July 1-September 30, 2021
- Net sales increased 4 percent to SEK 2,968 M (2,863). Organic growth was 4 percent. Net sales were negatively impacted 1 percent due to currency effects.
- Adjusted EBIT amounted to SEK 290 M (270) and the adjusted EBIT margin was 10 percent (9).
- EBIT totaled SEK 255 M (208) and the EBIT margin was 8 percent (7). EBIT was not impacted by any items affecting comparability during the quarter (neg: 24).
- Earnings per share, before and after dilution, amounted to SEK 3.02 (2.18).
- Cash flow from operating activities amounted to SEK 450 M (521).
- Net debt was SEK 2,275 M (2,964) at the end of the period, compared with SEK 2,673 M at December 31, 2020 and SEK 2,549 M at June 30.
- Restrictions related to covid-19 had a limited impact on the quarter and the comparative period.
January 1-September 30, 2021
- Net sales increased 6 percent to SEK 9,180 M (8,631). Organic growth was 9 percent. Net sales were negatively impacted by currency effects of 2 percent.
- Adjusted EBIT amounted to SEK 828 M (649) and the adjusted EBIT margin was 9 percent (7).
- EBIT totaled SEK 721 M (478) and the EBIT margin was 8 percent (5). EBIT was not impacted by any items affecting comparability during the period (neg: 55).
- Earnings per share, before and after dilution, amounted to SEK 8.12 (4.38).
- Cash flow from operating activities amounted to SEK 1,035 M (1,252).
- Restrictions related to covid-19 had a limited impact on the period, while the comparative period was adversely impacted by the outbreak of covid-19 and the data breach.
- New financing through the issue of a senior unsecured bond of SEK 1.25 billion.
- At the capital markets day held on February 25 an updated strategy was presented to achieve the long-term financial targets.
Organic growth, improved profitability and important green steps in our transformation
Mekonomen Group is continuing to grow and improve its profitability, at the same time as we pass milestones in the green transformation of our industry. The third quarter saw strong demand for our products and services - and greater loyalty from our customers. The market showed signs of normalization as restrictions were eased, but higher raw material prices, a shortage of individual components and supply chain disruptions impacted market development. We reported healthy organic growth for the quarter, with increased profitability and strong cash flow. Overall, Mekonomen Group has a unique and leading position with a very clear goal: To continue to deliver profitable growth as electrification continues with full force.
Sustained organic growth
Organic net sales growth was 4 percent in the third quarter, primarily driven by strong growth in Poland and Sweden. Currency effects had a negative impact on growth of 1 percent. We can clearly see that loyalty has increased among our customers, which is confirmation of our long-term quality efforts and unique accessibility. The pandemic also entered a new phase with the easing of restrictions, which strengthened the market. Meanwhile, higher raw material prices, a shortage of individual components and supply chain disruptions had the opposite effect on market developments. We have ensured good access to spare parts and
accessories by being proactive and through our strong relationships with suppliers.
Improvement in profitability
Profitability increased during the quarter as a result of continued growth and due to our clear, consistent focus on reducing costs in all parts of Mekonomen Group. The gross margin improved to 46.4 percent (45.2), mainly due to previously implemented price increases and favorable exchange-rates related to our purchasing. EBIT rose to SEK 255 M (208) and the EBIT margin was 8 percent (7).
Strong financial position opens for new opportunities
We have purposefully endeavored to strengthen our financial position in the past year. As a result, our net debt relative to EBITDA decreased to 1.8 times (3.3). Cash flow from operating activities amounted to SEK 450 M (521), when the year-earlier period was positively impacted by deferred VAT and tax payments. We are now in a position of strength that offers us the right conditions to manage market fluctuations and to invest in continued growth. This could be organic in our existing operations or through strategic acquisitions.
Well-positioned for a more sustainable market
We continue to lead the industry in this important transformation to a fully electric, green vehicle fleet. Last spring, we were the first company in the industry to launch a new standard for servicing electric cars, E+. We also conducted an analysis of spare parts for the 30 most common electric cars in our markets. Our objective is to have a full range of these available in early 2022. We have already achieved our target that 1,500 of our workshops are to meet the requirements of E+, which is earlier than planned. Over the next eight months, we will increase the pace of this initiative as ProMeister is to travel throughout the length of Sweden to provide further training for our mechanics. In Denmark, FTZ has launched a concept for electric car workshops that encompasses everything from spare parts to equipment, service and training.
Summary of the third quarter
I am proud of what we have achieved together during the quarter. The market has gradually normalized as restrictions were lifted and our concepts are appreciated by our customers. We have met demand by being proactive in our purchasing and through strong relationships with our suppliers and, in parallel, improved our profitability through continued cost discipline. Our financial position is strong and we are well prepared to further strengthen our position by transforming into an even more sustainable and profitable company. We aim to be the best and most complete partner for everyone that services and maintains cars in our markets - today and in the future.
President and CEO
This information is such information that Mekonomen AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Market Act. The information was submitted for publication, through the agency of the contact person set out above, at 07:30 a.m CET on October 29, 2021. The interim report is published in Swedish and English. The Swedish version is the original version and has been translated into English.
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