Continued margin improvements

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Nobia Q1 2011

(All figures in brackets refer to the corresponding period in 2010)

Net sales for the first quarter amounted to SEK 3,207 million (3,456). Organic growth was positive 2 per cent (neg: 1) in total. Operating profit excluding restructuring costs of net SEK 8 million (124) amounted to SEK 71 million (loss: 24), corresponding to an operating margin of 2.2 per cent (neg: 0.7). Profit after tax and restructuring costs was SEK 30 million (loss: 134), corresponding to earnings per share of SEK 0.18 (loss: 0.80). Operating cash flow amounted to negative SEK 84 million (neg: 49).

The UK market continued to exhibit weak growth while the Continental Europe and the Nordic market in particular performed positively.
Negative currency effects of SEK 287 million (neg: 252) impacted net sales for the quarter. Divested Pronorm contributed SEK 46 million to net sales in the first quarter of 2010. Organic growth strengthened net sales by SEK 84 million (neg: 39) and was mainly attributable to the higher level of activity in the Nordic project market.
Operating profit excluding restructuring costs amounted to SEK 71 million (loss: 24), corresponding to an operating margin of 2.2 per cent (neg: 0.7).
Currency effects contributed SEK 20 million (neg: 20) to operating profit excluding restructuring costs, of which approximately negative SEK 5 million (0) comprised translation effects and SEK 25 million (neg: 20) comprised transaction effects.
The underlying improvement in earnings is mainly attributable to higher sales volumes and productivity improvements.
Return on capital employed including restructuring costs amounted to 4.1 per cent (2.7) over the past twelve-month period.
Operating cash flow was negatively impacted mainly by higher accounts receivables and inventory.

Comments from the CEO
"The cost savings initiated in the preceding quarter have begun to generate an effect and will further help earnings moving forward. The work on simplifying processes and the product range is continuing and will be presented in more detail on the Capital Markets Day in Stockholm on 26 May," says Morten Falkenberg, President and CEO.