The management team in Tiger of Sweden is focusing on executing the brand's new strategy including increased digitalisation as well as a strengthening of the brand and distribution control in key markets in the Nordic region which, e.g., has led to a termination of the agency agreements in Norway and Finland.

By Malene Birger has, simultaneously with an enhanced cost control, also implemented a significant optimisation of the production area and the organisation in general, which will lead to substantial cost savings as of the financial year 2019/20. At the same time, By Malene Birger is focusing on increasing the digitalisation of its business, in particular in e-commerce, as quickly as possible.

The transformation of IC Group is being executed faster and more efficiently than planned which, among others, will lead to a reduction of the originally expected non-recurring costs for both the financial years 2018/19 and 2019/20 as well as the current running costs for IC Group in 2019/20. As communicated in Company Announcement no. 6/2019, IC Group has divested its logistics function to Scan Global Logistics Group with an expected final closing date as at 30 June 2019.

The expectations for the financial year 2018/19 for the Group's continuing operations before non-recurring costs, which were announced on 8 May 2019 (Company Announcement no. 6/2019), are unchanged.

Financial performance for Q1-Q3

Revenue of the Group's continuing operations for Q1-Q3 2018/19 amounted to DKK 827 million (DKK 931 million) corresponding to a reduction of 11.2% (9.0% measured in local currency) driven by both the wholesale channel as well as the retail channel. The operating profit before central functions, etc  and non-recurring costs for Q1-Q3 2018/19 amounted to DKK 22 million (DKK 79 million) corresponding to an EBIT margin of 2.7% (8.5%). The Group generated an operating loss for Q1-Q3 2018/19 of DKK 13 million corresponding to an negative EBIT margin of 1.6% (positive EBIT margin of 10.8%).

Outlook for the financial year 2018/19

The expectations for the financial year 2018/19, which were announced on 8 May 2019 (Company Announcement no. 6/2019), are unchanged and are represented in their full length below.

Outlook for the Group's continuing operations before non-recurring costs for the financial year 2018/19

For the Group's continuing operations, which comprise Tiger of Sweden, By Malene Birger and the reporting segment "Central functions", a minor revenue reduction measured in local currency is expected for the financial year 2018/19 compared to the year before. The EBIT margin is expected to be realized at a level of 1-2% prior to non-recurring costs in respect of the transformation of IC Group.

In Tiger of Sweden, a minor revenue reduction (measured in local currency) and a moderate decline in nominal earnings are expected. In By Malene Birger, a moderate revenue reduction (measured in local currency) and a substantial decline in nominal earnings are expected.
 
The line item "Central functions" will be negative as it will be affected negatively by changed allocation principles in respect of costs in the corporate functions as well as idle costs in respect of the head office after the divestment of Peak Performance. Combined, these amount to approx. DKK 30 million.

Investments for the Group's continuing operations for the financial year 2018/19 are expected to amount to approx. 2% of the annual revenue.

Expectations for non-recurring costs for the financial years 2018/19 and 2019/20

Non-recurring costs relating to the transformation of IC Group are expected to amount to approx. DKK 45 million in total of which approx. DKK 30 million is expected to be recognised in the financial year 2018/19 and approx. DKK 15 million is expected to be recognised in the financial year 2019/20. When including the accounting loss attributable to the divestment of the Group's logistics function (approx. DKK 20 million), the non-recurring costs are expected to amount to approx. DKK 65 million in total of which DKK 50 million relates to the financial year 2018/19.

The exact amounts as well as the distribution between the individual financial years will still depend on the implementation of the transformation. As of the financial year 2020/21, the annual savings are still expected to be in the region of DKK 25 million.

Copenhagen, 14 May 2019

IC Group A/S

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.