Year-end report January – December 2012

14 February 2013 08:01

1 January – 31 December

• Revenues for 2012 rose 28 per cent to SEK 5,426 M (4,237). Adjusted for currency effects and calculated on comparable number of workdays revenues increased 30 per cent.
• EBIT declined 1 per cent to SEK 528 M (536) and the operating margin was 10 per cent (13).
• EBITA rose 7 per cent to SEK 602 M (560).
• Profit after financial items declined 9 per cent to SEK 474 M (523).
• Profit after tax totalled SEK 382 M (380).
• Earnings per share before and after dilution amounted to SEK 10.80 (11.39).
• Net debt at the end of the period amounted to SEK 1,875 M (580).
• The Board of Directors proposes a share dividend of SEK 7.00 (8.00) per share.

1 October – 31 December

• Revenues for the quarter rose 49 per cent adjusted for currency effects and calculated on comparable number of workdays. Prior to adjustment, revenues increased 43 per cent to SEK 1,556 M (1,088).
• Excluding the acquisition of Meca (Meca excluding Denmark), adjusted for currency effects and calculated on comparable number of workdays, revenues rose 6 per cent.
• EBIT increased 20 per cent to SEK 125 M (104) and the operating margin was 8 per cent (10). Earnings were negatively impacted by non-recurring effects in Denmark totalling SEK 12 M (0).
• EBITA rose 36 per cent to SEK 152 M (112).
• Excluding the acquisition of Meca (Meca excluding Denmark), the operating profit declined to SEK 78 M (104).
• Profit after financial items rose 9 per cent to SEK 109 M (100).
• Profit after tax totalled SEK 121 M (71), affected by lower company tax in Sweden.
• Earnings per share before and after dilution amounted to SEK 3.36 (2.16).

Significant events

• The acquisition of Meca on 23 May 2012 had an impact of SEK 446 M in the fourth quarter and SEK 1,000 M in the period 23 May – 31 December. EBIT was positively impacted by SEK 47 M in the fourth quarter and SEK 130 M during the 23 May – 31 December period. In addition to this, Group earnings were negatively impacted by transaction costs pertaining to the Meca acquisition totalling SEK 12 M for 2012 and SEK 0 M for the fourth quarter.

      
CEO’s comments

Higher market shares in a weak market

• Revenues for 2012 rose 28 per cent, EBIT fell 1 per cent.
• EBIT for the fourth quarter rose 20 per cent.
• Weak results in Denmark, the operating margin was a negative 5 per cent for 2012.
• Cash flow from operating activities in the fourth quarter increased to SEK 224 M (24).

The 2012 financial year was characterised by weak market growth. However, Mekonomen experienced a stronger growth than the total Nordic market, for the fourth quarter and 2012, primarily due to successful marketing activities. Revenues for Mekonomen for 2012 rose 28 per cent to SEK 5,426 M (4,237) and the EBIT decreased to SEK 528 M (536). EBITA for 2012 rose 7 per cent to SEK 602 M (560). During 2012, amortisation of intangible fixed assets identified in connection with the acquisition of Sørensen og Balchen and Meca amounted to SEK 19 M and SEK 35 M, respectively.

During the fourth quarter, revenues rose 43 per cent and the EBIT increased 20 per cent to SEK 125 M (104). Adjusted for Meca, growth was 0 per cent, in a total market that declined approximately 3 per cent during the quarter. Adjusted for Meca, currency effects and calculated on the number of comparable workdays, growth for the quarter was 6 per cent. Cash flow from operating activities amounted to SEK 224 M (24) in the fourth quarter. The number of affiliated workshops increased in 2012 to 2,302 (1,686) and the number of stores rose to 421 (334).

Meca Scandinavia was acquired in May 2012 and performed well during the year. The integration work was successful and Meca Scandinavia also reported strong earnings for the fourth quarter, an EBIT of SEK 47 M and net sales of SEK 446 M. EBIT has been charged with amortisation of intangible assets identified in connection with the acquisition totalling SEK 15 M.

From 1 October 2012, Mekonomen’s operation in Denmark also is included in the Meca Group. Meca’s total EBIT for the fourth quarter, including Denmark, amounted to SEK 20 M. The operating result in Denmark for the fourth quarter was a loss of SEK 27 M (profit: 1), with net sales of SEK 166 M (190). Earnings in Denmark for the fourth quarter were impacted by lower gross margin and non-recurring effects of SEK 12 M. For 2012, the operating results in the Danish operation were a loss of SEK 38 M (profit: 63) and the operating margin was a negative 5 per cent (pos: 8). As announced earlier, continuous measures are being implemented to adapt the structure and cost in Denmark to the prevailing market situation, with a focus on retaining our strong position in the market, according to Meca’s B2B-model. Additional structural costs are assumed to impact Denmark’s results with SEK 15 M during the first as well as during the second quarters of 2013.

EBIT for Sørensen og Balchen amounted to SEK 20 M (25) in the fourth quarter and to SEK 78 M (88) for 2012. Before amortisation of intangible fixed assets related to the acquisition, profit for 2012 amounted to SEK 97 M (102). Net sales for the fourth quarter rose 7 per cent to SEK 188 M (176). Adjusted for currency effects and calculated on the number of workdays, sales rose 10 per cent. Net sales for Sørensen og Balchen for 2012 amounted to SEK 748 M.

Mekonomen Norden, which comprises the operations in the original Mekonomen, excluding Denmark, reported EBIT totalling SEK 84 M (101) for the fourth quarter of 2012 and an EBIT of SEK 376 M (438) for 2012. Mekonomen Norden’s sales rose 3 per cent to SEK 721 M (703) for the fourth quarter and 2 per cent to SEK 2,830 M (2,766) for 2012. The largest units in Mekonomen Norden are Mekonomen Sweden and Mekonomen Norway, with an EBIT for the fourth quarter of SEK 73 M (78) and SEK 24 M (31), respectively. The operation in Finland developed in a positive direction. Sales during the year to affiliated workshops within Mekonomen Norden were satisfactory.

Following the acquisition of Sørensen og Balchen in 2011 and Meca in 2012, focus has been on consolidating the operations. 2013 will also be a year of consolidation, with a strong focus on improving profitability in Denmark, as well as the Group as a whole. The total market remained weak and the prevailing market situation is still uncertain. We foresee that 2013 will be a year when we additionally adapt our operations to market conditions, but where we continue to make CarLife easier. Mekonomen’s journey continues!

Håkan Lundstedt
President and CEO

For further information, please contact:
Håkan Lundstedt, President and CEO Mekonomen AB, Tel: +46 (0)8-464 00 00
Per Hedblom, CFO Mekonomen AB, Tel: +46 (0)8-464 00 00
Gunilla Spongh, Head of International Business Mekonomen AB, Tel: +46 (0)8-464 00 00

The information in this interim report is such that Mekonomen is obligated to publish in accordance with the Securities Market Act.
The information was submitted for publication on 14 February 2013.

Mekonomen makes CarLife easier through a wide and easily accessible range of inexpensive and innovative solutions and products for consumers and companies. We are the leading automotive spare-parts chain in the Nordic region, with proprietary wholesale operations, more than 400 stores and more than 2,300 workshops operating under the Mekonomen brands.

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