Musti Group Plc INTERIM REPORT 3
March 2020, at 8:30 a.m. EET
Musti Group Plc Interim Report 1 October–31 December 2019
Profitable growth in all segments
October–December 2019
· Group net sales totalled EUR 70.3 million (64.1 million), an increase of
9.7%.
· Like-for-like sales growth was 7.7%.
· Adjusted EBITA was EUR 7.8 (6.0) million, up by 30.0%.
· Adjusted EBITA margin was 11.1% (9.3%).
· Operating profit increased by 60.8% to EUR 5.4 (3.3) million, representing
7.7% (5.2%) of net revenue.
· Profit for the period totalled EUR 3.7 (1.1) million.
· Earnings per share was EUR 0.13 (0.04).
· Number of stores grew to 281 (272 at 31 December 2018). Number of loyal
customers grew to 1,052 thousand (917 thousand).
The figures in parenthesis refer to the comparison period, i.e. the same period
in the previous year, unless stated otherwise.
Musti’s financial year is from 1 October to 30 September.
Key figures
EUR millions or as Q1 10–12/19 Q1 10–12/18 Change % FY2019
indicated
Net sales 70.3 64.1 9.7 246.6
Net sales growth, % 9.7% 22.1% 14.1%
LFL sales growth, % 7.7% 10.2% 11.2%
LFL store sales 7.2% 6.5% 7.8%
growth, %
Online share, % 19.5% 19.8% 20.7%
Gross margin, % 45.4% 44.5% 44.3%
EBITA 6.8 4.7 45.5 18.1
Adjusted EBITA 7.8 6.0 30.0 21.9
Adjusted EBITA 11.1% 9.3% 8.9%
margin, %
Operating profit 5.4 3.3 60.8 12.5
Operating profit 7.7% 5.2% 5.1%
margin, %
Profit/loss for the 3.7 1.1 242.3 3.0
period
Earnings per share, 0.13 0.04 0.10
basic and diluted,
EUR
Cash flows from 14.7 14.8 -1.1 39.5
operating activities
Investments 2.5 1.6 55.7 6.4
Gearing, % 123.6% 141.6% 135.4%
Net debt / LTM 3.1 4.6 3.5
adjusted EBITDA
Number of loyal 1,052 917 14.6 1,018
customers, thousands
Number of stores at 281 272 3.3 277
the end of the period
of which directly 212 198 7.1 206
operated
CEO’s comments
This interim report is an important milestone for us as it is our first one as a
listed company. I am very proud of the work everyone at Musti Group has done in
growing and developing the company from a strong Finnish retail concept into the
leading Nordic pet care company.
We are pleased with Musti’s strong first quarter of the financial year 2020. Our
net sales grew by 9.7 percent to EUR 70.3 million compared to the corresponding
period last year. The growth was mainly driven by the increased number of
customers. The strong performance showed especially in the like-for-like store
sales growth of 7.2 percent. Our online growth was impacted by the planned
online platform change of Peten Koiratarvike in Q1, but the investment is
important for the further efficiency improvement of the group’s online
operations. We also continued to develop our digital customer platform to
increase the level of personalization of our customer communications.
Musti is focusing on profitable growth, supported by the scalable platform and
efficient cost control. This work showed in profitability development in Q1 as
our operating profit grew by 60.8 percent to EUR 5.4 million with an operating
cash flow of EUR 14.7 million. The adjusted EBITA margin improved from 9.3
percent (Q1/19) to 11.1 percent driven by strong operating performance in
Sweden. The adjusted EBITA margin is typically higher in Q1 than in other
quarters.
All three segments – Finland, Sweden and Norway – showed strong like-for-like
store sales growth and improved adjusted EBITA margins in Q1. We will continue
to focus on further improving profitability in all countries, especially in
Sweden and Norway.
At the end of the reporting period, Musti had 1,052 thousand loyal customers
(917 thousand in Q1 2019). People are increasingly treating their dogs and cats
like members of their family, and choosing more premium food, as well as a more
diverse range of products and services. These “pet parents” prefer shopping at
pet specialists like Musti. We aim to grow our market share by winning new
customers with expert advice, high-quality offering and total shopping
convenience.
During Q1, the positive market development continued and there were no
significant changes in the competitive landscape. We expect the Nordic pet care
market to grow steadily due to several favourable tailwinds, such as the pet
parenting megatrend and the pet population growth. We believe that Musti is also
set to benefit from global consumer megatrends like consumers’ desire for
convenience, demand for services and focus on health and wellness.
Finally, I want to warmly welcome our more than 4,000 new shareholders to the
next stage in Musti’s journey. Our shareholders and the capital raised in the
IPO will further support the successful execution of our strategy during this
financial year as well as in the coming years.
David Rönnberg
CEO
Financial targets and outlook
Musti Group does not publish its short-term outlook. However, Musti Group’s
Board of Directors has set the following long-term financial targets:
Growth Sales to reach at least EUR 350 million by the financial year
2023
by continuation of strong customer acquisition momentum.
Profitability Mid- to long-term adjusted EBITA margin of 10-12 percent with
steadily improving profile. Margin increase is expected to be
realised through steady gross margin and improving operating
leverage.
Capital Maintain net debt in relation to adjusted EBITDA below 2.5x
structure in the long term.
Dividend To pay a dividend corresponding to 60-80 percent of net profit.
policy Any potential dividend shall take into account acquisitions,
the company’s financial position, cash flow and future growth
opportunities.
Press conference for analysts and media
A press conference for analysts and media, combined with a live webcast and
international telephone conference, will be arranged on 3 March 2020 at 10:00
EET at Glo Hotel Kluuvi, Kluuvikatu 4, 00100 Helsinki, Finland. The event will
be held in English. The report will be presented by CEO David Rönnberg and CFO
Robert Berglund.
The press conference can also be followed through a live webcast at
https://mustigroup.videosync.fi/q1-results. A recording of the webcast will be
available later at the company’s website at www.mustigroup.com/investors/reports
-and-presentations/.
You can also participate in the news conference by calling:
FI: +358981710310
SE: +46 856642651
UK: +44 3333000804
US: +18558570686
The participants joining the news conference will be asked to provide the
following PIN code: 20644217#
Helsinki, 2 March 2020
Board of Directors
Further information:
David Rönnberg, CEO, tel. +46 70 896 6552
Robert Berglund, CFO, tel. +358 50 534 8657
Distribution:
Nasdaq Helsinki
Main media
www.mustigroup.com
Musti Group in brief
Musti makes the life of pets and their owners easier, safer and more fun. We are
the leading Nordic pet care company and we operate an omnichannel business model
to cater for the needs of pets and their owners across Finland, Sweden and
Norway. We offer a wide, curated assortment of pet products. We also provide pet
care services such as grooming, training and veterinary services in selected
locations.
Musti Group’s net sales were EUR 247 million in the financial year 2019. At the
end of the financial year 2019, the company had 1,100 employees, over one
million loyal customers and 277 stores.