Matas Q1 2025/26 presentation: Solid growth and free cash flow amid Nordic expansion

Introduction & Market Context

Matas Group presented its Q1 2025/26 results on August 13, 2025, reporting currency-neutral revenue growth of 4.7% year-over-year and maintaining its full-year guidance despite macroeconomic uncertainties. The Danish beauty and health retailer’s shares have recently experienced pressure, with the stock closing at DKK 131 on August 12, down 0.3% and well below its 52-week high of DKK 155.8.

The company highlighted significant improvements in free cash flow generation and continued progress on its "Win the Nordics" strategy, which focuses on integration, automation, and operational excellence across its Matas and KICKS banners.

Quarterly Performance Highlights

Matas Group reported Q1 2025/26 revenue of DKK 2,074 million, representing 4.7% currency-neutral growth (6.0% reported). The company achieved an EBITDA margin before special items of 14.5%, compared to 14.9% in the same period last year, with the decline primarily attributed to foreign exchange headwinds.

As shown in the following financial highlights chart, both main banners contributed to growth, with Matas delivering 5.3% growth and KICKS achieving 2.3% currency-neutral growth (7.8% excluding the closed Skincity business):

Online sales were particularly strong, with core online growth of 17.0% excluding Skincity. The company’s revenue breakdown by channel shows stores growing at 1.9% while online expanded by 9.7% (17.0% excluding Skincity):

Gross margin performance was mixed across the group’s banners. While Matas improved its gross margin from 46.1% to 47.7% through new assortment and product mix improvements, KICKS experienced a decline from 45.3% to 43.1%, primarily due to currency headwinds:

Strategic Initiatives

Matas Group’s "Win the Nordics" strategy continues to progress through two distinct phases. The first phase focuses on growth, integration, and automation investments, while the second phase emphasizes operational excellence and cash generation:

The company has made significant progress on several strategic priorities, including expanding its product assortment, growing its e-commerce business, refreshing stores, and integrating operations across the Nordic region:

A key operational milestone was the full activation of two automated logistics centers - one for KICKS in Rosersberg, outside Stockholm, and the Matas Logistics Center in Lynge, outside Copenhagen. These facilities are expected to drive long-term operational efficiencies:

The company has also successfully expanded its membership program to over 6 million Nordic club members, with Matas having more than 2 million members and KICKS approaching 4 million members, including over 1 million in Norway.

Detailed Financial Analysis

One of the quarter’s most significant achievements was the substantial improvement in free cash flow, which increased from DKK 32 million in Q1 2024/25 to DKK 344 million in Q1 2025/26. This improvement reflects better working capital management and normalized capital expenditures following the completion of the Matas Logistics Center:

The company’s EBITDA before special items was impacted by the strengthening of the Swedish krona against the Norwegian krone and euro, which affected gross margins in KICKS’ operations in Norway and Finland:

Matas Group’s gearing ratio (net interest-bearing debt to last twelve months EBITDA before special items) stood at 3.0x at the end of Q1, down from the previous quarter. In May 2025, the company successfully refinanced at competitive terms, securing financing for future growth with improved headroom.

Forward-Looking Statements

Matas Group maintained its financial guidance for 2025/26, projecting currency-neutral revenue growth of 3-7% (3.9-7.9% excluding Skincity) and an EBITDA margin before special items of around 15%. Capital expenditures are expected to normalize at 3-4% of revenue, equivalent to approximately DKK 330 million:

The company noted some macroeconomic uncertainty, particularly in Sweden, but indicated that consumer sentiment in Denmark, Norway, and Finland remained relatively stable. Management emphasized that the company’s strategy of assortment expansion, online growth, and moderate store expansion should drive growth even in uncertain times.

The company also highlighted that operational excellence, synergies, Nordic house brands, and a Nordic retail media offering are expected to drive margin improvement and create headroom to stay competitive on value. Significant cash generation is anticipated to allow for deleveraging, investments in growth, and distributions to shareholders.

Full presentation:

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