Matas A/S: Matas Group - Interim report H1 2024/25

Company announcement no. 8 2024/25
Allerød, 15 November 2024

(1 April - 30 September 2024)

Nordic strategy drives high revenue and earnings growth - revenue guidance narrowed upwards
Matas Group's strategy to Win the Nordics continues to progress as planned and to deliver as expected with proforma revenue growth of 6.8% currency neutral and proforma growth in EBITDA before special items of 6.8% currency neutral in Q2 2024/25.

• Matas Group generated total revenue of DKK 1,851 million in Q2 2024/25, corresponding to a year-on-year increase of 44.0% from DKK 1,285 million in Q2 2023/24 when the Group only owned KICKS for one month. Group proforma growth was 7.2% and currency neutral growth came to 6.8%.
• Growth in Matas stand-alone in Q2 2024/25 was 7.6%. KICKS stand-alone grew 5.7% currency neutral, with growth both in stores and online. Growth in KICKS was impacted by the continued integration of Skincity. KICKS excluding Skincity grew 10.4% currency neutral and KICKS online excluding Skincity grew 24.0%. Skincity is on track to be fully integrated into KICKS by end of the financial year.
• Gross margin was 46.0% in the quarter, compared to 46.4% last year. Proforma gross margin was 45.8% in Q2 2023/24. Key drivers of the improved margin were matured assortment expansion and synergies offset by price initiatives, discontinuation of certain in-house brands and Skincity impact at KICKS.
• EBITDA before special items came to DKK 233 million, corresponding to an EBITDA margin before special items of 12.6%, against 13.8% last year (12.6% proforma currency neutral). The EBITDA before special items in Q2 last year amounted to DKK 177 million (proforma currency neutral DKK 218 million in Q2 2023/24). Special items were DKK 5 million net income, attributable to a reversal of an accrual for deferred acquisition cost (Q2 2023/24: DKK 39 million net expense).
• Profit after tax in Q2 2024/25 amounted to DKK 24 million compared to DKK 2 million (proforma loss of DKK 3 million) last year.
• Free cash flow was an outflow of DKK 105 million in Q2 2024/25, reflecting early build-up of inventories to de-risk the first Q3 with KICKS' Logistics Center and the construction of Matas' Logistics Center, compared with an outflow of DKK 781 million in Q2 2023/24, which reflected the acquisition of KICKS.
• Matas Group adjusts its revenue guidance for the financial year 2024/25. Group revenue is now expected to grow between 5% and 7% (from 4% to 7%) currency neutral, corresponding to ~4.6% to 6.6% exchange rate adjusted (1) (previously ~3.2% to 6.2%), from the proforma revenue for 2023/24 of DKK 7.8 billion. The EBITDA margin before special items in 2024/25 is expected to be in the range of 14.5% and 15.5% (from proforma base of 14.3% in 2023/24). Investments, excluding M&A, are expected to be DKK ~650 million, including approximately DKK 325 million for Matas' Logistics Center.

Gregers Wedell-Wedellsborg, Group CEO of Matas A/S:
"Customers continue to show their passion for beauty across the Nordics. Our growth accelerated to 7% in Q2 with standout growth of 24% online in KICKS. After one year as a Nordic Group, we are offering more deals and better prices, introducing more brands and delivering products faster while keeping margins stable. We passed one million members in Norway and two million members in Denmark, orchestrated our very first pan-Nordic introduction of a new brand, and launched Matas Striberne in KICKS. Behind the scenes, KICKS' Logistics Center is ramped up and Matas' Logistics Center is nearing completion. We remain confident in delivering synergies on time. We are now ready for the all-important Christmas quarter with stores packed with products. We adjust our revenue guidance for the financial year to 5-7%."

(1) Based on actual rates for H1 2024/25 and forward rates for H2 2024/25 for NOK/DKK of 0.621 and SEK/DKK of 0.643 as of 13 November 2024.

Key figures and ratios

	Q2 2024/25	Q2 2023/24	Proforma Q2 2023/24	H1 2024/25	H1 2023/24	Proforma H1 2023/24
Key figures (DKKm)
Revenue	1,851	1,285	1,727	3,807	2,435	3,568
Gross profit	852	596	791	1,755	1,118	1,630
EBITDA before special items	233	177	219	526	378	489
Profit after tax	24	2	(3)	83	51	39
Free cash flow	(105)	(781)		(73)	(580)
Ratios
Revenue growth	44.0%	29.9%	7.2%	56.3%	19.2%	6.7%
Revenue currency neutral growth			6.8%			6.4%
Gross margin	46.0%	46.4%	45.8%	46.1%	45.9%	45.7%
EBITDA margin before special items	12.6%	13.8%	12.7%	13.8%	15.5%	13.7%
Net interest-bearing debt/ EBITDA before special items	3.0	2.8

Proforma numbers illustrate Matas Group had the Group owned KICKS in Q2 and H1 2023/24.

Q2 2024/25 highlights

• Matas Group's strategy to Win the Nordics is delivering as expected with proforma revenue growth of 6.8% currency neutral and proforma EBITDA before special items growth of 6.8% currency neutral.
• Growth in Matas stand-alone in Q2 2024/25 was 7.6%. Growth online was 18.7% and Matas stores grew 2.4% like-for-like. KICKS stand-alone grew 5.7% currency neutral. KICKS excluding Skincity grew 10.4% currency neutral, and KICKS online excluding Skincity grew 24.0% and stores grew 2.4% like-for-like.
• Customer traffic was good, and the number of transactions came to 8.6 million in Q2 2024/25, which was at level with proforma numbers in Q2 2023/24. The average basket size grew by 7.6% to DKK 212 per transaction compared to proforma Q2 last year.
• Gross profit for Q2 2024/25 amounted to DKK 852 million, up from DKK 596 million in Q2 2023/24 (proforma gross profit in Q2 2023/24 amounted to DKK 791 million). The gross margin was 46.0%, compared to 46.4% last year. Proforma gross margin was 45.8% in Q2 2023/24. Key drivers of the improved margin were matured assortment expansion and synergies offset by price initiatives, discontinuation of certain in-house brands and Skincity impact at KICKS.
• Other external costs amounted to DKK 235 million in Q2 2024/25, up from DKK 150 million (proforma DKK 215 million) in Q2 2023/24, driven by the KICKS acquisition and high digital growth.
• Q2 2024/25 staff costs amounted to DKK 389 million, up from DKK 272 million (proforma DKK 362 million) in Q2 2023/24 driven by the KICKS acquisition, annual salary adjustments and increased online sales as well as recruitment of new competencies. Q2 2024/25 staff costs were negatively impacted by around DKK 10 million relating to KICKS' Logistics Center inventory build-up for Q3 and learning curve.
• Special items amounted to DKK 5 million net income in Q2 2024/25, attributable to a reversal of an accrual for deferred acquisition cost, compared to DKK 39 million net expense in Q2 2023/24 related to the KICKS acquisition.
• EBITDA before special items came to DKK 233 million in Q2 2024/25 compared to DKK 177 million last year (proforma DKK 219 million), and the EBITDA margin before special items was 12.6% in the quarter against 13.8% last year (12.6% proforma currency neutral).
• The total depreciation, amortisation and impairment charges amounted to DKK 157 million in Q2 2024/25, up by DKK 44 million and mainly attributable to the acquisition of KICKS.
• Profit after tax in Q2 2024/25 amounted to DKK 24 million compared to DKK 2 million (proforma loss of DKK 3 million) last year. The increase reflects the continued growth of Matas Group.
• Free cash flow was an outflow of DKK 105 million in Q2 2024/25, reflecting early build-up of inventories to de-risk the first Q3 with KICKS' Logistics Center and the construction of Matas' Logistics Center, compared with an outflow of DKK 781 million in Q2 2023/24, which reflected the acquisition of KICKS.

H1 2024/25 highlights

• Matas Group's strategy to Win the Nordics is delivering as expected with proforma revenue growth of 6.4% currency neutral and proforma EBITDA before special items growth of 7.6% currency neutral.
• Growth in Matas stand-alone in H1 2024/25 was 7.8%. Growth online was 20% and stores grew 3.1%. KICKS stand-alone grew 4.2% currency neutral in H1 2024/25. KICKS excluding Skincity grew 8.6% currency neutral, and KICKS online excluding Skincity grew 22.4% and stores grew 4.5%.
• Customer traffic was good, and the number of transactions came to 17.5 million in H1, similar to the proforma numbers for H1 2023/24. The average basket size grew by 6.5% to DKK 214 per transaction compared to proforma H1 last year.
• Gross profit for H1 2024/25 amounted to DKK 1,755 million, up from DKK 1,118 million in H1 2023/24 (proforma gross profit in H1 2023/24 amounted to DKK 1,630 million). The gross margin was 46.1%, up from 45.9% in H1 2023/24 (45.7% proforma). Key drivers of the improved margin were matured assortment expansion, higher subsidies from suppliers and synergies offset by price initiatives, discontinuation of certain in-house brands and Skincity impact at KICKS.
• Other external costs amounted to DKK 451 million in H1 2024/25, up from DKK 257 million (proforma DKKK 417 million) in H1 2023/24, driven by the KICKS acquisition and digital growth.
• H1 2024/25 staff costs amounted to DKK 788 million, up from DKK 487 million (proforma DKK 734 million) in H1 2023/24 driven by the KICKS acquisition, salary increases, supply chain transformation at KICKS and increased online sales as well as recruitment of new competencies.
• Special items amounted to DKK 12 million in H1 2024/25, compared to DKK 60 million in H1 2023/24, which related to the acquisition of KICKS.
• EBITDA before special items came to DKK 526 million in H1 2024/25 compared to DKK 378 million last year (proforma DKK 489 million), and the EBITDA margin before special items was 13.8% in H1 against 15.5% last year (13.7% proforma currency neutral).
• The total depreciation, amortisation and impairment charges were DKK 315 million in H1 2024/25, up by DKK 111 million and mainly attributable to the acquisition of KICKS.
• Profit for the period amounted to DKK 83 million after tax compared to DKK 51 million last year (proforma DKK 39 million). The increase reflects the continued growth of Matas Group and the improved gross margin.
• Free cash flow was an outflow of DKK 73 million in H1 2024/25, reflecting early build-up of inventories to de-risk the first Q3 with KICKS' Logistics Center and the construction of Matas' Logistics Center, compared with an outflow of DKK 580 million in H1 2023/24, which related to the acquisition of KICKS.

Video conference
Matas Group will host a video conference regarding Q2 2024/25 results for investors and analysts on Friday, 15 November at 10:00 a.m. CET. The video conference and the presentation can be accessed from Matas Groups' investor website:
https://matas-events.eventcdn.net/events/q2-report-2024
Video conference access numbers for investors and analysts:
DK: [phone]
SE: [phone]
NO: [phone]
UK: [phone]
US: [phone]
PIN for all countries: 915912

Contacts
John Bäckman
Head of Investor Relations & Treasury, phone [phone]
Kristine Ahrensbach
Head of Corporate Communication, phone [phone]

Forward-looking statements
The interim report contains statements relating to the future, including statements regarding Matas Group's future operating results, financial position, cash flows, business strategy and future targets. Such statements are based on Management's reasonable expectations and forecasts at the time of release of this report. Forward-looking statements are subject to risks and uncertainties and a number of other factors, many of which are beyond Matas Group's control. This may have the effect that actual results may differ significantly from the expectations expressed in the report. Without being exhaustive, such factors include general economic and commercial factors, including market and competitive conditions, supplier issues and financial and regulatory issues, IT failures as well as any effects of healthcare measures that are not specifically mentioned above.

About Matas Group
Matas Group is the Nordic leader in beauty and wellbeing, consisting of the banners Matas, KICKS and Skincity. With almost 500 stores and leading web shops across Denmark, Sweden, Norway, and Finland, we are the leading omnichannel player offering a curated portfolio of third-party brands, own brands and an emphasis on personal and expert advisory and service excellence. We have well more than 5.5 million loyalty members across the Nordics. Matas Group is listed on Nasdaq OMX Copenhagen.