Interim report January – March 2022
First quarter 2022
• Net sales increased to SEK 3,779m (3,373) corresponding to organic sales growth of 6% (3).
• Operating profit decreased to SEK 182m (196), corresponding to an operating margin of 4.8% (5.8).
• Changes in exchange rates positively impacted operating profit by SEK 30m.
• Profit after tax amounted to SEK 128m (132), corresponding to earnings per share before and after dilution of SEK 0.76 (0.78).
• Operating cash flow amounted to SEK -420m (-69), of which -263m (-9) was related to investments in the new Nordic factory.
• Superfront was acquired.
• Adjusted segment reporting following organisational change
Demand and market prices continued to be strong in the quarter. However, availability constraints in the aftermath of covid, and the situation with the war in Ukraine, continued to drive inflation on core input materials and energy.
I am pleased that we implemented extraordinary price increases early on and that we delivered a solid winter sales campaign in Magnet with double-digit growth.
Continuing on our plan to focus on and drive profitable growth in Magnet, we are launching a cost-reduction program. The program is proposed to scale down central support functions in order to invest in the customer facing organization, in line with Magnet’s new revised operating model. We expect in total around 200 employees to be redundant, resulting in a run-rate annual saving of around SEK 150m. The program will entail a one-time charge of around SEK 130m to SEK 150m in the second quarter.
Organic growth continued across all Nordic markets, especially in the project segment, supported by the extraordinary price increases. The additional spike in material cost towards the end of the quarter could not be mitigated short term. It did however trigger further extraordinary price increases, which will have full effect by the end of the second quarter. Continued good performance in Denmark on the back of market share gains, and in Marbodal through the “Jordnära Färger” campaign.
In the UK, Magnet sales grew organically by 15 percent, backed by price increases and the improved proposition with strong focus on our trade customers. Price hikes in the region fully offset the increased material cost in the quarter. Our first group-wide kitchen design concept “Nordic Nature” was named “Kitchen of the Year 2022” by UK’s best-selling homes magazine, “Ideal Home”. An inspiring reward, recognizing our progress and strength in design and sustainability.
Sales in our Portfolio Business Units in the quarter decreased due to the softness in the London super-premium property market and lower property completion rates in The Netherlands. Austria continued to growth double-digit. Margins were burdened by the direct material cost increase.
We expect the high market uncertainty and rising inflation to continue throughout the year. Although, judging from our strong orderbook, we do not see any immediate impact on consumer demand. Having said that, we will be mindful of operating expenses in the inflationary environment and secure that we deliver on our important strategic projects, including the new state of the art factory in Jönköping which is progressing according to plan.
Jon Sintorn, President and CEO
This disclosure contains information that Nobia AB is obliged to make public pursuant to the EU Market Abuse Regulation (EU nr 596/2014). The information was submitted for publication, through the agency of the contact person, on 05-05-2022 08:30 CET.