CDON Group to recognise SEK 15 million of one-off costs

CDON Group AB (publ.) (‘CDON Group’ or ‘the Group’), the leading e-commerce group in the Nordic region, today announced that it will recognise one-off costs of approximately SEK 15 million in its results for the third quarter and nine months ended 30 September 2011. These costs reflect a restatement of Norwegian customs duties and VAT over the past three years, which had historically been inaccurately reported by Nelly.com and Gymgrossisten.com. The recognition will not affect the Group’s underlying business, profitability or revenue growth.

Approximately SEK 13 million of this amount is attributable to Nelly.com and SEK 2 million to Gymgrossisten.com.

The error resulting in an understatement of duty costs originated from an incorrect setting of the parameters that determined Norwegian customs duty declaration routines in 2007. This inaccurate setting had been made during the implementation of a new ERP-system and was discovered during a recent internal review of the Group’s exports processes, following the demerger from the former parent company MTG.

The one-off costs will be reported as a separate line item above the gross profit line in CDON Group’s consolidated income statement, and as an adjustment of interest bearing short term liabilities on the Group’s consolidated balance sheet.

These one-off costs will not have any impact on the Group’s future earning capabilities.

CDON Group will announce its financial results for the third quarter and nine months ended 30 September on 17 October.

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For further information please visit cdongroup.com or contact:

Mikael Olander, President and Chief Executive Officer
Tel:                          +46 (0) 10 703 20 00

Investor and analyst enquiries:
Martin Edblad, Chief Financial Officer         
Tel:                          +46 (0) 700 80 75 03
Email:                     ir@cdongroup.com            

Press enquiries:
Fredrik Bengtsson, Head of Communications              
Tel:                          +46 (0) 700 80 75 04
Email:                     press@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, BookPlus.fi, Lekmer.com), Fashion (Nelly.com, Heppo.com, Members.com), Sport & Health (Gymgrossisten.com, Bodystore.com) and Home & Garden (Tretti.com and Rum21.se) segments. The group reported revenues of SEK 2.2 billion for the full year 2010. CDON Group is listed on the NASDAQ OMX Stockholm Mid-cap list under short name CDON.

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 on 10 October 2011.