INTERIM REPORT FOR THE PERIOD 1 JULY 2017 TO 30 SEPTEMBER 2017

Nov 14, 2017, 8:00

 

Consolidated revenue for Q1 2017/18 amounted to DKK 810 million (DKK 851 million) corresponding to a reduction of 4.8% or 4.4% measured in local currency. Revenue decreased in the wholesale channel whereas the retail channel reported increased revenue driven by higher same-store revenue as well as the full-year effect from new stores. The gross margin amounted to 58.3% compared to 56.1% reported last financial year. Costs decreased by DKK 10 million whereas the cost ratio increased to 41.0% (40.2%). The consolidated operating profit for Q1 2017/18 amounted to DKK 140 million (DKK 135 million) resulting in an EBIT margin of 17.3% compared to 15.9% for Q1 2016/17.

We retain the outlook for the financial year 2017/18 as announced on 31 August 2017.

 

Segment performance for Q1

  • Peak Performance generated revenue for Q1 2017/18 of DKK 346 million (DKK 348 million) corresponding to a reduction of 0.6% (0.0% measured in local currency). The retail channel reported a revenue increase which consequently means that the revenue reduction was driven by the wholesale channel due to timing of deliveries. The operating profit amounted to DKK 72 million (DKK 62 million) corresponding to an EBIT margin of 20.8% (17.8%). The improved margin is attributable to a higher gross margin.

 

  • Tiger of Sweden generated revenue for Q1 2017/18 of DKK 266 million (DKK 289 million) thus corresponding to a decrease of 8.0% (7.5% measured in local currency). Revenue from the wholesale channel declined due to lower order intake on the autumn collections whereas revenue from the retail channel increased. The operating profit amounted to DKK 47 million (DKK 55 million), and the EBIT margin thus declined to 17.7% (19.0%) as a consequence of a higher cost ratio.

 

  • By Malene Birger generated revenue for Q1 2017/18 of DKK 96 million (DKK 99 million) corresponding to a decline of 3.0% (2.5% measured in local currency). This revenue reduction was primarily attributable to lower order intake whereas the retail revenue increased. The operating profit amounted to DKK 8 million (DKK 4 million), and the EBIT margin improved to 8.3% (4.0%) due to a higher gross margin.

 

  • Revenue from the Group’s Other brands decreased by 11.3% (11.2% measured in local currency) to DKK 102 million for Q1 2017/18 (DKK 115 million) driven by Saint Tropez. The operating profit amounted to DKK 3 million (DKK 13 million) resulting in an EBIT margin of 2.9% (11.3%).

 

Group performance for Q1

  • Consolidated revenue amounted to DKK 810 million (DKK 851 million) corresponding to a reduction of 4.8% (reduction of 4.4% measured in local currency). This reduction was driven by the wholesale channel, in particular by Tiger of Sweden, whereas revenue from the retail channel increased as a consequence of higher revenue from physical stores, high e-commerce growth as well as the full-year effect from stores opened within the past twelve months. During Q1 2017/18, the total number of stores was reduced by 6 primarily attributable to store closures in Saint Tropez.

 

  • The gross profit amounted to DKK 472 million (DKK 477 million) whereas the gross margin increased to 58.3% (56.1%) which was primarily attributable to improved product margins as well as a larger share of sales through own channels.

 

  • Capacity costs declined by DKK 10 million to DKK 332 million compared to Q1 2016/17. This reduction is, inter alia, attributable to the effect of the implemented structural changes during Q3 2016/17. However, the cost ratio increased to 41.0% (40.2%) as a consequence of the lower revenue.

 

  • The consolidated operating profit for Q1 2017/18 amounted to DKK 140 million (DKK 135 million) corresponding to an EBIT margin of 17.3% compared to 15.9% for Q1 2016/17.

 

  • The working capital amounted to DKK 565 million corresponding to a decline of DKK 114 million compared to last financial year and constituted 20.9% of the trailing twelve months revenue compared to 25.4% for the same period last financial year.

 

Unchanged outlook for the financial year 2017/18

For the Group as a whole, we expect to realize a minor revenue reduction compared to the financial year 2016/17 and an EBIT margin of approx. 5%. 
 
A moderate revenue and earnings growth is expected in Peak Performance. In Tiger of Sweden revenue is expected to decline while earnings are expected to be significantly reduced compared to last financial year. We expect a moderate revenue decline but significant earnings improvement in By Malene Birger.
 
Investments for the financial year 2017/18 are expected to be in the region of 3-4% of annual revenue.

 

Strategic review process of Peak Performance

As communicated in Company Announcement no. 22/2017 dated 5 October 2017, the Group has initiated a strategic review process of Peak Performance. The purpose of this process is, inter alia, to identify whether IC Group – either partial or in full – also serves as the best owner of Peak Performance in the future.
 
The process is on schedule, however, yet at an early stage. The Group has no further comments.

 

Copenhagen, 14 November 2017

IC Group A/S

 

Alexander Martensen-Larsen

CEO

 

 

Information Meeting

IC Group will host an information meeting for investors, analysts and other stakeholders on Tuesday 14 November 2017 at 10.00 a.m.

The information meeting will be held in English via audio cast and telephone, and it will be possible to raise questions online using the chat function or telephone. To participate in the information meeting online, please use the link below which is also available on our corporate website icgroup.net under Investors/calendar-events/: https://edge.media-server.com/m6/p/xmkj5fda

 

To participate in the telephone conference, please dial in using the below-listed telephone numbers:

 +45 3271 1659 (Denmark)

+1 646 254 3388 (USA)

+44 (0) 20 3427 1919 (UK)

 

 

Please direct any questions regarding this announcement to:                                                                   

Jens Bak-Holder

Head of Investor Relations

Phone: +45 21 28 58 32

 

 

 

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.