Cost-cutting measures at Tiger of Sweden
As part of the process of executing Tiger of Sweden’s strategy, of which the purpose is, among others, to create a more competitive, digitally-oriented and agile brand, a number of cost-cutting measures such as organizational changes and store closures will be initiated.
The cost-cutting measures will lead to non-recurring costs for the financial year 2018/19, primarily for severance payments and costs in respect of store closures. The non-recurring costs for 2018/19 are expected to amount to approx. DKK 10 million. The exact amounts as well as the distribution between the individual financial years will depend on the negotiations with the parties involved.
As of the financial year 2019/20, the annual savings are expected to amount to approx. DKK 10 million. The plan is for Tiger of Sweden to return to the level of earnings performance generated in previous years as quickly as possible.
Outlook for the Group’s continuing operations for the financial year 2018/19
As a consequence of the above, the expectations for the EBIT margin before non-recurring costs in respect of the transformation of IC Group are changed to approx. 0% (previously “1-2%”) and Tiger of Sweden’s nominal earnings are changed to a substantial decline (previously “moderate decline”).
The remaining expectations for the financial year 2018/19 are clarified in the below table.
|DKK million|| Realized
| Most recent
|Revenue development (local currency)||(7.3)%||Minor reduction||Reduction of 6-7%.|
|Tiger of Sweden||(9.0)%||Minor reduction||Reduction of approx. 6%|
|By Malene Birger||(4.0)%||Moderate reduction||Reduction of approx. 7%|
| EBIT margin before non-recurring costs for
the transformation of IC Group
|Tiger of Sweden||47||Moderate decline||Substantial decline|
|By Malene Birger||18||Substantial decline||Substantial decline|
|Investments||2.3%||Approx. 2%.||Approx. 2%.|
Expectations for non-recurring costs for the financial years 2018/19 and 2019/20 – unchanged
Non-recurring costs relating to the transformation of IC Group are expected to amount to approx. DKK 45 million in total of which approx. DKK 30 million is expected to be recognised in the financial year 2018/19 and approx. DKK 15 million is expected to be recognised in the financial year 2019/20. When including the accounting loss attributable to the divestment of the Group’s logistics function (approx. DKK 20 million), the non-recurring costs are expected to amount to approx. DKK 65 million in total of which DKK 50 million relates to the financial year 2018/19. The exact amounts as well as the distribution between the individual financial years will still depend on the implementation of the transformation.
As of the financial year 2020/21, the annual savings are expected to be in the region of DKK 25 million.
IC Group A/S
Please direct any questions regarding this announcement to:
Karin Hjort Jensen
Executive assistant to the CEO
+45 32 66 75 43
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.