Interim report – H1 2016/17
Matas A/S Half Year financial report Interim report – H1 2016/17 Company announcement no. 28 2016/17 Allerød, 2016-11-09 07:47 CET (GLOBE NEWSWIRE) -- Weak revenue and profit performance – guidance revised Q2 2016/17 revenue was DKK 771.6 million, representing a 1.5% year-on-year decrease. H1 2016/17 revenue was DKK 1,619.7 million. The underlying like-for-like store-sales growth rate was minus 1.5% in Q2 2016/17. The like-for-like growth rate for H1 2016/17 was 0.8%. EBITA was DKK 97.5 million in Q2 2016/17, equivalent to an EBITA margin of 12.6%, down from 15.7% in the year-earlier period. EBITA for H1 2016/17 was DKK 234.4 million, representing an EBITA margin of 14.5%. The guidance for 2016/17 has been revised. Matas now expects like-for-like revenue growth to be 0 - 2% and an EBITA margin of around 16%. Statement by Terje List, Chief Executive Officer: “Our Q2 revenue and profit performance was unsatisfactory. The main reasons were growing competition within mass beauty products and higher strategy implementation costs. At the same time, we are seeing a positive development in high-end beauty and the Vital area and strong growth in online sales. The new store concept and the new version of Club Matas are also performing well. Despite the upcoming Christmas season and more business days in Q4 2016/17, we revise our full-year guidance. In order to strengthen our market position, also in the short term, we will further sharpen our strategy in terms of activities targeting sales growth and increased earnings. In this connection, we are initiating a cost cutting programme in the range of DKK 25 - 30 million. The programme will be phased in during Q4 2016/17 to take full effect from Q1 2017/18.” § Q2 2016/17 revenue was down by 1.5% year on year to DKK 771.6 million. The like-for-like growth rate for Q2 was minus 1.5%. Revenue for H1 2016/17 was DKK 1,619.7 million, representing like-for-like growth of 0.8% on the year-earlier period. § Q2 2016/17 gross profit was DKK 361.9 million, equivalent to a gross margin of 46.9%, which was on a level with Q2 2015/16. Gross profit for H1 2016/17 was DKK 763.0 million, representing a gross margin of 47.1%, up from 46.8% in the year-earlier period. § EBITA was DKK 97.5 million in Q2 2016/17, equivalent to an EBITA margin of 12.6%, down from 15.7% in Q2 2015/16. EBITA was adversely affected by increased payroll costs, especially at head office, in connection with the execution of Matas’s strategic initiatives, general salary increases, a small increase in the number of staff in the stores, partly as a consequence of the acquisition of stores and costs of DKK 6.6 million in connection with changes to an option programme. EBITA for H1 2016/17 was DKK 234.4 million (H1 2015/16: DKK 260.7 million). Overall, the EBITA margin for H1 2016/17 was 14.5%, which was 1.7%-point lower than in the year-earlier period. § Profit after tax in Q2 2016/17 was DKK 54.6 million, and adjusted profit after tax net of amortisation not related to software was DKK 69.4 million (Q2 2015/16: DKK 85.8 million). Adjusted profit after tax for H1 2016/17 was DKK 168.7 million (H1 2015/16: DKK 186.7 million). § Cash generated from operations decreased to DKK 13.1 million in Q2 2016/17 (Q2 2015/16: DKK 44.0 million). The free cash flow in Q2 2016/17 was an outflow of DKK 21.8 million (Q2 2015/16: an inflow of DKK 18.6 million). § Gross debt stood at DKK 1,766.7 million at 30 September 2016. The target of a gross debt of DKK 1,600 - 1,800 million remains unchanged. Net interest-bearing debt was DKK 1,732.1 million at 30 September 2016, equivalent to 2.8x LTM EBITDA before exceptional items as compared to 2.4x at the end of Q2 2015/16. § Club Matas continued its net membership growth in Q2 2016/17, retaining its position as the largest customer club in Denmark. After the summer, the relaunch of Club Matas was focused on making customers even more aware of the individualised customer benefits inherent in the programme. § Matas’s webshop continued its high growth rate in the quarter. § After the end of the quarter, Matas has opened the first M·A·C shop-in-shop and the first pharmacy shop-in-shop in the new store in Sønderborg, which is the largest Matas store in Denmark. Outlook for 2016/17 The financial targets for the Group for 2016/17 are as follows: § Like-for-like revenue is expected to grow by 0 - 2% (previously 1 - 3%). § The EBITA margin is expected to be around 16% (previously slightly below 17%). § Investment (CapEx), excluding acquisitions of stores, is expected to be at the level of DKK 90 - 100 million (unchanged). Conference call Matas will host a conference call for investors and analysts on 9 November at 10:00 a.m. (CET). The conference call and presentation will be available on our investor website: investor.en.matas.dk. Conference call access numbers for investors and analysts: Denmark: +45 3271 1659 US: +1 646 254 3365 UK: +44 (0)20 3427 0503 Event code: 8303818 or “Matas” Contacts: Terje List Søren Mølbak CEO, tel +45 4816 5555 Head of Investor Relations, tel +45 4816 5548 Anders T. Skole-Sørensen Henrik Engberg Johannsen CFO, tel +45 4816 5555 Information Manager, tel +45 2171 2474