Profit after tax increased by 29%

Transcription

1 H E M T E X A B C O R P. R E G. N O HEMTEX THIRD-QUARTER REPORT, MAY 1, 2006 JANUARY 31, 2007 Profit after tax increased by 29% All figures pertain to the Group unless otherwise stated. Comparisons in the interim report refer to the corresponding period in the 2005/2006 fiscal year, unless otherwise stated. This report is prepared in accordance with International Financial Reporting Standards (IFRS). Nine months (May 2006 January 2007) Net sales increased to SEK 1,147.8 M (904.1), up 27% from the year-earlier period. The increase for the Group s comparable stores was 1% (12). Third quarter (November 2006 January 2007) Net sales rose to SEK M (378.2), up 33% from the year-earlier period. Sales for the Group s comparable stores decreased by 1% (+14). Profit after tax totaled SEK M (112.8). Earnings per share before dilution rose to SEK 5.21 (4.15). Profit after tax amounted to SEK 80.4 M (60.1). Earnings per share before dilution rose to SEK 2.87 (2.14). The Group acquired 29 franchise stores in the Hemtex chain and established 29 new stores. The Group acquired 12 franchise stores in the Hemtex chain and established 13 new stores. GROUP EARNINGS TREND (CONDENSED) 3 months 9 months Rolling months Nov Jan May Jan Feb-Jan May-April 2005/ / / / / /06 Operating income, SEK M , , ,178.3 Operating profit, SEK M Profit after financial items, SEK M Net profit for the period, SEK M Operating margin, % Earnings per share before dilution, SEK Hemtex conducts retail operations involving interior decorating products for the home and for public environments. Hemtex s product areas are Bedroom, Bathroom, Windows and Dining & Entertaining. In March 2007, Hemtex had a total of 183 stores; of which 136 were in Sweden, 32 in Finland, nine in Denmark and six in Norway. 160 of the stores are currently owned by the Hemtex Group and 23 by franchisees. All stores outside Sweden are owned by the Hemtex Group. The Parent Company Hemtex AB is responsible for concept development, marketing, business management, control functions and product supply to Hemtex stores. In addition to the Parent Company Hemtex AB, the Hemtex Group includes the wholly owned subsidiaries Hemtex Oy (Finland), Hemtex A/S (Denmark), Hemtex AS (Norway) plus seven dormant companies.

2 The Hemtex Group s favorable business trend continues. For the interim period, May 2006 January 2007, net sales rose by 27% to SEK 1,147.8 M and operating profit by 29% to SEK M. Hemtex s store expansion program remains successful and growth is achieved in combination with a strong increase in the gross margin. SIGNIFICANT EVENTS Continued earnings improvement The Hemtex Group s operating profit improved during the interim period, May 2006 January 2007, to SEK M, compared with SEK M in the year-earlier period. The improvement in profit was mainly due to an increase in net sales and strong growth in the gross margin, while a reduction in sales in comparable stores had a negative impact on earnings. Favorable exchange rate movements and an increased proportion of direct purchases from producers resulted in a reduction in purchasing costs. Acquisition of franchise stores also contributed positively to the Group s earnings trend. Market Despite the fact that sales growth in comparable stores in Sweden declined toward the end of the year, Hemtex strengthened its position as the leading player in the market. The most recent figures from market research company GfK show that the total home-textile market in Sweden grew by 3.6% to SEK 5.3 billion in value during the 2006 calendar year. Market performance was positive during the first six months of the year, while there was zero growth during the second six months. During the year of 2006, Hemtex s market share has increased to 31.1%, an increase of 5.5 percentage points compared with During the second six months of the year, Hemtex market share amounted to 31.7%, the highest level to date. The market share in Finland was slightly more than 8%, according to Hemtex s calculations. Hemtex estimates its share of the Danish market at slightly more than 2%. The store establishments in Norway have been received positively, in accordance with the company s expectations. Hemtex estimates that its total share of the Nordic home textile market amounts to about 9%. Hemtex s goal is to achieve a market share of at least 15% in the Nordic region. New stores During the third quarter, November January 2007, the Group opened 13 new stores. In total, the Group opened 29 new stores during the reporting period, of which 13 in Sweden, 10 in Finland, five in Norway and one in Denmark. In Sweden, new stores were opened in Gothenburg (Ale Torg, Bäckebol and Södra Högsbo), Bålsta, Charlottenberg, Happaranda, Hyllinge, Karlskrona, Karlskoga, Ludvika, Stockholm (Stureplan and Tumba) and Vetlanda. In Finland, stores were opened in Helsinki (Vuosaari and Malmi), Kotka, Lempäälä, Riihimäki (2), Rovaniemi, Salo, Hämeenlinna and Vantaa. In Norway, stores were opened in Oslo (House of Oslo and Torggatan), Moss, Skien and Tönsberg. In Denmark, a store was opened on Fredriksborggade. A franchise store was opened in Katrineholm, Sweden. During the fourth quarter, February April 2007, four new stores will be established, which means that Hemtex will establish 34 stores during the 2006/2007 fiscal year. Acquisitions In November 2006, Hemtex acquired the remaining 12 stores from the group of 24 stores, as announced in earlier reports and in the press release of June 14, The 24 franchise stores were acquired during the period August November In addition, a further two franchise stores were acquired during the same period. The acquired stores are located in Avesta, Boden, Borlänge, Borås (2), Falkenberg, Falun, Gävle (2), Helsingborg (2), Jönköping (2), Karlstad (2), Luleå (2), Stockholm (Kista, Nacka, Sickla and Sollentuna), Uppsala (2), Varberg, Värnamo and Ängelholm. These 26 stores have total annual sales of approximately SEK 280 M. Since Hemtex AB already supplied the majority of the goods sold by these stores, the Group s sales will increase by about half of the annual sales of the acquired stores. The purchase consideration for the 26 stores totaled SEK M. The net assets of the stores amounted to SEK 56.1 M, which resulted in goodwill of SEK M. Apart from goodwill and rental rights, no intangible fixed assets within the acquisition have been identified. The goodwill is attributable to

3 the estimated profit from the store operations and the favorable impact the store operations will have on the Hemtex Group. These 26 stores contributed sales of SEK 53.9 M and operating profit of SEK 15.0 during the most recent quarter. During the reporting period, sales increased by SEK 64.2 M and operating profit by SEK 18.1 M. During the first quarter, May 2006 July 2006, three franchise stores were acquired, in Norrköping, Kristianstad and Mariestad. These three stores increased Hemtex s sales by SEK 5.8 M and operating profit by SEK 1.8 M during the most recent quarter. During the reporting period, sales increased by SEK 13.3 M and operating profit by SEK 2.8 M. Additional details regarding these three acquisitions were provided in the interim report for the period from May 2006 to July 2006 published on September 5, COMMENTS ON THE INCOME STATEMENT AND BALANCE SHEET Net sales Consolidated net sales comprise consumer retail sales via own stores and wholesale sales to franchise stores in the Hemtex chain. The Group s total net sales during the third quarter increased by 32.5% (55.0%) to SEK M (378.2). Of the sales increase during the third quarter, 13.9 percentage points were attributable to acquisitions, while 18.6 percentage points corresponded to organic growth. At unchanged exchange rates, the increase was 33.3%. During the reporting period, net sales increased by 27.0% (44.1) to SEK 1,147.8 M (904.1). Organic growth accounted for 18.3 percentage points and acquired franchise stores for the remaining 8.7 percentage points. At unchanged exchange rates, the increase was 27.5%. The sales increase during the first nine months of the fiscal year resulted from continuing favorable demand for the Group s products and the contribution made by newly established and acquired stores. Of the Group s net sales, Finnish operations accounted for SEK M (109.2), operations in Denmark for SEK 65.4 M (64.1) and operations in Norway for SEK 17.4 M (-). Other operating income amounted to SEK 12.5 M (14.3) and consisted primarily of franchise fees and bonus payments from suppliers and collaborator partners. During the most recent 12-month period, Hemtex s net sales at the consumer level (including franchise stores) increased in all markets by 19% to SEK 1,559 M (1,306). During the third quarter, consolidated sales in comparable stores decreased by 1%, compared with an increase of 14% for the year-earlier period. This was largely due to the unusually warm weather during the period, which had a negative influence on sales of down quilts and pillows. This was especially significant in Denmark, which has the largest proportion of sales of down quilts and pillows in the market. During the reporting period, sales increased by 1% (12). In Sweden, sales in comparable stores increased by 0% (18) during the most recent quarter and 2% (14) during the reported period. In Finland, the total sales increase was 42% for the reporting period. Sales in comparable stores increased by 1% (7) during the third quarter and by 0% (13) during the reporting period. In Denmark, sales in comparable stores declined by 7%, during the most recent quarter, compared with an increase of 4% in the year-earlier period. During the reporting period, sales in comparable stores declined by 6%, compared with an increase of 3% for the year-earlier period. In Norway, there were six stores at the end of the third quarter. The new establishments in the Norwegian market has stated up well, and continued expansion in this market is a high priority. Sales growth, comparable stores 3 months Nov-Jan 9 months May-Jan 12 months Feb-Jan Group -1% 1% 3% Sweden 0% 2% 5% Finland 1% 0% 0% Denmark -7% -6% -4% Consolidated sales for comparable stores during the most recent 12-month period amounted to SEK 36,600 per square meter, calculated on the basis of average floor space of 265 square meters. Earnings Consolidated gross profit (sales revenues less cost of goods sold) increased by 41.9% to SEK M (420.4). The gross profit margin rose to 52.0% (46.5), which was primarily due to an increased share of retail sales in the Group, favorable exchange-rate trends and lower purchase prices as a result of the company s efforts to improve purchasing processes. The background to the increase in retail sales within the Group is the establishment of new stores and the acquisition of franchise stores. The proportion of wholesale sales to franchise stores thus decreased. One aim of the purchasing work is to increase the share of goods purchased directly from producers to 80%. The proportion of direct purchases is currently slightly more than H e m t e x A B o r g n r

4 60%, which is 10 percentage points higher than in the corresponding period of the preceding year. As a result of the change in the value of outstanding forward contracts, in accordance with IAS 39, gross profit increased by SEK 2.0 M (decrease: 1.6) during the reporting period. Operating expenses, excluding goods for resale and depreciation and impairment losses on tangible and intangible assets, amounted to SEK M (261.9). As a percentage of sales, these expenses amounted to 33.7% (29.0). The increase in costs as a percentage of sales, which was planned, was attributable to store expansion and was more than offset by the increase in the gross margin for newly opened and acquired stores. During the first quarter, nonrecurring costs were booked in conjunction with a change of logistics partner. There were no such costs during the third quarter. Depreciation and impairment of tangible and intangible fixed assets were distributed as follows: rental rights by SEK 3.5 M (2.6) and other depreciation by SEK 15.5 M (12.5). Operating profit rose to SEK M (157.7), corresponding to an operating margin of 17.7% (17.4). An operating profit was reported in all markets except Norway, where the Hemtex Group s costs for establishing operations had a negative effect on earnings. Earnings for each market are presented in the segment reporting on page 9 of this report. Consolidated pretax profit amounted to SEK M (157.0), resulting in a profit margin of 17.7% (17.4). After-tax profit amounted to SEK M (112.8). Investments The level of investment remained high during the period, due to the expansion in the number of Group stores. During the reporting period, 29 stores were acquired from franchisees, compared with 14 in the corresponding period in the yearearlier period. The Group s net investments affecting liquidity during the reporting period totaled SEK M (94.4), of which SEK M (68.9) pertained to store acquisitions and SEK 57.2 M (25.5) to other investments, which primarily consisted of investments in store renovations and new construction. Goodwill investments during the reporting period amounted to SEK M (41.6). Cash flow Cash flow from operating activities rose by SEK 82.0 M to SEK M. Cash flow after investments during the reporting period was a negative SEK 2.2 M (pos: 48.8), due to the high rate of acquisition and establishment during the Group s second and third quarters. Seasonal fluctuations As with other segments of the home furnishing industry, Hemtex s net sales, operating profit and cash flow fluctuate over the year. This is because costs are relatively constant, while net sales vary. This normally means that the Group s strongest earnings are generated during the second and third fiscal quarters, meaning the period from August to January. However, Hemtex aims to reduce seasonal fluctuations through sales activities, changes in the product mix and by adapting staffing in the stores. Financial position At January 31, 2007, cash and cash equivalents amounted to SEK M (150.6). During the most recent 12-month period, net debt, defined as interest-bearing debt less cash and cash equivalents, increased by SEK M to SEK negative 26.8 M (neg 131.6) at January 31, The net debt/equity ratio was negative 6% (neg: 35) at January 31, The equity/assets ratio decreased to 61%, compared with 66% at the same date in the preceding year. Inventories On January 31, 2007, inventories amounted to SEK M (180.9). The main reason for the increased inventories was the higher number of stores and a rise in proprietary imports. Hemtex s purchasing function now accounts for more than 95% of the supply of products to the stores, since the share of external brands continued to be reduced. Wholesale inventories accounted for SEK 79.5 M (86.7) of total inventories. On January 31, 2007, inventories per Group store averaged SEK 1.0 M (1.0). Goodwill As reported in the consolidated balance sheet at January 31, 2007, Goodwill in the Hemtex Group totaled SEK M (110.6). Of consolidated goodwill, SEK M (92.7) relates to Swedish operations, while the remainder relates to Danish operations. The valuation takes into consideration accrued values determined on an earnings basis, as well as the Group s market shares in Sweden and Denmark, the strength of the Hemtex brand in these markets, established supplier contacts and the expertise of the Group s employees. H e m t e x A B o r g n r

5 Earnings per share Earnings per share during the reporting period amounted to SEK 5.21 (4.15) before dilution and SEK 5.01 (4.00) after dilution. Equity per share was SEK (13.56). The number of shares in Hemtex AB at January 31, 2007 was 28,017,400. The average number of shares during the reporting period was 28,017,400. Average number of employees in the Group The average number of employees in the Group during the reporting period was 550 (395). The increase in personnel was mainly attributable to store expansion. Parent Company Hemtex AB s net sales rose sharply during the reporting period to SEK 1,148.0 M (823.5). Wholesale operations, including deliveries to Group-owned stores at fair value, accounted for SEK M (599.4) of total net sales, up 19.9%. This positive trend was attributable to continued sales growth in the chain s stores. Profit after financial items amounted to SEK M (149.8). Net investments in fixed assets totaled SEK M (82.8). The average number of employees in Hemtex AB during the reporting period was 424, compared with 293 a year earlier. The increase was mainly attributable to the expansion in the Group-owned store operation in Sweden. OTHER Events after the closing date On March 2007, Hemtex AB acquired the Hemtex store in Växjö, which was previously a franchise store within Hemtex. Consequently, the number of stores acquired during the fiscal year totaled 30. The Board decided to form a branch for the establishment of Hemtex s first store in Estonia. The store is scheduled to open in Pernu in June 2007, and will have approximately 200 square meters of retail space. To facilitate Hemtex s continued geographical expansion, the Board of Directors has decided that company management may seek cooperation partners in respect of franchise rights as a complement to the establishment of proprietary stores. According to the press release on February 21, 2007, the Board also decided to establish a volume store at Sergelgatan in Stockholm. The store will have approximately 1,000 square meters of retail space. The establishment is scheduled for October 2007 and will be followed by an additional 3 4 volume stores during the 2007/2008 fiscal year. Reporting dates The year-end report for May 2006 to April 2007 will be published on June 14, The annual report for 2006/2007 is scheduled to be published and distributed to shareholders who so request in mid-august The interim report for May 2007 to July 2007 will be published on September 5, For information about future reports, refer to the financial calendar in the Investor Relations section of the company s website: Accounting principles This report was prepared in accordance with IAS 34, the Financial Accounting Standards Council s recommendation RR 31 and, with respect to the Parent Company, RR 32. The applied accounting principles are identical to those applied in the 2005/2006 Annual Report. Borås, March 6, 2006 Hemtex AB Board of Directors Further information For further information, contact Anders Jansson, President and CEO: +46 (0) , or Tommy Svensson, CFO: +46 (0) Hemtex AB Druveforsvägen 8 PO Box 495 SE Borås, Sweden ir@hemtex.se H e m t e x A B o r g n r

6 REVIEW REPORT Introduction We have reviewed the interim report for Hemtex AB (publ), reg. no , for the period May 1, 2006 January 31, Management is responsible for the preparation and presentation of this interim report in accordance with IAS 34 and the Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review. Scope of review We conducted our review in accordance with the Standard on Review Engagements SÖG 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by FAR. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with the Standards on Auditing in Sweden RS and other generally accepted auditing practices. The procedures performed in a review do not enable us to obtain a level of assurance that would make us aware of all significant matters that might be identified in an audit. Therefore, the conclusion expressed based on a review does not give the same level of assurance as a conclusion expressed based on an audit. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim report is not prepared, in all material respects, in accordance with IAS 34 and the Annual Accounts Act. Göteborg, March 6, 2007 KPMG Bohlins AB Jan Malm Authorized Public Accountant H e m t e x A B o r g n r

7 CONSOLIDATED INCOME STATEMENT (SEK 000s) 3 months 9 months Rolling months November January May January Feb-Jan May-April 2005/ / / / / /06 Net sales 378, , ,109 1,147,831 1,403,420 1,159,698 Other operating income 5,463 5,241 14,324 12,503 16,828 18,650 Total operating income 383, , ,433 1,160,334 1,420,248 1,178,348 Operating expenses Goods for resale - 192, , , , , ,525 Other external costs - 55,112-90, , , , ,400 Personnel expenses - 47,457-68, , , , ,829 Depreciation/impairment losses on tangible and intangible assets - 5,537-7,486-15,128-19,056-24,579-20,652 Operating profit 83, , , , , ,942 Result from financial items Other interest income and similar items ,529 2,316 1,026 Interest expenses and similar items , ,385-1,474-1,010 Total result from financial items Profit before tax 82, , , , , ,958 Tax on profit for the period - 22,759-31,267-44,241-56,794-63,101-50,503 Net profit for the period 60,097 80, , , , ,455 Earnings per share before dilution, SEK Earnings per share after dilution, SEK Number of shares outstanding on the closing date 28,017,400 28,017,400 28,017,400 28,017,400 28,017,400 28,017,400 Average number of shares outstanding before dilution 28,017,400 28,017,400 27,196,476 28,017,400 28,017,400 27,396,647 after dilution 29,056,794 29,160,100 28,158,056 29,128,473 29,125,737 28,380,074 GROUP KEY RATIOS 3 months 9 months Rolling months November January May January Feb-Jan May-April 2005/ / / / / /06 Sales growth, % Sales growth, comparable stores, % Gross profit margin, % Operating margin, % Profit margin, % Return on equity, % Return on capital employed, % Equity/asset ratio, % Cash flow after investments, SEK M Number of warrants outstanding, 000s Cash flow after investments per share, SEK Shareholders equity per share, SEK H e m t e x A B o r g n r

8 CONSOLIDATED CASH-FLOW STATEMENT (CONDENSED) 9 months Full-year May-January May April (SEK 000s) 2005/ / /06 Cash flow from operating activities 143, , ,449 Cash flow from investing activities - 94, , ,290 Cash flow for the period after investments 48,828-2,221 13,159 Cash flow from financing activities 45,148-10,373 43,719 Cash flow for the period 93,976-12,594 56,878 Net debt at the end of the period - 131,572-26,759-95,209 CONSOLIDATED BALANCE SHEET (CONDENSED) January 31 April 30 (SEK 000s) Intangible fixed assets 1) 139, , ,848 Tangible fixed assets 53,469 95,234 59,163 Financial assets 6,779 6,153 6,827 Inventories 180, , ,230 Current assets 48,373 33,564 43,571 Cash and cash equivalents 150, , ,610 Total assets 579, , ,249 Shareholders equity 379, , ,023 Long-term liabilities 2) 23,759 31,156 27,129 Short-term liabilities 2) 175, , ,097 Total equity and liabilities 579, , ,249 1) Of which, goodwill 110, , ,267 2) Of which, interest-bearing liabilities 18,992 73,678 18,401 STATEMENT OF CHANGES IN CONSOLIDATED SHAREHOLDERS EQUITY 9 months Full-year May-January May-April (SEK 000s) 2005/ / /06 Total shareholders equity at the beginning of the period 215, , ,106 Adjustment for changed accounting principles 1) 1,089-1,089 Adjusted shareholders equity at the beginning of the period 216, , ,195 New share issue 70,800-70,935 Exchange-rate differences Dividend - 19,944-65,841-19,944 Net profit 112, , ,455 Total shareholders equity at the end of the period 379, , ,023 1) Valuation of financial instruments according to IAS 39 H e m t e x A B o r g n r

9 SEGMENT REPORTING (CONDENSED) 3 months 9 months Full-year Net sales per geographical market November January May January May April (SEK 000s) 2005/ / / / /06 Sweden 300, , , , ,909 Finland 49,484 67, , , ,313 Denmark 28,362 27,482 64,096 65,356 79,852 Norway - 12,253-17, Total 378, , ,109 1,147,831 1,159,698 3 months 9 months Full-year Operating profit per geographical market November January May January May April (SEK 000s) 2005/ / / / /06 Sweden 68,654 94, , , ,671 Finland 10,292 13,748 15,734 22,164 13,667 Denmark 4,077 3,628 5,319 5,096 6,119 Norway Total 83, , , , ,942 3 months 9 months Full-year Operating margin per geographical market November January May January May April % 2005/ / / / /06 Sweden Finland Denmark Norway Total The segment s operating profit includes earnings from retail operations in each market and the earnings of Swedish wholesale operations from sales to each market. NUMBER OF STORES April 30 January Sweden Finland Denmark Norway Total stores in the Group Franchise stores in Sweden Total stores in the chain H e m t e x A B o r g n r

10 QUARTERLY EARNINGS - GROUP 2004/ / / / / / / /07 SEK M Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Net sales Other operating income Total operating income Operating expenses Goods for resale Other external costs Personnel expenses Depreciation/impairment losses on tangible and intangible assets Operating profit Operating margin. % Result from financial items Profit after financial items Tax on profit for the period Net profit for the period MULTI-YEAR REVIEW Rullande 12 Feb-Jan 2001/02 1) 2002/ / / / /07 Net sales, SEK M , ,403.4 Net sales growth, % Gross profit margin, % Operating profit, SEK M Operating margin, % Net profit, SEK M Cash flow after investments, SEK M Return on equity, % Return on capital employed, % Equity/assets ratio, % Capital turnover ratio, times Earnings per share before dilution, SEK Earnings per share after dilution, SEK Cash flow after investments per share, SEK Equity per share, SEK ) Figures for the fiscal year 2001/2002 have not been recalculated according to IFRS. H e m t e x A B o r g n r

11 THE HEMTEX SHARE Hemtex AB s share capital amounts to SEK 70.0 M, represented by 28,017,400 shares each with a par value of SEK Each share entitles the holder to one vote at General Meetings and all shares carry equal rights to participation in the Company s assets and profits. The Hemtex share was listed on the Stockholm Stock Exchange, on October 6, and is now included in the Nordic list in the Stockholm Stock Exchange s Mid Cap segment. The introduction price for the share was SEK 56. At February 28, 2007, the price quoted was SEK corresponding to an increase of 162% from the listing date. Shareholders At January 31, 2007, Hemtex AB had 5,050 shareholders. The information in the table below pertains to the circumstances at that date according to the share register maintained by the Swedish Securities Register Center (VPC AB). Owner Total no. of shares Share of voting rights and capital Skandia Investment 2,801, % AB Industrivärden 2,130, % Modulus Europe 1,475, % SMALLCAP World Fund Inc 1,435, % Första AP-Fonden 1,171, % EFG Private Bank S.A., W8IMY 799, % Orkla ASA 793, % Cantillon Capital Management LLP 700, % Swedbank Robur Funds 631, % HL Hemtextil AB and others 550, % Other owners 15,529, % Total 28,017, % Ownership structure Number of shares Number of owners % of all owners Number of shares % of capital , % 400, % , % 919, % % 1,245, % % 4,503, % % 20,948, % Total 5, % 28,017, % Share of voting rights and Distribution of owners capital Foreign owners 29.9% Swedish owners 70.1% of which Legal entities 75.1% Private individuals 24.9% H e m t e x A B o r g n r

12 DEFINITIONS Capital employed The balance-sheet total less non-interest bearing liabilities including deferred tax liabilities. Cash flow after investments Profit before depreciation/impairment losses plus/minus financial items less tax paid plus/minus changes in operating capital minus investments. Cash flow after investments per share Cash flow after investments divided by the average number of shares outstanding during the period. Comparable stores Stores that have been operational for more than 12 months. Earnings per share Profit after tax divided by the average number of shares outstanding during the period. Earnings per share after dilution Profit after tax divided by the number of shares outstanding on the closing date as well as warrants outstanding. adjusted for possible dilution effects. Equity/assets ratio Shareholders equity as a percentage of total assets. Gross profit margin Net sales for the period less the cost of goods sold as a percentage of net sales. Hemtex Hemtex refers to the Hemtex brand or to the entire retail chain including the stores operated as franchises. Hemtex AB Refers to the legal entity Hemtex AB that is the P Hemtex franchise system. arent Company of the Group and the franchisor in the Net debt Interest-bearing liabilities less cash and bank balances. Net debt/equity ratio Interest-bearing liabilities less cash and bank balances as a percentage of shareholders equity. Number of annual employees The total number of hours of attendance divided by the normal working hours for the particular country. Operating margin Operating profit as a percentage of net sales for the period. Profit margin Profit after financial items as a percentage of net sales for the period. Return on capital employed Return before tax plus financial expenses as a percentage of average capital employed. Return on equity Profit after tax as a percentage of average shareholders equity. Shareholders equity per share Shareholders equity divided by the number of shares on the closing date. H e m t e x A B o r g n r