Interim report for 1 January – 31 March 2017

INCREASED GROSS PROFIT AND CREDIT MARKET LICENCE

FIRST QUARTER[1]

• Net sales for continuing[2] operations decreased by 1 per cent, amounting to SEK 999.7 (1,010.5) million
• Operating earnings before depreciation, amortisation and impairment for continuing[2] operations improved by SEK 25.6 million, amounting to SEK -9.8 (-35.3) million. Excluding items from previous year affecting comparability, it improved by SEK 10.2 million to SEK -9.8 (-20.0) million
• Operating earnings for continuing[2] operations improved by SEK 21.2 million, amounting to SEK -28.5 (-49.7) million. Adjusted operating earnings[3] improved by SEK 5.9 million and amounted to SEK -28.5 (-34.3) million
• Basic and diluted earnings per share amounted to SEK -0.15 (-0.27) 
• Qliro AB became credit market company after having received authorisation from the Swedish Financial Supervisory Authority

[1] In conjunction with the subsidiary Qliro AB receiving authorization as a capital market company in March 2017, Qliro Group changed the internal reporting of segment Qliro Financial Services. The most significant effect is that interest expenses in Qliro Financial Services are included in the cost of goods sold for the Group. See page 13 and 25 respectively for more information.
[2] Qliro Group’s sale of subsidiary Tretti AB was completed in the third quarter of 2016. Comparative figures in the income statements and cash flow statements present continuing operations excluding Tretti. Tretti is recognised as a discontinued operation in the consolidated income statement.
[3] The term adjusted is used to show that earnings were adjusted to exclude items affecting comparability. Items affecting comparability are detailed on page 6 and, for this quarter, only include items from the previous year.

 
INCREASED GROSS PROFIT AND CREDIT MARKET LICENCE

During the first quarter, we increased gross profit by 15 per cent in our e-commerce business and became profitable before depreciation and amortisation in Qliro Financial Services. Consolidated operating earnings before depreciation, amortisation and impairment improved by SEK 25.6 million to SEK -9.8 (-35.3) million for continuing operations.  

We took several steps to strengthen our position as a leading Nordic platform within digital commerce and complementary financial services. For instance, the increase in sales generated by external merchants and the investments in CDON’s marketplace, earnings improvement in Nelly, credit market licence and new services in Qliro Financial Services and cash flow improvement in Gymgrossisten.  

CDON Marketplace increased sales from external merchants
CDON Marketplace increased its sales from external merchants by 93 per cent in the quarter, which demonstrates that the marketplace is an effective sales channel. In line with the strategy, we hired new employees and are investing in the technology platform to develop the marketplace.

Nelly increased profitability
Nelly’s net sales were unchanged while operating earnings before depreciation, amortisation and impairment improved by SEK 14.7 million to SEK 12.3 (-2.4) million. This was driven by increased product margin and reduced logistics costs.  

Qliro Financial Services launches new services
Qliro Financial Services’ operating income increased by 57 per cent to SEK 49.2 million and operating earnings before depreciation, amortisation and impairment was SEK 2.0 (-2.2) million for the quarter. Business volume increased by 15 per cent.

An important milestone was that the Group’s subsidiary Qliro AB became a credit market company, which allows us to gradually launch our own payment solution in Norway, introduce savings accounts covered by government deposit insurance and several other financial services for merchants and consumers.

Gymgrossisten strengthened cash flow
Gymgrossisten’s net sales decreased by 4 per cent during the quarter. Gymgrossisten is a leader in protein powder which is a mature market with decreasing volumes. The segment is expanding and growing in health foods and B2B.

In line with our strategy for the segment, we focus on cash flow and profitability. During the quarter profitability was good and cash flow improved to SEK 36.2 (21.1) million. We are looking for partnerships and evaluating various options to create shareholder value.

Lekmer remains weak
Lekmer’s net sales decreased by 4 per cent during the quarter to SEK 86.9 million. Sales increased in Norway, Finland and Denmark, but declined in Sweden. The business remained loss-making due to high logistics costs and a seasonally weak quarter. The actions we have taken to improve profitability are long-term and has not yet resulted in any substantial financial impact. We continue the process to look for partnerships and we are evaluating various options to create shareholder value.

Leading platform for digital commerce
Qliro Group’s overall goal is to strengthen its position as a leading platform for digital commerce and complementary financial services. We see several advantages with combining a platform for digital commerce with financial services for both consumers and e-merchants. The focus is on CDON Marketplace, the fashion sites Nelly.com and NLYMan and Qliro Financial Services.

During the quarter, we took several steps towards achieving our revised strategy. We continue to work on efficiency, constant improvements and continuous investments.

Stockholm, April 2017
Marcus Lindqvist
President and CEO

 
Conference call
Analysts and the media are invited to a conference call today at 10:00 a.m. To participate in the conference call, please dial:

Sweden:                 +46 8 5065 3942  
International:           +44 330 336 9412
USA:                      +1 719 325 2385

The pin code to access this call is 5087313. To listen to the conference call online, please go to www.qlirogroup.com.

For additional information, please visit www.qlirogroup.com or contact:
Marcus Lindqvist, President and Chief Executive Officer
Mathias Pedersen, Chief Financial Officer
Tel: +46 10-703 20 00

Press, investor and analyst enquiries:
Niclas Lilja, Acting Director of Communications
Tel: +46 736 511 363
Email: press@qlirogroup.com, ir@qlirogroup.com

About Qliro Group
Qliro Group is a leading e-commerce group in the Nordic region. Established in 1999, the Group has expanded its product portfolio and is now a leading e-commerce player within consumer goods and lifestyle products through CDON.com, Lekmer, Nelly.com, NLYman.com and Gymgrossisten (including Bodystore.com and Fitness Market Nordic). The payment service and consumer finance solution Qliro is also part of the Group. In 2016, the Group generated revenue of SEK 4.5 billion. Qliro Group’s shares are listed on the Nasdaq Stockholm MidCap list under the ticker symbol “QLRO”.

This information is information that Qliro Group AB is required to disclose under the EU Market Abuse Regulation. The information was provided by the above contact persons for publication on 19 April 2017 at 08:00 CET. 

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