Musti Group plc Financial Statements release 1 October 2019 – 30 September 2020
Musti Group plc Financial Statements Release 12 November 2020 at 8:30 a.m. EET
Musti Group plc Financial Statements release 1 October 2019 – 30 September 2020
Continued strong momentum
- Group net sales totalled EUR 76.9 million (64.5 million), an increase of 19.2%.
- Like-for-like sales growth was 12.2%.
- Adjusted EBITA was EUR 10.1 (7.0) million, up by 44.6%.
- Adjusted EBITA margin was 13.1% (10.8%).
- Operating profit increased by 63.5% to EUR 7.8 (4.8) million, representing 10.2% (7.4%) of net revenue.
- Profit for the period totalled EUR 5.9 (2.3) million.
- Earnings per share, basic was EUR 0.18 (0.08).
- Four directly operated stores were opened and one franchise store was acquired.
October 2019 – September 2020
- Group net sales totalled EUR 284.4 million (246.6 million), an increase of 15.3%.
- Like-for-like sales growth was 11.5%.
- Adjusted EBITA was EUR 29.8 (21.9) million, up by 36.2%.
- Adjusted EBITA margin was 10.5% (8.9%).
- Operating profit increased by 56.5% to EUR 19.6 (12.5) million, representing 6.9% (5.1%) of net revenue.
- Profit for the period totalled EUR 11.8 (3.0) million.
- Earnings per share, basic was EUR 0.37 (0.10).
- Number of stores grew to 293 (277).
- Number of loyal customers grew to 1,151 thousand (1,018 thousand).
- The Board of Directors of Musti Group plc proposes to the Annual General Meeting on 21 January 2021 that shareholders will be paid a capital return of EUR 0.38 per share to be distributed from the invested unrestricted equity reserve totalling approximately EUR 12.7 million and that no dividend will be paid for the financial year ended 30 September 2020. The profit distribution corresponds to approximately 80% of the profit of the period excluding the impact of adjustments to EBITA of EUR 4.3 million. The capital return corresponds to approximately 80% of the profit for the financial year before non-recurring adjustments of EUR 4.3 million.
The figures in parenthesis refer to the comparison period, i.e. the same period in the previous year, unless stated otherwise. Musti’s financial year is from 1 October to 30 September.
|EUR million or as indicated||7-9/2020||7-9/2019||Change %||10/2019–9/2020||10/2018–9/2019||Change %|
|Net sales growth, %||19.2%||15.9%||15.3%||14.1%|
|LFL sales growth, %||12.2%||12.7%||11.5%||11.2%|
|LFL store sales growth, %||7.9%||11.3%||7.3%||7.8%|
|Online share, %||22.1%||20.2%||22.5%||20.7%|
|Gross margin, %||44.0%||45.2%||43.8%||44.3%|
|Adjusted EBITA margin, %||13.1%||10.8%||10.5%||8.9%|
|Operating profit margin, %||10.2%||7.4%||6.9%||5.1%|
|Profit/loss for the period||5.9||2.3||160.9||11.8||3.0||289.7|
|Earnings per share, basic, EUR||0.18||0.08||0.37||0.10|
|Net cash flow from operating activities||20.6||10.0||105.7||42.3||39.5||7.1|
|Investments in tangible and intangible assets||1.9||1.2||53.7||8.9||6.4||40.0|
|Net debt / LTM adjusted EBITDA||2.0||3.5||-43.7||2.0||3.5||-43.7|
|Number of loyal customers, thousands||1,151||1,018||13.1||1,151||1,018||13.1|
|Number of stores at the end of the period||293||277||5.8||293||277||5.8|
|of which directly operated||231||206||12.1||231||206||12.1|
I am very proud to conclude our first financial year as a listed company with the results we have published today. Over the past few quarters we have witnessed how individuals, businesses and societies everywhere in the world have adapted to a new way of living due to the COVID-19 pandemic. During the pandemic, our top priorities have been to keep our staff and customers safe and to maintain our ability to deliver high-quality support to our customers under exceptional circumstances.
We have been able to deliver high-quality service to our customers under exceptional circumstances and grow profitably in a challenging environment. Throughout this financial year, the commitment and efforts by the entire Musti team have been outstanding. I am also very grateful for the trust our customers have shown us and the ability of our staff to develope new opportunities in this environment. The fourth quarter of July-September continued to demonstrate again the strengths and resilience of Musti Group’s business model.
Group net sales increased by 19.2% to EUR 76.9 million (EUR 64.5 million). The increase was largely due to like-for-like growth in all countries, mainly driven by the increasing number of new customers, and an increased number of directly operated stores.
Store sales increased by 17.3% to EUR 56.3 million, driven by the increased number of stores and strong like-for-like store sales growth. Like-for-like store sales growth amounted to 7.9%.
Online sales increased by 30.0% to EUR 17.0 million. Online sales accounted for 22.1% of total net sales in the quarter. The channel shift impact from stores to online sales from COVID-19 was lower compared to the third quarter and we have started to see online shift to stores, bringing the channel mix back towards normal levels.
Net cash flow from operating activities was strong in the quarter and totaled EUR 20.6 million (EUR 10.0 million)
Musti Group’s underlying growth has continued strong after the fourth quarter.
Following of the ongoing strong pet parenting trend accelerated by the COVID-19 period, the number of pets in Musti Group’s operating markets has been seen to grow throughout the year as a result of increased registration of puppies. The number of Musti Group’s new puppy customers has increased by 22 per cent during the fourth quarter compared to the third quarter and the number of puppy customers is outgrowing our market share. Musti Group has a wide range of different initiatives, campaigns and activities planned to best serve the important phase of the puppy and kitten first year. The continued increase in puppy customers during the financial year 2020 will continue to support growth in a long-term and as we see growth opportunities geographically in all countries, we estimate to increase the number of own stores by 25-35 during the reporting year 2021, as we expect the favorable momentum in the market to continue also during 2021. Increasing the number of own stores allows us to reach even more customers through utilizing our omnichannel business model.
Musti Group is focusing on profitable growth, supported by the scalable, cost efficient platform. This work continued strong in the fourth quarter profitability development as Musti Group’s adjusted EBITA increased by 44.6% to EUR 10.1 million from the corresponding quarter previous year. Gross margin decreased to 44.0% (45.2%) mainly due to the higher distribution costs driven by increased share of online sales, lower share of sales of own and exclusive brands and non-recurring items relating to the ongoing warehouse consolidation project. Operating profit increased by 63.5% to EUR 7.8 million.
Sweden and Norway are approaching the profitability level of Finland faster than expected, with adjusted EBITA margin increasing to 14.8% in Sweden and to 15.4% in Norway in the fourth quarter. In Finland, adjusted EBITA margin remained approximately at previous year’s level at 26.0%. The platform change in Vetzoo and the warehouse consolidation in Sweden, both to be finalized during the first quarter of the financial year 2021, are expected to increase efficiency in Sweden and Norway in the long term.
We have been agile and have updated the concept to meet the higher market growth expectations. We warmly welcome all the new pet customers to join the Musti pack, and we intend to pay a lot of attention to the continuous development of our services and products to even better serve our customers in the Nordics. We are in an excellent position going into the financial year 2021.
Musti Group does not publish its short-term outlook. However, Musti Group’s Board of Directors has set the following long-term financial targets:
|Growth||Sales to reach at least EUR 350 million by the financial year 2023
by continuation of strong customer acquisition momentum.
|Profitability||Mid- to long-term adjusted EBITA margin of 10-12 per cent with steadily improving profile. Margin increase is expected to be realised through steady gross margin and improving operating leverage.|
|Capital structure||Maintain net debt in relation to adjusted EBITDA below 2.5x
in the long term.
|Dividend policy||To pay a dividend corresponding to 60-80 per cent of net profit. Any potential dividend shall take into account acquisitions, the company’s financial position, cash flow and future growth opportunities.|
The financial targets are forward-looking statements and are not guarantees of future financial performance.
Press conference for analysts and media
A live webcast for analysts and media will be arranged today, 12 November 2020 at 14:00 EET. The event will be held in English. The report will be presented by CEO David Rönnberg and CFO Robert Berglund.
The webcast can be followed at https://mustigroup.videosync.fi/2020-q4-results.
A recording of the webcast will be available later at the company’s website at www.mustigroup.com/investors/reports-and-presentations/.
You can participate in the telephone conference by calling:
United Kingdom: +44 3333000804
Sweden: +46 856642651
United States: +1 6319131422
The participants will be asked to provide the following PIN code: 31683059#
Helsinki, 12 November 2020
Board of Directors
The information in this financial statement release is unaudited.
David Rönnberg, CEO, tel. +46 70 896 6552
Robert Berglund, CFO, tel. +358 50 534 8657
Essi Nikitin, Head of IR and Communications, tel +358 50 581 1455
Musti Group in brief
Musti makes the life of pets and their owners easier, safer and more fun. We are the leading Nordic pet care company and we operate an omnichannel business model to cater for the needs of pets and their owners across Finland, Sweden and Norway. We offer a wide, curated assortment of pet products. We also provide pet care services such as grooming, training and veterinary services in selected locations.
Musti Group’s net sales were EUR 284 million in the financial year 2020. At the end of the financial year 2020, the company had 1,162 employees, over one million loyal customers and 293 stores.