"Our team's integration of footwear into our business has been a resounding success, with a staggering 199% growth this quarter. I'm incredibly proud of their work"
Henrik Bunge, CEO BJÖRN BORG AB
Key facts
Net sales
Overall Net sales in Q2 2024 increased by 28.7% to SEK 213 m.
By channel NS to WHS increased by 50%, mainly related to the footwear integration. Own Retail storesincreased 17% related to late incoming covid contributions in the Netherlands. Excluding store closuresand governmental contributions the increase was 4%. Own e-commerce continued strongly withincreased sales of 9%. Distributors bounced back and increased by 4%.
By category NS increased by 43% for sports apparel and 6% for underwear. Footwear recovered asexpected and increased with 199%, and bags showed a strong quarter with an increase of 33%.
By channel NS to WHS increased by 50%, mainly related to the footwear integration. Own Retail storesincreased 17% related to late incoming covid contributions in the Netherlands. Excluding store closuresand governmental contributions the increase was 4%. Own e-commerce continued strongly withincreased sales of 9%. Distributors bounced back and increased by 4%.
By category NS increased by 43% for sports apparel and 6% for underwear. Footwear recovered asexpected and increased with 199%, and bags showed a strong quarter with an increase of 33%.
Gross profit margin
Gross profit margin declined by 3.8 ppt to 51.8%, related to larger one-off discounts in footwear due to theinventory takeover from the previous distributor. Currency neutral the gross profit margin decreased by 3.3ppt to 52.3%.
Operating profit
Operating profit increased by 17.5% to SEK 9.5 m. Currency neutral the operating profit increased by 27.5%to SEK 10.3 m.
Solidity
The financial solidity remains strong, showing an equity ratio of 46% and a net debt / EBITDA ratio of 0.45.
Our mission, our business strategy and our long-term financial objectives are clearly set
Our mission
We inspire people to be more, through our belief that sports can make our minds, souls and bodies become something more than what we are today, and that anyone can become anything.
Our long-term financial objectives
— Annual sales growth of min 5%
— Annual operating margin of min 10%
— Annual dividend of min 50% of net profit
— An equity/assets ratio of min 35%
— Annual operating margin of min 10%
— Annual dividend of min 50% of net profit
— An equity/assets ratio of min 35%
Our business strategy
We inspire people to be more, through our belief that sports can make our minds, souls and bodies become something more than what we are today, and that anyone can become anything.
Our brand journey continues in the right direction with strong brand heat signs
We conducted surveys in our biggest markets to find out if we were their last purchase or top 3
+45%
Purchase intention HER in SE
22% in Q2 2023 → 32% in Q2 2024
+20%
Brand top 3 HIM in SE
35% in Q2 2023 → 42% in Q2 2024
+53%
Unaided awareness HIM
3,6% in Q2 2023 → 5,5% in Q2 2024
— A variety of touchpoints gives us a great reach and with that an increased awareness
— Offline activations works well among our male target group, such as partnerships with Barry’s, Tough Viking etc.
— Our message “Train To Live” is resonating well with our target group
— A strong online and influencer focus is clearly working
— Source: Brand Track Data from weekly end consumer surveys done by XTREME. 22k people/year. Markets: SE, NO, FI, DK, NL, BE, DE.
— Offline activations works well among our male target group, such as partnerships with Barry’s, Tough Viking etc.
— Our message “Train To Live” is resonating well with our target group
— A strong online and influencer focus is clearly working
— Source: Brand Track Data from weekly end consumer surveys done by XTREME. 22k people/year. Markets: SE, NO, FI, DK, NL, BE, DE.
Increasing our strong market position in men’s underwear andat the same time increasing our apparel position
BJÖRN BORG AB – Brand heat KPIs 2018 - 2024 - All countries
Underwear HIM
Apparel
Source: Brand Track Data from weekly end consumer surveys done by XTREME. 22k people/year. Markets: SE, NO, FI, DK, NL, BE, DE.
The growth continues in the second quarter of 2024, delivering a clear sales record for a second quarter
BJÖRN BORG AB – Net Sales development by quarter [SEK m]
Strong momentum overall, especially in the largest markets Sweden and the Netherlands, related to Footwear integration
BJÖRN BORG AB - Total Sales development Q2 2024 by country
Source: BB AB Investor Relations
Bounce-back in wholesale due to footwear integration, whileown e-commerce continues to grow
BJÖRN BORG AB – Channel development Q2 2024
Wholesale
+50%
VS Q2 2023
Wholesale e-tailers with strong growth in the quarter,+20%.
Brick and mortar stores with strong growth with an increase of +72%.
Brick and mortar stores with strong growth with an increase of +72%.
Own E-com
+9%
VS Q2 2023
Own e-commerce keeps growing by +9%
Own retail
17%
VS Q2 2023
Comparable stores +4%.
Late incoming governmental covid contributions of SEK4m in Q2 2024.
Late incoming governmental covid contributions of SEK4m in Q2 2024.
Distributors
4%
VS Q2 2023
Distributors bounced back in the quarter and increase with +4%.
Largest distributor, Norway, increase with +27%.
Largest distributor, Norway, increase with +27%.
Strong online development in the quarter, across all channels, predominantly external e-tailers
BJÖRN BORG AB – Online sales 2020-2024 [SEK m]
Source: BB AB Investor Relations
All categories demonstrated strong growth in Q2, withfootwear and sports apparel leading the way.
BJÖRN BORG AB – Category development Q2 2024
Underwear
+6%
Apparel
+43%
Bags
+33%
Footwear
+199%
(due to integration of footwear licence business)
Gross profit margin and operating income show strong improvement vs last year
BJÖRN BORG AB – Bottom line KPIs Q1 2024
Gross margin [% NS]
EBIT [m SEK]
Net income [m SEK]
All balance sheet KPIs on good levels
BJÖRN BORG AB – Balance sheet KPIs as per Q2 2024
Equity [% of assets]
Net debt [m SEK]
WC 12 months rolling [% of GS]
A quarter with very strong own e-commerce sales and improved profit
BJÖRN BORG AB – Key take-aways Q1 2024
1.
Brand gaining significant traction in all markets with record high awareness
2.
Record sales for WHS andcontinued growth for owne-commerce. Improved profit despite short term gross margin decline
3.
Very strong momentum for Sports apparel with 43% growth
Björn Borg is on a solid basis to show continued profitable growth
1. Proven track record of steady profitable growth since 2014.
2. Convincing strategy for continued profitable growth in the years to come.
3. Proven value creation, share price growth much higher than OMX during the last years.
4. Stable and high dividend payments.
5. Safe equity ratio and net debt ratios way below bank covenant.
6. Strong, professional and committed management team
7. Solid business foundation due to new ERP system, e.com platform, cyber security process and supplychain set-up.
Thank you!
