Clas Ohlson AB Q1 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Niklas Ekman - Carnegie Investment Bank AB - Analyst : Thank you. Yes, a couple of questions from my end. Firstly, on the gross margin, can you elaborate a little bit about these external factors that you talked about here in Q1? How do you see these developing over the next few quarters? Are these continued headwinds and will they worsen or better? Just generally here, what do you see on the gross margin?

Question: Niklas Ekman - Carnegie Investment Bank AB - Analyst : Yeah. And there's been no change now in Q1. There's been no change really in the markdown levels versus previous years, right?

Question: Niklas Ekman - Carnegie Investment Bank AB - Analyst : Very clear. And I'm also curious about your margin target. I know you talked about reported margin, but if you look at adjusted margin, excluding the one-offs you had last year, you are now on a rolling 12-month basis, you're at 9.1%. That's above the 7% to 9% target. And given that growth now continues to be quite strong also in August, is there any reason to assume that these margins could not continue higher than this 7% to 9% target? Any reason why you are sticking to this target at the moment and not revising it?

Question: Niklas Ekman - Carnegie Investment Bank AB - Analyst : Fair enough. Good. On Spares, I'm also curious because when I look at the average monthly sales in the first five months after you consolidated it, they grew -- or they -- the sales were in the range of SEK50 million to SEK60 million during the winter period. And now in the last five months, they've been above SEK70 million, and that's been during the summer period. I would imagine that seasonal pattern would have been the opposite or so -- just can you clarify what -- if there are any big seasonal swings here or if the sequential improvement here is mainly related to strong growth in Spares?

Question: Niklas Ekman - Carnegie Investment Bank AB - Analyst : Very clear. Thank you. And finally, just when I look at your planned store openings, you have seven planned openings now for the next three months, and there is nothing announced after that. Are you temporarily pausing expansion and now kind of evaluating the pickup in store openings that you've seen or do you expect the expansion pace to remain at a similar pace going into 2025?

Question: Niklas Ekman - Carnegie Investment Bank AB - Analyst : Yes. And you think that could continue into the financial year '25/'26?

Question: Niklas Ekman - Carnegie Investment Bank AB - Analyst : Okay. Thank you so much for taking my questions.

Question: Magnus Rsman - Kepler Cheuvreux (Sweden) - Analyst : Thank you very much. I'll start tying into the last question about future store expansion or potential as such. I mean you write here in the report also that you expect the online growth to surpass store growth in the market in the coming years. So in such an environment, do you see room to continue expanding the store network beyond this fiscal year? Maybe if you can elaborate in some way on that.

Question: Magnus Rsman - Kepler Cheuvreux (Sweden) - Analyst : Right. Perhaps you could also comment on how you view the competitive landscape, maybe particularly in the Swedish market with several discounters investing in growth and quite a busy online scene as well with players growing such as Amazon? How do you see the competitive landscape?

Question: Magnus Rsman - Kepler Cheuvreux (Sweden) - Analyst : Thanks. And you have built a solid net cash position here in recent years, adjusting for leases. And I guess that's especially supported by the two recent dividends that have been rather small. Should we view this as preparing the group for possible consolidation in the market or do you see any material organic investment needs ahead or how should we view it?

Question: Magnus Rsman - Kepler Cheuvreux (Sweden) - Analyst : Right. But it's interesting that you mentioned the dividend being up then clearly, of course, from the very, very low level the year before. I think we have to look back to 2012 or something like that to find as low of a dividend as you had for than your most recent dividend. So do you regard that as a high dividend given it was like increasing a lot year on year?

Question: Magnus Rsman - Kepler Cheuvreux (Sweden) - Analyst : Right. Yeah, just to maybe linger a little bit too long on the dividend question, but if I look at the period before the two recent years, you paid out, I think, on average, 98% over a period of some seven, eight years where you actually had one year with postponed dividend included in that. So I think there is also -- you kept the dividend policy relative your reported EPS while that was including some write-downs, noncash driven. So I mean it is clearly substantially lower dividend in the two recent years. Just trying to get sort of the understanding of if you wanted to maintain that policy when, at the same time, you're building cash, so that you prefer keeping the cash instead of distributing to shareholders?

Question: Magnus Rsman - Kepler Cheuvreux (Sweden) - Analyst : Right, thank you. And just finally, on CapEx, you retained the -- or you keep the SEK200 million CapEx guidance? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 04, 2024 / 7:00AM, CLASb.ST - Q1 2025 Clas Ohlson AB Earnings Call

Question: Niklas Ekman - Carnegie Investment Bank AB - Analyst : Thank you.