Our ambition is to provide investors and other stakeholders with relevant information about Odd Molly
Odd Molly International AB (publ)
Stockholm, Sweden, February 19, 2014
A year distinguished by changes to increase control and long-term growth
January 1 - December 31, 2013
· Net sales amounted to SEK 228.2 million (223.7).
· The gross profit margin was 54.5 percent (53.6).
· The operating loss was SEK -24.1 million (0.2) and was charged with one-time expenses of about SEK 12.3 million.
· The net loss was SEK -19.4 million (3.0).
· Earnings per share amounted to SEK -3.38 (0.52).
October 1 - December 31, 2013
· Net sales amounted to SEK 47.3 million (34.3).
· The gross profit margin was 52.7 percent (45.4).
· The operating loss was SEK -14.1 million (-7.0) and was charged with one-time expenses of about SEK 7.6 million.
· The net loss was SEK -11.4 million (-2.9).
· Earnings per share amounted to SEK -1.98 (-0.50).
· The Board of Directors proposes to the Annual General Meeting that no dividend be paid for the financial year 2013. The dividend for financial year 2012 was SEK 1.50 per share.
Events during the quarter
· Odd Molly decided during the quarter to take over sales responsibility for the Swedish market. The official takeover was through an acquisition in January 2014.
· A number of changes were made during the quarter to adapt the organization to future business investments.
Comment from the CEO
When I joined Odd Molly two years ago, I knew we had to make changes to see change. That requires an energetic response and financial maneuverability - both of which we have. Thanks to a strong balance sheet, Odd Molly is in a favorable situation where we can do what has to be done to ensure our long-term success. Last year was one of major strategic decisions and actions. As a result, earnings for 2013 were charged with significant transitional costs that will lead to future opportunities. Last year also saw the results of the weak order values we reported in 2012, whereas the fine increase of order value during the fall of 2013 will have an impact on revenues in 2014. The fourth quarter was also highlighted - in terms of both activities and results - by further steps in Odd Molly’s process of change.
Collection - new merchandise and sales focus
Important category development work has resulted in clearly improved order values (spring/summer 2014 saw an increase of 25 percent), good retail sales and strong performance in our own sales channels - especially Odd Molly’s web shop. We are selling more high-volume products and have reduced the average price but increased the average order - exactly as planned. In January, we began promoting the 2014 fall/winter collection and feel optimistic about the future. With a category strategy that has proven itself, we will continue to fine-tune the collections and how we work with sourcing and sales over the course of the year.
Organization - targeted focus
During the quarter we implemented a number of changes to adapt the organization to future business investments with a focus on design, sales, and closeness to customers. Certain services have been modified and others disappeared. Such change obviously affects the entire organization, but these measures are necessary to make Odd Molly more competitive.
Distribution - customer focus
In an effort to strengthen growth prospects, we decided during the fourth quarter to take over sales responsibility for the Swedish market. This is a strategic decision, and a big one, which gives Odd Molly greater control over the supply chain and brings us closer to the customer. We feel this is vital to our success. Having made this decision, we now have responsibility for sales throughout Scandinavia - our closest and most important market.
Greater control over distribution in Scandinavia (we terminated the agency agreements in Norway and Denmark earlier in the year) also means greater flexibility to develop the business. With a higher share of consumer sales through our own channels, we believe we can eventually achieve more consistency over the course of the year.
Summation - focus on profitable long-term growth
In summary, we implemented several changes and took important steps in 2013 - steps that entailed costs last year but will bear fruit going forward. Expenses related to these changes and adjustments in certain valuation principles total about SEK 12 million.
Regardless of all the changes, Odd Molly’s foundation remains firmly in place: a distinctive design concept based on colors, patterns and craftsmanship - always with an attitude and a twist.
Anna Attemark, CEO
Please see the full report in the attached pdf file.