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Q4 and Full Year 2010 Report

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CDON Group AB (publ.) ("CDON Group” or “the Group") (Nasdaq OMX Stockholm’s Mid Cap market: CDON) today announced its financial results for the fourth quarter and full year ended 31 December 2010.

Fourth Quarter Highlights

  • Net sales up 25% year on year to SEK 768.9 (615.1) million
  • Gross profit of SEK 139.0 (116.4) million & gross margin of 18.1%
  • Operating profit of SEK 50.7 (50.7) million & operating margin of 6.6% when excluding non-recurring listing costs of SEK 12.6 million
  • Total operating profit of SEK 38.1 (50.7) million & operating margin of 5.0%
  • Net income of SEK 26.0 (35.4) million
  • Basic earnings per share of SEK 0.41 (69.88)[1]  

Full Year Highlights

  • Net sales up 27% year on year to SEK 2,210.0 (1,746.2) million
  • Gross profit of SEK 420.2 (348.5) million & gross margin of 19.0%  
  • Operating profit of SEK 147.3 (125.1) million & operating margin of 6.7% when excluding non-recurring listing costs of SEK 12.6 million
  • Total operating profit of SEK 134.6 (125.1) million & operating margin of 6.1%
  • Net income of SEK 90.2 (80.5) million
  • Basic earnings per share of SEK 5.00 (159.09)[2]

Mikael Olander, President & Chief Executive Officer, commented: "We have reported record sales for both the fourth quarter and the full year, with more than 25% net revenue growth for both periods and full year sales of over SEK 2 billion for the first time in the Group’s history. All of our segments delivered healthy growth and were profitable, with Fashion segment sales more than doubling year on year. Furthermore, the Group was successfully demerged from MTG and began life as a separately listed company at the end of the year, and we issued a five year convertible bond to fund the Group’s further expansion.”

“The results clearly illustrate the benefits and scalability of our e-commerce platform and reflect the ongoing migration of retail sales from traditional retail outlets to the internet. We are increasingly migrating the business into new and growing product areas, and executing on our growth strategy by broadening our product ranges, geographically expanding our existing businesses, and adding new brands to our portfolio.”

“The Group delivered a higher operating profit for the year despite our investments in the launch of Heppo.com, the acquisition and development of Lekmer.com, the Nordic roll-out of a number of our stores, the testing of Nelly.com in the German and Dutch markets, and the costs associated with becoming a listed company. Our operating cash flows and available liquid funds position us well to continue to invest in the further expansion of the Group, both organically and through acquisitions and start-ups, as is evidenced by the acquisition of designer furniture and decoration retailer Rum21.se this week.”

“The market conditions for entertainment media product sales are expected to remain challenging moving forward. E-commerce will however continue to rapidly grow its share of the total retail market and we will therefore continue to invest in growth during 2011 by developing our existing brands and new businesses. These investments will affect profitability levels in the first half of the year in particular, but we do expect a slight improvement in our full year underlying operating margin.”

  

The company will host a conference call today at 15.00 Stockholm local time, 14.00 London local time and 09.00 New York local time.

To participate in the conference call, please dial:

Sweden:          +46 (0)8 5352 6440
International:    +44 (0)20 7138 0825
US:                 +1 212 444 0481

The access pin code for the conference is 8748960

To listen to the conference call online, please go to www.cdongroup.com.

***

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

Mikael Olander, President & Chief Executive Officer
Martin Edblad, Chief Financial Officer
Phone:          +46 (0) 10 703 20 00
E-mail:           martin.edblad@cdongroup.com

Investor and analysts enquires:
Andreas Ericson, Head of Investor Relations
Phone:          +46 (0) 10 703 21 68
E-mail:           ir@cdongroup.com

Media enquires:
Fredrik Bengtsson, Head of Communications
Phone:           +46 (0) 10 703 20 04
E-mail:            fredrik.bengtsson@cdongroup.com

CDON Group is one of the largest e-commerce businesses 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 (www.CDON.COM, www.BookPlus.fi, www.Lekmer.com), Fashion (www.Nelly.com, www.LinusLotta.com, www.Heppo.com), and Sports & Health (www.Gymgrossisten.com, www.Fitnesstukku.fi, www.Bodystore.com) segments. CDON Group offers a market leading product range at competitive prices with quick delivery and high-quality customer service. CDON Group’s internet stores attract approximately two million customers a year across the Nordic region.

The information in this year-end report 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 on 2 February 2011.


[1] Based on the weighted average number of shares of 66,264,645 for the period Oct-Dec 2010 and 500,000  for the period Oct-Dec 2009.

[2] Based on the weighted average number of shares of 18,153,748 for the period Jan-Dec 2010 and 500,000  for the period Jan-Dec 2009.

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