Nobia: Continued challenging market

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Nobia Q1 2012

Net sales for the first quarter amounted to SEK 2,934 million (3,207). Organic growth totalled negative 10 per cent (pos: 2). Operating profit excluding restructuring costs of SEK 12 million (8) amounted to SEK 22 million (71), corresponding to an operating margin of 0.7 per cent (2.2). Loss after tax and including restructuring costs totalled SEK 12 million (profit: 30), corresponding to a loss per share of SEK 0.07 (profit: 0.18). Operating cash flow amounted to negative SEK 217 million (neg: 84).

Nobia's sales for the first quarter were adversely impacted by weaker demand in both France and the UK. Sales in France were particularly negatively affected by the fact that a large number of stores were closed for refurbishment in the latter part of 2011. Positive currency effects of SEK 35 million (neg: 287) impacted net sales for the quarter. Revenues declined 10 per cent organically.
The gross margin rose to 39.0 per cent (38.7), and was positively impacted but higher sales prices and cost reductions.
Operating profit excluding restructuring costs amounted to SEK 22 million (71), corresponding to an operating margin of 0.7 percent (2.2). The effect on earnings of lower sales volumes were only partly offset by cost savings and price increases.
Currency effects of approximately SEK 0 million (20) were charged to operating profit excluding restructuring costs, of which SEK 0 million (-5) in translation effects and SEK 0 million (25) in transaction effects.
Restructuring costs amounted to SEK 12 million (8), of which the capital loss from the sale of a production property amounted to net SEK 4 million.
Return on capital employed including restructuring costs amounted to 2.6 per cent over the past twelve-month period (Jan-Dec 2011: 3.6).
Operating cash flow declined primarily as a result of lower accounts payable, lower earnings generation influencing cash flows and higher payments as a result of previous years' restructuring measures.

Comments from the CEO
"While the market conditions for the first quarter were challenging in several markets, the work on implementing Nobia's strategic initiatives is progressing according to plan. More units are receiving parts of the Group-wide range and the efforts to implement the future production structure are continuing as planned. The Nordic region, which is Nobia's largest, displayed relatively healthy growth and profitability, but were unable to compensate for the sharp decline in sales in other regions. In the UK, sales volumes fell in all market segments. In France, the turnaround takes longer than planned, although the refurbished stores performed better than non-refurbished stores. Furthermore, we see many opportunities for leveraging our strong position in Denmark, where a government financing plan for renovating municipal housing has been introduced," says Morten Falkenberg, President and CEO.

For further information
Please contact any of the following on:
+46 (0)8 440 16 00 or +46 (0)705 95 51 00:
· Morten Falkenberg, President and CEO
· Mikael Norman, CFO
· Lena Schattauer, Head of Investor Relations