Nobina Interim report 1 September–30 November 2018
STRONG QUARTER WITH TWO ACQUISITIONS COMPLETED
The third quarter
· Net sales amounted to SEK 2,609 million (2,260), an increase of 15.4 per cent.
· Operating profit (EBIT) amounted to SEK 243 million (220).
· Profit before tax amounted to SEK 214 million (185).
· Profit after tax amounted to SEK 166 million (145), and earnings per share totalled SEK 1.90 (1.64) before dilution.
· Cash flow from operations excluding changes in working capital was SEK 431 million (382).
The nine-month period
- Net sales amounted to SEK 7,205 million (6,541), an increase of 10.1 per cent.
- Operating profit (EBIT) amounted to SEK 464 million (429).
- Profit before tax amounted to SEK 372 million (325).
- Profit after tax amounted to SEK 285 million (251), and earnings per share totalled SEK 3.29 (2.84) before dilution.
- Cash flow from operations excluding changes in working capital was SEK 1,006 million (914).
Significant events during the third quarter
- Following the approval of the Swedish Competition Authority, Nobina concluded the acquisition of the leading player in special public transport services in the Stockholm market, Samtrans AB, on 1 October.
- In conjunction with the interim report for the second quarter, it was concluded that all of the financial targets set in connection with the IPO in 2015 had been met and at the company’s Capital Markets Day on 9 October, new financial targets were presented (see page 9).
- In October and November, Nobina repurchased 1,246,654 treasury shares for a total amount of approximately SEK 74 million within the framework of the two Share Saving Schemes, covering about 60 senior executives and key employees in total, as resolved by the Annual General Meetings in 2017 and 2018.
- Nobina has again been entrusted by HSL and defended contracts in the Helsinki region, where the total value of the six contracts is estimated at SEK 1.2 billion over the contract periods. Two contracts have tenors of seven years, four contracts have tenors of one year and all of them have the option to extend by three years. Traffic is scheduled to start in August 2019 and comprises a total of 115 scheduled buses.
- At 30 November, Nobina concluded an agreement to acquire the public transport company DBO Busser Holding A/S “De Blaa Omnibusser” in Denmark and as a result secured three new contracts with annual sales of about DKK 160 million. The company reported sales of DKK 158 million in 2017 with an EBT margin of about 16 per cent. The total purchase price was DKK 210 million on a cash and debt-free basis.
Significant events after the end of the quarter
- On 18 December, Nobina AB obtained an investment grade credit rating of BBB- with a stable outlook from the international credit rating agency Fitch Ratings.
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 recognised at an aggregate amount under the line item “profit/loss from discontinued operations” in the consolidated income statement.
Nobina is continuing to perform well. During the third quarter of the fiscal year, we noted an increase in net sales of 15 per cent and profit before tax (EBT) of SEK 214 million, which is 16 per cent higher year on year. As previously communicated, we have met the financial targets established ahead of the IPO in June 2015 and therefore presented new targets in connection with our Capital Markets Day in October. These include average annual net sales growth of 5 per cent, including both organic growth and acquisitions, and continued strengthening of the profit margin before tax towards 5%.
Operations in the past quarter were particularly characterized by acquisition activities. In early October, we concluded and consolidated the acquisition of Samtrans, the leading player in special public transport services in Stockholm. The integration of operations is proceeding as planned and has made a positive contribution to profit and margin in the third quarter. During the quarter, we also announced and concluded our first acquisition in Denmark, of De Blaa Omnibusser, which is an important step in strengthening our position and profitability in the Danish market.
In Norway, we have continued to pursue long-term improvement initiatives for greater profitability, though profit for the quarter was adversely impacted by delayed indexation of fuel price increases and rising costs for maintenance and sick leave, among other items. In Finland, we defended our market share in the Helsinki region through six renewed contracts with HSL for 115 buses with sales of SEK 1.2 billion over the contract period. Underlying profit in the Finnish market is developing as planned but since year-end no longer includes any metro replacement services in Helsinki. In our largest market, Sweden, we have continued to deliver at a high level and reported a substantial improvement in profit for the quarter, fuelled by a mature contract portfolio and extra business. In Sweden, we have also initiated scheduled services with autonomous buses in Barkarbystaden, the first exciting step towards what may become the most modern city transport in the world.
In recent months, concern about the business environment has become apparent in media and in the markets. We are monitoring developments but know at the same time that our operations are relatively independent of the economic situation. Our focus is primarily on publicly-tendered contractual traffic services with contracts of between five and ten years. As long as we are successful in winning the contracts we are interested in winning, and if we manage them well, we have stable and long-term earnings. Variations may arise between quarters depending on traffic start-ups and terminations. Confirmation of the fact that we are conducting business with limited market risk and stable, predictable cash flows was reflected in the investment grade credit rating we were recently assigned after the quarter by the credit rating institute Fitch Ratings.
President and CEO
This information is such that Nobina AB (publ) is obligated to publish in accordance with the EU Market Abuse Regulation. The information was published, through the agency of the below-mentioned contact persons, on 20 December 2018, at 8:00 a.m.