Interim report January-March 2019
- Net sales for the first quarter amounted to SEK 3,469 million (3,173).
- Organic growth was a negative 1 per cent (neg: 6).
- Operating profit amounted to SEK 260 million (255), corresponding to an operating margin of 7.5 per cent (8.0).
- Currency gains had an impact of approximately SEK 5 million on the Group’s operating profit, of which a positive SEK 10 million in translation effects and a negative SEK 5 million in transaction effects.
- Profit after tax amounted to SEK 183 million (193), corresponding to earnings per share after dilution of SEK 1.09 (1.14).
- Operating cash flow amounted to SEK 241 million (64).
Comments from the President and CEO
Given the volatile market situation I am overall pleased with the results for the quarter. Our cost reduction programme is running according to plan and productivity is gradually recovering in our supply chain. In addition, the successful integration of Bribus is generating solid profit contribution to the Group.
Despite difficult market conditions, sales in the UK remained on the same level as the previous year. Retail sales improved somewhat on the back of a better product mix, while sales through our improved trade concept continued to grow. We have now trialled the new trade concept in 30 stores over a 6-month period with good results, and will thus expand the concept to an additional 120 stores during the year. Project sales were down in the quarter, but by the end of March our London based project business started deliveries to a number of key sites such as Southbank Place, Berkeley’s South Quay Plaza and Canary Wharf Contractors. We expect these to deliver close to SEK 200 million within the next nine months.
In the Nordics our Danish business had good momentum in both project and consumer sales. I am especially pleased with the performance of our consumer sales where the two new kitchen concepts, “New York” and “Nordic Spirit”, have outperformed already high sales expectations. We have also modernised the HTH website and started to roll out a revitalised store concept in Denmark during the quarter. Sales in Sweden declined in the period on the back of a softer project market. We currently estimate our Swedish contracts business, representing 5 per cent of Group sales, to have its largest volume drop in Q2/Q3 and to stabilise going into Q4.
Our reported profit generation was slightly improved versus the same period last year, supported by the Bribus acquisition. In addition, higher order values and continued reduction in our fixed cost base mitigated continued price pressure in raw materials and logistics. Performance in our supply chain has also stabilised after last year’s disruptions, resulting in improved productivity in the quarter.
Looking ahead, we believe the high market volatility is likely to continue, especially as a result of Brexit. We are therefore targeting a reduction in our fixed cost base, but also pushing ahead to make further range reductions and faster supply chain consolidation in line with previous communication. All in all, I feel confident that these measures will support a continued strong balance sheet and stable cash flow in the event of a softer global economy. It will also give us head room for investments in growth opportunities and potential M&As, while still keeping dividends in line with our financial targets.
President and CEO
For further information
Contact any of the following on +46 (0)8 440 16 00:
• Morten Falkenberg, President and CEO
• Kristoffer Ljungfelt, CFO
This interim report is information such that Nobia is obliged to make public pursuant to the EU’s Market Abuse Regulation and the Swedish Securities Market Act. The information was submitted for publication, through the agency of the contact person set out above, on 2 May 2019 at 08.45 CET.
Nobia develops and sells kitchens through some twenty strong brands in Europe, including Magnet in the UK; HTH, Norema, Sigdal, Invita, Marbodal in Scandinavia; Petra and A la Carte in Finland and Ewe, FM and Intuo in Austria. Nobia generates profitability by combining economies of scale with attractive kitchen offerings. The Group has approximately 6,100 employees and net sales of about SEK 13 billion. The Nobia share is listed on Nasdaq Stockholm under the ticker NOBI. Website: www.nobia.com