Interim report - 9M 2023/24

Company announcement no. 17 2023/24
Allerød, 2 February 2024

Interim report – 9M 2023/24

(1 April – 31 December 2023)

All-time high revenue and improved earnings in Q3

Q3 2023/24 was the first full quarter including KICKS Group AB ("KICKS”) following the acquisition. Both Matas and KICKS delivered all-time high revenue in Q3, and underlying earnings improved whilst integration work continued.

• 9M 2023/24 includes KICKS from completion of the acquisition on 31 August 2023, hence four months of financial performance. All numbers for 9M and Q3 2023/24 reflect the combined business, Matas Group, unless stated otherwise.
• Matas Group generated a total revenue of DKK 2,508 million in Q3 2023/24 corresponding to a year-on-year increase of 80% from DKK 1,396 million in Q3 2022/23. Organic growth in Q3 was 9%. KICKS grew 3% in local currency. Both Matas and KICKS generated all-time high revenue in Q3.
• Gross margin was 43.7% in the quarter, in line with expectations and 0.8 percentage points below last year due to KICKS acquisition, channel mix and assortment expansion.
• EBITDA before special items came to DKK 424 million in Q3 2023/24 compared to DKK 296 million last year, and the EBITDA margin before special items was 16.9% in the quarter against 21.2% last year, primarily reflecting the KICKS acquisition.
• Profit for the period amounted to DKK 163 million after tax compared to DKK 147 million last year. Q3 2023/24 was impacted by special items of DKK 20 million related to the integration of KICKS.
• Free cash flow was an inflow of DKK 560 million in Q3 2023/24 compared with an inflow of DKK 382 million in Q3 2022/23, primarily driven by performance and cash flow from KICKS, and partly due to timing effects.
• Guidance is maintained from 9 January 2024 when Matas Group upgraded its guidance for the financial year 2023/24 to revenue in the range of DKK 6,650-6,750 million (previously DKK 6,400-6,600 million). Expectation to EBITDA margin before special items was maintained at around 15%, and CAPEX, excl. M&A, was maintained at DKK 500-525 million. Please see company announcement no. 16 2023/24 for assumptions related to the guidance.
  
  

Gregers Wedell-Wedellsborg, Group CEO of Matas A/S:
"Matas and KICKS' first Christmas as one Nordic company was a rock-solid success. Despite macroeconomic uncertainty and ongoing integration work, the Group executed flawlessly, grew sales in all markets and channels and improved underlying earnings. Given the strong Q3, we upgraded our revenue guidance on 9 January.”

Key figures and ratios

Q3 2023/24 highlights

• Matas Group generated a total revenue of DKK 2,508 million in Q3 2023/24 a year-on-year increase of 80% from DKK 1,396 million in Q3 2022/23 when the Group did not own KICKS. Organic growth was 9.2%. KICKS grew 3% in local currency.
• Organic growth online was 23% and stores grew 4%. KICKS grew both in stores and online. Both Matas and KICKS had all-time high revenue in Q3.
• Customer traffic was strong, and the organic number of transactions increased by 7.6% to 7.3 million, and the organic average basket size grew by 1.8% to DKK 206 per transaction compared to Q3 last year.
• Gross profit for Q3 2023/24 amounted to DKK 1,096 million, up from DKK 621 million in Q3 2022/23. The gross margin was 43.7%, down from 44.5% in Q3 2022/23 due to acquisition of KICKS, channel mix and assortment expansion.
• Other external costs amounted to DKK 274 million in Q3 2023/24, up from DKK 105 million in Q3 2022/23, driven by the KICKS acquisition and increased online sales. Other external costs include special items of DKK 17 million in Q3 2023/24, attributable to the KICKS integration.
• Q3 2023/24 staff costs amounted to DKK 417 million, up from DKK 220 million in Q3 2022/23, driven by KICKS acquisition and increased online sales. Staff costs include special items of DKK 3 million in Q3 2023/24, attributable to the KICKS integration.
• EBITDA before special items came to DKK 424 million in Q3 2023/24 compared to DKK 296 million last year, and the EBITDA margin before special items was 16.9% in the quarter against 21.2% last year, primarily reflecting the KICKS acquisition.
• The total amortisation, depreciation and impairment charges were DKK 155 million in Q3 2023/24, up by DKK 61 million and mainly attributable to KICKS.
• Profit for the period amounted to DKK 163 million after tax compared to DKK 147 million last year, impacted by special items of DKK 20 million related to the integration of KICKS and higher interest rates.
• Free cash flow was an inflow of DKK 560 million in Q3 2023/24 compared with an inflow of DKK 382 million in Q3 2022/23, primarily driven by performance and cash flow from KICKS.

9M 2023/24 highlights

• Matas Group generated a total revenue of DKK 4,943 million in 9M 2023/24 corresponding to a year-on-year increase of 43.8% from DKK 3,439 million in 9M 2022/23 when the Group did not own KICKS. Organic growth was 8.8%.
• Revenue was up across all sales channels.
• Customer traffic was strong, and the number of transactions increased by 34.5% to 23.7 million, and the average basket size grew by 7.4% to DKK 205 per transaction.
• Gross profit for 9M 2023/24 was DKK 2,174 million, up by DKK 644 million from DKK 1,530 in 9M 2022/23. The gross margin was 44.0% down from 44.5%.
• Other external costs amounted to DKK 538 million in 9M 2023/24, up by DKK 269 million from DKK 269 million in 9M 2022/23.
• Staff costs amounted to DKK 914 million in 9M 2023/24, up from DKK 618 million in 9M 2022/23.
• 9M 2023/24 EBITDA before special items amounted to DKK 802 million, against DKK 647 million in 9M 2022/23. The EBITDA margin before special items was 16.2% against 18.8% in 9M 2022/23.
• The total amortisation, depreciation and impairment charges were DKK 359 million in 9M 2023/24, up by DKK 89 million and mainly attributable to KICKS.
• In 9M 2023/24 adjusted profit after tax amounted to DKK 316 million against DKK 294 million in 9M 2022/23.
• Free cash flow excluding acquisitions of subsidiaries and operation was an inflow of DKK 599 million in 9M 2023/24, compared with an inflow of DKK 543 million in 9M 2022/23. In addition, Matas Group acquired KICKS in 9M 2023/24 for DKK 692 million, net DKK 617 million less KICKS' own cash at the time of the acquisition of DKK 75 million.

Webcast
Matas Group will host a webcast for investors and analysts on Friday, 2 February 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

SE: +46 8 1241 0952

NO: +47 2195 6342

UK: +44 203 769 6819

US: +1 646 787 0157

PIN for all countries: 915912

Link to webcast: https://matas-events.eventcdn.net/events/q3-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

About Matas Group
Matas Group is the Nordic leader in beauty and wellbeing, consisting of the banners Matas, KICKS and Skincity. With almost 500 stores and leading web shops across Denmark, Sweden, Norway, and Finland, we are the leading omnichannel player offering a curated portfolio of third party brands, own brands and an emphasis on personal and expert advisory and service excellence. We have more than 5 million loyalty members across the Nordics. Matas Group is listed on Nasdaq OMX Copenhagen.

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_Q3_2023-24_UK_FINAL