Nobina as an investment

Nobina is the Nordic region’s largest and most experienced public transport company. Our expertise in prospecting, the tender process and active management of traffic contracts in combination with long-term delivery quality make us the industry leader.

FINANCIAL TARGETS

Nobina has a target of increasing net sales at a faster pace than market growth.

Nobina will increase profit before tax and achieve an EBT margin in excess of 4.5 per cent in the medium term.

Nobina strives to maintain a net debt/equity ratio of between 3.0 and 4.0 in relation to EBITDA. 

STRATEGY FOR CONTINUED GROWTH 

Nobina has a target of increasing net sales at a faster pace than market growth. Nobina operates in stable, growing markets in the Nordic countries that have similar conditions in terms of public transport services. A large influx into metropolitan regions, a high degree of environmental awareness and public initiatives to increase public transport are examples of common denominators. Our focus is therefore to win the right contracts in the right traffic areas in these markets and thereby continue our trend of profitable growth.

SELECTIVE TENDER PROCESS FOR GREATER PROFITABILITY 

Nobina will increase profit before tax and achieve an EBT margin in excess of 4.5 per cent in the medium term. For Nobina, a natural part of the process involves analysing the prerequisites for healthy profitability in each individual assignment. Therefore, we study the characteristics of the traffic area and how the contract matches in relation to our depots and traffic control centres. For us, it is also important that the right bus is in the right place, particularly from a cost perspective, which is why we also review the possibility of reallocating buses between different traffic areas. Analysis and improvement measures in existing contracts focusing on both revenue and expenses are carried out continuously in combination with ongoing operational improvements. Together, this contributes to making the conditions for healthy profitability in each individual contract as favourable as possible. We also operate in an industry that is not particularly affected by economic fluctuations and there is political consensus about the tendering methods. Combined with long contract periods, this generates long-term, favourable conditions for analysis.

STABLE NET INDEBTEDNESS 

Nobina strives to maintain a net debt/equity ratio of between 3.0 and 4.0 in relation to EBITDA. A higher net debt is often a result of the start of new contracts and the procurement of new buses. As far as possible, Nobina’s buses are financed via finance leases and loans, and are therefore recognised as assets and liabilities in the balance sheet. Because no buses are purchased unless new contracts are planned for start-up, the higher indebtedness is a result of Nobina growing via new contracts which, given Nobina’s endeavours to only win profitable contracts, will eventually lead to improved profitability. Nobina finances buses over ten years. However, our buses have a useful life of 14 years, which further strengthens our results moving forward.

DIVIDEND

Nobina’s dividend policy stipulates that Nobina, under normal circumstances with consideration to Nobina’s cash flow, investment need and general operating conditions, annually will distribute more than 75 per cent of its profit before tax (EBT). For the 2016/2017 fiscal year, the Board has proposed a dividend of SEK 3.10 per share, equivalent to 77 per cent of earnings before tax (EBT) and a dividend yield of 5.6 per cent as per 28 February 2017.

ABOUT THE GROUP

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CORPORATE GOVERNANCE

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SUSTAINABLE BUSINESS

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