Correction to announcement no. 2/2015 - interim report for H1 2014/15


IC GROUP A/S
HALF YEAR FINANCIAL REPORT

After publishing the company announcement no. 2/2015 on 5 February 2015 we have
been made aware that guidance for the Group's full-year revenue 2014/15 was
incorrect. 
  
The correct full-year guidance on revenue is at a level of DKK 2,600 - 2,650m 
  
The full announcement in it's corrected form is shown below 
  
GROUP REVENUE WAS DKK 1,426M (DKK 1,380M) IN H1 2014/15, AN INCREASE OF 3.3%
(5.5% IN LOCAL CURRENCY) COMPARED TO THE SAME PERIOD LAST YEAR. GROSS MARGIN
WAS 55.1% FOR THE GROUP’S CONTINUING OPERATIONS, WHICH WAS LOWER THAN FOR THE
SAME PERIOD LAST YEAR (57.2%). OPERATING PROFIT FOR THE GROUP’S CONTINUING
OPERATIONS WHICH CAME TO DKK 162M WAS IMPACTED BY NON-RECURRING COSTS OF DKK
12M RELATING TO A POTENTIAL CASE CONCERNING INDIRECT TAXES. 
  

* Peak Performance generated revenue for H1 2014/15 of DKK 586m (DKK 565m),
corresponding to growth of 3.6% (5.6% in local currency). Growth in sales to
wholesale customers was satisfactory, whereas revenue growth of the retail
channel was negative. The brand generated revenue growth in the Nordic region
and Central European countries. Operating profit was DKK 103m (DKK 91m). 

* Tiger of Sweden increased revenue by 8.4% (12.2% in local currency) to DKK
468m (DKK 432m). The retail channel recorded moderate revenue growth, while
sales to wholesale customers in particular made a positive contribution to the
overall revenue growth. The Nordic region and Germany were the main
contributors to the overall revenue growth. Operating profit was DKK 51m (DKK
45m). 

* Revenue reported by By Malene Birger of DKK 161m was unchanged compared to
the same period last year (DKK 160m), corresponding to growth of 1.4% in local
currency. Revenue from the wholesale channel increased and outweighed reduced
revenue of the retail channel. This reduction in revenue was primarily
attributable to the e-commerce channel where website traffic was not adequately
converted into sales. Operating profit was DKK 8m (DKK 13m). 

* Revenue from the non-core business declined by 5.2% in H1 2014/15 (declined
by 4.6% in local currency). Saint Tropez increased revenue in Q2 2014/15, thus
partly outweighing its negative performance in Q1 2014/15. Designers Remix
generated positive revenue growth in H1 2014/15. Operating profit was DKK 13m
(DKK 17m). 

* In Q2 2014/15, a provision of DKK 25m was made to cover non-recurring costs
relating to a potential case concerning indirect taxes. Continuing operations
were impacted by DKK 13m, while the remaining DKK 12m related to the
discontinued operations. Gross profit for the continuing operations was
impacted by DKK 8m, operating profit was impacted by DKK 12m, while DKK 1m
related to financials. 

* Gross margin for the Group’s continuing operations was 55.1% in H1 2014/15
against 57.2% in the same period last year, a decline which was attributable to
the non-recurring costs as indicated above, negative exchange rate effects,
higher discounts and mix effects of goods sold. 

* Capacity costs which increased by DKK 2m to DKK 625m were negatively impacted
by the non-recurring costs referred to above, but positively affected by
exchange rate effects. Following the divestment of the Mid-Market division,
idle capacity costs impacted the Group’s performance negatively by DKK 8m in H1
2014/15. 

* Operating profit declined by DKK 4m to DKK 162m (DKK 166m) primarily due to
the negative impact of non-recurring costs of DKK 12m in Q2 2014/15,
corresponding to an EBIT margin of 11.3% (12.0%). Adjusted for non-recurring
costs and idle capacity costs, EBIT margin was 12.8% in H1 2014/15. 

  
OUTLOOK FOR THE FINANCIAL YEAR 2014/15 – UPDATED 
  
The Group’s Premium brands are expected to continue their positive trend of
growth in 2014/15, and Group revenue is therefore expected to increase
(unchanged). Consequently, revenue from continuing operations is expected to be
in the region of DKK 2,600-2,650m. 
  
In 2014/15, the Group’s continuing operations will be negatively impacted by
DKK 12m due to provisions made to cover non-recurring costs relating to a
potential case concerning indirect taxes and due to idle capacity costs
estimated at approximately DKK 30m (previous guidance: DKK 45m). 
  
Adjusted for these costs, earnings of the Group’s Premium brands are expected
to improve (unchanged) and operating profit is expected to be realised in the
region of DKK 200-230m. 
  
As a result of lower revenue, the Group’s non-core business is not expected to
maintain the current earnings level (previous guidance: to maintain the current
earnings level), and operating profit is expected to be realised in the region
of DKK 15-25m before non-recurring cost and idle capacity costs as indicated
above. 
  
Operating profit for the Group’s continuing operations is expected to be
approximately DKK 170-210m. Adjusted for the above-mentioned costs, operating
profit for continuing operations is expected to be in the region of DKK
215-255m.

Attachments

Q2 2014-15 UK 05.02.2015_FINAL.pdf