Interim report January- October 20, 2014 Magnus Agervald and Pernilla Walfridsson
Summary January- In the third quarter, Byggmax s net sales increased 4.5 percent and EBIT improved and amounted to SEK 175 M. Net sales amounted to SEK 1,228.1 M (1,175.2) for the third quarter and SEK 2,851.8 M (2,583.2) for the first nine months of the year. Net sales for comparable stores declined 1.6 percent (rose 1.1) for the third quarter and rose 3.8 percent (rose 2.1) for the first nine months of the year. EBIT for the third quarter totaled SEK 175.0 M (170.0). EBIT for the first nine months of the year amounted to SEK 250.2 M (212.4) excluding non-recurring items and SEK 258.9 M including non-recurring items. The operating margin for the third quarter was 14.3 percent (14.5) and the operating margin for the first nine months of the year was 9.1 percent (8.2). Earnings per share amounted to SEK 2.1 (2.2) per share for the third quarter and SEK 3.1 (2.6) per share for the first nine months of the year. 2
Summary January- Seven (eleven) new stores were opened: four in Sweden, two in Norway and one in Finland. Two new stores were opened in the first quarter: one in Sweden and one in Finland. Three new stores were opened in the second quarter: two in Sweden and one in Norway. Two new stores were opened in the third quarter: one in Sweden and one in Norway. Four stores were converted to the Byggmax 2.0 concept during the quarter and 20 stores were converted during the first nine months of the year. During the quarter, Byggmax signed a new three-year financing agreement with 30- percent lower interest expenses on a full-year basis. During the quarter, Karin Hyllgren Jonsson was elected as a new Board member of Byggmax Group AB (publ) and Johannes Lien declined reelection. Mikael Bengtsson will leave the position of Business Manager at his own request at the end of 2014 and will be replaced by Marcus Hed who will move from his current role as Regional Manager at Byggmax. 3
Stores: Seven new stores were opened in 2014 Store network at September 30, 2014 The following stores have been opened in 2014: - Sweden: Katrineholm, Munkedal, Ullstämman (Linköping) and Värmdö - Norway: Tönsberg and Åsane (Bergen) - Finland: Pirkkala (Tampere) Hudiksvall will be moved in Q4 2014 Byggmax plans to open between seven and 13 stores in 2015. Byggmax stores New stores in 2014 (until and incl. September 30) Stores are announced when the contracts have been signed and the municipal permits secured. 4
45 stores converted to 2.0 Byggmax 2.0 is an updated store concept, with more articles and clearer communication, utilizing the same sales area and with improved sales control. 50 45 40 35 30 Number of 2.0 stores 32 39 45 Byggmax 2.0 stores continue to deliver promising sales increases following conversion. One additional store was converted during the quarter. Our aim is to convert 15 additional stores during the fourth quarter of 2014. 25 20 15 10 5 0 3 8 15 18 2013 Q1 2013 Q2 2013 Q3 2013 Q4 2014 Q1 2014 Q2 2014 Q3 3% 8% 14% 17% 30% 35% 40% The diagram above shows the number of stores using the 2.0 concept, as well as the proportion of the total number of stores. In spring 2015, the plan is to convert another 20 to 30 stores. 5
Byggmax increases its online range for 2015 Byggmax has operated an online store since 2009. Initially, the online store only sold the same items as those available in the stores. Today the range has been expanded with about 5,000 online goods. By 2015, the intention is to substantially increase the number of online goods to between 10,000 and 20,000. 6
Financial information October 20, 2014
Results trend Net sales increased by 4.5 percent in Q3. The gross margin was 0.1 percent lower than in Q3 the preceding year. Overheads increased during the quarter, mainly due to the rise in the number of stores. 8
Sales trend The operation s net sales amounted to SEK 1,228.1 M (1,175.2) for the third quarter, up 4.5 percent, and to SEK 2,851.8 M (2,583.2) for the first nine months of the year, up 10.4 percent. Net sales for comparable stores declined 1.6 percent in local currency for the third quarter and rose 3.8 percent in local currency for the first nine months of the year. Net sales for the third quarter totaled SEK 894.0 M (856.1) in Sweden and SEK 334.1 M (319.2) in the other countries in the Nordic market. Net sales for the first nine months of the year amounted to SEK 2,098.4 M (1,905.6) in Sweden and SEK 753.3 M (677.6) in the other Nordic markets. 9
Gross margin Third quarter The gross margin was 31.1 percent (31.2) 31,2 31,1 30,3 30,8 First nine months of the year The gross margin was 30.5 percent (30.3) excluding non-recurring items and 30.8 percent including nonrecurring items Q3 9 months 2013 2014 10
Operating expenses Third quarter Personnel costs and other external expenses rose a total of SEK 10.5 M. This was mainly attributable to expenses of SEK 11.8 M for stores opened after the third quarter of 2013. Personnel costs 229,0 254,7 85,2 90,9 First nine months of the year Personnel costs and other external expenses rose a total of SEK 43.8 M. This was mainly attributable to expenses of SEK 46.2 M for stores opened after the third quarter of 2013. Investments related to the conversion to Byggmax 2.0 will be capitalized as of January 1, 2014, in accordance with the information previously provided. Q3 9 months Other operating expenses 302,4 320,5 2013 2014 97,3 102,1 2013 2014 Q3 9 months 11
Net financial items Net financial items for the quarter were negatively impacted by exchange-rate effects of SEK 4.5 M (positive: 4.3). 12
Financial position and cash flow Cash flow from operating activities for the third quarter declined SEK 89.9 M compared with the year-earlier period. This was attributable to Byggmax reducing the proportion of invoices paid cash in the second quarter and many invoices were instead paid in the third quarter. This had a negative impact on third-quarter cash flow. Cash flow for the first nine months rose SEK 33.7 M. Investments relating to the conversion of stores to the Byggmax 2.0 concept totaled SEK 3.5 M for the third quarter and totaled SEK 28.7 M for the first nine months of 2014. 13
Condensed financial statements January- October 20, 2014
Income statement 15
Balance sheet 16
Cash-flow statement 17
Cash-flow statement, continued Note that cash and cash equivalents in the cash flow are adjusted for blocked bank funds 18
Largest shareholders at September 30, 2014 Name Number of shares Holding (%) Nordea Investment Funds 5,833,468 9.60 Norges Bank Investment Management 3,384,378 5.57 Handelsbanken Fonder AB 3,324,295 5.47 JPMorgan Asset Management (UK) Ltd. 3,035,975 5.00 SEB Investment Management 2,795,979 4.60 Schroder Investment Management North America, Inc. 2,400,000 3.95 Jarrton Management (Göran Peterson) 2,381,296 3.92 Lannebo fonder 2,377,022 3.91 Swedbank Robur fonder 2,150,184 3.54 Öresund Investment AB 1,846,241 3.04 Total ten largest shareholders (grouped by shareholders) based on holding 29,528,838 48.62 Total other shareholders 31,208,207 51.38 Total, September 30, 2014 60,737,045 100.00 Source: Euroclear. 19