Interim Report 1 October–31 December 2019 3 March 2020 CEO David Rönnberg CFO Robert Berglund
Agenda • Musti Group snapshot • Group development • Segments • Financials and market outlook Musti Group | Interim Report October–December 2019 2
Musti Group snapshot Musti Group | Musti Group | Interim Report October–December 2019 3
Musti – the leading Nordic pet care specialist Leading Nordic Omnichannel business Wide loyalty program pet care specialist model 2 >1 million loyal customers, #1 in Nordics, 277 stores , unique rich data on Nordic 22% market share 1 20.7% of net sales pets and Pet Parents generated through online channel in FY19 Stable business model Trusted expert advice High quality O&E Pet food represents 52% of 93% of Musti’s staff are pet assortment product sales in own parents themselves Strong O&E brand portfolio, channels – honest, reliable advice and 52% of product sales – food is non-discretionary excellent customer service in own channels in FY19 and sticky in nature, with recurring purchasing habits Source: Company information, a study ordered by the company from an international consulting company. Note: Financial Year Ended 30 September. 1 2018 market share for Nordic pet food and products market; Musti’s market share is based on FY19 consumer sales (including sales from franchisees). 2 Omnichannel represents physical stores and online. Musti Group | Interim Report October–December 2019 4
Strategic focus on Pet Parents across the Nordic countries We make the life of pets and their parents easier, safer and more fun. MISSION Finland Sweden Norway SEGMENTS Stable development as the Further expansion and Store rollout with strong most mature country convergence in efficiency ramp up and increasing towards Finnish levels country profitability 127 stores 121 stores 33 stores STORE BANNER OMNI- .FI BANNER .SE .NO ONLINE BANNER Musti Group | Musti Group | Interim Report October–December 2019 5
Profitable growth in all segments Musti Group | Musti Group | Interim Report October–December 2019 6
Highlights in Q1/2020 • Group net sales totalled EUR 70.3 million (64.1), 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 sales. • Net debt amounted to EUR 126.3 million (30 Sep 2019: EUR 133.3 million). Net debt in relation to LTM adjusted EBITDA was 3.1. • Initial Public Offering successfully completed on 12 February, raising EUR 45 million in gross proceeds. The IPO will further support the strategy execution. The figures in parenthesis refer to the comparison period, i.e. the same period in the previous year, unless stated otherwise. Musti Group | Interim Report October–December 2019 7
Q1: The Group’s net sales increased by 9.7% Net sales and like-for-like growth Net sales: rolling 12 months Net sales by segment in Q1/2020 252,8 246,6 10% 12% 11% 11% 8% 8 % 70,3 64,5 64,1 59,0 59,0 49 % 43 % Finland Sweden Norway 2019 Q1/20 Q1/19 Q2/19 Q3/19 Q4/19 Q1/20 % Net sales, EUR million Like-for-like growth, % Musti Group | Interim Report October–December 2019 8
Profitability improved Operating profit 1 , EUR million Adjusted EBITA, EUR million • Adjusted EBITA increased by 30.0% 7,8 and adjusted EBITA margin was 11.1%. 8,0 8,0 14,0 % 14,0 % • The improvement was mainly due to an 7,0 7,0 increase in sales combined with slightly 6,0 12,0 % 12,0 % higher gross margin and operating 6,0 6,0 5,4 leverage. 11,1 % 10,0 % 10,0 % 5,0 5,0 • The adjusted EBITA margin is typically 9,3 % higher in Q1 than in other quarters. 8,0 % 8,0 % 4,0 4,0 3,3 7,7 % • Adjustments to EBITA were EUR 0.9 million 6,0 % 6,0 % 3,0 3,0 (1.3) and they were related to the IPO process. 5,2 % 4,0 % 4,0 % 2,0 2,0 • Operating profit increased by 60.8%. 2,0 % 2,0 % 1,0 1,0 0,0 0,0 % 0,0 0,0 % Q1/19 Q1/20 Q1/19 Q1/20 Operating profit Operating profit, % Adjusted EBITA Adjusted EBITA, % 1 Operating profit = Profit before financial income and expenses, net, and income tax expense. Musti Group | Interim Report October–December 2019 9
Segments Musti Group | Musti Group | Interim Report October–December 2019 10
Finland: Adjusted EBITA increased by 10.0% Net sales, EUR million, Adjusted EBITA, EUR million and % • Net sales in Finland increased to like-for-like growth, % EUR 34.6 million (32.1) driven by 40,0 % like-for-like growth of 4.0% and 10 4.0% 35,0 % growth from three new stores 9.1% 8,7 34,6 opened or acquired in FY19. 7,9 35 32,1 30,0 % 8 • Online sales growth was impacted 30 25,0 % by the planned online platform 6 25,1 % 25 24,6 % change of Peten Koiratarvike. 20,0 % 20 • Adjusted EBITA increased by 10.0% 15,0 % 4 due to more efficient campaigning 15 and supply chain management. 10,0 % 10 2 • One new store was opened in 5,0 % 5 Finland during Q1, and one 0 0 0,0 % franchise store was acquired. Q1/19 Q1/20 Q1/19 Q1/20 Adjusted EBITA Net sales Adjusted EBITA-% Like-for-like segment sales growth % Musti Group | Interim Report October–December 2019 Musti Group | 11
Sweden: 10.5% like-for-like growth in Q1 Net sales, EUR million, Adjusted EBITA, EUR million and % • Net sales in Sweden increased by like-for-like growth, % 6.2% driven by like-for-like 6 25,0 % growth of 10.5% partly offset by 10.5 % weakening SEK rate and closure 10.0 % 5 of three stores during FY19. 20,0 % 35 29,9 3,9 • Adjusted EBITA increased by 28,2 4 30 44.4% due to more efficient 15,0 % 25 campaigning and supply chain 2,7 3 management. 20 12,9 % 10,0 % • 2 During the reporting period, one 15 9,5 % new store was opened in 10 5,0 % Sweden, one store was closed 1 5 and one franchise store was acquired. 0 0 0,0 % Q1/19 Q1/20 Q1/19 Q1/20 Adjusted EBITA Net sales Adjusted EBITA-% Like-for-like segment % sales growth Musti Group | Interim Report October–December 2019 Musti Group | 12
Norway: Expansion of store network continued Net sales, EUR million, Adjusted EBITA, EUR million and % • Net sales in Norway increased by like-for-like growth, % 50.2% driven by strong like-for-like 1,2 25,0 % growth and ramp-up of the 11 stores opened during FY19. 21.7% 1 20,0 % 7 • Adjusted EBITA amounted to 5,8 EUR 0.6 million (0.1). 6 0,8 35.1% 15,0 % • Adjusted EBITA was driven by 5 0,6 3,9 0,6 operating leverage of the increasing 4 net sales and increased store 10,0 % 3 0,4 efficiency as stores start to reach 10,3 % the mature phase or the end of the 2 5,0 % 0,1 ramp-up curve. 0,2 3,3 % 1 • Three new stores were opened 0 0,0 % 0 in Norway during Q1. Q1/19 Q1/20 Q1/19 Q1/20 Adjusted EBITA Net sales Adjusted EBITA-% Like-for-like segment % sales growth Musti Group | Interim Report October–December 2019 13
Financials and market outlook Musti Group | Musti Group | Interim Report October–December 2019 14
Financial position and cash flow • Net cash flow from operating Cash flow from operating Gearing, % activities totalled EUR 14.7 million activities, EUR million (14.8). • Gearing at the end of Q1 was 123.6% 14,8 14,7 200,0 % (30 Sep 2019: 135.4%). 180,0 % • Net debt amounted to EUR 126.3 160,0 % 135,4 % million (30 Sep 2019: EUR 133.3 140,0 % 123,6 % million). 120,0 % • 100,0 % Net debt in relation to LTM adjusted 80,0 % EBITDA was 3.1. 60,0 % • In February, Musti Group arranged 40,0 % a share issue of EUR 45 million in 20,0 % connection with the IPO. 0,0 % Q1/19 Q1/20 Q4/19 Q1/20 In connection with the IPO, Musti refinanced its existing loans with the share issue of EUR 45 million and a new loan agreement of EUR 60 million, consisting of a EUR 50 million term loan and a EUR 10 million revolving credit facility. The repayment date of the facilities is in 2023. The loan agreement contains two financial covenants: leverage and gearing. The EUR 50 million term loan was drawn to refinance the existing loans. The revolving credit facility has not yet been drawn. Musti Group | Interim Report October–December 2019 Musti Group | 15
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