Executing One Nobia Strategy Morten Falkenberg President and
Executing One Nobia Strategy Morten Falkenberg, President and CEO
Nobia In brief § Develops, manufactures and sells kitchens § Strong local brands § Around 310 own stores and a network of franchise stores and retailers § Organised into three regions: Nordic, UK and Central Europe § Net sales approx. 12. 5 bn SEK § About 6, 400 employees § Listed on Nasdaq Stockholm, Large Cap
The leading European kitchen specialist Market share, % Nobia Nobilia Ikea Europe Alno Howdens Joinery Häcker Küchen SALM Group Schüller Nolte Küchen Ballingslöv Fournier Bauformat Küchen Scavolini Snaidero Bruynzeel Keukens Lube Group Veneta Group Bulthaup Liecht Küchen Sie. Matic Ca 10% market share • Fragmented kitchen market • Possibilities for synergy effects 0% Source: CSIL 2015, producer prices 2014 2% 4% 6% 8% 10% 12%
History – growth by acquisition • • Kitchens Doors Windows Building products Focus on kitchens Organic growth and acquisitions, increasing profitability IPO Declining growth, decreasing profitability Target EBIT margin Net sales 1996 4 1998 2000 2002 2004 2006 2008 2010 2012 2014
Financial targets Profitability >10% EBIT margin Financing <100% debt/equity ratio Dividends 40 -60% of net profit after tax
Where are we now?
Net sales and EBIT margin* SEK m 8. 5% 15 991 15 418 5. 8% 14 085 13 114 12 343 4. 6% 3. 7% 5. 9% 11 773 11 411 2013 2014 9. 1% 12 535 3. 9% 2. 2% 2008 2009 2010 *excluding items affecting comparability Figures for 2014 and 2015 excluding Hygena 2011 2012 R 12 2015
Net debt and debt/equity ratio SEK m 3 181 2 426 77% 62% 1 510 44% 2008 2009 2010 1 586 45% 2011 1 707 49% 2012 1 176 1 206 1 123 37% 38% 33% 2013 2014 30 -Jun-15
Today a totally different company Net Sales EBIT margin ~7, 900 15. 4 SEK bn Employees 12. 5 9. 1% SEK bn 498 ~6, 400 Stores 310 Factories 2. 2% 2009 R 12 2015 2009 17 R 12 2015 2008 -2009 13 R 12 -2015
Nobia’s share price has increased by Share price 575% 100 80 60 Strategy presented CEO started Positive profit warning Divestment of Hygena approved Divestment of Hygena announced Acquisition of Rixonway announced 40 OMX Stockholm 30 Index 20 2011 2012 2013 2014 2015
What did we do?
Create a sense of urgency Never let a good crisis go to waste
Who should be on the bus? • Right attitude and willingness to go the extra mile • Diversity • Flat organization • Politics blocks business performance
Take your time to craft clear Vision and Strategy Understand key stakeholders’ point of view Create a clear roadmap for communication Plan destination clear activities and responsibilities Identify key issues and roadblocks Identify what it takes from a cost perspective to change break-even point Identify where we make and lose money Fish where the fish are to identify future profit pool
Strategy for a strong Nobia Initiatives Growth Efficiency TARGET: EBIT margin 10%
Innovation Growth Digital initiatives Screen Sharing Front-end excellence ecommerce
Harmonised range Centralised sourcing Efficiency Efficient production initiatives Action programme in Hygena
Our plan to reach the 10% EBIT margin target Incremental impact, based on top line 2010 Run-rate EBIT impact SEK m Run-rate EBIT margin impact Launch date Timeframe to run-rate Range / Purchasing 150 – 250 1. 0 – 1. 6% Q 2, 2011 ~ 3 years Production restruct. 250 – 300 1. 6 – 2% Q 2, 2011 3 – 4 years Will extend into 2014 Hygena turnaround 200 – 300 1. 3 – 2% Q 2, 2011 2 – 3 years Store refurbishment program largely complete by end of 2012. Investment ~SEK 250 m Front-end initiatives 250 – 350 1. 6 – 2. 2% Q 2, 2011 2 – 3 years Store efficiency, pricing strategy, CRM etc Cost-out program 1 100 – 125 0. 6 – 0. 8% Q 4, 2010 < 1 year SEK 244 m EBIT charge taken in Q 4 2010 Cost-out program 2 125 0. 8% Q 3, 2011 < 1 year SEK 168 m EBIT charge taken in Q 3 and Q 4 2011 Comment Net purchasing benefit including expected raw materials increases
Communicate, communicate! 43 Only % familiar with ”One Nobia”* *My voice 2013
You get what you inspect, not what you expect Tight performance follow up Cut big and deep
Group - Financial trends Net Sales (12 m roll. ) & monthly organic sales growth rate MSEK 17 000 Gross Margin* % 15 Monthly organic sales growth, % 16 000 10 15 000 5 14 000 0 13 000 -5 12 000 11 000 10 000 -10 Net sales 12 m roll, MSEK Jun Aug 2013 Oct Dec -15 Feb Apr 2014 Jun Aug Oct Dec Feb Apr 2015 Jun 44% 43% 42% 41% 40% 39% 38% 37% 36% 35% 34% Gross margin, monthly Gross margin, 12 m roll. Jun Aug 2013 Oct Dec SG&A %* Feb Apr 2014 Jun Aug Oct Dec Feb Apr 2015 Jun EBIT-margin* 40% 10% 8% SG&A, monthly 38% EBIT-margin, 12 m roll 6% 36% SG&A, 12 m roll 34% EBIT margin, monthly 4% 2% 32% 0% 30% Jun Aug 2013 Oct Dec Feb Apr 2014 Jun Aug Oct Dec Feb Apr 2015 Jun * Excluding restructuring costs. Please note that in 2014 and 2015 Hygena is treated as discontinued operations -2% Jun Aug 2013 Oct Dec Feb Apr 2014 Jun Aug Oct Dec Feb Apr 2015 Jun
Head count versus sales development Total No. H incl contractors Quarterly organic sales growth 9 000 8 000 10% 5% 7 000 0% 6 000 Y-o-Y change %, No. H* 5 000 -10% 4 000 3 000 -5% Dec Mar May Aug Oct Dec Mar May 2011 2012 2013 2014 2015 * Adjusted for the divestment of Optifit & Hygena as well as the acquisition of Rixonway -15%
Front end excellence programme Sales process Training and coaching In store experience 23 KPIs
Our biggest competitor in the last 5 years has been ourselves
“Part of being a leader is having the guts to go first” John Kotter
Conclusions Crystal clear, easy to understand strategy Clear roles and responsibilities – decentralize execution Speed and short lead times
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