Weak market and comprehensive restructuring measures

 

 

The year began with weak demand, intensified competition and pressed margins. Nobia's sales fell during the first quarter to SEK 3,777 million (3,835). After charges for structural expenses totalling SEK 238 million, a loss after tax of SEK 259 million (profit: 128) and a loss per share after dilution of SEK 1.55 (pos: 0.74) were reported. The operating cash flow was positive and amounted to SEK 141 million (neg: 89).

 

In addition to the market climate, the currency situation with a weak SEK and GBP in relation to the EUR adversely affected Nobia's earnings. The currency effect was a negative SEK 30 million.

 

Nobia's supply chain is being restructured. Three plants are currently being closed in the Nordic region with the aim of improving the efficiency of the production structure. Structural expenses were charged to operating profit in the amount of SEK 238 million, of which SEK 8 million affected cash flow negatively. Annual savings resulting from restructuring measures are expected to total SEK 130 million, with a successive effect from the fourth quarter of 2009.

 

The operating loss for the quarter amounted to SEK 34 million (profit: 211) excluding structural expenses and the operating margin was a negative 0.9 per cent (pos: 5.5). The operating cash flow was positive and amounted to SEK 141 million (neg: 89). The reasons for this included lower tied up working capital and reduced investments.

"We have initiated an extensive programme in our production structure aimed at ensuring that the company will emerge from the recession with a competitive cost structure. We are also continuing to strengthen the positions of our brands and are taking advantage of opportunities arising in the market," says President and CEO Preben Bager.