IC Companys A/S
Announcement of annual results 2011/12

IC Companys A/S 

07.08.2012 07:34
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Company Announcement no. 10/2012                                               
                               Copenhagen 7 August 



Consolidated revenue for 2011/12 amounted to DKK 3,819 million corresponding to
a reduction of 3% compared to 2010/11. Efficient price campaigns and sales
promoting activities resulted in the Group being able to retain its market
position, but did at the same time, however, increase the pressure on the
Group's gross margin which suffered a substantial decline. The Group has
embarked on a number of structural changes to reduce the cost base which
started to have an impact in H2 2011/12. Consolidated operating profit for
2011/12 amounted to DKK 130 million corresponding to a setback of 60%. However,
the sales promoting efforts ensured a solid cash flow and a positive inventory
development. 



  -- Revenue for the financial year 2011/12 amounted to DKK 3,819 million (DKK
     3,925 million) corresponding to a setback of 3% compared to last financial
     year. The last reported outlook indicated a level of DKK 3,800-3,850
     million. Revenue for Q4 2011/12 amounted to DKK 680 million corresponding
     to a setback of 5% compared to Q4 2010/11.



  -- Wholesale revenue amounted to DKK 2,356 million (DKK 2,395 million)
     corresponding to a setback of 2% compared to last financial year. Wholesale
     revenue for Q4 2011/12 declined by 3% to DKK 337 million compared to Q4
     2010/11.



  -- Retail revenue amounted to DKK 1,464 million (DKK 1,531 million)
     corresponding to a decline of 4% compared to last financial year. Retail
     revenue for Q4 2011/12 decreased by 8% to DKK 343 million compared to Q4
     2010/11.



  -- Gross profit amounted to DKK 2,154 million (DKK 2,322 million). The Group
     thereby generated a gross margin of 56.4% (59.1%) corresponding to a
     decline of 2.7 percentage points compared to last financial year. The gross
     profit for Q4 2011/12 improved by 0.3 percentage points to 58.4%.



  -- Capacity costs amounted to DKK 2,024 million (DKK 2,000 million)
     corresponding to an increase of 1% compared to last financial year. The
     Group thereby achieved a cost rate of 53.0% (51.0%) corresponding to an
     increase of 2.0 percentage points compared to last financial year.



  -- After having adjusted for non-recurring costs of DKK 23 million (DKK 16
     million) and the negative impact attributable to provisions for bad debts
     of DKK 24 million (positive effect of DKK 12 million), consolidated
     capacity costs were thus reduced by 1% compared to last financial year and
     by 2% compared to Q4 2010/11.



  -- Operating profit amounted to DKK 130 million (DKK 321 million). The Group
     thus generated an EBIT margin of 3.4% (8.2%). The last reported outlook
     indicated a level of DKK 130-150 million. Operating loss for Q4 2011/12
     amounted to DKK 71 million which is a decline of DKK 27 million compared to
     Q4 2010/11.



  -- Cash flow from operating and investing activities rose by DKK 73 million to
     DKK 150 million (DKK 77 million) for 2011/12.



  -- Investments for the financial year 2011/12 amounted to DKK 106 million (DKK
     102 million) which is higher than expected (the last reported outlook
     indicated a level of DKK 80-100 million). This deviation is attributable to
     a temporary difference of IT investments and leasehold improvements.



  -- Order intake for the winter collection 2012 is expected to record a setback
     of 5% reported in local currencies.



  -- The Board of Directors recommends that a dividend of DKK 25 million
     corresponding to DKK 1.50 per ordinary eligible share is distributed.



  -- As the Group's revenue and earnings targets for the financial year under
     review were not achieved, no warrants will be granted to the Executive
     Board and other executives for the financial year 2011/12.





Outlook for 2012/13



Management expects that the volatile market conditions will continue in
2012/13. Consequently, a same-store setback and the pressure on the Group's
wholesale customers are expected to continue in 2012/13. However, the pressure
on the Group's gross margin is expected to abate in 2012/13 due to
normalisation of discounts and sales activities of the industry. Furthermore,
the new sourcing structure and continuous optimisation are expected to have a
positive impact on the Group's gross margin. 



In the light of the development for the financial year 2011/12, the Group thus
expects to close down a number of stores in 2012/13. In alignment with the
corporate strategy Management expects to close down the retail stores in the
Mid Market and Fast Fashion segments positioned outside the core markets of the
individual brands. 



As a consequence of the Group's earnings development, the Management expects
that the efforts of reducing costs will be intensified in 2012/13. 



Based on this, the Management expects the consolidated revenue for the
financial year 2012/13 to be lower compared to the financial year 2011/12,
however, the consolidated operating profit for the financial year 2012/13 is
expected to attain the same or a higher level compared to the financial year
2011/12. 



Investments for the financial year 2012/13 are expected to attain the same
level as the financial year 2011/12 primarily for an expansion of the
distribution in the Premium segment. 





Chief Executive Officer of IC Companys A/S Niels Mikkelsen commented;

'The reported results for 2011/12 are, in spite of the challenging market
conditions, both disappointing and dissatisfactory. However, the direction for
the Group is clear; the efforts of reducing fixed costs will be intensified,
resiliency must be enhanced by improving the flexibility and variability of the
costs and IC Companys must gradually be developed into a group where the
majority of revenues is attributable to brands in the Premium segment. Our
future top priority is to ensure a continuous improvement of the Group's
earnings.' 





IC Companys A/S



Niels Mikkelsen                                                           Chris
Bigler 

Chief Executive Officer                                              Chief
Financial Officer 







Please direct any questions regarding this announcement to:

 Thomas Rohold

Head of Investor Relations and Communication

+45 32 66 70 93





This announcement is a translation from the Danish language. In the event of any
  discrepancy between the Danish and English versions, the Danish version shall
                                    prevail.
News Source: NASDAQ OMX



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Language:     English
Company:      IC Companys A/S
              
               
              Denmark
Phone:        
Fax:          
E-mail:       
Internet:     
ISIN:         DK0010221803
WKN:          
 
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