FNG Nordic AB (publ) Interim Report January - September 2021
2021-11-23 08:32

FNG NORDIC AB (PUBL) INTERIM REPORT JANUARY – SEPTEMBER
2021
The interim report for FNG Nordic AB (Ellos Group) is published today.

THE THIRD QUARTER 2021

  • Net sales increased by 8.8 % to SEK 846.6 (778.0) million. Currency effects had a negative effect on growth of 0.1 %.
  • The gross margin increased to 50.3 (32.5) %.
  • The operating profit/loss amounted to SEK 6.6 (-98.5) million. The operating margin was 0.8 (-12.7) %.
  • Adjusted EBITA amounted to SEK 36.4 (85.0) million. The adjusted EBITA margin stood at 4.3 (10.9) %.
  • Adjusted EBITDA amounted to SEK 60.6 (108.3) million. The adjusted EBITDA margin stood at 7.2 (13.9) %.
  • Cash flow from operating activities amounted to SEK 7.1 (79.1) million.
  • Operating cash flow totalled SEK -4.1 (75.1) million.
  • Cash and cash equivalents amounted to SEK 179.7 (263.4) million.

NINE MONTHS 2021
* Net sales increased by 16.0 % to SEK 2 529.8 (2 181.6) million. Currency effects had a negative effect on growth of 1.0 %.
* The gross margin increased to 51.7 (45.1) %.
* The operating profit/loss amounted to SEK 33.2 (-17.5) million. The operating margin was 1.3 (-0.8) %.
* Adjusted EBITA amounted to SEK 122.5 (190.7) million. The adjusted EBITA margin stood at 4.8 (8.7) %.
* Adjusted EBITDA amounted to SEK 193.8 (259.7) million. The adjusted EBITDA margin stood at 7.7 (11.9) %.
* Cash flow from operating activities amounted to SEK -59.6 (42.1) million.
* Operating cash flow totalled SEK -100.0 (23.0) million.
* Cash and cash equivalents amounted to SEK 179.7 (263.4) million.

Comment from the CEO of FNG Nordic AB (publ)

STRENGTHENED CUSTOMER OFFER IN FOCUS IN THE NORDICS AND EUROPE

Ellos Group delivers yet another quarter of profitable growth, despite challenging external conditions. We have taken several important steps towards improving our customer offer and customer experience on our e-commerce platforms.

Net sales in the third quarter amounted to SEK 846.6 million, corresponding to a growth of approx. 9 percent. Growth in the nine-month period landed at 16 percent, despite challenging comparative figures. Ellos Group has a continued strong position within home and fashion in the Nordic region and additional potential that we have started to realise in selected European markets.

Adjusted EBITA in the third quarter amounted to SEK 36.4 million, corresponding to a margin of 4.3 percent. The quarter was characterised by a tougher market and increased competition for customers, resulting in higher costs for digital marketing. Cost increases in the supply chain that we have seen earlier this year have continued. Nevertheless, we kept delivering a gross margin exceeding 50 percent both in the quarter and the nine-month period.
During the quarter, both home and fashion categories grew. We see customer buying patterns normalize as society is reopening. A larger part of household expenses is now dedicated to fashion. At the same time, home furnishings that have been driven by customers spending time at home, now faces competition from travel and other activities that were impossible during the pandemic. We consider the structural effects of people choosing online retail over brick-and-mortar to be permanent. In the short term, we expect some pendulum effects where restrictions have been stricter, such as in Norway, but we believe they will be temporary. The continued flow of customers on our e-commerce platforms is a great indication of how appreciated our offer is.

Ellos Group has made several important investments to improve the customer offer, both in the Nordics and in Europe. The European efforts continue and add extra sales to our scalable e-commerce platform. The extension of the Viared logistics center is well under way and expected to be completed in the first quarter 2022, according to plan. This will give us even better conditions to meet growth within home, to make our deliveries more efficient and increase customer service level. We also keep launching new collections and exciting new collaborations with a clear customer focus. Among other things, Ellos Home launched a successful rugs collaboration with Marie Ohlsson Nylander, and Ellos Fashion promoted a collaboration with the influencer Linda-Marie in the strategically important plus-size segment. Stayhard launched a new, exciting sub brand to Studio Total through Studio Teens, which is targeted towards teens.

Approaching the important Christmas shopping season, Ellos Group has decided to bring forward some purchases for the fall on the basis of the current situation regarding access to goods and transportation. Inventories increased during the quarter, with a negative effect on cash flow.

The strategic review that we have communicated earlier continues with the objective to give Ellos Group the best possible settings, capital structure and future possibilities. The board of Ellos Group is evaluating several strategic options.

We are humble for the challenges in the market and monitor the development closely. Ellos Group’s operation is constantly being adapted to prevailing conditions. As a leading e-commerce company with strong brands within home and fashion, we have a positive view of the future. We are well positioned on the market to benefit from the structural growth online.

Paul Lembrechts, CEO of FNG Nordic AB (publ).

For more information:
Johan Stigson, CFO, Telephone. +46 (0)33 16 08 05
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This information is information that FNG Nordic 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 23rd of November 2021 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. The 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