Nobia: Improved margins

Net sales for the third quarter amounted to SEK 2,863 million (3,109). Organic growth was a negative 5 per cent (0). Operating profit excluding net restructuring costs of SEK 26 million (113) amounted to SEK 142 million (126), corresponding to an operating margin of 5.0 per cent (4.1). Profit after tax and including restructuring costs was SEK 62 million (loss: 8), corresponding to earnings per share of SEK 0.37 (loss: 0.05). Operating cash flow amounted to SEK 123 million (124).

Nobia's sales for the third quarter were adversely impacted by weaker market development in all regions.

Negative currency effects of SEK 105 million (neg: 109) impacted net sales for the quarter. Sales declined 5 per cent organically.

The gross margin was 40.1 per cent (38.5), positively impacted by lower material prices, price increases and currency gains.

Operating profit improved, mainly a result of cost savings, lower material prices and price increases, which more than offset lower volumes and a negatively changed sales mix.

Currency effects contributed approximately SEK 10 million (neg: 5) to operating profit excluding restructuring costs, of which negative SEK 5 million (neg: 5) in translation effects and SEK 15 million (0) in transaction effects.

Net restructuring costs amounted to SEK 26 million (113), primarily related to store refurbishments in France and savings measures in Poggenpohl.

The return on capital employed including restructuring costs was 3.2 per cent over the past twelve-month period (Jan-Dec 2011: 3.6).

Operating cash flow amounted to SEK 123 million (124). Higher earnings generation and lower payments for structural measures offset increased investments during the quarter.

Comments from the CEO
"Our efforts to enhance efficiency through cost savings and increased co-ordination have begun to generate results. Despite a weaker market trend and lower sales in the UK and the Nordic regions, the Group's gross margin and operating margin strengthened year-on-year. It is also gratifying to see that growth was shown in the Continental Europe region. Project sales deferred during the first half of 2012 were delivered in the third quarter. The French refurbishment programme progressed as planned and the refurbished stores performed well. Due to anticipations of a continued weak market scenario, the focus in the near future will be on continuous efficiency enhancements in all of the Group's business units," says Morten Falkenberg, President and CEO.