Q2 2019 Interim financial report North Investment Group AB (publ)

Highlights

  • Group revenue of SEK 225m during the quarter comprising growth of 22.9% (+2.8% proforma 2018 incl Sørlie). Robust commercial development across most business areas.
  • EBITDA of SEK 15.0m in Q2 (SEK 16.0m).
  • Unrealized foreign exchange loss 1H 2019 of SEK 5.3m (SEK 1.1m gain 1H 2018).
  • Appointment of Ole Vinje as CEO, effective from 1st of September.
  • Integration of Sørlie Prosjektinnredninger continues at full strength.
  • The Agentur for Fossafe products in Norway taken over in June.
  • Order backlog of SEK 155m per Q2 2019 (SEK 136m Q2 2018).

Key consolidated figures

Q2 2019 Q2 2018 Jan-Jun 2019 Jan-Jun 2018
(SEKm, unless stated) Unaudited Unaudited Unaudited Unaudited
Revenue 225.0 183.1 464.2 362.3
Gross profit 86.8 72.4 176.9 141.6
EBITDA 15.0 16.0 37.8 39.1
EBIT 6.3 5.2 18.3 17.4
Net profit -4.2 -1.0 -3.9 2.7
Cash flow from operations -1.8 -0.4 -19.3 -2.3
No of outstanding shares 759,201 725,344 759,201 725,344
Net earnings per share (SEK) -5.47 -1.41 -5.08 3.74
Gross profit margin (%) 38.9 40.7 38.6 40.3
EBITDA margin (%) 6.7 9.0 8.2 11.1

Proforma Revenue incl Sørlie Prosjektinnredninger AS was SEK 219.9m in Q2 2018 and SEK 434.1m Jan-Jun 2018.
Proforma EBIT incl Sørlie Prosjektinnredninger AS was SEK 5.4m in Q2 2018 and SEK 18.1m Jan-Jun 2018.

CEO statement

"NIG continued to perform well during the second quarter of 2019, following our long term strategy. The sales figures are well ahead of previous year. With a negative difference in currency-effect YTD of SEK 6.4m compared to 2018 in mind, the underlying EBITDA of the Group is strong.

Both operating segments (Norway and Sweden) have performed well. The sales related to the school market in Sweden have not been at the expected level so far into 2019. But the underlying trend in Sweden is good for this market and we see our Group well positioned to take part in this growth in the years to come. The remaining business areas of the Group delivers according to, or better than, plan.

The integration of Sørlie Prosjektinnredninger will be accelerated further for the remaining of 2019. Different projects related to IT, purchase, sales etc will be initiated. During second quarter Sørlie Prosjektinnredninger renewed its frame agreement to the major municipalities in its main home region for the next 2-4 years with a yearly estimated sales value of NOK 20m, giving comfort that they will meet the Group's ambitious targets for the company. Through Sørlie NIG aims to increase its turnover towards customers requesting fixed furniture fittings.

The Group has through its daughter company Sarpsborg Metall agreed to take over the Agentur for Fossafe products in Norway. The product range is mainly fireproof filing cabinets, document cabinets, secure office cabinets, etc. This will broaden our portfolio making us more complete towards our customers, with an estimated revenue of appr. NOK 10m per year.

Our growth within workstations in Sweden to industrial customers continues at full strength. The agreement with Volvo Car Corporation gives us necessary volumes to further invest in employees within this segment, and we see this business area as one of the most exciting growth sectors for our Group in the years to come."

Ståle Eide, CEO
Tranås, 30th August 2019

Financial review

Q2 2019

Income statement
The Group reported revenue of SEK 225m (SEK 183m) and EBITDA of SEK 15m (SEK 16m) in Q2 2019. Order intake was SEK 262m (SEK 234m), corresponding to an increase of 12 % compared to Q2 2018. EBIT for the Group was SEK 6.3m (SEK 5.2m) and net profit SEK -4.2m (SEK -1.0m). Gross margin for the Group in Q2 2019 was 38.9% (40.7%). The main reason for the decrease in gross margin is the acquisition of Sørlie Prosjektinnredninger that has somewhat lower gross margin compared to Group average. As described above we have several initiatives ongoing to improve Sørlie Prosjektinnredninger's margin going forward.

Segments
NIG is divided into two segments, NIG Norway (Norway) and NIG Sweden (Sweden).

Norway delivered SEK 116m in revenue (SEK 73m) and SEK 11.2m in EBITDA (SEK 14.3m) during the quarter. Sweden reported revenue of SEK 114m (SEK 113m) and EBITDA of SEK 3.9m (SEK 1.7m).

Jan – Jun 2019

Income statement
The Group reported revenue of SEK 464m (SEK 362m) and EBITDA of SEK 38m (SEK 39m) in 1H 2019. Order intake was SEK 501m (SEK 397m), corresponding to an increase of 26 % compared to 1H 2018. EBIT for the Group was SEK 18.3m (SEK 17.4m) and net profit SEK -3.9m (SEK 2.7m). Gross margin for the Group in 2019 was 38.6% (40.3%). The main reason for the decrease in gross margin is the acquisition of Sørlie Prosjektinnredninger that has somewhat lower gross margin compared to Group average. The negative difference between the FX-loss in 2019 compared to the FX-gain in 2018 is SEK 6.4m.

Segments
NIG is divided into two segments, NIG Norway (Norway) and NIG Sweden (Sweden).

Norway delivered SEK 256m in revenue (SEK 149m) and SEK 26.5m in EBITDA (SEK 29.1m) during the first half year. Sweden reported revenue of SEK 228m (SEK 228m) and EBITDA of SEK 11.7m (SEK 11.0m).

Cash flow
The Group’s net cash flow from operations was negative with SEK 19.3m (SEK 2.3m). The Cash and cash equivalents as of 30th June 2019 amounts to SEK 78m (SEK 7m). The liquidity situation of the Group is according to plan.

Balance sheet
As of Q2 2019, the Group had assets of SEK 870m, mainly related to goodwill, right of use assets, accounts receivable and cash and cash equivalents.

During 1st half year 2019, the Group invested SEK 1.2m (SEK 3.7m) in tangible assets and SEK 42.6m (SEK 1.3m) intangible assets. The investment in intangible assets is mainly related to Goodwill from purchase of Sørlie. The investments in tangible assets is mainly relate to replacement of light machinery.

Net interest bearing debt (excl. Lease liabilities) was SEK 236.4m (SEK 184.8m).

Risk and uncertainties
The Group´s main risks and uncertainties are related to its high exposure to certain markets. In addition, the Group has financial risk related to primarily currency risk, interest rate risk related to its financing and credit risk related to sales.

     
Additional information

Please contact 

Ståle Eide
CEO
Stale@northinvestmentgroup.no
(+47) 913 49 322

Tore Skedsmo
CFO
Tore@northinvestmentgroup.no
(+47) 952 25 306

Ellen Hanetho
Investor Relations
Ellen@frigaardinvest.no
(+47) 482 20 750

North Investment Group AB (publ)
Bredmyra 4- 1739 Borgenhaugen, Norway
Corporate Identity Number 556972-0468

Financial Calendar:
2019 3rd Quarter Report: 29.11.2019

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