Interim report – Q1 2020/21 – Sales and earnings growth despite COVID-19

Company announcement no. 04 2020/21 – INSIDE INFORMATION
Allerød, 20 August 2020

Interim report – Q1 2020/21

(1 April – 30 June 2020)

Sales and earnings growth despite COVID-19

“The first quarter was historically challenging and historically strong at the same time. The COVID-19 pandemic and the national lockdown boosted demand for health, hygiene and personal care products and triggered a boom on with sales soaring by 216%. Overall, Matas Group grew revenue by more than 8% during the first quarter of the financial year, while earnings were up by almost 7% despite the costs incurred to ensure a safe shopping environment for our customers and employees”, said Gregers Wedell-Wedellsborg, CEO of Matas A/S, and added:

“Things were looking bleak at the end of March, but we and our partners decided to put every ounce of energy into making an ultra-quick rebound. Sales soon recovered and customers quickly returned to the physical stores as Denmark began to reopen. Developments in Q1 really underlined Matas’ role in society during a health crisis and confirmed our strategy to be our customers’ preferred choice – whether shopping online or at physical stores”. 

Q1 2020/21 highlights

  • Revenue grew by 8.1% year on year, while underlying like-for-like sales, i.e. sales in stores operated by the Group in both Q1 2020/21 and Q1 2019/20, were up by 8.4% in Q1 2020/21. Boosting sales by 15.9%, Health & Wellbeing recorded the strongest sales growth. The number of trading days was unchanged compared with Q1 2019/20.
  • Online sales via were ahead by 216% year on year, while overall online sales, including revenue generated by Firtal, surged by 152% to make up 25.5% of Q1 2020/21 revenue from 10.9% in Q1 2019/20.
  • Underlying sales in the Group’s physical stores were down by 9.2% year on year as footfall was adversely affected by the COVID-19 pandemic, especially at the beginning of the quarter. In the second half of the quarter, footfall was up compared with Q1 2019/20.
  • The gross margin was 44.4% compared with 45.0% in Q1 2019/20. The lower gross margin was attributable to a higher proportion of online sales.
  • Overall costs amounted to 26.3% of revenue against 26.7% in the same quarter of last year and were up by DKK 15.4 million as a consequence of higher activity and acquisitions. Underlying costs fell as a result of ongoing rationalisation measures.
  • EBITDA before special items came to DKK 172.8 million, up from DKK 163.2 million in the year-earlier period. Growth was driven by higher revenue, which more than offset the higher costs. The EBITDA margin before special items was 18.3% against 18.6% in Q1 2019/20.
  • Cash generated from operations was an inflow of DKK 301.0 million in Q1 2020/21 against an inflow of DKK 82.7 million in Q1 2019/20. The DKK 218.2 million increase was driven mainly by favourable working capital developments with deferred payment of A tax and VAT under the government's COVID-19 relief package contributing some DKK 100 million.
(DKKm) Q1Q1
Revenue 946.8875.6
Gross profit 420.2394.0
EBITDA before special items 172.8163.2
EBIT 72.170.8
Adjusted profit after tax 67.466.0
Free cash flow 236.8(81.1)
Revenue growth 8.1%3.8%
Underlying like-for-like revenue growth 8.4%(1.2)%
Gross margin 44.4%45.0%
EBITDA margin before special items 18.3%18.6%
Net interest-bearing debt/EBITDA before special items 3.2n.a.*

The number cannot be calculated at 30 June 2019 due to a lack of historical EBITA numbers after IFRS 16 implementation.

Financial targets

The health, financial and structural consequences of the COVID-19 pandemic have been and continue to be severe, and the pandemic could potentially affect consumer behaviour and society at large for a long time to come. As a result, the current uncertainty pertaining to the retail industry in particular and economic developments in general has increased.

Based on the current uncertainty caused by the COVID-19 pandemic, Matas Group decided not to provide specific financial guidance for financial year 2020/21 in connection with the presentation of the annual report for 2019/20 on 27 May 2020. Based on revenue data for the first four and a half months and earnings data for the first three months of the financial year, the management of Matas A/S has chosen to establish financial guidance for financial year 2020/21 in connection with the presentation of this interim report for Q1 2020/21.

The Group’s financial targets for 2020/21 are as follows:

  • Overall revenue growth of around 6% relative to financial year 2019/20
  • Underlying (like-for-like) revenue growth of around 6%
  • EBITDA margin before special items of around 18% (after IFRS 16 effects)
  • CAPEX between DKK 120 million and DKK 140 million

The Group’s financial targets for 2020/21 are based on assumptions of continuing steady market growth, slightly growing sales of beauty, health and personal care products and a largely unchanged competitive climate. In addition, the ongoing channel shift from physical store to online shopping is expected to continue through the financial year, which is expected to entail a further drop in physical store footfall. Encouraged by continuing strong growth in online sales, the Group will bring forward some of its planned investments, and the overall CAPEX level is expected to be slightly higher than previously anticipated.

It should be noted that the assumptions are subject to higher-than-usual uncertainty. The above targets do not factor in the effects of a potential second wave of COVID-19 or a dramatic change in consumer behaviour in the wake of, for example, a recession in the second half of the financial year. Furthermore, management believes that sales in June, July and the first half of August were favourably affected by the low level of outbound travel activity among Danish consumers during the summer period.

Financial targets and ambitions
Q1 2020/21
Targets for
Ambitions for
Customer engagement (M-NPS)62.2 (index 97)Ongoing improvement70 (index 110)
Revenue growth*8.1%Around 6%Approx. DKK 4.0 billion
Underlying (like-for-like) revenue growth8.4%Around 6%Positive
EBITDA margin before special items18.3%Around 18%Above 18%
CAPEXDKK 40 millionDKK 120–140 millionBelow DKK 90 million

* Includes revenue from Firtal and Kosmolet A/S.

Video conference
Matas will host a video conference for investors and analysts on Thursday, 20 August 2020 at 11:30 a.m. The video conference and the presentation can be accessed on Matas’ investor website:

Video conference access numbers for investors and analysts:
DK:   +45 78 15 01 08
UK:   +44 333 300 9268
US:   +1 8338230586

Link to webcast:


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

Anders Skole-Sørensen
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 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 the announcement. Forward-looking statements are subject to risks and uncertainties and a number of other factors, many of which are beyond 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 as well as any effects of measures to curb the spread of COVID-19 that are not specifically mentioned above.