January – March 2016
Lower sales growth mainly due to negative Easter effect
A short fall in production is normal during the Easter weeks because of public holidays and holiday leave, which have a negative impact on net sales. The 2016 Easter holiday fell in the first quarter, unlike the previous year when Easter occurred in the second quarter. On Group level we estimate the negative impact from the Easter effect to 4-5 percent on net sales.
Norwegian operations and net sales were particularly affected by the Easter effect, which was part of the reason for the lower net sales in Norway. We are also seeing weak demand in the Southwest region, due to lower activity in the oil and gas sector. We are taking action to adjust capacity due to the lower demand. Overall demand in Norway continues to be good, supported by a strong order backlog which was up 6 percent.
Continued focus on margin over volume
The underlying operating margin, excluding Finland, improved from 5.3 percent to 5.5 percent. Operating profit in Sweden increased by 16 percent, the operating margin in Norway was stable, while the operating margin in Denmark decreased due to certain project write-downs. The market is gradually improving. Given this situation, project selection is important and margin always takes precedence over volume for Bravida.
Our work on the operational efficiency initiatives continues. In terms of our productivity initiatives, it is now implemented in 83 percent of our branches, within the purchasing initiative several contracts were renegotiated and are now being implemented in our branches. Within the service initiative training has started during the first quarter and the impact on sales is expected to show in the second half in 2016.
Order intake remains strong and order backlog at record levels
Order intake rose by 6 percent. This helped us maintain a good order backlog at a record high level, at just over SEK 7.1 billion. Compared with the first quarter of 2015, the order backlog in Norway increased by 6 percent in local currency, by 2 percent in Denmark and by 9 percent in Sweden. This healthy order backlog points to continued stable operations.
Sharp improvement in earnings per share
Earnings per share rose by 99 percent to SEK 0.61 (0.31). This was partly because the first quarter of 2016 was not burdened by specific costs, which amounted to SEK 20 million in 2015. It was also because the refinancing and settlement of currency and interest rate hedges in autumn 2015 improved net financial items by SEK 53 million, of which net interest items improved by SEK 46 million. Dividend proposal to the annual general meeting SEK 1 per share is above the financial target.
Mattias Johansson, Stockholm, April 2016
For further information, please contact:
Mattias Johansson, CEO and Group President of Bravida. Tel: +46 8 695 20 00
Nils-Johan Andersson, CFO of Bravida. Tel: +46 70 668 50 75
The information above has been published pursuant to the Swedish Securities Markets Act (Sw: Lag om värdepappersmarknaden) and the Swedish Financial Instruments Trading Act (Sw: Lagen om handel med finansiella instrument).
This information was released for publication at 07:30 CET on 28 April 2016.
A webcasted telephone conference will be held at 09:30 CET on 28 April 2016.