2006 06-28 Q3 2005/2006 Results

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2006 06-28 Q3 2005/2006 Results

  1. 1. KappAhlQ3 2005/06 Results Presentation 28 June, 2006
  2. 2. Disclaimer These materials are strictly confidential and may not be copied, published, distributed or transmitted These materials do not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities, nor shall part, or all, of these materials or their distribution form the basis of, or be relied on in connection with, any contract or investment decision in relation to any securities These materials is for the benefit of research analysts and is taking place in anticipation of our contemplated initial public offering. This invitation does not constitute an invitation to participate in the underwriting syndicate or management group of the proposed offering These materials are strictly confidential and must not be disclosed or distributed to third parties. In addition, these materials may not be distributed in certain countries, including the United States, Canada, or Japan. There will be no public offering of securities in the United States, Canada or Japan absent registration or an exemption from registration under the securities laws of the relevant jurisdiction The information in this presentation is being provided by the company. The joint global coordinators make no representation or warranty, express or implied, as to the accuracy or completeness of the information in this presentation, and nothing in this presentation is, or shall be relied upon as, a promise or representation by the joint global coordinators These materials contain forward-looking statements based on the currently held beliefs and assumptions of the management of KappAhl Holding AB, which are expressed in good faith and, in their opinion, reasonable. Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, financial condition, performance, or achievements of KappAhl Holding AB or industry results, to differ materially from the results, financial condition, performance or achievements expressed or implied by such forward-looking statements. Given these risks, uncertainties and other factors, recipients of this document are cautioned not to place undue reliance on these forward-looking statements. KappAhl Holding AB disclaims any obligation to update these forward-looking statements to reflect future events or developments These materials are directed only at (i) persons who are outside the United Kingdom, (ii) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) (the “Order”), (iii) persons falling within Article 49(2)(a) to (d) of the Order (high net worth companies, unincorporated associations, etc.) or (iv) persons to whom an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets Act 2000) in connection with the Offer may otherwise lawfully be communicated (all such persons together being referred to as "Relevant Persons"). These materials are directed only at Relevant Persons and must not be acted on or relied on by persons who are not Relevant Persons. Any investment or investment activity to which these materials relates is available only to Relevant Persons and will be engaged in only with Relevant Persons These materials and the information contained herein are no an offer of securities for sale in the United States and are not for publication or distribution to persons in the United States (within the meaning of Regulation S under the U.S. Securities Act of 1933, as amended (the “Securities Act”)). The securities proposed to be offered in the company have not been and will not be registered under the Securities Act and may not be offered or sold in the United States except pursuant to an exemption from the registration requirements of the Securities Act2 2
  3. 3. 3 3
  4. 4. Agenda I Business Highlights II Q3 2005/06 Results Key Conclusions III and Outlook4 4
  5. 5. I Business highlights – Q3 2005/06 Continued good business climate with positive development in all markets − Strong private spending levels Business as usual Store expansion program on track with 15-20 stores annually for this and next year − 6 new stores opened during Q3 2005/06 − 17 net new stores opened so far during fiscal year 2005/06 − Current network of 259 stores − 22 contracts for planned store openings5 5
  6. 6. II Financial highlights – Q3 2005/06 Sales increased by 6.5% to SEK 1 029m (SEK 966m) Gross margin improved to 61.9% (61.7%) Operating profit increased by 6.1% to SEK 120m (SEK 113m) − Operating margin of 11.7% (11.7%) Net profit SEK 73m (SEK 57m) or SEK 0.97 per share (SEK 0.76) Dividend MSEK 169 distributed in March6 6
  7. 7. II Revenue growth composition Q3 2005/06 vs. Q3 2004/05 +2.9% +5.0% -1.4% 6.5% Continued favourable FX impact, 1,100 49 -7 1,029 mainly due to strong NOK 28 1,000 966 Net new stores largest growth contributor with 5.0% 900 LFL of -1.4% impacted by discontinued cosmetics sales in Norway (-2.1%) SEKm 800 − Q3 2005/06 SEK 2m (SEK 19m) 700 − Gradual replacement of space with apparel sales 600 500 Q3 FX Net LFL Q3 04/05 effect new growth 05/06 stores7 7
  8. 8. II Sales breakdown Sales per country Q3 Q3 Growth Growth during the third quarter driven SEKm 05/06 04/05 SEK Loc. cur. by store expansion strategy Sweden 580 567 2.3% 2.3% − 17 net new stores since Q3 2004/05: Norway 291 265 9.8% 1.7% 4 Sweden, 6 in Norway, 4 in Finland, Finland 120 107 11.9% 9.6% 3 in Poland Poland 38 27 40.7% 22.7% Total 1,029 966 6.5% Flat LFL sales development in Sweden Poland Adjusted for discontinued cosmetics 4% sales in Norway, LFL was positive Finland Negative LFL in Finland and Poland 12% Inventory of SEK 482m at satisfying Sweden level Norway 56% 28%8 8
  9. 9. II Profitability drivers Q3 (Mar-May) SEKm 05/06 04/05 Gross profit 637 596 Continued focus on having the “right Gross margin 61.9% 61.7% product” − purchase prices Selling expenses -473 -448 − sell through of full priced % of sales 46.0% 46.4% merchandise Admin expenses -44 -34 − targeted mark down strategy % of sales 4.3% 3.5% Higher selling expenses due to 17 net new stores EBITDA 166 154 EBITDA margin 16.1% 16.0% Operating profit 120 113 Operating margin 11.7% 11.7%9 9
  10. 10. II Income statement Income statement Q3 (Mar-May) Q1-Q3 (Sep-May) SEKm 05/06 04/05 05/06 04/05 Net sales 1,029 966 3,207 2,959 Cost of goods sold -392 -370 -1,306 -1,246 Gross profit 637 596 1,901 1,713 Selling expenses -473 -448 -1,432 -1,329 Administrative expenses -44 -34 -112 -100 Operating profit 120 113 357 284 Financial income 0 1 3 5 Financial expense -18 -33 -101 -64 Profit before tax 102 81 259 225 Tax expense -29 -24 -72 -24 Net profit 73 57 187 20110 10
  11. 11. II Cash flow Cash flow statement Q3 Q1-Q3 SEKm 05/06 05/06 Cash flow from operations before working capital changes 88 294 Changes in working capital -5 70 Cash flow from operating activities 83 364 Cash flow investing activities -55 -181 Cash flow after investments 28 183 Cash flow from financing activities 215 84 Dividends paid -169 -169 Change in revolving credit -18 -72 Net cash flow for the period 56 26 Cash and bank balances at beginning of period 53 83 Cash and bank balances at end of period 109 10911 11
  12. 12. III Key conclusions and outlook Continued strong financial performance Growth plan with store openings and refurbishments on track In focus going forward: Continued focus on top line growth − 2 new stores to be opened in Q4 2005/06 to meet target of 15-20 net new stores for the year − Lease contracts signed for 22 new stores Sustained gross margin levels12 12
  13. 13. Recent activities13 13
  14. 14. Recent activities14 14
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