Continued growth and strong results in Norway
Third quarter 2015
· Net sales increased by 5 per cent in the third quarter, to SEK 1,806 (1,728)
million. Organic growth excluding currency fluctuations amounted to 6 per cent.
· The operating profit (adjusted EBITA) decreased by SEK 4 million to SEK 75
(79) million. Excluding currency fluctuations, earnings decreased by SEK 2
million. The operating margin (adjusted EBITA margin) was 4.2 (4.6) per cent.
EBIT was SEK 17 (-11) million.
· Earnings after tax were SEK 16 (-57) million. The improvement compared with
the previous year was mainly due to reduced financial expenses.
· Earnings per share were SEK 0.2 (-8.1). After adjustments for the effects of
the new capital structure, earnings per share were SEK 0.2 (-0.6).
· Operating cash flow was SEK -8 (140) million. Excluding the outflows related
to the listing, the operating cash flow was SEK 64 (140) million. The third
quarter was also affected by the favourable level of working capital in the
year’s second quarter.
The period January–September 2015
· Net sales during the period grew by 12 per cent to SEK 5,440 (4,877)
million. Currency fluctuations had no impact on net sales during the period.
· The operating profit (adjusted EBITA) improved by SEK 22 million to SEK 264
(242) million. Excluding currency fluctuations, earnings increased by SEK 24
million. The operating margin (adjusted EBITA margin) was 4.8 (5.0) per cent.
EBIT was SEK 26 (15) million.
· Earnings after tax were SEK 156 (-164) million. The change compared with the
previous year is mainly due to lower financial expenses, as well as because tax
losses are recognised during the second quarter.
· Earnings per share were SEK -4.2 (-23.3). After adjustments for the effects
of the new capital structure and nonrecurring costs in connection with the
listing, earnings per share were SEK 2.3 (-1.7).
· Operating cash flow was SEK 6 (15) million. Excluding outflows related to
the listing, the operating cash flow was SEK 125 (15) million.
CEO comments
Coor continues to deliver a strong organic growth of 6 percent in the third
quarter and 12 percent for the period from January to September.
The operating margin (adjusted EBITA margin) for the third quarter was 4.2 per
cent and 4.8 per cent for the period from January to September. The third
quarter has always been the weakest quarter in terms of margins for the Group as
a whole. Despite this margins have greatly improved in Norway, as well as in
Denmark and Finland.
Our underlying cash flow continues to be strong, and in the last twelve months
we have reduced operating capital by SEK 91 million and have cash conversion of
111 per cent. During the third quarter the cash flow was affected by large
outflows related to the listing.
Continued growth is driven by Norway and Denmark
During the third quarter we have continued to win new contracts and extend some
major existing contracts. The important contract extensions during the quarter
include the contract with the Danish Police service. We deliver integrated
facility management (IFM) to 210 police stations all over Denmark under this
agreement. Another important contract extension was with Sweden’s largest
property company Vasakronan, where we deliver IFM to Vasakronan and bundled FM
services to their tenants.
During the period we have successfully signed a new Norwegian IFM contracts with
Frontica Business Solutions (for services to Aker Solutions in Fornebu) and
Statoil (for services to five oil platforms in the North Sea). In addition, on 7
October we announced a large extension of the IFM contract with Aker Solutions
in Norway.
The pressure from low oil prices in the Norwegian oil and gas industry continues
to drive an interesting and expansive market for Coor and our effective IFM
solutions. As the market leader in IFM solutions in the Nordic countries, we are
well positioned to continue to help the Norwegian oil industry to find the next
level of outsourced efficiency.
Strengthened margins in all countries except Sweden
During the third quarter profitability was strong in all countries except for
Sweden.
For the Group as a whole and Sweden in particular, the third quarter has always
been the weakest quarter in terms of margins. This is due to the fact that July
and August are holiday months, which means that there are fewer additional
orders of services that provide a higher margin and that there are fewer diners
in Coor’s restaurants. This seasonal effect was offset during the third quarter
of 2014 by large additional orders in a single Swedish contract, which partly
explains the difference between this year’s third quarter and the third quarter
of 2014.
As we announced after the second quarter, the cutbacks in the operations at one
of our larger customers in Sweden were implemented during the third quarter.
This will affect us negatively during the second half year 2015 until we have
adjusted our cost mass.
On the other hand, Norwegian operations deliver a significant margin improvement
during the quarter, which is driven by larger contract volumes that have existed
for a longer period of time. This is an effect of our structured integration
work with large contract volumes during the last twelve months. The strengthened
margins in Denmark and Finland are mainly driven by efficiency measures which
were implemented in a number of existing contracts.
Strong cash conversion rolling 12 months
Our underlying cash flow is very strong. During the last twelve months we have
reduced operating capital by SEK 91 million and we have cash conversion of 111
per cent. Efforts to generate high cash flows have always been central to us at
Coor, and when we are able to combine a reduction in working capital with
organic growth we create a good platform for large dividends to our shareholders
in the future.
Good market prospects
In a turbulent world our home markets in the Nordic region continue to be stable
with underlying GDP growth in all of the Nordic countries except Finland. Market
prospects for outsourced FM services continue to be favourable. We are
witnessing a stable demand and high activity levels in all markets and are in a
good position to achieve continued growth with good cash flow.
Stockholm, 5 November, 2015
Mikael Stöhr
President and CEO, Coor Service Management
The information is disclosed pursuant to the Swedish Financial Instruments
Trading Act. The information was submitted for publication on November 5, 2015
at 08:00 CET.
Invitation to press and analyst presentation
On 5 November at 10:00 CET, Coor’s CEO and CFO will present the company’s
development during the third quarter in a webcast. To participate in the webcast
please register via the following link http://edge.media-server.com/m/p/5589hwda
before the meeting. If you would like to listen to the presentation via the
phone, please call +46 8 566 426 96 (Sweden), +47 235 002 53 (Norway), +358 981
710 492 (Finland) or +44 203 428 14 09 (England). The presentation material as
well as a recording of the webcast will be published on the company’s website
after the presentation.
Please find
more
information,
images etc.
at
www.coor.com
or contact
Thomas IR, Coor Service +46 thomas.backteman@coor.com
Backteman Management 70 831
11 66
Olof CFO, Coor Service +46 olof.stalnacke@coor.com
Stålnacke Management 10 559
59 20
Mikael Stöhr CEO, Coor Service +46 mikael.stohr@coor.com
Management 10 559
59 35
Åsvor Communications and +46 asvor.brynnel@coor.com
Brynnel Sustainability 10 559
Manager, 54 04
Coor Service
Management
Coor Service Management (Coor) is a leading provider of facility management
services in the Nordics, focusing on integrated and complex service undertakings
(IFM). Coor offers specialist expertise in workplace services (soft FM),
property services (hard FM) and strategic advisory services for development of
customers’ service activities. Coor creates value by executing, leading,
developing and streamlining its customers’ service activities, ensuring that
they provide optimal support to the core business over time. Coor’s customer
base includes many large and small companies and public-sector organisations
across the Nordic region, including AB Volvo, Aibel, Det Norske Veritas, DR
(Danish Radio), E.ON, Ericsson, EY, ICA, NCC, Politiet (Danish Police), Saab,
Sandvik, SAS, Skanska, Statoil, TeliaSonera, Swedish Transport Administration,
Vasakronan and Volvo Cars.
Coor was founded in 1998 and is listed on Nasdaq Stockholm since 2015. At 30
June 2015 the company had 6,600 employees based mainly in Sweden, Denmark,
Norway and Finland, and annual sales of SEK 7,300 million (rolling twelve-month
basis). Coor takes responsibility for the operations it conducts, in relation to
its customers, employees and shareholders, as well as for its wider impact on
society and the environment. Read more at www.coor.com