COMPANY PRESENTATION September 2018 Todays presenters Lotta Lyr Pr - PowerPoint PPT Presentation

COMPANY PRESENTATION September 2018

Today’s presenters Lotta Lyrå Pär Christiansen President and CEO CFO Experience: Experience: • Joined Clas Ohlson in 2017 • Joined Clas Ohlson in 2018 • Board member of MatHem, SCA and Svensk • Previously CFO at GANT, Group CFO at Handel Transcom, CFO at MTR and various senior positions at SAS • Previously Head of Development & Expansion at IKEA Group and various positions at Södra Skogsägarna and McKinsey & Co Education: Education: • MSc, Stockholm School of Economics • MSc, Faculty of Engineering LTH at Lund University • BSc, Lund University School of Economics and Management 2

TABLE OF CONTENTS 1. Introduction to Clas Ohlson 2. Key investment highlights 3. Appendix

INTRODUCTION TO CLAS OHLSON Clas Ohlson at a glance Sales Sales LTM Q1 FY18/19 This year, Clas Ohlson celebrates 100 years. Clas Ohlson is present in five geographical markets, employs over 5,000 employees and has annual sales Outside SEKm Sales CAGR Nordics above 8 SEKbn. While much has happened since 1918, one thing remains the 3% same; Clas Ohlson wants to help and inspire people to improve their everyday 6,808 7,330 7,602 7,990 8,211 8,386 lives by offering smart, simple, practical solutions at attractive prices Finland 12% Sweden 44% 1918 Clas Ohlson was founded in 1918 as a mail order business based in Injsön, Sweden, where it is still headquartered Norway 40% Sales CAGR 13.2% over the last 20 years Online sales CAGR 26.4% between FY13/14 - LTM Q1 FY18/19 with more digital initiatives under way NORWAY SWEDEN FINLAND CHINA About 40% of Clas Ohlson’s 802 SEKm 865 SEKm 222 SEKm purchases are made directly 8,386 SEKm sales LTM Q1 FY18/19 90 92 42 via in-house purchasers 628 SEKm EBITDA LTM Q1 FY18/19 234 1) stores in 5 countries 40 million customers annually 2) OUTSIDE NORDIC COUNTRIES UK GERMANY Sales Q1 FY18/19 Family-owned since 1918 69 SEKm 6 4 Stores September 2018 Source: Company information. Clas Ohlson markets Note: 1) As of September 2018. 2) Total number of customers FY17/18. 4

INTRODUCTION TO CLAS OHLSON A wide assortment leading to a constant customer demand Home Electrical Leisure Hardware Multimedia Spare parts Source: Company information. 5

Company history 1918 2018 1968 1985 1991 1999 2002 2008 2015 2016 2017 • Clas Ohlson & • Clas Ohlson • Sales exceed • Clas Ohlson • Clas Ohlson is • Clas Ohlson • Clas Ohlson’s • Clas Ohlson is • Clas Ohlson • Current CEO • Clas Ohlson named Sweden’s Co is founded on celebrates 50 100 SEKm for the continues to listed on the continues its first store outside opens its first Lotta Lyrå joins celebrates 100 27 June. The “& years first time in the expand. The Stockholm stock international of the Nordics strongest brand store in Germany. Clas Ohlson from years Co” is for Clas’s company’s company’s first exchange in expansion by opens in the in the category Germany and IKEA Group. She • For the first time • Clas Ohlson’s “Other retail” by is Clas Ohlson’s half-brother Emil history store in Norway October opening a store United Kingdom U.K. sales the company products can now Pettersson is opened in Finland. It is Evimatrix account of 3% of 6 th CEO since the • Clas Ohlson • Trading starts at recognises - Today there be delivered the company’s Clas Ohlson’s company’s Swedish Brand • The business is annual sales in starts mail order - As of 106 SEK and are 6 Clas directly to 29 th store Award sales as of LTM inception in 1918 customers’ run from a excess of 10 sales in Norway, September peaks at 146 Ohlson stores Q1 FY18/19 • The company’s • Mrs. Lyrå initiates basement in the SEKm establishing the 2018, there SEK during the - Finland in the United homes via company’s first 200 th store is Clas Ohlson’s MatHem’s digital village of Holen are 90 Clas first day accounts for Kingdom as international Ohlson stores 12% of Clas well as an opened in strategic platform • The first Ohlson’s subsidiary in Norway online offering Karlstad, Sweden overview, with • Click & Collect is catalogue, which annual sales initiatives such as contains only - The introduced on all as of LTM Q1 a strategic Clas Ohlson’s drawings, is Norwegian FY 18/19 cooperation with printed and ads market home markets MatHem for the new accounts for • Total return on venture are 40% of Clas the Clas Ohlson Ohlson’s placed in the share since the magazine Triumf sales in LTM IPO is c. 760% Q1 FY18/19 6

INTRODUCTION TO CLAS OHLSON 20 years of uninterrupted sales growth 10x SEKm 18 years after the IPO, Clas Ohlson is 10 times larger 2017 2016 10% stake in MatHem First store in acquired in Germany opens December 2008 First store in the 8,386 8,211 U.K opens 7,990 7,602 7,330 6,808 2002 6,519 6,260 First store in 5,828 5,556 1999 Finland opens 4,930 4,662 Clas Ohlson is listed on Nasdaq 4,101 Stockholm 1) in 3,568 October 2,955 2,510 2,131 1,732 1,349 1,067 830 678 Sales CAGR Source: Company inforrmation. Note: 1) Nasdaq Stockholm is the current name of the Stockholm stock exchange. 7

INTRODUCTION TO CLAS OHLSON Clas Ohlson moving forward Potential to further grow in the Nordic region 1 • Below 10% market share in the growing market Strong foundation to build on 2 • Consumers like Clas Ohlson – consumer awareness and purchase consideration are high Large potential in further commercialising full offer • Product assortment has increased by 15% over the last four years, which has extended the long-tail of underperforming products 3 • One item receipts comprise 40% of all transactions – large potential for increased cross-selling • Clas Ohlson has historically invested in the wrong types of promotions Opportunities to simplify and streamline operations • Lead-times toward customers are too long 4 • In-store inventory build-up • Clas Ohlson is currently behind best-in-class retailers in regards to buying direct as well as indirect goods Embracing digital 5 • Online sales comprise only c. 5% of total sales and are lagging behind overall market penetration • Historical investments in digital capabilities have not been sufficient Source: Company information. 8

INTRODUCTION TO CLAS OHLSON A new strategy for a changing retailing world Store based retail sector is changing • Rapidly changing customer behaviour leading to tough competition • Challenging the cost structure is key for future profitable growth 9

INTRODUCTION TO CLAS OHLSON Strong focus on sustainability Acknowledged sustainability work Collaborations and partnerships  In May 2018, Clas Ohlson was rewarded the “Sustainable Store Chain of the Year” in Sweden during  Save the Children The Retail Awards. Clas Ohlson’s sustainable products and services were highlighted  Sedex  Earlier in 2018 Clas Ohlson was acknowledged for its work together with QuizRR at the Sedex Awards  in London. QuizRR trains Clas Ohlson’s Chinese suppliers in important areas such as employee rights, UN Global Compact health and safety. At the time of the award, the training programme comprised over 9,000 training courses in 26 different factories, reaching over 4,000 factory workers A sustainable value chain… From here to sustainability ...through a sustainable strategy  “From here to sustainability” is Clas Ohlson’s   Clas Ohlson aims to wholly integrate Clas Ohlson identifies three main areas describing how the company’s strategy motto for how the company incorporates sustainability into the value chain. environmental and social aspects into its Sustainability is deemed crucial in order to: contributes to a resource-efficient value strategy and organisation. The ambitions are: chain: – Realise the company’s vision – – A sustainable value chain Develop a sustainable product offering – Create a sound basis for long-term profitability – – A sustainable customer offering Develop and market resource-efficient service – Stay one step ahead of stakeholder offerings contributing to a circular economy expectations – Create opportunities to decrease CO 2 -emissions from e-commerce and home deliveries Source: Company information. 10

TABLE OF CONTENTS 1. Introduction to Clas Ohlson 2. Key investment highlights 3. Appendix

Key investment highlights 1 ● Steadily growing market with limited cyclicality Attractive market ● Market transition providing attractive opportunities 2 ● Leading position on a 90 SEKbn Nordic market ● Leading market position Clas Ohlson is one of the most recognised and trusted brands in Sweden, Norway and Finland ● Strong and loyal customer base 3 ● Strategy defined in CO100+ action programme ● Compelling opportunities Initiatives are being taken to achieve both cost savings and move up the value chain ● Appealing opportunities to further strengthen the offering via strategic partnerships and M&A 4 ● Strong management team Management team with broad experience from diverse industries 5 ● 20 years of uninterrupted sales growth with strong cash flow, solid balance sheet and stable ownership structure Strong financial track record ● Financial strength to deliver short- and long-term shareholder value 12