Annual Report 2010 - CDON Group

CDON Group AB
Annual Report report 2010
Net financial items
Consolidated net financial items amounted to SEK -18.8 million (negative 11.8) for the full year,
which was mainly due to the increased debt/equity ratio in most of 2010, as well as exchange
differences. The Group also began to incur interest expenses attributable to the five-year
convertible bonds issued on 2 December 2010, which bear a cash interest rate of 2.85% per
annum. The effective interest that is charged against net financial income amounts to 6.99%.
Tax
Group profit before tax rose 2% from SEK 113.3 million to SEK 115.8 million for the full year.
The Group recognised tax expense of SEK -25.6 million (-32.8), including the utilisation of
previously unrecognised deficit deductions.
Net profit and earnings per share
Consolidated profit before tax increased 12% from SEK 80.5 million to SEK 90.2 million. The total
number of outstanding shares increased from 500,000 at the start of 2010 (taking a 250:1 split in
September 2010 in consideration) to 66,342,124 at year-end. The Group therefore reported
earnings per share of SEK 5.00 (159.09) for the full year.
Consolidated financial position
Group total assets grew by 37% year-on-year to SEK 1,014.2 million (741.2) at 31 December 2010,
which reflected the on-going expansion of the Fashion and the Entertainment segments.
Inventory levels increased year-on-year to SEK 251.3 million (153.0). The convertible bonds issued
by the CDON Group in December 2010 are therefore recognised partly as liability and partly as
equity in the consolidated and parent company statements of financial position.
Capital employed increased SEK 287.2 million compared with 2009 to SEK 553.7 million, which
was primarily due to the issue of the convertible bonds and increased inventory levels. Increased
inventory levels are due to increased sales in Fashion and Sports & Health, which are warehouseintensive
segments. The Group’s twelve month return on capital employed therefore declined
year-on-year to 36.1% (37.5). However, the twelve-month return on capital employed excluding
cash and cash equivalents increased year-on-year to 83.5% (68.3).
Cash flow from operating activities before change in working capital declined to SEK 126.2 million
(127.7) for the full year. The decline reflected higher financial items in conjunction with a higher
debt/equity ratio for the full year. The Group reported a SEK -32.9 million (91.2) change in
working capital for the year. The difference in the full year is primarily due to a non-recurring
effect in 2009 from a permanent decrease in accounts receivable, following the Group’s
outsourced invoice management for CDON.COM from June 2009.
Consolidated cash flow to investing activities stood at SEK -9.8 million (-5.6) for the full year,
which primarily reflected the SEK -4.0 million cash flow impact from the acquisition of
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