Revenue and earnings growth continued as Matas and KICKS joined forces

Company announcement no. 14 2023/24
Allerød, 10 November 2023

Interim report – H1 2023/24

(1 April – 30 September 2023)

Revenue and earnings growth continued as Matas and KICKS joined forces

On 31 August 2023, Matas A/S completed the acquisition of KICKS Group AB ("KICKS"). Jointly, the combined entity will operate the market leading beauty and wellbeing omnichannel retail concept in the Nordics. Through the combination, Matas and KICKS will be able to better serve customer demand for larger assortment, new brands, access to stores, fast, convenient and inspiring online shopping and keep a continued focus on personal and expert advisory and service. Matas and KICKS will serve +5 million club members across the four Nordic markets with almost 500 stores, leading web shops, +3,800 skilled colleagues, and offer a category leading portfolio of third party brands, own brands, and services.

• Q2 2023/24 includes KICKS from completion of the acquisition on 31 August 2023, hence one month of financial performance. All numbers for Q2 2023/24 reflect the combined business, Matas Group, unless stated otherwise.
• Matas grew 8% organically in Q2. Total revenue for Matas Group amounted to DKK 1,285 million in Q2 2023/24, corresponding to a year-on-year increase of 29.9% from DKK 989 million in Q2 2022/23.
• Gross margin was 44.5% in the quarter, in line with expectations and 0.3 percentage points below last year.
• EBITDA before special items came to DKK 177 million in Q2 2023/24, compared to DKK 160 million last year, and the EBITDA margin before special items was 13.8% in the quarter against 16.2% last year.
• Profit for the period amounted to DKK 2 million after tax compared to DKK 47 million last year, impacted by higher interest costs and special items (of DKK 39 million) related to the acquisition of KICKS.
• Matas Group maintains its guidance for the financial year 2023/24 to revenue in the range of DKK 6,400-6,600 million. Expectation to EBITDA margin before special items is maintained at around 15%, as well as expectations to CAPEX, excl. M&A, are maintained at DKK 500-525 million. Please see company announcement no. 12 2023/24 for assumptions related to the guidance.

Gregers Wedell-Wedellsborg, Group CEO of Matas A/S:

“The summer quarter was a milestone in Matas’ history. We joined forces with KICKS to create the Nordic market leader, and we are off to a good start with close collaboration and first synergies delivered. At the same time, our organic growth strategy delivered 8% growth despite a wet July and macroeconomic uncertainty. Sales were up across all channels with standout online growth of 33% in Matas. Our investment in assortment expansion continued with 44 new brands introduced in the quarter. Finally, we broke ground for Matas Logistics Center and took final steps towards the opening of KICKS’ Logistics Center, creating a platform for long-term growth across the Nordics.”

Key figures and ratios

Q2 2023/24 highlights

• Matas Group generated a total revenue of DKK 1,285 million in Q2 2023/24 corresponding to a year-on-year increase of 29.9% from DKK 989 million in Q2 2022/23. Retail sales increased by 30.2%, while organic growth in Matas was 8.0%.
• Online sales grew by 60.9%. Overall, online sales accounted for 29%. Physical stores reported sales up by 20.5% compared to Q2 last year. Organic growth online was 33% in Matas.
• Customer traffic was strong, and the number of transactions increased by 23.6% to 6.6 million, and the average basket size grew by 1.8% to DKK 183 per transaction compared to Q2 last year.
• Gross profit for Q2 2023/24 amounted to DKK 573 million, up from DKK 443 million in Q2 2022/23. The gross margin was 44.5%, down from 44.8% in Q2 2022/23 due to product mix and assortment expansion.
• Other external costs amounted to DKK 152 million in Q2 2023/24, up from DKK 86 million in Q2 2022/23. Other external costs include special items of DKK 27 million in Q2 2023/24 attributable to the KICKS transaction.
• Q2 2023/24 staff costs amounted to DKK 282 million, up by DKK 86 million from DKK 197 million in Q2 2022/23. Staff costs include special items of DKK 12 million in Q2 2023/24 attributable to KICKS.
• EBITDA before special items came to DKK 177 million, up from DKK 160 million in Q2 2022/23, resulting in an EBITDA margin before special items of 13.8% in Q2 2023/24.
• Total amortisation, depreciation and impairment charges were up by DKK 26 million to DKK 113 million in Q2 2023/24, whereof DKK 21 million derives from KICKS.
• Profit for the period amounted to DKK 2 million after tax against DKK 47 million in Q2 2022/23, impacted by the higher interest costs and special items of DKK 39 million related to the acquisition of KICKS.
• Free cash flow was an outflow of DKK 779 million in Q2 2023/24 compared with an inflow of DKK 60 million in Q2 2022/23, primarily driven by the acquisition of KICKS of DKK 692 million, with net impact of DKK 617 million after deducting KICKS’ own cash at the time of the acquisition of DKK 75 million.

H1 2023/24 highlights

• Matas Group generated a total revenue of DKK 2,435 million in H1 2023/24 corresponding to a year-on-year increase of 19.2% from DKK 2,043 million in H1 2022/23. Retail sales increased by 19.2%, while organic growth in Matas was 8.6%.
• Online sales grew by 42.6%. Overall, online sales accounted for 29%. Physical stores reported sales up by 11.6% compared to H1 last year. Organic growth online was 29% in Matas.
• Customer traffic was strong, and the number of transactions increased by 15.6% to 12.6 million, and the average basket size grew by 1.1% to DKK 185 per transaction.
• Gross profit for H1 2023/24 amounted to DKK 1,079 million, up from DKK 909 million in H1 2022/23. The gross margin was 44.3%, down from 44.5% in H1 2022/23 due to product mix and assortment expansion.
• Other external costs amounted to DKK 264 million in H1 2023/24, up from DKK 164 million in H1 2022/23. Excluding special items, other external costs increased by DKK 56 million compared to H1 2022/23, driven by the inclusion of KICKS and continued investment in assortment expansion.
• Staff costs amounted to DKK 497 million in H1 2023/24, up from DKK 398 million in H1 2022/23.
• EBITDA before special items came to DKK 378 million, up from DKK 352 million in H1 2022/23, resulting in an EBITDA margin before special items of 15.5% in H1 2023/24.
• Total amortisation, depreciation and impairment charges were up by DKK 28 million to DKK 204 million in H1 2023/24, whereof DKK 21 million derives from KICKS.
• Profit for the period amounted to DKK 51 million after tax against DKK 116 million in H1 2022/23, impacted by the higher interest costs and special items (DKK 60 million) related to the acquisition and integration of KICKS.
• Free cash flow was an outflow of DKK 578 million in H1 2023/24, compared with an inflow of DKK 159 million in H1 2022/23, primarily driven by the acquisition of KICKS of DKK 692 million, with net impact of DKK 617 million after deducting KICKS’ own cash at the time of the acquisition of DKK 75 million.

Webcast
Matas will host a webcast for investors and analysts on Friday, 10 November at 10:00 a.m. CET. The webcast and the presentation can be accessed from Matas’ investor website: https://investor.matas.dk.Webcast access numbers for investors and analysts:

DK: +45 78 76 84 90

UK: +44 203 769 6819

US: +1 646 787 0157

PIN for all countries: 915912

Link to webcast: https://matas-events.eventcdn.net/events/h1-interim-report-202324

Contacts
Gregers Wedell-Wedellsborg
Group CEO, phone +45 48 16 55 55

Per Johannesen Madsen
Group CFO, phone +45 48 16 55 55

John Bäckman
Head of Investor Relations & Treasury, phone +45 22 43 12 54

Klaus Fridorf
Head of Communication, phone +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 this report. 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 report. Without being exhaustive, such factors include general economic and commercial factors, including market and competitive conditions, supplier issues and financial and regulatory issues, IT failures as well as any effects of healthcare measures that are not specifically mentioned above.

Attachment

• Matas_H1_2023-24_UK_FINAL