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Matas Interim report – H1 2022/23

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Company announcement no. 11 2022/23
Allerød, 10 November 2022


Matas Interim report – H1 2022/23

(1 April – 30September 2022)


All-time high customer satisfaction, new assortment and online growth drives stable Q2 in a changing market

  • Matas grew revenue by 1.6% to DKK 989 million in Q2 2022/23 driven by 9.9% online growth.
  • EBITDA before special items declined by DKK 6 million to DKK 160 million compared to Q2 2021/22, due to an increase in energy costs of DKK 8 million in the quarter as well as planned cost increases related to the execution of long-term growth initiatives. The EBITDA margin before special items came to 16.2% for the quarter.
  • Profit after tax grew by DKK 10 million to DKK 47 million in Q2 2022/23, due to a decline in amortisation, related to the fully amortised Matas Brand trademark.
  • Customer satisfaction reached an all-time high with a Net Promoter Score of 75 on matas.dk and 73 in stores.
  • Matas maintains its guidance for the financial year 2022/23:
    • Revenue is expected in the range of DKK 4,390–4,520 million, corresponding to growth of between 1% and 4%.
    • The EBITDA margin before special items is expected in the range of 17%–18%, assuming moderate price increases in the Health and Beauty market.
    • Investments exclusive of potential acquisitions are expected in the DKK 225–250 million range.

Please see page 18 in the annual report 2021/22 for assumptions related to the guidance.

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

“Matas delivered growth in the summer quarter, with a slight dip in sales in July as Danish consumers started travelling abroad again. Growth continued after the summer despite cost-of-living concerns. Overall, customers shopped more frequently and spent more due to our assortment expansion on matas.dk, which came back to double-digit growth.

The successful transformation of Matas over the last five years has put us in a strong financial position and we will continue to invest in long-term growth.

We expect a tougher economic climate in the second half of the financial year, and we are seeing signs of customers trading down as well as cutting back on spending towards the end of each month. We maintain our guidance for the financial year butnote the higher downside riskand keep focusing on optimising our cost base for the remaining part of 2022/23.”


Key figures and ratios

2022/23 Q22021/22 Q22022/23 H12021/22 H1
Key figures (DKKm)
Revenue989.2973.92,042.71,995.2
Gross profit442.9430.9909.0884.0
EBITDA before special items160.0165.6351.5351.3
Profit after tax46.736.4115.890.5
Free cash flow60.286.1158.880.7
Ratios
Underlying like-for-like revenue growth1.6%1.8%2.3%3.9%
Gross margin44.8%44.2%44.5%44.3%
EBITDA margin before special items16.2%17.0%17.2%17.6%
Net interest-bearing debt/ EBITDA before special items2.02.2


Q2 2022/23 highlights

  • Matas generated total revenue of DKK 989 million in Q2 2022/23, a year-on year increase of 1.6% from DKK 974 million in Q2 2021/22. Retail revenue as well as underlying sales increased by 1.6%.
  • Online sales grew 9.9%, while physical stores reported sales down by 0.7% and wholesale sales were in line with Q2 last year.
  • Footfall was strong, and the number of transactions increased by 3.0% to 5.4 million, while the average basket size fell by 1.4% to DKK 179 per transaction.
  • Gross profit for Q2 2022/23 was DKK 443 million, up from DKK 431 million in Q2 2021/22. The gross margin was 44.8%, up from 44.2% in Q2 2021/22 due to an increase in sales from private labels within Mass Beauty.
  • Other external costs amounted to DKK 86 million in Q2 2022/23, up from DKK 69 million in Q2 2021/22. The increase in other external costs by DKK 17 million, was driven by a DKK 8 million increase in energy costs compared to Q2 2021/22.
  • EBITDA before special items came to DKK 160 million and EBITDA margin before special items was 16.2%, negatively affected 0.8% point from the increasing energy costs in the quarter. Adjusting for this, EBITDA margin before special items was in line with Q2 last year.
  • The total amortisation, depreciation and impairment charges were down by DKK 20 million to DKK 87 million in Q2 2022/23.
  • During Q4 of 2021/22 the Matas Brand trademark of approximately DKK 1.1 billion was fully amortised, reducing the quarterly amortisation and depreciation by DKK 18 million.
  • Profit for the period was DKK 47 million after tax, against DKK 36 million in Q2 2021/22.
  • Cash generated from operations was an inflow of DKK 146 million in Q2 2022/23 against an inflow of DKK 130 million in Q2 2021/22.


H12022/23 highlights

  • Retail revenue was up by 2.3% to DKK 1,994 million. Mass Beauty grew by 4.7% and Health and Wellbeing by 4.1% while High-End Beauty declined by 0.4%.
  • Total revenue was up by 2.4% in H1 2022/23 and experienced growth in all sales channels. Physical stores, online and wholesale were up 1.5%, 4.6% and 6.7% respectively. The positive development in wholesale was driven by the wholesale to Germany and an increase in wholesale from Nilens Jord in Q1 2022/23.
  • Footfall was strong, and the number of transactions increased by 5.7% to DKK 10.9 million, while the average basket size fell by 3.1% to DKK 183 per transaction.
  • Gross profit for H1 2022/23 was DKK 909 million, up from DKK 884 million in H1 2021/22. The gross margin was 44.5%, up from 44.3%.
  • Other external costs amounted to DKK 164 million in H1 2022/23, up from DKK 138 million in H1 2021/22. The increase in other external costs, was driven by a DKK 11 million increase in energy costs compared to H1 2021/22.
  • At DKK 352 million EBITDA before special items was largely unchanged from H1 2021/22. The EBITDA margin before special items was 17.2% against 17.6% in H1 2021/22.
  • Cash generated from operations came to DKK 290 million in H1 2022/23 against DKK 218 million in H1 2021/22.

Video conference
Matas will host a video conference for investors and analysts on Thursday, 10 November at 10:00 a.m. CET. The video conference and the presentation can be accessed from Matas’ investor website: https://investor.matas.dk.

Video conference 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://streams.eventcdn.net/matas/2022q2


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

Per Johannesen Madsen
CFO, tel +45 48 16 55 55

Klaus Fridorf
Head of Communication, tel +45 61 20 19 97

Frederikke Linde
Head of Investor Relations, tel. +45 60 62 60 87


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 as well as any effects of healthcare measures that are not specifically mentioned above.

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