Paul Fischbein, CEO comments: ”During the first quarter, Qliro Financial Services continued to develop in line with our high expectations. The business volume increased by 52% while operating income increased by a full 161% to SEK 47 million. Operating earnings (EBT) increased significantly and amounted to SEK -4.9 million compared to SEK -13.3 million last year. We expect that Qliro Financial Services soon will receive approval to become a credit market company, and the company has continued preparations for the launch on the Norwegian market. This, together with the introduction of additional financial services, will be the next big step in the company’s development.
For our retail businesses the quarter in general was affected by the, calendar wise, early Easter and the weakened Norwegian krone. Additionally, the mild weather has led to campaign-driven sales and a lower gross margin, not least for Nelly. At the same time we see positive signs that are expected to lead to substantial earnings effects during the year.
Nelly’s focus on reducing cost and profitable growth has started to show results and the operating margin increased during the quarter. Nelly’s sales increase was mainly driven by strong growth in Sweden, amounting to 17%. The margin improvement was achieved even though the company has conducted extensive campaigns as a result of the mild winter and a clearance-driven fashion market in the Nordics. Focus going forward will be on improving the product margin, something which will be supported by the fact the company has a sound inventory after the campaigns during the quarter. Nelly has also, in April, given notice to approximately 35 employees at the offices in Borås and Stockholm. This is never an easy decision, but necessary and important in order to strengthen the company and create an organization and cost structure suited to the continued implementation of the company’s Nordic strategy.
At Lekmer, we see that the quality of the warehouse operations in Arlandastad has increased substantially, with improvements in both delivery times and delivery quality. The delivery quality is now in line with where it should be and the fact that Lekmer once again reports increased visits and orders during the quarter is an important sign that our customers believe in Lekmer. Costs at the warehouse are however still high, but we hope to soon reach a solution which will reduce the cost level significantly.
Within CDON Marketplace, sales generated for external merchants (Marketplace) grew by around 20% in the quarter. This is an important development for the company and, as part of this development, we are of course very pleased that CDON has been able to add Adlibris as a merchant on CDON Marketplace. The next exciting initiative from CDON will be the launch of Green Friday, the Black Friday of the Spring, at the end of April.
Lastly, we can now see that the actions taken at Gymgrossisten in 2015 to secure continued strong profitability are starting to show results and the margins in the first quarter are at a satisfactory level.
The Groups financial position remains sound with cash and cash equivalents of over SEK 130 million. Moreover, we have also, with own funding, financed Qliro’s loans to the public with around SEK 150 million.”
For additional information, please visit www.qlirogroup.com or contact:
Paul Fischbein, President and Chief Executive Officer
Tel: +46 (0) 10 703 20 00
Nicolas Adlercreutz, CFO
Tel: +46 (0) 70 587 44 88
Press, investor and analyst enquiries:
Erik Löfgren, Head of Communications
Tel: +46 (0) 700 80 75 06
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 2015, the Group generated revenue of SEK 5.2 billion. Qliro Group’s shares are 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 19 April 2016.