Nelly Group — Interim / Quarterly Report 2013

Jul 17, 2013

Q2 Interim report, 1 January – 30 June 2013

CDON Group AB (NASDAQ OMX Stockholm Mid Cap: CDON) announces its financial results for the second quarter and first six months of 2013.

Second Quarter

• Net sales excluding divested operations was up 4.2% year on year to SEK 964.3 (925.3) million
• Net sales including divested operations was up 1.8% year on year to SEK 969.2 (952.1) million
• Gross margin of 11.9% (11.4%), excluding non-recurring costs and divested operations 15.7% (14.8%)
• Operating profit excluding non-recurring costs and divested operations was SEK -6.2 (0.5) million
• Operating profit including non-recurring costs and divested operations was SEK -48.9 (-43.5) million
• Net income of SEK -44.7 (-37.1) million
• Basic earnings per share of SEK -0.62 (-0.54) *
• The result is burdened by items affecting comparability of SEK 32 million in the Entertainment segment

First six months

• Net sales excluding divested operations was up 7.1% year on year to SEK 1,996.6 (1,864.2) million
• Net sales including divested operations was up 6.0% year on year to SEK 2,020.3 (1,906.4) million
• Gross margin of 13.0% (12.8%), excluding non-recurring costs and divested operations 14.9% (15.3%)
• Operating profit excluding non-recurring costs and divested operations was SEK -10.4 (7.5) million
• Operating profit including non-recurring costs and divested operations was SEK -56.6 (-55.6) million
• Net income of SEK -62.0 (-50.1) million
• Basic earnings per share of SEK -0.92 (-0.72) *

* Calculated on the average number of outstanding shares for the periods as reported on page 17.

CEO statement

Paul Fischbein, President and CEO, commented: "Group sales development in the second quarter continued to be positive with sales growth within many of our companies. Our stores have leading market positions in Nordic e-commerce and visitor numbers in our stores continue to increase.

Growth in the Sports & Health segment was 34 per cent and the segment continued to show solid profitability. In the second quarter the segment's warehouse was relocated and the new Milebreaker.com store was launched. We further extended the range of our private label products, contributing to further strengthened market positions.

The Fashion segment, together with our logistics centre in Falkenberg, continued to develop as planned. Sales in the Fashion segment increased by 20 per cent with positive operating profit. It is pleasant that the hard work put in by Nelly's new management in order to ensure long-term earnings is beginning to show results.

The Home & Garden segment operates in a highly competitive market, but nevertheless showed sales growth and clearly improved earnings in the quarter.

The Entertainment segment is a business under big transformation, particularly within CDON.com, which showed a negative sales trend and an operating loss in the quarter. The decline in sales and earnings were affected by increasingly negative market developments for media-related products, but the main reason for the quarter's negative result was a large clearance on computer products. The sale had a negative EBIT impact

of about SEK 10 million in the quarter. CDON.com have provided for a non recurring cost of SEK 32 million related to suspicions of an employee manipulating purchasing prices, which resulted in an under-provision of cost of goods sold. This employee has left the company and a police report has been filed. The deviation was found by internal control routines in connection with closing of the accounts for the second quarter. The result in the second quarter is burdened by the extraordinary cost, but has no effect on cash flow in the period, or on future cash flow."

Forward-looking statement

CDON Group operates in a sector with high growth within many product areas, and many of the Group's companies are well positioned to capitalize on this market growth. The Group's strategy during 2013 is to continue delivering sales growth and increased market shares in a balanced way, particularly within Nelly.com and Gymgrossisten.com. CDON.com is likely to affect the Group's overall growth figures negatively. In light of this CDON.com has intensified its efforts to reduce tied up capital in inventory through clearances and marketing efforts. The ambition is to continue to reduce CDON.com´s inventory level at a high pace. This is expected to have a negative impact on the Entertainment segment's results of approximately SEK 20 million over the next few quarters, as a result of lower margins.

Significant events during and after the second quarter 2013

Acquisition of all outstanding minority shares in Nelly.com

On 8 July 2013 CDON Group AB announced that they had acquired all remaining 2.23 per cent of the shares in its subsidiary NLY Scandinavia AB ("Nelly.com") from the company's minority shareholders. CDON Group now holds 100.0 per cent of the shares and votes in NLY Scandinavia AB.

New logistics centre for Sports & Health deployed

On 23 April 2013 CDON Group AB announced that the Group's Sports & Health segment had successfully deployed its new logistics centre in Trollhättan, Sweden, which serves the segment's three online stores Gymgrossisten.com, Bodystore.com and Milebreaker.com with warehousing, logistics and customer service. The relocation was completed in 49 hours and the non-recurring costs related to the relocation amounted to SEK 5.6 million.

Rights issue oversubscribed

On 17 April 2013 CDON Group AB announced that the Board of Directors had resolved on a rights issue of shares with preferential rights for existing shareholders to strengthen the Group's capital structure. The preferential rights issue was approved at an extraordinary general meeting on 14 May 2013. On 13 June 2013 the final summation was announced, through which the number of shares increases with 33,171,062 from 66,817,124 to 99,988,186. CDON Group received a capital injection of approximately SEK 514 million through the rights issue, before transaction costs.

Heppo.com divested

On 17 April 2013 CDON Group AB announced the divestment of the operations of subsidiary Heppo AB to Footway Group AB for a cash consideration of approximately SEK 42 million.

Launch of Milebreaker.com

On 15 April 2013 CDON Group AB announced that the Group had launched a beta version of the new internet store Milebreaker.com. The store is part of the segment Sports & Health. Milebreaker.com targets endurance athletes and offers supplements, training equipment and training clothes among other things.

The Group's financial summary, excluding divested entities and non-recurring costs*

(SEK Million)	2013 Apr-Jun	2012 Apr-Jun	Change (%)	2013 Jan-Jun	2012 Jan-Jun	Change (%)
Net sales	964.3	925.3	4.2%	1,996.6	1,864.2	7.1%
Gross profit	151.3	137.1	9.9%	296.8	284.3	2.8%
Gross margin (%)	15.7%	14.8%		14.9%	15.3%
Operating profit	-6.2	0.5	-	-10.4	7.5
Operating margin (%)	-0.6%	0.1%		-0.5%	0.4%
Ingoing inventory balance	596.2	480.6		575.7	438.8
Closing inventory balance	545.0	504.3	8.1%	545.0	504.3	8.1%

*Divested entities and non-recurring costs is reported on page 4

Earnings summary

Consolidated net sales increased 4.2% in the second quarter, excluding divested businesses. Growth was mainly driven by strong sales growth and increased market shares in the Sports & Health and Fashion segments. The Group's online stores had 58.9 (54.5) million visitors during the quarter and generated 1.5 (1.4) million orders during the period.

Consolidated gross margin was 15.7% (14.8%) in the quarter, excluding non-recurring items and divested operations. The improved margin in 2013 is attributable to more sales from segments with higher margins, namely the Sports & Health and Fashion segments. Consolidated selling and administrative expenses increased to SEK -160.0 (-150.6) million in the second quarter.

The Group reported an operating result of SEK -6.2 (0.5) million for the quarter, excluding divested operations and non-recurring items. Including these items, operating results totalled SEK -48.9 (-43.5) million.

Consolidated net financial expenses totalled SEK -9.4 (-5.0) million for the quarter, which primarily reflected the interest expenses related to the Group's convertible bond issue, revolving credit and bank overdraft facilities, and currency exchange effects.

Consolidated earnings before tax totalled SEK -58.2 (-48.5) million for the quarter. The Group recognized tax revenues of SEK 13.5 (11.4) million for the quarter as a result of capital loss carry forwards. Consolidated losses after tax thereby totalled SEK 44.7 (37.1) million.

Consolidated earnings per share before and after dilution totalled SEK -0.62 (-0.54).

Cash flow and financial position

The Group showed a cash flow from operations of SEK -6.3 (-50.0) million for the quarter. The cash flow effect from changes in working capital amounted to SEK 42.3 (4.1) million. The increase compared with the second quarter last year is mainly attributable to changes in inventory and current receivables.

Consolidated cash flow from investing activities totalled SEK 0.5 (-14.7) million. Cash flow was positively affected by the first instalment of the divested business Heppo.com which the Group received during the quarter. The Group continued to invest in the development of web platforms and logistics operations during the quarter.

The Group concluded a preferential rights issue during the quarter, which after transaction costs preliminarily provided a cash injection of approximately SEK 502 million. In conjunction with the issue, the Group repaid SEK 200 million of existing credit facilities and all credit facilities were re-negotiated. The Group utilised SEK 150 million of the new credit facilities as per the balance sheet day. In addition, the Group reduced its overdraft

facility by approximately SEK 50 million during the quarter. Total cash flow from financing activities totalled SEK 252.5 (0.0) million.

Consolidated cash and cash equivalents increased by SEK 288.9 million. Including currency differences the cash and cash equivalents increased from SEK 34.5 million to SEK 327.2 (110.4) million.

At the end of the quarter the Group had a net debt of SEK 50.0 (258.4) million compared to SEK 590.3 million in the first quarter. The decrease mainly reflected the completion of the rights issue and restructuring of the Group's long term debt as well as the positive cash flow in the quarter.

Total consolidated assets on the balance sheet date increased 23% year-on-year to SEK 1,747.3 (1,417.9) million. Inventory levels increased year-on-year to SEK 550.1 (532.6) million. Capital employed totalled to SEK 757.4 million in the quarter. The Group's rolling 12 months return on capital employed declined year on year and was negative, which is mainly explained by decreased earnings in the second half of 2012.

Consolidated equity increased during the quarter to SEK 707.4 (366.8) million compared with SEK 248.2 million in the first quarter. The increase is primarily attributable to the completion of the rights issue.

SUMMARY OF DIVESTED ENTITIES	2012	2012	2012	2012	2012	2012	2013	2013	2013
AND ONE OFF ITEMS	Jan-Mar	Apr-Jun	Jan-Jun	Jul-Sep	Oct-Dec	Jan-Dec	Jan-Mar	Apr-Jun	Jan-Jun
Revenue	15.4	26.9	42.2	29.2	31.3	102.6	18.7	4.9	23.6
Divested entity (Heppo)	15.4	26.9	42.2	29.2	31.3	102.6	18.7	4.9	23.6
Gross Profit	-11.6	-28.1	-39.7	-0.8	-100.3	-140.9	2.5	-35.8	-33.2
Nelly	-14.0	-33.9	-47.9	-6.6	-106.0	-160.5	0.0	0.0	0.0
Gymgrossisten	0.0	0.0	0.0	0.0	0.0	0.0	0.0	-4.6	-4.6
CDON	0.0	0.0	0.0	0.0	0.0	0.0	0.0	-32.0	-32.0
Divested entity (Heppo)	2.4	5.8	8.2	5.8	5.7	19.6	2.5	0.8	3.4
Operating Profit	-19.1	-44.0	-63.1	-10.1	-117.4	-190.6	-3.6	-42.6	-46.2
Nelly	-14.0	-37.7	-51.7	-6.6	-112.2	-170.5	0.0	0.0	0.0
Gymgrossisten	0.0	0.0	0.0	0.0	0.0	0.0	0.0	-5.6	-5.6
CDON	0.0	0.0	0.0	0.0	0.0	0.0	0.0	-32.0	-32.0
Divested entity (Heppo)	-5.1	-6.3	-11.4	-3.5	-5.2	-20.1	-3.6	-5.0	-8.6

Summary of divested entities and one off items

Development per segment

Entertainment*

(SEK Million)	2013 Apr-Jun	2012 Apr-Jun	Change (%)	2013 Jan-Jun	2012 Jan-Jun	Change (%)
Net sales	410.5	464.1	-11.5%	922.9	948.3	-2.7%
Operating profit	-9.9	11.8	neg.	3.4	36.0	-90.6%
Operating margin (%)	-2.4%	2.6%		0.4%	3.8%
Ingoing inventory balance	259.0	221.2		287.1	218.7
Closing inventory balance	252.3	208.5	21.0%	252.3	208.5	21.0%

* Excluding non-recurring costs as reported on page 4

The Entertainment segment comprises the online stores CDON.com and Lekmer.com. The segment's sales decreased by 12% for the quarter and by 3% for the first half year. The segment accounted for 43% (50%) of total Group sales in the quarter and 46% (51%) of sales for the first half year.

The negative market for media related products, representing 35% of the total quarterly sales volume for the segment, intensified during the quarter. This, along with a negative sales trend in and the product category computers burdened the segment's total sales development. As a result, CDON.com have, during the second quarter started to intensify its efforts to reduce tied up capital in inventory through clearances and marketing efforts.

Sales within CDON.com's new categories are developing as planned. Lekmer.com continues to show solid growth and market share gains, driven primarily by the expansion in the children's clothing and prams/car seats categories. Lekmer.com launched a new site design in the quarter in order to improve the user experience.

The segment reported a loss for the quarter, weighed down by the sales decrease in the product category media and clearances within consumer electronics. The clearance impacted the operating result negatively by approximately SEK 10 million.

CDON.com have provided for a non recurring cost of SEK 32 million related to suspicions of an employee manipulating purchasing prices, which resulted in an under-provision of cost of goods. This employee has left the company and a police report has been filed. The deviation was found by internal control routines in connection with closing of the accounts for the second quarter. The result in the second quarter is burdened by the extraordinary cost, but has no effect on cash flow in the period, or on future cash flow. See also page 4.

(SEK Million)	2013 Apr-Jun	2012 Apr-Jun	Change (%)	2013 Jan-Jun	2012 Jan-Jun	Change (%)
Net sales	239.2	199.1	20.1%	444.3	380.1	16.9%
Operating profit	1.0	-13.5	-	-12.9	-33.0	-
Operating margin (%)	0.4%	-6.8%		-0.3%	-8.7%
Ingoing inventory balance	190.7	146.2		159.6	111.7
Closing inventory balance	144.3	177.0	-18.5%	144.3	177.0	-18.5%

Fashion*

* Excluding divested entities and non-recurring costs as reported on page 4

The Fashion segment comprises the online stores Nelly.com and Members.com. Heppo.com was divested during the quarter. Excluding the divested business, the segment's sales grew by 20% in the quarter and by 17% for the half year. The segment accounted for 25% (22%) of total Group sales in the quarter and 22% (20%) for the first half year.

The segment reported higher sales growth in nearly all markets and the Swedish home market accounted for 43% of the segment's total sales volume for the quarter. Segment sales outside the Nordic countries accounted for 12%, and the Netherlands was the largest market outside the Nordic region. The segment's product margin was 51% during the quarter, positively affected by sales of private label products, which accounted for 29% of total sales in the second quarter. Nelly.com launched new collections from design collaborations with wellknown bloggers and artists in several markets, which among other things resulted in an increase in sales of private label goods.

In order to secure satisfactory long-term earnings, Nelly has, with its new management team, continued to focus on improving and streamlining the company's internal processes, cost levels, and margin structure. These efforts led to a positive operating result for the segment in the quarter.

The divested business Heppo.com's net sales totalled SEK 4.9 million during the quarter, with an operating loss of SEK 5.0 million.

Sports & Health*

(SEK Million)	2013 Apr-Jun	2012 Apr-Jun	Change (%)	2013 Jan-Jun	2012 Jan-Jun	Change (%)
Net sales	156.3	116.4	34.3%	333.1	244.0	36.5%
Operating profit	13.6	10.9	24.8%	31.6	24.2	30.6%
Operating margin (%)	8.7%	9.4%		9.5%	9.9%
Ingoing inventory balance	57.9	48.6		63.6	47.6
Closing inventory balance	80.6	59.8	34.8%	80.6	59.8	34.8%

* Excluding divested entities and non-recurring costs as reported on page 4

The Sports & Health segment comprises the online stores Gymgrossisten.com, Bodystore.com, and the recently launched Milebreaker.com. Segment sales grew by 34% in the quarter and by 37% for the first half year. The segment accounted for 16% (13%) of total Group sales in the quarter and 17% (13%) of half year sales.

Sales growth in the periods was a result of a continued positive sales trend in all markets. The company's market position was strengthened by the continued expansion of private label products, mainly Star Nutrition, which accounted for 46% of total sales in the second quarter. During the quarter, the segment's logistics centre in Trollhättan was relocated. With the new warehouse in place, the company is now able to stock a wider range of products and further increase operational efficiency.

During the period, Gymgrossisten launched a new site design with enhanced features along with Gymgrossisten Magazine, the biggest lifestyle magazine for athletes in the Nordics. The magazine is distributed free of charge with all shipments in Sweden.

The segment's operating profit, excluding non-recurring charges of SEK -5.6 million related to the warehouse move, was up 25% for the quarter. The operating margin was reduced somewhat by continued investments in the new markets Denmark and Germany as well as in the newly launched Milebreaker store.

(SEK Million)	2013 Apr-Jun	2012 Apr-Jun	Change (%)	2013 Jan-Jun	2012 Jan-Jun	Change (%)
Net sales Operating profit Operating margin (%)	158.8 -0.2 -0.1%	146.1 -3.4 -2.3%	8.7% -	302.0 -3.6 -1.2%	292.4 -9.3 -3.1%	3.3% -
Ingoing inventory balance Closing inventory balance	88.6 67.8	64.6 59.0	14.9%	65.4 67.8	60.9 59.0	14.9%

Home & Garden

The Home & Garden segment comprises the online stores Tretti.com and Room21.com. Segment sales grew by 9% in the quarter. The segment accounted for 16% (16%) of total Group sales in the quarter and 15% (16%) of half year sales.

Despite a highly competitive home appliance market, sales increased for Tretti.com and the business is now fully integrated with the Group's other Malmö-based businesses. The implemented organisational changes resulted in lower operating costs leading to improved earnings for Tretti.com.

The Furniture and interior design store Room21.com continues to show good growth with improved earnings. Room21.com also implemented measures that contributed to stronger product margins, increased sales of private label products, and higher efficiency in warehousing and logistics.

CDON Group Logistics

(SEK Million)	2013	2012	Change	2013	2012	Change
	Apr-Jun	Apr-Jun	(%)	Jan-Jun	Jan-Jun	(%)
Operating profit	-4.3	-	-	-16.3	-	-

CDON Group Logistics AB was founded in the autumn of 2012 when the assets of the logistics business that operates warehousing for mainly Nelly.com and Lekmer.com were acquired.

Operating results improved by SEK 7.8 million compared to the first quarter of 2013 and by SEK 14.6 million compared to the fourth quarter of 2012. Operating losses for the second quarter totalled SEK 4.3 million. Results are consolidated into the accounts of the Group's central functions. Group companies are charged fair market prices and, as efficiency increases, losses are expected to decrease gradually with a break-even result expected in the latter half of the year. Of current losses, approximately 60% are attributable to the Entertainment segment and about 40% to the Fashion segment.

Parent company

The CDON Group parent company reported sales of SEK 13.8 (14.5) million in the quarter. The parent company's cash and cash equivalents amounted to SEK 304.5 (95.8) million at the end of the period. The parent company has not executed any investments in non-current assets during the quarter.

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 2012 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 2012 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 are presently of the same character, but less extensive, than described in the 2012 Annual Report and in the 2013 prospectus for the rights issue.

Other information

Third Quarter 2013 Financial Results

CDON Group's results for the third quarter ending 30 September 2013 will be published on 21 October 2013.

This report has not been reviewed by the Group's auditor.

The Board of Directors and CEO declare that the six-month interim report provides a fair overview of the parent company's and group's operations, their financial position and performance, and describes material risks and uncertainties facing the parent company and other companies in the group.

17 July 2013

Lars-Johan Jarnheimer Chairman of the Board

Mengmeng Du Non-Executive Director

Lars Nilsson Non-Executive Director Patrick Andersen Non-Executive Director

David Kelly Non-Executive Director

Paul Fischbein President and CEO Mia Brunell Livfors Non-Executive Director

Jonas Kjellberg Non-Executive Director

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 13.00 Stockholm time. 12.00 London time and 07.00 New York time.

To participate in the conference call, please dial:
Sweden:	+46 (0)8 535 264 08
International:	+44 (0)20 3427 1901
US:	+1 646 254 3363

The access pin code for the conference call is 7673512. 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

Media. Investor and analysts enquiries:

Fredrik Bengtsson. Head of Communications and Investor Relations Phone: +46 (0) 700 80 75 04 E-mail: press@cdongroup.com. ir@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. Lekmer.com). Fashion (Nelly.com and Members.com). Sport & Health (Gymgrossisten.com. Bodystore.com and Milebreaker.com) and Home & Garden (Tretti.com and Rum21.se) segments. CDON Group's online stores attracted approximately 244 million site visits and more than two million unique customers in 2012.

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 08:00 CET 17 July 2013.

CONDENSED CONSOLIDATED	2013	2012	2013	2012	2012
INCOME STATEMENT (SEK million)	Apr-Jun	Apr-Jun	Jan-Jun	Jan-Jun	Jan-Dec
Net sales	969.2	952.1	2,020.3	1,906.4	4,461.7
Cost of goods and services	-853.7	-843.1	-1,756.7	-1,661.9	-3,990.5
Gross profit	115.5	109.0	263.6	244.6	471.2
Sales and administration expenses	-160.0	-150.6	-315.7	-297.9	-638.0
Other operating income and expenses, net	-4.4	-1.8	-4.6	-2.2	-7.2
Operating profit	-48.9	-43.5	-56.6	-55.6	-173.9
Net interest & other financial items	-9.4	-5.0	-21.6	-10.4	-27.3
Profit before tax	-58.2	-48.5	-78.3	-66.0	-201.2
Tax	13.5	11.4	16.3	15.9	49.4
Net income for the period	-44.7	-37.1	-62.0	-50.1	-151.7
EBITDA	-43.7	-40.0	-46.4	-48.9	-158.2
Attributable to:
Equity holders of the parent	-44.4	-35.7	-61.1	-47.7	-149.6
Non-controlling interests	-0.3	-1.4	-0.9	-2.5	-2.2
Net income for the period	-44.7	-37.1	-62.0	-50.1	-151.7
Basic earnings per share (SEK)*	-0.62	-0.54	-0.92	-0.72	-2.25
Diluted earnings per share (SEK)*	-0.62	-0.54	-0.92	-0.72	-2.25

* Basic earnings per share for Apr-Jun 2013 and Jan-Jun 2013 have been calculated to reflect completed new share issue by w hich the number of outstanding shares increased from 66,342,124 to 99,513,183 before dilution and from 72,921,071 to 107,577,702 after dilution.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME CONDENSED (SEK million)	2013 Apr-Jun	2012 Apr-Jun	2013 Jan-Jun	2012 Jan-Jun	2012 Jan-Dec
Profit for the period	-44.7	-37.1	-62.0	-50.1	-151.7
Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
Translation difference for the period	1.6	-0.3	0.5	-0.7	-1.2
Other comprehensive income for the period	1.6	-0.3	0.5	-0.7	-1.2
Total comprehensive income for period	-43.1	-37.4	-61.6	-50.8	-152.9
Total comprehensive income attributable to:
Parent company shareholders	-42.8	-36.0	-60.7	-48.3	-150.7
Non-controlling interests	-0.3	-1.4	-0.9	-2.5	-2.2
Total comprehensive income for the period	-43.1	-37.4	-61.6	-50.8	-152.9
Shares outstanding at period's end Shares outstanding at period's end, incl convertible	99,513,186 107,577,702	66,342,124 72,921,071	99,513,186 107,577,702	66,342,124 72,921,071	66,342,124 72,921,071
Average number of shares, basic Average number of shares, incl convertible	72,147,992 78,988,138	66,342,124 72,921,071	69,261,096 75,971,364	66,342,124 72,921,071	66,342,124 72,921,071

CONSOLIDATED STATEMENT OF FINANCIAL	2013	2012	2012
POSITION CONDENSED (SEK million)	30-Jun	30-Jun	31-Dec
Non-current assets
Goodw ill	462.2	446.5	461.8
Other intangible assets	162.4	153.2	156.5
Total intangible assets	624.6	599.7	618.3
Financial non-current assets	1.6	1.6	1.6
Tangible non-current assets	17.0	9.3	14.3
Deferred tax asset	44.4	6.0	44.4
Total non-current assets	687.5	616.6	678.5
Current assets
Inventories	550.1	532.6	609.7
Current interest-bearing receivables Current non-interest-bearing receivables	0.0	0.0	0.0
Total receivables	182.4 182.4	158.2 158.2	268.5 268.5
Cash and cash equivalents	327.2	110.4	126.1
Total current assets	1,059.7	801.2	1,004.3
Total assets	1,747.3	1,417.9	1,682.8
Equity Equity attributable to ow ners of the parent
Non-controlling interest	709.0	367.8	267.1
Total equity	-1.6 707.4	-1.0 366.8	-0.7 266.4
Non-current liabilities
Non interest bearing
Deferred tax liability	29.8	39.6	30.9
Other provisions	1.1	5.0	6.0
Interest bearing
Long term loans	150.0	0.0	0.0
Convertible bond	227.2	218.8	223.0
Total non-current liabilities	408.1	263.4	259.8
Current liabilities Short term interest bearing loans
Current interest-bearing liabilities	0.0	150.0	150.0
Current non-interest-bearing liabilities	15.0	15.0	15.0
Total current liabilities	616.7 631.7	622.7 787.7	991.6 1,156.6
Total equity and liabilities	1,747.3	1,417.9	1,682.8

The carrying amounts are considered to be reasonable approximations of fair value for all financial assets and financial liabilities, except for the convertible debt. Fair value of the convertible debt is estimated to be SEK 243,8 million as of June 30, 2013. Fair value of the convertible debt w as estimated to be SEK 245,5 million as of 31 December 2012.

CONSOLIDATED STATEMENT OF CASH FLOWS	2013	2012	2013	2012	2012
CONDENSED (SEK million)	Apr-Jun	Apr-Jun	Jan-Jun	Jan-Jun	Jan-Dec
Cash flow from operating activities	-6.3	-50.0	-68.4	-82.8	-97.5
Changes in w orking capital	42.3	4.1	-222.8	-197.7	-142.1
Cash flow from operations	36.0	-46.0	-291.2	-280.5	-239.6
Investments in subsidiaries*	-7.6	-4.9	-10.6	-4.9	-7.9
Investments in other non-current assets	-13.3	-9.8	-20.7	-21.8	-42.5
Divested operations**	21.4	0.0	21.4	0.0	0.0
Other cash flow from investing activities	0.0	0.0	0.0	0.0	0.0
Cash flow to/from investing activities	0.5	-14.7	-9.9	-26.7	-50.3
New share issue	502.2	0.0	502.2	0.0	0.0
Issue of credit facilities	150.0	0.0	150.0	0.0	0.0
Amortisation of credit facilities	-399.7	0.0	-150.0	0.0	0.0
Cash flow to/from financing activities	252.5	0.0	502.2	0.0	0.0
Change and cash equivalents for the period	288.9	-60.6	201.1	-307.2	-289.9
Cash and cash equivalents at period's start	34.5	170.7	126.1	417.4	417.4
Translation difference, cash and cash equivalents	3.8	0.3	0.0	0.2	-1.4
Cash and cash equivalents at period's end	327.2	110.4	327.2	110.4	126.1

* Investments in subsidiaries Jan-Jun 2013 comprises SEK 6.0 million acquisition of Business Linc BL AB's operations and SEK 4.6 million acquisition of Lekmer AB.

** Divested operations Jan-Jun 2013 comprises the first installment of SEK 21.4 million on disposal of Heppo AB's operations.

STATEMENT OF CHANGES IN EQUITY	2013	2012	2012
CONDENSED (SEK million)	30-Jun	30-Jun	31-Dec
Opening balance	266.4	417.3	417.3
Profit for the period	-62.0	-50.1	-151.7
Other comprehensive income	0.5	-0.7	-1.2
Effects of long term incentive program	0.3	0.3	0.9
New share issue*	502.2	0.6	0.6
Repurchased ow n shares	-	-0.6	-0.6
Effect of change in tax rate on convertible	-	-	1.2
Closing balance	707.4	366.8	266.4

* Transaction costs of approximately SEK 15.3 million (SEK 11.9 million net of tax) directly attributable to the issue of new ordinary shares are recognized, net of tax, in equity as a deduction from the proceeds.

NET SALES (SEK million)	2012 Jan-Mar	2012 Apr-Jun	2012 Jan-Jun	2012 Jul-Sep	2012 Oct-Dec	2012 Full year	2013 Jan-Mar	2013 Apr-Jun	2013 Jan-Jun
Entertainment	484.3	464.1	948.3	525.0	912.7	2,386.0	512.4	410.5	922.9
Fashion	196.4	225.9	422.3	193.3	327.3	942.9	223.8	244.1	467.9
Sport & Health	127.6	116.4	244.0	123.5	128.9	496.4	176.8	156.3	333.1
Home & Garden Total operational business areas	146.3	146.1	292.4	141.6	197.5	631.6	143.2	158.8	302.0
Group central operations	954.6	952.5	1,907.1	983.4	1,566.4	4,456.9	1,056.1	969.7	2,025.9
Eliminations	13.4	14.5	27.9	12.4	60.7	101.1	42.7	46.9	89.6
CONSOLIDATED TOTAL	-13.7 954.3	-14.9 952.1	-28.6 1,906.4	-13.4 982.5	-54.3 1,572.8	-96.2 4,461.7	-47.8 1,051.1	-47.4 969.2	-95.2 2,020.3
Intersegment sales Entertainment	-	-	-	0.0	0.5	0.5	8.5	0.8	9.4
Fashion	-	-	-	-	-	-	-	0.0	0.0
Sport & Health	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Home & Garden	0.2	0.4	0.6	0.9	0.6	2.1	0.0	0.0	0.0
Group central operations	13.4	14.5	27.9	12.4	53.2	93.6	39.2	46.6	85.8
Total	13.7	14.9	28.6	13.4	54.3	96.2	47.8	47.4	95.2
OPERATING PROFIT (SEK million)	2012 Jan-Mar	2012 Apr-Jun	2012 Jan-Jun	2012 Jul-Sep	2012 Oct-Dec	2012 Full year	2013 Jan-Mar	2013 Apr-Jun	2013 Jan-Jun
Entertainment	24.1	11.8	36.0	19.6	46.8	102.3	13.3	-41.9	-28.6
Fashion	-38.5	-57.5	-96.1	-30.3	-141.3	-267.6	-17.4	-4.0	-21.5
Sport & Health	13.3	10.9	24.3	10.6	12.4	47.3	17.9	8.0	25.9
Home & Garden	-5.9	-3.4	-9.3	-1.3	-3.1	-13.7	-3.4	-0.2	-3.6
Total operational business areas	-7.0	-38.2	-45.2	-1.3	-85.2	-131.6	10.3	-38.1	-27.8
Group central operations Of which CDON Group Logistics AB	-5.1 -	-5.3 -	-10.4 -	-6.3 -	-25.5 -19.4	-42.2 -19.4	-18.1 -12.1	-10.8 -4.3	-28.9 -16.3
CONSOLIDATED TOTAL	-12.1	-43.5	-55.6	-7.6	-110.7	-173.9	-7.8	-48.9	-56.6
PROFIT BEFORE TAX	2012	2012	2012	2012	2012	2012	2013	2013	2013
(SEK million)	Jan-Mar	Apr-Jun	Jan-Jun	Jul-Sep	Oct-Dec	Full year	Jan-Mar	Apr-Jun	Jan-Jun
Entertainment	23.6	11.7	35.3	17.9	46.1	99.3	10.8	-43.2	-32.4
Fashion	-40.5	-58.8	-99.2	-33.8	-144.1	-277.1	-22.9	-5.8	-28.6
Sport & Health	13.4	11.0	24.4	9.1	13.2	46.7	17.2	8.7	25.9
Home & Garden Total operational business areas	-6.0 -9.4	-3.4 -39.5	-9.4 -49.0	-1.4 -8.1	-3.2 -88.0	-14.1 -145.1	-3.8 1.4	-0.6 -40.9	-4.4 -39.5
Group central operations Of which CDON Group Logistics AB	-8.1 -	-8.9 -	-17.0 -	-8.3 -	-30.8 -19.5	-56.0 -19.5	-21.4 -12.5	-17.3 -4.8	-38.8 -17.3
CONSOLIDATED TOTAL	-17.5	-48.5	-66.0	-16.4	-118.8	-201.2	-20.1	-58.2	-78.3
INVENTORIES	2012	2012		2012	2012		2013	2013
(SEK million)	31-Mar	30-Jun		30-Sep	31-Dec		31-Mar	30-Jun
Entertainment	221.2	208.5		281.1	287.1		259.0	252.3
Fashion	175.2	205.3		276.2	193.6		238.4	149.3
Sport & Health	48.6	59.8		57.9	63.6		57.9	80.6
Home & Garden Total operational business areas	64.6 509.6	59.0 532.6		67.7 682.9	65.4 609.7		88.6 643.9	67.8 550.1
Group central operations	0.0	0.0		0.0	0.0		0.0	0.0
CONSOLIDATED TOTAL	509.6	532.6		682.9	609.7		643.9	550.1

PARENT COMPANY INCOME STATEMENT	2013	2012	2013	2012	2012
CONDENSED (SEK million)	Apr-Jun	Apr-Jun	Jan-Jun	Jan-Jun	Jan-Dec
Net Sales	13.8	14.5	27.1	27.9	54.0
Gross profit	13.8	14.5	27.1	27.9	54.0
Administration expenses	-20.3	-19.8	-39.7	-38.4	-76.9
Operating profit	-6.6	-5.3	-12.6	-10.4	-22.8
Net interest & other financial items	-6.0	-3.7	-9.0	-6.6	-13.7
Group contribution received	0.0	0.0	0.0	0.0	148.2
Group contribution paid	0.0	0.0	0.0	0.0	-120.4
Change in excess depreciation	0.0	0.0	0.0	0.0	0.0
Profit before tax	-12.6	-8.9	-21.5	-17.0	-8.7
Tax	2.7	2.4	4.7	4.5	2.3
Net income for the period	-9.9	-6.6	-16.8	-12.5	-6.4
PARENT COMPANY STATEMENT OF COMPREHENSIVE INCOME CONDENSED (SEK million)
Profit for period	-9.9	-6.6	-16.8	-12.5	-6.4

Other comprehensive income 0.0 0.0 0.0 0.0 0.0 Total comprehensive income for period -9.9 -6.6 -16.8 -12.5 -6.4

PARENT COMPANY STATEMENT OF FINANCIAL POSITION 2013 2012 CONDENSED (SEK million) 30-Jun 30-Jun Non-current assets	2012 31-Dec 818.2 0.0
Shares and participating interests 818.3 684.3
Equipment 0.0 0.0
Total non-current assets 818.4 684.3	818.3
Current assets
Current interest-bearing receivables
307.3 181.9 Current non-interest-bearing receivables	370.0
17.8 138.4 Cash and cash equivalents 304.5 95.8	156.1 87.7
Total current assets 629.5 416.2	613.8
Total assets 1,447.9 1,100.5	1,432.0
Equity
Restricted equity 200.8 134.4	134.4
Unrestricted equity 686.2 259.0	266.9
Total equity 887.0 393.5	401.3
Non-current liabilities
Convertible bonds 227.2 218.8	223.0
Interest-bearing liabilities 150.0 0.0	0.0
Deferred tax liability 5.0 8.2	6.0
Provisions 1.1 5.0	1.0
Total non-current liabilities 383.4 232.0	229.9
Current liabilities Short term interest bearing loans
0.0 150.0 Other interest-bearing liabilities	150.0
153.2 296.8 Non-interest-bearing liabilities	360.3
24.3 28.2 Total current liabilities	290.6
177.5 475.0 Total equity and liabilities 1,447.9 1,100.5	800.8 1,432.0

KEY RATIOS	2012	2012	2012	2012	2012	2012	2013	2013	2013
	Jan-Mar	Apr-Jun	Jan-Jun	Jul-Sep	Oct-Dec	Full year	Jan-Mar	Apr-Jun	Jan-Jun
GROUP
Sales grow th (%)	66.9	38.2	51.2	18.9	19.5	31.1	10.1	1.8	6.0
Change in operating expenses (%)	63.4	39.3	50.3	31.0	30.3	39.1	5.7	6.2	5.9
Operating margin (%)	-1.3	-4.6	-2.9	-0.8	-7.0	-3.9	-0.7	-5.0	-2.8
Gross profit margin (%)	14.2	11.4	12.8	13.1	6.2	10.6	14.1	11.9	13.0
Return on capital employed (%)	13.1	4.4	4.4	1.1	neg	neg	neg	neg	neg
Return on equity (%)	15.0	3.2	3.2	neg	neg	neg	neg	neg	neg
Equity/assets ratio (%)	28.1	25.9	25.9	23.9	15.8	15.8	15.9	40.5	40.5
Net debt (SEK million)	196.1	258.4	258.4	361.8	246.8	246.8	590.3	50.0	50.0
Cash flow s from operations (SEK million)	-234.5	-46.0	-280.5	-92.4	133.4	-239.6	-327.1	36.0	-291.2
Earnings per share (SEK)*	-0.18	-0.54	-0.72	-0.16	-1.38	-2.25	-0.25	-0.62	-0.92
Equity per share (SEK)**	6.09	5.53	5.53	5.34	4.02	4.02	3.74	7.12	7.12
Depreciation/Net sales (%)	0.3	0.4	0.4	0.4	0.3	0.4	0.5	0.5	0.5
Capital Expenditure/Net sales (%)	1.3	1.0	1.1	0.6	0.9	1.0	0.7	1.4	1.0
No. of visits (thousand)	58,679	54,532	113,211	53,332	77,802	244,344	64,394	58,926	123,321
No. of orders (thousand)	1,579	1,437	3,017	1,553	2,527	7,096	1,710	1,533	3,242
Average shopping basket (SEK)	581	643	611	611	590	603	618	633	625
Entertainment
No. of visits (thousand)	22,305	19,565	41,869	21,830	35,472	99,172	25,938	22,083	48,021
No. of orders (thousand)	1,048	868	1,916	1,039	1,748	4,702	1,089	904	1,993
Average shopping basket (SEK)	436	508	469	482	491	480	470	454	463
Fashion
No. of visits (thousand)	30,292	29,292	59,584	25,663	35,077	120,324	30,361	29,280	59,641
No. of orders (thousand)	296	356	652	292	514	1,459	323	352	675
Average shopping basket (SEK)	644	628	635	641	606	626	692	693	693
Sport & Health
No. of visits (thousand)	3,497	2,979	6,476	3,000	3,477	12,953	4,805	4,112	8,917
No. of orders (thousand)	180	158	338	164	173	676	237	214	451
Average shopping basket (SEK)	703	733	717	745	737	729	745	731	738
Home & Garden
No. of visits (thousand)	2,585	2,696	5,281	2,839	3,775	11,896	3,291	3,451	6,742
No. of orders (thousand)	56	55	110	58	91	259	60	63	123
Average shopping basket (SEK)	2,574	2,625	2,599	2,380	2,120	2,383	2,385	2,528	2,458

* Earnings per share for the periods Jan-Dec 2012 and Jan-Jun 2013 have been calculated on the average number of outstanding shares for the periods. The w eighted average number of shares for the full year 2012 is 66,342,124. For the period Apr-Jun 2013 w eighted average number of shares amounts to 72,147,992 and for the period Jan-Jun 2013 w eighted average number of shares amounts to 69,261,096.

** Calculated on present number of shares, as per June 2013, amounting to 99,513,186.

Definitions
Gross profit margin	Gross profit as a percentage of net sales. Gross profit includes costs directly attributable to the goods sold, fulfillment costs, and shipping costs.
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.

Note 1

CDON Group AB announced that the company has entered into an agreement to sell the operations of subsidiary Heppo AB to Footw ay Group AB.

The transaction w as made through an asset deal and included the majority of Heppo AB's assets, as w ell as the liabilities attributable thereto. Heppo AB w as part of the Group's fashion segment and reported total net sales of approximately SEK 103 million and an operating result of approximately SEK -20 million in 2012. The purchase price amounted to 42 million, half of w hich w as received as a cash consideration at closing, and the remainder received as four instalments betw een September 2013 and June 2014. The transaction w as closed on 18 April and affect second quarter earnings w ith approximately SEK -3 million.

RESULT FROM DIVESTED OPERATIONS (SEK million)		2012 Jan-Jun
Net sales	23.6	42.2
Expenses	-30.9	-53.8
Profit before tax	-7.2	-11.6
Tax	2.0	3.1
Profit after tax but before capital gain/loss from divested operations	-5.3	-8.6
Capital gain/loss from divested operations	-2.5	-
Tax attributable to the above capital gain/loss	0.5	-
Capital gain/loss after tax	-1.9	-
Total income for the period	-7.2	-
Net cash flow from divested operations
Cash flow from operations		-13.2
Cash flow to/from investing activities		-1.7
Cash flow to/from financing activities		14.9
Net cash flow from divested operations	9.4	0.0

DIVESTED ASSETS AND LIABILITIES FROM HEPPO AB'S OPERATIONS
(SEK million)	values
Tangible non-current assets	-0.3
Inventories	-42.2
Net identifiable assets and liabilities	-42.6
Purchase price	42.2
Deferred purchase price	-21.1
Net cash flow	21.1

Deferred purchase price

The purchase price amounts to 42 million, half of w hich w as received as a cash consideration at closing, and the remainder received as four instalments betw een September 2013 and June 2014.

SUMMARY DEVELOPMENT OF DIVESTED OPERATIONS (SEK million)	2012 Jan-Mar	2012 Apr-Jun	2012 Jul-Sep	2012 Oct-Dec	2013 Jan-Mar	2013 Apr-Jun
Net sales	15.4	26.9	29.2	31.3	18.7	4.9
Operating profit	-5.1	-6.3	-3.5	-5.2	-3.6	-5.0
Closing inventory balance	29.0	28.3	40.9	34.0	47.7	5.0