Interim report January-June 2018
• Net sales for the second quarter amounted to SEK 3,503 million (3,408).
• Organic growth was a negative 2 per cent (pos: 1).
• Operating profit amounted to SEK 387 million (413), corresponding to an operating margin of 11.0 per cent (12.1).
• Currency gains had an impact of approximately SEK 10 million on the Group’s operating profit, of which a positive SEK 15 million in translation effects and a negative SEK 5 million in transaction effects.
• Profit after tax amounted to SEK 297 million (314), corresponding to earnings per share before and after dilution of SEK 1.76 (1.86).
• Operating cash flow amounted to SEK 184 million (193).
Comments from the President and CEO
Strong Swedish project sales caused production disruptions, leading to a negative sales mix and a short-term EBIT deviation compared to last year.
We estimate that all markets in the Nordics grew in the quarter. However, the period was heavily impacted by manufacturing disruptions in Tidaholm on the back of strong project volumes, resulting in long lead-times and consequently a sharp drop in sales primarily to consumers in Sweden and Norway. We estimate that the production disruptions had a negative impact of SEK 20-25 million on operating profit. During June and July we carried out extensive maintenance work and the situation has improved for Q3 deliveries.
In the UK, competition intensified in the quarter, especially at the lower end and among builders’ merchants. I am therefore pleased that Magnet Retail managed to deliver double digit growth in the quarter, confirming that the new brand proposition stands strong in the current environment. We are now extending this work to Magnet Trade with the ambition of finalising it before the end of the year. The exit from Homebase and the extraordinarily strong past year deliveries in project sales affected year-over-year growth in the UK by approximately -5 per cent.
We were pleased to announce the acquisition of the Dutch company Bribus, with a turnover of EUR 65 million and profitability in line with Nobia’s target. The company is one of the strongest kitchen suppliers to the Dutch project market and has an impressive track record under current management. Bribus will give us a solid platform to expand our presence in Central Europe. The deal is financed through our renewed syndicated loan, but with our strong balance sheet we will still have room for further acquisitions.
Going forward we believe that the Nordic kitchen market will continue to be strong, mainly driven by the Danish and Finnish project markets. The Swedish project market is holding up better than expected and we now estimate that our project deliveries in Sweden will grow during the first half of 2019, after which they will most likely normalize. Our UK project business has good momentum and the order book is more than twice as big as last year.
Our financial targets including the dividend policy remain unchanged.
President and CEO
For further information
Contact any of the following on +46 (0)8 440 16 00 or +46 (0)705 95 51 00:
• Morten Falkenberg, President and CEO
• Kristoffer Ljungfelt, CFO
• Lena Schattauer, Head of Communication and Investor Relations
This interim report is information such that Nobia is obliged to make public pursuant to the EU’s Market Abuse Regulation and the Swedish Securities Market Act. The information was submitted for publication, through the agency of the contact person set out above, on 20 July 2018 at 13.00 CET.
Nobia develops and sells kitchens through some twenty strong brands in Europe, including Magnet in the UK; HTH, Norema, Sigdal, Invita, Marbodal in Scandinavia; Petra and A la Carte in Finland and Ewe, FM and Intuo in Austria. Nobia generates profitability by combining economies of scale with attractive kitchen offerings. The Group has approximately 6,300 employees and net sales of about SEK 13 billion. The Nobia share is listed on Nasdaq Stockholm under the ticker NOBI. Website: www.nobia.com