q1 report 2015/16 · loyalty programmes . next step in our sustainability efforts 38 •in early...

Q1 Report 2015/16 9 September 2015

Klas Balkow President & CEO

Agenda

• Q1 2015/16

• Events after period-end

• Future outlook

• Strategic priorities

• Q&A

High energy and strong position

3

200 stores in

5 countries omni-channel structure

76 million visitors

38 million customers

4,700

service-minded

employees

High focus on

sustainability

agenda

One of the

strongest brands in retail in the Nordics

R12 sales

7.5 billion SEK

Q1 2015/16 May – July

Highlights Q1

• Record sales up 8% to 1,770 MSEK

• Improved operating profit of 106 MSEK (102)

− Including non-recurring cost of 10 MSEK

• Earnings per share improved by 3%

5

Sales Q1

• Sales up 8% in local currencies

• Sales 1,770 MSEK, up 8%

• 13 additional stores compared to end of period last year (8)

6

1 387 1 462

1 507

1 642

1 770

Q111/12

Q112/13

Q113/14

Q114/15

Q115/16

MSEK +8%

LFL sales

7

100

101

103

105

104

103

101

102

104

Q113/14

Q2 Q3 Q4 Q114/15

Q2 Q3 Q4 Q115/16

Index Sales comparable units in local currency, up 4%

Long term target 2%

45%

40%

10%

5%

Sales share per market

8

Sweden

Norway

Finland Outside Nordics

73 stores

32 stores

81 stores

12 stores

Dubai

1 store

80

85

90

95

100

105

110

9

Source: www.tradingeconomics.com

94

97

100

103

106

109

Q111/12

Q2 Q3 Q4 Q112/13

Q2 Q3 Q4 Q113/14

Q2 Q3 Q4 Q114/15

Q2 Q3 Q4 Q115/16

Sweden Consumer Confidence

Sweden Retail Index

Source: HUI

Retail index current prices

Sweden Q1

• Sales up 6% to 806 MSEK

• Total 81 stores

− 1 new store during Q1

− 3 more stores compared to preceding Q1

• Increased market share

10

667 692 703

760 806

Q111/12

Q112/13

Q113/14

Q114/15

Q115/16

MSEK

+6%

100

102

104

106

Q111/12

Q2 Q3 Q4 Q112/13

Q2 Q3 Q4 Q113/14

Q2 Q3 Q4 Q114/15

Q2 Q3 Q4 Q115/16

11

-6

-3

0

3

6

9

12

Norway Consumer Confidence

Norway Retail Index


Source: SSB

554 593 605

645

702

Q111/12

Q112/13

Q113/14

Q114/15

Q115/16

Norway Q1

• Sales up 12% in local currency

• Sales 702 MSEK, up 9%

• Total 73 stores

− No new stores during Q1


• Strong market position and strengthened brand

12

MSEK

0

5

10

15

20

96

98

100

102

104

106

108

Q111/12

Q2 Q3 Q4 Q112/13

Q2 Q3 Q4 Q113/14

Q2 Q3 Q4 Q114/15

Q2 Q3 Q4 Q115/16

13

Finland Consumer Confidence

Finland Retail Index


Source: Statistikcentralen

Finland Q1

• Sales up 7% in local currency


• Total 32 stores



• Strengthened brand and market position

14

116 121

143

161

176

Q111/12

Q112/13

Q113/14

Q114/15

Q115/16

MSEK

-40

-30

-20

-10

0

10

15

UK UK Consumer Confidence

UK Retail Index

100

102

104

106

Q111/12

Q2 Q3 Q4 Q112/13

Q2 Q3 Q4 Q113/14

Q2 Q3 Q4 Q114/15

Q2 Q3 Q4 Q115/16


Source: Statistikcentralen

Outside Nordic countries Q1

• Sales -2% in local currencies

− Negatively affected due to periodization in supplies to franchisee


• 13 stores whereof one franchise


− No additional stores compared to preceding Q1

• Flat LFL sales in the UK

• Positive retail sales development in Dubai

− Search for second store ongoing

16

50 56 56

77

86

Q111/12

Q112/13

Q113/14

Q114/15

Q115/16

UAE

UK

MSEK

Gross margin long-term development

17

%

35

36

37

38

39

40

41

42

43

44

45

Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4

R12

• Down in the quarter by 0.1 p.p to 40.4%

− Negative currency impact

− Positive sales mix

− Increased sourcing efficiency

Share of selling expenses

18

33

27

39

31

34

27

39

31

Q213/14

Q3 Q4 Q114/15

Q2 Q3 Q4 Q115/16

• Share of selling expenses 31.0%, down 0.4 p.p. in quarter

%

Operating profit and Operating margin

19

126

330

-18

102

151

350

-8

106

-2

0

2

4

6

8

10

12

Q213/14

Q3 Q4 Q114/15

Q2 Q3 Q4 Q115/16

Operating profit, MSEK

R12, operating margin, %

• Improved operating profit by 4% to 106 MSEK (102)

• Including non-recurring cost of 10 MSEK

44

34

17

56

52

Q111/12

Q112/13

Q113/14

Q114/15

Q115/16

Investments

• Total investments 52 MSEK (56)

• New stores and refurbishments 11 MSEK (15)

• IT-systems 34 MSEK (34)

− Implementation of new IT-platform

− Other IT developments

20

MSEK

Strong cash flow

• Cash flow operating activities was 170 MSEK (171)

− Inventory 1,532 MSEK (1,329)

− Inventory turnover rate DC 6.7 (7.0)

• Cash flow after investments and financing activities of 86 MSEK (102)

• Net cash holdings of 601 MSEK (462)

21

22

Proposed dividend

• Proposed dividend 5.25 SEK per share (4.75)

• Equivalent to 75% (77) of net profit

• Inline with dividend policy

At least 50 per cent of earnings per share after tax, with consideration for the financial position

• Record date for payment of dividend 15 September

3,75

4,25 4,25

4,75

5,25

10/11 11/12 12/13 13/14 14/15

*

SEK +11%

*Proposed dividend

Events after period-end

August sales

• Sales 611 MSEK

• Sales up 2% in local currencies

− Sweden + 3%

− Norway + 1%

− Finland + 2%

− Outside Nordic countries - 5%

• 13 additional stores compared to end of last August (8)

24

527 530 561

611 611

Aug11/12

Aug12/13

Aug13/14

Aug14/15

Aug15/16

MSEK

Launch of new autumn range

25

• Many new smart products in range

− More than 2,000 news

− Increased focus on lighting and energy saving products

• New catalogue released

− Reduced volumes in Norway, Finland and the UK

• New market communication concept launched in all countries

Store number 200 • On 20 August, Clas Ohlson’s 200th store was opened in traditional fashion

• Located in Bergvik Köpcenter, just outside Karlstad.

• Yet another milestone in Clas Ohlson’s journey of growth

26

Future outlook

27

28

Main challenge going forward

6,3

6,8

7,3

7,8

8,3

8,8

1,03

1,08

1,13

1,18

USD/SEK

May 12 May 14 May 13 May 15

NOK/SEK

Excluding hedging effect

Sales in NOK – instant currency effect

Purchasing in USD – time lag in currency effect

Source: Sveriges Riksbank

• Increased negative effect from strengthened USD

• Effect from further weakened NOK with immediate impact on sales and gross margin

Counteracting measures

29

Monitor price development

Optimise sales mix

Increase sourcing efficiency

1 2 3

Price position

30

• Never compromise on low price value proposition

• Closely monitor market price development

• Over time we expect the USD-effect to be reflected in consumer pricing for the whole industry

1

Sales mix

• Continue to develop product and category mix

• Continue to develop private label

31

2

Sourcing efficiency

• Increase efficiency in supply chain

• Increase share of direct sourcing

• Further initiatives to increase efficiency with our main suppliers

• Increase efficiency at Distribution Centre

32

3

33

Main challenge going forward

6,3

6,8

7,3

7,8

8,3

8,8

1,03

1,08

1,13

1,18

USD/SEK

May 12 May 14 May 13 May 15

NOK/SEK

Excluding hedging effect

Sales in NOK – instant currency effect

Purchasing in USD – time lag in currency effect

Source: Sveriges Riksbank

• Currencies will have negative impact in coming quarters

• Will be able to offset currency fluctuations over time

Update on strategic priorities

Next steps in the UK

• Next step in UK expansion plan

− New smaller store format cluster in London region

− New stores in St Albans and Ealing being developed

• Optimising store network

− Store in Merry Hill in Birmingham closed in August

35

High interest for German expansion

• Three stores contracted to open in Hamburg

− Jungfernstieg to open Summer 2016

− Altona to open Autumn 2016

− Alstertal to open Autumn 2016

• Preparations according to plan

36

High energy in all sales channels

37

Stores

Catalogue/Phone

Social media

Online

Loyalty

programmes

Next step in our sustainability efforts

38

• In early September we launched our new sustainability concept for communicating with our customers

• Even greater focus on offering and more clearly showcasing our range of products for a more sustainable lifestyle

New communication concept

• To inspire and display the unique benefits of the company’s products using film as a media

• Aim to record 5,000 film clips this year

• Produced in a studio in Insjön, Sweden

• In four languages and with local ambassadors

39

40

• All time high sales and improved profit

• Strong financial position

• Many initiatives for further development

Summary Q1 15/16

Questions & Answers

www.clasohlson.com

q1 report 2015/16 · loyalty programmes . next step in our sustainability efforts 38 •in early...

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