• Cash Flow: Increased by almost SEK 500 million compared to the same period last year.
• Gross Margin: Improved to 38.6%, the highest since Q1 2018.
• Cost Savings: SEK 70 million savings in the quarter; over SEK 500 million savings in the last 1.5 to 2 years.
• Organic Growth: Overall at -6%; Nordics flat, UK declined by 12%.
• Operating Income: SEK 16 million with a margin of 0.6%.
• Nordic EBIT: Increased by SEK 86 million to SEK 109 million, margin improved to 7.5%.
• UK Organic Sales: Declined by 12%, adjusted decline of 3% after store closures.
• Operating Cash Flow: SEK 28 million compared to negative SEK 258 million last year.
• Net Debt: Decreased by approximately SEK 0.4 billion to just under SEK 2.5 billion year-over-year.

• Warning! GuruFocus has detected 5 Warning Signs with NBIAY.

Release Date: April 29, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Nobia AB (NBIAY) reported a positive EBIT for Q1, marking a significant improvement from the previous year.
• The company generated nearly half a billion Swedish crowns in cash flow, showcasing strong liquidity and working capital management.
• Gross margins improved for the fifth consecutive quarter, reaching 38.6%, the highest since Q1 2018.
• Cost-saving initiatives have resulted in SEK70 million savings in the quarter, with total savings exceeding half a billion Swedish crowns over the past 1.5 to 2 years.
• The Nordic region showed strong profitability improvements, driven by enhanced consumer sales and effective cost programs.

Negative Points

• The UK market experienced a 12% decline in organic sales, with a significant impact on profitability.
• Despite improvements, the product market remains soft, with no significant recovery expected in 2025.
• Operating income was modest at SEK16 million, with a margin of only 0.6%, indicating ongoing challenges.
• The UK operations incurred additional marketing costs, impacting profitability and delaying the full realization of cost savings.
• The company faces challenges in the Finnish market, necessitating the closure of a factory and a strategic shift in production.

Q & A Highlights

Q: With the UK losses accelerating, how confident are you in turning this around with the announced savings? A: Kristoffer Ljungfelt, CFO: We are confident in the turnaround strategy for the UK. The current quarter's losses are partly due to seasonality and increased marketing costs for the winter sales period. We expect cost savings to materialize throughout the year, especially as we have exited capital-intensive stores.

Q: Can you provide guidance on the timing of the SEK350 million cash outflows related to the Jonkoping factory? A: Henrik Skogsfors, Acting CFO: The cash outflows are expected to be evenly spread over the remainder of the year. Most investments have already been made, with SEK200 million booked as CapEx and SEK150 million as account payables.

Q: Regarding the UK store closures, do you have any lease expiries in 2025, and how long are the leases for your UK stores? A: Kristoffer Ljungfelt, CFO: We have leases coming up for renewal this year, around 10 to 15. Most cost savings will come from stores already closed. The average lease term is around five years, with recent negotiations shortening them compared to historical contracts.

Q: What is the expected production capacity at the Jonkoping factory by the end of 2025? A: Kristoffer Ljungfelt, CFO: We aim for two kitchens per minute once all flows are optimized and additional volumes are integrated. Initially, there will be manual supervision, but automation will increase over time.

Q: Can you clarify the SEK100 million in cost savings expected in 2025 and its distribution between the Nordics and the UK? A: Henrik Skogsfors, Acting CFO: The savings are split approximately 50-50, with a slight bias towards the UK. These savings do not include the EUR4 million from closing the Finnish factory, which will be realized separately.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.