q2 report 2015/16 - about.clasohlson.com...•q2 2015/16 •first six months 2015/16 •events after...
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Q2 Report 2015/16 9 December 2015
Klas Balkow President & CEO
Agenda
• Q2 2015/16
• First six months 2015/16
• Events after period-end
• Future outlook
• Strategic priorities
• Q&A
High energy and strong position
3
206 stores in
5 countries omni-channel structure
76 million visitors 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
38 million customers
Highlights
• Solid second quarter despite currency challenges
• Strong November sales gives good start to the important third quarter
4
Q2 2015/16 August – October
Sales Q2
• Sales up 5% in local currencies
• Flat LFL sales
− Improving trend during the quarter
• Sales 1,846 MSEK, up 2%
• 10 additional stores net compared to end of period last year (11)
• 4 store openings in the quarter
6
1 553 1 614
1 678
1 814 1 846
Q211/12
Q212/13
Q213/14
Q214/15
Q215/16
MSEK
+2%
Esbo – Finland
Karlstad – Sweden
Sandefjord – Norway
St Albans – UK
20 August 1 October
10 September 14 October
46%
39%
10% 5%
Sales share per market
8
Sweden
Norway
Finland Outside Nordics
74 stores
33 stores
82 stores
12 stores
Dubai
1 store
80
85
90
95
100
105
110
9
Source: www.tradingeconomics.com
94
97
100
103
106
109
Q211/12
Q3 Q4 Q112/13
Q2 Q3 Q4 Q113/14
Q2 Q3 Q4 Q114/15
Q2 Q3 Q4 Q115/16
Q2
Sweden Consumer Confidence
Sweden Retail Index
Source: HUI
Retail index current prices
Sweden Q2
• Sales up 6% to 847 MSEK
• Total 82 stores
− 1 new store during Q2
− 4 more stores compared to preceding Q2
• Maintaining market share in a strong market
10
722 742 771 803
847
Q211/12
Q212/13
Q213/14
Q214/15
Q215/16
MSEK
+6%
100
102
104
106
Q211/12
Q3 Q4 Q112/13
Q2 Q3 Q4 Q113/14
Q2 Q3 Q4 Q114/15
Q2 Q3 Q4 Q115/16
Q2
11
-9
-6
-3
0
3
6
9
12
Norway Consumer Confidence
Norway Retail Index
Source: www.tradingeconomics.com
Source: SSB
646 669 684
750 716
Q211/12
Q212/13
Q213/14
Q214/15
Q215/16
Norway Q2
• Sales up 5% in local currency
• Sales 716 MSEK, down 4%
• Total 74 stores
− 1 new stores during Q2
− 5 more stores compared to preceding Q2
• Increased market share in a volatile market
12
MSEK
0
5
10
15
20
96
98
100
102
104
106
108
Q211/12
Q3 Q4 Q112/13
Q2 Q3 Q4 Q113/14
Q2 Q3 Q4 Q114/15
Q2 Q3 Q4 Q115/16
Q2
13
Finland Consumer Confidence
Finland Retail Index
Source: www.tradingeconomics.com
Source: Statistikcentralen
Finland Q2
• Sales up 5% in local currency
• Sales 190 MSEK, up 7%
• Total 33 stores
− 1 new stores during Q2
− 1 more store compared to preceding Q2
• Increased market share and strengthened brand position in a soft market
14
122
140
158
177 190
Q211/12
Q212/13
Q213/14
Q214/15
Q215/16
MSEK
-40
-30
-20
-10
0
10
15
UK UK Consumer Confidence
UK Retail Index
100
102
104
106
Q211/12
Q3 Q4 Q112/13
Q2 Q3 Q4 Q113/14
Q2 Q3 Q4 Q114/15
Q2 Q3 Q4 Q115/16
Q2
Source: www.tradingeconomics.com
Source: Statistikcentralen
Outside Nordic countries Q2
• Sales -1% in local currencies
• Sales 93 MSEK, up 10%
• 13 stores whereof one franchise
− 1 new small format store opened
− 1 store closed
− No additional stores compared to preceding Q2
• Flat LFL sales in the UK
• Positive retail sales development in Dubai
16
63 63 65
84
93
Q211/12
Q212/13
Q213/14
Q214/15
Q215/16
UAE
UK
MSEK
Gross margin Q2
• Gross margin down 0.9 percentage points
• Negative currency impact
• Impact reduced by
− sales mix
− currency hedges NOK
17
42,3 42,0
43,3
44,8 43,9
Q211/12
Q212/13
Q213/14
Q214/15
Q215/16
%
Gross margin long-term development
18
%
35
36
37
38
39
40
41
42
43
44
45
Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2
R12
19
Negative currency impact
6,0
6,5
7,0
7,5
8,0
8,5
9,0
USD/SEK
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
1,00
1,05
1,10
1,15
1,20
NOK/SEK
Excluding hedging effect
Sales in NOK – instant currency effect
Jan 2013
Jan 2015
Jan 2014
May 2012
Nov 2015
Contribution from currency hedging
20
1,00
1,02
1,04
1,06
1,08
1,10
1,12
1,14
NOK/SEK
Excluding hedging effect
Sept 2014
March 2015
Sept 2015
Favourable sales mix
• Continued development of product and category mix
• Continued development of private label
• Continued pricing adjustments in line with the whole industry
21
Increased sourcing efficiency
• Increased share of direct sourcing
• Lower sourcing cost Asia
− raw material
− CNY currency
− general capacity
22
Share of selling expenses
23
31,6 32,9 32,9 33,7 33,4
Q211/12
Q212/13
Q213/14
Q214/15
Q215/16
%
• Share of selling expenses 33.4%, down 0.3 p.p. in quarter
Profit Q2
24
• Operating profit 145 MSEK
• Operating margin 7.8%
• Earnings per share 1.76 SEK 124
102
126
151 145
0
2
4
6
8
10
Q211/12
Q212/13
Q213/14
Q214/15
Q215/16
Operating profit, MSEK
Operating margin R12, %
Six months 2015/16 May – October
Sales Q1-Q2
• Sales up 6% in local currencies
• LFL sales +2%
• Sales 3,616 MSEK, up 5%
• 10 additional stores net compared to end of period last year (11)
26
2 940 3 076
3 184
3 457 3 616
Q1-Q211/12
Q1-Q212/13
Q1-Q213/14
Q1-Q214/15
Q1-Q215/16
+5% MSEK
243
203 218
253 250
0
2
4
6
8
10
Q1-Q211/12
Q1-Q212/13
Q1-Q213/14
Q1-Q214/15
Q1-Q215/16
Profit Q1-Q2
• Operating profit 250 MSEK
• Operating margin 6.9%
• Earnings per share 3.03 SEK
27
Operating profit, MSEK
Operating margin R12, %
105
94
68
107
115
Q211/12
Q212/13
Q213/14
Q214/15
Q215/16
Investments Q1-Q2
• Total investments 115 MSEK (107)
• New stores and refurbishments 40 MSEK (48)
• IT-systems 56 MSEK (46)
− Implementation of new IT-platform
− Other IT developments
28
MSEK
Strong cash flow
• Cash flow operating activities was 322 MSEK (272)
− Inventory 1,764 MSEK (1,609)
− Inventory turnover rate DC 6.4 (7.0)
• Cash flow after investments and financing activities of -155 MSEK (-147)
• Net cash holdings of 354 MSEK (213)
29
Events after period-end
Energy in all sales channels
• Good start to Christmas season
• High activity in all sales channels and markets
31
Voted christmas gift of the year
Robotic Vacuum Cleaner
November sales
• Sales 809 MSEK, up 8%
• Sales up 11% in local currencies
− Sweden + 10%
− Norway + 12%
− Finland + 19%
− Outside Nordic countries - 3%
• 9 additional stores compared to end of November last year (14)
• 4 store openings after period end
32
636 662
702 746
809
Nov11/12
Nov12/13
Nov13/14
Nov14/15
Nov15/16
MSEK
Ealing – UK
Åbo – Finland
Mall of Scandinavia – Solna, Sweden
Löddeköpinge – Sweden
4 November 26 November
12 November 3 December
1
Strong loyal customer base
34
2 8 1 9 6 9 members
2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 7
Future outlook
36
Continued challenge going forward
6,3
6,8
7,3
7,8
8,3
8,8
1,00
1,05
1,10
1,15
1,20
USD/SEK
NOK/SEK
Excluding hedging effect
Sales in NOK – instant currency effect
Purchasing in USD – time lag in currency effect
Source: Sveriges Riksbank
• Strengthened USD
• Weakened NOK
• Less positive effect from currency hedges going forward
Jan 2013
Jan 2015
Jan 2014
May 2012
Nov 2015
Counteracting measures
37
Monitor price development
Optimise sales mix
Increase sourcing efficiency
1 2 3
Update on strategic priorities
38
Sales channel development
39
Stores
Catalogue/Phone
Social media
Online
Loyalty
programmes
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 opened
• Optimising store network
40
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
41
• Solid second quarter
• Strong November sales
• Strong financial position
Summary Q2 15/16
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