Matas A/S: Matas Group - Interim report 9M 2024/25

Company announcement no. 12 2024/25
Allerød, 5 February 2025

(1 April - 31 December 2024)

Nordic strategy drives revenue and earnings growth in the largest quarter
Matas Group's strategy to Win the Nordics continues to deliver as expected with revenue growth of 7.7% currency neutral and growth in EBITDA before special items of 11.5% currency neutral in Q3 2024/25.

• Matas Group generated a total revenue of DKK 2,694 million in Q3 2024/25 corresponding to a year-on-year increase of 7.4% from DKK 2,508 million in Q3 2023/24. Group currency neutral growth came to 7.7%. Matas stand-alone growth in Q3 was 7.9% and KICKS stand-alone 7.3% currency neutral (14.2% excluding Skincity).
• Customer satisfaction continued at a high level, whilst number of transactions increased with 4% and the average basket size increased with 3%, supported by the continued assortment expansion.
• Gross margin was 46.2% in the quarter, compared to 44.5% currency neutral last year. Key drivers in the improved margin were matured assortment expansion and more support from suppliers on growth initiatives, offset by price initiatives, discontinuation of certain in-house brands, and Skincity impact at KICKS.
• EBITDA before special items came to DKK 474 million in Q3 2024/25 compared to DKK 424 million last year. The EBITDA margin before special items was 17.6% in the quarter against 17.0% currency neutral last year.
• Profit for the period amounted to DKK 201 million after tax compared to DKK 163 million last year. Q3 2024/25 was impacted by special items of DKK 1 million, compared to special items of DKK 20 million in Q3 2023/24.
• Free cash flow was an inflow of DKK 377 million in Q3 2024/25, reflecting higher NWC in Q3 and the construction of Matas' Logistics Center, compared with an inflow of DKK 560 million in Q3 2023/24.
• Synergies are on plan to deliver plus DKK 100 million full run-rate for the financial year 2025/26, through execution of organisational changes, sourcing and growth initiatives with suppliers as well as revenue synergies from best practice sharing on e-commerce and loyalty. A significant part of the synergies is reinvested in the market, through pricing, marketing, and capabilities.
• Matas Group maintains its guidance for the financial year 2024/25. Group revenue guidance was adjusted upwards on 7 January to between 6.5% and 7.5% (from 5% to 7%) growth currency neutral, corresponding to ~6.3% to 7.3% exchange rate adjusted (1) (previously ~4.6% to 6.6%), 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:
"Our colleagues delivered high growth in all markets and channels, and we have also improved our margins due to stellar execution and realisation of synergies. As one Nordic Group, we are offering more and more brands, opening new stores, delivering faster online, and securing even better deals for our customers and now over 6 million members. The KICKS' Logistics Center is operating as planned and, in January, we shipped the first test orders from our state-of-the-art Matas' Logistics Center and are on track to ramp up on time. Based on the strong growth in Q3, we upgraded our revenue guidance for the financial year on 7 January."

(1) Based on actual rates for 9M 2024/25 and forward rates for Q4 2024/25 for NOK/DKK of 0.634 and SEK/DKK of 0.51 as of 6 January 2025.

Key figures and ratios

	Q3 2024/25	Q3 2023/24	Currency neutral Q3 2023/24	9M 2024/25	9M 2023/24	Proforma currency neutral 9M 2023/24
Key figures (DKKm)
Revenue	2,694	2,508	2,502	6,501	4,943	6,079
Gross profit	1,245	1,115	1,114	3,000	2,234	2,749
EBITDA before special items	474	424	425	1,000	802	914
Profit after tax	201	163	166	285	214	211
Free cash flow	377	560		304	(20)
Ratios
Revenue growth	7.4%	79.6%	7.7%	31.5%	43.8%	6.9%
Gross margin	46.2%	43.7%	44.5%	46.1%	44.0%	45.2%
EBITDA margin before special items	17.6%	16.9%	17.0%	15.4%	16.2%	15.0%
Net interest-bearing debt/ LTM EBITDA before special items	2.7	2.2

Proforma numbers (currency neutral) illustrate Matas Group had the Group owned KICKS in 9M 2023/24.

Q3 2024/25 highlights

• Matas Group's strategy to Win the Nordics is delivering as expected with revenue growth of 7.7% currency neutral in Q3 2024/25 and EBITDA before special items growth of 11.5% currency neutral.
• Matas stand-alone growth in Q3 2024/25 was 7.9%, online segment growth was 17.4% and Matas stores grew with 2.3% like-for-like. KICKS stand-alone grew 7.3% currency neutral. KICKS excluding Skincity grew 14.2% currency neutral, and KICKS online excluding Skincity grew 23.3% and stores grew 10.3%, while like-for-like growth was 10.1%.
• Customer traffic was good, and the number of transactions came to 11.6 million in Q3 2024/25 which were 4.0% higher compared to Q3 2023/24. The average basket size increased by 3.1% to DKK 230 per transaction compared to Q3 last year.
• Gross margin was 46.2% in the quarter, compared to 44.5% currency neutral last year. Key drivers in the improved margin were matured assortment expansion and more support from suppliers on growth initiatives, offset by price initiatives, discontinuation of certain in-house brands, and Skincity impact at KICKS.
• Other external costs amounted to DKK 325 million in Q3 2024/25, up from DKK 279 million in Q3 2023/24, reflecting variable cost of sales from KICKS' and Matas' continuing digital growth and execution of the assortment expansion, as well as incremental marketing to drive growth initiatives.
• Q3 2024/25 staff costs amounted to DKK 451 million, up from DKK 418 million in Q3 2023/24, driven by volume growth and wage inflation offset by cost synergies. The staff cost accounted for 16.7% of the revenue in Q3 2024/25 and on par with the same period last year currency neutral.
• Special items amounted to DKK 1 million in Q3 2024/25, compared to DKK 20 million in Q3 2023/24 related to the KICKS acquisition.
• EBITDA before special items came to DKK 474 million in Q3 2024/25 compared to DKK 424 million last year. The EBITDA margin before special items was 17.6% in the quarter against 16.9% last year (17.0% currency neutral).
• The total depreciation, amortisation and impairment charges amounted to DKK 156 million in Q3 2024/25, up by DKK 1 million.
• Profit for the period amounted to DKK 201 million after tax compared to DKK 163 million last year.
• Free cash flow was an inflow of DKK 377 million in Q3 2024/25, reflecting higher NWC in Q3 and the construction of Matas' Logistics Center, compared with an inflow of DKK 560 million in Q3 2023/24.

9M 2024/25 highlights

• Matas Group's strategy to Win the Nordics is delivering as expected with proforma revenue growth of 6.9% currency neutral in 9M 2024/25 and proforma EBITDA before special items growth of 9.4% currency neutral.
• Matas stand-alone growth in 9M 2024/25 was 7.8%. Growth online was 18.8% and stores grew 2.9%. KICKS stand-alone grew 5.5% currency neutral in 9M 2024/25. KICKS excluding Skincity grew 11.0% currency neutral, and KICKS online excluding Skincity grew 22.8% and stores grew 6.8% currency neutral.
• Customer traffic was good, and the number of transactions came to 29.1 million in 9M 2024/25, corresponding to growth of 1.3% compared to proforma numbers for 9M 2023/24. The average basket size grew by 5.5% to DKK 220 per transaction compared to proforma 9M last year.
• Gross profit in 9M 2024/25 amounted to DKK 3,000 million, up from DKK 2,234 million in 9M 2023/24 (DKK 2,749 million proforma currency neutral). The gross margin was 46.1%, up from 44.0% in 9M 2023/24 (45.2% proforma currency neutral). Key drivers in the improved margin were matured assortment expansion, more support from suppliers on growth initiatives and synergies, offset by price initiatives, discontinuation of certain in-house brands and Skincity impact at KICKS.
• Other external costs amounted to DKK 776 million in 9M 2024/25, up from DKK 537 million in 9M 2023/24 (DKK 691 million proforma currency neutral), driven by the KICKS acquisition, high digital growth in both Matas and KICKS as well as continued assortment expansion.
• 9M 2024/25 staff costs amounted to DKK 1,239 million, up from DKK 904 million (DKK 1,153 million proforma currency neutral) in 9M 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 13 million in 9M 2024/25, compared to DKK 80 million in 9M 2023/24, which related to the acquisition of KICKS.
• EBITDA before special items came to DKK 1,000 million in 9M 2024/25 compared to DKK 802 million last year (DKK 914 million proforma currency neutral), and the EBITDA margin before special items was 15.4% in 9M against 16.2% reported last year (15.0% proforma currency neutral).
• The total depreciation, amortisation and impairment charges were DKK 471 million in 9M 2024/25, up from DKK 359 million and mainly attributable to the acquisition of KICKS.
• Profit for the period amounted to DKK 285 million after tax compared to DKK 214 million last year (DKK 211 million proforma currency neutral). The increase reflects the continued growth of Matas Group and the improved gross margin.
• Free cash flow was an inflow of DKK 304 million in 9M 2024/25, reflecting broader assortment and higher minimum inventory at KICKS and the construction of Matas' Logistics Center, compared with an outflow of DKK 20 million in 9M 2023/24, which related to the acquisition of KICKS.

Video conference

Matas Group will host a video conference regarding Q3 2024/25 results for investors and analysts on Wednesday, 5 February 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/q3-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]

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 more than 6 million loyalty members across the Nordics. Matas Group is listed on Nasdaq OMX Copenhagen.