Fagerhult (FAG) Q2 2013 earnings summary

Executive summary

• Q2 net sales were MSEK 740.8, down 3% YoY on a currency-adjusted basis; operating profit rose to MSEK 50.9 from 44.7, with cost savings and stronger gross margin offsetting lower sales.

• H1 net sales were MSEK 1,430.1, down 3% adjusted for currency; operating profit was MSEK 85.3, down MSEK 19.7 YoY.

Financial highlights

• Q2 orders received were MSEK 818, down 1% adjusted for currency YoY, but up 12% from Q1; H1 orders were MSEK 1,551, down 3% adjusted for currency.

• Q2 profit after tax was MSEK 33.8 vs 26.9 YoY; H1 net profit was MSEK 55.0 vs 59.4.

• H1 operating profit fell to MSEK 85.3 from 105.0, including MSEK 7 of negative currency effects; fixed costs were MSEK 28 lower YoY.

• H1 operating cash flow was MSEK 67.1 vs 42.0; cash flow from investing activities was MSEK -108.4, including subsidiary investments of MSEK 82.

Outlook and guidance

• Management expected weak demand in Indoor Lighting and stable, low demand in Retail Lighting to continue through H2 2013.

• Asia and the Pacific orders were 30% above H1 sales, supporting an expectation of higher net sales in H2.

• Planned continued significant investment in product development and marketing, alongside increased internationalisation.