Outlook

Outlook for 2018/19

Following the divestment of IC Group’s largest and most profitable brand; Peak Performance, the Board of Directors has determined to change the Company’s business model entailing that IC Group will become a listed holding company owning shares in the remaining brands. The Board of Directors will continuously consider when it is in the best interest of the shareholders to divest these brands.

The Group’s changed business model will result in tasks previously undertaken by IC Group are transferred to and performed by the individual brands in the future to the effect that these brands become independent units with their own support functions. In addition, the Group is also considering divesting its Logistics function.

The transformation of IC Group is expected to be completed during the financial year 2019/20. Non-recurring costs in relation to the transformation are expected to amount to approx. DKK 55 million – approx. DKK 35 million for the financial year 2018/19 and approx. DKK 20 million for the financial year 2019/20. As of the financial year 2020/21, the annual savings are expected to be in the region of DKK 25 million. The exact amounts as well as the distribution between the individual financial years will depend on the implementation of the transformation.

For the financial year 2018/19, a flat revenue development for the remaining brands in total, measured in local currency, is expected. The EBIT margin is expected to be realized at a level of 0-1% prior to the above-mentioned non-recurring costs.

In Tiger of Sweden, revenue is expected to increase while the nominal earnings are expected at the same level as last financial year. Growth will primarily be driven by international wholesale revenue and e-commerce, while higher costs for staff and marketing will have a negative impact on earnings.

In By Malene Birger, revenue is also expected to increase while the nominal earnings are expected at the same level as last financial year. Growth will primarily be driven by pre-order revenue and e-commerce, while higher staff costs will have a negative impact on earnings.

In Saint Tropez, revenue is expected to continue to decline while the nominal earnings are expected to improve compared to last financial year. The lower revenue will be driven by both the wholesale channel as well as the retail channel where a number of stores have been and will be closed. Cost-cutting measures implemented during the financial year 2017/18 will have a positive impact on earnings.

Finally, in Designers Remix, both revenue and nominal earnings are expected to be reduced. The setback will primarily be driven by a lower wholesale revenue.

The line item “Unallocated items and eliminations” will be negative as it will be affected negatively by changed allocation principles in respect of costs in the corporate functions as well as idle costs in respect of the head office after the divestment of Peak Performance. Combined, these amount to approx. DKK 30 million.

Investments for the financial year 2018/19 are expected to amount to approx. 4% of annual revenue primarily driven by Tiger of Sweden.

Last update: August 31, 2018