Interim report – Q1 2016/17

Matas A/S
Quarterly report

Interim report – Q1 2016/17

Company announcement no. 14 2016/17

Allerød, 2016-08-16 07:56 CEST (GLOBE NEWSWIRE) -- Growing revenue – guidance
confirmed – new share buyback programme 

Q1 2016/17 revenue was up by 2.6% year on year to DKK 848.1 million. The
underlying like-for-like growth rate in store sales was 2.9% in Q1 2016/17. 

EBITA was DKK 136.9 million in Q1 2016/17, equivalent to an EBITA margin of
16.1%, down from 16.7% in the year-earlier period. 

The guidance for 2016/17 is unchanged: a like-for-like increase in revenue by
1-3% and an EBITA margin slightly below 17%. 

Due to substantial cash generation, a new share buyback programme will be
initiated for DKK 150 million in accordance with the company’s capital
structure policy. The programme will commence on 1 September 2016. 

Statement by Terje List, Chief Executive Officer: “Although we are pleased with
the quite positive revenue growth rate in the quarter, the sales growth was
mainly attributable to more business days during the quarter and a better sun
season in the early part of the summer. During the quarter, we continued to
roll out a number of strategic initiatives in order to boost long-term growth
in Matas’s revenue and earnings and, not least, we relaunched Club Matas, so
customers can now choose individualised benefits that match their buying
behaviour. The initiation of another share buyback programme underlines that
Matas is a highly cash generating company focused on ongoing returns to our

  -- Q1 2016/17 revenue grew 2.6% year on year to DKK 848.1 million. The
     like-for-like growth rate was 2.9%. Revenue was favourably affected by the
     number of business days and, to a lesser extent, developments in seasonal
     sales compared with the year-earlier period.

  -- Q1 2016/17 gross profit was DKK 401.1 million, equivalent to a gross margin
     of 47.3%, which was an improvement of 0.6 percentage point compared to
     46.7% in Q1 2015/16.

  -- EBITA was DKK 136.9 million in Q1 2016/17, equivalent to an EBITA margin of
     16.1%, against 16.7% in the year-earlier period.

  -- Profit after tax for the period was DKK 84.6 million, and adjusted profit
     after tax net of amortisation not related to software was DKK 99.4 million
     (Q1 2015/16: DKK 100.9 million).

  -- ​
Cash generated from operations decreased to DKK 86.5 million in Q1 2016/17
     (Q1 2015/16: DKK 199.5 million). The free cash flow in Q1 2016/17 was an
     inflow of DKK 25.7 million (Q1 2015/16: DKK 177.5 million). (The lower cash
     flow in the quarter was the result of the acquisition of four associated
     stores, investment in the stores and the deliberate build-up of inventories
     to reduce the number of stock-out situations.)

  -- Gross debt stood at DKK 1,534.2 million as at 30 June 2016. The target of a
     gross debt of DKK 1,600-1,800 million remains unchanged. Net
     interest-bearing debt was DKK 1,428.1 million at 30 June 2016, equivalent
     to 2.2x LTM EBITDA before exceptional items as compared to 2.5x at the end
     of Q1 2015/16.

  -- The annual general meeting held on 29 June 2016 passed a resolution to pay
     a dividend of DKK 6.30 per share of DKK 2.50, equivalent to a total
     dividend of DKK 254 million, which was paid out at the beginning of Q2

  -- Club Matas sustained the net membership growth in Q1 2016/17, retaining its
     position as the largest customer club in Denmark. Towards the end of the
     quarter, Club Matas was relaunched with additional customer benefits that
     are individualised and based on factors such as the customer’s purchase

  -- Matas’s online store continued its high growth rate in the quarter.

  -- After the end of the quarter, Matas has signed a letter of intent with
     Estée Lauder Company for the roll-out of a number of shops-in-shops with
     the internationally recognised make-up brand M·A·C, initially in the five
     StyleBox stores and in one Matas store.

  -- An agreement has been signed for the first shop-in-shop pharmacy at a Matas
     store in Sønderborg.

  -- Matas took over four associated stores in the quarter: one in Skagen, one
     in Haderslev and two in Sønderborg.

Outlook for 2016/17

The financial targets for the Group for 2016/17 are unchanged:

  -- Like
-for-like revenue is expected to grow by 1-3%.
  -- The EBITA margin is expected to be slightly below 17%.
  -- Investments(CapEx), excluding acquisitions of stores, is expected to be at
     the level of DKK 90-100 million.

Conference call

Matas will host a conference call for investors and analysts on Tuesday, 16
August at 12:30 a.m. 

The conference call and presentation will be available on our investor website: 

Conference call access numbers for investors and analysts:

DK                                                     +45 3271 1660

UK:                                                    +44 (0)20 3427 1904

US:                                                    +1 646 254 3388

Event code:                                     2054771


Terje List                                                                
Søren Mølbak 

CEO, tel +45 4816 5555                                         Head of Investor
Relations, tel +45 4816 5548 

Anders T. Skole-Sørensen                                     Henrik Engberg

CFO, tel +45 4816 5555                                         Information
Manager, tel +45 2171 2474