Full year 2015
Comments by the CEO
Paul Fischbein, President and CEO comments: “The fourth quarter held many positives but was also challenging. The Groups largest segment, CDON Marketplace, delivered both strong sales and a significant earnings improvement. During the year, we have implemented many important changes within CDON which now are starting to bear fruit. CDON is undergoing major changes and the result in the fourth quarter is a confirmation that we are heading in the right direction even if key measures remains, including a larger reorganization which we are working on now.
Our newly established subsidiary Qliro Financial Services continued to develop in line with our high expectations. The large order volumes in the Group during the quarter also contributed to large business volumes for the Qliro payment solution and, one year after the launch, Qliro Financial Services reported positive earnings in the fourth quarter. Loans to the public amounted to approximately SEK 530 million at the end of the year, financed by around SEK 200 million by own funding. It has of course been pleasing to follow the development of Qliro Financial Services during the first year of operations and this result also gives an indication of the future potential in the segment. Next important steps include, among other things, the continued roll out of Qliro Financial Services, not least through a launch in Norway and the introduction of additional financial services after the expected approval to become a credit market company has been received from Finansinspektionen (the Swedish Financial Supervisory Authority).
On the negative side we find Lekmer, where operational disturbances at the warehouse once again had a large impact on the company’s and the Group´s sales and earnings. The warehouse move and the deployment of the new warehouse system has been more complex than expected, which resulted in major operational consequences when volumes gradually increased during the quarter. At the end of November, the company decided to minimize its marketing and other sales promotion activities and to focus solely on delivering the orders which had already been made. As a result of the disturbances, Lekmer has in conjunction with the year-end closing expensed SEK 26 million related to inventory valuation which is presented under non-recurring items in the fourth quarter. 2015 was a turbulent year for Lekmer and the challenges in 2015 are fully related to Lekmer’s new warehouse. However, we estimate that the major operational problems are now behind us, even though it is expected to take another one to two quarters before Lekmer is back to the same good standing it was a year ago. We believe that Lekmer´s future high potential remains.
Overall, the fourth quarter was a challenging quarter affected by external factors such as weather and currency effects at the same time as Lekmer’s warehouse experienced large operational disturbances. However, we see that our companies have strong market positions and, during 2015, the amount of active customers continued to increase and now amount to a bit over 4 million consumers in the Nordics. This creates very good conditions for an exciting future.”
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
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 Year-End 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 27 January 2016.