May 17, 2019
Nobia, which owns Magnet, Gower and Rixonway Kitchens in the UK, has announced that Morten Falkenberg will step down from his post as chief executive after nine years in the role.
The firm said Falkenberg will transition into new roles including industrial adviser for Nobia’s largest owner, Nordstjernan, while Jon Sintorn, recently president and CEO of wheelchair firm Permobil, will succeed Falkenberg at the latest on September 1.
Sintorn has entered an agreement with Nordstjernan to imminently acquire 1.5 million call options at a market price of about SKr7 million (£569,000).
The announcement comes as the Swedish kitchen giant said net profit was down during its January-to-March financial period and anticipated continued “high market volatility” in the UK as a result of the ongoing Brexit process.
“Given the volatile market situation, I am overall pleased with the results for the quarter,” outgoing boss Falkenberg said.
“Our cost reduction programme is running according to plan and productivity is gradually recovering in our supply chain. In addition, the successful integration of [Dutch kitchen supplier] Bribus is generating solid profit contribution to the group,” he added.
Profit after tax amounted to SKr183m during the quarter, down from SKr193m, while operating margin shrunk slightly to 7.5%, from 8% during the comparable trading period last year.
Sales were up, though, to SKr3.4bn (SKr3.2bn).
“Despite difficult market conditions, sales in the UK remained on the same level as the previous year,” said Falkenberg.
“Retail sales improved somewhat on the back of a better product mix, while sales through our improved trade concept continued to grow. We have now trialled the new trade concept in 30 stores over a six-month period with good results, and will thus expand the concept to an additional 120 stores during the year.
“Project sales were down in the quarter, but by the end of March our London-based project business started deliveries to a number of key sites, such as Southbank Place, Berkeley’s South Quay Plaza and Canary Wharf Contractors. We expect these to deliver close to SKr200m within the next nine months.”
In the Nordics, the firm said its Danish business “had good momentum”
in both project and consumer sales with “pleasing” retail performance of the firm’s New York and Nordic Spirit kitchen concepts.
The firm said it had started to roll out a new store concept in Denmark during the quarter.
“Looking ahead, we believe the high market volatility is likely to continue, especially as a result of Brexit,” Falkenberg continued.
“We are, therefore, targeting a reduction in our fixed cost base, but also pushing ahead to make further range reductions and faster supply chain consolidation in line with previous communication.
“All in all, I feel confident that these measures will support a continued strong balance sheet and stable cash flow in the event of a softer global economy.
“It will also give us headroom for investments in growth opportunities and potential mergers and acquisitions, while still keeping dividends in line with our financial targets.”
Have something to say? Email the editor