Nobina interim report 1 March–31 May 2019
STRONG START TO THE YEAR
The first quarter
· Net sales amounted to SEK 2,749 million (2,351), an increase of 16.9 per cent.
· Operating profit amounted to SEK 152 million (114).
· Profit before tax amounted to SEK 97 million (70).
· Profit after tax amounted to SEK 76 million (52), and earnings per share totalled SEK 0.87 (0.63) before dilution.
· Cash flow from operations excluding changes in working capital was SEK 434 million (377).
Significant events during the first quarter
- On 12 March, Nobina’s first green bond was listed in the market for sustainable bonds on Nasdaq Stockholm and thereby became available for trade on the same day.
- In March, Nobina was awarded two new contracts for Västtrafik in Sjuhärad, Sweden with a total contract value of SEK 1.4 billion over the contract period, spanning over 10.5 years. Traffic is scheduled to start in June 2020 and involves a total of 70 scheduled buses.
- Nobina was awarded two new contracts by HSL for city transport in Helsinki, Finland which together comprise 34 scheduled buses with a total contract value of approximately EUR 50 million. By securing the contracts, Nobina will now operate five electric buses in Helsinki.
- Nobina secured two contracts, whereof one new, for city and regional transport throughout Halland, Sweden to develop public transport together with Hallandstrafiken. The agreements will involve 127 scheduled buses and have a contract value of approximately SEK 3 billion. The services will be launched on 15 June 2020 and the contracts will run for ten years without an optional extension period.
- Nobina was awarded a contract by Piteå Municipality to operate and develop city transport in Piteå, Sweden. The contract, which will launch in July 2020, involves 12 scheduled buses and extends over ten years and has a total value of SEK 250 million.
- The 2018/2019 AGM approved the Board’s proposed dividend of SEK 3.80 per share, and a resolution was taken to introduce a performance-based share saving scheme for 60 key employees. Johan Bygge was elected new director and Deputy Chairman.
- Nobina appointed Pernilla Walfridsson as new CFO of Nobina AB and member of Group management. Pernilla will succeed Per Skärgård, who will retire on 31 October 2019 following 15 years as CFO of Nobina.
Significant events after the end of the quarter
- No significant events occurred 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 recognised at an aggregate amount under the line item “profit/loss from discontinued operations” in the consolidated income statement.
We have had a strong start to the new fiscal year. Higher sales supported by organic growth, underlying earnings improvements in the contract portfolio and contributions from previous acquisitions yielded an adjusted profit before tax of SEK 113 million (71) for the first quarter. In Sweden, performance was particularly strong in Skåne and the Stockholm region. In Denmark, the acquisition of De Blaa Omnibusser and Örslev Holding contributed to sales growth and stronger earnings, and in Finland we further improved underlying profitability through continuing efficiency enhancements. However, in Norway earnings slowed partly due to the start-up of new contracts.
After the recent year’s strong earnings trend, which continues into this year, we will see somewhat more challenging comparables in the second half of the year due to extensive contract migration. However, the effects of contract migration will be less due to the underlying strengthening of the quality of the contract portfolio, since certain poorer performing contracts like Tromsö expire. Profitability in new contracts is always at its lowest early in the contract period, and then gradually improves to be the highest at the end.
As we place stringent demands on which contracts we want to win, it is at the same time positive for long-term profitability that we can continue to grow. The first quarter was successful in a business context. We have defended and expanded our responsibility for operating and developing public transport throughout Halland as well as in Bollebygd and Kinna in Västra Götaland, through contracts with a total value of SEK 4.6 billion. We have also extended collaboration with HSL in the Helsinki region and won a contract to develop city transport in Piteå. Taken together, the contracts secured during the quarter mean we have increased our market shares and long-term growth. Tender volumes are also extensive during the rest of the year, particularly in Sweden and Norway. As few of our own contracts are expiring, we have the right conditions to add further shares in a market that is attractive in the long term.
We are also expanding within existing contracts, where greater responsibility for transport solutions is providing new business opportunities. This includes, for example, solutions for Mobility as a Service (MaaS), meaning digital services that simplify travel from door-to-door. MaaS is one important element in developing complete solutions for public transport, where we collaborate with clients and other stakeholders to develop entire cities and districts in a sustainable manner. Our commitment in Barkarbystaden is one excellent example of this and has become an international role model. Our autonomous buses in regular service were lauded in April at Tech.AD Award in Berlin, the leading European event for autonomous technology. At the world’s largest public transport event, Global Public Transportation Summit, which was held in Stockholm in June, our bus solutions in Barkarbystaden were of course included in discussions.
Complete solutions for increased comfort in urban areas, fossil-free fuel, new technology that eliminates harmful emissions and a great commitment for integration and gender equality, form part of our responsibility to deliver sustainable solutions to society and in meeting major challenges. You can read more about how we work with this, and how this is driving our profitability and growth, in our annual report and corporate presentation, which is available on our website. In cooperation with Telia, we have developed an IoT solution for smarter heating of our buses. It was launched in June and contributes to extensive energy savings and a more comfortable climate in the buses. The proceeds from the green bond of SEK 500 million we issued in February are now completely reserved for purchasing new electric-powered buses and buses that operate on fossil-free fuel. We, as the largest electric bus operator in the Nordics, currently have orders for more than 100 electric buses, which means our electric bus fleet will triple within one year.
In summary, I can look back on a strong start to the new fiscal year. Our sales and earnings are increasing, we are winning new contracts and our business is growing within existing contracts, and the integration of previous acquisitions is progressing as planned. The earnings impact from imminent major start-ups and terminations should be viewed on the basis of Nobina’s long-term strong underlying earnings capacity and growing business volume.
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 27 June 2019.