Nobia Ab · OMXSTO:NOBI
Nobia Ab — Q1 2003 Earnings Presentation
39 slides from Nobia Ab's earnings presentation, Apr 23, 2003
Slide 1: January - March 2003
January - March 2003 1 2003-04-23
Slide 2: Content
Content • Summary • Financial review – UK operation – Nordic operation – Continental European operation – Group • Market outlook 2 2003-04-23
Slide 3: Summary
Summary 3 2003-04-23
Slide 4: Summary January – March 2003
Summary January – March 2003 • Net sales down 2 per cent to SEK 2,346 million (2,404). • Operating margin increased to 7.0 per cent (6.5). • Income after financial items up 22 per cent to SEK 148 million (121). • Earnings per share after full dilution up 9 per cent to SEK 1.70 (1.56). • Continued im
Slide 5: Financial performance
Financial performance 9,594 9,536 8,283 6.6% 8.3% 7.1% 8.2% 3,977 4,049 4,102 3,412 3,316 3.4% 2.4% 2.7% 1996 1997 1998 1999 2000 2001 2002 2003 q1 LTM -4.1% Sales SEK million EBITA margin 5 2003-04-23
Slide 6: The UK operation
The UK operation 6 2003-04-23
Slide 7: The UK Economy
UK The UK Economy • Interest rates at an historically low level and unemployment rate stable • Consumer Confidence in March 2003 stood the lowest figure recorded since December 1995. • Housing Transactions down by 7 % LTM • Consumer spending in decline since mid 2002 • Consumer furniture sale shows
Slide 8: The UK Kitchen market
UK The UK Kitchen market • Estimated increase by 2% in q1 2003 • Kitchen demand up, furniture sales down • Highest growth channel is the vertically integrated sector (Magnet, MFI) • Flatpack kitchens growing, having reversed the decline over past years • Decline in new build sector due to fall in ho
Slide 9: Net sales and operating income
UK Net sales and operating income Jan–Mar Jan–Mar SEK, million 2003 2002 Change Net sales 1,008 1,065 -5% Net sales (comp units curr adj.)* 12% Jan–Mar Jan–Mar 2003 2002 Operating profit 111 110 Operating margin, % 11.0 10.3 * Includes adjustment for divested joinery operations impacting sales by -8
Slide 10: Comments to net sales and operating income
UK Comments to net sales and operating income • Organic growth 12% – kitchen, bathroom and bedroom interiors up 12% – joinery products up 10% • Sale of property resulted in a gain of GBP 1.7 m (1.0) • Operating margin excluding property gain decreased to 8.6 (8.9) • Factors influencing operating mar
Slide 11: The Nordic operation
The Nordic operation 11 2003-04-23
Slide 12: Estimated development for the Nordic kitchen interiors market q1 2003
Nordic Estimated development for the Nordic kitchen interiors market q1 2003 • Nordic market, up 1-2% • Sweden, increase by 5% • renovation segment up • decline in new build segment • Denmark, flat • growth in renovation segment • Norway, decline by 2% • new build segment flat • decline in renovatio
Slide 13: Net sales and operating income
Nordic Net sales and operating income Jan–Mar Jan–Mar SEK, million 2003 2002 Change Net sales 879 834 5% Organic growth (curr adj.)* 4% Jan–Mar Jan–Mar 2003 2002 Change Operating profit 80 82 Operating margin, % 9.1 9.8 * 4% more delivery days in q1 2003 13 2003-04-23
Slide 14: Comments to net sales and operating income
Nordic Comments to net sales and operating income • Sales – Growth in Denmark, Sweden and Finland – Decline in Norway – Continued growth of DIY-products • Factors influencing operating margin – Positive factors – increased AOV – material cost savings – Negative factors – reduced sales through the No
Slide 15: The Continental European operation
The Continental European operation 15 2003-04-23
Slide 16: Trends for the German consumer market
Continental Europe Trends for the German consumer market • The consumers in Germany are still waiting for a trend change • Retail trade weak in kitchen sales and household products • Investment climate in retail trade on a low level 16 2003-04-23
Slide 17: Trends for the Continental European kitchen interiors market
Continental Europe Trends for the Continental European kitchen interiors market • Germany, decline – continued decline in q1 2003 – trend towards lower AOV – kitchen studios loosing to furniture stores • Netherlands, decline – new build market very weak – less of a decline within the renovation mark
Slide 18: Net sales and operating income
Continental Europe Net sales and operating income Jan–Mar Jan–Mar SEK, million 2003 2002 Change Net sales 479 512 -6% Organic growth (curr adj.) -4% Jan–Mar Jan–Mar 2003 2002 Change Operating profit 9 2 Operating margin, % 1.9 0.4 18 2003-04-23
Slide 19: Comments to net sales and operating income
Continental Europe Comments to net sales and operating income • Sales – organic growth –4% – sales decline in Germany and the Netherlands – increased sales to the UK and the US • Operating margin – operating margin 1.9% (0.4%) • Factors influencing operating margin – Positive factors – material cost
Slide 20: Financial review Group
Financial review Group 20 2003-04-23
Slide 21: Net sales - Group
Net sales - Group Jan–Mar Jan–Mar SEK, million 2003 2002 Change Net sales 2,346 2,404 -2% Net sales, comparable units curr.adj. 5% • Net sales in q1 2003 (comparable units curr. adj.) 5% • Organic growth in Nordic operation and UK operation • Continued decline in Continental Europe 21 2003-04-23
Slide 22: Operating income - Group
Operating income - Group Jan–Mar Jan–Mar SEK, million 2003 2002 Change Operating income 164 157 4% Operating margin, % 7.0 6.5 22 2003-04-23
Slide 23: Main reasons for improved operating income Jan-Mar 2003
Main reasons for improved operating income Jan-Mar 2003 – Gross margin: • increase by 2.1% points main drivers: – material cost savings – increased average order value – reduction in personnel – S&A costs: • additional personnel and costs in the sales network (Nordic, UK) • additional business (UK a
Slide 24: Net financial items
Net financial items Jan–Mar Jan–Mar SEK, million 2003 2002 Net financial items -16 -36 • Net financial items less than half compared with corresponding period previous year. 24 2003-04-23
Slide 25: Earnings
Earnings Jan-Mar Jan-Mar Apr-Mar 2003 2002 02/03 EPS after full dilution, SEK 1.70 1.56 7.64 Return on capital employed, % 18.1 Return on shareholders´ equity, % 19.5 • EPS diluted from last year’s new issue • EPS up 9% but net result up 24% 25 2003-04-23
Slide 26: Cash flow
Cash flow Jan–Mar Jan-Mar Jan-Dec Apr-Mar SEK, million 2003 2002 2002 2002/03 Current activities Operating profit 164 157 725 732 Depreciation 76 81 311 306 Adjustment for items not included in cash flow -33 -25 -147 -155 Interest, dividend and tax -43 -42 -204 -205 Change in working capital -224 -2
Slide 27: Capital employed and working capital
Capital employed and working capital Mar Mar Dec 2003 2002 2002 Capital Employed 4,023 4,171 4,001 Turnover, LTM 2.4 2.3 2.4 Working capital 859 785 685 Working capital of LTM, % 9.0 8.1 7.1 • Capital turnover improved • Working capital higher than in q1 2002 because of increase in A/R and less A/P*
Slide 28: Personnel development
Personnel development March Dec March Change Change 2002 2002 2003 LTM LQ Nordic 2624 2632 2643 19 11 whereof additional business 58 36 reductions -39 -25 Cont. Europe 1355 1307 1265 -90 -42 UK 2159 1946 1819 -340 -127 whereof joinery -242 outsourced -100 -100 Homebase 10 sales operations 23 -27 oth
Slide 29: Restructuring provisions
Restructuring provisions Dec Dec Dec Mar SEK, million C/B 2000 2001 2002 2003 Poggenpohl / Norema 252 91 7 2 Magnet 154 17 11 Total 252 245 24 13 Jan-Mar 2003 Pgp/Nor Magnet Total Utilisation 5 5 10 Currency effect 0 1 1 Total 5 6 11 29 2003-04-23
Slide 30: Net Debt
Net Debt Net debt Year-end 2002 1,098 Currency effects -54 Operations 85 Mar 2003 1,129 • Available credits and non-utilised credit overdraft facilities by end of December SEK 955 m • Available cash amounted to SEK 242 m 30 2003-04-23
Slide 31: Balance Sheet Ratios
Balance Sheet Ratios March March 2003 2002 Equity/Assets ratio 45% 28% Net debt/Equity ratio 43% 120% • Key financial ratios were in the main unchanged compared with year- end 2002 31 2003-04-23
Slide 32: Refinancing of Syndicated Loan
Refinancing of Syndicated Loan • Renegotiated with the purpose to delay the repayment plan • Renegotiated loan consisting of a revolving credit of 1 800 MSEK and an overdraft facility of 445 MSEK • Annual repayment of revolving credit 180 MSEK 2003-2007 with final payment of 900 MSEK in 2008 • Incre
Slide 33: Market outlook
Market outlook 33 2003-04-23
Slide 34: Market outlook q2 2003
Market outlook q2 2003 The trends on Nobia's main markets are expected to be essentially the same during the second quarter as in the first quarter. In the UK, however, certain economic indicators point to a negative trend and consequently a weakening in demand may occur in the UK market. 34 2003-04
Slide 35: Thank you for your attention
Thank you for your attention 35 2003-04-23
Slide 36: Europe’s leading kitchen interiors company
Europe’s leading kitchen interiors company • Europe’s largest kitchen interiors company • Sales in 2002 • SEK 9,6 billion • Decentralised organisation, three regions – Nordic – Continental Europe – United Kingdom • Strong brand portfolio, focus on upper-middle segment 36 2003-04-23
Slide 37: Sales by country
Sales by country The Netherlands Other 4% 6% Finland 7% Sweden United Kingdom 8% 44% Germany 9% Denmark 11% Norway 11% 37 2003-04-23
Slide 38: Comments to net sales and operating income
Nordic Comments to net sales and operating income • Sweden – sales increase in renovation segment – sales decline in new build segment • Denmark – sales increase to renovation and new build segment – increased sales of rigid and DIY kitchens – growth supported by showroom openings – the K 20 transit
Slide 39: Internal actions in 2003
Internal actions in 2003 • Nobia will in 2003 continue its programs aiming for improved internal cost efficiency – Material cost saving program continues with increased emphasis on component reduction – Further transfers to the K 20 standard measurement system – Review of production capacity includi