Press release

FNG Nordic AB (publ) Interim report January - June 2022

The interim report for Ellos Group AB (publ) is published today.

THE SECOND QUARTER 2022

• Net sales increased by 0.2 % to SEK 854.6 (852.9) million. Currency effects had a positive effect on growth of 1.9 %.

• The gross margin decreased to 51.3 (53.9) %.

• Adjusted EBITA amounted to SEK 8.4 (54.6) million. The adjusted EBITA margin stood at 1.0 (6.4) %.

• The operating profit/loss amounted to SEK -1.7 (19.0) million. The operating margin was -0.2 (2.2) %.

• Cash flow from operating activities amounted to SEK 16.8 (19.7) million.

• Cash and cash equivalents amounted to SEK 156.7 (198.3) million.

SIX MONTHS 2022

• Net sales increased by 1.8 % to SEK 1 714.0 (1 683.2) million. Currency effects had a positive effect on growth of 1.7 %.

• The gross margin decreased to 51.3 (52.4) %.

• Adjusted EBITA amounted to SEK 23.4 (86.1) million.

• The adjusted EBITA margin stood at 1.4 (5.1) %.

• The operating profit/loss amounted to SEK -24.9 (26.6) million. The operating margin was -1.5 (1.6) %.

• Cash flow from operating activities amounted to SEK -87.1 (-66.8) million.

• Cash and cash equivalents amounted to SEK 156.7 (198.3) million.

Comment from the CEO of Ellos Group AB (publ)

AN EVENTFUL QUARTER
Demand for Ellos Group’s comprehensive and affordable range of products remained strong during a quarter characterised by a volatile external environment and some degree of uncertainty among customers.

Like the first quarter of the year, sales were high from a historical perspective, although the increase compared to the previous year remained at 0.2 percent. Sales were approximately 30 percent higher than the corresponding quarter in 2019. It was also 12 percent higher than the same quarter in 2020, which was the first quarter when e-commerce in the Nordics was positively affected by Covid-19.

Demand for our fashion offering was strong. The sales trend clearly demonstrates that our customers have returned to their normal living habits in terms of work, socialising, leisure activities and entertainment.

Our home furnishing sales, facing a strong 2021 comparative quarter, were somewhat lower than expected but still at a high level as compared with the 2019 and 2020 comparative quarters. This development is in line with changes in consumer behaviour. Competition for home furnishing consumers is strong, and we drove sales during the quarter with a range of campaign activities.

The quarter’s gross margin was 51.3 per cent (53.9) and was mainly affected by negative currency effects. The gross margin was also affected by increased storage costs and discounts.

As during the first quarter, returns increased over last year’s low levels. We view this development as a normalisation from a longterm comparative perspective.

The inventory levels are high from a historical perspective, partly influenced by frontloaded autumn deliveries but also by the general market situation. At the same time, we see high inventories as a strength considering continued supply chain uncertainty. We are closely monitoring this development.

The turbulent world situation, coupled with high inflation, price increases and rising interest rates, indicates that consumers are tightening their purse strings. This is likely to affect consumption as we move forward. The current global situation, with continued production and supply chain disruptions, had a negative impact on our costs this quarter, mainly as regards customer deliveries.

Ellos Group has succeeded in countering the major shifts in consumer purchasing patterns over the past two years. We see that our comprehensive fashion and home furnishings offer gives us resilience and flexibility.

As we previously communicated, we are sharpening our strategy by concentrating our efforts and focus on our offering to our core customers – women in mid-life. We made the difficult decision that Stayhard was no longer part of our core business. We were pleased to announce the sale of Stayhard in early July and are gratified that the brand will live on.

During the quarter we also learned that Nordic Capital is once again the owner of Ellos Group. I see this as a positive development and a bit of a fresh start. With the support of a strong owner, we will now focus on working with our sharpened strategy to continue to grow the business profitably.

In spite of the dark clouds looming over our world, we continue to look positively to the future. With a strong market position and a stable owner, we are well positioned to capitalise on the continuing structural growth and online demand, in the Nordic region and across Europe.

Hans Ohlsson, CEO

For more information:
Johan Stigson, CFO, Telephone. +46 (0)33 16 08 05

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This information is information that Ellos Group AB (publ) is legally obliged to disclose in accordance with the EU Market Abuse Regulation and the Swedish Securities Market Act. Through the agency of the contact persons shown above, the information was released for publication on 31st of August 2022 at 08.30 CET.

ABOUT ELLOS GROUP
The Ellos Group, which includes Ellos, Jotex, Stayhard, and Homeroom, is the Nordic region’s leading e-commerce group. Working closely with our millions of customers, we are constantly striving to develop and offer attractive and sustainable fashion and household items for the entire family. Our focus is always on the customer. We continuously work to develop our business through innovation, creativity, and sustainability. Ellos Group, headquartered in Borås, and with operations in all Nordic countries, has around 550 employees and sales of around SEK 3.2 billion. www.ellosgroup.com