P R E S E N T A T I O N S E C O N D Q U A R T E R O F / THURSDAY 17 MARCH 2016

Transcription

1 P R E S E N T A T I O N S E C O N D Q U A R T E R O F / THURSDAY 17 MARCH 2016

2 AGENDA Acquisition of retail-clothing company JOY Financial information Q2 2015/2016 First six months of 2015/2016 Commercial development according to plan Acquisition of the Bondelid brand Long-term growth strategy Questions

3 ACQUISITION OF RETAIL-CLOTHING COMPANY JOY

4 ACQUISITION OF RETAIL-CLOTHING COMPANY JOY The acquisition of JOY is an important step in MQ s long-term strategy to generate growth and advance its position as a player in the fashion industry Nationwide retail company with 54 stores, online shopping and 350 employees Full-year net sales for 2015 was SEK 258 million with an operating loss of SEK 9 million The acquisition is expected to have a neutral impact on earnings in MQ s current financial year An established retail concept that is deeply rooted among the target group of midlife women Purchase price of SEK 38.5 million paid in cash Scheduled closing date is 1 May. The acquisition is conditional to the Swedish Competition Authority s approval

5 JOY S TARGET GROUP IS EXTREMELY ATTRACTIVE Midlife women is a target group that has strong buying power and time for and interest in fashion Complements MQ s target group: Men and women with the mind-set of a 30-to- 40 year-old Women in the 50+ age group account for more than half of the Swedish womenswear market Women in the 50+ age group are today the market s fastest growing customer group Few fashion players in Sweden have fully focused on this target group We see that JOY has significant growth and development potential

6 CLEAR STRATEGY FOR JOY JOY will be run as a separate retail brand Clear strategy for harnessing the potential in JOY and its target group that has strong buying power Experience gained from MQ s change process can be applied Positive synergy effects in many areas We see potential for growth in the company

7 SECOND QUARTER OF 2015/2016 D E C E M B E R F E B R U A R Y

8 SUMMARY OF THE QUARTER MQ s commercial development progressing Positive sales trend continues MQ continues to capture market shares in a growing sector Gross margin impacted by weak sale start Refurbishment of two of MQ s largest and most important stores Development costs charged to the quarter but cost control remains sound Acquisition of the Bondelid brand

9 Q2 NET SALES Net sales SEK 433 million (417) - Total sales +3.8% - Like-for-like sales +2.5% (market s comparable stores, according to the Swedish Retail Institute Index, up +1.9%) - Other sales +1.3% /16 14/15

10 Q2 GROSS MARGIN Gross margin 47.6% (50.0) - Sluggish sale start due to initially insufficient discounts - Effect of the US dollar mostly offset 50.0% 47.6% 15/16 14/15

11 Q2 OPERATING EXPENSES Operating expenses SEK 188 million (182) - Expenses charged for commercial development - New stores - Salary increases/higher employer s contributions for young employees Q2 15/16 Q2 14/15 Other external costs Personnel expenses

12 Q2 OPERATING PROFIT Operating profit SEK 16 million (26) Q2 15/16 Q2 14/15 Operating margin 3.6% 6.2%

13 Q2 PROFIT FOR THE PERIOD Profit for the period SEK 12 million (19) Q2 15/16 Q2 14/15

14 Q2 CASH FLOW Cash flow from operating activities SEK 45 million (60) Higher income tax paid during the period Lower earnings Q2 15/16 Q2 14/15

15 NET DEBT Net debt SEK 149 million (160) Net debt/ebitda 0.8 (0.9)

16 FIRST SIX MONTHS OF 2015/2016 S E P T E M B E R F E B R U A R Y

17 NET SALES FOR THE FIRST SIX MONTHS Net sales SEK 815 million (774) - Total sales +5.3% - Like-for-like sales +4.6% (market s comparable stores, according to the Swedish Retail Institute Index, up +4.0%) - Other sales +0.7% /16 14/15

18 GROSS MARGIN FOR THE FIRST SIX MONTHS Gross margin 53.3% (55.1) - Sluggish start of Christmas sale start due to initially insufficient discounts - Mid-season sale in October and Black Friday effects 55.1% 53.3% 15/16 14/15

19 OPERATING EXPENSES FOR THE FIRST SIX MONTHS Operating expenses SEK 370 million (354) - Expenses charged for commercial development - New stores - More external communication - Salary increases including social security expenses - Continued cost savings /16 14/15 Other external costs Personnel expenses

20 OPERATING PROFIT FOR THE FIRST SIX MONTHS Operating profit SEK 57 million (65) /16 14/15 Operating margin 7.0% 8.3%

21 PROFIT FOR THE FIRST SIX MONTHS Profit for the period SEK 44 million (49) /16 14/15

22 CASH FLOW FOR THE FIRST SIX MONTHS Cash flow from operating activities SEK 46 million (70) Refers to higher income tax paid /16 14/15

23 SUMMARY OF THE FIRST HALF OF THE YEAR Continued strong sales growth Gross margin influenced Commercial development progressing according to plan Store development affects the first half and strengthens MQ for the future Acquisition of the Bondelid brand Cost control is sound and we have ongoing cost reductions in underlying administration and operations

24 COMMERCIAL DEVELOPMENT ACCORDING TO PLAN

25 COMMERCIAL DEVELOPMENT ACCORDING TO PLAN Continued commercial development focus according to plan New stores, including Mall of Scandinavia, Norrtälje, Vetlanda and Bollnäs Store updates in Karlskrona, Jakobsberg, Löddeköpinge New store concept in Gallerian, Stockholm and Femman, Gothenburg Relocalisation to better location of Grensen in Oslo, Falun and Umeå New brands Menswear Replay, Lacoste, Knowledge Cotton Apparel and Scotch & Soda Womenswear Boomerang, Dry Lake and Didrikssons Shop Online Richmond & Finch, Sophie by Sophie, Selected Homme, Replay Women, Ichi, Boomerang, Custommade, Pelle P and Lacoste Women Strong focus on making MQ the leading brand destination

26 ACQUISITION OF THE BONDELID BRAND

27 ACQUISITION OF THE BONDELID BRAND Acquisition of the Bondelid brand for SEK 10 million as of 1 January 2016 Formerly licensed for more than ten years Strong Swedish brand for Men and Women Positive effect on the brand s gross margin

28 LONG-TERM GROWTH STRATEGY

29 LONG-TERM GROWTH STRATEGY The acquisition of JOY is an important step in MQ s long-term strategy to generate growth and advance its position as a player in the fashion industry Great potential both in the target group and in growing JOY as a retail company Good experience from MQ s change process We continue to build and develop the Group on several levels based on a strong financial platform MQ is now positioned to take even an greater share of the fashion apparel market, in both the short and the long term

30 O U R V I S I O N I S T O B E C O M E T H E L E A D I N G R E TA I L E R O F FA S H I O N B R A N D S I N T H E N O R D I C R E G I O N!