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Year-end report 2020 Nelly Group AB “Nelly”

2021-02-04 08:00 - Regulatory press release

Relaunch of Nelly

FOURTH QUARTER
· Net sales decreased to SEK 393.8 (400.2) million, but increased 2 percent in local currencies
· Operating result before depreciation and amortization amounted to SEK 7.7 (-23.5) million
· Operating result amounted to SEK 0.2 (-31.0) million
· Result after tax amounted to SEK -9.9 (-41.9) million
· The results of discontinued operations were primarily impacted by the distribution of CDON, which had a positive accounting effect of SEK 528.8 million without impacting cash flow or tax for the period
· Result after tax including discontinued operations amounted to SEK 508.8 (-53.3) million
· Result per share after tax including discontinued operations amounted to SEK 28.31 (-3.56)
· Nelly became independent through the distribution of Qliro AB and CDON AB
· Kristina Lukes took up the post as the new CEO and renewed the management team
· In 2021, Nelly will concentrate its operations to Borås and take its new automated warehouse into operation

FULL YEAR
· Net sales amounted to SEK 1,394.1 (1,452.2) million, corresponding to a decrease of 1 percent in local currencies
· Operating result before depreciation and amortization amounted to SEK -17.5 (-24.7) million
· Operating result amounted to SEK -45.9 (-61.7) million
· Result after tax amounted to SEK -71.1 (-86.8) million and to SEK 512.1 (-110.2) million including discontinued operations 
· Result per share after tax including discontinued operations amounted to SEK 31.97 (-7.36)

Relaunch of Nelly 
Finally, Nelly is an independent company. We are customer-focused and technology-driven and offer a vibrant world of fashion to young women aged 15-25. Our customers want to feel fab every day. We satisfy this need by providing enticing and limitless inspiration with our own brands and carefully selected must-haves from an international portfolio. 

Of course, 2020 was marked by uncertainty and changes as a result of the pandemic. For example, our largest product group, party dresses, dropped steeply early on in the pandemic. Thanks to a clear customer focus, data analysis and daily dialog, we quickly adjusted our operations. We reduced stock levels and we improved our results in the second half of the year. In parallel with this, we embarked on a relaunch of our brand and company. The most important components of our business are data-driven digital sales, influencer-based and community-based marketing, a fashion-sensitive international purchasing organization, a cutting-edge and scalable IT platform and efficient logistics. 

Positive signals in relaunch and despite pandemic 
We focused clearly on the Nordic region and on improving our profitability. During the quarter, sales in local currencies increased and gross profit increased by 18 percent to SEK 91.4 million. Lower direct sales costs, improved efficiency, our geographical focus and a lower return rate resulted in an increase in the gross margin of 3.9 percentage points to 23.2 percent.

The inventory turnover rate for the year increased, which released working capital and strengthened our financial position.

Three strong initiatives in 2021
Our relaunch of our brand and company has only just begun. During the year we will implement a number of initiatives aimed at strengthening our core business and pave the way for our next growth phase.

First of all, we will continue to develop our brand positioning. We will continue to inspire young women to express themselves and celebrate her “fab you”. This will enable us to strengthen our relevance and loyalty among our target audience of young women in the Nordic region.

Second, we will refine our winning Nelly culture. The first priority is to concentrate all employees in shared, modern premises in Borås. In 2021, we will close our office in Stockholm and move our warehouse from Falkenberg to a newly built, automated warehouse in Borås. Soon, the entire management team will also be based in Borås. We intend to stay ahead of trends thanks to our culture and data-driven analysis, combined with dialog with our customers and influencers. We strengthen our data rich approach with new ways to set and follow up goals for the business.

Third, we will improve our logistics to offer efficient and precise deliveries through the creation of an energy-efficient and automated warehouse in Borås. As part of the development of our value chain we will also raise the bar for our sustainability work.

Full focus on the brand Nelly
We have been focusing solely on Nelly since the beginning of the quarter, when Qliro AB and CDON AB were distributed to shareholders. This has raised our profile and opened up new possibilities. 

I would like to thank our customers, for your trust in our fashion sense, our employees for your passion, and our shareholders for your trust in us. Always celebrate the fab you!

Kristina Lukes, CEO, February 4, 2021

Nelly Group AB (publ)
Registered office: Stockholm
Corporate ID number: 556035-6940 
Postal address: PO Box 690, SE-501 13 Borås, Sweden
Visiting address: Lundbygatan 1, 506 30 Borås, Sweden

Conference call
Analysts, investors, and the media are invited to a conference call and webcast today at 11 a.m. The presentation will be delivered in English by Kristina Lukes, CEO, and David Granath, CFO

Webcast:
https://tv.streamfabriken.com/nelly-group-q4-2020
Teleconference:
Sweden: +46850558351
UK: +443333009265
US: +18332498405
The presentation material and webcast will be published at www.nellygroup.com

For further information, please contact:
Niclas Lilja, Investor Relations
+46736511363
ir@nelly.com

About Nelly Group
Nelly is one of the Nordic countries’ strongest fashion brands for young women. The core of the business is its own brand, combined with digital sales direct to our target market. Nelly has attracted a very enthusiastic target audience through cutting-edge fashion and digital marketing. The company has 1.1 million customers in the Nordic region and net sales of SEK 1.4 million per year. Nelly Group was previously known as Qliro Group. Nelly Group’s shares are listed on the Nasdaq Stockholm Small Cap segment under the ticker symbol NELLY.

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