Continued sales growth
First six months
Comments by the CEO
Paul Fischbein, President and CEO comments: “During the second quarter of 2015 we continued to execute on our growth strategy. The majority of our subsidiaries delivered stable sales growth and at the same time the roll out of Qliro Financial Services continued at a high speed.
During the quarter Nelly was, for the first time, the largest company in the Group in terms of sales. The positive effects from Nelly’s focus on the Nordics is beginning to pay off and the Nordic growth was approximately 25%, driven by strong sales in Sweden. An important part of Nelly’s growth strategy is to increase the share of private label sales. It was therefore encouraging that the share of private label sales accelerated and amounted to 35% of Nelly’s turnover during the second quarter. This success will be central to Nelly’s future profitability. In all, Nelly continues to show positive momentum even though important purchasing currencies, such as USD and GBP, have appreciated against the Swedish Krona. During the quarter that currency effect had a negative impact on Nelly’s result but excluding this, Nelly is showing underlying improvements in profit compared to last year.
The development of CDON Marketplace is also very positive and the transformation of the business into an online marketplace in the Nordics continues. Sales generated to external merchants increased by 75% during the second quarter. The rapid transformation has been positive for CDON’s profitability, which improved compared to last year. CDON’s important warehouse consolidation project will also be completed shortly.
Tretti has during the past quarters shown stable and high growth, 17% during the second quarter, coupled with positive earnings. The relocation of Tretti’s offices and the new organization have started to show results. Lekmer has during the quarter been focusing on deploying the new automated warehouse. It is important that the new warehouse is fully tuned for the important fourth quarter and the efforts will continue during the third quarter. Despite the deployment of the new warehouse Lekmer recorded sales growth of 22% during the second quarter. When the new infrastructure is fully operational it is expected to have a positive impact both on customer satisfaction and efficiency.
Gymgrossisten delivered sales growth of 5% and even though the Nordic market has matured the growth fell short of our expectations. The lower growth combined with the fact that purchasing currencies have appreciated against the Swedish Krona has, in the short term, affected the product margin and profitability negatively. We are continuously working to secure continued strong sales and profitability going forward.
Qliro Financial Services was launched during the fourth quarter of last year. In less than a year we have handled over 1,5 million orders and a business volume exceeding SEK 1 billion. During the quarter the roll-out of the payment solution in Finland continued and all the Group’s sites now offer Qliro as a payment option. Furthermore, the demand from external merchants is high and the affiliation of external clients and partnerships with platform providers have continued. We applied for a license to become a credit market company earlier during the year and, when approved, that license will create interesting opportunities for us to launch new initiatives and launch the payment solution in new markets. After these initial months of operations we are clearly very enthusiastic about Qliro Financial Services’ future development.
To summarize, we have continued to strengthen our market positions. We have healthy and satisfactory inventory levels, a good momentum and we are looking forward to the important second half of the year.”
For additional information, please visit www.qlirogroup.com or contact:
Paul Fischbein, President and Chief Executive Officer
Phone: +46 10 703 20 00
Investor and analyst enquiries:
Nicolas Adlercreutz, CFO
Phone: +46 70 587 44 88
Fredrik Bengtsson, Head of Communications
Phone: +46 70 080 75 04
About Qliro Group
Qliro Group is a leading e-commerce group in the Nordic region. Established in 1999, the Group has expanded its product portfolio and is now a leading e-commerce player within consumer goods and lifestyle products through CDON.com, Lekmer, Nelly (Nelly.com, NLYman.com, Members.com), Gymgrossisten (Gymgrossisten.com/Gymsector.com, Bodystore.com, Milebreaker.com) and Tretti. The payment service solution Qliro is also part of the Group. In 2014, the Group generated earnings of SEK 5.0 billion. Qliro Group’s share is listed on the Nasdaq Stockholm MidCap list under the ticker symbol “QLRO”.
The information in this interim report is that which Qliro Group AB is required to disclose under the Securities Markets Act. This information was released for publication at 08.00 CET on 16 July 2015.