Fagerhult (FAG) Q1 2014 earnings summary

Executive summary

• Best Q1 on record for orders, sales and operating profit; order book increased by nearly MSEK 100.

• Market shares increased across several major markets, with strong growth in Retail Lighting and broad improvement in Indoor Lighting.

• Strong gross margins were retained; LED solutions represented ~30% of quarterly sales.

Financial highlights

• Orders received were MSEK 983.3 (733.1), up 24% adjusted for currency effects and acquired operations.

• Net sales were MSEK 885.5 (689.3), up 21% adjusted for currency effects and acquisitions; reported sales growth was 28.5%.

• Operating profit was MSEK 75.3 (34.4); operating margin rose to 8.5% from 5.0%.

• Net profit was MSEK 49.5 (21.2), up 133%; EPS was SEK 3.92 (1.68).

Outlook and guidance

• Management expected the gradual market recovery to continue through 2014, with pace varying by geography and later-year conditions difficult to assess.

• Improvements were expected across Indoor, Outdoor and Retail Lighting; I-Valo and Arlight acquisitions were expected to support EPS in 2014.

• Product development, marketing and internationalisation investments were set to continue.