Musti Group plc Financial Statements Release 1 October 2021 – 30 September 2022
Musti Group plc Financial Statements Release 8 November 2022 at 8:30 a.m. EET
Musti Group plc Financial Statements Release 1 October 2021 – 30 September 2022
Our resilient growth continues
July – September 2022
- Group net sales totaled EUR 101.8 million (91.5), an increase of 11.3%.
- Like-for-like sales growth was 4.7%.
- Adjusted EBITDA was EUR 17.6 (17.2) million, up by 2.2%.
- Adjusted EBITDA margin was 17.2% (18.8%).
- Adjusted EBITA was EUR 10.2 (11.2) million, down by 9.2%.
- Adjusted EBITA margin was 10.0% (12.2%).
- Operating profit decreased by 0.6 % to EUR 8.5 (8.6) million, representing 8.4% (9.4%) of net sales.
- Profit for the period totaled EUR 7.3 (5.2) million.
- Earnings per share, basic was EUR 0.22 (0.16).
- Number of stores grew to 335 (312).
- Number of loyal customers grew to 1,454 thousand (1,297 thousand).
October 2021 – September 2022
- Group net sales totaled EUR 391.1 million (340.9 million), an increase of 14.7%.
- Like-for-like sales growth was 6.7%.
- Adjusted EBITDA was EUR 66.9 (58.8) million, up by 13.7%.
- Adjusted EBITDA margin was 17.1% (17.3%).
- Adjusted EBITA was EUR 38.8 (36.8) million, up by 5.4%.
- Adjusted EBITA margin was 9.9% (10.8%).
- Operating profit increased by 8.8% to EUR 30.9 (28.4) million, representing 7.9% (8.3%) of net sales.
- Profit for the period totaled EUR 22.3 (20.9) million.
- Earnings per share, basic was EUR 0.67 (0.62).
- The Board proposes to the Annual General Meeting that shareholders will be paid a capital return of EUR 0.50 per share
The figures in parentheses refer to the comparison period, i.e., the same period in the previous year, unless stated otherwise. Musti Group’s financial year is from 1 October to 30 September.
| EUR million or as indicated | 7-9/2022 | 7-9/2021 | Change % | 10/2021-9/2022 | 10/2020-9/2021 | Change % |
| Net sales | 101.8 | 91.5 | 11.3% | 391.1 | 340.9 | 14.7% |
| Net sales growth, % | 11.3% | 18.9% | 14.7% | 19.9% | ||
| LFL sales growth, % | 4.7% | 10.9% | 6.7% | 11.8% | ||
| LFL store sales growth, % | 2.4% | 8.2% | 4.2% | 8.8% | ||
| Online share, % | 21.3% | 22.3% | 22.2% | 23.1% | ||
| Gross margin, % | 45.2% | 45.7% | 46.4% | 45.7% | ||
| EBITDA | 17.6 | 16.2 | 8.1% | 65.4 | 56.9 | 14.9% |
| EBITDA margin, % | 17.2% | 17.8 % | 16.7% | 16.7% | ||
| Adjusted EBITDA | 17.6 | 17.2 | 2.2% | 66.9 | 58.8 | 13.7% |
| Adjusted EBITDA margin, % | 17.2% | 18.8% | 17.1% | 17.3 % | ||
| EBITA | 10.2 | 10.3 | -0.8% | 37.3 | 34.9 | 6.9% |
| EBITA margin, % | 10.0% | 11.2% | 9.5% | 10.2% | ||
| Adjusted EBITA | 10.2 | 11.2 | -9.2% | 38.8 | 36.8 | 5.4% |
| Adjusted EBITA margin, % | 10.0% | 12.2% | 9.9% | 10.8% | ||
| Operating profit | 8.5 | 8.6 | -0.6% | 30.9 | 28.4 | 8.8% |
| Operating profit margin, % | 8.4% | 9.4% | 7.9% | 8.3% | ||
| Profit/loss for the period | 7.3 | 5.2 | 40.1% | 22.3 | 20.9 | 6.9% |
| Earnings per share, basic, EUR | 0.22 | 0.16 | 40.4% | 0.67 | 0.62 | 7.3% |
| Net cash flow from operating activities | 13.6 | 15.0 | -9.4% | 46.1 | 54.9 | -16.0% |
| Investments in tangible and intangible assets | 2.7 | 3.2 | -16.8% | 14.2 | 12.9 | 10.4% |
| Net debt / LTM adjusted EBITDA | 2.1 | 1.9 | 11.3% | 2.1 | 1.9 | 11.3% |
| Number of loyal customers, thousands | 1,454 | 1,297 | 12.2% | 1,454 | 1,297 | 12.2% |
| Number of stores at the end of the period | 335 | 312 | 7.4% | 335 | 312 | 7.4% |
| of which directly operated | 319 | 280 | 13.9% | 319 | 280 | 13.9% |
CEO’s comments
The team and I are extremely proud of our double-digit topline growth of 15% to EUR 391.1 million and adjusted EBITDA growth of 13.7% to EUR 66.9 million during a period when accelerating inflation has placed incremental pressure on both our consumers and ourselves. It highlights once again the unique defensive growth characteristics of the pet category and our business. I want to express my gratitude and thanks to the entire Musti team for their passionate commitment to our mission, purpose, and the delivery of an outstanding result.
During 2022 we capitalized effectively on the growth boost that came from increased consumer pet ownership and spending during the pandemic, growing our share of new puppy customers further enabling us to increase our customer base. Hence, I have firm confidence in our resilient multibrand, multichannel, broad assortment business model and our ability to adapt to a changing environment enabling us to secure our long-term growth. We are progressing as planned in executing our long-term financial targets.
I am also pleased to report that during the 2022 financial year:
- We increased gross margin to 46.4% from 45.7%
- We added 39 new directly operated stores to our network
- Share of sales of own and exclusive brands increased to 52.7% (51.0%) - a great achievement.
- Group adjusted EBITA increased by 5.4% to EUR 38.8 million as a result of strong seasonal sales growth and the improved gross margin.
We continue succeeding in winning new customers and increasing the stickiness of the existing customers by strengthening our ecosystem. Puppy acquisition continues at all-time high pace and the retention of puppy customers is solid. 70% of our new Musti puppies join the Puppy Club and those who join the club, spend significantly more. To further boost our market share of Nordic puppies, we have upgraded our popular Breeder Club during the second half of the financial year based on feedback and needs of the breeder community. Breeders are a key channel to reach new pet parents, and highly influential in early stages especially on pet nutrition choices.
Building a one-stop-shop ecosystem and a Musti community is a strategic differentiator to drive growth going forward. The end-to-end ecosystem presents a unique value proposition enhancing and strengthening sticky customer relationships and differentiating us from the competitors. When customers spend more time in our ecosystem, learning more of our differentiated support, their commitment to Musti grows and they shop more of our product categories and channels growing their spend.
Over 70% of our products are non-discretionary products such as food and cat litter, characterized by repeat purchasing behavior that is consistent through a pet’s lifecycle. We continue to win more than our market share of the new puppies, and customers display a willingness to sustain spending on non-discretionary pet care purchases even while expenditure on discretionary categories has been affected.
I am confident of our long-term growth outlook and look forward to new opportunities the financial year 2023 has to bring.
David Rönnberg,
CEO
Financial targets
The long-term financial targets updated by the Board of Directors on 3 May 2021 are:
| Growth | Net sales to reach at least EUR 500 million by the financial year 2024 by continuation of strong customer acquisition momentum and increasing share of wallet. |
| Profitability | Mid- to long-term adjusted EBITA margin of at least 13 per cent with steadily improving profile. Margin increase is expected to be realised through steady gross margin and improving operating leverage. |
| Capital structure | Maintain net debt in relation to adjusted EBITDA below 2.5x in the long term. |
| Dividend policy | To pay a dividend corresponding to 60-80 per cent of net profit. Any potential dividend shall take into account acquisitions, the company’s financial position, cash flow and future growth opportunities. |
The financial targets are forward-looking statements and are not guarantees of future financial performance.
Board of Directors’ proposal for profit distribution and capital return
The Board of Directors of Musti Group plc proposes to the Annual General Meeting that shareholders will be paid a capital return of EUR 0.50 per share from the invested unrestricted equity reserve totalling approximately EUR 16.7 million and that no dividend will be paid for the financial year that ended on 30 September 2022. The capital return corresponds approximately 75% of Musti Group’s profit for the financial year.
The parent company’s distributable funds total EUR 144,049,079.54 of which the profit for the financial year is EUR 3,618,827.84.
The Board of Directors proposes that the capital return be paid in two instalments. The first instalment of EUR 0.25 per share would be paid to the shareholders who are registered in the shareholders' register of the Company maintained by Euroclear Finland Ltd on the record date of the first capital return instalment on 1 February 2023. The Board of Directors proposes that the first capital return instalment would be paid on 8 February 2023.
The second capital return instalment of EUR 0.25 per share would be paid in August 2023. The second instalment would be paid to shareholders who are registered in the shareholders' register of the Company maintained by Euroclear Finland Ltd on the record date of the second capital return instalment on 22 August 2023. The Board of Directors proposes that the second capital return instalment would be paid on 29 August 2023.
The Board of Directors also proposes that the Annual General Meeting would authorize the Board of Directors to resolve, if necessary, on a new record date and date of payment for the second capital return instalment should the rules of Euroclear Finland Ltd or statues applicable to the Finnish book-entry system change or otherwise so require.
Webcast for analysts and media
A webcast for analysts and media will be arranged on 8 November 2022 at 14:00 EET. The event will be held in English. The report will be presented by CEO David Rönnberg and CFO Toni Rannikko.
The webcast can be followed at https://mustigroup.videosync.fi/2022-q4-results. A recording of the webcast will be available later at the company’s website at www.mustigroup.com/investors/reports-and-presentations/.
The telephone conference can be attended by calling:
Finland: +358 9 2319 5436
Sweden: +46 (0) 8 5051 0086
UK: +44 (0) 33 0551 0202
US: +1 646 843 4609
The participants will be asked to provide the following PIN code: 4319022#
Helsinki, 8 November 2022
Board of Directors
The information in this Financial Statements Release is unaudited.
Further Information:
David Rönnberg, CEO, tel. +46 70 896 6552
Toni Rannikko, CFO, tel. +358 40 078 8812
Essi Nikitin, Head of IR and Communications, tel +358 50 581 1455
Distribution:
Nasdaq Helsinki
Principal media
Musti Group in brief
Musti makes the life of pets and their owners easier, safer and more fun. We are the leading Nordic pet care company, and we operate an omnichannel business model to cater for the needs of pets and their owners across Finland, Sweden and Norway. We offer a wide, curated assortment of pet products. We also provide pet care services such as grooming, training and veterinary services in selected locations.
Musti Group’s net sales were EUR 391 million in the financial year 2022. At the end of the financial year 2022, the company had 1,587 employees, 1.5 million loyal customers and 335 stores.