Year-end report January - December 2015

17 February 2016 07:30

1 October - 31 December 2015 1)

● Revenue increased 5 per cent to SEK 1,447 M (1,373). Excluding the acquisition of Opus Equipment, revenue increased 3 per cent. Adjusted for currency effects and calculated on the comparable number of workdays, revenue rose 7 per cent. Sales in comparable units rose 5 per cent.
● EBITA amounted to SEK 138 M (184) and the EBITA margin amounted to 10 per cent (13).
● EBIT amounted to SEK 109 M (145) and the EBIT margin was 8 per cent (11). In the fourth quarter non-recurring costs have affected EBIT negatively totalling SEK 21 M. MECA’s export business to Denmark has affected EBIT negatively totalling SEK 11 M.
● The gross margin amounted to 54.2 per cent (56.1).
● Earnings per share, before and after dilution, amounted to SEK 2.14 (2.87).
● Cash flow from operating activities rose to SEK 195 M (178), of which discontinued operations comprised SEK 13 M (neg: 25).

1 January - 31 December 2015 1)

● Revenue increased 7 per cent to SEK 5,761 M (5,390). Excluding the acquisition of Opus Equipment, revenue increased 6 per cent. Adjusted for currency effects and calculated on the comparable number of workdays, revenue rose 8 per cent.
● EBITA amounted to SEK 726 M (763) and the EBITA margin amounted to 13 per cent (14).
● EBIT amounted to SEK 616 M (639) and the EBIT margin amounted to 11 per cent (12).
● Earnings per share before and after dilution amounted to SEK 11.77 (12.80).
● Cash flow from operating activities rose to SEK 439 M (413), of which discontinued operations comprised a negative SEK 134 M (neg: 115).
● Net debt amounted to SEK 1,626 M (1,629).
● The Board of Directors proposes a dividend of SEK 7.00 (7.00).

1) During the first quarter 2015, the two last stores in Denmark were discontinued and, in the 2015 interim reports, the Danish store operation is presented according to the rules for discontinued operations in IFRS 5. All comparative periods have been recalculated. The Danish store operation was previously included in the MECA segment. With the exception of cash flow and net debt, all amounts pertain to continuing operations.

CEO’s comments

Continued good growth but a quarter affected negatively by
non-recurring costs

The fourth quarter was characterised by continued good growth which confirms the group's trend of capturing market shares in its main markets during 2015. Non-recurring costs and Denmark had a negative impact of about SEK 30 M on operating profit during the fourth quarter. The weakening of the NOK during the quarter has been offset by price increases. Cash flow from operating activities strengthened in the quarter.

Mekonomen Group’s revenue for the fourth quarter of 2015 increased 5 per cent to SEK 1,447 M (1,373). The good growth in the quarter is primarily driven by increased sales to affiliated and independent workshops, where the growth reached over 10 per cent. Increased market investments together with the development of ProMeister and that we systematically improved the availability of spare parts locally are the main factors behind the positive development.

The operating profit declined to SEK 109 M (145), where the operating profit in the fourth quarter was impacted by non-recurring costs. The non-recurring costs are mainly pertained to inventory impairment and provisions for returns as well as organisational changes and discontinuation of stores in Mekonomen Sweden. In addition, MECA’s export business to Denmark continued to have negative effect on earnings.

When summing up 2015 we can conclude that Sørensen og Balchen, Mekonomen Norway and MECA, excluding the Danish export business, strengthened their earnings in the fourth quarter and the full-year of 2015. We can also conclude that all group companies captured market shares in 2015.

During the full-year 2015, Mekonomen Group was negatively impacted by the weakening of the NOK, our export business to Denmark and the non-recurring costs in the fourth quarter. At the same time, Mekonomen Group has strengthened its position in the market and initiated key initiatives for the future.

The market trend has been stable compared with the year-earlier period and the conditions for 2016 are that we have a slightly larger car fleet as the new car sales in Sweden reached a historical high level. We see potential in a slightly stronger market in 2016. In the short run, we are also able to report that the cold weather in January had a positive impact on sales.

MECA’s export business to Denmark is expected to have a continued negative impact on earnings in the first quarter of 2016 and we note a fewer number of workdays in the first quarter of 2016 compared with the year-earlier period.

We continue to have a favourable sales for our proprietary brand ProMeister, which accounted for about 13 per cent of spare parts sales in the group in the fourth quarter and Mekonomen Group’s sales of ProMeister during 2015 amounts to more than SEK 500 M.

Our efforts to increase quality in our workshops remain in focus, as well as the investment in our digital business, with a group-wide e-commerce platform for B2B and B2C. In addition, going forward we will increase focus on reviewing possible synergies in our logistics function with retained delivery assurance, which is one of the cornerstones of our offering to workshops. We have good conditions to streamline the operation in the future while maintaining a high rate of innovation.

With our strong customer focus, Mekonomen Group stands well equipped to create profitable growth!


Magnus Johansson

President and CEO

For further information, please contact:
Magnus Johansson, President and CEO Mekonomen AB, Tel: +46 (0)8-464 00 00
Per Hedblom, CFO Mekonomen AB, Tel: +46 (0)8-464 00 00

The information in this interim report is such that Mekonomen AB (publ) is obligated to publish in accordance with Securities Market Act. The information was submitted for publication on 17 February 2016 at 7:30 a.m.