Interim report January – September 2013

SUMMARY OF THE THIRD QUARTER, 1 July – 30 September 2013

• Revenues for the quarter declined 1 per cent to SEK 1,417 M (1,433). Adjusted for currency effects and calculated on a comparable number of workdays, revenues declined 1 per cent.
• EBITA rose 1 per cent to SEK 178 M (176) and the EBITA margin increased to 13 per cent (12).
• EBIT declined 2 per cent to SEK 149 M (151) and the EBIT margin amounted to 10 per cent (11).
• Profit after financial items rose 5 per cent to SEK 133 M (127).
• Earnings per share before and after dilution increased to SEK 2.67 (2.46).
• Net debt at the end of the period was SEK 1,815 M (2,038), compared with SEK 1,875 M at the end of the year.
• Cash flow from operating activities amounted to SEK 108 M (165).

CEO’s comments

Increased market shares in the car service market

* EBITA rose 1 per cent (one)
* EBIT declined 2 per cent and revenues declined 1 per cent (one)
* Mekonomen takes shares in the car service market
* Increased EBIT in Sørensen og Balchen and Mekonomen Nordic
* Entered into co-operation agreement with Inter Cars, after the end of the reporting period
* Purchasing company established in Hong Kong, after the end of the reporting period

Revenues for the Mekonomen Group for the third quarter of 2013 declined 1 per cent (one) to SEK 1,417 M (1,433) and comparable sales rose 2 per cent. EBITA rose 1 per cent (one) to SEK 178 M (176) and profit after financial items increased to SEK 133 M (127). EBIT declined 2 per cent to SEK 149 M (151). Adjusted for currency effects and calculated on the comparable number of workdays, revenues declined 1 per cent (one). The third quarter of 2013 has been negatively impacted by SEK 15 M compared with the corresponding period in 2012, partly due to currency effects.

EBIT for Sørensen og Balchen during the period rose to SEK 22 M (19) and the EBIT margin increased to 13 per cent (10). EBITA increased to 27 SEK M (24) and the EBITA margin rose to 15 per cent (13). Underlying net sales declined 1 per cent (one). Consolidation of the store network impacted sales.

EBIT for Mekonomen Nordic rose to SEK 97 M (95) during the third quarter and the EBIT margin was 14 (14) per cent. EBITA increased to SEK 104 M (97) and the EBITA margin rose to 15 (14) per cent. Underlying sales rose 1 per cent (one). Mekonomen Sweden’s EBIT margin was 17 per cent (17) and Mekonomen Norway’s EBIT margin rose to 17 per cent (14).

EBIT for MECA, including Denmark, amounted to SEK 29 M (45) during the period and EBITA was SEK 47 M (62). EBIT for the third quarter of 2012 was positively impacted by non-recurring items. Underlying earnings for MECA is stable. EBIT in Denmark declined to a loss of SEK 9 M (loss: 7). Repositioning with a strong focus on workshop continues, as well as closure and restructuring of consumer entities.

During the first nine months of the year, we consolidated the store network and reduced the number of stores by 17.

Our workshop chains take market shares and our investments lay the foundation for continued growth. Spare parts under our proprietary brand ProMeister were well received by the market during the quarter. The positive trend for our affiliated workshops, including our proprietary workshops, continued. Sales to our affiliated Mekonomen Service Centres and our affiliated MECA Car Service workshops rose 15 per cent in local currency, compared with the third quarter of 2012. The number of concept-affiliated and proprietary workshops are planned to be increased to meet the growing demand for our service and our offering.

We see no major change in the total Nordic market in the fourth quarter compared with the third quarter. Growth differs between the Nordic countries. Most positive right now is the Swedish market.

After the end of the reporting period, we have entered into a co-operation agreement with Inter Cars, which holds a leading position in Eastern Europe. The co-operation pertains to purchasing and logistics from Asia, and a common product testing centre and thanks to this we can further broaden our range and reach new customer groups. A joint company will be established in Warsaw.

A purchasing company in Hong Kong has been established after the end of the reporting period to bolster our purchasing power.

Investments in increased growth have been a focus during the quarter and will also continue to be important going forward. The Mekonomen Group stands for innovation in our industry and is one of the leading companies in Europe.

Håkan Lundstedt
President and CEO

For further information, please contact:

Håkan Lundstedt, President and CEO of Mekonomen AB, tel: +46 (0)8-464 00 00
Per Hedblom, CFO of 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 7 November 2013.