Copenhagen Stock Exchange
Herning, 28 November
2007
hb/ls
Announcement of financial results of BoConcept Holding
A/S for the first half of 2007/2008 On 28 November 2007
the supervisory board of BoConcept Holding A/S adopted
the financial statements for the first half of the
financial year 2007/2008, which cover the period from 1
May 2007 to 31 October 2007.
• In the first half of the financial year 2007/2008 revenue has risen by 19.7%
compared to
the same period of last year. Of this figure, same-store sales growth amounted
to 8%
• Profit before tax was DKK 42.1 million in the first half of 2007/2008 compared
to DKK
28.0 million last year. For the second quarter of 2007/2008 seen in isolation
growth was DKK 6.9 million compared to DKK 24.6 million last year
• The year-to-date operating margin was 8.3 per cent compared to 6.2 per cent
during the
same time last year
• Since the beginning of the financial year there has been an addition of 18 new
BoConcept
Brand Stores and one has been closed. There has been a net addition of 17
BoConcept Brand Stores
• At 31 October 2007 the balance sheet total was DKK 564.0 million, down DKK
15.9 million
compared to the corresponding period of last year.
• A positive cash flow of DKK 15.7 million before instalments on long-term
liabilities other
than provisions
• The full-year forecast remains unchanged - a profit before tax of DKK 85-95
million and
an increase in turnover of 15-20 per cent
• After a planned investment level in non-current assets amounting to DKK 40-45
million,
the forecast cash flow before instalments on long-term liabilities other than
provisions is maintained at minimum DKK 35 million
For further information, please contact President and CEO, Viggo Mølholm, or
Vice President and CFO, Hans Barslund, on telephone number: +45 7013 1366.
Webcast presentation of financial accounts for the first half of 2007/2008 will
be available via OMX and at the company's website (WWW.BoConceptholding.dk) as
from tomorrow on 29 November - at 9am.
BoConcept is the retail-oriented concept holder of the global franchise chain
and the global brand of BoConcept. The chain represents the best co-ordinated
designer furniture and accessories in the industry. The collection, store
concept, consumer communications and supply chain are controlled from the
headquarters in Denmark.
BoConcept Brand Stores are independent stores with floorages of between 400 and
800 square metres in attractive locations while Studios are in-store departments
with floorages of between 100 and 400 square metres located in existing
furniture stores. As per 31 October 2007 there were 210 Brand Stores and 133
Studios in 44 markets worldwide.
Announcement to the Copenhagen Stock Exchange 28.11.07 - 13/2007 Page 1 of 9
The group's financial highlights 2007/2008
Second Second Year-to- Year-to-
quarter quarter date date
2007/08 2006/07 2007/08 2006/07
Income statement (DKK
million)
Revenue 319,1 273,5 593,7 495,8
Gross profit 122,0 107,5 235,6 201,0
Profit before net financials 30,7 18,8 49,5 30,5
Net financials -6,1 -1,1 -7,4 -2,5
Profit before tax 24,6 17,7 42,1 28,0
Balance sheet (DKK million)
Non-current assets 229,0 254,8
Current assets 335,0 325,1
Balance sheet total 564,0 579,9
Equity, year-end 171,5 127,1
Interest-bearing debt 181,6 254,9
Cash flow (DKK million)
Cash flow before instalments on
long-term liabilities other than
provisions 15,7 -30,3
Financial ratios
Operating margin, % 9,6 6,9 8,3 6,2
Return on net assets (for the
period), % 8,9 5,7
Earnings per share before tax 9,5 6,8 16,2 10,8
Book value per share 66 49
Return on equity before tax 26,3 23,8
Equity share 30,4 21,9
Statement of equity movements:
(DKK million)
Equity as per 30 April 2007 148,5
Profit before tax for the reporting period 42,1
Calculated tax -12,4
Value adjustment of hedging instruments -5,0
Equity as per 31 July 2007 -1,7
171,5
The accounting policies applied are the same as those applied in the annual
report for 2006/2007. The comparative figures for last year have been adjusted
according to the same policies. The interim financial statements are unaudited.
Announcement to the Copenhagen Stock Exchange 28.11.07 - 13/2007 Page 2 of 9
Excellent revenue growth in the face of decline in certain markets BoConcept
produced revenue of DKK 593.7 million in the first 6 months of the financial
year 2007/2008 compared to DKK 495.8 million during the same period last year.
The growth of 19.7 per cent is primarily due to an 8 per cent increase in
same-store-sales compared to 2006/2007 as well as the effect of the opening of
new BoConcept Brand Stores.
Sales to BoConcept Brand Stores rose by 34 per cent compared to last year, and
sales to BoConcept Studios rose by 3 per cent, while sales to product customers,
as expected, declined by 61 per cent and now account for less than 4% of
BoConcept's total revenue. The graph below shows the year-to-date revenue trends
by sales channels.
Revenue by sales channels
2006/07 2007/08
100%
80%
60%
40%
20%
0%
BoConcept Brand Stores BoConcept Studios Produktkunder
The revenue growth of 19.7% in the first half of the year is at the high end of
expectations of full-year growth amounting to between 15 and 20 per cent in
2007/2008. The new collection, which has resulted in the replacement of 25 per
cent of the total product range, has been successfully implemented and well
received.
However, revenue growth differs considerably from market to market. Due to
reduced purchasing power in some markets, same-store sales have been under
pressure since the end of the second quarter. As a result of the BoConcept
chain's broad composition of countries, we expect to see a steady growth in
same-store-sales - however the growth in the second half-year will be at a lower
level compared to the first half-year. With the addition of new openings, we
expect the total turnover for the year to maintain in the range 15-20 per cent.
As was expected, gross profit has been reduced from 40.5 per cent in the first
half of this year to 39.7 per cent in the same period of this year. As
previously stated, this is due to increasing prices on raw materials, energy and
labour, and also due to the fact that BoConcept's sales prices have been fixed
until the catalogue season in September 2007 where prices were raised by
approximately 6 per cent. The price increase together with the effect of
efficiency enhancements and outsourcing agreements implemented by BoConcept in
the spring of 2007 are expected to improve the gross profit in the second half
of 2007/2008.
The operating margin (EBIT) has been improved from 6.2 per cent last year to 8.3
per cent this year, which coincides with expectations of realising an operating
margin of approximately 8 per cent in the financial year.
Financial items were affected by the steep drop in the US dollar rate in the
second quarter of the year. Foreign exchange losses thus amounted to DKK 3.6
million in the year to date. This is primarily due to the impairment of forward
exchange contracts at the current rate of exchange. Conversely, there were
foreign exchange gains of DKK 2.4 million in the first half of 2006/2007.
Announcement to the Copenhagen Stock Exchange 28.11.07 - 13/2007 Page 3 of 9
The profit before tax for the second quarter of 2007/2008 is DKK 24.6 million
compared to DKK 17.7 million last year.
The result before tax has risen by just over DKK 14.1 million compared to last
year and thus amounts to DKK 42.1 million this year. The increase is primarily a
consequence of satisfactory marginal earnings on revenue growth.
Balance sheet and cash flow
At the end of the first half-year of 2007/2008 the BoConcept balance sheet total
was DKK 564.0 million, which is an increase of DKK 17.1 million compared to the
beginning of the financial year. This development covers an increase in
inventory levels initiated to meet the increasing rate of activity in terms of
service and delivery. During the first half of the financial year the company
invested DKK 17.7 million in non-current assets and expansions, which coincides
with the forecast expressed in the annual report 2006/2007.
Compared to the equivalent period of last year the balance sheet total has been
reduced by DKK 15.9 million, which is due, among other things, to the closure of
the upholstery factory in Hornslet and the sale of one Brand Store in Glasgow
and two in Berlin in the first quarter of 2007/2008.
The year-to-date shows a positive cash flow of DKK 15.7 million before
instalments on long-term liabilities other than provisions against a negative
cash flow of DKK 30.3 million in the same period last year.
At the end of the reporting period the equity amounted to DKK 171.5 million,
representing an equity ratio of 30,4 per cent.
Number of newly opened BoConcept Brand Stores support plans for growth A total
of 18 BoConcept Brand Stores have opened year-to-date, primarily in the
company's principal markets in Germany, Spain, USA, Japan and Denmark. One Brand
Store has been closed in the first half-year, resulting in a year-to-date net
addition of 17 Brand Stores, which brings the total number of BoConcept Brand
Stores to 210 as per 31 October 2007.
At the end of October there were 25 BoConcept Brand Stores in the project
department of which 10-13 will be opening during the third quarter of the
2007/2008 financial year. The company's targeted net addition of total 30-40
Brand Stores in the 2007/2008 financial year is maintained.
At 31 October 2007 the number of BoConcept Studios amounted to 133 outlets - a
net reduction of 15 compared to the beginning of the year. The net reduction is
the result of closing down 21 outlets, primarily in Austria where the
co-operation with a major furniture chain ceased at the beginning of the
financial year. At present BoConcept is negotiating with potential franchisees
in Austria and expects studio revenue to be converted to Brand Store revenue in
the course of the next year.
Post-balance-sheet events
As announced in stock exchange announcement no. 12/2007, a share issue of class
B-shares conferring pre-emptive rights on employees in BoConcept A/S has been
completed. 23,745 class B-shares of DKK 10.00 were subscribed to at the price of
200. Of the authorised officers 83.1% subscribed for employee shares, and the
management finds this very satisfactory. The difference between the subscription
price and current rate is total DKK 8.4 million which according to IAS2 have to
be entered between income statement and equity statement. The subscription has a
positive effect of the cash flow of DKK 4.7 million.
Apart from the events mentioned above, the supervisory board is aware of no
events after 31 October 2007 which would materially influence the financial
position of the group.
Announcement to the Copenhagen Stock Exchange 28.11.07 - 13/2007 Page 4 of 9
Forecast
In the 2006/2007 annual report (cf. Announcement no. 07/2007) BoConcept expected
a full-year pre-tax profit for 2007/2008 of DKK 85-95 million and a revenue
growth of 15-20 per cent compared to last year. The result realised in the first
half of 2007/2008 does not give rise to a review of this forecast.
The full-year forecast excludes the effect of employee shares.
The increase in revenue is based on organic growth due to the full-year effect
of store openings in 2006/2007 and expectations of a net addition of 30 to 40
new BoConcept Brand Stores in 2007/2008. Also, a general increase in same-store
sales is expected as a result of activities launched to underpin and optimise
the operation of BoConcept Brand Stores although it should be noted that growth
in the second half of the year is expected to be down on growth in the first
half of the year due to the general economic climate. As in previous years, the
sale to product customers is expected to decline dramatically.
The full-year effect of the changes implemented in the upholstery production and
the closing down of the factory in Hornslet, which were effected during the past
financial year, have resulted in savings on production costs. In like manner the
projects launched to optimise the work routines relating to sales order flow and
efficiency enhancements in the board furniture production will improve
productivity. Overall, an 8 per cent improvement in the operating margin is
expected.
In the year ahead there are plans to make investments in non-current assets
amounting to DKK 40-45 million, and this is considerably more than last year.
The overall target for the coming year is a positive cash flow of at least DKK
35 million before installments on long-term liabilities other than provisions.
Finance calendar 2007/08
4 March 2008: Third quarter announcement 2007/08.
Overview of stock exchange announcements issued between 1 May 2007 and 31
October 2007 01.06.07
Allocation of shares
28.06.07 Preliminary announcement of financial statements
05.07.07 Insider trades
28.08.07 Change in financial calendar
28.08.07 Quarterly Review, first quarter
28.08.07 Business conducted at annual general meeting
07.11.07 Subscription of class B shares conferring a pre-emptive right on
employees
Best regards
BoConcept Holding A/S
Svend Sigaard Viggo Mølholm
Chairman of the Supervisory Board President & CEO
Encl: Income statement
Balance sheet
Cash flow
Announcement to the Copenhagen Stock Exchange 28.11.07 - 13/2007 Page 5 of 9
BoConcept Holding A/S
Encl.
Consolidated income statement 1 May - 31 October 2007
Second quarter Year to date
2007/08 2006/07 2007/08 2006/07
DKK'000 DKK'000 DKK'000 DKK'000
319.147 273.459 593.711 495.751
-197.099 -165.921 -358.148 -294.779
122.048 107.538 235.563 200.972
-75.863 -74.741 -150.221 -139.506
-16.475 -14.136 -36.786 -29.029
952 78 952 78
0 0 0 -2.000
30.662 18.739 49.508 30.515
446 1.894 1.112 3.352
-6.472 -2.958 -8.567 -5.837
24.636 17.675 42.053 28.030
-7.148 -4.948 -12.415 -7.847
17.488 12.727 29.638 20.183
BoConcept Holding A/S
Encl.
Balance sheet as per 31 October 2007
2007 2006
DKK'000 DKK'000
ASSETS
Goodwill 13.267 16.532
Master rights 7.983 7.983
Software 1.899 214
Total intangible assets 23.149 24.729
Land and buildings 85.484 104.492
Leasehold improvements 14.738 16.043
Plant and machinery 44.894 53.815
Fixture and fittings, other plant and equipment 8.815 12.329
Property, plant and equipment in progress 16.626 9.018
Total property, plant and equipment 170.557 195.697
Deferred tax 22.350 21.407
Securities 992 728
Deposits 9.945 11.732
Other loans 1.974 498
Total other non-current assets 35.261 34.365
Total non-current assets 228.967 254.791
Inventories 152.360 149.335
Receivables 167.802 146.076
Other receivables 6.671 18.382
Cash 8.155 11.315
Total current assets 334.988 325.108
TOTAL ASSETS 563.955 579.899
BoConcept Holding A/S
Encl.
Balance sheet as per 31 October 2007
2007 2006
DKK'000 DKK'000
LIABILITIES
Share capital 26.000 26.000
Reserve for hedging transactions 1.083 1.808
Translation reserve -5.767 -840
Retained earnings 150.182 99.720
Dividend proposed 0 0
Equity attributable to shareholders of BoConcept Holding A/S 171.498 126.688
Minority interests
0 406
Total equity 171.498 127.094
Deferred tax 30.383 27.250
Mortgage credit institutions and banks 90.334 116.308
Total non-current liabilities 120.717 143.558
Mortgage credit institutions and banks 91.292 138.641
Trade payables 63.149 40.234
Prepayment from customers 21.226 24.896
Other payables 96.073 105.476
Total current liabilities 271.740 309.247
Total liabilities 392.457 452.805
TOTAL LIABILITIES AND EQUITY 563.955 579.899
BoConcept Holding A/S
Encl.
Consolidated cash flow statement 2nd quarter 2007/2008
Second quarter
2007/08
DKK'000
Revenue and other operating income 594.663
Operating expenses' -545.155
Depreciation and amortisation 14.026
Change in net working capital -24.232
Cash flow from operating activities before financial income 39.302
Interest income etc. 1.112
Interest paid -8.502
Cash flow from ordinary operating activities 31.912
Income taxes paid -640
Cash flow from operating activities 31.272
Acquisition of intangible fixed assets -1.335
Sale of intangible fixed assets 0
Acquisition of property, plant and equipment -16.409
Sale of property, plant and equipment 265
Acquisition of investments 0
Sale of investments 161
Other loans 1.140
Acquisition of companies 0
Disposal of companies 655
Cash flow from investing activities -15.523
Cash flow before repayment of bank debt 15.749
Instalments on long-term debt -7.829
Dividend paid -5.005
Utilisation share options 1.292
Cash flow from financing activities -11.542
Net cash inflow/outflow 4.207
Cash and cash equivalents less short-term bank debt -72.774
Revaluation of cash and cash equivalents
-65
Cash and cash equivalents -68.632
The amount can be broken down as follows:
Cash without restrictions 8.155
Short-term debt to credit institutions -76.787
-68.632
