Company announcement no. 13 2019/20 – INSIDE INFORMATION
Allerød,
Interim report – 9M 2019/20
(1 April –
Earnings growth in Matas on the back of strong Christmas season quarter with higher sales, more customers and a new online sales record. Guidance upgraded.
Underlying like-for-like sales, i.e. sales in stores operated in both Q3 2019/20 and Q3 2018/19, were up by 4.7% in Q3 2019/20.
The Group’s digital transformation continued at full speed with sales on matas.dk surging by a record-high 84%. Factoring in revenue from Firtal, 16.2% of sales were completed online, compared with 8.5% in the year-earlier period. Matas still aims to be the customer’s first choice, online as well as in retail stores.
Revenue guidance for financial year 2019/20 has been upgraded to overall revenue growth of above 5% (previously around 5%) and underlying revenue growth of above 1.5% (previously around 1.5%). Guidance for the EBITDA margin before exceptional items is specified at 14-14.5% before IFRS 16 (previously 14-15%).
“We’re pleased to note that the strong momentum witnessed in the Christmas season quarter has continued into 2020 and that we're therefore able to upgrade our revenue guidance for financial year 2019/20. We will continue to invest in renewing Matas and have also specified our earnings guidance”, said
The interim report for Q3 2019/20 is presented in accordance with IFRS 16. However, key financials are also presented before IFRS 16 in order to enable year-on-year comparisons with 2018/19. IFRS 16 implementation primarily affected EBITDA and EBIT as well as cash flows from operating and financing activities. Revenue and gross margin were not affected by IFRS 16 implementation.
Q3 2019/20 highlights
- Revenue grew by 7.4%, while underlying like-for-like sales, i.e. sales in stores operated in both Q3 2019/20 and Q3 2018/19, were up by 4.7% in Q3 2019/20.
- Online sales via matas.dk were ahead by 84% year-on-year, while overall online sales, including revenue acquired from Firtal, surged by 104% to make up 16.2% of Q3 2019/20 revenue from 8.5% in Q3 2018/19.
- The gross margin was 43.9% against 44.0% in Q3 2018/19.
- On
9 October 2019 ,Firtal Group acquired Din Frisør Shop, a small operator of two webshops. The initial purchase price wasDKK 15 million , to which should be added contingent consideration ofDKK 5 million . With the acquisition of Din Frisør Shop, Firtal has gained access to new segments focused on professional haircare and beauty products.
The below cost and earnings comments are based on pre-IFRS 16 numbers.
- Impacted by costs added by Firtal and Kosmolet and by increased activity on matas.dk, costs were up by
DKK 21.2 million . Other external costs were up byDKK 13.7 million and staff costs rose byDKK 7.5 million . - EBITDA before exceptional items came to
DKK 218.9 million , up fromDKK 206.0 million in the year-earlier period. The EBITDA margin before exceptional items was 18.7% against 18.8% in Q3 2018/19. - Cash generated from operations was an inflow of
DKK 209.2 million in Q3 2019/20 against an inflow ofDKK 337.1 million in Q3 2018/19. The free cash flow was an inflow ofDKK 109.7 million compared with an inflow ofDKK 127.4 million in the year-earlier period. - The ratio of net interest-bearing debt to EBITDA before exceptional items was 3.0 against 2.8 at
31 December 2018 .
9M 2019/20 highlights
- Revenue was up by 5.8% and underlying like-for-like sales grew by 1.6% over the first nine months of 2018/19.
- Online sales via matas.dk were ahead by 72% year-on-year, while overall online sales, including revenue acquired from Firtal, surged by 141% to make up 13.4% of 9M 2019/20 revenue from 5.9% in the same period of 2018/19.
- The gross margin was 44.1% against 44.6% for the first nine months of 2018/19.
The below cost and earnings comments are based on pre-IFRS 16 numbers.
- Overall costs increased by
DKK 64.5 million relative to the first nine months of 2018/19. Costs added from the acquisitions of Firtal and Kosmolet drove other external costs up byDKK 34.4 million and staff costs byDKK 18.4 million . Costs were further impacted by significantly increased activity on matas.dk. - EBITDA before exceptional items and after adjustments came to
DKK 446.2 million againstDKK 452.9 million in the year-earlier period. The EBITDA margin before exceptional items and after adjustments was 15.5% against 16.7% for the first nine months of 2018/19. - Disregarding acquisitions of subsidiaries, the free cash flow for the first nine months of 2019/20 was
DKK 130.4 million againstDKK 316.8 million for the year-earlier period. The decline was attributable to larger inventories to cover the Christmas quarter and the addition of stocks from the new matas.dk webshop and Kosmolet and Firtal, which were only to a limited extent offset by increases in other working capital items. In addition, the free cash flow was adversely affected by larger investments in the first nine months of the year than in the year-earlier period.
After IFRS 16 | Bef. IFRS 16 | Bef. IFRS 16 | After IFRS 16 | Bef. IFRS 16 | Bef. IFRS 16 | |||||||
2019/20 | 2019/20 | 2018/19 | 2019/20 | 2019/20 | 2018/19 | |||||||
(DKKm) | Q3 | Q3 | Q3 | 9M | 9M | 9M | ||||||
Revenue | 1,173.4 | 1,173.4 | 1,092.6 | 2,871.5 | 2,871.5 | 2,713.6 | ||||||
Gross profit | 515.1 | 515.1 | 480.9 | 1,266.6 | 1,266.6 | 1,211.6 | ||||||
EBITDA before exceptional items | 262.7 | 218.9 | 206.0 | 562.2 | 446.2 | 452.9 | ||||||
EBIT | 165.6 | 167.5 | 162.9 | 282.1 | 287.0 | 313.9 | ||||||
Adjusted profit after tax | 137.5 | 142.9 | 139.8 | 259.6 | 275.6 | 290.5 | ||||||
Free cash flow | 154.7 | 109.7 | 127.4 | 127.3 | (7.3) | 206.1 | ||||||
Revenue growth | 7.4% | 7.4% | 1.7% | 5.8% | 5.8% | 0.7% | ||||||
Underlying like-for-like revenue growth | 4.7% | 4.7% | 0.5% | 1.6% | 1.6% | 0.0% | ||||||
Gross margin | 43.9% | 43.9% | 44.0% | 44.1% | 44.1% | 44.6% | ||||||
EBITDA margin before except. items | 22.5% | 18.7% | 18.8% | 20.2% | 15.5% | 16.7% | ||||||
Net interest-bearing debt/EBITDA before exceptional items | n.a. | 3.0 | 2.8 |
Financial targets
The Group’s financial targets for financial year 2019/20 for overall revenue growth and underlying revenue growth have been upgraded relative to the guidance announced in company announcement no. 11 2019/20 (Trading Update for Q3 2019/20). At the same time, guidance for the EBITDA margin before exceptional items has been specified.
Our overall financial targets for financial year 2019/20 are as follows:
- Overall revenue growth of above 5% (previously: around 5%)
- Underlying like-for-like revenue growth of above 1.5% (previously: around 1.5%)
- EBITDA margin before exceptional items of 14-14.5 % before IFRS 16 (previously: 14-15%)
- CAPEX between
DKK 150 million andDKK 170 million (unchanged)
The Group’s financial targets for financial year 2019/20 reflect the full-year effects of the Firtal acquisition (closing at
The Group’s financial targets for 2019/20 are based on assumptions of slightly growing sales of beauty, health and personal care products, a continuing decline in physical store footfall and persistently intensive competition in the beauty, health and personal care market. The Group’s revenue guidance for the remainder of financial year 2019/20 does not factor in any significant effects of the spreading of the COVID-19 virus.
The Group’s long-term financial ambitions are unchanged.
Realised and projected KPI levels are set out in the table below.
Financial targets and ambitions | Realised Q3 2019/20 | Realised 9M 2019/20 | Targets for 2019/20 | Ambitions for 2022/23 |
Ongoing | ||||
Customer engagement (M-NPS) | 63 (index 98) | 63 (index 98) | improvement | 70 (index 110) |
Revenue (DKK)/revenue growth* | 1,173m/+7.4% | 2,871m/+5.8% | Above 5% | App. |
Underlying like-for-like revenue growth | 4.7% | 1.6% | Above 1.5% | Positive |
EBITDA margin** b. except. items (b. IFRS 16) | 18.7% | 15.5% | 14-14.5% | Above 14% |
CAPEX (DKK m) | 46m | 126m | 150-170m | Below 90m |
Gearing** (before IFRS 16) | 3.0 | 2.5-3 | 2.5-3 |
* Includes revenue from Firtal for the period
As expected, the acquisition of Kosmolet A/S involved an initial investment of
As expected, the acquisition of Din Frisør Shop involved an initial investment of
Conference call
Matas will host a conference call for investors and analysts on Thursday,
The conference call and the presentation can be accessed on our investor website: www.investor.en.matas.dk.
Conference call access numbers for investors and analysts:
DK: +45 78 15 01 08
UK: +44 (0) 333 300 9266
US: +1 833 526 8395
Link to webcast: https://matas.eventcdn.net/202002/
Contacts
Gregers Wedell-Wedellsborg
CEO, tel +45 48 16 55 55
CFO, tel +45 48 16 55 55
Elisabeth Toftmann Klintholm
Head of Investor Relations & Corp. Affairs, tel +45 48 16 55 48
Klaus Fridorf
Head of Communication, tel +45 61 20 19 97
Forward-looking statements
This interim report contains statements relating to the future, including statements regarding the
Attachment
- 13 Matas 9M 2019_20 FINAL
UK
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