Nobia AB: Year-end report 2024

Improved earnings despite challenging market conditions

Fourth quarter summary:

• Net sales decreased to SEK 2,512m (2,642), corresponding to an organic decline of -7% (-23) and operating profit, including a non-recurring goodwill impairment, amounted to SEK -575m (-110).
• Adjusted gross margin increased to 38.7% (38.0).
• Adjusted operating profit increased to SEK 48m (-32).
• Adjusted operating profit in the Nordic region amounted to SEK 115m (44) and in the UK region
• to SEK -36m (-38).
• Items affecting comparability amounted to SEK -623m, of which SEK -478m refer to a non-cash,
• non-recurring goodwill impairment related to the Commodore business in the UK.
• Profit after tax, total operations, amounted to SEK -856m (-174) corresponding to earnings per
• share after dilution of SEK -1.27 (-0.46).
• Operating cash flow amounted to SEK 138m (-188). In addition, a SEK 190m payment was received, related to the sale-and-leaseback transaction.
• Amendments of terms and conditions for Group's long-term funding completed in December.
• The Board proposes that no dividend shall be paid for the fiscal year 2024.

CEO comment

During the quarter, we took further significant steps to enhance profitability in challenging market conditions. I am pleased with the improved performance in the Nordic region, which delivered higher earnings and achieved market share gains despite a substantial volume decline in the project market. In the UK, we continued to make progress in transitioning to a new business model, while also implementing additional cost-reduction initiatives during the period.

Organic net sales for the Group declined -7% driven by the lower project market volumes. Despite the volume drop, our strong focus on margin enhancements and cost-reduction activities strengthened profitability and operating cash flow in the quarter. Adjusted gross margin improved for the fourth consecutive quarter to 38.7% (38.0). SG&A savings, including previously announced cost out programs, amounted to SEK 136m, and accumulated savings since beginning of 2023 now exceeds SEK 500m. Adjusted operating profit improved to 48 MSEK (-32) on the back of the margin enhancements and solid performance in the Nordics. Operating profit, incl. a non-cash, non-recurring goodwill impairment of SEK -478m, amounted to SEK -575m (-110).

Adjusted operating profit in the Nordics increased to SEK 115m (44) and the adjusted operating profit margin rose to 8.2% (2.8), despite an organic sales decline of -11% due to a continued soft project market. Successful transition of resources to the consumer sales on all Nordics markets drove higher average order values with improved gross margins. The solid performance in HTH Denmark continued with market share gains in consumer and the Nordic supply chain performed well with normalized dispatch reliability and productivity improvements.

We are making significant progress at our new Nordic manufacturing site, with the industrialization of fully automated production continuing and additional products and components being gradually integrated. A key milestone was reached in January with the delivery of the first assembled kitchens to external customers.

Net sales in the UK was flat organically, with growth in consumer being offset by decline in project sales. Adjusted operating profit amounted to SEK -36m (-38). The weak market and consequently low production volumes and underabsorption continue to burden the gross margin. The cost reduction initiatives implemented earlier in the year are generating savings according to plan.

As part of our previously communicated strategy, we are progressing towards an asset-light operating model in the UK, led by our strong and trusted Magnet brand. Consequently, Commodore, our brand serving project customers in London, has been fully integrated into Magnet's project organization. Additionally, 14 underperforming stores were closed in the quarter. Cost related to this transition, including a non-cash, non-recurring goodwill impairment, was recorded as items affecting comparability in the quarter.

Amidst an uncertain market outlook, we continue to drive margin improvements by leveraging group scale, capitalizing on our strong consumer brands and executing cost-reduction initiatives, expected to yield another SEK 150m in savings during the first half of 2025. With progress on our strategic agenda, including the launch of production at our new Nordic factory, and the renegotiation of long-term financing terms in December, we are better positioned to navigate soft market conditions and leverage our position as the number one kitchen specialist as the markets recover.

Kristoffer Ljungfelt President & CEO

This disclosure contains information that Nobia AB is obliged to make public pursuant to the EU Market Abuse Regulation (EU nr 596/2014) and the Swedish Securities Markets Act (2007:528). The information was submitted for publication, through the agency of the contact person, on 04-02-2025 08:30 CET.

For further information

Henrik Skogsfors, CFO
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Tobias Norrby, Head of Investor Relations
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Nobia develops, manufactures and sells kitchen solutions through a number of strong brands in Europe, including Magnet in the UK; HTH, Norema, Sigdal, Invita, Superfront and Marbodal in Scandinavia as well as Novart in Finland. Nobia generates profitability by combining economies of scale with attractive kitchen offerings. The Group has approximately 4,000 employees and net sales of about SEK 11 billion. The share is listed on Nasdaq Stockholm under the ticker NOBI. www.nobia.com