IC Group revenues rise in FY15/16, outlook positive

Consolidated revenue for the financial year 2015/16 at IC Group amounted to 2,665 million Danish krone (399.2 million dollars) corresponding to an increase of 1 percent, or 1.9 percent measured in local currency, compared to last financial year. The gross margin improved by 2 percentage points to 56.8 percent and the operating profit (EBIT) amounted to 243 million Danish krone (36.4 million dollars) corresponding to an EBIT margin of 9.1 percent.

The company said that both the revenue growth and the EBIT margin are in line with the most recently announced outlook for 2015/16. The Board of Directors plans to recommend an ordinary dividend of 5 Danish krone (0.75 dollar) per eligible share corresponding to a total dividend of 85 million Danish krone (12.7 million dollars).

Detailed review of the fiscal performance

Revenue from Peak Performance for Q4 2015/16 amounted to 110 million Danish krone (16.4 million dollars) corresponding to a growth rate of 34.1 percent or 36.2 percent measured in local currency. This significant growth, the company said, was primarily driven by e-commerce, however, higher revenue reported from outlets also contributed.

The revenue growth was equally reported in the Nordic region as well as Rest of Europe whereas revenue from Rest of the world was at the same level as Q4 2014/15. The operating loss for Q4 2015/16 amounted to 43 million Danish krone (6.4 million dollars) corresponding to a negative EBIT margin of 39.1 percent.

Revenue from Tiger of Sweden for Q4 2015/16 declined by 6.1percent and by 4.8 percent in local currency) to 217 million Danish krone (32.4 million dollars). Revenue from the retail channel rose, which was particularly driven by e-commerce. The shift in deliveries had an impact on the markets in the Nordic region which consequently reported revenue reductions. Revenue from Rest of Europe was positively affected by, in particular, the growth rate of 40.3 percent reported in Germany. Also, Rest of the world reported revenue growth for Q4 2015/16.The operating profit amounted to 10 million Danish krone (1.4 million dollars) corresponding to an EBIT margin of 4.6 percent.

Revenue from By Malene Birger amounted to 80 million Danish krone (11.9 million dollars) corresponding to a growth rate of 6.7 percent or 8.1 percent in local currency. Revenue from the wholesale channel rose whereas strong e-commerce growth was not able to compensate the reduced revenue reported in physical retail stores. Consequently, revenue from the retail channel decreased in Q4 2015/16 compared to the same period last financial year. Revenue from both the Nordic region as well as Rest of Europe rose whereas Rest of the world reported lower revenue. The operating profit amounted to 4 million Danish krone (0.5 million dollars) corresponding to an EBIT margin of 5 percent.

Other financial highlights of the reviewed period

Revenue from the Group’s other brands amounted to 101 million Danish krone (15.1 million dollars) which is at the same level as the corresponding period last year and rose by 0.6 percent in local currency). Saint Tropez reported higher revenue, whereas Designers Remix reported a revenue reduction. The operating profit rose by 4 million Danish krone (0.5 million dolars) due to a higher gross margin in Saint Tropez and lower costs in Designers Remix. The EBIT margin amounted to 11.9 percent.

A total growth rate of 11.9 percent reported in the retail channel contributed in general to the higher consolidated revenue for Q4 2015/16 – driven by Peak Performance and Tiger of Sweden. The shift in deliveries in Tiger of Sweden had a negative impact on the consolidated wholesale revenue which consequently decreased by 2.6 percent. Consolidated revenue amounted to 509 million Danish (76.1 million dollars) corresponding to a growth rate of 3.2 percent or 4.5 percent in local currency. The gross profit rose by 18 million Danish krone (2.6 million dollars) to 291 million Danish krone (43.5 million dollars), and the gross margin improved by 1.8 percentage points to 57.2 percent which is primarily attributable to higher margins on sold products.

Expects further revenue growth driven by premium brands

Going forward, the company expects the Group’s premium brands to drive the total revenue development. Revenue growth is expected to be driven by both the wholesale channel as well as the retail channel where new stores are expected to impact positively – both stores opened during the financial year 2015/16 as well as store openings planned for 2016/17. At present, the Group’s Premium brands expect to open 10–15 new stores during the financial year 2016/17.

Specifically, the company expects to realize a revenue growth rate measured in local currency of at least 6 percent. Based on the exchange rates of the Group’s primary sales currencies, this corresponds to a reported revenue growth rate of at least 5 percent. The consolidated earnings are expected to be positively impacted by a higher gross margin whereas the number of store openings mentioned above will lead to a higher level of costs. Consequently, the company expects the Group’s EBIT margin to attain a level of approximately 9 percent.

Pictures:Tiger of Sweden,Peak Performance