Fagerhult (FAG) Q1 2013 earnings summary

Executive summary

• Q1 demand remained weak in Indoor and Retail Lighting; currency-adjusted orders fell 5% YoY and sales fell 8% YoY.

• Lower sales and an MSEK 8 adverse currency impact reduced operating profit; cost savings partly offset the decline, while gross margin held at the prior-year level.

Financial highlights

• Net sales were MSEK 689.3 vs 775.2, down 11.1% reported and 8% currency-adjusted; FX accounted for 3% of the decline.

• Orders received were MSEK 733 vs 798, down 5% after currency adjustments.

• Operating profit was MSEK 34.4 vs 60.3; operating margin was 5.0% vs 7.8%.

• Net profit was MSEK 21.2 vs 32.5; EPS was SEK 1.68 vs 2.58.

• Gross margin was unchanged YoY despite adverse currency effects; fixed expenses were MSEK 15 lower YoY, with almost half the sales decline offset by savings.

Outlook and guidance

• Lower demand was expected to continue through most of 2013; Retail Lighting demand was considered stable at a low level.

• Product development, marketing and internationalisation investments were set to continue despite weaker market conditions.