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Kid ASA Earnings Release 2024

Aug 22, 2024

3642_rns_2024-08-22_9e01909b-cebb-4ef3-a3ff-d5498609b8bb.pdf

Earnings Release

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Second quarter in brief

  • Group revenues increased by 10.2% (-0.8%) to MNOK 797.8. In constant currency:
    • Group revenues increased by 10.6% (-2.5%)
    • LFL revenues increased by 9.2% (-3.3%)
    • Online revenues increased by 9.8% (+9.3%)
  • Gross margin increased by 1.0 percentage points to 63.2%
  • EBITDA increased by MNOK 34.9 to MNOK 201.5
  • EPS of NOK 1.19 (NOK 0.90)
  • Cash flow from operations of MNOK 111.2 impacted by planned inventory build-up

Second quarter in brief

  • Fourth consecutive quarter with double-digit reported revenue growth
  • Categories launched since 2022 accounted for MNOK 22.5 (MNOK 12.1) in revenues
  • The Extended concept progresses satisfactorily in Hemtex after launch in first quarter 2024
  • Made-to-measure technical sun screening was successfully launched in Hemtex in April
  • Investment in our customer loyalty program has yielded positive results, with membership reaching 3.2 million by the end of the quarter, including a milestone of 1.5 million members in Norway for the first time
  • Completed three store projects in Kid Interior and three in Hemtex. Total of three new stores, with one in Norway and two in Sweden
  • Successful opening of the sixth Extended store at Grini (Oslo, Norway) in June. Three new Extended stores signed during the quarter, resulting in a total of 13 signed Extended stores
  • Warehouse project in Sweden is progressing according to plan

Pilot and test European markets under the Hemtex brand

  • General acceptance for the Kid concept is positive in the Nordics
  • Preliminary market studies support that our concept and products have a potential outside the current markets
  • German-language website will be launched with local marketing investments for the market in Germany. Additionally, an Englishlanguage site will be launched targeting other European countries, but with no specific marketing investments
  • The ecommerce initiative will have limited investments, costs and risks
  • Estimated launch of the pilot during H2-25

Group revenues Q2 increased by 10.2% to MNOK 797.8

  • In constant currency:
    • Group revenues increase of 10.6% (-2.5%)
    • Group like-for-like revenues increase of 9.2% (-3.3%) including online sales
    • Online growth of 9.8% (+9.3%), equivalent to an online share of 12.1% (12.1%). Including click-and-collect, the online share was 17.3% (17.2%)
  • Kid Interior revenues growth of 11.0% (-1.1%)
    • Like-for-like growth of 9.5% (-2.0%) including online sales
    • Online sales increased by 15.4% (+15.6%)
  • Hemtex revenues growth of 8.8% (-0.4%). In constant currency:
    • Revenues growth of 9.9% (-4.8%)
    • Like-for-like growth of 8.7% (-5.4%) including online sales
    • Online sales increased by 3.1% (+2.5%)

Robust gross margin

  • Group gross margin was 63.2% for the quarter, up 1.0pp compared to Q2-23
    • Kid Interior gross margin increased by 0.2pp to 63.3% (63.1%)
    • Hemtex gross margin increased by 2.5pp to 63.2% (60.7%)
  • Strong gross margin resulted from early price adjustments to address higher freight rates and currency hedge levels
  • The situation in the Red Sea / Gulf of Aden is monitored closely and we are prepared to take further actions, if necessary

OPEX-TO-SALES (excl. IFRS 16) of 50.7% (51.1%)

  • Employee benefit expenses increased by MNOK 17.3
    • General salary increase and increased number of working hours in stores, in addition to store project activity and net new stores
    • Increased logistics due to own employees in new Swedish warehouse
    • MNOK 0.7 decrease due to changes in SEKNOK exchange rate
  • Other operating expenses increased by MNOK 2.4
    • Increased marketing cost and net new stores
    • Reduced logistics costs due to shift between other operating expenses and employee benefit expenses for the logistics operation in Sweden
    • MNOK 0.6 decrease due to changes in SEKNOK exchange rate

Kid Interior Hemtex

Cash flow development in Q2

  • Cash flow from operations affected by planned inventory build-up during the quarter
  • Cash flow from investments reflects mainly CAPEX relating to store openings and projects
  • Cash flow from financing represents lease payments, net interests, use of credit facilities and payment of dividend

Robust financial position

  • Cash and available credit facilities of MNOK 357.5 (MNOK 175.9), including an unused termloan facility of MNOK 125 related to investments in the Swedish warehouse
  • Net interest-bearing debt excl. IFRS 16 leasing liabilities of MNOK 756.0 (MNOK 842.7)
  • Gearing ratio, excl. IFRS 16 effects, of 1.22x (2.40x)
Completed
2024
per quarter-end		 Signed, but not yet completed
New stores NO:
Oslo City
NO:
Egersund
SE:
Vetlanda
SE:
Ringen, Stockholm		 NO:
Værste, Fredrikstad (Q4-24)
NO:
Grünerløkka
(Q2-25)
NO:
Bryn (Q2-25)
SE:
1 store
FI:
1 store
Closures NO:
2 stores
SE:
4 stores
Relocations NO:
6 stores
SE:
4 stores		 NO:
4 stores
SE:
1 store
Refurbishment/
expansion		 NO:
4 stores
SE:
2 stores		 NO:
5 stores
SE:
1 store
Extended NO:
Grini		 NO:
Kilen, Tønsberg
(Q3-24)
NO:
Moa, Ålesund
(Q4-24)
NO:
Tiller (Q4-24)
NO:
Oslo (Q1-25)
NO:
City Nord, Bodø (Q2-25)
NO:
Lagunen (Q4-25)
NO:
1 store**

  • In H2-24, we have five store projects in Kid Interior and two in Hemtex. These projects include a combination of refurbishment, enlargement and relocations
  • Monitoring the freight situation closely. Expect limited impact from delays

KID Interior

(Amounts
millions)
in
NOK		 Q2
2024		 Q2
2023		 H1
2024		 H1
2023		 FY
2023
Revenue 500.4 450.7 938.1 836.6 2,122.9
growth
Revenue		 11.0
%		 -1.1% 12.1
%		 %
1.7		 7.0
%
growth
including
online
sales
LFL		 9.5
%		 -2.0% 11.1
%		 0.5
%		 6.1
%
COGS -183.8 -166.4 -352.1 -338.6 -796.2
profit
Gross		 316.6 284.3 586.0 498.0 1,326.7
(%)
Gross
margin		 63.3
%		 63.1
%		 62.5
%		 59.5
%		 62.5
%
Other
operating
revenue		 0.3 0.1 0.3 0.1 0.1
Employee
benefits
expense		 -107.0 -96.6 -218.7 -197.6 -436.5
Other
operating
expense		 -118.3 -112.4 -236.6 -220.6 -463.9
Other
effect
operating
expense - IFRS
16		 54.4 45.9 106.6 93.3 189.2
EBITDA 146.0 121.2 237.6 173.2 615.5
(%)
EBITDA
margin		 29.2
%		 26.9
%		 25.3
%		 20.7
%		 29.0
%
of
shopping
days
No.		 7
3		 7
1		 148 148 306
of
physical
period
end
No.
stores
at		 158 156 158 156 157

Hemtex
--------
Q2
2024		 Q2
2023		 H1
2024		 H1
2023		 FY
2023
297.4 273.4 556.2 492.9 1,290.7
9.9
%		 -4.8% 11.9
%		 -7.7% 3.2
%
8.7
%		 -5.4% 11.6
%		 -5.9% %
4.4
-109.6 -107.4 -209.5 -201.5 -518.0
187.8 166.0 346.7 291.5 772.6
63.2
%		 60.7
%		 62.3
%		 59.1
%		 59.9
%
1.0 0.9 1.8 1.5 4.2
-72.6 -65.7 -139.8 -125.6 -268.2
-106.8 -95.0 -209.8 -192.4 -390.0
46.0 39.3 89.4 75.1 150.4
55.5 45.4 88.4 50.0 269.0
18.6
%		 16.6
%		 15.8
%		 10.1
%		 20.8
%
9
0		 9
0		 180 179 362
119
117 117 117 117

¹ Calculated in local currency

(Amounts
thousand)
in
NOK		 Q2
2024		 Q2
2023		 H1
2024		 H1
2023		 FY
2023
Revenue 797.8 724.1 1,494.3 1,329.5 3,413.6
COGS -293.4 -273.8 -561.6 -540.0 -1,314.3
profit
Gross		 504.5 450.3 932.7 789.5 2,099.3
(%)
Gross
margin		 63.2
%		 62.2
%		 62.4
%		 59.4
%		 61.5
%
Other
operating
revenue		 1.3 1.0 2.2 1.6 4.3
OPEX -304.3 -284.6 -608.9 -567.8 -1,219.1
EBITDA 201.5 166.6 326.0 223.2 884.5
(%)
margin
EBITDA		 25.2
%		 23.0
%		 21.8
%		 16.8
%		 25.9
%
Depreciation
and
amortisation		 -118.2 -100.8 -233.1 -196.7 -404.1
EBIT 83.3 65.8 92.9 26.6 480.4
(%)
EBIT
margin		 %
10.4		 %
9.1		 %
6.2		 %
2.0		 %
14.1
finance
Net		 -23.1 -20.5 -43.0 -38.4 -76.6
Share
of
result
from
joint
ventures		 -0.9 0.1 -3.4 -0.3 -1.2
Profit
before
tax		 59.3 45.3 46.5 -12.1 402.5
profit
Net		 48.4 36.4 37.4 -10.2 313.8

(Amounts in NOK thousand) Note 30.06.2024 30.06.2023 31.12.2023
Assets Unaudited Unaudited Audited
Goodwill 9 69,497 68,662 70,169
Trademark 9 1,513,331 1,512,694 1,513,851
Other intangible assets 9 45,226 34,504 46,699
Deferred tax asset 9,232 0 6,593
Total intangible assets 1,637,286 1,615,859 1,637,312
Right of use asset 9 1,199,167 1,042,467 1,050,028
Fixtures and fittings, tools, office machinery and
equipment 9 328,862 308,316 303,178
Total tangible assets 1,528,029 1,350,783 1,353,206
Investments in associated companies and joint ventures 1
0		 0 0 1,013
Loans to associated companies and joint ventures 8 69,990 37,024 50,702
Total financial fixed assets 69,990 37,024 51,716
Total fixed assets 3,235,304 3,003,666 3,042,234
Inventories 759,889 666,049 576,279
Trade receivables 27,274 32,841 32,640
Other receivables 41,421 50,141 43,031
Derivatives 42,438 79,614 29,337
Totalt receivables 111,133 162,597 105,009
Cash and bank deposits 0 0 225,065
Total currents assets 871,021 828,646 906,353
Total assets 4,106,325 3,832,315 3,948,587
(Amounts
thousand)
in
NOK		 Note 30.06.2024 30.06.2023 31.12.2023
Equity
and
liabilities		 Unaudited Unaudited Audited
Share
capital 48,770 48,770 48,770
Share
premium		 321,050 321,050 321,050
Other
paid-in-equity		 64,617 64,617 64,617
Total
paid-in-equity		 434,440 434,440 434,440
Other
equity		 818,593 747,136 880,840
Total
equity		 1,253,030 1,181,576 1,315,280
Deferred
tax		 319,576 316,306 312,218
Total
provisions		 319,576 316,306 312,218
liabilities
Lease		 893,652 768,113 779,287
Liabilities
to financial
institutions		 6 681,541 511,654 491,661
Total
long-term
liabilities		 1,575,193 1,279,768 1,270,947
liabilities
Lease		 343,063 301,678 305,640
to financial
Liabilities
institutions		 6 74,477 331,061 30,000
Trade
payable		 182,136 110,930 203,375
payable
Tax		 0 0 55,813
Public
duties
payable		 127,356 100,844 209,941
Other
short-term
liabilities		 220,351 208,745 191,626
Derivatives 11,143 1,408 53,748
Total
short-term
liabilities		 958,527 1,054,666 1,050,144
Total
liabilities		 2,853,296 2,650,740 2,633,310
Total
equity
and
liabilities		 4,106,325 3,832,315 3,948,587
Total year Total year
(MNOK) Q1 2024 Q1 2023 Q2 2024 Q2 2023 Q3 2024 Q3 2023 Q4 2024 Q4 2023 2024 2023
Kid ASA and Kid Interior
Segment allocated employee benefits
expense		 4.0 4.2 4.3 4.0 4.0 6.6 8.3 18.9
Segment allocated other operating
expense		 1.2 0.5 1.3 0.5 0.5 1.3 2.5 2.6
Hemtex
Segment allocated employee benefits
expense		 -4.0 -4.2 -4.3 -4.0 -4.0 -6.6 -8.3 -18.9
Segment allocated other operating
expense		 -1.2 -0.5 -1.3 -0.5 -0.5 -1.3 -2.5 -2.6

18 Kid ASA – Q2 presentation

Group
Total growth
Year Q1 Q2 Q3 Q4
2021 10.4 % 3.9 % 3.6 % 2.5 %
2022 9.3 % 8.8 % 0.5 % 2.1 %
2023 -1.3 % -2.5 % 12.1 % 10.2 %
2024 13.7 % 10.6 %
Like-for-like growth
Year Q1 Q2 Q3 Q4
2021 9.3 % 2.9 % 0.1 % 0.2 %
2022 7.3 % 5.6 % -0.4 % 1.8 %
2023 -0.3 % -3.3 % 12.9 % 9.3 %
2024 13.5 % 9.2 %
Kid
Interior		 Hemtex
Total growth Total growth
Year Q1 Q2 Q3 Q4 Year Q1 Q2 Q3
2020 -3.6 % 28.0 % 22.1 % 15.3 % 2020 6.6 % 14.7 % -3.7 %
2021 13.6 % 1.7 % -3.9 % -1.0 % 2021 6.4 % 7.7 % 17.4 %
2022 12.5 % 8.9 % 1.4 % 2.3 % 2022 4.8 % 8.8 % -1.0 %
2023 5.2 % -1.1 % 13.1 % 9.3 % 2023 -10.9 % -4.8 % 10.5 %
2024 13.4 % 11.0 % 2024 14.3 % 9.9 %
Like-for-like growth Like-for-like growth
Year Q1 Q2 Q3 Q4 Year Q1 Q2 Q3
2020 -4.0 % 27.1 % 20.9 % 13.6 % 2020 7.9 % 18.0 % 9.2 %
2021 10.3 % -0.9 % -7.1 % -3.8 % 2021 7.8 % 9.8 % 14.6 %
2022 10.7 % 5.8 % -1.0 % 0.9 % 2022 2.0 % 5.2 % 0.8 %
2023 3.5 % -2.0 % 12.7 % 8.5 % 2023 -6.5 % -5.4 % 13.3 %
2024 12.7 % 9.5 % 2024 14.9 % 8.7 %

Kid Interior Hemtex

Number of sales days Number of sales days

Year Q1 Q2 Q3 Q4 Total Year Q1 Q2 Q3 Q4 Total
2023 77 71 79 79 306 2023 89 90 92 91 362
2024 75 73 148 2024 90 90 180
ar 01 02 03
2023 Q1 Q2 Q3 Q4 Total 2023 Q1 Q2 Q3 Q4 Total
New stores 0 1 0 1 2 New stores 1 0 0 2 3
Closed stores 1 0 0 0 1 Closed stores 2 1 0 0 3
Relocated stores 4 1 0 1 6 Relocated stores 1 3 3 3 10
Refurbished stores 3 3 1 3 10 Refurbished stores 0 1 1 3
Total number of stores 155 156 156 157 Total number of stores* 129 128 128 130
2024 Q1 Q2 Q3 Q4 Total 2024 Q1 Q2 Q3 Q4 Total
New stores 1 2 3 New stores 2 2
Closed stores 1 1 2
Closed stores		 1 3 4
Relocated stores 4 2 6 Relocated stores 3 4
Refurbished stores 3 1 4 Refurbished stores 2 0 2
Total number of stores 157 158 Total number of stores* 129 128
Total number of LFL stores 154 153 Total number of LFL stores* 126 123

Number of store projects Number of store projects

2023 Q1 Q2 Q3 Q4 Total 2023 Q1 Q2 Q3 Q4 Total
New stores 0 1 0 1 2 New stores 1 0 0 2 3
Closed stores 1 0 0 0 1 Closed stores 2 1 0 0 3
Relocated stores 4 1 0 1 6 Relocated stores 1 3 3 3 10
Refurbished stores 3 3 1 3 10 Refurbished stores 1 0 1 1 3
2024 Q1 Q2 Q3 Q4 Total 2024 Q1 Q2 Q3 Q4 Total
New stores 1 2 3 New stores 0 2 2
Closed stores 1 1 2 Closed stores 1 3 4
Relocated stores 4 2 6 Relocated stores 1 3 4
Refurbished stores 3 1 4 Refurbished stores 2 0 2
Total number of stores 157 158 Total number of stores* 129 128

*incl franchise stores

Logistic costs - Sweden

Total
year		 Total
year
(MSEK) Q1
2024		 Q1
2023		 Q2
2024		 Q2
2023		 Q3
2024		 Q3
2023		 Q4
2024		 Q4
2023		 2024 2023
benefits
Employee
expense		 5
4		 3
5		 2
2		 4
4		 2
5		 10
6		 11
7
Third-party
logistics
expense		 12
1		 1
7		 13
9
expenses*
Central
warehouse		 7
7		 2
0		 10
1		 9
9		 8
3		 6
7		 8
17		 27
8
Total
incl
. non-recurring
items		 13.0 14.2 15.4 13.7 0.0 12.7 0.0 12.8 28.5 53.4
Non-recurring
items
Employee
benefits
expense		 -0
8		 -0
6		 -1
4
Third-party
logistics
expense		 -2
2		 -1
7		 0
4		 -3
5
Central
warehouse
expenses		 -0
5		 -0
5
Total
excl
. non-recurring
items		 13.0 10.7 15.4 11.4 0.0 13.1 0.0 12.8 28.5 48.0

*Excluding IFRS 16. Please note that we in 2023 have lower rental costs due to agreed discount in the lease agreement.

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