Nobina Year-end report March 2019–February 2020
ANOTHER STABLE YEAR FOR NOBINA
The fourth quarter
· Net sales amounted to SEK 2,605 million (2,560), an increase of 1.7 percent compared to the prior-year quarter, of which 0.5 percent related to acquisitions, 0.9 percent was organic growth and 0.3 percent derived from currency effects.
· EBITA amounted to SEK 89 million (102).
· EBIT amounted to SEK 64 million (80).
· Profit before tax amounted to SEK 10 million (23).
· Profit after tax amounted to SEK 0 million (18), and earnings per share totalled SEK 0.02 (0.21) before dilution.
· Cash flow from operations excluding changes in working capital was SEK 346 million (349).
The fiscal year 1 March 2019 – 29 February 2020
- Net sales amounted to SEK 10,645 million (9,734), an increase of 9.4 percent, of which 6.5 percent related to acquisitions, 2.4 percent was organic growth and 0.5 percent derived from currency effects.
- EBITA amounted to SEK 662 million (620).
- EBIT amounted to SEK 597 million (575).
- Profit before tax amounted to SEK 399 million (389).
- Profit after tax amounted to SEK 305 million (298), and earnings per share totalled SEK 3.47 (3.44) before dilution.
- Cash flow from operations excluding changes in working capital was SEK 1,739 million (1,564).
Significant events during the fourth quarter
- Nobina won a tender for bus-for-rail services from Skånetrafiken encompassing the entire Öresund and Pågatåg systems in six counties and for six years, with the option of extending for two years. The contract will include fossil-free buses.
- In December, Nobina repurchased 351,799 shares for a total amount of approximately SEK 23 million within the framework of a share saving programme.
- Nobina has been entrusted once again by MOVIA to operate and develop regional transport services in Zealand and the total contract is valued at more than DKK 320 million across 4.5 years with an option for one additional year. The services will be launched in December 2020 and involve a total of 34 buses.
Significant events after the end of the quarter
- Our firm belief is that Public Transport is a critical part of our society – today and in the long term. A large part of our revenue comes from contracts not directly linked to changes in passenger demands. However, the full extent of the impact on Nobina from Covid-19 is difficult to predict. In order to ensure as strong a financial position as possible the Board of Directors has proposed that no dividend should be declared for the fiscal year 2019-2020.
- After 18 years with Nobina, Deputy CEO Jan Bosaeus has decided to retire. All of his work duties will be shared among the existing Group management team and the changes came into effect on 1 April.
The financial information presented in this 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 comparative periods and recognised at an aggregate amount under the line item “profit/loss from discontinued operations” in the consolidated income statement.
Statement from the CEO
I can look back on another stable year for Nobina. Sales, adjusted for currency effects, rose 8.9 percent to SEK 10.6 billion and adjusted EBT rose to SEK 464 million (434). I am especially satisfied with the year’s performance as we carried out one of the largest contract migrations ever by Nobina, with more than 1,000 buses in contracts either started or terminated. This migration had a particular impact on the last two quarters of the fiscal year. During the fourth quarter, adjusted EBT declined to SEK 35 million (45), and we expect the impact of the migration to continue into the beginning of the current fiscal year.
Improvements in all countries
All our markets reported improved profitability in 2019/2020 compared with the previous fiscal year. In Sweden, we consolidated our leading position in a market with substantial tender volumes and secured six new contracts with a total of 321 buses. In the fourth quarter, we expanded our bus-for-rail services through an agreement with Skånetrafiken. We have also continued to plan for an electrification of bus services in Malmö, an initiative enabled by our complete solutions concept, Nobina Electrical Solutions, which encompasses everything from charging infrastructure to operations and maintenance. In Norway, the termination of underperforming contracts and an increase in extra traffic had a positive impact on profitability during the year. Profitability was also strengthened by underlying efficiency improvements in our expanded services in the Oslo region. In Denmark, we were entrusted with the renewal of a minor contract in Zealand in the fourth quarter, while previous acquisitions produced strong key metrics for the full year.
All three acquisitions conducted in the 2018/2019 fiscal year – Örslev and De Blaa Omnibusser (DBO) in Denmark and Samtrans in Sweden – are now fully integrated into Nobina and are providing a significant contribution to both sales and earnings. In the special needs transportation segment, where we are active through Samtrans and Örslev, favourable opportunities for continued growth exist– both organically and through new acquisitions.
The electrification of the bus fleet is continuing. Out of the 462 buses started during the year 100 run on electricity, though electric buses still account for only a small portion of our total bus fleet. Electric buses are part of the solution in all new contracts starting in 2020, and we expect electric buses to play an increasingly important role in future tenders. Public transport services by bus address challenges such as congestion, accessibility and air quality and electrification makes these services even more attractive to society. At the end of the fiscal year, 82 percent (81) of our bus fleet was running on electricity or renewable fuels. The highly successful launch of our first green bond of SEK 500 million took place a little over one year ago. These funds have been invested in new electric buses and buses that run solely on renewable fuels.
The favourable long-term outlook for public transport means that we have an urgent need to recruit new bus drivers and mechanics. Through our own initiatives and together with job centres in the Nordic countries, we are helping people who are long-term unemployed to find work with us. In Sweden alone we recruited some 750 people during the year who were new to the bus driver profession.
Public transport in the Nordic region is facing challenges in the short term. I am, of course, referring to the impact that the coronavirus (COVID-19) has had on our communities. Travelling and meeting in groups are two things that authorities are now advising against in order to limit the spread of the virus. The situation is changing rapidly from day to day and varies between countries. It is difficult to assess the possible economic impact on Nobina. In our current view we consider the first half of the fiscal year to be more challenging than the second half where we expect a recovery back to a more normal situation. We are in a proactive dialogue with our clients about how to solve various aspects of the situation, such as distancing on board, the need for extra buses and other flexible solutions to maintain efficient public transport services for society and all parties in this new situation. Our actions are first and foremost designed to protect the health of our employees and passengers. Such measures include limiting the number of passengers to the number of seats, blocking off the seats at the front of buses and airing all buses at end terminals. In addition to this, in consultation with certain clients, we have made the decision to keep the front entrance doors closed. We are following the developments carefully and are continuously evaluating different scenarios and action plans.
The current uncertainty about the financial impact of the prevailing situation has led to the Board of Directors’ recommendation to the AGM to refrain from paying a dividend for the 2019/2020 fiscal year. While Nobina as a supplier of critical public services stands strong in the longer term, this recommendation reflects the near-term need to take responsibility for the company and all of its stakeholders in these uncertain times.
Despite short-term concerns and uncertainty, we are continuing our focused and dedicated efforts – through efficiency improvements in our day-to-day operations and through new innovations – to create competitive and sustainable public transport services by bus. We reaped the benefits of these efforts in the 2019/2020 fiscal year, and I am convinced that in the longer term we will continue to deliver and achieve the financial targets and sustainability goals we have set ourselves – in the best interests of our shareholders, customers, employees and society.
I would also like to express my gratitude to all Nobina employees for your extraordinary efforts that take us through these challenging times that we are currently in.
President and CEO
This information is such that Nobina AB (publ) is obligated to publish in accordance with the EU Market Abuse Regulation and the Securities Market Act. The information was published, through the agency of the below-mentioned contact person, on 8 April 2020, at 8:00 a.m.