31 May 2013

Matas announces intention to list its shares on NASDAQ OMX Copenhagen

Source: OMX
Company announcement Allerød, 31 May 2013 NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA OR JAPAN This announcement is not a prospectus but an advertisement and nothing herein contains an offering of securities. No one should purchase or subscribe for any securities in Matas A/S ("Matas" or the “Company”) except on the basis of information in any prospectus published by Matas in connection with the potential offering and admission of such securities to trading and official listing on NASDAQ OMX Copenhagen A/S (“NASDAQ OMX Copenhagen”). Matas announces today its intention to launch an Initial Public Offering ("IPO") and to list its shares on NASDAQ OMX Copenhagen. The contemplated IPO is expected to consist of a partial sale of existing shares by the Company’s two major shareholders. The contemplated IPO is an important milestone for Matas, further enhancing the Company’s profile and providing a long-term platform to support the Company’s strategy and future growth, access to public capital markets and a diversified base of new Danish and international shareholders. Terje List, Matas’ CEO, commented: “Since the acquisition of Matas in 2007 by the current shareholders, we have undergone a significant transformation,creating an integrated and efficient modern retail company. We have invested to enhance the business, acquired associated stores, centralised purchasing, increased efficiency across store operations, optimised logistics and inventory management, developed a multi-channel marketing platform including the loyalty programmes Club Matas and ClubM and invested further in the training and education of our employees. We are proud of the quality of our business and of our financial performance,and believe we are well positioned to leverage the strength of our platform to drive future growth. We look forward to offering new shareholders in Matas the opportunity to be part of our successful development going forward.” Søren Vestergaard-Poulsen, Chairman of Matas and Partner at CVC Capital Partners commented: “Since 2007 we have together with Materialisternes Invest worked closely with management to help build a market-leading retail business, and we firmly believe that Matas has a strong future ahead of it as a publicly listed company. We are very excited about inviting investors to participate in this important new phase for Matas and as part of this transition see it as a natural point to strengthen the board through several new appointments. We look forward to working with the new board members in continuing to support the business in the future.” Information on Matas Matas is the largest health and beauty retailer in Denmark with a network of 293 stores in Denmark, of which the Company owns and operates 258 retail stores while the remaining 35 are associated stores that are independently owned by those store owners who did not sell their stores in 2007. This network of stores, together with Matas’ online store, holds a market-leading position in the attractive Danish beauty market with an estimated market share of approximately 38% in 2012, with a particular strength in the high-end beauty segment. In the financial year 2012/13 Matas’ revenue was DKK 3,200 million, Adjusted EBIT was DKK 548 million and Adjusted Profit After Tax was DKK 336 million. Matas has more than 2,400 employees. Founded in 1949 as an association of independent stores, Matas has developed a strong reputation for professional advice and customer service excellence and today is one of the best-known retail chains in Denmark. Matas offers a distinctive one-stop retail concept with a wide product selection across categories, brands and price levels. Each Matas store offers a broad selection of products in four product segments: -- Beauty Shop : Beauty products, such as cosmetics, fragrances, skincare and hair care, covering everyday and luxury beauty needs. -- Vital Shop : Vitamins, minerals and supplements. -- Material Shop : Household and personal care goods including household cleaning and maintenance, personal grooming, babycare and sports-related products (such as support bandages). -- Matas MediCare : Over-the-counter medicine and first aid products. Matas’ product offering includes both international and Danish health and beauty brands, and Matas is a key channel in Denmark for a number of these brands. In addition, Matas offers its own branded products under the Stripes brand, which is the Company’s principal own brand, and various other own brands, such as Matas Natur and Plaisir. Introduced in 1967 as an attractively priced alternative to more expensive branded products, Stripes has since become one of the leading beauty and personal care brands in Denmark. One of Matas’ key strengths is its loyal and active customer base. Building on this, in 2010 the Company launched the Club Matas loyalty programme which has quickly become one of the largest loyalty programmes in Denmark with approximately 1.2 million members. Club Matas is a key element of Matas’ multi-channel marketing platform, allowing the Company to reach a wide target audience as well as to increasingly focus marketing and promotional strategies on customers’ specific product preferences and purchasing habits. To further broaden the appeal of Club Matas a broader coalition loyalty network, ClubM, was introduced in 2012, allowing Club Matas members to earn points on transactions at participating retailers. As part of Matas’ ongoing strategy and growth plans, in May 2013, the Company acquired Esthetique Danmark A/S, a high-end beauty retailer, and its nine Danish retail store locations. Matas expects to use up to seven of these stores to introduce its new StyleBox retail concept. StyleBox is an exciting new step in the Company’s development, allowing Matas to expand its existing selective beauty product offering with luxury/professional hair care, nail care and make-up products as well as in-store related beauty treatments. In addition to this, Matas intends to continue to strengthen its retail network by opening new stores at certain locations in Denmark and selectively acquiring additional associated stores. The Company also intends to grow its successful online store and to further enhance its popular Club Matas loyalty programme. Matas believes its comprehensive store network, centralised purchasing and recently upgraded distribution, logistics structure and IT-systems, as well as its skilled employees, provide a strong platform to further grow the existing business and expand selectively into complementary areas. This could include expanding into the Danish market for prescription medicine, subject to further liberalisation. In this regard, Matas welcomes the recommendations made yesterday by The Danish Productivity Commission in respect of steps to liberalise the pharmacy market. New Board of Directors Matas is pleased to announce that in connection with the IPO, Lars Vinge Frederiksen, Ingrid Jonasson Blank and Birgitte Nielsen will be elected as new independent board members of the Company immediately prior to completion of the IPO. Lars Vinge Frederiksen is expected to be appointed Chairman. The new members bring extensive and diverse management experience from public and private companies to the Company’s Board of Directors and the Company strongly believes their expertise will help Matas achieve its strategic goals and contribute to the future success of the business. Lars Vinge Frederiksen (born 1958, Danish) has between 1980 and March 2013 held a number of senior positions at the Chr. Hansen group, most recently as CEO of Chr. Hansen Holding A/S. He is currently a member of the board of directors of Widex A/S and Generalkonsulinde Anne Hedorf and Generalkonsul Frode Hedorfs Foundation. Ingrid Jonasson Blank (born 1962, Swedish) has between 1985 and 2010 held a number of senior positions at ICA group, most recently as executive vice president of ICA Sverige AB. She is currently a member of the board of directors of several companies including Orkla ASA, Royal Unibrew A/S, Fiskars OY, ZetaDisplay AB, Billia AB, Travel Support & Services Nordic AB, Scandinavian Studios AB and Carema Holding AB. Birgitte Nielsen (born 1963, Danish) has between 1992 and 2003 held a number of senior positions at the FLSmidth group, most recently as CFO of FLSmidth & Co. A/S. She is currently a member of the board of directors of several companies including Topdanmark A/S, Finansiel Stabilitet A/S, Kirk Kapital A/S, Arkil Holding A/S and De Forenede Ejendomsselskaber A/S. Following the expected election of the new members, the Company’s Board of Directors will consist of the three new members and the current board members Søren Vestergaard-Poulsen and Lars Frederiksen. Key Financials DKKm, Financial Year ending 31 March 2012/13 2011/12 2010/11 ----------------------------------------------------------------------------- Profit & Loss ------------------------------------------------------------------------------ Revenue 3,200 3,097 2,992 ----------------------------------------------------------------------------- Gross Profit 1,471 1,414 1,347 ----------------------------------------------------------------------------- Gross margin 46.0% 45.6% 45.0% ----------------------------------------------------------------------------- Adjusted EBITDA(1) 605 580 530 ----------------------------------------------------------------------------- Adjusted EBITDA margin 18.9% 18.7% 17.7% ----------------------------------------------------------------------------- Adjusted EBIT(2) 548 532 480 ----------------------------------------------------------------------------- Adjusted EBIT margin 17.1% 17.2% 16.0% ----------------------------------------------------------------------------- Adjusted Profit After Tax(3) 336 279 205 ----------------------------------------------------------------------------- ------------------------------------------------------------------------------ Balance Sheet ------------------------------------------------------------------------------ Total Assets 5,770 5,596 5,657 ----------------------------------------------------------------------------- Net Debt(4) 1,749 2,060 2,470 ----------------------------------------------------------------------------- Equity 2,359 2,096 1,877 ----------------------------------------------------------------------------- ----------------------------------------------------------------------------- Financial Ratios ------------------------------------------------------------------------------ Cash Conversion(5) 96% 112% 92% ----------------------------------------------------------------------------- Pre-tax Return on invested capital ex. goodwill(6) 80% 64% 51% ----------------------------------------------------------------------------- 1. Adjusted EBITDA represents IFRS operating profit plus (A) amortization of trademarks and other intangible assets, impairment losses and other writedowns (DKK 76 million, DKK 75 million and DKK 75 million in 2012/13, 2011/12 and 2010/11 respectively), plus (B) writedowns of goodwill (DKK 0 million, DKK 3 million and DKK 7 million in 2012/13, 2011/12 and 2010/11 respectively) plus (C) depreciation (DKK 57 million, DKK 48 million and DKK 50 million in 2012/13, 2011/12 and 2010/11 respectively) and plus (D) external costs not part of normal operations (DKK 16 million, DKK 0 million and DKK 0 million in 2012/13, 2011/12 and 2010/11 respectively). 2. Adjusted EBIT represents IFRS operating profit plus (A) amortization of trademarks and other intangible assets, impairment losses and other writedowns (DKK 76 million, DKK 75 million and DKK 75 million in 2012/13, 2011/12 and 2010/11 respectively), plus (B) writedowns of goodwill (DKK 0 million, DKK 3 million and DKK 7 million in 2012/13, 2011/12 and 2010/11 respectively) and plus (C) external costs not part of normal operations (DKK 16 million, DKK 0 million and DKK 0 million in 2012/13, 2011/12 and 2010/11 respectively). 3. Adjusted Profit After Tax represents IFRS Profit for the Year plus (A) tax-adjusted impact of amortization and impairment (DKK 57 million, DKK 60 million and DKK 63 million in 2012/13, 2011/12 and 2010/11 respectively) and plus (B) tax-adjusted impact of external costs not part of normal operations (DKK 16 million, DKK 0 million and DKK 0 million in 2012/13, 2011/12 and 2010/11 respectively). 4. Financial indebtedness net of cash and cash equivalents. 5. Cash Conversion Ratio represents (A) Adjusted EBITDA plus change in net working capital less capital expenditure (excluding the impact of acquisitions of associated stores) divided by (B) Adjusted EBITDA. 6. Return on invested capital represents Adjusted EBIT divided by average invested capital excluding goodwill. Financial Highlights Matas’ strong recent financial performance has been characterised by revenue growth, consistently improved profitability and high cash conversion despite unfavourable macroeconomic conditions. Matas’ total revenue increased 3.3% in the financial year 2012/13 compared to 2011/12 driven by 2.9% Like for Like growth, the opening of new stores and the acquisition of associated stores. The like for like growth was underpinned by the continued increase in both the number of transactions and the average basket size during the period, resulting in higher store revenues. Revenue growth in 2012/13 was negatively impacted by the lower number of trading days due to the timing of public holidays in Denmark compared to the financial year 2011/12. 92.3% of total revenue in 2012/13 was derived from the sale of goods from retail stores and 7.7% from the sale of goods to the associated stores. In the financial year 2012/13, 74.3% of revenues relating to the sale of goods from retail stores in Denmark were derived from the beauty segment. Gross margin increased by 0.4 percentage points in 2012/13 relative to the previous financial year, primarily as a result of improvements in logistics and distribution, the acquisition of the associated stores and moderate pricing contribution. The increase in Adjusted EBIT was positively impacted by an increased gross margin and supported by the stable cost base, reflecting the Company’s ongoing focus on staff planning and efficiency in its overheads structure. The Adjusted EBIT margin was negatively affected by the impact of fewer trading days and increased depreciation. The Company has deleveraged significantly through its high cash flow generation, reducing its leverage from 4.7x Net Debt/Adjusted EBITDA in the financial year 2010/11 to 2.9x Net Debt/Adjusted EBITDA in 2012/13, whilst continuing to invest in the business, including the development of the Company’s information technology systems, online store and Club Matas platform. Information on the Offering The contemplated IPO is expected to consist of a sale of shares by the Company’s existing major shareholders, Svenska M Holding 1 AB (ultimately owned by certain funds advised by affiliates and subsidiaries of CVC Capital Partners SICAV-FIS S.A. - a private equity firm) and Materialisternes Invest ApS (ultimately owned by former Matas store owners and certain of their related parties). In addition, executive management and key employees and certain former and current employees will sell a part of their shares to the major shareholders on a pro rata basis based on their existing shareholding in the Company in connection with the offering, primarily to cover tax obligations arising in connection with the Offering. Morgan Stanley & Co. International plc and Nordea Markets (division of Nordea Bank Danmark A/S) have been appointed to act as Joint Global Coordinators and Joint Bookrunners for the proposed IPO. Carnegie Bank A/S, Danske Bank A/S and SEB, Skandinaviska Enskilda Banken, Danmark, Filial of Skandinaviska Enskilda Banken AB (publ) Sverige, are acting as Co-Lead Managers. Enquiries: Terje List, CEO Matas A/S, tel +45 48 16 55 55 Søren Vestergaard-Poulsen, CVC Capital Partners, tel +44 207 420 4200 Lars Frederiksen, Chairman, Materialisternes Invest Holding ApS tel +45 40 20 66 35 Per Bech Thomsen, Impact Communications, tel +45 31 37 31 33 This document and the information contained herein are not for distribution or release, directly or indirectly, in or into the United States of America (including its territories and possessions, any state of the United States of America and the District of Columbia) (the “United States”), Australia, Canada or Japan. This communication does not constitute, or form part of, an offer to sell, or a solicitation of an offer to purchase, any securities in the United States, Australia, Canada or Japan or in any jurisdiction in which any offer or solicitation would be unlawful. The securities of Matas A/S have not been and will not be registered under the U.S. Securities Act of 1933 (the “Securities Act”) and may not be offered or sold within the United States absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. This communication is an advertisement and not a prospectus for the purpose of directive 2003/71/EC as amended (together with any applicable implementing measures in any member State, the “Prospectus Directive”). A prospectus to be prepared pursuant to the Prospectus Directive is intended to be published, which, when published, can be obtained from Matas A/S with certain limitations. Investors should not purchase or otherwise acquire any securities referred to in this communication except on the basis of information contained in a prospectus. In any EEA Member State, other than Denmark, that has implemented the Prospectus Directive, this communication is only addressed to and is only directed at qualified investors in that Member State within the meaning of the Prospectus Directive. This communication is only directed at (i) persons who are outside the United Kingdom or (ii) to investment professionals falling within Article 19(5) of the U.K. Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or (iii) high net worth entities falling within Article 49(2)(a) to (d) of the Order or (iv) other persons to whom it may lawfully be communicated (the persons described in (i) through (iv) above together being referred to as “relevant persons”). The securities are only available to, and any invitation, offer or agreement to purchase or otherwise acquire such securities will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents. Stabilisation/FCA The Joint Global Coordinators and Joint Bookrunners and the Co-lead Managers and their affiliates are acting exclusively for Matas A/S and the selling shareholders and no-one else in connection with the contemplated IPO. They will not regard any other person as their respective clients in relation to the contemplated IPO and will not be responsible to anyone other than Matas A/S and the selling shareholders for providing the protections afforded to their respective clients, nor for providing advice in relation to the contemplated IPO, the contents of this communication or any transaction, arrangement or other matter referred to herein. In connection with the contemplated IPO, the Joint Global Coordinators and Joint Bookrunners and the Co-lead Managers and any of their affiliates, acting as investors for their own accounts, may purchase shares and in that capacity may retain, purchase, sell, offer to sell or otherwise deal for their own accounts in such shares and other securities of Matas A/S or related investments in connection with the contemplated IPO or otherwise. Accordingly, references in the prospectus to the shares being offered, acquired, placed or otherwise dealt in should be read as including any offer to, acquisition, placing or dealing by, such Joint Global Coordinators and Joint Bookrunners and the Co-lead Managers and any of their affiliates acting as investors for their own accounts. The Joint Global Coordinators and Joint Bookrunners and the Co-lead Managers do not intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so. Matters discussed in this communication may constitute forward-looking statements. Forward-looking statements are statements (other than statements of historical fact) relating to future events and anticipated or planned financial and operational performance and can be identified by words such as “targets”, “believes”, “expects”, “aims”, “intends”, “plans”, “seeks”, “will”, “may”, “might”, “anticipates”, “would”, “could”, “should”, “continues”, “estimate” or similar expressions. The forward-looking statements in this communication are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although Matas A/S believes that these assumptions were reasonable when made, these assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies and other important factors which are difficult or impossible to predict and are beyond its control. Such risks, uncertainties, contingencies and other important factors could cause actual events to differ materially from the expectations expressed or implied in this communication by such forward-looking statements. The information, opinions and forward-looking statements contained in this announcement speak only as at its date, and are subject to change without notice.