q4 2015 presentasjon final [skrivebeskyttet]ir.ekornes.com/-/media/files/investor...
TRANSCRIPT
Q4 2015Preliminary and unaudited
EKORNES ASAFebruary 17th 2016
Agenda
• Highlights• Operational review• Financial review• Summary & outlook
Highlights
• Record annual group revenues of NOK 3.3bn
• Q4 and FY 2015 revenue growth vs 2014 driven by IMG, currency and Svane®
• Low Q4 profitability reflects one‐offs, production issues and sales
• Stressless® revenues stable, but low profitability and order book
• Strong results and development within IMG
• Svane® turnaround progresses positively
Financial results
Operating revenue Operating earnings (EBIT)
0
100
200
300
400
500
600
700
800
900
1 000
NOKm
Q3 2015
817.5
Q2 2015
789.8
Q1 2015
898.9
Q4 2014
785.8
Q4 2015
841.7
0
10
20
30
40
50
60
70
80
90
100
NOKm
Q3 2015
95.4
Q2 2015
62.4
Q1 2015
82.9
Q4 2015
70.6
Q4 2014
73.1
Operational review
IMG
Contract
Svane
Stressless
Segments – operating revenue
0
100
200
300
400
500
600
700
800
900
1 000
841.7
Q3 2015
817.5
Q2 2015
789.8
Q1 2015
898.9
Q4 2014
785.8
624.3
48.4
104.7
641.1
62.4
101.6
711.8
67.5
107.0
646.2
61.1
118.2
654.9
46.4
68.4
Q4 2015
NOKm
• Slight increase in underlying annual sales, up NOK 55m to FY’15 revenue of NOK 2.6bn
• Margin decline due to extraordinary costs, weaker sales and production issues in Q4
Stressless®
Stable revenues, quarterly margin level too lowOperating revenue and operating margin
0
100
200
300
400
500
600
700
800
0
5
10
15
20
%NOKm
Q3 2015
641.1
12.6%
Q2 2015
624.3
9.6%
Q1 2015
711.8
10.4%
Q4 2015
6.9%
646.2
Q4 2014
654.9
11.7%
Stressless®
Production
• 1 643 seats per day in Q4, sequentially down from 1 694 per day in Q3
– Production issues in October and December– Production of some of the new models launched in the
autumn of 2015 started up in January
• Production capacity at 1 750 seats per day– Dependent on product mix– New models to be introduced adding complexity– Focus on production efficiency measures– Low order reserve at the end of Q4, no plans to change
production capacity in Q1, but monitoring situation
Stressless®
Mixed market development
• Positive development in Norway during 2015
• Central‐Europe stable development in 2015
• US, Southern‐Europe and UK revenue down
• Distribution strategy evolved in H2’15, main collection split into two collections to enable marketing flexibility
UK/Ireland
Other Nordic
Contract/Other markets
Southern EuropeUSA/Canada/Mexico
Central‐EuropeJapan
Norway
Asia sales includes:• China• Hong Kong• Taiwan • Korea• Singapore• Malaysia• Indonesia• India • Mauritius
Australia / NZ
Stressless®
• Strong Q4 contributed to FY’15 revenue of NOK 431.5m
– Good demand, further supported by currency effects
– IMG part of the Ekornes Group since 1 November 2014
• Operating margin of 29.1% in Q4 exceeds expectations
– Positive effect from raw materials– Increased prices
IMG
Strong performance continuesOperating revenue and operating margin
0
10
20
30
40
50
60
70
80
90
100
110
120
0
5
10
15
20
25
30
35
40
%NOKm
Q4 2015
118.2
29.1%
Q2 2015
104.7
23.6%
Q1 2015
107.0
22.8%
Nov+Dec 2014
68.4
28.6%
101.6
Q3 2015
29.7%
IMG
Market fluctuations
US/Canada/Mexico
Asia & Other
Norway and Other Nordic• Strong sales in Norway, Sweden, US, Australia and New Zealand
• Sales in Denmark and certain Asian markets weaker
• IMG being introduced in Central Europe, initial orders received
• New products and concepts on sale in stores in several markets from Q2/Q3 2016
• FY’15 revenues NOK 239.5m, up NOK 15.2m
• Break even in 2015, operating loss of NOK 0.3m
• Improvement in operating performance due to increasedsales revenues and value‐chain efficiencies
• Further improvement needed
Svane®
Svane turnaround progresses positivelyOperating revenue and operating margin
‐15
‐10
‐5
0
5
10
15
20
25
30
3570
60
50
40
30
20
10
0
‐10
‐20
Q3 2015
NOKm
62.4
0.6%
Q2 2015
48.4
‐14.0%
Q1 2015
67.5
0.8%
Q4 2015
9.1%
61.1
Q4 2014
46.4
‐5.2%
%
Svane®
Positive market developments in Q4
• After a difficult spring and summer, good progress was made in all markets in the fourth quarter.
• Sales grew in Germany/Switzerland and Finland in 2015 as a whole.
• Operating revenues in Norway in 2015 were on a par with the year before.
Norway
Other Nordic
Central‐Europe
• FY’15 revenue NOK 53.5m, down NOK 16.6m vs ‘14
– Shipping market weak– Positive sales pick‐up within hotel and
office distributors towards end of 2015
• Improved margins due to cost cuts
Ekornes® Contract
Decrease in revenue, increase in marginOperating revenue and operating margin
0
2
4
6
8
10
12
14
16
18
0
5
10
15
20
25
Q4 2015
16.2
21.3%
%NOKm
Q3 2015
12.4
12.9%
Q2 2015
12.4
13.2%
Q1 2015
12.5
11.7%
Q4 2014
16.1
10.4%
Financial results(preliminary and unaudited)
• Q4 revenue up NOK 55.9mfrom Q4 2014
– Growth driven by IMG (included from 1 Nov 2014), currency and Svane®
– FY’15 revenue of NOK 3.3bn, up NOK 590m
Operating revenue
0
100
200
300
400
500
600
700
800
900
1 000
NOKm
Q3 2015
817.5
Q2 2015
789.8
Q1 2015
898.9
Q4 2014
785.8
Q4 2015
841.7
• EBIT‐margin at 8.4%– 10.4% adjusted for IMG accruals
• Stressless®‐margins affected by lower efficiency in production
• Positive development in other segments
Operating earnings and operating margin
0
10
20
30
40
50
60
70
80
90
100
110
120
0
5
10
15
10.4%
8.4%
Q3 2015
13.8%
11.7%
Q2 2015
10.1%
7.9%
Q1 2015
11.1%
9.2%
%
Q4 2014
10.8%
9.3%
NOKm
Q4 2015
EBITEBIT % before IMG accrual
EBIT beforer IMG accrualEBIT %
Adjusted for IMG accrual the operating margin is up• Contingent consideration purchase price IMG
– Accruals of NOK 17.3 million– Negative impact on operating earnings (IFRS) in line with expectations
• Realization currency hedge in Q4 NOK ‐34.6 million, negative impact on operating earnings
• Stressless®‐segment below 10% in 2015– No employee‐bonus– Release of accrual made end of Q3 of NOK 7.8 million. 2014 bonus cost of
NOK 10.5 million charged in Q4 2014
• Extraordinary costs linked to ongoing cost reduction program of NOK 18 million
Earnings per share
0,75
1,98
0,771,42
1,040,00
1,00
2,00
3,00
4,00
5,00
6,00
7,00
8,00
Q42014
Q12015
Q22015
Q32015
Q42015
4,36
5,154,79 4,91 5,20
0,00
1,00
2,00
3,00
4,00
5,00
6,00
7,00
8,00
Q42014
Q12015
Q22015
Q32015
Q42015
7,456,95
6,04
4,36
5,20
0,00
1,00
2,00
3,00
4,00
5,00
6,00
7,00
8,00
2011 2012 2013 2014 2015
Per quarter 12 months rollingPer quarter Full yearNOK NOK NOK
• Decrease working capital mainly due to increase in current liabilities
• NOK 149 million decrease in short term debt in Q4. Down NOK 22.4 million in 2015
• Q4 investments at moderate NOK 10 million
• Full year 2015 investments of NOK 117.6 million, includes acquisition of IMG Inc. ‐net 24.7 million
Cash flow
185
70
80
63
149
230
0
50
100
150
200
250
300
350
400
Paid taxes
9
EBTCash 30.9.2015
NOKm
Cash 31.12.2015
Netfinancingactivities
Change inventory, AR and AP
10
Investment acticities
Depr. and other
operational activities
Compared to YE 2014:• Short term interest bearing debt
NOK 308.7 million, down NOK 24.4 million
– Well within covenants– Undrawn facilities close to
NOK 350 million• Current liabilities, excluding short term
interest bearing debt, up NOK 136.5 million
• Current assets, excluding cash, up NOK 68.3 million
• Equity ratio 52.7%, down from 57.0%– 2014 dividend of NOK 147 million
paid in Q2– Decrease value forward contracts
NOK 136.5 million
Financial position
Cash
Other current assets
Non‐current assets
Non‐current liabilities
Current liabilities
Equity
0
500
1 000
1 500
2 000
2 500
3 000
Equity and liabilitiesAsset
NOKm
Non‐Currentassets
Other currentassets
Cash
Equity
Non‐Current liabilities
Currentliabilities
Outlook and summary
Outlook
• Order receipts in January down vs. January 2015, order reserve behind January 2015 both for Stressless® and IMG reflecting increased uncertainty
– January 2015 was strong for all segments– Good order situation for Svane®
• No planned capacity changes in Q1, order situation monitored
• Cost reduction programme ongoing
Summary
• Record annual group revenues of NOK 3.3bn
• Q4 and FY 2015 revenue growth vs 2014 driven by IMG, currency and Svane®
• Low Q4 profitability reflects one‐offs, production issues and sales
• Stressless® revenues stable, but low profitability and order book
• Strong results and development within IMG
• Svane® turnaround progresses positively
CEO: Olav Holst‐[email protected]: + 47 93 48 31 01
CFO: Trine‐Marie Hagentrine‐[email protected]: + 47 99 61 75 05
Financial calendar
May 4th2016 Q1 presentation
Jul 15th2016 Q2 presentation
Nov 7th2016 Q3 presentation
General assembly May 3rd(Ålesund)
Presentations are held at Hotel Continental, Oslo ‐ at 08.00 a.m.