Year-end Report 2022
Fourth quarter 2022
- Net sales increased to SEK 3,780m (3,509) corresponding to organic sales growth of 2% (2).
- Operating profit, excl. items affecting comparability, decreased to SEK 25m (238),
corresponding to an operating margin of 0.7% (6.8).
- Operating profit includes items affecting comparability of SEK -156m (0).
- Profit after tax amounted to SEK -166m (146), corresponding to earnings
per share after dilution of SEK -0.98 (0.87).
- Operating cash flow amounted to SEK -81m (-2), including a temporarily high amount of
investments in fixed assets due to the construction of the new factory.
- The results were pre-announced in conjunction with the communication of the
cost-reduction programme in January, 2023.
- The Board of Directors proposes that no dividend be paid for 2022, considering the
temporarily high investment level.
Organic sales growth was 2% in the fourth quarter, predominately driven by higher average order values and price increases. The UK region and Portfolio Business Units grew while the Nordic region was slightly down, -1%. The macroeconomic environment remains challenging and the geopolitical situation is unpredictable, which we see reflected in a slowdown for consumer demand and increasing uncertainty for housing construction.
At the beginning of the new year, we announced a major Group-wide restructuring programme aimed at improving operating profit by SEK 300m over the next 18 months. Restructuring of our UK operations, in particular the underperforming project business, is an important part of the programme. It includes exiting parts of the UK project sales that have insufficient profit, the closure of two manufacturing sites, staff reductions affecting most areas of the Group and discretionary spend reductions.
Our order books in the Nordics are at good levels, as housing completions remain solid. Sales in the Nordics declined organically by 1%, mainly due to the consumer segment. Supply chain efficiency remained unsatisfactory, although we do see improvements from the measures implemented. Combined with continued direct material cost pressure, margins were lower. The new Jönköping factory is being ramped up earlier for a select part of component manufacturing, which we will utilise to further stabilise the supply chain situation and insource component manufacturing to improve costs. The production building is almost completed and the installation of production equipment is continuing as per plan.
In the UK region, sales were up 5% organically, primarily driven by higher average order values. However, profit decreased into negative numbers due to heavy input cost inflation and a higher cost level reflecting activities to capture market share during the trade autumn campaign and winter sales period. A significant part of our UK projects business is running with insufficient profitability and continued slow markets. This is now being addressed with the restructuring programme and in parallel we are continuing to press ahead with the long-term transformation plan for our UK operations focusing on the Magnet brand mass-premium position.
The Portfolio Business Units Austria and the Netherlands delivered solid growth and earnings.
Our restructuring, the UK transformation plan and the completion of our new factory are some initiatives that will enhance our competitiveness and provide resilience, which is especially important with the current macro development. To provide further profit protection, key focus areas are maintaining a strong pricing discipline, supply chain operational efficiency and leveraging our scale to improve sourcing efficiency.
Our cash-conversion going forward is expected to be good. However, in light of our temporarily high investment level, the Board finds it prudent to recommend no dividend for 2022.
There is clearly a macro headwind and uncertainty to manage. At the same time, we are making good progress and follow plan on the transformational initiatives. I would also like to take this opportunity to acknowledge and convey appreciation for our committed staff.
President and CEO
This disclosure contains information that Nobia AB is obliged to make public pursuant to the Swedish Securities Markets Act (2007:528). The information was submitted for publication, through the agency of the contact person, on 09-02-2023 08:30 CET.