Q4 2018 Interim financial report North Investment Group AB (publ)

Highlights 

• Robust commercial momentum across all business areas: Strong growth in Norway (20.6%), Sweden somewhat behind 2017 (-4.6%) due to currency effects and public sector delays
• Group revenue of SEK 190m during the quarter (+7.1%) and SEK 746m for the year (+1.3%)
• EBITDA of SEK 18m in Q4, record-high of SEK 89m in 2018 (+118%, SEK 14m above budget)
• Strong order backlog of SEK 103m per Q4 2018 (+19%)
• Continued margin improvement as outsourcing strategy takes effect
• Acquisition of Sørlie Prosjektinnredninger effective from January 2019
• Rights issue of SEK 29m completed in January 2019 in connection with the acquisition

 
Key consolidated figures

CEO statement

“2018 is the first year where our Group operated with the organisational structure and go-to-market approach that was set forth in our long-term strategy. For 2018, we generated an EBITDA-margin of 11.9 %, compared to 5.5 % for 2017.

In October, we entered into a contract with Volvo Car Corporation AB to supply interior for their workshops worldwide. The agreed product range covers some 30 products which will be supplied over a 2-3 year period. Estimated contract value is approximately SEK 29 million.

Important organisational changes during 2018 include the appointment of Market Directors with responsibility for NIG Sweden and NIG Norway, respectively. The purpose is to further strengthen our market approach and to better coordinate our sales in all markets and regions.

NIG’s overall digitalisation strategy is divided into several projects, whereas some are finalised, some are in process and others have not yet started. As we succeed in achieving several new large and ambitious customers (e.g. Volvo), the demand to be more efficient towards the end-customer is likely to increase.

There are several ongoing initiatives related to NIG’s key suppliers. NIG is continuously focusing on finding the best partners to supply its products, both in Europe and Asia. The Company’s mission is to sell the right product at the right time at the right price. NIG is continuously focusing on finding and keeping suppliers that share this mission and that can facilitate for its long-term growth strategy.

In January, we completed the acquisition of Sørlie Prosjektinnredninger; combining Sørlie's strong brand and market position in Eastern Norway with NIG's industrial expertise. The acquisition strengthens our strategic position in addition to generating attractive synergies, and we look forward to developing Sørlie further with Arnfinn Sørlie and his family in the years to come."

Ståle Eide, CEO
Tranås, 28th February 2019

 
Financial review

Q4 2018

Income statement
The Group reported revenue of SEK 189m (SEK 177m) and EBITDA of SEK 18m (SEK 2m) in Q4 2018.
Order intake was SEK 160m (SEK 134m), corresponding to an increase of 19 % compared to Q4 2017. EBIT for the Group was SEK 7.9m (SEK -6.3m) and net profit SEK -3.5m (SEK -14m).

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

Norway delivered SEK 69m in revenue (SEK 59m) and SEK 4.7m in EBITDA (SEK 4m) during the quarter. Sweden reported revenue of SEK 132m (SEK 125m) and EBITDA of SEK 13m (SEK -1.9m).

Full-year 2018

Income statement
For the full-year 2018, NIG generated revenue of SEK 746m (SEK 737m) and EBITDA of SEK 89m (SEK 41m).
The order intake amounted to SEK 748m (SEK 720m), corresponding to an increase of 4% compared to 2017.
The Group experiences seasonal variations as one of the largest customers is schools. Q3 revenue is therefore normally higher compared to the other quarters of the year. EBIT for the Group was SEK 46.7 million (SEK 3.0 million) and net profit was SEK 18.1 million (SEK -18.2 million). Gross margin for the Group in 2018 was 40.4 % (31.7 %). The margin improvement was evident in both Norway and Sweden, but mostly in Sweden due to the Malmö factory closing.

Segments
Norway delivered SEK 286m in revenue (SEK 237m) and SEK 45m in EBITDA (SEK 23m), Sweden reported revenue of SEK 495m (SEK 519m) and EBITDA of SEK 46m (SEK 19m).  

Cash flow
The Group’s net cash flow from operations was positive with SEK 52m (SEK 22m). The liquidity situation of the Group is strong.

Balance sheet
As of 2018, the Group had assets of SEK 795m, mainly related to goodwill, right of use assets and cash and cash equivalents.

During 2018, the Group invested SEK 1.8m (SEK 3.6m) in tangible assets and SEK 2.4m (SEK 0.9m) intangible assets. The investments mainly relate to replacement of light machinery and new software.

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:
2018 Annual Report: 26.04.2019