Nobina Interim Report 1 June 2021–31 August 2021
Strong earnings and reduced climate impact.
Nobina reported a very strong second quarter of 2021/2022 and noted the highest quarterly earnings in the Group’s history. The earnings improvement is largely due to a strong performance by our Covid-19 testing activities, higher level of pandemic-adapted contracts in place compared to corresponding quarter last year, more replacement traffic and positive index effects. The recovery in passenger volumes continued in the second quarter. It is also gratifying to see the positive trend in terms of our ambition to reduce the Group’s climate impact, which is reflected in a major step taken during the second quarter towards reaching our target to reduce carbon dioxide emissions per driven kilometre by 80 percent no later than 2030.
The second quarter
- Net sales amounted to SEK 3,040 million (2,564), an increase of 18.6 percent compared with the prior-year quarter, of which +14.8 percent was organic growth, +4.0 percent acquisitions and –0.2 percent currency effects.
- EBITA amounted to SEK 333 million (190).
- EBIT amounted to SEK 307 million (175).
- Profit after tax amounted to SEK 218 million (114), and earnings per share totalled SEK 2.52 (1.29) before dilution.
- Cash flow from operations was SEK 658 million (483).
The first half of the year
- Net sales amounted to SEK 6,314 million (5,073), an increase of 24.5 percent, of which +21.9 percent was organic growth, +3.1 percent acquisitions and –0.5 percent derived from currency effects.
- EBITA amounted to SEK 588 million (279).
- EBIT amounted to SEK 543 million (245).
- Profit after tax amounted to SEK 365 million (135), and earnings per share totalled SEK 4.23 (1.53) before dilution.
- Cash flow from operations was SEK 1,127 million (1,051).
Significant events during and after the quarter
- New 10-year contract was won with Västtrafik in Vänersborg and Trollhättan worth SEK 1.7 billion.
- During the quarter, Nobina started new traffic with a total of 244 buses in Skåne, Helsinki, Turku, Piteå and Copenhagen due to the contracts secured in 2020.
- As of 1 July 2021, the strategic acquisition Telepass AB, market leader for service traffic in Skåne, was consolidated into the Nobina Group’s operations and accounts.
- After the end of the quarter, a 10-year agreement with Movia in Copenhagen was renewed and expanded, valued at approximately SEK 780 million.
Statement from the CEO
The second quarter of the fiscal year was again very strong and Nobina noted the highest quarterly earnings in the Group’s history. Sales, adjusted for currency effects, rose 18.6 percent to more than SEK 3 billion and adjusted EBT amounted to SEK 293 million (153). The strong earnings must also be seen in light of an impairment of our bus fleet of SEK 72 million during the quarter as certain buses, due to their vehicle specification, have been identified as difficult to optimise, or where production of vehicles has ceased with subsequent problems acquiring spare parts.
The earnings improvement is largely due to a strong performance by our Covid-19 testing activities, which were still in a start-up phase in the second quarter of last year. During the second quarter of the year, Nobina operated an average of approximately 250 test lines, compared with the corresponding quarter last year when we operated an average of approximately 50 test lines. We can also see that our testing activities tend to have a higher persistence than we previously assessed. Our testing capacity, in the form of the number of testing lines, was reduced slightly for most of the second quarter compared with the first quarter of the year, though this was in line with our expectations. However, at the end of the period the trend reversed and we now expect testing activities in the third quarter to remain at roughly the same high level as for the second quarter. The assessment is therefore that the contribution from testing activities in the third quarter will be greater than in the year-earlier quarter, which would in such a case exceed our previous expectations. The relevant authorities can best explain the reason for this trend, but we can see indications that it is linked to the fact that insufficient numbers in certain areas have been vaccinated and possibly that many, out of concern for colleagues and friends, have continued to test themselves as society now slowly opens up. The performance of the underlying operations in Samtrans, Göteborgs Buss and Telepass, which we acquired in the first quarter, is positive. Work to capitalise on our shared expertise is well on track and is helping to consolidate our role as the market’s leading provider of service traffic.
In bus operations, the underlying business also developed positively during the period and the recovery in passenger volumes we noted earlier this year has continued in the second quarter. During the quarter, we also received remuneration in accordance with our Covid-adapted incentive contracts, which we have renegotiated due to the pandemic and was slightly higher than in the prior-year period. In addition, our successful and profitable activities in replacement buses and positive index effects contributed to the improvement in earnings. We believe our core business in Sweden will continue its strong recovery in the third quarter.
The large-scale transition to electric buses is continuing in public transport and Nobina is unquestionably playing an active role in driving the development. In the second quarter alone, by starting up 190 new ones, we doubled our number of electric buses in traffic. Electrification is well suited to us and our sustainability agenda and we have made a substantial effort to adapt our own fleet to the new reality. Nobina has decided to further accelerate its sustainability work. It is therefore gratifying to see the positive trend in reducing the Group’s climate impact, which is reflected in a major step towards reaching our target to reduce carbon dioxide emissions per driven kilometre by 80 percent no later than 2030.
In the quarter, we again demonstrated our competitiveness with the renewed contract to operate public transport in Vänersborg, Trollhättan and Lilla Edet for a total contract value of about SEK 1.7 billion. In addition, Movia in Denmark has chosen to renew two new contracts with Nobina after the end of the quarter, one of which also involves an expansion of the current collaboration and has a total contract value of approximately SEK 780 million. The contracts comprise a total of 89 scheduled buses, of which most operate on electricity and a few on biogas, and these will make further contributions in our journey to reduce climate impact.
Furthermore, I can confirm that the recent stable and successful development of operations has naturally further strengthened the company’s financial position, giving us more scope to quickly and flexibly act in a market that remains characterised by favourable long-term growth conditions, so that we can continue to create value for all of our stakeholders. We are confident as we enter the autumn of 2021 that we will once again become the natural choice for all those who wish to travel – both young and old. We look forward to this.
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 persons, on 30 September 2021, at 8:00 a.m.