Growth and higher earnings for the Group’s Premium brands

May 13, 2015, 8:00

For the first three quarters of 2014/15, the Group generated revenue of DKK 2,145m (DKK 2,095m), an increase of 2.4% (4.5% in local currency) compared to the same period last year. Gross margin was 54.7% for the Group’s continuing operations, thus lower than in the same period last year (56.7%). Operating profit of the Group’s Premium brands increased, whereas operating profit for the Group’s overall continuing operations declined by DKK 26m to DKK 227m.

  • For the first three quarters of 2014/15, Peak Performance generated revenue of DKK 871m (DKK 843m), corresponding to growth of 3.3% (5.0% in local currency). Both wholesale and retail channels reported revenue growth, with the markets in the Alps region as the main contributors. Operating profit was DKK 145m (DKK 132m).
  • Tiger of Sweden increased revenue by 6.2% (9.7% in local currency) to DKK 712m (DKK 671m). Revenue of the retail channel was moderate, whereas sales to wholesale customers contributed positively to overall revenue growth. Growth remained strong in Germany, while revenue in the Nordic region was unchanged. Operating profit was DKK 88m (DKK 72m).
  • By Malene Birger reported an increase in revenue by 5.6% (6.8% in local currency) to DKK 266m (DKK 252m) driven by the wholesale channel. Revenue of the retail channel remained unchanged. Geographically, growth was generated primarily in the Nordic region and in Japan. Operating profit was DKK 21m (DKK 25m).
  • Revenue of the non-core business declined by 9.9% (9.3% in local currency) during the first three quarters of 2014/15 mainly due to less successful collections of Saint Tropez impacting Saint Tropez revenue negatively. Operating profit was DKK 14m (DKK 26m).
  • Gross margin of the Group’s continuing operations was 54.7% for the first three quarters of 2014/15 against 56.7% in the same period last year. Gross profit was impacted by previously reported non-recurring costs in Q2 and negative exchange rate effects, clearance of old stock and larger discounts. Management is in the process of planning the implementation of targeted price increases of the goods of all brands to respond to the increased USD exchange rate level.
  • Capacity costs which increased by DKK 11m to DKK 947m were negatively impacted by previously reported non-recurring costs in Q2, but positively impacted by exchange rate effects. Following the divestment of the Mid-Market division, idle capacity costs impacted the first three quarters of 2014/15 negatively by DKK 18m.
  • Operating profit which declined by DKK 26m to DKK 227m (DKK 253m) was negatively impacted by previously reported non-recurring costs in Q2 of DKK 12m, the development of the Group’s non-core business and the effect of idle capacity costs. Operating profit in the first three quarters of 2014/15 corresponded to an EBIT margin of 10.6% compared to 12.1% in the same period last year. EBIT margin was only slightly negatively impacted by exchange rate effects in the period. Adjusted for non-recurring costs in Q2 and idle capacity costs, EBIT margin came to 12.0%.

Outlook for the financial year 2014/15 – clarified

 

The Group’s Premium brands are expected to continue to generate positive growth in 2014/15, and consequently revenue for continuing operations is expected to be in the region of DKK 2,600m to DKK 2,650m (unchanged).

 

For the Group’s Premium brands, operating profit is expected to be in the region of DKK 200m to DKK 230m, while operating profit for the non-core business is expected to be about DKK 15m to DKK 25m (unchanged).

 

In 2014/15, the Group’s continuing operations will be negatively impacted by non-recurring costs of DKK 12m and by idle capacity costs estimated to come to about DKK 30m (unchanged). As a result of the changed reporting structure, these costs will be reported under “unallocated items and eliminations”.

 

Overall, operating profit for the Group’s continuing operations is expected to be in the region of DKK 170m to DKK 210m. Adjusted for the above costs, operating profit for the Group’s continuing operations is expected to come to DKK 215m to DKK 255m (unchanged).

 

Investments in the financial year 2014/15 are expected to constitute 3% of revenue (clarified).

 

This announcement is a translation from the Danish language. In the event of any discrepancy between the Danish and English versions, the Danish version shall prevail.