FIRST NINE MONTHS
|Operating profit before depreciation||12.8||19.0||23.2||-16.1|
|Operating margin before depreciation, %||2.1%||2.9%||1.2%||-0.7%|
 Operations are recognized excluding the effects of IFRS 16. Lekmer and HSNG are recognized as discontinued in historic numbers for the group in 2018.
LISTING OF THE SUBSDIARY QLIRO PLANNED IN THE FIRST HALF OF 2020
The subsidiary Qliro has increased profits and connected more merchants to its payment solution. CDON is in its final phase of completing its transition to a marketplace and has proven the attractiveness of this business model. Nelly showed continued growth but lower margins in a challenging market.
Qliro preparing for listing at Nasdaq Stockholm
The subsidiary Qliro (formerly called Qliro Financial Services) increased its loan book by 49 percent in the quarter to just under SEK 1.9 billion, whereof personal loans amounted to SEK 653 million at the end of the quarter. Total operating income rose by 12 percent to SEK 86 million, and operating income before depreciation, amortization and impairment rose 85 percent to SEK 19 million.
Qliro Group has initiated the process to list the subsidiary Qliro on Nasdaq Stockholm’s main market in the first half of 2020. The company has grown rapidly over the last few years. The Board of Directors of Qliro Group believes that a stock exchange listing gives Qliro the best platform to take advantage of future opportunities for growth and value creation as well as access to the capital markets.
CDON’s transformation soon completed
CDON (formerly called CDON Marketplace) has now reached the final stage of its transition into a marketplace for external merchants, complemented with sales from own inventory. External merchant sales increased by as much as 66 percent and the total gross merchandise value of the marketplace grew again during the quarter. Commission income increased by 39 percent, which helped boost the gross margin by as much as 5.1 percentage points to 19.9 percent. Employee costs decreased significantly as the company makes efficiency improvements following investments in technology and automation.
The transition to the marketplace model, has had a negative effect on net sales but a positive effect on profitability and capital tied up in the company. Due to a successful transition, CDON has reached an operating profit before depreciation of SEK 2.3 (-5.9) million in the quarter and SEK 11 (-29) million over the last 12 months. This shows that CDON’s marketplace model is scalable and profitable.
Nelly grows in a weak market
Nelly increased its sales by 7 percent in a generally weak market that was characterized by much campaign activity. Consequently, Nelly increased its marketing spend by SEK 5 million. Some major campaigns were launched, which are also being planned for the rest of the year. Earnings were also negatively impacted by a non-recurring effect of SEK 5 million (costs for departing CFO and a settlement with PostNord). Gross profit amounted to SEK 76 million and operating profit before depreciation, amortization and impairment decreased to SEK 5 (24) million.
Nelly intends to move its warehouse from Falkenberg to Borås in 2021. This is in line with the ambition to improve logistics and thereby deliver a better customer experience, higher efficiency and scalability.
Focus on e-commerce
After the Qliro listing, the group will focus on e-commerce through Nelly and CDON. In both companies, value-creating activities are underway that will improve conditions for growth and profitability. When Qliro is listed, Qliro Group intends to change its name to better reflect its future business.
Qliro Group has gone from actively developing many businesses to owning three independent companies. The need for central functions has thereby decreased and central costs will decrease over time. We continue to work on developing our companies, which are driving forces in Nordic e-commerce and related financial services.
President and CEO
Stockholm, October 22, 2019
Analysts, investors and the media are invited to a conference call today at 10 a.m. To participate in the conference call, please dial:
Sweden: 08 5033 6573
UK: +44 330 336 9104
US: +1 929 477 0630
The pin code to access this call is 537924.
The presentation material and webcast will be published at www.qlirogroup.com.
For additional information, please visit www.qlirogroup.com or contact:
Marcus Lindqvist, President and Chief Executive Officer
Niclas Lilja, Head of Investor Relations
Phone: +46 (0)736511363
About Qliro Group
Qliro Group is a Nordic e-commerce group that owns the leading Nordic online marketplace CDON.COM, the fashion brand Nelly and the fintech company Qliro offering financial services to merchants and consumers. In 2018 the Group had sales of SEK 3.2 billion. Qliro Group’s shares are listed on the Nasdaq Stockholm MidCap segment under the ticker symbol QLRO.
This information is information that Qliro Group AB is required to disclose under the EU Market Abuse Regulation. The information was released for publication through the agency of the above-mentioned contacts at 8:00 a.m. on October 22, 2019.