Nobina Interim Report 1 March–31 May 2018
CONTINUED PROFITABLE GROWTH
The first quarter
- Net sales amounted to SEK 2,361 million (2,205), an increase of 7.1 per cent.
- Operating profit amounted to SEK 104 million (95).
- Profit before tax amounted to SEK 72 million (58).
- Profit after tax amounted to SEK 54 million (41), and earnings per share totalled SEK 0.63 (0.46).
- Cash flow from operations excluding changes in working capital was SEK 275 million (229).
Significant events during the first quarter
- Extension of two contracts with Ruter in Oslo and investment in electric buses. The extensions run from 2019 through 2022 and 2023 respectively and comprise a total of 92 scheduled buses, of which 20 are new electric articulated buses. The total value of the extensions is estimated at approximately NOK 800 million.
- New traffic contract with Ruter in Romerike in the north of Oslo, comprising 141 buses, of which 22 are electric buses, with a contract value of around NOK 2.7 billion. The contract starts in July 2019 and extends over eight years with a three-year extension option.
- Entrusted once again by Sörmlandstrafiken to operate bus services in Sörmland, comprising 145 buses, with a contract value of around SEK 2.6 billion. The contract starts in August 2019 and extends over ten years.
- The wholly owned express bus company, Swebus Express AB, was sold to the travel company, FlixBus Sverige AB, for EUR 10.2 million (SEK 108 million equivalent). The divestment encompasses Swebus’s commercial operations, brand and most of the vehicle fleet.
- The 2017/2018 AGM approved the Board’s proposed dividend of SEK 3.35 per share, and a resolution was taken to introduce a performance-based share saving scheme for 60 key employees. Bertil Persson was elected as a new director of the board.
Significant events after the end of the quarter
- Entrusted once again by Västtrafik to operate bus services in Ale, comprising around 20 buses, with a contract value of around SEK 500 million. The contract starts in June 2019 and extends over ten years.
- Unique public transport agreement between Nobina, Stockholm County Council and Järfälla municipality with a goal of creating the world’s most modern city transport in Barkarbystaden. The initiative includes fully electrified bus services with autonomous buses used in scheduled services commencing 2019.
- Agreement signed to acquire Samtrans AB, the leading player in special public transport in the Stockholm region. The purchase price comprises a fixed consideration of SEK 225 million and a potential additional purchase price of up to SEK 225 million. In 2017, Samtrans reported turnover of SEK 746 million and a profit before tax of SEK 106 million. The acquisition, which is conditional on the approval of the Swedish Competition Authority, is expected to be concluded in the third quarter of 2018.
* The financial information presented in the report pertains to continuing operations, unless otherwise stated. The divestment of Swebus Express AB was reported pursuant to IFRS 5 and is therefore adjusted in the current and the comparative periods and recognised at an aggregate amount under the line item “profit/loss from discontinued operations” in the consolidated income statement.
Nobina is continuing to perform strongly. In the first quarter of the fiscal year, we posted an increase in revenue of slightly more than 7 per cent and reported improved profitability. Profit before tax amounted to SEK 72 million (58), up 24 per cent, and was due to enhanced performance in existing contracts and more profitable transactions outside of the agreements. At the same time, results were negatively impacted by the discontinuation of metro replacement traffic in Helsinki.
As I announced previously, we have now entered a phase with high tender volumes. To date, outcomes have been favourable for us and, during the quarter, we renewed contracts in the Oslo region and in Sörmland. The total contract volume amounted to slightly more than SEK 6.4 billion. The high quality we provide, together with our bus solutions, including efficient electric transport solutions through Nobina Electrical Solutions, comprise key success factors. From June it is decided that Nobina will not continue operating the challenging Tromsö contract after July 2019.
Bus services will continue to be electrified at an undiminished rate. For example, from autumn 2019 in Nyköping, Katrineholm and Flen, we will operate city transport solely with electric buses, and in Oslo, we are adding 20 electric buses in conjunction with the exercise of extension options in existing contracts. We are also preparing for additional projects with autonomous buses, based, among other things, on experience gained from our popular autonomous services on public roads in Kista. Our know-how and our concept for electric power and autonomous vehicles comprise key elements of the strategic knowledge we have built up at Nobina. We are now advancing this know-how one step further and, in partnership with SL and Järfälla Municipality, we are creating the world’s most modern public transport system in Barkarbystaden, outside of Stockholm.
We have completed two transactions in line with our strategic focus areas, which aim to develop its contract business and create the best solutions for public transport. In May, we divested Swebus Express, which operated in the highly competitive interregional express bus services market, making a capital gain of SEK 56 million. Our recently announced acquisition of Samtrans, the leading player in special public transport in Stockholm County, creates growth through synergies with the existing operations, further broadens the contract market and is expected to make a positive contribution to the Group’s earnings and margin from the outset. There is also potential to grow with Samtrans’ contractual models in other metropolitan regions. This is Nobina’s first acquisition in many years, but as the Nordic region’s largest bus company, and with a trend indicating continued market consolidation, we are naturally open to making further acquisitions. To sum up, I see excellent opportunities to create continued profitable growth by concentrating resources in our four strategic focus areas – Bus solutions, Contract management, Resource efficiency and Employee development.
President and CEO
The information comprises such as Nobina AB (publ) is obliged to publicly disclose pursuant to the EU Market Abuse Regulation and the Securities Market Act. Through the above contact person, the information was submitted for publication at 8.00 am CET on 29 June 2018.