Musti Group plc Interim Report 1 October 2021 – 30 June 2022
Musti Group plc lnterim Report 9 August 2022 at 8:30 a.m. EEST
Musti Group plc Interim Report 1 October 2021 – 30 June 2022
Profitable growth on the way towards long-term targets
January – June 2022
- Group net sales totaled EUR 95.5 million (82.7 million), an increase of 15.5%.
- Like-for-like sales growth was 8.3%.
- Adjusted EBITDA was EUR 15.6 (12.9) million, up by 20.8%.
- Adjusted EBITDA margin was 16.3% (15.6%).
- Adjusted EBITA was EUR 8.3 (7.3) million, up by 14.0%.
- Adjusted EBITA margin was 8.7% (8.8%).
- Operating profit increased by 27.3 % to EUR 6.7 (5.3) million, representing 7.0% (6.4%) of net sales.
- Profit for the period totaled EUR 4.4 (4.1) million.
- Earnings per share, basic was EUR 0.13 (0.12).
- Number of stores grew to 329 (308).
- Number of loyal customers grew to 1,409 thousand (1,257 thousand).
October 2021 – June 2022
- Group net sales totaled EUR 289.3 million (249.4 million), an increase of 16.0%.
- Like-for-like sales growth was 7.4%.
- Adjusted EBITDA was EUR 49.3 (41.7) million, up by 18.4%.
- Adjusted EBITDA margin was 17.1% (16.7%).
- Adjusted EBITA was EUR 28.6 (25.6) million, up by 11.7%.
- Adjusted EBITA margin was 9.9% (10.3%).
- Operating profit increased by 12.9% to EUR 22.3 (19.8) million, representing 7.7% (7.9%) of net sales.
- Profit for the period totaled EUR 15.1 (15.7) million.
- Earnings per share, basic was EUR 0.45 (0.47).
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 | 4-6/2022 | 4-6/2021 | Change % | 10/2021-6/2022 | 10/2020-6/2021 | Change % | FY2021 |
| Net sales | 95.5 | 82.7 | 15.5% | 289.3 | 249.4 | 16.0% | 340.9 |
| Net sales growth, % | 15.5% | 20.2% | 16.0% | 20.2% | 19.9% | ||
| LFL sales growth, % | 8.3% | 11.6% | 7.4% | 12.1% | 11.8% | ||
| LFL store sales growth, % | 6.3% | 10.7% | 4.8% | 9.1% | 8.8% | ||
| Online share, % | 22.6% | 24.1% | 22.6% | 23.4% | 23.1% | ||
| Gross margin, % | 46.4% | 45.4% | 46.8% | 45.6% | 45.7% | ||
| EBITDA | 15.6 | 12.5 | 24.1% | 47.9 | 40.7 | 17.6% | 56.9 |
| EBITDA margin, % | 16.3% | 15.2% | 16.5% | 16.3% | 16.7% | ||
| Adjusted EBITDA | 15.6 | 12.9 | 20.8% | 49.3 | 41.7 | 18.4% | 58.8 |
| Adjusted EBITDA margin, % | 16.3% | 15.6% | 17.1% | 16.7% | 17.3% | ||
| EBITA | 8.3 | 6.9 | 19.7% | 27.1 | 24.6 | 10.1% | 34.9 |
| EBITA margin, % | 8.7% | 8.4% | 9.4% | 9.9% | 10.2% | ||
| Adjusted EBITA | 8.3 | 7.3 | 14.0% | 28.6 | 25.6 | 11.7% | 36.8 |
| Adjusted EBITA margin, % | 8.7% | 8.8% | 9.9% | 10.3% | 10.8% | ||
| Operating profit | 6.7 | 5.3 | 27.3% | 22.3 | 19.8 | 12.9% | 28.4 |
| Operating profit margin, % | 7.0% | 6.4% | 7.7% | 7.9% | 8.3% | ||
| Profit/loss for the period | 4.4 | 4.1 | 7.1% | 15.1 | 15.7 | -4.1% | 20.9 |
| Earnings per share, basic, EUR | 0.13 | 0.12 | 7.5% | 0.45 | 0.47 | -3,8% | 0.62 |
| Net cash flow from operating activities | 14.0 | 10.1 | 39.6% | 32.5 | 39.9 | -18.5% | 54.9 |
| Investments in tangible and intangible assets | 3.3 | 3.5 | -4.3% | 11.6 | 9.7 | 19.3% | 12.9 |
| Net debt / LTM adjusted EBITDA | 2.1 | 2.0 | 4.8% | 2.1 | 2.0 | 4.8% | 1.9 |
| Number of loyal customers, thousands | 1,409 | 1,257 | 12.1% | 1,409 | 1,257 | 12.1% | 1,297 |
| Number of stores at the end of the period | 329 | 308 | 6.8% | 329 | 308 | 6.8% | 312 |
| of which directly operated | 312 | 257 | 21.4% | 312 | 257 | 21.4% | 280 |
CEO’s comments
We maintained our strong business momentum in April-June despite the historically challenging economic environment affecting the overall retail market heavily by rising prices and weakened consumer confidence. The pet space has proven to be very resilient in economic downturns. We kept improving both sales and profitability with strong double-digit growth figures and presented a 40% increase in operative cash flow compared to previous year. In addition, we have continuously grown our relative share of new puppies, which have proven to be more valuable customers than the earlier vintages. I am more confident than ever with our strong business model. I want to express my sincere thanks to all our staff for the great commitment.
Group net sales increased by 16% to EUR 95.5 million in the third quarter supported by the continuously increasing number of customers, successful price increases through high loyalty of our customers and the increased number of stores. We added a net 9 directly operated stores during the quarter and altogether 55 directly operated stores during the last 12 months. Both store and online sales showed convincing development - store sales increased by 22.3% to EUR 73.2 million and online sales by 8.6% to EUR 21.6 million.
Gross margin continued the healthy growth increasing to 46.4% from 45.4% a year earlier supported by the increased number of directly operated stores and successful campaign pressure with higher share of own and exclusive products and mitigating inflation with price increases. Adjusted EBITDA increased 21% to EUR 15.6 million in the third quarter as a result of the improved gross margin, growing the network and tighter cost and price control across the business. Adjusted EBITDA margin increased to 16.3% from 15.6% a year earlier.
Overall, Musti Group performed extremely well in the third quarter. We expect to benefit from the strength and breadth of our footprint in our markets with our unique multibrand omnichannel network. I am confident with the strong future performance when the new stores are running with all cylinders.
We are progressing as planned in executing our long-term financial targets for the financial year 2024 and are well placed to withstand continuing challenges in economic environment to support our customers. That is the Musti way forward – to be the trusted partner for pets and their parents. In both favorable and challenging times.
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.
Webcast for analysts and media
A webcast for analysts and media will be arranged on 9 August 2022 at 14:00 EEST. 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-q3-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 81 710 310
Sweden: +46 856 642 651
UK: +44 3 333 000 804
US: +1 6319131422
The participants will be asked to provide the following PIN code: 87066365#
Helsinki, 9 August 2022
Board of Directors
The information in this Interim Report 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
Main 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 341 million in the financial year 2021. At the end of the financial year 2021, the company had 1,397 employees, 1.3 million loyal customers and 312 stores.