q2 report 2015/16 - about.clasohlson.com...•q2 2015/16 •first six months 2015/16 •events after...

Q2 Report 2015/16 9 December 2015

Klas Balkow President & CEO

Agenda

• Q2 2015/16

• First six months 2015/16

• Events after period-end

• Future outlook

• Strategic priorities

• Q&A

High energy and strong position

3

206 stores in

5 countries omni-channel structure

76 million visitors 4,700

service-minded

employees

High focus on

sustainability

agenda

One of the

strongest brands in retail in the Nordics

R12 sales

7.5 billion SEK

38 million customers

Highlights

• Solid second quarter despite currency challenges

• Strong November sales gives good start to the important third quarter

4

Q2 2015/16 August – October

Sales Q2

• Sales up 5% in local currencies

• Flat LFL sales

− Improving trend during the quarter

• Sales 1,846 MSEK, up 2%

• 10 additional stores net compared to end of period last year (11)

• 4 store openings in the quarter

6

1 553 1 614

1 678

1 814 1 846

Q211/12

Q212/13

Q213/14

Q214/15

Q215/16

MSEK

+2%

Esbo – Finland

Karlstad – Sweden

Sandefjord – Norway

St Albans – UK

20 August 1 October

10 September 14 October

46%

39%

10% 5%

Sales share per market

8

Sweden

Norway

Finland Outside Nordics

74 stores

33 stores

82 stores

12 stores

Dubai

1 store

80

85

90

95

100

105

110

9

Source: www.tradingeconomics.com

94

97

100

103

106

109

Q211/12

Q3 Q4 Q112/13

Q2 Q3 Q4 Q113/14

Q2 Q3 Q4 Q114/15

Q2 Q3 Q4 Q115/16

Q2

Sweden Consumer Confidence

Sweden Retail Index

Source: HUI

Retail index current prices

Sweden Q2

• Sales up 6% to 847 MSEK

• Total 82 stores

− 1 new store during Q2

− 4 more stores compared to preceding Q2

• Maintaining market share in a strong market

10

722 742 771 803

847

Q211/12

Q212/13

Q213/14

Q214/15

Q215/16

MSEK

+6%

100

102

104

106

Q211/12

Q3 Q4 Q112/13

Q2 Q3 Q4 Q113/14

Q2 Q3 Q4 Q114/15

Q2 Q3 Q4 Q115/16

Q2

11

-9

-6

-3

0

3

6

9

12

Norway Consumer Confidence

Norway Retail Index


Source: SSB

646 669 684

750 716

Q211/12

Q212/13

Q213/14

Q214/15

Q215/16

Norway Q2

• Sales up 5% in local currency

• Sales 716 MSEK, down 4%

• Total 74 stores

− 1 new stores during Q2

− 5 more stores compared to preceding Q2

• Increased market share in a volatile market

12

MSEK

0

5

10

15

20

96

98

100

102

104

106

108

Q211/12

Q3 Q4 Q112/13

Q2 Q3 Q4 Q113/14

Q2 Q3 Q4 Q114/15

Q2 Q3 Q4 Q115/16

Q2

13

Finland Consumer Confidence

Finland Retail Index


Source: Statistikcentralen

Finland Q2

• Sales up 5% in local currency

• Sales 190 MSEK, up 7%

• Total 33 stores

− 1 new stores during Q2

− 1 more store compared to preceding Q2

• Increased market share and strengthened brand position in a soft market

14

122

140

158

177 190

Q211/12

Q212/13

Q213/14

Q214/15

Q215/16

MSEK

-40

-30

-20

-10

0

10

15

UK UK Consumer Confidence

UK Retail Index

100

102

104

106

Q211/12

Q3 Q4 Q112/13

Q2 Q3 Q4 Q113/14

Q2 Q3 Q4 Q114/15

Q2 Q3 Q4 Q115/16

Q2


Source: Statistikcentralen

Outside Nordic countries Q2

• Sales -1% in local currencies


• 13 stores whereof one franchise

− 1 new small format store opened

− 1 store closed

− No additional stores compared to preceding Q2

• Flat LFL sales in the UK

• Positive retail sales development in Dubai

16

63 63 65

84

93

Q211/12

Q212/13

Q213/14

Q214/15

Q215/16

UAE

UK

MSEK

Gross margin Q2

• Gross margin down 0.9 percentage points

• Negative currency impact

• Impact reduced by

− sales mix

− currency hedges NOK

17

42,3 42,0

43,3

44,8 43,9

Q211/12

Q212/13

Q213/14

Q214/15

Q215/16

%

Gross margin long-term development

18

%

35

36

37

38

39

40

41

42

43

44

45

Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2

R12

19

Negative currency impact

6,0

6,5

7,0

7,5

8,0

8,5

9,0

USD/SEK

Purchasing in USD – time lag in currency effect

Source: Sveriges Riksbank

• Increased negative effect from strengthened USD

• Effect from further weakened NOK with immediate impact on sales and gross margin

1,00

1,05

1,10

1,15

1,20

NOK/SEK

Excluding hedging effect

Sales in NOK – instant currency effect

Jan 2013

Jan 2015

Jan 2014

May 2012

Nov 2015

Contribution from currency hedging

20

1,00

1,02

1,04

1,06

1,08

1,10

1,12

1,14

NOK/SEK


Sept 2014

March 2015

Sept 2015

Favourable sales mix

• Continued development of product and category mix

• Continued development of private label

• Continued pricing adjustments in line with the whole industry

21

Increased sourcing efficiency

• Increased share of direct sourcing

• Lower sourcing cost Asia

− raw material

− CNY currency

− general capacity

22

Share of selling expenses

23

31,6 32,9 32,9 33,7 33,4

Q211/12

Q212/13

Q213/14

Q214/15

Q215/16

%

• Share of selling expenses 33.4%, down 0.3 p.p. in quarter

Profit Q2

24

• Operating profit 145 MSEK

• Operating margin 7.8%

• Earnings per share 1.76 SEK 124

102

126

151 145

0

2

4

6

8

10

Q211/12

Q212/13

Q213/14

Q214/15

Q215/16

Operating profit, MSEK

Operating margin R12, %

Six months 2015/16 May – October

Sales Q1-Q2


• LFL sales +2%

• Sales 3,616 MSEK, up 5%

• 10 additional stores net compared to end of period last year (11)

26

2 940 3 076

3 184

3 457 3 616

Q1-Q211/12

Q1-Q212/13

Q1-Q213/14

Q1-Q214/15

Q1-Q215/16

+5% MSEK

243

203 218

253 250

0

2

4

6

8

10

Q1-Q211/12

Q1-Q212/13

Q1-Q213/14

Q1-Q214/15

Q1-Q215/16

Profit Q1-Q2

• Operating profit 250 MSEK

• Operating margin 6.9%

• Earnings per share 3.03 SEK

27

Operating profit, MSEK

Operating margin R12, %

105

94

68

107

115

Q211/12

Q212/13

Q213/14

Q214/15

Q215/16

Investments Q1-Q2

• Total investments 115 MSEK (107)

• New stores and refurbishments 40 MSEK (48)

• IT-systems 56 MSEK (46)

− Implementation of new IT-platform

− Other IT developments

28

MSEK

Strong cash flow

• Cash flow operating activities was 322 MSEK (272)

− Inventory 1,764 MSEK (1,609)

− Inventory turnover rate DC 6.4 (7.0)

• Cash flow after investments and financing activities of -155 MSEK (-147)

• Net cash holdings of 354 MSEK (213)

29

Events after period-end

Energy in all sales channels

• Good start to Christmas season

• High activity in all sales channels and markets

31

Voted christmas gift of the year

Robotic Vacuum Cleaner

November sales



− Sweden + 10%

− Norway + 12%

− Finland + 19%

− Outside Nordic countries - 3%

• 9 additional stores compared to end of November last year (14)

• 4 store openings after period end

32

636 662

702 746

809

Nov11/12

Nov12/13

Nov13/14

Nov14/15

Nov15/16

MSEK

Ealing – UK

Åbo – Finland

Mall of Scandinavia – Solna, Sweden

Löddeköpinge – Sweden

4 November 26 November

12 November 3 December

1

Strong loyal customer base

34

2 8 1 9 6 9 members

2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 7

Future outlook

36

Continued challenge going forward

6,3

6,8

7,3

7,8

8,3

8,8

1,00

1,05

1,10

1,15

1,20

USD/SEK

NOK/SEK


Sales in NOK – instant currency effect

Purchasing in USD – time lag in currency effect

Source: Sveriges Riksbank

• Strengthened USD

• Weakened NOK

• Less positive effect from currency hedges going forward

Jan 2013

Jan 2015

Jan 2014

May 2012

Nov 2015

Counteracting measures

37

Monitor price development

Optimise sales mix

Increase sourcing efficiency

1 2 3

Update on strategic priorities

38

Sales channel development

39

Stores

Catalogue/Phone

Social media

Online

Loyalty

programmes

Next steps in the UK

• Next step in UK expansion plan

− New smaller store format cluster in London region

− New stores in St Albans and Ealing opened

• Optimising store network

40

High interest for German expansion

• Three stores contracted to open in Hamburg

− Jungfernstieg to open Summer 2016

− Altona to open Autumn 2016

− Alstertal to open Autumn 2016

• Preparations according to plan

41

• Solid second quarter

• Strong November sales

• Strong financial position

Summary Q2 15/16

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