qliro group year end: dec 2018 2019 2020e 2021e 2022e eps ... · ao world plc overstock.com inc...

research.sebgroup.com/corporate Important. All disclosure information can be found on pages 15 – 17 of this document

Corporate Research Qliro Group NOT TO BE DISTRIBUTED IN, OR TAKEN OR TRANSMITTED INTO, THE UNITED STATES, CANADA, JAPAN, AUSTRALIA OR IN ANY OTHER JURISDICTION WHERE TO DO SO WOULD BE UNLAWFUL.

Results Analysis Retail Sweden 16 July 2020

Closing in on pending break-up Qliro Group is tidying up its operations ahead of the pending break-up “before the year-end”. Qliro will be separately listed, CDON will be distributed as a Lex Asea dividend to shareholders and Nelly will remain in the Qliro Group, which will change name to Nelly Group. Based on updated peer group valuation and revised earnings forecasts, we raise our mid-point SOTP value from SEK 9 per share to SEK 10.60.

We argue the SOTP value exceeds the value based on a going concern Based on our mid-point SOTP model, comparing Qliro's operations to industry peers, we arrive at an equity value of about SEK 10.60 per share. Here, we value CDON Marketplace at about SEK 700m, Qliro at SEK 700m, and Nelly at SEK 500m. We apply median consumer sector EV/EBIT multiples to value group common costs, and we add back our 2020 forecast net cash position (excluding Qliro). This compares with our DCF valuation which yields a mid-point value of about SEK 8.50 per share. We argue this corroborates the pending break-up strategy.

E-commerce operations recorded a combined 2% margin in the period In Q2 the group charged its P&L with SEK 4m in non-recurring costs, expensed SEK 16m in write-downs (SEK 7m in Q1) and changed accounting in Qliro impacts with another SEK 8m. Adjusting for these items, underlying group LBIT came in at SEK 15m (SEB: SEK 23m). The e-commerce operations (CDON and Nelly) generated adjusted EBIT of SEK 13m (2.1% margin) – up from SEK 1m in Q2 last year. Adjusting also for accounting changes, Qliro’s lending book increased 29% y/y and operating income was up 10%. Adjusted LBIT came in at SEK 12m – a clear improvement compared with the previous two quarters.

2021E: a positive delta in earnings ahead and EV/Sales valuation of 0.30x Based on our forecasts for improvements in margins and earnings growth in 2021, bolstered by implemented restructurings and write-downs, we find the current EV/Sales valuation of 0.30x attractive relative to all the company’s peer groups.

Key Data (2020E)

Price (SEK)ReutersBloomberg

Market cap (SEKm)Market cap (USDm)Market cap (EURm)Net debt (SEKm)Net gearingNet debt/EBITDA (x) (3.5)

Shares fully dil. (m)Avg daily turnover (m)Free float

QLRO.STQLRO:SS

1,090120

7.30

70%

105(279)

(36%)

149.30.0

Share Price (12M)

Absolute (green) / Relative to Sweden (purple).

0

5

10

15

Jul Aug Oct Dec Mar May Jul

Financials (SEK)

Source for all data on this page: SEB (estimates) and Millistream/Thomson Reuters (prices)

Year end: Dec 2018 2019 2020E 2021E 2022ERevenues (m) 3,226 2,939 2,760 2,811 2,968Adj. EBIT (45) (78) (72) 23 99Pre-tax profit (m) (84) (105) (110) 17 92EPS (0.91) (0.74) (0.73) 0.11 0.59Adj. EPS (0.84) (0.64) (0.53) 0.11 0.59DPS 0.00 0.00 0.00 0.00 0.00

Revenue growth (%) (20.3) (8.9) (6.1) 1.8 5.6Adj. EBIT growth (%) n.m. n.m. n.m. n.m. 328.4Adj. EPS growth (%) n.m. n.m. n.m. n.m. 457.7

Adj. EBIT margin (%) (1.4) (2.7) (2.6) 0.8 3.3ROE (%) (13.6) (11.7) (13.2) 2.0 10.5ROCE (%) (3.2) (5.5) (5.5) 1.9 7.8

PER (x) n.m. n.m. n.m. 69.3 12.4Free cash flow yield (%) (23.7) 4.3 (7.4) (2.3) (4.5)Dividend yield (%) 0.0 0.0 0.0 0.0 0.0P/BV (x) 1.38 1.17 1.40 1.38 1.24

EV/Sales (x) 0.29 0.25 0.29 0.30 0.30EV/Adj. EBITDA (x) 28.7 11.4 9.2 5.1 3.7EV/Adj. EBIT (x) (21.0) (9.3) (11.2) 36.2 8.9Operating cash flow/EV (%) (24.6) 25.2 7.2 11.1 12.0Net debt/Adj. EBITDA (x) (16.08) (6.36) (3.50) (1.56) (0.86)

Estimate Revisions (%)

2020E 2021E 2022ERevenues 1 2 1Adj. EBIT 6 18 7Adj. EPS 4 64 11

Marketing communication commissioned by: Qliro Group

Results Analysis Marketing communication commissioned by: Qliro Group 16 July 2020 2

Corporate Research NOT TO BE DISTRIBUTED IN, OR TAKEN OR TRANSMITTED INTO, THE UNITED STATES, CANADA, JAPAN, AUSTRALIA OR IN ANY OTHER JURISDICTION WHERE TO DO SO WOULD BE UNLAWFUL.

A valuation case for 2021 Mid-point SOTP raised to SEK 10.60 Valuation summary

DCF value, mid-point (SEK) 8.30 SOTP value, mid-point (SEK) 10.60 Share price (SEK) 7.30 2021E EV/Sales at current share price (x) 0.30 Low High Mid SOTP valuation range (SEK) 8.00 13.30 10.60 Share price difference to SOTP value (%) 10 82 45 2021E EV/Sales at SOTP valuation range 0.33 0.62 0.47 Disc./(prem.) to SOTP value (%) 25 (25) 0 Source: SEB

EBIT bridge (SEKm)

Source: SEB

Group EBIT margin forecasts excluding and including consumer banking (%)

Source: SEB

(4)

9

(15)(40) (23)

(2)12

16 18

(15)

(20)

34

93

36

(1)

17

29

40

(14)

(28)

2

(2)(15)

(20) (46)

17 80

(28)(38)

(48) (38)

(37)

(51)

(56)

(38)

(39)

-100%

-80%

-60%

-40%

-20%

0%

20%

40%

60%

80%

2014

2015

2016

2017

2018

2019

2020

E

2021

E

2022

E

CDON Marketplace Nelly Qliro Eliminations Group cost

EBIT forecasts by division, 2020-22E (SEKm)

(1.9)

0.5

(0.7)

(1.4)

0.5

(0.9)

(2.0)

(1.0)

0.2 0.6

8.7

6.4

7.2

6.5

4.4

(0.1)

(1.9)

0.2

(1.3) (1.3)

0.5

(1.4)

(2.7) (2.6)

0.8

3.3

(4.0)

(2.0)

0.0

2.0

4.0

6.0

8.0

10.0

(4.0)

(2.0)

0.0

2.0

4.0

6.0

8.0

10.0

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

E

2021

E

2022

E

EBIT (ex. NRIs & Qliro) margin (%) EBIT (ex. NRIs) margin (%)



Mid-point SOTP equity valuation model

(SEKm) Sales 2021E Adj. EBIT 2021E Peer group/methodology Disc./(prem.) (%) Multiple used (x) Implied EV EV/share

CDON Marketplace 820 16 Online Marketplaces, med: EV/Sales 85 0.82 672 4.50 Nelly 1,520 29 Online Apparel Retail, med: EV/Sales 75 0.31 465 3.12 Qliro 475 17 Sweden Consumer, med: EV/Sales (40) 1.42 672 4.51 Group common costs (3) (38) Sweden Consumer, med: EV/EBIT 0 13.3 (505) (3.38) Group consolidated P&L 2,811 23 Total group EV 1,305 8.74

Net debt/(cash), excl. QFS 2020E (279) (1.87)

Mid-point SOTP equity value 1,584 10.61 Mid-point SOTP equity value, per share 10.61 Share price 7.30 Equity valuation potential (to SOTP) (%) 45.3 Source: SEB

Peer group 2021 EV/Sales estimates (x)

Source: SEB, ThomsonReuters

Peer group share performance, -12M (%)

Source: SEB, ThomsonReuters

0.15

0.30

0.39

0.50

0.51

0.57

0.85

1.09

1.17

1.20

1.28

1.54

1.85

3.73

3.78

3.92

4.14

5.47

5.49

6.09

6.37

9.07

11.07

14.11

0.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00 16.00

SRP Groupe SA

Qliro Group

Verkkokauppa.com Oyj

Dustin

Zooplus AG

AO World PLC

Overstock.com Inc

ASOS PLC

Boozt AB

BHG Group

Boohoo Group PLC

JD.com Inc

Zalando SE

Amazon.com Inc

Farfetch Ltd

CarGurus Inc

eBay Inc

ZOZO Inc

Alibaba Group Holding Ltd

Ocado Group PLC

B2W Companhia Digital

Pinduoduo Inc

Mercadolibre Inc

Auto Trader Group PLC

EV/Sales (x) 2021E

(46.3)(38.9)(36.3)

(28.5)(24.3)(22.2)(21.1)(18.7)

(6.7)3.3 3.5

18.3 29.0

36.8 42.1

47.0 47.5 50.8 53.4

57.7 73.9

79.8 98.6 99.9

126.9 150.6

206.1 356.3

(100.0) (50.0) 0.0 50.0 100.0 150.0 200.0 250.0 300.0 350.0 400.0

Delticom AGQliro Group

CarGurus IncDustin

Sportamore AB (Publ)Footway Group AB

SRP Groupe SAJumei International Holding Ltd

Auto Trader Group PLCFarfetch Ltd

Boohoo Group PLCZooplus AG

ASOS PLCZOZO Inc

Verkkokauppa.com OyjAlibaba Group Holding Ltd

eBay IncMercadolibre IncAmazon.com Inc

Zalando SEOcado Group PLC

Boozt ABAO World PLC

JD.com IncOverstock.com Inc

BHG GroupB2W Companhia Digital

Pinduoduo Inc

Abs. performance (%) -12M



Nordic consumer banking: indexed share price performance, -12M (%)

Source: SEB

Peer group share price performance and valuation

CCY Share Mkt cap EV/Sales (x) EV/EBIT (x) EBIT (%) Sales 3Y Abs. performance (%) Online Marketplaces & Retail price price (EURm) 2020E 2021E 2022E 2020E 2021E 2022E 2021E CAGR % -1M -3M -12M

Online Retail AO World PLC GBP 141.00 742 0.62 0.57 0.54 29.9 22.6 17.3 2.5 6.5 4.4 135.0 98.6 ASOS PLC GBP 3,373.00 3,706 1.26 1.09 0.93 n.a. 48.8 18.4 2.2 16.5 8.8 51.1 29.0 Boohoo Group PLC GBP 217.00 3,009 1.60 1.28 1.03 21.2 16.4 13.0 7.8 24.3 (40.3) (19.0) 3.5 Boozt AB SEK 91.70 502 1.37 1.17 1.04 48.7 25.4 19.5 4.6 14.7 34.9 118.9 79.8 BHG Group SEK 96.60 1,000 1.38 1.20 1.00 22.1 19.7 16.4 6.1 12.7 15.7 48.8 150.6 Delticom AG EUR 2.54 32 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. (10.9) (1.9) (46.3) Dustin SEK 57.10 488 0.51 0.50 0.48 16.1 16.8 14.6 3.0 3.2 12.0 17.7 (28.5) Footway Group AB SEK 15.80 117 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 13.7 (12.2) (22.2) Jumei International Holding Ltd USD 19.93 207 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 5.3 7.7 (18.7) Ocado Group PLC GBP 1,988.50 16,380 6.87 6.09 5.28 n.a. n.a. n.a. (5.1) 14.1 1.6 34.0 73.9 Overstock.com Inc USD 43.13 1,528 0.95 0.85 0.78 n.a. n.a. n.a. (1.4) 10.6 118.4 395.2 126.9 SRP Groupe SA EUR 1.05 53 0.12 0.15 n.a. n.a. n.a. n.a. (3.5) n.a. 15.4 78.0 (21.1) Verkkokauppa.com Oyj EUR 5.16 231 0.41 0.39 0.38 15.9 14.0 12.2 2.8 3.9 (4.1) 47.4 42.1 Zalando SE EUR 66.00 16,772 2.19 1.85 1.59 97.5 61.3 46.1 3.0 17.3 6.8 58.6 57.7 Zooplus AG EUR 141.00 1,003 0.56 0.51 0.46 n.a. n.a. 77.7 0.3 11.1 1.6 34.8 18.3 Online Retail, avg 1.48 1.30 1.23 35.9 28.1 26.1 1.8 12.3 11.5 63.7 32.5 Online Retail, med 1.10 0.97 0.93 22.1 21.2 17.3 2.7 12.7 6.1 41.1 23.6

Online Marketplaces Alibaba Group Holding Ltd USD 248.58 589,965 6.90 5.49 4.55 27.2 20.5 16.1 26.8 22.9 14.2 21.4 47.0 Amazon.com Inc USD 3,084.00 1,349,793 4.38 3.73 3.19 n.a. 61.5 41.8 6.1 17.2 21.2 35.1 53.4 Auto Trader Group PLC GBP 514.80 5,475 17.93 14.11 12.87 28.2 20.0 17.9 70.5 18.0 (2.9) 21.1 (6.7) B2W Companhia Digital BRL 115.69 9,924 7.34 6.37 5.31 n.a. n.a. 68.7 5.8 17.5 16.3 94.4 206.1 CarGurus Inc USD 24.19 2,391 4.94 3.92 3.43 41.7 26.9 19.3 14.5 19.9 (5.1) 21.0 (36.3) eBay Inc USD 59.08 36,429 4.41 4.14 3.84 13.9 12.9 12.0 32.1 7.2 24.0 65.3 47.5 Farfetch Ltd USD 20.61 6,147 5.02 3.78 3.07 n.a. n.a. n.a. (16.3) 27.5 36.8 83.2 3.3 JD.com Inc USD 62.13 169,921 1.83 1.54 1.32 88.9 55.3 41.2 2.8 18.0 7.1 41.7 99.9 Mercadolibre Inc USD 972.63 42,427 15.20 11.07 7.96 n.a. n.a. n.a. (0.7) 38.2 8.5 73.1 50.8 Pinduoduo Inc USD 87.33 91,777 14.39 9.07 6.77 n.a. n.a. 52.1 3.2 45.8 19.5 103.0 356.3 ZOZO Inc JPY 2,612.00 6,660 5.89 5.47 5.15 n.a. n.a. n.a. n.a. 7.0 12.8 62.2 36.8 Online Marketplaces, avg 8.02 6.24 5.22 40.0 32.8 33.6 14.5 21.7 13.9 56.5 78.0 Online Marketplaces, med 5.89 5.47 4.55 28.2 23.7 30.2 5.9 18.0 14.2 62.2 47.5

Online Marketplaces & Retail, avg Online Marketplaces & Retail, med

4.61 3.67 3.23 37.6 30.2 29.7 7.6 17.0 12.4 60.7 51.0 2.19 1.85 2.33 27.7 21.5 18.4 3.0 16.8 8.8 47.4 42.1

Qliro Group SEK 7.30 105 0.29 0.30 0.30 n.a. 36.2 8.9 0.8 3.7 21.1 56.7 (38.9) Discount/(Premium) to Apparel retail peers, avg (%/pp) 93.6 91.9 90.8 n.a. (19.9) 69.9 6.8 13.3 (8.6) 4.1 89.9 Discount/(Premium) to Apparel peers, med (%/pp) 86.6 83.9 87.2 n.a. (67.8) 51.5 2.2 13.1 (12.3) (9.2) 81.0 Source: SEB, ThomsonReuters

132.87

88.05 95.21

78.28

19.15

71.68

(30.00)

0.00

30.00

60.00

90.00

120.00

150.00

180.00

15/0

7/19

29/0

7/19

12/0

8/19

26/0

8/19

09/0

9/19

23/0

9/19

07/1

0/19

21/1

0/19

04/1

1/19

18/1

1/19

02/1

2/19

16/1

2/19

30/1

2/19

13/0

1/20

27/0

1/20

10/0

2/20

24/0

2/20

09/0

3/20

23/0

3/20

06/0

4/20

20/0

4/20

04/0

5/20

18/0

5/20

01/0

6/20

15/0

6/20

29/0

6/20

13/0

7/20

NORWEGIAN FINANS HOLDING KOMPLETT BANK TF BANK RESURS HOLDING COLLECTOR QLIRO GROUP

Absolute share price performance, -1Ys, indexed



Qliro Group mid-point DCF equity valuation

Source: SEB

Capitalization and valuation forecasts

Capitalization (SEKm) 2017 2018 2019 2020E 2021E 2022E

Share price (SEK) 7.30 7.30 7.30 7.30 7.30 7.30 No of shares, f. dil. (m) 149.3 149.3 149.3 149.3 149.3 149.3 Market cap (SEKm) 1,090 1,090 1,090 1,090 1,090 1,090 Net debt/(cash) excl. Qliro (f. QFS) (SEKm) (303) (420) (314) (279) (255) (207) EV (SEKm) 786 670 776 811 835 882

Valuation (x) 2017 2018 2019 2020E 2021E 2022E Net sales 3,390 3,226 2,939 2,760 2,811 2,968 Adj. EBIT 8 (45) (78) (72) 23 99 EBIT margin (%) 0.3 (1.4) (2.7) (2.6) 0.8 3.3

EV/Sales (x) 0.23 0.21 0.26 0.29 0.30 0.30 EV/EBIT (x) 92.7 n.a. n.a. n.a. 36.2 8.9 Source: SEB

Group KPI forecasts

Q1/19 Q2/19 Q3/19 Q4/19 Q1/20 Q2/20 Q3/20E Q4/20E 2019 2020E 2021E 2022E Operating KPIs No. of active customers (thousands) 3,112 3,071 3,064 3,069 3,105 3,232 3,234 3,297 3,069 3,297 3,510 3,747 No. of visits (thousands) 50,881 52,853 45,355 65,519 50,788 59,110 47,414 68,987 214,608 226,299 239,737 253,908 No. of orders (thousands) 1,334 1,485 1,262 1,937 1,318 1,766 1,348 2,048 6,018 6,480 6,781 7,144 Average shopping basket (SEK) 636 693 692 670 675 639 712 698 680 698 716 740

Conversion rate (%) 2.6 2.8 2.8 3.0 2.6 3.0 2.8 3.0 2.8 2.9 2.8 2.8 Average shopping basket, calculated (SEK) 489 493 502 475 449 387 442 434 488 426 415 416

No. of active customers growth % (y-o-y) 1.5 (1.5) (3.3) (1.9) (0.2) 5.2 5.6 7.4 (1.9) 7.4 6.4 6.7 No. of visits growth % 1.5 2.8 2.1 (0.6) (0.2) 11.8 4.5 5.3 1.3 5.4 5.9 5.9 No. of orders growth % (7.9) (5.5) (3.0) (7.1) (1.2) 18.9 6.8 5.7 (6.0) 7.7 4.6 5.3 Average basket growth % 1.9 2.4 3.7 3.5 6.1 (7.8) 2.9 4.2 4.1 2.6 2.6 3.4

No. of active customers growth % (q-o-q) (0.5) (1.3) (0.2) 0.2 1.2 4.1 0.1 1.9 (1.9) 7.4 6.4 6.7 No. of visits growth % (q-o-q) (22.8) 3.9 (14.2) 44.5 (22.5) 16.4 (19.8) 45.5 1.3 5.4 5.9 5.9 No. of orders growth % (q-o-q) (36.0) 11.3 (15.0) 53.5 (32.0) 34.0 (23.7) 51.9 (6.0) 7.7 4.6 5.3 Average basket growth % (q-o-q) (1.7) 9.0 (0.1) (3.3) 0.7 (5.3) 11.4 (2.0) 4.1 2.6 2.6 3.4

12M trailing No. of active customers, 12M trailing (‘000) 3,131 3,120 3,094 3,079 3,077 3,118 3,160 3,217 3,069 3,297 3,510 3,747 No. of visits, 12M trailing (‘000) 53,157 53,512 53,749 53,652 53,629 55,193 55,708 56,575 214,608 226,299 239,737 253,908 No. of orders, 12M trailing (‘000) 1,573 1,551 1,542 1,505 1,501 1,571 1,592 1,620 6,018 6,480 6,781 7,144 Average shopping basket, 12M trailing (SEK) 657 661 667 673 682 669 674 681 680 698 716 740 Source: SEB

DCF valuation (SEKm) Weighted average cost of capital (%)

NPV of FCF in explicit forecast period 418 Risk free interest rate 2.5

NPV of continuing value 548 Risk premium 5.0

Value of operation 967 Cost of equity 7.5

Net debt (279) After tax cost of debt 1.8

Share issue/buy-back in forecast period 0

Value of associated companies 0 WACC 7.5

Value of minority shareholders' equity 0

Value of marketable assets 0 Assumptions

DCF value of equity 1,245 Number of forecast years 10

DCF value per share (SEK) 8.34 EBIT margin - steady state (%) 2.8

Current share price (SEK) 7.30 EBIT multiple - steady state (x) 9.8

DCF performance potential (%) 14 Continuing value (% of NPV) 56.7



Consolidated financial forecasts

(SEKm) Q1/19 Q2/19 Q3/19 Q4/19 Q1/20 Q2/20 Q3/20E Q4/20E 2019 2020E 2021E 2022E Net sales 653 733 634 919 592 684 596 889 2,939 2,760 2,811 2,968 COGS (478) (503) (444) (710) (440) (475) (409) (662) (2,135) (1,986) (1,972) (2,061) Gross profit 175 230 190 209 152 209 187 227 803 775 840 907 SG&A costs (219) (227) (201) (226) (212) (228) (202) (210) (873) (852) (836) (828) Other operating income/costs 11 (2) 3 (21) (6) (5) (1) 17 (9) 5 20 20 Non-recurring items 0 0 (5) (10) (10) (20) 0 (2) (15) (31) 0 0 EBIT (33) 1 (12) (48) (76) (43) (16) 32 (93) (103) 23 99 Of which: NRIs 0 0 (5) (10) (10) (20) 0 (2) (15) (31) 0 0 Of which: Qliro Financial Services 2 0 2 (24) (19) (20) (9) 2 (20) (46) 17 80 EBIT excl. NRIs (33) 1 (8) (38) (67) (23) (16) 34 (78) (72) 23 99 EBIT excl. NRIs & Qliro (36) 1 (9) (14) (48) (3) (8) 32 (58) (26) 6 19 Net financial items (11) (1) (1) (1) 0 (2) (1) (4) (13) (6) (7) (7) Reported pre-tax profit (44) 0 (13) (49) (76) (44) (18) 29 (105) (110) 17 92 Minority interests 0 0 0 0 0 0 0 0 0 0 0 0 Total taxes 0 0 0 (5) (0) 1 1 (1) (5) 0 (1) (5) Net profit (cont. operations), reported (44) 1 (13) (53) (77) (44) (17) 27 (110) (110) 16 88 Net profit (cont. operations), adj for NRIs (44) 1 (8) (44) (67) (24) (17) 29 (96) (79) 16 88

EPS, reported (SEK) (0.30) 0.00 (0.09) (0.36) (0.51) (0.29) (0.11) 0.18 (0.74) (0.73) 0.11 0.59 EPS, adj (cont. oper) (0.30) 0.00 (0.06) (0.30) (0.45) (0.16) (0.11) 0.20 (0.64) (0.53) 0.11 0.59 Sales growth (%) (8.8) (9.2) (4.7) (11.4) (9.4) (6.7) (6.0) (3.3) (8.9) (6.1) 1.8 5.6 EBIT growth (%) n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 328.4 EBIT (ex. NRIs) growth (%) n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 328.4 EBIT (ex. NRIs & Qliro) growth (%) n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 198.1 Pre-tax profit growth (%) n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 457.7 EPS, adj (cont. oper) growth (%) n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 457.7 Gross margin (%) 26.7 31.4 29.9 22.7 25.6 30.5 31.4 25.6 27.3 28.1 29.9 30.6 Gross margin, chg, y/y (pp) 7.8 6.4 3.6 (0.2) (1.1) (0.9) 1.5 2.8 4.1 0.7 1.8 0.7 SG&A excl NRIs (SEKm) 208 229 197 247 218 232 203 193 881 847 816 808 SG&A/sales (excl NRIs) (%) 31.9 31.3 31.1 26.9 36.9 33.9 34.1 21.7 30.0 30.7 29.0 27.2 SG&A/sales (excl NRIs), chg, y/y (pp) 5.7 4.9 4.9 5.5 5.1 2.7 3.0 (5.2) 5.3 0.7 (1.6) (1.8) EBIT margin (%) (5.1) 0.2 (1.9) (5.2) (12.9) (6.3) (2.7) 3.6 (3.2) (3.7) 0.8 3.3 EBIT (ex. NRIs) margin (%) (5.1) 0.2 (1.2) (4.1) (11.3) (3.4) (2.7) 3.8 (2.7) (2.6) 0.8 3.3 EBIT (ex. NRIs & Qliro) margin (%) (5.5) 0.1 (1.5) (1.5) (8.2) (0.5) (1.3) 3.6 (2.0) (1.0) 0.2 0.6 Pre-tax margin (%) (6.8) 0.0 (2.0) (5.3) (12.9) (6.5) (3.0) 3.2 (3.6) (4.0) 0.6 3.1 Net profit margin (%) (6.8) 0.1 (2.0) (5.8) (12.9) (6.4) (2.8) 3.1 (3.7) (4.0) 0.6 3.0 Net profit margin, adjusted (%) (6.8) 0.1 (1.3) (4.8) (11.3) (3.5) (2.8) 3.3 (3.3) (2.8) 0.6 3.0 Tax rate (%) (0.1) 66.7 0.0 10.0 0.3 (1.4) (5.0) (4.5) 4.4 0.0 (5.0) (5.0)

No of shares, f. dil, avg, adj. (m) 149.3 149.3 149.3 149.3 149.3 149.3 149.3 149.3 149.3 149.3 149.3 149.3 Source: SEB

Qliro financial forecasts and implied valuation from peers

Qliro P&L (SEKm) 2017 2018 2019 2020E 2021E 2022E

Sales 220 281 375 417 475 620 EBIT, adj. (2) (15) (20) (46) 17 80 Adj. EBIT margin (%) (0.7) (5.5) (5.2) (11.0) 3.5 12.8 EV based on peer group 672 672 672 672 672 672 EV/EBIT (implied) (x) n.a. n.a. n.a. n.a. 40.4 8.4 22% tax rate assumption 0 3 4 10 (4) (18) ATP (1) (12) (15) (36) 13 62 PER, implied (x) n.a. n.a. n.a. n.a. 51.8 10.8 Source: SEB



Qliro: cost/income forecasts (%) Qliro: NPLs/lending book forecasts (%)

Source: SEB Source: SEB

Qliro: total lending and EBITDA forecasts (SEKm) Qliro: operating income and EBT margin forecasts (%)


Earnings revisions

New estimates Old estimates Difference (%) (SEKm) Q2/20 2020E 2021E 2022E Q2/20E 2020E 2021E 2022E Q2/20E 2020E 2021E 2022E Net sales 684 2,760 2,811 2,968 658 2,722 2,744 2,925 3.9 1.4 2.4 1.5 EBIT, reported (43) (103) 23 99 (53) (108) 20 93 19.3 4.2 17.8 6.5 EBIT, adj. (23) (72) 23 99 (31) (77) 20 93 25.9 5.8 17.8 6.5 Pre-tax profit (44) (110) 17 92 (55) (117) 10 83 18.6 6.4 63.5 10.8 Net profit (44) (110) 16 88 (54) (111) 10 79 18.9 1.4 63.5 10.8 EPS, reported (0.29) (0.73) 0.11 0.59 (0.36) (0.75) 0.06 0.53 18.9 1.4 63.5 10.8 EPS, adj. (0.16) (0.53) 0.11 0.59 (0.22) (0.55) 0.06 0.53 24.7 3.7 63.5 10.8

Sales by area CDON Marketplace 197 903 820 770 168 867 731 693 17.3 4.2 12.2 11.1 Nelly 393 1,444 1,520 1,582 403 1,444 1,520 1,613 (2.3) 0.0 0.0 (1.9) Qliro (f. QFS) 96 417 475 620 89 414 497 623 6.9 0.6 (4.5) (0.4) Eliminations (2) (4) (3) (4) (2) (4) (3) (3) (21.3) 0.0 (1.4) (2.4) Total, consolidated 684 2,760 2,811 2,968 658 2,722 2,744 2,925 3.9 1.4 2.4 1.5

EBIT by area, reported CDON Marketplace (4) 5 16 18 (8) 1 14 17 47.9 525.1 12.2 11.1 Nelly 19 15 29 40 10 6 46 53 86.7 152.5 (36.7) (25.7) Qliro (f. QFS) (36) (61) 17 80 (35) (56) 18 81 (1.0) (9.9) (8.7) (1.1) Group/Other costs (22) (62) (38) (39) (20) (59) (58) (58) (10.1) (5.6) 34.6 32.6 Total, consolidated (43) (103) 23 99 (53) (108) 20 93 19.3 4.2 17.8 6.5

Total NRIs (20) (31) 0 0 (22) (31) 0 0 n.a. n.a. n.a. n.a. Total group EBIT, adj (23) (72) 23 99 (31) (77) 20 93 25.9 5.8 17.8 6.5 Source: SEB

55.3

85.7 88.3

85.9 87.3

94.2

81.0

74.4 70.1

50.0

0.0

25.0

50.0

75.0

100.0

125.0

150.0

2015

2016

2017

2018

2019

2020

E

2021

E

2022

E

2023

E

Cost ex NLLs/income (%) Cost/income target 2023 (%)

(3.1)(2.8)

(3.3)

(2.4)

(2.9)

(3.4) (3.5)(3.9)

(4.1)(3.8) (3.9)

(3.3)(3.7)

(4.3)(4.5) (4.5)

(3.6)

(2.8)(2.4) (2.4) (2.4)

(12.0)

(10.0)

(8.0)

(6.0)

(4.0)

(2.0)

0.0

0

20

40

60

80

100

120

Q4/1

6

Q1/1

7

Q2/1

7

Q3/1

7

Q4/1

7

Q1/1

8

Q2/1

8

Q3/1

8

Q4/1

8

Q1/1

9

Q2/1

9

Q3/1

9

Q4/1

9

Q1/2

0

Q2/2

0

Q3/2

0E

Q4/2

0E

Q1/2

1E

Q2/2

1E

Q3/2

1E

Q4/2

1E

12M trailing credit losses, net (SEKm) 12M trailing underlying credit losses/recoveries, net as % of total lending, annualized

28 33 23

43

102

150

113

(75)

(25)

25

75

125

175

225

0

500

1,000

1,500

2,000

2,500

3,000

Q1/1

5

Q2/1

5

Q3/1

5

Q4/1

5

Q1/1

6

Q2/1

6

Q3/1

6

Q4/1

6

Q1/1

7

Q2/1

7

Q3/1

7

Q4/1

7

Q1/1

8

Q2/1

8

Q3/1

8

Q4/1

8

Q1/1

9

Q2/1

9

Q3/1

9

Q4/1

9

Q1/2

0

Q2/2

0

Q3/2

0E

Q4/2

0E

Q1/2

1E

Q2/2

1E

Q3/2

1E

Q4/2

1E

Total lending 12M trailing EBTDA (SEKm) Old EBITDA target 2019 onwards (mid-point)

(10.0)

(8.0)

(6.0)

(4.0)

(2.0)

0.0

2.0

4.0

6.0

0

75

150

225

300

375

450

525

600

Q1/1

5

Q2/1

5

Q3/1

5

Q4/1

5

Q1/1

6

Q2/1

6

Q3/1

6

Q4/1

6

Q1/1

7

Q2/1

7

Q3/1

7

Q4/1

7

Q1/1

8

Q2/1

8

Q3/1

8

Q4/1

8

Q1/1

9

Q2/1

9

Q3/1

9

Q4/1

9

Q1/2

0

Q2/2

0

Q3/2

0E

Q4/2

0E

Q1/2

1E

Q2/2

1E

Q3/2

1E

Q4/2

1E

12M trailing Net fee and commission income (SEKm) 12M trailing Other income (SEKm)

12M trailing Net interest income (NII) (SEKm) 12M trailing EBT margin (EBT/tot lending) (%)



Q2 deviation of reported from expected results

Q2/20 Deviation SEB Q2/19 Q1/20 (SEKm) Actual SEB Abs Rel (%) Actual y/y (%) Actual q/q (%) Sales 684 658 25 3.9 733 (6.7) 592 15.6 COGS (475) (468) (7) 1.5 (503) (5.5) (440) 8.0 Gross profit 209 190 18 9.7 230 (9.3) 152 37.7 SG&A costs (228) (220) (7) 3.2 (227) 0.2 (212) 7.3 Other operating income/costs (24) (23) (1) n.a. (2) n.a. (16) n.a. EBIT (43) (53) 10 19.3 1 n.a. (76) 43.8 NRIs (20) (22) 2 n.a. 0 n.a. (10) (106.3) EBIT, adj. (excl. NRIs) (23) (31) 8 25.9 1 n.a. (67) 65.1 Effect from accounting changes (8) (8) 0 n.a. 0 n.a. 0 n.a. EBIT, adj. (excl. NRIs & accounting) (15) (23) 8 34.7 1 n.a. (67) 77.1 Net financials (2) (1) (0) (7.1) (1) 87.5 0 n.a. Pre-tax profit (44) (55) 10 18.6 0 n.a. (76) 41.8 Total taxes 1 1 0 n.a. 0 n.a. (0) 400.0 Minority interests 0 0 0 n.a. 0 n.a. 0 n.a. Net profit reported, cont. oper. (44) (54) 10 18.9 1 n.a. (77) 42.8 EPS, reported (0.29) (0.36) 0.07 18.9 0.00 n.a. (0.51) 42.8 EPS, adj (0.16) (0.22) 0.05 24.7 0.00 n.a. (0.45) 63.5 No of shares, f. dil (m) 149.3 149.3 0.00 0.0 149.3 0.0 149.3 0.0

Growth & margins (%) Sales growth (6.7) (10.1) n.a. 3.5 (9.2) 2.5 (9.4) n.a. COGS/Sales 69.5 71.1 n.a. (1.6) 68.6 0.9 74.4 (4.9) SG&A/Sales (excl. NRIs) 33.9 33.7 n.a. 0.3 31.3 2.7 36.9 (3.0)

Gross margin 30.5 28.9 n.a. 1.6 31.4 (0.9) 25.6 4.9 EBIT margin (6.3) (8.1) n.a. 1.8 0.2 (6.4) (12.9) 6.6 Adj. EBIT margin (excl. NRIs) (3.4) (4.8) n.a. 1.4 0.2 (3.6) (11.3) 7.9

Sales by area CDON Marketplace 197 168 29.0 17.3 218 (9.6) 184 6.8 Nelly 393 403 (9.4) (2.3) 424 (7.3) 305 28.9 Qliro (f. QFS) 96 89 6.2 6.9 92 3.9 105 (8.6) Eliminations (2) (2) n.a. n.a. (1) n.a. (3) n.a. Total 684 658 25.4 3.9 733 (6.7) 592 15.6

EBIT by area, reported CDON (4) (8) 3.9 47.9 (7) 43.2 (15) 72.4 Nelly 19 10 8.7 86.7 23 (18.3) (27) 169.4 Qliro (f. QFS) (36) (35) (0.4) (1.0) 0 n.a. (19) (92.5) Eliminations 0 0 0.0 n.a. (1) n.a. 0 n.a. Group HQ and NRIs (22) (20) (2.0) (10.1) (13) 62.5 (15) (40.5) Total (43) (53) 10.2 19.3 1 n.a. (76) 43.8

Group adj EBIT and Inventory EBIT, reported (43) (53) 10.2 19.3 1 n.a. (76) 43.8 NRIs (20) (22) 2.1 n.a. 0 n.a. (10) (106.3) EBIT excl. NRIs (23) (31) 8.1 25.9 1 n.a. (67) 65.1 EBIT excl. NRIs & accounting changes (15) (23) 8.1 34.7 1 n.a. (67) 77.1 EBIT excl. NRIs and Qliro (f. QFS) 13 4 8.5 (212.6) 1 1,370.6 (48) 125.9 Source: SEB



Divisional P&L forecasts

Q1/19 Q2/19 Q3/19 Q4/19 Q1/20 Q2/20 Q3/20E Q4/20E 2019 2020E 2021E 2022E 2023E Qliro Group - pro forma (excl. Tretti, Lekmer, HSNG) Sales (SEKm) CDON Marketplace 261 218 212 422 184 197 168 354 1,112 903 820 770 738 Nelly 302 424 330 399 305 393 331 414 1,456 1,444 1,520 1,582 1,617 Qliro 92 92 93 97 105 96 98 118 375 417 475 620 733 Inter-company sales/other (2) (1) (1) 1 (3) (2) (1) 2 (4) (4) (3) (4) (4) Group sales 653 733 634 919 592 684 596 889 2,939 2,760 2,811 2,968 3,084

Sales growth (%) CDON Marketplace (31.1) (35.5) (26.0) (24.5) (29.3) (9.6) (20.7) (16.0) (28.7) (18.8) (9.3) (6.1) (4.1) Nelly 9.6 5.3 6.8 (0.9) 1.0 (7.3) 0.5 3.7 4.7 (0.8) 5.3 4.0 2.2 Qliro 43.2 35.1 29.9 26.5 13.6 3.9 5.1 21.7 33.3 11.2 13.9 30.7 18.2 Sales growth (pro forma Tretti, Lekmer, HSNG) (8.8) (9.2) (4.7) (11.4) (9.4) (6.7) (6.0) (3.3) (8.9) (6.1) 1.8 5.6 3.9

Reported EBIT (SEKm) CDON Marketplace (10) (7) (1) 17 (15) (4) 3 22 (2) 5 16 18 16 Nelly (12) 23 1 (17) (27) 19 1 22 (6) 15 29 40 40 Qliro 2 0 2 (34) (19) (36) (9) 2 (30) (61) 17 80 132 Eliminations (1) (1) (1) (1) 0 0 0 0 (5) 0 0 0 0 Group cost (12) (13) (12) (13) (15) (22) (12) (13) (51) (62) (38) (39) (40) Group EBIT, rep. (pro forma Tretti, Lekmer, HSNG) (33) 1 (12) (48) (76) (43) (16) 32 (93) (103) 23 99 149

Reported EBIT margin (%) CDON Marketplace (4.0) (3.4) (0.4) 4.0 (8.3) (2.1) 1.7 6.2 (0.2) 0.6 1.9 2.4 2.2 Nelly (4.0) 5.4 0.2 (4.3) (8.9) 4.8 0.4 5.2 (0.4) 1.0 1.9 2.5 2.5 Qliro 2.7 0.3 1.7 (34.9) (17.8) (37.4) (8.9) 1.6 (7.9) (14.7) 3.5 12.8 18.0 Rep EBIT mgn (pro forma Tretti, Lekmer, HSNG) (%) (5.1) 0.2 (1.9) (5.2) (12.9) (6.3) (2.7) 3.6 (3.2) (3.7) 0.8 3.3 4.8

NRIs (SEKm) CDON Marketplace 0 0 0 0 (7) 0 0 0 0 (7) 0 0 0 Nelly 0 0 (5) 0 (3) 0 0 0 (5) (3) 0 0 0 Qliro 0 0 0 (10) 0 (16) 0 0 (10) (16) 0 0 0 Group cost 0 0 0 0 0 (4) 0 (2) 0 (6) 0 0 0 Total NRIs (pro forma Tretti, Lekmer, HSNG) 0 0 (5) (10) (10) (20) 0 (2) (15) (31) 0 0 0

Adjusted EBIT (SEKm) CDON Marketplace (10) (7) (1) 17 (8) (4) 3 22 (2) 12 16 18 16 Nelly (12) 23 5 (17) (25) 19 1 22 (1) 17 29 40 40 Qliro 2 0 2 (24) (19) (20) (9) 2 (20) (46) 17 80 132 Eliminations (1) (1) (1) (1) 0 0 0 0 (5) Group cost (12) (13) (12) (13) (15) (18) (12) (11) (51) (56) (38) (39) (40) Group adjusted EBIT, excl. NRIs (33) 1 (8) (38) (67) (23) (16) 34 (78) (72) 23 99 149 Qliro EBIT 2 0 2 (24) (19) (20) (9) 2 (20) (46) 17 80 132 Pro forma adjusted EBIT (excl. NRIs and Qliro) (36) 1 (9) (14) (48) (3) (8) 32 (58) (26) 6 19 17

Adj EBIT margin (%) CDON Marketplace (4.0) (3.4) (0.4) 4.0 (4.5) (2.1) 1.7 6.2 (0.2) 1.4 1.9 2.4 2.2 Nelly (4.0) 5.4 1.5 (4.3) (8.1) 4.8 0.4 5.2 (0.1) 1.2 1.9 2.5 2.5 Qliro 2.7 0.3 1.7 (24.6) (17.8) (21.1) (8.9) 1.6 (5.2) (11.0) 3.5 12.8 18.0 Adj EBIT margin (%) (5.1) 0.2 (1.2) (4.1) (11.3) (3.4) (2.7) 3.8 (2.7) (2.6) 0.8 3.3 4.8 Source: SEB



Overview Investment considerations

The investment case in Qliro group builds on the ongoing break-up of the group in 2020. Qliro, its consumer bank, will be separately listed in a pending IPO. CDON, its online marketplace operations, will be dividended to shareholders and Nelly, its online fashion retailer, will remain in Qliro Group, which will change name to Nelly Group. Following several restructurings and write-downs over the past year, focusing on margins and profitability, we expect improving earnings in 2021 and beyond.

Company profile

Qliro Group is a holding company for Nordic e-commerce brands within popular consumer segments. Its origins are in CDON.com, which was founded as an online record store in 1999 as part of the media company MTG. In December 2010, CDON Group was demerged from MTG and distributed via a stock dividend to MTG's shareholders and listed on the Nasdaq OMX Stockholm stock exchange. It was renamed Qliro Group in 2014. Since then, it has expanded with a broader product range, new online stores and through acquisitions. In recent years, after several divestments and restructurings, its current assets now include Nordic market-leading brands, such as the online marketplace CDON and the online fashion retailer Nelly. It also operates Qliro, the consumer bank offering digital payment solutions and banking services, designed to add value to both its own brands and companies, as well as increasingly to external merchants.

Valuation approach

Based on our mid-point sum-of-the-parts model, comparing Qliro's various operations to industry peers, we arrive at an equity value of about SEK 11 per share. Here, we value CDON Marketplace at about SEK 700m, Qliro at SEK 700m, and Nelly at SEK 500m. We apply the median consumer sector EV/EBIT multiples to value group common costs and we add back its 2020E net cash position (excluding Qliro, its consumer bank). This compares with our DCF valuation that yields a mid-point value of about SEK 8.50 per share

Risks E-commerce, as with all retail, is based on consumer spending. A significant economic

downturn in Qliro Group's core markets means structural growth may not be able to offset lower consumption. Increasing online retail competition from domestic and foreign players (e.g. Amazon and Zalando) is likely to weigh on Qliro Group's growth prospects and burden margins. Also, its consumer bank Qliro is in an investment phase burdening bottom-line developments as well.

Revenues by region Revenue by division


Sweden: 56% Other Nordic: 42%Other Europe: 2% Americas: 0%Asia: 0% RoW: 0%

CDON Marketplace33%

Nelly52%

Qliro15%



PER - 12 month forward P/BV - 12 month forward


EV/Sales - 12 month forward EV/EBITA - 12 month forward


Net sales & EBITDA margin EBIT & Operating margin


Comparison with sector index - 1 year Comparison with Boozt - 1 year

Source: SIX Source: SIX

(4.0)

(2.0)

0.0

2.0

4.0

6.0

8.0

10.0

(4,000)

(2,000)

0

2,000

4,000

6,000

8,000

10,000

2010 2012 2014 2016 2018 2020E 2022E

(%)

(SE

Km

)

Net sales EBITDA margin

0

200

400

600

800

1,000

1,200

2010 2013 2016 2019

(%)

P/BV - 12 month forward

(3.0)

(1.0)

1.0

3.0

5.0

7.0

9.0

(100)

(50)

0

50

100

150

200

250

300

2010 2012 2014 2016 2018 2020E 2022E(%

)

(SE

Km

)

EBIT Operating margin

0

10

20

30

40

50

2010 2013 2016 2019

(x)

PER - 12 month forward

0

10

20

30

40

50

60

2010 2013 2016 2019

(x)

EV/EBITA - 12 month forward

0.0

0.2

0.4

0.6

0.8

1.0

2010 2013 2016 2019

(x)

EV/Sales - 12 month forward

0

2

4

6

8

10

12

14

Jul 19 Sep 19 Dec 19 Mar 20 Jun 20

Qliro Group Rel Nordic Retail

0

2

4

6

8

10

12

14

Jul 19 Sep 19 Dec 19 Mar 20 Jun 20

Qliro Group Rel Boozt



Profit & loss statement - Qliro Group(SEKm) 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020E 2021E 2022ENet Sales 2,210 3,404 4,462 4,441 5,015 5,174 4,630 4,050 3,226 2,939 2,760 2,811 2,968Other revenues 0 0 0 0 0 0 0 0 0 0 0 0 0Total revenues 2,210 3,404 4,462 4,441 5,015 5,174 4,630 4,050 3,226 2,939 2,760 2,811 2,968

Total expenses (2,069) (3,264) (4,620) (4,467) (4,940) (5,255) (4,673) (3,935) (3,207) (2,904) (2,689) (2,648) (2,727)Profit before depreciation 142 140 (158) (27) 75 (81) (43) 115 19 35 71 164 241

Depreciation - Fixed assets (5) (7) (6) (5) (7) (11) (13) (63) (44) (96) (68) (72) (69)Depreciation - Other assets (2) (4) (10) (17) (19) (31) (32) (27) (27) (31) (84) (68) (74)Amortisation - Goodwill 0 0 0 0 (15) 0 0 0 0 0 0 0 0Amortisation - Other intangibles 0 0 0 0 0 0 0 0 0 0 (23) 0 0Operating profit 135 129 (174) (48) 33 (123) (88) 25 (52) (93) (103) 23 99

Net interest expenses (19) (18) (27) (34) (25) (7) (8) (12) (29) (8) (4) (4) (4)Foreign exchange items 0 0 0 0 0 0 0 2 (3) (2) 0 0 0Other financial items 0 0 0 0 0 0 0 0 (1) (3) (3) (3) (3)Value changes - Fixed assets 0 0 0 0 0 0 0 0 0 0 0 0 0Value changes - Financial assets 0 0 0 0 0 0 0 0 0 0 0 0 0Value changes - Other assets 0 0 0 0 0 0 0 0 0 0 0 0 0Reported pre-tax profit 116 111 (201) (82) 9 (130) (96) 15 (84) (105) (110) 17 92

Minority interests 1 0 0 0 (3) (1) 1 0 0 0 0 0 0Total taxes 26 28 49 15 (3) 29 19 (9) (52) (5) 0 (1) (5)Reported profit after tax 142 139 (152) (67) 3 (102) (77) 6 (136) (110) (110) 16 88

Discontinued operations 0 0 0 0 0 1 (111) (30) 139 0 (3) 0 0Extraordinary items 0 0 0 0 0 0 0 0 0 0 0 0 0Net Profit 142 139 (152) (67) 3 (102) (187) (25) 3 (110) (112) 16 88

Adjustments:Discontinued operations 0 0 0 0 0 (1) 111 30 (139) 0 3 0 0Interest on convertible debt 17 17 17 17 0 0 0 0 0 0 0 0 0Minority interests (IFRS) 0 0 0 0 0 0 0 0 0 0 0 0 0Value changes 0 0 0 0 0 0 0 0 0 0 0 0 0Goodwill/intangibles amortisations 0 0 0 0 15 0 0 0 0 0 23 0 0Restructuring charges 0 0 0 0 0 0 0 0 0 0 0 0 0Other adjustments 10 20 171 43 (24) 57 35 (6) 7 15 9 0 0Tax effect of adjustments 2 5 (42) (8) 3 (13) (7) 4 4 1 0 0 0Adjusted profit after tax 171 182 (6) (15) (3) (58) (48) 3 (125) (95) (79) 16 88

Margins, tax & returnsOperating margin 6.1 3.8 (3.9) (1.1) 0.7 (2.4) (1.9) 0.6 (1.6) (3.2) (3.7) 0.8 3.3Pre-tax margin 5.2 3.3 (4.5) (1.8) 0.2 (2.5) (2.1) 0.4 (2.6) (3.6) (4.0) 0.6 3.1Tax rate (22.1) (25.2) 24.5 18.0 35.3 21.9 19.8 60.7 (61.1) (4.4) 0.0 5.0 5.0ROE 53.0 24.9 (22.7) (6.8) 0.3 (8.1) (6.9) 0.6 (13.6) (11.7) (13.2) 2.0 10.5ROCE 33.5 20.8 (0.5) (0.7) 2.3 (5.2) (4.6) 1.6 (3.2) (5.5) (5.5) 1.9 7.8

Growth rates y-o-y (%)Total revenues n.a. 54.0 31.1 (0.5) 12.9 3.2 (10.5) (12.5) (20.3) (8.9) (6.1) 1.8 5.6Operating profit 7.6 (4.0) n.m. n.m. n.m. n.m. n.m. n.m. n.m. n.m. n.m. n.m. 328.4Pre-tax profit 2.2 (4.1) n.m. n.m. n.m. n.m. n.m. n.m. n.m. n.m. n.m. n.m. 457.7EPS (adjusted) 7.3 5.5 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 457.7

Cash flow(SEKm) 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020E 2021E 2022ENet profit 142 139 (152) (67) 3 (102) (187) (25) 3 (110) (112) 16 88Non-cash adjustments (24) (20) 54 12 14 6 179 116 (30) 139 174 141 142Cash flow before work cap 118 120 (98) (55) 17 (96) (9) 92 (28) 29 62 156 230

Ch. in working capital / Other 3 112 (135) (84) (123) (307) (167) (67) (206) 155 (3) (63) (125)Operating cash flow 121 231 (233) (139) (106) (403) (176) 25 (234) 183 59 93 106

Capital expenditures (5) (5) (42) (50) (96) (112) (95) (107) (91) (139) (139) (118) (154)Asset disposals 0 0 0 32 77 0 0 12 387 0 0 0 0L/T financial investments 0 0 0 (14) 0 0 0 0 0 0 0 0 0Acquisitions / adjustments (25) (337) 0 (19) (7) (1) 249 0 0 0 0 0 0Free cash flow 91 (110) (275) (189) (132) (515) (21) (70) 63 45 (80) (25) (49)

Net loan proceeds 125 150 0 (150) 0 330 146 336 0 (184) 0 0 0Dividend paid 0 0 (1) (1) 0 0 0 0 0 0 0 0 0Share issue 0 0 1 502 626 0 0 0 0 0 0 0 0Other 213 (54) (17) 1 (249) (25) (14) (77) 4 1 0 0 0Net change in cash 428 (14) (292) 163 246 (210) 111 189 67 (138) (80) (25) (49)

AdjustmentsC/flow bef chng in work cap 118 120 (98) (55) 17 (96) (9) 92 (28) 29 62 156 230Adjustments 0 0 (0) (0) 0 0 0 0 0 0 0 0 0Int on conv debt net of tax 17 17 17 17 0 0 0 0 0 0 0 0 0Cash earnings 136 137 (80) (37) 17 (96) (9) 92 (28) 29 62 156 230

Per share informationCash earnings 1.87 1.88 (1.1) (0.42) 0.16 (0.64) (0.06) 0.61 (0.19) 0.19 0.42 1.05 1.54Operating cash flow 1.91 3.41 (2.95) (1.36) (1.0) (2.7) (1.18) 0.17 (1.57) 1.23 0.39 0.62 0.71Free cash flow 1.49 (1.27) (3.53) (1.92) (1.24) (3.45) (0.14) (0.47) 0.42 0.3 (0.54) (0.17) (0.33)

Investment coverCapex/sales (%) 0.2 0.1 0.1 0.3 0.3 0.3 0.2 0.3 0.3 0.6 1.0 1.0 2.0Capex/depreciation (%) 117 77 68 278 200 120 69 19 25 19 41 39 86

Source for all data on this page: SEB



Balance sheet - Qliro Group(SEKm) 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020E 2021E 2022ECash and liquid assets 431 417 126 289 534 324 435 625 864 809 729 703 655Debtors 73 146 269 223 215 215 188 276 205 227 213 177 187Inventories 251 459 610 525 658 702 548 448 418 350 284 290 306Other 0 0 0 0 181 528 746 1,055 1,493 2,070 2,425 2,925 3,350Current assets 756 1,022 1,004 1,037 1,588 1,769 1,916 2,403 2,980 3,455 3,651 4,096 4,498

Interest bearing fixed assets 0 0 0 0 0 0 0 65 25 0 0 0 0Other financial assets 0 8 46 66 66 95 122 108 113 111 111 111 111Capitalized development cost 7 7 20 45 68 159 135 137 155 245 272 294 316Goodwill 189 447 462 463 456 455 207 63 64 64 64 64 64Other intangibles 59 131 137 131 162 135 124 78 78 25 2 2 2Fixed tangible assets 4 11 14 21 28 37 28 24 25 110 69 25 15Other fixed assets 0 0 0 0 0 0 0 366 0 0 0 0 0Fixed assets 259 603 679 725 780 882 615 841 460 554 519 496 508

Total assets 1,014 1,625 1,683 1,762 2,368 2,651 2,532 3,244 3,440 4,010 4,170 4,592 5,007

Creditors 431 783 992 807 1,024 680 549 612 966 1,819 1,626 1,694 1,870Other trade financing 0 0 0 0 0 0 0 0 0 0 0 0 0S/T interest bearing debt 0 15 165 0 0 328 512 2 2 29 34 41 47Other 0 0 0 0 0 411 426 875 767 827 1,292 1,630 1,781Current liabilities 431 798 1,157 807 1,024 1,419 1,488 1,489 1,736 2,675 2,952 3,366 3,699

L/T interest bearing debt 0 150 0 0 0 0 1 577 708 446 441 434 428Other long-term liabilities (43) (35) (27) (18) 0 0 0 164 0 0 0 0 0Convertible debt 250 250 250 250 0 0 0 0 0 0 0 0 0Pension provisions 0 0 0 0 0 0 0 0 0 0 0 0 0Other provisions 2 5 6 3 7 3 5 3 2 1 1 1 1Deferred tax 27 41 31 29 23 23 12 1 0 0 0 0 0Long term liabilities 236 410 260 264 30 27 18 745 710 447 442 435 429

Minority interests 1 1 (1) 2 1 1 0 0 0 0 0 0 0

Shareholders' equity 346 416 267 689 1,314 1,204 1,026 1,010 995 889 776 792 880

Total liabilities and equity 1,014 1,625 1,683 1,762 2,368 2,651 2,532 3,244 3,440 4,010 4,170 4,592 5,007

Net debt (m) (181) (2) 289 (39) (534) (324) (435) (303) (420) (314) (279) (255) (207)Working capital (m) (107) (178) (113) (59) 30 354 506 291 383 1 4 67 192Capital employed (m) 597 832 681 941 1,314 1,205 1,026 1,396 1,464 1,384 1,226 1,241 1,327Net debt/equity (%) (52) (1) 108 (6) (41) (27) (42) (30) (42) (35) (36) (32) (24)Net debt/EBITDA (x) (1.2) (0.0) 23.7 (2.4) (10.6) 13.7 57.4 (2.8) (16.1) (6.4) (3.5) (1.6) (0.9)Equity/total assets (%) 34 26 16 39 56 45 41 31 29 22 19 17 18Interest cover 7.2 7.1 (6.4) (1.4) 1.3 (15.1) (9.4) 2.1 (1.8) (11.0) (21.6) 5.0 21.0

Valuation(SEK) 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020E 2021E 2022E

No of shares, fully dil. (y/e) 72.9 72.9 72.9 106.1 149.3 149.3 149.3 149.3 149.3 149.3 149.3 149.3 149.3No of shares, fully dil. avg. 72.7 72.9 72.9 89.5 106.1 149.3 149.3 149.3 149.3 149.3 149.3 149.3 149.3

Share price, y/e 23.0 28.0 29.6 27.7 17.5 12.1 8.7 18.1 9.2 7.0 7.3 7.3 7.3Share price, high 27.4 34.0 51.6 30.3 28.7 18.5 12.4 20.6 19.3 12.4 7.5Share price, low 20.0 18.0 24.9 15.7 13.8 8.5 6.3 8.5 8.9 6.8 3.5Share price, avg 22.6 25.5 33.0 23.2 21.3 13.7 9.2 15.4 12.8 10.3 5.8

EPS (reported) 2.19 2.15 (1.84) (0.55) 0.03 (0.69) (0.51) 0.04 (0.91) (0.74) (0.73) 0.11 0.59EPS (adjusted) 2.36 2.49 (0.08) (0.16) (0.03) (0.39) (0.32) 0.02 (0.84) (0.64) (0.53) 0.11 0.59Cash earnings/share 1.87 1.88 (1.10) (0.42) 0.16 (0.64) (0.06) 0.61 (0.19) 0.19 0.42 1.05 1.54Dividend/share 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Enterprise value/share 17.1 24 30 25 13.9 9.9 5.7 16.1 6.4 4.9 5.4 5.6 5.9Book value/share 5.2 6.3 4.0 6.9 8.8 8.1 6.9 6.8 6.7 6.0 5.2 5.3 5.9Adjusted equity/share 5.2 6.3 4.0 6.9 8.8 8.1 6.9 6.8 6.7 6.0 5.2 5.3 5.9

PER (adjusted) 9.7 11.2 n.m. n.m. n.m. n.m. n.m. n.m. n.m. n.m. n.m. 69.3 12.4CEM 12.3 14.9 (26.9) (66.5) 112.5 (18.8) (148.7) 29.4 (49.1) 36.4 17.6 7.0 4.7Dividend yield 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

EV/EBITDA 8.2 11.2 180.0 165.9 41.2 (62.6) (112.9) 22.0 36.4 14.8 10.2 5.1 3.7EV/EBITA 8.6 12.0 (627.5) (491.6) 52.7 (22.6) (16.2) 125.2 (21.0) (9.3) (16.4) 36.2 8.9EV/EBIT 8.6 12.0 (627.5) (491.6) 85.5 (22.6) (16.2) 125.2 (21.0) (9.3) (11.2) 36.2 8.9EV/Sales (x) 0.56 0.52 0.49 0.60 0.41 0.29 0.18 0.59 0.29 0.25 0.29 0.30 0.30Price/Book value 4.42 4.46 7.35 4.01 1.99 1.50 1.26 2.68 1.38 1.17 1.40 1.38 1.24Price/adjusted equity 4.42 4.46 7.35 4.01 1.99 1.50 1.26 2.68 1.38 1.17 1.40 1.38 1.24

Free cash flow/Market cap (%) 6.9 11.1 (12.8) (7.6) (10.9) (28.5) (20.9) (3.0) (23.7) 4.3 (7.4) (2.3) (4.5)Operating cash flow/EV (%) 9.7 12.9 (10.6) (5.2) (5.1) (27.2) (20.5) 1.0 (24.6) 25.2 7.2 11.1 12.0EV/Capital employed (x) 2.1 2.1 3.2 2.8 1.6 1.2 0.8 1.7 0.6 0.5 0.7 0.7 0.7

Main shareholders Management Company informationName (%) Votes Capital Title Name ContactRite Ventures 29.9 29.9 COB Lars-Johan Jarnheimer Internet www.qlirogroup.comAvanza Pension 6.6 6.6 CEO Marcus Lindqvist Phone number +46 (0)10 703 20 00Kinnevik 4.3 4.3 CFO Mathias PedersenForeign owners (total) 12.0 12.0 IR Niclas Lilja

Source for all data on this page: SEB



About this publication This report is a marketing communication commissioned by Qliro Group and prepared by Skandinaviska Enskilda Banken AB (publ). It does not constitute investment research; as such, it has not been prepared in accordance with the legal requirements to promote the independence of investment research, nor is it subject to any prohibition on dealing ahead of the dissemination of investment research.

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The SEB Group: members, memberships and regulators SEB is a member of, inter alia, Nasdaq OMX Nordic, Oslo Stock Exchange, the London Stock Exchange, NYSE Euronext, SIX Swiss Exchange, Frankfurt Stock Exchange, Tallinn Stock Exchange as well as certain European MTF's such as BATS-Chi-X, Turquoise and Burgundy. SEB is regulated by Finansinspektionen in Sweden and, for the conduct of investment services business, in (i) Denmark by Finanstilsynet, (ii) Norway by Finanstilsynet, (iii) Finland by Finanssivalvonta, (iv) Germany by Bundesanstalt für Finanzdienstleistungsaufsicht, (v) the UK by the Financial Conduct Authority and Prudential Regulation Authority (details about the extent of our regulation by the Financial Conduct Authority and Prudential Regulation Authority are available from us on request), (vi) Estonia by the Estonian Financial Supervision Authority, (vii) Lithuania by the Bank of Lithuania, (viii) Latvia by the Financial and Capital Markets Commission and Futures Commission.

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Your attention is also drawn to the fact that: The current market price of the securities shown in this report is the price prevailing at the close of the business day preceding the date of publication, save where such price was more than 5% different from the price prevailing as at the time of publication, in which case it is the latter.

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Methodology Final consideration as to any valuations, projections and forecasts contained in this report are based on a number of assumptions and estimates and are subject to contingencies and uncertainties, and their inclusion in this report should not be regarded as a representation or warranty by or on behalf of the Group or any person or entity within the Group that they or their underlying assumptions and estimates will be met or realized. Different assumptions could result in materially different results. Past performance is not a reliable indicator of future performance. Foreign currency rates of exchange may adversely affect the value, price or income of any security or related investment mentioned in this report. In addition, investors in securities, such as ADRs, whose values are influenced by the currency of the underlying security, effectively assume currency risk.

Company specific disclosures and potential conflicts of interest A member of, or an entity associated with, SEB or its affiliates, officers, directors, employees or shareholders of such members (a) is not, and has never been, represented on the board of directors or similar supervisory entity of Qliro Group, (b) has from time to time bought or sold the securities issued by the company or options relating to the company, and (c) SEB does not hold any short / long position exceeding 0.5% of the total issued share capital of Qliro Group as of 30 Jun 2020. The analyst(s) responsible for this research report (jointly with their closely related persons) hold(s) 0 shares in Qliro Group and do(es) not have holdings in other instruments related to the company.

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