Annual Report 2010 - CDON Group

14 CDON Group AB
Annual Report report 2010
Sports & Health
(SEK thousand) 2010 2009 Change (%)
Net sales 284,658 210,709 35.1%
Operating profit 35,358 26,200 35.0%
Operating margin, % 12.4% 12.4%
No. of visits (thousand) 6,226 4,833 28.8%
No. of orders (thousand) 391 280 39.6%
Average shopping basket (SEK) 727 750 -3.1%
The Sports & Health segment comprises the Gymgrossisten.com, Fitnesstukku.fi, and
Bodystore.com online stores. Segment sales were up 35% for the full year and accounted for
12.9% (12.1) of sales for the full year. The sales growth primarily reflected market share gains for
Gymgrossisten.com in Norway and for Fintesstukku.fi in Finland. The first quarter is the seasonally
strongest period of the year for the Sports & Health segment, due to the higher interest in
exercise and physical well-being in the early part of the year, with the remaining quarters typically
of approximately equal size.
Segment operating profits grew by 35% for the full year, with an operating margin of 12.4%
despite the Group’s investments to increase its market shares in Finland and Norway.
Significant events after the end of the period
CDON Group acquired 90.1% of Rum21 AB, a family-owned online retailer of designer-brand
furniture and interior decoration products on 31 January 2011. The company, less cash and
liabilities, was acquired for a purchase price of SEK 14 million, of which SEK 7.3 million is paid as a
deferred/contingent part of the acquisition price over a three-year period starting in 2012.
Rum21.se provides the Group with access to an industry segment that is well suited for ecommerce
and has considerable growth potential. Company profits are consolidated within the
Group from 1 February 2011. Its sales in 2010 amounted to SEK 11 million and it had four
employees at year-end.
The conversion price for the Group’s SEK 250.0 million five-year convertible bond was set as of 19
January 2011 at SEK 38.00, which corresponds to 125% of the volume-weighted share price for
CDON Group shares during the first 20 days of trading, that is to say, the period from 15
December 2010 to 14 January 2011. MTG may therefore convert the bond into a maximum of
6,578,947 CDON Group shares from 15 June 2012 through 1 December 2015, which would
represent a 9.0% dilution effect based on the number of shares outstanding as at 31 December
2010.
Nelly.com was test launched in Germany in May 2010 and marked the first expansion of CDON
Group outside the Nordic region. The online store’s initial marketing campaign comprised affiliate
programmes, online social media, as well as TV advertising campaigns. The test launch showed a