Björn Borg AB (publ)

If you haven't been outside yet, it's absolutely beautiful. At least if you're in Stockholm, not sure about the other cities. But we're not here to talk about the weather. We're here to talk about our Q3 report for 2024. So welcome. And well, first things first, it's a record quarter. So never before have we sold more products, which of course makes us extremely happy. Another fantastic victory in the quarter is our own e-commerce that is continuing to having a fantastic development and it's growing 32% in the quarter. Very good. Looking into our channels. Ecom growing, as I said, retail, comparable stores, plus 1%. However, if we just compare retail versus retail, we're down. As you probably remember, since 2018, we've said we want to pull out from concept store on retail development and rather focus on outlets. So, of course, we've been closing store as contracts have been running out. And, of course, that's the reason why our retail numbers have been declining over the years. But, again, comparable stores were growing. wholesale our biggest channel is growing five percent and running through different markets of course we have a few super strong highlights of which one is the development in germany so plus 44 as you have recalled in august we talked about that we want to increase our growth we believe that we're ready to fuel growth even more and that we said that we want to grow at least 10 and one of the focus areas that we have said is to be successful in germany so we simply need to be bigger in a big market so a lot of effort has gone into the german market and here we see you know first signs of very very good progress so growing 44 in the quarters that's very good but um also the other smaller markets are developing very very nicely The Netherlands as well, which is our second biggest market. Looking at Sweden, on one hand, our own e-commerce is growing a lot in Sweden. However, the wholesale business is declining a bit. But overall, a very, very good momentum in terms of sales for the entire quarter. looking at product categories of course you know the victories that we have integrated footwear as you know our former licensed partner went bankrupt at the beginning of the year we took that over and we're seeing q3 that we're growing 29 percent so very very strong development and looking at our own ecom development for footwear it's actually up 114 percent So indication that there is a strong potential for further growth within footwear. Also, sports are powerless growing. So in the quarter, plus 25 percent year to date, plus 29 percent. And of course, for those of you that has been following us for a while, the whole, you know, walk to fame has been to move the brand from underwear to sports apparel and building a sports fashion brand or a sports band with a fashion edge and we've been very successful in doing that transition even though of course it's been taking a lot of time but we see now you know for the last 10 quarters that our sports apparel collection is continuing to grow looking at the margin a bit of a hit so a slight decline versus last year one reason is you know footwear West which short term has a lower margin also we've had a very strong momentum with a few of our really big European key accounts and they have a slightly higher discount and combining the two is leading to a slightly decline in our gross margin looking at operating profit however that's increasing to 42 million So yet again, we can see that we can and we have the ability to drive profitable growth. So growing top line without diluting profitability, even if the profit ratio is slightly lower than last year, still close to 15%. So overall, a good quarter. If we then look into where we want to go, just as a reminder, I think you all know it by now, but of course, our idea is to build an iconic sports fashion brand. That's where we're heading. and one of the trick of doing that of course is to really fuel all our investment is to building that no sports brand proposition and we are determined to do so and of course one of the things that we're doing is investing into the brand and short term of course that's gonna mean that the marketing investment will go up about mid and long term of course that will mean that the brand will be stronger and stronger and of course I would facilitate future growth and So just in the quarter, we actually invested $7 million more than last year, all of course into creating long-term growth opportunities. And looking at the brand, it's developing really, really well. So of course, we are asking 22,000 consumers every year. a bunch of different questions to be sure, of course, that our marketing investment is really, you know, creating attention and making sure that we are building and becoming stronger as a sports brand. And it's it's working. And of course, one of the signs is the very, very strong own e-commerce development. Looking at the the challenge. So of course, you know, we are market leader in men's underwear. We want to maintain that market leadership position. But we want to build not an underwear brand, a sports brand. Of course, that's a bit tricky. But when we are measuring also how the consumers review our underwear, we can see that we are maintaining our market leader position here. And at the same time, of course, gaining strength as a sports brand. And of course, that's reassuring and a sign that we're doing the right things when it comes to communication and building this sports fashion brand going forward. Looking at then the development, so as we said, you know, record quarter is absolutely fantastic. Year to date, of course, is also then a record. So we have, you know, strong growth momentum, but we want to grow even more. If we take out, you know, currency impact, actually, we are growing 10% and 10.4% actually, but without that, we're just shy of 9% growth in the quarter. But again, you know, a very, very strong quarter also, of course, given what is happening around us in the world. uh looking at the different countries as i said initially you know very strong momentum in germany uh sweden is declining a bit where wholesale or partners are declining whilst on the other hand our own e-commerce sweden is growing more than 30 percent netherlands you know our second biggest market is you know developing nicely finland you know belgium and denmark is also having a very very strong momentum And also we've seen a very strong recovery from the distributors that had a very tough last year, but also the beginning of the year was slightly challenging. And here, of course, Norway is our biggest distributor, and we have a good momentum across both Norway and UK and some of the other distributors. Looking at the channels, so wholesale plus 5%, that's our biggest challenge. What we see in Q3 is a strong development with our e-tailers. We have a number of pan-European e-tailers, Boost, Zalando, they're developing really, really, really good. Looking at own e-commerce, I said already, so exceptionally well-performed Q3 with growth of 32%. Also increased profitability, so 17% versus last year, 16%. So that channel is really doing well. Own retail, so declining 5%. However, of course, that's due to store closures. If you compare store by store, we're plus 1%. And distributors are plus 31%. So strong recovery from that side where the Norwegian distributor, again, as I said, is the biggest one. and looking at the online share so as you probably remember what we've said early on is that we believe that the brand has a lot of growth potential within the online environment so whether it's online marketing online communication own ecom marketplaces or e-tailers here's where we saw we have a great opportunity to grow even further And looking at this year, you know, currently it's 41% of our overall businesses coming from, you know, pure e-tailers, including own e-com. So we take a bigger and bigger share here. And of course, that group will most likely continue, even though, of course, we see that there is some changes in the landscape now. So it's a number of brick and mortar doors also doing fairly good. And of course, our idea is to have a very balanced footprint. We simply need to be where the consumers are. and where they want to go in and shop at Stadium, which we know they want, then we need to be there. And if they want to go into Boost, of course, we need to be at Boost as well. And of course, complementing them with a very strong own e-com platform. So I think the combination of the different channels is making us very, very strong. Looking at our categories, they're developing slightly differently in the quarter. So underwear, our biggest one is declining a bit. Looking at apparel, so plus 25%, so very, very good. So of course, now we are into 10th quarters of apparel growth. Looking at bags, declining, but they had a very good start of the year, so still we're growing year to date. And looking at footwear, so again, we integrated that. I think you followed us in the beginning of the year when our license partner went bankrupt. know we took that over we now integrate that into the business and we're growing 29 percent in the quarter and we can also see that the initial challenges with gross morning is actually picking up and looking ahead we believe that the footwear leisure you know is a category that actually will you know help our gross margin development and with that said of course The bottom line is also increasing, but I'm not going to be the one talking you through that. That instead will be Jens. So Jens, you fire away. I will do.

Thanks a lot, Henrik. And good morning to you all. And what a morning it is. In just a few hours, I will be jumping around, playing with my colleagues at our sports hour. And if you are on your way to Frösundavik, join us 11 o'clock today. Beatrice, I haven't talked about Beatrice in a long while. She's been out sick for a few days. She's now back. I'm so happy for you, Bea. And my very good friend Robin is back to training. So it's a fantastic morning. It's a good Friday. But back to the bottom line. So yeah, the gross margin we heard from Henrik already. A few things about slight drop in the quarter, however, due to the footwear and the larger key accounts taking a bigger share in the quarter. But still, we believe going forward that the footwear will actually contribute to our overall margin. So we have big hopes for this going forward. The operating profit, fantastic quarter, 42 million ahead of last year and also the years before. So good development on the bottom line. Net income even more strongly, let's say a development in 35 million versus 32 last year, same quarter. So good development on the profitability where we can see that the growth also comes with a good profit. If we look at the balance sheet items, we can see that our equity of assets or the solidity of the company is still strong, even though a slight dip in the Q3. However, we remain way ahead of our targets that we set for the company. The net debt is increasing slightly in the quarter, 139 million compared to 94 last year. This has to do with the footwear integration requiring some more capital here, but also a slightly higher dividend earlier in the year. Another KPI that we look at internally is of course the working capital and we compare that to a 12-month rolling gross sales and here we are declining which is a good thing obviously for us as we keep good track of that. We're just below 20% and this is despite the fact that we took over footwear that requires more working capital. We have some overbuys in the warehouse to be sure that we have good levels of inventory But despite all that, we are keeping the KPI on a good level. So I'm very happy to see that. So strong balance sheet as we close Q3. And with that short words from me, Henrik, I'll leave it to you to close this fantastic Friday.

So first, of course, as we've said, the Bjornborg brand is continuing to develop well. That's our biggest asset. That's what sets us apart. That's what we are fully owning ourselves. So, of course, very important to continue to invest. Secondly, it is a record quarter. Yes, we always want to grow even more, especially myself, but still a record quarter. We see a strong momentum across all channels. I think highlighting e-com once again, so 32% in the quarter is clearly significant. way better than almost all of our competitors and those we compare ourselves against. Last, of course, looking at the categories. As I've said many years ago, if you want to look at our development, watch out for our sports apparel development. When we get traction there, that's when you can really see that the brand is getting slowly to where it needs to be as a sports brand. So sports apparel growing 25% in the quarter. Year-to-date, 29%. footwear is growing 29 percent in the court and also a very very strong development so uh that those are the three main key takeaways i think um if i would just give you one sort of victory from q3 i think it has to be the development in germany so we really need to be big in a big market we need to get some tractions in a new market and um 44% up in Germany, I think is absolutely fantastic. We're working together with German e-tailers. We're investing into our own e-com in Germany that is actually growing 48%. And we're also slowly building a strong community in Hamburg with physical space, with partners, with individuals. And we believe really that building the brand from one city will be the key to fuel further growth in the German market. We also have this last slide. Again, looking back, I think we now can conclude that we have shown profitable growth and a solid development since a long, long, long time. It has been a bit of a dividend case. Of course, we've had high and stable dividends. Looking back... It's a strong team that has been on board. And of course, we're really, really dedicated. We also, of course, have invested ourselves heavily into this. So we want it to go good. And I think also with the growth initiatives that we now have in place and we have all the ingredients to to turn this from, you know, a mid-high single-digit growth case to a double-digit growth case. And that's really the ambition going forward. And clearly, just to highlight, what you should look for then is sports apparel that needs to grow, of course, footwear, of course, but also bags. Underwear we need to maintain, but that's not really where we see double-digit growth. And in terms of market, it's definitely Germany. Yes, we need to continue the good development in other markets, but Germany is really where we need to get a strong foothold in. We also are looking into the US, but that's fairly slow. We're a bit careful there. But Germany is really where we want to invest our money into. And looking at channels, we continue to believe that we have a very relevant place online. So meaning investing in own e-com, investing in marketplaces and, of course, in e-tailers. And, of course, the combination of those, we believe, will enable the brand then to lift to a new level when it comes to sales growth. So I think with that said, good to be here. I hope you have a fantastic Friday. As Jan said, join us for the Sports Hour. Training is going to make your day a bit better. You live a bit longer. And remember, train to have fun. Train so you can take that beer later today, not necessarily to do that triathlon on a Saturday. So with that said, I'm sure that Hjalmar has a bunch of questions for me as well. So Hjalmar, jump on board. Fire away.