• Operating income totalled SEK 319.4 (261.2) million during the fourth quarter.
• Sales growth for the same period was 22.2 (5.8) per cent.
• Earnings per share before dilution totalled SEK 0.73 (1.01).
• Cash flow from operating activities was SEK -21.5 (-29.9) million.
• Adjusted EBITDA in the Sweden segment was SEK 3.3 (11.4) million.
• Adjusted EBITDA in total was SEK 12.3 (13.8) million.

• Operating income totalled SEK 947.3 (758.7) million during the period.
• Sales growth for the same period was 24.9 (6.8) per cent.
• Earnings per share before dilution totalled SEK 0.12 (-0.82).
• Cash flow from operating activities was SEK -19.7 (-39.6) million.
• Adjusted EBITDA in the Sweden segment was SEK -0.5 (15.5) million.
• Adjusted EBITDA in total was SEK 14.3 (5.2) million.

"In the fourth quarter, Sportamore illustrated the strength of its model and delivered strong growth in all geographical regions in a tough market characterised by high campaign intensity. Net sales grew by 22 per cent and totalled SEK 319 (261) million.  

Our strong customer focus continues with service and the experience at its heart, and customer acquisition on an annual basis has accelerated by 75 per cent compared with last year. The active customer base is now 975,000 active customers, with 55,000 of these having been added during the last quarter. The cost of marketing as a proportion of sales has actually fallen by 1.8 percentage points during the period to a figure of 10.1 per cent. The proportion of customers who returned within 90 days of the previous transaction was over 40 per cent during the period, despite a strong influx of new customers.

Scalable organisation and infrastructure for growth with improved profitability

Sportamore continues to gear up for growth in the future, and in this work we are placing great emphasis on making sure that the infrastructure and work methods are robust and designed for scalability and duplication. We are continuing our work to automate all repetitive tasks and process as far as possible, and the effects of this focus on scalability and rationalisation are now become increasingly evident. Operating expenses (excluding goods for resale) fell during the period as well as the full year as proportion of sales by two percentage points compared with last year - driven primarily by increased efficiency and benefits of scale in logistics and marketing. During the year there has at the same time been a doubling in production capacity at the Group's automated facility, and storage capacity has been trebled in order to facilitate continued growth.

Sportamore's data processing department was also reinforced during the quarter with additional resources in order to accelerate work on segmentation and personalisation, so that the relevance of the customer experience can be enhanced. This department plays an important role in delivering data for automation and data-based decision support in all the Group's functions.

Healthy stock levels and optimisation

The gross margin during the period totalled 34.6 (38.0) per cent. Half of the change compared with the previous year is attributable to the Group's diligent work to control, and in time reduce, stock levels in relation to sales. Goods more than three months old have been capitalised to a greater extent than was the case last year, while seasonal goods have been sold at the same margin as last year despite challenging market conditions. The remaining difference in margin is attributable to a higher reservation for potential obsolescence and greater caution in the valuation of expiring inventories linked to the size of inventories. At the end of the year, inventories totalled SEK 280 (218) million, and the proportion more than six months old was less than 16 per cent at the end of the period.

New business model with potential

We have continued to develop our new business model, in which suppliers are being given the opportunity to sell directly to the consumer via our customer interface. This model, which is only a few months old, is still partly under development, but despite this it is already generating sales to a seven-digit product value on a monthly basis with only two suppliers affiliated (Adidas and Asics). The model is a complement to the existing business and is reducing the relative capital requirement, which is particularly significant in a strong growth phase. At the same time, the model also allows suppliers to reach the market with a bigger product range than would otherwise have been possible. In 2019 we will continue work to add new suppliers in order to drive the development of this business model.

New trading prospects outside the Nordic region

In 2019 Sportamore will continue its expansion and move outside the Nordic region. Against the background of our improved infrastructure and strong position in the Nordic markets, we now see an opportunity to start trading with minimal start-up costs in new markets, by making use of the existing organisation and infrastructure with a high degree of automation in the processes being used. The start-up costs for a new market are estimated at less than SEK 1 million, and the first new market to be opened will be France, with trading expected to start during the second half of 2019.

We look forward to an exciting 2019."

Johan Ryding

CEO Sportamore

This information is information that Sportamore AB (publ) is obligated to disclose pursuant to the EU Market Abuse Regulation and the Swedish Securities Market Act. The information was submitted, through CEO Johan Ryding, for publication on 22 February 2019 at 08:00 CET.