Interim report - Q1 2014/15: Strong and stable earnings – solid market position retained

Q1 2014/15 revenue grew 3.0% year on year to DKK 827 million. Like-for-like growth was 1.4% in Q1 2014/15, including a minor negative calendar effect. EBITA was DKK 130 million in Q1 2014/15 equivalent to an EBITA margin of 15.8%, down from 16.9% in the year-earlier period. The guidance for earnings and the financial targets for the full year are retained although the growth rate fell slightly short of expectations.

Terje List, Chief Executive Officer, said: "We have noted that the Danish retail market remains difficult, contributing to dampening revenue growth, which, at the rate of 3% in Q1, was slightly below our expectations. However, thanks to our robust business model, we again successfully retained our position in the market, which we expect will benefit us in the remaining part of the year."

• Q1 2014/15 revenue grew 3.0% year on year to DKK 827 million. Like-for-like growth was 1.4% and was adversely affected by fewer business days this year than in Q1 2013/14. The consolidation of acquired operations accounted for 1.6% of the revenue growth in Q1 2014/15.
• Q1 gross profit was DKK 386 million, equivalent to a gross margin of 46.7%, up from 46.6% in Q1 2013/14.
• EBITA was DKK 130 million in Q1 2014/15 equivalent to an EBITA margin of 15.8%, down from 16.9% in the year-earlier period.
• Profit after tax for the period was DKK 68 million, and adjusted profit after tax net of amortisation of trademarks was DKK 82 million (Q1 2013/14: DKK 82 million).
• Cash generated from operations increased to DKK 184 million in Q1 2014/15 (Q1 2013/14: DKK 46 million). The free cash flow was an inflow of DKK 156 million (Q1 2013/14: an inflow of DKK 3 million).
• Net interest bearing debt was DKK 1,468 million at 30 June 2014, equivalent to 2.4x LTM adjusted EBITDA before exceptional items as compared to 2.9x at the end of Q1 2013/14.
• At the Annual General Meeting held on 30 June 2014, a resolution was passed to declare a dividend of 5.50 per share of DKK 2.50, equivalent to a total dividend of DKK 224 million, which will be recognised in the cash flow statement for Q2 2014/15.
• Club Matas continued the net membership growth in Q1, retaining its position as the largest customer club in Denmark.

Outlook for 2014/15
The financial targets for the Group for 2014/15 are unchanged as follows:

• Revenue is expected to be around DKK 3.5 billion, assuming like-for-like growth of 2-3% after taking into account a negative calendar effect.
• The EBITA margin is expected to be on a level with the 2013/14 EBITA margin, which was 17.1%.

The Danish retail market was challenging in the first quarter of the financial year with continuing weak demand among consumers despite an improvement in consumer confidence. The financial targets for 2014/15 are based on an assumption of unchanged market conditions in the near term but an increase in consumption towards the end of the financial year. Moreover, it is expected that the Group will be in a position to continue to grow its market share.

Conference call
Matas will host a conference call for investors and analysts on Thursday, 21 August at 11:00 a.m. The conference call and presentation will be available on our investor website: investor.en.matas.dk. 

Conference call access numbers for investors and analysts: