The coronavirus crisis continued to affect RNB in the fourth quarter, although to a lesser extent than in the third quarter. The corporate restructuring has proceeded according to plan, including operational changes, and the companies are now in good shape as the process comes to an end at the beginning of November. Operating income and cash flow for the quarter improved in year-on-year terms.
FOURTH QUARTER, JUNE 1, 2020 – AUGUST 31, 2020 IN SUMMARY
- Net sales decreased to SEK 326 M (552).
- Comparable sales for the Group on all national markets decreased by -32.8 percent.
- Sales for comparable units in Sweden decreased by -35.5 percent, compared to the market downturn of -18.4 percent.
- Operating income was SEK -17 M (-101).
- Operating income, excluding IFRS 16 and goodwill impairment, was SEK -47 M (-36).
- Profit after tax was SEK -50 M (-106).
- Earnings per share was SEK -0.49 (-3.13).
- Cash flow from operating activities was SEK 10 M (-44).
THE PERIOD, SEPTEMBER 1, 2019 – AUGUST 31, 2020 IN SUMMARY
- Net sales decreased to SEK 1,784 M (2,267).
- Comparable sales for the Group on all national markets decreased by -20.2 percent.
- Sales for comparable units in Sweden decreased by -20.4 percent, compared to the market downturn of -12.1 percent.
- Operating income was SEK -341 M (-110).
- Operating income, excluding IFRS 16 and goodwill impairment, was SEK -191 M (-45).
- Profit after tax was SEK -435 M (-142).
- Earnings per share was SEK -5.21 (-4.20).
- Cash flow from operating activities was SEK 245 M (49).
- In the second quarter, a preferential rights issue raised some SEK 84.8 M before issue expenses.
- In the third quarter, Brothers´ operations in Finland, including 12 stores and an online platform, were wound down.
- In the third quarter, four of the Group’s companies started a process of corporate restructuring.
EVENTS IN THE QUARTER
- A settlement proposal was submitted to the Stockholm District Court on July 1. The proposal involves an initial payment of SEK 10,000 and 25 percent of the remainder to the companies’ creditors, implying a write-down of 75 percent of outstanding debt.
EVENTS AFTER THE END OF THE QUARTER
- The corporate restructuring period was extended by a further three months to December 23.
- The settlement negotiations were held on October 16. Stockholm District Court approved the settlement proposal on the same date, and the settlement will become legally binding on November 6. The reconstructions will end on the same day.
- The settlement benefits arising once the arrangement becomes legally binding are preliminary estimated at more than SEK 200 M for the Group.
- Comparable sales decreased by -20 percent in September, in-store sales were down -26 percent and e-commerce sales increased by 23 percent compared to the same month in the previous year. However, all operations have been adapted to reflect the lower sales.
- Sales of the first quarter and most probably quarter two will remain affected by the Covid-19 pandemic, although it is currently hard to assess the extent of the impact because of the volatile situation.