CDON Group AB (NASDAQ OMX Stockholm's Mid Cap market: CDON) today announced its financial results for the third quarter and first nine months, the period 1 January - 30 September 2012.
- Net sales up 18.9% year on year to SEK 982.5 (826.4) million
- Gross profit of SEK 128.6 (121.5) million with a gross margin of 13.1%; when excluding non-recurring items of SEK -6.6 million the gross margin is 13.8%**
- Operating profit of SEK -7.6 (18.7) million and operating margin of -0.8%; when excluding non-recurring items the operating margin is -0.1%**
- Net income of SEK -11.3 (11.5) million
- Basic earnings per share of SEK -0.16 (0.18)
First Nine Months
- Net sales up 38.4% year on year to SEK 2,888.9 (2,087.3) million and organic growth of 46%*
- Gross profit of SEK 373.2 (357.8) million with a gross margin of 12.9%; when excluding non-recurring items of SEK -54.5 million the gross margin is 14.8%**
- Operating profit of SEK -63.2 (57.9) million and operating margin of -2.2%; when excluding non-recurring items of SEK -58.3 million the operating margin is -0.2%**
- Net income of SEK -61.4 (34.6) million
- Basic earnings per share of SEK -0.88 (0.53)
* Excluding Tretti AB for the period Jan-May 2012
** There are non-recurring items of SEK -6.6 million in the Group's result for the third quarter attributed to the Nelly.comwarehouse relocation. The result for the first nine months of the year also includes further non-recurring costs of SEK -51.7 million of which SEK -47.9 million affect the gross profit.
Paul Fischbein, President and CEO of CDON Group commented: "CDON Group sales increased by 19% to a new record sales level for the third quarter. We are growing strongly and we are continuing to consolidate our position in the attractive e-commerce market."
"The Entertainment segment and the Sports & Health segment continue to perform strongly, partly due to investments to expand the product range. Growth in the Fashion segment continued to be affected by Nelly's warehouse relocation, as the new warehouse unit did not reach the expected productivity level in the quarter."
"During the third quarter, we signed an agreement to acquire the logistics operations from the partner that performed these services for our online stores Nelly, Heppo, Lekmer and Members. The acquisition - which was completed on 1 October - is strategically important as it secures our customer offering and delivery capabilities and at the same time the acquisition facilitates future expansion and sales growth. We now internally operate logistics for eight of our ten online stores. Since the acquisition CDON Group has taken several actions to improve productivity in the warehouse and we are already seeing production increasing."
Forward looking statement
CDON Group operates in a sector with a high underlying market growth. The Group is in an intense growth phase and the strategy is to strengthen its market position through a retained high growth momentum. This includes substantial investments in expansion and in improving the infrastructure to ensure long-term growth, earnings and customer satisfaction such as the recent warehouse acquisition. As a result, we estimate the Group to deliver a negative operating margin, including non-recurring items, of between 0.5-1.0% for the full year. This replaces the Group's previous statement which was that: "The objective is to deliver a positive operating result, including non-recurring items, for the full year".
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) 20 713 620 54
US: +1 212 444 08 95
The access pin code for the conference call is 6439550.
To listen to the conference call online, please go to www.cdongroup.com
For additional information, please visit www.cdongroup.comor 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.fiand Lekmer.com), Fashion (Nelly.com, Heppo.comand Members.com), Sports & Health (Gymgrossisten.comand Bodystore.com) and Home & Garden (Tretti.comand Room21.com) segments. CDON Group's ten online stores attract approximately 172 million site visits and two million unique customers on a yearly basis.
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 17 October 2012.