Clas Ohlson AB — Interim / Quarterly Report 2020

Mar 11, 2020

clas ohlson
nine-month report 2019/20

Third quarter – 1 Nov to 31 Jan

• Sales in the Nordics increased by 2% to 2,883 MSEK (2,823), organic growth up 2% and total sales as well as organic growth were unchanged at 2,905 MSEK (2,915)
• Online sales increased 19% to 177 MSEK (148)
• Operating profit, including non-recurring costs and costs linked to the CO100+ action programme, totalled 378 MSEK (105). Excluding the effect of IFRS 16, operating profit amounted to 355 MSEK
• Underlying operating profit amounted to 368 MSEK (363) (excl IFRS 16)
• The operating margin was 13.0% (3.6)
• Net debt/EBITDA excluding the effect of IFRS 16 (12 months) amounted to -0.3 times (0.5)
• Profit after tax totalled 283 MSEK (79)
• Earnings per share amounted to 4.47 SEK (1.24)

Nine months – 1 May to 31 Jan

• Sales in the Nordics increased by 4% to 7,040 MSEK (6,801), organic growth up 3% and total sales increased by 1% to 7,115 MSEK (7,030), organic growth up 1%
• Operating profit, including non-recurring items and costs linked to CO100+ action programme, totalled 590 MSEK (171). Excluding the effect of IFRS 16, operating profit amounted to 515 MSEK
• Underlying operating profit amounted to 612 MSEK (549) (excl IFRS 16)
• The operating margin was 8.3% (2.4)
• Profit after tax totalled 422 MSEK (133)
• Earnings per share amounted to 6.68 SEK (2.11)

Events after the reporting period

• In February, sales in the Nordics increased by 8% to 566 MSEK (527), organic growth up 9% and total sales increased by 5% to 570 MSEK (545), organic growth up 6%
• Online sales in February increased by 16% to 31 MSEK (27)
• Follow-up investment of 27 MSEK in MatHem i Sverige AB

The roll-out of the Clas Fix It service started in February and will be offered in Sweden's four largest cities during the year.

+2%
Organic growth
in the Nordics in Q3

5.8%
Operating margin R12

	3 Months			9 Months			12 Months
	Nov 2019 - Jan 2020	Nov 2018 - Jan 2019	Percentage change	May 2019 - Jan 2020	May 2018 - Jan 2019	Percentage change	Feb 2019 - Jan 2020	May 2018 - Apr 2019
Sales, MSEK	2,905	2,915	0	7,115	7,030	1	8,857	8,772
Operating profit, MSEK	378	105	259	590	171	246	513	94
Operating profit, excl. IFRS 16, MSEK	355	105	238	515	171	202	438	94
Underlying operating profit, MSEK	368	363	1	612	549	11	560	497
Profit after tax, MSEK	283	79	258	422	133	217	361	72
Gross margin, %	40.1	40.4	-0.4 p.e	39.8	40.3	-0.4 p.e	39.5	39.8
Operating margin, %	13.0	3.6	9.4 p.e	8.3	2.4	5.9 p.e	5.8	1.1
Operating margin, excl. IFRS 16, %	12.2	3.6	8.6 p.e	7.2	2.4	4.8 p.e	4.9	1.1
Cashflow from operating activities, MSEK	864	728	-	1,318	639	-	991	312
Equity/assets ratio, %	30.3	47.3	-17.0 p.e	30.3	47.3	-17.0 p.e	30.3	49.0
Equity/assets ratio, excl. IFRS 16, %	50.4	47.3	3.1 p.e	50.4	47.3	3.1 p.e	50.4	49.0
Net debt/EBITDA ratio	-	-	-	-	-	-	1.9	0.5
Net debt/EBITDA excl. IFRS 16 ratio	-	-	-	-	-	-	-0.3	0.5
Earnings per share before dilution, SEK	4.47	1.24	259	6.68	2.11	216	5.70	1.13

The 2019/20 financial year comprises the period from 1 May 2019 to 30 April 2020.
This information is such that Clas Ohlson AB (publ) is obliged to publish pursuant to the EU Market Abuse Regulation. This information was submitted for publication, through the agency of the contact person set out, on 11 March 2020 at 7:00 a.m. (CET).

Contact person: Carolina Strömlid

Head of Investor Relations
+36 70 880 71 745 carolina.stromlid@clasohlson.se

CLAS OHLSON S-MONTH REPORT 2019/20

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CEO'S COMMENTS

Improved profitability

Both store and online growth in the Nordics

In summarising Clas Ohlson's most important quarter that includes Christmas shopping, we can conclude that our sales in the Nordics increased organically by 2 per cent in all our home markets of Sweden, Norway and Finland, despite fewer stores and a challenging market climate. Online growth remained favourable.

The fact that Black Friday was our single best sales day ever shows just how much Christmas shopping has changed. Many of our customers are choosing to make bigger purchases early in the run-up to Christmas during Black Week, both in stores and online. We succeeded in responding to customer demand with relevant offerings for the entire Christmas shopping period, which, together with strict inventory control, also meant that our inventory value decreased. Our gross margin for the quarter continued to be impacted by a stronger USD. The gross margin was at 40.1 per cent compared with 40.4 in the preceding year, in line with the trend in previous quarters.

Lower costs and improved profitability

Our systematic and dedicated work to reduce costs is generating results. Besides having a positive effect on the margin here and now, it is creating conditions for profitable growth over time. Under the framework of the CO100+ action programme, we primarily focused on continuing to concentrate on purchasing costs, more efficient logistics and a more productive organisation. Most of the activities have now been completed and all in all, this means that we have taken further steps towards our target of an operating margin of 4-6 per cent for the current year. One quarterly period of the programme remains, and we will report on the effects achieved when we close the financial year.

Underlying operating profit amounted to 368 MSEK for the quarter, compared with 363 MSEK last year, and for the nine-month period improved to 612 MSEK, compared with 549 MSEK.

Contingency for the impact of corona virus and macro consequences

We are exposed in different ways to some of the effects resulting from the corona virus. In addition to taking certain precautions in consideration for our employees, we believe that the current situation will not have any material impact on earnings. Naturally, we have respect for the uncertainty surrounding the future. Our assessment is that developments in the future will be affected by the recovery of supplier chains in China and the further spread of the virus in the Nordics, which could impact customer behaviour patterns. In addition, a weaker macro economy would probably have a negative impact on consumption in the long-term.

All of these factors combined could impact our earnings and we will provide more information in future quarters. We are closely monitoring the situation and continuously evaluating various scenarios so that we can manage any consequences that may arise in terms of production, purchasing and deliveries as well as changed customer behaviour patterns.

Synergies between our channels and offering

Giving customers greater accessibility to Clas Ohlson's offering is a central part of our strategy. Accordingly, we are continuing to develop the combination of stores in prime locations, smart services, online shopping in various platforms and many delivery options. The partnerships with MatHem in Sweden and Kolonial in Norway are key components in this work that we are continuously developing by expanding and tailoring our product range based on the season and customer needs, and by carrying our joint marketing activities.

> We will continue to remain forward-thinking and take every chance to improve the operations to overcome challenges, become more efficient and capitalise on new business opportunities.

CLAS OHLSON NINE-MONTH REPORT 2019/20

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We also strongly believe in our service offering, and an important step here is to expand our Clas Fix it DIY service. The roll-out of the service started in February to cover Sweden's four largest cities during the year.

We believe that offering consumers Clas Ohlson in a variety of channels that relate to the home in some way is the key to future growth and the synergies between these channels is becoming increasingly clear. We are now continuing to develop both the product offering and service offering and bring them closer together. The aim is to create an even more sustainable offering with clear added value for customers.

Long-term profitable growth

The results of the CO100+ action programme, our strong brand in the Nordics and solid financial position provide us with a strengthened platform for long-term profitable growth.

We will continue to remain forward-thinking and take every chance to improve the operations to overcome challenges, become more efficient and capitalise on new business opportunities. This way, we will create a sustainable and profitable Clas Ohlson that delivers shareholder value both this year and beyond.

Lotta Lyrå

President and CEO of Clas Ohlson AB

Financial targets/framework

• Sales will increase organically an average of 5% annually over a five-year period.
• Operating margin will amount to 6–8% within a five-year period. During the 2018/19 and 2019/20 financial years, approximately 1–2% of the underlying operating margin are expected to be invested in strategic initiatives in the CO100+ action programme.*
• The dividend is to comprise at least 50% of earnings per share after tax, with consideration for the company's financial position. Over the first two years, 2018/2019 and 2019/2020, the ambition is that the dividend will be maintained on a level with the 2016/17 financial year, in absolute terms.

• Net debt in relation to EBITDA is to fall below two (2) times.*

• To continue to link the earnings trend for the 2019/20 financial year to the established financial targets, operating margin and net debt/EBITDA are also stated excluding the effects of IFRS 16.

Q3 presentation 11 Mar at 9.00 CET a.m.

The report will be presented at 9:00 a.m. via a webcast teleconference. For more information, visit about.clasohlson.com/webcast-201920-q3

Financial information

Current financial information is available at about.clasohlson.com/en/investors

This interim report has been prepared in Swedish and translated into English. In the event of any discrepancies between the Swedish and the translation, the former shall have precedence.

Calendar

3 Jun 2020	Year-end Report 2019/20
Week beginning 6 July	Annual report
9 Sep 2020	Three-month Report 2020/21
12 Sep 2020	AGM
2 Dec 2020	Six-month Report 2020/21
10 Mar 2021	Nine-month Report 2020/21
2 Jun 2021	Year-end Report 2020/21

Contents

Financial statements	9
Key ratios	14
Quarterly overview	15
Accounting policies	17
Alternative performance measures	18
The share	22
Key ratio definitions	23
Store overview	25

CLAS OHLSON NINE-MONTH REPORT 2019/20

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Sales

Distribution of sales

MSEK	3 Months				9 Months
	Nov 2019 - Jan 2020	Nov 2018 - Jan 2019	Percentage change		May 2019 - Jan 2020	May 2018 - Jan 2019	Percentage change
			SEK	organic			SEK	organic
Sweden	1,311	1,264	4	4	3,221	3,062	5	5
Norway	1,196	1,190	0	1	2,917	2,882	1	2
Finland	376	369	2	-1	902	856	5	2
Nordics	2,883	2,823	2	2	7,040	6,801	4	3
Outside the Nordics	23	92	-75	-77	75	229	-67	-68
Total	2,905	2,915	0	0	7,115	7,030	1	1
Of which comprise online sales	177	148	19	19	404	337	20	19

Distribution of sales increase

Per cent	3 Months	9 Months
	Nov 2019 - Jan 2020	May 2019 - Jan 2020
Comparable units in local currency	1	2
Change in store network	-1	-1
Exchange-rate effects	0	0
Total	0	1

Third quarter

Sales in the Nordics increased by 2 per cent to 2,883 MSEK (2,823). The organic growth in the Nordics was 2 per cent compared with the preceding year. Total sales and organic growth were unchanged at 2,905 MSEK (2,915). Sales in comparable units and local currency increased by 1 per cent. Online sales increased by 19 per cent to 177 MSEK (148). During the quarter, the store network was reduced by two stores (expanded by one). At the end of the quarter, the total number of stores was 230, a reduction of a net eight stores compared with the year-earlier period (expanded by fourteen). For a store overview see page 25.

Nine months

Sales in the Nordics increased by 4 per cent to 7,040 MSEK (6,801). The organic increase in the Nordics was 3 per cent compared with the preceding year. Total sales increased by 1 per cent to 7,115 MSEK (7,030). The organic growth was 1 per cent. Sales in comparable units and local currency increased by 2 per cent. Online sales increased by 20 per cent to 404 MSEK (337). During the first nine months of the financial year, the net store network was reduced by net two stores (expanded by nine).

Retail trade development*

%	Q3 18/19	Q4 18/19	Q1 19/20	Q2 19/20	Q3 19/20
Sweden
Retail**	1.3	-0.2	3.9	1.0	3.4
Consumer Confidence	-6.4	-6.0	-5.7	-1.1	-1.9
Norway
Retail**	2.0	0,0	0.7	1.0	-0.1
Consumer Confidence	14.1	13.0	12.8	-3.2	-3.5
Finland
Retail**	1.3	-0.1	1.3	1.0	0.6
Consumer Confidence	16.3	15.8	-3.4	-6.2	-4.6

Source: HUI, Konjunkturinnstitutet, Office for National Statistics, Opinion, Statistikcentralen, Statistisk sentralbyrå, Trading Economics.
*Increase in % compared with the same quarter in the preceding year, measured at current prices.

Distribution per sales channel, %

Total number of stores

Distribution of numbers of stores

Sales, MSEK

Distribution of sales, %

CLAS OHLSON NINE-MONTH REPORT 2019/20

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Results

Consolidated Income Statement

MSEK	3 Months		9 Months		12 Months
	Nov 2019 - Jan 2020	Nov 2018 - Jan 2019	May 2019 - Jan 2020	May 2018 - Jan 2019	Feb 2019 - Jan 2020	May 2018 - Apr 2019
Sales	2,905	2,915	7,115	7,030	8,857	8,772
Cost of goods sold	-1,741	-1,736	-4,280	-4,200	-5,358	-5,278
Gross profit	1,164	1,179	2,834	2,830	3,499	3,495
Selling expenses	-732	-800	-2,074	-2,246	-2,767	-2,939
Administrative expenses	-54	-62	-170	-202	-221	-253
Other operating income/expenses	0	-211	-1	-211	2	-209
Operating profit	378	105	590	171	513	94

Specification of change in profits

MSEK	3 Months		9 Months
	Nov 2019 - Jan 2020		May 2019 - Jan 2020
Operating profit corresponding period previous year	105		171
Profit from sales	1		69
Change in gross margin	-12		-35
Increased administrative expenses, excluding strategy overview and CO100+	8		9
Non-recurring costs, costs linked to the CO100+ action programme and sCORE	245		281
Change in expansion costs stores	1		7
Change in depreciation, excl IFRS 16	7		14
Change in other operating income/expenses	1		0
Changed accounting policy, IFRS 16	23		75
Operating profit actual period	378		590

Third quarter

Earnings for the quarter were impacted by costs linked to the CO100+ action programme of approximately 13 MSEK (260).

The gross margin was 40.1 per cent (40.4). During the quarter, the gross margin was negatively affected by a stronger purchasing currency (USD). This was largely offset by an improved product mix, lower sourcing costs and the positive effects of currency hedging (NOK).

The share of selling expenses declined 2.2 percentage points to 25.2 per cent (27.4). Excluding the effect of IFRS 16 of 0.7 percentage points, the share declined by 1.5 percentage points. The share of selling expenses was impacted by lower expenses in the UK and Germany and lower costs related to the CO100+ action programme.

Operating profit amounted to 378 MSEK (105). IFRS 16 had a positive effect of 23 MSEK on operating profit, resulting in operating profit of 355 MSEK excluding this effect. Operating profit was affected by non-recurring costs and costs linked to the CO100+ action programme of a total of approximately 13 MSEK (260). Underlying operating profit amounted to 368 MSEK (363). The operating margin was 13.0 per cent (3.6). IFRS 16 had a positive effect on operating margin by 0.8 of a percentage point.

Profit after financial items totalled 362 MSEK (104). IFRS 16 had a positive effect on profit after financial items of 7 MSEK and profit after tax of 5 MSEK.

Depreciation for the period amounted to 174 MSEK (59), of which 122 MSEK pertained to depreciation of right-of-use assets in accordance with IFRS 16.

Spot exchange rates for key currencies averaged 1.05 for NOK and 9.53 for USD, compared with 1.06 and 9.03, respectively, in the year-earlier period. Currency hedging was undertaken in USD and NOK. The company's policy is to hedge 50 per

Gross margin rolling 12 months, %

Share of selling expenses, %

Operating profit, MSEK

Operating margin rolling 12 months, %

CLAS OHLSON NINE-MONTH REPORT 2019/20

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cent of the expected flow in each currency continuously, with three to nine-month maturities.

Nine months

Earnings for the period were affected by non-recurring costs and costs linked to the CO100+ action programme totalling approximately 97 MSEK (380).

The gross margin was 39.8 per cent (40.3). The gross margin was negatively impacted by a stronger purchasing currency (USD), which was largely offset by positive effects from currency hedging (NOK) from currency forwards, exchange-rate effects related to the delay in inventory, lower sourcing costs and the product mix.

The share of selling expenses declined 2.8 percentage points to 29.1 per cent (32.0). Excluding the effect of IFRS 16 of 1.0 percentage points, the share declined by 1.8 percentage points. The share of selling expenses was impacted by lower expenses in the UK and Germany and lower costs related to the CO100+ action programme.

Operating profit amounted to MSEK 590 (171). IFRS 16 had a positive effect of 75 MSEK on operating profit, resulting in operating profit of 515 MSEK excluding this effect. Operating profit was affected by non-recurring costs and costs linked to the CO100+ action programme totalling approximately 97 MSEK (380). Underlying operating profit amounted to 612 MSEK (549). The operating margin was 8.3 per cent (2.4). IFRS 16 had a positive effect on operating margin of 1.1 percentage points.

Profit after financial items amounted to 540 MSEK (169). IFRS 16 had a positive impact of 28 MSEK on profit after financial items and a positive impact of 22 MSEK on profit after tax.

Depreciation for the period amounted to 509 MSEK (177), of which 346 MSEK pertained to depreciation of right-of-use assets in accordance with IFRS 16.

Spot exchange rates for key currencies averaged 1.07 for NOK and 9.57 for USD, compared with 1.07 and 8.95, respectively, in the year-earlier period. Currency hedging was undertaken in USD and NOK. The company's policy is to hedge 50 per cent of the expected flow in each currency continuously, with three to nine-month maturities.

Investments

Investments during the nine-month period totalled 147 MSEK (174). Of this amount, investments in new or refurbished stores accounted for MSEK 33 (41). Investments in IT systems for the quarter amounted to 100 MSEK (88).

Financing and liquidity

Cash flow from operating activities during the nine-month period totalled 1,318 MSEK (639). Cash flow for the period, after investing and financing activities, was 127 MSEK (70). Excluding the effect of IFRS 16, cash flow from operating activities amounted to 943 MSEK and cash flow from financing activities to -670 MSEK.

The average 12-month value of inventories was MSEK 2,007 (1,973). Over a rolling 12-month period, the stock turnover rate at the distribution centre was 5.7 times (5.7).

At the end of the period, the value of inventories was 1,821 MSEK (1,983). The lower level was primarily due to strict inventory control during the quarter.

The Group's net debt at the end of the period, meaning interest-bearing liabilities less cash and cash equivalents, amounted to 2,004 MSEK (net cash holdings last year 185). Net debt in relation to EBITDA amounted to 1.9 times. Excluding the effect of IFRS 16, net debt in relation to EBITDA amounted to -0.3 times, which is in accordance with our financial framework (below 2.0 times). Credits granted and loan commitments amounted to 850 MSEK, of which 0 MSEK had been utilised at the end of the period. The company's financial position remains strong. The equity/assets ratio was 30 per cent (47). Excluding the effect of IFRS 16, the equity/assets ratio amounted to 50 per cent.

Employees

The number of employees in the Group was approximately 5,000, recalculated to full-time equivalents, this corresponds to an average of 3,017 (3,100).

Cash flow, MSEK*
* from operating activities

CLAS OHLSON NINE-MONTH REPORT 2019/20

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CLAS OHLSON NINE-MONTH REPORT 2019/20

Seasonal fluctuations

Clas Ohlson's market and operations are influenced by consumer purchasing behaviour. The company's product range is particularly well suited to Christmas preparations and Christmas shopping, which means that the third quarter (November-January) is generally the strongest quarter of the financial year. This is followed by the second and first quarters and, finally, the fourth quarter, which is the weakest in terms of sales and profit.

Parent Company

Parent Company sales during the nine-month period amounted to 5,717 MSEK (5,430) and profit after financial items totalled 333 MSEK (-31). Investments for the period amounted to 118 MSEK (133). Contingent liabilities for the Parent Company amounted to 202 MSEK (265).

Events after the end of the reporting period

Sales in February

Sales in the Nordics in February increased by 8 per cent to 566 MSEK (527). The organic increase in the Nordics was 9 per cent compared with the preceding year. Total sales increased by 5 percent to 570 MSEK (545). The organic increase was 6 per cent. Sales in comparable units and local currency increased by 8 per cent. Compared to February of the previous year, sales were positively affected by a calendar effect of 4 percentage points due to additional trading days. Online sales increased by 16 per cent to 31 MSEK (27).

Compared with the same month of the preceding year, the store portfolio was reduced by a net nine stores (expanded by thirteen). At the end of the period, the total number of stores was 229. For a store overview see page 25.

Distribution of sales

MSEK	Feb 2020	Feb 2019	Percentage change
			SEK	organic
Sweden	262	246	6	6
Norway	230	214	7	11
Finland	74	66	12	11
Nordics	566	527	8	9
Outside the Nordics*	4	19	-77	-78
Total**	570	545	5	6

• Affected by store optimization in UK and Germany.
  ** Of which 31 Mkr (27) comprise online sales.

In the first ten months of the financial year (May-February), total sales increased by 1 per cent to 7 685 MSEK (7,575). Organic sales increased by 1 per cent compared with the preceding year. Sales in comparable units and local currency increased by 2 per cent. Sales in the Nordics increased by 4 per cent to 7 606 MSEK (7 327) and the organic increase was 4 per cent. Online sales increased by 20 per cent to 435 MSEK (363).

Follow-up investment of SEK 27 million in MatHem i Sverige AB

Clas Ohlson is investing 27 MSEK in a funding round totaling approximately 500 MSEK in MatHem i Sverige AB to retain its rights under the shareholders' agreement. The investment is reported in the fourth quarter of 2019/20 and after the funding round, Clas Ohlson will be the fifth largest owner in MatHem with an ownership stake of 7.7 per cent. Kinnevik, the largest shareholder in MatHem, is investing 150 MSEK and pension company AMF is investing 280 MSEK and will thus be the third largest owner with a 10 per cent ownership stake. The funding round enables the development of MatHem's new environmentally certified warehouses in Larsboda in Stockholm.

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CLAS OHLSON NINE-MONTH REPORT 2019/20

Risks and uncertainties

To develop an attractive and relevant customer offering and to ensure our competitiveness, we must understand how our business environment is changing. The operations that Clas Ohlson carries on entail risks that could negatively impact the Group to varying extents. These risks are divided into strategic, operational and financial risks.

When managed correctly, risks may lead to opportunities and add value to the business. We work continuously to update the Group's risk situation through a systematic process in which risks are identified, evaluated, managed and reported. Priority is assigned to the risks assessed as having the greatest negative impact in terms of probability and conceivable effects on operations. This work contributes to the strategic and operational management of the company.

Risks of a strategic character primarily comprise risks associated with changes in the business environment and increased competition, shifts in technology and in customers' purchasing habits, market positioning, and product range and offering as well as growth. Operational risks are mainly risks associated with purchasing and products, sustainability, IT systems, logistics, key employees, leases, shrinkage and regulatory risks, while risks of a financial nature consist primarily of risks associated with changes in the economy, currency exposure, transport costs, raw material prices and salary inflation.

For a detailed description of the Group's significant risks and risk management, refer to pages 83-96 of the 2018/19 Annual Report. In addition to the risks described, the uncertainty surrounding the effects of the corona virus and its potential impact on the Group's operations and earnings was also added during the quarter.

Nomination Committee for the AGM 2020

The members of the Nomination Committee have now been appointed based on the ownership structure as of 30 September 2019. Jonas Bergh, representing the Haid owner family, is the Chairman of the Committee. The other members are Kenneth Bengtsson, Chairman of the Board of Clas Ohlson AB, Göran Sundström, representing the Tidstrand owner family, Ricard Wennerklint, representing If Skadeförsäkring AB and Erik Durhan, Nordea Funds. The Annual General Meeting will be held on 12 September 2020. For more information visit about.clasohlson.com/en/nomination-committee

Review

The interim report is unaudited.

Clas Ohlson AB (publ)
Insjön, 11 March 2020

Lotta Lyrå
President and CEO

8

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Financial statements

Consolidated Income Statement**
	3 Months		9 Months		12 Months
MSEK	Nov 2019 - Jan 2020	Nov 2018 - Jan 2019	May 2019 - Jan 2020	May 2018 - Jan 2019	Feb 2019 - Jan 2020	May 2018 - Apr 2019
Sales	2,905.4	2,914.8	7,114.8	7,030.1	8,856.9	8,772.3
Cost of goods sold	-1,741.2	-1,736.3	-4,280.3	-4,200.2	-5,357.7	-5,277.5
Gross profit	1,164.1	1,178.5	2,834.4	2,829.9	3,499.3	3,494.8
Selling expenses	-732.2	-799.9	-2,073.8	-2,246.2	-2,766.5	-2,939.0
Administrative expenses	-53.6	-62.4	-169.9	-202.2	-220.8	-253.2
Other operating income/expenses *	-0.3	-211.1	-0.6	-210.8	1.6	-208.6
Operating profit	378.1	105.2	590.1	170.7	513.5	94.0
Financial income	0.1	0.5	0.2	1.1	0.2	1.1
Financial expenses	-16.6	-1.6	-50.1	-3.0	-50.4	-3.3
Profit after financial items	361.5	104.1	540.2	168.8	463.3	91.9
Income tax	-78.6	-25.5	-117.8	-35.4	-102.7	-20.3
Profit for the period	282.9	78.6	422.4	133.4	360.6	71.6

• Closure of store network outside the Nordics.
  **IFRS 16 has affected the income statement from 1 May 2019. The assessment of parameters was adjusted at the end of the 2019 calendar year. For January 2020, the positive effect on operating profit was approximately 6 MSEK.

Consolidated Comprehensive Income Statement
	3 Months		9 Months		12 Months
MSEK	Nov 2019 - Jan 2020	Nov 2018 - Jan 2019	May 2019 - Jan 2020	May 2018 - Jan 2019	Feb 2019 - Jan 2020	May 2018 - Apr 2019
Profit for the period	282.9	78.6	422.4	133.4	360.6	71.6
Other comprehensive income, net of tax:
Items that later can be reversed back to the Consolidated income statement:
Exchange rate differences	-2.1	-9.1	-16.4	-13.8	-1.3	1.3
Cash flow hedging	-14.1	-9.3	4.2	4.6	6.6	7.0
Total	-16.2	-18.4	-12.2	-9.2	5.3	8.3
Items that later can not be reversed back to the Consolidated income statement:
Revaluation of net pension obligations	0.0	0.0	0.0	0.0	0.0	0.0
Total	0.0	0.0	0.0	0.0	0.0	0.0
Total other comprehensive income, net of tax	-16.2	-18.4	-12.2	-9.2	5.3	8.3
Total comprehensive income for the period	266.8	60.2	410.2	124.2	365.9	79.9
Profit for the period attributable to:
Owners of the parent	283.0	78.3	422.5	133.3	361.9	72.7
Non-controlling interests	0.0	0.3	-0.1	0.1	-1.3	-1.1
Comprehensive income attributable to:
Owners of the parent	266.8	59.9	410.3	124.1	367.2	81.0
Non-controlling interests	0.0	0.3	-0.1	0.1	-1.3	-1.1

CLAS OHLSON NINE-MONTH REPORT 2019/20

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Data per share

	3 Months		9 Months		12 Months
	Nov 2019 - Jan 2020	Nov 2018 - Jan 2019	May 2019 - Jan 2020	May 2018 - Jan 2019	Feb 2019 - Jan 2020	May 2018 - Apr 2019
Number of shares before dilution	63,301,451	63,217,794	63,252,683	63,217,724	63,243,490	63,218,212
Number of shares after dilution	63,334,330	63,227,850	63,279,816	63,227,091	63,267,986	63,227,438
Number of shares at end of period	63,337,447	63,217,794	63,337,447	63,217,794	63,337,447	63,217,794
Earnings per share before dilution, SEK	4.47	1.24	6.68	2.11	5.70	1.13
Earnings per share after dilution, SEK	4.47	1.24	6.68	2.11	5.70	1.13
Comprehensive income per share, SEK	4.21	0.95	6.48	1.96	5.79	1.26

Consolidated Balance Sheet

MSEK	31 Jan 2020	31 Jan 2019	30 Apr 2019
Assets
Intangible assets	526.9	478.4	476.9
Tangible assets	820.4	980.1	911.6
Right-of-use assets	2,126.6	0.0	0.0
Securities held as fixed assets	225.3	225.3	225.3
Non-current receivables	60.4	15.6	21.5
Inventories	1,820.6	1,983.2	1,987.3
Other receivables	160.5	346.2	249.4
Cash and cash equivalents	230.4	184.7	105.0
Total assets	5,971.1	4,213.4	3,976.9
Equity and liabilities
Equity attributable to owners of the parent	1,804.0	1,984.6	1,940.8
Equity attributable to non-controlling interests	6.5	7.4	6.6
Total equity	1,810.4	1,992.0	1,947.3
Long-term lease liabilities, interest bearing	1,722.3	0.0	0.0
Long-term liabilities, non-interest bearing	202.2	211.6	204.8
Current lease liabilities, interest bearing	511.7	0.0	0.0
Current liabilities, interest bearing	0.0	0.0	283.1
Current liabilities, non-interest bearing	1,724.4	2,009.8	1,541.7
Total equity and liabilities	5,971.1	4,213.4	3,976.9

CLAS OHLSON NINE-MONTH REPORT 2019/20

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Consolidated Cash Flow

MSEK	3 Months		9 Months		12 Months
	Nov 2019 - Jan 2020	Nov 2018 - Jan 2019	May 2019 - Jan 2020	May 2018 - Jan 2019	Feb 2019 - Jan 2020	May 2018 - Apr 2019
Operating profit	378.1	105.2	590.1	170.7	513.5	94.0
Adjustment for items not included in cash flow	194.1	263.5	495.5	375.0	452.6	332.1
Interest received	0.1	0.5	0.2	1.1	0.2	1.1
Interest paid	-16.6	-1.6	-50.1	-3.0	-50.4	-3.3
Tax paid	-20.4	-9.5	-53.2	-63.7	-94.0	-104.5
Cash flow from operating activities before changes in working capital	535.2	358.2	982.5	480.1	822.0	319.5
Change in working capital	328.3	369.8	335.9	158.9	169.5	-7.6
Cash flow from operating activities	863.5	728.1	1,318.4	639.0	991.4	312.0
Investments in intangible assets	-52.0	-36.2	-99.9	-88.1	-116.7	-104.9
Investments in tangible assets	-11.8	-19.8	-47.0	-84.7	-68.1	-105.8
Investments in securities held as fixed assets	0.0	-0.8	0.0	-0.8	0.0	-0.8
Change in current investments	0.0	0.0	0.3	0.1	0.3	0.1
Cash flow from investing activities	-63.8	-56.8	-146.5	-173.5	-184.5	-211.4
Change in current liabilities, interest-bearing	-357.3	-596.0	-283.1	0.0	0.0	283.1
Repayment of lease liabilities	-129.7	0.0	-374.7	0.0	-374.7	0.0
Sale of own shares	8.3	0.0	11.0	0.0	11.0	0.0
Capital contribution from minority	0.0	0.0	0.0	0.5	0.0	0.5
Change in longterm assets	0.0	0.0	-2.3	-0.8	-2.0	-0.6
Dividend to shareholders	-197.6	0.0	-395.5	-395.1	-395.5	-395.1
Cash flow from financing activities	-676.3	-596.0	-1,044.6	-395.4	-761.2	-112.0
Cash flow for the period	123.4	75.3	127.3	70.0	45.8	-11.5
Liquid assets at the start of the period	106.7	109.9	105.0	115.8	184.7	115.8
Exchange rate difference for liquid assets	0.2	-0.5	-1.9	-1.2	-0.1	0.6
Cash and cash equivalents at the end of the period	230.4	184.7	230.4	184.7	230.4	105.0

CLAS OHLSON NINE-MONTH REPORT 2019/20

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CLAS OHLSON NINE-MONTH REPORT 2019/20

Sales by segment

MSEK	3 Months		9 Months
	Nov 2019 - Jan 2020	Nov 2018 - Jan 2019	May 2019 - Jan 2020	May 2018 - Jan 2019
Sweden	1,310.8	1,263.8	3,221.1	3,062.0
Norway	1,195.5	1,189.9	2,917.0	2,882.3
Finland	376.3	368.9	901.6	856.4
Outside Nordic countries	22.7	92.2	75.1	229.4
Group functions	948.1	904.4	2,495.5	2,367.6
Sales to other segments	-948.1	-904.4	-2,495.5	-2,367.6
Total	2,905.4	2,914.8	7,114.8	7,030.1

Operating profit by segment

MSEK	3 Months		9 Months
	Nov 2019 - Jan 2020	Nov 2018 - Jan 2019	May 2019 - Jan 2020	May 2018 - Jan 2019
Sweden	53.8	48.5	132.3	122.5
Norway	50.4	43.9	123.0	115.3
Finland	12.0	11.8	28.9	27.4
Outside Nordic countries	0.7	2.9	2.3	7.1
Group functions	261.2	-1.9	303.6	-101.6
Total	378.1	105.2	590.1	170.7

12

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Securities held as fixed assets, valued at fair value*

MSEK	31 Jan 2020	31 Jan 2019
Securities held as fixed assets, valued at fair value at the beginning of the year	225.3	224.5
Acquisition**	0.0	0.8
Revaluation during the year	0.0	0.0
Securities held as fixed assets, valued at fair value at the end of the period	225.3	225.3

According to level three in the fair value hierarchy.
*In December 2018 shares amounting to 0.8 MSEK was acquired in Mathem.

Change in equity

MSEK	9 Months
	May 2019 - Jan 2020	May 2018 - Jan 2019
Equity brought forward	1,947.3	2,263.9
Change in accounting policy IFRS 16	-166.9	0,0
Adjusted equity at start of year	1,780.5	2,263.9
Dividend to shareholders	-395.5	-395.1
Sale of own shares	11.0	0.0
Capital contribution from minority	0.0	0.5
Paid-in option premiums:
Value of employee services	4.3	-1.6
Total comprehensive income	410.2	124.2
Of which, comprehensive income attributable to non-controlling interests	6.5	7.4
Equity carried forward	1,810.4	1,992.0

Forward contracts

As per balance-sheet date, outstanding cash-flow hedging existed according to the following table per currency pair (carrying amount and fair value)
MSEK	31 Jan 2020	31 Jan 2019
Sell/buy
NOK/SEK	0.5	-1.7
NOK/USD	8.3	2.1
SEK/USD	0.0	0.0
Total	8.8	0.4

Forward contracts belong to the derivate category, which is used for hedging purposes. All derivates are measured at fair value, established by using forward contract prices on balance-sheet date, meaning, level 2 in the fair value hierarchy according to IFRS 13. As per 31 January 2020 there are positive and negative market values in the currency pairs. Forward contracts with negative market value totalled 0.6 MSEK (4.4), which was recognized in the item Current liabilities, non-interest-bearing. Forward contracts with positive market values amounted to 9.4 MSEK (4.8), which is recognized in the item Other receivables. The company hedge the expected flow in each currency every month, with three to nine-month maturities. A deferred tax liability of 1.9 MSEK (0.1) was taken into account and the remaining fair value of 6.9 MSEK (0.3) was recognized in the hedging reserve within equity. The amount for forward contracts NOK/USD of 8.3 MSEK (2.1) is allocated on the currency pair NOK/SEK with 5.9 MSEK (0.4) and on the currency pair SEK/USD with 2.4 MSEK (2.1).

CLAS OHLSON NINE-MONTH REPORT 2019/20

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Key ratios

	3 Months		9 Months		12 Months
	Nov 2019 - Jan 2020	Nov 2018 - Jan 2019	May 2019 - Jan 2020	May 2018 - Jan 2019	Feb 2019 - Jan 2020	May 2018 - Apr 2019
Sales growth, %	-0.3	6.1	1.2	7.7	1.6	6.8
Gross margin, %	40.1	40.4	39.8	40.3	39.5	39.8
Operating margin, %	13.0	3.6	8.3	2.4	5.8	1.1
Operating margin, excl IFRS 16, %	12.2	3.6	7.2	2.4	4.9	1.1
Return on capital employed, %	-	-	-	-	14.4	4.1
Return on equity, %	-	-	-	-	20.1	3.5
Equity/assets ratio, %	30.3	47.3	30.3	47.3	30.3	49.0
Equity/assets ratio, excl IFRS 16, %	50.4	47.3	50.4	47.3	50.4	49.0
Net debt/EBITDA	-	-	-	-	1.9	0.5
Net debt/EBITDA, excl IFRS 16	-	-	-	-	-0.3	0.5
Sales per sq.m in stores, SEK thousand	10.5	10.4	25.9	25.1	32.1	30.8
Number of stores at period end	230	238	230	238	230	232
Number of employees at period end	3,017	3,100	3,017	3,100	3,017	3,099
Data per share
Number of shares before dilution	63,301,451	63,217,794	63,252,683	63,217,724	63,243,490	63,218,212
Number of shares after dilution	63,334,330	63,227,850	63,279,816	63,227,091	63,267,986	63,227,438
Number of shares at period end	63,337,447	63,217,794	63,337,447	63,217,794	63,337,447	63,217,794
Earnings per share before dilution, SEK	4.47	1.24	6.68	2.11	5.70	1.13
Earnings per share after dilution, SEK	4.47	1.24	6.68	2.11	5.70	1.13
Comprehensive income per share, SEK	4.21	0.95	6.48	1.96	5.79	1.26
Cash flow per share*, SEK	13.64	11.52	20.84	10.11	15.68	4.93
Cash flow per share excl IFRS 16*, SEK	11.59	11.52	14.92	10.11	9.75	4.93
Equity per share, SEK	28.58	31.51	28.58	31.51	28.58	30.80

• From the operating activities.

CLAS OHLSON NINE-MONTH REPORT 2019/20

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Quarterly overview

MSEK	Q3 17/18	Q4 17/18	Q1 18/19	Q2 18/19	Q3 18/19	Q4 18/19	Q1 19/20	Q2 19/20	Q3 19/20
Sales	2,745.9	1,683.1	1,958.1	2,157.1	2,914.8	1,742.2	2,044.0	2,165.4	2,905.4
Cost of goods sold	-1,625.1	-1,065.9	-1,203.8	-1,260.1	-1,736.3	-1,077.3	-1,264.3	-1,274.8	-1,741.2
Gross profit	1,120.8	617.3	754.3	897.0	1,178.5	664.8	779.7	890.6	1,164.1
Selling expenses	-706.8	-668.1	-659.2	-787.2	-799.9	-692.7	-641.5	-700.1	-732.2
Administrative expenses	-64.7	-56.6	-63.0	-76.8	-62.4	-51.0	-58.7	-57.6	-53.6
Other operating income/expenses	-0.2	1.5	-0.2	0.4	-211.1	2.2	-0.1	-0.3	-0.3
Operating profit	349.2	-105.9	32.0	33.4	105.2	-76.6	79.4	132.6	378.1
Financial income	0.3	0.2	0.3	0.3	0.5	0.1	0,0	0.0	0.1
Financial expenses	-0.5	-0.6	-0.6	-0.8	-1.6	-0.3	-16.7	-16.7	-16.6
Profit after financial items	349.0	-106.3	31.7	32.9	104.1	-76.9	62.7	116.0	361.5
Income tax	-78.6	20.6	-1.9	-7.9	-25.5	15.1	-13.9	-25.3	-78.6
Profit for the period	270.4	-85.7	29.7	25.0	78.6	-61.8	48.8	90.7	282.9

Assets

Intangible assets	401.4	428.2	446.7	454.5	478.4	476.9	472.9	495.2	526.9
Tangible assets	1,029.2	1,041.3	1,007.5	1,010.8	980.1	911.6	879.1	850.6	820.4
Right-of-use assets	0.0	0.0	0.0	0.0	0.0	0.0	2,008.4	1,936.5	2,126.6
Securities held as fixed assets	224.0	224.5	224.5	224.5	225.3	225.3	225.3	225.3	225.3
Non-current receivables	18.5	14.9	14.8	15.7	15.6	21.5	65.1	62.8	60.4
Inventories	1,880.3	2,038.0	1,936.6	2,345.0	1,983.2	1,987.3	1,954.8	2,257.2	1,820.6
Other receivables	222.6	336.9	310.3	349.7	346.2	249.4	180.6	208.4	160.5
Liquid assets	584.0	115.8	97.3	109.9	184.7	105.0	104.6	106.7	230.4
Total assets	4,360.0	4,199.7	4,037.7	4,510.1	4,213.4	3,976.9	5,891.0	6,142.9	5,971.1

Equity and liabilities

Equity attributable to owners of the parent	2,285.3	2,263.9	2,293.2	1,925.4	1,984.6	1,940.8	1,821.9	1,527.7	1,804.0
Equity attributable to non-controlling interests	0.0	0.0	0.0	7.1	7.4	6.6	6.3	6.5	6.5
Total equity	2,285.3	2,263.9	2,293.2	1,932.5	1,992.0	1,947.3	1,828.3	1,534.2	1,810.4
Long-term lease liabilities, interest bearing	0.0	0.0	0.0	0.0	0.0	0.0	1,669.1	1,596.0	1,722.3
Long-term liabilities, non-interest bearing	231.2	227.4	223.6	211.7	211.6	204.8	205.5	203.8	202.2
Current lease liabilities, interest bearing	0.0	0.0	0.0	0.0	0.0	0.0	468.0	456.5	511.7
Current liabilities, interest bearing	0.0	0.0	60.1	596.0	0.0	283.1	118.5	357.3	0.0
Current liabilities, non-interest bearing	1,843.4	1,708.4	1,460.9	1,770.0	2,009.8	1,541.7	1,601.6	1,995.1	1,724.4
Total equity and liabilities	4,360.0	4,199.7	4,037.7	4,510.2	4,213.4	3,976.9	5,891.0	6,142.9	5,971.1

Key ratios for the period

Gross margin, %	40.8	36.7	38.5	41.6	40.4	38.2	38.1	41.1	40.1
Operating margin, %	12.7	-6.3	1.6	1.6	3.6	-4.4	3.9	6.1	13.0
Operating margin, excl. IFRS 16, %	12.7	-6.3	1.6	1.6	3.6	-4.4	2.6	4.9	12.2
Earnings per share before dilution, SEK	4.28	-1.36	0.47	0.40	1.24	-0.98	0.77	1.43	4.47
Earnings per share after dilution, SEK	4.27	-1.36	0.47	0.40	1.24	-0.98	0.77	1.43	4.47
Equity per share, SEK	36.16	35.82	36.27	30.57	31.51	30.80	28.92	24.27	28.58

CLAS OHLSON NINE-MONTH REPORT 2019/20

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Parent Company Income Statement

MSEK	Note	3 Months		9 Months		12 Months
		Nov 2019 - Jan 2020	Nov 2018 - Jan 2019	May 2019 - Jan 2020	May 2018 - Jan 2019	Feb 2019 - Jan 2020	May 2018 - Apr 2019
Sales		2,258.9	2,168.2	5,716.6	5,429.6	7,074.8	6,787.8
Cost of goods sold	1	-1,645.3	-1,569.8	-4,198.3	-3,986.4	-5,190.3	-4,978.5
Gross profit		613.6	598.4	1,518.3	1,443.2	1,884.5	1,809.4
Selling expenses	1	-332.5	-413.1	-1,034.7	-1,110.3	-1,357.8	-1,433.4
Administrative expenses	1	-44.5	-53.2	-146.1	-176.7	-176.9	-207.5
Other operating income/expenses		0.0	-186.8	0.2	-187.3	-13.0	-200.6
Operating profit		236.7	-54.6	337.7	-31.1	336.8	-32.1
Dividends from group companies		0.0	0.0	0.0	3.2	279.0	282.2
Financial income		0.1	0.5	0.1	1.1	1.5	2.4
Financial expenses		-1.9	-2.2	-4.4	-4.2	-5.3	-5.1
Profit after financial items		234.9	-56.4	333.5	-31.0	611.9	247.4
Appropriations		0.0	0.0	0.0	0.0	41.2	41.2
Profit before tax		234.9	-56.4	333.5	-31.0	653.1	288.7
Income tax		-51.0	12.3	-72.7	7.4	-83.2	-3.1
Profit for the period		183.9	-44.1	260.8	-23.5	569.9	285.6

Parent Company Comprehensive Income Statement

MSEK	3 Months		9 Months		12 Months
	Nov 2019 - Jan 2020	Nov 2018 - Jan 2019	May 2019 - Jan 2020	May 2018 - Jan 2019	Feb 2019 - Jan 2020	May 2018 - Apr 2019
Profit for the period	183.9	-44.1	260.8	-23.5	569.9	285.6
Other comprehensive income, net of tax:
Items that later can be reversed back to the Consolidated income statement:
Income from hedge of net investment in foreign operations	0.0	-1.5	-0.3	-4.5	-4.0	-8.2
Other comprehensive income, net of tax	0.0	-1.5	-0.3	-4.5	-4.0	-8.2
Total comprehensive income	183.9	-45.6	260.5	-28.0	565.8	277.4

Note 1 Depreciations

Note 1 Depreciations	3 Months		9 Months		12 Months
	Nov 2019 - Jan 2020	Nov 2018 - Jan 2019	May 2019 - Jan 2020	May 2018 - Jan 2019	Feb 2019 - Jan 2020	May 2018 - Apr 2019
Depreciations for the period	39.0	40.6	118.4	119.3	160.1	161.1

CLAS OHLSON NINE-MONTH REPORT 2019/20

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Parent Company Balance Sheet

MSEK	31 Jan 2020	31 Jan 2019	30 Apr 2019
Assets
Intangible assets	526.9	478.4	476.9
Tangible assets	599.3	674.6	655.4
Financial assets	270.8	291.1	268.9
Inventories	1,264.8	1,341.7	1,364.2
Other receivables	149.5	254.0	296.1
Liquid assets	168.2	124.1	33.4
Total assets	2,979.6	3,163.8	3,095.0
Equity and liabilities
Equity	645.2	460.6	764.8
Untaxed reserves	994.5	1,035.7	994.5
Provisions	50.6	55.1	49.9
Long-term liabilities, non-interest-bearing	5.0	5.0	5.0
Current liabilities, interest-bearing	0.0	0.0	283.1
Current liabilities, non interest-bearing	1,284.3	1,607.3	997.6
Total equity and liabilities	2,979.6	3,163.8	3,095.0

Accounting policies

Clas Ohlson applies the International Financial Reporting Standards (IFRS) adopted by the EU. This interim report has been prepared in accordance with the Swedish Annual Accounts Act, IAS 34 Interim Financial Reporting and RFR 1 Supplementary Accounting Rules for Groups. Disclosures in accordance with IAS 34 Interim Financial Reporting are provided in both notes and elsewhere in this interim report.

The Parent Company's financial statements have been prepared in accordance with the Swedish Annual Accounts Act and the Swedish Financial Reporting Board's Recommendation RFR 2. The same accounting policies are applied as for the Group, except in those cases described under the section headed "Parent Company accounting policies" in the 2018/19 Annual Report on page 107.

The same accounting policies and calculation methods are applied as in the latest annual report except that IFRS 16 is now applied. For a more detailed description of the accounting policies applied to the Group and Parent Company in this interim report, refer to the 2018/19 Annual Report, pages 102-107.

New accounting policies for 2019/20 and onward

As of 1 May 2019, Clas Ohlson began to apply IFRS 16 in its consolidated financial statements. The new standard primarily impacts the lessee's recognition of operating leases and entails that the leases that meet the definition of a lease in accordance with IFRS 16 are to be recognised in the balance sheet as a right-of-use asset instead of being expensed straight-line over the lease term. In addition, a financial liability connected to the lease is recognised.

The main impact of IFRS 16 on the Group's reporting is attributable to the recognition of leases for premises. On the transition date, Clas Ohlson had about 250 leases for the lease of store premises and warehouses. In addition, the company has a small number of cars and other assets that fall under the framework of IFRS 16. The effect in the small number of cases in which the Group is the lessor is not material.

The transition has resulted in extensive preparatory work within the Group, where a project group has been tasked with the assignment of compiling all lease contracts, implementing system solutions, the analysis of contract data and outcomes together with external accounting specialists, and arranging workshops and training courses together with affected parties in the Group.

At the transition date, 1 May 2019, Clas Ohlson decided to apply the modified retrospective approach whereby the lease liability was measured at the present value of future lease payments and the right-of-use asset was measured as if IFRS 16 has been applied since commencement. In accordance with the standard, comparative figures have not be restated. The cumulative effect of the transition was recognised as an adjustment to the opening balance of retained earnings as per 1 May 2019. On transition, Clas Ohlson applies the exemption rules that do not include low-value assets and leases with a term of less than 12 months. The exemptions will be applied in the future.

CLAS OHLSON NINE-MONTH REPORT 2019/20

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The lease term is the non-cancellable contract period where consideration is given to the option to extend or terminate the contract and to how reasonably certain it is that this option will be exercised. If it is not reasonably certain that an extension or termination will be exercised, the extension is not included in the calculation of the lease liability.

Clas Ohlson's right-of-use assets almost exclusively comprise leased premises. IFRS 16 is not applied to the Parent Company's financial statements.

For a more detailed description of IFRS 16 and the effects on the consolidated financial statements, see the 2018/19 Annual Report, page 102.

Reconciliation of operating lease commitments (MSEK)
Operating lease commitments at 30 April 2019	2,663
Discounting by applying the Group's incremental borrowing rate (where applicable, the implicit interest rate is used)	-249
Short-term leases that are expensed	-119
Non-lease components	-502
Adjustment regarding extension options or termination clauses	466
Lease liability recognised in 1 May 2019	2,259
Effects on the balance sheet 1 May 2019 (MSEK)
---	---
Right-of-use assets	2,120
Deferred tax assets	46
Prepaid expenses	-77
Equity	-170
Long-term lease liabilities	1,779
Short-term lease liabilities	480

CLAS OHLSON NINE-MONTH REPORT 2019/20

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Alternative performance measures

This section contains a reconciliation of certain alternative performance measures (APMs) with the closest reconcilable items in the financial statements. As analysis tools, APMs are limited, and must be considered in their context and not as a replacement of financial measures prepared in accordance with IFRS. APMs are presented to improve an investor's evaluation of the operations, as an aid in forecasts of forthcoming periods, and to simplify meaningful comparisons of earnings between periods. Management uses these APMs, for example, to evaluate the operating activities compared with previous results, for internal planning and forecasts and to calculate certain performance-related remuneration. For definitions, refer to page 23. The APMs recognised in this quarterly report may differ from similarly named measures used by other companies.

	3 Months		9 Months		12 Months
	Nov 2019 - Jan 2020	Nov 2018 - Jan 2019	May 2019 - Jan 2020	May 2018 - Jan 2019	Feb 2019 - Jan 2020	May 2018 - Apr 2019
Return on equity
Net profit for the period, MSEK	-	-	-	-	360.6	71.6
Average equity, MSEK	-	-	-	-	1,797.8	2,062.1
Return on equity	-	-	-	-	20.1%	3.5%

Reason for use: Return on equity is a measure of profitability in relation to the book value of equity. Return on equity is also a measure of how investments are used to generate increased income.

Return on capital employed

Operating profit, MSEK	-	-	-	-	513.5	94.0
Interest income, MSEK	-	-	-	-	0.2	1.1
Average capital employed, MSEK	-	-	-	-	3,577.0	2,345.2
Return on capital employed	-	-	-	-	14.4%	4.1%

Reason for use: Return on capital employed is a measure of profitability after taking into account the amount of capital used. A higher return on capital employed indicates that capital is used more efficiently.

Gross margin

Gross profit, MSEK	1,164.1	1,178.5	2,834.4	2,829.9	3,499.3	3,494.8
Sales, MSEK	2,905.4	2,914.8	7,114.8	7,030.1	8,856.9	8,772.3
Gross margin	40.1%	40.4%	39.8%	40.3%	39.5%	39.8%

Reason for use: Gross margin shows the difference between net sales and the cost of goods sold expressed as a percentage of net sales. Gross margin is affected by several factors, for example, product mix, price trend and cost reductions.

Gross profit, MSEK

Sales	2,905.4	2,914.8	7,114.8	7,030.1	8,856.9	8,772.3
Cost of goods sold	-1,741.2	-1,736.3	-4,280.3	-4,200.2	-5,357.7	-5,277.5
Gross profit	1,164.1	1,178.5	2,834.4	2,829.9	3,499.3	3,494.8

Reason for use: Gross profit shows the difference between net sales and the cost of goods sold. Gross profit is affected by several factors, for example, product mix, price trend and cost reductions.

Equity per share, SEK

Total equity, MSEK	1,810.4	1,992.0	1,810.4	1,992.0	1,810.4	1,947.3
Number of shares at end of period (millions of share)	63.34	63.22	63.34	63.22	63.34	63.22
Equity per share	28.58	31.51	28.58	31.51	28.58	30.80

Reason for use: Equity per share measures the company's net value per share and determines whether a company increases its shareholders' capital over time.

EBITDA, MSEK

Operating profit	378.1	105.2	590.1	170.7	513.5	94.0
Depreciation	173.8	59.0	509.1	176.9	569.1	236.9
EBITDA	551.9	164.2	1,099.2	347.5	1,082.6	330.9

Reason for use: Measures the operative financial performance before depreciation.

EBITDA excl IFRS 16, MSEK

Operating profit excl IFRS 16	355.4	105.2	514.8	170.7	438.1	94.0
Depreciation excl IFRS 16	52.4	59.0	163.3	176.9	223.4	236.9
EBITDA excl IFRS 16	407.7	164.2	678.1	347.5	661.5	330.9

Reason for use: Measures the operative financial performance before depreciation.

CLAS OHLSON NINE-MONTH REPORT 2019/20

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CLAS OHLSON NINE-MONTH REPORT 2019/20

	3 Months		9 Months		12 Months
	Nov 2019 - Jan 2020	Nov 2018 - Jan 2019	May 2019 - Jan 2020	May 2018 - Jan 2019	Feb 2019 - Jan 2020	May 2018 - Apr 2019
Sales growth, MSEK
Sales actual period	2,905.4	2,914.8	7,114.8	7,030.1	8,856.9	8,772.3
Sales previous period	2,914.8	2,745.9	7,030.1	6,527.6	8,713.2	8,210.7
Sales growth	-0.3%	6.1%	1.2%	7.7%	1.6%	6.8%

Reason for use: The change in sales reflects the company's realised sales growth over time.

Average inventory value, MSEK

Average inventory value	-	-	-	-	2,007.1	2,049.0

Reason for use: Shows average inventory value over the past 12 months.

Cash flow from operating activities per share, SEK

Cash flow from operating activities, MSEK	863.5	728.1	1,318.4	639.0	991.4	312.0
Number of shares before the dilution (millions of share)	63.30	63.22	63.25	63.22	63.24	63.22
Cash flow from operating activities per share	13.64	11.52	20.84	10.11	15.68	4.93

Reason for use: Cash flow from operating activities per share measures the cash flow that the company generates per share before capital investments and cash flows attributable to the company's financing.

Cash flow from operating activities per share excl IFRS 16, SEK

Cash flow from operating activities excl IFRS 16, MSEK	733.8	728.1	943.4	639.0	616.4	312.0
Number of shares before the dilution (millions of share)	63.30	63.22	63.25	63.22	63.24	63.22
Cash flow from operating activities per share excl IFRS 16, SEK	11.59	11.52	14.92	10.11	9.75	4.93

Reason for use: Cash flow from operating activities per share measures the cash flow that the company generates per share before capital investments and cash flows attributable to the company's financing.

Net debt, MSEK

Interest bearing liabilities	-	-	-	-	2,234.0	283.1
Cash and cash equivalents	-	-	-	-	230.4	105.0
Total Net debt	-	-	-	-	2,003.6	178.1

Reason for use: Net debt shows the company's indebtedness over time.

Net debt excl IFRS 16, MSEK

Interest-bearing-liabilities excl lease liabilities	-	-	-	-	0.0	283.1
Cash and cash equivalents	-	-	-	-	230.4	105.0
Total Net debt excl IFRS 16	-	-	-	-	-230.4	178.1

Reason for use: Net debt shows the company's indebtedness over time.

Working capital, MSEK

Total current assets	2,211.4	2,514.0	2,211.4	2,514.0	2,211.4	2,341.7
-Cash and cash equivalents	-230.4	-184.7	-230.4	-184.7	-230.4	-105.0
-Current non-interest bearing liabilities	-1,724.4	-2,009.8	-1,724.4	-2,009.8	-1,724.4	-1,541.7
Working capital	256.7	319.5	256.7	319.5	256.7	695.0

Reason for use: Working capital is used to measure the company's ability to meet short-term capital requirements.

Operating margin

Operating profit, MSEK	378.1	105.2	590.1	170.7	513.5	94.0
Sales, MSEK	2,905.4	2,914.8	7,114.8	7,030.1	8,856.9	8,772.3
Operating margin	13.0%	3.6%	8.3%	2.4%	5.8%	1.1%

Reason for use: The operating margin shows operating profit as a percentage of net sales and shows operational profitability.

Operating margin excl IFRS 16

Operating profit excl IFRS 16, MSEK	355.4	105.2	514.8	170.7	438.1	94.0
Sales, MSEK	2,905.4	2,914.8	7,114.8	7,030.1	8,856.9	8,772.3
Operating margin excl IFRS 16	12.2%	3.6%	7.2%	2.4%	4.9%	1.1%

Reason for use: The operating margin shows operating profit as a percentage of net sales and shows operational profitability.

Equity/assets ratio

Total equity, MSEK	1,810.4	1,992.0	1,810.4	1,992.0	1,810.4	1,947.3
Total assets, MSEK	5,971.1	4,213.4	5,971.1	4,213.4	5,971.1	3,976.9
Equity/Assets ratio	30.3%	47.3%	30.3%	47.3%	30.3%	49.0%

Reason for use: A high equity/assets ratio provides the financial scope and independence required for conducting the operations and managing variations in the need for working capital and for capitalising on business opportunities.

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CLAS OHLSON NINE-MONTH REPORT 2019/20

	3 Months		9 Months		12 Months
	Nov 2019 - Jan 2020	Nov 2018 - Jan 2019	May 2019 - Jan 2020	May 2018 - Jan 2019	Feb 2019 - Jan 2020	May 2018 - Apr 2019
Equity/assets ratio excl IFRS 16
Total equity excl IFRS 16, MSEK	1,955.5	1,992.0	1,955.5	1,992.0	1,955.5	1,947.3
Total assets excl IFRS 16, MSEK	3,882.1	4,213.4	3,882.1	4,213.4	3,882.1	3,976.9
Equity/assets ratio excl IFRS 16	50.4%	47.3%	50.4%	47.3%	50.4%	48.0%

Reason for use: A high equity/assets ratio provides the financial scope and independence required for conducting the operations and managing variations in the need for working capital and for capitalising on business opportunities.

Capital employed, MSEK

Total assets	5,971.1	4,213.4	5,971.1	4,213.4	5,971.1	3,976.9
Long-term non-interest bearing liabilities	-202.2	-211.6	-202.2	-211.6	-202.2	-204.8
Current non-interest bearing liabilities	-1,724.4	-2,009.8	-1,724.4	-2,009.8	-1,724.4	-1,541.7
Capital employed	4,044.5	1,992.0	4,044.5	1,992.0	4,044.5	2,230.5

Reason for use: Capital employed measures the company's ability, in addition to cash balances and cash equivalents, to meet the needs of the operations.

Comprehensive income per share, SEK

Comprehensive income for the period, MSEK	266.8	60.2	410.2	124.2	365.9	79.9
Average number of shares before dilution (millions of share)	63.30	63.22	63.25	63.22	63.24	63.22
Comprehensive income per share	4.21	0.95	6.48	1.96	5.79	1.26

Reason for use: Measures the comprehensive income in relation to average number of shares before dilution.

Underlying operating profit, MSEK

Operating profit excl IFRS 16	355.4	105.2	514.8	170.7	438.1	94.0
Non-recurring costs and costs for action program CO100+	12.7	257.7	97.3	378.4	121.9	403.0
Underlying operating profit	368.1	362.9	612.1	549.1	560.0	497.0

Reason for use: Underlying operating profit is intended to show operating profit adjusted for non-recurring expenses and costs associated with action program CO100+

Earnings per share (before and after dilution), SEK*

Net profit for the period, MSEK	282.9	78.6	422.4	133.4	360.6	71.6
Number of shares before dilution (millions of share)	63.30	63.22	63.25	63.22	63.24	63.22
Number of shares after dilution (millions of share)	63.33	63.23	63.28	63.23	63.27	63.23
Number of shares before dilution	4.47	1.24	6.68	2.11	5.70	1.13
Number of shares after dilution	4.47	1.24	6.68	2.11	5.70	1.13

*Defined in accordance with IFRS

21

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The share

Clas Ohlson Series B shares have been listed on Nasdaq Stockholm since 1999 and are included in the Consumer Services sector index. At 31 January 2020, the share price was SEK 102.20 and the total market capitalisation amounted to 6,116 MSEK.

Number of shares

The number of registered shares totalled 65,600,000 (5,760,000 Series A shares and 59,840,000 Series B shares), unchanged from the preceding year. At 31 January 2020, the company held 2,262,553 shares (2,382,206) corresponding to 3.4 per cent of the total number of registered shares. At the end of the period, the number of shares outstanding, net after buy-back, was 63,337,447 (63,217,794).

Dividend policy

Clas Ohlson's dividend policy is that the dividend is to comprise at least 50 per cent of earnings per share after tax, taking into account the company's financial position.

The AGM held on 7 September 2019 approved the proposed dividend of 6.25 SEK per share, divided in two payments. The first payment was resolved at 3.13 SEK per share and the second payment at 3.12 SEK per share. The record dates were set as 10 September 2019 and 14 January 2020, respectively.

Owner	CLAS A	CLAS B	Capital	Votes
Haid family	3,023,880	12,029,103	22.9%	36.0%
Tidstrand family	2,736,120	7,079,828	15.0%	29.3%
Nordea Fonder		4,311,059	6.6%	3.7%
If Skadeförsäkring AB		2,973,238	4.5%	2.5%
Vanguard		1,115,661	1.7%	0.9%
Svenska Handelsbanken AB for PB		1,006,500	1.5%	0.9%
JP Morgan Asset Management		936,548	1.4%	0.8%
Swedbank Robur Fonder		668,400	1.0%	0.6%
Norges Bank		646,254	1.0%	0.6%
SEB Fonder & Liv		536,436	0.8%	0.5%
SHB Fonder & Liv		504,702	0.8%	0.4%
Avanza Pension		453,523	0.7%	0.4%
Dimensional Fund Advisors		446,109	0.7%	0.4%
BlackRock		397,893	0.6%	0.3%
Nordnet Pensionsförsäkring		342,067	0.5%	0.3%
Total top 15	5,760,000	33,447,321	59.8%	77.5%
Other shareholders		26,392,679	40.2%	22.5%
Total	5,760,000	59,840,000	100.0%	100.0%
Shares owned by Clas Ohlson		2,262,553	3.4%	1.9%
Share data
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Listing	Nasdaq Stockholm
Mid Cap
Ticker	Clas B
Industry	Consumer Services
ISIN-kod	SE0000584948

Earnings per share, SEK

Dividend per share, SEK

CLAS OHLSON NINE-MONTH REPORT 2019/20

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Key ratio definitions

Clas Ohlson uses certain financial measures in this interim report that are not defined in accordance with IFRS. Clas Ohlson believes that these key ratios are relevant to users of the financial report as a supplement for assessing Clas Ohlson's performance. These financial measures are not always comparable with the measures used by other companies since not all companies calculate such financial measures in the same way. Accordingly, these financial measures are not to be regarded as a replacement for measures defined according to IFRS. The measures not defined according to IFRS are presented below, unless otherwise stated.

Average inventory value

Average inventory value is calculated as the total inventories for the most recent 12 months divided by 12.

Capital employed

Balance-sheet total (total assets) less current liabilities and non-current liabilities, non-interest-bearing liabilities.

Cash flow from operating activities

Operating profit adjusted for items not included in cash flow, interest, paid tax and change in working capital.

Cash flow from operating activities excl IFRS 16

Operating profit adjusted for items not included in cash flow, interest, paid tax and change in working capital excl effect on operating costs, interest and depreciation according to IFRS 16.

Cash flow from operating activities per share

Cash flow from operating activities divided by the average number of shares before dilution.

Comprehensive income per share

Comprehensive income divided by average number of shares before dilution.

Dividend yield

Dividend per share divided by the year-end share price.

Earnings per share (before and after dilution)*

Profit for the period divided by the number of shares (before and after dilution).

EBITDA

Operating profit/loss before interest, tax, depreciation and amortisation.

EBITDA excl IFRS 16

Operating profit/loss before interest, tax, depreciation and amortisation excl effect on operating costs according to IFRS 16.

Equity/assets ratio

Equity at the end of the period divided by the balance-sheet total (total assets).

Equity/assets ratio excl IFRS 16

Equity at the end of the period divided by the balance-sheet total (total assets) excl effects relating to equity and lease liabilities according to IFRS 16.

Equity per share

Equity divided by the number of shares outstanding at the end of the period.

Gross margin

Gross profit divided by sales for the period.

Gross profit

Gross profit is calculated as the total of sales less cost of goods sold.

Net debt

Interest-bearing liabilities less cash and cash equivalents.

Net debt excl IFRS 16

Interest-bearing liabilities excl interest-bearing lease liabilities less cash and cash equivalents.

Net debt/EBITDA

Net debt divided by EBITDA for the last 12 months.

Non-recurring costs

Cost that is not regularly found in the business.

Operating margin

Operating profit divided by sales for the period.

Operating margin excl IFRS 16

Operating profit, excl effects on operating costs according to IFRS 16, divided by sales for the period.

Operating profit

Operating profit comprises profit before financial items and tax.

Operating profit excl IFRS 16

Operating profit comprises profit before financial items and tax, excl effects on operating costs according to IFRS 16.

Organic growth

Sales growth in local currencies, excluding acquisitions.

P/E ratio

Share price at year-end divided by earnings per share before dilution.

Payout ratio

Dividend divided by earnings per share before dilution.

• Defined in accordance with IFRS.

CLAS OHLSON NINE-MONTH REPORT 2019/20

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CLAS OHLSON NINE-MONTH REPORT 2019/20

Return on equity

Net profit for the period expressed as a percentage of average equity. Average equity is calculated as the total equity for the most recent 12 months divided by 12.

Return on capital employed

Operating profit plus financial income expressed as a percentage of average capital employed. Average capital employed is calculated as the total capital employed for the most recent 12 months divided by 12.

Sales growth

Sales in relation to sales during the year-earlier period.

Share of selling expenses, %

Selling expenses in relation to sales.

Underlying operating profit/loss

Operating profit excl effects relating to IFRS 16 adjusted for non-recurring costs and costs related to the CO100+ action programme.

Working capital

The total of current assets, minus cash and cash equivalents (inventories and current receivables), less current non-interest-bearing liabilities.

Glossary

Clas Office

Our concept that facilitates purchases for our corporate customers.

Club Clas

Our loyalty program, our loyalty club.

CO100+

An action programme where our strategic initiatives have been defined. The programme contains initiatives to drive sales growth and cost reductions mainly in the following areas: A more optimised product range, enhanced purchasing efficiency, administration, logistics and customer offering.

Sales per square metre

Store sales in relation to the effective retail space. For new stores, a conversion has been made in relation to how long the store has been open.

GRI

The Global Reporting Initiative, a global standard for sustainability reporting.

Comparable units

Units that have been in operation during the current period and the entire year-earlier period.

Conversion rate

The percentage of visitors who make a purchase.

Omni-channel

A shopping experience where customers perceive a seamless interaction between physical stores, the online store and telephone sales.

Products for a more sustainable lifestyle

Products with a positive, or significantly lower, environmental impact throughout their life cycle than a standard product.

sCORE

Systems for Clas Ohlson Retail Efficiency, our new business system.

Average receipt

Average amount per purchase.

Store traffic

Number of visitors.

Code of Conduct

The standards we set for ourselves, and the suppliers of our products and services, regarding working conditions, workplace health and safety and the environment.

24

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Store overview

Update on store network

The number of forthcoming, contracted store openings amounts to three stores. A decision was made during the 2018/19 financial year to discontinue the store network in the UK and Germany. In the UK, only the Reading store remains, which serves as an e-commerce logistics hub. In addition, a decision was made to close four stores in Finland and one store in Sweden during current fiscal year of which three stores in Finland were closed.

Closed stores

• Finland, Helsinki Hakaniemi, January 2020
• Finland, Helsinki Mannerheimintie, January 2020
• Finland, Espoo Otaniemi, February 2020

Future store openings

• Finland, Porvoo - Lundi, scheduled to open in April 2020
• Norway, Trondheim - Sirkus Kjøpesenter, scheduled to open in August 2020
• Sweden, Uddevalla - Torp, scheduled to open in October 2020

For more information, refer to the detailed list on the website about.clasohlson.com

CLAS OHLSON NINE-MONTH REPORT 2019/20

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clas ohlson in brief

OUR MISSION IS TO help and inspire people to improve their everyday life by offering smart, simple, practical solutions at attractive prices.

Clas Ohlson was founded in 1918 as a mail order business based in Insjön, Dalarna, Sweden. Today, we are a retail company with customers in five markets, just over 5,000 employees, and sales of approximately 9 billion SEK. Our share is listed on Nasdaq Stockholm.

We will grow in the Nordic market, focusing on simplifying people's everyday lives at home through a combination of products, advice and supplementary services.

A developed online business model, unique offering, world-class service and simplified, streamlined operations are critical parts of our new growth strategy. Leveraging the strength of our large, loyal customer base, we will now play a greater and more important role in every home.

Read more about us and our passion about simplifying life in every home at about.clasohlson.com.

Strategic focus areas

• A unique customer offering
• Outstanding customer service
• Smartness and simplicity

Financial targets/framework

• Sales will increase organically an average of 5% annually over a five-year period
• Operating margin will amount to 6–8% within a five-year period
• Net debt in relation to EBITDA to fall below two (2) times
• The dividend is to comprise at least 50% of earnings per share after tax, considering the company's financial position

Focus areas Sustainability

• Develop the sustainability aspect of our product offering.
• Develop and market resource-efficient service offerings that promote a circular economy.
• Create opportunities to reduce the impact of carbon emissions from online shopping and home deliveries.

www.clasohlson.com

Clas Ohlson AB | SE-793 85 Insjön, Sweden | Telephone +46 (0)247-444 00 | Corp. Reg. No. 556035-8672

CLAS OHLSON NINE-MONTH REPORT 2019/20