Nobina Interim Report 1 June–31 August 2018
ALL FINANCIAL TARGETS FROM THE IPO MET
The second quarter
· Net sales amounted to SEK 2,235 million (2,076), an increase of 7.7 per cent.
· Operating profit amounted to SEK 117 million (114).
· Profit before tax amounted to SEK 86 million (82).
· Profit after tax amounted to SEK 65 million (65), and earnings per share totalled SEK 0.73 (0.74).
· Cash flow from operations excluding changes in working capital was SEK 300 million (303).
The first half of the year
- Net sales amounted to SEK 4,596 million (4,281), an increase of 7.4 per cent.
- Operating profit amounted to SEK 221 million (209).
- Profit before tax amounted to SEK 158 million (140).
- Profit after tax amounted to SEK 119 million (106), and earnings per share totalled SEK 1.36 (1.20).
- Cash flow from operations excluding changes in working capital was SEK 575 million (532)..
Significant events during the second quarter
- Entrusted once again by Västtrafik to operate bus services in Ale, comprising around 20 buses, with a contract value of around SEK 500 million. The contract starts in June 2019 and extends over ten years.
- Unique public transport agreement between Nobina, Stockholm County Council and Järfälla Municipality with a goal of creating the world’s most modern city transport in Barkarbystaden. The initiative includes fully electrified bus services with autonomous buses used in scheduled services commencing fall 2018.
- Agreement signed to acquire Samtrans AB, the leading player in special public transport in the Stockholm region. The purchase price comprises a fixed consideration of SEK 225 million and a potential additional purchase price of up to SEK 225 million. In 2017, Samtrans reported turnover of SEK 746 million and a profit before tax of SEK 106 million. The acquisition was conditional on the approval of the Swedish Competition Authority, which has now been obtained, and is expected to be concluded in the third quarter of 2018.
Significant events after the end of the quarter
- No significant events noted after the end of the quarter.
The financial information presented in the report pertains to continuing operations, unless otherwise stated. The divestment of Swebus Express AB was reported pursuant to IFRS 5 and is therefore adjusted in the current and the comparative periods and recognized at an aggregate amount under the line item “profit/loss from discontinued operations” in the consolidated income statement.
During the second quarter, we continued to deliver higher revenue and stable profitability. Profit before tax (EBT) amounted to SEK 86 million (82), which includes a capital loss recognized earlier of SEK 20 million following the faster than anticipated phasing out of excess buses in connection with the contracts ending in Nordhordland in Norway. Operations in Norway otherwise demonstrated a significant improvement in underlying profitability. The main reason was profitable extra business and higher revenue due to business development in existing contracts. For other markets, Sweden continued its positive performance in line with the increasing contract maturity of its portfolio, while Finland noted lower profitability, as expected, in comparison with the previous year, which was a result of the end of the metro replacement services contract in the Helsinki region at year-end.
Nobina was listed just over three years ago and I can confirm that all of the financial targets established ahead of the listing have been met. We have demonstrated an average annual growth rate of 6.5 per cent, almost twice underlying market growth, our net debt/equity ratio is in the lower part of the target range and the margin for profit before tax was 4.5 per cent for the latest 12-month period. By concentrating resources in our four strategic areas – Bus solutions, Contract management, Resource efficiency and Employee development – there are good opportunities for continued profitable growth. We will talk more about our strategy work at the Capital Markets Day in Stockholm on 9 October.
In addition to continuing organic growth, we are actively opportunistic on acquisitions and have clear assessment criteria in this area. As previously communicated, during the second quarter we signed an agreement to acquire Samtrans, the leading player in special public transport in Stockholm County. The competition authority has approved the acquisition and we expect to conclude the transaction in the third quarter. I look forward to welcoming Samtrans to Nobina and to realising new business opportunities moving forward.
It is worth repeating that the outlook for public bus transport services is excellent. This is particularly true for opportunities to solve complex transport challenges in expanding cities. A good example of this is our involvement in Barkarbystaden near Stockholm, where we will start regular services with autonomous buses this autumn. We believe our complete solutions for public bus transport, with electric and autonomous buses as natural components, will lead to more partnerships for sustainable urban planning and further strengthen our position as the leading bus company in the Nordic region.
President and CEO
The information comprises such as Nobina AB (publ) is obliged to publicly disclose pursuant to the EU Market Abuse Regulation and the Securities Market Act. Through the above contact person, the information was submitted for publication at 8.00 am CET on 28 September 2018.