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Tuesday, 6 February 2018

INTERIM REPORT FOR THE PERIOD 1 JULY 2017 TO 31 DECEMBER 2017

IC Group A/S    

Published: 08:00 CET 06-02-2018 /GlobeNewswire /Source: IC Group A/S / : IC /ISIN: DK0010221803

INTERIM REPORT FOR THE PERIOD 1 JULY 2017 TO 31 DECEMBER 2017


Consolidated revenue for H1 2017/18 amounted to DKK 1,483 million (DKK 1,517 million) corresponding to a reduction of 2.2% (1.5% measured in local currency). Revenue decreased in the wholesale channel whereas the retail channel reported increased revenue. The gross margin increased by 1.3% to 57.9% compared to the same period last financial year. Costs decreased by DKK 26 million, and the cost ratio was improved by 44.0% (44.7%). The consolidated operating profit for H1 2017/18 amounted to DKK 207 million (DKK 180 million) resulting in an EBIT margin of 14.0% compared to 11.9% for H1 2016/17.


We retain the outlook for the financial year 2017/18 for the Group as a whole, however, specified more precisely on each business unit.

 

Segment performance for Q2

  • Peak Performance generated revenue for Q2 2017/18 of DKK 313 million (DKK 267 million) corresponding to a growth rate of 17.2% (18.5% measured in local currency). The revenue development was driven by the wholesale channel as a consequence of higher in-season selling and timing of deliveries from Q1 2017/18. Furthermore, the retail channel also contributed to this growth which was driven by the full-year effect of new stores as well as increased outlet activity. The operating profit amounted to DKK 61 million (DKK 49 million) corresponding to an EBIT margin of 19.5% (18.4%). The higher margin is primarily attributable to an improved cost ratio.
  • Revenue from Tiger of Sweden for Q2 2017/18 declined by 14.1% (13.1% measured in local currency) to DKK 189 million (DKK 220 million). Both the retail channel as well as the wholesale channel reported lower revenues. The operating loss amounted to DKK 3 million (profit of DKK 6 million) resulting in a negative EBIT margin of 1.6% (positive EBIT margin of 2.7%) as a consequence of a higher cost ratio.
  • By Malene Birger generated revenue for Q2 2017/18 of DKK 78 million (DKK 77 million) corresponding to a growth rate of 1.3% (2.2% measured in local currency) driven by the retail channel from both physical stores as well as e-commerce. The operating profit amounted to DKK 5 million (DKK nil), and the EBIT margin improved to 6.4% (0.0%) due to a higher gross margin and an improved cost ratio.
  • Revenue from the Group's Other brands decreased by 8.0% (7.6% measured in local currency) to DKK 92 million for Q2 2017/18 (DKK 100 million) driven by Saint Tropez. The operating loss amounted to DKK 2 million (profit of DKK 4 million) resulting in a negative EBIT margin of 2.2% (positive EBIT margin of 4.0%).

Group performance for Q2

  • Consolidated revenue amounted to DKK 673 million (DKK 666 million) corresponding to a growth rate of 1.1% (2.1% measured in local currency) driven by the wholesale channel of Peak Performance and the retail channel of By Malene Birger partly offset by the lower sales reported by the wholesale channel of Tiger of Sweden. During Q2 2017/18, the total number of stores was unchanged as Peak Performance opened one store and Saint Tropez closed down one store.
  • The gross profit amounted to DKK 387 million (DKK 381 million) whereas the gross margin increased to 57.5% (57.2%) which was primarily attributable to improved margins on sold products.
  • Capacity costs declined by DKK 16 million to DKK 320 million compared to Q2 2016/17. This reduction is, inter alia, attributable to the effect of the implemented structural changes during Q3 2016/17. The cost ratio declined to 47.5% (50.5%).
  • The consolidated operating profit for Q2 2017/18 amounted to DKK 67 million (DKK 45 million) corresponding to an EBIT margin of 10.0% compared to 6.8% for Q2 2016/17.

Segment performance for H1

  • Peak Performance generated revenue for H1 2017/18 of DKK 659 million (DKK 615 million) corresponding to a growth rate of 7.2% (8.1% measured in local currency). The revenue development was driven by both the wholesale channel as well as the retail channel. The operating profit amounted to DKK 133 million (DKK 111 million) corresponding to an EBIT margin of 20.2% (18.0%). The improved margin is attributable to a higher gross margin. The cost ratio was at the same level as H1 2016/17.
  • Revenue from Tiger of Sweden for H1 2017/18 declined by 10.6% (9.9% measured in local currency) to DKK 455 million (DKK 509 million). Revenue from the wholesale channel declined due to lower order intake and in-season selling whereas revenue from the retail channel increased. The operating profit amounted to DKK 44 million (DKK 61 million), and the EBIT margin thus declined to 9.7% (12.0%) as a consequence of a higher cost ratio. The gross margin was at the same level as H1 2016/17.
  • By Malene Birger generated revenue for H1 2017/18 of DKK 174 million (DKK 176 million) corresponding to a reduction of 1.1% (0.5% measured in local currency) driven by the wholesale channel as a consequence of lower in-season selling whereas e-commerce and the physical stores contributed to growth in the retail channel. The operating profit amounted to DKK 13 million (DKK 4 million), and the EBIT margin improved to 7.5% (2.3%) due to a higher gross margin and a lower cost ratio.
  • Revenue from the Group's Other brands decreased by 9.8% (9.5% measured in local currency) to DKK 194 million for H1 2017/18 (DKK 215 million) particularly driven by the retail channel of Saint Tropez. The operating profit amounted to DKK 1 million (DKK 17 million) resulting in an EBIT margin of 0.5% (7.9%).

Group performance for H1

  • Consolidated revenue amounted to DKK 1,483 million for H1 2017/18 (DKK 1,517 million) corresponding to a reduction of 2.2% (reduction of 1.5% measured in local currency). This reduction was driven by the wholesale channel whereas revenue from the retail channel increased due to e-commerce growth as well as increased activity in outlets. During H1 2017/18, the total number of stores was reduced by 6.
  • The gross profit amounted to DKK 859 million (DKK 858 million) whereas the gross margin increased by 1.3 percentage points to  57.9% which was primarily attributable to improved margins on sold products as well as a larger share of sales through own channels.
  • Capacity costs declined by DKK 26 million to DKK 652 million compared to H1 2016/17. This reduction is primarily attributable to the effect of the implemented structural changes during Q3 2016/17. The cost ratio declined to 44.0% (44.7%).
  • The consolidated operating profit for H1 2017/18 amounted to DKK 207 million (DKK 180 million) corresponding to an EBIT margin of 14.0% compared to 11.9% for H1 2016/17.
  • The working capital amounted to DKK 456 million corresponding to a decline of DKK 14 million compared to last financial year and constituted 16.8% of the trailing twelve months revenue which is at the same level as last financial year.

Outlook for the financial year 2017/18

Based on year-to-date performance as well as our current expectations for the rest of the year, we maintain our guidance for the financial year 2017/18 for the Group as a whole. Hence, we expect to realize a minor revenue reduction compared to the financial year 2016/17 and an EBIT margin of approx. 5% (unchanged).

For Peak Performance we still expect a moderate revenue growth but significantly (previously moderate) higher earnings compared to 2016/17. Expectations for Tiger of Sweden are unchanged and we still expect revenue to decline while earnings are expected to be significantly reduced compared to last financial year. For By Malene Birger, expectations are also unchanged, and we thus expect a moderate revenue decline but significant earnings improvement. For Other brands, we expect that the performance in physical retail in Saint Tropez will lead to a significant revenue and earnings decline leading to an earnings deficit for 2017/18 (not specified previously).

Investments for the financial year 2017/18 are expected to be in the region of 3-4% of annual revenue (unchanged).

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 progressing according to the plan. The Group has no further comments.

 

Copenhagen, 6 February 2018

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 6 February 2018 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/ptb7w56t

 

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

+45 3515 8121 (Denmark)

+1 646 828 8156 (USA)

+44 (0) 330 336 9411 (UK)

  

Please direct any questions regarding this announcement to:  

Jens Bak-Holder

Head of Investor Relations

+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.

 

 

 



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This announcement is distributed by Nasdaq Corporate Solutions (One Liberty Plaza, 165 Broadway, New York, NY 10006. Tel: +1 212 401 8700. www.nasdaqomx.com) on behalf of Nasdaq Corporate Solutions clients. Source: IC Group A/S, Raffinaderivej 10, Copenhagen 2300, Denmark
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