Nobia has reported a slowdown in profit in the UK for the third quarter of 2016, mainly driven by currency losses.
Third-quarter UK net sales amounted to SKr 1.49 billion (£135 million), down marginally from SKr 1.53bn in the same period last year.
Organic growth was at -2%, with currency losses of SKr 233 million impacting sales for the quarter. However, this decline was mainly due to lower sales for Magnet in the retail sector, while the trade segment remained unchanged.
Gross profit for the UK also decreased from SKr 631m to SKr 573m in Q3 2016, and the gross margin at 38.3%, compared with 41.1% last year.
However, operating profit for the quarter increased slightly from SKr 163m to SKr 166m, with the operating margin up from 10.6% to 11.1%, despite being impacted by currency losses. This improvement was primarily due to the earnings contribution from Commodore and CIE, lower prices of materials and higher sales values.
Nobia also stated that the UK’s plans to leave the EU increased macro-economic uncertainty and weakened consumer confidence, which primarily impacted the higher price segments.
However, on a global scale, Nobia reported an improvement in the market in Q3, compared with the same period last year.
The group saw net sales increase from SKR 3.2bn to SKr 3.25bn. These were positively impacted by acquisitions and negatively impacted by currency effects and a decline in sales for Hygena.
Organic growth was 2%, down from 9% in Q3 2015. Operating profit amounted to SKr 337m (SKr 343m in 2015), corresponding to an operating margin of 10.4%.
Currency losses had an impact of SKr 45m on group operating profit.
Morten Falkenberg, Nobia president and chief executive, said: “Nobia’s sales increased in the third quarter, despite significant currency effects. I am very pleased with the growth we can report for the Nordic region and that we succeeded in improving the operating margin in the UK. Although macro-economic uncertainty did rise in the UK following the referendum, Nobia’s third-quarter earnings in the region show that the company also remains on the right path there. Organic growth was the result of strong demand for kitchens in the project segment in the Nordic countries. We are working intensively towards achieving our target of an operating margin of 10% as soon as possible.”