Q1 Report 2015/16 · Loyalty programmes . Next step in our sustainability efforts 38 •In early...
Transcript of Q1 Report 2015/16 · Loyalty programmes . Next step in our sustainability efforts 38 •In early...
Q1 Report 2015/16 9 September 2015
Klas Balkow President & CEO
Agenda
• Q1 2015/16
• Events after period-end
• Future outlook
• Strategic priorities
• Q&A
High energy and strong position
3
200 stores in
5 countries omni-channel structure
76 million visitors
38 million customers
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
Q1 2015/16 May – July
Highlights Q1
• Record sales up 8% to 1,770 MSEK
• Improved operating profit of 106 MSEK (102)
− Including non-recurring cost of 10 MSEK
• Earnings per share improved by 3%
5
Sales Q1
• Sales up 8% in local currencies
• Sales 1,770 MSEK, up 8%
• 13 additional stores compared to end of period last year (8)
6
1 387 1 462
1 507
1 642
1 770
Q111/12
Q112/13
Q113/14
Q114/15
Q115/16
MSEK +8%
LFL sales
7
100
101
103
105
104
103
101
102
104
Q113/14
Q2 Q3 Q4 Q114/15
Q2 Q3 Q4 Q115/16
Index Sales comparable units in local currency, up 4%
Long term target 2%
45%
40%
10%
5%
Sales share per market
8
Sweden
Norway
Finland Outside Nordics
73 stores
32 stores
81 stores
12 stores
Dubai
1 store
80
85
90
95
100
105
110
9
Source: www.tradingeconomics.com
94
97
100
103
106
109
Q111/12
Q2 Q3 Q4 Q112/13
Q2 Q3 Q4 Q113/14
Q2 Q3 Q4 Q114/15
Q2 Q3 Q4 Q115/16
Sweden Consumer Confidence
Sweden Retail Index
Source: HUI
Retail index current prices
Sweden Q1
• Sales up 6% to 806 MSEK
• Total 81 stores
− 1 new store during Q1
− 3 more stores compared to preceding Q1
• Increased market share
10
667 692 703
760 806
Q111/12
Q112/13
Q113/14
Q114/15
Q115/16
MSEK
+6%
100
102
104
106
Q111/12
Q2 Q3 Q4 Q112/13
Q2 Q3 Q4 Q113/14
Q2 Q3 Q4 Q114/15
Q2 Q3 Q4 Q115/16
11
-6
-3
0
3
6
9
12
Norway Consumer Confidence
Norway Retail Index
Source: www.tradingeconomics.com
Source: SSB
554 593 605
645
702
Q111/12
Q112/13
Q113/14
Q114/15
Q115/16
Norway Q1
• Sales up 12% in local currency
• Sales 702 MSEK, up 9%
• Total 73 stores
− No new stores during Q1
− 8 more stores compared to preceding Q1
• Strong market position and strengthened brand
12
MSEK
0
5
10
15
20
96
98
100
102
104
106
108
Q111/12
Q2 Q3 Q4 Q112/13
Q2 Q3 Q4 Q113/14
Q2 Q3 Q4 Q114/15
Q2 Q3 Q4 Q115/16
13
Finland Consumer Confidence
Finland Retail Index
Source: www.tradingeconomics.com
Source: Statistikcentralen
Finland Q1
• Sales up 7% in local currency
• Sales 176 MSEK, up 9%
• Total 32 stores
− No new stores during Q1
− 2 more stores compared to preceding Q1
• Strengthened brand and market position
14
116 121
143
161
176
Q111/12
Q112/13
Q113/14
Q114/15
Q115/16
MSEK
-40
-30
-20
-10
0
10
15
UK UK Consumer Confidence
UK Retail Index
100
102
104
106
Q111/12
Q2 Q3 Q4 Q112/13
Q2 Q3 Q4 Q113/14
Q2 Q3 Q4 Q114/15
Q2 Q3 Q4 Q115/16
Source: www.tradingeconomics.com
Source: Statistikcentralen
Outside Nordic countries Q1
• Sales -2% in local currencies
− Negatively affected due to periodization in supplies to franchisee
• Sales 86 MSEK, up 12%
• 13 stores whereof one franchise
− No new stores during Q1
− No additional stores compared to preceding Q1
• Flat LFL sales in the UK
• Positive retail sales development in Dubai
− Search for second store ongoing
16
50 56 56
77
86
Q111/12
Q112/13
Q113/14
Q114/15
Q115/16
UAE
UK
MSEK
Gross margin long-term development
17
%
35
36
37
38
39
40
41
42
43
44
45
Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4
R12
• Down in the quarter by 0.1 p.p to 40.4%
− Negative currency impact
− Positive sales mix
− Increased sourcing efficiency
Share of selling expenses
18
33
27
39
31
34
27
39
31
Q213/14
Q3 Q4 Q114/15
Q2 Q3 Q4 Q115/16
• Share of selling expenses 31.0%, down 0.4 p.p. in quarter
%
Operating profit and Operating margin
19
126
330
-18
102
151
350
-8
106
-2
0
2
4
6
8
10
12
Q213/14
Q3 Q4 Q114/15
Q2 Q3 Q4 Q115/16
Operating profit, MSEK
R12, operating margin, %
• Improved operating profit by 4% to 106 MSEK (102)
• Including non-recurring cost of 10 MSEK
44
34
17
56
52
Q111/12
Q112/13
Q113/14
Q114/15
Q115/16
Investments
• Total investments 52 MSEK (56)
• New stores and refurbishments 11 MSEK (15)
• IT-systems 34 MSEK (34)
− Implementation of new IT-platform
− Other IT developments
20
MSEK
Strong cash flow
• Cash flow operating activities was 170 MSEK (171)
− Inventory 1,532 MSEK (1,329)
− Inventory turnover rate DC 6.7 (7.0)
• Cash flow after investments and financing activities of 86 MSEK (102)
• Net cash holdings of 601 MSEK (462)
21
22
Proposed dividend
• Proposed dividend 5.25 SEK per share (4.75)
• Equivalent to 75% (77) of net profit
• Inline with dividend policy
At least 50 per cent of earnings per share after tax, with consideration for the financial position
• Record date for payment of dividend 15 September
3,75
4,25 4,25
4,75
5,25
10/11 11/12 12/13 13/14 14/15
*
SEK +11%
*Proposed dividend
Events after period-end
August sales
• Sales 611 MSEK
• Sales up 2% in local currencies
− Sweden + 3%
− Norway + 1%
− Finland + 2%
− Outside Nordic countries - 5%
• 13 additional stores compared to end of last August (8)
24
527 530 561
611 611
Aug11/12
Aug12/13
Aug13/14
Aug14/15
Aug15/16
MSEK
Launch of new autumn range
25
• Many new smart products in range
− More than 2,000 news
− Increased focus on lighting and energy saving products
• New catalogue released
− Reduced volumes in Norway, Finland and the UK
• New market communication concept launched in all countries
Store number 200 • On 20 August, Clas Ohlson’s 200th store was opened in traditional fashion
• Located in Bergvik Köpcenter, just outside Karlstad.
• Yet another milestone in Clas Ohlson’s journey of growth
26
Future outlook
27
28
Main challenge going forward
6,3
6,8
7,3
7,8
8,3
8,8
1,03
1,08
1,13
1,18
USD/SEK
May 12 May 14 May 13 May 15
NOK/SEK
Excluding hedging effect
Sales in NOK – instant currency effect
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
Counteracting measures
29
Monitor price development
Optimise sales mix
Increase sourcing efficiency
1 2 3
Price position
30
• Never compromise on low price value proposition
• Closely monitor market price development
• Over time we expect the USD-effect to be reflected in consumer pricing for the whole industry
1
Sales mix
• Continue to develop product and category mix
• Continue to develop private label
31
2
Sourcing efficiency
• Increase efficiency in supply chain
• Increase share of direct sourcing
• Further initiatives to increase efficiency with our main suppliers
• Increase efficiency at Distribution Centre
32
3
33
Main challenge going forward
6,3
6,8
7,3
7,8
8,3
8,8
1,03
1,08
1,13
1,18
USD/SEK
May 12 May 14 May 13 May 15
NOK/SEK
Excluding hedging effect
Sales in NOK – instant currency effect
Purchasing in USD – time lag in currency effect
Source: Sveriges Riksbank
• Currencies will have negative impact in coming quarters
• Will be able to offset currency fluctuations over time
Update on strategic priorities
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 being developed
• Optimising store network
− Store in Merry Hill in Birmingham closed in August
35
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
36
High energy in all sales channels
37
Stores
Catalogue/Phone
Social media
Online
Loyalty
programmes
Next step in our sustainability efforts
38
• In early September we launched our new sustainability concept for communicating with our customers
• Even greater focus on offering and more clearly showcasing our range of products for a more sustainable lifestyle
New communication concept
• To inspire and display the unique benefits of the company’s products using film as a media
• Aim to record 5,000 film clips this year
• Produced in a studio in Insjön, Sweden
• In four languages and with local ambassadors
39
40
• All time high sales and improved profit
• Strong financial position
• Many initiatives for further development
Summary Q1 15/16
Questions & Answers
www.clasohlson.com