Stronger margins in a weakened market
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Nobia Q2 2011
(All figures in brackets refer to the corresponding period in 2010)
Net sales for the second quarter amounted to SEK 3,559 million (3,796). Organic growth totalled 1 per cent (neg: 3). Operating profit excluding restructuring costs of net SEK 24 million (30) amounted to SEK 241 million (195), corre-sponding to an operating margin of SEK 6.8 per cent (5.1). Profit after tax and including restructuring costs totalled SEK 137 million (113), corresponding to earnings per share of SEK 0.82 (0.68). Operating cash flow amounted to SEK 96 million (310).
The Nordic market continued to display a positive trend, while the trend for other markets was negative.
Negative currency effects of SEK 272 million (neg: 315) impacted net sales for the quarter. Organic growth boosted net sales by SEK 35 million (neg: 109) and was primarily attributable to the Nordic project market.
Operating profit excluding restructuring costs amounted to SEK 241 million (195), corresponding to an operating margin of 6.8 per cent (5.1). Currency effects contributed approximately SEK 10 million (neg: 5) to operating profit excluding restructuring costs, of which negative SEK 20 million (neg: 15) in translation effects and positive SEK 30 million (10) in transaction effects.
The stronger earnings trend was mainly attributable to price increases implemented in the Nordic and Continental Europe regions, an improved sales mix and cost savings.
Return on capital employed including restructuring costs was 5.0 per cent (4.2) over the past twelve-month period.
Operating cash flow was negatively impacted, primarily by lower prepayments in the UK and France.
Comments from the CEO
"Given the continued weak market situation, I believe that we have posted an acceptable result for the UK. It is also positive that we have succeeded in improving our profitability in both the Continental Europe and Nordic regions. However, because we recently noted that the French market had weakened, we have decided to accelerate the rate of refurbishment of Hygena's store network; a measure that will impact future quarters' sales and earnings figures. We are continuing to closely monitor market trends in all regions and adjust our cost base accordingly," says Morten Falkenberg, President and CEO.