weighted average number of shares outstanding before dilution for the third quarter of 2011 amounted to 66,342,124. The weighted average number of shares outstanding after dilution in the third quarter of 2011 amounted to 72,921,071.

Group summary

Group net sales were up 61% year on year in the quarter and 45% for the year to date and organically sales were up 33% year on year in the quarter and 31% for the year to date, following sales growth and continued market share gains for each business segment. The Group's sites attracted 41.3 (26.8) million visits during the quarter and generated 1.4 (1.1) million orders during the period. A total of 111.0 (76.7) million visits and 3.8 (3.1) million orders were registered during the first nine months of the year.

The Group's consolidated cost of goods sold increased by 68% year on year to SEK 704.9 (420.7) million in the quarter and by 49% to SEK 1,729.5 (1,159.9) million for the year to date. The lower year on year gross margins of 14.7% (18.1%) in the quarter and 17.1% (19.5%) for the year to date primarily reflected the one-off costs related to the restatement of Norwegian customs duties and VAT, and for the nine months period also by the adverse impact on Group sales of the appreciation of the Group's reporting currency against its other operating currencies. The gross margin was also impacted by the ongoing shift in the Entertainment segment away from the sale of media products towards growth categories such as consumer electronic products, and affected by

the consolidation of Tretti.com from June 3, as the company's gross margins are somewhat lower than the Group's average.

Sales, general and administrative expenses increased by 67% year on year to SEK 105.1 (63.0) million in the quarter and by 65% to SEK 303.4 (183.6) million for the first nine months, which reflected the higher sales volumes from existing and new business lines, investments in the launch of Members.com in the Nordics and Nelly.com in the EU, as well as marketing initiatives, such as Nelly.com in the German market and for Gymgrossisten's internet store Bodystore.dk in Denmark. The Group also incurred higher year on year TV advertising costs as a stand-alone company following the signing of a new agreement with the former parent company Modern Times Group, which took effect from the beginning of 2011. Group central costs of SEK 19.8 (0.5) million in the third quarter and SEK 33.7 (0.9) million for the year to date reflected the Group's status as a stand-alone and publicly listed company with its own central functions and governing bodies, as well as nonrecurring cost of SEK 15 million associated with the restatement of Norwegian customs duties and VAT and SEK 4.7 million associated with the acquisition of Tretti AB during the second quarter.

The Group therefore reported an operating profit of SEK 33.7 (30.8) million in the quarter, and SEK 77.7 (96.5) million for the year to date, with operating margins of 4.1% (6.0%) and 3.7% (6.7%) when excluding the nonrecurring costs mentioned above. The Group reported an operating profit of SEK 18.7 million in the quarter and SEK 57.9 million for the year to date including non-recurring costs.

The Group´s net interest and other financial items amounted to SEK -5.4 (-5.5) million in the third quarter and SEK -12.8 (-14.2) million for the year to date, which primarily reflected the interest costs related to the convertible bond issued by CDON Group in December 2010, as well as the Group´s revolving credit facility.

Group pre-tax profits amounted to SEK 13.3 (25.3) million in the third quarter and SEK 45.1 (82.4) million for the year to date.

The Group reported income tax expenses of SEK 1.8 (6.0) million in the third quarter and SEK 10.5 (18.2) million for the first nine months of the year. Group consolidated net income therefore totalled SEK 11.5 (19.3) million in the quarter and SEK 34.6 (64.2) million for the year to date.

The total number of shares amounted to 66,532,124 at the end of the third quarter and the total number of outstanding shares amounted to 66,342,124. The Group reported basic earnings per share of SEK 0.18 (4.05) for the quarter and SEK 0.53 (32.76) for the year to date, based on weighted average number of shares during the period. The Group reported diluted earnings per share of SEK 0.16 (4.05) for the quarter and SEK 0.48 (32.76) for the year to date, based on weighted average number of shares during the period.

Segmental Operating Review

Entertainment

(Tkr)	2011 Jul-Sep	2010 Jul-Sep	Change (%)	2011 Jan-Sep	2010 Jan-Sep	Change (%)
Net sales	429,844	328,270	30.9%	1,156,847	930,183	24.4%
Operating profit	23,734	20,951	13.3%	51,795	56,312	-8.0%
Operating margin (%)	5.5%	6.4%		4.5%	6.1%
No. of visits ('000)	18,991	15,875	19.6%	53,917	45,376	18.8%
No. of orders ('000)	954	867	10.0%	2,707	2,425	11.6%
Avr. shopping basket (SEK)	429	364	17.9%	404	363	11.3%

The Entertainment segment comprises the online stores CDON.com, BookPlus.fi and Lekmer.com. The segment sales were up 31% year on year in the third quarter and up 24% for the year to date. The segment accounted for 52% (64%) of total Group sales in the third quarter and 55% (65%) for the first nine months period.

Media products grew in the third quarter despite the fact that the market for films, games and music declined. The ongoing shift from media products towards new growth areas such as consumer electronics and small appliances continues to accelerate and to drive the growth in this segment. In addition, toys developed strongly as a result of the continued broadening of the product range, and reported three-digit growth in the quarter. All product categories strengthened their positions and their market shares in both periods.

The first step in the development of CDON.com from a store to a shopping-mall was taken in the third quarter as Lekmer.com's assortment of toys was integrated and is now also available at CDON.com.

The segment's operating income and the average basket value increased during the quarter compared to last year as a result of increased sales volumes and the shift towards consumer electronics that have higher order values than media products. Consumer electronics is now the largest product group within Entertainment. The fast transition from media products is set to continue, leading to lower gross margins. The operating margin is impacted in the short term by market investments in Lekmer.com

(Tkr)	2011 Jul-Sep	2010 Jul-Sep	Change(%)	2011 Jan-Sep	2010 Jan-Sep	Change (%)
Net sales	159,613	112,488	41.9%	455,506	298,494	52.6%
Operating profit	2,457	1,458	68.5%	6,382	14,221	-55.1%
Operating margin (%)	1.5%	1.3%		1.4%	4.8%
No. of visits ('000)	17,892	9,352	91.3%	47,555	26,769	77.6%
No. of orders ('000)	224	159	40.9%	668	439	52.2%
Avr. shopping basket (SEK)	686	693	-1.0%	662	690	-4.1%

Fashion

The Fashion segment comprises the online stores Nelly.com, Heppo.com and Members.com. The segment sales were up 42% year on year in the quarter and up 53% for the year to date. The segment also accounted for 19% (22%) of total Group sales in the third quarter and 22% (21%) for the nine months period.

Nelly.com was test-launched in the Netherlands and in Austria during the first quarter 2011. At the end of the third quarter, Nelly.com was launched across the entire EU, thereby increasing its reach to 20 new markets. Nelly.com is now available in English, German, Swedish, Danish, Norwegian, Finnish and Dutch language versions. A global launch is planned for during 2012.

Heppo.com expanded its assortment during the quarter and continues to develop at a fast pace.

Members.com was launched in the Nordic region in the third quarter and has come off to a good start. Members.com is a new and exclusive shopping club with daily unique offerings in fashion, beauty and lifestyle for selected members.

The segment's strong underlying development is stressed by the fact that the operating income and operating margin increased during the quarter, while absorbing the costs related to the launch of Members.com in the Nordics, the launch of Nelly.com in 20 new European countries, the continued expansion of Heppo.com in the Nordic region, and the continued expansion of Nelly.com in Germany, the Netherlands and Austria.

Sports & Health

(Tkr)	2011 Jul-Sep	2010 Jul-Sep	Change (%)	2011 Jan-Sep	2010 Jan-Sep	Change (%)
Net sales	93,412	72,983	28.0%	280,073	212,424	31.8%
Operating profit	9,046	8,844	2.3%	29,489	26,953	9.4%
Operating margin (%)	9.7%	12.1%		10.5%	12.7%
No. of visits ('000)	2,207	1,547	42.7%	6,623	4,539	45.9%
No. of orders ('000)	129	100	29.0%	403	290	39.0%
Avr. shopping basket (SEK)	723	731	-1.1%	693	727	-4.7%

The Sports & Health segment comprises the online stores Gymgrossisten.com, Fitnesstukku.fi and Bodystore.com. The segment's sales were up 28% year on year in the quarter and up 32% for the year to date. The segment accounted for 11% (14%) and 13% (15%) of total Group sales for the two respective periods.

Gymgrossisten.com continued to develop strongly and increased its market shares in all markets during the third quarter, partly as a result of marketing efforts to develop the company's position in Finland, Norway and Denmark.

The segment's operating profit was up 2% year on year in the third quarter, and up 9% for the year to date. The segment's operating margin was down year on year as a result of the previously mentioned investments in market activities.

Home & Garden

(Tkr)	2011 Jul-Sep	2010 Jul-Sep	Change (%)	2011 Jan-Sep	2010 Jan-Sep	Change (%)
Net sales	143,530	-	-	194,916	-	-
Operating profit	3,194	-	-	3,940	-	-
Operating margin (%)	2.2%	-	-	2.0%	-	-
No. of visits ('000)	2,199	-	-	2,898	-	-
No. of orders ('000)	51	-	-	65	-	-
Avr. shopping basket (SEK)	2,781	-	-	2,907	-	-

The Home & Garden segment comprises the recently acquired online-shop Tretti.com and Rum21.se, which was previously reported as part of the fashion segment. The segment's sales accounted for 17% (-) and 9% (-) of total Group sales for the quarter and year to date respectively.

Tretti.com developed well and has strengthened its market shares during the quarter. Marketing activities associated with Rum21's expansion to Norway, Denmark and Finland as well as investments in increased sales activities in Sweden has affected the operating profit for the segment during the quarter.

Financial position

Group total assets grew by 85% year on year to SEK 1,346.8 (729.9) million. At the end of the second quarter, the Groups total assets amounted to SEK 1,287.9 million. The increase reflected the ongoing rapid expansion of the Group. Inventory levels increased year on year to SEK 474.9 (219.2) million, compared to SEK 382.4 million at the end of the second quarter of 2011, which reflected the higher proportion of Group sales generated from the more inventory intensive Fashion and Sports & Health segments, the expansion of the Group's product categories and assortments, e.g. consumer electronics within the Entertainment segment as well as a general increase in inventory levels in anticipation of the Christmas season.

Cash flow from operating activities before changes in working capital increased to SEK 30.9 (26.3) million in the quarter but decreased to SEK 51.1 (81.9) million for the first nine months of the year, and included SEK 18.9 million of corporate tax payments incurred during 2010. The Group reported a SEK -59.4 (14.2) million change in working capital in the quarter and a SEK -161.1 (-97.5) million change for the nine months period. Capital employed decreased by SEK 6.0 million year on year, to SEK 766.9 million in the third quarter. Therefore the Group's rolling twelve month return on capital employed declined year on year to 15.8% (44.1%) in the third quarter, which mainly reflected the acquisition of Tretti AB.

Group cash flow to investing activity amounted to SEK -10.3 (-1.6) million in the quarter and SEK -336.3 (-8.6) million for the first nine months, which primarily reflected the SEK -5.3 million net cash flow impact from the acquisition of Rum21 AB in February and the SEK -317.5 million net cash flow impact from the acquisition of Tretti AB in June.

Group cash flow from financing activities amounted to SEK -35.5 (-32.6) million in the quarter and SEK 150.0 (42.5) million for the first nine months, which reflected the revolving credit facility and an amortization of the facility during the quarter.

The Group's total interest-bearing borrowings amounted to SEK 377.8 (84.9) million at the end of the period, compared to SEK 396.4 million at the end of the second quarter 2011. This increase mainly reflected the revolving credit facility and the convertible issued by Modern Times Group.

The Group's cash and cash equivalents decreased by SEK -73.8 (6.3) million to SEK 135.5 (21.3) million at the end of the quarter, compared to SEK 209.3 million at the end of the second quarter 2011. The Group therefore had a net debt position (defined as interest-bearing liabilities less cash and cash equivalents) of SEK 242.3 (net cash of 81.0) million at the end of the reporting period, compared to a net cash position of SEK 187.1 million at the end of the second quarter of 2011.

Parent company

The CDON Group parent company reported sales of SEK 8.6 (0.0) million in the quarter and SEK 28.2 (0.0) million for the first nine months, 100.0% and 99.9% of it to companies within the Group for the respective period. Administrative expenses amounted to SEK -13.2 (-0.5) million in the quarter and SEK -41.4 (-1.3) million for the year to date.

Other net financial items amounted to SEK -4.6 (-2.5) million in the quarter and SEK -11.1 (-7.6) million for the first nine months. Income before tax amounted to SEK -9.2 (-3.0) million in the quarter and SEK -24.3 (-8.9) million for the year to date.

The parent company reported cash and cash equivalents of SEK 82.2 (0.1) million, which reflected the Group's cash pool including the funds of SEK 250.0 million pertaining to the convertible bond.

The parent company has not made any investments in non-current assets during the quarter. During the first nine months the parent company investments of SEK 359.6 million in non-current assets, relating to the acquisition of Tretti AB and 90.1% of the shares of Rum21 AB.

Accounting policies

This report has been prepared in accordance with 'IAS 34 Interim Financial Reporting' and the 'Annual Accounts Act'. The interim report for the parent company has been prepared in accordance with the 'Annual Accounts Act'. The accounting policies in the Group's consolidated financial statements and the parent company's financial statements have been prepared according to the same accounting policies and calculation methods as the 2010 annual accounts.

Risks and uncertainties

Several factors could affect CDON Group's earnings and operations, most of which can be managed through internal procedures but some of which are controlled by external factors. Risks and uncertainties include IT and control systems, suppliers, seasonal variations and currencies, new market entries, changes in market conditions, and changes in e-commerce spending behaviour. The parent company is also subject to interest rate risks. The 2010 Annual Report contains a more comprehensive description of the risks and uncertainty factors affecting the Group in the Management Report and in Note 20.

Related party transaction

Related party transactions for the period are of the same character and amounts as the transactions described in the 2010 Annual Report.

Other information

Annual General Meeting of shareholders 2012

CDON Group's 2012 Annual General Meeting of shareholders will be held on 8 May 2011 in Stockholm. Shareholders wishing to have matters considered at the Annual General Meeting should submit their proposals in writing to ir@cdongroup.com or to CDON Group AB, Box 385, SE- 201 23 Malmö, Sweden, at least seven weeks before the Annual General Meeting, in order that proposals may be included in the notices to the meeting. Further details on how and when to register will be published in advance of the meeting.

Nomination Committee for the 2012 Annual General Meeting of shareholders

A Nomination Committee of major shareholders in CDON Group has been formed in accordance with the resolution of the 2011 Annual General Meeting, The Nomination Committee is comprised of Cristina Stenbeck on behalf of Investment AB Kinnevik; Ryan Schaper on behalf of Point Lobos Capital, LLC; Jeffrey Pierce on behalf of Luxor Capital Group LP; and Björn Lind on behalf of AMF and AMF Funds.

Fourth Quarter and Full Year 2011 Financial Results

CDON Group's results for the fourth quarter and full year ended 31 December 2011 will be published on 1 February 2012.

17 October 2011

Mikael Olander, President & CEO

CDON Group AB Bergsgatan 20 Box 385 SE-201 23 Malmö Corporate ID number: 556035-6940

The company will host a conference call today at 15.00 Stockholm time, 14.00 London time and 09.00 New York time.

To participate in the conference call, please dial: Sweden: +46 (0)8 5593 6764 International: +44 (0)20 3106 4822 US: +1 646 254 3361 The access pin code for the conference call is 9438653. To listen to the conference call online, please go to www.cdongroup.com.

***

For additional information, please visit www.cdongroup.com or contact:

Mikael Olander, President & Chief Executive Officer Phone: +46 (0) 10 703 20 00

Investor and analysts enquiries:

Martin Edblad, Chief Financial Officer Phone: +46 (0) 700 80 75 03 E-mail: ir@cdongroup.com

Media enquiries: Fredrik Bengtsson, Head of Communications Phone: +46 (0) 700 80 75 04 E-mail: press@cdongroup.com

About CDON Group

CDON Group is the leading e-commerce group in the Nordic region. Established in 1999, the Group has continuously expanded its product portfolio and is now a leading e-commerce player in the Entertainment (CDON.COM, BookPlus.fi, Lekmer.com), Fashion (Nelly.com, Heppo.com Members.com), Sport & Health (Gymgrossisten.com, Bodystore.com) and Home & Garden (Tretti.com and Rum21.se) segments. CDON Group's nine online stores attracted approximately 115 million site visits and two million unique customers in 2010.

The information in this announcement is that which CDON Group AB is required to disclose under the Securities Markets Act. This information was released for publication at 13:00 CET 17 October 2011.

Auditors' Review Report concerning this interim report

Introduction

We have reviewed the interim report for CDON Group AB as of September 30, 2011 and the nine month period ending on this date. The Board of Directors and the President and CEO are responsible for the preparation and presentation of this interim report in accordance with IAS 34 and the Swedish Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.

The focus and scope of the review

We conducted our review in accordance with the Standard on Review Engagements (SÖG) 2410, Review of the 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, performing an analytical examination and applying other review procedures. A review has a different focus and is substantially less in scope than an audit conducted according to 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. Accordingly, the conclusion expressed based on a review does not constitute the same level of assurance as a conclusion based on an audit.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the interim report, in all material respects, is not prepared for the Group in accordance with IAS 34 and the Swedish Annual Accounts Act and for the Parent Company in accordance with the Swedish Annual Accounts Act.

Stockholm, 17 October 2011

KPMG AB

George Pettersson Authorized Public Accountant

CONDENSED CONSOLIDATED	2011	2010	2011	2010	2010
INCOME STATEMENT (SEK thousand)	Jul-Sep	Jul-Sep	Jan-Sep	Jan-Sep	Jan-Dec
Net sales	826,399	513,741	2,087,331	1,441,101	2,210,034
Cost of goods and services	-689,891	-420,711	-1,714,511	-1,159,915	-1,789,814
Non-recurring items*	-15,000		-15,000
Gross profit	121,508	93,030	357,820	281,186	420,220
Sales and administration expenses	-105,106	-63,028	-303,384	-183,633	-287,382
Other operating income and expenses, net	2,276	778	3,485	-1,008	1,790
Operating profit	18,678	30,780	57,921	96,545	134,628
Net interest & other financial items	-5,377	-5,517	-12,777	-14,152	-18,799
Profit before tax	13,301	25,263	45,144	82,393	115,829
Tax	-1,764	-6,012	-10,537	-18,161	-25,595
Net income for the period	11,537	19,251	34,607	64,232	90,234
Attributable to:
Equity holders of the parent	11,800	19,339	35,115	63,570	90,835
Non-controlling interests	-263	-88	-508	662	-601
Net income for the period	11,537	19,251	34,607	64,232	90,234
Basic earnings per share (SEK)**
Diluted earnings per share (SEK)**	0.18	4.05	0.53	32.76	5.00
	0.16	4.05	0.48	32.76	4.90

* For an explanation of the non-recurring items please see heading "Recognition of one-off costs" under the section "Significant events during and after the end of the third quarter".

** Earnings per share for the period Jun-Sep and Jan-Sept 2011 has been calculated on the average number of outstanding shares for the period, amounting to 66,342,124.Earnings per share for Jul-Sept 2010 and Jan-Sept 2010 are based on the average number of outstanding issued shares for these periods which are 4,774,682 and 1,940,552 respectively. The earnings per share for the period Jan-Dec 2010 have been recalculated to reflect a 250:1 share split and two share issues, by which the amount of issued shares increased in September from 500,000 to 66,045,122, and in October to 66,342,124.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
CONDENSED (SEK thousand)
Profit for period
	11,537	19,251	34,607	64,232	90,234
Other comprehensive income
Translation difference for the period	766	-911	1,004	-2,292	-3,250
Other comprehensive income for the period	766	-911	1,004	-2,292	-3,250
Total comprehensive income for period	12,303	18,340	35,611	61,940	86,984
Total comprehensive income attributable to:
Parent company shareholders	12,566	18,428	36,119	61,278	87,585
Non-controlling interests	-263	-88	-508	662	-601
Total comprehensive income for the period	12,303	18,340	35,611	61,940	86,984
Shares outstanding at period's end*	66,342,124	66,045,122	66,342,124	66,045,122	66,342,124
Shares outstanding at period's end, incl convertible*	72,921,071	66,045,122	72,921,071	66,045,122	72,921,071
Average number of shares, basic*	66,342,124	4,774,682	66,342,124	1,940,552	18,153,748
Average number of shares, diluted*	72,921,071	4,774,682	72,921,071	1,940,552	18,694,484

* Outstanding shares at the end of the reporting period and weighted average number of shares before and after dilution for the period Jan-Dec 2010 have been recalculated with regards to the share split 250:1 and two share issues, where the number of shares increased from 500,000 to 66,045,122 in September, and to 66.342.124 in October.

CONSOLIDATED STATEMENT OF FINANCIAL	2011	2010	2010
POSITION CONDENSED (SEK thousand)	30-Sep	30-Sep	31-Dec
Non-current assets
Goodwill	447,579	192,568	188,966
Other intangible assets	134,837	66,425	65,878
Total intangible assets	582,416	258,993	254,844
Financial non-current assets	1,817	0	0
Tangible non-current assets	8,715	3,404	3,660
Total non-current assets	592,948	262,397	258,504
Current assets
Inventories		219,188	251,284
	474,946
Current interest-bearing receivables	0	144,534	0
Current non-interest-bearing receivables	143,378	82,411	73,066
Total receivables	143,378	226,945	73,066
Cash and cash equivalents	135,513	21,333	431,343
Total current assets	753,837	467,466	755,693
Total assets		729,863	1,014,197
	1,346,785
Equity
Equity attributable to owners of the parent	382,030	308,373	345,665
Non-controlling interest	7,030	2,035	879
Total equity	389,060	310,408	346,544
Non-current liabilities
Non interest bearing
Deferred tax liability	40,730	15,870	26,748
Other provisions	4,814	4,515	2,397
Interest bearing Long term loans		0	0
Convertible bond	150,000	0	207,204
Total non-current liabilities	212,795	20,385	236,349
	408,339
Current liabilities
Current interest-bearing liabilities	15,000	84,907	0
Current non-interest-bearing liabilities	534,386	314,163	431,304
Total current liabilities	549,386	399,070	431,304
Total equity and liabilities		729,863	1,014,197
	1,346,785

CONSOLIDATED STATEMENT OF CASH FLOWS	2011	2010	2011	2010	2010
CONDENSED (SEK thousand)	Jul-Sep	Jul-Sep	Jan-Sep	Jan-Sep	Jan-Dec
Cash flow from operating activities	30,945	26,335	51,126	81,903	126,162
Changes in working capital	-59,377	14,151	-161,111	-97,536	-32,876
Cash flow from operations	-28,432	40,486	-109,985	-15,633	93,286
Investments in subsidiaries*	0	0	-322,757	-5,055	-4,459
Investments in other non-current assets	-10,298	-1,640	-13,508	-3,466	-5,373
Other cash flow from investing activities	0	10	0	-45	0
Cash flow to/from investing activities	-10,298	-1,630	-336,265	-8,566	-9,832
Other cash flow from/to financing activities	-35,474	-32,560	150,000	42,487	353,808
Cash flow to/from financing activities	-35,474	-32,560	150,000	42,487	353,808
Change and cash equivalents for the period	-74,204	6,296	-296,250	18,288	437,262
Cash and cash equivalents at period's start	209,310	15,037	431,343	3,045	3,045
Translation difference, cash and cash equivalents	407	0	420	0	-8,964
Cash and cash equivalents at period's end	135,513	21,333	135,513	21,333	431,343

* Investments in subsidiaries Jan-Sep 2011 comprises SEK 5,303 thousand acquisition of Rum21 AB and SEK 317,454 thousand acquisition of Tretti AB, see Note 1 and 2.

STATEMENT OF CHANGES IN EQUITY	2011	2010	2010
CONDENSED (SEK thousand)	30-Sep	30-Sep	Jan-Dec
Opening balance	346,544	8,211	8,211
Profit for the period	34,607	64,232	90,234
Other comprehensive income	1,004	-2,292	-3,250
Effects of employee option program	283	430	-
New share issue	380	239,000	239,594
Repurchased own shares	-380	-	-
Acquisition of non-controlling interests with a change in control	6,623	-	827
Acquisition of shares from non-controlling interests without a change in control	-	827	-21,033
Equity-part of convertible bonds	-	-	31,960
Closing balance	389,060	310,408	346,544

SEGMENT REPORTING

NET SALES	2010	2010	2010	2010	2010	2011	2011	2011	2011
(SEK thousand)	Jan-Mar	Apr-Jun	Jul-Sep	Oct-Dec	Full year	Jan-Mar	Apr-Jun	Jul-Sep	Jan-Sep
Entertainment	328,941	272,972	328,270	561,971	1,492,154	361,215	365,788	429,844	1,156,847
Fashion	69,035	116,971	112,488	134,673	433,167	113,959	184,374	159,613	455,506
Sport & Health	71,757	67,684	72,983	72,234	284,658	96,660	90,001	93,412	280,073
Home & Garden	-	-	-	-	-	-	48,946	143,530	194,916
Total operational business areas	469,733	457,627	513,741	768,878	2,209,979	571,834	689,109	826,399	2,087,342
Group central operations	-	-	-	55	55	7,961	11,624	8,638	28,223
Eliminations	0	0	0	0	0	-7,974	-11,622	-8,638	-28,234
CONSOLIDATED TOTAL	469,733	457,627	513,741	768,933	2,210,034	571,821	689,111	826,399	2,087,331
Intersegment sales Entertainment	-	-	-	-	-
						27	-	-	27
Fashion	-	-	-	-	-	-	-	-	-
Sport & Health	-	-	-	-	-	-	-	-	-
Home & Garden	-	-	-	-	-	-	-	-	-
Group central operations	-	-	-	-	-	7,947	11,622	8,638	28,207
Total	0	0	0	0	0	7,974	11,622	8,638	28,234
OPERATING PROFIT	2010	2010	2010	2010	2010	2011	2011	2011	2011
(SEK thousand)	Jan-Mar	Apr-Jun	Jul-Sep	Oct-Dec	Full year	Jan-Mar	Apr-Jun	Jul-Sept	Jan-Jun
Entertainment	24,186	11,175	20,951	43,422	99,734	18,191	9,861	23,743	51,795
Fashion	3,857	8,906	1,458	1,857	16,078	-4,259	8,292	2,457	6,382
Sport & Health	10,126	7,983	8,844	8,405	35,358	10,823	9,620	9,046	29,489
Home & Garden	-	-	-	-	-	-	638	3,194	3,940
Total operational business areas	38,169	28,064	31,253	53,684	151,170	24,755	28,411	38,440	91,606
Group central operations	-258	-210	-473	-15,601	-16,542	-4,617	-9,306	-19,762	-33,685
CONSOLIDATED TOTAL	37,911	27,854	30,780	38,083	134,628	20,138	19,105	18,678	57,921

PARENT COMPANY INCOME STATEMENT	2011	2010	2011	2010	2010
CONDENSED (SEK thousand)	Jul-Sep	Jul-Sep	Jan-Sep	Jan-Sep	Jan-Dec
Net Sales	8,638	0	28,223	0	55
Gross profit	8,638	0	28,223	0	55
Administration expenses Operating profit	-13,190 -4,552	-474 -474	-41,419 -13,196	-1,335 -1,335	-17,814 -17,759
Net interest & other financial items	-4,621	-2,477	-11,090	-7,560	-8,321
Profit before tax	-9,173	-2,951	-24,286	-8,895	-26,080
Tax	2,456	651	6,226	1,988	6,682
Net income for the period	-6,717	-2,300	-18,060	-6,907	-19,399
PARENT COMPANY STATEMENT OF COMPREHENSIVE INCOME
CONDENSED (SEK thousand) Profit for period	-6,717	-2,300	-18,060	-6,907	-19,399
Other comprehensive income	0	0	0	0	0
Total comprehensive income for period	-6,717	-2,300	-18,060	-6,907	-19,399
PARENT COMPANY STATEMENT OF FINANCIAL POSITION			2011	2010	2010
CONDENSED (SEK thousand)			30-Sep	30-Sep	30-Dec
Non-current assets
Shares and participating interests Equipment			640,486	248,060 0	280,282 0
Total non-current assets			30	248,060	280,282
			640,516
Current assets
Current interest-bearing receivables			81,896	0	27,399
Current non-interest-bearing receivables			6,759	2,683	139,815
Cash and cash equivalents			82,235	120	407,444
Total current assets			170,890	2,803	574,658
Total assets			811,406	250,863	854,940
Equity
Restricted equity			133,864	132,890	133,484
Unrestricted equity			198,126	113,445	216,283
Total equity			331,990	246,335	349,767
Non-current liabilities
Convertible bonds				0	207,204
Interest-bearing liabilities			212,795	0	0
Interest-bearing liabilities, MTG cash pool accounts			150,000	0	0
Deferred tax liability			0 9,785	0	11,255
Provisions			4,766	0	2,660
Total non-current liabilities			377,346	0	221,119
Current liabilities
Other interest-bearing liabilities			87,274	1,957	241,311
Non-interest-bearing liabilities			14,796	2,571	42,743
Total current liabilities			102,070	4,528	284,054
Total equity and liabilities			811,406	250,863	854,940

KEY RATIOS

	2010	2010	2010	2010	2010	2011	2011	2011	2011
KEY RATIOS	Jan-Mar	Apr-Jun	Jul-Sep	Oct-Dec	Full year	Jan-Mar	Apr-Jun	Jul-Sep	Jan-Sep
GROUP
Sales growth (%)	21.3	32.3	29.1	25.0	26.6	21.7	50.6	60.9	44.8
Change in operating expenses (%)	17.8	32.7	31.9	29.5	28.0	27.8	65.3	66.8	65.2
Operating margin (%)	8.1	6.1	6.0	5.0	6.1	3.5	2.8	2.3	2.8
Gross profit margin (%)	19.9	20.7	18.1	18.1	19.0	19.2	18.3	14.7	17.1
Return on capital employed (%)	41.3	44.9	44.1	36.1	36.1	27.0	20.6	15.8	15.8
Return on equity (%)	62.7	81.0	62.0	60.6	60.6	35.4	24.1	17.5	17.5
Equity/assets ratio (%)	5.6	8.6	42.5	34.2	34.2	38.4	29.2	28.9	28.9
Net debt (SEK million)	186.9	189.7	-81.0	-224.1	-224.1	-52.2	187.1	227.3	227.3
Cash flows from operations (SEK million)	-65.3	9.2	40.5	108.9	93.3	-161.9	80.4	-28.4	-110.0
Earnings per share (SEK)*	49.46	39.00	4.05	0.41	5.00	0.19	0.16	0.18	0.53
Equity per share (SEK)*	65.61	103.53	4.70	5.22	5.22	5.43	5.68	5.86	5.86
Earnings per share (SEK)**	0.37	0.29	0.30	0.41	1.37
Equity per share (SEK)**	0.44	0.77	4.65	5.22	5.22	0.19 5.43	0.16 5.68	0.18 5.86	0.53 5.86
No. of visits (thousand)	26,102	23,807	26,774	37,419	114,102	34,092	35,611	41,289	110,993
No. of orders (thousand)	1,065 419	963 465	1,126 443	1,557 453	4,711 442	1,250	1,235	1,358	3,843
Average shopping basket (SEK)						438	536	588	523
Entertainment
No. of visits (thousand)	16,490	13,011	15,875	23,189	68,564	18,864	16,061	18,991	53,917
No. of orders (thousand)	861 357	697 368	867 364	1,260 400	3,685 375	935	818	954	2,707
Average shopping basket (SEK)						363	424	429	404
Fashion
No. of visits (thousand)	7,997	9,420	9,352	12,543	39,312	12,848	16,814	17,892	47,555
No. of orders (thousand)	107	173	159	196	635	173	271	224	668
Average shopping basket (SEK)	639	659	693	661	655	643	657	686	668
Sport & Health
No. of visits (thousand)	1,616	1,376	1,547	1,687	6,226	2,380	2,036	2,207	6,623
No. of orders (thousand)	97	93	100	101	391	142	132	129	403
Average shopping basket (SEK)	722	727	731	709	727	681	679	723	693
Home & Garden
No. of visits (thousand)	-	-	-	-	-	-	699	2,199	2,898
No. of orders (thousand)	-	-	-	-	-	-	14	51	65
Average shopping basket (SEK)	-	-	-	-	-	-	3,377	2,781	2,907

* Earnings per share for the period Jan-Sept 2011 has been calculated on the average number of outstanding shares for the period, amounting to 66,342,124. Earnings per share for the first three quarters 2010 have been recalculated with regards to a split of 250:1 in september 2010. The number of shares for these periods is 500,000. Earnings per share for the full year 2010 and Oct-Dec 2010 have, in addition to the recalculation following the 250:1 split, been recalculated with regards to share issues, where the number of shares has increased from 500,000 to 66,342,124. The weighted average number of shares for the full year 2010 is 18,153,748 and 66,264,645 for the period Oct-Dec 2010.

** Calculated on present number outstanding of shares, as per September 2011, amounting to 66,342,124.

Definitions Equity/assets ratio Net debt (+) / Net cash (-) No. of visits Return on equity Return on capital employed Earnings per share Equity per share Net income for the last four quarters as a percentage of average equity for the last four quarters. Operating income for the last four quarters as a percentage of average of total non-current assets, cash and cash equivalents, and net working capital reduced for provisions, for the last four quarters Equity attributable to the parent company's shareholders divided by average number of shares. Earnings for the year attributable to the parent company's shareholders divided by average number of shares. Gross number of visits. Equity plus non-controlling interests as a percentage of total assets. Interest-bearing liabilities less interest-bearing current and non-current assets and cash and cash equivalents.

Note 1

Preliminary purchase price allocation for Rum21 AB	Recognised values
Net identifiable assets and liabilities	7,195
Non-controlling interest	-1,535
Goodwill on acquisition	8,314
Consideration transferred	13,974
Deferred payment Contingent consideration Cash in acquired company	-5,000 -2,311 -1,360
Net cash flow	5,303

Note 2

Preliminary purchase price allocation for Tretti AB	Recognised values
Net identifiable assets and liabilities	96,163
Non-controlling interest	-5,084
Goodwill on acquisition	249,620
Consideration transferred	340,699
Cash in acquired company	-23,245
Net cash flow	317,454