Half year report for 1 January – 30 June 2017
SUBSTANTIALLY IMPROVED OPERATING EARNINGS IN THE QUARTER
- Net sales increased by 7 per cent to SEK 983.6 (918.5) million
- The gross margin increased by 5.5 percentage points to 23.9 (18.4) per cent
- Operating earnings before depreciation, amortisation and impairment improved by SEK 23.1 million to SEK 36.3 (13.2) million
- Operating earnings improved by SEK 16.9 million to SEK 16.6 (-0.3) million
- Basic and diluted earnings per share including discontinued operations improved to SEK -0.04 (-0.81)
- On April 25 the divestment of Lekmer was announced and on June 30 it was completed
- A bond of SEK 250 million was issued
FIRST SIX MONTHS
- Net sales increased by 3 per cent to SEK 1,897.6 (1,839.4) million
- The gross margin increased by 4.8 percentage points to 22.3 (17.5) per cent
- Operating earnings before depreciation, amortisation and impairment amounted to SEK 47.2 (11.4), an increase of SEK 35.8 million compared with last year’s adjusted operating earnings before depreciation, amortisation and impairment
- Operating earnings amounted to SEK 9.5 (-15.1) million, an increase of SEK 24.6 million compared with last year’s adjusted operating earnings
- Basic and diluted earnings per share including discontinued operations improved to SEK -0.19 (-1.07)
 Tretti AB was divested in the third quarter of 2016 and Lekmer AB in the second quarter of 2017. These companies are recognised as discontinued operations in the group. Comparative figures in the income statements and cash flow statements present continuing operations. This report refers to continuing operations unless otherwise stated. In addition, interest expenses in Qliro Financial Services have been included in cost of goods sold in the consolidated financial statements since 1 January 2017, which has been adjusted for in comparative figures.
 The term “adjusted” is used to show that earnings in the first quarter of 2016 were adjusted with items affecting comparability of SEK -15.3 million related to a reorganisation in CDON Marketplace, see page 6.
SUBSTANTIALLY IMPROVED OPERATING EARNINGS IN THE QUARTER
During the quarter, we took several important steps in line with our stated strategy. In our core areas, we are pleased with the growth in CDON Marketplace, the growth and profitability in Nelly and the expansion in Qliro Financial Services. In addition, we have divested Lekmer and are working to create additional value in Health and Sports Nutrition Group (formerly Gymgrossisten segment). During the quarter, we have also secured additional funding through the placing of a SEK 250 million bond, the divestment of Lekmer and the launch of savings accounts in Qliro Financial Services where deposits from the public amounted to SEK 425 million at the end of the quarter.
CDON Marketplace grew by 18 per cent
CDON Marketplace has taken several successful steps towards becoming the leading online marketplace in the Nordics. Gross merchandise value rose by 18 per cent to SEK 485 million, driven by both external merchants and own sales. External merchants’ sales increased by 83 per cent and net sales by 8 per cent. This shows that the marketplace is appreciated by consumers and that it is an effective sales channel for external merchants. We continue to invest in developing the marketplace, not at least within automatization and the brand CDON.COM. Growth within CDON Marketplace provides volumes and advantages of scale for the rest of the group, including Qliro Financial Services.
Nelly well positioned for profitable growth
Nelly is taking advantage of its strong market position in online fashion. Sales increased by 10 per cent to SEK 365 million, and operating earnings before depreciation, amortisation and impairment increased by nearly SEK 30 million to SEK 46 million during a seasonally strong quarter. To a certain extent, the increase in profits was driven by a favourable inventory with optimized assortment and stock levels at the start of the quarter. Jan Wallsin took over as Head of Nelly during the quarter. We are working on further developing Nelly’s product lines, its private label and online and mobile marketing and sales as a foundation for further growth.
Qliro Financial Services launches new services
Qliro Financial Services increased its operating income by 57 per cent to SEK 53 million and its operating earnings before depreciation, amortisation and impairment became positive with SEK 2 million. Business volume increased by 34 per cent. During the quarter, our offering to merchants was strengthened by the introduction of the full payment service in Norway and to consumers by the launch of savings accounts. The strategy is to continue to broaden our offering and the next step is to launch private loans to consumers in Sweden during second half of the year.
Health and Sports Nutrition Group had a weak quarter
Net sales for the Health and Sports Nutrition Group (formerly Gymgrossisten segment) decreased by 9 per cent to SEK 180 million during the quarter, despite a moderately growing market. Sales fell sharply in April with this year’s Easter holiday, but recovered back to growth by June. The decrease was mainly in sales of protein powder online, where Gymgrossisten is the market leader. We invest and achieved growth in Bodystore (health food) and Fitness Market Nordic (wholesale operation), which together accounted for 18 per cent of sales.
Gustav Hasselgren joined as Head of Health and Sports Nutrition Group. As previously announced, we are looking for potential partnerships and evaluating strategic alternatives to create greater shareholder value.
Lekmer and Members.com divested
The divestment of Lekmer to Babyshop was closed on 30 June and the sale of Members.com to Campadre was closed on 3 July. The transactions release capital and make our underlying earnings more transparent in our core areas. It will allow us to invest even more in our core areas.
Leading platform for digital commerce
Qliro Group’s goal is to be the leading Nordic platform for digital commerce with complementary financial services. We combine digital commerce with financial services for both consumers and merchants. The focus is on CDON Marketplace, the fashion company Nelly and Qliro Financial Services. We did take several important steps during the quarter and continue to implement the strategy with continuous streamlining and investments.
Stockholm, July 2017
President and CEO
Analysts, investors and the media are invited to a conference call today at 10:00 a.m.
To participate in the conference call, please dial:
Sweden: 08 5065 3942
UK: +44 330 336 9412
US +1 719 457 2086
The pin code to access this call is 1063618.
The presentation material will be published at www.qlirogroup.com/presentations/
For additional information, please visit www.qlirogroup.com or contact:
Marcus Lindqvist, President and Chief Executive Officer
Mathias Pedersen, Chief Financial Officer
Telephone +46 10 703 20 00
Niclas Lilja, Acting Head of Communications
Telephone +46 736 511 363
About Qliro Group
Qliro Group is a leading Nordic e-commerce group in consumer goods, lifestyle products and related financial services. Qliro Group operates CDON.COM (the leading Nordic marketplace), Nelly.com and NLYman.com (fashion), Gymgrossisten and Bodystore.com (health and training), and Qliro Financial Services. In 2016 the Group had sales of SEK 4 billion. Qliro Group’s shares are listed on the Nasdaq Stockholm mid cap segment under the ticker symbol “QLRO”.
This information is information that Qliro Group AB is obliged to make public pursuant to the EU Market Abuse Regulation and the Swedish Securities Markets Act. The information was submitted for publication, through the agency of the contact persons set out above, at 08:00 CET on 14 July 2017.