Interim report January - March 2011

Interim report January - March 2011

- Revenues increased 12 per cent adjusted for currency effects and
calculated on comparable workdays. Prior to adjustment, revenues
increased 7 per cent to SEK 863 M (803).

- EBIT increased 6 per cent to SEK 95 M (90) and the EBIT margin
amounted to 11 per cent (11).

- Profit after financial items increased 4 per cent to SEK 95 M (91).

- Profit after tax amounted to SEK 70 M (67).

- Earnings per share amounted to SEK 2.12 (2.08).

- The equity/assets ratio was 54 per cent (60).  

- On 11 March, Sørensen og Balchen was acquired in Norway.
 
 

SUMMARY OF THE GROUP'S EARNINGS TREND  January - March       12 months  
   Full-year
                                       2011  2010  Change %  April -
March  2010
Revenues, SEK M                        863   803   7         3 507      
   3 447
EBIT, SEK M                            95    90    6         490        
   485
Profit after financial items, SEK M    95    91    4         489        
   485
Profit after tax, SEK M                70    67    4         354        
   351
Earnings per share, SEK                2.12  2.08  2         10.99      
   10.95
EBIT margin, %                         11    11              14         
   14

CEO's comments
A strong first quarter, despite a weak market

Operating profit increased 6 per cent - comparable revenues rose 12 per
cent

Mekonomen's EBIT for the first quarter of 2011 increased 6 per cent to
SEK 95 M (90). Revenues increased 7 per cent to SEK 863 M (803).
Adjusted for currency effects and calculated on comparable workdays,
revenues increased 12 per cent.

On 11 March, Sørensen og Balchen was acquired in Norway, which
contributed 204 workshops and 74 stores to Mekonomen. Thereafter the
number of affiliated workshops rose to 1,566 (1,248) and the number of
stores was 306 (223).

The first quarter of 2011 was characterised by generally weak market
growth, particularly with respect to sales to consumers and sales of
accessories. However, Mekonomen's market activities were strong during
the period, resulting in higher market shares. During the first quarter,
investments continued in new Mega units, the establishment in Finland,
and preparations for establishment in Iceland continued as planned, the
investment in snowmobiles and marine was further developed and the
acquisition of Sørensen og Balchen in Norway was concluded.  Costs for
these ventures amounted to SEK 15 M during the period and costs for the
second quarter are expected to amount to SEK 10 M.

Net sales in Denmark declined to SEK 187 M (204) due to negative
currency fluctuations.  The underlying net sales increased 2 per cent.
EBIT rose to SEK 17 M (6) and the EBIT margin amounted to 9 per cent
(3). Mekonomen's position in the Danish market was further strengthened.

In Norway, net sales declined to SEK 177 M (194).  The underlying net
sales decreased by 2 per cent. EBIT declined to SEK 25 M (28) and the
EBIT margin remained unchanged at 14 per cent. The main reason for the
decline was the decrease in consumer sales in January and February,
compared with a very strong trend during the first quarter of 2010, when
net sales rose 14 per cent.  However, the trend in workshop sales was
positive during the first quarter. 

Net sales in Sweden rose to SEK 405 M (381) and EBIT increased to SEK 67
M (55), up 22 per cent.  EBIT margin amounted to 16 per cent (14).  The
high pace in the effort to convert traditional units to Mega and Medium
units generated a positive effect on profitability, due to improved
efficiency.  In a weak market, the position in Sweden strengthened,
largely due to the successful marketing of Mekonomen's concept.

Following the end of the period, Mekonomen acquired eight workshops that
were previously operated in cooperation with Svenska Bil.  All workshops
are located in Mega facilities.  In total, Mekonomen now owns 15
workshops and recognises the importance of owning workshops in order to
raise Mekonomen´s workshop concepts to an even higher level.

The effort in the marine area received a positive start as anticipated
and the marine range is currently offered in 86 stores in Sweden.

After the first quarter, 15 April, a Mega facility was opened at Gärdet
in Stockholm.  In addition to the facility being the largest in the
Group, customers are offered a turnkey concept.  Store, workshop,
vehicle inspection, car care, car wash, car hire and a café are all
located in the more than 5,000 square-metre facility.  A new feature is
also that the facility is the first in Europe to offer 24-hour workshop
service, which includes all vehicle models and is aimed at all
customers.

Despite a weak consumer market, I confidently look forward to the rest
of 2011. With presence in all Nordic countries and with a concept that
clearly focuses on the customer, Mekonomen is the winner in the Nordic
market. 

Håkan Lundstedt

President and CEO

 
For further information, please contact:

 

Håkan Lundstedt, President and CEO Mekonomen AB, Tel: +46 (0)8-464 00 00
Gunilla Spongh, CFO Mekonomen AB, Tel: +46 (0)8-464 00 00

Mekonomen makes CarLife easier through a wide and easily accessible
range of inexpensive and innovative solutions and products for consumers
and companies. We are Scandinavia's leading spare-parts chain with
proprietary wholesale operations, more than 300 stores and more than
1,500 workshops operating under the Mekonomen brand.