Musti Group plc Interim Report 10 August 2023 at 8:30 a.m. EEST
Musti Group plc Interim Report 1 October 2022 - 30 June 2023
Double digit like-for-like with increasing adjusted EBITA margin
April - June 2023
- Group net sales totaled EUR 103.3 (95.5) million, an increase of 8.2%.
- Group net sales growth excluding the changes in the
currency exchange rates was 15.6% - Like-for-like sales growth was 10.2%.
- Adjusted EBITDA was EUR 17.3 (15.6) million, up by 10.9%.
- Adjusted EBITDA margin was 16.7% (16.3%).
- Adjusted EBITA was EUR 9.5 (8.3) million, up by 14.4%.
- Adjusted EBITA margin was 9.2% (8.7%).
- Net cash flow from operating activities was EUR 22.1 (14.0) million, up by 57.5%.
- Operating profit increased by 47.9% to EUR 9.9 (6.7) million, representing 9.6% (7.0%) of net sales.
- Profit for the period totaled EUR 7.3 (4.4) million.
- Earnings per share, basic was EUR 0.22 (0.13).
- Number of stores grew to 341 (329).
- Number of loyal customers grew to 1,522 thousand (1,409 thousand).
October 2022 - June 2023
- Group net sales totaled EUR 315.4 (289.3) million, an increase of 9.0%.
- Group net sales growth excluding the changes in the currency exchange rates was 14.7%
- Like-for-like sales growth was 9.3%.
- Adjusted EBITDA was EUR 53.0 (49.3) million, up by 7.5%.
- Adjusted EBITDA margin was 16.8% (17.1%).
- Adjusted EBITA was EUR 30.1 (28.6) million, up by 5.1%.
- Adjusted EBITA margin was 9.5% (9.9%).
- Net cash flow from operating activities was EUR 50.5 (32.5) million, up by 55.2%.
- Operating profit increased by 21.5% to EUR 27.1 (22.3) million, representing 8.6% (7.7%) of net sales.
- Profit for the period totaled EUR 19.1 (15.1) million.
- Earnings per share, basic was EUR 0.57 (0.45).
The figures in parentheses refer to the comparison period, i.e., the same period in the previous year, unless stated otherwise. Musti Group's financial year is from 1 October to 30 September.
| EUR million or as indicated | 4-6/2023 | 4-6/2022 | Change % | 10/2022-6/2023 | 10/2021-6/2022 | Change % | FY2022 |
| Net sales | 103.3 | 95.5 | 8.2% | 315.4 | 289.3 | 9.0% | 391.1 |
| Net sales growth, % | 8.2% | 15.5% | 9.0% | 16.0% | 14.7% | ||
| LFL sales growth, % | 10.2% | 8.3% | 9.3% | 7.4% | 6.7% | ||
| LFL store sales growth, % | 7.3% | 6.3% | 6.6% | 4.8% | 4.2% | ||
| Online share, % | 23.5% | 22.6% | 23.1% | 22.6% | 22.2% | ||
| Gross margin, % | 45.7% | 46.4% | 45.6% | 46.8% | 46.4% | ||
| EBITDA | 19.2 | 15.6 | 23.1% | 54.5 | 47.9 | 13.7% | 65.4 |
| EBITDA margin, % | 18.5% | 16.3% | 17.3% | 16.5% | 16.7% | ||
| Adjusted EBITDA | 17.3 | 15.6 | 10.9% | 53.0 | 49.3 | 7.5% | 66.9 |
| Adjusted EBITDA margin, % | 16.7% | 16.3% | 16.8% | 17.1% | 17.1% | ||
| EBITA | 11.4 | 8.3 | 37.4% | 31.5 | 27.1 | 16.0% | 37.3 |
| EBITA margin, % | 11.0% | 8.7% | 10.0% | 9.4% | 9.5% | ||
| Adjusted EBITA | 9.5 | 8.3 | 14.4% | 30.1 | 28.6 | 5.1% | 38.8 |
| Adjusted EBITA margin, % | 9.2% | 8.7% | 9.5% | 9.9% | 9.9% | ||
| Operating profit | 9.9 | 6.7 | 47.9% | 27.1 | 22.3 | 21.5% | 30.9 |
| Operating profit margin, % | 9.6% | 7.0% | 8.6% | 7.7% | 7.9% | ||
| Profit/loss for the period | 7.3 | 4.4 | 64.0% | 19.1 | 15.1 | 26.8% | 22.3 |
| Earnings per share, basic, EUR | 0.22 | 0.13 | 63.6% | 0.57 | 0.45 | 27.1% | 0.67 |
| Net cash flow from operating activities | 22.1 | 14.0 | 57.5% | 50.5 | 32.5 | 55.2% | 46.1 |
| Investments in tangible and intangible assets | 2.9 | 3.3 | -11.9% | 9.0 | 11.6 | -21.7% | 14.2 |
| Net debt / LTM adjusted EBITDA | 2.1 | 2.1 | 0.3% | 2.1 | 2.1 | 0.3% | 2.1 |
| Number of loyal customers, thousands | 1,522 | 1,409 | 8.0% | 1,522 | 1,409 | 8.0% | 1,454 |
| Number of stores at the end of the period | 341 | 329 | 3.6% | 341 | 329 | 3.6% | 335 |
| of which directly operated | 328 | 312 | 5.1% | 328 | 312 | 5.1% | 319 |
'The team and I are pleased to report a solid third quarter. Our Q3 like-for-like growth has grown to 10.2% supporting an expansion in adjusted EBITA margin to 9.5% and a quarterly cashflow record of 22.1 million. This accelerating pace in both growth and profitability highlights the strong momentum coming from our ability to continue to meet the changing needs of our pet parents, especially in this inflationary environment. I am extremely proud of what we as a team continue to achieve quarter after quarter. ' - David Rönnberg, Musti Group CEO
Food and consumables, that make up over 70% of our sales, remained strong sales pillars throughout the quarter. Pet Parents are not sacrificing their pets' needs by trading down, and we are maintaining a high level of new puppy customers coming to Musti for advice and support for their new family member and adding to the membership numbers of our Musti loyalty program.
Group adjusted EBITA increased by 14.4% in the third quarter. Unfavourable movements of the local currencies SEK and NOK had a negative impact of EUR -0.8 million on adjusted EBITA. It is inspiring to see that our relentless focus and effort to improve the productivity and scalability of our operating model is bearing fruit. Group functions cost as a percentage of net sales continue to improve quarter after quarter. The Eskilstuna central warehouse is reaching the efficiency level set for it resulting in significant improvements in our end-to-end supply chain efficiency.
In April we announced that we acquired full ownership of Premium Pet Food Suomi Oy in Lieto, Finland, integration work has been progressing very well. Having an own factory allows us to deepen our commitment to sustainably produced products given the manufacturing facility is optimized for raw material supply as the majority of ingredients come from local producers. We are excited about the possibilities this transaction brings to us; the ability to respond to the increased demand for locally and sustainably produced products and the opportunity to increase our profitability by insourcing the production of our own brands. It supports our strategy perfectly.
I am very pleased with the progress we are making. Our ability to combine a growing portfolio of products, services and advice into convenient propositions for Pet Parents is a key enabler of how we consistently outgrow the markets in which we operate. Also our operative performance shows great results by more efficient net working capital management, reducing inventories and extremely strong operative cashflow. We would not have been able to support our customers and achieve such strong results without the dedication and skill of our incredible team.
Our primary focus is and always will be to provide the best possible advice and support to our Pet Parent customers. We recognize that without their trust and loyalty we would not be where we are today. So, to our almost 2,500 team members - on behalf of our shareholders, our Board, our Group management team and myself, thank you for your tireless commitment to our customers and their pets.
David Rönnberg,
CEO
Financial targets
The long-term financial targets updated by the Board of Directors on 3 May 2021 are:
| Growth | Net sales to reach at least EUR 500 million by the financial year 2024 by continuation of strong customer acquisition momentum and increasing share of wallet. |
| Profitability | Mid- to long-term adjusted EBITA margin of at least 13 per cent with steadily improving profile. Margin increase is expected to be realised through steady gross margin and improving operating leverage. |
| Capital structure | Maintain net debt in relation to adjusted EBITDA below 2.5x in the long term. |
| Dividend policy | To pay a dividend corresponding to 60-80 per cent of net profit. Any potential dividend shall take into account acquisitions, the company's financial position, cash flow and future growth opportunities. |
The financial targets are forward-looking statements and are not guarantees of future financial performance.
Webcast for analysts and media
A webcast and a teleconference for analysts and media will be arranged on 10 August 2023 at 14:00 EET. The event will be held in English. The report will be presented by CEO David Rönnberg and CFO Toni Rannikko.
The webcast can be followed at https://mustigroup.videosync.fi/2023-q3-results. A recording of the webcast will be available later at the company's website at www.mustigroup.com/investors/reports-and-presentations/.
The teleconference can be accessed by registering at http://palvelu.flik.fi/teleconference/?id=1009767. After the registration, participants will be provided with phone numbers and a conference ID to access the conference. To ask a question, please dial *5 on your telephone keypad to enter the queue.
Helsinki, 10 August 2023
Board of Directors
The information in the Interim Report is unaudited.
Further information:
David Rönnberg, CEO, tel. +46 70 896 6552
Toni Rannikko, CFO, tel. +358 40 078 8812
Martin Svedholm, Director, Treasury and Investor Relations, tel. +358 50 479 9040
Distribution:
Nasdaq Helsinki
Main media
www.mustigroup.com
Musti Group in brief
Musti makes the life of pets and their owners easier, safer and more fun. We are the leading Nordic pet care company, and we operate an omnichannel business model to cater for the needs of pets and their owners across Finland, Sweden and Norway. We offer a wide, curated assortment of pet products. We also provide pet care services such as grooming, training and veterinary services in selected locations.
Musti Group's net sales were EUR 391 million in the financial year 2022. At the end of the financial year 2022, the company had 1,587 employees, 1.5 million loyal customers and 335 stores.
