Interim report January – September 2012

1 July - 30 September

• Revenues increased 33 per cent adjusted for currency effects and calculated on comparable number of workdays. Prior to adjustment, revenues increased 28 per cent to SEK 1,433 M (1,117). 
• Excluding Meca, revenues declined 3 per cent adjusted for currency effects and calculated on comparable numbers of workdays.
• EBIT declined 7 per cent to SEK 151 M (163) and the EBIT margin was 11 per cent (15). 
• Excluding Meca, operating profit declined to SEK 100 M (163). 
• Profit after financial items declined 21 per cent to SEK 127 M (161).
• Profit after tax totalled SEK 91 M (118).
• Earnings per share before and after dilution amounted to SEK 2.46 (3.48).

1 January – 30 September

• Revenues increased 24 per cent adjusted for currency effects and calculated on comparable numbers of workdays. Prior to adjustment, revenues increased 23 per cent to SEK 3,870 M (3,149). 
• EBIT declined 7 per cent to SEK 403 M (432) and the EBIT margin was 10 per cent (14).
• Profit after financial items declined 14 per cent to SEK 365 M (423). 
• Profit after tax totalled SEK 261 M (309).
• Earnings per share before and after dilution amounted to SEK 7.42 (9.24).
• Net debt at the end of the period totalled SEK 2,038 M (543). Net debt at December 31, 2011 totalled SEK 580 M.

Significant events

• During the third quarter, the acquisition of Meca on 23 May 2012 had a positive impact of SEK 381 M on net sales and SEK 554 M for the nine-month period. EBIT was positively impacted by SEK 52 M during the third quarter and SEK 84 M for the nine-month period. In addition, the Group’s earnings were negatively impacted by transaction expenses pertaining to the Meca acquisition totalling SEK 12 M for the nine-month period, and SEK 0 M for the third quarter.
  
  

CEO’s comments 

Decline in earnings. Strong cash flow.

• Revenues for the third quarter of 2012 rose 28 per cent, including Meca, which has been included from 23 May
• Strong earnings in Meca. Lower total earnings impacted by weak market 
• Cash flow increased to SEK 165 M (137)

Mekonomen’s EBIT for the third quarter of 2012 declined 7 per cent to SEK 151 M (163). EBIT, adjusted for Meca, amounted to SEK 100 M (163). Revenues increased 28 per cent to SEK 1,433 M (1,117) and the EBIT margin was 11 per cent (15). Adjusted for Meca, currency effects and calculated on comparable number of workdays growth declined 3 per cent, in a total market that declined approximately 6 per cent during the quarter. Cash flow from operating activities amounted to SEK 165 M (137) for the third quarter. The focus during the quarter was on further consolidating our operation. 

The integration of Meca has been successful. Meca recorded strong results in the third quarter. Net sales amounted to SEK 381 M and EBIT, which was positively impacted by synergy effects, to SEK 52 M and the EBIT margin was 14 per cent.

Sørensen og Balchen was also impacted by a weak consumer market during the third quarter. Net sales during the third quarter declined to SEK 180 M (190) and the EBIT margin was 10 per cent (13). 

Mekonomen Norway reported an EBIT margin of 14 per cent (17) during the quarter and net sales declined to SEK 195 M (208). Mekonomen Fleet continues to develop well in the Norwegian market.

EBIT in Denmark declined to a loss of SEK 15 M (profit: 18), with a negative EBIT margin of 9 per cent (pos: 10), due to a rapid decline in the market situation and an increase in competitive pressure. Net sales for the third quarter declined to SEK 157 M (187), while the underlying net sales declined 8 per cent. Measures are being implemented continuously to adapt the structure and fixed costs in Denmark to the prevailing market situation, but with a focus on retaining our strong position in this market. 

The third-quarter EBIT margin in Sweden was 17 per cent (20). Provisions pertaining to receivables for Panaxia totalling SEK 6 M had a negative impact on earnings. Net sales fell 6 per cent and the underlying net sales decreased 5 per cent. Sales to affiliated workshops developed well. 

In Finland, the trends for the new units were positive and the Mekonomen concept is well suited to the Finnish market. 

During the year, we reviewed the structures of our costs, stores and logistics and measures were successively implemented. In the prevailing market situation, there is potential to make additional structural changes.

As has been announced earlier, we anticipate a continued weak market for the remainder of 2012. The automotive industry is among the first industries to enter the recession and we note that other industries are also now being affected. Our section of the automotive industry is also the first to recover from the recession and we recognise the same pattern now as in 2008, when a weak market was then followed by a recovery. During the latter portion of the third quarter, we noticed that the downward trend has begun to level out. Overall, we still see good potential for organic growth in the coming years, while we are equipping ourselves for a continued weak market period.

Håkan Lundstedt, 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 is obligated to publish in accordance with the Securities Market Act.
The information was submitted for publication on 8 November 2012.

Mekonomen makes CarLife easier through a wide and easily accessible range of inexpensive and innovative solutions and products for consumers and companies. We are the leading automotive spare-parts chain in the Nordic region, with proprietary wholesale operations, more than 400 stores and more than 2,200 workshops operating under the Mekonomen brand.

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