Interim report for H1 2010/11

Feb 09, 2011, 8:25

Growth, earnings capacity and future investments

Consolidated revenue for H1 2010/11 rose by 13% to DKK 2,108 million. This revenue growth is built on growth in both the retail and wholesale segments. Operating profit amounted to DKK 265 million. To enhance future earnings capacity Management implemented a new structure for logistics and the organisation which led to non-recurring costs of DKK 16 million in Q2 2010/11. After having adjusted for total non-recurring costs of DKK 28 million, the Group achieved an expected EBIT margin of 13.9%.

  • Consolidated revenue for H1 2010/11 amounted to DKK 2,108 million (DKK 1,865 million) which is an increase of 13% compared to last year. Consolidated revenue for Q2 2010/11 amounted to DKK 893 million corresponding to an increase of 14% compared to last year.
  • Wholesale revenue amounted to DKK 1,301 million (DKK 1,156 million) which constitutes an increase of 13% compared to last year. Wholesale revenue for Q2 2010/11 rose by 15% to DKK 459 million compared to last year.
  • Retail revenue amounted to DKK 807 million (DKK 710 million) and thus represents a 14% increase. Retail revenue for Q2 2010/11 rose by 12% to DKK 433 million.
  • Gross profi t amounted to DKK 1,267 million (DKK 1,157 million). The Group thus generated a gross margin of 60.1% (62.0%). The pending Canadian duty case had a negative impact on the gross margin by 0.6 percentage points for H1 2010/11. After having adjusted for this, the gross margin was thus reduced by 1.3 percentage points compared to last financial year. The gross margin for Q2 2010/11 was reduced by 0.7 percentage point to 61.1%.
  • Capacity costs amounted to DKK 1,002 million (DKK 894 million) corresponding to an increase of 12%. The new implemented structure for logistics and the organisation during Q2 2010/11 led to non-recurring costs of DKK 16 million which resulted in rising capacity costs. After having adjusted for non-recurring costs, the cost efficiency amounted to 46.8% (47.9%) which is an improvement of 1.1 percentage points. The cost effi ciency for Q2 2010/11 was improved by 1.3 percentage points to 55% after having adjusted for non-recurring costs.
  • Operating profit amounted to DKK 265 million (DKK 263 million). The Group thus generated an EBIT margin of 12.6% (14.1%). After having adjusted for non-recurring costs, the EBIT margin for H1 2010/11 amounted to 13.9%. The EBIT margin for Q2 2010/11 was improved by 0.4 percentage points to 5.7% after having adjusted for nonrecurring costs.
  • Order intake for the summer collection 2011 is expected to record an increase of 10%.

Outlook for 2010/11

  • Consolidated revenue for the financial year 2010/11 is still expected to attain DKK 3,900 – 4,000 million (unchanged). The existing pressure on the Group’s gross margin as a consequence of rising sourcing costs and a more fierce competition in the wholesale market is expected to continue. On this basis, the operating profit for the financial year 2010/11 is expected to attain a level of DKK 320 – 360 million (unchanged).
  • Investments in the region of DKK 130 – 150 million (unchanged) are expected primarily for an expansion of the distribution and sales promoting improvements of the IT platform.

Copenhagen, 9 February 2011

For further information, please contact:

Niels Mikkelsen
Chief Executive Officer
Phone: +45 3266 7721

Chris Bigler
Chief Financial Officer
Phone: +45 3266 7017