Q2 Interim report, 1 January – 30 June 2013

2013-07-17 08:00 - Regulatory press release

Second Quarter

• Net sales excluding divested operations was up 4.2% year on year to SEK 964.3 (925.3) million
• Net sales including divested operations was up 1.8% year on year to SEK 969.2 (952.1) million
• Gross margin of 11.9% (11.4%), excluding non-recurring costs and divested operations 15.7% (14.8%)
• Operating profit excluding non-recurring costs and divested operations was SEK -6.2 (0.5) million
• Operating profit including non-recurring costs and divested operations was SEK -48.9 (-43.5) million
• Net income of SEK -44.7 (-37.1) million
• Basic earnings per share of SEK -0.62 (-0.54) *
• The result is burdened by items affecting comparability of SEK 32 million in the Entertainment segment

First six months

• Net sales excluding divested operations was up 7.1% year on year to SEK 1,996.6 (1,864.2) million
• Net sales including divested operations was up 6.0% year on year to SEK 2,020.3 (1,906.4) million
• Gross margin of 13.0% (12.8%), excluding non-recurring costs and divested operations 14.9% (15.3%)
• Operating profit excluding non-recurring costs and divested operations was SEK -10.4 (7.5) million
• Operating profit including non-recurring costs and divested operations was SEK -56.6 (-55.6) million
• Net income of SEK -62.0 (-50.1) million
• Basic earnings per share of SEK -0.92 (-0.72) *

* Calculated on the average number of outstanding shares for the periods as reported on page 17.

CEO statement
Paul Fischbein, President and CEO, commented: “Group sales development in the second quarter continued to be positive with sales growth within many of our companies. Our stores have leading market positions in Nordic e-commerce and visitor numbers in our stores continue to increase.

Growth in the Sports & Health segment was 34 per cent and the segment continued to show solid profitability.  In the second quarter the segment’s warehouse was relocated and the new Milebreaker.com store was launched. We further extended the range of our private label products, contributing to further strengthened market positions.

The Fashion segment, together with our logistics centre in Falkenberg, continued to develop as planned. Sales in the Fashion segment increased by 20 per cent with positive operating profit. It is pleasant that the hard work put in by Nelly’s new management in order to ensure long-term earnings is beginning to show results.

The Home & Garden segment operates in a highly competitive market, but nevertheless showed sales growth and clearly improved earnings in the quarter.

The Entertainment segment is a business under big transformation, particularly within CDON.com, which showed a negative sales trend and an operating loss in the quarter. The decline in sales and earnings were affected by increasingly negative market developments for media-related products, but the main reason for the quarter’s negative result was a large clearance on computer products. The sale had a negative EBIT impact of about SEK 10 million in the quarter. CDON.com have provided for a non recurring cost of SEK 32 million related to suspicions of an employee manipulating purchasing prices, which resulted in an under-provision of cost of goods sold. This employee has left the company and a police report has been filed. The deviation was found by internal control routines in connection with closing of the accounts for the second quarter. The result in the second quarter is burdened by the extraordinary cost, but has no effect on cash flow in the period, or on future cash flow.”

For additional information, please visit www.cdongroup.com or contact:

Paul Fischbein. President & Chief Executive Officer
Phone:+46 (0) 10 703 20 00

Media. Investor and analysts enquiries:

Fredrik Bengtsson. Head of Communications and Investor Relations
Phone: +46 (0) 700 80 75 04
E-mail: press@cdongroup.com. ir@cdongroup.com

About CDON Group
CDON Group is the leading e-commerce group in the Nordic region. Established in 1999. the Group has continuously expanded its product portfolio and is now a leading e-commerce player in the Entertainment (CDON.com. Lekmer.com). Fashion (Nelly.com and Members.com). Sport & Health (Gymgrossisten.com. Bodystore.com and Milebreaker.com) and Home & Garden (Tretti.com and Rum21.se) segments. CDON Group’s online stores attracted approximately 244 million site visits and more than two million unique customers in 2012.

The information in this announcement is that which CDON Group AB is required to disclose under the Securities Markets Act. This information was released for publication at 08:00 CET 17 July 2013.