Annual report 2018/19 – Matas meets profit guidance, acquires Kosmolet A/S and steps up investments as planned

Company announcement no. 02 2019/20 – Inside information
Allerød, 28 May 2019


Annual Report 2018/19

Matas meets profit guidance, acquires Kosmolet A/S and steps up investments as planned
The Board of Directors of Matas A/S today considered and approved the financial statements for Q4 2018/19 and the annual report for the financial year 1 April 2018 – 31 March 2019.

In Q4 2018/19, Matas grew overall revenue by 7.6%. Underlying like-for-like revenue rose by 2.1% and EBITDA before exceptional items increased.  

We improved our financial performance in the final quarter of the financial year, growing our top line on the back of the acquisition of Firtal and supported also by our existing business. Once again, we are delivering healthy and stable full-year earnings despite our substantial investments in future growth and earnings capacity”, states CEO Gregers Wedell-Wedellsborg.

Firtal Group, which Matas acquired in November 2018, is performing in line with expectations, and online sales via grew by more than 50% in the past financial year. In total, online sales accounted for 11% of overall revenue in Q4 2018/19 as compared with 4% a year earlier.  

For financial year 2018/19 as a whole, Matas delivered EBITDA before exceptional items of DKK 549 million, slightly down on the DKK 555 million reported for financial year 2017/18. Revenue was up by 2.2% year on year to DKK 3,541 million, while underlying like-for-like revenue growth was 0.5%. Affected primarily by higher digitalisation costs, the EBITDA margin before exceptional items was 15.5% against 16.0% for 2017/18. As such, the full-year performance was in line with the upgraded guidance specified in connection with the release of the interim financial statements for Q3 2018/19.

(DKKm)2018/192017/18Q4 2018/19Q4 2017/18
Gross profit1,5891,549377342
EBITDA before exceptional items5495559684
Profit for the period2632803332
Adjusted profit after tax3433565347
Cash flow from operating activities451384456
EBITDA margin15.0%15.4%11.2%10.6%
EBITDA margin before exceptional items15.5%16.0%11.6%10.9%
Revenue growth2.2%(1.3)%7.6%(2.7)%
Underlying like-for-like revenue growth0.5%(1.4)%2.1%(2.6)%


Private label portfolio strengthened by new acquisition
Today, Matas entered into an agreement to acquire Kosmolet A/S, the owner of the successful Danish makeup brand Nilens Jord. Known for its allergy-friendly and sustainable profile, Nilens Jord is the best-selling makeup brand carried by Matas.

“With the acquisition of Nilens Jord, we are adding the best-selling makeup brands to our portfolio of private labels, while at the same time welcoming a successful and financially sound business with a competent organisation to our family”, states CEO Gregers Wedell-Wedellsborg.

As Matas already carries Nilens Jord, the acquisition will have a limited effect on revenue, but is expected to boost annual EBITDA by up to DKK 25 million after completion of the integration. Exceptional items of about DKK 5 million are expected to be incurred in 2019/20.

Matas will pay DKK 145 million for Kosmolet A/S, of which DKK 10 million will be paid in Matas shares. In addition, an earn-out agreement of up to DKK 20 million has been agreed.

The acquisition is subject to confirmatory due diligence, which is expected to be completed in June 2019.

Based on the performance for the year, the acquisition of Firtal Group and the expected acquisition of Kosmolet A/S as well as the Group’s financial targets for 2019/20, the Board of Directors recommends that a dividend of DKK 3.00 per share be distributed.

Stepping up investments
“We are off to a good start with our strategy ‘Renewing Matas’, which has delivered its first positive results. However, the ongoing transformation of the retail industry will continue, and we expect competition to intensify even further. Against this background, we are stepping up our investments as planned with a view to retaining our position as our customers’ preferred choice – whether shopping at our physical stores or online”, states CEO Gregers Wedell-Wedellsborg.

During the current financial year, Matas will continue its digital build-up with initiatives including faster delivery,   addition of new brands to the product range, improved online customer service and subscription solutions designed to make our customers’ lives easier.

Matas will also accelerate the upgrading of stores and the adjustment of the retail network. Matas is currently testing its future store concept, Matas Life, which was launched in March 2019. So far, nine stores have been upgraded to the new concept, and the roll-out is planned to continue in 2019/20 in at least 30 additional locations. The roll out will consist of both upgrades and mergers of a number of small stores into larger stores with more attractive locations.

Based on the planned levels of investment and activity, Matas expects positive underlying like-for-like revenue growth going forward to 2022/23. Factoring in the digital build-up and higher costs relating to investments for growth, the EBITDA margin before exceptional items for 2019/20 is expected to be down on 2018/19.

Financial targets
The Group’s financial targets for financial year 2019/20, including the full-year effects of Firtal Group and the effects of the acquisition of Kosmolet A/S from closing, are as follows:

  • Overall revenue growth of 3.5 – 6.5%
  • Underlying like-for-like revenue growth of 0.5 – 2.5%.
  • An EBITDA margin before exceptional items of 14 –15% (before effects of IFRS 16).
  • CAPEX of DKK 200 – 220 million.
  • Investments of about DKK 145 million for acquisition of Kosmolet A/S, of which DKK 10 million will be paid in Matas shares.

In 2019/20, the effect of the introduction of IFRS 16 is expected to increase the EBIDTA margin by about 4 percentage points. In addition IFRS 16 will lead to a technical increase in Matas’ debt by around DKK 950 m, while increasing the assets by the same amount.             

Financial ambitions

The Group’s financial ambitions going forward to 2022/23 are specified as follows:

  • Overall 2022/23 revenue of about DKK 4 billion.
  • Positive underlying like-for-like revenue growth going forward to 2022/23 (revised). Previously: positive underlying like-for-like growth from financial year 2020/21 at the latest.
  • An EBITDA margin before exceptional items above 14% towards the end of the strategy period (before effects of IFRS 16).
  • Average annual CAPEX of DKK 120 –140 million, with investments skewed to the first three years of the strategy period.
  • A gearing ratio (before effects of IFRS 16) of 2.5 – 3 (ratio of net interest-bearing debt to EBITDA before exceptional items). The gearing ratio should not materially exceed 3 for longer periods of time (specified).

Conference call
Matas will host a conference call for investors and analysts on 28 May 2019 at 11:00 a.m. (CEST). The conference call and presentation can be accessed on our investor website: Conference call access numbers for investors and analysts:

DK:                       +45 32 72 80 42
UK:                       +44 (0) 844 571 8892
US:                       +1 631 510 7495
Event code:           8298779

Please call 5-10 minutes before the conference call begins.

Link to webcast:

Annual general meeting
The annual general meeting will be held on Thursday, 27 June 2018 at 4:00 p.m. (CEST) at IDA Mødecenter, Kalvebod Brygge 31-33, DK-1780 Copenhagen V, Denmark.

Gregers Wedell-Wedellsborg
CEO, tel +45 48 16 55 55

Anders T. Skole-Sørensen
CFO, tel +45 48 16 55 55

Elisabeth Toftmann Klintholm
Head of Investor Relations & Corporate Affairs, tel +45 48 16 55 48

Klaus Fridorf                                                                                            
Head of Communication, tel +45 61 20 19 97

Forward-looking statements
This announcement contains statements relating to the future, including statements regarding the Matas Group's future operating results, financial position, cash flows, business strategy and future targets. Such statements are based on management’s reasonable expectations and forecasts at the time of release of this announcement. Forward-looking statements are subject to risks and uncertainties and a number of other factors, many of which are beyond the Matas Group's control. This may have the effect that actual results may differ significantly from the expectations expressed in the announcement. Without being exhaustive, such factors include general economic and commercial factors, including market and competitive conditions, supplier issues and financial and regulatory issues.