Release Date: August 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Matas AS (OCSE:MATAS, Financial) reported a 6.2% overall growth for the group, with Matas itself achieving 8% growth.
- The company maintained a strong EBITDA margin of 15% before special items, up from 14.7% last year.
- Significant progress was made in the integration of KICKS, leading to improved profitability despite a decline in revenues.
- The launch of the Beauty Pharmacy category in KICKS was successful, indicating potential for future growth.
- High growth rates were observed in the e-commerce market, with KICKS online achieving around 20% growth.
Negative Points
- The Skincity business, part of the KICKS acquisition, continued to experience a decline in revenues and was loss-making.
- The ramp-up of the KICKS warehouse led to stock-out situations, affecting growth in the first half of the quarter.
- Supply chain transformation costs were higher than expected, impacting overall expenses.
- Inventory levels increased, partly due to timing and deliveries, affecting working capital.
- The Norwegian market remains highly competitive, posing challenges for growth and market share expansion.
Q & A Highlights
Q: What drove the growth performance in KICKS during the quarter? Was it due to market improvement or product assortment expansion?
A: The growth was mainly due to overcoming initial stock-out issues in the first part of the quarter. Once operational changes were stabilized, KICKS showed strong growth, particularly online. - Gregers Wedell-Wedellsborg, CEO
Q: Can we expect the same run rate for launching new brands in KICKS in the coming quarters?
A: The focus is not on the number of brands but on launching significant brands and building categories. The launch of the Beauty Pharmacy category in KICKS is a strategic move, especially in the Swedish market. - Gregers Wedell-Wedellsborg, CEO
Q: When do you expect Skincity to improve and align with KICKS' performance?
A: Skincity is experiencing a faster decline than expected. The focus is on creating a sound business and integrating Skincity's offerings into KICKS. We are not providing specific guidance on Skincity's timeline. - Gregers Wedell-Wedellsborg, CEO
Q: What is the plan for store openings, upgrades, or relocations this year?
A: There will be no significant change in the pace of store openings or upgrades. The focus is on investing in the warehouse, and store expansion will depend on finding the right locations and terms. - Gregers Wedell-Wedellsborg, CEO
Q: How sustainable is the gross margin expansion seen this quarter?
A: The margin expansion is partly due to becoming a Nordic Group, but we anticipate the need to invest in pricing in some markets. The current margin should not be seen as a new run rate. - Gregers Wedell-Wedellsborg, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
