Year-end report January-December 2018
• Net sales for the fourth quarter amounted to SEK 3,390 million (3,116).
• Organic growth was a negative 2 per cent (0).
• Operating profit amounted to SEK 109 million (282). Operating profit was impacted by a pension cost of SEK 66 million, which is recognised as an item affecting comparability, and by non-recurring costs of SEK 88 million.
• Operating profit excluding items affecting comparability and including non-recurring costs amounted to SEK 175 million (282), corresponding to an operating margin, excluding items affecting comparability, of 5.2 per cent (9.1).
• Currency losses had an impact of approximately negative SEK 10 million on the Group’s operating profit, excluding items affecting comparability, of which a positive SEK 10 million in translation effects and a negative SEK 20 million in transaction effects.
• Profit after tax amounted to SEK 62 million (232), corresponding to earnings per share after dilution of SEK 0.37 (1.38).
• Operating cash flow amounted to SEK 138 million (196).
• The Board proposes a dividend of SEK 4.00 per share. For 2017, an ordinary dividend of SEK 3.50 per share was paid, as well as an extra dividend of SEK 3.50 per share – a total of SEK 7.00 per share.
Comments from the President and CEO
The restructuring programme and lower sales volumes contributed to a weaker operating margin in the fourth quarter. In light of the increased uncertainty in our markets, we continued to reduce the overall cost level. Our strong balance sheet allows for an increased ordinary dividend.
The decline in organic sales in the fourth quarter was 2 per cent. Operating profit was impacted by non-recurring costs of SEK 88 million, primarily related to the cost savings programme initiated in the fourth quarter. The effects of this cost savings programme include reductions in staff and the closure of 16 stores, primarily in the UK. These measures will generate annual savings of SEK 80 million in 2019.
Overall, the Nordic market was unchanged compared with the fourth quarter last year and the growth rate diminished, primarily in the consumer segment. The decision to convert own stores in Norway to franchise stores had a negative effect on the organic growth but have reduced fixed cost significantly. For 2019 we see somewhat weaker demand in the Nordic construction sector. During the quarter there was inefficiency in operations, which we worked hard to rectify. Our focus now lies on both increasing productivity in manufacturing and logistics and on proactively adapting our staff numbers in accordance with any weakening of the market.
The political uncertainty over Brexit continues to hamper demand in the UK. At the beginning of 2019, the risk of a ‘no deal’ exit from the EU increased. Nobia is well prepared for such a situation, having taken such measures as building up a backup supply of components and fronts so that we can deliver complete kitchens to our customers even if there are disruptions to imports.
Sales via Magnet increased in the fourth quarter, despite the decision to reduce the joinery assortment as part of the repositioning of Magnet Trade. The new customer-centric Trade offering received a positive response and resulted in increased kitchen sales in this channel. Also B2B sales increased, while project sales via Rixonway and Commodore/CIE weakened due to delayed projects.
In the Central Europe region, productivity improved and prices increased in Austria. Bribus is performing well, having contributed growth of 3 per cent in 2018 and so far we are very pleased with the acquisition.
Nobia’s balance sheet is strong, and the Board proposes a dividend of SEK 4 per share. Acquisitions remain high on the agenda. In 2019 we will also initiate robust measures to enhance the efficiency of the production structure, and focus intensely on continually bringing down the cost level.
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 Investor Relations
This year-end report is such information 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 6 February 2019 at 8:00 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; Ewe, FM and Intuo in Austria as well as Bribus in the Netherlands. Nobia generates profitability by combining economies of scale with attractive kitchen offerings. The Group has approximately 6,100 employees and net sales of about 13 billion. The Nobia share is listed on Nasdaq Stockholm under the ticker NOBI. Website: www.nobia.com