Real estate business is growing in importance and earnings pick-up continues in the fashion business

1 julY – 30 september  2020

• Total revenue decreased by 23 percent to SEK 59.2 million (76.6).
• The gross profit margin increased to 48.3 percent (47.6).
• Operating profit amounted to SEK 13.7 million (-9.3), including an effect of valuation of acquired properties of SEK 18.2 million during the quarter.
• Profit after tax amounted to SEK 7.1 million (-9.0), including an effect of valuation of properties acquired during the quarter of SEK 14.4 million.
• Earnings per share amounted to SEK 0.18 (-0.61).).

1 january – 30 September 2020

• Total revenue decreased by 27 percent to SEK 164.0 million (225.5).
• The gross profit margin increased to 53.1 percent (49.1).
• Operating profit amounted to SEK -1.4 million (-44.7), including an effect of valuation of acquired properties during the period of SEK 18.2 million.
• Profit after tax amounted to SEK -11.4 million (-47.4), including an effect of valuation of properties acquired during the period of SEK 14.4 million.
• Earnings per share amounted to SEK -0.31 (-4.39).

IMPORTANT EVENTS DURING and after the end of the quarter

• Underlying operating costs decreased by an additional SEK 11 million during the quarter, in line with the action plan to gradually implement savings of approximately SEK 85 million on a full-year basis. Accumulated savings so far in 2019-2020 are approximately SEK 83 million.
• On July 13, the wholly owned subsidiary Odd Molly Fastigheter AB signed a new lease agreement with the existing tenant in the property Kristianstad Vä 1:10, which also includes the construction of a new logistics building on the property, which is expected to be completed in spring 2021. The agreed annual rent amounts to approximately SEK 1.8 million with a triple-net lease that runs 11 years, until July 2031. The total annual net operating income of Kristianstad Vä 1:10 is thus expected to increase by nearly 20 percent to SEK 11.9 million.
• In the second half of August, the Hunkydory brand was relaunched. This autumn’s collection, which is the first to be developed since Odd Molly licensed the brand in autumn 2019, is now available in own web shop hunkydory.com and at selected retailers.
• On August 18, it was announced that Odd Molly had entered into an agreement to acquire four logistics and warehouse properties in Småland through the acquisition of 100 percent of the shares in Millennium Fastigheter AB. The property portfolio comprises a lettable area of 29,840 square meters and generates annual rental income of approximately SEK 11.7 million and net operating income of approximately SEK 9.8 million. In connection with the closing on September 1, Odd Molly conducted a directed issue of 4,260,110 new class A ordinary shares at a price of SEK 4.80 per share to the sellers of Millenium Fastigheter AB and a directed cash rights issue totalling 2,916,668 new Class A ordinary shares at a price of SEK 4.80 per share to a group of investors. In total, issues of just over SEK 34 million were carried out before issue costs.
• On August 26, it was announced that Odd Molly had entered into an agreement to acquire two additional logistics properties. The property portfolio comprises a lettable area of 23,790 square meters and generates annual rental income of approximately SEK 13.8 million and net operating income of approximately SEK 10.7 million. The underlying property value amounts to approximately SEK 186 million. The transaction is made through two acquisitions of companies, one of which was executed on 22 October and the other is scheduled to be executed on 5 November. In connection with the closing on October 22, Odd Molly conducted a directed issue of 3,750,000 new class A ordinary shares at a price of SEK 8.00.
• On September 1, the Board of Directors decided to carry out a directed cash rights issue totalling 3,400,000 new Class A ordinary shares at a price of SEK 8.00 per share to a group of international investors under the direction of the insurance company The Phoenix Insurance Company Ltd, within the framework of the existing mandate from the Annual General Meeting on May 7. Funds amounting to SEK 27.2 million before issue costs have been added to Odd Molly through the rights issue.
• On 13 October, a prospectus was published in connection to the registration of newly issued shares, and on 13 and 14 October a total of 10,576,778 new shares were registered.
• An extraordinary general meeting of Odd Molly International AB was held on October 15.
• On October 21, the company announced that the Board of Directors had decided to carry out a fully guaranteed rights issue of approximately SEK 110 million and directed issues of approximately SEK 135 million and that an agreement had been entered into to acquire a portfolio of properties with a real estate value of approximately SEK 354 million.
• A new Managing Director has been hired in Used By, which will take office in early November. The new CEO, Jason McMillion, has a solid experience from e-commerce and other tech businesses.
• In order to create optimal conditions for the fashion and real estate activities, an evaluation of a clear operational, organizational and legal structure has been initiated. The evaluation includes the possibility of dividing the activities into two separate companies.

update in relation to the covid-19 pandemic

The outbreak of the pandemic affects Odd Molly’s operations, mainly in the form of reduced traffic to the company’s six own physical stores and to retailers’ stores, as well as delayed deliveries of goods from certain producers, which had a negative impact on second and third quarter sales. Online sales, which account for more than half of the company’s revenue from the fashion business, are an important factor in counteracting the impact in the physical channels. At present, we have not seen any financial impact from the pandemic on our real estate business. However, the continued development of the pandemic and its consequences are unpredictable, and Odd Molly cannot currently make a firm assessment of the extent of the continued effects on the company’s operations and financial development over the long term, other than that the company and the company’s customers will be affected for some time to come. A number of measures have been taken to protect employees, customers and partners’ health and to mitigate the impact on earnings and liquidity. The Board of Directors and management continuously monitor the development of operations in this context in order to quickly and effectively manage the risk of the pandemic and to act with further initiatives to counteract the negative impact as far as possible. Further savings have been implemented and the company has benefited from state aid in the form of  short-term work allowance, reduced social security contributions and deferred tax payments.

For further information please contact:

Jennie Högstedt Björk, CEO

08-522 28 509

jennie.hogstedtbjork@oddmolly.com

Johanna Palm, CFO and Deputy CEO

0760-10 24 55

johanna.palm@oddmolly.com

This information is information that Odd Molly International AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted, through the agency of the above contact persons, for publication on 23 October 2020 at 08:00 CET.

This is an extract translation of the original Swedish language report. In the event of discrepancies, the original Swedish wording shall prevail.

For full report, see attached (in Swedish)

Odd Molly International AB, Kornhamnstorg 6, 111 27 STOCKHOLM, +46 8 522 28 500

www.oddmolly.com