Ladies and gentlemen, welcome to the Q1 Interim Report 2020- 2021 for the period April 1, 2020 to June 30th, 2020. For the first part of this call, all participants will be in a listen only mode, and afterwards, there will be a question and answer session. Today, I'm pleased to present CEO, Gregers Wedell-Wedellsborg, and Anders Skole-Sørensen, CFO. Please begin your meeting.
Thank you so much, operator, welcome everyone to the presentation covering the first quarter of the 2020-21 financial year, a very special quarter. With me today, our CFO, Anders Skole-Sørensen. Today, we will go through my comments on the situation as it is right now. We will cover the corona impact on Matas' Q1 results and preliminary Q2 sales. I will hand over to Anders, who will cover the financial results in more detail. I will close off by offering the background for the outlook for 2021, where we have a new guidance for the financial year, while our long-term ambitions are unchanged.
At the end, we will look forward to taking all your questions. Please turn to slide number three. Overall, we have had a solid quarter. We have seen strong results for Q1. Topline growth of 8.1% is actually a historical high for us. We've seen that trend continue into Q2. Like-for-like growth was 8.4%, and that trend, as we mentioned, continued into Q2, thanks to the fact that a lot of Danes, well, opted to stay back or had no other choice but to stay in the country and shop locally. We saw EBITDA up 7% with the margin before special items coming in at 18.3%, slightly down from last year.
I think the key takeaway on a higher level is that our business model and Matas has proved to be very resilient in the face of the pandemic and even through a lockdown period. We saw the sales growth being driven by an extraordinary demand for our health and wellbeing products, and also the fact that there was limited competition in the first half of Q1, where shopping centers were partly closed.
We have seen spectacularly an online boom. We will get back to that. I think we can add that we have seen further proof that the online growth is profitable, a key question for the Matas case. We've also seen record high customer satisfaction for the online. Supply chain has been volatile. We've seen a lot of sudden demand changes that has impacted our inventories in both Q4 of last year and Q1 of this year. As for the strategy, our main conclusion is that we are on the right track, we're on the right course, but we have an opportunity to actually accelerate our strategic transformation.
Primarily by investing in digital, and we will also conduct a logistics review to be prepared for the future, the demand online. We have also seen that this quarter has actually prepared us even more for the international competition that we expect online to be part of our reality in the future. As I mentioned, we have new financial targets for the financial year, I should mention straight away that they are subject to higher than usual uncertainty due to COVID-19 and due to the risk of another lockdown, even recessionary pressures.
We have maintained our long-term financial ambitions, we note that there is increased macro risk. With that, please turn to the next slide. We have tried to isolate the effects of COVID-19 in the first quarter, you know the numbers from the Q4 that we saw a DKK 50 million drop in revenues in Q4. We have seen the reverse of that in Q1, a DKK 35 million increase, a windfall from some of the beneficial factors that we talked about before. We had COVID related costs in the fourth quarter of DKK 5 million. We have also had extraordinary cost in Q1 of DKK 4 million.
As for our EBITDA, we took around DKK 20 million hit in end Q4. We've seen around DKK 10 million increase in Q1 as a result of all that's been going on. Working capital is where we felt the most impact with an increase in our inventories. As you can tell, our working capital has improved quite a lot, but it should be noted right away that DKK 100 million of the decrease is due to the liquidity packages that the government has offered to all companies in Denmark. Underlying, our working capital is still increasing.
Q2 trading, we've seen a growth rate in Q2 to date that is similar to what we have seen in Q1. We should also note that for the liquidity package, we will obviously see a reversal in some of it coming in the Q2 quarter. Please turn to the next slide. This is good news. This is a continuation of what we saw with our trading update, namely that this is not only a recovery driven by health and wellbeing, it is a recovery across the board, across all the categories that we have in stock. Matas Beauty, high-end beauty, and health and wellbeing, all delivering growth compared to last year.
We have had some spectacular one-product hits in the first quarter. We didn't sell any masks, but in the second quarter, of course, demand for masks has exploded, and I know there is some speculation as to whether that will lead to an additional income. I should note that masks in Denmark is a complete commodity right now. It is all over retail, and it is being sold at zero or very, very slim margins. That is a decision we actually took consciously, that it was all about getting cheap masks out to serve the Danes and to be able to allow everyone to wear a mask.
It will affect our revenues, but it will not significantly affect our income. Please turn to the next slide. This, of course, is one of the main stories of the quarter, that we have seen a spectacular growth online, in particular in the first part of the quarter, but it actually continued into the second quarter at higher levels as well. For the quarter, in total, 25.5% of our business came from digital channels. Just looking back three years to the same quarter in the year 2017 and 2018, we were at 2.5%.
I think this highlights, more than anything, the quite dramatic transformation that we were already running with Matas, and that got an extra kick with the lockdown. I would point your attention to our customer development because is this just a one-off boom and back to normal afterwards? We are seeing some lasting benefits from this online boom. We now are looking at the last 12 months.
We have served more than 400,000 customers that shop in both our channels. That's quite attractive for us because it means we capture a greater share of that wallet from those customers. We've also seen about 250,000 customers shopping at the matas.dk in Q1 with record high customer satisfaction. We actually recruited 60,000 customers that had never shopped at our online shop before, especially in the young demographic. Having seen those customers get a good experience, I think it's something that has lasting value for Matas.
If you please turn to the next slide. This is the other good story from the quarter. As you can see, store like-for-like declined overall in the quarter. That was driven by the selective sort of store closures we had in the first half of the quarter in shopping centers in particular, and that trend reversed in the second half. From April to mid-May, we saw about 30+ stores that were closed part of that period. Shopping centers, for the most part, remained closed overall as a shopping destination, or at least very, very limited to food retail and us.
We saw limited high street traffic because people simply stayed at home and shopped from home. In the second part of the quarter, we saw a quite spectacular reversal. All stores, of course, opening again, shopping centers normalizing very, very quickly, and traffic returning to the high streets quite rapidly as well. Even in the face of a situation where competition was normalizing, we saw an uptick in like-for-like growth in the physical stores in isolation. I should note, of course, that there is some benefit from the fact that people are not traveling and staying at home. Then, if you please turn to the next slide, I will hand over to Anders to go through the financial results.
Thank you, Gregers. As you can see from the slide, overall revenue, we saw an increase of the 8.1%, as mentioned by Gregers, from DKK 876 million in the first quarter of last year to DKK 947 million in the first quarter of this year. Growth was positively impacted by the three factors: higher revenue across all segments with health and wellbeing, of course, being the strongest; the staycation, as already mentioned by Gregers; tailwinds from the Danes staying home this summer; and obviously the very strong online growth of more than 200%.
If you look at the underlying like-for-like growth, they were up by, as mentioned, 8.4%. Also worth mentioning, like-for-like growth was positive in every month of the quarter. As to our physical stores, yes, they were down by 9.2% sales in physical stores year-on-year in the quarter. That, as mentioned by Gregers, was due to the declining footfall in the first part of the quarter as a result of the COVID-19 pandemic. In the second quarter, we saw a rebound, as Gregers also mentioned.
With regard to gross margin, the gross margin in the quarter was 44.4%, which is marginally down from the 45.0% we saw in the same quarter of last year. The channel shift that we are seeing so clearly towards online impacted the margin negatively and was the prime reason for the drop. Higher sales overall and of course, total gross profit for the quarter rose by almost DKK 26 million in spite of the drop in gross margin.
As to costs, overall operating costs rose by just shy of DKK 17 million year-on-year in the quarter. A significant part of the increase was due to added costs from Firtal, which grew a lot, and from Kosmolet, which was in the numbers in this quarter and barely in the numbers last year around, because we bought them at the end of the quarter. Of course, the increased activity on matas.dk and our webshop also led to an increase in cost. Underlying cost reduction measures actually offset this increase, and I will return to the cost development more in detail later.
EBITDA before special items were up by close to DKK 10 million to almost DKK 173 million. Adjusted net profit was roughly unchanged at DKK 67 million against DKK 66 million in the first quarter of last year. Free cash flow, which I will also come back to later, amounted to DKK 237 million in the first quarter of this year. The number of transactions for both stores and online was down by 5.4%, driven by lower footfall, as mentioned to the stores, while the number of online transactions grew. The basket size grew a very impressive 14.5%, or almost DKK 25 per basket, as our customers chose to concentrate their purchases on fewer baskets.
Please note that these numbers now both include transactions from the Firtal Group, which they have not done historically, but we've included them now. Overall, in the quarter, we continued to see traffic moving towards online, where Matas is very well positioned to serve our customers, both through our own matas.dk webshop, as well as through the webshops operated by the Firtal Group, such as, for example, helsebixen.dk, jala-h elsekost.dk, and made4men.dk.
With that, now please turn to the next slide, where we look at some more long-term trends in the business. Here we can see the longer-term developments in both revenue growth, gross margin, EBITDA margin before special items, of course, and the absolute level of EBITDA, again, before special items. If you just make some very short comments, of course, the revenue growth is a positive development, even longer term, and even if we normalize, so to speak, for the very high growth we saw in this quarter, then we should also probably normalize for the low growth in Q4.
We are seeing what we believe to be a positive upwards trend in line with our strategic goals. As to the level of gross margin, yes, we think that this is a long-term stabilization. Of course, as mentioned, the challenge that we are experiencing does make a difference here and is weighing down on gross margin. As to EBITDA margin, we also believe we are seeing a stabilizing development. We can't really turn these very long-term trends on EBITDA margin because this is, of course, post IFRS 16, and we don't have post IFRS 16 going further back than the first quarter of last year.
As to revenue and EBITDA in, so to speak, dollars and cents of Danish kroner, what we are seeing is still the very longer-term picture of saying we do have to work a little harder to make as much money as we have historically, but this is exactly what we are addressing through our strategy. Please turn to the next page, where I will look a little more in detail at our costs. In Q1, overall operating costs, as mentioned, rose by around DKK 17 million. It's very important that one of the big changes here was the cost of running matas.dk, our webshop, which rose by DKK 14 million due to the growth of the business which is driving fulfillment costs.
As you know, we started our new webshop in Humlebæk back in September of last year, and the facility was actually fully up and running well before the Black Friday peak in November. We have, however, also on several occasions made it clear that it takes time to run such a facility and to make it run efficiently. We've made a lot of progress, but the facility is not running at an optimum or peak level, given the COVID-19 pandemic has sent sales on growth on matas.dk into overdrive with over 200% growth.
We have been busy making sure that we meet the expectations of our customers, which frankly has led to the addition of operating costs and a constant flow of new hires, basically to follow the business. The solid growth in Firtal also meant that their cost base grew by around DKK 11 million, while Kosmolet, as mentioned, added around DKK 6 million to the cost base, but that wasn't because they grew, that was because they weren't in the numbers in the first part of the first quarter of last year, because we bought them at the end.
The quarter saw around DKK 4 million, as mentioned, in new costs, which are related to measures to limit the spread of the COVID-19 virus. To finance the online growth, we have continued our efforts to reduce the cost base in the rest of the Matas business. On a net basis, the underlying cost base has been permanently reduced by around DKK 18 million compared to the first quarter of last year. Actually, the savings have been higher. In the physical stores and at that part of the HQ, which I, for lack of a better word, will call the analog part, we have reduced costs by at least another DKK 10 million more.
We've chosen to reinvest these savings in the digital side of the business by strengthening, for instance, our [SoMe] team and Club Matas, amongst others. With that, now please turn to slide 11 or the next slide, where I'll talk briefly about the cash flow. Cash generated from operations amounted to an inflow of DKK 300 million in the first quarter. This compares to an inflow of a mere DKK 83 million in the first quarter of last year.
One of the primary drivers behind the increase of DKK 218 million was the positive cash flow effects of around DKK 100 million stemming from the COVID-19 aid packages that have extended the due dates on VAT payments and payroll taxes. Most of this benefit, as Gregers has already mentioned, will however be reversed, so it's a bit short-lived. In the quarter, trade payables rose while they actually fell in the same quarter of last year, adding a quite nice chunk of cash relative to that of last year. The developments in accounts receivables had a negative impact on working capital.
Finally, working capital in the first quarter of this year was less negatively affected by an increase in inventories. Mind you, less negatively. It was still negatively affected but not by as much as it was in the same quarter of last year. As to CapEx, was roughly in the same level as we saw in the same quarter last year. Acquisitions and other investments fell by almost DKK 100 million compared to Q1 last year. This is because we did not make any major acquisitions this year while we bought Kosmolet last year. Summing up, the free cash flow came in at a positive DKK 237 million compared to a negative DKK 81 million in the same quarter of last year.
Please turn to the next slide where we will cover the development in our inventories. In total, inventories was DKK 153 million higher at the end of the first quarter of this year than at the same time last year. If we look at this, a quarter of the increase was due to a management decision to increase inventories back in the Christmas quarter to avoid stock situation. That is what we describe in the graph as being the existing business increase. One third of the increase was driven by the new webshop facility in Humlebæk, plus the addition of increased inventories at Firtal due to the growing online business, and also the small bolt-on acquisition carried out by Firtal.
We estimate that the remaining roughly 40% of the increase in inventories can be traced back to COVID-19, both directly and indirectly, as we continue to see a mismatch between what we have in stock and what the customers are actually looking for. In addition, we have had to boost our inventories of what we call COVID-19 specifically related products such as hand sanitizers and, the latest addition, the face masks.
At the risk of sounding like a broken record, I would like to take this opportunity to reiterate that our ambition for this financial year is very clear. We will exit this year with a lower level of inventories than we entered with, and we have actually mobilized the whole organization to make sure that we can fulfill this ambition. With that, I hand the word back to Gregers, who will talk about the strategic progress.
Thank you, Anders. Please turn to the next slide. This is our overview of the strategy and the five tracks that we have in our strategy. Overall, the first quarter of this year has actually strengthened our strategic stance and strategic position. We have seen an increase in our brand rankings compared to all other brands in Denmark. Actually, the second strongest brand evaluated by the customers in all of Denmark is Matas by now, and particularly young shoppers have taken a liking to the Matas brand.
As mentioned, we've also seen very high levels of increase in the customer satisfactions, particularly in matas.dk. Online, we're stronger than ever online. As for the stores, we have not done a lot of upgrades, not a lot of work on the stores for obvious reasons, in the particular quarter. As I mentioned, the stores have come back quite spectacularly at the end of the quarter. As for new growth, the bet we made two and a half years ago on strengthening our position in health and wellbeing and the green area really paid off in this quarter because this was obviously what customers demanded of Matas in this particular quarter.
I think the most notable thing for this quarter is that we have pulled forward a review of our logistics. We have a good and very efficient or very fast delivery set up at this point, we will be looking into how we should run our logistics long term and what investments are required to build the future logistics set up for Matas. Please turn to the next slide. As we look ahead, obviously, the headline is insecurity and uncertainty.
We don't know what is going to happen. However, we are wiser now than we were at the trading update in May. We do expect some recession, but we have seen no impact into the business at this point. However, this is a recession without precedent. It is a recession that so far has not hurt our business, but other businesses, as you well know, are much more impacted by what is going on in the overall economy. We do expect that online competition is going to heat up. However, we feel that we are well prepared and better prepared actually than ever as a result of what we have learned throughout the quarter.
As for the second wave pandemic, we see this as a risk, of course, to society overall. As we have just shown, for Matas in isolation, we actually have a high degree of resilience and have now, of course, learned from all the things that we did right in the first quarter, but also all the things that we did wrong in the first quarter. So we are better prepared to deal with the ups and downs of a second wave pandemic. As for opportunities, it has become clear that the fact that people have been staying at home, that they have been shopping locally, staying more in rural areas where we have stores, has been a clear advantage to Matas.
We really get the benefit from our broad and national store network at this point. Even seeing stores that we may have looked at in a slightly different light before Corona, performing really strongly as a result of this, and I think this speaks to the strength of our model. Obviously, there is an opportunity to accelerate the digital growth, and what we have seen throughout the quarter is that Matas has been capable of winning market share once again, even with such spectacular growth in online overall. We have been the winner in the digital area. Finally, we think that demand for health and personal care is here to stay.
There is, for sure, new habits that all of us will take into the future as well, and we see that Matas, to an increasing degree, is perceived as a destination not only for beauty but also for health. That is the backdrop for what we're looking to for the rest of the year. There is a lot of speculation, and there has been a lot of speculation about Amazon for years. Speculation has turned into fact, namely that Amazon has announced that they will open in Sweden. They have said nothing about their plans in Denmark.
We do get indications that Denmark is on their roadmap, but there is no hard fact to tell us whether and when Amazon will arrive in Denmark. However, as we've said many times, we have, right from day one of this strategy, assumed that Amazon will be part of our future and have tried to act as if they were already here. On this slide, we have compiled all the elements of our strategy to compete effectively with Amazon. We know from looking at other countries that there is a big degree of difference as to how successful Amazon is, and in particular, how successful Amazon is in our part of the market.
I will not go through all of this and encourage you to read it. It's summing up some of the things we have talked about over the years. Just highlight that on almost every single of the indicators that we follow to ask ourselves whether we are prepared to meet the competition, the trend is going up, and that actually, the COVID experience has further fueled our preparedness. Just one example, we have seen that our operating model can actually handle a rapid shift in demand patterns, both for the categories and, of course, for the channels.
I would highlight that this is all about being the first choice for customers, even in a future with new competition. We are quite well-positioned. We think we will have to address Amazon once they arrive, but we feel that we are better prepared than we have ever been. I will close off by the financial targets and ambitions for the financial year. For this year, we expect total revenue growth around 6% compared to last year.
We also expect underlying revenue, given that we have made no new acquisitions, to be around 6%. EBITDA margin before special items expected to be around 18%. CapEx, we have actually made a decision to pull forward some investments in the digital space in our software, and also actually to increase our capability to do fast delivery, same-day delivery. We've pulled forward some investments. As for our financial ambitions towards 2022- 2023, it remains turnover around DKK 4 billion, an EBITDA margin before special items above 18%, annual CapEx between DKK 80 million and DKK 120 million for the remaining years.
Our gearing level, as we mentioned in the trading update in May, remains between 2.5 and 3, which is a slight tightening of the gearing compared to earlier. I will close off by noting obligatory that this guidance is surrounded by more uncertainty than we have been used to, both in relations to how demand is going to develop, how competition is going to develop, and impacts of either recession or a second wave. Increased uncertainty. Also, we should note again that we have had some benefits from the competitive situation and the fact that Danes are staying at home in this particular quarter, that can't be pulled into the rest of the year. With that, I will ask you to turn to the next slide, and we will open for questions.
Thank you. If you have a question for the speakers, please press zero one on your telephone keypad. Our first question comes from the line of Magnus Jensen from SEB. Please go ahead.
Thank you very much, and congratulations with the strong results. Two questions from my side. First, you mentioned Amazon is going into Sweden, which is well known now, and we don't know the exact timing. Do you expect that to have any kind of impact on your business when they open up in Sweden, or will that basically be a non-event for you guys? The second question goes to, you said that you would have some revenue from these masks that will not give you any profits. Will that have a meaningful impact on your gross margin? Maybe you could comment a bit on that. That was my questions for now. Thank you.
Yes. As for Amazon in Sweden, Danes already now can go shopping in Sweden, both in the physical world and online. Of course, this depends very much on how Amazon acts in their launch in Sweden and what categories they offer and how they do it, and especially, what delivery terms to Denmark. For now, we consider them to be another cross-border actor. I will remind you that it's not new that you can order goods from outside of Denmark into Denmark.
We don't expect that to be a seismic shift in our competitive situation, but obviously, a slight tightening and a forewarning of what we're going to compete with in the years ahead. As for the gross margin impact of the masks, there will be very limited, but some impact on the gross margin. We can't say whether it will be offset by other things. Obviously, this particular thing will have a slight drag down on the margin.
Thank you. I'll jump back in the queues for a couple more questions later. Thank you.
The next question comes from the line of Poul Jessen from Danske Bank. Please go ahead.
Thank you. I came in a little late to the call, therefore you may have addressed it to them, I apologize. Coming on the face masks as well, have you, since we should all be buying that as the last week, mainly, have you seen any impact on add-on sales, meaning that people buy other stuff while they're in the store to buy the masks? That's one question.
More on the longer term, if I calculate on your guidance for this year, you increased your guides on 5% growth in the last nine months. If you assume that during the summertime, it's been quite well, let's say 3%-4% for the second half of the year. Is that what you look at also yourself? Secondly, looking beyond COVID, that means 2021. I know it's early days, but could you say something about what decisions, conclusions are you making yourself on what actually is a normalized performance on the business right now, if it's possible?
Yeah. Let me comment on the masks. I will comment on 2021- 2022 as well. Anders will take the guidance. We see both kinds of customers. We see customers coming in just to get masks, and they go out again. That drives traffic, but it drives no additional sales. We also see customers coming in for masks or coming in for something else and buying masks. We don't think that it's going to give any kind of meaningful change to the business other than it is right now sustaining the momentum that we have seen in the first quarter. This obviously is going to be part of everyday life as if you were buying a box of Kleenex.
It's not going to be anything out of the ordinary once we have passed these couples of weeks of going out to buy your base supply to the home. As for 2021- 2022, obviously, we don't give any guidance, but your underlying question whether is what we are seeing in Q1 just a one-off effect? Clearly, there are one-off effects by the favorable competitive situation that we're in, and the fact that Danes will be traveling again eventually. However, and I think that this is really key, there are some things that we have gotten out of this era that will help us through 2021 and into the next year.
Of course, the very strong position that we have now gained online and the fact that we get new customers that we acquire into the business, the fact that those customers are really pleased with the experience that they have. The fact that we have been really stress-testing our operating model and are capable of shifting the business in a matter of weeks to accommodate to radical shifts in demand, just to give you a few examples.
Obviously, maybe the key one, the fact that our Matas brand is stronger than ever, and customer satisfaction is higher than ever because that is what it's all about. I think there are lasting benefits even into the next couple of years from what we have learned and what we have seen and what we have gained in this quarter. Obviously, there are also one-offs that we will never see again.
Just remind me, Poul, what exactly was your question around the 2021 guidance? I wasn't quite sure what your question was.
Question was that when I take out the growth you had in the first quarter, and then implicitly take for the remaining three quarters, then it's about 5% growth. I assume that the second quarter will be highly supported as well as Danes have stayed at home during summer, in July and into early August. If I subtract that, then I get a growth for maybe the remainder post-summer of 4% or something. Is that what you're looking at?
We're not going to comment on guidance on a quarter-by-quarter level. Obviously, we are looking into a world where we saw, and if you of course cast your mind back, we saw a very strong third quarter, which is obviously the most important quarter, last year. That does have some impact on the overall level of the guidance for the whole year as such. Otherwise, I can't comment on specific individual quarters.
Okay. I have two others. One is then the Kosmolet acquisition. You say that sales to third parties is actually down. How are you looking at Kosmolet? When you acquired it, you said it was to get the control of the pricing and the brand, but also to do external sales. As this is down, is it developing as you expect, or do you not have many ambitions for third party?
No, I think we're talking about Kosmolet now.
Yeah.
The brand Nilens Jord. Obviously, one of the areas that was quite hard hit by the COVID-19 pandemic was actually makeup sales. The products that is at the core of Nilens Jord, and as such, that is what we've seen, and also that's what we've seen with the Nilens Jord sales outside of the Matas channel. We do certainly expect that to revert to a more normal situation. You shouldn't put too much emphasis on that specific quarter because of the specific effects that are related to COVID-19.
I would agree.
Kosmolet had a one-off bad quarter because the main sales channels outside of Matas is department stores and travel retail, which has obviously not had a great first quarter. We have seen a rapid recovery of Nilens Jord. We don't think that there is any negative impact to the business case for the Kosmolet acquisition and our plans to strengthen that brand.
Okay, thanks. Then finally, maybe you can help on the delivery cost per transaction that you're doing online. I was just considering if you have an Amazon, and people look at the U.S. and others, their distribution costs are much lower than in Denmark, and they have this Prime subscription. As delivery costs in Denmark, I believe, are fairly much higher than in the U.S., then the advantage or the pricing of a Prime subscription should be higher to cover it. What are actually a delivery cost when you have volume discounts for companies like you and others when you deliver a package?
More a question for Amazon than for Matas to decide.
What your costs were.
I think what we've seen that's significant in the quarter is that fulfillment costs online came down in line with volumes growing. We do expect that delivery costs in and of themselves, as the market matures and as demand grows, there will be a downward pressure on delivery cost as well. I will remind you that we actually have a structural advantage to online pure players because we can do delivery to the store, pickup in-store.
A nd the delivery cost to do pickup in store is much, much lower because we can obviously consolidate a lot of packages, bring it out together with our normal logistics string, and have it delivered to the store for customers to pick up. We actually have an advantage in that particular stream. As for the delivery to the home, it's pretty much a market price game. There are things you can do and then volume discounts. We have become a big player, and we believe that we are able to compete in that market as well.
Okay, thank you.
The next question comes from the line of Aleksander Edemann from Nordea. Please go ahead.
Yes, thank you for taking my questions and congratulations on the strong reports. I have a few questions. The first one, on slide four, you say that COVID-19 had a 35% or DKK 35 million increase in your revenue. Can you maybe comment on what is that reflecting? Is that the sale of COVID-19 related products such as hand sanitizers? That would be my first question.
It's not as specific as that. It's a best guess estimate, just as the DKK 15 million in the Q4 was a best guess estimate as to what is the impact of all the factors put together. The combination of the fact that we were allowed to keep our stores open in shopping centers while others had to close, the fact that we had limited competition from especially department stores, but we had increased competition from the supermarket sector. It's the cocktail effects of all those things, the fluke demand in hand sanitizer, all those things that are directly COVID-19 related and that we might not expect to see again sometime soon. We estimate that to be around DKK 35 million. It's not wildly off, but it's not an exact number.
Okay. Thank you. I calculate it to be around 4% on your revenue growth, but I guess it's not only products then. Maybe this is a very difficult question to ask, but what do you expect in your guidance for 2021 from this COVID-19? Is it fair to assume that we multiply this 35 by four to get the effect on the full year guidance? If you can comment.
I think even if we wanted to comment, I think you should take our comments for nothing because there is so much bumpy road ahead and so many clouds ahead that speculating about 2021- 2022 is wildly premature, even if you're inside the business.
Okay. It was just more to get an underlying performance for the full year guidance. Fair enough.
We will get back to that. We don't have that clarity at this point. It would not be serious to even try.
Okay. My second question. In this quarter you talk about permanent reduction in cost in your store network and also in your headquarters. I think you say it's about DKK 18 million. Do you expect further cost savings in the coming quarters, or is this the level we should expect?
No, our overall strategy, and this is really key, our overall strategy is to reduce cost in the parts of the business that are not growing, and this has been equal to the physical stores. We do that by optimizing the existing operating model, but also by consolidating closing stores, as you've seen over the years. We do that to free up the resources to invest as much as we can and as wisely as we can into getting the number one position on digital and grow our business in other ways.
This is an effort that we will continue. It will be part of our future for as long as we can envision to constantly optimize the cost of the parts of the business that are not growing. As I mentioned, right now we're very happy that we have stores, small and big stores and stores all around the country.
Okay. That leads to my final question for now. I see you reduced your number of stores by four in this quarter compared to in Q4. I guess maybe that's also driving some of the cost savings. What should we expect going forward in this year? Are you also trying to reduce your stores further?
Yeah. We have taken down our investments in modernizing the stores for reasons that we discussed with the trading update, and we have increased investments in digital. We are constantly on the lookout for opportunities to consolidate stores to refurbish or expand stores or relocate stores to a more attractive location. I wouldn't expect any kind of a shift in the level of activity that's part of our running business with a clear trend towards having fewer, bigger, and more modern stores at the end of the strategy period.
Okay. This level of four closed stores in this quarter, is that like a normal, let's say, run rate going forward, or is it like a one-off?
We can't guide on that because it's so much driven by opportunity. Is there a lease that we can get a hold of that's attractive? If there are five leases, we will go for that. If there's only one, we will go for that. Right now with the performance of the stores that we're seeing, obviously that has taken down our appetite to close stores.
Okay. Fair enough. The last one. In this quarter, your EBITDA margin on matas.dk , you haven't disclosed it, but you did in your full year report. Is it still around the 10%?
Well, there's a reason we didn't disclose. We will talk about that annually. What we can give you is what I said in the beginning that we have actually seen with volumes growing, we've seen further proof that the model that we have built, the operating model that we built, the business that we're running is actually scaling. We're getting more profitable as the online business grows.
All right. That was my question. Thank you.
Just as a reminder, if you do wish to ask a question, please press zero one on your telephone keypad now. We have a follow-up question from the line of Magnus Jensen from SEB. Please go ahead.
Thank you very much. Yeah, two questions more from my side. First on trade payables, it increased quite a lot this quarter. How do you expect that to develop for the rest of the financial year? Maybe also comment on why it has increased so much. The second one is to your omni-channel customers who you say typically spend a lot more than a normal customer, and you are at around 400,000. Could you say how that number has developed over COVID-19, so basically over Q1? Thank you.
I'll take the first one. Regarding trade payables, as you know, there was a somewhat special situation around the end of the year because of COVID-19. If you look at it in a historical context, trade payables at the end of the last financial year was actually rather on the low side. What we've seen is basically more or less of a normalization.
If you go back a couple of years, you will notice that the numbers are not all that different. That's how you should look at it more than say that it's a big trend change or anything. Otherwise than that, I'm not in the habit of giving specific trade payable forecasts on a quarterly basis. I'm certainly not going to do so at the moment while we still have, as we say, very rocky waters that we're in. It's more to be seen in that context of a normalization than anything else.
As for the omni-channel number, it's wise of you to focus on that number because it's really what we hope to be the future of our business is not to talk about the online channel and the physical channel, but rather talk about customers and how much customers spend with us overall, and even how much customers spend with us over a lifetime of hopefully shopping with Matas. It is a number we follow very closely, and it is a number that we do all that we can to drive up. We have seen an uptick in that number as online has grown.
We have seen an uptick in that number, I believe, by 48% since the same period of last year. We also see that there are really two effects. First, that it is the most loyal Matas customer with the biggest spend on Matas that will convert first into omni-channel, thereby leading us to say, "Okay, these are more attractive customers from a spend point of view." There is also another factor, and I think that's the key one to understand.
That is that once a customer starts shopping in both channels, when we track that customer behavior from before using the Club Matas data to after they have become an omni-channel customer, they spend more with us. Why is that? It's because the brand is more present to them. It's because they have shifted their online shopping from one of our competitors into the Matas family. There are a number of reasons for that. Obviously, as we become better and better at communicating to that customer based on her preferences, we can grow that number. It is an absolute key number for us to understand and to drive.
Thank you very much.
As there are no further questions, I'll hand it back to the speakers for closing remarks.
Thank you so much for joining us today and for all your questions. I wish you a less rocky season than the one we have just had. Thank you for joining.
This now concludes our conference call. Thank you all for attending. You may now disconnect your line.