MQ Holding AB Interim report

Transcription

1 MQ Holding AB Interim report MQ strengthens earnings and financial position It is gratifying that both earnings and cash flow are continuing to develop positively despite strong figures from the preceding year for MQ. The key to the financial improvement for the quarter lies in a higher gross margin and continued favourable cost control. First quarter (September 2014-November 2014) Net sales amounted to SEK 357 million (372), down 4.0 percent. Sales in comparable stores fell 4.2 percent (the Swedish Retail Institute Index was down 2.2 percent). The gross margin was 61.0 percent (60.1). Operating profit amounted to SEK 39 million (35), corresponding to an operating margin of 10.9 percent (9.4). Profit after tax was SEK 29 million (25), corresponding to SEK 0.83 (0.72) per share after dilution. Cash flow from operating activities totalled SEK 10 million (6). Events during the first quarter MQ decided to close one store in Bogstadveien, Oslo. At the same time, MQ has signed a contract for premises in Grensen, Oslo, to create MQ s first flagship store in Norway. A decision has been made to launch the MQ Shop Online in Norway in March The external brand, Jumperfabriken, was launched on MQ Shop online. Events after the end of the reporting period No events occurred after the end of the reporting period. 1

2 Key figures SEK m 14/15 13/14 Rolling 12 Months Dec 13-Nov 14 Financial year Sep-Aug 13/14 Net sales , Gross margin, % Operating profit Operating margin, % Profit after financial items Profit for the period Earnings per share before dilution, SEK Earnings per share after dilution, SEK Number of stores, at the end of the period

3 MQ HOLDING AB MQ (Corp. HOLDING Reg. No. AB ) (Corp. Comments by the CEO In terms of results, MQ has strong figures from the preceding year. Despite this, earnings continue to improve. We have further strengthened the gross margin through a carefully selected range, fewer campaigns and improved purchasing procedures. At the same time, we have good control of the cost trend in line with the action programme, which generated the first step in MQ s improved position a year ago. During the autumn, sales of seasonal warm outdoor garments and knitted clothing were weak. However, it is gratifying that other categories performed well, which confirms that MQ has a strong position as a fashion destination. This year s Christmas campaign is broad and we are visible in several channels. The Association of Swedish Advertisers has, through the survey company Novus, asked Swedish people about the brand/company from which they would want a Christmas present. In terms of the clothes category, it is gratifying to see that Swedes would most like to see a Christmas present from MQ under the Christmas tree. In conjunction with our Christmas activities, we are now also making an extra contribution to the Swedish Childhood Cancer Foundation s Give Hope campaign, for which we are also the principal sponsor this year. Ahead of the Christmas shopping period, the popular Swedish brand, Jumperfabriken, was launched on MQ Shop Online, which continues to be a channel for strong growth for MQ. During the period, planning for a new start in Norway has been intense since we foresee growth potential in this market. In March 2015, we will be starting MQ Shop Online in Norway while also actively searching for locations for new stores. There is more to do and develop with respect to the customer offering, and how and where we communicate with customers. During the autumn, we intensified our growth focus and development work is in progress on several levels. The improved results in the first quarter of 2014/2015 show that MQ is on the right track. The financial position has further improved and will facilitate the continued journey. Christina Ståhl, President and CEO,MQ Holding AB 3

4 Operations The MQ Group is a retailer of women s and men s fashion in the Swedish and Norwegian markets. The range, which focuses on fashion-conscious consumers, contains a mix of proprietary and external brands. Store network The stores are located throughout Sweden from Ystad in the south to Luleå in the north. MQ was launched in Norway in September 2010 and currently has four stores located in Oslo, Jessheim, Drammen and Kristiansand. All stores sell both women s and men s fashions. At the end of the period, the total number of stores was 120. Market The market for ready-to-wear clothing in Sweden was weak during the first quarter (September November 2014), with a negative sales trend of 2.2 percent during the quarter. The sales trend in the market for the 12-month period (December November 2014) was negative, declining 0.1 percent. Comments on financial performance Net sales First quarter, September 2014 November 2014 Net sales amounted to SEK 357 million (372) during the quarter, down 4.0 percent. MQ s sales in comparable stores declined 4.2 percent year-onyear, compared with the market decline of 2.2 percent. The product range for women noted a sales decline of 1.6 percent to SEK 190 million (193) and the product range for men a sales decline of 6.7 percent to SEK 167 million (179). Earnings First quarter, September November 2014 Gross profit totalled SEK 218 million (223), corresponding to a gross margin of 61.0 percent (60.1). Other costs and personnel expenses for the quarter amounted to SEK 172 million (183). The cost level declined SEK 11 million, which is a collective result of the savings programme in the preceding year, and a thorough cost awareness that has become a natural culture in the company. Operating profit during the quarter amounted to SEK 39 million (35), corresponding to an operating margin of 10.9 percent (9.4). Depreciation/amortisation according to plan amounted to SEK 7 million (9). Net financial items for the first quarter totalled an expense of SEK 2 million (expense: 3). Profit after financial items amounted to SEK 37 million (32). Profit after tax was SEK 29 million (25). Establishing stores Efforts to find new store locations are proceeding as planned. In Norway, we are closing the store in Bogstadveien to open a flagship store in Grensen, Oslo. We are supplying resources and commencing efforts to enable MQ to realise the potential that exists in the Norwegian market. Cash flow MQ s cash flow from operating activities during the quarter amounted to SEK 10 million (6). Cash flow after investments amounted to SEK 7 million (4). Inventories At 30 November 2014, the value of inventories was SEK 257 million (269). In total, the composition of inventories is deemed to be at a satisfactory level. Investments Investments during the period totalled SEK 3 million (2) and pertained to investments in existing stores. Financing and liquidity At 30 November 2014, interest-bearing net debt amounted to SEK 166 million, compared with SEK 310 million at the same date in the preceding year. At the end of the period, cash and cash equivalents was SEK 46 million (29). Interest-bearing net debt/ebitda was 1.0 (3.1) for the 12-month period of December 2013 November Events during the first quarter In Norway, we are closing the store in Bogstadveien to open a flagship store in Grensen, Oslo. In March 2015, we will be starting MQ Shop Online in Norway in parallel with actively searching for locations for new stores. The external brand, Jumperfabriken, was launched on MQ Shop online. Events after the end of the reporting period No events occurred after the end of the reporting period. Employees The average number of full-time employees during the 12-month period (December November 2014) was 585 compared with 654 in the yearearlier period. Related-party transactions There were no material related-party transactions during the period. 4

5 Risks and uncertainties MQ s operations are exposed to a number of risks that are completely or partly beyond the company s control, but which could impact sales and earnings. The risks that the company is exposed to include the economic trend, shifts in fashion, and interestrate and currency risks. MQ is dependent on consumer preferences with respect to trends, design and quality. MQ makes conscious efforts to develop its trend monitoring, information systems, forecasts, supply chain management and to shorten lead times in the development of products to minimise the risks in fashion shifts. The purchasing power of Swedish consumers is a prerequisite for retail growth. This is particularly important for growth in the high price ranges, characterised by high fashion content among retailers and brand specialists. It is probable that a change in Sweden s economic growth would impact the purchasing power of consumers and thus growth in the retail sector. Financial risks pertain to fluctuations in the company s earnings and cash flow resulting from movements in exchange rates, interest rates, liquidity and credit risks. The Group s financial risks are managed by the Group s finance department, which is in charge of identifying and minimising the risk of negative effects on earnings and of improving the predictability of future earnings. For further information about financial instruments and risk management; see the Administration Report and Notes 23 and 24 of the Annual Report for the 2012/2013 financial year. Parent Company The Parent Company s net sales during the quarter amounted to SEK 3 million (3) and the result after financial items to a loss of SEK 1 million (loss: 1). No investments were made by the Parent Company during the period. Financial Reporting and applicable regulations of the Swedish Annual Accounts Act. The interim report for the Parent Company has been prepared in accordance with Chapter 9 of the Swedish Annual Accounts, Interim Financial Reporting. For the Group and the Parent Company, the same accounting policies and measurement principles have been applied as in the most recent Annual Report. Derivative instruments are measured at fair value, which amounted to SEK 11.9 million at 30 November For currency contracts (currency forward contracts), the fair value is determined based on measurement from credit institutions if such is available. If such is not available, the fair value is calculated by discounting the difference between the contracted forward rate and the forward rate that can be subscribed on the balancesheet date for the remaining contract period. For other financial instruments, carrying amounts reflect their fair value. According to IFRS 7, financial instruments must be categorised in three categories based on the input data used to measure the fair value. The first category pertains to financial instruments listed in an active market. The second category to financial instruments that are not listed in an active market but where other market information can be used to obtain a measurement. The final category to measurements where there are no market listings or other market data. Techniques to obtain a valuation for level three mainly involve discounting cash flows. All of MQ s derivatives belong to the second category. Annual General Meeting The Annual General Meeting will be held in Gothenburg on 29 January 2015 in MQ s premises. The Annual Report will be available on as of the week commencing 22 December Accounting policies This condensed consolidated year-end report has been prepared in accordance with IAS 34 Interim 5

6 The Board of Directors and the CEO give their assurance that the year-end report provides a fair overview of the development of the Group s and Parent Company s operations, financial position and earnings, and also describes the material risks and uncertainties facing the Parent Company and the companies included in the Group. Gothenburg, 17 December 2014 Board of Directors MQ Holding AB Erik Olsson Chairman of the Board Göran Barsby Board Member Bengt Jaller Board Member Annika Rost Board Member Arthur Engel Board Member Mernosh Saatchi Board Member Michael Olsson Board Member Christina Ståhl President Teleconference A teleconference will be held at 9:00 a.m. on 18 December for analysts, investors and the media. The presentation will also be webcast on To participate, please call +46 (0) Reporting calendar Interim report, second quarter, December 2014 February March 2015 Interim report, third quarter, March 2014 May June 2015 Year-end report fourth quarter, June 2015 August October 2015 This constitutes information that MQ Holding AB (publ) is legally obliged to publish under the Securities Market Act and/or the Financial Instruments Trading Act. The information was submitted for publication on 18 December 2014, at 7:15 a.m. Contact For further information, please contact: Christina Ståhl, President and CEO: Tel: +46 (0) Tony Siberg, Deputy CEO and CFO: Tel: +46 (0) MQ Holding AB S:t Eriksgatan 5 Box SE Gothenburg Corp. Reg. No This interim report has not been reviewed by the company s auditors. 6

7 Consolidated statement of earnings and other comprehensive income Condensed consolidated statement of comprehensive income in (SEK m) 2014/15 Rolling 12 Months Dec 13-Nov 14 Financial year Sep-Aug Net sales , Other operating income Total operating income , Goods for resale Other external costs Personnel expenses Other operating expenses Depreciation/amortisation Operating profit Financial income Financial expenses Profit after financial items Tax on profit for the period PROFIT FOR THE PERIOD attributable to parent company shareholders OTHER COMPREHENSIVE INCOME Items that have been restated or that can be restated in profit for the period Translation difference Changes in fair value of cash-flow hedging Incentive programmes TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO PARENT COMPANY SHAREHOLDERS Earnings per share before dilution (SEK) Earnings per share after dilution (SEK) Average number of shares before dilution 35,156,507 34,631,507 35,156,507 34,631,507 Average number of shares after dilution 35,156,507 34,725,233 35,156,507 34,667,053 7

8 Consolidated balance sheet Condensed consolidated balance sheet (SEK m) 30 November November August 2014 ASSETS Fixed assets Intangible fixed assets 1,203 1,205 1,203 Tangible assets Total fixed assets 1,253 1,276 1,259 Current assets Inventories Current receivables Cash and cash equivalents Total current assets TOTAL ASSETS 1,627 1,637 1,650 EQUITY AND LIABILITIES Equity 1, Liabilities Interest-bearing long-term liabilities Non-interest-bearing long-term liabilities Interest-bearing current liabilities Non-interest-bearing current liabilities TOTAL EQUITY AND LIABILITIES 1,627 1,637 1,650 Statement of changes in equity Specification of changes in the Group s equity (SEK m) Period 2014/15 Period Period Sep-Aug Equity, opening balance Total comprehensive income Dividend EQUITY, CLOSING BALANCE 1,

9 Consolidated cash-flow statement Condensed consolidated cash-flow statement (SEK m) 2014/15 Financial year Sep-Aug Cash flow from operating activities before changes in working capital Changes in working capital Cash flow from operating activities Cash flow from investing activities Acquisition of intangible assets Acquisition of tangible assets Cash flow after investing activities Financing activities Amortisation Dividend Utilisation of overdraft facility Cash flow from financing activities Cash flow for the period Cash and cash equivalents at the beginning of the period Cash and cash equivalents at the end of the period Key figures 2014/15 Rolling 12 Months Dec 13-Nov 14 Financial year Sep-Aug Growth in net sales, % Sales growth, comparable stores, % Gross margin, % Operating profit, SEK m Operating margin, % Profit after financial items Profit for the period Total depreciation/amortisation, SEK m Earnings per share before dilution, SEK Interest-bearing net debt, SEK m Interest-bearing net debt/ebitda, multiple Equity/assets ratio, % Equity, SEK m 1, , Average number of shares before dilution 35,156,507 34,631,507 35,156,507 34,631,507 Average number of shares after dilution 35,156,507 34,725,233 35,156,507 34,667,053 9

10 Largest shareholders as of 28 November 2014 Name Number of shares Votes and capital, % ÖRESUND, INVESTMENT AB 4,800, DANSKE CAPITAL SVERIGE AB 4,575, JALLER KLÄDCENTER AB 3,062, LÄNSFÖRSÄKRINGAR FONDFÖRVALTNING AB 1,935, SVENSKA LÄRARFONDER 1,265, CATELLA FONDFÖRVALTNING 1,118, UNIONEN 1,100, DNB - CARLSON FONDER 1,053, HANDELSBANKEN FONDER AB RE JPMEL 793, FÖRSÄKRINGSAKTIEBOLAGET, AVANZA PENSION 707, SKANDIA FONDER 686, SECOND SWEDISH NATIONAL PENSION FUND 563, QVIBERG ENGEBRETSEN, ANNA 400, QVIBERG, JACOB 400, NORDNET PENSIONSFÖRSÄKRING AB 334, Total 15 largest 22,797, Other 12,359, Total 35,156,

11 Parent Company income statement Parent Company income statement in summary (SEK m) 2014/15 Rolling 12 Months Dec 13-Nov 14 Financial year Sep-Aug Net sales Other operating income Total operating income Goods for resale Other external costs Personnel expenses Other operating expenses Depreciation/amortisation Operating profit/loss Income from shares Group contributions received Financial income Financial expenses Profit/loss after financial items Tax on profit for the period PROFIT/LOSS AFTER TAX Parent Company balance sheet Parent Company balance sheet in summary (SEK m) 30 November November August 2014 ASSETS Fixed assets Intangible assets Tangible assets Financial fixed assets 1,110 1,110 1,110 Total fixed assets 1,110 1,110 1,110 Current assets Current receivables Cash and cash equivalents Total current assets TOTAL ASSETS 1,112 1,112 1,111 EQUITY AND LIABILITIES Equity Liabilities Interest-bearing long-term liabilities Interest-bearing current liabilities Non-interest-bearing liabilities TOTAL EQUITY AND LIABILITIES 1,112 1,112 1,111 Assets pledged as security Shares in subsidiaries 1,110 1,111 1,110 Contingent liabilities Guarantees related to subsidiaries completion of leasing contracts Guarantees related to MQ Retail AB Total contingent liabilities

12 Definitions Gross margin Net sales less costs for goods sold as a percentage of sales. EBITDA Earnings before interest, taxes, depreciation and amortisation. Equity Consists of share capital, other contributed capital, reserves and retained earnings, including the Group s profit for the year. Equity per share Equity divided by the number of shares on the closing date. Interest-bearing net debt Interest-bearing liabilities minus cash and cash equivalents. Interest-bearing net debt/ebitda Interest-bearing liabilities divided by EBITDA for the most recent 12-month period. Operating margin Operating profit as a percentage of net sales for the period. Equity/assets ratio Equity as a percentage of total assets. Like-for-like sales The term like-for-like sales is used to designate all sales in Swedish stores, with the exception of sales in new stores. A new store becomes comparable when it has been opened for one year. MQ is one of Sweden s leading retailers of fashion brands. Through a select mix of proprietary and external brands, MQ offers men s and women s clothes with a high fashion content in attractive stores. The store chain currently comprises 120 stores and the aim is to establish MQ as the leading retailer of fashion brands in the Nordic region. The MQ share has been listed on NASDAQ Stockholm since 18 June For more information, please visit our website at 12