2007 06-28 Q3 2006/2007 Results

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2007 06-28 Q3 2006/2007 Results

  1. 1. Third quarter andnine months reportMarch 1 to May 31, 2007 Christian W. Jansson President & CEO Håkan Westin CFO 1
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  7. 7. Disclaimer• These materials may not be copied, published, distributed or transmitted to third parties.• These materials may contain forward-looking statements. If so, such statements are based on our current expectations and are subject to risks and uncertainties that could negatively affect our business. Please read our earnings report and our most recent annual report for a better understanding of these risks and uncertainties.• These materials do not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities, nor shall part, or all, of these materials or their distribution form the basis of, or be relied on in connection with, any contract or investment decision in relation to any securities. These materials and the information contained herein are no an offer of securities for sale in the United States and are not for publication or distribution to persons in the United States. 7
  8. 8. 3Business highlights 272 stores end May 2007 32 new contracts signed; 2 in 06/07 17 in 07/08 3 41 132 3 13 forward 84 2 3 2 2 4 2 3 5 2 2 7 2 2 2 3 5 15 7 8
  9. 9. Financial highlights Q3• Net sales MSEK 1,106 (1,029), an increase of 7.5 percent.• Operating profit MSEK 132 (120), an increase of 10.0 percent.• Gross margin 62.3 (61.9) percent and operating margin 11.9 (11.7) percent.• Profit after taxes MSEK 79 (73), equivalent SEK 1.05 (0.97) per share.• Cash flow from operating activities MSEK 136 (83). 9
  10. 10. Income statement Q3 MSEK March-May 06/07 05/06 Net sales 1 106 1 029 Cost of goods sold -417 -392 Gross profit 689 637 Selling expenses -528 -477 Administrative expenses -32 -40 Administrative expenses 3 0 Operating profit 132 120 Financial income 11 0 Financial expense -32 -18 Profit before tax 111 102 Tax expense -32 -29 Net profit 79 73 10
  11. 11. Sales Q3 MSEK % • Strong Like For LikeNet sales Q3 2005/2006 1 029 performance.Currency effect -1.5 • Increased marketingNew net stores +3.0 activities boost sales.Like For Like growth +6.0Net sales Q3 2006/2007 1 106 +7.5 11
  12. 12. Profitability drivers Q3 06/07 05/06 • Strong gross margin + currencyGross margin 62.3 61.9 - offeringsSelling expenses % of sales 47.7 46.4 • Increased marketingAdmin expenses % of sales 2.9 3.9 costsOperating margin 11.9 11.7 • Stable operating margin 12
  13. 13. Financial highlights 9m• Net sales MSEK 3,383 (3,207), an increase of 5.5 percent.• Operating profit MSEK 435 (357), an increase of 21.8 percent.• Gross margin 60.8 (59.3) percent and operating margin 12.9 (11.1) percent.• Profit after taxes MSEK 540 (187), equivalent SEK 7.20 (2.49) per share.• Cash flow from operating activities MSEK 449 (364). 13
  14. 14. Income statement 9m MSEK Sept-May 06/07 05/06 Net sales 3 383 3 207 Cost of goods sold -1 326 -1 306 Gross profit 2 057 1 901 Selling expenses -1 529 -1 432 Administrative expenses -109 -112 Other operative income 16 0 Operating profit 435 357 Financial income 23 3 Financial expense -81 -101 Profit before tax 377 259 Tax expense 163 -72 Net profit 540 187 14
  15. 15. Sales 9m MSEK % • Like For Like excludingNet sales 9m 2005/2006 3 207 cosmetics was +4.6 percentCurrency effect -1.7New net stores +3.9Like For Like growth +3.0Net sales 9m 2006/2007 3 383 +5.5 15
  16. 16. Sales breakdown 9m Poland Finland 4% (4%) Growth 11%MSEK 06/07 05/06 SEK Loc.cur. (11%)Sweden 1 931 1 803 7,1% 7,1%Norway 938 939 -0,1% 5,8%Finland 383 355 8,5% 10,4%Poland 131 110 18,1% 20,9% Norway SwedenTotal 3 383 3 207 5,5% 28% 57% (29%) (56%) 16
  17. 17. Profitability drivers 9m • Improved gross margin 06/07 05/06Gross margin 60.8 59.3 • Unchanged cost as percentage of salesSelling expenses % of sales 45.2 44.7 – marketing + economies of scaleAdmin expenses % of sales 3.2 3.5Operating margin 12.9 11.1 • Improved operating margin 17
  18. 18. Cash flow 9mMSEK Sept-May 06/07 05/06Cash flow from operations before working capital changes 464 294Changes in working capital -15 70Cash flow from operating activities 449 364Cash flow investing activities -210 -181Cash flow after investments 239 183Change in revolving credit 60 84Dividends -188 -169Cash flow from other financing activities -66 -72Net cash flow for the period 45 26Cash and bank balances at beginning of period 83 83Cash and bank balances at end of period 128 53 18
  19. 19. New dividend policy 06/07 70-100 percent of profit after paid taxes 19
  20. 20. New store expansion program The number of stores will increase by 20-25 per year 20
  21. 21. Key conclusions and outlook • Continued sales success • Stable gross margin • Increased marketing efforts Moving further ahead • Continue marketing activities • Maintain gross margin • Increased store expansion program • Investigate a potential new market 21
  22. 22. We don’t believe in selling a lifestyle. You have one already. We don’t believe in expensive collections for an exclusive few. We believe in fashion that suits you.We don’t believe in eternal youth, howeverwe believe that people mature, grow wiser and even more beautiful. Take it as a compliment. 22
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  25. 25. To be continued… 25
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