A N N UA L R E P O R T 2 01 2 /1 3
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IC COMPANYS • ANNUAL REPORT 2012/13 • MANAGEMENT COMMENTARY
2
MANAGEMENT LETTER
5
FINANCIAL HIGHLIGHTS AND KEY RATIOS
6
STRATEGY AND CAPITAL STRUCTURE
11
OUTLOOK
12
PERFORMANCE OF BUSINESS SEGMENTS
20
PERFORMANCE OF GROUP
24
RISK MANAGEMENT
28
CORPORATE RESPONSIBILITY
34
CORPORATE GOVERNANCE
38
EXECUTIVE BOARD AND BOARD OF DIRECTORS
40
SHAREHOLDER INFORMATION AND SHARE PERFORMANCE
45
CONSOLIDATED FINANCIAL STATEMENTS
77
PARENT FINANCIAL STATEMENTS
91
DEFINITION OF KEY RATIOS
92
STATEMENTS
94
GROUP STRUCTURE
95
FINANCIAL HIGHLIGHTS AND KEY RATIOS, QUARTERLY
FOR 2012/13 (UNAUDITED)
MANAGEMENT COMMENTARY • ANNUAL REPORT 2012/13 • IC COMPANYS
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A YEAR MARKED BY
ESSENTIAL CHANGES
FOR IC COMPANYS
Strategy and organisation finalised
The financial year 2012/13 was a significant year for IC
Companys. Efforts of adjusting the corporate structure and developing a clear portfolio strategy for the Group during the past
few years have resulted in IC Companys now having an even
more transparent, simple and flexible structure and with a clear
plan for the future – to generate growth and boost earnings in
the Group’s Premium brands, and to strengthen the earnings
capacity of the Group’s Mid Market brands.
New segmentation and stronger focus
During the financial year under review the main focus area has
been to reduce the complexity of the corporate structure and
create transparency in all parts of the business. As a consequence of the adopted new portfolio strategy, a new segmentation of the Group’s activities and changes to the responsibilities
of the Group Management were implemented. This new segmentation of the Group’s operations into three core segments
and one non-core segment has provided the Group with the
opportunity to focus even more on the clearly defined strategic
targets.
Premium brands deliver satisfactory results
The Group therefore finds it very satisfactory that its two
Premium segments have generated profits for the financial
year 2012/13 in accordance with the defined strategies which
confirms the potential of the three Premium brands Peak Performance, Tiger of Sweden and By Malene Birger.
Foundation of The Original Group
With the segmentation of the Group’s operations, a new business unit in the Mid Market Contemporary segment came into
existence under the name The Original Group. The foundation
of The Original Group, which was announced in Q3 2012/13, is
well under way and with the latest restructurings, the first important steps have been taken towards improving this business
unit’s long-term earnings capacity under a less complex structure. The financial performance of this segment is expected to
improve already in 2013/14.
2
IC COMPANYS • ANNUAL REPORT 2012/13 • MANAGEMENT COMMENTARY
Adjusted capacity
As the Group’s activities are expected to continue genera-
The corporate shared service functions have continuously been
ting positive cash flow from operations, the improved capital
adjusted during the financial year under review which has resul-
structure will thus imply that the Group will distribute any future
ted in improved profit margins for Group brands. This has also
surplus liquidity to the shareholders through a combination of
made it possible to better and quicker adjust the capacity of the
dividends and share buy-back.
shared service functions to the future activity level of the Group.
Finally, this adjustment has rendered it possible to eliminate the
New Group CEO
excess capacity arising after the sale of the two Group brands
Immediately after the end of the financial year 2012/13 Mads
Jackpot and Cottonfield.
Ryder was appointed Group CEO of IC Companys A/S. Mads
Ryder joined the Group on 1 August 2013 and now that the
Important strategic divestment of Jackpot and Cottonfield
Group’s strategy and organisation have been finalised, he will
The sale of Jackpot and Cottonfield to COOP in May 2013 mark-
be heading the execution plans.
ed an important mile stone in the process of achieving a less
have generated declining revenues and operating losses during
The Group reported mixed results, but the total performance was disappointing
a longer period of time, added complexity to the overall Group
The Group’s important Premium segments realised satisfactory
perspective as their business operations to a large extent were
results for the financial year 2012/13 whereas the disappoin-
based on retail in Eastern Europe, which is considered far from
ting performance of the Mid Market Contemporary segment and
the Group’s core competence. After having concluded this sale,
the discontinued operations had a negative impact on the total
the Group may now focus more on its profit-earning activities.
Group performance for 2012/13. Revenue of continuing ope-
complex business model. The two brands in question, which
rations for the financial year 2012/13 amounted to DKK 3,314
Sale of headquarters
million and the operating profit for the year after tax merely
The divestment of the two brands, several restructurings as well
amounted to DKK 6 million which is unsatisfactory.
as the relocation of The Original Group into one of the Group’s
other leases have in combination heavily reduced the utilisation
Profit of continuing operations as expected
of the corporate headquarters. The Group therefore decided
After having adjusted for total non-recurring costs of DKK 53
to sell the property located Raffinaderivej, Denmark. The sales
million for 2012/13, the operating profit for the year of continu-
process has been commenced and a clarification of the process
ing operations amounted to DKK 210 million (DKK 209 million)
is expected by the end of the calendar year 2013.
which is in line with the Management’s expectations.
High free cash flow and solid capital structure
A stronger IC Companys
With the expected sale of the headquarters, another of the
The Management looks back on a year marked by essential
Group’s important targets will be accomplished which is a total
changes which all have been implemented to ensure a stronger
net interest-bearing debt of zero. During the past years the
IC Companys. The strategy is clear. The organisation and capa-
Group has continuously employed its free cash flow to reduce
city have been adjusted. The cost and capital structures have
its net interest-bearing debt, and during Q4 2012/13 the short-
been optimised. The top priority is now to execute in order to
term net interest-bearing debt was turned into a net deposit.
generate higher revenues and earnings growth for the Group.
Consequently, the Group now has a far more solid and flexible
capital structure which will support the need for potential investments in the Group’s Premium segments.
MANAGEMENT COMMENTARY • ANNUAL REPORT 2012/13 • IC COMPANYS
3
*
* EBITDA margin, adjusted for non-recurring items
All the above key ratios are based on continuing operations
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.
4
IC COMPANYS • ANNUAL REPORT 2012/13 • MANAGEMENT COMMENTARY
FINANCIAL HIGHLIGHTS
AND KEY RATIOS
DKK million
2012/13
2011/121)
2010/111)
2009/101)
2008/091)
3,292.5
1,834.6
290.5
3,297.5
1,925.2
415.0
2,904.3
1,730.3
346.3
2,966.1
1,738.8
250.2
304.5
195.2
(0.7)
194.5
134.1
(44.7)
89.4
157.4
443.0
318.2
(13.4)
304.8
243.1
3.2
246.3
186.0
354.3
242.2
(5.2)
237.0
201.5
34.3
235.8
249.1
365.2
140.5
(10.8)
129.7
93.6
15.6
109.2
113.9
520.3
1,502.0
144.3
2,022.3
169.4
808.8
82.5
1,131.0
140.0
2,022.3
722.9
1,284.6
2,007.5
169.4
830.6
246.8
930.1
2,007.5
770.7
1,155.7
1,926.4
169.4
742.7
246.1
937.6
1,926.4
793.3
1,010.5
1,803.8
169.4
747.2
196.6
860.0
1,803.8
803.7
981.0
1,784.7
169.4
509.1
222.8
1,052.8
1,784.7
232.1
(66.3)
(58.2)
258.4
(108.2)
(71.5)
179.7
(103.2)
(79.3)
424.4
(122.5)
(92.1)
335.1
(135.8)
(129.5)
182.5
135.9
64.3
231.3
185.2
(16.7)
(34.8)
131.0
14.3
(86.7)
63.5
12.2
(142.8)
(66.3)
70.6
(44.3)
257.6
14.1
(83.0)
116.3
56.4
7.5
9.1
4.7
13.6
40.0
1,402.1
11.2
118.2
(2.7)
55.7
8.8
9.2
5.9
17.0
41.4
1,320.7
14.8
248.1
29.9
58.4
12.6
13.4
9.6
32.7
38.6
1,209.2
26.3
310.9
41.9
59.6
11.9
12.2
8.3
32.1
41.4
1,173.5
20.6
243.4
32.6
58.6
8.4
12.3
4.7
19.1
28.5
1,162.1
12.1
533.1
104.7
16,402.1
122.0
0.2
0.2
14.2
49.1
610.0
16,406.3
97.5
5.4
5.4
15.8
50.5
18.2
16,519.9
221.0
14.8
14.7
11.0
44.7
15.1
16,549.3
176.0
13.9
13.9
25.9
44.7
12.7
16,524.4
103.0
6.1
6.1
20.3
30.0
16.8
1,615
1,720
1,702
1,750
1,761
INCOME STATEMENT
Revenue
3,314.2
Gross profit
1,868.9
Operating profit before depreciation and amortisation (EBITDA) 248.5
Operating profit before depreciation and amortisation,
adjusted for non-recurring costs
301.5
Operating profit (EBIT)
157.0
Net financials
(13.1)
Profit for the year before tax
143.9
Profit for the year of continuing operations
111.5
Profit/loss for the year of discontinued operations
(105.7)
Profit for the year
5.8
Comprehensive income
(3.8)
STATEMENT OF FINANCIAL POSITION
Total non-current assets
Total current assets
Assets classified as held-for-sale
Total assets
Share capital
Total equity
Total non-current liabilities
Total current liabilities
Liabilities concerning assets classified as held-for-sale
Total equity and liabilities
STATEMENT OF CASH FLOWS
Cash flow from operating activities
Cash flow from investing activities
Cash flow from investments in property, plant and equipment
Cash flow from operating and investing activities of
continuing operations
Cash flow from operating and investing activities of
discontinued operations
Cash flow from financing activities
Net cash flow for the year
KEY RATIOS - CONTINUING OPERATIONS
Gross margin (%)
EBITDA margin (%)
EBITDA margin, adjusted for non-recurring items (%)
EBIT margin (%)
Return on equity (%)
Equity ratio (%)
Average invested capital including goodwill
Return on invested capital (%)
Net interest-bearing debt, end of year
Financial gearing (%)
SHARE-BASED RATIOS*
Average number of shares excluding
treasury shares, diluted (thousands)
Share price, end of year, DKK
Earnings per share, DKK
Diluted earnings per share, DKK
Diluted cash flow per share, DKK
Diluted net asset value per share, DKK
Diluted price/ earnings, DKK2)
EMPLOYEES
Number of employees, full-time equivalent at end of the year
(continuing operations)
1)
The comparative figures in the income statement have been adjusted in order to reflect that the brands Jackpot and Cottonfield have been
separated as discontinued operations.
2)
Diluted price/earnings for 2012/13 based on continuing operations amounted to 18.2.
* The effect of IC Companys’ programmes for share options and warrants has been included in the diluted values.
The key ratios and share data have been calculated according to the recommendations in “Recommendations and Ratios 2010” issued by the
Danish Society of Financial Analysts. Please see definition of key ratios on page 91.
MANAGEMENT COMMENTARY • ANNUAL REPORT 2012/13 • IC COMPANYS
5
A CLEAR STRATEGY FOR
IC COMPANYS
IC Companys’ vision is to be one of the best developers of fashion and sports brands. The Group brands are developed by means of a well-defined business model and an efficient shared service platform which constitute the
framework for the Group’s mission of building successful brands by uniting business expertise with creativity and
innovation. It is IC Companys’ ambition that an increasing part of the Group’s total revenues and earnings derive
from brands in the Premium segment.
The market of fashion and sportswear
Then there is also a large mass-market for non-branded products as well as private labels.
IC Companys operates within the market of fashion and sportswear which constitutes one of the world’s largest consumer
IC Companys’ core business operates within the Premium and
goods markets. Nevertheless, this market is highly fragmented
Mid Market segments.
and regionally divided where even the biggest international
market players only account for small market shares. The market of fashion and sportswear may roughly be divided into four
IC Companys’ business segments
segments based on factors such as price, brand perception
and distribution chain. These four segments are as follows:
IC Companys is one of the largest companies within fashion and
sportswear in the Nordic region with a core business comprising
•
•
•
•
Luxury segment comprising brands such as Gucci, Louis
seven brands within the two market segments – Premium (Out-
Vuitton, Prada and Burberry.
door and Contemporary) and Mid Market (Contemporary).
Premium segment comprising brands such as Peak Performance, Tiger of Sweden, By Malene Birger, Hugo Boss,
Five years ago the Premium segment constituted less than 60%
Filippa K and Acne.
of the Group’s revenue, however, this segment has generated
Mid Market segment comprising brands such as InWear,
an average annual growth rate of 5% during the last five years.
Matinique, Part Two, Soaked in Luxury, Esprit, GAP and
Today the Premium segment’s revenue share accounts for 70%.
French Connection.
The Mid Market segment, in contrast, has suffered an average
Fast Fashion segment comprising brands such as H&M,
annual setback of 5% during the same period of time.
ZARA, Topshop and Mango
MARKET SEGMENTS
Market for fashion and sportswear
LUXURY
PREMIUM
MID MARKET
FAST FASHION
6
IC COMPANYS • ANNUAL REPORT 2012/13 • MANAGEMENT COMMENTARY
The highest earnings level is generated by the Group’s Premium
The Group’s Mid Market segment will focus on strengthening its
segment which has realised an EBIT margin of approx. 8-10%
position in the Nordic core markets as well as harvesting the sy-
during the past few years whereas the Mid Market segment has
nergy potential between the four brands in the segment in order
been under pressure generating an EBIT margin below 5%.
to improve earnings.
Non-core business
A focused portfolio strategy providing
clear targets
The two brands Saint Tropez and Designers Remix are considered non-core business. Saint Tropez is a Fast Fashion brand and
is thus operating in a market positioned outside the corporate
IC Companys has set out a clear portfolio strategy comprising a
strategic focus. IC Companys exercises active ownership but
portfolio of brands within the Premium and Mid Market segments
the brand is not integrated into the corporate shared service
as well as a matching set of key competences needed for opera-
platform. Saint Tropez will continue its operations independently
ting successfully within these two segments.
and may in the long-term be divested. Designers Remix is a
Premium brand only partly owned by IC Companys which makes
The Group’s Premium segment comprising the three brands Tiger
it non-core business.
of Sweden, By Malene Birger and Peak Performance operates in
attractive markets holding significant growth opportunities. The
Group’s Mid Market brands operate in a market characterised by
The corporate business model
highly challenging market conditions.
The corporate business model seeks to maximise the value of
While all of the Group’s business segments are operated with
the Group’s portfolio of Premium and Mid Market brands while
strong focus on earnings, the Premium segments (Contemporary
recognising their different potentials. Focus is on boosting
and Outdoor) are also pursuing revenue growth. Consequently, in
performance of the individual brands through a combination of
the future these segments are thus expected to account for an in-
strategic development, business support and shared service
creasing share of the core business resulting in capital and other
functions.
resources primarily to be allocated for generating growth in these
business segments. The Group will strive at generating organic
With great respect for the individual brands, the fundamental
growth in these segments. In the long-term, growth through acqui-
management philosophy for the Group’s Premium brands is that
sitions may also prove to be an option in the Premium segment.
each brand should have full ownership of those parts in the value chain being most important for ensuring a strong position in
Both organic growth and improved earnings in the Premium seg-
the market. For the Group’s Mid Market brands the fundamental
ments are expected to be realised through higher market shares
management philosophy is rooted in sharing as much as pos-
in existing markets as well as internationalisation in new markets.
sible in order to optimise the utilisation of the synergy potential.
At present no actual acquisition plans have been formulated.
IC COMPANYS BUSINESS UNITS
Group brands divided into market segments
MID MARKET
PREMIUM
Outdoor
Contemporary
Contemporary
MANAGEMENT COMMENTARY • ANNUAL REPORT 2012/13 • IC COMPANYS
7
Both the Premium and Mid Market brands share best practice in
This common set of beliefs is referred to as ”Leadership Beliefs”
key areas within the value chain as well as the corporate shared
and comprises competences and characteristics which are
service platform.
particularly important for retaining a high performance culture
throughout the entire organisation and in the way the business
The corporate business model is based on three elements which
is operated.
are as follows:
•
Strategy, business development and support
The Group’s Leadership Beliefs form the framework as to how
•
Corporate shared service functions
people work in IC Companys and how IC Companys attracts, re-
•
People and culture
tain and develop excellent employees who contribute in realising
the Group’s strategic targets.
Strategy, business development and support
IC Companys has predefined frames for how to do business. This
includes well-defined structures and processes for development,
implementation and follow-up on brand strategies for all Group
Investments in the Premium segment
supported by a strong capital structure
brands.
Growth strategy and the basis for future investments
It also includes principles, guidelines and tools on how to
The expected future revenue development is based on the
practise the key business disciplines such as retail, franchise,
growth and internationalisation strategy pursued in the Group’s
e-commerce and wholesale excellence, collection development
Premium segments. Since this strategy is highly driven by distri-
and sourcing of collections as well as marketing and brand-
butor or franchise partners, investments in the Group’s Premium
building.
brands will primarily include selected concept stores or particularly important locations in key markets as well as brand-building
These frames have been developed in co-operation between
initiatives. Investments in the Group’s Mid Market segment
brands and the Executive Board and supported by Corporate
which is focusing on earnings will almost merely be limited to
Business Development.
retaining and adjusting the activities in the core markets. This
means that investments will primarily be implemented in the
Corporate shared service functions
Premium segment.
Corporate shared service functions have been set up in those
areas in which significant operational as well as knowledge
A well-functioning service platform on Group level means that
synergies have been identified.
only limited investments are required in order to support a
growing business. In the future the Group aims at keeping the
The corporate shared service functions consist of the depart-
annual investments level at roughly the same level as the annual
ments Finance, Global Sourcing, HR, IT, Legal & Real Estate and
depreciation and amortisation. The Group’s future investment
Logistics. These service functions are shared by all brands to
level is expected to attain a level of 3% of the annual revenue.
simplify the day-to-day operations and to provide scale advantages in respect of costs/competences or control at Group level.
The working capital is still expected to constitute approx. 12% of
the annual revenue and consequently it will gradually increase in
The shared service functions provide the Group brands with a
line with the activity level in the long-term.
more efficient and service-minded set-up than they could obtain
on their own or source outside the Group. Efficient refers to a
Cash flow and debt level
set-up which is transparent and lean and consequently offers
The Group still expects to generate a high level of cash flow from
services at competitive prices. In addition to this, it also offers
operating activities. During the year under review the accumu-
counselling which is competent, relevant and concrete. Service-
lated surplus cash has been employed to reduce the Group’s
minded refers to a pro-active set-up which is customer-focused,
net interest-bearing debt. During Q4 2012/13 the short-term
business-oriented and reliable.
net interest-bearing debt was turned into a net deposit, and with
the expected sale of the headquarters located Raffinaderivej,
The corporate shared service functions allow the brands to focus
Denmark, during 2013 the total net interest-bearing debt will be
on their core business – brand building and generating revenue
converted into a net deposit.
and earnings growth.
As the Group’s total cash flow development is expected to be
People and culture
positive in the coming years, the Group expects to accumulate
In IC Companys people play an important role in the Group’s
considerable surplus cash by 2013/14.
strategy execution. Differences are acknowledged and respected
8
– both between people and the different brands and their indivi-
To maintain the highest possible flexibility in the future and
dual cultures - however, a common set of beliefs throughout the
thereby support the growth strategies pursued in the Premium
organisation is of vital importance.
segments in the best way possible, the Group has decided to
IC COMPANYS • ANNUAL REPORT 2012/13 • MANAGEMENT COMMENTARY
retain the level of net interest-bearing debt to zero. The Group’s
After having paid ordinary dividends and with respect of the
credit facilities will then primarily be employed to cover for seaso-
zero net interest-bearing debt level as at 30 June, any additional
nal fluctuations of the cash outflows. As at 30 June 2013 the net
surplus liquidity will be distributed to the shareholders through
interest-bearing debt amounted to DKK 118 million.
share buy-back or extraordinary dividend.
The Group has furthermore decided that in the future the net
Based on the profit for the year of continuing operations,
interest-bearing debt, including its lease commitments, may only
Management will propose at the Annual General Meeting 2013
as a maximum be increased to a level three times higher than
that a resolution recommending DKK 2.00 per ordinary share,
EBITDA should such measures be necessary. At present the
corresponding to a total dividend of DKK 33 million, in respect of
Group has no plans of employing gearing to the maximum level.
the financial year 2012/13 to be distributed as dividend to the
shareholders.
Dividend policy
As a minimum, 30% of the consolidated profit after tax will be
Furthermore, during the financial year 2013/14 Management
distributed as an ordinary dividend.
expects to distribute DKK 100 million through a combination of
share buy-back and extraordinary dividend.
MANAGEMENT COMMENTARY • ANNUAL REPORT 2012/13 • IC COMPANYS
9
OUTLOOK
Outlook for 2012/13 realised
Outlook for 2013/14
Consolidated revenue of continuing operations for the financial
The Group’s Premium brands are expected to continue the posi-
year 2012/13 amounted to DKK 3,314 million (DKK 3,293
tive development and generate solid growth rates for 2013/14.
million) corresponding to an increase of 1%. The last reported
As a consequence of the challenges in the Group’s Mid Market
outlook for continuing operations stated an expected level of
segment, which is expected to suffer a revenue setback, the
DKK 3,250-3.300 million.
total consolidated revenue growth for 2013/14 is expected to be
modest.
In the Group’s interim report for Q3 2012/13 Management
specified the outlook of the operating profit for 2012/13 of
However, earnings are expected to be improved in all segments
continuing operations. The consolidated operating profit for
and the total consolidated earnings are consequently expected
2012/13 was expected to attain a level of DKK 170-200 mil-
to increase significantly compared to DKK 157 million realised in
lion excluding non-recurring costs for Q4 2012/13. During Q4
2012/13.
the Group recognised non-recurring costs of DKK 38 million.
Operating profit for 2012/13 of continuing operations amounted
Investments for the financial year 2013/14 are expected to
to DKK 157 million. After having adjusted for the non-recurring
attain a level of DKK 70-90 million primarily for an expansion of
costs recognised in Q4 2012/13, the operating profit amounted
the distribution in the two Premium segments.
to DKK 195 million and was consequently in line with the last
announced outlook for the financial year 2012/13.
Management will propose at the Annual General Meeting 2013
that a resolution recommending DKK 2.00 per ordinary share,
During the year under review the Group incurred total non-recur-
corresponding to a total dividend of DKK 33 million, in respect of
ring costs of DKK 53 million relating to the continuing operati-
the financial year 2012/13 to be distributed as dividend to the
ons. After having adjusted for these, the consolidated operating
shareholders. Furthermore, during the financial year 2013/14
profit for the year of continuing operations amounted to DKK
Management expects to distribute DKK 100 million through a
210 million (DKK 209 million) corresponding to an EBIT margin
combination of share buy-back and extraordinary dividend.
of 6.3%.
Investments of continuing operations for the financial year
2012/13 amounted to DKK 66 million (DKK 108 million) which
is lower than expected (the last reported outlook indicated an investment level of the same level as the financial year 2011/12).
These investments were primarily attributable to the Group’s
Premium segments.
MANAGEMENT COMMENTARY • ANNUAL REPORT 2012/13 • IC COMPANYS
11
PREMIUM OUTDOOR
Peak Performance constitutes the Group brand in the Premium Outdoor segment. The target is to improve revenue and earnings supported by the new strategy plan where focus on product development and sale to the end
customers are key elements. During the financial year under review the organisation has been strengthened by a
new brand CEO.
Premium Outdoor
The brand’s products are sold through 2,065 selling points of
The main target of the brand is to generate growth through
which 86 are branded stores divided between 46 franchise
enhanced market penetration and internationalisation and
stores and 40 own retail stores. The wholesale customers repre-
thereby boost both revenue and earnings.
sent 1,979 selling points. Furthermore, Peak Perfomance is sold
through own as well as third party e-commerce channels.
Peak Performance forms the largest brand in Scandinavia
regarding tecnical and fashion sportswear. The brand was
To read more about Peak Performance please visit their web
originally founded within the skiing community in 1986 by pas-
page at www.peakperformance.com.
sionate skiers. Since then, Peak Performance has been among
the world’s leading producers when it comes to technical,
performance sportswear.
Development in 2012/13
The Nordic home markets account for the majority of Peak
During the financial year under review Peak Performance imple-
Perfomance’s revenue with Sweden as the largest market.
mented a new and well-defined strategy. This new strategy plan
During the financial year 2012/13 the four Nordic countries
forms an important foundation for the efforts of capitalising on
accounted for 67% of the total revenue. The brand has gained
the brand’s large potential. Peak Performance’s strategic target
a strong foothold in Europe with the markets in the Alps being
is to be the number one brand for skiers and the lifestyle they
particurlarly important. The market segment Rest of Europe
love to live focusing especially on product development and sale
thus accounted for 29% of revenue in 2012/13 whereas
to the end customer. The strong focus on product development,
the market segment Rest of the world accounted for 4% of
which distinguishes Peak Perfomance positively from other
revenue.
PREMIUM OUTDOOR
Financial highlights and key ratios
Revenue development
EBIT development and EBIT margin
DKK million
DKK million
1200
180
36
1000
150
30
800
120
24
600
90
18
400
60
12
200
30
6
0
0
2010/11
2011/12
2012/13
2010/11
EBIT
12
IC COMPANYS • ANNUAL REPORT 2012/13 • MANAGEMENT COMMENTARY
Geographic breakdown of revenue
%
2011/12
2012/13
EBIT margin
0
Nordic region 67%
Rest of the world 4%
Rest of Europe 29%
brands within the same segment, and the increased focus on
Earnings development
winning the end customers, where they do their shopping, are
both key elements of the strategy plan.
Peak Performance realised a revenue of DKK 931 million for the
financial year 2012/13 (DKK 976 million) corresponding to a
Headed by a new brand CEO, efforts have been made during the
setback of 5% which is primarily attributable to the brand’s who-
year to strengthen the organisation by recruiting key employees
lesale customers generally being under pressure – particularly
and managers – e.g. within sale, marketing and product develop-
in the large Swedish home market. Revenue for Q4 2012/13
ment. A strong team is now in place and with a revitalisation of
amounted to DKK 99 million (DKK 80 million) corresponding to a
the strong culture, which has always lived in Peak Performance,
growth rate of 24%.
the organisation has a solid foundation with a clear focus on the
brand’s targets.
The wholesale customers have been under pressure during
the financial year 2012/13 which is reflected in a wholesale
The increased focus on product development takes its outset
revenue setback of 9%. Sales through own sales channels
within technical performance sportswear which has always been
(retail, e-commerce and outlets) increased by 6% compared to
the brand’s core competence with especially outerwear being an
2011/12 which was primarily attributable to high e-commerce
important product segment. With development projects such as
sales as well as sales through outlets. However, the brand suf-
the highly innovative “Project 9” and the re-launch of the “R&D”
fered a minor retail same-store setback of 0.2% which includes
concept it is Peak Performance’s target to be among the leading
a reported decline in sales in physical stores and an increase
producers within this type of clothes as well as to transfer
within e-commerce.
these innovative features to the Casual collection. An optimised
Outdoor collection for this segment has been launched and also
The oprating profit increased by 25% to DKK 69 million (DKK 55
in this segment the ambition is that Peak Performance must dif-
million) corresponding to an EBIT margin of 7.4% (5.6%). Even
ferentiate distinctively from its peers.
though this marks a significant improvement, Peak Performance’s profit margin is still expected to improve. The positive
During 2012/13 Peak Performance has taken decisive steps
development of the EBIT margin is primarily attributable to a
towards a larger internationalisation. The brand has entered
significant improvement of the gross margin as a consequence
into distributor agreements in Eastern Europe, China and Hong
of improved purchasing and sourcing as well as lower inven-
Kong. These agreements are not considered to contribute much
tory write-downs. Lower capacity costs also contributed to the
to revenues in the short-term, however, these markets are ex-
improved earnings in spite of lower revenues compared to the
pected to boost the brand’s growth significantly in the long-term
financial year 2011/12.
perspective.
PREMIUM OUTDOOR
Earnings overview
Q4
2012/13
Q4
2011/12
Year
2012/13
Year
2011/12
Revenue
Wholesale and franchise
Retail, e-commerce and outlet
99.0
49.4
49.6
79.8
30.7
49.1
930.5
625.2
305.3
975.5
686.6
288.9
Operating profit before depreciation, amortisation and net financials (EBITDA)
Depreciation, amortisation and impairment losses
(44.1)
(6.4)
(47.1)
(9.5)
95.5
(26.6)
85.4
(30.6)
Operating profit (EBIT)
(50.5)
(56.6)
68.9
54.8
EBIT margin (%)
(51.0)
(70.9)
7.4
5.6
DKK million
MANAGEMENT COMMENTARY • ANNUAL REPORT 2012/13 • IC COMPANYS
13
PREMIUM CONTEMPORARY
The Premium Contemporary segment comprises the two brands Tiger of Sweden and By Malene Birger which both
realised growth and had success with the international expansion during the year under review.
Premium Contemporary
In total the segment has 2,032 selling points which are divided
between 1,967 wholesale customers, 29 franchise stores,
The Premium Contemporary segment comprises the two
18 own retail stores and 18 concessions. Furthermore, the
brands Tiger of Sweden and By Malene Birger and the main
segment’s products are sold through own as well as third party
target for these two brands is to generate growth through
e-commerce channels.
enhanced market penetration and internationalisation thereby
To read more about Tiger of Sweden and By Malene Birger
boosting both revenue and earnings.
please visit their web pages at:
Tiger of Sweden was established in 1903 in Sweden and has
www.tigerofsweden.com
its foundation in the strong menswear confection tradition
www.bymalenebirger.com
and solid tailoring skills, refined for 110 years. Today, Tiger of
Sweden is a modern, unisex brand which distinguishes itself by
offering a design characterised by ”a different cut”.
Development in 2012/13
By Malene Birger is a high-profile, Danish designer brand for
Tiger of Sweden
women which offers luxury at affordable prices. Having enjoyed
All of Tiger of Sweden’s geographical markets and all sales
10 years of success and continuous progress, the brand has
channels reported progress and growth for the financial year
achieved great recognition on the international fashion scene.
2012/13 which is considered very positive. The brand has
experienced a breakthrough in the important strategic markets
Geographically, the Nordic home markets acount for the ma-
Great Britain and Germany. Tiger of Sweden ranked among the
jority of the segment’s revenue. Consequently, Denmark, Swe-
best-selling menswear brands at the internationally recognised
den, Norway and Finland accounted for 78% of the segment’s
department store Selfridges in London and in August 2013 a
revenue in 2012/13. The market segment Rest of Europe
new Tiger of Sweden flagship store is scheduled to open at St.
accounted for 15% of revenue whereas 7% of the segment’s
James, London – a very important event toward supporting
revenue derived from markets positioned outside Europe.
the brand’s continued expansion in Great Britain as well as
PREMIUM CONTEMPORARY
Financial highlights and key ratios
EBIT development and EBIT margin
DKK million
DKK million
1200
180
36
1000
150
30
800
120
24
600
90
18
400
60
12
200
30
6
0
0
2010/11
2011/12
2012/13
2010/11
EBIT
14
Geographic breakdown of revenue
Revenue development
IC COMPANYS • ANNUAL REPORT 2012/13 • MANAGEMENT COMMENTARY
%
2011/12
2012/13
EBIT margin
0
Nordic region 78%
Rest of the world 7%
Rest of Europe 15%
internationally. The brand has also performed well in Germany
10-year anniversary show – a show which subsequently received
with newly opened shop-in-shops in the recognised department
good publicity on both the Danish and international fashion
stores such as Oberpollinger in Munich and Galleries Lafayette in
scene and a show which particularly emphasised By Malene
Berlin. Finally, during the year under review Tiger of Sweden has
Birger as a strong international fashion brand.
expanded its position in the Nordic home markets through both
store openings and increased sales to wholesale customers.
Earnings development
Tiger of Sweden has enjoyed great success with different
branding initiatives such as the marketing campaigns “Dressing
The Premium Contemporary segment realised a revenue of
Room Sessions”, “Working 9 to 5” and the Tiger Jeans campaign
DKK 1,064 million, corresponding to an increase of 18% compa-
“Paint it Black” which all differentiate the brand significantly
red to last financial year. Both brands contributed to the positive
from its peers. Consequently, this emphasises Tiger of Sweden’s
revenue development, however, Tiger of Sweden accounted for
strong brand DNA which is rooted in “a different cut”.
the highest growth rate of the two brands. Revenue for this segment in Q4 2012/13 amounted to DKK 243 milllion correspon-
During the financial year under review Tiger of Sweden have com-
ding to an impressive growth rate of 33%.
pleted the insourcing of its accessories collection. The effect of this
insourcing is expected to lead to a significant future revenue growth
The segment reported revenue growth in the wholesale channel
deriving from accesories which previously only constituted revenue
as well as higher sales through own stores and e-commerce. In
from royalties. At the same time the sourcing and capacity costs will
particular, the wholesale channel reported strong progress with
increase as Tiger of Sweden will be fully responsible for the entire
a growth rate as high as 19%. Tiger of Sweden contributed most
value chain in the future.
to this positive development. Both brands contributed equally to
the growth rate of 14% reported in the retail channel which is at-
By Malene Birger
tributable to new stores and higher sales through existing stores.
With a new brand CEO in place By Malene Birger experiences
The retail operations generated a same-store increase of 13%
strong growth in the Nordic home markets and makes great
driven by both own stores as well as e-commerce.
progress of the internationalisation process which is a key focus
area. The brand has worked on opening a new store in the well-
The operating profit for this segment amounted to DKK 95 million
known department store Galleries Lafayette as well as its own
(DKK 98 million) and thereby realised an EBIT margin of 8.9%
retail store in Palais Royal in Paris – both with scheduled grand
compared to an EBIT margin of 10.8% for 2011/12. Investments in
openings in August 2013. In addition, agreements have been
future growth and the continued international expansion have af-
entered into with selected distributors in Japan and in the Middle
fected the operating profit due to higher operating costs as well as
East – markets which are both characterised by high purchasing
increased costs for the mentioned insourcing of Tiger of Sweden’s
power and a high demand for consumer goods and thereby
accessories. The gross margin for the Premium Contemporary seg-
important markets for By Malene Birger.
ment for 2012/13 was at the same level as last financial year.
In January 2013 By Malene Birger hosted one of the most
Depreciation and amortisation were higher in 2012/13 compa-
spectacular fashion shows in Denmark seen in a long time. The
red to last financial year. As expected, they reflect the signifi-
scene of the Royal Danish Theater was used for the brand’s
cant investments in growth and expansion implemented in this
segment during the past few years.
PREMIUM CONTEMPORARY
Earnings overview
Q4
2012/13
Q4
2011/12
Year
2012/13
Year
2011/12
242.6
137.5
105.1
182.2
90.9
91.3
1,063.6
676.7
386.9
905.1
566.8
338.3
14.0
(7.0)
11.8
(5.3)
120.9
(25.9)
119.7
(21.9)
Operating profit (EBIT)
7.0
6.5
95.0
97.8
EBIT margin (%)
2.9
3.6
8.9
10.8
DKK million
Revenue
Wholesale and franchise
Retail, e-commerce and outlet
Operating profit before depreciation, amortisation and net financials (EBITDA)
Depreciation, amortisation and impairment losses
MANAGEMENT COMMENTARY • ANNUAL REPORT 2012/13 • IC COMPANYS
15
MID MARKET CONTEMPORARY
The Mid Market Contemporary segment comprises four brands organised under the independent division named
The Original Group. Since the division was founded in the spring 2013 it has initiated a number of restructurings
which are expected to contribute to an improved earnings capacity.
Mid Market Contemporary
To read more about the four brands of this segment please
The Group’s Mid Market segment comprises four brands orga-
visit their home pages at:
nised under one division named The Original Group. The three
www.inwear.com
brands InWear, Part Two and Soaked in Luxury are women’s
www.matinique.com
fashion brands whereas Matinique exclusively produces me-
www.parttwo.com
answear. Besides the four brands the division also includes the
www.soakedinluxury.com
multi-brand store concept Companys.
The main targets for The Original Group are to harvest the syner-
Development in 2012/13
gies between the four brands, to improve the earnings capacity
as well as to strengthen the market position in the Nordic core
As a consequence of the Group’s new segmentation of its
markets.
brand portfolio, the four Mid Markets brands, together with the
Companys concept, were united in February 2013 under one
Geographically, the majority of the segment’s revenue in
division with a shared management team. This division was
2012/13 is divided between the Nordic home markets
named The Original Group. During spring 2013 the division
Denmark, Sweden, Norway and Finland which accounted for
moved into separate headquarters at one of the Group’s other
63% whereas the market segment Rest of Europe accounted
leases. During Q3 2012/13 non-recurring costs of DKK 8 million
for 30% of revenue. In particular, a large part of Matinique’s
were realised in connection with establishing the division, the
revenue derived from the market segment Rest of Europe. The
initial restructurings and the relocation.
market segment Rest of the world accounted for the remaining
7% of revenue.
The Original Group still faces serious challenges due to its very
complex business – in particular, the number of distribution
The Original Group has 3,879 selling points of which 3,737 are
channels and geographical markets. Consequently, this business
wholesale customers. The segment has 71 franchise stores of
unit is now working on simplifying the complex business by
which 40 are Companys stores. Finally, products from the four
focusing on the Nordic core markets with wholesale customers,
brands are sold through 24 own retail stores, 47 concessions
concessions, outlets and the Companys store concept as its
as well as through own third party e-commerce channels.
primary distribution channels.
MID MARKET CONTEMPORARY
Financial highlights and key ratios
Revenue development
EBIT development and EBIT margin
DKK million
DKK million
1200
60
12
1000
40
8
20
4
0
0
200
(20)
(4)
0
(40)
800
600
400
2010/11
2011/12
2012/13
2010/11
EBIT
16
Geographic breakdown of revenue
%
IC COMPANYS • ANNUAL REPORT 2012/13 • MANAGEMENT COMMENTARY
2011/12
2012/13
EBIT margin
(8)
Nordic region 63%
Rest of the world 7%
Rest of Europe 30%
The largest and most profitable distributor agreements in the
Earnings development
other geographical markets are retained and the segment’s
e-commerce solution will be optimised. In the retail channel the
The segment realised a revenue of DKK 891 million (DKK 995
focus will be on concessions and the Companys concept stores,
million) corresponding to a decline of 11% which is equally
and on certain geographical wholesale markets the sales set-up
driven by reported setbacks in retail, wholesale and franchise.
will be changed into a more flexible one. Adjusting the number
The segment’s same-store development reflected a decrease of
of geographical markets and distribution channels is expected to
7% driven by lower sales through own stores.
lead to a significant reduction in the division’s total revenue and
cost base in the coming financial year.
The operating loss for this segment amounted to DKK 37 million (profit of DKK 40 million) corresponding to a negative EBIT
According to the plan, the business model will be simplified with
margin of 4.2% compared to a positive EBIT margin of 4.0% in
focus on improving the earnings capacity. A more commercial ap-
2011/12. However, the financial performance was significantly
proach towards collection development with smaller collections
affected by total non-recurring costs of DKK 46 million for the
and improved price points, realisation of sourcing synergies, less
financial year under review. After having adjusted for non-
expensive logistic solutions as well as focus on the marketing ef-
recurring costs, the segment realised an operating profit of DKK
forts in the Nordic core markets are some of the initiatives which
9 million.
are expected to contribute to improved earnings in the future.
The unsatisfactory results are attributable to a revenue setback
Part of the expected savings arising from the restructurings will
which has not been offset sufficiently by adjustments of the ca-
be re-invested in the Nordic core business by means of more
pacity costs. Furthermore, a deteriorated gross margin also had
competitive price points as well as enhanced marketing efforts.
a negative impact on earnings.
As a consequence of the restructuring plan, The Original Group
During the next two financial years the mentioned initiatives are
has implemented structural organisational changes in Q4
expected to have a total negative revenue impact of approx. DKK
2012/13 resulting in staff reductions – both in the sales organi-
80-100 million whereas a positive effect of approx. DKK 30-50
sation and in the division’s headquarters.
million is expected on earnings when the initiatives are fully
implemented.
In total the implemented initiatives in Q4 2012/13 led to non-recurring costs attributable to, e.g., closure of showrooms and retail
stores as well as staff reductions. The total non-recurring costs
for Q4 2012/13 of DKK 38 million are distributed as follows;
•
closure of showrooms and retail stores DKK 19 million;
•
staff reductions DKK 14 million; and
•
other costs in connection with the restructuring plan
DKK 5 million.
MID MARKET CONTEMPORARY
Earnings overview
Q4
2012/13
Q4
2011/12
Year
2012/13
Year
2011/12
Revenue
Wholesale and franchise
Retail, e-commerce and outlet
179.1
96.5
82.6
200.1
120.7
79.4
890.5
580.6
309.9
995.2
647.1
348.1
Operating profit before depreciation, amortisation and net financials (EBITDA)
Depreciation, amortisation and impairment losses
(51.1)
(7.6)
8.5
(7.2)
(9.1)
(28.0)
71.8
(31.7)
Operating profit (EBIT)
(58.7)
1.3
(37.1)
40.1
EBIT margin (%)
(32.8)
0.6
(4.2)
4.0
DKK million
MANAGEMENT COMMENTARY • ANNUAL REPORT 2012/13 • IC COMPANYS
17
NON-CORE BUSINESS
A part of the Group’s brand portfolio is defined as non-core business due to these operations lying either
outside the Group’s core competences or because they are not wholly owned by IC Companys.
Non-core business
Earnings development
The Group’s operations comprise two brands classified as non-
The segment reported a revenue of DKK 430 million (DKK
core business. These two brands; Saint Tropez and Designers
417 million) corresponding to a 3% increase. New stores in the
Remix are both profitable.
segment’s retail channel contributed to the positive development whereas sales to the segment’s wholesale and franchise
Saint Tropez is a Fast Fashion brand which has not been inte-
customers have almost been on the same level as last financial
grated into IC Companys’ shared service platform. The brand
year. The segment experienced a minor same-store setback, yet,
will continue its operations independently and may in the long-
e-commerce reported growth.
term be divested.
During the year 2012/13 Saint Tropez, which accounts for the
Designers Remix is a Premium brand which has developed
majority of the segment, increased its focus on improving ear-
well during the past few years. IC Companys holds 51% of the
nings after the disappointing earnings performance in 2011/12.
brand and the founders Niels and Charlotte Eskildsen hold the
This higher focus has resulted in significantly improved earnings
remaining 49%. The future ownership of the brand remains to
which contribute substantially to the segment’s operating profit
be resolved.
of DKK 30 million (DKK 3 million) corresponding to an EBIT
margin of 7.0% (0.6%). The satisfactory earnings growth is attributable to an improved gross margin and lower capacity costs.
Saint Tropez has consequently regained its strong earnings
capacity documented over the past couple of years.
NON-CORE BUSINESS
Earnings overview
Q4
2012/13
Q4
2011/12
Year
2012/13
Year
2011/12
102.9
47.1
55.8
105.8
52.0
53.8
429.7
234.7
195.0
416.6
234.2
182.4
Operating profit before depreciation, amortisation and net financials (EBITDA)
Depreciation, amortisation and impairment losses
7.3
(2.8)
(0.9)
(2.8)
41.1
(10.9)
13.6
(11.0)
Operating profit (EBIT)
4.5
(3.7)
30.2
2.5
EBIT margin (%)
4.4
(3.5)
7.0
0.6
DKK million
Revenue
Wholesale and franchise
Retail, e-commerce and outlet
18
IC COMPANYS • ANNUAL REPORT 2012/13 • MANAGEMENT COMMENTARY
RESTRUCTURINGS AFFECT THE
TOTAL CONSOLIDATED
OPERATING PROFIT
Consolidated revenue for 2012/13 of continuing operations amounted to DKK 3,314 million corresponding to a
minor increase of 1%. In total, the Group’s Premium segments and non-core business contributed to the improved
earnings, but the non-recurring costs for restructurings, primarily attributable to the Group’s Mid Market Contemporary segment, affected the profit for the year significantly. However, a reduction in the Group’s working capital
and the total interest-bearing debt ensured that the Group once again reported a significantly improved cash flow.
Earnings development
Non-recurring costs incurred for restructurings implemented in the Mid Market Contemporary segment
Revenue development
Consolidated costs including other operating income and costs
Consolidated revenue of continuing operations for the financial
for 2012/13 amounted to DKK 1,712 million (DKK 1,639 mil-
year 2012/13 amounted to DKK 3,314 million (DKK 3,293 mil-
lion) corresponding to an increase of 4%. The costs were negati-
lion) corresponding to a setback of 1%. Revenue was positively
vely affected by foreign currency translation of DKK 45 million.
affected by foreign currency translation of DKK 94 million.
The cost rate for the year under review amounted to 51.7%
Consolidated revenue of continuing operations for Q4 2012/13
(49.8%) and thus increased by 1.9 percentage points.
amounted to DKK 624 million (DKK 568 million) corresponding
to a growth rate of 10%. Revenue was positively affected by
Consolidated costs for Q4 2012/13 were negatively affected by
foreign currency translation of DKK 6 million.
non-recurring costs of DKK 38 million primarily attributable to
provisions for restructurings in the Mid Market Contemporary
Minor improvement of gross margin
segment covering closures of showrooms and retail stores,
Consolidated gross profit for the financial year 2012/13
severance payments as well as a number of other implemented
amounted to DKK 1,869 million (DKK 1,835 million) correspon-
measures.
ding to an improvement of 2%.
Total consolidated non-recurring costs of continuing operations
The gross margin for 2012/13 amounted to 56.4% (55.7%)
amounted to DKK 53 million compared to DKK 14 million in
which reflects an improvement of 0.7 percentage points com-
2011/12.
pared to last financial year. The higher gross margin is primarily
attributable to an improved inventory situation compared to last
After having adjusted for non-recurring costs and foreign cur-
financial year. When adjusted for new products, the volume of
rency translation in both 2012/13 and 2011/12, consolidated
products was significantly lower at the end of the season resul-
costs were reduced by DKK 11 million compared to last financial
ting in lower inventory write-downs. Furthermore, the Group has
year. This cost reduction was achieved in spite of higher costs
experienced an improved control of its sourcing activities. On the
in the Premium Contemporary segment needed for boosting
other hand the market pressure throughout 2012/13 has been
present and future growth.
fierce and the expected reduction in customer discounts was not
fully feasible.
Consolidated costs for Q4 2012/13 amounted to DKK 435 million (DKK 380 million) which constitutes an increase of 14%. The
Consolidated gross profit for Q4 2012/13 amounted to DKK 336
costs were negatively affected by foreign currency translation of
million (DKK 327 million) corresponding to an increase of 3%.
DKK 5 million.
The gross margin for Q4 2012/13 amounted to 53.9% (57.6%)
After having adjusted for non-recurring costs and foreign cur-
corresponding to a setback of 3.7 percentage points compared
rency translation in Q4 for both 2012/13 and 2011/12, consoli-
to Q4 2011/12. The lower gross margin is primarily attributable
dated costs rose by DKK 12 million driven by higher costs in the
to the temporary changes between Q3 and Q4 2012/13 where
Premium Contemporary segment due to the realised growth and
the gross margin was realised by an improvement of 3 percen-
investments in future growth.
tage points in Q3 2012/13.
20
IC COMPANYS • ANNUAL REPORT 2012/13 • MANAGEMENT COMMENTARY
Operating profit at the same level as last financial year
after having adjusted for non-recurring costs
Profit for the year
Consolidated operating profit of continuing operations for
89 million) corresponding to a decline of 93%.
Consolidated profit for the year amounted to DKK 6 million (DKK
2012/13 amounted to DKK 157 million (DKK 195 million) corresponding to a setback of 19% and an EBIT margin of 4.7% (5.9%).
Comprehensive income
Comprehensive income for 2012/13 totalled a loss of DKK 4
After having adjusted for non-recurring costs in both 2012/13
million (income of DKK 157 million). The comprehensive income
and 2011/12, the operating profit of DKK 210 million was rea-
was positively affected by adjustments deriving from foreign
lised at the same level as last financial year (DKK 209 million).
currency hedging instruments by DKK 1 million (positive adjustment of DKK 85 million) and negatively affected by foreign
Consolidated operating loss for Q4 2012/13 amounted to DKK
currency translation adjustments regarding subsidiaries by DKK
98 million (loss of DKK 53 million) corresponding to a deteriora-
10 million (positive adjustment of DKK 11 million).
tion of DKK 45 million.
Net financials
Statement of financial position and
cash flows
Net financials totalled costs of DKK 13 million which constitutes
an increase of DKK 12 million (costs of DKK 1 million). This
Statement of financial position
increase is attributable to realised loss on derivative financial
Consolidated assets rose by DKK 14 million to DKK 2,022 mil-
instruments of DKK 4 million (gain of DKK 4 million). Interest on
lion as at 30 June 2013 (DKK 2,008 million) which is attribu-
liabilities to credit institutions for 2012/13 was lower compared
table to an increase of the consolidated current assets.
to 2011/12 due to a lower debt level during the year.
Non-current assets were reduced by DKK 203 million relative to
Net financials for Q4 2012/13 totalled costs of DKK 4 million
last financial year which is primarily attributable to assets clas-
(income of DKK 4 million). This decrease is attributable to a posi-
sified as held-for-sale of DKK 144 million.
tive impact from realised gain on derivative financial instruments
in 2011/12.
Consolidated intangible assets declined by DKK 23 million to
DKK 258 million (DKK 281 million) which is attributable to fewer
Tax on profit for the year
investments as well as amortisation and impairment losses on
Tax expense for 2012/13 amounted to DKK 8 million (DKK 40
software and IT systems.
million) which constitutes 56% (31%) on profit before tax.
Property, plant and equipment decreased by DKK 194 million to
The higher tax rate compared to last financial year is primarily
DKK 144 million (DKK 338 million) primarily as a consequence
due to the fact that the Group reassessed its tax assets in
of DKK 144 million being classified as assets held-for-sale as
2012/13 and the tax carried in the income statement was thus
well as impairment losses in connection with discontinued
affected negatively by DKK 9 million.
operations. In general the Group has invested less than the level
of depreciation.
Tax payable amounted to DKK 40 million (DKK 39 million) after
having utilised losses carried forward from previous years. An
Current assets rose by DKK 217 million to DKK 1,502 million
amount of DKK 55 million of the tax assets recognised in previous
(DKK 1,285 million) due to surplus liquidity being invested in
years was utilised corresponding to a tax value of DKK 14 million.
securities as well as the reclassification of the Group’s headquarters as assets classified as held-for-sale.
Profit for the year of continuing operations
Profit for the year of continuing operations declined by 16% to
Inventories amounted to DKK 529 million for 2012/13 (DKK 529
DKK 112 million (DKK 134 million).
million) which is at the same level as last financial year. During
the financial year under review the Group has continued focusing
Loss for the year of discontinued operations
on reducing its inventories and inventory risks by clearing produ-
Loss for the year of discontinued operations amounted to DKK
cts out-of-season which has improved the age distribution of the
106 million (loss of DKK 45 million) corresponding to a setback
Group’s inventories compared to 30 June 2012. As a consequen-
of 136%.
ce of this clearing, inventory write-downs were reduced by DKK
17 million to DKK 90 million (DKK 107 million). The inventory
This loss for the year is attributable to the fact that the proceeds
turnover amounted to 3.1 which is the same level as 2011/12.
received from the sales transaction with COOP do not exceed the
provisions and impairment losses recognised for the disconti-
Trade receivables as at 30 June 2013 amounted to DKK
nued operations.
391 million (DKK 392 million) which is at the same level as
2011/12. Gross trade receivables rose by DKK 12 million to
MANAGEMENT COMMENTARY • ANNUAL REPORT 2012/13 • IC COMPANYS
21
DKK 460 million (DKK 448 million). This development reflects
million in the operating profit. The Group has achieved a reduc-
the Group’s planned change in delivery flows resulting in col-
tion of DKK 7 million in the tied-up working capital compared to
lections being delivered earlier to the stores. Furthermore, the
a reduction of DKK 31 million in the tied-up working capital last
age distribution of trade receivables was deteriorated. Neverthe-
financial year.
less, the level of days sales outstanding was at the same as last
financial year. Write-downs of trade receivables rose by DKK 13
Investments for 2012/13 amounted to DKK 66 million (DKK
million to DKK 69 million (DKK 56 million) as a consequence of
108 million) corresponding to a decrease of DKK 42 million. The
the deteriorated age distribution.
investments were primarily employed for interior design of new
stores and IT.
Other receivables declined to DKK 72 million (DKK 137 million)
which is primarily attributable to the fact that accruals of financial
Consolidated cash flow from financing activities for 2012/13
foreign exchange contracts last year included an unrealised gain
amounted to an outflow of DKK 35 million (outflow of DKK 87
of DKK 76 million compared to an unrealised gain of DKK 26
million).
million for the year under review. This gain is primarily a result of
higher sales currency exchange rates throughout the financial
Total consolidated cash flow for 2012/13 amounted to an inflow
year 2012/13.
of DKK 131 million (an inflow of DKK 64 million) corresponding
to an increase of DKK 67 million.
Prepayments decreased by DKK 14 million which is attributable
to a decline in accruals of rent and others.
Cash situation
As at 30 June 2013 consolidated net interest-bearing debt
The Group’s surplus liquidity has been invested in securities
amounted to DKK 118 million (DKK 248 million) corresponding
which amounted to DKK 101 million (nil).
to a decline of DKK 130 million compared to 30 June 2012.
Furthermore, cash and cash equivalents increased by DKK 27
As at 30 June 2013 the Group’s total credit facilities including
million to DKK 110 million (DKK 83 million).
banker’s credit and guarantees constituted DKK 924 million
(DKK 1,097 million) in terms of withdrawal rights of which an
After adjusting for non-cash funds, the total working capital
amount of DKK 329 million has been drawn in relation to current
amounted to DKK 403 million (DKK 410 million) which is at the
and non-current liabilities to credit institutions and an amount of
same level as last financial year. The working capital constitutes
DKK 188 million has been drawn for trade finance facilities and
11% of revenue for the year under review (11%).
guarantees. Undrawn credit facilities thus amounted to DKK 407
million. All credit guarantees, except from the Group’s loan in the
Long-term liabilities decreased by DKK 164 million to DKK 83
corporate head office, are standby credits which may be drawn
million (DKK 247 million) which is primarily due to DKK 140 mil-
with a day’s notice. The withdrawal rights have at no point in
lion being classified as liabilities concerning assets classified as
time during the financial year 2012/13 exceeded 63%, including
held-for-sale.
provisions for trade finance facilities, bank guarantees, etc.
Current liabilities increased by DKK 201 million to DKK 1,131
Equity
million (DKK 930 million). An amount of DKK 140 million has
Equity as at 30 June 2013 decreased by DKK 22 million to
been classified as liabilities concerning assets classified as
DKK 809 million compared to 30 June 2012 (DKK 831 million)
held-for-sale under current liabilities. Furthermore, provisions
which is primarily attributable to negative foreign currency trans-
under current liabilities have been increased by DKK 99 million
lation adjustments concerning subsidiaries and intercompany
as a consequence of discontinued operations and the restruc-
loans whereas payment of dividend in respect of the financial
turings in the Mid Market Contemporary segment. Liabilities to
year 2011/12 reduced equity by DKK 25 million. Equity ratio as
credit institutions were reduced by DKK 2 million whereas trade
at 30 June 2013 was 40.0% (41.4%).
payables rose by DKK 23 million. Other liabilities were reduced
by DKK 72 million to DKK 252 million (DKK 324 million) which is
primarily attributable to a decrease of unrealised loss on finan-
Events after the reporting period
cial contracts and other costs payable.
Mads Ryder was appointed Group CEO of IC Companys A/S as at
Statement of cash flows
1 August 2013.
Consolidated cash flow from operating activities for 2012/13
22
amounted to an inflow of DKK 232 million (inflow of DKK 258
Besides this, no material events have taken place after the
million) corresponding to a decrease of DKK 26 million compa-
reporting period that have not been recognised or included in
red to 2011/12 which is attributable to a reduction of DKK 104
the Annual Report.
IC COMPANYS • ANNUAL REPORT 2012/13 • MANAGEMENT COMMENTARY
EFFICIENT RISK MANAGEMENT
IN THE FASHION AND SPORTS
INDUSTRIES
As a market player within the fashion and sports industries the Group is exposed to a number of risks. Through
the development of an innovative knowledge centre and more than 30 years of experience, the Group has
achieved a unique ability to control the various risks. To the extent that the efficiency, flexibility and service level
in respect to brands are not compromised, the risks that fall outside the scope of the Group’s key disciplines are
outsourced to external partners.
Due to the Group’s activities, IC Companys is exposed to a num-
when they reach the stores do not appeal to the customers and
ber of risks. This entails a variety of risks all inherent in the fa-
consequently cannot be sold at the expected volumes and at
shion and sports industries. The Management of IC Companys
the expected prices.
considers efficient risk management as an integrated part of all
Group activities and all risks are therefore assessed thoroughly
Each individual brand develops their collections from a com-
in order to minimise uncertainty and thus create stakeholder
mercial and facts-based approach in order to minimise this risk.
value. Reassessment of the risks will be conducted annually in
Furthermore, at Group level, there is an inherent high level of
order to determine whether the risks have changed or the risk
diversification as a result of the number of different and inde-
control measures are adequate or relevant.
pendent brands.
In general, IC Companys handles risk management at a
Brand value risk
strategic level and categorises its risks as either core risks or
The Group operates nine strong brands which all hold significant
non-core risks. Both risk categories are managed with the pur-
intangible values accumulated over a number of years. Conti-
pose of limiting the volatility in Group cash flows. The first risk
nuous development of the collections results in an all-existing
category represents areas in which IC Companys hold special
risk of errors which may damage the value of the individual
competences, whereas the second category represents areas
brand.
which are either core risks for other companies or risks that fall
outside the scope of efficient management.
However, a strong control of the fashion risk influencing the Group
brands and a selective distribution help reducing this risk. Furthermore, the Group brands continuously work on brand building and
Core risks
marketing in order to retain and build up intangible values.
Any business operation involves a variety of risks and the
Bad publicity in the national and international media or with the
success of the business depends on its ability to control these
brand’s core customers may lead to considerable loss of brand
risks, minimise uncertainty and thus optimise its profit. The
value. The Group leads an active policy of corporate responsibi-
Group creates stakeholder value by managing and minimising
lity which requires the Group brands to comply with a number of
uncertainty within the core activities in a manner superior to
guidelines. Furthermore, the individual brands have their own
that of its competitors. IC Companys considers fashion, sup-
focus areas within corporate responsibility. The risk of Group
plier, logistics, inventory, debtor, employee and brand value
brands being involved in questionable issues, which may lead to
risks as such risks. The Management believes that these core
loss of brand value, is thus limited.
risks should be accepted as an integrated part of the Group’s
business. The Group’s processes are thus employed in such
Supplier risk
a manner that risks are controlled efficiently based on the ex-
The Group’s products are solely produced by sub-suppliers
periences and competences achieved over time in the fashion
which ensures a high level of flexibility. Yet, the co-operation
and sports industries by the Group.
with external suppliers entails a number of risks in regards of
correct production of the ordered products.
Fashion risk
24
All Group brands are heavily influenced by fashion trends. As
Sourcing for all brands is handled by own shared sourcing of-
collections change at a minimum of four times a year and have
fices in China, (including Shanghai and Hong Kong) India and
a long lead time, there is a potential risk that the products
Romania and to a limited extent by the use of agents.
IC COMPANYS • ANNUAL REPORT 2012/13 • MANAGEMENT COMMENTARY
The Group’s sourcing strategy, of which the objective is to capi-
2%. The Group has a total of 314 suppliers of which the largest
talise on the relevant synergies arising between Group brands
10 suppliers account for 30% of the total production value. The
by systematising the co-operation between Group brands and
largest single supplier accounts for 5% of the total production
selected sourcing partners, ensures that individual brands have
value and the Group is thus not substantially dependent on one
their production located in the right countries and co-operate with
single supplier. IC Companys is also working towards increasing
the best suppliers.
the number of suppliers who have completed BSCI training.
These efforts are described further in the section Corporate
The strategy enhances the compliance control of the Group’s
Responsibility on page 28. The number of the Group’s suppliers
business and ethical standards through a systematic scoring of
who are actively employing the BSCI processes amounted to
all suppliers. In addition to this, the Group is working on increa-
62% in 2012/13.
sing the trade with each individual supplier as well as improving
the co-operation with its best suppliers. Consequently, this will
Supplier risk management is based on the Group’s international
lead to a reduction in the number of suppliers and thereby a less
sourcing experience gained over more than 40 years.
complex sourcing structure.
Inventory risk
Furthermore, the sourcing structure makes it possible for all
Sale through own stores and the need to carry inventories and
brands to handle geographic sourcing alternatives safely and
supplementary products for retailers result in a risk that pro-
quickly and thereby move production to wherever the combina-
ducts, which during the year have been allocated for sale, re-
tion of price, quality and supply stability is best. This allows IC
main unsold at the end of the season just as the Group is often
Companys to harness new sourcing opportunities more efficiently
liable for sourcing materials until the products reach the stores
as well as reduce the operational risk.
which is 6-9 months.
In 2012/13 China accounted for 63% of the production whereas
By focusing on collection development and the purpose of each
rest of Asia accounted for 10%, Europe for 24% and Africa for
individual style in the brand’s distribution, a significant part of
MANAGEMENT COMMENTARY • ANNUAL REPORT 2012/13 • IC COMPANYS
25
the inventory risk may be reduced. A substantial amount of the
optimisation of the corporate logistics function. To ensure timely
total purchase has been pre-ordered by the Group’s wholesale
deliveries to our own and customers’ stores is a key element of
customers which also contributes to a reduction of the inventory
the corporate shared service functions.
risk.
Debtor risk
The Group also has a network of outlets to where surplus pro-
The risk of late or no payment from the Group’s wholesale
ducts are channelled and are sold continously during the year.
customers poses a significant risk to the Group. The Group
Capacity in this network is increased or reduced as required.
brand products are sold at more than 8,000 selling points. As a
Any products that cannot be sold through own outlets are sold to
considerable number of the Group’s wholesale customers are
brokers for resale outside the Group’s established markets.
customers of more than one brand, the actual number of wholesale customers is lower. No customer accounts for more than 3%
As a consequence of the divestment of Jackpot and Cottonfield
of the Group’s wholesale revenue.
and thereby the closure or sale of these brand stores, the number of own stores will be reduced significantly and the inventory
Prior to entering into business relations with customers, the
risk will thus be reduced.
Group always assesses the customer pursuant to the Group’s
Debtor Policy and based on their distribution set-up. These as-
Logistics risk
sessments are subsequently performed on a regular basis. By
Collections are products with a limited life-span. If the right pro-
ensuring a healthy base of customers, the debtor risk is reduced;
ducts are not available in the stores at the right time, this may
however, unanticipated losses may still occur. In addition to this,
result in lost revenues or a potential higher amount of returned
a new bank integration system is expected to provide a faster
and surplus products leading to write-downs. Late, faulty or non-
and improved overview of the Group’s wholesale customers.
delivery thus poses a risk.
Credit insurance is typically only taken out in those countries where
In general the Group’s products are handled in two ways; the
the credit risk exposure is estimated to be high and where this
products are either distributed in flat packages or hanging with
is feasible. This primarily applies to distant markets in which IC
the flat packages being the primary transport method. The ma-
Companys is not represented through an independent sales set-up.
jority of the Group’s products sourced in Asia is transported on
container liners to Europe, but if deemed necessary air freight
Credit terms vary in line with individual market practise. In the
is used instead. Measured by total volume, approx. 85% of the
past years the Group has recognised loss on trade receivables
products are transported on container liners while approx. 15%
amounting to less than 1% of the wholesale revenue. The Group
is transported by air freight. All the Group’s products sourced in
has thus recognised loss on trade receivables of 0.6% of the
Europe are transported by truckage which is a very flexible trans-
wholesale revenue for the financial year under review.
port method. Flexible geographical sourcing and the possibility of
moving freight from container liners to air planes help reducing
the logistics risk
Non-core risks
The core of the Group’s logistics structure consists of three large
The Group is exposed to a number of other risks. These risks
warehouses; a modern warehouse in Brøndby, Denmark, which
relate to activities in which the Group does not hold special
handles the Group’s flat packages for the majority of the Group
competences in efficient risk management. To the extent that
brands, a warehouse at Raffinaderivej, Denmark, which handles
the efficiency, flexibility and service level in respect to brands
the Group’s hanging products for the majority of the Group
are not compromised, these risks are outsourced. Such strategic
brands and a warehouse in Herning, Denmark, which handles
decisions are made at management level.
the Group brand Tiger of Sweden’s hanging products.
Political risk
26
Many years of logistics management and distribution experi-
A substantial part of the Group’s sourcing takes place in markets
ence within the fashion and sports industries has reduced the
posing significant political risks. The Group’s single largest poli-
logistics risk significantly. The corporate shared logistics function
tical risk factor concerns reliable supplies from China which ac-
is continuously working on optimising and enhancing the plan-
counts for 63% of the Group’s sourcing. The sourcing functions
ning systems. Investment in a new Warehouse Management
are continuously monitoring the conditions at the global sourcing
System is expected to contribute further to the management and
markets and are thereby assisting in providing updated reports
IC COMPANYS • ANNUAL REPORT 2012/13 • MANAGEMENT COMMENTARY
of the situation. As mentioned earlier, geographic relocation of
IT risk
sourcing may take place swiftly if deemed necessary.
The Group is dependent on efficient and reliable IT systems for
the day-to-day business operations as well as to ensure control
Financial risks
of product sourcing and to enhance efficiency throughout the
The Group’s financial risks may be categorised as follows;
Group’s supply chain. The Group is continuously working on
foreign currency exposure risk, interest rate risk and liquidity
minimising the risks relating hereto. This work primarily includes
risk, including counter-party risk. The Group monitors and con-
development and new employment of IT systems as well as
trols all its financial risks through the Parent Company’s Treasury
the day-to-day operation of these systems. Access controls and
Department. The use of financial instruments and the related
implemented contingency plans also contribute to an improved
risk management are controlled and set by the Group’s Treasury
security when using the Group’s IT systems.
Policy approved by the Board of Directors.
Solid IT support in all aspects of sourcing, distribution, logistics,
Financial instruments are solely used by the Group to hedge
administration and sales renders it possible for the individual
financial risks. All financial instruments are entered into as a
brands to focus on the creative and commercial development
means of hedging the underlying commercial activity and thus
aspects. The Point of Sale IT System has led to significant
no speculative contracts are made.
improvements of the Group’s retail data which permits a more
efficient utilisation of the sales area. The new Warehouse
Foreign currency exposure risk
Management System is expected to contribute significantly to
The Group is exposed to significant foreign currency exposure
an improved logistics function and the bank integration system
risks which arise through purchase of supplies and sale of pro-
will enhance the control of customer payments. Consequently,
ducts in foreign currencies. The main part of the Group’s
in a number of areas the shared operation of the IT platform
purchase of supplies is made in the Far East and denominated
ensures a significant risk reduction for the individual brands and
in USD and USD-related currencies while the main part of the
the Group.
revenues and capacity costs are denominated in DKK, SEK, EUR
and other European currencies. The natural currency hedge in
Employee risk
the Group’s transactions is thus limited.
In order to succeed with the corporate strategy, IC Companys
strives at creating a high-performance culture, where passio-
In general, the Group hedges all material transaction risks on
nate, committed employees may provide the all-important com-
a forward trailing 15 months basis. The Group primarily uses
petitive edge. To attract, develop and retain high-performance
foreign exchange contracts to hedge the Group’s foreign cur-
employees thus poses a risk to the Group.
rency exposure risks.
IC Companys strives at being an attractive employer offering
Interest rate risk
unique career opportunities, talent development and the op-
The Group’s interest rate risks are related to the Group’s
portunity to move between the different Group functions and
interest-bearing assets and liabilities.
brands.
The Group’s interest rate risk is controlled by obtaining loans
The Group has a professional and experienced HR department
with a floating or fixed rate and/or financial instruments hedging
which supports the development of IC Companys as a know-
against the interest rate risk on the underlying investment.
ledge centre. Furthermore, the HR department is responsible for
the development and updating of guidelines, tools, processes
Liquidity risk
and training, and conducts employee surveys to ensure that the
The Group’s cash resources and capital structure are allocated
Group is well on its way to becoming a world class employer.
and planned in such manner as to always ensure and support
This helps support the development of the Group’s performance
the Group’s on-going operations as well as planned investment
culture and ensures that all employees have clear goals and can
projects. Measures taken to minimise liquidity risks are described
act as accountable, trustworthy ambassadors for our brands
further under the section Cash flow and debt level on page 8.
and Group.
Please see note 31 to the consolidated financial statement for
further information on the Group’s financial risks at 30 June
2013.
MANAGEMENT COMMENTARY • ANNUAL REPORT 2012/13 • IC COMPANYS
27
CORPORATE RESPONSIBILITY IN
IC COMPANYS
IC Companys’ corporate responsibility framework of People, Planet and Profit is based on international principles
and the UN Global Compact. Working with these international principles continues to play an important role in
guiding IC Companys in making the right decisions while also contributing to the Group’s readiness to meet future
challenges. As a natural part of aligning the corporate responsibility work with international best practices and to
further develop the implementation framework, IC Companys has joined the Sustainable Apparel Coalition.
Corporate responsibility policy
enables the Group to prioritise and allocate resources to where the
biggest impact can be achieved. Moreover, IC Companys believes
IC Companys recognises that the Group is part of an industry with
that for CR to be sustainable, it has to be integrated in the relevant
many corporate responsibility (CR) challenges both in terms of
functions within IC Companys and the Group brands. Consequently,
complex supply chains and resource challenges. These chal-
the Group has thus assigned responsibility for the CR issues and
lenges are taken seriously and the Group has adopted an overall
CR targets to the relevant functions based on continuously updated
approach of making sure that it is not a barrier to sustainable
assessment.
development. However, IC Companys would like to take it one step
further and where possible work towards turning these challenges
For a complete description of the CR policy, please see the corpo-
into opportunities. The Group therefore strives at employing its
rate webpage www.iccompanys.com/responsibility/.
creativity and strong innovation skills to make a difference and
contribute to sustainable development.
Highlights in 2012/13
For IC Companys, CR is about not only reassuring that the products comply with the Group’s high quality standards and fulfill
Further development of the implementation framework
the customer expectations, but also that they are produced
During 2012/13 IC Companys has focused on further develo-
responsibly. IC Companys considers CR to be an integrated part
ping the processes to guide the implementation of the Group’s
of its business and an essential element in the Company’s profi-
CR strategy. This includes a very thorough revision and update
tability. Furthermore, working with CR plays an important role in
of IC Companys’ Restricted Substance List to become even
making sure that IC Companys is ready to meet future challenges.
more comprehensive and aligned with the Group’s ‘precautionary principle’. Furthermore, IC Companys has launched a
IC Companys’ CR efforts are based on the UN Global Compact’s
‘Chemical Workflow’ to assist employees in eliminating harmful
10 principles which are rooted in internationally adopted declarati-
chemicals in the different stages of a collection development.
ons and conventions on human rights, labour rights, environmen-
IC Companys has also introduced a new risk management pro-
tal protection and anti-corruption. These principles and the United
cedure based on Country Risk Analyses to assess challenges in
Nations Guiding Principles are used as an overall framework to
existing sourcing countries and to assess potential new sourcing
guide CR policies and implementation processes in the Group.
countries.
IC Companys has pledged to work pro-actively internally as well
IC Companys’ CR implementation framework continues to pro-
as externally with its suppliers to promote compliance with these
vide valuable guidance in the Group’s everyday CR work where
principles. The Group will never be able to guarantee 100% comp-
the processes offer hands-on guidance on how to operationalise
liance, but it strives at making a positive difference and setting up
the CR work.
due diligence processes to avoid non-compliance issues. Furthermore, the Group’s Compliance Hotline is used to enable access to
First Danish member of the Sustainable Apparel Coalition
remediation in cases of non-compliance.
During the financial year under review IC Companys has joined
the Sustainable Apparel Coalition (SAC), an industry-wide initia-
28
A cornerstone in IC Companys’ approach is a continuous assess-
tive established by a group of sustainability leaders from global
ment of the Group’s CR risks and opportunities. This is essential
apparel and footwear companies. The members recognise that
for the efforts in securing compliance. Equally importantly, it
addressing the industry’s current CR challenges is both a busi-
IC COMPANYS • ANNUAL REPORT 2012/13 • MANAGEMENT COMMENTARY
ness imperative and an opportunity. The member base consists
the Group’s CR performance. An example of this partnership
of more than 90 leading apparel and footwear brands, retailers,
approach is Peak Performance’s long-term sourcing strategy
suppliers and NGOs working to reduce the environmental and so-
which focuses on a closer relationship with the suppliers. The
cial impacts of apparel and footwear products around the world.
target of Peak Performance is to be the best brand in the world
on relationship-based sourcing as opposed to transaction-based
IC Companys sees SAC as an opportunity to take it one step
sourcing. To achieve this, Peak Performance has worked on
further and be a part of defining the rules of the game.
being closer to its suppliers and has among others held strate-
IC Companys believes that cooperating to find common solutions
gic workshop with the suppliers and set CR requirements for its
is the way forward instead of every member developing their
partner suppliers.
own initiatives which frustrates suppliers and creates confusion
amongst consumers.
During the financial year under review IC Companys has also
started to implement the supplier scorecard which in addition to
IC Companys believes that through cooperation with other mem-
parameters like quality, price and delivery also includes CR pa-
bers in SAC and setting a common industry standard, the Group
rameters. The tool is used to further promote dialogue with the
has an opportunity to contribute to a more transparent and
Group’s suppliers and to emphasise the focus on CR performan-
sustainable fashion industry. This will benefit consumers, sup-
ce as an important aspect of being an IC Companys supplier.
pliers and brands. Furthermore, a membership of SAC is in line
The implementation is still at an initial phase, but the Group has
with how IC Companys, through the membership of the Danish
already received very positive feedback from the suppliers who
Ethical Trading Initiative (DIEH), the Business Social CompIiance
have been involved.
Initiative (BSCI) and Kemikaliegruppen, works to find solutions
and try to exert leverage beyond what can be achieved alone.
An important aspect of working with responsible suppliers is
Finally, the membership matches the Group’s focus on education
the Group’s membership of BSCI. The Group uses the BSCI
as one of the main means to being able to identify potential CR
audit process but puts equal emphasis on BSCI’s capacity
challenges and solutions. In SAC IC Companys gains access to a
building work. Consequently, IC Companys has continued during
highly qualified network which provides valuable insight in new
2012/13 to be an active member of BSCI’s Capacity Building
trends, challenges and opportunities.
Working Group and to continuously promote BSCI training for the
Group’s suppliers. In other words, auditing is important but can
During 2012/13 IC Companys has used the member-ship of SAC
never stand alone. It is through training and partnerships with
to, among others, participate in developing The Higg Index. The
suppliers that the Group expects to see the biggest improve-
Higg Index is primarily an indicator-based tool for apparel that
ments.
enables businesses to evaluate material types, products, facilities and processes based on a range of environ-
Furthermore, IC Companys has updated the Group’s Standard
mental and product design choices. IC Companys has piloted
Operating Procedures to be aligned with the CR approach
The Higg Index both at a product level among the Group’s own
including the focus on the partnership approach and training,
brands and on a brand level to assist in setting targets for the
etc. Likewise, the Group has developed new procedures for its
Group’s CR efforts. The pilot exercise has also shown the edu-
nominated fabric and trim suppliers.
cational value of The Higg Index by highlighting the options for
improving the sustainability of a product.
During the financial year 2012/13 the Group has reduced the
number of suppliers to 314 from 349.
For further information on SAC and The Higg Index, please visit
www.apparelcoalition.org
DIEH (Danish Ethical Trading Initiative)
As one of the founding members of DIEH, IC Companys conti-
Working with the suppliers
nues to play a significant role in the initiative. During 2012/13
The Group sees its suppliers as critical partners in its CR efforts.
IC Companys’ CR Manager has played the role of vice chairman
Consequently, using a partnership approach to promote respon-
and also functioning chairman for a period. This period coinci-
sible supply chain management has continued to be a main
ded with the partnership agreement on responsible garments
focus area during 2012/13. This has included not only assisting
and textile production in Bangladesh between the Danish
the Group’s suppliers to find the most responsible solutions
Ministry of Foreign Affairs and the Danish garment and textile
but also listening to the suppliers’ ideas on how to improve
industry which was established in the aftermath of the terrible
MANAGEMENT COMMENTARY • ANNUAL REPORT 2012/13 • IC COMPANYS
29
accident in the garment factory in Savar, Bangladesh. DIEH took
hard to have even better systems and processes in place for
lead in not only getting the support of the Danish industry to the
implementing the CR efforts across the board. Furthermore, the
partnership, but also in the follow-up work on suggesting con-
Group’s membership of the SAC and the implementation of The
crete actions for implementation and getting the Danish industry
Higg Index will be an important driver for the Group’s CR work in
to sign the international Accord on Fire and Building Safety in
2013/14. Moreover, IC Companys will finalise the implementation
Bangladesh. An agreement which IC Companys has also signed
of the anti-corruption policy which was not fully implemented in
and which put emphasis on ensuring fire and building safety at
2012/13. In terms of using more quantitative indicators inspired
factories by means of inspections as well as education of factory
by the Global Reporting Initiative, the Group will assess the new
workers and building inspectors.
set of guidelines (G4) and then evaluate if inspiration can be
drawn from this new set of indicators for future reporting.
For IC Companys its engagement in DIEH reflects the Group’s
belief in working together in a multistakeholder approach to
Furthermore IC Companys will focus on the following;
create sustainable solutions to the challenges in the industry.
• full roll out of Supplier Scorecard tool;
This also reflects the growing awareness in the industry that no
• continue the work to further increase transparency
single stakeholder can solve the complex challenges alone. On
the contrary, there is great potential in working together and in
identifying where each stakeholder has the best competences to
contribute to sustainable solutions.
of supplier CR performance and ranking;
• continuous training and dialogue with preferred and
partner suppliers;
• active membership of BSCI including participation
in working groups;
Implementation of the Compliance Hotline
• active membership of SAC;
During the financial year under review IC Companys has imple-
• active membership of DIEH;
mented the Compliance Hotline allowing employees/managers
• continuous updating of the RSL;
and agents working on the Group’s behalf to report suspected
• tools and training on harmful chemicals for
misconduct in a secure and confidential way. The Compliance
Hotline plays an important role in ensuring that IC Companys
complies with all internal policies and regulatory requirements
and is an important part of the on-going due diligence work. IC
Companys has only received one case during the financial year
2012/13 which was handled by the CR Committee.
brands and production offices;
• increased training for sourcing and design teams
on using The Higg Index;
• implementation of The Higg Index Facility
and Product modules; and
• continue support to DIEH and the search
for multistakeholder solutions.
Targets for 2013/14
The above sections and the following schedule constitute the
Statutory Annual Corporate Responsibility Statement, cf. section
In the next financial year IC Companys will continue its strong
99a of the Danish Financial Statements Act. For more informa-
support of the UN Global Compact Principles and will work
tion about the Group’s CR activities, please read the separate
CR report on the corporate website www.iccompanys.com.
”Through Sustainable Apparel Coalition we can all
contribute and work together in setting a common industry
standard which we believe is needed.”
30
IC COMPANYS • ANNUAL REPORT 2012/13 • MANAGEMENT COMMENTARY
CR ACTIVITIES AND RESULTS 2012/13
PRINCIPLES
COMMITMENTS
SYSTEMS
ACTIONS
RESULTS
CR Integration in relevant
departments, managed
by Corporate CR Manager,
who reports directly to our
Group CEO
Assessed CR risk and
opportunities through
Country Risk Analyses
Increased awareness of
CR challenges in existing
and potential supplier
countries
PEOPLE – SOCIAL RESPONSIBILITY
Principle 1: Support and
respect the protection of
internationally proclaimed
human rights
Principle 2: Make sure
that we are not complicit
in human rights abuses
Principle 3: Support freedom of association
and the right to collective
bargaining
Principle 4: Support
elimination of all forms
of forced and compulsory
labour
Principle 5: Support the
effective abolition of child
labour
IC Companys supports
and respects the Universal Declaration of Human
Rights which is outlined
in the UN Global Compact
principles 1-6. We do
this by continuously
identifying and assessing
potential adverse human
rights impacts both
internally in IC Companys
as well as in cooperation
with our suppliers
Furthermore, we use
education both externally
with our suppliers and
internally as a mean to
develop the capacity and
understanding of the
importance and value
of working with human
rights
Principle 6: Support elimination of discrimination
in respect of employment
and occupation
Increased dialogue with
suppliers on how to avoid
identified potential noncompliance issues
Consultation Committee
with participation of management and employees
representatives
CR standards included in
Occupational Health and
Safety guidelines
Annual Employee Surveys
Employee survey
Employee survey results:
Satisfaction & Motivation and Loyalty’ scores
among IC Companys’
employees are the same
as for the 2012 survey
Input to and membership
of BSCI capacity building
work group
In 2012, BSCI trained
12,200 factory and farm
staff
Assessment of suppliers
using BSCI process
62% of the production deriving from countries with
a high risk profile was
from suppliers who had
or were in the process
of completing the BSCI
auditing process
Compliance Hotline
Business Social Compliance Initiative (BSCI)
Code of Conduct (covering principles 3-6)
Supplier scorecard incl.
CR indicators linked to
BSCI process
Initiated rating of our
suppliers (Supplier
Scorecard) according
to progression in BSCI
process
Global Sourcing Project
Country Risk Analysis
Performed country risk
analysis on all existing
supplier countries
Social and Labour part of
The Higg Index
Piloted and provided
input to the Social and
Labour part of the The
Higg Index
Reduction of suppliers in
2012-13 by 10% to a total
of 314 (349)
Increased awareness
internally and for
selected suppliers on
the standards for social
and labour and how to
improve
Signed International Accord on Fire and Building
Safety in Bangladesh
PLANET – ENVIRONMENTAL RESPONSIBILITY
Principle 7: Support a
precautionary approach
to environmental challenges
32
IC Companys supports
the UN Global Compact’s
principles for the environment. Practically we do
this by continuously assessing our environmental challenges and following the overall principle
of taking a precautionary
approach to environmental challenges
HQ chemicals knowledge
center
Risk Matrix and supporting guiding documents
for avoiding harmful
chemicals
IC COMPANYS • ANNUAL REPORT 2012/13 • MANAGEMENT COMMENTARY
Continued chemicals
training of HQ knowledge
center including participation in monthly Swerea
meetings
Increased competences
of own staff and suppliers
on how to avoid harmful
chemicals in our products
PRINCIPLES
COMMITMENTS
SYSTEMS
ACTIONS
RESULTS
Training of HQ knowledge
center on sustainable
leather
Increased competences
to work with sustainable
leather production
Revised and updated
Restricted Substance List
Improved RSL covering latest REACH (Registration,
Evaluation, Authorisation and Restriction of
Chemical substances)
developments
PLANET – ENVIRONMENTAL RESPONSIBILITY
Principle 8: Undertake
initiatives to promote
greater environmental
responsibility
Principle 9: Encourage
the development and diffusion of environmentally
friendly technologies
Furthermore, we focus
on educating our staff to
become even better at
identifying where in the
supply chain we can take
action to reduce our impact on the environment
and where we can work
with our suppliers to facilitate that they, e.g., use
environmentally friendly
technologies
Restricted Substance List
(RSL)
Database for monitoring
test results on harmful
chemicals
One-on-One dialogue with
and advice to suppliers
on using non-harmful
chemicals
Chemical Workflow
Workshop with brands
on harmful chemicals
and what can be done
to eliminate them in the
different stages of the collection development
Increased competences
in brands to eliminate
harmful chemicals
Internal guidelines on
working with chemicals
Supplier scorecard incl.
CR indicators on harmful
chemicals
Suppliers rated according
to chemical performance
Membership of Swerea
–The Swedish Chemicals
Group - which includes
continuous updates on
newest research and developments with regards
to chemicals in textiles
Training of Hong Kong
and Shanghai offices and
suppliers on how to avoid
harmful chemicals
Increased transparency
and awareness for suppliers with regards to
compliance with our RSL
Increased knowledge of
own staff and suppliers
on how to avoid harmful
chemicals
Compliance Hotline
Country Risk Analysis
Environmental part of The
Higg Index
Piloted and provided input
to the Environmental part
of The Higg Index
Chemical risk matrix
Application of Risk Matrix
on all styles to secure the
‘right’ products are tested
for harmful chemicals
PROFIT – FINANCIAL RESPONSIBILITY
Principle 10: Work against
corruption in all its forms,
including extortion and
bribery
With regards to anticorruption, we support
the 10th principle of the
UN Global Compact and
apply a zero tolerance approach against corruption
in all its forms, including
extortion and bribery. To
further safeguard our
Company against illegal
activities and to identify
corrupt practices we apply our whistle-blower
system which provides
a confidential system
through which employees
can report misconduct
Anti-Corruption policy
Established Anti-corruption policy
Compliance Hotline
Established Compliance
Hotline
Code of Conduct
Resolved one issue reported to the Compliance
Hotline
MANAGEMENT COMMENTARY • ANNUAL REPORT 2012/13 • IC COMPANYS
33
IC COMPANYS’ WORK WITH
CORPORATE GOVERNANCE
IC Companys considers Corporate Governance as an inherent and decisive factor in realising the corporate strategic targets. Group Management is thus subject to continuous development and monitoring. The objective is to
ensure an efficient, suitable, appropriate and sound management of IC Companys which is in accordance with the
prevailing recommendations on Corporate Governance.
The following sections constitute the Statutory Annual Corporate
For more information on ownership structure, please see the
Governance Statement, cf. section 107b of the Danish Financial
section on Shareholder information and share performance on
Statements Act.
page 40. In case of completed acquisition offers, no significant
agreements will be affected
The Board of Directors of IC Companys considers its primary task
to promote the long-term interests of the Company and thus of
all shareholders. This task is handled at six board meetings a
Articles of Association
year and through an on-going dialogue between the Chairmanship and the Executive Board.
Amendments to the Articles of Association must be adopted at a
general meeting. All resolutions at the general meeting may only
As expressed in IC Companys’ Corporate Governance schedule, the
be adopted by simple majority unless the Danish Companies’
Board of Directors has reviewed the Group’s relationship with its
Act stipulates specific regulation regarding presentation and
stakeholders as well as the tasks of the Board of Directors and the
majority.
Executive Board and their interaction with each other. The Corporate Governance schedule may be downloaded from the corporate
In the event of an equality of votes, the resolution in question is
website www.iccompanys.com under About/Corporate Governance.
decided by drawing of lots.
The schedule serves as a framework for IC Companys’ Manage-
The article defining majority may only be amended if at least
ment in connection with, e.g., the planning of working procedures
nine-tenths of the total votes at a general meeting vote in favour
and principles of;
of such amendment.
•
•
the Group’s relationship with its stakeholders,
The voting procedure at the general meeting takes place by show
including the public and the press;
of hands unless the general meeting resolves to take a poll, or
the Group’s external communication, including its
the Chairman of the meeting deems a pool desirable.
Investor Relations Policy;
•
the tasks and composition of the Board of Directors,
including its rules of procedures;
•
•
•
rules of procedures;
The Company’s Board of Directors consists of four to eight mem-
the relationship between the Board of Directors and
bers being elected at the annual general meeting for one-year
the Executive Board; and
terms. Members may be re-elected, however, when a member
the remuneration and incentive programmes for the
reaches the age of 70, the member must resign from the Board
Company’s Management and employees.
at the first coming annual general meeting.
This framework is intended to ensure an efficient, suitable,
Prior to the election process of board members at the annual
appropriate and sound management of IC Companys. The
general meeting, all information regarding each candidate’s
framework has been prepared within the scope defined by IC
occupations, membership of board committees or other commit-
Companys’ Articles of Association, business concept, vision,
tees in both Danish as well as foreign companies, except from
mission and corporate values as well as the prevailing legislation
wholly-owned subsidiaries, must be disclosed.
and rules applicable for Danish listed companies.
34
Board of Directors
the tasks of the Executive Board, including its
IC COMPANYS • ANNUAL REPORT 2012/13 • MANAGEMENT COMMENTARY
The Board of Directors is composed with emphasis on extensive
dence, including, in particular, additional services rendered to IC
experience within both the fashion industry and general manage-
Companys A/S and its subsidiaries. The Audit Committee meets
ment. It is furthermore emphasised that the Board of Directors
at least three times a year to undertake its assigned tasks.
collectively has a professional broad spectrum, extensive experience and documented strategical and managerial competences
The Remuneration Committee makes proposals, for approval of
to the effect that the Board of Directors can perform their tasks
the Board of Directors, on the Remuneration Policy, including the
in the best possible way.
general guidelines for incentive pay of the Board of Directors and
the Executive Board. Furthermore, the Remuneration Committee
When assessing the nomination of new candidates, the need for
makes proposals to the Board of Directors on remuneration for
integration of new talent and the need for diversity in relation to,
members of the Board of Directors and the Executive Board and
e.g., international experience, gender and age are considered.
ensures that the remuneration is consistent with the Remuneration Policy. Finally, the Remuneration Committee oversees that
IC Companys has signed “Recommendation for more women on
the information in the annual report on the remuneration for
supervisory boards” and it is the Group’s target, over the coming
members of the Board of Directors and the Executive Board is
years, to work consistently to recruit more female managers
correct, true and sufficient. The Remuneration Committee meets
in the Company in general and increase the number of female
at least two times a year to undertake its assigned tasks.
candidates to the supervisory boards of Danish limited liability
companies. The proportionate share of females in IC Companys’
The Board of Directors conducts an annual self-evaluation in
Board of Directors constitutes 17% at 30 June 2013 and the
order to, systematically and based on unequivocal criteria, eva-
Group works continuously to recruit and develop new female
luate the performance of the Board of Directors, the Chairman
managers.
and the individual members.
The employees of IC Companys have chosen not to apply the pro-
IC Companys complies - except from one issue explained in the
visions of the Danish Companies Act on employee representation
following sections - with the Recommendations on Corporate
on the Board of Directors.
Governance of May 2013 by NASDAQ OMX Copenhagen which
are based on the Recommendations from the Committee on
Corporate Governance.
Corporate Governance recommendations
NASDAQ OMX Copenhagen recommends that the supreme
The Group is subject to compliance with the recommendations
governing body establishes a nomination committee. In general,
of Corporate Governance issued by the Committee of Corporate
the Chairmanship of the Board of Directors undertakes the
Governance which are available at www.corporategovernance.dk.
preparatory tasks which are recommended to be assigned to
a nomination committee. Taking the size and structure of IC
In compliance with the recommendations from NASDAQ OMX
Companys into account, it is not deemed expedient to establish
Copenhagen, the Board of Directors has assessed the need for
such a nomination committee.
establishing additional board committees, including an audit
committee, a remuneration committee and a nomination com-
The principles and the scope of the remuneration to the Board
mittee. As a result of this, the Board of Directors has appointed
of Directors and the Executive Board are disclosed under the
an Audit Committee and a Remuneration Committee. Further-
following section Remuneration Policy and under note 4 to the
more, the Board of Directors will on an on-going basis assess the
consolidated financial statements.
need for establishing other particular ad hoc committees.
The Audit Committee monitors the financial reporting process
Financial reporting and internal controls
and estimates whether the Company’s internal control and risk
management systems operate in an efficient manner. Further-
The Group’s risk management and internal controls in con-
more, the Audit Committee monitors the statutory auditing of
nection with its financial reporting are planned with a view to
the annual report and makes proposal, for the approval of the
reduce the risk of material errors and omissions in the financial
entire Board of Directors, on the appointment of auditors. Finally,
reporting.
the Audit Committee monitors and controls the auditor indepen-
MANAGEMENT COMMENTARY • ANNUAL REPORT 2012/13 • IC COMPANYS
35
The Board of Directors and the day-to-day management regularly
grammes. Pursuant to the IC Companys’ Corporate Governance
assess material risks and internal controls in connection with the
guidelines, members of the Board of Directors are not included
Group’s financial reporting process.
in the incentive pay programmes.
The Board of Directors has appointed an Audit Committee which
The members of the Executive Board and a number of other exe-
regularly monitors the financial reporting process and estimates
cutives are included in a bonus programme where payments are
whether the internal control systems operate in an efficient and
dependent on the financial results achieved within the emplo-
adequate manner, including new financial reporting standards,
yee’s area of responsibility. The scope of the bonus is potentially
significant accounting policies and accounting estimates and
between 20% to 50% of the annual salary. The bonus pro-
assumptions.
gramme is dependent on the results achieved in the individual
financial year and helps ensure that the Group’s performance
The Audit Committee reports to the entire Board of Directors.
targets are met as the full bonus is only paid upon meeting these
performance targets.
The Board of Directors monitors and reviews the independence
of the external auditors and monitors the planning, execution
The Group has granted warrants and share options to a number
and the opinion of the external auditors.
of managers and key employees in earlier years, please find
further details on these programmes under note 4 to the consoli-
The Board of Directors and the Executive Board define the guide-
dated financial statements.
lines for procedures and internal controls to which compliance
must be kept. These include;
Incentive programmes
•
continuous follow-up on achieved targets and results in
relation to approved budgets;
With effect from the financial year 2010/11 the Executive Board
•
guidelines for general management;
has been offered a warrant programme. The Board of Directors
•
Code of Conduct;
resolved under the authorisation granted at the Annual General
•
Finance Policy;
Meeting 2010 to grant the Executive Board warrants span-
•
Insurance Policy;
ning over a three-year programme for 2010/11, 2011/12 and
•
Investor Relations Policy;
2012/13. Each of these financial year the individual members of
internal rules; Dealing in IC Companys shares and related
the Executive Board could be granted warrants at a value of up
financial instruments;
to 100% of their fixed salary.
•
•
•
Remuneration Policy and general guidelines for incentive
pay of the Executive Board; and
The warrants granted represent the right, against payment in
Rules of Authority.
cash, to subscribe for a number of new shares equivalent to the
warrants granted. The new shares may be acquired immediately
The adopted policies, guidelines and procedures are updated
after the Company’s announcements of the annual reports after
and communicated on a regular basis.
3, 4 or 5 years, respectively. In case a member of the Executive
Board chooses to resign, the warrants granted become void if
Any material weaknesses, inadequacies and violation of adopted
they are not exercisable at the date of resignation.
policies, procedures and internal controls are reported to the
Board of Directors and the Audit Committee.
The warrants have been issued at an exercise price fixed according to the highest share price of either the closing price of the
Company’s share at NASDAQ OMX Copenhagen on the date of
Remuneration Policy
the announcement of the Annual Reports for 2010/11, 2011/12
and 2012/13, respectively, or the average closing price of the
The complete Remuneration Policy of IC Companys is available
five previous trading days.
on the corporate website www.iccompanys.com.
The programme was fully performance dependent. The number
With the purpose of promoting common interests between share-
of warrants granted each financial year was assessed by the use
holders, the Executive Board and other executives and creating
of the Black & Scholes model as follows:
a working environment where focus is on meeting the Group’s
targets, IC Companys has established bonus and share-based
•
0% to 50% was granted on a pro rata basis when revenue
growth of 5% to 15%, compared to the previous financial
incentive programmes.
year, was achieved
The incentive pay for the members of the Executive Board and
other executives includes bonus and share-based incentive pro-
36
IC COMPANYS • ANNUAL REPORT 2012/13 • MANAGEMENT COMMENTARY
•
0% to 50% was granted on a pro rata basis when an EBIT
margin of 5% to 15% was achieved
The members of the Executive Board were granted warrants
after the Company’s announcement of the annual report after
for the financial year 2010/11 based on the Group’s financial
3, 4 or 5 years, respectively. In case a member of the Executive
performance, whereas no warrants were granted for the financial
Board chooses to resign, the warrants granted become void if
year 2011/12. Due to the Group’s realised profit for the financial
they are not exercisable at the date of resignation.
year under review, no warrants have been granted to the Executive Board and other executives for the financial year 2012/13.
The warrants will be issued at an exercise price fixed according
to the highest share price of either the closing price of the
However, the members of the Executive Board have been awar-
Company’s share at NASDAQ OMX Copenhagen on the date of
ded cash bonuses for the financial year under review based on
the announcement of the Annual Report for 2013/14 or the ave-
the profit of continuing operations. The total remuneration of the
rage closing price of the five previous trading days.
Executive Board and other executives is described in note 4 to
the consolidated financial statements.
The programme will be fully performance dependent. The number of warrants granted each financial year is assessed by the
Warrant programme for 2013/14
use of the Black & Scholes model as follows:
The Board of Directors has decided to offer the Executive Board a
warrant programme with effect from the financial year 2013/14
•
financial year
programme and where the individual members of the Executive
Board may be granted warrants at a value of up to 100% of their
fixed salary.
0% to 50% is granted on a pro rata basis when achieving
revenue growth of 3% to 15% compared to the previous
with a similar structure as the recently completed warrant
•
0% to 50% is granted on a pro rata basis when achieving
an EBIT margin of 3% to 15%
The warrants granted represent the right, against payment in
No warrants will be granted when achieving an EBIT margin of
cash, to subscribe for a number of new shares equivalent to the
3% or less.
warrants granted. The new shares may be acquired immediately
MANAGEMENT COMMENTARY • ANNUAL REPORT 2012/13 • IC COMPANYS
37
EXECUTIVE BOARD
MADS RYDER
CHRIS BIGLER
Group Chief Executive Officer (2013).
Born 1963.
Chief Financial Officer (2004). Born 1970.
Member of the Board of Directors of
Jensen’s bøfhus A/S
Member of the Board of Directors of MLAGruppen A/S
Mads Ryder has served as Reserve Officer
in the Danish Army and hereafter earned a
Master of Business Law degree from Aarhus
University. He joined the Group from Royal
Copenhagen where he was CEO. Prior to this
he served as Senior Vice President of WeightWathers and CEO of all LEGOLAND parks
with residence in various places,e.g. London,
Germany, Korea and Japan. He started his
career in the LEGO Group where he, among
others, worked as Global Head of HR.
Member of the Executive Board since 2013
Member of the Board of Directors of BLS
Invest
Chris Bigler holds a Bachelor in Business
Administration and Commercial Law from
Aalborg University, a Master in Business
Administration and Auditing from Aarhus
School of Business and was certified as
Chartered Accountant in 2000. Previously,
Chris Bigler held a position as Group Finance
Manager of IC Companys A/S. Prior to this,
he worked as a chartered accountant with
Arthur Andersen and Deloitte.
Member of the Executive Board since 2008
Share holdings: 4,339
Share options: 50,237
Resigns as at 31 August 2013
Share holdings: nil
Share options: nil
ANDERS CLEEMANN
PETER FABRIN
Executive Vice President (2008). Born 1967.
Executive Vice President (2009). Born 1966.
Member of the Board of Directors of Muuto
A/S
Member of the Board of Directors of Ball
Group A/S
Member of the Board of Directors of Prefa
A/S
Anders Cleemann holds a MSc in Economics
and Business Administration from Copenhagen Business School and has previously
worked as Brand Director for Part Two in IC
Companys A/S and international Marketing
Director in InWear Group A/S. Further, he
has worked in sales and marketing with Reebok A/S and Carlsberg A/S and has been
CEO of Valtech A/S.
Member of the Executive Board since 2008
Share holdings: 1,850
Share options: 57,494
38
IC COMPANYS • ANNUAL REPORT 2012/13 • MANAGEMENT COMMENTARY
Peter Fabrin holds a business diploma and
has further training from, among others, IMD,
Lausanne and has been Chief Executive Officer of Diesel Nordic. Furthermore, he has been
Executive Sales Officer and before that Retail
Manager for InWear Group A/S, director with
Kilroy Travels Denmark and Country Manager
for Norway for Carli Gry International A/S.
Member of the Executive Board since 2009
Share holdings: nil
Share options: 49,967
BOARD OF DIRECTORS
NIELS MARTINSEN
HENRIK HEIDEBY
PER BANK
Chairman. Born 1948.
Director of Friheden Invest A/S
Debuty Chairman. Born 1949. Group CEO &
President of PFA Holding A/S/PFA Pension
Board member. Born 1967.
CEO of Dansk Supermarked A/S
Chairman of the BoD of A/S Sadolinparken
and A/S Rådhusparken. Member of the BoD
of Friheden Invest A/S
Chairman of the BoD of FIH Holding A/S,
Kirk & Thorsen Invest A/S, PFA Ejendomme
A/S, PFA Professional Forening and PFA
Invest International A/S and associated businesses. Deputy Chairman of the BoD of FIH
Erhvervsbank A/S and Forsikring & Pension.
Member of the BoD of C.P. Dyvig & Co. A/S,
PFA Kapitalforvaltning, fondsmæglerselskab
A/S and PFA Brug Livet Fonden.
Per Bank has an extensive national and international management experience through,
among others, his current position as CEO
of Dansk Supermarked A/S and previously
as Commercial Director of Clothing, General
Merchandising and e-Commerce and member
of the board of directors of Tesco UK, CEO of
Tesco Stores Ltd. Hungary, and as Group CEO
of Coop Denmark and Coop Norden A/S. With
this background, Per Bank has an extensive
knowledge of and experience within European
retail. Further, Per Bank also has experience
from board committees of other companies.
As founder of InWear A/S and long-standing
CEO of InWear Group A/S and subsequently
IC Companys A/S, Niels Martinsen has
extensive national as well as international
management experience as well as a solid
experience within the international fashion
industry. Further, he has experience from
board committees of other companies.
Member of the Board of Directors (2001),
the Audit Committee (2009) and the Remuneration Committe (2011)
Considered a dependent Board member
Share holdings: 7,191,128 shares held by Friheden Invest A/S controlled by Niels Martinsen
Henrik Heideby has extensive national and international management experience as Group
CEO & President of PFA Pension and previously
in Alfred Berg Bank and FIH as well as experience with financing and risk management and
from board committees of other companies.
Member of the Board of Directors (2005)
and Chairman of the Audit Committee (2009)
Member of the Board of Directors (2008)
Considered an independent Board member
Shareholdings: nil
Considered an independent Board member
Shareholdings: 12,500
OLE WENGEL
ANDERS COLDING FRIIS
Deputy Chairman. Born 1949.
Board member. Born 1963.
CEO of Scandinavian Tobacco Group A/S
As former Director of Corporate Affairs of
InWear Group A/S, Ole Wengel has experience
in the management of a major fashion
company and the international fashion industry. Through his many years in the Group,
he further has an extensive insight into and
knowledge of the Company.
Member of the Board of Directors (2003),
Chairman of the Remuneration Committee
(2011) and member of the Audit Committee
(2009)
Considered an independent Board member
Shareholdings: 43,333
Chairman of the BoD of Dagrofa A/S and Monberg & Thorsen A/S. Deputy Chairman of the
BoD of Industriens Arbejdsgivere i København
and member of the BoD of Topdanmark A/S
and the Executive Committee and Central
Board of the Confederation of Danish Industry.
Anders Colding Friis has an extensive national
and international management experience as
CEO of Scandinavian Tobacco Group as well
as experience from board committees of other
companies.
Member of the Board of Directors (2005) and
the Remuneration Committee (2011)
Considered an independent Board member
Shareholdings: 6,925
ANNETTE BRØNDHOLT
SØRENSEN
Board member. Born 1963.
Management Consultant of VS Consulting
As former Business & Finance Director and
board member of By Malene Birger A/S, Annette Brøndholt Sørensen has experience of
the international fashion industry as well as
board work. Through several executive positions within the SAS Group, Annette Brøndholt
Sørensen has furthermore gained extensive
experience within management, strategy,
management accounting and process
optimisation.
Member of the Board of Directors (2010)
Considered a dependent Board member
Shareholdings: 253
MANAGEMENT COMMENTARY • ANNUAL REPORT 2012/13 • IC COMPANYS
39
SHAREHOLDER INFORMATION
AND SHARE PERFORMANCE
A strong free cash flow development and a reduction of the Group’s net interest-bearing debt during the financial
year under review ensure a sound financial position supporting the corporate strategic targets. In the future the
Group will distribute any surplus liquidity to the shareholders through dividends and share buy-back programmes.
The financial year 2012/13 has been marked by significant
to DKK 122 per share as at 28 June 2013. At the end of the fi-
events. The financial performance combined with the large stra-
nancial year the market capitalisation of IC Companys amounted
tegic projects announced by the Group during 2012/13 have
to DKK 2.1 billion. The highest closing price of the IC Companys
had significant impact on the share price which, however, did
share was registered on 4 April 2013 at DKK 138 per share.
develop significantly positively throughout the year.
The total trading volume of IC Companys’ shares for the financial
As in line with the corporate strategy, IC Companys financial tar-
year 2012/13 amounted to DKK 334 million (DKK 369 million)
gets is to ensure a long-term competitive return on investment
and the transaction volume totalled 2.9 million (2.9 million).
to the shareholders of the Company.
Treasury shares
Share performance 2012/13
As at 30 June 2013 IC Companys owned 540,672 shares to be
The IC Companys share is listed on the NASDAQ OMX Copen-
used for outstanding share options. This number of shares cor-
hagen. Measured on the daily average closing price, the share
responds to 3.2% of the total number of issued shares which is
increased by 25% from DKK 97.5 per share as at 29 June 2012
at the same level as 30 June 2012.
SHARE PRICE MOVEMENT
(29 June 2012 = index 100)
Index
150
140
130
120
110
90
80
Jul 12
Aug 12
IC Companys A/S
40
Sep 12
Oct 12
Nov 12
NASDAQ OMX MidCap
IC COMPANYS • ANNUAL REPORT 2012/13 • MANAGEMENT COMMENTARY
Dec 12
Jan 13
NASDAQ OMX C20
Feb 13
Mar 13
Apr 13
May 13
Jun 13
Ownership structure
Investor relations
As at 30 June 2013 IC Companys had 7,534 registered sharehol-
The Group has set out the objective to maintain a high and uni-
ders who aggregated held 96.8% of the total share capital. The
form information level as well as engaging in an open and active
share of votes is equivalent to the share capital for the Group’s
dialogue with investors, analysts and other stakeholders. Our
shareholders. A breakdown of the shareholders is as follows:
Investor Relations Policy, financial statements, presentations,
company announcements and other relevant investor informati-
Number
Share
capital
on are available at the corporate website www.iccompanys.com.
Friheden Invest A/S* (DK)
7,191,128
42.4%
During the financial year the Group hosted four webcasts in con-
Hs 2.G Aps (DK)
1,793,730
10.6%
nection with the announcements of the interim reports and the
Arbejdsmarkedets Tillægspension (DK)
1,792,097
10.6%
annual report. Furthermore, the Company participates regularly
Other Danish institutional investors
2,152,142
12.7%
in road shows, investor seminars and sets up meetings with
Danish private investors
1,315,590
7.8%
individual investors and financial analysts. The four week period
953,849
5.6%
leading up to the announcement of financial reports or other sig-
56,876
0.3%
nificant information is deemed to be a quiet period which means
540,672
3.2%
that IC Companys does not hold investor meetings.
1,146,723
6.8%
16,942,807
100.0%
Shareholders as at 30 June 2013
Foreign institutional investors
Foreign private investors
Treasury shares
Non-grouped
Total
*Friheden Invest A/S is controlled by the Group’s Chairman of the
Board of Directors.
MANAGEMENT COMMENTARY • ANNUAL REPORT 2012/13 • IC COMPANYS
41
FINANCIAL CALENDAR 2013/14
Date
25 September 2013
Event
2013 Annual General Meeting expected to be held
1 October 2013
Expected dividend payment in respect of the financial year 2012/13
13 November 2013
Expected announcement of interim report for Q1 2013/14
4 February 2014
Expected announcement of interim report for H1 2013/14
15 May 2014
Expected announcement of interim report for Q3 2013/14
13 August 2014
Expected deadline for proposed resolutions to be considered at the 2014 Annual General Meeting
21 August 2014
Expected announcement of Annual Report 2013/14
24 September 2014
2014 Annual General Meeting expected to be held
29 September 2014
Expected dividend payment in respect of the financial year 2013/14
COMPANY ANNOUNCEMENTS 2012/13
Date
Number
Subject
24 July 2012
9 (2012)
Information meeting
7 August 2012
10 (2012)
Annual Report for 2011/12
29 August 2012
11 (2012)
Notice of Annual General Meeting 2012
24 September 2012
12 (2012)
Minutes of Annual General Meeting 2012
5 October 2012
13 (2012)
Articles of Association
24 October 2012
14 (2012)
Information meeting
7 November 2012
15 (2012)
Interim report for Q1 2012/13
22 January 2013
1 (2013)
Information meeting
29 January 2013
2 (2013)
Amended financial calendar for 2012/13
5 February 2013
3 (2013)
Interim report for H1 2012/13
16 April 2013
4 (2013)
Historical comparative figures for new business segments
16 April 2013
5 (2013)
CFO Chris Bigler resigns
1 May 2013
6 (2013)
Information meeting
15 May 2013
7 (2013)
Interim report for Q3 2012/13
15 May 2013
8 (2013)
Correction to interim report for Q3 2012/13
17 May 2013
9 (2013)
Announcement regarding insider transactions
28 May 2013
10 (2013)
Sale of Jackpot and Cottonfield
10 June 2013
11 (2013)
Financial calendar for 2013/14
30 July 2013
12 (2013)
New Group CEO has been appointed in IC Companys
8 August 2012
13 (2013)
Information meeting
21 August 2013
14 (2013)
New CFO has been appointed in IC Companys
Analyst
E-mail
ANALYSTS
Securities house
Carnegie
Jonas Guldborg
jonas.guldborg@carnegie.dk
Danske Bank
Kristian T. Johansen
kjoha@danskebank.dk
Handelsbanken
Fasial Kalim Ahmad
faah01@handelsbanken.dk
Nordea
Dan Wejse
dan.wejse@nordea.com
Inquiries from shareholders, financial analysts and other stakeholders may be directed to:
Investor Relations Manager Jens Bak-Holder
IC Companys A/S, 10 Raffinaderivej
2300 Copenhagen S, Denmark
Phone: +45 2128 5832 E-mail: jeba@iccompanys.com
42
IC COMPANYS • ANNUAL REPORT 2012/13 • MANAGEMENT COMMENTARY
Annual General Meeting 2013
The Annual General Meeting 2013 is scheduled to be held on Wednesday 25 September 2013 at 3 p.m. at the Company’s
headquarters located at 10 Raffinaderivej, 2300 Copenhagen S, Denmark.
The agenda is as follows:
1.
Report of the Board of Directors on the Company’s activities during the year under review.
2.
Presentation of the Annual Report for the period 1 July 2012 - 30 June 2013 endorsed by the auditors and
adoption of the audited Annual Report.
3.
Appropriation of the profits, including the declaration of dividends, or provision for losses as recorded in the adopted Annual
Report. The Board of Directors recommends that a dividend of DKK 32.8 million corresponding to DKK 2.00 per ordinary
share eligible for dividend is distributed.
4.
Election of members of the Board of Directors. The Board of Directors proposes re-election of the remaining
Board.
5.
Approval of remuneration of the Board of Directors for the financial year 2013/14.
6.
Appointment of auditors.
7.
Authorisation of the Board of Directors for the period until the next annual general meeting to allow the Company to acquire
own shares representing 10% of the share capital and at a price deviating by no more than 10% from the listed price at the
time of the acquisition.
8.
Any other business.
MANAGEMENT COMMENTARY • ANNUAL REPORT 2012/13 • IC COMPANYS
43
CONSOLIDATED
FINANCIAL STATEMENTS
CONSOLIDATED INCOME STATEMENT
PAGE 46
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
PAGE 46
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
PAGE 47
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
PAGE 48
CONSOLIDATED STATEMENT OF CASH FLOWS
PAGE 49
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS FOR PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS
PAGE 50
2. ACCOUNTING ESTIMATES AND ASSUMPTIONS
PAGE 50
3. SEGMENT INFORMATION
PAGE 51
4. STAFF COSTS
PAGE 53
5. OTHER EXTERNAL COSTS
PAGE 55
6. OTHER OPERATING INCOME AND COSTS
PAGE 55
7. FINANCIAL INCOME AND COSTS
PAGE 56
8. TAX FOR THE YEAR OF CONTINUING OPERATIONS
PAGE 56
9. DISCONTINUED OPERATIONS
PAGE 57
10. EARNINGS PER SHARE
PAGE 57
11. DIVIDENDS
PAGE 57
12. INTANGIBLE ASSETS AND PROPERTY, PLANT AND EQUIPMENT
PAGE 58
13. FINANCIAL ASSETS
PAGE 59
14. DEFERRED TAX
PAGE 60
15. INVENTORIES
PAGE 60
16. TRADE RECEIVABLES
PAGE 61
17. OTHER RECEIVABLES
PAGE 61
18. PREPAYMENTS
PAGE 61
19. SHARE CAPITAL
PAGE 61
20. RETIREMENT BENEFIT OBLIGATIONS
PAGE 62
21. PROVISIONS
PAGE 63
22. NON-CURRENT LIABILITIES TO CREDIT INSTITUTIONS
PAGE 63
23. CURRENT LIABILITIES TO CREDIT INSTITUTIONS
PAGE 64
24. OTHER LIABILITIES
PAGE 64
25. ASSETS AND LIABILITIES CLASSIFIED AS HELD-FOR-SALE
PAGE 64
26. OPERATING LEASES
PAGE 64
27. OTHER LIABILITIES AND CONTINGENT LIABILITIES
PAGE 65
28. CHANGE IN WORKING CAPITAL
PAGE 65
29. SECURITIES
PAGE 65
30. CASH AND CASH EQUIVALENTS
PAGE 65
31. FINANCIAL RISKS AND DERIVATIVE FINANCIAL INSTRUMENTS
PAGE 65
32. RELATED PARTY TRANSACTIONS
PAGE 68
33. EVENTS AFTER THE REPORTING PERIOD
PAGE 69
34. APPROVAL OF THE ANNOUNCEMENT OF THE ANNUAL REPORT
PAGE 69
35. SIGNIFICANT ACCOUNTING POLICIES
PAGE 69
CONSOLIDATED
INCOME STATEMENT
Note
DKK million
2012/13
2011/12
3
Revenue
Cost of sales
Gross profit
3,314.2
(1,445.3)
1,868.9
3,292.5
(1,457.9)
1,834.6
5
4
6
12
Other external costs
Staff costs
Other operating income and costs
Depreciation, amortisation and impairment losses
Operating profit
(756.6)
(865.9)
2.1
(91.5)
157.0
(727.7)
(827.7)
11.2
(95.2)
195.2
7
7
Financial income
Financial costs
Profit before tax
9.3
(22.4)
143.9
35.7
(36.4)
194.5
8
Tax on profit for the year of continuing operations
Profit for the year of continuing operations
(32.4)
111.5
(60.4)
134.1
9
Loss for the year of discontinued operations
Profit for the year
(105.7)
5.8
(44.7)
89.4
Profit allocation:
Shareholders of IC Companys A/S
Non-controlling interests
Profit for the year
3.7
2.1
5.8
88.1
1.3
89.4
Earnings per share
Earnings per share, DKK
Diluted earnings per share, DKK
Earnings per share of continuing operations, DKK
Diluted earnings per share of continuing operations, DKK
0.2
0.2
6.7
6.7
5.4
5.4
8.2
8.2
10
10
10
10
CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
Note
DKK million
Profit for the year
31
31
31
31
8
OTHER COMPREHENSIVE INCOME
Items which may be reclassified to the income statement:
Foreign currency translation adjustments arising in connection with foreign subsidiaries
Foreign currency translation adjustments on intercompany loans
Fair value adjustments, gains on derivatives held as cash flow hedges
Fair value adjustments, loss on derivatives held as cash flow hedges
Reclassification to profit or loss, gains on realised cash flow hedges
Reclassification to profit or loss, loss on realised cash flow hedges
Tax on other comprehensive income
Total other comprehensive income
Total comprehensive income
Comprehensive income allocation:
Shareholders of IC Companys A/S
Non-controlling interests
Total
46
IC COMPANYS • ANNUAL REPORT 2012/13 • CONSOLIDATED FINANCIAL STATEMENTS
2012/13
2011/12
5.8
89.4
2.9
(12.7)
25.7
(6.0)
(56.4)
37.9
(1.0)
(9.6)
(3.8)
(14.7)
25.5
56.4
(37.9)
(2.0)
68.2
(27.5)
68.0
157.4
(5.9)
2.1
(3.8)
156.1
1.3
157.4
CONSOLIDATED STATEMENT OF
FINANCIAL POSITION
ASSETS
Note
DKK million
30 June 2013
30 June 2012
12
NON-CURRENT ASSETS
Goodwill
Software and IT systems
Leasehold rights
IT systems under development
Total intangible assets
205.5
36.9
15.4
257.8
205.1
48.5
17.5
9.5
280.6
12
Land and buildings
Leasehold improvements
Equipment and furniture
Property, plant and equipment under construction
Total property, plant and equipment
8.6
70.4
57.6
6.9
143.5
151.7
97.7
86.0
2.5
337.9
Financial assets
Deferred tax
Total other non-current assets
Total non-current assets
39.3
79.7
119.0
520.3
40.3
64.1
104.4
722.9
529.4
390.8
60.5
71.5
95.0
100.9
109.6
1,357.7
528.5
391.9
34.8
137.4
109.4
82.6
1,284.6
144.3
1,502.0
2,022.3
1,284.6
2,007.5
30 June 2013
30 June 2012
EQUITY
Share capital
Reserve for hedging transactions
Translation reserve
Retained earnings
Equity attributable to shareholders of the Parent Company
169.4
16.8
(46.6)
665.5
805.1
169.4
15.9
(36.1)
679.5
828.7
Equity attributable to non-controlling interests
Total equity
3.7
808.8
1.9
830.6
8.1
36.6
12.3
25.5
82.5
12.9
52.2
7.1
34.6
140.0
246.8
188.7
420.1
30.7
252.3
99.2
991.0
140.0
1,131.0
1,213.5
2,022.3
190.7
396.5
19.0
323.9
930.1
930.1
1,176.9
2,007.5
13
14
15
16
8
17
18
29
30
25
CURRENT ASSETS
Inventories
Trade receivables
Tax receivable
Other receivables
Prepayments
Securities
Cash
Assets classified as held-for-sale
Total current assets
TOTAL ASSETS
EQUITY AND LIABILITIES
Note
19
20
14
21
24
22
DKK million
LIABILITIES
Retirement benefit obligations
Deferred tax
Provisions
Other liabilities
Non-current liabilities to credit institutions
Total non-current liabilities
23, 30 Current liabilities to credit institutions
Trade payables
8
Tax payable
24
Other liabilities
21
Provisions
25
Liabilities concerning assets classified as held-for-sale
Total current liabilities
Total liabilities
TOTAL EQUITY AND LIABILITIES
CONSOLIDATED FINANCIAL STATEMENTS • ANNUAL REPORT 2012/13 • IC COMPANYS
47
CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY
DKK million
Equity at 1 July 2011
Reserve for
Share
hedging
capital transactions
169.4
Translation
reserve
Total equity
owned by Total equity
Parent
owned by
Retained
Company
non-contr.
earnings shareholders
interests
Total
equity
(47.7)
(40.6)
657.5
738.6
4.1
742.7
-
-
-
88.1
88.1
1.3
89.4
-
-
(14.7)
-
(14.7)
-
(14.7)
-
-
25.5
-
25.5
-
25.5
-
56.4
-
-
56.4
-
56.4
-
(37.9)
-
-
(37.9)
-
(37.9)
-
(2.0)
-
-
(2.0)
-
(2.0)
-
68.2
(21.1)
63.6
(6.4)
4.5
-
68.2
(27.5)
68.0
-
68.2
(27.5)
68.0
15.9
(36.1)
(73.8)
7.7
679.5
(73.8)
7.7
828.7
(3.5)
1.9
(77.3)
7.7
830.6
-
-
-
3.7
3.7
2.1
5.8
-
-
2.9
-
2.9
-
2.9
-
-
(12.7)
-
(12.7)
-
(12.7)
-
25.7
-
-
25.7
-
25.7
-
(6.0)
-
-
(6.0)
-
(6.0)
-
(56.4)
-
-
(56.4)
-
(56.4)
-
37.9
(0.3)
0.9
(0.7)
(10.5)
-
37.9
(1.0)
(9.6)
-
37.9
(1.0)
(9.6)
16.8
(46.6)
(24.6)
6.9
665.5
Comprehensive income 2011/12
Profit for the year
Other comprehensive income
Foreign currency translation adjustments
arising in connection with foreign
subsidiaries
Foreign currency translation adjustments on
intercompany loans
Fair value adjustments, gains on derivatives
held as cash flow hedges
Fair value adjustments, loss on derivatives
held as cash flow hedges
Reclassification to profit or loss, gains on
realised cash flow hedges
Reclassification to profit or loss, loss on
realised cash flow hedges
Tax on other comprehensive income
Total other comprehensive income
Dividends paid
Share-based payments
Equity at 30 June 2012
169.4
Comprehensive income 2012/13
Profit for the year
Other comprehensive income
Foreign currency translation adjustments
arising in connection with foreign
subsidiaries
Foreign currency translation adjustments on
intercompany loans
Fair value adjustments, gains on derivatives
held as cash flow hedges
Fair value adjustments, loss on derivatives
held as cash flow hedges
Reclassification to profit or loss, gains on
realised cash flow hedges
Reclassification to profit or loss, loss on
realised cash flow hedges
Tax on other comprehensive income
Total other comprehensive income
Dividends paid
Share-based payments
Equity at 30 June 2013
48
169.4
IC COMPANYS • ANNUAL REPORT 2012/13 • CONSOLIDATED FINANCIAL STATEMENTS
(24.6)
6.9
805.1
(0.2)
3.7
(24.8)
6.9
808.8
CONSOLIDATED STATEMENT OF
CASH FLOWS
Note
DKK million
2012/13
2011/12
3
3,9
CASH FLOW FROM OPERATING ACTIVITIES
Operating profit, continuing operations
Operating loss, discontinued operations
Operating profit
157.0
(130.6)
26.4
195.2
(64.8)
130.4
Reversed depreciation and impairment losses and gain/loss on sale of non-current assets
Share-based payments recognised in profit or loss
Provisions
Other adjustments
Change in working capital
Cash flow from ordinary operating activities
137.5
6.9
104.4
13.2
6.7
295.1
128.7
(7.7)
13.2
31.2
295.8
Financial income received
Financial costs paid
Cash flow from operating activities
22.7
(31.8)
286.0
11.6
(19.5)
287.9
Tax paid
Total cash flow from operating activities
(53.9)
232.1
(29.5)
258.4
CASH FLOW FROM INVESTING ACTIVITIES
Investments in intangible assets
Investments in property, plant and equipment
Change in deposits and other financial assets
Purchase and sale of other non-current assets
Total cash flow from investing activities
(16.1)
(58.2)
6.3
1.7
(66.3)
(34.3)
(71.5)
(4.9)
2.5
(108.2)
Total cash flow from operating and investing activities
165.8
150.2
CASH FLOW FROM FINANCING ACTIVITIES
Repayment of non-current liabilities
Share buy-back programmes
Dividends paid
Total cash flow from financing activities
NET CASH FLOW FOR THE YEAR
(10.0)
(24.8)
(34.8)
131.0
(9.4)
(77.3)
(86.7)
63.5
CASH AND CASH EQUIVALENTS
Cash and cash equivalents at 1 July
Foreign currency translation adjustment of cash and cash equivalents at 1 July
Net cash flow for the year
Cash and cash equivalents at 30 June
(108.1)
(1.1)
131.0
21.8
(170.9)
(0.7)
63.5
(108.1)
28
8
12
12
11
30
The consolidated statement of cash flows may not be concluded based solely on the announced financial statements.
CONSOLIDATED FINANCIAL STATEMENTS • ANNUAL REPORT 2012/13 • IC COMPANYS
49
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
1. Basis for preparation of consolidated financial statements
The consolidated financial statements and the parent financial statements of IC Companys A/S for the financial year 2012/13 have
been prepared in accordance with the International Financial Reporting Standards (IFRS) as adopted by the EU and additional Danish
disclosure requirements for the annual reports of listed companies (accounting class D), cf. the Statutory Order on the adoption of IFRS
under the Danish Financial Statements Act.
The consolidated financial statements and the parent financial statements are also prepared in accordance with the IFRS standards as
issued by the International Accounting Standards Board (IASB).
The consolidated financial statements and the parent financial statements are expressed in Danish Kroner (DKK), which is considered
the primary currency of the Group’s operations and the functional currency of the Parent Company.
The accounting policies are applied consistently throughout the financial year and for the comparative figures. Few reclassifications and
adjustments of the comparative figures have been made as a consequence of applying the IFRS concerning discontinued operations as
well as the requirement regarding classification of discontinued operations.
During the financial year under review the segment reporting has been changed and in the future the Group’s segment information will be
disclosed under the Group’s three core business segments: Premium Outdoor, Premium Contemporary and Mid Market Contemporary.
This segmentation reflects the reporting to the Chief Operating Decision Maker. This new reporting provides an enhanced transparency
in respect of the future performance of the individual core segments. Please see note 3 for further information on segment information.
New standards in 2012/13
Implementation of new standards and interpretations
IC Companys has adopted all new and amended standards and interpretations (IFRIC) as endorsed by the EU and which are effective
for the financial year 1 July 2012 - 30 June 2013. Based on thorough analysis, IC Companys has concluded that the standards which
are effective for the financial year beginning on 1 July 2012 are either of no relevance to the Group or exert no material impact on the
consolidated financial statements.
New and amended standards and interpretations not yet effective
IASB has issued a number of IFRS standards, amended standards and IFRIC interpretations which are effective for financial years
beginning on or after 1 July 2013. IC Companys has thoroughly considered the impact of the IFRS standards, amended standards and
IFRIC interpretations not yet effective, and it is estimated that these standards and interpretations are deemed to exert no material
impact on the consolidated financial statements or the parent financial statements in the coming years.
Please see note 35 for further information on significant accounting policies.
2. Accounting estimates and assumptions
The calculation of the carrying amount of certain assets and liabilities requires an estimate of how future events will affect the value
of such assets and liabilities at the end of the reporting period. Estimates material to the financial reporting are made in connection
with, e.g., the calculation of depreciation, amortisation and impairment losses, the valuation of inventories and receivables, tax assets,
goodwill, provisions and discontinued operations.
The accounting estimates applied in respect of provisions and write-downs of discontinued operations are especially based on
Management’s best estimates of assumptions and judgments. Due to uncertainty in the closing down process these estimates could be
affected significantly by changes in the assumptions and judgments applied.
The estimates applied are based on assumptions which Management believes to be reasonable, but which are inherently uncertain and
unpredictable. In the consolidated financial statements, the measurement of inventories and receivables could be materially affected
by significant changes in estimates and assumptions underlying the calculation of inventory and receivables write-downs. Similarly, the
measurement of goodwill could be affected by significant changes in estimates and assumptions underlying the calculation of values.
Please see note 12 to the consolidated financial statements for a more detailed description of impairment tests for intangible assets.
The measurement of inventories is based on an individual assessment of season and age and on the realisation risk assessed to exist
for individual items.
Tax assets are written down if Management believes that it is not sufficiently likely that the operations of an individual tax object
(business) or a group of jointly taxed businesses can generate a profit within the foreseeable future (typically 3-5 years), the expected
taxable income is insufficient for the tax assets to be exploited in full or there is uncertainty with respect to the value of the tax asset at
the end of the reporting period, e.g., as a result of an on-going tax audit or pending tax litigation.
50
IC COMPANYS • ANNUAL REPORT 2012/13 • CONSOLIDATED FINANCIAL STATEMENTS
3. Segment information
Business segments
Reporting to the Executive Board, which is considered to be the Chief Operating Decision Maker, is based on the Group’s three core
business segments; Premium Outdoor, Premium Contemporary and Mid Market Contemporary.
IC Companys’ two brands; Saint Tropez and Designers Remix are considered non-core business and are presented under the business
segment Non-core business.
On 28 May 2013 IC Companys entered into an agreement to sell its two brands Jackpot and Cottonfield to COOP (Company Announcement
10/2013) after having had a formal sales process. These two brands have therefore been classified separately as discontinued
operations in the income statement.
The Executive Board evaluates operating profits of business segments separately in order to make decisions in relation to resource
allocation and performance measurement. The segment results are evaluated on the basis of operating results, which are calculated
by the same methods as in the consolidated financial statements. Financial income, costs and corporate taxes are calculated at Group
level and are not allocated to operating segments.
No material trade or other transactions take place between the business segments. Revenue from external customers, which is reported
to Management, is measured by the same methods as in the income statement. Cost allocation between business segments is made on
an individual basis with the addition of some, systematically allocated indirect costs to show the profitability of the business segments.
Assets and liabilities of the individual business segments are not included in the regular reporting to the Management.
No individual customer accounts for more than 10% of revenue.
Premium Outdoor and Premium Contemporary
Premium Outdoor comprises the following brand; Peak Performance as well as any external third party revenue generated in the brand’s
stores.
Premium Contemporary comprises the following two brands; Tiger of Sweden and By Malene Birger as well as any external third party
revenue generated in the brands’ stores.
The main target for Premium Outdoor and Premium Contemporary is to generate growth through enhanced market penetration and
internationalisation and thereby boost revenues and earnings. Consequently, the prerequisite for future investments is that the business
segments must;
•
be among the most successful businesses in their home markets within their segment;
•
be able to document international growth potential; and
•
achieve a high return on invested capital.
Mid Market Contemporary
Mid Market Contemporary comprises the following brands; InWear, Matinique, Part Two and Soaked in Luxury as well as any external
third party revenue generated in the brands’ stores and the Group’s Companys stores.
These brands are operated as one business unit with a shared management team.
The main targets for brands in Mid Market Contemporary are optimisation and consolidation of their core markets. The requirements for
these brands are as follows;
•
to be relevant within their core markets in their segment;
•
to be able to generate satisfactory earnings; and
•
to be able to convert profit to cash flow.
Non-core business
Non-core business comprises the two brands; Saint Tropez and Designers Remix.
Saint Tropez operates independently and has not been integrated into IC Companys’ shared service platform and may in the long-term
be divested. Designers Remix is only partly owned by IC Companys and the future ownership needs to be resolved.
The Group sells clothing within a number of brands all characterised as “fashion wear”. As a result, no Group products or services
differentiate by comparison and separate information on products or services are consequently not provided.
CONSOLIDATED FINANCIAL STATEMENTS • ANNUAL REPORT 2012/13 • IC COMPANYS
51
Premium
Outdoor
2012/13
DKK million
Total revenue
930.5
Growth compared to 2011/12 (%)
Operating profit/loss before depreciation
amortisation and net financials (EBITDA)
EBITDA margin (%)
Depreciation and amortisation
Impairment losses
Operating profit/loss (EBIT)
EBIT margin (%)
Premium Mid Market
Contemp.
Contemp.
2012/13
2012/13
1,063.6
890.5
(5)
18
95.5
120.9
10.3
11.4
(1.0)
(26.2)
(0.4)
68.9
(25.9)
95.0
(27.4)
(0.6)
(37.1)
7.4
Non-core
business
2012/13
Contin.
operations
2012/13
Discontin.
operations
2012/13
Group
2012/13
429.7
3,314.2
468.8
3,783.0
(11)
(9.1)
8.9
3
41.1
(10.9)
30.2
(4.2)
DKK million
Total revenue
Operating profit/loss before depreciation
amortisation and net financials (EBITDA)
EBITDA margin (%)
Depreciation and amortisation
Impairment losses
Operating profit/loss (EBIT)
(84.6)
7.5
(18.0)
(90.5)
(1.0)
157.0
7.0
(17.4)
(28.6)
(130.6)
4.7
(27.9)
(1)
163.8
4.3
(108.1)
(29.6)
26.4
0.7
157.0
9.3
(22.4)
143.9
(32.4)
111.5
Premium Mid Market
Contemp.
Contemp.
2011/12
2011/12
Non-core
business
2011/12
Contin.
operations
2011/12
Discontin.
operations
2011/12
Group
2011/12
975.5
905.1
995.2
416.6
3,292.4
526.7
3,819.1
85.4
119.7
71.8
13.6
290.4
(31.3)
259.1
8.8
13.2
7.2
3.3
8.8
(21.9)
97.8
(27.6)
(4.1)
40.1
10.8
4.0
(28.1)
(2.5)
54.8
EBIT margin (%)
(11)
248.5
9.6
Reconciliation of segment information of continuing operations
Operating profit (EBIT)
Financial income
Financial costs
Profit before tax
Tax on profit for the year
Profit for the year
Premium
Outdoor
2011/12
1
5.6
(11.0)
2.5
(88.6)
(6.6)
195.2
0.6
Reconciliation of segment information of continuing operations
Operating profit (EBIT)
Financial income
Financial costs
Profit before tax
Tax on profit for the year
Profit for the year
(5.9)
5.9
(21.4)
(12.1)
(64.8)
(12.3)
6.8
(110.0)
(18.7)
130.4
3.4
195.2
35.7
(36.4)
194.5
(60.4)
134.1
Geographic information
Revenue is allocated to the geographic areas based on the customer’s geographic location. Allocation of assets is made based on the
geographic location of the assets.
Assets are measured by the same method as in the statement of financial position.
In all material aspects, geographic breakdown of Group revenue and assets are as follows:
Revenue
DKK million
Nordic region
Rest of Europe
Rest of the world
Total
growth
growth
share
share
2012/13 2011/12 2012/13 2011/12 2012/13 2011/12
2,379.8
759.0
175.4
3,314.2
2,199.1
915.9
177.4
3,292.4
8%
(17%)
(1%)
1%
3%
(8%)
10%
0%
72%
23%
5%
100%
67%
28%
5%
100%
*Compulsory reporting of assets consists of non-current assets excluding financial assets and deferred tax.
52
IC COMPANYS • ANNUAL REPORT 2012/13 • CONSOLIDATED FINANCIAL STATEMENTS
Compulsory reporting of assets*
share
share
30 June 30 June 30 June 30 June
2013
2012
2013
2012
359.4
33.2
8.7
401.3
540.0
72.1
6.4
618.5
90%
8%
2%
100%
87%
12%
1%
100%
4. Staff costs
DKK million
2012/13
2011/12
Total salaries, remuneration, etc. can be specified as follows:
Remuneration to the Board of Directors
Remuneration to the Audit Committee
Remuneration to the Remuneration Committee
Salaries and remuneration*
Defined contribution plans, cf. note 20 to the consolidated financial statements
Defined benefit plans, cf. note 20 to the consolidated financial statements
Other social security costs
Share-based payments
Other staff costs
Total staff costs
2.3
0.4
0.2
731.4
38.2
(2.0)
67.2
6.8
21.4
865.9
2.3
0.4
0.2
693.8
36.4
1.1
62.4
7.7
23.4
827.7
Average number of Group employees
1,576
1,807
* Costs re. external agents amounting to DKK 92.3 million (DKK 79.3 million) have been included under salaries and remuneration.
Remuneration to the Board of Directors, Executive Board and other executives is as follows:
DKK million
Remuneration to the Board of Directors
Remuneration to the Audit Committee
Remuneration to the Remuneration Committee
Salaries and remuneration
Bonus payments
Retirement contributions
Share-based payments
Total
Board of
Directors
2012/13
Executive
Board
2012/13
Other
executives*
2012/13
Board of
Directors
2011/12
Executive
Board
2011/12
Other
executives*
2011/12
2.3
0.4
0.2
2.9
16.4
4.0
2.8
23.2
22.5
3.6
1.4
2.4
29.9
2.3
0.4
0.2
2.9
15.7
3.1
18.8
20.1
0.6
1.4
2.9
25.0
* The category other executives comprises Vice Presidents and CEOs. Other executives are together with the Executive Board responsible for planning, executing and
supervising the operations of the Group. 15 employees were defined as other executives (15 employees) in 2012/13. Vice Presidents appointed as at 1 July 2013
are not included in the figures above, but are listed under other executives on page 97.
DKK thousands
2012/13
2011/12
625.0
650.0
660.0
300.0
350.0
300.0
2,885.0
625.0
650.0
660.0
300.0
350.0
300.0
2,885.0
Hereof remuneration to the Audit Committee:
Henrik Heideby (Chairman)
Niels Martinsen
Ole Wengel
Total
175.0
100.0
100.0
375.0
175.0
100.0
100.0
375.0
Hereof remuneration to the Remuneration Committee:
Ole Wengel (Chairman)
Anders Colding Friis
Niels Martinsen
Total
85.0
50.0
50.0
185.0
85.0
50.0
50.0
185.0
2012/13
2011/12
9.8
4.3
4.7
4.4
23.2
8.3
3.4
3.6
3.5
18.8
Remuneration to the Board of Directors:
Niels Martinsen (Chairman)
Henrik Heideby (Deputy chairman)
Ole Wengel (Deputy chairman)
Per Bank
Anders Colding Friis
Annette Brøndholt Sørensen
Total remuneration to the Board of Directors
DKK million
Remuneration to the Executive Board:
Niels Mikkelsen (Chief Executive Officer)
Chris Bigler (Chief Financial Officer)
Anders Cleemann (Executive Vice President)
Peter Fabrin (Executive Vice President)
Total remuneration to the Executive Board
The members of the Executive Board and other executives are included in a bonus programme, the payments of which are related to the
financial performance of the employee’s own area of responsibility. The bonus potential is in the range of 20-50% of the annual salary.
The bonus programme is based on profits achieved in the individual financial year which helps ensure that the Group’s growth targets
are met.
CONSOLIDATED FINANCIAL STATEMENTS • ANNUAL REPORT 2012/13 • IC COMPANYS
53
Remuneration Policy
The Board of Directors ensures that the total individual remuneration to the members of the Executive Board reflects their performance
and the value added to the Company. The remuneration paid to the members of the Executive Board consists of a cash salary, an
annual bonus, share-based incentive programmes, a company car and the usual other benefits. When not taking into account the
discontinuation of employment of the former CEO, the overall composition of the Executive Board’s remuneration is in general expected
to be unchanged for 2013/14 meaning that the Remuneration Policy will be applied as in 2012/13.
If the employment of a member of the Executive Board of the Parent Company is terminated by the Company before reaching retirement
age, the Company shall pay the executive severance payment during the period of notice, which is 12-18 months and in certain
circumstances up to 24 months.
Incentive programmes
General information
With the purpose of motivating and retaining employees, other executives and members of the Executive Board, IC Companys has
established incentive programmes consisting of option and warrant programmes. Furthermore, these programmes are to ensure
common interest between the employees and the shareholders.
All exercise prices have been fixed according to the listed share price applicable on the date of the grant.
The share options and warrants granted to the employees may only be exercised against payment in cash. The obligation regarding the
incentive programmes is partly settled by IC Companys’ holding of treasury shares.
Valuation assumptions
The market values of IC Companys’ share options and warrants have been calculated by using the Black & Scholes model.
The expected volatility is based on the volatility over the past years for the IC Companys share compared with Management’s expectations
at the time when granted.
The risk-free interest rate has been set corresponding to the yield of a government bond with similar maturity terms as the programme
in question.
The applied assumptions are as follows:
Stated in %
2012/13
2011/12
Expected volatility
Expected dividend rate compared to share price
Risk-free interest rate (based on Danish government bonds with similar maturity terms)
25.0-46.4
1.3-4.1
2.7-4.4
25.0-46.4
1.3-4.1
2.7-4.4
Outstanding share options are specified as follows:
Executive Board
(no.)
Other employees
(no.)
Total
(no.)
Average exercise
price per option
(DKK)
Outstanding share options at 1 July 2011
311,353
311,251
622,604
226.3
Expired/void
Void due to discontinuation of employment
Outstanding share options at 30 June 2012
(60,000)
251,353
(23,167)
288,084
(60,000)
(23,167)
539,437
171.2
239.5
228.9
Expired/void
Void due to discontinuation of employment
Outstanding share options at 30 June 2013
(110,000)
141,353
(5,404)
282,680
(110,000)
(5,404)
424,033
151.4
223.8
252.0
141,353
282,680
424,033
252.0
Outstanding
share options
138,380
21,353
40,000
10,000
10,000
144,300
60,000
424,033
Exercise price
per option (DKK)
329.4 + 5% p.a.
329.4 + 5% p.a.
180.0 + 5% p.a.
163.0 + 5% p.a.
113.0 + 5% p.a.
139.0
237.3
251.9
Number of shares options that are exercisable at 30 June 2013
Other employees
Executive Board
Executive Board
Executive Board
Executive Board
Other employees
Executive Board
Total share options
Financial year
2007/08
2007/08
2007/08
2008/09
2008/09
2009/10
2010/11
No share options have been exercised in 2012/13.
54
IC COMPANYS • ANNUAL REPORT 2012/13 • CONSOLIDATED FINANCIAL STATEMENTS
Exercise period 4 weeks after
announcement of annual report
2012/13
2012/13
2012/13
2012/13
2012/13
from 2012/13
to 2013/14
2012/13
The fair value of the share options recognised in the consolidated income statement amounted to costs of DKK 0.3 million (DKK 1.3
million) for 2012/13. The fair value of the share options recognised in the Parent Company’s income statement amounted to costs of
DKK 0.4 million (DKK 0.8 million) for 2012/13.
Outstanding warrants are specified as follows:
Executive Board
(no.)
Outstanding warrants at 1 July 2011
Other employees
(no.)
Total
(no.)
Average exercise
price per warrant
(DKK)
-
98,590
98,590
263,8
Granted during the financial year
Void due to discontinuation of employment
Outstanding warrants at 30 June 2012
147,294
147,294
110,471
(11,097)
197,964
257,765
(11,097)
345,258
153.9
211.7
183.2
Void due to discontinuation of employment
Outstanding warrants at 30 June 2013
147,294
(3,250)
194,714
(3,250)
342,008
263.8
182.4
-
-
-
-
Number of warrants that are exercisable at 30 June 2013
Financial year
Other employees
Executive Board
Other employees
Total warrants
Outstanding
Exercise price
warrants per warrant (DKK)
2010/11
2011/12
2011/12
88,768
147,294
105,946
342,008
263.8
166.8
136.0
182.4
Exercise period 14 days after
announcement of annual report
from 2012/13
from 2013/14
from 2013/14
to 2014/15
to 2015/16
to 2015/16
No warrants have been exercised in 2012/13.
The fair value of the warrants recognised in the consolidated income statement amounted to costs of DKK 6.5 million (DKK 6.4 million)
for 2012/13. The fair value of the warrants recognised in the Parent Company’s income statement amounted to costs of DKK 4.5 million
(DKK 3.8 million) for 2012/13.
5. Other external costs
Other external costs include the total fees paid to the auditors appointed at the annual general meeting for auditing the financial
statements for the financial year under review.
DKK million
Statutory audit
Other statements and opinions with guarantees
Tax consultancy
Other services
Total other external costs
2012/13
2011/12
3.5
0.1
1.0
0.4
5.0
3.6
0.1
1.9
0.4
6.0
One of the Group’s minor subsidiaries is not audited by Deloitte, nor by its international business partners nor by a recognised international
auditing company. Costs attributable to this amount to DKK 0.1 million (DKK 0.1 million).
6. Other operating income and costs
DKK million
Loss on sale of intangible assets and property, plant and equipment
Proceeds in connection with handing over store leases
Other
Total other operating income and costs
2012/13
2011/12
(0.3)
1.2
1.2
2.1
(2.6)
13.8
11.2
CONSOLIDATED FINANCIAL STATEMENTS • ANNUAL REPORT 2012/13 • IC COMPANYS
55
7. Financial income and costs
DKK million
2012/13
2011/12
Financial income:
Interest on bank deposits
Interest on receivables
Other financial income
Interest income from financial assets not measured at fair value
1.5
5.0
0.1
6.6
5.2
5.0
1.5
11.7
Interest income on securities
Realised gain on derivative financial instruments
Net gain on foreign currency translation
Total financial income
0.1
2.6
9.3
22.8
1.2
35.7
Financial costs:
Interest on liabilities to credit institutions
Interest on mortgage loans
Other interest costs
Interest costs from financial liabilities not measured at fair value
(7.0)
(2.7)
(3.9)
(13.6)
(14.4)
(4.9)
(3.1)
(22.4)
Fair value adjustments on securities
Realised loss on derivative financial instruments
Net loss on foreign currency translation
Total financial costs
Net financials
(0.4)
(6.9)
(1.5)
(22.4)
(13.1)
(14.0)
(36.4)
(0.7)
8. Tax for the year of continuing operations
DKK million
2012/13
2011/12
Current tax
Current tax for the year under review
Prior-year adjustments, current tax
Foreign non-income dependent taxes
Total current tax
33.2
5.3
1.7
40.2
36.3
0.3
2.1
38.7
Deferred tax
Change in deferred tax
Prior-year adjustments, deferred tax
Adjustment regarding changes in tax rates, deferred tax
Total deferred tax
Tax for the year
(18.4)
(7.5)
(5.8)
(31.7)
8.5
28.7
0.4
29.1
67.8
Recognised as follows:
Tax on profit for the year of continuing operations
Tax on loss of discontinued operations
Tax on other comprehensive income
Tax for the year
32.4
(24.9)
1.0
8.5
60.4
(20.1)
27.5
67.8
Net tax receivable at 1 July
15.8
25.0
Tax payable on profit for the year
Tax paid during the year
Foreign currency translation adjustments, etc.
Net tax receivable at 30 June
(40.2)
53.9
0.3
29.8
(39.2)
29.5
0.5
15.8
Recognised as follows:
Tax receivable
Tax payable
Net tax receivable at 30 June
60.5
(30.7)
29.8
34.8
(19.0)
15.8
Breakdown on tax on profit for the year of continuing operations is as follows:
DKK million
56
2012/13
2011/12
Calculated tax on profit before tax, 25%
Effect of other non-taxable income and other non-deductable costs
Effect of adjustment regarding changes in tax rates, deferred tax
Effect of net deviation of tax in foreign subsidiaries relative to 25%
Foreign non-income dependent taxes
Prior-years adjustments
Revaluation of tax losses, etc.
Other adjustments
Total tax on profit for the year
24.6
3.7
(5.8)
(0.2)
1.7
(2.0)
8.5
1.9
32.4
52.5
5.3
0.4
(1.1)
2.1
0.6
0.6
60.4
Effective tax rate for the year (%)
22.5
31.0
Tax on other comprehensive income
Foreign currency translation adjustments arising in connection with foreign subsidiaries
Fair value adjustment on derivatives held as cash flow hedges
Total tax on other comprehensive income
(0.7)
(0.3)
(1.0)
(6.4)
(21.1)
(27.5)
IC COMPANYS • ANNUAL REPORT 2012/13 • CONSOLIDATED FINANCIAL STATEMENTS
9. Discontinued operations
DKK million
Revenue
Costs
Loss before tax for the year
Tax on loss for the year
Loss after tax for the year
Write-downs
Tax on write-downs
Value adjustment after tax
Loss for the year of discontinued operations
Statement of cash flows:
Cash flow from operating activities
Cash flow from investing activities
Cash flow from financing activities
Total cash flow
EPS - Earnings per share of discontinued operations
EPS - Diluted earnings per share of discontinued operations
2012/13
2011/12
468.8
(570.8)
(102.0)
19.4
(82.6)
(28.6)
5.5
(23.1)
(105.7)
526.6
(579.3)
(52.7)
16.3
(36.4)
(12.1)
3.8
(8.3)
(44.7)
(14.9)
(1.8)
(16.7)
3.2
11.1
14.3
(6.4)
(6.4)
(2.7)
(2.7)
A formal sales process for the Group brands Jackpot and Cottonfield was initiated in the beginning of the calendar year 2013. As a
consequence hereof the operations were presented in the interim report for Q3 2012/13 as discontinuing operations, and related
assets and liabilities were presented as assets held-for-sale and liabilities concerning assets classified as held-for-sale, respectively.
The sales process resulted in an agreement with COOP entered on 28 May 2013 regarding the sale of the trademark rights of Jackpot
and Cottonfield whereas the remaining assets and liabilities relating to the two brands in question, including existing retail stores,
gradually will be sold or closed down during the financial year 2013/14. The profit/loss from the sales transaction and closing down
process is therefore still presented as discontinued operations. The distribution to wholesale customers will continue until 31 December
2013. COOP did not want to take over the distribution as Jackpot and Cottonfield will be sold through their own distribution chain.
The sales proceeds have been recognised as an income under costs.
10. Earnings per share
DKK million / 1,000 shares
2012/13
2011/12
3.7
109.4
88.1
132.8
Average number of shares
Number of issued shares
Number of treasury shares
Number of outstanding shares
16,942.8
(540.7)
16,402.1
16,942.8
(540.7)
16,402.1
Diluted effect of outstanding shares and warrants
Number of shares excluding treasury shares, diluted
16,402.1
4.2
16,406.3
0.2
0.2
6.7
6.7
5.4
5.4
8.2
8.2
Profit for the year
Profit for the year attributable to shareholders of IC Companys
The Group IC Companys’ profit share of continued operations
Earnings per share (EPS)
Earnings per share, DKK
Diluted earnings per share, DKK*
Earnings per share of continuing operations, DKK
Diluted earnings per share of continuing operations, DKK*
*When calculating diluted earnings per share, 424,033 share options (421,637 share options) have not been included as they are characterised as out-of-the-money,
but they may, however, dilute earnings per share in the future.
11. Dividends
Please see note 9 of the parent financial statements.
CONSOLIDATED FINANCIAL STATEMENTS • ANNUAL REPORT 2012/13 • IC COMPANYS
57
12. Intangible assets and property, plant and equipment
INTANGIBLE ASSETS
Goodwill
Software
and IT
systems
Trademark
rights
Cost at 1 July 2011
199.4
204.4
8.1
99.6
Foreign currency translations adjustments
Reclassification of assets under construction
Addition
Disposal
Cost at 30 June 2012
5.7
205.1
6.0
28.3
(0.1)
238.6
8.1
4.4
(12.9)
91.1
(6.0)
1.6
9.4
5.7
34.3
(13.0)
552.3
Foreign currency translations adjustments
Reclassification of assets under construction
Addition
Disposal
Cost at 30 June 2013
0.4
205.5
9.5
11.7
(1.8)
258.0
8.1
(0.2)
4.4
(2.1)
93.2
0.1
(9.5)
-
0.3
16.1
(3.9)
564.8
DKK million
Lease- IT systems
Total
hold under de- intangible
rights velopment
assets
13.8
525.3
Accumulated amortisation and impairment at 1 July 2011
-
(175.8)
(8.0)
(79.1)
-
(262.9)
Foreign currency translations adjustments
Amortisation and impairment on disposals
Amortisation and impairment for the year
Accumulated amortisation and impairment at 30 June 2012
-
(0.2)
0.2
(14.3)
(190.1)
(0.1)
(8.1)
(0.3)
10.9
(5.1)
(73.6)
0.1
0.1
(0.5)
11.1
(19.4)
(271.7)
Foreign currency translations adjustments
Amortisation and impairment on disposals
Amortisation and impairment for the year
Accumulated amortisation and impairment at 30 June 2013
-
0.1
0.8
(31.9)
(221.1)
(8.1)
0.2
1.2
(5.6)
(77.8)
(0.1)
-
0.2
2.0
(37.5)
(307.0)
Carrying amount at 30 June 2013
205.5
36.9
-
15.4
-
257.8
Carrying amount at 30 June 2012
205.1
48.5
-
17.5
9.5
280.6
PROPERTY, PLANT AND EQUIPMENT
DKK million
58
Leasehold
Land and
improvebuildings
ments
Total
EquipAssetsproperty
ment & under conplant &
furniture
struction equipment
Cost at 1 July 2011
192.3
406.9
424.0
5.9
1,029.1
Foreign currency translations adjustments
Reclassification
Addition
Disposal
Cost at 30 June 2012
0.7
1.1
194.1
2.1
35.1
(74.0)
370.1
2.2
0.2
38.6
(61.0)
404.0
0.1
(0.2)
(3.3)
2.5
5.1
71.5
(135.0)
970.7
Foreign currency translations adjustments
Reclassification
Addition
Disposal
Reclassification of assets held-for-sale
Cost at 30 June 2013
5.3
2.8
(0.1)
(184.9)
17.2
(2.5)
(5.3)
27.9
(15.1)
375.1
(1.8)
23.0
(18.6)
406.6
4.5
(0.1)
6.9
(4.3)
58.2
(33.9)
(184.9)
805.8
Accumulated depreciation and impairment at 1 July 2011
(37.3)
(288.9)
(327.4)
-
(653.6)
Foreign currency translations adjustments
Depreciation and impairment on disposals
Depreciation and impairment for the year
Accumulated depreciation and impairment at 30 June 2012
(0.2)
(4.9)
(42.4)
(1.8)
76.0
(57.7)
(272.4)
(2.3)
58.4
(46.7)
(318.0)
-
(4.4)
134.4
(109.3)
(632.8)
Foreign currency translations adjustments
Depreciation and impairment on disposals
Depreciation and impairment for the year
Reclassification
Reclassification of assets held-for-sale
Accumulated depreciation and impairment at 30 June 2013
0.2
(3.2)
(3.8)
40.6
(8.6)
1.7
12.7
(50.5)
3.8
(304.7)
1.5
13.8
(46.3)
(349.0)
-
3.2
26.7
(100.0)
40.6
(662.3)
Carrying amount at 30 June 2013
8.6
70.4
57.6
6.9
143.5
Carrying amount at 30 June 2012
151.7
97.7
86.0
2.5
337.9
IC COMPANYS • ANNUAL REPORT 2012/13 • CONSOLIDATED FINANCIAL STATEMENTS
Goodwill
Goodwill on business combinations is allocated at the takeover date to the cash-generating units expected to achieve economic benefits
from the takeover. The carrying amount of goodwill is allocated to the respective cash-generating units as follows:
DKK million
Tiger of Sweden AB (Premium Contemporary)
Peak Performance AB (Premium Outdoor)
Saint Tropez A/S (Non-core business)
IC Companys Norway AS - the Peak Performance activity of the business (Premium Outdoor)
Carrying amount of goodwill
30 June 2013
30 June 2012
87.4
53.7
37.0
27.4
205.5
87.2
53.5
37.0
27.4
205.1
Goodwill is tested at least once annually for impairment and more frequently in the event that impairment is indicated.
The recoverable amounts of the individual cash-generating units to which the goodwill amounts have been allocated are calculated
based on expected discounted future cash flows compared with the carrying amounts. Future cash flows are based on the entities’
business plans and budgets during the strategy period for 2013/14–2017/18. The most important parameters in the calculation of the
net present value are revenue, EBITDA and working capital. The business plans are based on Management’s specific assessment of the
business units’ expected performance during the strategy period. When calculating the net present value, a discount rate of 13.78%
before tax/10.35% after tax has been applied which is unchanged compared to 2011/12.
No write-down of goodwill was recorded during the financial year 2012/13 (no write-downs of goodwill last financial year).
Leasehold rights with indeterminable useful lives
Of the total carrying amount of leasehold rights DKK 6.2 million (DKK 6.2 million) relates to leasehold rights with indeterminable useful
lives which are determined on the basis of the contractual terms of the leases. Therefore, impairment tests were conducted at 30 June
2013, and Management assessed that the recoverable amount exceeded the carrying amount.
Non-current assets including leasehold rights with determinable useful lives in Group stores
The Group’s non-current assets, which are located in Group stores, are tested annually for impairment. The recoverable amounts of
the individual stores (cash-generating units) are calculated based on the store’s net present value. Future cash flows are based on the
individual store’s budget for a period corresponding to the average expected useful life of the store’s assets. When calculating the net
present value, a discount rate of 13.78% before tax/10.35% after tax has been applied which is unchanged compared to 2011/12.
Write-downs of non-current assets and leasehold rights amounted to DKK 29.6 million (DKK 18.7 million) for 2012/13 which is disclosed
in note 3 to the consolidated financial statements.
13. Financial assets
Long-term loans
to business
partners
Shares
and bonds
Deposits, etc.
Total
financial
assets
Carrying amount at 1 July 2011
0.4
0.7
32.7
33.8
Net additions, disposals and foreign currency
translation adjustments for the year
Carrying amount at 30 June 2012
(0.2)
0.2
6.6
7.3
0.1
32.8
6.5
40.3
Net additions, disposals and foreign currency
translation adjustments for the year
Carrying amount at 30 June 2013
(0.2)
-
(1.3)
6.0
0.5
33.3
(1.0)
39.3
DKK million
Long-term loans to business partners
The Group had granted subordinated loans of DKK 0.4 million to business partners as at 30 June 2012. An amount of DKK 0.2 million
of the loans was classified as long-term loans to business partners.
The Group has received payments of DKK 0.2 million corresponding to the long-term part of the loans for 2012/13. The short-term part
of the loans amounting to DKK 0.2 million has been recognised under other receivables.
All outstanding amounts are interest-bearing.
No security has been received for the loan. The carrying amount of the financial assets corresponds to the fair value.
Shares
Net additions for the year amounting to DKK 1.3 millon are attributable to shares used for hedging of retirement benefit obligations in
one of the Group businesses.
CONSOLIDATED FINANCIAL STATEMENTS • ANNUAL REPORT 2012/13 • IC COMPANYS
59
14. Deferred tax
DKK million
30 June 2013
30 June 2012
Deferred tax at 1 July
11.9
42.7
Prior-year adjustments
Adjustment regarding changes in tax rates
Foreign currency translation adjustments
Deferred tax on other comprehensive income
Change in deferred tax on profit/loss for the year
Net deferred tax at 30 June
7.5
5.8
(0.5)
(1.0)
19.4
43.1
(0.4)
(1.8)
(27.5)
(1.1)
11.9
Recognised as follows:
Deferred tax assets
Deferred tax liabilities
Net deferred tax at 30 June
79.7
(36.6)
43.1
64.1
(52.2)
11.9
Breakdown of deferred tax at 30 June as follows:
Gross deferred tax assets and liabilities
Unrecognised tax assets
Net deferred tax at 30 June
104.8
(61.7)
43.1
64.5
(52.6)
11.9
Unrecognised tax assets relate to tax losses that are assessed not to be sufficiently likely to be utilised in the foreseeable future. The
unrecognised tax losses have in all material respect no expiry date.
Temporary differences and changes during the year are specified as follows:
DKK million
Net deferred
tax assets at
1 July 2012
Foreign
currency
translation
adjustment
Recognised
in profit
for the year
6.4
27.5
1.7
22.0
3.3
(48.8)
(10.5)
62.9
(52.6)
11.9
(0.2)
(0.1)
0.1
(0.3)
0.2
(0.2)
(0.5)
(0.6)
0.6
1.5
(6.2)
31.7
16.9
9.6
(10.2)
(8.9)
34.4
Net deferred
tax assets at
1 July 2011
Foreign
currency
translation
adjustment
7.4
15.4
1.2
26.9
(50.8)
17.0
76.9
(51.3)
42.7
0.1
(0.1)
0.1
0.2
(2.1)
0.2
(0.2)
(1.8)
Intangible assets
Property, plant and equipment
Receivables
Inventories
Provisions
Other liabilities
Financial instruments
Tax losses
Unrecognised tax assets
Total
DKK million
Intangible assets
Property, plant and equipment
Receivables
Inventories
Provisions
Other liabilities
Financial instruments
Tax losses
Unrecognised tax assets
Total
Reclassified
Recognised
as assets
in other
held-for-sale comp. income
(1.7)
(1.7)
Net deferred
tax assets at
30 June 2013
(1.0)
(1.0)
5.8
26.2
3.1
15.9
35.0
(32.2)
(1.9)
52.9
(61.7)
43.1
Recognised
Recognised
in profit
in other
for the year comp. income
Net deferred
tax assets at
30 June 2012
(1.1)
12.2
0.4
(5.1)
3.3
4.1
(14.2)
(1.1)
(1.5)
(27.5)
(27.5)
6.4
27.5
1.7
22.0
3.3
(48.8)
(10.5)
62.9
(52.6)
11.9
30 June 2013
30 June 2012
37.2
328.2
164.0
529.4
42.3
341.0
145.2
528.5
15. Inventories
DKK million
Raw material and consumables
Finished goods and goods for resale
Goods in transit
Total inventories
Changes in inventory write-downs are as follows:
DKK million
30 June 2013
30 June 2012
Inventory write-downs at 1 July
107.3
120.6
Write-down for the year, addition
Write-down for the year, reversal
Total inventory write-downs
37.9
(54.9)
90.3
47.8
(61.1)
107.3
Inventories recognised at net realisable value amounted to DKK 75.9 million (DKK 87.3 million) at 30 June 2013.
60
IC COMPANYS • ANNUAL REPORT 2012/13 • CONSOLIDATED FINANCIAL STATEMENTS
16. Trade receivables
Trade receivables (gross) are specified as follows:
DKK million
Not yet due
Due, 1-60 days
Due, 61-120 days
Due more than 120 days
Total gross trade receivables
30 June 2013
30 June 2012
277.7
65.7
33.3
83.4
460.1
279.6
67.3
41.7
59.3
447.9
In general, the receivables do not carry interest until between 30 and 60 days after the invoice date. After this date, interest is charged
on the outstanding amount.
The Group has recognised DKK 5.0 million (DKK 5.0 million) in connection with interest on overdue trade receivables for 2012/13.
Change in write-downs regarding trade receivables is as follows:
DKK million
30 June 2013
30 June 2012
Write-downs 1 July
56.0
49.1
Foreign currency translations adjustments
Change in write-downs for the year
Realised loss for the year
Total write-downs
0.6
27.0
(14.3)
69.3
2.9
18.1
(14.1)
56.0
Receivables are written down to net realisable value corresponding to the amount of expected future net payments received on the
receivables. Write-downs are calculated on the basis of individual assessments of the receivables.
The carrying amounts of the receivables correspond in all material respect to their fair values.
17. Other receivables
DKK million
VAT
Receivables from third party stores
Credit card receivables
Unrealised gain on financial instruments
Sundry receivables
Total other receivables
30 June 2013
30 June 2012
9.2
0.6
18.1
25.9
17.7
71.5
12.0
9.4
10.0
76.2
29.8
137.4
All other receivables are due for payment within 1 year.
Management assesses that the carrying amount of receivables at 30 June 2013 corresponds in all material respect to the fair value, and
that the receivables are not subject to any particular credit risk.
18. Prepayments
DKK million
Collection samples
Advertising
Rent, etc.
Others
Total prepayments
30 June 2013
30 June 2012
43.5
6.6
25.8
19.1
95.0
44.2
6.5
29.0
29.7
109.4
19. Share capital
The share capital consists of 16,942,807 shares with a nominal value of DKK 10 each. No shares carry any special rights. The share
capital is fully paid up.
CONSOLIDATED FINANCIAL STATEMENTS • ANNUAL REPORT 2012/13 • IC COMPANYS
61
The below capital adjustments have been made in the past five years as follows:
Number
Nominal value
DKK thousands
Share capital at 1 July 2008
17,919,632
179,196
Share capital reduction due to share buy-back programmes
Share capital at 30 June 2009
Share capital at 30 June 2010
Share capital at 30 June 2011
Share capital at 30 June 2012
Share capital at 30 June 2013
(976,825)
16,942,807
16,942,807
16,942,807
16,942,807
16,942,807
(9,768)
169,428
169,428
169,428
169,428
169,428
% of share
capital
Number
Nominal value
DKK thousands
3.2
3.2
3.2
540,672
540,672
540,672
5,407
5,407
5,407
Treasury shares are as follows:
Treasury shares at 1 July 2011
Treasury shares at 1 July 2012
Treasury shares at 30 June 2013
Pursuant to a resolution passed by the shareholders at the Company’s general meeting, the Company may acquire treasury shares
equivalent to a maximum of 10% of the share capital.
The Company has not engaged in any share buy-back for the financial year 2012/13.
The value of the Company’s treasury shares at market price on 30 June 2013 amounted to DKK 65.9 million (DKK 52.7 million).
20. Retirement benefit obligations
The retirement benefit obligations of Danish companies are covered by insurance which is also the case with the retirement benefit
obligations of a large number of the Group’s subsidiaries. Foreign subsidiaries whose retirement benefit obligations are not or only partly
covered by insurance (defined benefit plans) recognise the uncovered retirement benefit obligations on an actuarial basis at the present
value at the end of the reporting period. The Group has defined benefit plans in the Netherlands and Norway. These retirement plans are
covered in retirement funds for the employees. In the consolidated financial statements an amount of DKK 2.7 million (DKK 6.3 million)
has been recognised under liabilities in relation to the Group’s obligations for current and former employees after deduction of assets
relating to the plan. The Parent Company only operates defined contribution pension plans.
Furthermore, an amount of DKK 5.4 million (DKK 6.6 million) attributable to retirement benefit obligations in one of the Group companies
has been included which has been hedged by shares and recognised under financial assets.
For defined benefit plans, the present value of future benefits, which the Company is liable to pay under the plan, is computed using
actuarial principles. The computation of the present value is based on assumptions of computable rate of interest, increases in pay rates
and retirement contributions, investment yield, staff resignation rates and mortality rates. Present value is computed exclusively for the
benefits to which the employees have earned entitlement through their employment with the Company up till now.
Costs of DKK 38.2 million (DKK 36.4 million) have been recognised in the consolidated income statement relating to plans covered by
insurance (defined contribution plans). For plans not covered by insurance (defined benefit plans) income of DKK 2.0 million have been
recognised (costs of DKK 1.1 million).
For defined contribution plans, the employer is obliged to pay a defined contribution (for example a fixed amount or a fixed percentage of
an employee’s salary). For defined contribution plans, the Group runs no risk in respect of future developments in interest rates, inflation,
mortality or disability.
DKK million
Recognised in profit or loss:
Contributions for defined contributions plans
62
30 June 2013
30 June 2012
38.2
36.4
Retirement benefit obligations for the year
Calculated interest on obligations
Expected return on the assets of the plan, etc.
Prior-year adjustments
Recognised actuarial gain/loss
Total recognised obligations regarding defined benefit plans
Total recognised obligations in profit or loss
1.3
1.3
(1.3)
(0.1)
(3.2)
(2.0)
36.2
1.2
1.4
(1.1)
(0.4)
1.1
37.5
Change in recognised obligations:
Net obligations for defined benefit plans at 1 July
Foreign currency translation adjustments of obligations, at the beginning of the year
Recognised in the income statement, net
Group contributions
Total net obligations
6.3
(0.1)
(2.0)
(1.5)
2.7
5.8
0.1
1.1
(0.7)
6.3
IC COMPANYS • ANNUAL REPORT 2012/13 • CONSOLIDATED FINANCIAL STATEMENTS
The retirement benefit obligations are specified as follows:
DKK million
Present value of defined benefit plans
Fair value of the assets of the plan
Total net retirement benefit obligations
30 June 2013 30 June 2012 30 June 2011 30 June 2010 30 June 2009
39.2
40.3
35.8
35.0
25.0
(36.5)
(34.0)
(30.0)
(28.1)
(20.4)
2.7
6.3
5.8
6.9
4.6
The average assumptions for the actuarial calculations at the end of the reporting period were as follows:
Stated in %
Average discounting rate applied
Expected return on plan assets
Expected future pay increase rate
2013
2012
3.7
3.7
2.8
3.1
3.7
2.6
The plan assets consist of ordinary investment assets, including shares and bonds. No investments have been made in treasury shares.
The expected return on the plans is based on long-term expectations for the return of the assets in the respective countries. The return
on the plans’ assets amounted to DKK 1.2 million for 2012/13 (gain of DKK 9.5 million). The Group’s expected contribution to the plans
for 2013/14 amounted to DKK 1.6 million.
21. Provisions
DKK million
Provisions for
expected potential financial
risks of pending
litigation
Provisions at 1 July 2011
Provisions
for
loss-making Provisions for
contracts restructurings
Other
provisions
Total
provisions
-
-
-
-
-
Provisions for the year
Provisions at 30 June 2012
1.5
1.5
5.6
5.6
-
-
7.1
7.1
Provisions for the year
Provisions at 30 June 2013
1.5
30.0
35.6
30.6
30.6
43.8
43.8
104.4
111.5
Specified in the consolidated financial statement of position as follows:
Current liabilities
Provision at 30 June 2012
1.5
1.5
5.6
5.6
-
-
Non-current liabilities
Current liabilities
Provision at 30 June 2013
1.5
1.5
8.7
26.9
35.6
3.6
27.0
30.6
43.8
43.8
7.1
7.1
12.3
99.2
111.5
From time to time the Group is involved in court litigations of various kinds. Management considers that pending litigation poses no
significant financial risks.
Provisions for loss-making contracts are primarily attributable to closure of showrooms and termination of retail leases in respect of
discontinued operations.
Provisions for restructurings are attributable to measures initiated in the Mid Market Contemporary segment. Please see the section on
Mid Market Contemporary on page 17 in this Annual Report for further information.
Other provisions primarily relate to staff reductions in discontinued operations.
22. Non-current liabilities to credit institutions
DKK million
30 June 2013
30 June 2012
Maturity structure of non-current liabilities:
After 5 years from the end of the reporting period
Total non-current liabilities
-
140.0
140.0
Nominal value
-
140.0
The loan is attributable to the Group’s headquarters which have been put up for sale. Consequently, the loan has been reclassified as
liabilities concerning assets classified as held-for-sale. Please see note 25 to the consolidated financial statements.
CONSOLIDATED FINANCIAL STATEMENTS • ANNUAL REPORT 2012/13 • IC COMPANYS
63
23. Current liabilities to credit institutions
The Group’s total current liabilities to credit institutions comprise Danish and foreign overdraft facilities carrying variable interest at an
average rate of 2.09% p.a. (3.22% p.a.).
Current liabilities are repayable on demand, and therefore the carrying amount corresponds to the fair value.
Current liabilities to credit institutions are denominated in the currencies as follows:
Stated in %
DKK
SEK
EUR
USD
PLN
CHF
CAD
GBP
Other currencies
Total
30 June 2013
30 June 2012
40
44
7
4
5
100
4
61
13
13
1
4
1
3
100
30 June 2013
30 June 2012
79.1
126.0
15.6
9.1
48.0
277.8
73.9
116.1
39.1
6.3
123.1
358.5
24. Other liabilities
DKK million
VAT, customs and tax deducted from income at source
Salaries, social security costs and holiday allowance payable
Unrealised loss on financial instruments
Severance payments
Other costs payable
Total other liabilities
In other costs payable an amount of DKK 25.6 million (DKK 34.6 million) has been recognised which is due after 12 months.
The carrying amount of amounts payable under other liabilities corresponds in all material respect to the fair value of the liabilities.
25. Assets and liabilities classified as held-for-sale
DKK million
30 June 2013
30 June 2012
Property, plant and equipment
Assets classified as held-for-sale
144.3
144.3
-
Liabilities to credit institutions
Liabilities concerning assets classified as held-for-sale
140.0
140.0
-
The Group’s headquarters have been put up for sale and, consequently, the buildings have been classified as assets as held-for-sale.
Non-current liabilities to credit institutions as at 30 June 2013 constituted a mortgage loan denominated in DKK and based on a six
month CIBOR interest. The loan was taken out on 26 January 2010 with the Group’s headquarters located at Raffinaderivej 10 as
security for the loan. The average interest rate for 2012/13 amounted to 1.44% p.a. (2.03% p.a.). As of 30 June 2011 the loan was
hedged with a 2 year interest rate swap. 6 month CIBOR interest is received and a fixed interest rate of 1.17% p.a. is paid.
26. Operating leases
DKK million
30 June 2013
30 June 2012
210.0
242.9
32.9
485.8
262.8
340.1
40.5
643.4
14.0
9.6
23.6
16.3
23.2
39.5
Commitments under non-terminable operating leases are:
Store leases and other land and buildings
0-1 year
1-5 years
More than 5 years
Total
Equipment and furniture leases, etc.
0-1 year
1-5 years
More than 5 years
Total
The Group leases properties under operating leases. The lease period is typically between 3-10 years with an option to extend upon
expiry. Many of the lease contracts contain rules regarding revenue based lease.
64
IC COMPANYS • ANNUAL REPORT 2012/13 • CONSOLIDATED FINANCIAL STATEMENTS
In addition, the Group leases cars and other operating equipment under operating leases. The lease period is typically between 3-5 years
with an option to extend upon expiry.
An amount of DKK 394.5 million (DKK 360.2 million) relating to operating leases has been recognised in the consolidated income
statement for 2012/13.
Some of the leased stores are sub-let to franchise stores, etc., and for these, the Group has received a rental income on non-terminable
leases of DKK 19.7 million (DKK 16.7 million). The future rental income on non-terminable leases is expected as a minimum to amount
to DKK 87.7 million (DKK 90.4 million) for the financial years 2013/14–2018/19.
27. Other liabilities and contingent liabilities
DKK million
Guarantees and other collateral security
30 June 2013
30 June 2012
594.9
682.3
The Company has entered into binding agreements with suppliers on the delivery of collections until 31 December 2013 of which the
majority is tied to sales orders entered into with pre-order customers. The Group has furthermore guaranteed punctual and correct payment,
secured against the merchandise, on behalf of a business partner in China to the suppliers approved by the Group.
As at 30 June 2013 the Group was not involved in any pending litigation which may have a material effect on the Group’s financial
position.
The Group is subject to the usual return obligations imposed on the industry. Management expects no major loss on these obligations.
28. Change in working capital
DKK million
Change in inventories
Change in receivables excluding derivative financial instruments
Change in current liabilities excluding tax and derivative financial instruments
Total change in working capital
30 June 2013
30 June 2012
(1.0)
31.6
(23.9)
6.7
28.0
(54.3)
57.5
31.2
30 June 2013
30 June 2012
29. Securities
DKK million
Listed bonds
Total securities
100.9
100.9
-
The Group’s securities measured at fair value amounted to a nominal value of DKK 100 million of 0.71% Nykredit 21E 2018.
30. Cash and cash equivalents
DKK million
Cash
Credit institutions, current liabilities
Listed bonds
Cash and cash equivalents, cf. the statement of cash flows
30 June 2013
30 June 2012
109.6
(188.7)
(79.1)
82.6
(190.7)
(108.1)
100.9
(21.8)
(108.1)
As at 30 June 2013 The Group’s total credit facilities amounted to DKK 924 million (DKK 1,097 million) in terms of withdrawal rights. Of
this amount, DKK 329 million has been drawn in relation to current and non-current liabilities to credit institutions and DKK 188 million
has been drawn in relation to trade finance facilities and guarantees. Accordingly, undrawn credit facilities thus amount to DKK 407
million. All credit facilities are standby credits which may be drawn with a day’s notice.
31. Financial risks and derivative financial instruments
Foreign exchange risk
The Group’s foreign exchange risk (transaction risk) is handled centrally by the Group’s Treasury Department. The Parent Company’s
functional currency is DKK, and foreign exchange positions are generally hedged vis-à-vis DKK. The Group’s primary transaction risk
relates to the buying and selling of goods in foreign currencies. Hedge accounting as well as hedging of expected risks take place by
means of forward contracts and/or options. Hedging is made on a 15-month horizon.
The risk coverage of the Group’s transaction exposure is made from an estimate of the cash flow demand for the future 15 months. As
a general rule cash flows in all currencies are hedged except from EUR.
CONSOLIDATED FINANCIAL STATEMENTS • ANNUAL REPORT 2012/13 • IC COMPANYS
65
Foreign exchange contracts only relate to hedging of selling and buying of goods pursuant to the Group’s policy hereto. The risk coverage
of the Group’s transaction exposure is made from an estimate of the cash flow demand for the future 15 months.
The Group’s foreign exchange exposure is hedged centrally although a few subsidiaries have unhedged foreign exchange exposures if
they have signed leases in a currency other than the local currency.
As at 30 June 2013 the Group’s risks for the coming 0-15 months may be specified as follows:
At 30 June 2013
Million:
EUR
USD
HKD
SEK
NOK
GBP
CHF
PLN
CZK
HUF
CAD
At 30 June 2012
Million:
EUR
USD
HKD
SEK
NOK
GBP
CHF
PLN
CZK
HUF
CAD
Expected
inflow
Expected
outflow
Hedges
0-6 m.
Hedges
7-12 m.
Hedges
13-15 m.
Average
rate
Net
position
Net position DKK
million
96.7
4.9
610.6
381.5
11.5
19.3
16.0
32.0
105.4
15.8
(45.7)
(124.8)
(225.0)
(20.2)
(2.2)
(0.3)
(0.5)
(1.0)
-
48.1
87.0
298.0
174.0
5.7
9.1
15.0
32.0
7.5
52.4
95.0
204.4
147.0
4.0
6.7
5.8
19.4
43.0
88.0
58.3
1.5
3.0
2.5
572.8
73.8
85.1
97.3
900.6
612.8
170.0
29.2
546.3
51.0
105.4
-
380.4
2.7
-
Expected
inflow
Expected
outflow
Hedges
0-6 m.
Hedges
7-12 m.
Hedges
13-15 m.
Average
rate
Net
position
Net position DKK
million
96.5
2.4
708.9
379.8
13.9
20.8
31.9
65.4
180.4
17.4
(38.6)
(149.7)
(297.4)
(8.9)
-
73.6
153.2
(300.0)
(174.5)
(6.0)
(11.4)
(15.0)
(31.0)
(75.0)
(7.6)
55.5
104.0
(280.0)
(147.3)
(6.0)
(5.6)
(11.9)
(23.8)
(7.3)
18.2
40.2
(120.0)
(58.0)
(1.9)
(3.8)
(5.0)
(10.6)
(2.5)
547.9
70.3
81.2
95.4
870.3
627.8
173.1
30.0
2.6
546.3
57.9
105.4
-
430.4
2.7
-
Net outstanding foreign exchange contracts at 30 June 2013 for the Group and the Parent Company designated and qualifying as hedge
accounting of cash flow are as follows:
DKK million
USD
HKD
SEK
NOK
Other currencies
Total at 30 June
2013
fair value
adjustments
recognised
in statement
of other
Notial
compr.
principal*
income Fair value
119.9
225.0
(590.4)
(379.3)
-
(4.8)
(1.2)
3.6
13.4
8.7
19.7
682.3
164.8
(498.8)
(355.7)
(179.6)
(187.0)
2012
fair value
adjustments
recognised
in statement
of other
Maturity
Notial
compr.
months principal*
income Fair value
0-15
0-15
0-15
0-15
0-15
123.5
213.6
(700.0)
(379.8)
-
46.9
9.5
(20.1)
(9.2)
(8.6)
18.5
727.8
162.3
(588.5)
(371.5)
(206.4)
(276.3)
Maturity
months
0-15
0-15
0-15
0-15
0-15
* Positive principal amounts on foreign exchange contracts indicate a purchase of the currency in question. Negative principal amounts indicate a sale.
Costs of DKK 4.7 million relating to ineffective cash flow hedges have been recognised in the income statement for 2012/13 (income of
DKK 8.8 million). Ineffective cash flow hedges are recognised in the income statement under financial income/costs.
Open foreign exchange contracts for the Group and the Parent Company qualifying as hedges of recognised assets and liabilities are as
follows:
DKK million
HKD
USD
SEK
Total at 30 June
2013
fair value
adjustments
recognised
Notial in income
principal* statement Fair value
65.0
20.9
(70.0)
(2.2)
(4.7)
(2.0)
(8.9)
47.8
119.2
(59.5)
107.5
2012
fair value
adjustments
recognised
Maturity
Notial in income
months principal* statement Fair value
0-15
0-15
0-15
83.8
23.8
-
7.4
12.3
19.7
63.8
113.9
177.7
* Positive principal amounts on foreign exchange contracts indicate a purchase of the currency in question. Negative principal amounts indicate a sale.
Fair value adjustments as at 30 June 2013 have been recognised in the consolidated income statement under cost of sales.
66
IC COMPANYS • ANNUAL REPORT 2012/13 • CONSOLIDATED FINANCIAL STATEMENTS
Maturity
months
0-15
0-15
0-15
The fair values have been calculated based on current interest rate curves and foreign exchange rates as at 30 June 2013.
Neither the Group nor the Parent Company has any open foreign exchange contracts that do not qualify for hedge accounting at 30 June
2013 or at 30 June 2012.
The recognised positive/negative market values under equity have been treated in accordance with the rules for hedging of future cash
flows and are closed/adjusted during the year according to the hedge accounting principles.
The net position of the Group calculated according to the value at risk method will as a maximum result in a loss of DKK 1.0 million. The
calculation is made by using a 95% confidence interval with a term of 6 months. Value at risk states the amount that as a maximum may
be lost on a position calculated by using historical volatilities on the different currencies as well as correlations between the currencies.
Except from derivative financial instruments for hedging of foreign exchange exposure risks in the statement of financial position, no fair
value adjustments for unlisted financial assets and liabilities have been recognised in the income statement.
The existing categories of financial assets and liabilities are as follows:
DKK million
30 June 2013
30 June 2012
100.9
6.0
106.9
7.3
7.3
Listed securities
Unlisted shares and bonds recognised under non-current assets (shares)
Financial assets at fair value recognised through the income statement
Derivative financial instruments for hedging of
recognised assets and liabilities, recognised under current assets (other receivables)
Derivative financial instruments for hedging of
future cash flow, recognised under current assets (other receivables)
Financial assets for hedging purposes
-
19.7
25.7
25.7
56.4
76.1
Deposits (financial assets)
Long-term loans (financial assets)
Trade receivables
Other receivables
Cash
Loans and receivables
Total financial assets
33.3
390.8
45.7
109.6
579.4
712.0
32.8
0.2
391.9
61.2
82.6
568.7
652.1
Liabilities to credit institutions (non-current liabilities)
Liabilities to credit institutions (current liabilities)
Trade payables
Share of other liabilities recognised at amortised cost (non-current liabilities)
Share of other liabilities recognised at amortised cost (current liabilities)
Financial liabilities measured at amortised cost
188.7
420.1
25.5
236.5
870.8
140.0
190.7
396.5
34.6
284.8
1,046.6
Derivative financial instruments for hedging of
recognised assets and liabilities, recognised under current liabilities (other liabilities)
Derivative financial instruments for hedging of
future cash flow, recognised under current liabilities (other liabilities)
Interest rate swap for hedging interest rate level on the Group’s
mortgage loan for property at Raffinaderivej 10
Financial liabilities for hedging purposes
Total financial liabilities
8.9
-
6.0
37.9
14.9
885.7
1.1
39.0
1,085.7
Fair value hierarchy for financial instruments measured at fair value in the statement of financial position
The fair value hierarchy is divided into three levels:
•
Listed prices in active markets for identical assets and liabilities (level 1).
•
Listed prices in active markets for identical assets and liabilities or other methods of measurement where all substantial inputs are
based on market observables (level 2).
•
Method of measurement where substantial inputs may not be based on market observables (level 3).
Calculation of the fair value adjustments of the Group’s cash flow hedges and interest rate swaps is based on listed prices in active
markets for identical assets where all substantial inputs are based on market observables (level 2).
Inputs for measurement of the Group’s unlisted shares have not been based on market observables (level 3).
Liquidity risk
IC Companys secures a sufficient liquidity reserve by a combination of liquidity control and non-guaranteed credit facilities. Please see
below for maturity profiles on financial assets and liabilities.
Interest rate risk
The Group’s interest rate risk is continuously monitored by the Treasury Department in accordance with Group policies. The Group
employs matching of the maturities of each individual asset/liability. The typical neutral maturity for the Group is 2 months. Potential
interest rate risks are hedged by means of FRAs and/or interest rate swaps.
CONSOLIDATED FINANCIAL STATEMENTS • ANNUAL REPORT 2012/13 • IC COMPANYS
67
The Company’s interest rate risk relates to the interest-bearing debt and the securities with a nominal value of DKK 100 million of 0.71%
Nykredit 21E 2018. The Company’s loan portfolio consists of current bank debt and a long-term loan financing the properties which the
Company owns. The sensitivity of an interest rate change of 1%/(1%) amounts to approximately DKK 6.5/(6.5) million calculated by using
the BPV method (DKK 3.8/(3.8) million).
The below maturity/reassessment profiles applying to the Group’s financial assets and liabilities are as follows:
Re-assessment-/maturity profile
At 30 June 2013 in DKK million
Short-term loans to business partners
Trade receivables
Listed securities
Trade payables
Credit institutions, current liabilities
Credit institutions, non-current liabilities*
0-1 year
1-5 years
above 5 years
Fixed
interest rate
Effective
interest rate
0.2
390.8
100.9
420.1
188.7
-
-
-
No
No
No
No
No
No
1.70%
2-24%
0.71%
2.09%
1.44%
Re-assessment-/maturity profile
At 30 June 2012 in DKK million
Long-term loans to business partners
Short-term loans to business partners
Trade receivables
Trade payables
Credit institutions, current liabilities
Credit institutions, non-current liabilities*
0-1 year
1-5 years
above 5 years
Fixed
interest rate
Effective
interest rate
0.2
391.9
396.5
190.7
-
0.2
-
140.0
No
No
No
No
No
No
2.06%
2.06%
2-24%
3.22%
2.03%
* The re-assessment profile is within 1-5 years. The loan is reclassified as liabilities concerning assets classified as held-for-sale.
Default on loans
The Group has not defaulted any loan during the year under review or last financial year.
Credit risk
The Group solely uses internationally recognised banks with a high credit rating. The credit risk on forward contracts and bank deposits
is consequently deemed to be low.
In respect of trade receivables, the Group typically uses credit insurance in countries in which the credit risk is deemed to be high
and where credit insurance is feasible. This primarily applies to export markets in which IC Companys is not represented through an
independent sales company.
Beyond this, the credit risk regarding trade receivables and other receivables is limited as the Group has no material credit risk as the
exposure is spread on a large amount of counter-parties and customers in many different markets.
Capital structure
The Company’s Management considers on a regular basis whether the Group’s capital structure is in the best interest of the Company
and its shareholders. The general target is to ensure a capital structure which supports long-term financial growth and at the same time
increases the return on investment for the Group’s stakeholders by optimising the ratio between equity and debt. The overall strategy of
the Group is unchanged compared to last year. The Group’s capital structure consists of debt which includes financial liabilities such as
mortgage loan, bank loans and cash and equity which includes share capital, other reserves as well as retained earnings.
32. Related party transactions
IC Companys A/S’ related parties include subsidiaries as set out at the back of this Annual Report, their boards of directors, executive
boards and other executives as well as their related family members. Related parties also comprise businesses in which the individuals
mentioned above have material interests. IC Companys A/S has no related parties with controlling influence on the Company.
IC Companys A/S conducts substantial trading with all its subsidiaries. Trading is conducted on an arm’s length basis.
Information on trading with subsidiaries is as follows:
DKK million
Purchase of finished goods and consumables from subsidiaries
Sale of finished goods and consumables to subsidiaries
Sale of services to subsidiaries
Group
30 June 2013
-
Group
30 June 2012
-
Parent
Company
30 June 2013
Parent
Company
30 June 2012
1,256.8
1,249.5
134.8
1,276.3
1,405.2
136.3
Transactions with subsidiaries have been eliminated in the consolidated financial statements in accordance with the accounting policies.
The remuneration paid to the members of the Executive Board, the Board of Directors, and other executives as well as share-based
remuneration programmes and acquisitions are disclosed in note 4 to the consolidated financial statements. Shareholdings of the
Executive Board and the Board of Directors are disclosed under Executive Board and Board of Directors in the section IC Companys’
work with Corporate Governance.
68
IC COMPANYS • ANNUAL REPORT 2012/13 • CONSOLIDATED FINANCIAL STATEMENTS
Interest on accounts with subsidiaries is stated in note 7 to the parent financial statements.
The Parent Company’s accounts with the subsidiaries comprise ordinary trade balances concluded on trading terms equivalent to those
applied for the Group’s and the Parent Company’s other customers and suppliers. Furthermore, the Parent Company has granted loans
to subsidiaries with a total balance as at 30 June 2013 of DKK 33.1 million (DKK 945.8 million) consisting of two bullet loans for which
no due dates have been set. During the financial year 2012/13 loans corresponding to DKK 912.8 million have been repaid. The Parent
Company’s net receivables from subsidiaries include a provision of DKK 149.8 million (DKK 164.0 million) to meet likely future losses
in subsidiaries with negative equity values.
The Parent Company has issued letters of comfort for certain subsidiaries.
The Parent Company has recognised dividends of DKK 69.6 million (DKK 221.3 million) from subsidiaries for 2012/13.
The Company has had other transactions during the year with the former CEO of the Company as well as the Chairman of the Board of
Directors and businesses controlled by the Chairman of the Board of Directors. The transactions were all made on arm’s length terms
and did not exceed DKK 1 million for the financial year under review.
With the exception of intragroup transactions, which have been eliminated in the consolidated financial statements, and usual
management remuneration, the Group has not made any other transactions other than mentioned above in this or any previous years
with the Board of Directors, Executive Board, other executives, major shareholders or other related parties.
33. Events after the reporting period
Mads Ryder was appointed Group CEO of IC Companys A/S as at 1 August 2013.
Besides from this, no material events have taken place after the reporting period that have not been recognised or included in this
Annual Report.
34. Approval of the announcement of the Annual Report
The Board of Directors of IC Companys A/S has approved the announcement of this Annual Report at a board meeting held on 22 August
2013. This Annual Report will be presented for approval at the Annual General Meeting of IC Companys A/S to be held on 25 September
2013.
35. Significant accounting policies
Except from the accounting policies described in note 1 and note 2 to the consolidated financial statements, the significant accounting
policies applied are as described below.
DESCRIPTION OF SIGNIFICANT ACCOUNTING POLICIES
Basis of consolidation
The consolidated financial statements consist of the financial statements of IC Companys A/S (the Parent Company) and its subsidiaries
in which the Company’s voting rights directly or indirectly exceed 50%, or in which the Company is able to exercise a controlling interest
in any other way.
The consolidated financial statements are prepared on the basis of the parent financial statements and the individual subsidiaries by
consolidating items of a uniform nature. Equity interests, intercompany transactions, intercompany balances, unrealised intercompany
gains on inventories and dividends are eliminated.
The items of the financial statements of subsidiaries are fully consolidated in the consolidated financial statements. The proportionate
share of the results of non-controlling interests is recognised in the consolidated income statement for the year.
Business combinations
Newly acquired or newly established businesses are recognised in the consolidated financial statements from the acquisition date
or incorporation date. The acquisition date is the date when control of the business actually passes to the Group. Businesses sold or
liquidated are recognised up to the date of disposal or liquidation. The date of disposal is the date when control of the business actually
passes to a third party.
Acquisitions are accounted for using the acquisition method, under which the identifiable assets, liabilities and contingent liabilities of
businesses acquired are measured at fair value at the acquisition date. Acquired non-current assets held-for-sale are measured at fair
value less expected costs to sell, however.
Restructuring costs are only recognised in the acquisition’s statement of financial position if they represent a liability to the acquired
business. The tax effect of revaluations is taken into account.
The cost of a business is the fair value of the consideration paid. If the final determination of the consideration is conditional on one or
more future events, these adjustments are recognised at fair value from the acquisition date.
CONSOLIDATED FINANCIAL STATEMENTS • ANNUAL REPORT 2012/13 • IC COMPANYS
69
Costs directly attributable to acquisitions are recognised directly in the income statement from the date of payment.
Any excess (goodwill) of the cost of an acquired business, the value of the non-controlling interest in the acquired business and the fair
value of previously acquired capital interests over the fair value of the acquired assets, liabilities and contingent liabilities is recognised
as an asset under intangible assets and tested annually for impairment. If the carrying amount of an asset exceeds its recoverable
amount, the asset is written down to the lower recoverable amount.
In case of negative differences (negative goodwill), the calculated fair values and the calculated cost of the business, the value of
the non-controlling interest in the acquired business and the fair value of previously acquired capital interests are reassessed. If the
difference is still negative following the reassessment, the difference is then recognised as income in the income statement.
Acquisitions of non-controlling interest in subsidiaries are accounted for as equity transactions in the consolidated financial statements,
and the difference between the consideration and the carrying amount is recognised under equity owned by Parent Company.
Gains or losses on disposal or liquidation of subsidiaries are stated as the difference between the disposal or liquidation amount and
the carrying amount of net assets including goodwill at the date of disposal or liquidation, accumulated foreign exchange adjustments
recognised under other comprehensive income and anticipated disposal or liquidation costs. The disposal or liquidation amount is
measured as the fair value of the consideration received.
Foreign currency translation
For each of the reporting entities in the Group, a functional currency is determined. The functional currency is the currency in the primary
economic environment in which the individual reporting entity operates. Transactions in currencies other than the functional currency
are transactions denominated in foreign currencies.
On initial recognition, transactions denominated in foreign currencies are translated into the functional currency at the exchange rate
ruling at the transaction date. Foreign exchange differences arising between the exchange rates at the transaction date and the date of
payment are recognised in the income statement under revenue, cost of sales or financial income or costs.
Receivables, payables and other monetary items denominated in foreign currencies are translated into the functional currency at the
exchange rates ruling at the end of the reporting period. The difference between the exchange rate ruling at the end of the reporting
period and the exchange rate at the date when the receivable or payable arose or was recorded in the most recent annual report is
recognised in the income statement under revenue, sales of costs or financial income or costs. Property, plant and equipment and
intangible assets, inventories and other non-monetary assets acquired in foreign currencies and measured based on historical cost are
translated at the exchange rates prevailing at the transaction date.
The statements of financial position of foreign subsidiaries are translated into DKK at the exchange rate ruling at the end of the reporting
period, while income statements are translated into DKK at monthly average exchange rates during the year. Foreign exchange differences
arising on the translation of foreign subsidiaries’ opening equity using the exchange rates ruling at the end of the reporting period as
well as on the translation of the income statements using average exchange rates at the end of the reporting period are recognised
under other comprehensive income. Foreign exchange adjustments of receivables and subordinated loan capital in foreign subsidiaries
that are considered to be part of the overall investment in the subsidiaries are recognised under other comprehensive income in the
consolidated financial statements and in the income statement of the parent financial statements.
Derivative financial instruments and hedging activities
On initial recognition in the statement of financial position, derivative financial instruments are measured at their fair value. Positive
and negative fair values of derivative financial instruments are recognised under other receivables and other liabilities, respectively, as
unrealised gain on financial instruments and unrealised loss on financial instruments, respectively.
Changes in the fair value of derivative financial instruments designated as and qualifying for recognition as cash flow hedges are
recognised under other comprehensive income. Gains and losses relating to such hedge transactions are reclassified from other
comprehensive income on realisation of the hedged item and recognised in the same line item as the hedged item.
Changes in the fair value of derivative financial instruments used to hedge net investments in independent foreign subsidiaries and
which otherwise meet the criteria for hedge accounting are recognised under other comprehensive income in the consolidated financial
statements (net investment hedge).
For derivative financial instruments not qualifying as hedges, changes in the fair value are recognised in the income statement under
financial income or costs.
Discontinued operations and non-current assets held-for-sale
Discontinued operations are major business areas or geographical areas which have been sold or which are held-for-sale according to
an overall plan.
The results of discontinued operations are presented as separate items in the income statement, consisting of the operations’ operating
profit/loss after tax and any gains or losses on fair value adjustment or sale of the related assets.
Cash flow from discontinued operations has been included in the consolidated statement of cash flows under cash flows from operating,
investing and financing activities of continuing operations and has been explained in the notes.
Non-current assets and groups of assets held-for-sale, including assets related to discontinued operations, are presented as separate
items in the statement of financial position under current assets. Liabilities directly related to the assets and discontinued operations
in question are presented under current liabilities in the statement of financial position. Assets are classified as held-for-sale when
their carrying amounts will be recovered principally through a sale transaction within 12 months according to a formal plan rather than
through continuing use.
70
IC COMPANYS • ANNUAL REPORT 2012/13 • CONSOLIDATED FINANCIAL STATEMENTS
Impairment losses arising at the initial classification of held-for-sale as well as any subsequent gains or losses measured at the lower of
the carrying amount or the fair value less costs to sell are recognised in the income statement under the items in question. Gains and
losses are explained in the notes.
Non-current assets held-for-sale are not depreciated or amortised, but are written down to fair value less expected costs to sell where
this is lower than the carrying amount. Comparative figures in the statement of financial position are not adjusted.
INCOME STATEMENT
Revenue
Revenue from the sale of goods is recognised in the income statement when delivery and transfer of risk to the buyer have taken place
and if the income can be reliably measured and is expected to be received. Revenue is measured excluding VAT, indirect taxes and less
expected returns and discounts related to sales.
Revenue is measured at the fair value of the consideration received or receivable.
In addition to the sale of goods, revenue comprises license revenue.
Cost of sales
Cost of sales includes direct costs incurred in generating the revenue for the year. The Company recognises cost of sales as revenue is
earned.
Staff costs
Staff costs include salaries, remuneration, retirement benefit schemes, share-based payments and other staff costs to the Group’s
employees, including the members of the Executive Board and Board of Directors. Agents’ commissions to external sales agents are
also included.
Depreciation, amortisation and impairment losses
Depreciation, amortisation and impairment losses comprise amortisation of intangible assets, depreciation of property, plant and
equipment and impairment losses for the year.
Other external costs
Other external costs comprise other purchase and selling costs and administrative costs, bad debts, etc.
Lease costs relating to operating lease agreements are recognised by using the straight-line method in the income statement under
other external costs.
Other operating income and costs
Other operating income and costs comprise items of a secondary nature relative to the principal activities, including gains and losses on
sale of intangible assets and property, plant and equipment.
Financial income and costs
Financial income and costs include interest, realised and unrealised foreign currency translation adjustments, fair value adjustments
of derivative financial instruments which do not qualify for hedge accounting and supplements, deductions and allowances relating to
the payment of tax.
Interest income and costs are accrued based on the principal and the effective rate of interest. The effective rate of interest is the
discount rate to be used in discounting expected future payments in relation to the financial asset or the financial liability so that their
present value corresponds to the carrying amount of the asset or liability, respectively.
Tax on profit for the year
Tax for the year comprises of current tax for the year and adjustments in deferred tax. Tax for the year relating to the profit/loss for
the year is recognised in the income statement and tax for the year relating to items recognised under other comprehensive income
or directly in equity is recognised under other comprehensive income or directly in equity, respectively. Foreign currency translation
adjustments of deferred tax are recognised as part of the adjustment of deferred tax for the year.
The current tax expense for the year is calculated based on the tax rates and rules applicable at the end of the reporting period.
The Parent Company is taxed jointly with all consolidated wholly owned Danish subsidiaries. The current tax expense is allocated among
the companies of the Danish tax pool in proportion to their taxable income (full absorption with refunds for tax losses). The jointly taxed
companies pay tax under the Danish on-account tax scheme.
Deferred tax is calculated using the current tax rules and tax rates on temporary differences between carrying amounts and tax bases.
Deferred tax assets, including the tax base of deferrable tax losses, are recognised at the expected value of their utilisation as a setoff
against future taxable income or as a setoff against deferred tax liabilities within the same legal entity and jurisdiction. If deferred tax is
an asset, it is included in non-current assets based on an assessment of the potential for future realisation.
Deferred tax is calculated based on the planned use of each asset and settlement of each liability, respectively.
Deferred tax is measured using the tax rates and tax rules that, based on legislation in force or in reality in force at the end of the
reporting period, are expected to apply in the respective countries when the deferred tax is expected to crystallise as current tax.
Changes in deferred tax as a result of changed tax rates or tax rules are recognised in the income statement unless the deferred tax is
attributable to transactions which have been recognised previously under other comprehensive income or directly in equity.
CONSOLIDATED FINANCIAL STATEMENTS • ANNUAL REPORT 2012/13 • IC COMPANYS
71
Deferred tax is recognised on temporary differences arising on investments in subsidiaries, unless the Parent Company is able to control
when the deferred tax is to be realised and it is likely that the deferred tax will not crystallise as current tax in the foreseeable future.
STATEMENT OF FINANCIAL POSITION, ASSETS
Intangible assets
On initial recognition, goodwill is measured and recognised as described under the section Business combinations. Subsequently,
goodwill is measured at cost less accumulated impairment losses. Goodwill is not amortised but tested at least once a year for impairment
as further described in the below section on Impairment.
The carrying amount of goodwill is allocated to the Group’s cash-generating units at the date of acquisition. The determination of cashgenerating units is based on the management structure and the internal financial management.
Payments to take over leases (“key money”) are classified as leasehold rights. Leasehold rights are amortised over the lease period or
the useful life if this is shorter. The basis of amortisation is reduced by any write-downs. Leasehold rights with an indeterminable useful
life are not amortised, but tested for impairment annually.
Software and IT development are amortised over the useful life of 3-7 years. Cost includes the acquisition price as well as costs arising
directly in connection with the acquisition and until the point of time where the asset is ready for use. Amortisation is provided on a
straight-line basis over the expected useful life.
Property, plant and equipment
Property, plant and equipment are measured at historical cost less accumulated depreciation and impairment losses.
Cost comprises the acquisition price and costs directly related to the acquisition until the time when the asset is ready for use.
The difference between cost and the expected scrap value is depreciated on a straight-line basis over the expected economic lives of the
assets. The depreciation period is determined on the basis of Management’s experience in the Group’s business area, and Management
believes the following estimates to be the best estimate of the economic lives of the assets:
Leasehold improvements
Buildings
Equipment and furniture
up to 10 years
25-50 years
3-5 years
If the depreciation period or the scrap values are changed, the effect on depreciation going forward is recognised as a change in
accounting estimates.
Gains and losses on disposal of property, plant and equipment are computed as the difference between the selling price less costs to
sell and the carrying amount at the date of disposal. Gains and losses are recognised in the income statement under other operating
income or costs.
Property, plant and equipment are written down to the recoverable amount if this is lower than the carrying amount as described in the
below section on Impairment.
Impairment
The carrying amount of goodwill is tested at least once a year for impairment together with the other non-current assets of the cashgenerating unit to which the goodwill has been allocated, and is written down to the recoverable amount through the income statement
if this is lower than the carrying amount. The recoverable amount is generally calculated as the present value of the future cash flows
expected to derive from the cash-generating unit to which the goodwill relates.
The carrying amount of non-current assets other than goodwill, intangible assets with indeterminable useful lives, deferred tax assets
and financial assets is tested annually for indications of impairment. If such an indication exists, the recoverable amount of the asset is
calculated. The recoverable amount is the higher of the fair value of the asset less costs to sell and the value in use.
An impairment loss is recognised when the carrying amount of an asset or a cash-generating unit exceeds the recoverable amount of
the asset or the cash-generating unit. Impairment losses are recognised in the income statement under depreciation, amortisation and
impairment losses.
Impairment losses on goodwill are not reversed. Write-downs of other assets are reversed to the extent changes have occurred to the
assumptions and estimates leading to the write-down. Write-downs are only reversed to the extent the new carrying amount of an asset
does not exceed the carrying amount the asset would have had net of depreciation, had the asset not been written down.
Financial assets
Securities are measured at their fair value at the end of the reporting period. Other financial assets are measured at cost or at fair value
at the end of the reporting period if this is lower.
Inventories
Inventories are measured at cost using the FIFO method. Inventories are written down to the lower of cost and net realisable value.
The cost of raw materials and consumables includes the purchase price and direct costs to take delivery of the products.
72
IC COMPANYS • ANNUAL REPORT 2012/13 • CONSOLIDATED FINANCIAL STATEMENTS
The cost of finished products includes the cost of raw materials, consumables, external production costs and costs to take delivery of
the products.
The net realisable value of finished products is determined as the expected selling price less costs incurred to execute the sale.
Receivables
Receivables include trade receivables and other receivables. Receivables are part of the category loans and receivables which are
financial assets with fixed or definable payments and which are not listed on an active market nor derivative financial instruments.
Receivables are, on initial recognition, measured at fair value and subsequently at amortised cost which usually corresponds to the
nominal value less provision for bad debts.
Prepayments
Prepayments recognised under assets comprise costs incurred relating to the following financial year, including collection samples, rent,
insurance, etc. Prepayments are measured at cost.
STATEMENT OF FINANCIAL POSITION, EQUITY
Dividends
Proposed dividends are recognised as a liability at the time of adoption by the shareholders at the annual general meeting.
Treasury shares
The acquisition and sale of treasury shares and dividends thereon are taken directly to equity under retained earnings.
Translation reserve
The translation reserve comprises the shareholders of the Parent Company’s share of foreign exchange differences arising in connection
with the translation of foreign subsidiaries’ financial statements reported in their functional currency into the Group’s reporting currency
(DKK).
Reserve for hedging transactions
Reserve for hedging transactions comprises the accumulated net change of the fair value of hedging transactions which qualify for
recognition as cash flow hedges, and where the hedged transaction has not yet been realised.
Share-based incentive programmes
Share-based incentive programmes in which employees can only chose to buy or subscribe for shares in the Parent Company (equity
schemes) are measured at the equity instruments’ fair value at the grant date and recognised in the income statement under staff costs
over the period during which the employee’s right to buy the shares vests. The balancing item is recognised directly in equity.
The fair value of equity instruments is determined by using the Black & Scholes model with the parameters stated in note 4 to the
consolidated financial statements.
STATEMENT OF FINANCIAL POSITION, LIABILITIES
Retirement benefit obligations
The Group has entered into retirement benefit agreements and similar agreements with the majority of the Group’s employees.
Obligations relating to defined contribution plans are recognised in the income statement in the period in which the employees render
the related service, and contributions due are recognised in the statement of financial position under other liabilities.
For defined benefit plans, an annual actuarial assessment is made of the net present value of future benefits to be paid under the plan.
The net present value is calculated based on assumptions of the future developments of, e.g., salary, interest, inflation and mortality
rates. The net present value is only calculated for those benefits to which the employees have earned the right through their past service
for the Group. The actuarial calculation of the net present value less the fair value of any assets related to the plan is included in the
statement of financial position as retirement benefit obligations, however, please see below.
Differences between the expected development of assets and liabilities in connection with retirement benefit schemes and the realised
values are termed actuarial gains or losses. Subsequently, all actuarial gains or losses are recognised in the income statement.
If a retirement plan represents a net asset, the asset is only recognised to the extent that it offsets future contributions from the plan, or
it will reduce future contributions to the plan.
Provisions
Provisions are recognised when, as a consequence of a past event during the financial year or previous years, the Group has a legal
or constructive obligation, and it is likely that settlement of the obligation will require an outflow of the Company’s financial resources.
Provisions are measured as the best estimate of the costs required to settle the liabilities at the end of the reporting period. Provisions
with an expected term of more than a year at end of the reporting period are measured at present value.
In connection with planned restructurings of the Group, provisions are only made for liabilities relating to the restructurings that have
been set out in a specific plan at the end of the reporting period and where the parties affected have been informed of the overall plan.
CONSOLIDATED FINANCIAL STATEMENTS • ANNUAL REPORT 2012/13 • IC COMPANYS
73
Mortgage loans
Mortgage loans are measured at fair value less any transaction costs at the date of raising the loan. Subsequently, mortgage loans are
measured at amortised cost.
Other financial liabilities
Other financial liabilities, including bank loans and trade payables, are on initial recognition measured at fair value. In subsequent
periods, financial liabilities are measured at amortised cost, applying the effective interest method, to the effect that the difference
between the proceeds and the nominal value is recognised in the income statement as financial costs over the term of the loan.
STATEMENT OF CASH FLOWS
The statements of cash flows of the Group and the Parent Company show the cash flows from operating, investing and financing activities
for the year, and the net cash flows for the year as well as cash and cash equivalents at the beginning and at the end of the financial year.
The statement of cash flows presents cash flow from operating activities indirectly based on the ordinary operating profit.
Cash flow from operating activities is calculated as operating profit adjusted for non-cash operating items, provisions, financials paid,
change in working capital and tax.
The working capital comprises current assets, excluding cash items or items attributable to the investing activity, less current liabilities
excluding bank loans, mortgage loans and tax payable.
Cash flow from investing activities includes payments regarding acquisition and sale of non-current assets and securities including
investments in businesses.
Cash flow from financing activities includes payments to and from shareholders as well as the raising and repayment of mortgage loans
and other non-current liabilities not included in working capital.
Cash and cash equivalents comprise cash, listed securities and net short-term bank loans that are an integral part of the Group’s cash
management.
SEGMENT INFORMATION
Segment information has been prepared in accordance with the Group’s applied accounting policies and is consistent with the Group’s
internal reporting to the Executive Board.
Segment income and costs comprise income and costs that are directly attributable to the individual segment and the items that can be
allocated to the individual segment on a reliable basis.
The comparative figures for the financial year 2011/12 have been adjusted to the new business segments. The adjusted comparative
figures were announced on 16 April 2013 (Company Announcement no. 4/2013).
No information has been provided as to the segments’ share of items concerning financial position or cash flows as the Executive Board
does not use this segmentation in the internal reporting of the statement of financial position or the statement of cash flows
74
IC COMPANYS • ANNUAL REPORT 2012/13 • CONSOLIDATED FINANCIAL STATEMENTS
PARENT FINANCIAL
STATEMENTS
INCOME STATEMENT
PAGE 78
STATEMENT OF COMPREHENSIVE INCOME
PAGE 78
STATEMENT OF FINANCIAL POSITION
PAGE 79
STATEMENT OF CHANGES IN EQUITY
PAGE 80
STATEMENT OF CASH FLOWS
PAGE 81
NOTES TO THE PARENT FINANCIAL STATEMENTS
1. BASIS FOR PREPARATION OF PARENT FINANCIAL STATEMENTS
PAGE 82
2. ACCOUNTING ESTIMATES AND ASSUMPTIONS
PAGE 82
3. REVENUE
PAGE 82
4. STAFF COSTS
PAGE 82
5. OTHER OPERATING INCOME AND COSTS
PAGE 82
6. OTHER EXTERNAL COSTS
PAGE 83
7. FINANCIAL INCOME AND COSTS
PAGE 83
8. TAX FOR THE YEAR
PAGE 83
9. DIVIDENDS
PAGE 84
10. INTANGIBLE ASSETS AND PROPERTY, PLANT AND EQUIPMENT
PAGE 84
11. INVESTMENTS IN SUBSIDIARIES
PAGE 85
12. FINANCIAL ASSETS
PAGE 85
13. DEFERRED TAX
PAGE 86
14. INVENTORIES
PAGE 86
15. TRADE RECEIVABLES
PAGE 87
16. OTHER RECEIVABLES
PAGE 87
17. PREPAYMENTS
PAGE 87
18. SHARE CAPITAL
PAGE 87
19. CURRENT LIABILITIES TO CREDIT INSTITUTIONS
PAGE 88
20. OTHER LIABILITIES
PAGE 88
21. PROVISIONS
PAGE 88
22. OPERATING LEASES
PAGE 88
23. OTHER LIABILITIES AND CONTINGENT LIABILITIES
PAGE 89
24. CHANGE IN WORKING CAPITAL
PAGE 89
25. SECURITIES
PAGE 89
26. CASH AND CASH EQUIVALENTS
PAGE 89
27. FINANCIAL RISKS AND DERIVATIVE FINANCIAL INSTRUMENTS
PAGE 89
28. RELATED PARTY TRANSACTIONS
PAGE 89
29. EVENTS AFTER THE REPORTING PERIOD
PAGE 89
30. APPROVAL OF THE ANNOUNCEMENT OF THE ANNUAL REPORT
PAGE 90
31. SIGNIFICANT ACCOUNTING POLICIES
PAGE 90
INCOME STATEMENT
Note
DKK million
2012/13
2011/12
3
Revenue
1,423.1
1,564.3
Cost of sales
Gross profit
(1,322.5)
100.6
(1,360.0)
204.3
(178.4)
(265.4)
168.8
(40.8)
(215.2)
(168.1)
(260.9)
135.9
(20.1)
(108.9)
6
4
5
10
Other external costs
Staff costs
Other operating income and costs
Depreciation, amortisation and impairment losses
Operating loss
11
7
7
Income from investments in subsidiaries
Financial income
Financial costs
Loss/profit before tax
83.8
113.4
(38.6)
(56.6)
217.5
135.9
(48.2)
196.3
8
Tax on profit/loss for the year
Loss/profit for the year
42.6
(14.0)
(3.5)
192.8
Profit allocation:
Proposed dividend
Retained earnings
Loss/profit for the year
32.8
(46.8)
(14.0)
24.6
168.2
192.8
9
STATEMENT OF
COMPREHENSIVE INCOME
Note
27
27
27
27
8
78
2012/13
2011/12
Loss/profit for the year
DKK million
(14.0)
192.8
OTHER COMPREHENSIVE INCOME
Items which may be reclassified to the income statement:
Fair value adjustments, gains on derivatives held as cash flow hedges
Fair value adjustments, loss on derivatives held as cash flow hedges
Reclassification to profit or loss, gains on realised cash flow hedges
Reclassification to profit or loss, loss on realised cash flow hedges
Tax on other comprehensive income
Total other comprehensive income
Total comprehensive income
25.7
(6.0)
(56.4)
37.9
(1.0)
0.2
(13.8)
56.4
(37.9)
(2.0)
68.2
(21.1)
63.6
256.4
IC COMPANYS • ANNUAL REPORT 2012/13 • PARENT FINANCIAL STATEMENTS
STATEMENT OF
FINANCIAL POSITION
ASSETS
Note
DKK million
30 June 2013
30 June 2012
10
NON-CURRENT ASSETS
Software and IT systems
IT systems under development
Total intangible assets
33.6
33.6
46.2
9.5
55.7
10
Leasehold improvements
Equipment and furniture
Property, plant and equipment under construction
Total property, plant and equipment
2.0
12.4
2.5
16.9
2.4
18.9
1.7
23.0
Investments in subsidiaries
Financial assets
Deferred tax
Total other non-current assets
Total non-current assets
1,462.7
36.8
39.5
1,539.0
1,589.5
546.7
949.6
15.5
1,511.8
1,590.5
CURRENT ASSETS
Inventories
Trade receivables
Receivables from subsidiaries
Tax receivable
Other receivables
Prepayments
Securities
Cash
Total current assets
TOTAL ASSETS
323.7
22.1
406.0
12.0
26.9
11.2
100.9
0.8
903.6
2,493.1
352.4
33.3
380.7
8.7
77.5
12.0
34.3
898.9
2,489.4
30 June 2013
30 June 2012
169.4
16.1
1,092.4
1,277.9
169.4
15.9
1,124.1
1,309.4
25.5
25.5
34.6
34.6
91.7
45.1
920.9
120.4
11.6
1,189.7
1,215.2
2,493.1
102.4
34.2
880.1
128.7
1,145.4
1,180.0
2,489.4
11
12
13
14
15
8
16
17
25
26
EQUITY AND LIABILITIES
Note
18
20
DKK million
EQUITY
Share capital
Reserve for hedging transactions
Retained earnings
Total equity
LIABILITIES
Other liabilities
Total non-current liabilities
19,26 Liabilities to credit institutions
Trade payables
Payables to subsidiaries
20
Other liabilities
21
Provisions
Total current liabilities
Total liabilities
TOTAL EQUITY AND LIABILITIES
PARENT FINANCIAL STATEMENTS • ANNUAL REPORT 2012/13 • IC COMPANYS
79
STATEMENT OF
CHANGES IN EQUITY
DKK million
Equity at 1 July 2011
Reserve for
Share
hedging
capital transactions
Retained
earnings
Total
equity
(47.7)
996.8
1,118.5
-
-
192.8
192.8
-
56.4
(37.9)
(2.0)
68.2
(21.1)
63.6
169.4
Comprehensive income 2011/12
Profit for the year
Other comprehensive income
Fair value adjustments, gains on derivatives held as cash flow hedges
Fair value adjustments, loss on derivatives held as cash flow hedges
Reclassification to profit or loss, gains on realised cash flow hedges
Reclassification to profit or loss, loss on realised cash flow hedges
Tax on other comprehensive income
Total other comprehensive income
Dividends paid
Share-based payments
Other adjustments
Equity at 30 June 2012
169.4
15.9
-
56.4
(37.9)
(2.0)
68.2
(21.1)
63.6
(73.8)
7.7
0.6
1,124.1
(73.8)
7.7
0.6
1,309.4
Comprehensive income 2012/13
Loss for the year
-
-
(14.0)
(14.0)
-
25.7
(6.0)
(56.4)
37.9
(1.0)
0.2
-
25.7
(6.0)
(56.4)
37.9
(1.0)
0.2
Other comprehensive income
Fair value adjustments, gains on derivatives held as cash flow hedges
Fair value adjustments, loss on derivatives held as cash flow hedges
Reclassification to profit or loss, gains on realised cash flow hedges
Reclassification to profit or loss, loss on realised cash flow hedges
Tax on other comprehensive income
Total other comprehensive income
Dividends paid
Share-based payments
Equity at 30 June 2013
80
IC COMPANYS • ANNUAL REPORT 2012/13 • PARENT FINANCIAL STATEMENTS
169.4
16.1
(24.6)
6.9
1,092.4
(24.6)
6.9
1,277.9
STATEMENT OF CASH FLOWS
Note
24
8
10
10
DKK million
2012/13
2011/12
(215.2)
40.8
4.9
30.6
107.5
(31.4)
(108.9)
20.4
4.6
(37.5)
(13.1)
(134.5)
Financial income received
Financial costs paid
Cash flow from operating activities
90.7
(13.9)
45.4
110.1
(25.3)
(49.7)
Tax recovered
Total cash flow from operating activities
14.4
59.8
18.0
(31.7)
CASH FLOW FROM INVESTING ACTIVITIES
Investments in intangible assets
Investments in property, plant and equipment
Sale of other non-current assets
Change in deposits and other financial assets
Dividend received, proceeds in connection with liquidation, etc.
Total cash flow from investing activities
(8.7)
(7.9)
(0.1)
69.6
52.9
(28.5)
(10.0)
2.0
(0.1)
221.3
184.7
112.7
153.0
CASH FLOW FROM FINANCING ACTIVITIES
Dividends paid
Repayment of non-current liabilities
Total cash flow from financing activities
NET CASH FLOW FOR THE YEAR
(24.6)
(10.0)
(34.6)
78.1
(73.8)
(9.4)
(83.2)
69.8
CASH AND CASH EQUIVALENTS
Cash and cash equivalents at 1 July
Net cash flow for the year
Cash and cash equivalents at 30 June
(68.1)
78.1
10.0
(137.9)
69.8
(68.1)
CASH FLOW FROM OPERATING ACTIVITIES
Operating loss
Reversed depreciation and impairment losses and gain/loss on sale of non-current assets
Share-based payments recognised in income statement
Other adjustments
Change in working capital
Cash flow from ordinary operating activities
Total cash flow from operating and investing activities
9
26
The statement of cash flows may not be concluded based solely on the announced financial statements.
PARENT FINANCIAL STATEMENTS • ANNUAL REPORT 2012/13 • IC COMPANYS
81
NOTES TO THE PARENT
FINANCIAL STATEMENTS
1. Basis for preparation of the parent financial statements
The financial statements of the Parent Company IC Companys A/S for the financial year 2012/13 have been prepared in accordance with
the International Financial Reporting Standards (IFRS) as adopted by EU and additional Danish disclosure requirements for the annual
reports of listed companies (accounting class D), cf. the Statutory Order on the adoption of IFRS under the Danish Financial Statements
Act.
The parent financial statements are also prepared in accordance with the IFRS standards as issued by the International Accounting
Standards Board (IASB).
The parent financial statements are expressed in Danish Kroner (DKK) which is the functional currency of the Parent Company.
The accounting policies for the Parent Company are consistent with those used in the previous financial year.
Please see note 30 for further information on significant accounting policies.
2. Accounting estimates and assumptions
Please see note 2 to the consolidated financial statements.
3. Revenue
DKK million
Sale of goods to subsidiaries
Sale of goods to non-Group related parties
Total revenue
2012/13
2011/12
1,250.4
172.7
1,423.1
1,405.1
159.2
1,564.3
2012/13
2011/12
2.3
0.4
0.2
234.6
14.2
1.5
4.9
7.3
265.4
2.3
0.4
0.2
231.0
15.2
1.6
4.6
5.6
260.9
358
394
4. Staff costs
DKK million
Total salaries, remuneration, etc., can be specified as follows:
Remuneration to the Board of Directors
Remuneration to the Audit Committee
Remuneration to the Remuneration Committee
Salaries and remuneration
Defined contribution plans
Other social security costs
Share-based payments
Other staff costs
Total staff costs
Average number of employees of the Parent Company
Remuneration to the Board of Directors, Executive Board and share-based programmes for the Management and employees are
disclosed in note 4 to the consolidated financial statements.
5. Other operating income and costs
DKK million
Services provided to subsidiaries
Loss on sale of non-current assets
Sales proceeds and other operating income and costs
Total other operating income and costs
82
IC COMPANYS • ANNUAL REPORT 2012/13 • PARENT FINANCIAL STATEMENTS
2012/13
2011/12
134.8
(1.1)
35.1
168.8
136.3
(0.4)
135.9
6. Other external costs
Other external costs include the total fees paid for the financial year under review to the auditors appointed at the annual general
meeting.
DKK million
2012/13
2011/12
0.7
0.1
0.5
0.1
1.4
1.0
0.7
1.7
2012/13
2011/12
Financial income:
Interest on receivables from subsidiaries
Interest on bank deposits
Other financial income
Interest income from financial assets not measured at fair value
107.0
0.7
0.1
107.8
83.2
2.5
1.1
86.8
Interest income on securities
Realised gain on derivative financial instruments
Net gain on foreign currency translation
Total financial income
0.1
2.6
2.9
113.4
22.8
26.3
135.9
Financial costs:
Interest on liabilities to credit institutions
Interest on payables to subsidiaries
Interest costs from financial liabilities not measured at fair value
(9.5)
(21.3)
(30.8)
(11.2)
(23.4)
(34.6)
Fair value adjustments on securities
Realised loss on derivative financial instruments
Total financial costs
Net financials
(0.4)
(7.4)
(38.6)
74.8
(13.6)
(48.2)
87.7
Statutory audit
Other statements and opinions with guarantees
Tax consultancy
Other services
Total other external costs
7. Financial income and costs
DKK million
8. Tax for the year
DKK million
2012/13
2011/12
Current tax
Current tax for the year under review
Prior-year adjustments, current tax
Total current tax
(11.1)
(6.6)
(17.7)
(8.1)
(8.1)
Deferred tax
Change in deferred tax
Adjustments regarding changes in tax rates
Prior-year adjustments, deferred tax
Total deferred tax
Tax for the year
(23.0)
1.0
(1.9)
(23.9)
(41.6)
27.6
5.1
32.7
24.6
Recognised as follows:
Tax on loss/profit for the year
Tax on other comprehensive income
Tax for the year
(42.6)
1.0
(41.6)
3.5
21.1
24.6
Net tax receivable at 1 July
8.7
18.6
Tax payable on profit for the year
Tax paid during the year
Net tax receivable at 30 June
17.7
(14.4)
12.0
8.1
(18.0)
8.7
Recognised as follows:
Tax receivable
Net tax receivable at 30 June
12.0
12.0
8.7
8.7
PARENT FINANCIAL STATEMENTS • ANNUAL REPORT 2012/13 • IC COMPANYS
83
9. Dividends
IC Companys A/S distributed to its shareholders DKK 24.6 million in dividends during the financial year 2012/13 (DKK 73.8 million).
The Board of Directors has resolved to recommend a dividend of DKK 2.00 per ordinary share corresponding to a total dividend of DKK
32.8 million in respect of the financial year 2012/13 (DKK 1.50 per ordinary share).
10. Intangible assets and property, plant and equipment
INTANGIBLE ASSETS
Software
and IT
systems
Trademark
rights
IT systems
under
development
Total
intangible
assets
Cost at 1 July 2011
200.9
8.1
13.8
222.8
Reclassification
Addition
Disposal
Cost at 30 June 2012
6.1
26.7
(0.1)
233.8
8.1
(6.1)
1.8
9.5
28.5
(0.1)
251.3
Reclassification
Addition
Disposal
Cost at 30 June 2013
9.5
8.7
(1.6)
250.4
8.1
(9.5)
-
8.7
(1.6)
258.4
Accumulated amortisation and impairment at 1 July 2011
(174.2)
(8.0)
-
(182.2)
Amortisation and impairment on disposals
Amortisation and impairment for the year
Accumulated amortisation and impairment at 30 June 2012
(13.3)
(187.5)
(0.1)
(8.1)
-
(13.4)
(195.6)
Amortisation and impairment on disposals
Amortisation and impairment for the year
Accumulated amortisation and impairment at 30 June 2013
0.8
(30.0)
(216.8)
(8.1)
-
0.8
(30.0)
(224.8)
Carrying amount at 30 June 2013
33.6
-
-
33.6
Carrying amount at 30 June 2012
46.2
-
9.5
55.7
Assetsunder construction
Total
property
plant &
equipment
DKK million
PROPERTY, PLANT AND EQUIPMENT
Leasehold
improvements
Equipment &
furniture
Cost at 1 July 2011
10.0
58.2
4.3
72.5
Reclassification
Addition
Disposal
Cost at 30 June 2012
10.0
4.3
8.3
(5.9)
64.9
(4.3)
1.7
1.7
10.0
(5.9)
76.6
Reclassification
Addition
Disposal
Cost at 30 June 2013
2.0
(5.0)
7.0
5.1
(3.1)
66.9
0.8
2.5
7.9
(8.1)
76.5
Accumulated depreciation and impairment at 1 July 2011
(6.2)
(44.9)
-
(51.1)
Depreciation and impairment on disposals
Depreciation and impairment for the year
Accumulated depreciation and impairment at 30 June 2012
(1.4)
(7.6)
4.2
(5.3)
(46.0)
-
4.2
(6.7)
(53.6)
Reclassification
Depreciation and impairment on disposals
Depreciation and impairment for the year
Accumulated depreciation and impairment at 30 June 2013
3.8
(1.2)
(5.0)
1.1
(9.6)
(54.5)
-
4.9
(10.8)
(59.6)
Carrying amount at 30 June 2013
2.0
12.4
2.5
16.9
Carrying amount at 30 June 2012
2.4
18.9
1.7
23.0
DKK million
84
IC COMPANYS • ANNUAL REPORT 2012/13 • PARENT FINANCIAL STATEMENTS
11. Investments in subsidiaries
DKK million
30 June 2013
30 June 2012
905.9
905.9
916.0
1,821.9
905.9
Write-downs at 1 July
(359.2)
(359.2)
Write-downs at 30 June
(359.2)
(359.2)
1,462.7
546.7
Cost at 1 July
Addition
Cost at 30 June
Total carrying amount
An overview of the Group structure may be found at the back of this Annual Report.
Income from investments in subsidiaries amounts to net DKK 83.8 million (income of DKK 217.5 million) and comprises dividends from
subsidiaries deducted write-downs of investments and receivables for the year.
An amount of DKK 14.2 million for 2012/13 was recognised in the income statement regarding prior-year write-downs of short-term
receivables from subsidiaries (write-down of DKK 3.8 million).
During the financial year 2012/13 the loan granted to ICe Companys Sweden Holding AB has been repaid and converted into investment
in the subsidiary.
12. Financial assets
Long-term
receivables
from
subsidiaries
Long-term
loans to
business
partners
Deposits, etc.
Total
financial
assets
33.0
0.4
3.5
36.9
Addition
Disposal
Cost at 30 June 2012
875.3
908.3
(0.2)
0.2
0.1
3.6
875.4
(0.2)
912.1
Addition
Disposal
Cost at 30 June 2013
(875.3)
33.0
(0.2)
-
0.1
3.7
0.1
(875.5)
36.7
0.4
-
-
0.4
Foreign currency translation adjustments for the year, etc.
Value adjustments at 30 June 2012
37.1
37.5
-
-
37.1
37.5
Foreign currency translation adjustments for the year, etc.
Disposal
Value adjustments at 30 June 2013
(40.3)
2.9
0.1
-
-
(40.3)
2.9
0.1
Carrying amount at 30 June 2013
33.1
-
3.7
36.8
Carrying amount at 30 June 2012
945.8
0.2
3.6
949.6
DKK million
Cost at 1 July 2011
Value adjustments at 1 July 2011
The Parent Company has not granted any loans for 2012/13.
During the financial year under review the Parent Company has converted receivables from a subsidiary corresponding to a carrying
amount of DKK 916 million into investment in the subsidiary.
All loans are interest-bearing.
No security has been received for the loans. The carrying amount of the financial assets corresponds to the fair value.
PARENT FINANCIAL STATEMENTS • ANNUAL REPORT 2012/13 • IC COMPANYS
85
13. Deferred tax
DKK million
30 June 2013
30 June 2012
Deferred tax at 1 July
15.5
48.3
Prior-year adjustments
Adjustments regarding changes in tax rates
Deferred tax on other comprehensive income
Change in deferred tax on profit/loss for the year
Total net deferred tax at 30 June
1.9
(1.0)
(1.0)
24.0
39.5
(5.2)
(21.1)
(6.5)
15.5
Recognised as follows:
Deferred tax
Total net deferred tax at 30 June
39.5
39.5
15.5
15.5
Breakdown of deferred tax at 30 June as follows:
Gross deferred tax
Unrecognised tax assets
Total net deferred tax at 30 June
45.5
(6.0)
39.5
21.5
(6.0)
15.5
Unrecognised tax assets relate to tax losses that are assessed not to be sufficiently likely to be utilised in the foreseeable future. The
unrecognised tax losses are not limited in time.
Changes to temporary differences during the year are as follows:
DKK million
Intangible assets
Property, plant and equipment
Receivables
Provisions
Other liabilities
Financial instruments
Tax losses
Unrecognised tax assets
Total
DKK million
Intangible assets
Property, plant and equipment
Receivables
Provisions
Other liabilities
Financial instruments
Tax losses
Unrecognised tax assets
Total
Net deferred
tax assets at
1 July 2012
6.6
14.1
0.3
(11.9)
12.4
(6.0)
15.5
Net deferred
tax assets at
1 July 2011
6.6
8.5
0.4
(0.2)
16.5
22.5
(6.0)
48.3
Recognised
Recognised
in profit
in other
for the year compr. income
(2.6)
(2.0)
31.7
9.6
(11.7)
25.0
Net deferred
tax assets at
30 June 2013
(1.0)
(1.0)
4.0
12.1
32.0
(3.3)
0.7
(6.0)
39.5
Recognised
Recognised
in profit
in other
for the year compr. income
Net deferred
tax assets at
30 June 2012
5.6
(0.1)
0.2
(7.3)
(10.1)
(11.7)
(21.1)
(21.1)
6.6
14.1
0.3
(11.9)
12.4
(6.0)
15.5
30 June 2013
30 June 2012
153.1
170.6
323.7
191.1
161.3
352.4
14. Inventories
DKK million
Finished goods and goods for resale
Goods in transit
Total inventories
Changes in inventory write-downs are as follows:
DKK million
30 June 2013
30 June 2012
Inventory write-downs at 1 July
27.3
35.6
Write-down for the year, addition
Write-down for the year, reversal
Total inventory write-downs
21.4
(36.9)
11.8
17.1
(25.4)
27.3
Inventories recognised at net realisable value amount to DKK 16.7 million at 30 June 2013 (DKK 34.8 million).
86
IC COMPANYS • ANNUAL REPORT 2012/13 • PARENT FINANCIAL STATEMENTS
15. Trade receivables
Breakdown of gross trade receivables is as follows:
DKK million
Not yet due
Due, 1-60 days
Due, 61-120 days
Due more than 120 days
Total gross trade receivables
30 June 2013
30 June 2012
14.8
7.2
3.9
25.9
22.0
10.3
1.0
0.9
34.2
The carrying amounts of trade receivables in all material respect correspond to their fair values.
In general, trade receivables do not carry interest until between 30 and 60 days after the invoice date. After this date, interest is charged
on the outstanding amount.
Change in write-downs regarding trade receivables are as follows:
DKK million
30 June 2013
30 June 2012
Write-downs 1 July
0.9
2.9
Foreign currency translation adjustments
Change in write-downs for the year
Realised loss for the year
Total write-downs
3.7
(0.8)
3.8
(1.3)
(0.7)
0.9
30 June 2013
30 June 2012
0.1
0.9
25.9
26.9
0.1
1.2
76.2
77.5
Please see note 16 to the consolidated financial statement.
16. Other receivables
DKK million
VAT
Sundry receivables
Unrealised gain on financial instruments
Total other receivables
All other receivables are due for payment within 1 year.
Management assesses that the carrying amount of receivables at 30 June 2013 in all material respect corresponds to the fair value, and
that the receivables are not subject to any particular credit risk.
17. Prepayments
DKK million
Collection samples
Advertising
Others
Total prepayments
30 June 2013
30 June 2012
4.1
0.4
6.7
11.2
5.0
1.2
5.8
12.0
18. Share capital
Information on the share capital distribution on number of shares, etc., is disclosed in note 19 to the consolidated financial statements.
PARENT FINANCIAL STATEMENTS • ANNUAL REPORT 2012/13 • IC COMPANYS
87
19. Current liabilities to credit institutions
The Parent Company’s total current liabilities to credit institutions comprise Danish and foreign overdraft facilities carrying interest at an
average floating rate of 2.09% p.a. (3.22% p.a.).
Current liabilities are repayable on demand, and the fair value therefore corresponds to the carrying amount. Current liabilities to credit
institutions are denominated in the below currencies as follows:
Stated in %
DKK
SEK
EUR
USD
PLN
CHF
CAD
GBP
Other currencies
Total
30 June 2013
30 June 2012
70
6
10
1
9
4
100
6
45
17
19
2
6
1
4
100
30 June 2013
30 June 2012
26.8
35.2
14.8
1.2
67.9
145.9
32.6
31.8
37.9
1.1
59.9
163.3
20. Other liabilities
DKK million
VAT, customs and tax deducted from income at source
Salaries, social security costs and holiday allowance payable
Unrealised loss on financial instruments
Severance payments
Other costs payable
Total other liabilities
In other costs payable an amount of DKK 25.5 million (DKK 34.6 million) has been recognised which is due after 12 months.
The carrying amount of amounts payable under other liabilities in all material respect corresponds to the fair value of the liabilities.
21. Provisions
DKK million
Provisions for
restructurings
Other
provisions
Total
provisions
Provisions at 1 July 2011
-
-
-
Provisions at 30 June 2012
-
-
-
Provisions for the year
Provisions at 30 June 2013
2.5
2.5
9.1
9.1
11.6
11.6
30 June 2013
30 June 2012
17.5
27.3
44.8
24.6
35.7
60.3
3.6
3.8
7.4
3.4
3.6
7.0
22. Operating leases
DKK million
Commitments under non-terminable operating leases are:
Store leases and other land and buildings
0-1 year
1-5 years
Total
Lease of equipment and furniture, etc.
0-1 year
1-5 years
Total
88
IC COMPANYS • ANNUAL REPORT 2012/13 • PARENT FINANCIAL STATEMENTS
The Parent Company leases properties under operating leases. The lease period is typically between 3-10 years with an option to extend
upon expiry.
In addition, the Parent Company leases cars and other operating equipment under operating leases. The lease period is typically between
3-5 years with an option to extend upon expiry.
An amount of DKK 23.1 million (DKK 26.2 million) relating to operating leases has been recognised in the income statement of the
Parent Company for 2012/13.
23. Other liabilities and contingent liabilities
DKK million
Guarantees and other collateral security in connection with subsidiaries
Other guarantees and collateral security
30 June 2013
30 June 2012
540.5
11.4
618.7
23.0
30 June 2013
30 June 2012
28.7
56.1
22.7
107.5
36.9
(45.9)
(4.1)
(13.1)
30 June 2013
30 June 2012
The Parent Company has issued letters of comfort for certain subsidiaries.
24. Change in working capital
DKK million
Change in inventories
Change in receivables
Change in current liabilities excluding tax
Total change in working capital
25. Securities
DKK million
Listed bonds
Total securities
100.9
100.9
-
The Group’s securities measured at fair value amounted to a nominal value of DKK 100 million of 0.71% Nykredit 21E 2018.
26. Cash and cash equivalents
DKK million
30 June 2013
30 June 2012
Cash
Credit institutions, current liabilities
0.8
(91.7)
(90.9)
34.3
(102.4)
(68.1)
Listed bonds
Cash and cash equivalents, cf. the statement of cash flows
100.9
10.0
(68.1)
27. Financial risks and derivative financial instruments
Please see note 31 to the consolidated financial statements.
28. Related party transactions
Please see note 32 to the consolidated financial statements.
29. Events after the reporting period
Please see note 33 to the consolidated financial statements.
PARENT FINANCIAL STATEMENTS • ANNUAL REPORT 2012/13 • IC COMPANYS
89
30. Approval of the announcement of the Annual Report
Please see note 34 to the consolidated financial statements.
31. Significant accounting policies
The accounting policies for the Parent Company are the same as for the Group with the exception of the items below, please see note 35
to the consolidated financial statements.
Other operating income and costs
Other operating income and costs comprise administration fees paid from subsidiaries to the Parent Company for their share of the
Group’s overheads.
Dividends from investments in subsidiaries in the parent financial statements
Dividends from investments in subsidiaries are recognised in the income statement for the financial year in which the dividend are
declared.
Investments in subsidiaries in the parent financial statements
Investments in subsidiaries are measured at cost. Where the recoverable amount is lower than cost, the investments are written down
to such lower value.
Receivables from subsidiaries in the parent financial statements
On initial recognition, receivables from subsidiaries in the parent financial statements are measured at fair value and subsequently at
amortised cost which usually corresponds to the nominal value less write-downs for bad debts.
90
IC COMPANYS • ANNUAL REPORT 2012/13 • PARENT FINANCIAL STATEMENTS
DEFINITION OF KEY RATIOS
Gross profit
Gross margin (%)
=
Revenue
EBITDA margin (%)
=
Operating profit before depreciation and amortisation
Revenue
EBIT margin (%)
=
Operating profit
Revenue
Return on equity (%)
=
Profit for the year
Average equity
Equity ratio (%)
=
Equity year-end
Total assets year-end
Average invested capital
=
Net average working capital plus intangible assets and property,
plant and equipment less provisions. Goodwill included represents
total purchased goodwill after write-down for impairment.
Return on invested capital (%)
=
Operating profit before goodwill write-down and special items
Average capital employed including goodwill
Net interest-bearing debt
=
Short-term and long-term liabilities to credit institutions
and lease debt less cash and cash equivalents
Financial gearing (%)
=
Net interest-bearing debt
Equity at year-end
Earnings per share
=
Profit attributable to shareholders of the Parent Company
Average number of shares excluding treasury shares
Diluted earnings per share
=
Profit attributable to shareholders of the Parent Company
Average number of shares excluding treasury shares, diluted
Diluted cash flow per share
=
Cash flow from operating activities
Average number of shares excluding treasury shares, diluted
Diluted net asset value per share
=
Equity at year-end excluding non-controlling interests
Number of shares at year-end excluding treasury shares, diluted
Diluted price / earnings
=
Market price per share at year-end
Diluted earnings per share
Same-store definition
=
A store measured on same-store data has an unchanged location, sales area and name
on shop for a full financial year of comparable sales data.
Inventory turnover
=
Cost of sales
Inventories at year-end
Days sales outstanding (DSO)
=
Trade receivables at year-end x 182
Wholesale revenue for H2
ANNUAL REPORT 2012/13 • IC COMPANYS
91
STATEMENTS
Statement by the Management
The Board of Directors and the Executive Board have today considered and approved the Annual Report of IC Companys A/S for the
financial year 1 July 2012 - 30 June 2013.
The Annual Report is prepared in accordance with International Financial Reporting Standards as adopted by the EU and Danish
disclosure requirements for listed companies.
In our opinion, the consolidated financial statements and the parent financial statements give a true and fair view of the Group’s and
the Parent Company’s financial position at 30 June 2013 and of the results of their operations and cash flows for the financial year 1
July 2012 - 30 June 2013 .
We believe that the management commentary contains a fair review of the development in the Group’s and Parent Company’s operations
and financial affairs, the financial performance for the year as well as the Parent Company’s financial position and the financial position
as a whole of the entities included in the consolidated financial statements, and describes the significant risks and uncertainty factors
that may affect the Group and the Parent Company.
We recommend the Annual Report for adoption at the Annual General Meeting.
Copenhagen, 22 August 2013
Executive Board:
MADS RYDER
Group Chief Executive Officer
CHRIS BIGLER
Chief Financial Officer
ANDERS CLEEMANN
Executive Vice President
PETER FABRIN
Executive Vice President
Board of Directors:
92
NIELS ERIK MARTINSEN
Chairman
HENRIK HEIDEBY
Deputy Chairman
OLE WENGEL
Deputy Chairman
ANDERS COLDING FRIIS
PER BANK
ANNETTE BRØNDHOLT SØRENSEN
IC COMPANYS • ANNUAL REPORT 2012/13
The independent auditor’s report
TO THE SHAREHOLDERS OF IC COMPANYS A/S
Report on the consolidated financial statements and parent financial statements
We have audited the consolidated financial statements and parent financial statements of IC Companys A/S for the financial year 1 July
2012 – 30 June 2013, which comprise the income statement, statement of comprehensive income, statement of financial position,
statement of changes in equity, cash flow statement and notes, including the accounting policies, for the Group as well as for the
Parent Company. The consolidated financial statements and parent financial statements are prepared in accordance with International
Financial Reporting Standards as adopted by the EU and Danish disclosure requirements for listed companies.
Management’s responsibility for the consolidated financial statements and parent financial statements
Management is responsible for the preparation of consolidated financial statements and parent financial statements that give a true and
fair view in accordance with International Financial Reporting Standards as adopted by the EU and Danish disclosure requirements for
listed companies and for such internal control as Management determines is necessary to enable the preparation and fair presentation
of consolidated financial statements and parent financial statements that are free from material misstatement, whether due to fraud
or error.
Auditor’s responsibility
Our responsibility is to express an opinion on the consolidated financial statements and parent financial statements based on our
audit. We conducted our audit in accordance with International Standards on Auditing and additional requirements under Danish audit
regulation. This requires that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about
whether the consolidated financial statements and parent financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial
statements and parent financial statements. The procedures selected depend on the auditor’s judgement, including the assessment
of the risks of material misstatements of the consolidated financial statements and parent financial statements, whether due to fraud
or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation of consolidated
financial statements and parent financial statements that give a true and fair view in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit
also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by
Management, as well as the overall presentation of the consolidated financial statements and parent financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Our audit has not resulted in any qualification
Opinion
In our opinion, the consolidated financial statements and parent financial statements give a true and fair view of the Group’s and the
Parent’s financial position at 30 June 2013, and of the results of their operations and cash flows for the financial year 1 July 2012 – 30
June 2013 in accordance with International Financial Reporting Standards as adopted by the EU and Danish disclosure requirements
for listed companies.
Statement on the management commentary
Pursuant to the Danish Financial Statements Act, we have read the management commentary. We have not performed any further
procedures in addition to the audit of the consolidated financial statements and parent financial statements.
On this basis, it is our opinion that the information provided in the management commentary is consistent with the consolidated financial
statements and parent financial statements.
Copenhagen, 22 August 2013
Deloitte
Statsautoriseret Revisionspartnerselskab
Kirsten Aaskov Mikkelsen
State Authorised Public Accountant
Lars Siggaard Hansen
State Authorised Public Accountant
ANNUAL REPORT 2012/13 • IC COMPANYS
93
GROUP STRUCTURE AT 30 JUNE 2013
Company
94
Share capital
1,000 units
Country
Currency
Wholly-owned subsidiary
IC Companys Danmark A/S
IC Companys Danmark Premium Brands A/S
Saint Tropez af 1993 A/S
By Malene Birger A/S
Raffinaderivej 10 A/S
IC Companys Norway AS
ICe Companys Sweden AB
Tiger of Sweden AB
ICe Companys Sweden Holding AB
Vingåker Factory Outlet AB
Carli Gry International Sweden AB
Peak Performance AB
Peak Performance Production AB
S T Sweden AB
By Malene Birger AB
IC Companys Finland Oy
IC Companys Holding & Distributie B.V.
IC Companys Nederland B.V.
IC Companys B.V.
IC Companys Belgium N.V.
IC Companys (UK) Ltd.
IC Companys Germany G.m.b.H.
IC Companys Verwaltungs G.m.b.H.
IC Companys Austria G.m.b.H.
IC Companys AG
IC Companys Spain S.A.
IC Companys France SARL
IC Companys Canada Inc.
IC Companys Poland Sp. Z o.o.
IC Companys Hungary Kft.
IC Companys Cz s.r.o.
IC Companys Hong Kong Ltd.
IC Companys (Shanghai) Ltd.
IC Companys Romania SRL
Peak Performance Italy SRL
Denmark
Denmark
Denmark
Denmark
Denmark
Norway
Sweden
Sweden
Sweden
Sweden
Sweden
Sweden
Sweden
Sweden
Sweden
Finland
Netherlands
Netherlands
Netherlands
Belgium
UK
Germany
Germany
Austria
Switzerland
Spain
France
Canada
Poland
Hungary
Czech Rep.
Hong Kong
China
Romania
Italy
DKK
DKK
DKK
DKK
DKK
NOK
SEK
SEK
SEK
SEK
SEK
SEK
SEK
SEK
SEK
EUR
EUR
EUR
EUR
EUR
GBP
EUR
EUR
EUR
CHF
EUR
EUR
CAD
PLN
HUF
CZK
HKD
CNY
ROL
EUR
18,000
500
500
500
500
9,450
10,000
501
50,000
200
100,000
2,645
400
100
100
384
2,269
16
23
3,305
4,350
26
1,432
413
3,101
1,400
457
2,200
126
10,546
2,000
10,000
5,289
1,317
10
51%-owned subsidiary
Designers Remix A/S
Denmark
DKK
500
IC COMPANYS • ANNUAL REPORT 2012/13
FINANCIAL HIGHLIGHTS AND
KEY RATIOS
QUARTERLY FOR 2012/13 (UNAUDITED)
DKK million
INCOME STATEMENT1)
Revenue
Gross profit
Operating profit/loss before depreciation and amortisation (EBITDA)
Operating profit/loss before depreciation and amortisation,
adjusted for non-recurring costs
Operating profit/loss (EBIT)
Net financials
Profit/loss before tax
Profit/loss for the quarter of continuing operations
Profit/loss for the quarter of discontinued operations
Profit/loss for the quarter
Comprehensive income
STATEMENT OF FINANCIAL POSITION
Total non-current assets
Total current assets
Assets classified as held-for-sale
Total assets
Share capital
Total equity
Total non-current liabilities
Total current liabilities
Liabilities concerning assets classified as held-for-sale
Total equity and liabilities
STATEMENT OF CASH FLOWS
Cash flow from operating activities
Cash flow from investing activities
Cash flow from investments in property, plant and equipment
Cash flows from financing activities
Net cash flow for the year
KEY RATIOS - CONTINUING OPERATIONS
Gross margin (%)
EBITDA margin (%)
EBITDA margin (%), adjusted for non-recurring costs
EBIT margin (%)
Return on equity (%)
Equity ratio (%)
Average invested capital including goodwill
Return on invested capital (%)
Net interest-bearing debt, end of quarter
Financial gearing (%)
SHARED BASED RATIOS*
Average number of shares excluding
treasury shares, diluted (thousands)
Share price, end of quarter, DKK
Earnings per share, DKK
Diluted earnings per share, DKK
Diluted cash flow per share, DKK
Diluted net asset value per share, DKK
Diluted price/earnings, DKK
EMPLOYEES
Number of employees, full-time equivalent at the end of the quarter
(continuing operations)
Q1
Q2
Q3
Q4
1,050.7
601.6
187.2
734.3
415.3
32.8
905.6
515.8
102.4
623.6
336.2
(73.8)
187.2
165.2
(1.8)
163.4
122.6
0.4
123.0
65.4
39.8
10.4
(5.5)
4.9
3.7
(12.1)
(8.4)
(7.2)
110.4
79.2
(2.1)
77.0
60.0
(16.4)
43.6
66.7
(35.9)
(97.7)
(3.7)
(101.4)
(74.8)
(77.6)
(152.4)
(128.7)
730.5
1,501.4
2,231.9
169.4
873.3
241.8
1,116.7
2,231.9
727.9
1,212.7
1,940.6
169.4
868.0
232.0
840.6
1,940.6
533.6
1,474.0
308.1
2,007.6
169.4
936.4
98.4
972.8
168.1
2,007.6
520.3
1,502.0
144.3
2,022.3
169.4
808.8
82.5
1,131.0
140.0
2,022.3
(182.1)
(6.7)
(13.4)
(24.6)
(213.4)
310.0
(25.9)
(16.7)
(9.7)
274.4
(77.7)
(10.9)
(7.0)
(88.6)
181.9
(22.8)
(21.1)
(0.5)
158.6
57.3
17.8
17.8
15.7
14.1
39.1
1,452.0
11.4
463.2
53.0
56.6
4.5
5.4
1.4
0.4
44.7
1,392.6
0.7
188.5
21.7
57.0
11.3
12.2
8.8
6.8
46.6
1,229.2
6.4
277.3
29.6
53.9
(11.8)
(5.8)
(15.7)
(9.0)
40.0
1,402.1
(7.0)
118.2
14.6
16,402.1
102.5
7.4
7.4
(11.2)
53.0
13.9
16,402.1
134.0
(0.5)
(0.5)
18.8
51.0
(268.0)
16,408.9
134.0
2.6
1.9
(4.7)
56.8
70.5
16,402.1
122.0
(9.3)
(9.3)
11.1
49.6
(13.1)
1,729
1,712
1,640
1,615
The comparative figures in the income statement have been adjusted in order to reflect that the brands Jackpot and Cottonfield have been separated
as discontinued operations.
* The effect of IC Companys’ programmes for share options and warrants has been included in the diluted values.
1)
The key ratios and share data have been calculated according to the recommendations in “Recommendations and Ratios 2010” issued by the Danish Society of
Financial Analysts. Please see definition of key ratios on page 91.
MANAGEMENT COMMENTARY • ANNUAL REPORT 2012/13 • IC COMPANYS
95
OTHER EXECUTIVES
NAME
POSITION
Frederik Aakerlund
Vice President, IT
Henrik Bunge
CEO, Peak Performance
Martin Christiansen
Vice President, Group Legal & Real Estate
Charlotte Egelund
CEO, By Malene Birger
Niels Eskildsen
CEO, Designers Remix
Hans-Peter Henriksen
CEO, Saint Tropez
Tine Knarreborg
Vice President, Finance
Christian Heireth Levorsen
Vice President, Logistics
Morten Linnet
Vice President, Group HR
Alexander Martensen-Larsen
Senior Vice President, Corporate Business Development
David Thunmarker
CEO, Tiger of Sweden
Charlotte Witmeur
Vice President, Sourcing
AUDITOR
Deloitte Statsautoriseret Revisionspartnerselskab
IC COMPANYS CORPORATE INFORMATION
Share capital
Number of shares
Share classes
ISIN code
Registration number
169,428,070
16,942,807
One class
DK0010221803
62816414
Reuter ticker
Bloomberg ticker
IC.CO
IC DC
Address
IC Companys A/S
10 Raffinaderivej
2300 København S
Denmark
Phone:
+45 3266 7788
Fax:
+45 3266 7703
E-mail:
hqreception@iccompanys.com
Homepage: www.iccompanys.com
ANNUAL REPORT 2012/13 • IC COMPANYS
97