Interim Report January-September 2001

Interim Report January - September 2001 1 November 2001 July - September January - Full September year Key figures 200120001) 2001 20001 2000 ) Net sales, SEK m 2 301 765 5 840 2 554 4 102 Operating profit before depreciation, SEK m 583 255 356 (EBITDA) 246 151 Operating profit before goodwill 418 206 270 amortisation, SEK m (EBITA) 177 137 Operating profit, SEK m (EBIT) 161 136 383 202 261 Operating margin, % 7.0 17.8 6.6 7.9 6.4 Profit after financial items, SEK m122 127 299 175 220 Earnings per share, after full dilution, SEK 41.01 26.72 28.97 15.91 25.51 Return on capital employed, % 22.2 Return on shareholders' equity, % 17.2 1) Because of the acquisitions and disposals made by the Group, comparisons with previous year are of limited value. Development during the period: - Net sales increased by 129 per cent to SEK 5,840 million (2,554), of which 5 per cent was organic growth. - The profit after financial items rose 71 per cent to SEK 299 million (175). - EPS after full dilution increased 53 per cent to SEK 41.01 (26.72). - The cash flow from current activities prior to investments totalled SEK 345 million (32). - Efficiency-enhancing programmes at acquired units proceeded as planned. - The closing of the Star Beka production unit has proceeded as planned and is due to be completed at the end of this year. Key events during the third quarter: - Strong sales and profit growth in the Nordic region. - Continued efficiency enhancement through integration of acquired units and staff reductions. - Lower demand in the Continental European market. For more information about this report, please contact: Fredrik Cappelen, President and CEO, Lennart Rappe, Vice President and CFO, Katarina Sivander, Communications Manager, Tel.: +46 8 440 16 00 Financial information is also available on Nobia's web site: www.nobia.se The Nobia Group, January-September 2001 Changes in the Group's structure A decision was made in 1999 to focus the Nobia Group's business activities on kitchens, bathrooms and wardrobes. This led to the disposal in 2000 of its door and window business activities. 2000 also saw the acquisition of kitchen business activities in Germany, Sweden, Norway and Denmark. Acquisition of Magnet During 2001, the streamlining and focusing of the business activities has continued. June saw the acquisition of the UK kitchen group, Magnet. Magnet manufactures and sells interior products, mainly for kitchens, bathrooms and bedrooms and primarily in the UK. Magnet also includes C.P. Hart, whose business activities focus on exclusive bathroom interiors. In addition, it also includes the manufacturing and sale of joinery products. Magnet has 215 sales outlets in the UK, as well as four factories and around 2,300 employees. The purchase price for the Magnet Group without debts was GBP 123 million. GBP 103 million of the purchase sum was paid in cash while the rest, GBP 20 million, took the form of a loan from the vendors. Magnet is included in Nobia's accounts as of May 2001. Disposal of Star Byggprodukter As part of the streamlining process of Nobia, the Swedish building materials wholesaler Star Byggprodukter was sold in January. The capital gains amounted to SEK 22 million, which is recorded as an item affecting comparability. The effect on the net debt was a reduction by SEK 132 million. Market trends The demand for kitchen interior products normally reflects demand for consumer durables. The market comprises consumer purchases for renovation purposes, which account for the greater part of demand, as well as a project market for professional new construction/renovation. In the Nordic market, demand weakened in the consumer market, while the project market rose during the year. Demand thus remained largely unchanged over the period, although there was a certain weakening during the third quarter. In the Continental European market, and especially in Germany, the market continued to weaken and this was particularly noticeable during the third quarter, with capacity cutbacks announced by several major German players. A continued strength of the consumer market has led to an increase in UK demand over the period. Financial report for the period January-September Net sales Sales increased 129 per cent during the period January - September to SEK 5,840 million (2,554). Within the core business activities, i.e. excluding units disposed, sales increased SEK 4,105 million or 237 per cent compared with the same period the previous year. Acquired business activities accounted for around SEK 3,890 million of this increase. For comparable core business activities excluding acquisitions, net sales increased 12 per cent or around SEK 215 million, of which currency effects accounted for 8 per cent or around SEK 130 million. Organic growth for comparable units was thus 5 per cent. For the Nordic business activities, net sales totalled SEK 2,518 million (1,630). Around SEK 619 million of the SEK 888 million increase was attributable to acquired units. For comparable business activities excluding acquisitions, net sales increased SEK 269 million or 16 per cent, of which currency effects accounted for 8 per cent. Organic growth was 9 per cent, and was positive in all Nordic countries, mainly as a result of higher market shares and increased product content. Several new stores have also been opened during the year. For the Continental European business activities, net sales totalled SEK 1,957 million (191). The increase is attributable exclusively to acquisitions. Sales for comparable units fell as a result of the decision to close production at Star Beka. Invoiced sales for the Continental European business activities increased outside Germany but fell inside Germany. For the UK business activities, invoiced sales for the period May up to and including September totalled SEK 1,570 million. Several investments in new stores have been made. Results The Group's operating profit was SEK 383 million (202). The operating margin came to 6.6 per cent (7.9). The operating profit for the core business activities excluding units disposed and items affecting comparability, came to SEK 361 million (106). The operating margin totalled 6.2 per cent (6.1). For comparable business activities, the Swedish krona's depreciation led to a profit boost of around SEK 15 million. The operating profit was affected by the higher goodwill amortisation resulting from the acquisitions, an increase of SEK 31 million compared to the previous year. Net financial items totalled SEK -84 million (-27). The higher financial expenses compared with the previous year are explained by the increased debt caused by company acquisitions. Lower interest rate levels and the amortisation of loans during the third quarter had a positive impact on interest expenses. The profit after financial items rose 71 per cent to SEK 299 million (175). The Group's tax expenses came to 34 per cent of the pre-tax profit. Excluding non-deductible consolidated goodwill amortisation, the tax rate was 30 per cent of the pre-tax profit. The net profit totalled SEK 198 million (88) and EPS after dilution effects came to SEK 41.01 (26.72). The operating profit for the Nordic business activities rose to SEK 255 million (148). Acquired units contributed SEK 38 million to the increase. The operating margin improved from 9.1 per cent to 10.1 per cent. The profit improvement within the original business activities is mainly due to increased sales and higher cost efficiency. The acquired Nordic business activities have seen the implementation of cost rationalisations. The operating profit for the Continental European business activities totalled SEK 54 million. The operating margin came to 2.8 per cent. Costs at the acquired units have been cut, mainly via staff reductions. The closing of the Star Beka production unit has proceeded as planned and is due to be completed at the end of this year. The close down costs for Star Beka have been eliminated against the Group's restructuring reserve fund and have thus not affected the period's profits. The operating profit for the period May-September for the UK business activities came to SEK 132 million, with an operating margin of 8.4 per cent. Cost cuts are also being implemented in the UK business activities. Net sales and financial results for the third quarter Net sales totalled SEK 2,301 million (765). The operating profit rose to SEK 161 million (136), with an operating margin of 7.0 (17.8) per cent. The profit after tax was SEK 78 million (84). The previous year's operating profit includes items affecting comparability of SEK 94 million, consisting of SPP funds and capital gains on the disposal of Svenska Fönster. Integration of acquired units The integration of the units acquired last year is proceeding as planned, including the intended cost rationalisations. For the Continental European business activities, the effect has been partly counteracted by the fall in demand. Costs for the ongoing rationalisation programmes have been recorded in the restructuring reserve fund, and have thus not affected the period's profits. Cash flow The Group's cash flow from current activities prior to investments totalled SEK 345 million (32). Working capital, which, for seasonal reasons, is normally high during September, rose SEK 47 million (77) excluding exchange rate effects. Investments Investments in fixed assets totalled SEK 126 million (33). These investments mainly involved the replacement of machinery, new stores and IT. Acquisitions and disposals led to a net cash outflow of SEK -1,448 million. Capital employed, net debt and liquidity The Group's capital employed came to SEK 4,285 million compared with SEK 2,242 million at the turn of last year. Via acquisitions and disposals, capital employed increased around SEK 1,800 million. The Group's net debt totalled SEK 2,249 million, compared with SEK 601 million at the turn of last year. The net effect of acquisitions and disposals led to an increase of the net debt of around SEK 1,760 million. Exchange rate effects have raised the net debt by SEK 110 million. Shareholders' equity totalled SEK 1,669 million and the equity/assets ratio was 25.7 per cent. The Group's available liquidity, including agreed credit facilities, totalled around SEK 760 million on 30 September. In connection with the acquisition of Magnet, the Nobia Group was refinanced to the tune of SEK 2,500 million. Agreed credit facilities have varying terms extending to the year 2008. Parent company The parent company made a loss after financial items of SEK -38 million (-9). Employees The headcount at the end of the reporting period came to around 6,200, as compared with around 4,300 at the start of the year. Acquisitions and disposals accounted for a change of around 2,100, while staff reductions accounted for around 220. Accounting principles Nobia complies with the recommendations of the Swedish Financial Accounting Standards Council. The accounting principles are unchanged compared with the previous year. For a definition of key figures and ratios, see Nobia's annual report 2000. Stockholm 1 November 2001 Fredrik Cappelen President and CEO This report has not been reviewed by the company's auditors. Nobia AB corporate registration no. is 556528-2752 Interim report for 2001 will be published on 22 February 2002 Short on Nobia Nobia is Europe's largest and the world's second largest kitchen interiors Group with an estimated yearly sale of SEK 10 billion and approximately 6,200 employees. The group is mainly active in the Nordic region, Continental Europe and the UK. The UK accounts for around 40 per cent of group sales, while the Nordic region accounts for around 30 per cent, Continental Europe for around 25 per cent and other markets for around 5 per cent. Nobia's brands include Marbodal, Myresjökök, HTH, Uno form, Invita, Sigdal, Norema, Petra, Parma, à la Carte, Poggenpohl, Pronorm, Optifit, Goldreif, C.P. Hart and Magnet. The products are manufactured in Sweden, Norway, Denmark, Finland, Germany and the UK. Corporate headquarters are located in Stockholm. Nobia is owned by the Industri Kapital 1994-fund, Skanska, Norsk Kjøkken Invest and Nobia's corporate Management. Nobia AB, Box 70376, SE-107 24 Stockholm, Tel.: +46 8 440 16 00, Fax: +46 8 440 16 20 www.nobia.se Income statement July January Full - September Juli - sp - September year SEK m 2001 20001) 2001 20001) 2000 Net sales 2301 765 5 840 2 554 4 102 Cost of goods sold -1412 -555 -3 644 -1 830 -2 768 Gross profit 889 210 2 196 724 1 334 Sales expenses -616 -140 -1 510 -482 -881 Administrative expenses -113 -31 -316 -108 -223 Other income/expenses 17 4 26 8 -6 Items affecting 0 94 22 64 46 comparability Operating profit before 177 137 418 206 270 amortisation of goodwill Amortisation of -16 -1 -35 -4 -9 goodwill Operating profit 161 136 383 202 261 Net financial items -39 -9 -84 -27 -41 Profit after financial 122 127 299 175 220 items Tax -44 -43 -101 -87 -115 Minority share in 0 - 0 - 0 profit/loss for the period Profit after tax 78 84 198 88 105 Operating margin exc. 7.7 17.9 7.2 8.1 6.6 amortisation of goodwill, % Operating margin, % 7.0 17.8 6.6 7.9 6.4 Return on capital 22,2 employed, % Return on shareholders' 17,2 equity, % EPS before dilution, 16.75 26.83 42.70 28.11 30.33 SEK EPS after full 15.91 25.51 41.01 26.72 28.97 dilution, SEK No. of shares before 4 656 356 4 118 281 4 656 4 118 4 627 dilution 356 281 404 Average no. of shares 4 656 356 3 130 645 4 637 3 130 3 462 before dilution 055 645 408 No. of shares after 4 902 488 4 280 913 4 902 4 280 4 790 full dilution 488 913 036 Average no. of shares 4 902 488 3 293 277 4 827 3 293 3 625 after full dilution 520 277 040 1) Because of the acquisitions and disposals made by the Group, comparisons with previous year are of limited value. Balance sheet 30 September 31 Dec. SEK m 2001 2000 2000 Assets Fixed assets Goodwill 1 219 208 430 Other intangible fixed assets 34 43 32 Tangible fixed assets 2 243 1 195 1 370 Financial fixed assets 148 234 143 Total fixed assets 3 644 1 680 1 975 Current assets Stock 1 144 488 614 Accounts receivable 1 190 880 739 Other receivables 177 106 96 Cash and bank balances 341 152 221 Total current assets 2 852 1 626 1 670 Total assets 6 496 3 306 3 645 Shareholders' equity and liabilities Shareholders' equity 1 669 1 023 1 363 Minority shares 5 5 5 Provisions 625 499 457 Long-term liabilities 2 524 527 559 Current liabilities 1 673 1 252 1 261 Total shareholders' equity and 6 496 3 306 3 645 liabilities Change in the Group's shareholders' January - Full equity September year 2001 2000 2000 Opening shareholders' equity, 31 1 363 351 351 December Translation differences 108 0 22 Net profit for the period 198 88 105 Non-cash issue - 584 885 Other changes 0 0 0 Amount at the end of the period 1 669 1 023 1 363 Balance sheet-related key figures Equity/assets ratio, % 25.7 30.9 37.4 Net debt, closing balance 2 249 531 601 Capital employed, closing balance 4 285 1 756 2 242 Cash flow statement January - Full September year SEK m 2001 2000 2000 Current activities Operating profit 383 202 261 Adjustment for items not included in 125 -16 -17 cash flow Interest, dividends and tax -116 -77 -102 Changes in working capital -47 -77 14 Cash flow from current activities 345 32 156 Investment activities Investments in fixed assets -126 -33 -87 Sale of subsidiary 144 392 392 Acquisition of subsidiary -1 592 -293 -271 Other items included in investment 13 8 25 activities Cash flow from investment activities -1 561 74 59 Financing activities Loans raised 2 063 - 75 Amortisation of liabilities -754 -88 -128 Cash flow from financing activities 1 309 -88 -53 Cash flow for the year exc. exchange rate differences in liquid funds 93 18 162 Core business' net sales and operating profit Net Operating sales profit Jan - Full Jan - Ful Sep yr Sep l yr SEK m 2001 2000 2000 2001 2000 200 0 Booked value 5 840 2 554 4 383 202 261 102 Deducted items -22 -64 -46 affecting comparability Adjustments for -819 - -32 -39 disposed units 1012 Core business 5 840 1 735 3 361 106 176 090 Core business' net sales, operating profit and operating margin per business area Net Operating Operating sales profit margin, % Jan - Full yr Jan - Sep Ful Jan - Sep Ful Sep l l yr yr SEK m 2001 2000 2000 200 200 200 2001 200 200 1 0 0 0 0 Nordic 2 518 1 630 2 428 255 148 237 10.1 9.1 9.8 business activities Continental European 1 957 191 813 54 -9 -4 2.8 - - business 4.7 0.5 activities UK business 1 570 132 8.4 activities Goodwill -35 -4 -9 amortisation Consolidated adjustment -205 -86 -151 -45 -29 -48 22.0 33. 31. and other 7 8 Core 5 840 1 735 3 090 361 106 176 6.2 6.1 5.7 business Core activities' net sales and profit per business area Quarterly figures 2001 2000 SEK m III II I IV III II I Net sales Nordic business 759 912 847 798 475 611 544 activities Original business 579 685 635 620 475 611 544 Acquired business 180 227 212 178 Continental European business activities 624 666 667 622 63 65 63 Original business 35 61 64 67 63 65 63 Acquired business 589 605 603 555 UK business activities 983 587 Consolidated adjustments and other -65 -69 -71 -65 -25 -30 -31 Total core activities 2 301 2 096 1 443 1 355 513 646 576 Operating profit Nordic business 82 106 67 89 44 71 33 activities Original business 70 87 60 82 44 71 33 Acquired business 12 19 7 7 Continental European business activities 16 32 6 5 -4 -3 -2 Original business 0 0 0 -7 -4 -3 -2 Acquired business 16 32 6 12 UK business activities 92 40 Goodwill amortisation -16 -13 -6 -5 -1 -2 -1 Consolidated adjustments and other -13 -22 -10 -19 -10 -10 -9 Total core activities 161 143 57 70 29 56 21 Operating margin, % Nordic business 10.8 11.6 7.9 11.2 9.3 11.6 6.1 activities Original business 12.1 12.7 9.4 13.2 9.3 11.6 6.1 Acquired business 6.7 8.4 3.3 3.9 Continental European business activities 2.6 4.8 0.9 0.8 -6.3 -4.6 -3.2 Original business 0.0 0.0 0.0 -10.4 -6.3 -4.6 -3.2 Acquired business 2.7 5.3 1.0 2.2 UK business activities 9.4 6.8 Consolidated adjustments and other Total core activities 7.0 6.8 4.0 5.2 5.7 8.7 3.6 ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2001/11/01/20011101BIT00430/bit0001.doc http://www.waymaker.net/bitonline/2001/11/01/20011101BIT00430/bit0002.pdf

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