HEMA - slight beat and frugal cash management

All,

Hema results came in not far from expectation. 

Deviations from model for Q3:

Sales: + E7m. LfL consumer sales of +3.1% + 2.1% in the Netherlands and Belgium respectively (slightly negative in France and Germany).

GM: + E5m, margin up 0.5%

Opex: + E3m staff costs and + E2m Other costs offset by Adjustments of E2m (similar level to last year).

EBITDA: + E2m, margin up 0.5%. Positive LfL sales together with margin improvement measures could not fully offset the increase in LfL costs. What drove the earnings growth was the EBITDA contribution of online and new stores (which includes the 9 railway stores transferred to in-house in October 2018). Still deliveries to franchise stores were up strongly at +3.5%, despite the above mentioned transfer of railway stores).

WC: + E17m. We had expected a small outflow. And a less pronounced outflow in Q4, due to the VAT normalisation. The company points to another meaningful positive WC effect to occur in Q4 (presumably vs the comparable - E18m outflow) due to the Quarter end cut-off dates (the VAT effect).

CapEx: + E5m (lower Capex). Two new owned stores + refurbishments.

FCF: + E24m

RCF Pay-Down: - E39m

NCF: - E15m

Cash and Equivalents at Quarter End: E 27m. Note that of that amount only E12.6m are held in actual cash, vs E11m considered restricted in Q2.

Liquidity accessible: E86.4m

Wolfgang