Annual Report 2012/13 - Clas Ohlson

On 21 November 2012, the Swedish Government decided
to reduce the corporate tax rate from 26.3 per cent to
22.0 per cent, effective from the financial year commencing
after 1 January 2013 (from the financial year 2013/14
for Clas Ohlson). Deferred tax has been recalculated to
the lower tax rate for the third quarter of 2012/13, entailing
that deferred tax liabilities decreased by approximately
SEK 31 M, with a corresponding reduction in deferred tax
expense (income).
Prospects for the next financial year
Clas Ohlson’s business concept, to offer a broad and attractively
priced product range that conveniently solves the
little practical problems of everyday life, is highly attractive
in established markets. The concept is unique and has
the potential to expand in several countries, and increase
market shares in existing markets.
Growth in new markets will take place in accordance
with the long-term financial objectives. Over the coming
years, establishment in new markets is expected to have
a negative effect on Clas Ohlson’s operating margin in the
range of 2–3 percentage points per financial year.
During the coming 2013/14 financial year, Clas Ohlson
plans to establish 12–17 new stores. The proportion of
new stores in mature markets will decline to match the
development of investments in new expanding sales channels
(e-commerce).
The company anticipates that it will take time to establish
the brand and position in new markets and that the
conversion rates, average purchase and sale are expected
to increase successively in the coming years.
The continuing development of Clas Ohlson’s product
range, sales channels and new customer segments (corporate
customers) will generate additional growth potential,
both in established and new markets. Preparation is
in progress to enter the German market with an initial 1–2
stores in Northern Germany and e-commerce with planned
launch not later than during the 2014 calendar year.
Clas Ohlson is also developing a new offering directed
at corporate customers, Clas Office, with an expanded
range and service that focuses primarily on small and midsize
offices. The offering will be made available through
Clas Ohlson’s e-commerce, and will include a network of
stores. The launch of the concept is scheduled for the first
half of 2014, commencing in Sweden and Norway.
Financial position
Cash flow from operating activities during the financial year
was SEK 518 M (965). During the financial year, SEK 73 M
in additional tax was paid, since the regulations for Swedish
companies with a split financial year were amended
with payment of preliminary tax being brought forward.
Otherwise, the difference between the years was primarily
attributable to a positive change in working capital in
2011/12, as a result of significantly reduced value of inventories.
Cash flow for the year, after investing and financing
operations, amounted to SEK 17 M (neg: 23). In September
2012, a cash dividend of SEK 269 M (239) was distributed
to Clas Ohlson’s shareholders.
The average value on inventories during the 12 months
amounted to SEK 1,336 M (1,291). The rolling 12-month
stock turnover rate at the central distribution facility was
6.9 multiples (6.1).
At the end of the financial year, inventories amounted to
SEK 1,304 M (1,229). Compared with the same month a
year earlier, 17 stores had been added.
The repurchase of own shares to secure LTI 2012 (Long
Term Incentive programme 2012) amounted to SEK 36
M (11) during the year. The Group’s net cash, that is cash
and cash equivalents less interest-bearing liabilities, totalled
SEK 125 M (net cash of SEK 82 M in the preceding
year). The equity/assets ratio was 59 per cent (60).
Investments
Investments during the financial year amounted to SEK
167 M (207). Of these, SEK 103 M (93) pertains to investments
in new or remodelled stores. Other investments
pertained primarily to IT investments and replacement
investments. Investments in e-commerce and IT-related
support processes totalled SEK 37 M (56).
Shares and share capital
Clas Ohlson B shares are listed on the NASDAQ OMX
Nordic Exchange Stockholm. The share capital totals
SEK 82 M, broken down into 5,760,000 A shares,
59,840,000 B shares, each with a quotient value of
1.25. Each A share carries ten votes, while each B
share carries one vote. All shares carry equal rights to
payment of dividend. Holders of A shares can request
that A shares be converted to B shares. The share
capital is unchanged in comparison with the preceding
financial year.
On 30 April 2013, there were a total of 26,449 shareholders
according to the register of shareholders held by
Euroclear Sweden, compared with 27,462 on 30 April
2012. The ten largest shareholders at the same date
accounted for 59 per cent of the capital and 77 per cent
of the votes. For a list of shareholders, see pages 45-47 of
the printed annual report.
The Articles of Association do not contain any reservations
for right of first refusal or other restrictions on the
transferability of B shares. Apart from authorisation pertaining
to the repurchase of shares stated on page 57,
there are no other circumstances of the kinds the company
is obligated to disclose under the provisions of Chapter
6, Section 2a (4-11) of the Annual Accounts Act. The
number of registered shares amounted to 65,600,000,
which is unchanged compared with the preceding year.
As of 30 April 2013, the company had 2,312,192 shares
(1,985,000), corresponding to 4 per cent (3) of the total
number of registered shares. The number of shares outstanding,
net after repurchase, amounted to 63,287,808
(63,615,000). To secure the company’s commitment
regarding conditional matching shares and employee
stock options in connection with LTI 2012, Clas Ohlson
repurchased 366,000 shares during the first quarter of
2012/13 for a total of SEK 36 M, at an average price of
approximately SEK 99 per share.
Director’s report 49