Annual Report for the financial year 1 January 2006 – 31 December 2006

Odd Molly International AB, Stockholm 2007-03-05Significant events in the financial year

In 2006 Odd Molly has enjoyed exeptional growth due to the strong demand for the company´s products, particularly on the international market. Odd Molly is represented in 23 countries and by more than 1,000 shops globally. Odd Molly applies great care in selected shops, and the product line can be found in many of the foremost departed stores in the world.

The major part of the sales takes place in Europe with an emphasis on the nordic market, but there is a growth in sales on important future markets such as the USA, Australia and Japan.

Odd Molly is displaying its collections at exhibitions world-wide. The exhibitions form a basis of sales to customers, marketing and meetings with existing and potential agents and distributors.

Odd Molly is subjected to great media interest in Sweden as well as abroad, which, in combination with its attractive product line, is the reason for enjoying growth despite limited marketing efforts.

In August 2006 the company had its first major international fashion show in Stockholm, a break-through attracting client as well as media interest.

Net Sales and results
Sales in 2006 amounted to SEK 54,5 million, an increase of 158 per cent compared to last year. The gross margin increased by 176 % to SEK 29,9 million. The gross margin for the year improved from 50 to 55 %.

The organization and administration of the company was improved in 2006 to cope with the strong increase in the operations. The number of employees increased from 8 to 15. All employees are stationed at the Stockholm head office. Odd Molly has during the year procured and implemented a new Microsoft business system. Other major expense items include sales commission and exhibition expenses.

Operating profits increased significantly to SEK 4,932 thousand compared to SEK 890 thousand in 2005; an increase in the operating margin from 4,2 % to 9,1 %. The company´s financial position is strong and well adapted to a continued rapid expansion. The company´s balance sheet total amounted to SEK 10,512 thousand compared to SEK 4,702 thousand in 2005. Adjusted equity amounted to SEK 6,046 thousand (SEK 2,754 last year), an equity ratio of 57,5 % (58,6 % last year).

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Odd Molly International AB (“Company” or “Odd Molly”) commenced its operations in the spring of 2002 and carries on design, production and sale of clothing and accessories primarily under the trademark Odd Molly. The products are sold to shops through local agents or distributors in the respective countries. Since the start, Odd Molly has in a short time successfully established itself as an international brand in the upper medium-price segment of women´s fashion.