Interim report January - September 2014
SUMMARY OF THE THIRD QUARTER, 1 July – 30 September 2014
● Revenues for the quarter increased 4 per cent to SEK 1,467 M (1,417). Adjusted for currency effects and calculated on a comparable number of workdays, revenues rose 2 per cent.
● EBIT increased to SEK 172 M (149) and the EBIT margin rose to 12 per cent (10). EBIT was negatively impacted by non-recurring effects of SEK 4 M (1).
● The gross margin amounted to 55.0 per cent (55.2).
● Profit after financial items increased to SEK 159 M (133).
● Earnings per share before and after dilution rose to SEK 3.20 (2.67).
● The net debt at the end of the period amounted to SEK 1,763 M (1,794), compared with SEK 1,642 M at the end of the year.
● No significant events occurred during the third quarter of 2014.
Strong results in the third quarter
Mekonomen Group achieved one of its strongest operating results for a quarter. Excluding Denmark, the results were the highest achieved to date. The Nordic market has been weak but stable during the year and growth was primarily from our affialiated workshops.
Mekonomen Group’s revenues for the third quarter of 2014 increased 4 per cent to SEK 1,467 M (1,417) and EBIT increased to SEK 172 M (149). The EBIT margin rose to 12 per cent (10). Non-recurring costs attributable to the action plan in Denmark had a negative impact of SEK 4 M (1) on EBIT. Excluding Denmark, EBIT rose to SEK 186 M (158).
The Nordic market has been weak but stable during the quarter and to date this year and we expect no change for the rest of the year or in 2015. In this market, players with strong concepts are able to report growth.
Improved profitability in all Group companies
Good cost control and strong growth of 10 per cent in our affiliated workshops in the quarter contributed to growth and profitability for the Group. Particularly the satisfactory trend for all our companies in Norway and Sweden proving that our affiliated workshops were holding their own against competitors and that we advanced our positions during the period. The trend for ProMeister is positive and entailed that we are increasing competitiveness primarily in other workshops. Consumer sales displayed some increase in Sørensen og Balchen’s BilXtra stores, but declined in Mekonomen Nordic.
The situation in Denmark is still strained. Sales in our concept workshops Mekonomen Autoteknik and MekoPartner were stable during the quarter, at the same time as the measures are progressing. However, it is too early to speak about a turnaround in Denmark.
Aggressive efforts and higher cost efficiency
The investment in organic growth entails a focus on our affiliated workshops and on the development of ProMeister. Higher cost efficiency and strong purchasing power remain a key focus for the rest of 2014 and 2015.
Our ongoing work with quality assurance in our affiliated workshops is a success factor for retaining our strong growth. Training of mechanics is an important component in continuously improving quality and our training initiative, ProMeister Academy, is a strong tool in this effort.
One example of our ambitious investments in the digital area is Lasingoo, which is being launched in 2014. This car portal is owned by industry players, including Mekonomen Group, and will simplify for car owners when selecting and booking workshops. Our investments in the future will be both proprietary and with alliance partners.
The third quarter was a good quarter for the Mekonomen Group. This is a confirmation that our concept can hold its own and we will continue to develop our position in the market with humility and with confidence in the future.
President and CEO
For further information, please contact:
Håkan Lundstedt, President and CEO Mekonomen AB, Tel: +46 (0)8-464 00 00
Per Hedblom, CFO Mekonomen AB, Tel: +46 (0)8-464 00 00
Gunilla Spongh, Head of International Business, Mekonomen AB, Tel: +46 (0)8-464 00 00
The information in this interim report is such that Mekonomen AB (publ) is obligated to publish in accordance with the Securities Market Act. The information was submitted for publication on 12 November 2014 at 7:30 a.m.