Interim report January – March 2011

11 May 2011 08:00

- Revenues increased 12 per cent adjusted for currency effects and calculated on comparable workdays. Prior to adjustment, revenues increased 7 per cent to SEK 863 M (803).

- EBIT increased 6 per cent to SEK 95 M (90) and the EBIT margin amounted to 11 per cent (11).

- Profit after financial items increased 4 per cent to SEK 95 M (91).

- Profit after tax amounted to SEK 70 M (67).

- Earnings per share amounted to SEK 2.12 (2.08).

- The equity/assets ratio was 54 per cent (60).  

- On 11 March, Sørensen og Balchen was acquired in Norway.
 
 

CEO’s comments
A strong first quarter, despite a weak market

Operating profit increased 6 per cent – comparable revenues rose 12 per cent

Mekonomen’s EBIT for the first quarter of 2011 increased 6 per cent to SEK 95 M (90). Revenues increased 7 per cent to SEK 863 M (803). Adjusted for currency effects and calculated on comparable workdays, revenues increased 12 per cent.

On 11 March, Sørensen og Balchen was acquired in Norway, which contributed 204 workshops and 74 stores to Mekonomen. Thereafter the number of affiliated workshops rose to 1,566 (1,248) and the number of stores was 306 (223).

The first quarter of 2011 was characterised by generally weak market growth, particularly with respect to sales to consumers and sales of accessories. However, Mekonomen’s market activities were strong during the period, resulting in higher market shares. During the first quarter, investments continued in new Mega units, the establishment in Finland, and preparations for establishment in Iceland continued as planned, the investment in snowmobiles and marine was further developed and the acquisition of Sørensen og Balchen in Norway was concluded.  Costs for these ventures amounted to SEK 15 M during the period and costs for the second quarter are expected to amount to SEK 10 M.

Net sales in Denmark declined to SEK 187 M (204) due to negative currency fluctuations.  The underlying net sales increased 2 per cent. EBIT rose to SEK 17 M (6) and the EBIT margin amounted to 9 per cent (3). Mekonomen’s position in the Danish market was further strengthened.

In Norway, net sales declined to SEK 177 M (194).  The underlying net sales decreased by 2 per cent. EBIT declined to SEK 25 M (28) and the EBIT margin remained unchanged at 14 per cent. The main reason for the decline was the decrease in consumer sales in January and February, compared with a very strong trend during the first quarter of 2010, when net sales rose 14 per cent.  However, the trend in workshop sales was positive during the first quarter. 

Net sales in Sweden rose to SEK 405 M (381) and EBIT increased to SEK 67 M (55), up 22 per cent.  EBIT margin amounted to 16 per cent (14).  The high pace in the effort to convert traditional units to Mega and Medium units generated a positive effect on profitability, due to improved efficiency.  In a weak market, the position in Sweden strengthened, largely due to the successful marketing of Mekonomen's concept.

Following the end of the period, Mekonomen acquired eight workshops that were previously operated in cooperation with Svenska Bil.  All workshops are located in Mega facilities.  In total, Mekonomen now owns 15 workshops and recognises the importance of owning workshops in order to raise Mekonomen´s workshop concepts to an even higher level.

The effort in the marine area received a positive start as anticipated and the marine range is currently offered in 86 stores in Sweden.

After the first quarter, 15 April, a Mega facility was opened at Gärdet in Stockholm.  In addition to the facility being the largest in the Group, customers are offered a turnkey concept.  Store, workshop, vehicle inspection, car care, car wash, car hire and a café are all located in the more than 5,000 square-metre facility.  A new feature is also that the facility is the first in Europe to offer 24-hour workshop service, which includes all vehicle models and is aimed at all customers.

Despite a weak consumer market, I confidently look forward to the rest of 2011. With presence in all Nordic countries and with a concept that clearly focuses on the customer, Mekonomen is the winner in the Nordic market. 

Håkan Lundstedt

President and CEO

 
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Mekonomen makes CarLife easier through a wide and easily accessible range of inexpensive and innovative solutions and products for consumers and companies. We are Scandinavia’s leading spare-parts chain with proprietary wholesale operations, more than 300 stores and more than 1,500 workshops operating under the Mekonomen brand.