Musti Group plc Interim Report 8 February 2022 at
8:30 a.m. EET
Musti Group plc Interim Report 1 October 2021 – 31 December 2021
Record sales and EBITDA
October 2021 – December 2021
· Group net sales totalled EUR 101.3 million (84.3 million), an increase of
20.2%.
· Like-for-like sales growth was 9.2%.
· Adjusted EBITDA was EUR 19.8 (15.7) million, up by 26.5%.
· Adjusted EBITDA margin was 19.6% (18.6%).
· Adjusted EBITA was EUR 13.3 (10.6) million, up by 25.4%.
· Adjusted EBITA margin was 13.1% (12.6%).
· Operating profit increased by 21.2% to EUR 10.2 (8.4) million, representing
10.1% (10.0%) of net sales.
· Profit for the period totalled EUR 6.8 (7.8) million.
· Earnings per share, basic was EUR 0.20 (0.24).
· Number of stores grew to 320 (300).
· Number of loyal customers grew to 1,340 thousand (1,189 thousand).
The figures in parentheses refer to the comparison period, i.e., the same period
in the previous year, unless stated otherwise. Musti Group’s financial year is
from 1 October to 30 September.
EUR million or as 10-12/2021 10-12/2020 Change % 10/2020-9/2021
indicated
Net sales 101.3 84.3 20.2% 340.9
Net sales growth, % 20.2% 19.9% 19.9%
LFL sales growth, % 9.2% 13.1% 11.8%
LFL store sales 6.6% 8.0% 8.8%
growth, %
Online share, % 21.5% 21.6% 23.1%
Gross margin, % 47.5% 46.1% 45.7%
EBITDA 18.4 15.1 21.9% 56.9
Adjusted EBITDA 19.8 15.7 26.5% 58.8
Adjusted EBITDA 19.6% 18.6% 17.3%
margin, %
EBITA 11.8 10.0 18.3% 34.9
Adjusted EBITA 13.3 10.6 25.4% 36.8
Adjusted EBITA margin, 13.1% 12.6% 10.8%
%
Operating profit 10.2 8.4 21.2% 28.4
Operating profit 10.1% 10.0% 8.3%
margin, %
Profit/loss for the 6.8 7.8 -11.9% 20.9
period
Earnings per share, 0.20 0.24 -13.0% 0.62
basic, EUR
Net cash flow from 12.7 15.9 -20.2% 54.9
operating activities
Investments in 10.2 4.6 126.4% 23.5
tangible and
intangible assets
Net debt / LTM 1.9 1.8 7.2% 1.9
adjusted EBITDA
Number of loyal 1,340 1,189 12.7% 1,297
customers, thousands
Number of stores at 320 300 6.7% 312
the end of the period
of which directly 294 242 21.5% 280
operated
CEO’s comments
I couldn’t be happier to present the first quarter results today with record
-breaking sales and profitability performance. December quarter proved our
agility, resilience to global challenges and the strength of our concept in a
difficult business environment colored by the supply chain challenges impacting
global trade, and the new rapidly spreading wave of the COVID-19 variant. We
managed to stay unaffected during the very important Christmas period, adapting
our operations to be able to continue providing our segment leading levels of
pet care to customers with an excellent availability of products on shelves and
online.
Front end* continues to deliver with 20% growth in the first quarter. We are
seeing better performance also in the back end** but our bar for excellence is
high and there are yet many opportunities to reach. During the first quarter we
had a comprehensive efficiency project ongoing in the Eskilstuna central
warehouse and more widely the whole end-to-end supply chain, and the measures
that have been taken are starting to bear fruit targeting scale effects going
forward in the quarters to come. With over 40% 2-year growth and global supply
chain issues, managing the volumes and securing availability has been priority
and that has been a big success – we see clear opportunity to work on the cost
base going forward for example in the procurement and group functions area
through more process-oriented ways of working, automation and making sure our
back-end scales well.
Growth was strong in the first quarter:
· Group net sales increased by 20.2% to EUR 101.3 million (EUR 84.3 million).
The increase was largely due to the increasing number of customers together with
an increased number of directly operated stores. Like-for-like growth amounted
to 9.2%.
· Store sales increased by 24.9% to EUR 77.9 million (EUR 62.4 million),
driven by an increased number of stores as we added net 14 directly operated
stores to our network and continued like-for-like store sales growth amounting
to 6.6%.
· Online sales increased by 19.6% to EUR 21.8 million (EUR 18.2 million).
Online sales accounted for 21.5% (21.6%) of total net sales in the first quarter
The development was good in all the main indicators supporting our profitable
growth:
· We increased the number of our loyal customers by 13%. What is most
important, we continuously increase our proportion of the new puppies coming
into the market and win close to 60% of the new puppies as our customers.
· We grew the average spend per loyal customer to EUR 187.0 from 183.3 a year
ago.
· We are in good speed in the network expansion, as we added net 14 directly
operated stores to our network during the first quarter. During Q1, five
franchise stores were acquired in Sweden and we will continue the franchise
acquisitions in Sweden according to the strategy. The target is to increase the
net number of directly operated stores by 30-35 stores during the financial
year.
· We increased the share of own and exclusive products to 53.6% during the
quarter leading to a very strong gross margin development.
Group adjusted EBITA increased to EUR 13.3, up by 25.4%. The adjusted EBITDA
increased by 26.5% to EUR 19.8 million and was the best quarterly adjusted
EBITDA in Musti Group history. The increase in profit was supported by strong
season sales growth and improved gross margin. Gross margin increased to 47.5%
(46.1%) mainly due to increased number of directly operated stores and favorable
product mix. The positive development was slightly burdened by increasing
freight costs, especially from Asia. Operating profit increased by 21.2% to EUR
10.2 million.
I am very proud of the progress we are making. Our unique ability to combine a
growing portfolio of products, services and advice into convenient propositions
for Pet Parents is a key enabler of how we consistently outgrow the market in
which we operate. I am sincerely grateful to all our employees across the Group
for their tireless work and dedication. Employee satisfaction will be in the
focus going forward too, and together we will continue to support and safeguard
the furry everyday life of pet lovers in the Nordics and deliver according to
our strategy for long-term profitable growth.
David Rönnberg,
CEO
*Front end = customer facing operations, stores and online **Back end = supply
chain management and group functions
Financial targets
The long-term financial targets updated by the Board of Directors on 3 May 2021
are:
Growth Net sales to reach at least EUR 500 million by the financial
year 2024 by continuation of strong customer acquisition
momentum and increasing share of wallet.
Profitability Mid- to long-term adjusted EBITA margin of at least 13 per cent
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 per cent of net
policy profit. Any potential dividend shall take into account
acquisitions, the company’s financial position, cash flow and
future growth opportunities.
The financial targets are forward-looking statements and are not guarantees of
future financial performance.
Webcast for analysts and media
A live webcast for analysts and media will be arranged on 8 February 2022 at
14:00 EET. The event will be held in English. The report will be presented by
CEO David Rönnberg and CFO Toni Rannikko.
The webcast can be followed at https://mustigroup.videosync.fi/2022-q1-results.
A recording of the webcast will be available later at the company’s website at
www.mustigroup.com/investors/reports-and-presentations/.
The telephone conference can be participated by calling:
Finland: +358 981710310
Sweden: +46 856642651
UK: +44 3333000804
US: +1 6319131422
The participants will be asked to provide the following PIN code: 67531446#
Helsinki, 8 February 2022
Board of Directors
The information in the Interim Report is unaudited.
Further information:
David Rönnberg, CEO, tel. +46 70 896 6552
Toni Rannikko, CFO, tel. +358 40 078
8812
Essi Nikitin, Head of IR and Communications, tel +358 50 581 1455
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 341 million in the financial year 2021. At the
end of the financial year 2021, the company had 1,397 employees, 1.3 million
loyal customers and 312 stores.