Björn Borg : BJÖRN BORG AB INTERIM REPORT JANUARY – MARCH 2023

JANUARY 1 MARCH 31, 2023

• Group's net sales amounted to SEK 246.9 million (226.6), an increase of 8.9 percent. Currency-neutral, the net sales increased by 5.2 percent.
• Net sales for own e-commerce and e-tailers amounted to SEK 92.9 million (94.6), a decrease of 1.7 percent. Sales for own e-commerce increased by 32.9 percent to SEK 33.4 million (25.1).
• The gross pro t margin amounted to 52.2 percent (50.0). Currency-neutral, the gross pro t margin amounted to
• 1. percent, an increase of 4.4 percentage points.
• Operating pro t amounted to SEK 31.4 million (29.3), an increase of 7.1 percent. Currency-neutral, operating pro t amounted to SEK 33.6 million, an increase of
• 1. percent.
• Pro t after tax amounted to SEK 24.8 million (23.1), an increase of 7.2 percent.
• Earnings per share before and after dilution amounted to SEK 0.99 (0.92).

QUOTE FROM THE CEO

"The strength of our sports collection becomes particularly clear when we look at the growth of our own e-commerce, where our sports collection grew by 102 percent in the quarter," CEO Henrik Bunge comments.

CEO's comments

We start the year with good sales and very good development of our operating pro t. The fact that we increased our operating pro t in the quarter to SEK 31.4 million, despite the continued weak krona and a troubled world, is a real statement of strength.

Net sales during the quarter were SEK 246.9 million (226.6), an increase of 8.9 percent compared to the previous year. Currency-neutral our net sales increase with 5.2 percent. All markets, except Germany, grew during the quarter. Sweden, Finland and above all the Netherlands grew very strongly. In Germany, the performance of our German e-tailers, mainly Zalando, developed worse than in the corresponding period last year.

At the same time, our own e-commerce continued to develop very strongly, with growth of 33 percent. Our own stores also developed very well with comparable stores growing by 41 percent in the quarter. All our product areas grew with our fastest growing category being sports apparel, which increased by 19 percent, followed by bags, which grew by 17 percent. Both underwear and footwear grew by 6 percent in the quarter. The strength of our sports collection becomes particularly clear when we look at the growth of our own e-commerce, where our sports collection grew by 102 percent in the quarter.

The gross pro t margin increased to 52.2 percent (50.0). Adjusted for currency e ects, the gross pro t margin would have been 54.4 percent, an increase of 4.4 percent. This was the result of a continued focus on pro tability, with reduced

discounts both at the wholesale level and in our own stores and own e-commerce. For own e-commerce, increased full- price sales resulted in an operating pro t of over 20 percent.

We increased our operating costs in the quarter by SEK

1. million as planned. These were mainly investments in the brand through increased marketing activities.
   The excellent development in sales with an increased gross pro t margin meant that, despite the planned higher operating costs, we increased our operating pro t by 7.1 percent to SEK 31.4 million (29.3). Currency-neutral, our operating pro t increased by almost 15 percent to SEK

1. million.

With the rst quarter behind us, I can state that we have started 2023 strongly with continued good growth, increased pro tability and a brand that is constantly strengthening. There is, of course, much to be proud of. The highlights include our sports collection which continues to develop very well, very strong growth for our own e-commerce and the brand, which continued to strengthen during the

rst quarter. At the same time, it is becoming clearer that we are operating in a troubled world which is already a ecting consumption, even though we did not see any such tendencies during the quarter. Regardless of the developments in the world around us, I am convinced that we will also deliver pro table growth going forward and continue our journey to build a global sports fashion brand.

Now, let's go!

Head coach, Henrik Bunge

CHANNELS, FIRST QUARTER 2023

The largest channel, the wholesale business, showed an increase of 3 percent in the rst quarter of 2023. Physical stores in the wholesale business increased by 13 percent, while e-tailers decreased by 14 percent, mainly due to the afore-mentioned development in the German market. Our own stores increased on the previous year by 14 percent, due to the fact that stores in the Netherlands were closed for a large part of the rst quarter of the previous year because of Corona. Our own e-commerce continued to show strong growth and increased by 33 percent. Distributors were down 15 percent year-on-year, mainly due to timing in distribution, while licensing income was unchanged, year-on-year.

NET SALES

First quarter, January-March 2023

Group net sales during the rst quarter amounted to SEK 246.9 million (226.6), an increase of 8.9 percent. Turnover in the quarter, adjusted for positive currency e ects, increased by 5.2 percent.

The main reason for the increase in the quarter was the increased demand within the Consumer Direct segment, where sales in our own physical stores increased by 14 percent and by 33 percent in our own e-commerce. For further details, see below under "Development by segment."

PROFIT

First quarter, January-March 2023

The gross pro t margin for the rst quarter increased to

52.2 percent (50.0). Adjusted for currency e ects, the gross pro t margin would have been 54.4 percent. It was, above all, the greater focus on pro tability in the wholesale operations and the reduced discounts in our own stores and in own e-commerce that contributed to the positive e ect.

Other operating income amounted to SEK 3.3 million (9.9) and referred mainly to unrealized pro ts on trade receivables in foreign currency.

Operating costs increased in the quarter by SEK 6.9

million compared to the previous year's rst quarter, primarily through increased marketing activities and reserves for uncertain accounts receivable.

Increased sales and higher gross pro t margin, notwithstanding planned increases in operating costs compared to the previous year, resulted in an increase in the operating pro t to SEK 31.4 million (29.3).

Net nancial items amounted to -0.7 MSEK (-0.1). The worsening of the nancial net compared to the previous year was mainly attributable to the revaluation of nancial assets and liabilities in foreign currency.

Pro t after tax for the quarter increased to SEK 24.8 million (23.1).

Developments by segment

Björn Borg's segment reporting consists of the company's main revenue streams, which are divided into: Wholesale business, Own e-commerce, Own stores, Distributors, and Licensing, which is also how the business is followed up internally in the Group. Since the last quarterly report, the company has adjusted the follow-up per segment by dividing the previous segment "Consumer direct" into two parts; "Own e-commerce" and "Own stores". This is to further clarify for the reader how the two di erent revenue streams develop.

Wholesale business

The segment's external operating income amounted to SEK 182.2 million (177.7), which was an increase of 3 percent. One explanation for the increase was that the company saw an increased demand in physical trade within the segment and growth in the quarter was 13 percent, amounting to SEK 123 million (108). Sales for E-tailers, on the other hand, who primarily sell online, were down by 14 percent and amounted to SEK 60 million (69). Within the wholesale business, the two largest markets, Sweden and the Netherlands, showed growth and increased by 2 and 6 percent respectively. The Finnish market increased by 12 percent, while Germany decreased by 20 percent due to weak development of German e-tailers.

Operating pro t amounted to SEK 25.1 million (32.5), a decrease of 23 percent. The fall in earnings was primarily due to increased operating costs in the form of reserves for possible customer losses.

Own e-commerce continued to grow strongly. During the rst quarter of the year, own e-commerce increased by

33 percent to SEK 33.4 million (25.1). The increase was mainly due to strong growth in the sports apparel product area, which was up 102 percent compared to the previous year's rst quarter. The underwear product area also increased strongly and grew by 24 percent. Bags continued to show strong momentum and grew by 118 percent.

In terms of growth in the di erent markets, all major markets grew strongly, with the largest market, the Netherlands, growing by 40 percent. Sweden increased by 61 percent, Finland by 81 percent and Denmark by 91 percent.

Operating pro t for the rst quarter of 2023 amounted to SEK 6.9 million (2.6), an increase of 163 percent and was the result of improvements in all the parameters of the income statement; higher sales, better gross pro t margins and lower operating costs.

Own stores

Distributors

The segment's external operating income decreased during the rst quarter of 2023 compared to 2022 and amounted to SEK 9.4 million (11.1). Sales to the two major distributor markets, Norway and Great Britain, decreased compared to the previous year, by 41 and 34 percent respectively, mainly due to the timing of the distribution. For other distributor markets, sales increased by a total of 27 percent.

Operating pro t decreased to SEK 1.3 million (1.7) because of the lower sales.

Licensing

The segment's external operating income remained at the same level during the rst quarter of 2023 as in 2022 and amounted to SEK 4.4 million (4.4). All categories within the segment remained at the previous year's level.

Operating pro t amounted to SEK 3.9 million (3.8) for the rst quarter of 2023.

Our own physical stores showed strong development compared to last year's rst quarter. In total, the increase was 14 percent despite the company choosing to close down ve stores, according to company strategy to close down unpro table stores. This was o set by the fact that the stores in the Netherlands were closed for large parts of last year's rst quarter as a result of the pandemic. For comparable stores, i.e., stores that were open in the corresponding period of the previous year, the increase was 41 percent.

In the Netherlands, sales in own stores increased by

44 percent, mainly because the stores were closed for a large part of the rst quarter of 2022. In Sweden, sales in our own stores increased by 20 percent, related to the increased tra c to the stores and the fact that the average spend was also higher than in previous years. Sales for the quarter in Finland and Belgium were down by 12 percent each, as a result of fewer stores this year compared to last year's rst quarter. For comparable stores, Finland and Belgium increased by 64 and 31 percent, respectively.

Intra-Group sales

Intra-Group sales for the rst quarter of 2023 amounted to SEK 169.0 million (138.7).

SEASONAL VARIATIONS

The Björn Borg Group operates in an industry with seasonal variations. The di erent quarters vary in terms of sales and pro t. See diagram with net sales and operating pro t per quarter on page 4.

INVESTMENTS AND CASH FLOW

The Group's cash ow from operating activities in the rst quarter of 2023 amounted to -27.1 MSEK (-57.0). The

improvement was mainly due to reduced accounts receivable.

Cash ow from investment activities was negative SEK -2.7 million (-2.2). The larger investments related to the remodeling of the head o ce's showroom. Cash ow from nancial activities amounted to SEK 22.7 million (-25.8). The improvement compared to the previous year was due to increased utilization of bank facilities.