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Q3 2008/2009

Q3 2008/2009. June 17, 2009 Mikael Solberg, CEO Gunnar Bergquist, CFO Cecilia Lannebo, IR. RNB focus for remaining 2008/2009. Divesture of operations at NK Focus the business, i.e. optimize the store structure at JC – some divestures and close downs Further cost cuts

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Q3 2008/2009

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  1. Q3 2008/2009 June 17, 2009 Mikael Solberg, CEO Gunnar Bergquist, CFO Cecilia Lannebo, IR

  2. RNB focus for remaining 2008/2009 • Divesture of operations at NK • Focus the business, i.e. optimize the store structure at JC – some divestures and close downs • Further cost cuts • Streamline remaining business • 2008/2009 –actions done to support a solid business 2009/2010

  3. Status divesture of operations at NK • 25th of March 2009 - communication of divestment of RNB´s operations at NK in Stockholm and Gothenburg • 15 April 2009- approval at Extraordinary shareholders meeting • Facts: • Purchase price 440 MSEK • Conditional upon approval of the competition authorities • Decrease of net debt – pro forma per 31 May to 372,9 MSEK • The Competition Authority (Konkurrensverket) has decided to implement a special investigation prior to decision. This investigation will be completed no later than 1 of September.

  4. Q3; March 2009-May 2009 • Net sales amounted to 695.9 MSEK (776.9) a decrease of 10.4 percent • sales to franchisees are down by approx. 70 MSEK, explaining the lowered sales • currency effects have impacted sales marginally negative • -2.3 percent in like-for-like in own stores • HUI in the quarter -1,9 percent in like-for-like • Operating loss at -36.1 MSEK (23.8) • Operating result includes 17,7 MSEK in write-down of liabilities in Stores • Approx. 40 MSEK in negative impact from lowered sales to franchise and higher purchasing costs from unfavorable currency • Unrealized exchange-rate losses on forward contracts amounted to SEK 12.3 M during the quarter. • Loss after tax -64.2 MSEK (5.8) • Cash flow from current operations for the period at 17.8 MSEK (61.7)

  5. Key issues • JC • Restructuring • Store network • Franchisees • Balance sheet • Capital tied up • Inventories • Liabilities • Department Stores • Steen & Ström – Fourth floor, “Sporten” closed • Illum – agreement to close 3 out of 5 stores signed • Currency • Cost cutting • Market development

  6. Swedish market development -The Swedish market during 2009 has improved and stabilized -RNB has due to internal difficulties with JC and focus on liquidity had a more volatile development Autumn weakness A hit in consumer confidence

  7. Polarn O. Pyret • Sales • Q3 sales 96.3 MSEK (86.0) • Growth of 12 percent • +4.7 percent like-for-like • Operating profit • 3.6 MSEK (5.8) • Higher cost of purchasing from unfavorable currency effects of approx. 5 MSEK • Operating profit margin • 3.7 percent (6.7) • Net new store openings, +4 • E-commerce in Sweden and the US, launch mid-March

  8. Sales Q3 sales 354.8 MSEK (441.0) Decrease of 19,5 percent Low discounting at JC in the quarter have hurt top-line but benefited gross margin -7.0 percent like-for-like own stores Operating loss -26.5 MSEK (29.9) Including -52,7 MSEK from: Write-down of liabilities of 17,7 MSEK Lowered sales to franchisees and higher purchasing costs due to unfavorable currency effects of 35 MSEK JC: -29,0 MSEK Brothers and Sisters: 2,5 MSEK New store openings in the quarter Net +/- 0 Brothers +2 Sisters: +2 JC: -4 Stores

  9. JC gross profit development in Sweden Internal brands Accumulated gross profit in Sweden between 1 of January 2009 to 31 of May 2009 is up by 63%.

  10. JC gross profit in Sweden in %Internal brands

  11. Departments & Stores • Sales • Q3 sales 240.2 MSEK (252.7) • Decrease of 4.9 percent • -1.5 percent like-for-like • Operating loss • -3.6 MSEK (-6.1) • Illum -7.7 MSEK (-8.3)

  12. Going forward • Focus on business… • JC turnaround • store structure • further cost cuttings • Brothers and Sisters • consolidation • Departments & Stores • divesture • Polarn O. Pyret • continued international roll-out • …and financials • Capital structure – further lowered debts and capital tied up • Lowered costs – organization, store network and international exposure

  13. Q&A’s

  14. Consolidated income statement (MSEK) Net turnover Operating result Financial items Result after fin. Items Result for the period

  15. Consolidated balance sheet (MSEK) Intangible assets Tangible assets Financial assets Inventories Other current assets Total assets Equity Long-term liabilities Short-term liabilities Total equity and liabilities

  16. Key figures Gross profit margin (%) Operating margin (%) Net profit margin (%) Equity (MSEK) Equity ratio (%) Average number of employees Number of stores

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