Slide 1: Year-End Report Q4 2018
YEAR-END REPORT Q4 2018 January 25, 2019 1 25/01/2019
Slide 2: Highlights
HIGHLIGHTS ─ Increased sales and profit in Q4 o Net sales increased 5 percent o Byggmax segment sales increased 10 percent o EBITDA excl. non-recurring items SEK 28m (22m) ─ Positive impact of strategic initiatives ─ Previous negative effects of external factors normalized during Q4 ─ Focus on profi
Slide 3: Summary Q4 2018
SUMMARY Q4 2018 ─ Net sales in Q4 increased by 5.1 percent Mkr Q4 2018 Q4 2017 Diff.% 2018 year-on-year o Driven by the Byggmax segment Net Sales 998.6 950.2 5.1 5,107.8 o Positive impact of growth initiatives Gross Margin (%) 31.3 31.1 0.2 30.8 ─ Gross margin in Q4 was 31.3 percent, an EBITDA 27.5
Slide 4: Byggmax
BYGGMAX Mkr Q4 2018 Q4 2017 Diff.% ─ Net sales in Q4 increased 9.7 percent year-on-year o Increased sales in comparable stores Net Sales 882.9 804.9 9.7 o Growth driven by strategic initiatives, EBITDA 26.5 43.1 -38.6 particularly new stores EBITDA, adjusted 26.5 34.7 -23.8 o Positive impact of cons
Slide 5: High pace in Byggmax strategic initiatives 2018
HIGH PACE IN BYGGMAX STRATEGIC INITIATIVES 2018 Building for profitable growth during 2018 ─ 18 new stores o Six stores of the new format for smaller towns o Contribute significantly to sales growth by Q4 ─ Garden concept launched in 12 more stores ─ Continued to develop our e- e- commerce o Increas
Slide 6: Store openings
STORE OPENINGS The following stores were opened during the fourth quarter 2018, Sweden: Skånska Sweden Norway Finland ‒ Byggmax Stenungsund Byggvaror Norway: New stores Q4 2018 1 2 0 -1 ‒ Byggmax Hönefoss ‒ Byggmax Kristiansund New stores YTD 2018 12 4 2 -2 Skånska Byggvaror closed one showroom stor
Slide 7: Updated visual identity
UPDATED VISUAL IDENTITY Modernized visual identity launched during Q4: logo, marketing material, signage, etc. First launched at opening of store no. 100 in Sweden, Stenungsund Introduced gradually during coming years 7 1/25/2019
Slide 8: Tested "Store 3.0"
TESTED ”STORE 3.0” Tested ”Store 3.0” in two stores during autumn Goal to upgrade our offer in existing stores FIXA NY BILD ─ More complete for both smaller and bigger projects ─ Improved shopping experience Upgrade to Store 3.0 includes ─ Selected new assortments in electrical installation, ventila
Slide 9: Several growth options connected to core business
SEVERAL GROWTH OPTIONS CONNECTED TO CORE BUSINESS Store expansion E- commerce ─ White space remains ─ Complementary online ─ Format for smaller towns exclusive assortment 150 stores and e-com in three countries Focused store assortment, lowest prices, and quick and easy shopping Garden departments S
Slide 10: Byggmax focus 2019: profitable growth
BYGGMAX FOCUS 2019: PROFITABLE GROWTH Store expansion ─ 12 new stores ─ Of which ca 5 format for smaller towns Upgrade our offer Focused ─ 8 new Garden departments growth ─ Upgrade 15 existing stores to Store 3.0 E- commerce growth ─ Expand assortment ─ More delivery options Simple and efficient ope
Slide 11: Skånska Byggvaror
SKÅNSKA BYGGVAROR Mkr Q4 2018 Q4 2017 Diff.% ─ Q4 marked end of restructuring, towards a more focused leader within ‘Garden Living’ Net Sales 89.8 117.4 -23.5 EBITDA -4.6 -37.5 87.6 ─ Sales decreased by 23.5 percent in Q4 o Decision to reduce unprofitable sales EBITDA, adjusted -4.6 -5.2 10.5 o Real
Slide 12: Transformation year 2018 executed according to plan
TRANSFORMATION YEAR 2018 EXECUTED ACCORDING TO PLAN 2018 transformation year towards a modern leader within “Garden Living” Initiatives executed according to plan with positive effects − Choice to reduce unprofitable sales − Gross margins returned to historically high levels − Costs decrease in line
Slide 13: Skånska Byggvaror focus 2019: build for growth
SKÅNSKA BYGGVAROR FOCUS 2019: BUILD FOR GROWTH Focus 2019 on building for profitable growth in core business Growth initiatives within − Assortment − Sales − Marketing Continuous efficiency improvements Expect first positive effects of growth initiatives in the coming peak season, i.e., the second a
Slide 14: Market development
MARKET DEVELOPMENT Nordic consumer market estimated to have increased 1- 1-3 percent in the fourth quarter ‒ Consumer market for home improvement projects return to modest growth in the fourth quarter ‒ Positive impact of mild autumn weather ‒ Continue to perceive somewhat passive consumer behavior
Slide 15: Dividend
DIVIDEND The Board of Directors propose to not pay any dividend in 2019 2018 year with tough external factors − Results improved in the fourth quarter − Financial result for full year weak Good profitability in Byggmax core business, with many business opportunities and proven initiatives driving pr
Slide 16: Financial overview
FINANCIAL OVERVIEW 25/01/2019 16
Slide 17: Result development Q4
RESULT DEVELOPMENT Q4 Mkr Q4 2018 Q4 2017 Diff.% 2018 Net Sales 998.6 950.2 5.1 5,107.8 Growth comparable stores (%) -3.9 -1.9 -2.0 -10.8 Gross Margin (%) 31.3 31.1 0.2 30.8 EBITDA, adjusted 27.5 22.1 24.8 346.2 EBITDA margin (%), adjusted 2.8 2.3 0.5 6.8 EBIT, adjusted -16.3 -17.9 9.2 178.2 EBIT ma
Slide 18: Result development FY 2018
RESULT DEVELOPMENT FY 2018 Mkr 2018 FY 2017 FY Diff.% ‒ Sales decreased -4.0 percent Net Sales 5,107.8 5,321.4 -4.0 o Negatively impacted by unfavorable Byggmax 4,480.5 4,491.1 -0.2 weather during first three quarters Skånska Byggvaror 509.9 709.2 -28.1 o Decision to reduce unprofitable sales in Oth
Slide 19: Sales development
SALES DEVELOPMENT Growth percent Q4 2018 Q4 2017 ‒ Sales in Q4 increased by 5.1 percent year-on-year ‒ Sales for the Byggmax segment increased 9.7 Comparable stores, local currency -3.9 -1.9 percent Non-comparable stores and Other 7.6 0.6 o Increased sales in comparable stores o Growth driven by str
Slide 20: Gross margin
GROSS MARGIN ‒ The gross margin was 31.3 percent (31.1) in the fourth quarter, an increase of 0.2 pp compared to the same period last year ‒ The gross margin decreased for Byggmax. In the beginning of the quarter, the gross margin continued to be negatively affected by higher raw material prices for
Slide 21: Operating expenses
OPERATING EXPENSES ‒ Personnel costs and other external expenses decreased SEK 10.9 M in the fourth quarter. Adjusted for non-recurring costs in Q4 2017, the expenses rose SEK 12.8 M ‒ Costs increase by SEK 19.3 M due to new Byggmax stores ‒ In total, cost share of sales decreased slightly during th
Slide 22: Net financial items
NET FINANCIAL ITEMS ‒ Net financial items in Q4 were SEK Q4 2018 Q4 2017 Diff.% 2018 4.5 M lower than in the same period 2017. Net financial items -7.7 -3.2 -139.7 -25.9 ‒ Net financial items for the quarter were negatively impacted by exchange-rate effects of SEK 10.6 M (negative: 2.8). 22 25/01/20
Slide 23: Cash flow
CASH FLOW ‒ The fourth quarter generated a cash-flow from operating activities in line with previous seasonal patterns. ‒ Cash-flow from operating activities increased SEK 57.1. M and amounted to SEK -204.0 M compared to SEK -261.1 M the same period last year. 23 25/01/2019
Slide 24: Impact of IFRS16
IMPACT OF IFRS16 − The IFRS 16 accounting standard will be implemented from January 1, 2019. − This will result in the majority of the company’s finance leases being recognized in the balance sheet. In the Group, leases primarily relate to store leases. − IFRS16 entails an increase in balance sheet
Slide 25: Financial goal
FINANCIAL GOAL As at result of IFRS 16, from 2019 the profitability target will be updated. Byggmax will change the profitability goal to be based on EBITA (replacing EBITDA): − EBITA margin of 7-8 percent per year. − The historic difference between EBITDA and EBITA has been around 2.5 percent. − IF
Slide 26: Outlook and summary
OUTLOOK AND SUMMARY 26 25/01/2019
Slide 27: Outlook
OUTLOOK ‒ Previously negative effect of Intent to renovate, Sweden increased timber prices normalized 0 during the fourth quarter -5 -10 ‒ Positive market indications for 2019, particularly regarding Swedish -15 consumers’ intent to renovate -20 -25 ‒ Focus on profitable growth in 2019 -30 o Byggmax
Slide 28: Summary
SUMMARY Sales and profit increase in Q4 Positive market indications for 2019 Initiatives in place to drive profitable growth in core business 28 1/25/2019
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