Nobia presses on with UK transformation plan as sales slip

Swedish kitchen furniture group Nobia, owner of UK brand Magnet, has reported a decline in sales while updating on its UK transformation plans.

According to its latest trading update for the first quarter 2023, total sales declined 6% to SEK 3,660m, with profit after tax amounted to SEK -214m, down from SEK 128m.

Nobia said that markets continued to be impacted by high price inflation, affecting both end-market sales prices and supply chain costs. Price increases are supporting the value of the kitchen markets, although measured as number of kitchen cabinets sold then markets are decreasing in size.

Within its UK division, sales decreased 5% to SEK 1,227m. The gross margin was stable at 43.4% (43.6), excluding items affecting comparability. Operating profit improved to SEK 5m (0), and the operating margin was 0.4% (0), excluding items affecting comparability.

“Price increases and savings following the cost-out measures impacted positively, however offset by the volume decline, unfavourable mix and direct material cost inflation. Items affecting comparability, referring to restructuring measures, amounted to SEK -170m. Changes in exchange rates negatively impacted operating profit by SEK -15m,” Nobia said.

Jon Sintorn, President and CEO, commented on the UK: “In the UK region, sales were down -5% organically, while profit was slightly better reflecting cost reductions. We are also pressing ahead with the long-term transformation plan for the UK that was communicated at the capital markets update in March. The plan includes shifting to more focus on value, differentiating to grow share in the more premium part of the mass segment, upgrading stores and new product development at the same time as we pursue maximum cost efficiency and simplification across all operations.

“Performance in Portfolio Business Units was mixed in the quarter. The Netherlands delivered solid growth while Austria and Commodore & CIE had lower sales. The unit is also part of the restructuring programme, in particular the UK, and will contribute with savings going forward.”

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