Interim results January - June 2001

Interim results January - June 2001 30 August 2001 * Nobia is Europe's largest, and the world's second largest, kitchen interiors company, with annual sales of approximately SEK 10.5 billion * Nobia's net sales increased by 98 per cent to SEK 3,539 million (1,789), of which organic growth accounted for six per cent * Nobia's profit after financial items rose 270 per cent to SEK 177 million (48) * Earnings per share after full dilution amounted to SEK 49 (2) * The integration of acquired companies proceeded according to plan * The acquisition of UK-based kitchen interiors group Magnet was completed in June Nobia Group - the first half of 2001 Nobia Group, Europe's leading kitchen interiors group, has its principal markets in the Nordic region, continental Europe, and, with the acquisition of Magnet, Great Britain. Group sales for the first half of 2001 increased by 98 per cent to SEK 3,539 million. The increase in sales occurred through acquisitions and organic growth. Sales rose in each of the Nordic countries. The Group's profit after financial items rose 270 per cent to SEK 177 million (48). The integration of companies acquired in Germany and the Nordic countries has proceeded according to plan, including the intended cost- cutting scheme. In June, Nobia acquired UK-based kitchen manufacturer Magnet. Magnet manufactures and sells interior products for kitchens, bathrooms, and bedrooms on a retail and trade basis, predominantly in the UK. Acquisitions and sales The acquisition of Magnet In June, Nobia acquired UK kitchen interiors group Magnet from Enodis Plc, a listed company based in the UK. Magnet manufactures and sells interior products primarily for kitchens, bathrooms, and bedrooms, almost exclusively to the UK market. Included in the Magnet Group is the exclusive bathroom interiors brand, C.P. Hart. Magnet's operations also include, to a certain extent, sales and manufacturing of timber and PVC-U joinery. Magnet has 215 showrooms in the UK, four factories, and approximately 2,300 employees. The purchase price for Magnet Group, on a debt-free basis, amounted to GBP 123 million, comprising GBP 103 million in cash and GBP 20 million in a seller-financed loan. The Magnet Group fits well in Nobia's core operations and brings additional retail expertise to the Nobia Group. After the acquisition, some 500 wholly owned stores and franchise stores will handle the biggest portion of the Group's sales. Magnet's market position, brand strength, and product range strengthen Nobia's position as Europe's leading kitchen interiors company. The acquisition extends Nobia's geographic coverage and provides the Group with a strong position in the UK market. After the acquisition of Magnet, the proportion of overall sales by region is: 40 per cent in the UK, 30 per cent in the Nordic region, 25 per cent in continental Europe, and five per cent in other markets. Magnet will be consolidated into Nobia's accounts from the beginning of May 2001. The sale of Star Byggprodukter AB In January, Nobia sold Sweden-based building materials wholesaler Star Byggprodukter to Mindab AB as a part of its strategy to streamline operations. Capital gains associated with the sale, which amounted to SEK 22 million, were entered as items affecting comparability. The sale reduced net debt by SEK 132 million. Other events during the first half of 2001 Restructuring of Nobia's central European kitchen interiors operations The restructuring of Nobia's central European kitchen interiors operations began during the period. Within the framework of this restructuring scheme, a decision was made to discontinue production at Star Beka. This move was designed to channel products from Group companies Pronorm and Goldreif into the market. The refinancing of Nobia Group A refinancing of Nobia Group to the value of SEK 2,500 million was carried out in conjunction with the acquisition of Magnet. The borrowing facilities, which have varying maturity periods through 2008, were arranged by a consortium comprising Svenska Handelsbanken, Swedbank, Nordbanken and LB Kiel, with Svenska Handelsbanken acting as agent. Financial information Market trends Since demand in the kitchen interiors market tends to track demand for durable goods, a slight weakening has occurred during the year. Interest rates are of considerable importance in this context, affecting both purchasing activity and the interior renovation segment in the housing sector. The kitchen interiors market in the Nordic region dipped somewhat during the year. In central Europe, the market continued to soften, while in Great Britain there was a slight upturn. Net sales Net sales for the Group amounted to SEK 3,539 million. Sales attributable to Nobia's core business (operations excluding companies sold the previous year) improved by 190 per cent, or SEK 2,317 million. Acquired operations accounted for approximately SEK 2,170 million of the increase in sales. Net sales for comparable operations (operations excluding acquired companies) increased by 12 per cent, or roughly SEK 150 million, of which currency translation effects accounted for 6 per cent. Net sales for operations in the Nordic region amounted to SEK 1,759 million (1,155). Acquired companies accounted for approximately SEK 440 million of the increase in sales. Net sales for the comparable operations (operations excluding acquired companies - SEK 1,320 million) excluding currency translation effects rose by 7 per cent. Currency translation positively affected sales by six per cent. Sales improved in each of the Nordic countries. Net sales for central European operations amounted to SEK 1,333 million (128). The increase in sales is wholly attributable to acquired entities. Invoiced sales for central European operations declined domestically and increased abroad. In May and June, invoiced sales for UK operations amounted to SEK 587 million. Profits Operating profit for the Group amounted to SEK 222 million (66), representing an increase of 236 per cent. Operating margins amounted to 6.3 per cent (3.7). The operating profit for Nobia's core business (excluding sold companies and items affecting comparability) amounted to SEK 200 million (77) and the operating margin amounted to 5.7 per cent (6.3). Operating profit was affected by a write-down for goodwill representing an increase of SEK 16 million compared with previous years. Net financial items totalled SEK -45 million (-18), and tax for the period was 32 per cent of pre-tax profit. Net profit for the Group amounted to SEK 120 million (4), and earnings per share after full dilution totalled SEK 49 (2). Net profit for the Nordic operations rose by SEK 69 million to SEK 173 million, of which acquired companies accounted for SEK 26 million. Operating profit improved from 9.0 per cent to 9.8 per cent. Profit increases for operations excluding acquired companies were achieved in each of the Nordic countries. Net profit improved for central European operations, totalling SEK 38 million; the operating margin amounted to 2.8 per cent. As a result of the decision to close down Star Beka, German operations consist entirely of acquired companies. Net profit for UK operations in May/June amounted to SEK 40 million, with an operating margin of 6.8 per cent. Integration of acquired businesses Integration of businesses acquired in 2000 has proceeded according to plan, including intended cost-cutting measures. The effects of the scheme on central European operations have, however, been partially affected by declining demand in the central European market. Expenses relating to the cost-cutting program have not affected profit for the period, as these were entered against restructuring reserves. Cash flow Group cash flow from current activities amounted to SEK 174 million (33). Working capital, which normally rises during the first half of the year, increased by SEK 50 million (63). Investments in fixed assets amounted to SEK 72 million (30). Acquisitions and sales have resulted in a net cash outflow of SEK -1,509 million. Capital employed, net debt, and liquidity The Group's capital employed amounted to SEK 4,186 million compared with SEK 2,242 million at the most recent year-end. Capital employed rose by roughly SEK 1,800 million through acquisitions and sales. The Group's net debt amounted to SEK 2,323 million compared with SEK 601 million at the most recent year-end. The net effect of acquisitions and sales resulted in an increase of SEK 1,747 million. Shareholders' equity totalled SEK 1,531 million and the equity/assets ratio was 23.9 per cent. The Group's available liquidity including credit commitments amounted to approximately SEK 700 million as of June 30, 2001. Parent company The parent company's loss after financial items amounted to SEK -20 million (-5). Employees The number of employees totalled 6,600 at the end of the period, an increase of 2,100 through acquisitions and sales. Accounting principles Nobia adheres to the recommendations of the Swedish Accounting Advisory Board. The accounting principles remain unchanged from the previous year. Stockholm, August 30, 2001 Fredrik Cappelen MD and CEO The Company's auditors have not audited this report Nobia AB, Corporate identity: 556528-2752 For more information, please contact: Fredrik Cappelen, MD and CEO, Tel +46 (0) 705 67 08 00 Lennart Rappe, Executive Vice President and CFO, Tel +46 (0) 706 97 45 03 Peter Petersson, Human Resources/Communications, Tel +46 (0) 705 84 43 55 About Nobia Nobia is Europe's largest manufacturer of kitchen interiors, with combined pro forma sales of approximately SEK 10.5 billion and 6,600 employees. Nobia's brands include Marbodal, Myresjökök, HTH, Uno form, Invita, Sigdal, Norema, Petra, Parma, A la Carte, Poggenpohl, Pronorm, Optifit, Goldreif, C.P. Hart, and Magnet. Nobia's products are manufactured in Sweden, Norway, Denmark, Finland, Great Britain, and Germany. Nobia's head office is situated in Stockholm. Nobia is owned by the Industri Kapital 1994 fund, Skanska, Norsk Kjøkken Invest, and Nobia's management. Please visit Nobia's Web site: www.nobia.se ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2001/08/30/20010830BIT00410/bit0001.doc The full report http://www.waymaker.net/bitonline/2001/08/30/20010830BIT00410/bit0001.pdf The full report