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MarketScreener Homepage  >  Equities  >  NASDAQ OMX STOCKHOLM  >  Nelly Group AB (publ)    NELLY   SE0003652163

NELLY GROUP AB (PUBL)

(NELLY)
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Qliro : Interim report for January 1 – September 30, 2020

10/21/2020 | 02:10am EST

Interim report for January 1 - September 30, 2020

SPLIT-UP BEING FINALIZED

THIRD QUARTER

  • Net sales amounted to SEK 460.7 (540.8) million
    • CDON increased external merchant's sales by 100 percent. Net sales increased by 82 percent for CDON Marketplace (service income) and decreased by 42 percent for CDON Retail (sale of own goods).
    • Nelly's sales in the Nordics decreased by 3 percent but was stable in local currencies in the Nordic. In line with the Nordic focus, sales decreased outside the region.
  • Operating profit before depreciation and amortization improved to SEK 14.0 (-0.8) million
    • CDON's operating profit before depreciation and amortization increased to SEK 7.6 (3.6) million
    • Nelly's operating profit before depreciation and amortization amounted to SEK 1.8 (9.3) million, impacted by restructuring costs of SEK 5.4 million
  • Operating profit improved to SEK 0.2 (-13.9) million
  • Profit after tax improved to -1.9(-13.9) million and to SEK 126.4 (-13.0) million including discontinued operations
  • Basic and diluted earnings per share including discontinued operations improved to SEK 0.83 (-0.09)
  • Qliro AB was distributed and listed on Nasdaq Stockholm on October 2 and CDON is scheduled to be distributed and listed on First North in November
  • On November 6, Qliro Group will change its name to Nelly Group and Kristina Lukes will become CEO

FIRST NINE MONTHS

  • Net sales amounted to SEK 1,535.8 (1,742.1) million
  • Operating profit before depreciation, amortization, and impairment was SEK -15.6(-5.9) million
  • Operating profit totaled SEK -64.7(-49.2) million
  • Profit after tax amounted to SEK -79.5(-59.8) million and to SEK 3.3 (-56.9) million including discontinued operations
  • Earnings per share after tax including discontinued operations amounted to SEK 0.02 (-0.38)
  • Cash and cash equivalents amounted to SEK 222.0 (313.9) million at the end of the period

2020

2019

2020

2019

SEK million

July-Sep

July-Sep

Jan-Sep

Jan-Sep

Net sales

460.7

540.8

1,535.8

1,742.1

Gross profit

133.8

118.0

375.4

388.9

Gross margin

29.0%

21.8%

24.4%

22.3%

Operating profit before depreciation

14.0

-0.8

-15.6

-5.9

Operating margin before depreciation

3.0%

-0.2%

-1.0%

-0.3%

Operating profit

0.2

-13.9

-64.7

-49.2

Operating margin

0.0%

-2.6%

-4.2%

-2.8%

Qliro AB is recognized as a discontinued operation in this report. Operations are recognized including the effects of IFRS 16. Comparisons refer to the same period last year if nothing else is stated.

Interim report Q3 2020

UNBUNDLING BEING FINALIZED

During the quarter, we took several steps toward the goal of unbundling the Group into three independent listed companies. Qliro AB is now listed on Nasdaq Stockholm and we intend to distribute CDON and list the company on First North in November. When that is done, the unbundling of Qliro Group will be completed.

Qliro Group's sole business will be Nelly and on November 6, Qliro Group is changing its name to Nelly Group.

Our shareholders previously owned shares in a conglomerate with limited synergies but will instead hold shares in three focused listed companies.

Strong development for CDON in the quarter

CDON increased sales from external merchants by 100 percent for the third quarter and 102 percent for the first nine months. This was driven by quick digitalization of commerce and the successful positioning of the marketplace as a significant sales channel for e-merchants. CDON Marketplace is the company's core operation and this segment's net sales grew 82 percent. CDON Marketplace rapid growth meant that 80 percent of CDON's total gross profit was generated by service-related income from the 1,385 merchants who pay fees to be part of the marketplace.

CDON has a scalable business model with a strong cash flow. The company has exceeded expectations and is ready to continue growing outside Qliro Group. Provided that the extra general meeting on October 26 resolves to distribute CDON to Qliro Group's shareholders, the company is expected to be listed on First North in early November.

Focus on Nelly and name change to Nelly Group

Nelly's sales in the Nordics fell by 3 percent but was stable in local currency in the Nordics. Nelly increased its gross margin through higher efficiency, focus on the Nordics and lower return rates. The inventory turnover rate increased, which limited the need for working capital. The company continues to streamline its organization and is gathering its operations and logistics in Borås.

Qliro AB has been distributed and soon CDON will also be an independent listed company. I thank you for the privilege to lead the group during the split-up, and I look forward to continuing the work as a board member of Nelly Group with Kristina Lukes as its CEO.

Mathias Pedersen

President and CEO

Stockholm, October 21, 2020

Qliro Group AB

2

Interim report Q3 2020

CDON'S EXTERNAL MERCHANTS INCREASED SALES BY 100 PERCENT

2020

2019

2020

2019

SEK million

July-Sep

July-Sep

Jan-Sep

Jan-Sep

CDON Marketplace

Gross merchandise value, external merchants1

426.1

213.1

100%

1,155.7

571.9

102%

Net sales

46.9

25.8

82%

123.5

70.1

76%

Gross profit

44.7

24.9

80%

117.6

67.4

75%

CDON Retail

Gross merchandise value1

107.5

186.1

-42%

412.0

620.1

-34%

Net sales

107.5

186.1

-42%

412.0

620.1

-34%

Gross profit

11.3

17.3

-35%

40.1

60.2

-33%

Total gross merchandise value1

533.6

399.1

34%

1,567.7

1,192.0

32%

Net sales

154.5

211.9

-27%

535.5

690.1

-22%

Gross profit

56.0

42.1

33%

157.7

127.4

24%

Gross margin (%)

36.3%

19.9%

16.4 p.e

29.5%

18.5%

11.0% p.e

Operating profit before depreciation

7.6

3.6

110%

9.5

-4.7

Operating margin before depreciation

4.9%

1.7%

3.2 p.e

1.8%

-0.7%

2.5% p.e

Operating profit

0.9

-0.7

-18.6

-18.4

Operating margin (%)

0.6%

-0.3%

0.9 p.e

-3.5%

-2.7%

-0.8 p.e

Investments

-5.3

-6.4

-17%

-16.5

-20.9

-21%

Opening inventory balance

40.9

107.3

-62%

103.7

176.7

-41%

Closing inventory balance

26.3

86.5

-70%

26.3

86.5

-70%

Active customers, last 12 months, thousands

2,141

1,747

23%

2,141

1,747

23%

Visits, thousands

28,255

20,071

41%

81,337

62,813

29%

Orders, thousands

863

638

35%

2,457

1,945

26%

Average shopping basket, SEK

607

612

-1%

627

602

4%

1Gross merchandise value refers to total sales of goods and services excluding returns and sales tax.

CDON is the leading Nordic marketplace

CDON continues to strengthen its position as the leading Nordic online marketplace. Consumers turn to CDON to compare terms and shop millions of products on one site, competitive prices, easy payments, and fast delivery. Merchants connect to CDON Marketplace to reach new customers and increase sales through CDON's services and technology. This is complemented by CDON Retail, which sells its own goods in categories that are missing from the external merchants' range of products.

CDON's vision is to simplify digital commerce for Nordic e-merchants and consumers by investing in technology and automation. By attracting more merchants more products will be made available to consumers under better terms. This in turn attracts more visitors resulting in a positive spiral that drives continued growth. The number of products and merchants has increased rapidly in recent years, and by the end of the quarter, 1,385 merchants were using CDON's services to increase their sales.

CDON's growth is driven by digitalization of commerce

During the quarter, CDON increased its number of orders by 35 percent, customers by 23 percent and visits by 41 percent. This is driven by the rapid digitalization and successful positioning of CDON. Total gross merchandise value increased by 34 percent to SEK 533.6 (399.1) million and total gross profit by 33 percent to SEK 56.0 (42.1) million.

CDON has two business areas: the core business CDON Marketplace (external merchants) and the complementary CDON Retail (sale of own goods). CDON Retail is a merchant on CDON Marketplace.

CDON Marketplace increased external merchant sales 100 percent

CDON Marketplace is the company's core business and strategic focus area. This segment is growing very quickly and represented 80 percent of the company's total gross profit. This means that 80 percent of CDON's gross profit was generated by service-related income from merchants who paid fees to be part of the marketplace.

Qliro Group AB

3

Interim report Q3 2020

CDON drives growth in CDON Marketplace by connecting new merchants, growing existing merchants and launching new services to merchants. The external merchants increased their sales by 100 percent. This helped the segment increase net sales by 82 percent to SEK 46.9 million and gross profit by 80 percent to SEK 44.7 million.

CDON Retail is a merchant on CDON Marketplace

CDON Retail's strategy is to sell goods in categories that external merchants do not offer, mostly traditional media. CDON Retail acts as one of the merchants on CDON Marketplace.

CDON Retail previously offered a wide range of its own products, but over the last few years, it has changed its strategy so as to not compete with the external merchants. For example, CDON's offering of consumer electronics have been built by specialized external merchants and consequently CDON Retail has phased out its own sales of consumer electronics. This transition reduced net sales for the segment by 42 percent to SEK

107.5 (186.1) million. The segment's gross profit amounted to SEK 11.3 (17.3) million.

Less inventory increased scalability and reduced risk

CDON's operating profit before depreciation, amortization and impairment increased to SEK 7.6 (3.6) million. The company has launched new functions in the technology platform, which increased depreciations.

Due to the transition to a service-based income model, inventory levels were 70 percent lower at the end of the quarter compared with the previous year. This lowered the operations' inventory risk and increased the scalability of the business model.

Developing the offering

CDON continuously launches new services to merchants to drive sales and improve the marketplace. A new website was launched during the quarter that will make it easier for consumers to search among the merchants' over eight million products. In addition, data-driven insights will provide the merchants with new tools for driving sales.

CDON Connect, the merchants' tool for driving sales on CDON, was improved during the quarter. CDON Connect contains several smart functions. By making more data-driven decisions, merchants can follow sales in real time, compare prices, optimize product pages, attract traffic, extract sales reports and much more. Merchants can also easily upload items manually using a drag and drop function, via APIs or by integrating other IT systems.

CDON is always looking for new ways to generate value-creatingadd-on sales. One example is the new collaboration with mySafety Försäkringar, which makes it possible for customers to buy insurance when purchasing mobile phones through CDON.

Qliro Group AB

4

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

Qliro Group AB published this content on 21 October 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 21 October 2020 06:09:04 UTC


© Publicnow 2020
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Financials
Sales 2019 2 939 M 348 M 348 M
Net income 2019 -110 M -13,1 M -13,1 M
Net Debt 2019 161 M 19,1 M 19,1 M
P/E ratio 2019 -9,49x
Yield 2019 -
Capitalization 627 M 74,3 M 74,3 M
EV / Sales 2018 0,43x
EV / Sales 2019 0,41x
Nbr of Employees 750
Free-Float 81,5%
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NameTitle
Mathias Pedersen Chief Executive Officer & Director
Marcus Lindqvist President
Carl-Johan Christoffer Häggblom Chairman
David Granath Chief Financial Officer
Daniel Konrad Mytnik Independent Non-Executive Director
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