Interim report January–September 2014

Net sales for the third quarter amounted to SEK 2,950 million (2,798). Organic
growth was a negative 3 per cent (pos: 2). Operating profit, excluding
restructuring costs of SEK 326 million (–) related to goodwill impairment in
Hygena, amounted to SEK 233 million (180), corresponding to an operating margin
of 7.9 per cent (6.4). Currency gains of approximately SEK 15 million (losses:
25) affected the Group’s operating profit excluding restructuring costs. Loss
after tax including restructuring costs amounted to SEK 323 million (profit:
90), corresponding to earnings per share of negative SEK 1.93 (pos: 0.55).
Operating cash flow amounted to SEK 171 million (207).
In total, market performance was deemed to be unchanged compared with the year
-earlier period. The UK market continued to grow, but on the whole other
relevant markets declined slightly.
Organic sales growth was negative 3 per cent (pos: 2). Currency effects impacted
net sales positively for the quarter in an amount of SEK 237 million (neg: 34).
The gross margin rose to 42.9 per cent (40.7), positively impacted by primarily
higher sales values, lower prices of materials and positive currency effects.
Operating profit increased primarily due to the improved gross margin, which
offset lower sales volumes.
Currency gains of approximately SEK 15 million (losses: 25) affected the Group’s
operating profit, of which SEK 15 million (neg: 5) comprised translation effects
and SEK 0 million (neg: 20) transaction effects.
Restructuring costs attributable to the planned sale of Hygena amounted to SEK
477 million, of which SEK 326 million pertained to impairment of goodwill and
SEK 151 million to impairment of deferred tax assets.
Return on capital employed including restructuring costs amounted to 10.9 per
cent over the past twelve-month period (Jan-Dec 2013: 14.6), negatively affected
by goodwill impairment in Hygena.
Operating cash flow decreased as a result of the negative change in working
capital and increased investments.
Comments from the CEO
“The gross margin for the past twelve-month period has continued to improve and
the operating margin is the highest third-quarter figure in eight years. A large
part of the negative organic growth is related to the sales decline in Hygena,
but the decrease was also attributable to lower sales during the summer months
in the Nordic region, except for Sweden. The planned divestment of Hygena is
expected to be finalised before year-end, subject to approval from the French
competition authority. Going forward, we are focusing on generating organic
growth, while we are evaluating potential acquisitions and plan to increase our
number of stores from next year,” says Morten Falkenberg, President and CEO.
For further information
Please contact any of the following on: +46 (0)8 440 16 00 or +46 (0)705 95 51
00:
• Morten Falkenberg, President and CEO
• Mikael Norman, CFO
• Lena Schattauer, Head of Investor Relations