31 May 2013

Matas announces intention to list its shares on NASDAQ OMX Copenhagen

Source: OMX
Company announcement
Allerød, 31 May 2013


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

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

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. 


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

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


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