Earnings call transcript: Matas Q1 2025 sees stock surge with 6% revenue growth

Matas (MATAS), the $834 million market cap Nordic retailer, reported a strong first quarter of 2025, with revenue growing by 6% year-over-year, which was well-received by the market. The company’s stock surged 6.87%, closing closer to its 52-week high. The earnings call highlighted operational achievements and strategic expansions, contributing to investor optimism. According to InvestingPro data, the company maintains a "GOOD" Financial Health Score of 2.64, underpinning its solid market position.

Key Takeaways

• Matas reported a 6% revenue growth in Q1 2025.
• Stock price increased by 6.87%, nearing its 52-week high.
• Strong performance in subsidiaries with 12% growth.
• Operational efficiencies achieved with logistics and IT integrations.
• Expansion of Nordic house brands and new partnerships.

Company Performance

Matas demonstrated robust performance in Q1 2025, marked by a 6% increase in revenue. The company benefited from the growth of its subsidiaries, which saw a 12% rise. The expansion of Nordic house brands and new partnerships, such as with Kiko Milano, fueled this growth. Despite challenges in the Swedish market, Matas maintained a strong position across other Nordic countries.

Financial Highlights

• Revenue: 6% increase, 4.7% currency-neutral growth.
• EBITDA margin: 14.5%, consistent with the previous year.
• Gross margin: Impacted by a 1.4% drop due to FX fluctuations.
• Transactions: 300,000 more compared to the same quarter last year.

Market Reaction

Matas’ stock surged by 6.87% following the earnings release, closing at 149, close to its 52-week high of 155.8. This positive market reaction reflects investor confidence in the company’s strategic initiatives and growth potential despite certain market challenges. InvestingPro analysis shows strong analyst consensus, with an average recommendation of 1.5 (where 1 is Strong Buy), suggesting continued optimism about the company’s prospects.

Outlook & Guidance

The company maintains a full-year revenue growth guidance of 3-4% and an EBITDA margin of 15%. Matas is focusing on operational excellence and expanding its Nordic house brands. The guidance suggests a continued emphasis on growth and efficiency.

Executive Commentary

CEO Gregers Will Wilsborn emphasized a strategic focus on cash generation and member service, stating, "We are now entering a highly cash generative phase." He also highlighted the company’s strategy to "serve our members better," pointing to customer-centric initiatives.

Risks and Challenges

• FX fluctuations impacting gross margins, particularly due to the Swedish krona.
• Potential slowdown in the Swedish market.
• Execution risks associated with new market expansions.
• Consumer behavior trends, including trading down, could impact sales.
• Integration challenges with new logistics and IT systems.

Q&A

During the Q&A session, analysts inquired about consumer behavior trends, specifically trading down, and its impact on sales. Questions also addressed the FX impacts on margins and the recent logistics center integration, highlighting the learning curve associated with these changes.

Full transcript - Matas (MATAS) Q1 2026:

Conference Operator: Hello, and welcome to Matas Q1 Conference Call. For the first part of this call, all participants are in a listen only mode. Afterwards, there will be a question and answer session. This call is being recorded. I would now like to introduce CEO, Gregers Will Wilsborn and CFO, Peter Johannesen Madsen.

Please begin.

Gregers Will Wilsborn, CEO, Matas: Thank you, operator, and welcome, everyone, to the call, our earnings call for the first quarter of the financial year. And it’s been a good start to the quarter, but it’s also a quarter of more symbolic importance because we are approaching the two year mark of our acquisition and integration of Kix in Sweden, Norway and Finland. So our agenda for the day is that I will make some comments on where we are on the grander time line of the Win the Nordics strategy and then point out a few areas of our strategy where we are making progress. And then I’ll hand over to Peer to cover the financial results in more details before we open for Q and A. And really, this is to us the central message of the announcement that we’ve made today that two years into the acquisition of Kix Group, we now enter a new stage of the Win the Nordics strategy.

For the last two years, we have been focused on growth, and we have been focused on integration and really getting the two companies together and driving our synergies and the biggest investment program in our history, building and opening two automated warehouses. As we look ahead, we look into a different kind of phase, still focused on growth and our long term growth ambitions, but also more focused on operational excellence and execution. And also from a financial point of view, we enter a highly cash generative phase, offering us a lot of freedom to keep investing no matter if the markets are friendly or less friendly out there. And digging into what we have covered for the last two years, I think of note for us as a first time buyer of a company outside of Denmark after seventy five years of operation in just one market, we have been able to deliver sustained market share gains with growth in all four markets and both the physical channel and the online channel while integrating. We have seen, and this was not something we counted on, we have seen a growth in our membership across The Nordics past the 6,000,000 mark for the number of members, which is obviously a very, very key asset for us and a key part of the reason we are competitive.

We also announced when we acquired Kix that we would be able to deliver €140,000,000 in improvements and synergies. That’s on track. It will be fully in, in this financial year. And as we said with the financial year reporting, we have identified another DKK50 million of synergies coming into the next financial year. We have a Nordic organization.

We have a Nordic management team, leadership team in place. And the IT integration that is still running, it’s on track. And we have actually delivered in the last quarter our first win on a joint e commerce platform where Finland migrated into the new Nordic platform. So IT integration on track as well. Two automated logistics centers.

That is, of course, a critical project both financially but also operationally to completely remake our supply chain. It has been delivered on time, on budget, and they are both now fully operational and entering the phase of the learning curve phase, getting more and more efficient month by month. And financially, a full refinancing completed on competitive terms, offering us more headroom if we were to meet that and the launch of a share buyback program with the financial year. The next phase, and I’m not going to make any predictions about whether it’s going to be an easy market or a difficult market. It is for sure a volatile market.

But we have a strategy to grow driven by factors that are within our control. So our growth and our long term ambitions to grow, they are driven by assortment expansion, offering more to our members and customers in all markets. They are driven by online growth, delivering faster to the customer, this wider assortment and becoming an even more attractive place to shop online and moderate store expansion. Not a wild ride of store expansion, but we see opportunities for moderate store expansion. And I could add to this list the membership growth also as an important driver in uncertain times.

As for the margin and the margin improvement that we’re foreseeing, we have a lot of levers to drive the margin improvement. Operational excellence for sure will be a headline for us going forward. The realization of the 2027 sorry, 2026, 2027 synergies that we have announced. Our Nordic house brands, which is an area we will start focusing more on, taking national champions out into all four markets and then our retail media offering, which is an area where we are very advanced and where we can offer to suppliers Nordic offerings, something that they are really asking for and demanding of us that we can deliver as one of the few companies operating in this market. So we see significant tangible levers to drive margin improvements all creates the margin headroom we need to stay competitive on value in a time where consumers are looking for value.

And then again, at a phase where we will deliver significant cash flow generation, which would give us a lot of freedom to either deleverage, invest in growth and of course also distribute to shareholders. So a lot of financial freedom to operate no matter if the markets are friendly or less friendly out there. So all in all, a milestone, a new chapter, a new phase with more focus on operational excellence than the two years we’ve just gone through. And therefore, we feel confident in maintaining our long term financial ambitions. As for the quarter and the financial results of the quarter, 4.7% growth year on year, currency neutral.

Reported growth, six percent. So we got a bit of help from the SEK improving. On the other hand, on the margin, down from last year, driven mainly by FX by higher Swedish krona. And still, again, so we buy in Swedish krona, we sell in Norwegian krona, and that has affected our margin. But underlying, we see a flat margin towards last year despite the fact that we have extra costs opening and running the Danish warehouse and the redundancy that we have as we have opened the Danish warehouse.

So this is in line with our expectations underlying what we had expected for the quarter. So we feel like this is a start to the year with no surprises. And I think in this market, no surprises is what you can be hoping for. The highlights, of course, online growth, percent, so still growing double digit. And as you look at the numbers, remember that SkinCity is now completely out of the numbers.

We did have significant revenues in SkinCity same quarter of last year. That’s gone. The business is closed down, it’s out of the numbers. So 17% growth, I think, is very good and definitely above the market growth. Masked Beauty growing, and this is not surprising.

That’s where we can offer a lot of value to consumers. And one of the benefits of our strategy is that customers are able to trade down within the four walls of Matas and increasingly within the four walls and online proposition of Kix. As for gross margin and underlying improvements, we did see, as I mentioned, headwinds from currency effects on COGS being bought in SEK and sold in NOK. And of course, the SkinCity closure, SkinCity was a high gross margin business, but a loss making one. That affects as you look at gross margin, that affects somewhat.

I’ll return to Max’s Logistics Center, but the headline financially is, of course, that we are now entering a phase of normalized CapEx and significant cash flow generation. Our synergies are on track. We paid the dividends and the share buyback program. So as we look ahead, we see no reason to make any changes to our guidance, revenue growth of 3% to 4%. And if we exclude SkinCity, that is between 48%, so well in line with our long term financial ambitions.

And we maintain our EBITDA margin guidance as well of 15%, knowing that we will see the double count of costs in the first quarter disappear as we go into the quarters, the learning curve from our new facilities continuing and synergies rolling into the business. CapEx also maintained between three percent to 4% of revenues, $330,000,000, including the last little bit of investments into the Matas Logistics Center. So that’s the guidance for the year maintained. As we look at the numbers again, Matas driving the majority of growth. If you look at headline numbers, 6%, and that includes our subsidiaries, Firtal and Kraen and Wirtzunnhill, but 6% growth in Matas a gross profit margin that’s actually up due to both the category mix but also the realization of COGS synergies.

So a strong performer. Matas, the most mature market where we have the strongest market position. But again, the fact that Matas is able from that very strong market position to continue to drive this level of growth and clearly win market share, I think, is just a testament to the strength of the concept and the strategy. For Kix, 2.3% growth. And again, remember to take out SkinCity, and we’ve had discussion in previous quarters, is there like a migration effect and so on.

Now it’s pretty clear. Sin City is out of the numbers. So these are the pure underlying growth numbers with growth in all markets and all channels. Profit margin down in part due to FX, but also because we are investing in value. Kix does not have a reputation to be the have the best price perception, and we are doing something about that.

We want Kix to be positioned as a fair value player in the market, and we have the headroom to do that. So all in all, 4.7% reported 6% growth, 14.5% EBITDA margin, taking out FX in line with last year and in line with our own expectations. As for the strategy continued progress, we are making headway on all three pillars, main pillars of our strategy. And our strategy is about serving our members better, offering more to our members, whether it’s third party brands, more new products, more categories offered to consumers or investment into price and value, but also the expansion of our in house brands, which I will talk about later, but in very important area that we haven’t really started to harvest yet that we can take our national champions and we can roll them out into all Nordic markets. Again, closer to you, driving e commerce growth, you see that very clearly.

And the growth in membership as well is a testament to that strategy kicking in and working. And for our stores, again, it is a modest program that we have. We love our stores. They are central to our business model. We don’t believe that you should rush into store expansion.

But we are confident that stores and modern stores in the right locations are part of our long term future. And I would also mention that we have recruited a very senior new country manager to lead and drive growth in the Norwegian market, which we find to be an attractive market where we have opportunities. And then finally, as I mentioned before, the whole idea that as a Nordic company, we would be stronger, have better bargaining position, be able to take out costs, clearly showing in this quarter as well. Our strategy is to launch more brands, more categories, educate the consumers and members that they can use Matas, can use Kix for much more than they did in the old days with the store around the corner. So no matter if they shop in the store or if they go online, they have a lot bigger choice and they experience much more many more news coming in and many more categories and many more needs they can fulfill by shopping with Matas and Kix.

A couple of wins. Kiko Milano, a really cool brand, used to be very only their own distribution have now gone into retail in The Nordics, choosing us as our partner, which we’re really proud about, really good start for that brand. We see which is of central importance Kix, which is the Kix business is very strong in makeup, very strong in fragrance. We would like to build the strength in skincare that we know from the Mesa side. And acquiring and getting partnerships with some of these really strong, well known brands that consumers might know from the pharmacy sector is of key importance to the credibility of our skincare play.

And also in Denmark, the fact that we can both get the very high end brand into our environment and also some of these really top selling products in the health and well-being space is a testament to the fact that suppliers see us as a relevant channel for products that they may not have considered to retail with us in the past. So good progress on discount. Closer to you, as I mentioned, more members, customer satisfaction critically going up, younger demographics coming into business. We see the young really shopping with Kix and Matas, and they are shopping across more categories and channels. The key one for us actually is the fact that we have been able to make two supply chain transformations, a really big one in Kix that is running very stably, numbers improving month by month, that has enabled us now to offer a wider assortment and faster shipping to consumers, but also, of course, run the logistics part much more effectively.

It is in operation. It is in full operation. We have seen no major disruptions. So we are really proud that that’s stable. The big thing is our Matas Logistics Center, our biggest investment in e commerce logistics for Matas.

We opened in the spring. It was a very smooth transition. I don’t think customers noticed at all. And if they did, it was maybe for a week or two. And of course, we go into the learning curve phase of this.

So just one little fact, more than 1,000,000 we passed out of the 1,000,000 mark web orders shipped from this brand new facility with limited downtime. And that is, I can tell you from previous experience, an exceptionally well run transition by our logistics team. So now it’s all about operations. It’s about getting all the benefits out, the learning curve, keeping the steady operations, seeing customers appreciate faster delivery both in our Kix markets and our Matas markets and for us, of course, seeing the cost to serve improving as we progress into the year. A lot of discussion amongst ourselves and in the market about macroeconomic uncertainty, volatility and drop in consumer confidence, we’re all following those numbers closely.

That sentiment is reflected in our guidance for the year. And we remarked with the full year that in Denmark, we see no impact. That’s still the case. In Norway, we saw limited impact. That is still the case.

In Finland, we saw no impact. That is still the case. And in Sweden, probably the more volatile of the markets, we did see signs of slowdown both in market data but also in peer reporting. And we wonder whether this is of a more cyclical temporary nature. Nothing has changed on that perspective either.

So pretty similar to the situation we saw before the summer when we reported the full year numbers. And with that, I’ll hand over to Peer to cover the financial results.

Peter Johannesen Madsen, CFO, Matas: Thank you, Gregers. Well, and as Gregers said, this is really a quarter delivering as we expected and in line with our guidance for the full year. But let me take you through the numbers. Firstly, in terms of our revenues by banner, as Flag has alluded to earlier, Matas growing 5.3% with our subsidiaries growing 12%, so really strong growth on our small business as well. And kicks into excluding Skin City, growing 7.8%.

So coming out of the first quarter with a 6% reported and 4.7% currency neutral. If we look at the channels, again, stores, 1.9%. Of course, this is on a also growth on a like for like basis. We need to remember that we had fewer sales days in this quarter due to the timing of Easter, actually impacting a little bit the store performance, especially on the major side. From an online perspective, 17%, excluding SkinCity, again, a very strong growth as we progress into the next quarter.

Moving into our gross margin. And that is really, as Kleer has alluded to, this is where we have a little bit of special effect this quarter compared to our previously reporting. Matas is straightforward, a strong growth also on the gross margin level, led by our product mix, as Clair said, some of the synergies that we were expecting, but also a stronger profitability or gross margin on our assortment expansion is really coming through. The maturity is actually showing in the numbers as we talked about since we launched all the assortment in 2021. On kicks, on the other side, we are investing in the market.

As we’ve said all along, we are investing in price. We’re investing in being more competitive. Our nice price program is showing. And then, of course, we are cycling some stronger gross margins from SkinCity. But on the numbers, it’s not as dramatic as it actually shows as 1.4% of the drop is coming from higher input costs on cost of goods in Norway and Finland from the Swedish slightly stronger Swedish krona.

So that is, as also reported, it’s 1.4% or around €8,000,000 that we are impacted with on that account. So in totality, when we look at it, we’re growing our gross margin almost in line with our top line of 4.4% despite the impact from the FX. Moving into our costs. So basically, staff costs and other costs. If we start with staff costs, basically, we’re looking at our staff costs basically following the percentage compared to revenues compared to last year, slightly below actually.

And that has also to do with the focus and the operational excellence space that we’re moving into, where we really focus on streamlining our approaches in terms of how we manage our salaries and also on some of the adjustments and the synergies we’re getting on the organization. And at the same time, of course, as we move forward building all the capabilities we need to win the Nordics. Other costs, of course, is impacted by the fact that we have very strong growth. When we grow our e com business, as we grow this quarter, it has an impact in terms of our shipping costs, and that is also reflected on the external costs. Marketing is basically in line with our top line growth.

And again, assortment expansion now is more and more in line with the growth that we are seeing as we are on a more mature level, especially on the major side. And the Nordic efficiencies and synergies, as we talked about, is coming in as we progress during the year. Taking that down, just to summarize on our EBITDA, adjusting for the FX, which is important, we’re basically in line with last year, so a 0.4% impact on our EBITDA margin in this quarter, so actually 14.9% compared to 14.9% last year. And on that amount, we need to remember that in this quarter, we are running the learning curve where we just launched the MLC, so we have a little bit of extra cost. So we’re very pleased with the performance also on EBITDA margin level.

With the EBITDA coming in turning into our inventories and then our cash flow, As you’ll see, our inventories are up compared to last year. It is not increasing compared to end of last financial year. So compared to March, it’s pretty much in line with that adjusting a little bit for the FX. So the change we’re seeing is actually the changes we made last year. As you recall, last year, we went live with Kix Logistics Center, and we upped the inventories in the first quarter of last year to make sure that we have sufficient inventories, both in stores and also in our logistics center to make sure that we’ve got that as efficient up and running as possible and with a least impact on our consumers.

In this quarter, we had now had the impact of Matas MLC. And of course, that impacts our numbers compared to last year. We’re running with slightly higher inventories. And as we progress throughout the year, we expect that to level out somewhat. Turning to the cash flow.

And really a strong quarter. And some of that or the majority of that is actually coming from our improved working capital. And that is linked to a reset of our accounts payables to a large extent. And that’s the majority of the impact, and that’s coming from a very low accounts payable or support on our inventories for our suppliers. You can say end of last financial year, we have reset that to a more normal level in this quarter, and we expect that to continue throughout the year.

The other point, of course, to our strong cash flow is that we are now back into a normal level of investments. Last year, we had the investments in MLC. And this year, we are back to the normal 3% to 4%, which is also improving our cash flow with roughly €100,000,000 So a positive of above €300,000,000 in this year’s first quarter compared to last year’s first quarter. This is not a timing. It is more a reset and then investment level will continue at the same pace, which will be lower than last year.

Which brings into the gearing, and that means that we’re going to close this quarter around 3x, 3x our EBITDA. And of course, this is impacted by the stronger cash flow, so a slight decline in this quarter. Normally in Q1, go up a little bit, but in this quarter with our stronger cash flow, we are actually decreasing the ratio. And that then ends up with our guidance. As Greg has already alluded to, with the performance in first quarter.

We remain and keep our guidance for the full year, both in terms of revenues, our EBITDA and EBITDA margin as well as our investments in the 3% to 4% range. And with that, I think Q and A before we say thank you. So I’ll leave the table open for questions.

Conference Operator: Thank you. We will now start the Q and A session. The first question will be from the line of Paul Yassen from Danske Bank. Please go ahead. Your line will now be unmuted.

Paul Yassen, Analyst, Danske Bank: Yes. Thank you, and congratulations for the week of the no surprises like the last time. Question number one, you reiterated the the view that you had on the four Nordic markets, but we also see the split between high end and mass beauty performing quite differently. Can you put some words on what what is it the market that is taking down the the high end and out of the mass so people are trading down, or is it coincident with the launch of new brands or that you are putting more pressure on Sweden and Norway on the mass market? What’s the reasons here?

Gregers Will Wilsborn, CEO, Matas: Yes. So I think you almost gave the answer, Paul. It is a combination of when consumers are uncertain, they do a bit of trading down, but it is also in part driven by our focus because what we do typically when we feel that there is a softer consumer, we do shift our marketing around both the messaging but also the types of products that we are advertising. So you could say it’s a bit of a self reinforcing thing. I would say the number that I would look at more than anything is the number of transactions.

So we’re 300,000 more transactions in the first quarter compared to same quarter of last year. And to me, that is the best sign of underlying health of the consumer that you can ever find as a retailer, those kinds of numbers. So we are not becoming irrelevant, but we are seeing shifts in the market. And of course, with kicks being more high end positioned, they are a bit more exposed. But also remember that SkinCity was almost entirely a high end proposition.

So that should also be taken into account.

Paul Yassen, Analyst, Danske Bank: So if you see people trading somewhat down, then we should expect that split between the two categories continuing at least in the near term?

Gregers Will Wilsborn, CEO, Matas: I think that’s hard to predict. We go into the golden quarter in just I mean, we’re already there mentally thinking about Christmas. Christmas is a gifting season. It is a season where people are more ready to spend and splash on their own. So I don’t think we can take a Q1 performance and then extrapolate into the rest of the year.

And we are in a position where we are in tune with the customer at all times. So we see these little shifts in our customer data, and we adapt our marketing and our messaging and our campaign. And we can do that because we’re so digital now in the way we market, we can do that with very, very short notice. And as you remember, Paul, in the old days, it was like a twenty month or twenty week plus lead time to begin to change messaging when we were driven by leaflet communication and mass marketing communication. Now it’s one to one.

It’s digital. It’s day by day. It can be even be influenced by is it raining or is the sun shining. So I would not jump to conclusions as for the rest of the year mix.

Paul Yassen, Analyst, Danske Bank: Okay. And then on Norway, you’re changing manager up there. What’s the reason behind it? Is Norway underperforming or is it because that you are changing the the focus on what’s going on that you want to expand fast or or what’s behind?

Gregers Will Wilsborn, CEO, Matas: We’ve actually had a good and strong team, and Norway have been performing. Looking at local currencies, so take away the currency effects, I think Norway has been performing very convincingly over the last few years. I think it’s fair to say that in the old KICKS structure, there was a lot of focus on Sweden and less on Finland and Norway. And we just want to add more attention to the opportunities that we see ahead of us in both Norway, which is a very attractive market from a financial point of view, but also Finland with a smaller market today, but we are not as penetrated in Finland. So what you should take from this is it’s not a reaction to something gone wrong or not performing as planned.

It is really an investment in being more clear and having bolder ambitions in the Norwegian market. And that, of course, was in our long term guidance. That was always the plan that we would see some potential in those two markets. So this is just execution of a strategy that we think should be driven by even more senior leadership added to an already great Norwegian team.

Paul Yassen, Analyst, Danske Bank: Okay. And then a more technical question, spend saving. You say they’re out of the books now. When are they fully out of the base when we do the year over year comparison?

Gregers Will Wilsborn, CEO, Matas: February year is the majority. And as you remember, it’s around DKK 80,000,000 that of sales in Danish in Skincity overall, the vast majority of that in the February. There’s a little bit left in the Christmas quarter and the fourth quarter, but it should be insignificant from the conversations we’re having about headline numbers.

Paul Yassen, Analyst, Danske Bank: Okay. And what does that mean that when we look into the second quarter, then it’s below €20,000,000 in headwind?

Gregers Will Wilsborn, CEO, Matas: Second quarter, I won’t comment specifically on second quarter. But as you look into Q3 and Q4, SkinCity should not be a part of our conversation.

Conference Operator: Next question will be from Yi Wei from SEB. Please go ahead. Your line will now be unmuted. Hi. It’s Yi from SEB.

Yi Wei, Analyst, SEB: Thank you for taking my question. I have two. Firstly, could you please elaborate a bit on the price initiatives in the case? Is it a sort of a normal sales campaigns or is something special here? And also, if you can say that if we should expect this sort of the same kind of margin dilution also in the coming quarters?

Gregers Will Wilsborn, CEO, Matas: So remember, before we go into the commercial mechanics, just remember the two things that are structurally different or different. One is the FX that Kix margin was pressured by the fact we buy in Swedish and sell in NOK. So that’s actually a material effect. But also the fact that SkinCity leaves the numbers and SkinCity is a or was a higher gross margin business. Commercially, how we think about it is working with our suppliers to fund competitiveness as a Nordic group, go to suppliers and develop growth plans, win win initiatives with suppliers that helps us fund the price investments that we’re making.

Having said that, we also from time to time make decisions to fund price cuts on our own margin, just if we see that we’re out of line with competitors or if we see a good business case in shifting from more campaign driven sales to more of an everyday low price offering. And these are things we play with all the time. And then, of course, on top of that, there is the normal campaign cycle that we might adjust up and down. So clearing out sort of the more one off elements of FX and SkinCity, this would be reflecting where we are. You can’t really say that this is the level going forward because we do see opportunities also to fuel our own brand offering, which is margin expansive.

And of course, we’re having a conversation with suppliers all the time, how to share the bill for being price competitive in the market.

Yi Wei, Analyst, SEB: Okay, great. Thanks for the clarification. And my second question here on the your EBITDA margin guidance, 15% for this year. Is it currency a neutral target or is sort of already reflecting the currency movements?

Peter Johannesen Madsen, CFO, Matas: You can say the EBITDA margin target for this year of 15%, we keep that and we maintain our guidance for that. In the first quarter, we got a it’s not a currency neutral adjustment, but we got an FX impact of 0.4. As we move forward in the year, we’ll see how that develops and some of the mitigating actions we can do to mitigate that. But still looking at the full year, we maintain our guidance around the 15%.

Yi Wei, Analyst, SEB: Yes. And if we assume the similar movements of Swedish krona against the other two currency where you do the procurement, I guess the 15%, we have to sort of put a negative FX impact on this. Is it a fair assumption?

Peter Johannesen Madsen, CFO, Matas: Yes. You can make your assumptions around that as you progress into the year and see how the currencies develop. I don’t want to speculate on the currencies. We will be trying to mitigate as much as we can in case the currencies continues in the way they do right now. Again, from a full year perspective, we still believe that we will be able to be in our guidance around the 15%.

Gregers Will Wilsborn, CEO, Matas: And also, I would like to comment from a more commercial operational point of view. FX is not just something happening. It is also something that starts a conversation with suppliers because sometimes we win on FX and sometimes they win on FX. And oftentimes, we have a meeting and we discuss how do we make sure that it’s not the roulette of FX that’s determining our performance, but really jointly sharing whatever happens. So we’re having those conversations as well.

So as we see negative FX, of course, we are doing things on the business side to mitigate that. And with all the other things that we have mentioned, we feel comfortable about the guidance for the year.

Paul Yassen, Analyst, Danske Bank: Yes. Okay. That was clear.

Yi Wei, Analyst, SEB: And last question on the special items. We got that in the last quarter, you’re guiding $14,000,000 in total for the full year. Could you please guide a bit on the phasing for the special items over the quarters?

Peter Johannesen Madsen, CFO, Matas: Yes. Well, I was going say that the first quarter is $5,000,000 We still believe it’s going to be around the $40,000,000 for the full year. So you can say it’s going to be a little bit backloaded. That’s the assumption I would make. And remember, just for the sake of

Gregers Will Wilsborn, CEO, Matas: this order, it’s related to the next round of synergies, so the €50,000,000 we’re seeing materialize in the next financial year. And of course, as part of our plan to deliver, we are looking at is there some of those initiatives that we can pull forward into this financial year. So that’s another bucket that we have to look at as we drive performance this year.

Yi Wei, Analyst, SEB: Okay, great. Thank you so much. I’ll jump back to the queue.

Conference Operator: Thank you, Ebrahim. The next question will be from Sebastian Gao from Nordea. Please go ahead. Your line will now be unmuted.

Sebastian Gao, Analyst, Nordea: Good morning, guys, and thank you for taking my questions as well, and congrats on a strong result here today. I would like to revert to a bit more technical questions about the FX impact on the EBITDA margin, and I apologize for that. But just wanted to get understanding, assuming that FX remains at the current level as of today, how would the sort of the year on year dilution look for the remainder of the year compared to the 0.4 percentage point dilution that you saw here in Q1?

Peter Johannesen Madsen, CFO, Matas: And I think, as I just said, Sebastian, I don’t want to predict the FX. And as Greg has alluded to you, this is not a maintenance only discussion. We’re having these discussions with our suppliers as well. Sometimes we’re gaining, sometimes they’re gaining. And we are looking into how do we balance this for the remaining of the year.

So I don’t want to predict for the rest of the year in terms of how this is going to turn out because there’s a lot of moving parts in that element. I think the key thing is for you to take away from this quarter is really that the impact of in this quarter was the 400,000,000.0 which was a little bit of a impact after all the announcement and all the geopolitical movements and changes, which really moved everything around. So the discussions right now is, of course, with our suppliers and how we manage these different elements. So again, first quarter, 0.4%. I think that’s the key number you need to take into account.

Sebastian Gao, Analyst, Nordea: Yes. No, no, that’s completely fair. And take it as a compliment that we are digging into this nitty gritty stuff that means that there’s no bigger or

Conference Operator: worse surprises except the border.

Sebastian Gao, Analyst, Nordea: Exactly. I just want to talk about the MLC as well. So you alluded to the learning curve and time of double costs here. Is it fair to assume that now given that you’re also entering this important or nearing the important Q3, is it fair to assume that the double cost that you are incurring in MLC that those will persist for the time being until we are past Q3? Or how should we think of this learning curve?

Gregers Will Wilsborn, CEO, Matas: There are really two elements to that. One is that we as we opened MLC and the robotics facility out there, we also kept our manual operations on standby and thereby incurring double costs. That’s going to fade fairly quickly with the performance we’re seeing in MLC. So no surprises as to our internal plans on those cost items. The other effect that we’re seeing is the learning curve that as you start out with a new facility like this, the cost to serve, the cost per unit is high.

And then it gets better over the year. And of course, we have planned for that kind of learning curve as we go into the year. So that’s the other element. And that’s really the element that we are following more closely. And you may remember from last year when we did the KLC, we underestimated how that would play out in a brand new facility.

And of course, we took that learning and we applied it into our budgets, our plans and our financial guidance. So that’s it.

Sebastian Gao, Analyst, Nordea: Sure. Sounds good. And then just last question from my side. So you provide these comments per market. Could you maybe elaborate a bit more on the Swedish market, in particular, what are you seeing here?

I mean signs of a slowdown, question mark. How did the quarter play out sort of over the quarter? And is there any sort of silver lining here in quarter that things are improving? Or is there any color to add to this?

Gregers Will Wilsborn, CEO, Matas: No. Really unchanged conditions to when we spoke before this summer. Of course, we have some more market data that you also have access to, reporting from our peers but also publicly available market data for Sweden, indicating that there is some kind of slowdown in retail overall, actually also a slowdown in online growth as we look at the totality of e commerce in Sweden. And I think that gives us a lot of confidence that even with a slowdown in e com growth in Sweden overall, we are delivering really good growth, excluding the SkinCity business. So our strategy of being able to grow out of stuff that’s within our control, even in a more unfriendly market, if you will, I think there’s proof of that in Q1.

Sebastian Gao, Analyst, Nordea: Great. Thank you for taking my questions.

Conference Operator: Thanks, Sebastian. The next question is from Matthew Crisco from DNB Carnegie. Please go ahead. Your line will now be unmuted. Thank you for taking my question.

I only have one, which also is a nitty gritty one since all my remaining questions have already been answered. But but coming back to the customer club, the membership club, you’re pretty happy about the development. But if I compare the number to q four, I can see it’s actually slightly down. So why are so happy with the development in the membership club on Nordic level? That would Yes. Be my

Gregers Will Wilsborn, CEO, Matas: So we clean out once in a while. We do the spring cleaning of looking at members that haven’t been active for a while. And instead of inflating the number year over year, that’s really easy to do, by the way, if you just hold on to members that are not active. So we do a bit of spring cleaning and look at what’s the underlying growth in number of active members. And it’s that number that makes me pleased with the development of the club.

And then frankly, some of this is also do we run a drive to recruit new members, which we did in the last year. Even though it wasn’t a main theme, we did it last year, But we haven’t done that in the first quarter. But we kind of know now how to play that game if needed.

Conference Operator: That makes sense. Then maybe also a question on the Nordic power plants. So what is the timing here? Is it to launch something in this quarter? So you’re ready for the base Q3?

Or what is the timing?

Gregers Will Wilsborn, CEO, Matas: Yes. So usually, we won’t cover too much on forward looking, but you can expect us to be actively working to launch some of our hero brands. Niedensure, the company that we bought in 2019, has really, really grown and become an even stronger franchise in the period where we have owned the business. We have really strong management. We have expanded into new categories, so going from being mainly a makeup brand also into skincare, haircare, men’s offering.

So the brand in Denmark is at its very peak. And now what we’re doing is preparing to introduce this fantastic brand that has very, very high quality at affordable prices. We are introducing that to the Swedish, Norwegian and Finnish customer. And the costs associated with that, getting ahead of your question, that’s already in the guidance. But this is a big thing for us.

It’s not going to it’s not part of the explanation for why we believe in the margin or the growth this year because building a brand from scratch in a new market just takes time. It took Niedenshaw thirty years to get to the number one spot before we bought it. Nowadays, building a brand is both faster and cheaper because of online marketing, social media and, of course, the fact that we have all our stores behind this, all our colleagues behind this launch. So we are making a splash with Niensure in the quarters ahead.

Conference Operator: Sounds good. Thank you. Thank you, Mads. As we have no further questions in the queue, I will hand it back to the speakers for any closing remarks.

Gregers Will Wilsborn, CEO, Matas: Thank you very much, operator. Thanks for the questions. I think the takeaway is a good start to the year, in line with our expectations. The two big risks of buying a company and integrating and opening two automated facilities, they are now lapsed. They are behind us.

We are looking into a new chapter focusing much, much more on the customer, less on the engine room, but also really with an eye on operational excellence and getting all those benefits from the investments that we’ve made in the organization that we have set up. So again, a good start to the year, but also even more significantly, I think, a milestone in the execution of our Win the Nordic strategy. Thanks for joining, and see you next quarter.

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