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Nelly Group — Interim / Quarterly Report 2012
Oct 17, 2012
3179_10-q_2012-10-17_d25185f4-478f-41f0-8664-51612d009a76.pdf
Interim / Quarterly Report
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19% YEAR ON YEAR SALES GROWTH IN THE THIRD QUARTER
CDON Group AB (NASDAQ OMX Stockholm's Mid Cap market: CDON) today announced its financial results for the third quarter and first nine months, the period 1 January – 30 September 2012.
Third Quarter
- Net sales up 18.9% year on year to SEK 982.5 (826.4) million
- Gross profit of SEK 128.6 (121.5) million with a gross margin of 13.1%; when excluding non-recurring items of SEK -6.6 million the gross margin is 13.8%**
- Operating profit of SEK -7.6 (18.7) million and operating margin of -0.8%; when excluding non-recurring items the operating margin is -0.1%**
- Net income of SEK -11.3 (11.5) million
- Basic earnings per share of SEK -0.16 (0.18)
First Nine Months
- Net sales up 38.4% year on year to SEK 2,888.9 (2,087.3) million and organic growth of 46%*
- Gross profit of SEK 373.2 (357.8) million with a gross margin of 12.9%; when excluding non-recurring items of SEK -54.5 million the gross margin is 14.8%**
- Operating profit of SEK -63.2 (57.9) million and operating margin of -2.2%; when excluding non-recurring items of SEK -58.3 million the operating margin is -0.2%**
- Net income of SEK -61.4 (34.6) million
- Basic earnings per share of SEK -0.88 (0.53)
- * Excluding Tretti AB for the period Jan-May 2012
** There are non-recurring items of SEK -6.6 million in the Group's result for the third quarter attributed to the Nelly.com warehouse relocation. The result for the first nine months of the year also includes further non-recurring costs of SEK -51.7 million of which SEK -47.9 million affect the gross profit.
CEO's statement
Paul Fischbein, President and CEO of CDON Group commented: "CDON Group sales increased by 19% to a new record sales level for the third quarter. We are growing strongly and we are continuing to consolidate our position in the attractive e-commerce market."
"The Entertainment segment and the Sports & Health segment continue to perform strongly, partly due to investments to expand the product range. Growth in the Fashion segment continued to be affected by Nelly's warehouse relocation, as the new warehouse unit did not reach the expected productivity level in the quarter."
"During the third quarter, we signed an agreement to acquire the logistics operations from the partner that performed these services for our online stores Nelly, Heppo, Lekmer and Members. The acquisition - which was completed on 1 October - is strategically important as it secures our customer offering and delivery capabilities and at the same time the acquisition facilitates future expansion and sales growth. We now internally operate logistics for eight of our ten online stores. Since the acquisition CDON Group has taken several actions to improve productivity in the warehouse and we are already seeing production increasing."
Forward looking statement
CDON Group operates in a sector with a high underlying market growth. The Group is in an intense growth phase and the strategy is to strengthen its market position through a retained high growth momentum. This includes substantial investments in expansion and in improving the infrastructure to ensure long-term growth, earnings and customer satisfaction such as the recent warehouse acquisition. As a result, we estimate the Group to deliver a negative operating margin, including non-recurring items, of between 0.5-1.0% for the full
year. This replaces the Group´s previous statement which was that: "The objective is to deliver a positive operating result, including non-recurring items, for the full year".
Significant events during and after the third quarter 2012
Management changes
On 16 July 2012 CDON Group announced the appointment of Magnus Månsson as new CEO of Nelly.com and Head of the Group's Fashion segment. Magnus Månsson will commence his position on 22 October 2012. On 21 August 2012 CDON Group announced the appointment of Nicolas Adlercreutz as new CFO of the Group, with planned commence date in February 2013. On 4 September 2012 CDON Group announced the appointment of Patrik Illerstig as new Head of Business Development. Patrik Illerstig assumed his position on 1 October 2012.
Launch of Tretti.com's assortment on CDON.com
On 13 July 2012 CDON.com announced the launch of Tretti.com's assortment of white goods, household appliances and outdoor products on CDON.com. The launch strengthens CDON.com position as the leading online shopping mall in the Nordic region, simultaneously increasing Tretti.com's reach on the market.
Launch of Sports & Leisure products on CDON.com
CDON.com announced on 11 September 2012, the launch of a new product assortment on CDON.com. The launch of the Sport & Leisure product category is part of the company's continued broadening of its customer offering.
CDON Group acquired Business Linc's logistical operations in Falkenberg, Sweden
On 28 September 2012 CDON Group announced that it signed an agreement to acquire Business Linc BL AB´s operations in Falkenberg, Sweden, through an asset deal. The acquisition of the logistical operations is an important step towards strengthening the Group´s value chain and delivering a high level of customer satisfaction. CDON Group completed the acquisition on 1 October 2012.
Increase of credit facility
After the third quarter CDON Group has taken up an additional overdraft facility of SEK 200.0 million where after the Group´s total overdraft facilities amount to SEK 320.0 million.
| (SEK Million) | 2012 Jul-Sep |
2011 Jul-Sep |
Change (%) | 2012 Jan-Sep |
2011 Jan-Sep |
Change (%) |
|---|---|---|---|---|---|---|
| Net sales | 982.5 | 826.4 | 18.9% | 2,888.9 | 2,087.3 | 38.4% |
| Gross profit | 128.6 | 121.5 | 5.8% | 373.2 | 357.8 | 4.3% |
| Gross margin (%) | 13.1% | 14.7% | 12.9% | 17.1% | ||
| Operating profit | -7.6 | 18.7 | - | -63.2 | 57.9 | - |
| Operating margin (%) | -0.8% | 2.3% | -2.2% | 2.8% | ||
| Net interest & other | ||||||
| financial items | -8.8 | -5.4 | -19.2 | -12.8 | ||
| Income before tax | -16.4 | 13.3 | - | -82.4 | 45.1 | - |
| Net income | -11.3 | 11.5 | - | -61.4 | 34.6 | - |
| Basic earnings per | ||||||
| share (SEK) | -0.16 | 0.18 | - | -0.88 | 0.53 | - |
| Diluted earnings per | ||||||
| share (SEK) | -0.16 | 0.18 | - | -0.88 | 0.53 | - |
| Total assets | 1,482.3 | 1,346.8 | 10.1% | 1,482.3 | 1,346.8 | 10.1% |
Financial summary
Group summary
Group net sales were up 19% year on year in the third quarter and up 38% year to date. The Group's sites attracted 53.3 (41.3) million visits and generated 1.6 (1.4) million orders during the third quarter, and 166.5 (111.0) million visits and 4.6 (3.8) million orders year to date.
The Group's gross margin was 13.1% (14.7%) in the quarter and 12.9% (17.1%) year to date. The decrease in margin is a result of the ongoing shift within the Entertainment segment away from the sale of media products towards growth categories such as consumer electronics. Furthermore, margins were affected by the nonrecurring cost of SEK -6.6 million, related to Nelly's warehouse relocation during the third quarter and SEK -54.5 million for the first nine months.
Sales, general and administrative expenses increased by 31% year on year to SEK 137.7 (105.1) million in the quarter and by 44% to SEK 435.7 (303.4) million year to date, which mainly reflected the higher sales volumes from both existing and new segments.
The Group reported an operating profit of SEK -1.0 (33.7) million in the quarter excluding one-off items with an operating margin of -0.1% (4.1%) and an operating profit of SEK -7.6 (18.7) million including non-recurring items with an operating margin of -0.8% (2.3%). The operating profit for the first nine months was SEK -4.9 (77.7) million excluding non-recurring with an operating margin of -0.2% (3.7%) items and an operating profit of SEK -63.2 (57.9) million including non-recurring items with an operating margin of -2.2% (2.8%).
The Group´s net interest and other financial items amounted to SEK -8.8 (-5.4) million in the third quarter and SEK -19.2 (-12.8) million year to date, which primarily reflected the interest costs related to the convertible bond, as well as the Group´s revolving credit facility.
Group pre-tax profits amounted to SEK -16.4 (13.3) million in the third quarter and SEK -82.4 (45.1) million for the first nine months. The Group reported a positive income tax effect of SEK 5.1 (-1.8) million in the quarter and 21.0 (-10.5) million for the first nine months, as a result of capitalised loss carry forwards. Group consolidated net income therefore totalled SEK -11.3 (11.5) million in the quarter and SEK -61.4 (34.6) million for the first nine months.
Development per segment
| (SEK Million) | 2012 Jul-Sep |
2011 Jul-Sep |
Change (%) |
2012 Jan-Sep |
2011 Jan-Sep |
Change (%) |
|---|---|---|---|---|---|---|
| Net sales | 525.0 | 429.8 | 22.1% | 1 473.4 | 1 156.8 | 27.4% |
| Operating profit | 19.6 | 23.7 | -17.4% | 55.6 | 51.8 | 7.3% |
| Operating margin (%) | 3.7% | 5.5% | 3.8% | 4.5% |
Entertainment
The Entertainment segment comprises the online stores CDON.com, BookPlus.fi and Lekmer.com. The segment's sales were up 22.1% year-on-year for the quarter and up 27.4% for the first nine months. The segment accounted for 53% (52%) of total Group sales in the third quarter and 51% (55%) of total Group sales for the first nine months.
The product categories Consumer Electronics and Toys showed a continued strong growth rate and increased their share of segment sales, while volume decreased in the Media category when comparing to the same period last year. CDON.com's focus is on strengthening its customer offering by widening its product range. In the third quarter, the assortment in the Consumer Electronics category was further broadened, the new product category Sports & Leisure was launched, and the product range from the Tretti.com store was added,
thereby bringing CDON.com one step closer to consolidating its position as the leading online shopping mall in the Nordic region.
The segment's operating profit declined in the third quarter, but improved for the first nine months. The shift from Media to Consumer Electronics went as planned during the quarter, which put pressure on gross margin in the period and affected the operating margin.
| (SEK Million) | 2012 Jul-Sep |
2011 Jul-Sep |
Change (%) |
2012 Jan-Sep |
2011 Jan-Sep |
Change (%) |
|---|---|---|---|---|---|---|
| Net sales | 193.3 | 157.2 | 23.0% | 615.6 | 453.1 | 35.9% |
| Operating profit | -30.3 | 2.3 | - | -126.3 | 6.3 | - |
| Operating margin (%) | -15.7% | 1.5% | -20.5% | 1.4% |
The Fashion segment comprises the online stores Nelly.com, Heppo.com and Members.com. The segment's sales were up 23.0% year on year for the quarter and 35.9% for the first nine months. The segment accounted for 20% (19%) of total Group sales in the third quarter and 21% (22%) of total Group sales for the first nine months.
Segment growth in the third quarter was mainly due to an increase in market shares for Nelly.com in the Nordic region and the growth of Members.com and Heppo.com. Growth was reduced in the period as finetuning processes and systems were adapted following Nelly.com's warehouse relocation.
The warehouse relocation, which took place during the second quarter, resulted in non-recurring items of SEK 6.6 million in the third quarter, charged to the Fashion segment's operating profit. The gross margin was negatively impacted in the quarter by two large clearance sales held in the third quarter, due to the overstock generated by lower sales during the warehouse relocation.
| (SEK Million) | 2012 Jul-Sep |
2011 Jul-Sep |
Change (%) |
2012 Jan-Sep |
2011 Jan-Sep |
Change (%) |
|---|---|---|---|---|---|---|
| Net sales | 123.5 | 93.4 | 32.2% | 367.5 | 280.1 | 31.2% |
| Operating profit | 10.6 | 9.0 | 17.5% | 34.9 | 29.5 | 18.3% |
| Operating margin (%) | 8.6% | 9.7% | 9.5% | 10.5% |
Sports & Health
The Sports & Health segment comprises the online stores Gymgrossisten.com (Fitnesstukku.fi in Finland, Bodystore.dk in Denmark and Bodystore.de in Germany) as well as the Swedish site Bodystore.com. The segment's sales were up 32.2% year-on-year for the quarter and 31.2% for the first nine months of the year. The segment accounted for 13% (11%) of total Group sales in the third quarter and 13% (13%) of total Group sales for the first nine months.
Sales growth remained strong in the third quarter and our assessment is that Gymgrossisten/Bodystore has taken market shares in each country, and that the total market for dietary supplements has grown during the period. The launch in the German market continued in the quarter with new sales campaigns. The strategy of focusing on growth in Germany remains.
The segment operating profit rose 17% in the quarter. The operating margin declined somewhat mainly due to continued investments in new markets. The number of products under the company's own brands has grown and costs for product launches and campaigns have also affected the operating profit.
Home & Garden
| (SEK Million) | 2012 Jul-Sep |
2011 Jul-Sep |
Change (%) |
2012 Jan-Sep |
2011 Jan-Sep* |
Change (%) |
|---|---|---|---|---|---|---|
| Net sales | 141.6 | 146.0 | -3.0% | 434.0 | 197.4 | 119.9% |
| Operating profit | -1.3 | 3.3 | - | -10.6 | 4.0 | - |
| Operating margin (%) | -0.9% | 2.3% | -2.4% | 2.1% |
* 2011 figures for the Home & Garden segment comprise Room21 from February 2011 and Tretti from June 2011
The Home & Garden segment comprises the online stores Tretti.com and Room21.com. The segment's sales were down 3.0% year-on-year for the quarter. The segment accounted for 14% (18%) of total Group sales for the quarter and 15% (9%) of total Group sales for the first nine months.
Segment sales in the quarter have been weak, as has the overall Swedish market for white goods. Several market players have made aggressive price cuts, and the tough competition has led to eliminations from the market. In July, Tretti.com launched its range of white goods, household appliances and outdoor products for sale through CDON.com in Sweden and later in Norway, which increases its customer visibility and thereby Tretti.com capitalises on the existing web traffic to CDON.com. The Room21.com online store has grown according to plan, and the store has widened its product portfolio with a new range of private label products.
Operating profit in the segment was encumbered by the expansion of Room21.com, as well as by the price pressure we experience in the white goods category.
Financial position
Group total assets grew by 10% year on year to SEK 1,482.3 (1,346.8) million. At the end of the second quarter 2012, the Groups total assets amounted to SEK 1,417.9 million.
Inventory levels increased year on year to SEK 682.9 (474.9) million in the period, compared to SEK 532.6 million at the end of the second quarter 2012. The increase was mainly reflected by the higher proportion of Group sales generated from the Fashion segment which is more inventory intensive and the expansion of the Group's product categories and assortment, e.g. consumer electronics within the Entertainment segment.
The Group reported a SEK -93.6 (-59.4) million change in working capital in the quarter and SEK -291.2 (-161.1) million for the nine month period. Capital employed decreased by SEK 10.2 million, to SEK 740.4 million in the quarter. The Group's rolling twelve-month return on capital employed declined year on year to 1.1% (15.8%) in the quarter, which mainly is explained by the lower operating profit compared to last year, the acquisition of Tretti AB in June 2011 as well as higher inventory due to the fact that the more inventory intensive segments' share of total Group sales has increased.
Group cash flow to investing activities amounted to SEK -6.1 (-10.3) million in the quarter and SEK -32.7 (-336.3) million for the first nine months, which primarily reflected investments in the Group's web platforms.
Group cash flow from financing activities amounted to SEK 0.0 (-35.5) million in the quarter and SEK 0.0 (150.0) million for the first nine months.
The Group's total interest-bearing loans amounted to SEK 370.9 (362.8) million at the end of the period compared to SEK 368.8 million at the end of the second quarter 2012.
In addition to the SEK 20.0 million already in place at the time, the Group took up an overdraft facility of SEK 100.0 million in the second quarter, of which SEK 0.0 was used at 30 September. After 30 September, the total group overdraft facilities have been increased to SEK 320.0 million.
The Group's cash and cash equivalents decreased by SEK -101.4 (-73.8) million to SEK 9.0 (135.5) million at the end of the quarter, compared to SEK 110.4 million at the end of the second quarter 2012. The Group therefore had a net debt position (defined as long term interest-bearing liabilities less cash and cash equivalents) of SEK 361.8 (227.3) million at the end of the reporting period, compared to SEK 258.4 million at the end of the second quarter 2012.
Parent company
The CDON Group parent company reported sales of SEK 12.4 (8.6) million in the third quarter and SEK 40.4 (28.2) million for the first nine months. The parent company's cash and cash equivalents amounted to SEK -10.3 (82.2) million at the end of the period.
The parent company invested SEK 0.0 (0.5) million in non-current assets during the quarter and SEK 0.5 (359.6) for the first nine months.
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 2011 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 and the group are also subject to interest rate risks. The 2011 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 parent company and the group in the period are of the same character and approximate amounts as the transactions described in the 2011 Annual Report.
Other information
Annual General Meeting of shareholders 2013
CDON Group's 2013 Annual General Meeting of shareholders will be held on 14 May 2013 in Stockholm. Shareholders that would like to have matters addressed at the Annual General Meeting should shall send a request in writing to [email protected] or to the Company Secretary, CDON Group AB (publ), Box 385, SE-201 23 Malmö, Sweden. To be certain that a matter can be included in the notice of the Annual General Meeting the request must have been received at least seven weeks before the Annual General Meeting. Further details on how and when to give notice to attend will be published in advance of the Annual General Meeting.
Nomination Committee for the 2013 Annual General Meeting of shareholders
In accordance with the resolution of the 2012 Annual General Meeting, Cristina Stenbeck has convened a Nomination Committee consisting of members representing the largest shareholders in CDON Group. The Nomination Committee is comprised of Cristina Stenbeck on behalf of Investment AB Kinnevik; Ryan Schaper on behalf of Point Lobos Capital LLC; Frank Larsson on behalf of Handelsbanken Fonder AB; and Jan Särlvik on behalf of Nordea Investment Funds. The members of the Committee will appoint the Committee Chairman at their first meeting. Information about the work of the Nomination Committee can be found on CDON Group's website at www.cdongroup.com.
Fourth Quarter and Full Year 2012 Financial Results
CDON Group's results for the fourth quarter and full year ending 31 December 2012 will be published on 8 February 2013.
17 October 2012
Paul Fischbein, President & CEO
CDON Group AB (publ.) 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)8 505 137 93 | |||||
| International: | +44 (0) 20 713 620 54 | |||||
| US: | +1 212 444 08 95 |
The access pin code for the conference call is 6439550. To listen to the conference call online, please go to www.cdongroup.com.
***
For additional information, please visit www.cdongroup.com or contact:
| Paul Fischbein, President & Chief Executive Officer | |
|---|---|
| Phone: | +46 (0) 10 703 20 00 |
Press, Investor and analysts enquiries:
Fredrik Bengtsson, Head of Communications Phone: +46 (0) 700 80 75 04 E-mail: [email protected], [email protected]
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 and Lekmer.com), Fashion (Nelly.com, Heppo.com and Members.com), Sports & Health (Gymgrossisten.com and Bodystore.com) and Home & Garden (Tretti.com and Room21.com) segments. CDON Group's ten online stores attract approximately 172 million site visits and two million unique customers on a yearly basis.
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 2012.
Auditors' Review Report concerning this interim report
Introduction
We have reviewed the interim report for CDON Group AB as of September 30, 2012 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 2012
KPMG AB
George Pettersson Authorized Public Accountant
| CONDENSED CONSOLIDATED | 2012 | 2011 | 2012 | 2011 | 2011 |
|---|---|---|---|---|---|
| INCOME STATEMENT (SEK million) | Jul-Sep | Jul-Sep | Jan-Sep | Jan-Sep | Jan-Dec |
| Net sales | 982.5 | 826.4 | 2,888.9 | 2,087.3 | 3,403.7 |
| Cost of goods and services | -853.8 | -704.9 | -2,515.7 | -1,729.5 | -2,816.4 |
| Gross profit | 128.6 | 121.5 | 373.2 | 357.8 | 587.3 |
| Sales and administration expenses | -137.7 | -105.1 | -435.7 | -303.4 | -458.8 |
| Other operating income and expenses, net | 1.5 | 2.3 | -0.7 | 3.5 | 0.7 |
| Operating profit | -7.6 | 18.7 | -63.2 | 57.9 | 129.2 |
| Net interest & other financial items | -8.8 | -5.4 | -19.2 | -12.8 | -18.2 |
| Profit before tax | -16.4 | 13.3 | -82.4 | 45.1 | 111.0 |
| Tax | 5.1 | -1.8 | 21.0 | -10.5 | -28.0 |
| Net income for the period | -11.3 | 11.5 | -61.4 | 34.6 | 83.0 |
| EBITDA | -3.4 | 21.7 | -52.2 | 65.2 | 139.7 |
| Attributable to: | |||||
| Equity holders of the parent | -10.4 | 11.8 | -58.1 | 35.1 | 83.3 |
| Non-controlling interests | -0.8 | -0.3 | -3.3 | -0.5 | -0.3 |
| Net income for the period | -11.3 | 11.5 | -61.4 | 34.6 | 83.0 |
| Basic earnings per share (SEK)* | -0.16 | 0.18 | -0.88 | 0.53 | 1.26 |
| Diluted earnings per share (SEK)* | -0.16 | 0.18 | -0.88 | 0.53 | 1.26 |
* Basic earnings per share for all periods has been calculated on the average number of outstanding shares for the periods, amounting to 66,342,124. Diluted earnings per share for all periods has been calculated on the average number of outstanding shares after dilution for the periods, amounting to 72,921,071.
| CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME | 2012 | 2011 | 2012 | 2011 | 2011 |
|---|---|---|---|---|---|
| CONDENSED (SEK million) | Jul-Sep | Jul-Sep | Jan-Sep | Jan-Sep | Jan-Dec |
| Profit for the period | -11.3 | 11.5 | -61.4 | 34.6 | 83.0 |
| Other comprehensive income | |||||
| Translation difference for the period | -1.7 | 0.8 | -2.0 | 1.0 | -3.3 |
| Other comprehensive income for the period | -1.7 | 0.8 | -2.0 | 1.0 | -3.3 |
| Total comprehensive income for period | -12.9 | 12.3 | -63.3 | 35.6 | 79.8 |
| Total comprehensive income attributable to: | |||||
| Parent company shareholders | -12.1 | 12.6 | -60.0 | 36.1 | 87.6 |
| Non-controlling interests | -0.8 | -0.3 | -3.3 | -0.5 | -0.6 |
| Total comprehensive income for the period | -12.9 | 12.3 | -63.3 | 35.6 | 87.0 |
| Shares outstanding at period's end | 66,342,124 | 66,342,124 | 66,342,124 | 66,342,124 | 66,342,124 |
|---|---|---|---|---|---|
| Shares outstanding at period's end, incl convertible | 72,921,071 | 72,921,071 | 72,921,071 | 72,921,071 | 72,921,071 |
| Average number of shares, basic | 66,342,124 | 66,342,124 | 66,342,124 | 66,342,124 | 66,342,124 |
| Average number of shares, diluted | 72,921,071 | 72,921,071 | 72,921,071 | 72,921,071 | 72,921,071 |
| CONSOLIDATED STATEMENT OF FINANCIAL | 2012 | 2011 | 2011 |
|---|---|---|---|
| POSITION CONDENSED (SEK million) | 30-Sep | 30-Sep | 31-Dec |
| Non-current assets | |||
| Goodw ill | 445.8 | 447.6 | 447.0 |
| Other intangible assets | 155.9 | 134.8 | 138.0 |
| Total intangible assets | 601.6 | 582.4 | 584.9 |
| Financial non-current assets | 1.6 | 1.8 | 1.6 |
| Tangible non-current assets | 8.0 | 8.7 | 10.8 |
| Deferred tax asset | 6.0 | 0.0 | 6.0 |
| Total non-current assets | 617.2 | 592.9 | 603.3 |
| Current assets | |||
| Inventories | 682.9 | 474.9 | 459.1 |
| Current interest-bearing receivables | 0.0 | 0.0 | 0.0 |
| Current non-interest-bearing receivables | 173.2 | 143.4 | 145.6 |
| Total receivables | 173.2 | 143.4 | 145.6 |
| Cash and cash equivalents | 9.030 | 135.5 | 417.4 |
| Total current assets | 865.1 | 753.8 | 1,022.1 |
| Total assets | 1,482.3 | 1,346.8 | 1,625.3 |
| Equity Equity attributable to ow ners of the parent |
|||
| Non-controlling interest | 356.4 | 382.0 | 415.8 |
| Total equity | -1.9 354.5 |
7.0 389.1 |
1.4 417.3 |
| Non-current liabilities | |||
| Non interest bearing | |||
| Deferred tax liability | 38.9 | 40.7 | 40.8 |
| Other provisions | 5.1 | 4.8 | 4.9 |
| Interest bearing | |||
| Long term loans | 150.0 | 150.0 | 150.0 |
| Convertible bond | 220.9 | 212.8 | 214.8 |
| Total non-current liabilities | 414.9 | 408.3 | 410.4 |
| Current liabilities Current interest-bearing liabilities |
|||
| Current non-interest-bearing liabilities | 15.0 | 15.0 | 15.0 |
| Total current liabilities | 697.9 712.9 |
534.4 549.4 |
782.6 797.6 |
| CONSOLIDATED STATEMENT OF CASH FLOWS CONDENSED (SEK million) |
2012 Jul-Sep |
2011 Jul-Sep |
2012 Jan-Sep |
2011 Jan-Sep |
2011 Jan-Dec |
|---|---|---|---|---|---|
| Cash flow from operating activities | 1.2 | 30.9 | -81.7 | 51.1 | 124.3 |
| Changes in w orking capital | -93.6 | -59.4 | -291.2 | -161.1 | 71.6 |
| Cash flow from operations | -92.4 | -28.4 | -372.9 | -110.0 | 195.9 |
| Investments in subsidiaries | 0.0 | 0.0 | -4.9 | -322.8 | -323.9 |
| Investments in other non-current assets | -6.1 | -10.3 | -27.9 | -13.5 | -21.9 |
| Cash flow to/from investing activities | -6.1 | -10.3 | -32.7 | -336.3 | -345.8 |
| Other cash flow from/to financing activities | 0.0 | -35.5 | 0.0 | 150.0 | 136.2 |
| Cash flow to/from financing activities | 0.0 | -35.5 | 0.0 | 150.0 | 136.2 |
| Change and cash equivalents for the period | -98.5 | -74.2 | -405.7 | -296.3 | -13.8 |
| Cash and cash equivalents at period's start | 110.4 | 209.3 | 417.4 | 431.3 | 431.3 |
| Translation difference, cash and cash equivalents | -2.9 | 0.4 | -2.7 | 0.4 | -0.1 |
| Cash and cash equivalents at period's end | 9.0 | 135.5 | 9.0 | 135.5 | 417.4 |
| STATEMENT OF CHANGES IN EQUITY | 2012 | 2011 | 2011 |
|---|---|---|---|
| CONDENSED (SEK million) | 30-Sep | 30-Sep | 31-Dec |
| Opening balance | 417.3 | 346.5 | 346.5 |
| Profit for the period | -61.4 | 34.6 | 83.0 |
| Other comprehensive income | -2.0 | 1.0 | -0.2 |
| Effects of long term incentive program | 0.6 | 0.3 | 0.3 |
| New share issue | 0.6 | 0.4 | 0.4 |
| Repurchased ow n shares | -0.6 | -0.4 | -0.4 |
| Acquisition of non-controlling interests w ith a change in control | - | 6.6 | 1.5 |
| Acquisition of shares from non-controlling interests w ithout a change in control | - | - | -13.8 |
| Closing balance | 354.5 | 389.1 | 417.3 |
SEGMENT REPORTING
| NET SALES (SEK million) |
2011 Jan-Mar |
2011 Apr-Jun |
2011 Jul-Sep |
2011 Oct-Dec |
2011 Full year |
2012 Jan-Mar |
2012 Apr-Jun |
2012 Jul-Sep |
2012 Jan-Sep |
|---|---|---|---|---|---|---|---|---|---|
| Entertainment | 361.2 | 365.8 | 429.8 | 772.1 | 1,928.9 | 484.3 | 464.1 | 525.0 | 1,473.4 |
| Fashion | 111.5 | 184.4 | 157.2 | 275.1 | 728.2 | 196.4 | 225.9 | 193.3 | 615.6 |
| Sport & Health | 96.7 | 90.0 | 93.4 | 97.1 | 377.1 | 127.6 | 116.4 | 123.5 | 367.5 |
| Home & Garden Total operational business areas |
2.4 571.8 |
48.9 689.1 |
146.0 826.4 |
172.1 1,316.4 |
369.5 3,403.8 |
146.3 954.6 |
146.1 952.5 |
141.6 983.4 |
434.0 2,890.5 |
| Group central operations | |||||||||
| 8.0 | 11.6 | 8.6 | 14.1 | 42.4 | 13.4 | 14.5 | 12.4 | 40.4 | |
| Eliminations | -8.0 | -11.6 | -8.6 | -14.1 | -42.4 | -13.7 | -14.9 | -13.4 | -41.9 |
| CONSOLIDATED TOTAL | 571.8 | 689.1 | 826.4 | 1,316.4 | 3,403.7 | 954.3 | 952.1 | 982.5 | 2,888.9 |
| Intersegment sales Entertainment |
0.0 | - | - | - | 0.0 | - | - | 0.0 | 0.0 |
| Fashion | - | - | - | - | - | - | - | - | - |
| Sport & Health | - | - | - | - | - | 0.0 | 0.0 | 0.0 | 0.0 |
| Home & Garden | - | - | - | - | - | 0.2 | 0.4 | 0.9 | 1.5 |
| Group central operations | 7.9 | 11.6 | 8.6 | 14.1 | 42.3 | 13.4 | 14.5 | 12.4 | 40.4 |
| Total | 8.0 | 11.6 | 8.6 | 14.1 | 42.4 | 13.7 | 14.9 | 13.4 | 41.9 |
| OPERATING PROFIT (SEK million) |
2011 Jan-Mar |
2011 Apr-Jun |
2011 Jul-Sep |
2011 Oct-Dec |
2011 Full year |
2012 Jan-Mar |
2012 Apr-Jun |
2012 Jul-Sep |
2012 Jan-Sep |
| Entertainment | 18.2 | 9.9 | 23.7 | 50.5 | 102.3 | 24.1 | 11.8 | 19.6 | 55.6 |
| Fashion | -4.4 | 8.3 | 2.3 | 13.5 | 19.8 | -38.5 | -57.5 | -30.3 | -126.3 |
| Sport & Health | 10.8 | 9.6 | 9.0 | 10.3 | 39.7 | 13.3 | 10.9 | 10.6 | 34.9 |
| Home & Garden | 0.1 | 0.6 | 3.3 | 1.2 | 5.3 | -5.9 | -3.4 | -1.3 | -10.6 |
| Total operational business areas | 24.8 | 28.4 | 38.4 | 75.5 | 167.1 | -7.0 | -38.2 | -1.3 | -46.5 |
| Group central operations | -4.6 | -9.3 | -19.8 | -4.1 | -37.8 | -5.1 | -5.3 | -6.3 | -16.7 |
| CONSOLIDATED TOTAL | 20.1 | 19.1 | 18.7 | 71.3 | 129.2 | -12.1 | -43.5 | -7.6 | -63.2 |
| PROFIT BEFORE TAX (SEK million) |
2011 Jan-Mar |
2011 Apr-Jun |
2011 Jul-Sep |
2011 Oct-Dec |
2011 Full year |
2012 Jan-Mar |
2012 Apr-Jun |
2012 Jul-Sep |
2012 Jan-Sep |
| Entertainment | 17.9 | 10.1 | 24.2 | 48.6 | 100.8 | 23.6 | 11.7 | 17.9 | 53.2 |
| Fashion | -5.3 | 8.2 | 1.4 | 11.2 | 15.5 | -40.5 | -58.8 | -33.8 | -133.0 |
| Sport & Health | 10.8 | 9.6 | 8.7 | 10.5 | 39.7 | 13.4 | 11.0 | 9.1 | 33.5 |
| Home & Garden | 0.1 | 0.8 | 3.2 | 1.1 | 5.2 | -6.0 | -3.4 | -1.4 | -10.8 |
| Total operational business areas | 23.5 | 28.8 | 37.5 | 71.5 | 161.3 | -9.4 | -39.5 | -8.1 | -57.1 |
| Group central operations | -6.8 | -13.6 | -24.2 | -5.6 | -50.2 | -8.1 | -8.9 | -8.3 | -25.3 |
| PARENT COMPANY INCOME STATEMENT | 2012 | 2011 | 2012 | 2011 | 2011 |
|---|---|---|---|---|---|
| CONDENSED (SEK million) | Jul-Sep | Jul-Sep | Jan-Sep | Jan-Sep | Jan-Dec |
| Net Sales | 12.4 | 8.6 | 40.4 | 28.2 | 42.4 |
| Gross profit | 12.4 | 8.6 | 40.4 | 28.2 | 42.4 |
| Administration expenses | -18.7 | -13.2 | -57.0 | -41.4 | -61.9 |
| Operating profit | -6.3 | -4.6 | -16.7 | -13.2 | -19.6 |
| Net interest & other financial items | -2.0 | -4.6 | -8.6 | -11.1 | -12.6 |
| Group contribution received | 0.0 | 0.0 | 0.0 | 0.0 | 124.0 |
| Group contribution paid Change in excess depreciation |
0.0 0.0 |
0.0 0.0 |
0.0 0.0 |
0.0 0.0 |
-16.0 0.0 |
| Profit before tax | -8.3 | -9.2 | -25.3 | -24.3 | 75.8 |
| Tax | |||||
| Net income for the period | 2.2 -6.1 |
2.5 -6.7 |
6.7 -18.6 |
6.2 -18.1 |
-20.1 55.7 |
| PARENT COMPANY STATEMENT OF COMPREHENSIVE INCOME | |||||
| CONDENSED (SEK million) Profit for period |
-6.1 | -6.7 | -18.6 | -18.1 | 55.7 |
| Other comprehensive income | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Total comprehensive income for period | -6.1 | -6.7 | -18.6 | -18.1 | 55.7 |
| PARENT COMPANY STATEMENT OF FINANCIAL POSITION | 2012 | 2011 | 2011 | ||
| CONDENSED (SEK million) | 30-Sep | 30-Sep | 31-Dec | ||
| Non-current assets | |||||
| Shares and participating interests Equipment |
684.3 | 640.5 | 683.9 | ||
| Total non-current assets | 0.0 | 0.0 | 0.0 | ||
| 684.3 | 640.5 | 683.9 | |||
| Current assets | |||||
| Current interest-bearing receivables | 316.1 | 81.9 | 17.7 | ||
| Current non-interest-bearing receivables | 142.9 | 6.8 | 131.5 | ||
| Cash and cash equivalents | -10.3 | 82.2 | 356.3 | ||
| Total current assets | 448.7 | 170.9 | 505.5 | ||
| Total assets | 1,133.1 | 811.4 | 1,189.4 | ||
| Equity | |||||
| Restricted equity | 134.4 | 133.9 | 133.9 | ||
| Unrestricted equity | 253.3 | 198.1 | 271.8 | ||
| Total equity | 387.7 | 332.0 | 405.7 | ||
| Non-current liabilities | |||||
| Convertible bonds | 220.9 | 212.8 | 214.8 | ||
| Interest-bearing liabilities | 150.0 | 150.0 | 150.0 | ||
| Deferred tax liability | 7.7 | 9.8 | 9.3 | ||
| Provisions | 5.1 | 4.8 | 4.9 | ||
| Total non-current liabilities | 383.6 | 377.3 | 378.9 | ||
| Current liabilities | |||||
| Other interest-bearing liabilities | 329.0 | 87.3 | 344.7 | ||
| Non-interest-bearing liabilities | 32.7 | 14.8 | 60.0 | ||
| Total current liabilities | 361.7 | 102.1 | 404.8 | ||
| Total equity and liabilities | 1,133.1 | 811.4 | 1,189.4 |
KEY RATIOS
| 2011 | 2011 | 2011 | 2011 | 2011 | 2012 | 2012 | 2012 | 2012 | |
|---|---|---|---|---|---|---|---|---|---|
| KEY RATIOS | Jan-Mar | Apr-Jun | Jul-Sep | Oct-Dec | Full year | Jan-Mar | Apr-Jun | Jul-Sep | Jan-Sep |
| GROUP | |||||||||
| Sales grow th (%) | 21.7 | 50.6 | 60.9 | 71.2 | 54.0 | 66.9 | 38.2 | 18.9 | 38.4 |
| Change in operating expenses (%) | 27.8 | 65.3 | 66.8 | 49.7 | 59.6 | 63.4 | 39.3 | 31.0 | 43.6 |
| Operating margin (%) | 3.5 | 2.8 | 2.3 | 5.4 | 3.8 | -1.3 | -4.6 | -0.8 | -2.2 |
| Gross profit margin (%) | 19.2 | 18.3 | 14.7 | 17.4 | 17.3 | 14.2 | 11.4 | 13.1 | 12.9 |
| Return on capital employed (%) | 27.0 | 20.6 | 15.8 | 18.7 | 18.7 | 13.1 | 4.4 | 1.1 | 1.1 |
| Return on equity (%) | 35.4 | 24.1 | 17.5 | 22.0 | 22.0 | 15.0 | 3.2 | -2.6 | -2.6 |
| Equity/assets ratio (%) | 38.4 | 29.2 | 28.9 | 25.7 | 25.7 | 28.1 | 25.9 | 23.9 | 23.9 |
| Net debt (SEK million) | -52.2 | 187.1 | 227.3 | -52.6 | -52.6 | 196.1 | 258.4 | 361.8 | 361.8 |
| Cash flow s from operations (SEK million) | -161.9 | 80.4 | -28.4 | 304.7 | 194.7 | -234.5 | -46.0 | -92.4 | -372.9 |
| Earnings per share (SEK)* | 0.19 | 0.16 | 0.18 | 0.73 | 1.26 | -0.18 | -0.54 | -0.16 | -0.88 |
| Equity per share (SEK)* | 5.43 | 5.68 | 5.86 | 6.29 | 6.29 | 6.09 | 5.53 | 5.34 | 5.34 |
| Depreciation/Net sales (%) | 0.3 | 0.3 | 0.4 | 0.2 | 0.3 | 0.3 | 0.4 | 0.4 | 0.4 |
| Capital Expenditure/Net sales (%) | 0.4 | 0.2 | 1.2 | 0.6 | 0.6 | 1.3 | 1.0 | 0.6 | 1.0 |
| No. of visits (thousand) | 34,092 | 35,611 | 41,289 | 60,765 | 171,758 | 58,679 | 54,532 | 53,332 | 166,542 |
| No. of orders (thousand) | 1,250 | 1,235 | 1,358 | 2,151 | 5,996 | 1,579 | 1,437 | 1,553 | 4,570 |
| Average shopping basket (SEK) | 438 | 536 | 588 | 587 | 546 | 581 | 643 | 611 | 611 |
| Entertainment | |||||||||
| No. of visits (thousand) | 18,864 | 16,061 | 18,991 | 27,519 | 81,436 | 22,305 | 19,565 | 21,830 | 63,699 |
| No. of orders (thousand) | 935 | 818 | 954 | 1,494 | 4,201 | 1,048 | 868 | 1,039 | 2,955 |
| Average shopping basket (SEK) | 363 | 424 | 429 | 484 | 433 | 436 | 508 | 482 | 474 |
| Fashion | |||||||||
| No. of visits (thousand) | 12,848 | 16,814 | 17,892 | 27,426 | 74,980 | 30,292 | 29,292 | 25,663 | 85,247 |
| No. of orders (thousand) | 173 | 271 | 224 | 445 | 1,113 | 296 | 356 | 292 | 944 |
| Average shopping basket (SEK) | 643 | 657 | 686 | 608 | 641 | 644 | 628 | 641 | 637 |
| Sport & Health | |||||||||
| No. of visits (thousand) | 2,380 | 2,036 | 2,207 | 2,863 | 9,486 | 3,497 | 2,979 | 3,000 | 9,475 |
| No. of orders (thousand) | 142 | 132 | 129 | 142 | 545 | 180 | 158 | 164 | 502 |
| Average shopping basket (SEK) | 681 | 679 | 723 | 688 | 692 | 703 | 733 | 745 | 726 |
| Home & Garden | |||||||||
| No. of visits (thousand) | 170 | 699 | 2,199 | 2,958 | 5,856 | 2,585 | 2,696 | 2,839 | 8,121 |
| No. of orders (thousand) | 2 | 14 | 51 | 71 | 136 | 56 | 55 | 58 | 169 |
| Average shopping basket (SEK) | 2,056 | 3,377 | 2,781 | 2,450 | 2,696 | 2,574 | 2,625 | 2,380 | 2,424 |
| * Earnings per share for the periods Jan-Dec 2011 and Jan-Jun 2012 have been calculated on the average number of outstanding shares for the periods, amounting to 66,342,124. |
|||||||||
| Definitions | |||||||||
| Equity/assets ratio | Equity plus non-controlling interests as a percentage of total assets. |
|---|---|
| Net debt (+) / Net cash (-) | Interest-bearing liabilities less interest-bearing current and non-current assets and cash and cash equivalents. |
| No. of visits | Gross number of visits to the Groups online stores. |
| Return on equity | Net income for the last four quarters as a percentage of average equity for the last four quarters. |
| Return on capital employed | Operating income for the last four quarters as a percentage of average of total non-current assets, cash and cash equivalents, and net w orking capital reduced for provisions, for the last four quarters |
| Earnings per share | Earnings for the year attributable to the parent company's shareholders divided by average number of shares. |
| Equity per share | Equity attributable to the parent company's shareholders divided by average number of shares. |
Capital Expenditure/Net Sales Investments in tangible non-current assets divided by Net sales for the period.
NOTES
Note 1
On 28 September 2012 CDON Group announced that it signed a deal to acquire Business Linc BL AB´s operations. Business Linc is a third-party logistics company w ith focus on the e-commerce market. The company operates approximately 50,000 sq. m. of w arehousing space in Falkenberg. The acquisition is structured as an assets deal and all approximately 340 personnel w ill be offered employment in the CDON Group. External customers outside CDON Group w ill be phased out.
The acquisition of the logistical operations is an important step tow ards strengthening the group´s value chain and delivering a high level of customer satisfaction. CDON Group completed the acquisition on 1 October and paid the first part of the consideration amouting 1 MSEK.
Accrued goodw ill in 2012 consists of strategic advantages and synergies. All part of recognised goodw ill is expected to be deductible.
| PRELIMINARY PURCHASE PRICE ALLOCATION FOR BUSINESS LINC BL AB'S OPERATIONS |
Recognised values |
|---|---|
| Tangible non-current assets | 5.7 |
| Trade creditors and other short term debts | -6.4 |
| Net identifiable assets and liabilities | -0.7 |
| Goodw ill on acquisition | 15.7 |
| Consideration transferred | 15.0 |
| Deferred purchase price | -9.0 |
| Provision, contingent consideration | -5.0 |
| Net cash flow | 1.0 |
Contingent consideration
The acquisition agreement states that a contingent consideration is to be paid to the former ow ners of the operation based on certain conditions, including the transfer to CDON Group of existing rental contracts w ith unchanged terms for the operations.