31% sales growth for the full year
The results are burdened by non-recurring items in the fourth quarter
CDON Group AB (NASDAQ OMX Stockholm’s Mid Cap market: CDON) today announced its financial results for the fourth quarter and full year.
- Net sales up 19.5% year on year to SEK 1,572.8 (1,316.4) million
- Gross profit of SEK 98.0 (229.5) million with a gross margin of 6.2%; when excluding non-recurring items of SEK -106.0 million the gross margin was 13.0%**
- Operating profit of SEK -110.7 (71.3) million and operating margin of -7.0%; when excluding non-recurring items of SEK -112.2 million the operating margin was 0.1%**
- Net income of SEK -90.4 (48.4) million
- Basic earnings per share of SEK -1.38 (0.73)
- Net sales up 31.1% year on year to SEK 4,461.7 (3,403.7) million and organic growth of 35.9%*
- Gross profit of SEK 471.2 (587.3) million with a gross margin of 10.6%; when excluding non-recurring items of SEK -160.5 million the gross margin was 14.2%**
- Operating profit of SEK -173.9 (129.2) million and operating margin of -3.9%; when excluding non-recurring items of SEK -170.5 million the operating margin was -0.1%**
- Net income of SEK -151.7 (83.0) million
- Basic earnings per share of SEK -2.25 (1.26)
* Excluding Tretti AB for the period Jan-May 2012
** There are non-recurring items of SEK -112.2 million in the Group’s result for the fourth quarter mainly attributed to value adjustments of Nelly's inventories and thereto related balance sheet items. The result for the full year also included further non-recurring costs of SEK -58.3 million, whereof SEK -54.5 million affected gross profit.
Paul Fischbein, President and CEO of CDON Group commented: “CDON Group's total sales reached new record levels both during the fourth quarter and the full year 2012. The revenue grew by 19% year-on-year in the fourth quarter and by 31% for the full year, which affirms the Group’s strong underlying business.
E-commerce continued to take shares from traditional retail during 2012, and we see a continued strong demand in all of our four segments. Two of our core assets, CDON.com and Gymgrossisten, continued their impressive sales growth whilst also delivering solid operating profits.
In the fourth quarter Nelly strengthened its market position with a sales growth of 22%. When completing the year-end closure within Nelly, negative non-recurring items of SEK 112 million were identified affecting the result in the fourth quarter. Nelly has a fundamentally strong business with high growth and a leading market position. The company has expanded intensely under entrepreneurial forms, and as a consequence, the company's former administrative procedures, financial management and controls had not been properly dimensioned for the fast growth. Since a few months, a large proportion of Nelly’s management has been replaced and major improvement initiatives have been launched. These measures will provide the company with future stability and growth capacity.
Despite this being a challenging year for our fashion segment, we enter the future with confidence. Our stores have strong market positions, they are poised for growth and they deliver underlying profits.”
CDON Group operates in a sector with high market growth and the Group’s companies are well positioned to capitalise on this momentum. The Group’s strategy is to, in a balanced way, continue to deliver sales growth and increased market shares. This growth is mainly expected to be generated from our three main assets; CDON.com, Nelly.com & Gymgrossisten.com. In order to facilitate these higher sales volumes, another key strategic focus is to further enhance the efficiency of the Group’s logistics. One step in this new strategic direction was the acquisition of the warehouse operations in Falkenberg, Sweden. The expected outcome of this strategic effort is to secure a retained high customer satisfaction in combination with future best in class cost effectiveness.
The company will host a conference call today at 15.00 Stockholm time, 14.00 London time and 09.00 New York time.
To participate in the conference call, please dial:
Sweden: +46 (0)8 505 137 93
International: +44 (0) 20 336 453 81
US: +1 212 444 04 12
The access pin code for the conference call is 6468601.
To listen to the conference call online, please go to www.cdongroup.com.
For additional information, please visit www.cdongroup.com or contact:
Paul Fischbein, President & Chief Executive Officer
Phone: +46 (0) 10 703 20 00
Press, Investor and analysts enquiries:
Fredrik Bengtsson, Head of Communications
Phone: +46 (0) 700 80 75 04
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, BookPlus.fi and Lekmer.com), Fashion (Nelly.com, Heppo.com and Members.com), Sports & Health (Gymgrossisten.com and Bodystore.com) and Home & Garden (Tretti.com and Room21.com) segments. CDON Group’s ten online stores attract approximately 244 million site visits and more than two million unique customers during 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 13:00 CET 8 February 2013.