PRESS RELEASE
Stockholm, February 18, 2011
Stable development, good profitability and financial strengthJanuary 1 – December 31, 2010
· Net sales increased by 8 percent to SEK 355.6 million (329.8)
· The gross profit margin rose to 56.6 percent (54.0)
· Operating profit amounted to SEK 50.7 million (59.2), corresponding to an operating margin of 14.3 percent (17.9). Excluding expenses of SEK 4.2 million for the listing change in June, operating profit was SEK 54.9 million and the operating margin was 15.4 percent
· Net profit amounted to SEK 36.2 million (43.0). The net margin was 10.2 percent (13.1)
· Earnings per share amounted to SEK 6.30 (7.48)
October 1 – December 31, 2010
· Net sales increased by 5 percent to SEK 56.1 million (53.5)
· The gross profit margin was 53.3 percent (53.1)
· Operating profit amounted to SEK 0.4 million (5.0), corresponding to an operating margin of 0.8 percent (9.4)
· Net profit amounted to SEK 1.4 million (2.7)
· Earnings per share were SEK 0.24 (0.47)
· The Board of Directors will propose to the Annual General Meeting a dividend of SEK 4.50 (3.50) per share, corresponding to 71.5 percent (46.7) of net profit
Events during the report period
· An outlet was opened in Barkarby, outside Stockholm, in December
· The order value for the 2011 spring and summer collections was SEK 165 million (180)
Comment from the CEO
Operating profit amounted to SEK 51 million despite major investments and listing change during the year
The fourth quarter met our expectations, which meant a sales increase of 5 percent compared with 2009 and a gross margin in line with the previous year.
We closed the full-year with a sales increase of 8 percent to about SEK 356 million. During the year we completed several major investments for the future that will be charged against earnings in the short term, despite which we reported an operating margin of just over 14 percent for the full-year.
The move to the big list (NASDAQ OMX Stockholm) in June means that more people can invest in the Odd Molly share. At the same time the process further improves our internal routines and procedures – and means a seal of approval. In 2010 we opened two of our own concept stores in Los Angeles and Copenhagen as well as two outlets outside Stockholm and Göteborg. We launched the new Post Fire Dew men’s collection, the first shipments of which were sent to retailers in fall 2010.
We are proud of having delivered a strong result – and of the stability and strength of the company. Odd Molly’s financial position remains very strong, with cash reserves of SEK 89 million and an equity/assets ratio of 81 percent.
Odd Molly’s collections
Operationally, 2010 was a good year, but a tough one, marking the first time in Odd Molly’s history that its order value had decreased. A number of factors explain why the order value for spring/summer 2011, which was presented in the fourth quarter, did not reach expectations. The order value amounted to about SEK 165 million, compared with about SEK 180 million for the previous year’s collections.
We have identified the reasons for the trend reversal and have taken a number of measures, mainly redistributions in the composition and pricing of the collections, to get back to a mix with a higher share of volume products. We have divided up our product range into three different parts, where we introduce Classic – a limited line with a number of best-selling pieces from previous collections – and what we call Gold – pieces with a more distinctive design and lots of hand-sewn details. The most important, however, is the bigger Odd Molly collection of commercial pieces, which we are constantly trying to refine without sacrificing that distinctive Odd Molly touch.
In addition to the collections, we are also working on improving our partnerships with agents and retailers around the world.
Odd Molly and the world
During the year we saw the prices of cotton, silk and other raw materials increase at the same time that our suppliers’ labor costs have risen, which has raised our purchasing prices. Our aim is to be able to handle this without it affecting our gross margins, partly through certain price increases and partly through the changes in the collection’s composition. Odd Molly’s clothing should still fall in the medium price range with prices “within reach.”
Odd Molly continuously monitors how the brand is represented around the world and signed an agreement during the year with a new distributor in Russia. The big sales meeting where we presented the fall/winter 2011 collections was recently concluded and orders are arriving. Post Fire Dew recently had its second runway show at Berns, and Odd Molly was shown again at New York Fashion Week. It is still too early to say anything about sales of the collections.
Outlook
In 2011 we will continue in our efforts to combine creativity and saleability, while further strengthening our brand through innovative sales work and marketing. At the same time we are working through a structured process to ensure consistently high quality and efficiency in operations. Our desire is to continuously improve in every respect, guided by our core values: Love, Courage and Integrity.
Christina Tillman, President and CEO
Please find the full report in the attached pdf-file.About Odd Molly
Odd Molly is a Swedish company that designs, markets and sells fashion. Odd Molly products are sold through around 1,300 retailers in around 40 countries around the world. In addition, Odd Molly currently has three concept stores in Stockholm, Los Angeles and Copenhagen as well as two outlets in Kungsbacka and Barkaby. Odd Molly has 57 employees. The company’s profitable growth is the result of creative design, consistent branding and a business model that facilitates expansion with limited capital requirements and minimal inventory risk. Odd Molly’s share is traded as of June 21, 2010 on NASDAQ OMX Stockholm.
For further information, please contact:
Christina Tillman, CEO of Odd Molly, phone: +46-8-522 28 502 or mobile: +46-733-10 60 00
Odd Molly International AB (Publ)
Kornhamnstorg 6
SE-111 27 STOCKHOLM, Sweden
Phone: +46 8 522 28 500
www.oddmolly.com (http://www.oddmolly.com/)
Press photos can be downloaded from Odd Molly’s website at www.oddmolly.com under “press”. Odd Molly also produces a newsletter, which reports on its day-to-day operations. To subscribe, go to www.oddmolly.com (http://www.oddmolly.com) and click “sign up for our newsletter.”