Clas Ohlson : 03-06-2024 Interim report Q3 Report

Third quarter - 1 November to 31 January

• Sales excluding the acquired Spares Group increased by 9% to 3,233 MSEK (2,954), an organic growth of 12% and an increase of 12% in comparable units. Sales including Spares Group amounted to 3,412 MSEK (2,954)
• Sales online excluding Spares Group increased by 19% to 410 MSEK (343). Sales online including Spares Group amounted to 589 MSEK (343)
• Operating profit amounted to 422 MSEK (215). Adjusted operating profit amounted to 425 MSEK (334)
• The operating margin was 12.4% (7.3)
• Net debt/EBITDA (12 months) excl IFRS 16 amounted to -0.5 times (-0.1)
• Profit after tax totalled 321 MSEK (158)
• Earnings per share was 5.07 SEK (2.50)

Nine months - 1 May to 31 January

• Sales excluding the acquired Spares Group increased by 9% to 7,886 MSEK (7,248), an organic growth of 10% and an increase of 11% in comparable units. Sales including Spares Group amounted to 8,065 MSEK (7,248)

• Sales online excluding Spares Group increased by 15% to 960 MSEK (834). Sales online including Spares Group amounted to 1,139 MSEK (834)
• Operating profit amounted to 651 MSEK (312). Adjusted operating profit amounted to 856 MSEK (466)
• The operating margin was 8.1% (4.3)
• Profit after tax totalled 468 MSEK (204)
• Earnings per share was 7.39 SEK (3.21)

Events after the end of the reporting period

• Sales in February, excluding the acquired Spares Group, increased by 17% to 636 MSEK (541), an organic growth of 19% and an increase of 19% in comparable units. Sales, including Spares Group, amounted to 686 MSEK (541)
• Sales online in February, excluding Spares Group, increased by 20% to 72 MSEK (60). Sales online, including Spares Group, amounted to 122 MSEK (60)

+12%

O R G A N I C G R O W T H

Q U A R T E R

422

MSEK

O P E R A T I N G P R O F I T

Q U A R T E R

+19%

O R G A N I C G R O W T H

F E B R U A R Y

The 2023/24 financial year comprises the period from 1 May 2023 to 30 April 2024.

Q3 presentation 6 March 09.00 a.m. CET

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

This is information that Clas Ohlson AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. This information was submitted for publication, through the agency of the contact person set out above, on 6 March 2024 at 7:00 a.m. (CET).

This nine-month Report is an English translation of the Swedish original. In the event of any discrepancies, the Swedish version shall govern.

Contact person:

Niklas Carlsson, Head of Communications & IR +46 247 444 29, niklas.carlsson@clasohlson.se

C E O ' S C O M M E N T S

Organic sales growth of 12 per cent and significantly improved operating profit

The positive momentum we have created with the right products at the right price, good product availability and good customer service has resulted in a strong third quarter in the financial year 2023/24. Sales increased across all prioritised product categories and in all markets. Overall, we achieved an organic sales increase of 12 per cent and operating profit improved to 422 MSEK compared with 215 MSEK the previous year. The operating margin for the quarter thereby amounted to 12.4 per cent (7.3).

We continue to work according to our plan to create customer and shareholder value through sustainable and profitable growth. The fourth quarter of the year has started well with an organic sales increase of 19 per cent in February. The sales increase comes from growth in all three markets and from all prioritised product categories. We have continued to renew our assortment in February, which also means we have phased out older products at a higher pace.

Our growth initiatives are delivering results

The external environment remains challenging in many ways, but the organisation has shown great determination to succeed in our three major focus areas for growth:

• A relevant assortment all year around
• A growing and profitable online business
• Expanding the store network

We clearly see that the many new products generate customer traffic and sales both in stores and online. By developing the range with more products that make home improvement easier and more fun, it also becomes clearer to customers what they can find at Clas Ohlson. Customers come to us to solve everyday problems and they appreciate both the products and the service they receive. And the number of customers is growing. We now have 5.4 million members in the Club Clas loyalty programme - about 25 per cent of all residents in our three markets - which is an increase of eight per cent compared with the previous year. The membership increase comes largely from younger customers, which is also an important piece of the puzzle in the continued growth journey.

New targets for the store expansion

Sales in comparable stores increased by 12 per cent in the quarter and the new stores we opened have been well received by customers. In Q3 we opened three new stores and in the last few days alone we have opened two rebuilt stores and closed one. The development of the store network will continue with more store openings in the last months of the year, and we look forward to continuing the store expansion also in 2024/25. We already have eight store contracts signed for the next financial year and, as in the current year, we are aiming to open around ten new stores net in 2024/25. At the same time as planning for more stores, we also see opportunities to rebuild and modernise existing stores to improve the conditions for continued sales growth.

A growing online business

Our online business also performed well in the quarter in an otherwise relatively weak e- commerce market. Our model in which online sales is closely linked to the store network is appreciated by customers and, with growth of 19 per cent in the quarter, e-com continues to account for a significant portion of total growth. Including sales from Spares Europe, which was acquired in November and consolidated into the Clas Ohlson Group as of the third quarter, approximately 17 per cent of the Group's total sales come

W E N O W H A V E 5 . 4

M I L L I O N M E M B E R S I N T H E

C L U B C L A S L O Y A L T Y

P R O G R A M M E - A B O U T 2 5

P E R C E N T O F A L L

R E S I D E N T S I N O U R T H R E E M A R K E T S - W H I C H I S A N I N C R E A S E O F E I G H T P E R C E N T C O M P A R E D W I T H

T H E P R E V I O U S Y E A R .

Sales

Distribution of sales

*Sales excluding Spares increased by 9 % to 3,233 MSEK during the quarter and by 9 % to 7,886 MSEK for the period May-Jan 2024.

**Sales online excluding Spares increased by 19 % to 410 MSEK during the quarter and by 15 % to 960 MSEK for the period May-Jan 2024.

Distribution of sales increase

Third quarter

Sales excluding the acquired Spares Group increased by 9 per cent to 3,233 MSEK (2,954). Organic sales growth was 12 per cent compared with the preceding year. Sales in comparable units and local currencies increased by 12 per cent compared with the preceding year. Sales including Spares Group amounted to 3,412 MSEK (2,954). Online sales excluding Spares Group increased by 19 per cent to 410 MSEK (343). Online sales including Spares Group amounted to 589 MSEK (343). At the end of the quarter, the total number of stores was 224, which was unchanged compared with the year-earlier period (a net decrease of five stores in the previous year). For a store overview, see page 27.

Nine months

Sales excluding the acquired Spares Group increased by 9 per cent to 7,886 MSEK

(7,248). Organic sales growth was 10 per cent compared with the preceding year. Sales in comparable units and local currencies increased by 11 per cent compared with the preceding year. Sales including Spares Group amounted to 8,065 MSEK (7,248). Online sales excluding Spares Group increased by 15 per cent to 960 MSEK (834). Online sales including Spares Group amounted to 1,139 MSEK (834). During the nine-month period, the store network increased by two stores (a net decrease of five stores in the previous year).

Sales, MSEK

4,000

3,500

3,000

2,500

2,000

1,500

1,000

500

0

Q1 Q2 Q3 Q4

Distribution of sales R12, %

R12 14

86

Stores

Online (of which sales acquired business 179 MSEK)

Distribution of sales, %

Q3

11 5

43

41

Sweden Norway Finland Spares

Distribution of numbers of stores

100

80

60

40

20

0

Sweden Norway Finland

F I N A N C I A L S T A T E M E N T S

Specification of change in profits

Third quarter

The gross margin increased by 0.2 percentage points to 38.4 per cent (38.2). The gross margin was positively affected by reduced sourcing costs and effects related to currency hedging (NOK). This was offset by a weaker Swedish krona in relation to the purchasing currency (USD), effects from product and price mix, weaker sales currency (NOK) and lower gross margin for the acquired Spares Group.

The share of selling expenses declined by 1.2 percentage points to 24.5 per cent (25.7). The share declined mainly as a result of the higher sales and cost savings linked to previously communicated activities in 2022/23 and in the first quarter of the current year.

Administrative expenses amounted to -50 MSEK (-51).

Operating profit totalled 422 MSEK (215). Adjusted operating profit totalled 425 MSEK (334). Operating margin was 12.4 per cent (7.3). Profit after financial items totalled 407 MSEK (200). Depreciation for the quarter amounted to 182 MSEK (194).

Spot exchange rates for key currencies averaged 0.98 for NOK and 10.45 for USD, compared with 1.05 and 10.47, respectively, in the year-earlier period. Currency hedging was undertaken in USD and NOK. Currency hedging that fell due during the quarter had a positive impact of 12 MSEK (NOK) on earnings and a negative impact on inventory value through an increase of 2 MSEK (USD). The company's policy is to hedge 50 per cent of the expected flow in each currency continuously, with three- to nine-month maturities.

Nine months

The gross margin increased by 2.0 percentage points to 39.2 per cent (37.2). The gross margin was positively affected by reduced sourcing costs, which during the period also included lower inventory management costs, an improved product and price mix and effects related to currency hedging (NOK). This was largely offset by a weaker Swedish krona in relation to the purchasing currency (USD) and weaker sales currency (NOK).

The share of selling expenses declined by 1.8 percentage points to 27.0 per cent (28.8). The share declined mainly as a result of higher sales and cost savings linked to previously communicated activities in 2022/23 and in the first quarter of the current year.

Administrative expenses amounted to -147 MSEK (-145).

Gross margin rolling 12 months, %

42.0

41.0

40.0

39.0

38.0

37.0

36.0

35.0

Share of selling expenses, %

40.0

30.0

20.0

10.0

0.0

Operating profit, MSEK

500

400

300

200

100

0

-100

Operating margin rolling 12 months, %

10.0

8.0

6.0

4.0

2.0

0.0

F I N A N C I A L S T A T E M E N T S

Operating profit totalled 651 MSEK (312). Adjusted operating profit totalled 856 MSEK (466). Operating margin was 8.1 per cent (4.3). Profit after financial items totalled 602 MSEK (265). Depreciation, amortisation and write-down for the period amounted to 701 MSEK (614).

Spot exchange rates for key currencies averaged 1.00 for NOK and 10.67 for USD compared with 1.05 and 10.46, respectively, in the year-earlier period. Currency hedging was undertaken in USD and NOK. Currency hedging that fell due during the period had a positive impact of 23 MSEK (NOK) on earnings and a positive impact on inventory value through a decrease of 15 MSEK (USD). 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 amounted to 499 MSEK (101). Of this amount, investments in new or refurbished stores accounted for 36 MSEK (34). Investments in IT systems for the period amounted to 1 MSEK (36). During the third quarter, Spares Group was acquired, see additional information on page 14. The initial purchase price for 91,4% of the shares in Spares amounted to 431 MSEK. The shares in Mathem were measured at fair value amounting to 6 MSEK, unchanged during the quarter and a decrease of 3 MSEK during the nine-month period.

During the nine-month period, measures have been taken to rationalise the company's IT system in order to better reflect the company's strategy and simplified working methods. This has resulted in write-downs amounting to 152 MSEK.

Financing and liquidity

Cash flow from operating activities during the nine-month period totalled 1,597 MSEK (947). Cash flow for the period, after investing and financing activities, was 331 MSEK (-377). The resolved dividend of 1.50 SEK per share was paid out during the nine-month period, totalling 95 MSEK.

The average 12-month value of inventories was 2,304 MSEK (2,394). Over a rolling 12- month period, the stock turnover rate at the distribution centre was 5.6 times (4.5).

At the end of the quarter, the inventory value was 2,303 MSEK (2,125). During the current financial year, the inventory value was impacted by external factors such as lower costs for incoming transports, which was partially offset by increased costs for purchase of products, partly related to a weaker Swedish krona in relation to the purchasing currency (USD). The inventory value was also impacted by the acquisition of Spares Group.

The Group's net debt at the end of the period, meaning interest-bearing liabilities less cash and cash equivalents, amounted to 1,362 MSEK (1,626). Excluding the effect of IFRS 16, the Group's net cash position was 475 MSEK (net debt -70). Excluding the effect of IFRS 16, net debt in relation to EBITDA was -0.5 times (-0.1), which is in accordance with the company's financial framework. Credits granted and loan commitments amounted to 1,110 MSEK, of which 0 MSEK had been utilized. The company's financial position remains strong. The equity/assets ratio was 30 per cent (29). In connection with the acquisition of Spares Europe AB on November 8th, credits granted and loan commitments were expanded by 510 MSEK, to a total of 1,110 MSEK.

Employees

The number of employees in the Group was approximately 4,900. Recalculated to average full-time equivalents (FTEs) in the quarter, this corresponds to an average of 3,054 (3,105).

Cash flow, MSEK*

1,400

1,200

1,000

800

600

400

200

0 -200

-400

Q1 Q2 Q3 Q4

* From operating activities