Coloured Pencils. 36 Pcs. DKK 30 an Invitation to a Richer Life
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Annual Report 2020 Coloured pencils. 36 pcs. DKK 30 An invitation to a richer life At Flying Tiger Copenhagen, we don’t design to make products look nice. We design to make people feel good. Whether we are designing extraordinary products for everyday life, or making everyday products look extraordinary, we want to bring you something that can bring you closer to someone else. Things that make you smile. Gifts you’ll want to give. Stuff you feel the urge to try and desperately want to share with others. Because real value lies not in the products we own, but in the experiences we share. Every month, Flying Tiger Copenhagen launches an array of new products. Things you need. Things you dream of. Things you didn’t know existed. Products made with thought for you and the resources we share. Each one designed to make the things you care about happen. A richer life doesn’t cost a fortune. At least not at Flying Tiger Copenhagen. Content 04 The world of Flying Tiger Copenhagen 46 Board of Directors 06 Message from Executive Management 47 Executive Management 07 Key figures 49 Consolidated financial statements 09 Mission and strategy 101 Financial statements – Parent Company 15 Operating and financial review 2020 127 Management statement 23 Sustainability 128 Independent Auditors’ report 39 Risk management We are 12 online Conscious stores 34 Global Retail 38 Operation One country, one entity 44 Sweden 51 stores (-4) Norway 39 stores (-3) Finland 31 stores Iceland 5 stores Denmark 52 stores (-20) Estonia 8 stores United Kingdom 86 stores (-6) Latvia 6 stores Netherlands 22 stores Lithuania 6 stores Ireland 23 stores (-3) Poland 45 stores Belgium 23 stores (-1) Czech Republic 17 stores (+1) Germany* South Korea 36 stores (-18) Slovakia 18 stores (+4) 8 stores France 52 stores (-4) Hungary 11 stores Austria 13 stores Portugal 36 stores (-1) Spain Switzerland Greece 127 stores (-1) 12 stores (+1) 13 stores Cyprus Japan Italy Malta 6 stores 31 stores (+2) 130 stores 3 store Flying Numbers* Revenue Approx. number of FTE Stores Countries 3,406 4,100 856 26 DKKm incl. Japanese joint venture across Europe and Asia *Excluding discontinued operations in Germany, US and South Korea. Note: The stores in South Korea are now operated by a franchise partner and therefore not included in the above. Sweden 51 stores (-4) Norway 39 stores (-3) Finland 31 stores Iceland 5 stores Denmark 52 stores (-20) Estonia 8 stores United Kingdom 86 stores (-6) Latvia 6 stores Netherlands 22 stores Lithuania 6 stores Ireland 23 stores (-3) Poland 45 stores Belgium Sweden 23 stores (-1) Czech Republic 17 stores (+1) 51 stores (-4) Germany* South Korea 36 stores (-18) Slovakia 18 stores (+4) 8 stores Norway France 52 stores (-4) Hungary 39 stores (-3) 11 stores Austria 13 stores Portugal 36 stores (-1) Finland Spain Switzerland Greece 127 stores (-1) 12 stores (+1) 13 stores Cyprus Japan 31 stores Italy Malta 6 stores 31 stores (+2) Iceland 130 stores 3 store 5 stores Denmark 52 stores (-20) United States* Estonia 0 stores (-13) 8 stores United Kingdom 86 stores (-6) Latvia 6 stores Netherlands Our markets 2020 22 stores Lithuania 6 stores Ireland Our franchise markets 23 stores (-3) Poland 45 stores Total number of stores 2020 Belgium (Net new stores 2020) 23 stores (-1) Czech Republic 17 stores (+1) Germany* South Korea 36 stores (-18) Slovakia 18 stores (+4) 8 stores France 52 stores (-4) Hungary 11 stores Austria 13 stores Portugal 36 stores (-1) Spain Switzerland Greece 127 stores (-1) 12 stores (+1) 13 stores Cyprus Japan Italy Malta 6 stores 31 stores (+2) 130 stores 3 store The world of Flying Tiger Copenhagen Zebra A/S, the Parent Company of the Flying Tiger Copenhagen stores, We constantly work on innovating our product offering and design, is a variety retailer founded in Denmark. Our stores offer new, fun, and and each month, we launch an array of new products. We want to useful products at affordable prices made with thought for our shared bring you products that can bring you closer to someone else. resources. All stores are marketed internationally under the Flying Tiger Our primary shopping missions are within “Gifting”, “Occasions”, Copenhagen brand name, and by the end of 2020, the Group operated “Sharing Moments” and “Everyday Essentials”. We keep our stores 856 stores in 26 countries from continuing operations across Europe bright and easy to navigate with our Scandinavian decor being a and Asia. Furthermore, 18 stores in South Korea are operated under a differentiating characteristic. franchise agreement. 6 Management Commentary Zebra A/S Annual Report 2020 Message from Executive Management 2019 proved our strong brand and concept with our teams delivering all of our colleagues at Flying Tiger Copenhagen coming together and an impressive turn-around. supporting one another in such challenging times. 2020 looked to be the year to continue the journey and build on the In February 2021, the company changed ownership and we are consolidation strategy with the launch of ecommerce, strong commercial now owned by the privately held Danish fund, Treville X Holding ApS. initiatives and our sustainability journey. A change in ownership that we are highly excited about and that is a true testament to our unique and solid brand and a belief in continued However, 2020 shifted to managing through the COVID-19 pandemic. growth of the business. As part of the transaction, new funding was Throughout the year, our first priority was to secure the safety of our injected into the business. employees around the world. Then came safeguarding our business with new capital from owners and banks as well as through various support Therefore, at the time of writing this report, optimism is back with and compensation schemes from governments. On the back of the first indications that the worst of the pandemic is behind us. We are wave, the focus has been on managing the operations in a volatile convinced that our strong brand and concept is sustainable and can pandemic with many waves and associated lock-downs and restrictions thrive with all of our colleagues driving us forward. We have – including managing the all important fourth quarter. demonstrated this in tough times before and we are convinced that we in Flying Tiger Copenhagen will come back strong. In summary, the year 2020 was a terrible year for the world in general and for us as a business. We are however very proud and happy to see / Martin Jermiin & Christian Kofoed H. Jakobsen Zebra A/S Management Commentary 7 Annual Report 2020 Key figures DKKm 20208 20198 20187, 8 20176, 7, 8 20166, 7, 8 Income statement Revenue 3,405.7 5,149.5 5,252.2 5,032.3 4,274.0 Gross profit 1,628.4 3,144.9 2,982.5 3,051.6 2,577.8 EBITDA before special items 153.1 1,151.0 137.3 380.0 368.2 Adjusted EBITDA2 (625.0) 412.4 289.3 460.2 443.2 EBIT (776.5) 76.1 (210.0) 89.2 186.7 Result from financial items (375.2) (93.0) (326.4) (63.5) (57.9) Adjusted profit/(loss) for the year 1, 3 (1,171.4) (15.4) (35.7) 138.9 167.7 Profit/(loss) for the year from continuing operations (1,335.8) (67.9) (498.3) 4.1 82.1 Profit/(loss) for the year from discontinued operations8 (206.5) (155.7) (43.1) - - Profit/(loss) for the year (1,542.3) (223.6) (541.4) 4.1 82.1 Financial position at 31 December Invested capital9 2,264.6 3,496.9 1,213.5 1,160.5 1,116.5 Total assets 3,998.5 5,745.6 3,666.2 2,848.4 2,743.5 Net interest-bearing debt1, 9 3,711.8 3,632.4 1,296.9 641.0 493.0 Pro forma adjusted equity4 (714.0) 563.7 503.9 819.2 882.3 Equity (1,458.9) 180.1 21.3 (220.8) (23.6) Cash flow and investments Investment in property, plant and equipment (37.2) (58.2) (241.2) (213.9) (263.4) Free cash flow 20.6 620.3 (307.0) (69.8) (155.0) Key ratio Revenue growth (33.9)% (2.0)% 4.4% 17.7% 19.7% Gross margin1 47.8% 61.1% 56.8% 60.6% 60.3% Adjusted gross margin2 47.8% 61.3% 59.7% 62.0% 62.1% EBITDA margin before special items1 4.5% 22.4% 2.6% 7.6% 8.6% Adjusted profit/(loss) margin1, 3 (34.4)% (0.3)% (0.7)% 2.8% 3.9% Profit/(loss) margin (39.2)% (1.3)% (9.5)% 0.1% 1.9% Comparable store sales growth1 (32.6)% (5.5)% 0.1% (1.4)% (4.5)% Leverage1 24.2x 3.2x 9.4x 1.7x 1.3x Number of stores, including joint ventures 856 895 915 863 745 Adjusted EBITDA margin2 (18.4)% 8.0% 5.5% 9.1% 10.4% Pro forma consolidated financial information5 Pro forma revenue 3,489.1 5,244.6 5,345.3 5,126.5 4,415.2 Pro forma adjusted EBITDA2 (625.8) 416.0 291.3 463.5 445.2 Pro forma adjusted EBITDA margin (17.9)% 7.9% 5.4% 9.0% 10.1% 1 Key figures are defined in 'Definition of key figures and ratios' on page 100. 2 Adjusted EBITDA, adjusted EBITDA margin and adjusted gross margin excludes extraordinary write-downs (net) and scrappings of DKK 0m recognised in Cost of sales (2019: DKK 12.9m, 2018: DKK 152.0m, 2017: DKK 70.4m and 2016: DKK 75.0m), special items, the impact of IFRS 16 and discontinued operations.