Nobia: Maintained full-year earnings despite weak market

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Nobia Q4 ENG

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

Net sales for the fourth quarter amounted to SEK 3,239 million (3,605). Organic growth totalled negative 10 per cent (pos: 6). Operating profit excluding restructuring costs of net SEK 189 million (281) amounted to SEK 80 million (193), corresponding to an operating margin of 2.5 per cent (5.4). Loss after tax and including restructuring costs totalled SEK 90 million (loss: 110), corresponding to a loss per share of SEK 0.53 (loss: 0.66). Operating cash flow amounted to negative SEK 127 million (pos: 97). The Board of Directors proposes that no dividend be paid for the 2011 fiscal year.

Nobia's sales for the fourth quarter were adversely impacted by weaker demand and reduced sales capacity in France due to the extensive refurbishment of the store network. Negative currency effects of SEK 12 million (neg: 281) impacted net sales for the quarter. Revenues declined 10 per cent organically.
The negative volume effect could only partially be offset by cost savings and price increases. The gross margin was also affected negatively by higher raw material prices and decreased to 39.0 per cent (39.3). Operating profit excluding restructuring costs amounted to SEK 80 million (193), corresponding to an operating margin of 2.5 per cent (5.4).
Negative currency effects of approximately SEK 5 million (10) were charged to operating profit excluding restructuring costs, of which SEK 0 million (neg: 20) in translation effects and negative SEK 5 million (30) in transaction effects.
Restructuring costs amounted to net SEK 189 million, of which SEK 148 million was attributable to cost-saving measures that were posted in the third quarter. Restructuring costs included further for instance impairment totalling SEK 17 million for a property.
Return on capital employed including restructuring costs amounted to 3.6 per cent (0.4) over the past twelve-month period.
Operating cash flow declined mainly as a result of payments within the framework of the renovation programme in Hygena totalling SEK 137 million and lower cash-influencing earnings generation.

Comments from the CEO

"We took strong initiatives with a focus on increased efficiency during the year, which strengthened the operating margin for the full year of 2011 compared with the preceding year, despite difficult market conditions. The change process continues as planned and the renovation programme in France was intensified during the fourth quarter - entailing a new start for Hygena, with 78 newly renovated stores prior to the first quarter, which is important from a sales perspective. The launch of the Group-wide range commenced at the same time. At the end of the quarter, the sales decline decreased slightly, but we are planning for continued challenging market conditions. Except for costs originating from plant closures, restructuring costs will be substantially lower henceforth," says Morten Falkenberg, President and CEO.