Magnet's sales rise in first quarter

Magnet's parent company - Nobia - has reported on Q1 trading, covering the three months to March 2016.

January-March 2016
• Net sales for the first quarter amounted to SEK 3,323 million (3,251).
• Organic growth was 3 per cent (5). Additionally, net sales were positively impacted by acquisitions and negatively impacted by currency effects.
• Operating profit amounted to SEK 235 million (211), corresponding to an operating margin of 7.1 per cent (6.5).
• Currency losses of approximately SEK 30 million had a negative effect on the Group’s operating profit, of which negative SEK 10 million comprised translation effects and negative SEK 20 million transaction effects.
• Profit after tax amounted to SEK 171 million (153), corresponding to earnings per share of SEK 1.02 (0.91).
• Operating cash flow amounted to SEK 78 million (34).

Consolidated net sales, earnings and cash flow
The kitchen market in total is deemed to have improved during the first quarter compared with the year-earlier period.

Sales increased organically 3 per cent (5). Currency losses of SEK 104 million (gains: 289) affected sales for the quarter. Commodore and CIE, which were consolidated on 1 November 2015, generated sales of SEK 104 million during the first quarter.

The gross margin amounted to 39.8 per cent (40.0), negatively affected by currency effects and the acquisition of Commodore and CIE.

Operating profit improved primarily as a result of higher sales volumes and lower prices of materials, but also due to the earnings contribution from Commodore and CIE.

The return on operating capital including items affecting comparability was 26.1 per cent over the past twelve-month period (Jan-Dec 2015: 26.9).

The return on shareholders’ equity including items affecting comparability was 24.8 per cent over the past twelve-month period (Jan-Dec 2015: 24.1).

Operating cash flow increased mainly as a result of lower investments and higher earnings generation. Nobia’s investments in fixed assets amounted to SEK 56 million (92), of which SEK 14 million (27) referred to store investments.

UK region January-March 2016
The UK kitchen market continued to grow, despite slightly increased macroeconomic uncertainty and the impact of intense price competition.

• Net sales amounted to SEK 1,578 million (1,522).
• Organic growth was 2 per cent (8). Currency losses of SEK 63 million (gains: 206) impacted net sales for the quarter.
• Gross profit amounted to SEK 621 million (604) and the gross margin was 39.4 per cent (39.7).
• Operating profit amounted to SEK 111 million (94) and the operating margin was 7.0 per cent (6.2).
• Currency effects totalling about SEK 0 million impacted operating profit, of which a negative SEK 5 million comprised translation effects and a positive SEK 5 million transaction effects.

Comments on performance
Organic growth was attributable to higher sales in Magnet. Magnet’s sales increase was due to the consumer segment (Retail) and to continued growth of project sales in Magnet Trade. Sales to builders’ merchants and DIY chains declined slightly.

Rixonway’s sales declined as a result of reduced public financial aid for social housing renovations introduced in summer 2015. Commodore and CIE, which were acquired during the fourth quarter of 2015, reported net sales of SEK 104 million during the quarter.

The gross margin declined, mainly as a result of lower sales values and the acquisition of Commodore and CIE, and this could only partially be offset lower prices of materials. The improvement in operating profit was mainly due to higher sales volumes, lower costs and the earnings contribution from Commodore and CIE. Efforts to realise synergy effects in the acquired companies are progressing as planned.  

Comments from the CEO
“Organic sales growth in the Group was 3 per cent during the first quarter. Our two largest regions, the UK and Nordic, which together accounted for 90 per cent of the quarter’s sales, reported both organic growth and improved operating profit. The operating margin for the past twelve months amounted to 9.4 per cent. We are now focusing on growth and increased profitability. During 2016, we will achieve the target of an operating margin of 10 per cent,” says Morten Falkenberg, President and CEO.

See the full publication here.

Source : Nobia Press Release
www.nobia.com

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