MQ Holding AB - Interim Report

Transcription

1 MQ Holding AB - Interim Report MQ continues to capture market shares First quarter (September 2011-November 2011) Net sales amounted to SEK 380 million (368), up 3.3 percent. Sales in comparable stores fell 1.1 percent (The Swedish Retail Institute Index declined 7.9 percent). The gross margin was 62.5 percent (64.5). Operating profit amounted to SEK 42 million (54), corresponding to an operating margin of 10.9 percent (14.8). Profit after tax totalled SEK 28 million (38), corresponding to SEK 0.80 (1.08) per share after dilution. Cash flow from operating activities was SEK 34 million (23). Events during the first quarter Mats Gärdsell assumed the position of CEO on 3 October. Peter Karlson assumed the position of Logistics and Sourcing Director on 3 October. Peter is a member of Executive Management Team. Two new stores were opened, one in Erikslund in Västerås, Sweden and one on Bogstadveien in Oslo, Norway. Events after the end of the reporting period No significant events took place after the end of the reporting period. Key figures SEK m 11/12 10/11 Rolling 12 months Dec 10- Nov 11 Sep-Aug 10/11 Net sales ,498 1,487 Gross margin, % Operating profit Operating margin, % Profit after financial items Profit after tax Earnings per share before dilution, SEK Earnings per share after dilution, SEK Number of stores, end of period

2 CEO s statement We boosted our total sales by 3.3 percent and remain stronger than the market in comparable stores (according to the Swedish Retail Institute Index). The debt crisis, warmer weather and customer restraint resulted in a difficult and challenging market. However, we captured market shares and lost only 1.1 percent compared with the overall market decline of 7.9 percent in comparable stores. Due to the extremely warm weather in the first quarter, we carried out sales promotion activities on our winterrelated products, such as jackets and knitwear, which led to a lower gross margin compared with the year-earlier period. The positive effect of these sales activities is that we ended this interim period with a well-balanced inventory level. The cash flow remains stable. During the period, we opened two new stores, one on Bogstadveien in Oslo, Norway and in Erikslund in Västerås, Sweden. During the period, MQ s new Savvy Citizen brand was launched in our key stores and the online store Shop Online and was well received by customers. I became CEO in October and my initial aim was to quickly familiarise myself with the company s business activities, understand the challenges and opportunities, while remaining actively involved in the operations. MQ is an exciting company with immense potential for development. My task now is to continue to work on strengthening our offering. Mats Gärdsell, CEO 2

3 Operations The MQ Group is a retailer of women s and men s fashion in the Swedish and Norwegian markets. The product portfolio, which focuses on fashionconscious consumers, contains a mix of proprietary and external brands. Store network The stores are located in Ystad in the south to Luleå in the north of Sweden. MQ was launched in Norway in September 2010 and currently has two stores in Oslo, one in Drammen and one in Skien. All stores sell both women s and men s fashions. At the end of the period, the total number of stores was 115. Two stores were opened during the first quarter. Market The Swedish clothing retail sector reported a weak period and the sales trend was negative during the first quarter (Sep Nov 2011) with a decline of 7.9 percent and the 12-month period (Dec Nov 2011) with a decline of 8.3 percent. Comments on financial performance Net sales First quarter, September November 2011 Net sales amounted to SEK 380 million (368) during the quarter, up 3.3 percent as a result of more stores. MQ s sales in comparable stores fell 1.1 percent during the first quarter compared with an overall market decline of 7.9 percent. Sales of women s fashion rose 3.9 percent to SEK 186 million (179) and men s fashion rose 2.6 percent to SEK 194 million (189). Earnings First quarter, September November 2011 Gross profit totalled SEK 237 million (238), corresponding to a gross margin of 62.5 percent (64.5). The first quarter was very weak for the entire retail sector, with extremely warm weather for the season, which meant that the gross margin for the period was adversely affected by sales activities primarily directed to the winter collection, such as jackets and knitwear. The positive effect of these activities was that the inventory level at the end of the reporting period was well balanced. Other external costs and personnel expenses for the quarter amounted to SEK 186 million (171). The cost increase was attributable to newly opened stores and standard cost increases for leases, salaries, etc. Operating profit for the quarter totalled SEK 42 million (54), corresponding to an operating margin of 10.9 percent (14.8). Depreciation/amortisation according to plan amounted to SEK 11 million (13). Net financial items amounted to an expense of SEK 3 million (expense: 3) for the first quarter. Profit after financial items amounted to SEK 38 million (51). Expansion Efforts to find new store locations in Norway and in Sweden are progressing according to plan. Cash flow MQ s cash flow from operating activities amounted to SEK 34 million (23) during the period. Cash flow after investments was SEK 22 million (3). Inventories On 30 November 2011, the value of the company s inventory amounted to SEK 276 million (247). The increase was due primarily to the early delivery of spring products compared with the year-earlier period, but also due to the increase in the number of stores. In general, the size and composition of the inventory is deemed to be at a satisfactory level. Investments Investments totalling SEK 12 million (20) were made during the period and pertained mainly to investments in new and existing stores. Two stores were opened during the first quarter, of which one in Sweden (Västerås) and one in Norway (Oslo). In addition, one store was refurbished and adapted to MQ s new store concept, which generated an additional 80 square metres of space. Financing and liquidity Interest-bearing net debt as of 30 November 2011 amounted to SEK 322 million, compared with SEK 355 million in the year-earlier period. At the end of the period, cash and cash equivalents amounted to SEK 49 million (45). Interest-bearing net debt/ebitda amounted to 2.0 for the rolling 12- month period, December November Events during the first quarter Mats Gärdsell was appointed the new CEO of MQ and assumed the position on 3 October. Peter Karlson assumed the position of Logistics and Sourcing Director in October. Two new stores were opened, one in Erikslund in Västerås, Sweden and one on Bogstadveien in Oslo, Norway. Events after the end of the period No significant events took place after the end of the reporting period. Employees The average number of full-time employees during the 12-month period (Dec 2010-Nov 2011) amounted to 654, compared with 629 in the yearearlier period. 3

4 Transactions with related parties No significant transactions were conducted with related parties during the period. Risks and uncertainties MQ s business is exposed to a number of risks that are fully or partially beyond the company s control, but that may have an impact on sales and earnings. The risks to which the company is exposed include economic trends, fluctuating fashion trends, interest risk and currency risk. MQ is dependent on consumer preferences with respect to trends, design and quality. The company makes conscious efforts to develop its trend monitoring, information systems, forecasts, goods supply and short production lead-times to minimise the risks associated with fluctuating fashion trends. The increased purchasing power among Swedish consumers in recent years is one of the reasons for the strong growth in the retail sector. In particular, this has been an important factor underlying the growth in the upper price range collections with high fashion content in the specialised retail segment and among brand specialists. A slowing of economic growth in Sweden would have a negative impact on consumer purchasing power and thus also on growth in the retail sector. The company s financial risks relate to fluctuations in the company s earnings and cash flow resulting from changes in exchange rates, interest rates, liquidity and credit risks. Management of the Group s financial risks is carried out by the Group s finance department, which is tasked with identifying and minimising the risk of negative effects on profits and improving the predictability of future profits. For more information on financial instruments and risk management, see the Directors Report, Notes 23 and 24 in the 2009/2010 Annual Report. Parent Company The Parent Company s net sales for the first quarter amounted to SEK 2 million (2) and a loss of SEK 1 million (loss: 1) after financial items was posted. The Parent Company did not implement any investments during the period. Annual General Meeting The Annual General Meeting will be held in Gothenburg on 31 January At the Annual General Meeting, the Board of Directors intends to propose a dividend of SEK 1.10 (1.02) per share. The Annual Report will be available at during the week of 19 December Accounting principles The summarised interim report for the Group was prepared in accordance with IAS 34 Interim Financial Reporting and the applicable provisions in the Swedish Annual Accounts Act. The interim report for the Parent Company was prepared in accordance with Chapter 9 of the Annual Accounts Act. For the Group and Parent Company, the same accounting and valuation policies have been applied as in the latest annual report. Reporting policies that have gained force and apply for the 2011 financial year have not had any impact on the Group s financial statements. The CEO and other senior executives are encompassed by a combined share-matching and performance-share programme, which includes a requirement for personal investment and a threeyear vesting period. Participation in the programme requires that the participant purchases new shares in the company ( Saving Shares ) at market price and locks in these Saving Shares over a three-year period. For each Saving Share acquired, the participant is allotted entitlement to receive one common share in MQ Holding AB (a Matching Share ) free of charge on a date set by the Board approximately three years after allotment, as well as entitlement to additional rights to receive additional shares in MQ Holding AB (a Performance Share ) free of charge on a date set by the Board approximately three years after allotment on condition that certain performance requirements have been fulfilled. The total number of Matching and Performance Shares may amount to a maximum of 525,000 shares. The total cost of the programme is calculated at SEK 7 million, including social security expenses. The incentive programme is recognised in accordance with IFRS 2. 4

5 The Board of Directors and the Chief Executive Officer affirm that this interim report provides a true and fair view of the Parent Company s and the Group s operations, position and performance, and describes the material risks and uncertainties faced by the Parent Company and the companies in the Group. Gothenburg, 21 December 2011 Board of Directors MQ Holding AB Erik Olsson Chairman of the Board Göran Barsby Board member, Vice Chairman Christel Kinning Board member Jonas Lagerstedt Board member Thomas Nyberg Board member Eva Redhe Ridderstad Board member Mats Gärdsell Chief Executive Officer Teleconference At 9:30 am CET today, MQ will hold a teleconference/webcast for capital market players. If in Sweden, please call , or if outside Sweden, please call Reporting schedule Interim report, second quarter, December February March 2012 Interim report, third quarter, March 2012-May June 2012 Interim report, fourth quarter, June 2012-August October 2012 Contact For more information, please contact: Mats Gärdsell, CEO: +46 (0) Tony Siberg, EVP and CFO: +46 (0) MQ Holding AB St. Eriksgatan 5 Box SE GOTHENBURG Corp. Reg. No This interim report is unaudited. 5

6 Consolidated income statement Summarised consolidated income statement (SEK m) 2011/12 Rolling 12 months Dec10-Nov11 Sep-Aug Net sales ,498 1,487 Other operating income Total operating income ,501 1,491 Goods for resale Other external costs Personnel expenses Depreciation/amortisation Operating profit Financial income Financial expenses Profit after financial items Tax on profit for the year PROFIT FOR THE PERIOD attributable to owners of the Parent Company Other comprehensive income Translation difference for the period Fair value of cash-flow hedging Incentive programme TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO OWNERS OF THE PARENT COMPANY Earnings per share before dilution (SEK) Earnings per share after dilution (SEK) Average number of shares before dilution 34,631,507 35,156,507 35,156,507 35,156,507 Average number of shares after dilution 34,651,139 35,156,507 35,156,507 35,156,507 6

7 Consolidated balance sheet Summarised consolidated balance sheet (SEK m) 30 November November August 2011 ASSETS Fixed assets Intangible fixed assets 1,205 1,206 1,205 Tangible fixed assets Total fixed assets 1,304 1,318 1,303 Current assets Inventories Current receivables 51, 48 66, Cash and cash equivalents Total current assets TOTAL ASSETS 1,680 1,658 1,642 EQUITY AND LIABILITIES Equity liabilities Interest-bearing long-term liabilities Non- interest-bearing long-term liabilities Interest-bearing current liabilities Non- interest-bearing current liabilities TOTAL EQUITY AND LIABILITIES 1,680 1,658 1,642 Statement of changes in equity Specification of changes in the Group s equity (SEK m) 2011/12 Sep-Aug Equity, opening balance Total comprehensive income Conversion of loans to shares New share issue/offset issue Dividend EQUITY, CLOSING BALANCE

8 Consolidated cash-flow statement Summarised consolidated cash-flow statement (SEK m) 2011/12 Sep-Aug Cash flow from operating activities before changes in working capital Changes in working capital Cash flow from operating activities Cash flow from investing activities Acquisition of intangible fixed assets Acquisition of tangible fixed assets Cash flow after investing activities Financing activities Repayment of debt Dividend Cash flow from financing activities Cash flow for the period Cash and cash equivalents at the beginning of the period Cash and cash equivalents at the end of the period Key figures 2011/12 Rolling 12 months Dec10-Nov11 Sep-Aug Growth in net sales, % Growth in net sales, comparable stores, % Gross margin, % Operating profit, SEK m Operating margin, % Profit after financial items Profit for the period Total depreciation/amortisation, SEK m Earnings per share, SEK Interest-bearing net debt, SEK m Interest-bearing net debt/ebitda, multiple Equity/assets ratio, % Equity, SEK m Average number of shares before dilution 34,631,507 35,156,507 35,156,507 35,156,507 Average number of shares after dilution 34,651,139 35,156,507 35,156,507 35,156,507 8

9 Shareholding structure Largest shareholders as at 30 November 2011 Name No. of shares Votes and capital Capman 9,244, Jaller Klädcenter AB 2,512, Länsförsäkringar Fondförvaltning AB 1,246, Carlson Fonder AB 1,002, Svenska Lärarfonder 877, Case Asset Management AB 699, Maneq 2005 AB 679, Handelsbanken Fonder 616, Catella Fondförvaltning 615, Skandia Fonder 565, Försäkringsaktiebolaget, Avanza Pension 496, Ålandsbanken Fonder AB 492, Parinvest Gruppen AB 454, Nordea Bank AB (Nds) 448, JP Morgan Bank 436, Total 15 largest 20,389, Others 14,766, Total 35,156,

10 Parent Company income statement Summarised Parent Company income statement (SEK m) 2011/12 Rolling 12 months Dec10-Nov11 Net sales Other operating income Total operating income Goods for resale Other external costs Personnel expenses Other operating expenses Depreciation/amortisation Operating loss Financial income Financial expenses Loss after financial items Tax on profit for the period LOSS FOR THE PERIOD Parent Company balance sheet Summarised Parent Company balance sheet (SEK m) 30 November November August 2011 ASSETS Fixed assets Intangible fixed assets Tangible fixed assets Financial fixed assets 1,110 1,110 1,110 Total fixed assets 1,110 1,110 1,110 Current assets Inventories Current receivables Cash and cash equivalents Total current assets TOTAL ASSETS 1,121 1,144 1,116 EQUITY AND LIABILITIES Equity Liabilities Interest-bearing long-term liabilities Interest-bearing current liabilities Non-interest-bearing liabilities TOTAL EQUITY AND LIABILITIES 1,121 1,144 1,116 Pledged assets Shares in subsidiaries 1,110 1,110 1,110 MQ brand Contingent liabilities General surety, MQ Retail AB

11 Definitions Gross margin Net sales less costs for goods sold as a percentage of sales. EBITDA Operating profit excluding depreciation, amortisation and impairment. Equity Consists of share capital, other contributed capital, reserves and retained earnings, including the Group s profit for the year. Interest-bearing net debt/ebitda Interest-bearing liabilities divided by EBITDA for the most recent 12-month period. Operating margin Operating profit as a percentage of net sales for the period. Equity/assets ratio Equity as a percentage of total assets. Equity per share Equity divided by the number of shares on the closing date. Comparable sales All sales except sales in new stores are termed "comparable sales." A new store becomes comparable when it has been open for one year. Interest-bearing net debt Interest-bearing liabilities less cash and cash equivalents. MQ is one of Sweden s leading retailers of fashion brands. Through a select mix of proprietary and external brands, MQ offers men s and women s clothes with a high fashion content in attractive stores. The store chain currently comprises 115 stores and the aim is to establish MQ as the leading retailer of fashion brands in the Nordic region. The MQ share has been listed on NASDAQ OMX Stockholm since 18 June For more information, please visit our website at 11