Nobia: Stable earnings in weak markets

Net sales for the second quarter amounted to SEK 3,449 million (3,559). Organic growth totalled negative 5 per cent (pos: 1). Operating profit excluding restructuring costs of SEK 62 million (24) amounted to SEK 205 million (241), corresponding to an operating margin of 5.9 per cent (6.8). Profit after tax and including restructuring costs totalled SEK 82 million (137), corresponding to earnings per share of SEK 0.49 (0.82). Operating cash flow amounted to SEK 198 million (96).

Nobia's sales for the second quarter were adversely impacted by weaker market development in all regions. Relevant macro indicators, such as consumer confidence and property transactions, did indeed recover slightly, yet remain on lower levels than last year on all markets.

Positive currency effects of SEK 79 million (neg: 272) impacted net sales for the quarter. Revenues declined 5 per cent organically.

The gross margin amounted to 40.1 per cent (40.0), positively impacted by price increases and currency effects.

Operating profit excluding restructuring costs amounted to SEK 205 million (241), corresponding to an operating margin of 5.9 per cent (6.8). Lower costs and price increases could only partly offset the effects of lower sales volumes and a negative sales mix.

Currency effects of approximately SEK 10 million (10) were charged to operating profit excluding restructuring costs, of which SEK 5 million (neg: 20) in translation effects and SEK 5 million (30) in transaction effects.

Restructuring costs amounted to SEK 62 million (24), primarily attributable to costs for introduction of the Group-wide range, but also to refurbishments in France and relocation of production in the Nordic region. 

Return on capital employed including restructuring costs amounted to 1.2 per cent over the past twelve-month period (Jan-Dec 2011: 3.6).

Operating cash flow increased primarily as a result of a positive change in working capital and received payment for the sale of a property. 

Comments from the CEO
"Despite a weak market development, an operating margin of almost 6 per cent was generated and cash flow was improved. Structural measures are continuing and the Group-wide range is being successively introduced into our various units. In France, we could see that refurbished stores displayed a positive trend and the renovation programme is being conducted according to plan. Sales losses in Continental Europe and the UK were partly offset by our growing Nordic operations that, with their efficient production and relatively high share of harmonised range, delivered an operating margin in excess of 12 per cent. However, looking ahead to the autumn, we see a weakening in the Nordic project market, which is why we have reduced the number of temporary employees in production. We are continuing to consistently take proactive measures to adjust the cost level to market trends," 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

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